Federal Register Vol. 83, No.146,

Federal Register Volume 83, Issue 146 (July 30, 2018)

Page Range36399-36722
FR Document

83_FR_146
Current View
Page and SubjectPDF
83 FR 36721 - Anniversary of the Americans with Disabilities Act, 2018PDF
83 FR 36590 - Sunshine Act MeetingPDF
83 FR 36627 - Sunshine Act: Notice of Agency MeetingPDF
83 FR 36569 - Applications for New Awards; Graduate Assistance in Areas of National NeedPDF
83 FR 36633 - Sunshine Act Meeting NoticePDF
83 FR 36577 - Applications for New Awards; Fund for the Improvement of Postsecondary Education-Open Textbooks Pilot ProgramPDF
83 FR 36661 - Notice of Final Federal Agency Actions on Juneau Access Improvements Project in AlaskaPDF
83 FR 36435 - Hazardous and Solid Waste Management System: Disposal of Coal Combustion Residuals From Electric Utilities; Amendments to the National Minimum Criteria (Phase One, Part One)PDF
83 FR 36660 - Petition for Exemption; Summary of Petition Received; Eagle Mountain CityPDF
83 FR 36574 - Applications for New Awards; Fund for the Improvement of Postsecondary Education-Pilot Program for Cybersecurity Education Technological Upgrades for Community CollegesPDF
83 FR 36660 - Petition for Exemption; Summary of Petition Received; Yamaha Motor Corporation, USAPDF
83 FR 36614 - Mortgage and Loan Insurance Programs Under the National Housing Act-Debenture Interest RatesPDF
83 FR 36581 - Agency Information Collection ExtensionPDF
83 FR 36586 - Boulder Canyon ProjectPDF
83 FR 36433 - State of Idaho Voluntary Transfer of Primacy of the Class II Underground Injection Control Program to the Environmental Protection AgencyPDF
83 FR 36568 - Arbitration Panel Decisions Under the Randolph-Sheppard ActPDF
83 FR 36659 - Notice of Availability of the Draft Environmental Assessment for the Proposed Keystone XL Pipeline Mainline Alternative Route in NebraskaPDF
83 FR 36629 - Program-Specific Guidance About Self-Shielded Irradiator Licenses and Program-Specific Guidance About Exempt Distribution LicensesPDF
83 FR 36609 - Announcement of Meeting of the Secretary's Advisory Committee on National Health Promotion and Disease Prevention Objectives for 2030PDF
83 FR 36562 - Proposed Collection; Comment RequestPDF
83 FR 36561 - Board of Regents, Uniformed Services University of the Health Sciences; Notice of Federal Advisory Committee MeetingPDF
83 FR 36561 - Submission for OMB Review; Comment RequestPDF
83 FR 36583 - PATH West Virginia Transmission Company, LLC; Notice of Petition for Declaratory OrderPDF
83 FR 36584 - Notice of Availability of the Environmental Assessment for the Proposed Texas Eastern Transmission, LP, Lambertville East Expansion ProjectPDF
83 FR 36586 - Notice of Preliminary Permit Application Accepted for Filing and Soliciting Comments, Motions To Intervene, and Competing Applications: Go With the Flow Hydro Power, LLCPDF
83 FR 36582 - PATH Allegheny Transmission Company, LLC; Notice of Petition for Declaratory OrderPDF
83 FR 36591 - Proposed Collection; Comment RequestPDF
83 FR 36617 - Notice of Realty Action: Recreation and Public Purposes Act Classification, MontanaPDF
83 FR 36616 - Notice of Realty Action: Classification for Lease and/or Conveyance for Recreation and Public Purposes of Public Lands (N-95402) for a School in the Southwest Portion of the Las Vegas Valley, Clark County, NVPDF
83 FR 36622 - Stainless Steel Flanges From China; DeterminationPDF
83 FR 36618 - Notice of Intent To Amend the Las Vegas Resource Management Plan and Prepare an Environmental Assessment; Notice of Segregation and Notice of Realty Action; Classification and Proposed Modified Competitive Sales of Public Land in Pahrump, Nye County, NevadaPDF
83 FR 36666 - Qualification of Drivers; Skill Performance Evaluation; Virginia Department of Motor Vehicles Application for Renewal ExemptionPDF
83 FR 36663 - Agency Information Collection Activities; Request for Comments; Revision and Renewal of an Approved Information Collection: Medical Qualification RequirementsPDF
83 FR 36662 - Parts and Accessories Necessary for Safe Operation; Application for an Exemption From Groendyke Transport, Inc.PDF
83 FR 36567 - Notice of Public Hearing and Business Meeting August 15 and September 13, 2018PDF
83 FR 36538 - Mid-Atlantic Fishery Management Council (MAFMC); Public MeetingsPDF
83 FR 36515 - Agency Information Collection Activities: Evaluation of Technology Modernization for SNAP Benefit Redemption Through Online Transactions for the USDA Food and Nutrition ServicePDF
83 FR 36583 - Records Governing Off-the-Record Communications; Public NoticePDF
83 FR 36585 - Combined Notice of Filings #1PDF
83 FR 36539 - New England Fishery Management Council; Public MeetingPDF
83 FR 36407 - Senior Community Service Employment Program; Performance AccountabilityPDF
83 FR 36624 - Agency Information Collection Activities; Comment Request; Distribution of Characteristics of the Insured UnemployedPDF
83 FR 36625 - TUV Rheinland of North America, Inc.: Applications for Expansion of RecognitionPDF
83 FR 36667 - Petition for Waiver of CompliancePDF
83 FR 36573 - Agency Information Collection Activities; Comment Request; Paul Douglas Teacher Scholarship Performance Report FormPDF
83 FR 36429 - Safety Zone; Waterview Loft Fireworks II, Detroit River, Detroit, MIPDF
83 FR 36431 - Safety Zone; Waterview Loft Fireworks I, Detroit River, Detroit, MIPDF
83 FR 36658 - Argosy Investment Partners IV, L.P.; Notice Seeking Exemption Under the Small Business Investment Act, Conflicts of InterestPDF
83 FR 36659 - Argosy Investment Partners V, L.P.; Notice Seeking Exemption Under the Small Business Investment Act, Conflicts of InterestPDF
83 FR 36522 - Takes of Marine Mammals Incidental to Specified Activities; Taking Marine Mammals Incidental to the Parallel Thimble Shoal Tunnel Project in Virginia Beach, VirginiaPDF
83 FR 36623 - Agency Information Collection Activities; Proposed eCollection eComments Requested; Update With Changes, of a Previously Approved Collection Which Expires November, 2018: Department of Justice Equitable Sharing Agreement and CertificationPDF
83 FR 36658 - Surety Bond Guarantee Program FeesPDF
83 FR 36670 - Proposed Collection; Comment Request for Regulation ProjectPDF
83 FR 36539 - Takes of Marine Mammals Incidental to Specified Activities; Taking Marine Mammals Incidental to Site Characterization Surveys Off the Coast of MassachusettsPDF
83 FR 36588 - Information Collection Being Reviewed by the Federal Communications Commission Under Delegated AuthorityPDF
83 FR 36467 - Technology Transitions; Policies and Rules Governing Retirement of Copper Loops by Incumbent Local Exchange CarriersPDF
83 FR 36513 - Availability of Guideline for Minimizing the Risk of Campylobacter and Salmonella Illnesses Associated With Chicken LiverPDF
83 FR 36516 - Request for Information: State Administrative Expense Allocation Formula for Child Nutrition ProgramsPDF
83 FR 36623 - Agency Information Collection Activities; Proposed eCollection eComments Requested; Revision of a Currently Approved Collection; Comments Requested: 2019 School Crime Supplement (SCS) to the National Crime Victimization Survey (NCVS)PDF
83 FR 36519 - Forged Steel Fittings From Taiwan: Final Determination of Sales at Less Than Fair ValuePDF
83 FR 36513 - Submission for OMB Review; Comment RequestPDF
83 FR 36564 - Arms Sales NotificationPDF
83 FR 36432 - Safety Zones; Annual Events in the Captain of the Port Buffalo Zone-August and September EventsPDF
83 FR 36456 - Adoption of the Methodology for the HHS-Operated Permanent Risk Adjustment Program Under the Patient Protection and Affordable Care Act for the 2017 Benefit YearPDF
83 FR 36594 - Agency Information Collection Activities; Submission for Office of Management and Budget Review; Comment Request; Survey on the Occurrence of Foodborne Illness Risk Factors in Selected Retail and Foodservice Facility TypesPDF
83 FR 36630 - Water Remediation Technology, LLCPDF
83 FR 36629 - Notice of Intent To Seek Approval To Renew an Information CollectionPDF
83 FR 36589 - Agency Information Collection Activities: Proposed Collection Renewal; Comment Request (OMB No. 3064-0185)PDF
83 FR 36589 - Notice to All Interested Parties of Intent To Terminate ReceivershipsPDF
83 FR 36628 - Submission for OMB Review, Comment Request, Proposed Collection: IMLS “2019-2022 Native Hawaiian Library Grant Program Notice of Funding Opportunity”PDF
83 FR 36627 - Submission for OMB Review, Comment Request, Proposed Collection: IMLS “2019-2022 Native American Basic Library Grant Program Notice of Funding Opportunity”PDF
83 FR 36519 - Submission for OMB Review; Comment RequestPDF
83 FR 36518 - Notice of Public Meeting of the Ohio Advisory Committee to the U.S. Commission on Civil RightsPDF
83 FR 36518 - Agenda and Notice of Public Meeting of the Rhode Island Advisory CommitteePDF
83 FR 36598 - Medical Device User Fee Rates for Fiscal Year 2019PDF
83 FR 36608 - Center for Devices and Radiological Health: Experiential Learning ProgramPDF
83 FR 36484 - Segregation of Assets Held as Collateral in Uncleared Swap TransactionsPDF
83 FR 36509 - Adjustment of Cable Statutory License Royalty RatesPDF
83 FR 36592 - Proposed Agency Information Collection Activities: Submission for OMB Review; Comment RequestPDF
83 FR 36472 - U.S. Fish and Wildlife Service Mitigation PolicyPDF
83 FR 36469 - Endangered and Threatened Wildlife and Plants; Endangered Species Act Compensatory Mitigation PolicyPDF
83 FR 36563 - Proposed Collection; Comment RequestPDF
83 FR 36635 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Withdrawal of a Proposed Rule Change To Adopt a New NYSE Arca Rule 8.900-E and To List and Trade Shares of the Royce Pennsylvania ETF, Royce Premier ETF, and Royce Total Return ETF Under Proposed NYSE Arca Equities Rule 8.900-EPDF
83 FR 36635 - Self-Regulatory Organizations; LCH SA; Order Approving Proposed Rule Change Relating to Liquidity Risk ManagementPDF
83 FR 36641 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Listing and Trading of Shares of the Columbia Multi-Sector Municipal Income ETFPDF
83 FR 36638 - Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt a Rule Concerning Handling of No Bid Options and To Clarify the Operation of Chapter V, Section 3, Entitled “Trading Halts”PDF
83 FR 36655 - Self-Regulatory Organizations; ICE Clear Credit LLC; Order Approving Proposed Rule Change Relating To Formalization of the ICC Model Validation FrameworkPDF
83 FR 36641 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Designation of a Longer Period for Commission Action on a Proposed Rule Change Relating to the Continued Listing Criteria Applicable to the Indexes Underlying the iShares California AMT Free Muni Bond ETF and iShares New York AMT-Free Muni Bond ETFPDF
83 FR 36623 - Meeting of the Judicial Conference Advisory Committee on Rules of EvidencePDF
83 FR 36605 - Request for Nominations for Individuals and Consumer Organizations for Advisory CommitteesPDF
83 FR 36568 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; 21st Century Community Learning Centers Annual Performance ReportPDF
83 FR 36560 - Virginia Broadband SummitPDF
83 FR 36607 - Agency Information Collection Activities; Announcement of Office of Management and Budget ApprovalsPDF
83 FR 36646 - Advisors Asset Management, Inc. and ETF Series Solutions; Notice of ApplicationPDF
83 FR 36652 - OFI Carlyle Private Credit Fund and OC Private Capital, LLC; Notice of ApplicationPDF
83 FR 36668 - Continental Tire the Americas, LLC, Grant of Petition for Decision of Inconsequential NoncompliancePDF
83 FR 36588 - Radio Broadcasting Services; AM or FM Proposals To Change the Community of LicensePDF
83 FR 36634 - Information Collection Request Submission for OMB ReviewPDF
83 FR 36428 - Drawbridge Operation Regulation; Gulf Intracoastal Waterway, South Pasadena, FLPDF
83 FR 36604 - Prescription Polyethylene Glycol 3350; Denial of a Hearing and Order Withdrawing Approval of Abbreviated New Drug Applications; Temporary Stay of Effective DatePDF
83 FR 36610 - 60-Day Notice of Proposed Information Collection: Voucher Management System (VMS), Section 8 Budget and Financial FormsPDF
83 FR 36611 - 30-Day Notice of Proposed Information Collection: Evaluation of the Supportive Services DemonstrationPDF
83 FR 36402 - Amendment of Class D Airspace, Removal of Class E Airspace, and Establishment of Class E Airspace; Olive Branch, MSPDF
83 FR 36401 - Amendment of Class E Airspace; Memphis, TNPDF
83 FR 36614 - 60-Day Notice of Proposed Information Collection: ONAP Training and Technical Assistance Evaluation FormPDF
83 FR 36403 - Standard Instrument Approach Procedures, and Takeoff Minimums and Obstacle Departure Procedures; Miscellaneous AmendmentsPDF
83 FR 36405 - Standard Instrument Approach Procedures, and Takeoff Minimums and Obstacle Departure Procedures; Miscellaneous AmendmentsPDF
83 FR 36482 - Proposed Establishment of Class E Airspace; Crystal Springs, MSPDF
83 FR 36621 - Certain Height-Adjustable Desk Platforms and Components Thereof Institution of InvestigationPDF
83 FR 36633 - Information Collection: 10 CFR Part 95, Facility Security Clearance and Safeguarding of National Security Information and Restricted DataPDF
83 FR 36479 - Energy Conservation Program: Data Collection and Comparison With Forecasted Unit Sales of Five Lamp TypesPDF
83 FR 36494 - Tracking of Workplace Injuries and IllnessesPDF
83 FR 36593 - Submission for OMB Review; Comment RequestPDF
83 FR 36399 - Airworthiness Directives; Costruzioni Aeronautiche Tecnam srl AirplanesPDF
83 FR 36476 - Onions Grown in South Texas; Proposed Amendments to Marketing Order 959 and Referendum OrderPDF
83 FR 36672 - Interstate and Intrastate Natural Gas Pipelines; Rate Changes Relating to Federal Income Tax Rate; American Forest & Paper AssociationPDF
83 FR 36417 - Substantiation and Reporting Requirements for Cash and Noncash Charitable Contribution DeductionsPDF
83 FR 36507 - Information Collection Request; Cranes and Derricks in Construction: Operator QualificationPDF
83 FR 36460 - Assessment and Collection of Regulatory Fees for Fiscal Year 2018PDF

Issue

83 146 Monday, July 30, 2018 Contents Agricultural Marketing Agricultural Marketing Service PROPOSED RULES Onions Grown in South Texas: Proposed Amendments to Marketing Order 959 and Referendum Order, 36476-36479 2018-15793 Agriculture Agriculture Department See

Agricultural Marketing Service

See

Food and Nutrition Service

See

Food Safety and Inspection Service

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 36513 2018-16193
Army Army Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 36561 2018-16235 Children Children and Families Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 36593-36594 2018-15987 Civil Rights Civil Rights Commission NOTICES Meetings: Ohio Advisory Committee, 36518 2018-16181 Rhode Island Advisory Committee, 36518-36519 2018-16179 Coast Guard Coast Guard RULES Drawbridge Operations: Gulf Intracoastal Waterway, South Pasadena, FL, 36428-36429 2018-16149 Safety Zones: Annual Events in Captain of the Port Buffalo Zone: August and September Events, 36432-36433 2018-16191 Waterview Loft Fireworks I, Detroit River, Detroit, MI, 36431-36432 2018-16208 Waterview Loft Fireworks II, Detroit River, Detroit, MI, 36429-36430 2018-16209 Commerce Commerce Department See

International Trade Administration

See

National Oceanic and Atmospheric Administration

See

National Telecommunications and Information Administration

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 36519 2018-16182
Commodity Futures Commodity Futures Trading Commission PROPOSED RULES Segregation of Assets Held as Collateral in Uncleared Swap Transactions, 36484-36494 2018-16176 Copyright Royalty Board Copyright Royalty Board PROPOSED RULES Adjustment of Cable Statutory License Royalty Rates, 36509-36512 2018-16175 Defense Department Defense Department See

Army Department

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 36562-36564 2018-16170 2018-16237 Arms Sales, 36564-36567 2018-16192 Meetings: Board of Regents, Uniformed Services University of Health Sciences, 36561-36562 2018-16236
Delaware Delaware River Basin Commission NOTICES Meeting and Public Hearing, 36567-36568 2018-16222 Education Department Education Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: 21st Century Community Learning Centers Annual Performance Report, 36568 2018-16158 Paul Douglas Teacher Scholarship Performance Report Form, 36573-36574 2018-16211 Applications for New Awards: Fund for Improvement of Postsecondary Education: Open Textbooks Pilot Program, 36577-36581 2018-16264 Fund for Improvement of Postsecondary Education: Pilot Program for Cybersecurity Education Technological Upgrades for Community Colleges, 36574-36577 2018-16259 Graduate Assistance in Areas of National Need, 36569-36573 2018-16330 Arbitration Panel Decisions under Randolph-Sheppard Act, 36568-36569 2018-16243 Employment and Training Employment and Training Administration RULES Senior Community Service Employment Program; Performance Accountability, 36407-36417 2018-16216 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Distribution of Characteristics of Insured Unemployed, 36624-36625 2018-16215 Energy Department Energy Department See

Energy Information Administration

See

Federal Energy Regulatory Commission

See

Western Area Power Administration

PROPOSED RULES Energy Conservation Program: Data Collection and Comparison with Forecasted Unit Sales of Five Lamp Types, 36479-36482 2018-16097
Energy Information Energy Information Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 36581-36582 2018-16250 Environmental Protection Environmental Protection Agency RULES Hazardous and Solid Waste Management System: Disposal of Coal Combustion Residuals from Electric Utilities; Amendments to National Minimum Criteria (Phase One, Part One), 36435-36456 2018-16262 Idaho Voluntary Transfer of Primacy of Class II Underground Injection Control Program, 36433-36435 2018-16245 Federal Aviation Federal Aviation Administration RULES Airworthiness Directives: Costruzioni Aeronautiche Tecnam srl Airplanes, 36399-36401 2018-15981 Amendment of Class D Airspace, Removal of Class E Airspace, and Establishment of Class E Airspace: Olive Branch, MS, 36402-36403 2018-16144 Amendment of Class E Airspace: Memphis, TN, 36401-36402 2018-16142 Standard Instrument Approach Procedures, and Takeoff Minimums and Obstacle Departure Procedures: Miscellaneous Amendments, 36403-36407 2018-16139 2018-16140 PROPOSED RULES Establishment of Class E Airspace: Crystal Springs, MS, 36482-36484 2018-16134 NOTICES Petitions for Exemptions; Summaries: Eagle Mountain City, 36660-36661 2018-16260 Yamaha Motor Corp., USA, 36660 2018-16258 Federal Communications Federal Communications Commission RULES Assessments and Collections of Regulatory Fees for Fiscal Year 2018, 36460-36467 2018-15651 Petitions for Declaratory Rulings: Technology Transitions; Incumbent Local Exchange Carriers are Non-Dominant in Provision of Switched Access Services; Policies and Rules Governing Retirement of Copper Loops by Incumbent Local Exchange Carriers, 36467-36469 2018-16198 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 36588 2018-16199 Radio Broadcasting Services: AM or FM Proposals to Change Community of License, 36588-36589 2018-16152 Federal Deposit Federal Deposit Insurance Corporation NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 36589-36590 2018-16186 Termination of Receiverships, 36589 2018-16185 Federal Election Federal Election Commission NOTICES Meetings; Sunshine Act, 36590-36591 2018-16325 2018-16399 Federal Energy Federal Energy Regulatory Commission RULES Interstate and Intrastate Natural Gas Pipelines; Rate Changes Relating to Federal Income Tax Rate: American Forest and Paper Assn., 36672-36717 2018-15786 NOTICES Combined Filings, 36585-36586 2018-16218 Environmental Assessments; Availability, etc.: Texas Eastern Transmission; Lambertville East Expansion Project, 36584-36585 2018-16233 Petitions for Declaratory Orders: PATH Allegheny Transmission Co., LLC, 36582-36583 2018-16231 PATH West Virginia Transmission Co., LLC, 36583-36584 2018-16234 Preliminary Permit Applications: Go With the Flow Hydro Power, LLC, 36586 2018-16232 Records Governing Off-the-Record Communications, 36583 2018-16219 Federal Highway Federal Highway Administration NOTICES Final Federal Agency Actions: Alaska; Juneau Access Improvements Project, 36661-36662 2018-16263 Federal Housing Finance Agency Federal Housing Finance Agency NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 36591-36592 2018-16230 Federal Motor Federal Motor Carrier Safety Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Medical Qualification Requirements, 36663-36666 2018-16224 Qualification of Drivers; Exemption Applications: Groendyke Transport, Inc.; Parts and Accessories Necessary for Safe Operation, 36662-36663 2018-16223 Skill Performance Evaluation; Virginia Department of Motor Vehicles, 36666-36667 2018-16225 Federal Railroad Federal Railroad Administration NOTICES Petitions for Waivers of Compliance, 36667-36668 2018-16212 Federal Reserve Federal Reserve System NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 36592-36593 2018-16173 Fish Fish and Wildlife Service RULES Endangered and Threatened Species: Endangered Species Act Compensatory Mitigation Policy, 36469-36472 2018-16171 Fish and Wildlife Service Mitigation Policy, 36472-36475 2018-16172 Food and Drug Food and Drug Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 36607-36608 2018-16156 Agency Information Collection Activities; Proposals, Submissions, and Approvals: Survey on Occurrence of Foodborne Illness Risk Factors in Selected Retail and Foodservice Facility Types, 36594-36598 2018-16189 Center for Devices and Radiological Health: Experiential Learning Program, 36608-36609 2018-16177 Denial of a Hearing and Order Withdrawing Approval of Abbreviated New Drug Applications: Prescription Polyethylene Glycol 3350, 36604 2018-16148 Medical Device User Fee Rates for Fiscal Year 2019, 36598-36604 2018-16178 Request for Nominations: Individuals and Consumer Organizations for Advisory Committees, 36605-36607 2018-16161 Food and Nutrition Food and Nutrition Service NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Evaluation of Technology Modernization for SNAP Benefit Redemption through Online Transactions, 36515-36516 2018-16220 Requests for Information: State Administrative Expense Allocation Formula for Child Nutrition Programs, 36516-36518 2018-16196 Food Safety Food Safety and Inspection Service NOTICES Guideline for Minimizing Risk of Campylobacter and Salmonella Illnesses Associated with Chicken Liver, 36513-36515 2018-16197 Health and Human Health and Human Services Department See

Children and Families Administration

See

Food and Drug Administration

RULES Adoption of Methodology for HHS-operated Permanent Risk Adjustment Program under the Patient Protection and Affordable Care Act for 2017 Benefit Year, 36456-36460 2018-16190 NOTICES Meetings: Secretary's Advisory Committee on National Health Promotion and Disease Prevention Objectives for 2030, 36609-36610 2018-16238
Homeland Homeland Security Department See

Coast Guard

Housing Housing and Urban Development Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Evaluation of Supportive Services Demonstration, 36611-36613 2018-16145 ONAP Training and Technical Assistance Evaluation Form, 36614 2018-16141 Voucher Management System (VMS), Section 8 Budget and Financial Forms, 36610-36611 2018-16147 Mortgage and Loan Insurance Programs under National Housing Act: Debenture Interest Rates, 36614-36616 2018-16255 Institute of Museum and Library Services Institute of Museum and Library Services NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: 2019-2022 Native American Basic Library Grant Program Notice of Funding Opportunity, 36627-36628 2018-16183 2019-2022 Native Hawaiian Library Grant Program Notice of Funding Opportunity, 36628-36629 2018-16184 Interior Interior Department See

Fish and Wildlife Service

See

Land Management Bureau

Internal Revenue Internal Revenue Service RULES Substantiation and Reporting Requirements for Cash and Noncash Charitable Contribution Deductions, 36417-36428 2018-15734 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Regulation Project, 36670 2018-16201 International Trade Adm International Trade Administration NOTICES Determinations of Sales at Less than Fair Value: Forged Steel Fittings from Taiwan, 36519-36521 2018-16194 International Trade Com International Trade Commission NOTICES Investigations; Determinations, Modifications, and Rulings, etc.: Certain Height-Adjustable Desk Platforms and Components Thereof, 36621-36622 2018-16126 Stainless Steel Flanges from China, 36622-36623 2018-16227 Judicial Conference Judicial Conference of the United States NOTICES Meetings: Judicial Conference Advisory Committee on Rules of Evidence, 36623 2018-16162 Justice Department Justice Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: 2019 School Crime Supplement to National Crime Victimization Survey, 36623 2018-16195 Equitable Sharing Agreement and Certification, 36623-36624 2018-16203 Labor Department Labor Department See

Employment and Training Administration

See

Occupational Safety and Health Administration

Land Land Management Bureau NOTICES Environmental Assessments; Availability, etc.: Intent to Amend Las Vegas Resource Management Plan and Prepare Environmental Assessment; Segregation and Realty Action; Classification and Proposed Modified Competitive Sales of Public Land in Pahrump, Nye County, NV, 36618-36621 2018-16226 Realty Actions: Classification for Lease and/or Conveyance for Recreation and Public Purposes of Public Lands (N-95402) for School in Southwest Portion of Las Vegas Valley, Clark County, NV, 36616-36617 2018-16228 Recreation and Public Purposes Act Classification, MT, 36617-36618 2018-16229 Library Library of Congress See

Copyright Royalty Board

National Credit National Credit Union Administration NOTICES Meetings; Sunshine Act, 36627 2018-16340 National Foundation National Foundation on the Arts and the Humanities See

Institute of Museum and Library Services

National Highway National Highway Traffic Safety Administration NOTICES Petitions for Decisions of Inconsequential Noncompliance: Continental Tire Americas, LLC, 36668-36670 2018-16153 National Oceanic National Oceanic and Atmospheric Administration NOTICES Meetings: Mid-Atlantic Fishery Management Council, 36538 2018-16221 New England Fishery Management Council, 36539 2018-16217 Takes of Marine Mammals Incidental to Specified Activities: Parallel Thimble Shoal Tunnel Project in Virginia Beach, VA, 36522-36538 2018-16204 Site Characterization Surveys off Coast of Massachusetts, 36539-36560 2018-16200 National Science National Science Foundation NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 36629 2018-16187 National Telecommunications National Telecommunications and Information Administration NOTICES Virginia Broadband Summit, 36560-36561 2018-16157 Nuclear Regulatory Nuclear Regulatory Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Facility Security Clearance and Safeguarding of National Security Information and Restricted Data, 36633 2018-16125 License Applications; Renewals: Water Remediation Technology, LLC, 36630-36633 2018-16188 Meetings; Sunshine Act, 36633-36634 2018-16278 Program-Specific Guidance: Self-Shielded Irradiator Licenses and Exempt Distribution Licenses, 36629-36630 2018-16239 Occupational Safety Health Adm Occupational Safety and Health Administration PROPOSED RULES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Cranes and Derricks in Construction: Operator Qualification, 36507-36509 2018-15687 Tracking of Workplace Injuries and Illnesses, 36494-36507 2018-16059 NOTICES Expansions of Recognitions; Applications: TUV Rheinland of North America, Inc., 36625-36627 2018-16214 Peace Peace Corps NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 36634-36635 2018-16150 2018-16151 Presidential Documents Presidential Documents PROCLAMATIONS Special Observances: Anniversary of the Americans with Disabilities Act (Proc. 9769), 36719-36722 2018-16429 Securities Securities and Exchange Commission NOTICES Applications: Advisors Asset Management, Inc. and ETF Series Solutions, 36646-36647 2018-16155 OFI Carlyle Private Credit Fund and OC Private Capital, LLC, 36652-36655 2018-16154 Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc., 36647-36652 2018-16166 ICE Clear Credit, LLC, 36655-36658 2018-16164 LCH SA, 36635-36638 2018-16168 Nasdaq BX, Inc., 36638-36640 2018-16165 NYSE Arca, Inc., 36635, 36641-36646 2018-16163 2018-16167 2018-16169 Small Business Small Business Administration NOTICES Conflicts of Interest; Exemptions: Argosy Investment Partners IV, LP, 36658 2018-16206 Argosy Investment Partners V, LP, 36659 2018-16205 Surety Bond Guarantee Program Fees, 36658-36659 2018-16202 State Department State Department NOTICES Environmental Assessments; Availability, etc.: Proposed Keystone XL Pipeline Mainline Alternative Route in Nebraska, 36659-36660 2018-16241 Transportation Department Transportation Department See

Federal Aviation Administration

See

Federal Highway Administration

See

Federal Motor Carrier Safety Administration

See

Federal Railroad Administration

See

National Highway Traffic Safety Administration

Treasury Treasury Department See

Internal Revenue Service

Western Western Area Power Administration NOTICES Boulder Canyon Project, 36586-36588 2018-16248 Separate Parts In This Issue Part II Energy Department, Federal Energy Regulatory Commission, 36672-36717 2018-15786 Part III Presidential Documents, 36719-36722 2018-16429 Reader Aids

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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83 146 Monday, July 30, 2018 Rules and Regulations DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0204; Product Identifier 2018-CE-003-AD; Amendment 39-19339; AD 2018-15-07] RIN 2120-AA64 Airworthiness Directives; Costruzioni Aeronautiche Tecnam srl Airplanes AGENCY:

Federal Aviation Administration (FAA), Department of Transportation (DOT).

ACTION:

Final rule.

SUMMARY:

We are adopting a new airworthiness directive (AD) for certain Costruzioni Aeronautiche Tecnam srl Model P2006T airplanes. This AD results from mandatory continuing airworthiness information (MCAI) issued by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as an incorrect part number for the rudder trim actuator is referenced in the Airworthiness Limitations section of the FAA-approved maintenance program (e.g., maintenance manual) and the life limit for that part may not be properly applied in service. We are issuing this AD to require actions to address the unsafe condition on these products.

DATES:

This AD is effective September 4, 2018.

ADDRESSES:

You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0204; or in person at U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590.

For service information identified in this AD, contact Costruzioni Aeronautiche Tecnam srl, Via Tasso, 478, 80127 Napoli, Italy, phone: +39 0823 620134, fax: +39 0823 622899, email: [email protected], internet: https://www.tecnam.com/us/support/.

FOR FURTHER INFORMATION CONTACT:

Jim Rutherford, Aerospace Engineer FAA, Small Airplane Standards Branch, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone: (816) 329-4165; fax: (816) 329-4090; email: [email protected]

SUPPLEMENTARY INFORMATION:

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to Costruzioni Aeronautiche Tecnam srl Model P2006T airplane. The NPRM was published in the Federal Register on March 19, 2018 (83 FR 11903). The NPRM proposed to correct an unsafe condition for the specified products and was based on mandatory continuing airworthiness information (MCAI) originated by the European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community. The MCAI states:

It was identified that the Part Number (P/N) of the rudder trim actuator mentioned in the P2006T Aircraft Maintenance Manual (AMM) Airworthiness Limitations Section (ALS) document was erroneously mentioned. As a result, it cannot be excluded that the life limit applicable to this actuator is not being applied in service.

This condition, if not corrected, could lead to failure of the rudder control system, possibly resulting in reduced control of the aeroplane.

To address this potential unsafe condition, TECNAM published Service Bulletin (SB)-285-CS Ed. 1 Rev. 0 (later revised) to inform operators about this typographical error. It is expected that, during the next revision of the P2006T AMM ALS document, it will list the correct the P/N for that rudder trim actuator.

For the reason described above, this [EASA] AD requires implementation of a life limit for rudder trim actuator.

The MCAI can be found in the AD docket on the internet at https://www.regulations.gov/document?D=FAA-2018-0204-0002. Comments

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM or on the determination of the cost to the public.

Changes Made to This AD

We changed the incorporation by reference of the service information for adding a life limit to the Airworthiness Limitations section of the maintenance program to only a reference. The service information does not provide any specific procedures or instructions for establishing the life limit.

We also inadvertently omitted information for “Contacting the Manufacturer,” which is a standard paragraph for FAA ADs related to MCAIs. We have added that paragraph in the final rule as paragraph (g)(2).

Conclusion

We reviewed the relevant data and determined that air safety and the public interest require adopting the AD as proposed except for the changes stated above and other minor editorial changes. We have determined that these minor changes:

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

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

Related Service Information

Costruzioni Aeronautiche Tecnam srl has issued Service Bulletin No. SB 285-CS-Ed 1, Revision 2, dated February 2, 2018. The service information describes procedures for correcting the part number of the rudder trim actuator in the Airworthiness Limitations section of the FAA-approved maintenance program (e.g., maintenance manual).

Costs of Compliance

We estimate that this AD will affect 20 products of U.S. registry. We also estimate that it will take about 1 work-hour per product to comply with this requirement to incorporate a correction to the Airworthiness Limitations section of the FAA-approved maintenance program (e.g., maintenance manual). The average labor rate is $85 per work-hour.

Based on these figures, we estimate the cost of this AD on U.S. operators to be $1,700, or $85 per product.

Authority for This Rulemaking

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

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

This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to small airplanes, gliders, balloons, airships, domestic business jet transport airplanes, and associated appliances to the Director of the Policy and Innovation Division.

Regulatory Findings

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

For the reasons discussed above, I certify this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

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

(3) Will not affect intrastate aviation in Alaska, and

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

Examining the AD Docket

You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0204; or in person at Docket Operations between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations (telephone (800) 647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

List of Subjects in 14 CFR Part 39

Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

Adoption of the Amendment

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

PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

49 U.S.C. 106(g), 40113, 44701.

§ 39.13 [Amended]
2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): 2018-15-07 Costruzioni Aeronautiche Tecnam srl: Amendment 39-19339; Docket No. FAA-2018-0204; Product Identifier 2018-CE-003-AD. (a) Effective Date

This AD becomes effective September 4, 2018.

(b) Affected ADs

None.

(c) Applicability

This AD applies to Costruzioni Aeronautiche Tecnam srl Model P2006T airplanes, all serial numbers that do not incorporate design change TECNAM modification (Mod) 2006/322 at production, certificated in any category.

(d) Subject

Air Transport Association of America (ATA) Code 27: Flight Controls.

(e) Reason

This AD was prompted by mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country to identify and address an unsafe condition on an aviation product. The MCAI describes the unsafe condition as an incorrect part number for the rudder trim actuator is referenced in the Airworthiness Limitations section of the FAA-approved maintenance program (e.g., maintenance manual), and the life limit for that part may not be properly applied in service. We are issuing this AD to prevent failure of the rudder trim actuator, which could cause the rudder control system to fail. This failure could result in reduced control of the airplane.

(f) Actions and Compliance

Unless already done, do the following actions in paragraphs (f)(1) through (3) of this AD. The hours time-in-service (TIS) specified in paragraph (f)(1) of this AD are those accumulated on the rudder trim actuator, part number (P/N) B6-7T, since first installed on an airplane. If the total hours TIS are unknown, the hours TIS on the airplane must be used.

(1) Initially replace the rudder trim actuator, P/N B6-7T, at the compliance time in paragraph (f)(1)(i) or (ii) of this AD that occurs later:

(i) Before accumulating 1,000 hours TIS; or

(ii) Within the next 25 hours TIS after September 4, 2018 (the effective date of this AD) or within the next 30 days after September 4, 2018 (the effective date of this AD), whichever occurs first.

(2) After the initial replacement required in paragraph (f)(1) of this AD, repetitively thereafter replace the rudder trim actuator, P/N B6-7T, at intervals not to exceed 1,000 hours TIS.

(3) Within the next 12 months after September 4, 2018 (the effective date of this AD), revise the Airworthiness Limitations section of the FAA-approved maintenance program (e.g., maintenance manual) by establishing a 1,000-hour life limit for the rudder trim actuator P/N B6-7T. You may refer to Costruzioni Aeronautiche Tecnam srl (TECNAM) Service Bulletin No. SB 285-CS-Ed 1, Revision 1 (dated November 7, 2017) or Revision 2 (dated February 2, 2018) for more information.

(g) Other FAA AD Provisions

The following provisions also apply to this AD:

(1) Alternative Methods of Compliance (AMOCs): The Manager, Small Airplane Standards Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. Send information to ATTN: Jim Rutherford, Aerospace Engineer, FAA, Small Airplane Standards Branch, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone: (816) 329-4165; fax: (816) 329-4090; email: [email protected] Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector (PI) in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO.

(2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, Small Airplane Standards Branch, FAA; or the European Aviation Safety Agency (EASA).

(h) Related Information

Refer to MCAI European Aviation Safety Agency (EASA) AD No. 2018-0029, dated January 31, 2018, and Costruzioni Aeronautiche Tecnam srl Service Bulletin No. SB 285-CS-Ed 1, Revision 1, dated November 7, 2017, and Revision 2, dated February 2, 2018, for related information. You may examine the MCAI on the internet https://www.regulations.gov/document?D=FAA-2018-0204-0002.

Issued in Kansas City, Missouri, on July 19, 2018. Pat Mullen, Acting Deputy Director, Policy & Innovation Division (AIR-601), Aircraft Certification Service.
[FR Doc. 2018-15981 Filed 7-27-18; 8:45 am] BILLING CODE 4910-13-P
DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2017-0754; Airspace Docket No. 17-ASO-16] Amendment of Class E Airspace; Memphis, TN AGENCY:

Federal Aviation Administration (FAA), DOT.

ACTION:

Final rule.

SUMMARY:

This action amends Class E airspace extending upward from 700 feet above the surface at Memphis International Airport, Memphis, TN. Airspace reconfiguration is necessary due to the decommissioning of the Elvis non-directional radio beacon (NDB), and for the safety and management of instrument flight rules (IFR) operations at this airport. Olive Branch Airport, Olive Branch, MS, is removed from the airspace description to be reestablished in a separate rulemaking.

DATES:

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.

ADDRESSES:

FAA Order 7400.11B, Airspace Designations and Reporting Points, and subsequent amendments can be viewed on line at http://www.faa.gov/air_traffic/publications/. For further information, you can contact the Airspace Policy Group, Federal Aviation Administration, 800 Independence Avenue SW, Washington, DC 20591; telephone: (202) 267-8783. The Order is also available for inspection at the National Archives and Records Administration (NARA). For information on the availability of FAA Order 7400.11B at NARA, call (202) 741-6030, or go to https://www.archives.gov/federal-register/cfr/ibr-locations.html.

FAA Order 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.

FOR FURTHER INFORMATION CONTACT:

John Fornito, Operations Support Group, Eastern Service Center, Federal Aviation Administration, 1701 Columbia Avenue, College Park, GA 30337; telephone (404) 305-6364.

SUPPLEMENTARY INFORMATION: Authority for This Rulemaking

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 E airspace extending upward from 700 feet above the surface at Memphis International Airport, Memphis, TN to support IFR operations at the airport.

History

The FAA published a notice of proposed rulemaking in the Federal Register (83 FR 19471, May 3, 2018) Docket No. FAA-2017-0754 to amend Class E airspace extending upward from 700 feet above the surface at Memphis International Airport, Memphis, TN, due to the decommissioning of the Elvis NDB and cancellation of the NDB approach, and removal of Olive Branch Airport, Olive Branch, MS, from the legal description to redesignate it in a separate rulemaking.

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 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.

Availability and Summary of Documents for Incorporation by Reference

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 ADDRESSES section of this document. FAA Order 7400.11B lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The Rule

This amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 amends Class E airspace extending upward from 700 feet above the surface within an 8-mile radius of Memphis International Airport, Memphis, TN. The segment extending from the 8-mile radius of the airport to 16 miles west of the Elvis NDB is removed due to the decommissioning of the Elvis NDB and cancellation of the NDB approach, and for continued safety and management of IFR operations at the airport.

Also, this action removes the language that excludes the Millington, TN, airspace area to comply with FAA Order 7400.2L, Procedures for Handling Airspace Matters.

Additionally, the airspace listed in the legal description for Olive Branch Airport, Olive Branch, MS, is removed and redesignated in a separate rulemaking.

Regulatory Notices and Analyses

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.

Environmental Review

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.

Lists of Subjects in 14 CFR Part 71

Airspace, Incorporation by reference, Navigation (air).

Adoption of the Amendment

In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:

PART 71—DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR TRAFFIC SERVICE ROUTES; AND REPORTING POINTS 1. The authority citation for part 71 continues to read as follows: Authority:

49 U.S.C. 106(f), 106(g); 40103, 40113, 40120, E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.

§ 71.1 [Amended]
2. The incorporation by reference in 14 CFR 71.1 of FAA Order 7400.11B, Airspace Designations and Reporting Points, dated August 3, 2017, effective September 15, 2017, is amended as follows: Paragraph 6005 Class E Airspace Areas Extending Upward From 700 Feet or More Above the Surface of the Earth. ASO TN E5 Memphis, TN [Amended] Memphis International Airport, TN (Lat. 35°02′33″ N, long. 89°58′36″ W) General DeWitt Spain Airport (Lat. 35°12′03″ N, long. 90°03′14″ W)

That airspace extending upward from 700 feet above the surface within an 8-mile radius of Memphis International Airport, and within a 6.4-mile radius of General DeWitt Spain Airport.

Issued in College Park, Georgia, on July 19, 2018. Ryan W. Almasy, Manager, Operations Support Group, Eastern Service Center, Air Traffic Organization.
[FR Doc. 2018-16142 Filed 7-27-18; 8:45 am] BILLING CODE 4910-13-P
DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2017-0866; Airspace Docket No. 17-ASO-20] RIN 2120-AA66 Amendment of Class D Airspace, Removal of Class E Airspace, and Establishment of Class E Airspace; Olive Branch, MS AGENCY:

Federal Aviation Administration (FAA), DOT.

ACTION:

Final rule.

SUMMARY:

This action amends Class D airspace, removes Class E airspace designated as an extension, and establishes Class E airspace extending upward from 700 feet or more above the surface at Olive Branch Airport, Olive Branch, MS. The Olive Branch non-directional radio beacon (NDB) has been decommissioned, requiring the redesign of the airspace. This action, also replaces the outdated term Airport/Facility Directory with the term Chart Supplement in the Class D legal description.

DATES:

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.

ADDRESSES:

FAA Order 7400.11B, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at http://www.faa.gov/air_traffic/publications/. For further information, you can contact the Airspace Policy Group, Federal Aviation Administration, 800 Independence Avenue SW, Washington, DC 20591; telephone: (202) 267-8783. The Order is also available for inspection at the National Archives and Records Administration (NARA). For information on the availability of FAA Order 7400.11B at NARA, call (202) 741-6030, or go to https://www.archives.gov/federal-register/cfr/ibr-locations.html.

FAA Order 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.

FOR FURTHER INFORMATION CONTACT:

John Fornito, Operations Support Group, Eastern Service Center, Federal Aviation Administration, 1701 Columbia Avenue, College Park, GA 30337; telephone 404 305-6364.

SUPPLEMENTARY INFORMATION: Authority for This Rulemaking

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 airspace, removes Class E airspace, and establishes Class E airspace at Olive Branch Airport, Olive Branch, MS, to support IFR operations at the airport.

History

The FAA published a notice of proposed rulemaking in the Federal Register (83 FR 19472, May 3, 2018) for Docket No. FAA-2017-0866 to amend Class D airspace, remove Class E airspace, and establish Class E airspace at Olive Branch Airport, Olive Branch, MS.

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 paragraphs 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.

Availability and Summary of Documents for Incorporation by Reference

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 ADDRESSES section of this document. FAA Order 7400.11B lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The Rule

This action amends Title 14 Code of Federal Regulations (14 CFR) part 71 by amending Class D airspace to a 4.1-mile radius, (from a 4-mile radius) at Olive Branch Airport, Olive Branch, MS, and removes Class E airspace designated as an extension to Class D, due to the decommissioning of the Olive Branch NDB and cancellation of the NDB approach. Also, this action establishes Class E airspace extending upward from 700 feet or more above the surface at Olive Branch Airport, Olive Branch, MS, (this airspace was removed the from Memphis, TN, airspace in a separate rulemaking).

Additionally, this action makes an editorial change to the Class D airspace legal description replacing Airport/Facility Directory with the term Chart Supplement.

Class D and Class 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 71.1. The Class D and E airspace designations listed in this document will be published subsequently in the Order.

Regulatory Notices and Analyses

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. Therefore, this regulation: (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.

Environmental Review

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.

Lists of Subjects in 14 CFR Part 71

Airspace, Incorporation by reference, Navigation (air).

Adoption of the Amendment

In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:

PART 71—DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR TRAFFIC SERVICE ROUTES; AND REPORTING POINTS 1. The authority citation for part 71 continues to read as follows: Authority:

49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.

§ 71.1 [Amended]
2. The incorporation by reference in 14 CFR 71.1 of Federal Aviation Administration Order 7400.11B, Airspace Designations and Reporting Points, dated August 3, 2017, effective September 15, 2017, is amended as follows: Paragraph 5000 Class D Airspace. ASO MS D Olive Branch, MS [Amended] Olive Branch Airport, MS (Lat. 34°58′44″ N, long. 89°47′13″ W)

That airspace extending upward from the surface to and including 2,900 feet within a 4.1-mile radius of Olive Branch Airport. This Class D airspace area is effective during the specific days and times established in advance by a Notice to Airmen. The effective days and times will thereafter be continuously published in the Chart Supplement.

Paragraph 6004 Class E Airspace Designated as an Extension to a Class D Surface Area. ASO MS E4 Olive Branch, MS [Removed] Paragraph 6005 Class E Airspace Areas Extending Upward From 700 Feet or More Above the Surface of the Earth. ASO MS E5 Olive Branch, MS [New] Olive Branch Airport, MS (Lat. 34°58′44″ N, long. 89°47′13″ W)

That airspace extending upward from 700 feet above the surface within a 6.6-mile radius of Olive Branch Airport.

Issued in College Park, Georgia, on July 19, 2018. Ryan W. Almasy, Manager, Operations Support Group, Eastern Service Center, Air Traffic Organization.
[FR Doc. 2018-16144 Filed 7-27-18; 8:45 am] BILLING CODE 4910-13-P
DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 97 [Docket No. 31204; Amdt. No. 3809] Standard Instrument Approach Procedures, and Takeoff Minimums and Obstacle Departure Procedures; Miscellaneous Amendments AGENCY:

Federal Aviation Administration (FAA), DOT.

ACTION:

Final rule.

SUMMARY:

This rule establishes, amends, suspends, or removes Standard Instrument Approach Procedures (SIAPs) and associated Takeoff Minimums and Obstacle Departure Procedures (ODPs) for operations at certain airports. These regulatory actions are needed because of the adoption of new or revised criteria, or because of changes occurring in the National Airspace System, such as the commissioning of new navigational facilities, adding new obstacles, or changing air traffic requirements. These changes are designed to provide safe and efficient use of the navigable airspace and to promote safe flight operations under instrument flight rules at the affected airports.

DATES:

This rule is effective July 30, 2018. The compliance date for each SIAP, associated Takeoff Minimums, and ODP is specified in the amendatory provisions.

The incorporation by reference of certain publications listed in the regulations is approved by the Director of the Federal Register as of July 30, 2018.

ADDRESSES:

Availability of matters incorporated by reference in the amendment is as follows:

For Examination

1. U.S. Department of Transportation, Docket Ops-M30, 1200 New Jersey Avenue SE, West Bldg., Ground Floor, Washington, DC 20590-0001.

2. The FAA Air Traffic Organization Service Area in which the affected airport is located;

3. The office of Aeronautical Navigation Products, 6500 South MacArthur Blvd., Oklahoma City, OK 73169 or,

4. The National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.

Availability

All SIAPs and Takeoff Minimums and ODPs are available online free of charge. Visit the National Flight Data Center at nfdc.faa.gov to register. Additionally, individual SIAP and Takeoff Minimums and ODP copies may be obtained from the FAA Air Traffic Organization Service Area in which the affected airport is located.

FOR FURTHER INFORMATION CONTACT:

Thomas J. Nichols, Flight Procedure Standards Branch (AFS-420), Flight Technologies and Programs Divisions, Flight Standards Service, Federal Aviation Administration, Mike Monroney Aeronautical Center, 6500 South MacArthur Blvd., Oklahoma City, OK 73169 (Mail Address: P.O. Box 25082, Oklahoma City, OK 73125) Telephone: (405) 954-4164.

SUPPLEMENTARY INFORMATION:

This rule amends Title 14 of the Code of Federal Regulations, Part 97 (14 CFR part 97), by establishing, amending, suspending, or removes SIAPS, Takeoff Minimums and/or ODPS. The complete regulatory description of each SIAP and its associated Takeoff Minimums or ODP for an identified airport is listed on FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR part 97.20. The applicable FAA forms are FAA Forms 8260-3, 8260-4, 8260-5, 8260-15A, and 8260-15B when required by an entry on 8260-15A.

The large number of SIAPs, Takeoff Minimums and ODPs, their complex nature, and the need for a special format make publication in the Federal Register expensive and impractical. Further, airmen do not use the regulatory text of the SIAPs, Takeoff Minimums or ODPs, but instead refer to their graphic depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP, Takeoff Minimums and ODP listed on FAA form documents is unnecessary. This amendment provides the affected CFR sections and specifies the types of SIAPs, Takeoff Minimums and ODPs with their applicable effective dates. This amendment also identifies the airport and its location, the procedure, and the amendment number.

Availability and Summary of Material Incorporated by Reference The material incorporated by reference is publicly available as listed in the ADDRESSES section.

The material incorporated by reference describes SIAPS, Takeoff Minimums and/or ODPS as identified in the amendatory language for part 97 of this final rule.

The Rule

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP, Takeoff Minimums and ODP as Amended in the transmittal. Some SIAP and Takeoff Minimums and textual ODP amendments may have been issued previously by the FAA in a Flight Data Center (FDC) Notice to Airmen (NOTAM) as an emergency action of immediate flight safety relating directly to published aeronautical charts.

The circumstances that created the need for some SIAP and Takeoff Minimums and ODP amendments may require making them effective in less than 30 days. For the remaining SIAPs and Takeoff Minimums and ODPs, an effective date at least 30 days after publication is provided.

Further, the SIAPs and Takeoff Minimums and ODPs contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these SIAPs and Takeoff Minimums and ODPs, the TERPS criteria were applied to the conditions existing or anticipated at the affected airports. Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedure under 5 U.S.C. 553(b) are impracticable and contrary to the public interest and, where applicable, under 5 U.S.C 553(d), good cause exists for making some SIAPs effective in less than 30 days.

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. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 97

Air Traffic Control, Airports, Incorporation by reference, Navigation (air).

Issued in Washington, DC, on July 13, 2018. John S. Duncan, Executive Director, Flight Standards Service. Adoption of the Amendment

Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal Regulations, Part 97 (14 CFR part 97) is amended by establishing, amending, suspending, or removing Standard Instrument Approach Procedures and/or Takeoff Minimums and Obstacle Departure Procedures effective at 0901 UTC on the dates specified, as follows:

PART 97—STANDARD INSTRUMENT APPROACH PROCEDURES 1. The authority citation for part 97 continues to read as follows: Authority:

49 U.S.C. 106(f), 106(g), 40103, 40106, 40113, 40114, 40120, 44502, 44514, 44701, 44719, 44721-44722.

2. Part 97 is amended to read as follows: Effective 16 August 2018 Moline, IL, Quad City Intl, Takeoff Minimums and Obstacle DP, Amdt 2 New Iberia, LA, Acadiana Rgnl, RNAV (GPS) RWY 17, Amdt 1A St Ignace, MI, Mackinac County, RNAV (GPS) RWY 7, Orig-B Midland, TX, Midland Airpark, Takeoff Minimums and Obstacle DP, Amdt 4 Effective 13 September 2018 Iliamna, AK, Iliamna, NDB RWY 36, Amdt 2A Iliamna, AK, Iliamna, RNAV (GPS) RWY 8, Amdt 4 Iliamna, AK, Iliamna, RNAV (GPS) RWY 18, Amdt 2 Iliamna, AK, Iliamna, RNAV (GPS) RWY 26, Amdt 2 Iliamna, AK, Iliamna, RNAV (GPS) RWY 36, Amdt 3 Iliamna, AK, Iliamna, Takeoff Minimums and Obstacle DP, Amdt 2A Nondalton, AK, Nondalton, ILIAMNA TWO, Graphic DP Nondalton, AK, Nondalton, RNAV (GPS) RWY 2, Amdt 1 Sand Point, AK, Sand Point, BORLAND TWO, Graphic DP Sand Point, AK, Sand Point, NDB RWY 14, Amdt 2 Sand Point, AK, Sand Point, NDB RWY 32, Amdt 1 Sand Point, AK, Sand Point, RNAV (GPS) RWY 14, Amdt 1 Sand Point, AK, Sand Point, RNAV (GPS) RWY 32, Orig Sand Point, AK, Sand Point, Takeoff Minimums and Obstacle DP, Amdt 4A St George, AK, St George, ILS OR LOC RWY 11, Amdt 1 St George, AK, St George, LOC/DME-C, Orig-A, CANCELED St George, AK, St George, RNAV (GPS) RWY 11, Orig St George, AK, St George, RNAV (GPS)-B, Orig-A, CANCELED St George, AK, St George, RNAV (GPS)-D, Amdt 1 Long Beach, CA, Long Beach/Daugherty Field/, RNAV (GPS) Z RWY 30, Amdt 3A Sacramento, CA, Sacramento Mather, ILS OR LOC RWY 22L, Amdt 6 Sacramento, CA, Sacramento Mather, RNAV (GPS) RWY 4R, Amdt 1C Sacramento, CA, Sacramento Mather, RNAV (GPS) RWY 22L, Amdt 3 Denver, CO, Front Range, ILS OR LOC RWY 17, Amdt 1B Denver, CO, Front Range, ILS OR LOC RWY 26, Amdt 6 Denver, CO, Front Range, ILS OR LOC RWY 35, Amdt 2 Denver, CO, Front Range, NDB RWY 26, Amdt 5A, CANCELED Denver, CO, Front Range, RNAV (GPS) RWY 17, Amdt 1B Denver, CO, Front Range, RNAV (GPS) RWY 26, Amdt 2 Denver, CO, Front Range, RNAV (GPS) RWY 35, Amdt 2 Dunnellon, FL, Marion County, Takeoff Minimums and Obstacle DP, Amdt 1A Charles City, IA, Northeast Iowa Rgnl, LOC RWY 12, Amdt 1A Chicago/Aurora, IL, Aurora Muni, ILS OR LOC RWY 9, Amdt 4 Chicago/Aurora, IL, Aurora Muni, LOC RWY 33, Amdt 1 Chicago/Aurora, IL, Aurora Muni, RNAV (GPS) RWY 9, Amdt 2 Chicago/Aurora, IL, Aurora Muni, RNAV (GPS) RWY 15, Amdt 1 Chicago/Aurora, IL, Aurora Muni, RNAV (GPS) RWY 33, Amdt 1A Chicago, IL, Chicago Midway Intl, ILS OR LOC RWY 13C, Amdt 1 Chicago, IL, Chicago Midway Intl, RNAV (GPS) RWY4L, Amdt 1 Chicago, IL, Chicago Midway Intl, RNAV (GPS) RWY 22R, Amdt 1 Chicago, IL, Chicago Midway Intl, RNAV (GPS) RWY 31R, Amdt 1 Chicago, IL, Chicago Midway Intl, RNAV (GPS) Z RWY 13C, Amdt 1 Lewisport, KY, Hancock Co-Ron Lewis Field, Takeoff Minimums and Obstacle DP, Orig-A Picayune, MS, Picayune Muni, RNAV (GPS) Y RWY 18, Orig-A Mansfield, OH, Mansfield Lahm Rgnl, NDB RWY 32, Amdt 11E Mansfield, OH, Mansfield Lahm Rgnl, RNAV (GPS) RWY 5, Amdt 1A Mansfield, OH, Mansfield Lahm Rgnl, RNAV (GPS) RWY 23, Amdt 1A Fairview, OK, Fairview Muni, RNAV (GPS) RWY 17, Amdt 1 Gallatin, TN, Sumner County Rgnl, VOR-A, Amdt 3 Millington, TN, Millington-Memphis, ILS OR LOC RWY 22, Amdt 5 Millington, TN, Millington-Memphis, RNAV (GPS) RWY 4, Amdt 1B Millington, TN, Millington-Memphis, RNAV (GPS) RWY 22, Amdt 2 Millington, TN, Millington-Memphis, Takeoff Minimums and Obstacle DP, Orig-B Millington, TN, Millington-Memphis, VOR OR TACAN RWY 22, Amdt 3 Rogersville, TN, Hawkins County, NDB RWY 7, Amdt 3 Rogersville, TN, Hawkins County, Takeoff Minimums and Obstacle DP, Amdt 3 Killeen, TX, Skylark Field, LOC RWY 1, Orig-A Yakima, WA, Yakima Air Terminal/McAllister Field, RNAV (GPS) W RWY 27, Amdt 1B, CANCELED Yakima, WA, Yakima Air Terminal/McAllister Field, RNAV (GPS) X RWY 27, Amdt 1E Milwaukee, WI, General Mitchell Intl, ILS OR LOC RWY 1L, ILS RWY 1L (CAT II), ILS RWY 1L (CAT III), Amdt 10 Milwaukee, WI, General Mitchell Intl, ILS OR LOC 7R, Amdt 16C Milwaukee, WI, General Mitchell Intl, ILS OR LOC RWY 19R, Amdt 13 Milwaukee, WI, General Mitchell Intl, LOC RWY 25L, Amdt 6 Milwaukee, WI, General Mitchell Intl, RNAV (GPS) RWY 1L, Amdt 2 Milwaukee, WI, General Mitchell Intl, RNAV (GPS) RWY 1R, Amdt 1 Milwaukee, WI, General Mitchell Intl, RNAV (GPS) RWY 7L, Amdt 1 Milwaukee, WI, General Mitchell Intl, RNAV (GPS) RWY 13, Amdt 1 Milwaukee, WI, General Mitchell Intl, RNAV (GPS) RWY 19L, Amdt 1 Milwaukee, WI, General Mitchell Intl, RNAV (GPS) RWY 25R, Amdt 1 Milwaukee, WI, General Mitchell Intl, RNAV (GPS) RWY 31, Amdt 1 Milwaukee, WI, General Mitchell Intl, RNAV (RNP) Y RWY 7R, Orig-B Milwaukee, WI, General Mitchell Intl, RNAV (RNP) Y RWY 25L, Orig-B Morgantown, WV, Morgantown Muni-Walter L Bill Hart Fld, VOR-A, Amdt 13, CANCELED
[FR Doc. 2018-16140 Filed 7-27-18; 8:45 am] BILLING CODE 4910-13-P
DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 97 [Docket No. 31205; Amdt. No. 3810] Standard Instrument Approach Procedures, and Takeoff Minimums and Obstacle Departure Procedures; Miscellaneous Amendments AGENCY:

Federal Aviation Administration (FAA), DOT.

ACTION:

Final rule.

SUMMARY:

This rule amends, suspends, or removes Standard Instrument Approach Procedures (SIAPs) and associated Takeoff Minimums and Obstacle Departure Procedures for operations at certain airports. These regulatory actions are needed because of the adoption of new or revised criteria, or because of changes occurring in the National Airspace System, such as the commissioning of new navigational facilities, adding new obstacles, or changing air traffic requirements. These changes are designed to provide for the safe and efficient use of the navigable airspace and to promote safe flight operations under instrument flight rules at the affected airports.

DATES:

This rule is effective July 30, 2018. The compliance date for each SIAP, associated Takeoff Minimums, and ODP is specified in the amendatory provisions.

The incorporation by reference of certain publications listed in the regulations is approved by the Director of the Federal Register as of July 30, 2018.

ADDRESSES:

Availability of matter incorporated by reference in the amendment is as follows:

For Examination

1. U.S. Department of Transportation, Docket Ops-M30, 1200 New Jersey Avenue SE, West Bldg., Ground Floor, Washington, DC 20590-0001;

2. The FAA Air Traffic Organization Service Area in which the affected airport is located;

3. The office of Aeronautical Navigation Products, 6500 South MacArthur Blvd., Oklahoma City, OK 73169 or,

4. The National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.

Availability

All SIAPs and Takeoff Minimums and ODPs are available online free of charge. Visit the National Flight Data Center online at nfdc.faa.gov to register. Additionally, individual SIAP and Takeoff Minimums and ODP copies may be obtained from the FAA Air Traffic Organization Service Area in which the affected airport is located.

FOR FURTHER INFORMATION CONTACT:

Thomas J. Nichols, Flight Procedure Standards Branch (AFS-420) Flight Technologies and Procedures Division, Flight Standards Service, Federal Aviation Administration, Mike Monroney Aeronautical Center, 6500 South MacArthur Blvd., Oklahoma City, OK 73169 (Mail Address: P.O. Box 25082 Oklahoma City, OK 73125), telephone: (405) 954-4164.

SUPPLEMENTARY INFORMATION:

This rule amends Title 14, Code of Federal Regulations, Part 97 (14 CFR part 97) by amending the referenced SIAPs. The complete regulatory description of each SIAP is listed on the appropriate FAA Form 8260, as modified by the National Flight Data Center (NFDC)/Permanent Notice to Airmen (P-NOTAM), and is incorporated by reference under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR 97.20. The large number of SIAPs, their complex nature, and the need for a special format make their verbatim publication in the Federal Register expensive and impractical. Further, airmen do not use the regulatory text of the SIAPs, but refer to their graphic depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP contained on FAA form documents is unnecessary.

This amendment provides the affected CFR sections, and specifies the SIAPs and Takeoff Minimums and ODPs with their applicable effective dates. This amendment also identifies the airport and its location, the procedure and the amendment number.

Availability and Summary of Material Incorporated by Reference

The material incorporated by reference is publicly available as listed in the ADDRESSES section.

The material incorporated by reference describes SIAPs, Takeoff Minimums and ODPs as identified in the amendatory language for part 97 of this final rule.

The Rule

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP and Takeoff Minimums and ODP as amended in the transmittal. For safety and timeliness of change considerations, this amendment incorporates only specific changes contained for each SIAP and Takeoff Minimums and ODP as modified by FDC permanent NOTAMs.

The SIAPs and Takeoff Minimums and ODPs, as modified by FDC permanent NOTAM, and contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these changes to SIAPs and Takeoff Minimums and ODPs, the TERPS criteria were applied only to specific conditions existing at the affected airports. All SIAP amendments in this rule have been previously issued by the FAA in a FDC NOTAM as an emergency action of immediate flight safety relating directly to published aeronautical charts.

The circumstances that created the need for these SIAP and Takeoff Minimums and ODP amendments require making them effective in less than 30 days.

Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedure under 5 U.S.C. 553(b) are impracticable and contrary to the public interest and, where applicable, under 5 U.S.C. 553(d), good cause exists for making these SIAPs effective in less than 30 days.

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. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 97

Air Traffic Control, Airports, Incorporation by reference, Navigation (air).

Issued in Washington, DC, on July 13, 2018. John S. Duncan, Executive Director, Flight Standards Service. Adoption of the Amendment

Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal Regulations, Part 97, (14 CFR part 97), is amended by amending Standard Instrument Approach Procedures and Takeoff Minimums and ODPs, effective at 0901 UTC on the dates specified, as follows:

PART 97—STANDARD INSTRUMENT APPROACH PROCEDURES 1. The authority citation for part 97 continues to read as follows: Authority:

49 U.S.C. 106(f), 106(g), 40103, 40106, 40113, 40114, 40120, 44502, 44514, 44701, 44719, 44721-44722.

2. Part 97 is amended to read as follows:

By amending: § 97.23 VOR, VOR/DME, VOR or TACAN, and VOR/DME or TACAN; § 97.25 LOC, LOC/DME, LDA, LDA/DME, SDF, SDF/DME; § 97.27 NDB, NDB/DME; § 97.29 ILS, ILS/DME, MLS, MLS/DME, MLS/RNAV; § 97.31 RADAR SIAPs; § 97.33 RNAV SIAPs; and § 97.35 COPTER SIAPs, Identified as follows:

* * * Effective Upon Publication AIRAC date State City Airport FDC No. FDC date Subject 16-Aug-18 IA West Union George L Scott Muni 8/0137 6/27/18 RNAV (GPS) RWY 17, Amdt 1. 16-Aug-18 IA West Union George L Scott Muni 8/0138 6/27/18 RNAV (GPS) RWY 35, Amdt 1. 16-Aug-18 LA Mansfield C E ‘Rusty’ Williams 8/0464 6/27/18 RNAV (GPS) RWY 18, Orig. 16-Aug-18 LA Mansfield C E ‘Rusty' Williams 8/0465 6/27/18 NDB RWY 18, Amdt 2. 16-Aug-18 MN Morris Morris Muni-Charlie Schmidt Fld 8/0575 6/27/18 RNAV (GPS) RWY 14, Amdt 1A. 16-Aug-18 MN Morris Morris Muni—Charlie Schmidt Fld 8/0577 6/27/18 RNAV (GPS) RWY 32, Amdt 1A. 16-Aug-18 NM Albuquerque Albuquerque Intl Sunport 8/1022 7/5/18 RNAV (RNP) Y RWY 26, Amdt 1A. 16-Aug-18 NM Albuquerque Albuquerque Intl Sunport 8/1023 7/5/18 RNAV (RNP) Z RWY 26, Amdt 2. 16-Aug-18 TN Elizabethton Elizabethton Muni 8/1292 7/5/18 Takeoff Minimums and Obstacle DP, Orig. 16-Aug-18 GA Brunswick Brunswick Golden Isles 8/1305 6/27/18 ILS OR LOC RWY 7, Amdt 10. 16-Aug-18 GA Brunswick Brunswick Golden Isles 8/1306 6/27/18 RNAV (GPS) RWY 7, Amdt 1A. 16-Aug-18 GA Brunswick Brunswick Golden Isles 8/1307 6/27/18 RNAV (GPS) RWY 25, Amdt 1. 16-Aug-18 GA Americus Jimmy Carter Rgnl 8/1343 6/27/18 RNAV (GPS) RWY 23, Amdt 1A. 16-Aug-18 GA Americus Jimmy Carter Rgnl 8/1344 6/27/18 ILS OR LOC RWY 23, Amdt 1B. 16-Aug-18 NJ Manville Central Jersey Rgnl 8/1456 6/27/18 Takeoff Minimums and Obstacle DP, Amdt 3. 16-Aug-18 OH Piqua Piqua Airport—Hartzell Field 8/1753 6/27/18 VOR RWY 26, Amdt 6B. 16-Aug-18 NY Kingston Kingston-Ulster 8/1772 6/27/18 RNAV (GPS) RWY 33, Amdt 1. 16-Aug-18 FL Naples Naples Muni 8/1781 7/10/18 RNAV (GPS)-A, Orig. 16-Aug-18 FL Naples Naples Muni 8/1782 7/10/18 RNAV (GPS)-B, Orig. 16-Aug-18 NJ Vineland Kroelinger 8/2485 7/5/18 Takeoff Minimums and Obstacle DP, Amdt 1. 16-Aug-18 OH Lima Lima Allen County 8/2919 7/5/18 Takeoff Minimums and Obstacle DP, Amdt 1. 16-Aug-18 MN Crookston Crookston Muni Kirkwood Fld 8/2927 7/5/18 NDB RWY 13, Amdt 9. 16-Aug-18 MN Crookston Crookston Muni Kirkwood Fld 8/2928 7/5/18 RNAV (GPS) RWY 13, Orig. 16-Aug-18 MN Crookston Crookston Muni Kirkwood Fld 8/2929 7/5/18 RNAV (GPS) RWY 31, Orig-A. 16-Aug-18 MN Crookston Crookston Muni Kirkwood Fld 8/2930 7/5/18 VOR/DME RWY 13, Orig-A. 16-Aug-18 GA Thomaston Thomaston-Upson County 8/3028 6/27/18 ILS OR LOC RWY 30, Amdt 2A. 16-Aug-18 IL Mattoon/Charleston Coles County Memorial 8/3782 7/5/18 RNAV (GPS) RWY 11, Orig-A. 16-Aug-18 FL Fernandina Beach Fernandina Beach Muni 8/3809 7/5/18 RNAV (GPS) RWY 13, Amdt 2A. 16-Aug-18 FL Fernandina Beach Fernandina Beach Muni 8/3813 7/5/18 RNAV (GPS) RWY 22, Amdt 1B. 16-Aug-18 KS Abilene Abilene Muni 8/3819 7/5/18 Takeoff Minimums and Obstacle DP, Orig. 16-Aug-18 IA Webster City Webster City Muni 8/3826 7/5/18 NDB RWY 32, Amdt 8. 16-Aug-18 WY Jackson Jackson Hole 8/4092 7/5/18 RNAV (GPS) Z RWY 19, Amdt 1A. 16-Aug-18 IL Morris Morris Muni—James R Washburn Field 8/4370 7/5/18 RNAV (GPS) RWY 18, Amdt 1. 16-Aug-18 IA Harlan Harlan Muni 8/4397 7/5/18 GPS RWY 15, Orig-B. 16-Aug-18 IA Harlan Harlan Muni 8/4408 7/5/18 GPS RWY 33, Orig-B. 16-Aug-18 TX Hereford Hereford Muni 8/4517 6/27/18 RNAV (GPS) RWY 20, Orig-A. 16-Aug-18 WI Madison Dane County Rgnl-Truax Field 8/4627 6/27/18 VOR RWY 14, Orig-D. 16-Aug-18 IL Springfield Abraham Lincoln Capital 8/4856 7/5/18 ILS OR LOC RWY 31, Amdt 2A. 16-Aug-18 OH Cadiz Harrison County 8/4975 7/5/18 VOR-A, Amdt 1. 16-Aug-18 GA Americus Jimmy Carter Rgnl 8/5187 6/27/18 RNAV (GPS) RWY 5, Amdt 1A. 16-Aug-18 TX Houston William P Hobby 8/5265 7/5/18 RNAV (GPS) RWY 35, Amdt 1A. 16-Aug-18 NY Westhampton Beach Francis S Gabreski 8/5268 7/5/18 ILS OR LOC RWY 24, Amdt 11. 16-Aug-18 FL Immokalee Immokalee Rgnl 8/5921 6/27/18 RNAV (GPS) RWY 9, Amdt 1. 16-Aug-18 FL Immokalee Immokalee Rgnl 8/5922 6/27/18 RNAV (GPS) RWY 18, Amdt 1. 16-Aug-18 FL Immokalee Immokalee Rgnl 8/5924 6/27/18 RNAV (GPS) RWY 27, Amdt 1. 16-Aug-18 FL Immokalee Immokalee Rgnl 8/5925 6/27/18 RNAV (GPS) RWY 36, Amdt 1. 16-Aug-18 SC Cheraw Cheraw Muni/Lynch Bellinger Field 8/6174 7/5/18 RNAV (GPS) RWY 8, Orig-A. 16-Aug-18 FL Inverness Inverness 8/6407 7/9/18 RNAV (GPS) RWY 19, Orig-A. 16-Aug-18 IN Valparaiso Porter County Rgnl 8/6943 7/9/18 ILS RWY 27, Amdt 3. 16-Aug-18 PA Philadelphia Wings Field 8/6979 6/27/18 RNAV (GPS) RWY 6, Amdt 1A. 16-Aug-18 PA Philadelphia Wings Field 8/6980 6/27/18 RNAV (GPS) RWY 24, Amdt 1A. 16-Aug-18 PA Harrisburg Harrisburg Intl 8/7378 6/27/18 ILS OR LOC RWY 31, Amdt 1C. FL Orlando Executive 8/8391 7/9/18 ILS OR LOC RWY 7, Amdt 24. 16-Aug-18 FL Orlando Executive 8/8393 7/9/18 RNAV (GPS) RWY 7, Amdt 2A. 16-Aug-18 MO Bowling Green Bowling Green Muni 8/8445 7/9/18 VOR/DME-A, Amdt 2. 16-Aug-18 MO Bowling Green Bowling Green Muni 8/8453 7/9/18 RNAV (GPS) RWY 13, Orig. 16-Aug-18 MO Bowling Green Bowling Green Muni 8/8454 7/9/18 RNAV (GPS) RWY 31, Orig. 16-Aug-18 MS Brookhaven Brookhaven-Lincoln County 8/8668 6/27/18 RNAV (GPS) RWY 22, Orig. 16-Aug-18 NH Keene Dillant-Hopkins 8/9189 6/27/18 ILS OR LOC RWY 2, Amdt 4. 16-Aug-18 NH Keene Dillant-Hopkins 8/9190 6/27/18 RNAV (GPS) RWY 2, Orig. 16-Aug-18 NH Keene Dillant-Hopkins 8/9191 6/27/18 VOR RWY 2, Amdt 13.
[FR Doc. 2018-16139 Filed 7-27-18; 8:45 am] BILLING CODE 4910-13-P
DEPARTMENT OF LABOR Employment and Training Administration 20 CFR Part 641 [Docket No. ETA-2017-0005] RIN 1205-AB79 Senior Community Service Employment Program; Performance Accountability AGENCY:

Employment and Training Administration, Labor.

ACTION:

Final rule.

SUMMARY:

The Employment and Training Administration (ETA) of the Department of Labor (Department) is adopting as a final rule without change the interim final rule (IFR) published by the Department in the Federal Register on December 1, 2017. The IFR revised performance accountability measures for the Senior Community Service Employment Program (SCSEP). The Older Americans Act (OAA) Reauthorization Act of 2016 (2016 OAA) amended the measures of performance for the SCSEP program in large part to align them with the performance measures mandated for programs under the Workforce Innovation and Opportunity Act (WIOA) and required implementation, including through regulation by December 31, 2017. The IFR revised the Performance Accountability subpart of the SCSEP regulations to reflect changes necessitated by the passage of the 2016 OAA. In addition, the IFR made minor, non-substantive amendments to other subparts of the SCSEP regulations to reflect the 2016 OAA amendments that aligned the SCSEP program statutory language with WIOA, such as updating outdated terminology and outdated references to the Workforce Investment Act of 1998 (WIA), which WIOA superseded. The implemented regulations, referred to as an IFR, took effect on January 2, 2018. The Department solicited public comment on the IFR, and the Department considered these comments when it prepared this final rule.

DATES:

Effective date: This final rule is effective August 29, 2018.

Compliance date: Grantees must report performance information under the measures implemented in the IFR and adopted without change in this final rule beginning July 1, 2018. This rule is not an E.O. 13771 regulatory action because this rule is not significant under E.O. 12866.

FOR FURTHER INFORMATION CONTACT:

Amanda Ahlstrand, Administrator, Office of Workforce Investment, [email protected], 202-693-3980. (This is not a toll-free number.)

SUPPLEMENTARY INFORMATION:

Preamble Table of Contents I. Background II. Summary of Public Comments Received on the Interim Final Rule III. Section-by-Section Discussion of the Final Rule IV. Regulatory Flexibility Analysis, Executive Order 13272, Small Business Regulatory Enforcement Fairness Act V. Other Regulatory Considerations I. Background

The SCSEP, authorized by title V of the OAA, is the only federally sponsored employment and training program targeted specifically to low-income, older individuals who want to enter or re-enter the workforce. Participants must be 55 years of age or older, with incomes no more than 125 percent of the Federal poverty level. The program offers participants training at community service assignments in public and non-profit organizations and agencies so that they can gain on-the-job experience. The dual goals of the program are to promote useful opportunities in community service activities and also to move SCSEP participants into unsubsidized employment, where appropriate, so that they can achieve economic self-sufficiency.

The 2016 OAA, Public Law 114-144 (Apr. 19, 2016), amended the statutory provisions authorizing SCSEP and requires the Department to implement the amendments to the SCSEP performance measures by December 31, 2017. See OAA sec. 513(d)(4) (42 U.S.C. 3056k(d)(4), as amended by 2016 OAA sec. 6(d)(4) 1 ). The Department met this statutory deadline when it published the IFR on December 1, 2017 (82 FR 56869). This final rule responds to public comments received and finalizes the IFR.

1 Section 6 of the 2016 OAA amended secs. 502-518 of title V of the original (1965) OAA (42 U.S.C. 3056 et seq.). For ease of reference, this preamble will refer to the changes to title V made by the 2016 OAA by referring to the amended sections of the OAA, and will not continue to provide the citations to sec. 6 of the 2016 OAA.

The IFR included both the definitions of the measures (as required by OAA sec. 513(b)(2)) and the processes used to implement these measures in the conduct of the SCSEP grants. These processes include how the Department and grantees initially determine and then adjust expected levels of performance for the grants, and how the Department determines whether a grantee fails, meets, or exceeds the levels of performance.

The Administrative Procedure Act (APA) authorizes agencies to issue a rule without notice and comment upon a showing of good cause. 5 U.S.C. 553(b)(B). The APA's good cause exception to public participation applies upon a finding that those procedures are “impracticable, unnecessary, or contrary to the public interest.” 5 U.S.C. 553(b)(B). According to the legislative history of the APA, “unnecessary” means “unnecessary so far as the public is concerned, as would be the case if a minor or merely technical amendment in which the public is not particularly interested were involved.” Senate Report No. 752 at p. 200, 79th Cong. 1st Sess. (1945). As explained by the U.S. Court of Appeals for the D.C. Circuit, “when regulations merely restate the statute they implement, notice-and-comment procedures are unnecessary.” Gray Panthers Advocacy Comm. v. Sullivan, 936 F.2d 1284, 1291 (DC Cir. 1991). The Department determined that there was good cause to find that a pre-publication comment period was unnecessary for the IFR. The revisions set forth in the IFR to the previous regulations at 20 CFR part 641 codified statutory changes requiring little to no agency discretion or were technical amendments updating terminology or outdated references to WIA, which WIOA superseded. Therefore, the Department's issuance of the IFR, with provision for post-promulgation public comment, was in accordance with sec. 553(b) of the APA.

The 2016 OAA requires the Department to establish and implement the new SCSEP performance measures after consultation with stakeholders. OAA sec. 513(b)(2). The Department satisfied these statutory requirements when it solicited public input on the definitions and implementation of the statutory performance measures in April and May of 2017. On May 8, 2017, the Department sent an email to 4,529 stakeholders, inviting them to register for the consultation. The Department also informed stakeholders that they could submit written comments after the consultation.

Of the 394 registered participants, 273 attended the consultation on May 16, 2017. The IFR discussed at length the comments received during and after the consultation and, in response to some of those comments, made the following clarifications:

• The changes in the IFR to the SCSEP performance measurement system reflect in large part an alignment of the SCSEP performance measures with the three employment outcome indicators mandated for WIOA core programs under WIOA sec. 116(b)(2)(A)(i)(I) through (III). In addition to these three WIOA employment outcome indicators of performance, SCSEP has three measures related to participation in the program: service level, hours of community service employment, and service to the most-in-need. These three measures are unique to SCSEP and the 2016 OAA amendments retained them unchanged. Although WIOA has several similar measures, these SCSEP measures are not directly applicable to WIOA. In addition, the WIOA primary indicators of performance include effectiveness in serving employers; the corresponding measure for SCSEP under the OAA, as discussed below at § 641.720, is not directly parallel because it includes participants and host agencies, as well as employers.

• All the SCSEP measures will be incorporated into the Participant Individual Record Layout (PIRL, the WIOA performance reporting system), along with other aspects of SCSEP performance.

• Although the 2016 OAA amendments require SCSEP to adopt several of WIOA's primary indicators of performance, SCSEP is independent of WIOA, and SCSEP performance is not included in the WIOA State program or indicator scores.

• While the Department is exploring a new case management system that may replace the SCSEP Performance and Results Quarterly Progress Report (SPARQ) system in whole or in part, grantees must continue using SPARQ until the Department informs them that a new system is available.

• Like the current measures, the new performance measures apply to all grantees, including both State and national grantees.

See Section I of the IFR for a more detailed discussion of the comments received during stakeholder consultation process.

The 2016 OAA changes to the SCSEP performance measurement system reflect in large part an alignment of the SCSEP performance measures with those mandated for WIOA core programs under WIOA sec. 116(b)(2)(A)(i). The WIOA performance measures were implemented in a joint final rule issued by the Departments of Labor and Education on August 19, 2016 (81 FR 55792) (Joint WIOA final rule), after notice-and-comment rulemaking, and are codified in 20 CFR part 677. The IFR, which this final rule finalizes, revised the SCSEP regulations at 20 CFR part 641, subpart G (Performance Accountability) to codify the revised SCSEP performance measures in 2016 OAA sec. 513, which in large part aligns the SCSEP performance measures with the WIOA performance measures. In addition, the IFR made (and this final rule carries forward) technical amendments to other subparts of part 641 to reflect 2016 OAA amendments that aligned the SCSEP program statutory language with WIOA, such as updating outdated terminology and outdated references to WIA, which WIOA superseded.

Coordination between the SCSEP and the WIOA programs continues to be an important objective of the OAA. SCSEP is a required partner in the workforce development system (per WIOA sec. 121(b)(1)(B)(v)), and SCSEP is required to coordinate with the WIOA One-Stop delivery system (OAA sec. 511, 42 U.S.C. 3056i), such as by accepting each other's assessments and Individual Employment Plans (IEPs) (OAA sec. 502(b)(3), 42 U.S.C. 3056(b)(3)). The underlying notion of the One-Stop delivery system is the coordination of programs, services, and governance structures, to ensure customer access to a seamless system of workforce development services. Although there are many similarities to the system established under WIA, there are also significant changes under WIOA that are intended to make substantial improvements to the public workforce delivery system. The Joint WIOA final rule requires partners to collaborate to support a seamless customer-focused service delivery network; requiring that programs and providers co-locate, coordinate, and integrate activities and information, so that the system as a whole is cohesive and accessible for individuals and employers alike.

The Department remains committed to a system-wide continuous improvement approach grounded upon proven quality principles and practices. Although many of the SCSEP regulations remain unchanged from the 2010 SCSEP final rule (75 FR 53786; Sept. 1, 2010), the IFR codified the 2016 OAA revisions to the program that align senior employment services with the workforce development system under WIOA. In particular, the IFR aligned the SCSEP performance measures related to employment and earnings with the performance measures established by WIOA to enhance consistency and coordination between the programs and ensure effective services for older Americans. Section III discusses in more detail the changes implemented by the IFR and finalized by this final rule.

II. Summary of Public Comments Received on the Interim Final Rule

The Department received comments from seven organizations and individuals. Four organizations (three national grantees and an association representing State grantees) submitted substantive comments that addressed issues within the scope of the IFR: Associates for Training and Development (A4TD), Vantage Aging (previously known as Mature Services), Senior Service America (SSAI), and the National Association of States United for Aging and Disabilities (NASUAD); the three individuals submitted non-substantive comments.

The Department considered all substantive comments received as it developed this final rule. In Section III below, “Section-by-Section Discussion of the Final Rule,” the Department summarizes and discusses the input received from A4TD, Vantage Aging, and NASUAD. SSAI resubmitted the same comments it submitted on June 6, 2017, in response to the May 16, 2017 stakeholder webinar, prior to the publication of the IFR. Because the Department fully responded to the SSAI comments in the preamble to the IFR, the Department will not respond further in this preamble except to clarify some of its prior responses.

Three comments from individuals described general dissatisfaction with the SCSEP program and its grantees based on either negative personal experiences or unfavorable anecdotal evidence. The preamble does not address these comments, as they were not in the scope of the rulemaking.

III. Section-by-Section Discussion of the Final Rule

The Department has made no changes to the regulatory text issued in the IFR.

Non-Substantive Technical Amendments

In addition to the changes made to part 641, subpart G (Performance Accountability) codifying the 2016 OAA statutory revisions as described more fully below, the IFR made non-substantive, technical amendments throughout all of part 641 to reflect the 2016 OAA amendments and to align the SCSEP program language with WIOA, such as updating outdated terminology and outdated references to WIA, which WIOA superseded. The Department did not receive any comments on these technical amendments and the final rule adopts them as issued in the IFR.

The remainder of this section-by-section discussion describes in detail only the substantive subpart G revisions.

Subpart G—Performance Accountability

Throughout this subpart, the Department has revised the term “core indicator(s)” to “core measure(s)” to align the regulation with the 2016 OAA, specifically sec. 513(a), 42 U.S.C. 3056k(a). The amended statute also refers to “indicators.” However, because the statute uses the terms interchangeably, for consistency and to reduce the possibility of confusion, the Department uses only the term “measures” throughout this subpart. Other changes made to the sections of subpart G are described below.

Section 641.700 What performance measures apply to Senior Community Service Employment Program grantees?

The Department did not receive any comments on this section. The final rule adopts the provision as originally issued in the IFR.

Section 641.710 How are the performance measures defined?

This section of the rule provides definitions of the core measures. The IFR revised the core indicator (now “core measure”) definitions contained in this section to align with the revised core measures set forth in § 641.700 of the IFR. As discussed below and in the IFR, the Department deleted the entirety of former paragraph (b) to remove the definitions for the former “additional indicators,” which the 2016 OAA removed. Thus, as an initial change, the IFR renumbered paragraphs (a)(1) through (6) to (a) through (g) (to include the definition for an added core measure, as discussed below).

Employment Measures

The IFR did not revise paragraph (a), renumbered from former paragraph (a)(1), which contains the definition for the first core measure for hours of community service employment as currently implemented.

In paragraph (b), renumbered from former paragraph (a)(2), the IFR included a definition for the second performance measure, “percentage of project participants who are in unsubsidized employment during the second quarter after exit from the project.” The IFR defined this performance measure by the following formula: The number of participants who exited during the reporting period who are employed in unsubsidized employment during the second quarter after the exit quarter, divided by the number of participants who exited during the reporting period, multiplied by 100 so as to be reported as a percentage. This definition aligns with the definition of the corresponding WIOA performance measure, as explained in Training and Employment Guidance Letter (TEGL) 10-16, Performance Accountability Guidance for Workforce Innovation and Opportunity Act (WIOA) Title I, Title II, Title III and Title IV Core Programs, published December 19, 2016.

In paragraph (c), renumbered from former paragraph (a)(3), the IFR included a definition for the third performance measure, “percentage of project participants who are in unsubsidized employment during the fourth quarter after exit from the project.” This performance measure is defined by the following formula: The number of participants who exited during the reporting period who are employed in unsubsidized employment during the fourth quarter after the exit quarter, divided by the number of participants who exited during the reporting period, multiplied by 100 so as to be reported as a percentage. This definition aligns with the definition of the corresponding WIOA performance measure, as explained in TEGL 10-16.

In response to the IFR, the Department received one public comment relating to the employment measures set forth in this section. Specifically, with regard to the fourth quarter unsubsidized employment measure at paragraph (c), the commenter expressed concern that the new fourth quarter unsubsidized employment measure, while simplifying the current measure for employment retention, will require grantees to follow participants for at least an entire year even if the participants did not leave the program for unsubsidized employment. The commenter contended that this core performance measure will place a significant burden on grantees while producing little increase in performance data.

The commenter is correct that the new measure is no longer conditioned on a participant's having been employed in the first quarter after the exit quarter (as the current core measure for employment retention and the additional measure for retention at 1 year require) and, therefore, includes in the pool every participant who exits from SCSEP unless the participant has one of the exclusions from exit. The Department, however, declines to revise the definition for this core measure. Once wage records are available to all grantees, nearly all data for this measure will be gathered without the need for follow-up, and there will be little additional burden on the grantees. See discussion of the use of wage records at § 641.720. Until that time, grantees should first focus their follow-up efforts on those participants who leave the program for unsubsidized employment or who are employed in the second quarter after the exit quarter. Grantees should then follow participants who did not have employment at exit or in the second quarter after exit but who grantees have reason to believe might become employed thereafter. The Department will provide technical assistance and guidance on the new timing and reporting requirements for § 641.710(b) through (d), which are hereinafter called the “three new employment outcome measures”.

Earnings Measure

In paragraph (d), renumbered from former paragraph (a)(4), the IFR included a definition for the fourth performance measure, “median earnings of project participants who are in unsubsidized employment during the second quarter after exit from the project.” This performance measure is defined by the following formula: For all participants who exited and are in unsubsidized employment during the second quarter after the exit quarter, the wage that is at the midpoint (of all the wages) between the highest and lowest wage earned in the second quarter after the exit quarter. This definition aligns with the definition of the corresponding WIOA performance measure, as explained in TEGL 10-16.

The Department did not receive any comments relating to paragraph (d). The final rule adopts the provision as originally issued in the IFR.

Effectiveness Measure

The IFR added a definition in paragraph (e) for the fifth performance measure, “effectiveness in serving employers, host agencies, and project participants.” While this definition is similar to the definition used for this indicator under the 2006 OAA, when it was an additional indicator, the 2016 OAA revised the definition so that it focuses more specifically on effectiveness rather than satisfaction in general. The Department received no comments in response to this definition. The final rule adopts the provision as originally issued in the IFR.

Although the new SCSEP measure of effectiveness parallels the language of the WIOA measure, it differs because it also measures the effectiveness in serving participants and host agencies, as well as employers. The WIOA approach to the measure, which is being piloted until 2019, does not have obvious application to SCSEP's other two customer groups. As a result, for the SCSEP measure, the Department has decided to continue surveying all three customer groups to assess the effectiveness of the services received as an interim measure at least until the WIOA pilot is complete and a WIOA measure is defined in final form. By using the same definition as that of the current customer satisfaction measure during this period, the Department will not require SCSEP customers to change their current practices or take on any additional burden.

Other Changes

To conform to the changes outlined above, the IFR renumbered former paragraph (a)(5) to (f). The IFR also renumbered former paragraph (a)(6)(i) through (xiii) to (g)(1) through (13). Renumbered paragraphs (f) and (g) correspond to the sixth and seventh SCSEP performance measures, the definitions of which were unchanged by the IFR. The Department received no comments in response to these technical changes and they are incorporated into this final rule without change.

The 2016 OAA removed the additional indicators of performance previously established in sec. 513(b)(2) of the 2006 OAA. Therefore, the IFR deleted former paragraphs (b)(1) through (3) that contained definitions for the additional indicators. The Department received no comments in response to these deletions.

In addition to the regulatory text changes discussed above, the IFR made various non-substantive changes to the regulations for purposes of correcting typographical errors and improving clarity.

Section 641.720 How will the Department and grantees initially determine and then adjust expected levels of the core performance measures?

The Department received several comments related to this provision. The comments are addressed below in the “Employment Outcome Measure” heading.

The IFR made substantial revisions to this section to align with the 2016 OAA, which in large part mirrors the process for establishing the expected performance levels required by WIOA for the title I core programs, as implemented in 20 CFR 677.170.

The IFR revised paragraph (a), which requires agreement between the grantee and the Department for expected levels of performance for the first 2 program years of the grant, to mirror the statutory language in 2016 OAA sec. 513(a)(2)(B) and (C)(i) and align with WIOA sec. 116(b)(3)(A)(iv)(I). Specifically, paragraph (a) of the IFR stated that each grantee must reach agreement with the Department on levels of performance for each measure listed in § 641.700 for each of the first 2 program years covered by the grant agreement. In reaching the agreement, the grantee and the Department must take into account the expected levels of performance proposed by the grantee and the factors described in paragraph (c) of this section. This paragraph also stated that the levels agreed to will be considered to be the expected levels of performance for the grantee for such program years, and the Department may not award funds under the grant until such agreement is reached. Lastly, this paragraph stated that, at the conclusion of negotiations concerning the performance levels with all grantees, the Department would make available for public review the final negotiated expected levels of performance for each grantee, including any comments submitted by the grantee regarding the grantee's satisfaction with the negotiated levels.

The IFR explained that the Department considers PY 2016 and PY 2017 to be the first 2 program years under the current SCSEP grants (i.e., the four-year grant cycle that began in PY 2016). For national grantees, these were the first 2 program years following the last (PY 2016) grant competition. For State grantees, these were the first 2 program years of the current (PY 2016) SCSEP State Plans.

The IFR also revised paragraph (b), which required agreement for expected levels of performance for the third and fourth program years of the grant, to mirror the statutory language provided in 2016 OAA sec. 513(a)(2)(B) and (C)(ii) and to align with WIOA sec. 116(b)(3)(A)(iv)(II). The IFR explained, in keeping with paragraph (a) above, that the Department considers PY 2018 and PY 2019 to be the third and fourth program years of the current (PY 2016) SCSEP grant agreements. Specifically, paragraph (b) stated that each grantee must reach agreement with the Department, prior to the third program year covered by the grant agreement, on levels of performance for each measure listed in § 641.700, for each of the third and fourth program years of the grant. This paragraph stated that, in reaching the agreement, the grantee and the Department must take into account the expected levels proposed by the grantee and the factors described in paragraph (c) of this section. This paragraph also stated that the levels agreed to will be considered to be the expected levels of performance for the grantee for those program years. Lastly, like the requirement in paragraph (a), this paragraph stated that, at the conclusion of negotiations concerning the performance levels with all grantees, the Department would make available for public review the final negotiated expected levels of performance for each grantee, including any comments submitted by the grantee regarding the grantee's satisfaction with the negotiated levels.

The IFR added a new paragraph (c), “Factors,” to require that the negotiated levels of performance must be based on the three factors listed in paragraphs (c)(1) through (3), as required by OAA sec. 513(a)(2)(D) and to align with WIOA sec. 116(b)(3)(A)(v). Paragraph (c)(1) of the IFR stated that the negotiated levels must take into account how a grantee's levels of performance compare with the expected levels of performance established for other grantees. See OAA sec. 513(a)(2)(D)(i) and WIOA sec. 116(b)(3)(A)(v)(I). Paragraph (c)(2) stated that the negotiated levels must be adjusted using an objective statistical model based on the model established by the Department of Labor with the Department of Education in accordance with WIOA sec. 116(b)(3)(A)(viii) and implemented in § 677.170(c). See 29 U.S.C. 3141(b)(3)(A)(viii), OAA sec. 513(a)(2)(D)(ii), and WIOA sec. 116(b)(3)(A)(v)(II). The IFR explained that the objective statistical adjustment model is to account for actual economic conditions and characteristics of participants, including the factors required by WIOA sec. 116(b)(3)(A)(v)(II). Paragraph (c)(3) stated that the negotiated levels must take into account the extent to which the levels involved promote continuous improvement in performance accountability on the core measures and ensure optimal return on the investment of Federal funds. See OAA sec. 513(a)(2)(D)(iii) and WIOA sec. 116(b)(3)(A)(v)(III). The Department stated it would provide the model to grantees prior to the first negotiations under the new performance measures. The initial revision to the adjustment model was in fact presented to the grantees in a webinar held in May 2018, prior to the start of the negotiation period for PY 2018 and PY 2019.

In paragraph (d), the IFR revised the adjustment requirements contained in former paragraph (b). The IFR replaced the adjustment factors specified in former (b)(1) through (3) with the requirement that the Department will, in accordance with the objective statistical model developed pursuant to paragraph (c)(2), adjust the expected levels of performance for a program year for grantees to reflect the actual economic conditions and characteristics of participants in the corresponding projects during such program year. The Department made these revisions in the IFR to align the pertinent regulations with OAA sec. 513(a)(2)(E).

For consistency with the 2016 OAA, the IFR removed the language in paragraphs (a)(1) through (3) of § 641.720 that describes the negotiation process in detail. However, as explained in the IFR, the negotiation process that the Department intends to use under these new performance measures is similar to the process that was used prior to the IFR, and includes similar opportunities for input from the grantees:

• In the spring of 2018, the Department analyzed grantees' baseline performance and issued proposed targets and goals for the next 2 program years, PY 2018 and PY 2019, based on the new adjustment factors.

• If a grantee disagreed with those targets and goals, it was allowed to propose its own goals and request to negotiate. No grantee chose to negotiate revisions to the proposed targets and goals.

• Prior to the negotiation, the grantee was required to provide the Department with the data on which the grantee based its proposed goals.

• The grantee and the Department must reach agreement before funds for PY 2018 and PY 2019 can be approved; the agreed-upon goals will be the expected levels of performance upon which the annual evaluation of grantee performance will be based. If the grantee and the Department fail to reach agreement, no funds may be released.

• At the conclusion of the negotiation, the grantee may submit comments regarding the grantee's satisfaction with the negotiated levels of performance, which the Department will publish, along with the expected levels of performance.

• At the time of the annual evaluation of grantee performance, the expected levels of performance will be adjusted a second time using the latest available adjustment data. The Department will base this evaluation on the newly adjusted levels of performance. See preamble discussion of § 641.740.

• The same process will be followed for subsequent 2-year periods.

In addition to the regulatory text changes discussed above, the IFR made various non-substantive changes for purposes of correcting typographical errors and improving clarity. Those changes have been retained in this final rule.

The new measures implemented by the IFR became effective on January 2, 2018, and the new measures were used during the second half of PY 2017, to negotiate the targets and goals for PYs 2018 and 2019. Performance under the PY 2018 targets and goals will begin to be reported starting July 1, 2018. The SCSEP QPR for PY 2017 will be based on the measures that were in place prior to the IFR, and the QPRs for PY 2018, will be based on the measures established in the IFR (and adopted without change in this final rule).

SCSEP participants who exit during PY 2017 when goals based on the prior measures were still in effect will have their performance reported under the old measures for PY 2017. For this same cohort of exiters, reporting for the core employment outcome measures would also take place throughout PY 2018, under the new measures set forth in the IFR and adopted without change in this final rule, and would be reflected in the grantees' PY 2018 QPRs. For example, a participant who exits in Quarter 3 of PY 2017 will be included in the previous entered employment measure for Quarter 4 of PY 2017; the grantee will also report this participant in the final rule's new measure of employment in the second quarter after exit in Quarter 1 of PY 2018. Since the underlying data required for the new measures that will be reported in PY 2018 are the same data required for the prior measures, grantees will have to follow different timing rules for the collection of data in PY 2018, but they will not be required to collect any new or additional data beyond the data they would have reported under the old measures. The Department will provide technical assistance and guidance on the new timing and reporting requirements. As with the core measures in use prior to the IFR, the grantees will collect data for the additional measures not carried forward in the IFR and now this final rule throughout PY 2017, and the final QPR for PY 2017 will be the last report of the additional measures.

Employment Outcome Measures

The Department received several comments relating to § 641.720, which are summarized below. The Department considered all of these comments as it finalized the IFR; our responses to each comment are set forth below. This final rule, however, adopts this provision as it was issued in the IFR for reasons discussed below.

A commenter asked for clarification of the calculation of two of the measures: Whether exclusions from exit will still be applied and whether the year-to-date measure for median earnings will be based on cumulative data or an average of the quarterly results.

As the Department stated in the IFR, as part of its adoption of the WIA common measures in PY 2007, SCSEP has been following the WIA exclusions. With the 2016 OAA's adoption of the measures consistent with the WIOA primary indicators of performance, SCSEP will examine the revised WIOA exclusions and will issue revised guidance as appropriate. The calculation of the year-to-date performance will continue to be based on cumulative data, as it has always been. The Department will issue guidance on the calculations and timing rules for all the new measures.

One commenter expressed concern that while achieving unsubsidized employment is a key goal of the SCSEP program, in many States and localities there remains a significant gap between the unsubsidized income needed to make ends meet and the possible reduction of public benefits due to achieving employment; that pursuit of improved performance under the new employment outcome measures could result in worsening the quality of life of SCSEP participants rather than improving it; and that the Department should work with States to identify mechanisms to ensure that every participant's life is improved by participation in the SCSEP program. The commenter recommended that the Department allow States to use additional economic factors such as housing availability and other issues related to affordability and cost of living as a part of their outcome measures. The commenter also recommended that the Department work with partners in the Federal Government to evaluate options for a gradual reduction in benefits for individuals as they leave SCSEP instead of the current benefits cliff.

The Department agrees that SCSEP is designed to improve participants' quality of life, including self-sufficiency. In fact, data from the participant customer satisfaction surveys consistently confirm that the program does effectively improve participants' physical, emotional, and financial quality of life, and that participants who exit from the program are satisfied with SCSEP, even if they do not achieve unsubsidized employment. Section 641.535(a)(3)(iii) of the SCSEP regulations (a section not affected by the IFR or this final rule) recognizes that unsubsidized employment may not be an appropriate goal for all participants and that if it becomes apparent that unsubsidized employment is not feasible, the grantee must modify the participant's IEP and assist the participant with other approaches to self-sufficiency, including transition to other services and programs.

The Department notes also that the goals for the employment outcomes have always been set at a level that recognizes that not all participants will obtain unsubsidized employment and that because seniors generally work part-time hours at lower pay levels, the goals for earnings have also been set at realistic levels. However, the Department disagrees that SCSEP participants in general cannot improve their financial condition through unsubsidized employment. If grantees do their best to help participants find jobs at their highest wage and skill level, many participants can and do achieve economic self-sufficiency.

Finally, the Department has no authority to revise the employment outcome measures required by the 2016 OAA and implemented by the IFR and this final rule. The Department will work with other Federal agencies to explore whether Federal benefits can be reduced gradually when SCSEP participants exit the program for unsubsidized employment. The Department will also consider adding additional economic factors to the statistical adjustment model as suggested by this commenter and other commenters. See discussion of the statistical adjustment model below.

Use of Unemployment Insurance Wage Records

Citing the additional burden the new measures place on grantees to conduct follow-ups and the incompleteness and inaccuracy of case management follow-up, all four commenters urged the Department to allow the use of unemployment insurance wage records to obtain employment outcome data. One commenter also urged the Department to phase out case management follow-up once access to wage records is available.

As the commenters recognized and as stated in the IFR, the Department is investigating access to wage records and hopes to implement aggregate wage record matching for all grantees. However, since wage matching does not provide data on all participants in unsubsidized employment, some supplemental use of case management follow-up would still be required. In addition, the SCSEP program model requires that grantees remain in touch with participants and employers during the four quarters after exit in order to help resolve any problems that may arise and to provide supportive services needed to help participants obtain and retain unsubsidized employment.

The Department will inform the grantees as soon as it ascertains when wage matching will be available to SCSEP and will consult with the grantees about the extent to which follow-up will still be required for both performance reporting and case management. In the meantime, as stated in the IFR, until the access to wage records occurs, all grantees must continue using case management follow-up. Using different methods of data collection would compromise the consistency of the performance measures and would potentially provide an unfair advantage to those grantees with access to wage records. In the meantime, the Department will review the standards for case management follow-up as set forth in various guidance materials, will confer with grantees about the changes in procedures desired, and will issue revised guidance if appropriate.

Negotiation Process

One commenter provided several comments relating to the negotiation process, including several concerns about the current process. The commenter described challenges that States have reported facing in negotiations on performance levels, including lack of interest from Federal partners, inconsistency regarding negotiations on a regional basis, delay resulting from confusion about what data to provide, and time pressures. The commenter requested that the Department issue guidance to States regarding the types of data the Department would take into account when negotiating performance levels. This commenter also requested that the Department work with other Federal agencies, including the Department of Health and Human Services and the Department of Agriculture, to provide guidance regarding data-sharing between programs such as SNAP, TANF, Unemployment Insurance, and the SCSEP program. Lastly, this commenter recommended that the Department allow for adjustments in the timeline for negotiations and allow for a certain percentage of funds to be released prior to agreement on the goals and/or to provide funds on an interim contingency basis while negotiations are ongoing.

Although the OAA provides that grantees may comment on the negotiation process and that the Department will publish such comments, very few grantees have commented at all since PY 2007, and no grantees have expressed the concerns raised by the commenter. The Department notes that it has been providing annual teleconferences and webinars on the negotiation process each year since PY 2007, and that, during the negotiations themselves, the Department and its subject matter experts make every effort to identify and help grantees locate data that may be useful to them in their negotiations. The Department thus welcomes the commenter's suggestions for improving the negotiation process and will take them under consideration to the extent it has the authority to do so. The Department agrees that all Federal regions should be engaged in the process and that grantees should be given the support they require to participate meaningfully. The Department will work with the Federal Project Officers to ensure that all grantees are aware of their right to negotiate their goals and have a full opportunity to do so. The Department will also ensure that grantees have information about relevant data sources.

As the commenter recognized, however, the requirement to reach agreement on negotiated levels of performance before the Department may release grant funds is contained in the OAA. The Department has no authority to waive or modify that requirement. The Department recognizes that the time period for negotiation is condensed and that negotiations occur during the same time that grantees are preparing their annual grant applications. The need to obtain the most recent baseline data and economic information to use in the goal setting and adjustment process necessitates this timing. The Department shares the commenter's desire to allow for a more relaxed schedule and will explore the possibility of using a more flexible baseline once the new performance measures have been in place long enough for a new baseline to emerge.

Indicators of Effectiveness

One commenter who addressed the new measure of effectiveness in serving SCSEP's three customer groups pointed out that “effectiveness” is more difficult to measure than “satisfaction”, which for this commenter is a more concrete measure. The commenter expressed uncertainty about how well the WIOA pilot project to explore measures of effectiveness will translate to SCSEP. This commenter expressed appreciation for the Department's continuing to utilize the current customer satisfaction measure until a more detailed and rigorous effectiveness measure can be tested and developed. The commenter recommended that the Department create a stakeholder workgroup to collaborate on evaluating the applicability of the WIOA pilot measures to SCSEP, as well as on the modification or development of new measures of effectiveness. A different commenter made a similar recommendation about involving grantees in the exploration and adoption of pilot measures of effectiveness in serving employers.

Another commenter asked whether there would be any changes in the administration, substance, or timeline for the customer satisfaction surveys during the interim period while the WIOA measure of effectiveness is not yet final.

The Department welcomes the suggestions for grantee involvement and reiterates that it will continue to use the current customer satisfaction surveys at least until the WIOA pilot is complete and the new WIOA effectiveness measure is finalized. During this interim period, the Department will explore with grantees, and with its three customer groups, options for best measuring the effectiveness of SCSEP's services, including the suggestions made by the commenters. The Department will also explore ways to improve the efficiency of the current customer surveys (including the use of online surveys and changes to the administration of the employer survey) and will examine what, if any, new or revised questions would support an index of effectiveness as an alternative to the current index of satisfaction. Until the Office of Management and Budget (OMB) approves any proposed changes to the content or methods of administration of the surveys, the currently approved surveys will continue to be administered as approved.

Statistical Adjustment Model

One commenter had several comments that relate to the statistical adjustment model, suggesting that the Department recognize differences between employment prospects for an individual residing in a metro or urban area versus one in a rural or frontier area, which would include allowing for different regional measures within the same State; the Department should consider other factors that influence performance, such as access to affordable housing, transportation, and the interplay of various public benefits programs with one another; and whenever possible, the Department should use data on older workers in its calculations. This includes when determining local and regional employment and unemployment figures, among others.

As the Department stated it would do in the preamble to the IFR, the Department is re-examining its current adjustment model to determine if additional aspects of the WIOA model should be incorporated into the SCSEP model or if other changes are appropriate. This consideration includes accounting for the percentage of participants who reside in rural areas, as well as examining an adjustment for the percentage of participants who are ex-offenders (as suggested by a comment made by SSAI). The Department will also explore whether it can obtain current economic data on the senior population as opposed to the general population. The adjustment model applied to the PY 2018 and PY 2019 proposed targets and goals included five new participant characteristics (including residing in a rural area) and one new economic factor (average weekly wages).

The Department notes that to the greatest extent possible, it uses county-level data in its adjustment model, thereby permitting the adjustment factors to be tailored to the specific service area of each grantee. This approach accounts for regional differences within each grantee's service area, as requested by the commenter. In applying the revised adjustment model, the Department used economic data for the new service areas in which the grantees were located at the time of the goal setting for PY 2018 and PY 2019. See also discussion of baseline in § 641.730.

Section 641.730 How will the Department assist grantees in the transition to the new core performance measures?

Although the Department received a few public comments relating to this provision, which are discussed below, the final rule adopts this provision as it was issued in the IFR.

The IFR made several changes in this section to update the Department's transition assistance plans to correspond with the 2016 OAA. As a non-substantive change, the IFR deleted the designation of paragraph (a) and its title “General transition provision,” because the IFR deleted paragraph (b), as discussed below. This section was, thus, left with only two sentences.

The first sentence as revised by the IFR stated that, as soon as practicable after January 2, 2018, the Department would determine whether a SCSEP grantee's performance under the measures in effect prior to January 2, 2018, would have met the expected levels of performance for PY 2018. The second sentence as revised by the IFR stated that if the Department determines that a grantee would have failed to meet those expected levels of performance, then the Department would provide technical assistance to help the grantee to eventually meet the expected levels of performance under the measures in § 641.700, as those measures were revised by the IFR.

The IFR explained that the Department would only make the above determination for the three new employment outcome measures, defined in § 641.710(b) through (d) of the IFR, since no transition is required for the remaining four core measures (three are unchanged, and for the fourth, the “indicators of effectiveness in serving employers, host agencies, and participants,” the IFR stated that the Department would use the same customer satisfaction measure that was used prior to the IFR). In making the determination, the IFR indicated that the Department intended to examine all relevant data, as feasible, in order to provide a crosswalk between the existing measures and the measures implemented in the IFR and to develop a new baseline from which to begin the development of goals for PY 2018 and PY 2019. The IFR promised to provide the analysis to all grantees when it was completed. As set forth above, the Department completed the analysis and cross-walk and provided it to the grantees prior to the development of proposed targets and goals for PY 2018 and PY 2019.

As noted above, the IFR removed paragraph (b) from § 641.730, which provided that PY 2007 would be treated as a baseline year for the most-in-need indicator so that grantees and the Department may collect sufficient data to set a meaningful goal for the measure for PY 2008. The IFR explained that since this provision included dates that have already passed, and given that the Department has documented information on this measure, this provision is no longer required. Therefore, the IFR deleted it from this section.

Baseline Year for New Employment Outcome Measures

Some comments from some of the organizations that responded to the IFR, like comments received from the stakeholder webinar, expressed concern that the new employment outcome measures are substantially different from the current SCSEP outcome measures and that there is no baseline upon which goals for the new measures can be set. For this reason, some comments suggested that the Department establish a pilot period for the new employment measures during which there would not be any expected levels of performance.

One commenter noted that, as a result of the 2016 national grantee competition, many national grantees operate in service areas different from their prior service areas and that the economic conditions in the new area are different as well. This commenter urged the Department to use a valid baseline rather than old data in establishing goals for the new measures.

The Department recognizes that all three of the new outcome measures use different calculations from the measures that were in place prior to the IFR, and that it will take time to establish a reliable baseline to use in setting goals for these measures. As stated in the preamble to the IFR, to help determine how performance under the prior measures relates to performance under the new measures, the Department reanalyzed prior grantee performance data reported under the prior measures using the calculations required for the new measures and created a crosswalk between the two sets of measures. Because the recalculation proved to be an inadequate basis for setting the PY 2018 and PY 2019 grantee-expected levels of performance, the Department decided to treat PYs 2018 and 2019 as baseline years for which targets, rather than expected levels of performance, are assigned, and has reserved the right to renegotiate the PY 2019 targets based on actual performance in PY 2018. Moreover, in developing the proposed goals, the Department used the grantees' most recent, reliable baseline performance. Where the recent baseline data were not reliable, the Department used a longer, historical baseline.

Use of the Participant Individual Record Layout (PIRL) and New Case Management System

One commenter requested that the Department offer training on using the PIRL system and raised several questions related to the transition from SPARQ to PIRL, including whether SPARQ data will migrate to PIRL and whether grantees should anticipate a period of dual entry into both systems. The comment further asked that the Department align its technical documentation with the PIRL data field specifications so that grantees may adjust their internal systems to support the new information codes and that the Department provide advanced notice of the new requirements and training on the new system.

The Department has announced that it is developing a new case management system that is designed to replace SPARQ in whole or in part. The Department anticipates that SPARQ data will be migrated to the new system and that grantees will continue to use SPARQ for exited case records until the conclusion of the reporting of the PY 2017 performance data on or around September 30, 2018. Since grantees will report the new performance measures beginning July 1, 2018, SPARQ is being reconfigured to support the new measures; grantees will continue using SPARQ for at least the first quarter of PY 2018. The Department anticipates that grantees will begin using the new system for active cases in the second or third quarter of PY 2018. The Department has aligned SPARQ data collection for the case management system with the PIRL. The Department will provide details of the new case management system and the transition requirements to the grantees as soon as possible and does anticipate providing training to grantees.

Section 641.740 How will the Department determine whether a grantee fails, meets, or exceeds the expected levels of performance and what will be the consequences of failing to meet expected levels of performance?

The Department did not receive any comments on this section. The final rule adopts the provision as it was issued in the IFR.

Section 641.750 Will there be performance-related incentives?

The Department did not receive any comments on this section. The final rule adopts the provision as it was issued in the IFR.

IV. Regulatory Flexibility Analysis, Executive Order 13272, Small Business Regulatory Enforcement Fairness Act

The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq., requires the Department to evaluate the economic impact of this rule with regard to small entities. The RFA defines small entities to include small businesses, small organizations including not-for-profit organizations, and small governmental jurisdictions. The Department must determine whether the rule imposes a significant economic impact on a substantial number of such small entities.

There are 75 SCSEP grantees; 50 of these are States and are not small entities as defined by the RFA. Six grantees are governmental jurisdictions other than States (four grantees are territories such as Guam; one grantee is Washington, DC; and another grantee is Puerto Rico). Governmental jurisdictions must have a population of less than 50,000 to qualify as a small entity for RFA purposes and the population of these 6 SCSEP grantees each exceeds 50,000. The remaining 19 grantees are non-profit organizations, which includes some large, national non-profit organizations.

The Department has determined that this final rule will impose no additional burden on small entities affected. Since the alignment with WIOA involved only definitions, the grantees are not required to collect any additional information that may cause a burden increase. In addition, the SCSEP program funds provided to grantees cover all such costs.

The Departments certifies that this final rule does not impose a significant economic impact on a substantial number of small entities.

V. Other Regulatory Considerations Executive Order 12866

Under Executive Order (E.O.) 12866, OMB's Office of Information and Regulatory Affairs determines whether a regulatory action is significant and, therefore, subject to the requirements of the Executive Order and review by OMB. 58 FR 51735 (Oct. 4, 1993). Section 3(f) of E.O. 12866 defines a “significant regulatory action” as an action that is likely to result in a rule that: (1) Has an annual effect on the economy of $100 million or more, or adversely affects in a material way a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local or tribal governments or communities (also referred to as economically significant); (2) creates serious inconsistency or otherwise interferes with an action taken or planned by another agency; (3) materially alters the budgetary impacts of entitlement grants, user fees, or loan programs, or the rights and obligations of recipients thereof; or (4) raises novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. Id. OMB has determined that this final rule is not a “significant regulatory action” under sec. 3(f) of E.O. 12866.

This rule is not an E.O. 13771 regulatory action because this rule is not significant under E.O. 12866.

E.O. 13563 directs agencies to propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs; it is tailored to impose the least burden on society, consistent with achieving the regulatory objectives; and in choosing among alternative regulatory approaches, the agency has selected those approaches that maximize net benefits. E.O. 13563 recognizes that some benefits are difficult to quantify and provides that, where appropriate and permitted by law, agencies may consider and discuss qualitatively values that are difficult or impossible to quantify, including equity, human dignity, fairness, and distributive impacts.

OMB declined review of this final rule because it is not a significant regulatory action.

Paperwork Reduction Act

The purposes of the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq., include minimizing the paperwork burden on affected entities.

A Federal agency may not conduct or sponsor a collection of information unless OMB approves it under the PRA and it displays a currently valid OMB control number. The public is also not required to respond to a collection of information unless it displays a currently valid OMB control number. In addition, notwithstanding any other provisions of law, no person will be subject to penalty for failing to comply with a collection of information if the collection of information does not display a currently valid OMB control number (44 U.S.C. 3512). OMB has approved the information collections contained in this final rule. See ICR Reference Number 201802-1205-003. The information collection is summarized as follows.

DOL-Only Performance Accountability, Information, and Reporting System

Agency: DOL-ETA.

Title of Collection: DOL-Only Performance Accountability, Information, and Reporting System.

Type of Review: Revision.

OMB Control Number: 1205-0521.

Affected Public: State, Local, and Tribal Governments; Individuals or Households; and Private Sector—businesses or other for-profits and not-for-profit institutions.

Obligation to Respond: Required to Obtain or Retain Benefits.

Estimated Total Annual Respondents: 17,532,542.

Estimated Total Annual Responses: 35,064,970.

Estimated Total Annual Burden Hours: 8,938,029.

Estimated Total Annual Other Burden Costs: $6,791,395.

Regulations sections: § 684.420, § 684.610, § 684.700, § 684.800, § 685.210, § 685.400, § 688.420, § 688.610. § 641.700, § 641.710, § 641.720, § 641.730, § 641.740, § 641.750.

Unfunded Mandates Reform Act

For purposes of the Unfunded Mandates Reform Act of 1995, this rule does not include any Federal mandate that may result in increased expenditures by State, local, and tribal governments in the aggregate of more than $100 million, or increased expenditures by the private sector of more than $100 million.

Executive Order 13132

The Department has reviewed this rule in accordance with E.O. 13132 regarding federalism and has determined that it does not have “federalism implications.” The rule does not “have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule defines and implements performance measures for the SCSEP and while States are SCSEP grantees, this rule merely makes changes to data collection processes that are ongoing. Requiring State grantees to implement these changes does not constitute a “substantial direct effect” on the States, nor will it alter the relationship or responsibilities between the Federal and State governments.

Executive Order 13045

E.O. 13045 concerns the protection of children from environmental health risks and safety risks. This rule defines and details the performance measures used by the SCSEP, a program for older Americans, and has no impact on safety or health risks to children.

Executive Order 13175

E.O. 13175 addresses the unique relationship between the Federal Government and Indian tribal governments. The order requires Federal agencies to take certain actions when regulations have “tribal implications.” Required actions include consulting with Tribal Governments prior to promulgating a regulation with tribal implications and preparing a tribal impact statement. The order defines regulations as having “tribal implications” when they have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

The Department has reviewed this final rule and concludes that it does not have tribal implications. While some tribes may be recipients of national SCSEP grantees, this rule will not have a substantial direct effect on those tribes because, as outlined in the RFA section of the preamble above, there are only small cost increases associated with implementing this regulation. This regulation does not affect the relationship between the Federal Government and the tribes, nor does it affect the distribution of power and responsibilities between the Federal Government and Tribal Governments. Accordingly, we conclude that this rule does not have tribal implications for the purposes of E.O. 13175.

Environmental Impact Assessment

The Department has reviewed this rule in accordance with the requirements of the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.), the regulations of the Council on Environmental Quality (40 CFR part 1500), and the Department's NEPA procedures (29 CFR part 11). The rule will not have a significant impact on the quality of the human environment and, thus, the Department has not prepared an environmental assessment or an environmental impact statement.

Assessment of Federal Regulations and Policies on Families

Section 654 of the Treasury and General Government Appropriations Act, enacted as part of the Omnibus Consolidated and Emergency Supplemental Appropriations Act of 1999 (Pub. L. 105-277, 112 Stat. 2681), requires the Department to assess the impact of this rule on family well-being. A rule that is determined to have a negative effect on families must be supported with an adequate rationale.

The Department has assessed this rule and determines that it will not have a negative effect on families. Indeed, the SCSEP strengthens families by providing job training and support services to low-income older Americans so that they can obtain fruitful employment and enjoy increased economic self-sufficiency.

Privacy Act

The Privacy Act of 1974, 5 U.S.C. 552a, provides safeguards to individuals concerning their personal information that the Government collects. The Act requires certain actions by an agency that collects information on individuals when that information contains personally identifiable information such as Social Security Numbers (SSNs) or names. Because SCSEP participant records are maintained by SSN, the Act applies here.

A key concern is for the protection of participant SSNs. Grantees must collect the SSN in order to pay participants properly for their community service work in host agencies. When grantees send participant files to the Department for aggregation, the transmittal is protected by secure encryption. When participant files are retrieved within the internet-based SCSEP data management system of SPARQ, only the last four digits of the SSN are displayed. Any information that is shared or made public is aggregated by grantee and does not reveal personal information on specific individuals.

The Department works diligently to ensure the highest level of security whenever personally identifiable information is stored or transmitted. All contractors that have access to individually identifying information are required to provide assurances that they will respect and protect the confidentiality of the data. ETA's Office of Performance and Technology has been an active participant in the development and approval of data security measures—especially as they apply to SPARQ.

In addition to the above, the Department provides a Privacy Act Statement to grantees for distribution to all participants. The Department advised grantees of the requirement in ETA's Older Worker Bulletin OWB-04-06. Participants receive this information when they meet with a caseworker or intake counselor. When the Department monitors the programs, implementation of this term is included in the review.

Executive Order 12630

This rule is not subject to E.O. 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights, because it does not involve implementation of a policy with takings implications.

Executive Order 12988

This regulation has been drafted and reviewed in accordance with E.O. 12988, Civil Justice Reform, and will not unduly burden the Federal court system. The Department has written the regulation so as to minimize litigation and provide a clear legal standard for affected conduct, and the Department has reviewed the regulation carefully to eliminate drafting errors and ambiguities.

Executive Order 13211

This rule is not subject to E.O. 13211, because it will not have a significant adverse effect on the supply, distribution, or use of energy.

Plain Language

The Department drafted this IFR in plain language.

List of Subjects in 20 CFR Part 641

Aged, Employment, Government contracts, Grant programs-labor, Privacy, Reporting and recordkeeping requirements.

Accordingly, the IFR amending 20 CFR part 641 which was published at 82 FR 56869 on December 1, 2017, is adopted as final without change. Rosemary Lahasky, Deputy Assistant Secretary for Employment and Training, Labor.
[FR Doc. 2018-16216 Filed 7-27-18; 8:45 am] BILLING CODE 4510-FN-P
DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Parts 1 and 602 [TD 9836] RIN 1545-BH62 Substantiation and Reporting Requirements for Cash and Noncash Charitable Contribution Deductions AGENCY:

Internal Revenue Service (IRS), Treasury.

ACTION:

Final regulations.

SUMMARY:

These final regulations provide guidance concerning substantiation and reporting requirements for cash and noncash charitable contributions. The final regulations reflect the enactment of provisions of the American Jobs Creation Act of 2004 and the Pension Protection Act of 2006. These regulations provide guidance to individuals, partnerships, and corporations that make charitable contributions.

DATES:

Effective date: These regulations are effective on July 30, 2018.

Applicability dates: For dates of applicability, see §§ 1.170A-1(k), 1.170A-14(j), 1.170A-15(h), 1.170A-16(g), 1.170A-17(c), 1.170A-18(d), 1.664-1(f), and 1.6050L-1(h).

FOR FURTHER INFORMATION CONTACT:

Charles Gorham at (202) 317-7003 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

The collections of information contained in these final regulations have been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) under control number 1545-1953.

The collections of information in these final regulations are in §§ 1.170A-15(a) and (d)(1); 1.170A-16(a), (b), (c), (d), (e), and (f); and 1.170A-18(a)(2) and (b). These collections of information are required to obtain a benefit and will enable the IRS to determine if a taxpayer is entitled to a claimed deduction for a charitable contribution.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number.

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and return information are confidential, as required by section 6103.

Background

This document contains amendments to the Income Tax Regulations, 26 CFR parts 1 and 602, relating to substantiating and reporting deductions for charitable contributions under section 170 of the Internal Revenue Code. These final regulations reflect amendments to section 170 made by section 883 of the American Jobs Creation Act of 2004, Public Law 108-357 (118 Stat. 1418, 1631) (Jobs Act), and sections 1216, 1217, and 1219 of the Pension Protection Act of 2006, Public Law 109-280 (120 Stat. 780, 1079-83) (PPA), which added new rules for substantiating charitable contributions. The final regulations also update cross-references to the section 170 regulations in other regulations.

Section 170(f)(8), which has been in the Code since 1993, provides that no deduction shall be allowed for any contribution of $250 or more, cash or noncash, unless the taxpayer substantiates the contribution with a contemporaneous written acknowledgment of the contribution by the donee organization. The contemporaneous written acknowledgment must include: (1) The amount of cash and a description (but not value) of any property other than cash contributed; (2) a statement of whether the donee organization provided any goods or services in consideration, in whole or in part, for any such cash or property; and (3) a description and good faith estimate of the value of any such goods or services or, if such goods or services consist solely of intangible religious benefits, a statement to that effect.

Section 170(f)(11), as added by section 883 of the Jobs Act, restates, in part, section 155(a) of the Deficit Reduction Act of 1984 and contains reporting and substantiation requirements relating to the allowance of deductions for noncash charitable contributions. Under section 170(f)(11)(C), taxpayers are required to obtain a qualified appraisal for donated property for which a deduction of more than $5,000 is claimed.

Under section 170(f)(11)(D), a qualified appraisal must be attached to any tax return claiming a deduction of more than $500,000. Section 170(h)(4)(B), as added by section 1213 of the PPA, adds the requirement that a qualified appraisal must be included with the taxpayer's return for the taxable year of the contribution for any contribution of a qualified real property interest that is a restriction as to the exterior of a building described in section 170(h)(4)(C)(ii).

Section 170(f)(11)(E), as amended by section 1219 of the PPA, provides statutory definitions of qualified appraisal and qualified appraiser for appraisals prepared with respect to returns filed after August 17, 2006.

Section 170(f)(11)(E)(i) provides that the term qualified appraisal means an appraisal that is (1) treated as a qualified appraisal under regulations or other guidance prescribed by the Secretary, and (2) conducted by a qualified appraiser in accordance with generally accepted appraisal standards and any regulations or other guidance prescribed by the Secretary.

Section 170(f)(11)(E)(ii) provides that the term qualified appraiser means an individual who (1) has earned an appraisal designation from a recognized professional appraiser organization or has otherwise met minimum education and experience requirements set forth in regulations prescribed by the Secretary, (2) regularly performs appraisals for which the individual receives compensation, and (3) meets such other requirements as may be prescribed by the Secretary in regulations or other guidance. Section 170(f)(11)(E)(iii) provides that an individual will not be treated as a qualified appraiser with respect to any specific appraisal unless that individual (1) demonstrates verifiable education and experience in valuing the type of property subject to the appraisal, and (2) has not been prohibited from practicing before the IRS by the Secretary under section 330(c) of Title 31 of the United States Code at any time during the 3-year period ending on the date of the appraisal.

On October 19, 2006, the Treasury Department and the IRS released Notice 2006-96, 2006-2 CB 902 (see § 601.601(d)(2)(ii)(b)), which provides transitional guidance on the definitions of qualified appraisal and qualified appraiser that apply on and after the effective date of the PPA definitions.

Section 170(f)(16) as added by section 1216 of the PPA generally provides that no deduction is allowed for a contribution of clothing or a household item unless the clothing or household item is in good used condition or better.

Section 170(f)(17) as added by section 1217 of the PPA imposes a recordkeeping requirement for all cash contributions, regardless of amount. Specifically, section 170(f)(17) requires a donor to maintain as a record of any cash, check, or other monetary gift (1) a bank record, or (2) a written communication from the donee. The record must show the name of the donee organization, the date of the contribution, and the amount of the contribution.

On December 2, 2006, the Treasury Department and the IRS released Notice 2006-110, 2006-2 CB 1127 (see § 601.601(d)(2)(ii)(b)), which provides rules under section 170(f)(17) for substantiating charitable contributions made by payroll deduction.

On January 8, 2008, the Treasury Department and the IRS released Notice 2008-16, 2008-1 CB 315 (see § 601.601(d)(2)(ii)(b)), which provides rules under section 170(f)(17) for substantiating a one-time, lump-sum charitable contribution of a cash, check, or other monetary gift made through the Combined Federal Campaign (CFC) or a similar program. Taxpayers may rely on Notice 2006-96, Notice 2006-110, and Notice 2008-16 prior to the effective date of these final regulations.

On August 7, 2008, the Treasury Department and the IRS provided guidance on complying with section 170 as amended by the Jobs Act and the PPA in a notice of proposed rulemaking (REG-140029-07) in the Federal Register (73 FR 45908). The Treasury Department and the IRS received comments responding to the notice of proposed rulemaking, and a public hearing was held on January 23, 2009. Copies of the comments received are available for public inspection at www.regulations.gov or upon request. After consideration of the comments received, the Treasury Department and the IRS adopt the proposed regulations as revised by this Treasury decision. The revisions are discussed in this preamble.

Explanation of Provisions and Summary of Comments

The final regulations implement changes made by the Jobs Act and PPA to the substantiation and reporting rules for charitable contributions under section 170. The final regulations set forth the substantiation requirements for contributions of more than $500 under section 170(f)(11)(B) through (D) (added by the Jobs Act); the new definitions of qualified appraisal and qualified appraiser applicable to noncash contributions under section 170(f)(11)(E) (added by the PPA); substantiation requirements for contributions of clothing and household items under section 170(f)(16) (added by the PPA); and recordkeeping requirements for all cash contributions under section 170(f)(17) (added by the PPA).

In addition, these final regulations amend the heading of § 1.170A-13 to alert readers to the updated regulations. The final regulations also update cross-references to the section 170 regulations in other regulations.

I. Cash, Check, or Other Monetary Gift Substantiation Requirements

Section 1.170A-15 implements the requirements of section 170(f)(17) for cash, check, or other monetary gift contributions, as added by the PPA, and clarifies that these rules supplement the substantiation rules in section 170(f)(8).

A. Contributions Made to a Distributing Organization

A donor may make a charitable contribution of cash, check, or other monetary gift to an organization that collects contributions and distributes them to ultimate recipient organizations (pursuant to the donor's instructions or otherwise). The final regulations adopt the general rule of the proposed regulations that treats as a donee for purposes of sections 170(f)(8) and 170(f)(17) an organization described in section 170(c) or a Principal Combined Fund Organization (PCFO) for purposes of the Combined Federal Campaign (CFC) and acting in that capacity. The CFC is a workplace giving campaign established by Executive Order 10728, as amended by Executive Orders 10927, 12353, and 12404, and administered by the United States Office of Personnel Management (OPM). A PCFO administers the local campaign and acts as a fiscal agent for the CFC.

1. Blank Pledge Card Is Not Substantiation

Some commenters asked whether a blank pledge card provided by a donee organization but filled out by the donor constitutes adequate substantiation for a contribution of cash to a distributing organization. Section 170(f)(17) requires a taxpayer to maintain as a record of a contribution of a cash, check, or other monetary gift either a bank record or a written communication from the donee that shows the name of the donee organization, the date of the contribution, and the amount of the contribution. The proposed and final regulations at § 1.170A-15(b)(2) provide that a bank record includes a statement from a financial institution, an electronic fund transfer receipt, a canceled check, a scanned image of both sides of a canceled check obtained from a bank website, or a credit card statement. In addition, the proposed and final regulations provide that a written communication includes an email. Because a blank pledge card provided by the donee organization to a donor does not show the information required under section 170(f)(17), it is not sufficient substantiation for a cash, check, or other monetary gift.

2. Name of Donee for Purposes of CFC

One commenter noted that because the CFC generally does not include the name of the donee organization on its pledge cards, and a PCFO for purposes of the CFC often is a potential ultimate recipient of a contribution to the CFC, including the name of the PCFO on the pledge card could unduly influence donors to contribute to the PCFO rather than to other eligible donees. The commenter asked that the name of the local CFC campaign be treated as the name of the donee organization. The Treasury Department and the IRS agree with this comment. Accordingly, § 1.170A-15(d)(2)(ii) provides that the name of the local CFC may be used instead of the name of the PCFO and may be treated as the donee organization for purposes of sections 170(f)(8) and 170(f)(17) and § 1.170A-15(d)(1)(ii).

B. Compliance With 170(f)(8) and 170(f)(17) in a Single Document

Some commenters asked if a single written acknowledgment can be used to satisfy the substantiation rules under sections 170(f)(8) and 170(f)(17). Section 170(f)(8) does not require that a contemporaneous written acknowledgment by the donee organization include the date of the contribution. In addition, section 170(f)(17) does not require that a written communication from the donee include a statement of whether any goods or services were provided in exchange for the contribution. Although there are different requirements under sections 170(f)(8) and 170(f)(17), § 1.170A-15(a)(3) of the final regulations provides that a single written acknowledgment that satisfies all substantiation requirements under both sections 170(f)(8) and 170(f)(17) is adequate substantiation for contributions of a cash, check, or other monetary gift.

II. Noncash Substantiation Requirements

Section 1.170A-16 implements the requirements of section 170(f)(11) for noncash contributions, as added by the Jobs Act, and clarifies that these rules are in addition to the requirements in section 170(f)(8).

Proposed and final § 1.170A-16 provide that a donor who claims a deduction for a noncash contribution of less than $250 is required only to obtain a receipt from the donee or keep reliable records. A donor who claims a noncash contribution of at least $250 but not more than $500 is required only to obtain a contemporaneous written acknowledgment, as provided under section 170(f)(8) and § 1.170A-13(f). For claimed noncash contributions of more than $500 but not more than $5,000, the donor must obtain a contemporaneous written acknowledgment and must also file a completed Form 8283 (Section A), “Noncash Charitable Contributions,” with the return on which the deduction is claimed. For claimed noncash contributions of more than $5,000, in addition to a contemporaneous written acknowledgment, the donor generally must obtain a qualified appraisal and must also complete and file either Section A or Section B of Form 8283 (depending on the type of property contributed) with the return on which the deduction is claimed. For claimed noncash contributions of more than $500,000, the donor must also attach a copy of the qualified appraisal to the return for the taxable year in which the contribution is made.

Section 170(f)(11)(F) provides that for purposes of the $500, $5,000, and $500,000 thresholds in section 170(f)(11), similar items contributed during the taxable year are treated as one property. In determining whether a contribution meets the $250 threshold, § 1.170A-13(f)(1) provides that separate contributions made during the tax year, regardless of whether the sum of those contributions equal or exceed $250, are not combined. The proposed and final regulations also provide that the requirements for substantiation that must be submitted with a return also apply to the return for any carryover year under section 170(d).

A. Reasonable Cause Exception

In light of recent case law (see Crimi v. Commissioner, T.C. Memo. 2013-51), the paragraph relating to the reasonable cause exception set forth in proposed regulation § 1.170A-16(f)(6) has been deleted from the final regulations because it is inconsistent with the Tax Court's position. In Crimi, the IRS argued that there was no qualified appraisal. The Tax Court discussed the doctrine of substantial compliance with respect to the qualified appraisal regulation, but stated that it was unnecessary to decide whether it was applicable to the petitioners' case because they established that the failure was due to reasonable cause. Specifically, the court stated that a reasonable cause inquiry is “inherently a fact-intensive one, and facts and circumstances must be judged on a case-by-case basis.” Id. at *99. The court found that petitioners reasonably and in good faith relied on their long-time certified public accountant's advice that their appraisal met all the legal requirements to claim the deduction. Thus, the final regulations do not contain a standard for the reasonable cause exception.

B. Appraiser Privacy Concerns

A number of commenters expressed concern over appraisers' privacy if the appraiser's social security number is required on qualified appraisals and Forms 8283 (Section B). This concern was addressed by the proposed regulations. Both the proposed and final regulations require an appraiser to use a taxpayer identification number on an appraisal, but that number does not need to be the appraiser's social security number. An appraiser may use an employer identification number, which may be obtained by: (1) Applying on the IRS website (www.regulationsgov); or (2) filing a completed Form SS-4, Application for Employer Identification Number, by mail or by fax. The IRS has modified the instructions to Form 8283 to make clear that an appraiser may use either a social security number or an employer identification number.

C. Form 8283 Is Not a Contemporaneous Written Acknowledgment

One commenter asked whether a Form 8283 can satisfy the requirement for a contemporaneous written acknowledgment under section 170(f)(8). Although no format is prescribed for a contemporaneous written acknowledgment (for example, an email may qualify), a contemporaneous written acknowledgment of a contribution by the donee organization must contain all of the information required by section 170(f)(8)(B). Moreover, section 170(f)(8)(A) states that the acknowledgment is made “by the donee organization.” Only Section B, part IV of Form 8283, completed for property valued at over $5,000, is a donee acknowledgment, and this acknowledgment only contains some of the information required by section 170(f)(8)(B). Accordingly, even a fully-completed Form 8283 does not satisfy the requirements of section 170(f)(8).

D. Form 8283 (Section B) Provided to Donee

Another commenter suggested that the Form 8283 (Section B) should be required to be fully completed, including the appraiser information and the appraised or claimed value of the property, before the donor obtains the donee's signature. Section 1.170A-16(d)(5)(iii) of the proposed regulations provides that specific portions of the Form 8283 (Section B) must be completed before it is signed by the donee, but that the Form 8283 (Section B) does not need to contain certain other information, such as the appraiser information and the appraised or claimed value of the property, before the donee signs the form. Regardless of any benefits that may result from additional information sharing, the public should have the opportunity to comment on any proposed requirement to share additional information with the donee. Accordingly, the final regulations adopt the proposed regulation language without adoption of this suggestion.

E. Attaching Appraisal to Carryover Year Returns

One commenter suggested deleting the requirement in the regulations to attach an appraisal to the tax returns for carryover years. Because the need for the IRS to have the appraisal attached to each return reflecting a contribution in excess of $500,000 outweighs the burden on taxpayers to supply it, the final regulations retain this requirement. Accordingly, if the appraisal is required to be attached to the return for the contribution year, it must also be attached to the returns for the carryover years.

III. New Requirements for Qualified Appraisals and Qualified Appraisers

As prescribed in section 170(f)(11)(E), as amended by the PPA, § 1.170A-17 of the proposed and final regulations provides definitions for qualified appraisal and qualified appraiser.

A. Transitional Rule

One commenter suggested that a transitional rule be included for § 1.170A-17 because additional time may be needed to meet the education and experience requirements in § 1.170A-17 for qualified appraisers. In order to provide appraisers with a reasonable amount of time to meet the new education and experience requirements, the final rules under § 1.170A-17 apply only to contributions made on or after January 1, 2019.

B. Definition of Generally Accepted Appraisal Standards

Section 170(f)(11)(E)(i)(II) provides that the term qualified appraisal means an appraisal that is conducted by a qualified appraiser in accordance with generally accepted appraisal standards. Generally accepted appraisal standards are defined in the proposed regulations at § 1.170A-17(a)(2) as the “substance and principles of the Uniform Standards of Professional Appraisal Practice [USPAP], as developed by the Appraisal Standards Board of the Appraisal Foundation.” Several commenters recommended that the final regulations require appraisal documents to be prepared “in accordance with USPAP” and not merely in accordance with the “substance and principles of USPAP.” Other commenters indicated that strict compliance with USPAP would eliminate use of all other appraisal standards, including some that are generally accepted in the appraisal industry. The Treasury Department and the IRS agree that it is beneficial to provide some flexibility by requiring conformity with appraisal standards that are consistent with the substance and principles of USPAP rather than requiring that all appraisals be prepared strictly in accordance with USPAP. Accordingly, the final regulations do not adopt the recommendation to require strict compliance with USPAP and retain the requirement of consistency with the substance and principles of USPAP.

C. Education and Experience Requirement for Qualified Appraisers

Section 170(f)(11)(E)(ii)(I) and (iii)(I) and § 1.170A-17(b) of the proposed regulations provide that a qualified appraiser is an individual with verifiable education and experience in valuing the type of property for which the appraisal is performed. Some commenters reiterated suggestions made in response to Notice 2006-96 that the final regulations interpret the requirement in section 170(f)(11)(E) that a qualified appraiser have verifiable “education and experience” as requiring verifiable “education or experience.” The Treasury Department and the IRS did not adopt this suggestion in the proposed regulations, and do not do so in the final regulations, because it would be contrary to the clear language of the statute.

Section 1.170A-17(b)(4) of the proposed regulations requires an appraiser to specify in the appraisal the appraiser's education and experience in valuing the type of property and to make a declaration in the appraisal that, because of the appraiser's education and experience, the appraiser is qualified to make appraisals of the type of property being valued. A commenter suggested that, to meet the “verifiable” requirement in § 1.170A-17(b), the appraiser should be required to specify in the appraisal only that the appraiser is a qualified appraiser under § 1.170A-17(b) and that the appraisal was prepared in accordance with the substance and principles of USPAP. The general statement of qualification suggested by the commenter does not demonstrate, as required under section 170(f)(11)(E)(iii)(I), that the appraiser has verifiable education and experience that qualifies the appraiser to prepare the appraisal for that type of property. Accordingly, the final regulations do not adopt this suggestion.

D. Parity Between “Designation” and “Education and Experience”

Section 1.170A-17(b)(2)(i) of the proposed regulations provides that an individual is treated as having education and experience in valuing the type of property if, as of the date the individual signs the appraisal, the individual has satisfied the following requirements: (A) Successfully completed professional or college-level coursework in valuing the type of property and has two or more years of experience in valuing the type of property; or (B) earned a recognized appraiser designation for the type of property. One commenter suggested that it is much more difficult to earn a designation from a generally recognized professional appraiser organization under § 1.170A-17(b)(2)(i)(B) than to satisfy the education and experience requirements under § 1.170A-17(b)(2)(i)(A). The commenter suggested that the education and experience requirements be made more stringent. In enacting section 170(f)(11)(E), Congress intended to improve the accuracy of deductions claimed for noncash contributions by requiring qualified appraisers to meet more stringent qualification standards, including by requiring that both education and experience requirements be met. See H.R. Rep. No. 108-548, pt. 1, at 356 (2004). The requirements for education and experience in the proposed regulations are sufficiently stringent as intended by Congress. Accordingly, the final regulations do not adopt this suggestion and retain without modification the requirements for education and experience in the proposed regulations.

E. Satisfying Verifiable Education Requirement

Section 170(f)(11)(E)(iii)(I) requires verifiable education and experience in valuing the type of property subject to the appraisal. Section 1.170A-17(b)(2)(i)(A) of the proposed regulations provides that an individual is treated as having education and experience in valuing the type of property if, as of the date the individual signs the appraisal, the individual has successfully completed (for example, received a passing grade on a final examination) professional or college-level coursework in valuing the type of property, and has two or more years of experience in valuing the type of property. One commenter asked whether attendance at a training event that does not include a final examination meets the requirement of successful completion of coursework. The reference to a passing grade on a final examination in § 1.170A-17(b)(2)(i)(A) is merely an example of what is considered successful completion of professional or college-level coursework, and other evidence of successful completion may be sufficient. However, mere attendance at a training event is not sufficient, and evidence of successful completion of coursework is necessary under the final regulations.

F. Education Provided by Trade Organization

Two commenters pointed out that, in addition to generally recognized professional appraiser organizations, a generally recognized professional trade organization may provide coursework that satisfies the requirement for verifiable education in valuing the type of property under § 1.170A-17(b)(2)(i)(A) and (ii)(B). The Treasury Department and the IRS agree with this comment, and the final regulations provide that an appraiser also can satisfy § 1.170A-17(b)(2)(i)(A) and (ii)(B) by successfully completing coursework in valuing the type of property from a generally recognized professional trade organization.

G. Examples of Generally Recognized Professional Appraiser Organizations

Some commenters objected to the references in the proposed regulations to designations conferred by one particular organization as examples of recognized appraiser designations. The Treasury Department and the IRS do not require or prefer the designation of any particular appraiser organization, and, therefore, the final regulations do not contain examples of any designations.

IV. Additional Comments

A number of commenters requested that the Treasury Department and the IRS provide that the final regulations apply to charitable contributions for all federal tax purposes, including estate and gift tax. These regulations are promulgated under Jobs Act and PPA provisions that apply only to income tax deductions for charitable contributions under section 170. No substantive changes were made to the proposed regulations in response to these comments because these comments were beyond the scope of the proposed regulations.

Some commenters suggested that appraisers be allowed to use certain IRS valuation tables, such as those for charitable remainder trusts, other remainder interests in property, and life insurance policies, instead of a qualified appraisal. These tables may be used to value property in certain other contexts, but they do not necessarily provide a fair market value of the property contributed. Therefore, these tables are not acceptable substitutes for a qualified appraisal to substantiate deductions for charitable contributions under section 170.

Another commenter suggested that taxpayers should not be required to substantiate their charitable contribution deduction with a qualified appraisal when they purchase medical equipment, such as a Magnetic Resonance Imaging (MRI) machine, and donate the equipment to a qualified organization. The purchase price of the medical equipment may differ from its fair market value. A qualified appraisal prepared by a qualified appraiser is required to determine the fair market value at the time of contribution. Therefore, no changes were made to the proposed regulations in response to this comment.

Effect on Other Documents

Notice 2006-96 provides transitional guidance on the definitions of qualified appraisal and qualified appraiser under section 170(f)(11). Notice 2006-110 provides transitional guidance under section 170(f)(17) for substantiating charitable contributions made by payroll deduction. Notice 2008-16 provides transitional guidance under section 170(f)(17) for substantiating a one-time, lump-sum charitable contribution of a cash, check, or other monetary gift made through the CFC or a similar program. All three notices provide that taxpayers may rely on the notices until final regulations are effective. Accordingly, Notice 2006-110 and Notice 2008-16 are obsolete as of July 30, 2018 and Notice 2006-96 is obsolete as of January 1, 2019.

V. Applicability Dates

In general, §§ 1.170A-15, 1.170A-16, and 1.170A-18 apply to contributions made after July 30, 2018. Section 1.170A-17 applies to contributions made on or after January 1, 2019. Taxpayers are reminded that the effective dates of the Jobs Act and the PPA relating to substantiating and reporting charitable contributions precede the effective date of these final regulations, and the Jobs Act and the PPA apply in accordance with their applicability dates. See Notice 2006-96.

Special Analyses

This regulation is not subject to review under section 6(b) of Executive Order 12866 pursuant to the Memorandum of Agreement (April 11, 2018) between the Department of the Treasury and the Office of Management and Budget regarding review of tax regulations. Further it is hereby certified that these regulations will not have a significant economic impact on a substantial number of small entities. Accordingly, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Although this rule could affect a substantial number of small entities, any economic impact is expected to be minimal. The final rule provides clarifications and simplifications to the existing substantiation and reporting requirements for charitable contributions and are designed to reduce the burden on taxpayers. Further, any substantiation and reporting rules contained in these final regulations that are in addition to the rules in current regulations reflect statutory substantiation and reporting requirements. Pursuant to section 7805(f) of the Internal Revenue Code, the notice of proposed rulemaking preceding this regulation was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business, and no comments were received.

Drafting Information

The principal author of these regulations is Charles Gorham of the Office of Associate Chief Counsel (Income Tax and Accounting). Other personnel from the Treasury Department and the IRS participated in their development.

List of Subjects 26 CFR Part 1

Income taxes, Reporting and recordkeeping requirements.

26 CFR Part 602

Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

Accordingly, 26 CFR parts 1 and 602 are amended as follows:

PART 1—INCOME TAXES Paragraph 1. The authority citation for part 1 amended by adding sectional authorities for §§ 1.170A-15 through 1.170A-18 in numerical order to read in part as follows: Authority:

26 U.S.C. 7805 * * *

§ 1.170A-15 also issued under 26 U.S.C. 170(a)(1).

§ 1.170A-16 also issued under 26 U.S.C. 170(a)(1) and 170(f)(11).

§ 1.170A-17 also issued under 26 U.S.C. 170(a)(1) and 170(f)(11).

§ 1.170A-18 also issued under 26 U.S.C. 170(a)(1).

§§ 1.170-0, 1.170-1, and 1.170-2 [Removed]
Par. 2. Sections 1.170-0, 1.170-1, and 1.170-2 are removed. Par. 3. Section 1.170A-1 is amended by revising the third sentence of paragraph (a) and adding two sentences to the end of paragraph (k) to read as follows:
§ 1.170A-1 Charitable, etc., contributions and gifts; allowance of deduction.

(a) * * * For rules relating to record keeping and return requirements in support of deductions for charitable contributions (whether by an itemizing or nonitemizing taxpayer), see §§ 1.170A-13, 1.170A-14, 1.170A-15, 1.170A-16, 1.170A-17, and 1.170A-18. * * *

(k) * * * The third sentence of paragraph (a) applies as provided in the sections referenced in that sentence.

Par. 4. Section 1.170A-13 is amended by revising the heading to read as follows:
§ 1.170A-13 Recordkeeping and return requirements for deductions for charitable contributions.
Par. 5. Section 1.170A-14 is amended by revising paragraphs (i) and (j) to read as follows:
§ 1.170A-14. Qualified conservation contributions.

(i) Substantiation requirement. If a taxpayer makes a qualified conservation contribution and claims a deduction, the taxpayer must maintain written records of the fair market value of the underlying property before and after the donation and the conservation purpose furthered by the donation, and such information shall be stated in the taxpayer's income tax return if required by the return or its instructions. See also § 1.170A-13(c) (relating to substantiation requirements for deductions in excess of $5,000 for charitable contributions made on or before July 30, 2018); § 1.170A-16(d) (relating to substantiation of charitable contributions of more than $5,000 made after July 30, 2018); § 1.170A-17 (relating to the definitions of qualified appraisal and qualified appraiser for substantiation of contributions made on or after January 1, 2019); and section 6662 (relating to the imposition of an accuracy-related penalty on underpayments). Taxpayers may rely on the rules in § 1.170A-16(d) for contributions made after June 3, 2004, or appraisals prepared for returns or submissions filed after August 17, 2006. Taxpayers may rely on the rules in § 1.170A-17 for appraisals prepared for returns or submissions filed after August 17, 2006.

(j) Effective/applicability dates. Except as otherwise provided in § 1.170A-14(g)(4)(ii) and § 1.170A-14(i), this section applies only to contributions made on or after December 18, 1980.

Par. 6. Section 1.170A-15 is added to read as follows:
§ 1.170A-15 Substantiation requirements for charitable contribution of a cash, check, or other monetary gift.

(a) In general—(1) Bank record or written communication required. No deduction is allowed under sections 170(a) and 170(f)(17) for a charitable contribution in the form of a cash, check, or other monetary gift, as described in paragraph (b)(1) of this section, unless the donor substantiates the deduction with a bank record, as described in paragraph (b)(2) of this section, or a written communication, as described in paragraph (b)(3) of this section, from the donee showing the name of the donee, the date of the contribution, and the amount of the contribution.

(2) Additional substantiation required for contributions of $250 or more. No deduction is allowed under section 170(a) for any contribution of $250 or more unless the donor substantiates the contribution with a contemporaneous written acknowledgment, as described in section 170(f)(8) and § 1.170A-13(f), from the donee.

(3) Single document may be used. The requirements of paragraphs (a)(1) and (2) of this section may be met by a single document that contains all the information required by paragraphs (a)(1) and (2) of this section, if the document is obtained by the donor no later than the date prescribed by paragraph (c) of this section.

(b) Terms—(1) Monetary gift includes a transfer of a gift card redeemable for cash, and a payment made by credit card, electronic fund transfer (as described in section 5061(e)(2)), an online payment service, or payroll deduction.

(2) Bank record includes a statement from a financial institution, an electronic fund transfer receipt, a canceled check, a scanned image of both sides of a canceled check obtained from a bank website, or a credit card statement.

(3) Written communication includes email.

(c) Deadline for receipt of substantiation. The substantiation described in paragraph (a) of this section must be received by the donor on or before the earlier of—

(1) The date the donor files the original return for the taxable year in which the contribution was made; or

(2) The due date, including any extension, for filing the donor's original return for that year.

(d) Special rules—(1) Contributions made by payroll deduction. In the case of a charitable contribution made by payroll deduction, a donor is treated as meeting the requirements of section 170(f)(17) and paragraph (a) of this section if, no later than the date described in paragraph (c) of this section, the donor obtains—

(i) A pay stub, Form W-2, “Wage and Tax Statement,” or other employer-furnished document that sets forth the amount withheld during the taxable year for payment to a donee; and

(ii) A pledge card or other document prepared by or at the direction of the donee that shows the name of the donee.

(2) Distributing organizations as donees. The following organizations are treated as donees for purposes of section 170(f)(17) and paragraph (a) of this section, even if the organization (pursuant to the donor's instructions or otherwise) distributes the amount received to one or more organizations described in section 170(c):

(i) An organization described in section 170(c).

(ii) An organization described in 5 CFR 950.105 (a Principal Combined Fund Organization (PCFO) for purposes of the Combined Federal Campaign (CFC)) and acting in that capacity. For purposes of the requirement for a written communication under section 170(f)(17), if the donee is a PCFO, the name of the local CFC campaign may be treated as the name of the donee organization.

(e) Substantiation of out-of-pocket expenses. Paragraph (a)(1) of this section does not apply to a donor who incurs unreimbursed expenses of less than $250 incident to the rendition of services, within the meaning of § 1.170A-1(g). For substantiation of unreimbursed out-of-pocket expenses of $250 or more, see § 1.170A-13(f)(10).

(f) Charitable contributions made by partnership or S corporation. If a partnership or an S corporation makes a charitable contribution, the partnership or S corporation is treated as the donor for purposes of section 170(f)(17) and paragraph (a) of this section.

(g) Transfers to certain trusts. The requirements of section 170(f)(17) and paragraphs (a)(1) and (3) of this section do not apply to a transfer of a cash, check, or other monetary gift to a trust described in section 170(f)(2)(B); a charitable remainder annuity trust, as described in section 664(d)(1) and the corresponding regulations; or a charitable remainder unitrust, as described in section 664(d)(2) or (d)(3) and the corresponding regulations. The requirements of section 170(f)(17) and paragraphs (a)(1) and (2) of this section do apply, however, to a transfer to a pooled income fund, as defined in section 642(c)(5).

(h) Effective/applicability date. This section applies to contributions made after July 30, 2018. Taxpayers may rely on the rules of this section for contributions made in taxable years beginning after August 17, 2006.

Par. 7. Section 1.170A-16 is added to read as follows:
§ 1.170A-16 Substantiation and reporting requirements for noncash charitable contributions.

(a) Substantiation of charitable contributions of less than $250—(1) Individuals, partnerships, and certain corporations required to obtain receipt. Except as provided in paragraph (a)(2) of this section, no deduction is allowed under section 170(a) for a noncash charitable contribution of less than $250 by an individual, partnership, S corporation, or C corporation that is a personal service corporation or closely held corporation unless the donor maintains for each contribution a receipt from the donee showing the following information:

(i) The name and address of the donee;

(ii) The date of the contribution;

(iii) A description of the property in sufficient detail under the circumstances (taking into account the value of the property) for a person who is not generally familiar with the type of property to ascertain that the described property is the contributed property; and

(iv) In the case of securities, the name of the issuer, the type of security, and whether the securities are publicly traded securities within the meaning of § 1.170A-13(c)(7)(xi).

(2) Substitution of reliable written records—(i) In general. If it is impracticable to obtain a receipt (for example, where a donor deposits property at a donee's unattended drop site), the donor may satisfy the recordkeeping rules of this paragraph (a) by maintaining reliable written records, as described in paragraphs (a)(2)(ii) and (iii) of this section, for the contributed property.

(ii) Reliable written records. The reliability of written records is to be determined on the basis of all of the facts and circumstances of a particular case, including the proximity in time of the written record to the contribution.

(iii) Contents of reliable written records. Reliable written records must include—

(A) The information required by paragraph (a)(1) of this section;

(B) The fair market value of the property on the date the contribution was made;

(C) The method used in determining the fair market value; and

(D) In the case of a contribution of clothing or a household item as defined in § 1.170A-18(c), the condition of the item.

(3) Additional substantiation rules may apply. For additional substantiation rules, see paragraph (f) of this section.

(b) Substantiation of charitable contributions of $250 or more but not more than $500. No deduction is allowed under section 170(a) for a noncash charitable contribution of $250 or more but not more than $500 unless the donor substantiates the contribution with a contemporaneous written acknowledgment, as described in section 170(f)(8) and § 1.170A-13(f).

(c) Substantiation of charitable contributions of more than $500 but not more than $5,000—(1) In general. No deduction is allowed under section 170(a) for a noncash charitable contribution of more than $500 but not more than $5,000 unless the donor substantiates the contribution with a contemporaneous written acknowledgment, as described in section 170(f)(8) and § 1.170A-13(f), and meets the applicable requirements of this section.

(2) Individuals, partnerships, and certain corporations also required to file Form 8283 (Section A). No deduction is allowed under section 170(a) for a noncash charitable contribution of more than $500 but not more than $5,000 by an individual, partnership, S corporation, or C corporation that is a personal service corporation or closely held corporation unless the donor completes Form 8283 (Section A), “Noncash Charitable Contributions,” as provided in paragraph (c)(3) of this section, or a successor form, and files it with the return on which the deduction is claimed.

(3) Completion of Form 8283 (Section A). A completed Form 8283 (Section A) includes—

(i) The donor's name and taxpayer identification number (for example, a social security number or employer identification number);

(ii) The name and address of the donee;

(iii) The date of the contribution;

(iv) The following information about the contributed property:

(A) A description of the property in sufficient detail under the circumstances, taking into account the value of the property, for a person who is not generally familiar with the type of property to ascertain that the described property is the contributed property;

(B) In the case of real or tangible personal property, the condition of the property;

(C) In the case of securities, the name of the issuer, the type of security, and whether the securities are publicly traded securities within the meaning of § 1.170A-13(c)(7)(xi);

(D) The fair market value of the property on the date the contribution was made and the method used in determining the fair market value;

(E) The manner of acquisition (for example, by purchase, gift, bequest, inheritance, or exchange), and the approximate date of acquisition of the property by the donor (except that in the case of a contribution of publicly traded securities as defined in § 1.170A-13(c)(7)(xi), a representation that the donor held the securities for more than one year is sufficient) or, if the property was created, produced, or manufactured by or for the donor, the approximate date the property was substantially completed;

(F) The cost or other basis, adjusted as provided by section 1016, of the property (except that the cost or basis is not required for contributions of publicly traded securities (as defined in § 1.170A-13(c)(7)(xi)) that would have resulted in long-term capital gain if sold on the contribution date, unless the donor has elected to limit the deduction to basis under section 170(b)(1)(C)(iii));

(G) In the case of tangible personal property, whether the donee has certified it for a use related to the purpose or function constituting the donee's basis for exemption under section 501, or in the case of a governmental unit, an exclusively public purpose; and

(v) Any other information required by Form 8283 (Section A) or the instructions to Form 8283 (Section A).

(4) Additional requirement for certain vehicle contributions. In the case of a contribution of a qualified vehicle described in section 170(f)(12)(E) for which an acknowledgment by the donee organization is required under section 170(f)(12)(D), the donor must attach a copy of the acknowledgment to the Form 8283 (Section A) for the return on which the deduction is claimed.

(5) Additional substantiation rules may apply. For additional substantiation rules, see paragraph (f) of this section.

(d) Substantiation of charitable contributions of more than $5,000—(1) In general. Except as provided in paragraph (d)(2) of this section, no deduction is allowed under section 170(a) for a noncash charitable contribution of more than $5,000 unless the donor—

(i) Substantiates the contribution with a contemporaneous written acknowledgment, as described in section 170(f)(8) and § 1.170A-13(f);

(ii) Obtains a qualified appraisal, as defined in § 1.170A-17(a)(1), prepared by a qualified appraiser, as defined in § 1.170A-17(b)(1); and

(iii) Completes Form 8283 (Section B), as provided in paragraph (d)(3) of this section, or a successor form, and files it with the return on which the deduction is claimed.

(2) Exception for certain noncash contributions. A qualified appraisal is not required, and a completed Form 8283 (Section A) containing the information required in paragraph (c)(3) of this section meets the requirements of paragraph (d)(1)(iii) of this section for contributions of—

(i) Publicly traded securities as defined in § 1.170A-13(c)(7)(xi);

(ii) Property described in section 170(e)(1)(B)(iii) (certain intellectual property);

(iii) A qualified vehicle described in section 170(f)(12)(A)(ii) for which an acknowledgment under section 170(f)(12)(B)(iii) is provided; and

(iv) Property described in section 1221(a)(1) (inventory and property held by the donor primarily for sale to customers in the ordinary course of the donor's trade or business).

(3) Completed Form 8283 (Section B). A completed Form 8283 (Section B) includes—

(i) The donor's name and taxpayer identification number (for example, a social security number or employer identification number);

(ii) The donee's name, address, taxpayer identification number, signature, the date signed by the donee, and the date the donee received the property;

(iii) The appraiser's name, address, taxpayer identification number, appraiser declaration, as described in paragraph (d)(4) of this section, signature, and the date signed by the appraiser;

(iv) The following information about the contributed property:

(A) The fair market value on the valuation effective date, as defined in § 1.170A-17(a)(5)(i).

(B) A description in sufficient detail under the circumstances, taking into account the value of the property, for a person who is not generally familiar with the type of property to ascertain that the described property is the contributed property.

(C) In the case of real property or tangible personal property, the condition of the property;

(v) The manner of acquisition (for example, by purchase, gift, bequest, inheritance, or exchange), and the approximate date of acquisition of the property by the donor, or, if the property was created, produced, or manufactured by or for the donor, the approximate date the property was substantially completed;

(vi) The cost or other basis of the property, adjusted as provided by section 1016;

(vii) A statement explaining whether the charitable contribution was made by means of a bargain sale and, if so, the amount of any consideration received for the contribution; and

(viii) Any other information required by Form 8283 (Section B) or the instructions to Form 8283 (Section B).

(4) Appraiser declaration. The appraiser declaration referred to in paragraph (d)(3)(iii) of this section must include the following statement: “I understand that my appraisal will be used in connection with a return or claim for refund. I also understand that, if there is a substantial or gross valuation misstatement of the value of the property claimed on the return or claim for refund that is based on my appraisal, I may be subject to a penalty under section 6695A of the Internal Revenue Code, as well as other applicable penalties. I affirm that I have not been at any time in the three-year period ending on the date of the appraisal barred from presenting evidence or testimony before the Department of the Treasury or the Internal Revenue Service pursuant to 31 U.S.C. 330(c).”

(5) Donee signature—(i) Person authorized to sign. The person who signs Form 8283 (Section B) for the donee must be either an official authorized to sign the tax or information returns of the donee, or a person specifically authorized to sign Forms 8283 (Section B) by that official. In the case of a donee that is a governmental unit, the person who signs Form 8283 (Section B) for the donee must be an official of the governmental unit.

(ii) Effect of donee signature. The signature of the donee on Form 8283 (Section B) does not represent concurrence in the appraised value of the contributed property. Rather, it represents acknowledgment of receipt of the property described in Form 8283 (Section B) on the date specified in Form 8283 (Section B) and that the donee understands the information reporting requirements imposed by section 6050L and § 1.6050L-1.

(iii) Certain information not required on Form 8283 (Section B) before donee signs. Before Form 8283 (Section B) is signed by the donee, Form 8283 (Section B) must be completed (as described in paragraph (d)(3) of this section), except that it is not required to contain the following:

(A) The appraiser declaration or information about the qualified appraiser.

(B) The manner or date of acquisition.

(C) The cost or other basis of the property.

(D) The appraised fair market value of the contributed property.

(E) The amount claimed as a charitable contribution.

(6) Additional substantiation rules may apply. For additional substantiation rules, see paragraph (f) of this section.

(7) More than one appraiser. More than one appraiser may appraise the donated property. If more than one appraiser appraises the property, the donor does not have to use each appraiser's appraisal for purposes of substantiating the charitable contribution deduction under this paragraph (d). If the donor uses the appraisal of more than one appraiser, or if two or more appraisers contribute to a single appraisal, each appraiser shall comply with the requirements of this paragraph (d) and the requirements in § 1.170A-17, including signing the qualified appraisal and appraisal summary.

(e) Substantiation of noncash charitable contributions of more than $500,000—(1) In general. Except as provided in paragraph (e)(2) of this section, no deduction is allowed under section 170(a) for a noncash charitable contribution of more than $500,000 unless the donor—

(i) Substantiates the contribution with a contemporaneous written acknowledgment, as described in section 170(f)(8) and § 1.170A-13(f);

(ii) Obtains a qualified appraisal, as defined in § 1.170A-17(a)(1), prepared by a qualified appraiser, as defined in § 1.170A-17(b)(1);

(iii) Completes, as described in paragraph (d)(3) of this section, Form 8283 (Section B) and files it with the return on which the deduction is claimed; and

(iv) Attaches the qualified appraisal of the property to the return on which the deduction is claimed.

(2) Exception for certain noncash contributions. For contributions of property described in paragraph (d)(2) of this section, a qualified appraisal is not required, and a completed Form 8283 (Section A), containing the information required in paragraph (c)(3) of this section, meets the requirements of paragraph (e)(1)(iii) of this section.

(3) Additional substantiation rules may apply. For additional substantiation rules, see paragraph (f) of this section.

(f) Additional substantiation rules—(1) Form 8283 (Section B) furnished by donor to donee. A donor who presents a Form 8283 (Section B) to a donee for signature must furnish to the donee a copy of the Form 8283 (Section B).

(2) Number of Forms 8283 (Section A or Section B)—(i) In general. For each item of contributed property for which a Form 8283 (Section A or Section B) is required under paragraphs (c), (d), or (e) of this section, a donor must attach a separate Form 8283 (Section A or Section B) to the return on which the deduction for the item is claimed.

(ii) Exception for similar items. The donor may attach a single Form 8283 (Section A or Section B) for all similar items of property, as defined in § 1.170A-13(c)(7)(iii), contributed to the same donee during the donor's taxable year, if the donor includes on Form 8283 (Section A or Section B) the information required by paragraph (c)(3) or (d)(3) of this section for each item of property.

(3) Substantiation requirements for carryovers of noncash contribution deductions. The rules in paragraphs (c), (d), and (e) of this section (regarding substantiation that must be submitted with a return) also apply to the return for any carryover year under section 170(d).

(4) Partners and S corporation shareholders—(i) Form 8283 (Section A or Section B) must be provided to partners and S corporation shareholders. If the donor is a partnership or S corporation, the donor must provide a copy of the completed Form 8283 (Section A or Section B) to every partner or shareholder who receives an allocation of a charitable contribution deduction under section 170 for the property described in Form 8283 (Section A or Section B). Similarly, a recipient partner or shareholder that is a partnership or S corporation must provide a copy of the completed Form 8283 (Section A or Section B) to each of its partners or shareholders who receives an allocation of a charitable contribution deduction under section 170 for the property described in Form 8283 (Section A or Section B).

(ii) Partners and S corporation shareholders must attach Form 8283 (Section A or Section B) to return. A partner of a partnership or shareholder of an S corporation who receives an allocation of a charitable contribution deduction under section 170 for property to which paragraph (c), (d), or (e) of this section applies must attach a copy of the partnership's or S corporation's completed Form 8283 (Section A or Section B) to the return on which the deduction is claimed.

(5) Determination of deduction amount for purposes of substantiation rules—(i) In general. In determining whether the amount of a donor's deduction exceeds the amounts set forth in section 170(f)(11)(B) (noncash contributions exceeding $500), 170(f)(11)(C) (noncash contributions exceeding $5,000), or 170(f)(11)(D) (noncash contributions exceeding $500,000), the rules of paragraphs (f)(5)(ii) and (iii) of this section apply.

(ii) Similar items of property must be aggregated. Under section 170(f)(11)(F), the donor must aggregate the amount claimed as a deduction for all similar items of property, as defined in § 1.170A-13(c)(7)(iii), contributed during the taxable year. For rules regarding the number of qualified appraisals and Forms 8283 (Section A or Section B) required if similar items of property are contributed, see § 1.170A-13(c)(3)(iv)(A) and (4)(iv)(B).

(iii) For contributions of certain inventory and scientific property, excess of amount claimed over cost of goods sold taken into account—(A) In general. In determining the amount of a donor's contribution of property to which section 170(e)(3) (relating to contributions of inventory and other property) or (e)(4) (relating to contributions of scientific property used for research) applies, the donor must take into account only the excess of the amount claimed as a deduction over the amount that would have been treated as the cost of goods sold if the donor had sold the contributed property to the donee.

(B) Example. The following example illustrates the rule of this paragraph (f)(5)(iii):

Example.

X Corporation makes a contribution of inventory described in section 1221(a)(2). The contribution, described in section 170(e)(3), is for the care of the needy. The cost of the property to X Corporation is $5,000 and the fair market value of the property at the time of the contribution is $11,000. Pursuant to section 170(e)(3)(B), X Corporation claims a charitable contribution deduction of $8,000 ($5,000 + 1/2 × ($11,000 − 5,000) = $8,000). The amount taken into account for purposes of determining the $5,000 threshold of paragraph (d) of this section is $3,000 ($8,000−$5,000).

(g) Effective/applicability date. This section applies to contributions made after July 30, 2018. Taxpayers may rely on the rules of this section for contributions made after June 3, 2004, or appraisals prepared for returns or submissions filed after August 17, 2006.

Par. 8. Section 1.170A-17 is added to read as follows:
§ 1.170A-17 Qualified appraisal and qualified appraiser.

(a) Qualified appraisal—(1) Definition. For purposes of section 170(f)(11) and § 1.170A-16(d)(1)(ii) and (e)(1)(ii), the term qualified appraisal means an appraisal document that is prepared by a qualified appraiser (as defined in paragraph (b)(1) of this section) in accordance with generally accepted appraisal standards (as defined in paragraph (a)(2) of this section) and otherwise complies with the requirements of this paragraph (a).

(2) Generally accepted appraisal standards defined. For purposes of paragraph (a)(1) of this section, generally accepted appraisal standards means the substance and principles of the Uniform Standards of Professional Appraisal Practice, as developed by the Appraisal Standards Board of the Appraisal Foundation.

(3) Contents of qualified appraisal. A qualified appraisal must include—

(i) The following information about the contributed property:

(A) A description in sufficient detail under the circumstances, taking into account the value of the property, for a person who is not generally familiar with the type of property to ascertain that the appraised property is the contributed property.

(B) In the case of real property or tangible personal property, the condition of the property.

(C) The valuation effective date, as defined in paragraph (a)(5)(i) of this section.

(D) The fair market value, within the meaning of § 1.170A-1(c)(2), of the contributed property on the valuation effective date;

(ii) The terms of any agreement or understanding by or on behalf of the donor and donee that relates to the use, sale, or other disposition of the contributed property, including, for example, the terms of any agreement or understanding that—

(A) Restricts temporarily or permanently a donee's right to use or dispose of the contributed property;

(B) Reserves to, or confers upon, anyone, other than a donee or an organization participating with a donee in cooperative fundraising, any right to the income from the contributed property or to the possession of the property, including the right to vote contributed securities, to acquire the property by purchase or otherwise, or to designate the person having income, possession, or right to acquire; or

(C) Earmarks contributed property for a particular use;

(iii) The date, or expected date, of the contribution to the donee;

(iv) The following information about the appraiser:

(A) Name, address, and taxpayer identification number.

(B) Qualifications to value the type of property being valued, including the appraiser's education and experience.

(C) If the appraiser is acting in his or her capacity as a partner in a partnership, an employee of any person, whether an individual, corporation, or partnership, or an independent contractor engaged by a person other than the donor, the name, address, and taxpayer identification number of the partnership or the person who employs or engages the qualified appraiser;

(v) The signature of the appraiser and the date signed by the appraiser (appraisal report date);

(vi) The following declaration by the appraiser: “I understand that my appraisal will be used in connection with a return or claim for refund. I also understand that, if there is a substantial or gross valuation misstatement of the value of the property claimed on the return or claim for refund that is based on my appraisal, I may be subject to a penalty under section 6695A of the Internal Revenue Code, as well as other applicable penalties. I affirm that I have not been at any time in the three-year period ending on the date of the appraisal barred from presenting evidence or testimony before the Department of the Treasury or the Internal Revenue Service pursuant to 31 U.S.C. 330(c)”;

(vii) A statement that the appraisal was prepared for income tax purposes;

(viii) The method of valuation used to determine the fair market value, such as the income approach, the market-data approach, or the replacement-cost-less-depreciation approach; and

(ix) The specific basis for the valuation, such as specific comparable sales transactions or statistical sampling, including a justification for using sampling and an explanation of the sampling procedure employed.

(4) Timely appraisal report. A qualified appraisal must be signed and dated by the qualified appraiser no earlier than 60 days before the date of the contribution and no later than—

(i) The due date, including extensions, of the return on which the deduction for the contribution is first claimed;

(ii) In the case of a donor that is a partnership or S corporation, the due date, including extensions, of the return on which the deduction for the contribution is first reported; or

(iii) In the case of a deduction first claimed on an amended return, the date on which the amended return is filed.

(5) Valuation effective date—(i) Definition. The valuation effective date is the date to which the value opinion applies.

(ii) Timely valuation effective date. For an appraisal report dated before the date of the contribution, as described in § 1.170A-1(b), the valuation effective date must be no earlier than 60 days before the date of the contribution and no later than the date of the contribution. For an appraisal report dated on or after the date of the contribution, the valuation effective date must be the date of the contribution.

(6) Exclusion for donor knowledge of falsity. An appraisal is not a qualified appraisal for a particular contribution, even if the requirements of this paragraph (a) are met, if the donor either failed to disclose or misrepresented facts, and a reasonable person would expect that this failure or misrepresentation would cause the appraiser to misstate the value of the contributed property.

(7) Number of appraisals required. A donor must obtain a separate qualified appraisal for each item of property for which an appraisal is required under section 170(f)(11)(C) and (D) and paragraph (d) or (e) of § 1.170A-16 and that is not included in a group of similar items of property, as defined in § 1.170A-13(c)(7)(iii). For rules regarding the number of appraisals required if similar items of property are contributed, see section 170(f)(11)(F) and § 1.170A-13(c)(3)(iv)(A).

(8) Time of receipt of qualified appraisal. The qualified appraisal must be received by the donor before the due date, including extensions, of the return on which a deduction is first claimed, or reported in the case of a donor that is a partnership or S corporation, under section 170 with respect to the donated property, or, in the case of a deduction first claimed, or reported, on an amended return, the date on which the return is filed.

(9) Prohibited appraisal fees. The fee for a qualified appraisal cannot be based to any extent on the appraised value of the property. For example, a fee for an appraisal will be treated as based on the appraised value of the property if any part of the fee depends on the amount of the appraised value that is allowed by the Internal Revenue Service after an examination.

(10) Retention of qualified appraisal. The donor must retain the qualified appraisal for so long as it may be relevant in the administration of any internal revenue law.

(11) Effect of appraisal disregarded pursuant to 31 U.S.C. 330(c). If an appraiser has been prohibited from practicing before the Internal Revenue Service by the Secretary under 31 U.S.C. 330(c) at any time during the three-year period ending on the date the appraisal is signed by the appraiser, any appraisal prepared by the appraiser will be disregarded as to value, but could constitute a qualified appraisal if the requirements of this section are otherwise satisfied, and the donor had no knowledge that the signature, date, or declaration was false when the appraisal and Form 8283 (Section B) were signed by the appraiser.

(12) Partial interest. If the contributed property is a partial interest, the appraisal must be of the partial interest.

(b) Qualified appraiser—(1) Definition. For purposes of section 170(f)(11) and § 1.170A-16(d)(1)(ii) and (e)(1)(ii), the term qualified appraiser means an individual with verifiable education and experience in valuing the type of property for which the appraisal is performed, as described in paragraphs (b)(2) through (4) of this section.

(2) Education and experience in valuing the type of property—(i) In general. An individual is treated as having education and experience in valuing the type of property within the meaning of paragraph (b)(1) of this section if, as of the date the individual signs the appraisal, the individual has—

(A) Successfully completed (for example, received a passing grade on a final examination) professional or college-level coursework, as described in paragraph (b)(2)(ii) of this section, in valuing the type of property, as described in paragraph (b)(3) of this section, and has two or more years of experience in valuing the type of property, as described in paragraph (b)(3) of this section; or

(B) Earned a recognized appraiser designation, as described in paragraph (b)(2)(iii) of this section, for the type of property, as described in paragraph (b)(3) of this section.

(ii) Coursework must be obtained from an educational organization, generally recognized professional trade or appraiser organization, or employer educational program. For purposes of paragraph (b)(2)(i)(A) of this section, the coursework must be obtained from—

(A) A professional or college-level educational organization described in section 170(b)(1)(A)(ii);

(B) A generally recognized professional trade or appraiser organization that regularly offers educational programs in valuing the type of property; or

(C) An employer as part of an employee apprenticeship or educational program substantially similar to the educational programs described in paragraphs (b)(2)(ii)(A) and (B) of this section.

(iii) Recognized appraiser designation defined. A recognized appraiser designation means a designation awarded by a generally recognized professional appraiser organization on the basis of demonstrated competency.

(3) Type of property defined—(i) In general. The type of property means the category of property customary in the appraisal field for an appraiser to value.

(ii) Examples. The following examples illustrate the rule of paragraphs (b)(2)(i) and (b)(3)(i) of this section:

Example (1).

Coursework in valuing type of property. There are very few professional-level courses offered in widget appraising, and it is customary in the appraisal field for personal property appraisers to appraise widgets. Appraiser A has successfully completed professional-level coursework in valuing personal property generally but has completed no coursework in valuing widgets. The coursework completed by Appraiser A is for the type of property under paragraphs (b)(2)(i) and (b)(3)(i) of this section.

Example (2).

Experience in valuing type of property. It is customary for professional antique appraisers to appraise antique widgets. Appraiser B has 2 years of experience in valuing antiques generally and is asked to appraise an antique widget. Appraiser B has obtained experience in valuing the type of property under paragraphs (b)(2)(i) and (b)(3)(i) of this section.

Example (3).

No experience in valuing type of property. It is not customary for professional antique appraisers to appraise new widgets. Appraiser C has experience in appraising antiques generally but no experience in appraising new widgets. Appraiser C is asked to appraise a new widget. Appraiser C does not have experience in valuing the type of property under paragraphs (b)(2)(i) and (b)(3)(i) of this section.

(4) Verifiable. For purposes of paragraph (b)(1) of this section, education and experience in valuing the type of property are verifiable if the appraiser specifies in the appraisal the appraiser's education and experience in valuing the type of property, as described in paragraphs (b)(2) and (3) of this section, and the appraiser makes a declaration in the appraisal that, because of the appraiser's education and experience, the appraiser is qualified to make appraisals of the type of property being valued.

(5) Individuals who are not qualified appraisers. The following individuals are not qualified appraisers for the appraised property:

(i) An individual who receives a fee prohibited by paragraph (a)(9) of this section for the appraisal of the appraised property.

(ii) The donor of the property.

(iii) A party to the transaction in which the donor acquired the property (for example, the individual who sold, exchanged, or gave the property to the donor, or any individual who acted as an agent for the transferor or for the donor for the sale, exchange, or gift), unless the property is contributed within 2 months of the date of acquisition and its appraised value does not exceed its acquisition price.

(iv) The donee of the property.

(v) Any individual who is either—

(A) Related, within the meaning of section 267(b), to, or an employee of, an individual described in paragraph (b)(5)(ii), (iii), or (iv) of this section;

(B) Married to an individual described in paragraph (b)(5)(v)(A) of this section; or

(C) An independent contractor who is regularly used as an appraiser by any of the individuals described in paragraph (b)(5)(ii), (iii), or (iv) of this section, and who does not perform a majority of his or her appraisals for others during the taxable year.

(vi) An individual who is prohibited from practicing before the Internal Revenue Service by the Secretary under 31 U.S.C. 330(c) at any time during the three-year period ending on the date the appraisal is signed by the individual.

(c) Effective/applicability date. This section applies to contributions made on or after January 1, 2019. Taxpayers may rely on the rules of this section for appraisals prepared for returns or submissions filed after August 17, 2006.

Par. 9. Section 1.170A-18 is added to read as follows:
§ 1.170A-18 Contributions of clothing and household items.

(a) In general. Except as provided in paragraph (b) of this section, no deduction is allowed under section 170(a) for a contribution of clothing or a household item (as described in paragraph (c) of this section) unless—

(1) The item is in good used condition or better at the time of the contribution; and

(2) The donor meets the substantiation requirements of § 1.170A-16.

(b) Certain contributions of clothing or household items with claimed value of more than $500. The rule described in paragraph (a)(1) of this section does not apply to a contribution of a single item of clothing or a household item for which a deduction of more than $500 is claimed, if the donor submits with the return on which the deduction is claimed a qualified appraisal, as defined in § 1.170A-17(a)(1), of the property prepared by a qualified appraiser, as defined in § 1.170A-17(b)(1), and a completed Form 8283 (Section B), “Noncash Charitable Contributions,” as described in § 1.170A-16(d)(3).

(c) Definition of household items. For purposes of section 170(f)(16) and this section, the term household items includes furniture, furnishings, electronics, appliances, linens, and other similar items. Food, paintings, antiques, and other objects of art, jewelry, gems, and collections are not household items.

(d) Effective/applicability date. This section applies to contributions made after July 30, 2018. Taxpayers may rely on the rules of this section for contributions made after August 17, 2006.

Par. 10. § 1.664-1 is amended by revising paragraph (a)(7)(i)(b) and adding a sentence to the end of paragraph (f)(1) to read as follows:
§ 1.664-1. Charitable remainder trusts.

(a) * * *

(7) * * *

(i) * * *

(b) Determined by a current qualified appraisal from a qualified appraiser, as those terms are defined in—

(1) Section 1.170A-13(c)(3) and 1.170A-13(c)(5), respectively, for appraisals prepared for returns or submissions filed on or before August 17, 2006;

(2) Section 3 of Notice 2006-96, 2006-2 CB 902, for appraisals prepared for returns or submissions filed after August 17, 2006, if the donations are made before January 1, 2019; or

(3) Section 1.170A-17(a) and 1.170A-17(b), respectively, for appraisals prepared for returns or submissions for donations made on or after January 1, 2019.

(f) * * *

(1) * * * The provisions of paragraph § 1.664-1(a)(7)(i)(b) apply as provided in that paragraph.

Par. 10. § 1.6050L-1 is amended by: 1. Revising the first two sentences of paragraph (a)(2)(i). 2. Revising paragraphs (c)(4)(i) introductory text and (d)(2). 3. Revising the first sentences of paragraphs (e) and (f)(2)(ii). 4. Adding paragraph (h).

The revisions and addition read as follows:

§ 1.6050L-1. Information return by donees relating to certain dispositions of donated property.

(a) * * *

(2) * * *

(i) In general. Paragraph (a)(1) of this section shall not apply with respect to an item of charitable deduction property disposed of by sale if the Form 8283 appraisal summary (as described in § 1.170A-13(c)(4) for contributions made on or before July 30, 2018 and § 1.170A-16(d)(3) for contributions made after July 30, 2018), or a successor form, signed by the donee with respect to the item contains, at the time of the donee's signature, a statement signed by the donor that the appraised value of the item does not exceed $500. In the case of a Form 8283 appraisal summary that describes more than one item, this exception shall apply only with respect to an item clearly identified as having an appraised value of $500 or less. * * *

(c) * * *

(4) * * *

(i) Shall provide its name, address, and employer identification number and a copy of the Form 8283 appraisal summary (as described in § 1.170A-13(c)(4) for contributions made on or before July 30, 2018 and § 1.170A-16(d)(3) for contributions made after July 30, 2018) relating to the transferred property to the successor donee on or before the 15th day after the latest of—

(d) * * *

(2) Retention of Form 8283 appraisal summary. Every donee shall retain the Form 8283 appraisal summary (as described in § 1.170A-13(c)(4) for contributions made on or before July 30, 2018 and § 1.170A-16(d)(3) for contributions made after July 30, 2018) in the donee's records for so long as it may be relevant in the administration of any internal revenue law.

(e) Charitable deduction property. For purposes of this section, the term charitable deduction property means any property (other than money and publicly traded securities to which § 1.170A-13(c)(7)(xi)(B) does not apply) contributed after December 31, 1984, with respect to which the donee signs (or is presented with for signature in cases described in § 1.170A-13(c)(4)(iv)(C)(2)) a Form 8283 appraisal summary (as described in § 1.170A-13(c)(4) for contributions made on or before July 30, 2018 and § 1.170A-16(d)(3) for contributions made after July 30, 2018). * * *

(f) * * *

(2) * * *

(ii) Exception. Notwithstanding paragraph (f)(2)(i) of this section, in the case of a donee who, on the date of receipt of the transferred property, had no reason to believe that the substantiation requirements of § 1.170A-13(c) or § 1.170A-16(d) apply with respect to the property, the donee information return is not required to be filed until the 60th day after the date on which such donee has reason to believe that the substantiation requirements of § 1.170A-13(c) or § 1.170A-16(d) apply with respect to the property. * * *

(h) Effective/applicability dates. The first two sentences of paragraph (a)(2)(i), paragraphs (c)(4)(i) and (d)(2), and the first sentences of paragraphs (e) and (f)(2)(ii) apply to contributions made after July 30, 2018.

PART 602—OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT Par. 11. The authority citation for part 602 continues to read as follows: Authority:

26 U.S.C. 7805.

Par. 12. In § 602.101, paragraph (b) is amended by adding in numerical order entries for 1.170A-15 through 1.170A-18 to read as follows:
§ 602.101 OMB Control numbers.

(b) * * *

CFR part or section where identified and described Current OMB control No. 1.170A-15 1545-1953 1.170A-16 1545-1953 1.170A-17 1545-1953 1.170A-18 1545-1953
Kirsten Wielobob, Deputy Commissioner for Services and Enforcement. Approved: April 23, 2018. David J. Kautter, Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 2018-15734 Filed 7-27-18; 8:45 am] BILLING CODE 4830-01-P
DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 117 [Docket No. USCG-2018-0730] Drawbridge Operation Regulation; Gulf Intracoastal Waterway, South Pasadena, FL AGENCY:

Coast Guard, DHS.

ACTION:

Notice of deviation from drawbridge regulation.

SUMMARY:

The Coast Guard has issued a temporary deviation from the operating schedule that governs the Corey Causeway (SR693) Bridge across the Gulf Intracoastal Waterway (GICW), mile 117.7, South Pasadena, FL. The deviation is necessary to accommodate repairs to the Bridge. This deviation allows the bridge open at requested times a single leaf and with a 6 hour notice for double leaf openings.

DATES:

This deviation is effective from 7 a.m. on August 1, 2018 to 7 a.m. on February 28, 2019.

ADDRESSES:

The docket for this deviation, USCG-2018-0730 is available at http://www.regulations.gov. Type the docket number in the “SEARCH” box and click “SEARCH”. Click on Open Docket Folder on the line associated with this deviation.

FOR FURTHER INFORMATION CONTACT:

If you have questions on this temporary deviation, call or email MST1 Deborah A. Schneller, U.S. Coast Guard Sector Saint Petersburg, Waterways Management Division, telephone (813) 228-2194 x 8133, email [email protected]

SUPPLEMENTARY INFORMATION:

Florida Department of Transportation (FDOT) via Quinn Construction Inc, has requested a temporary deviation from the operation that govern the Corey Causeway Bridge across the Gulf Intracoastal Waterway, mile 117.7. This deviation is necessary to facilitate mechanical and electrical repairs, painting, roadway and sidewalk grating replacement which includes concrete removal, spall repair and tender house replacement. The bridge is a double-leaf bascule bridge and has a vertical clearance in the closed to navigation position of 23 feet at mean high water.

The current operating schedule is set out in 33 CFR 117.287(f). Under this temporary deviation, the bridge will operate per the listed schedule but single leaf only and with a 6 hour notice for double leaf openings. This section of the Gulf Intracoastal Waterway is predominantly used by a variety of vessels including U.S. government vessels, small commercial vessels and recreational vessels. The Coast Guard has carefully considered 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 any time. The bridge will be able to open for emergencies and there is no immediate alternate route for vessels to pass. The Coast Guard will also inform the users of the waterways through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge so that vessel operators can arrange their transits to minimize any impact caused by the temporary deviation.

In accordance with 33 CFR 117.35(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.

Dated: July 24, 2018. Barry L. Dragon, Director, Bridge Branch, Seventh Coast Guard District.
[FR Doc. 2018-16149 Filed 7-27-18; 8:45 am] BILLING CODE 9110-04-P
DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket No. USCG-2018-0722] RIN 1625-AA00 Safety Zone; Waterview Loft Fireworks II, Detroit River, Detroit, MI AGENCY:

Coast Guard, DHS.

ACTION:

Temporary final rule.

SUMMARY:

The Coast Guard is establishing a temporary safety zone for navigable waters within a 350-foot radius of a portion of the Detroit River, Detroit, MI. This zone is necessary to protect spectators and vessels from potential hazards associated with the Waterview Loft Fireworks II.

DATES:

This temporary final rule is effective from 9:30 p.m. through 10 p.m. on August 17, 2018.

ADDRESSES:

To view documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov, type USCG-2018-0722 in the “SEARCH” box and click “SEARCH.” Click on Open Docket Folder on the line associated with this rule.

FOR FURTHER INFORMATION CONTACT:

If you have questions on this temporary rule, call or email Tracy Girard, Prevention Department, Sector Detroit, Coast Guard; telephone 313-568-9564, or email [email protected]

SUPPLEMENTARY INFORMATION:

I. Table of Abbreviations CFR Code of Federal Regulations COTP Captain of the Port Detroit DHS Department of Homeland Security FR Federal Register NPRM Notice of Proposed Rulemaking § Section U.S.C. United States Code II. Background Information and Regulatory History

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because doing so would be impracticable. The Coast Guard did not receive the final details of this fireworks display 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 Federal Register. Delaying the effective date of this rule would inhibit the Coast Guard's ability to protect participants, mariners and vessels from the hazards associated with this event.

III. Legal Authority and Need for Rule

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port Detroit (COTP) has determined that potential hazard associated with fireworks from 9:30 p.m. through 10 p.m. on August 17, 2018 will be a safety concern to anyone within a 350-foot radius of the launch site. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone while the fireworks are being displayed.

IV. Discussion of the Rule

This rule establishes a safety zone from 9:30 p.m. through 10 p.m. on August 17, 2018. The safety zone will encompass all U.S. navigable waters of the Detroit River, Detroit, MI, within a 350-foot radius of position 42°19.529′ N 083°02.436′ W (NAD 83). No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative.

V. Regulatory Analyses

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.

A. Regulatory Planning and Review

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, duration, and time-of-year of the safety zone. Vessel traffic will be able to safely transit around this safety zone which will impact a small designated area of the Detroit River from 9:30 p.m. through 10 p.m. on August 17, 2018. Moreover, the Coast Guard will issue Broadcast Notice to Mariners (BNM) via VHF-FM marine channel 16 about the zone and the rule allows vessels to seek permission to enter the zone.

B. Impact on Small Entities

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 FOR FURTHER INFORMATION CONTACT section.

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

C. Collection of Information

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

D. Federalism and Indian Tribal Governments

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

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

E. Unfunded Mandates Reform Act

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.

F. Environment

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 30 minute safety zone that 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 ADDRESSES.

G. Protest Activities

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

List of Subjects in 33 CFR Part 165

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:

PART 165—REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS 1. The authority citation for part 165 continues to read as follows: Authority:

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.

2. Add § 165.T09-0722 to read as follows:
§ 165.T09-0722 Safety Zone; Waterview Loft Fireworks II, Detroit River, Detroit, MI.

(a) Location. A safety zone is established to include all U.S. navigable waters of the Detroit River, Detroit, MI, within a 350-foot radius of position 42°19.529′ N 083°02.436′ W (NAD 83).

(b) Enforcement period. The regulated area described in paragraph (a) will be enforced from 9:30 p.m. through 10 p.m. on August 17, 2018.

(c) Regulations. (1) No vessel or person may enter, transit through, or anchor within the safety zone unless authorized by the Captain of the Port Detroit (COTP), or his on-scene representative.

(2) The safety zone is closed to all vessel traffic, except as may be permitted by the COTP or his on-scene representative.

(3) The “on-scene representative” of COTP is any Coast Guard commissioned, warrant or petty officer or a Federal, State, or local law enforcement officer designated by or assisting the Captain of the Port Detroit to act on his behalf.

(4) Vessel operators shall contact the COTP or his on-scene representative to obtain permission to enter or operate within the safety zone. The COTP or his on-scene representative may be contacted via VHF Channel 16 or at (313) 568-9464. Vessel operators given permission to enter or operate in the regulated area must comply with all directions given to them by the COTP or his on-scene representative.

Dated: July 25, 2018. Jeffrey W. Novak, Captain, U.S. Coast Guard, Captain of the Port Detroit.
[FR Doc. 2018-16209 Filed 7-27-18; 8:45 am] BILLING CODE 9110-04-P
DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket No. USCG-2018-0717] RIN 1625-AA00 Safety Zone; Waterview Loft Fireworks I, Detroit River, Detroit, MI AGENCY:

Coast Guard, DHS.

ACTION:

Temporary final rule.

SUMMARY:

The Coast Guard is establishing a temporary safety zone for navigable waters within a 350-foot radius of a portion of the Detroit River, Detroit, MI. This zone is necessary to protect spectators and vessels from potential hazards associated with the Waterview Loft Fireworks I.

DATES:

This temporary final rule is effective from 9:30 p.m. through 10 p.m. on August 14, 2018.

ADDRESSES:

To view documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov, type USCG-2018-0717 in the “SEARCH” box and click “SEARCH.” Click on Open Docket Folder on the line associated with this rule.

FOR FURTHER INFORMATION CONTACT:

If you have questions on this temporary rule, call or email Tracy Girard, Prevention Department, Sector Detroit, Coast Guard; telephone 313-568-9564, or email [email protected]

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

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because doing so would be impracticable. The Coast Guard did not receive the final details of this fireworks display 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 Federal Register. Delaying the effective date of this rule would inhibit the Coast Guard's ability to protect participants, mariners and vessels from the hazards associated with this event.

III. Legal Authority and Need for Rule

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port Detroit (COTP) has determined that potential hazard associated with fireworks from 9:30 p.m. through 10 p.m. on August 14, 2018 will be a safety concern to anyone within a 350-foot radius of the launch site. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone while the fireworks are being displayed.

IV. Discussion of the Rule

This rule establishes a safety zone from 9:30 p.m. through 10 p.m. on August 14, 2018. The safety zone will encompass all U.S. navigable waters of the Detroit River, Detroit, MI, within a 350-foot radius of position 42°19.529′ N 083°02.436′ W (NAD 83). No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative.

V. Regulatory Analyses

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.

A. Regulatory Planning and Review

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, duration, and time-of-year of the safety zone. Vessel traffic will be able to safely transit around this safety zone which will impact a small designated area of the Detroit River from 9:30 p.m. through 10 p.m. on August 14, 2018. Moreover, the Coast Guard will issue Broadcast Notice to Mariners (BNM) via VHF-FM marine channel 16 about the zone and the rule allows vessels to seek permission to enter the zone.

B. Impact on Small Entities

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 FOR FURTHER INFORMATION CONTACT section.

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

C. Collection of Information

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

D. Federalism and Indian Tribal Governments

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

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

E. Unfunded Mandates Reform Act

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.

F. Environment

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 30 minute safety zone that 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 ADDRESSES.

G. Protest Activities

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

List of Subjects in 33 CFR Part 165

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:

PART 165—REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS 1. The authority citation for part 165 continues to read as follows: Authority:

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.

2. Add § 165.T09-0717 to read as follows:
§ 165.T09-0717 Safety Zone; Waterview Loft Fireworks I, Detroit River, Detroit, MI.

(a) Location. A safety zone is established to include all U.S. navigable waters of the Detroit River, Detroit, MI, within a 350-foot radius of position 42°19.529′ N 083°02.436′ W (NAD 83).

(b) Enforcement period. The regulated area described in paragraph (a) will be enforced from 9:30 p.m. through 10 p.m. on August 14, 2018.

(c) Regulations.

(1) No vessel or person may enter, transit through, or anchor within the safety zone unless authorized by the Captain of the Port Detroit (COTP), or his on-scene representative.

(2) The safety zone is closed to all vessel traffic, except as may be permitted by the COTP or his on-scene representative.

(3) The “on-scene representative” of COTP is any Coast Guard commissioned, warrant or petty officer or a Federal, State, or local law enforcement officer designated by or assisting the Captain of the Port Detroit to act on his behalf.

(4) Vessel operators shall contact the COTP or his on-scene representative to obtain permission to enter or operate within the safety zone. The COTP or his on-scene representative may be contacted via VHF Channel 16 or at (313) 568-9464. Vessel operators given permission to enter or operate in the regulated area must comply with all directions given to them by the COTP or his on-scene representative.

Dated: July 24, 2018. Jeffrey W. Novak, Captain, U.S. Coast Guard, Captain of the Port Detroit.
[FR Doc. 2018-16208 Filed 7-27-18; 8:45 am] BILLING CODE 9110-04-P
DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket No. USCG-2018-0661] Safety Zones; Annual Events in the Captain of the Port Buffalo Zone—August and September Events AGENCY:

Coast Guard, DHS.

ACTION:

Notice of enforcement of regulation.

SUMMARY:

The Coast Guard will enforce certain safety zones located in Federal regulations for recurring marine events. This action is necessary and intended for the safety of life and property on navigable waters during these events. During each enforcement period, no person or vessel may enter the respective safety zone without the permission of the Captain of the Port Buffalo.

DATES:

The regulations in 33 CFR 165.939 will be enforced during the month of August and September as noted in the SUPPLEMENTARY INFORMATION section below.

FOR FURTHER INFORMATION CONTACT:

If you have questions about this notice of enforcement, call or email LTJG Sean Dolan, Chief of Waterways Management, U.S. Coast Guard Sector Buffalo; telephone 716-843-9322, email [email protected]

SUPPLEMENTARY INFORMATION:

The Coast Guard will enforce the Safety Zones; Annual Events in the Captain of the Port Buffalo Zone listed in 33 CFR 165.939 for the following events:

(1) Thunder on the Niagara Hydroplane Boat Races, North Tonawanda, NY; The safety zone listed in 33 CFR 165.939(c)(4) will be enforced from 9 a.m. to 6 p.m. on August 4, 2018, until August 5, 2018.

(2) D-Day Conneaut, Conneaut, OH; The safety zone listed in 33 CFR 165.939(c)(2) will be enforced from 9 a.m. to 5 p.m. on August 17, 2018, until August 18, 2018.

(3) Madison Township Light up the Park, Madison, OH; The safety zone listed in 33 CFR 165.939(d)(1) will be enforced from 9:15 p.m. to 10:15 p.m. on September 2, 2018.

(4) Cleveland National Air Show, Cleveland, OH; The safety zone listed in 33 CFR 165.939(d)(2) will be enforced daily from 9 a.m. to 6 p.m. August 30—September 3, 2018.

(5) Head of the Cuyahoga, Cleveland, OH; The safety zone listed in 33 CFR 165.939(d)(3) will be enforced from 6:45 a.m. to 4:15 p.m. on September 15, 2018.

Pursuant to 33 CFR 165.23, entry into, transiting, or anchoring within the safety zone during an enforcement period is prohibited unless authorized by the Captain of the Port Buffalo or his designated representative. Those seeking permission to enter the safety zone may request permission from the Captain of Port Buffalo via channel 16, VHF-FM. Vessels and persons granted permission to enter the safety zone shall obey the directions of the Captain of the Port Buffalo or his designated representative. While within a safety zone, all vessels shall operate at the minimum speed necessary to maintain a safe course.

This notice of enforcement is issued under authority of 33 CFR 165.939 and 5 U.S.C. 552(a). In addition to this notice of enforcement in the Federal Register, the Coast Guard will provide the maritime community with advance notification of this enforcement period via Broadcast Notice to Mariners or Local Notice to Mariners. If the Captain of the Port Buffalo determines that the safety zone need not be enforced for the full duration stated in this notice he or she may use a Broadcast Notice to Mariners to grant general permission to enter the respective safety zone.

Dated: July 25, 2018. Joseph S. Dufresne, Captain, U.S. Coast Guard, Captain of the Port Buffalo.
[FR Doc. 2018-16191 Filed 7-27-18; 8:45 am] BILLING CODE 9110-04-P
ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 147 [EPA-HQ-OW-2017-0584; FRL-9981-56-OW] State of Idaho Voluntary Transfer of Primacy of the Class II Underground Injection Control Program to the Environmental Protection Agency AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final rule.

SUMMARY:

The Environmental Protection Agency (EPA) is issuing a final rule to amend its Underground Injection Control (UIC) regulations to reflect the transfer of the state of Idaho's UIC program for Class II injection wells from Idaho to the EPA. Idaho submitted a formal request that the EPA transfer and directly implement the Class II UIC Program. Idaho will maintain primacy for Class I, III, IV, and V injection wells pursuant to their program approved by the EPA in 1985.

DATES:

This rule is effective July 30, 2018. For judicial purposes, this final rule is promulgated as of July 30, 2018.

ADDRESSES:

The EPA has established a docket for this action under Docket ID No. EPA-HQ-OW-2017-0584. All documents in the docket are listed on the http://www.regulations.gov website. Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the internet and will be publicly available only in hard copy form. Publicly available docket materials are available electronically through http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT:

Colin Dyroff, Drinking Water Protection Division, Office of Ground Water and Drinking Water (4606M), U.S. Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460; telephone number: (202) 564-3149; fax number: (202) 564-3754; email address: [email protected]; or Evan Osborne, U.S. Environmental Protection Agency, Region 10, 1200 6th Ave., OCE-101, Seattle, Washington 98101; telephone number: (206) 553-1747; fax number: (206) 553-1762; email address: [email protected].

SUPPLEMENTARY INFORMATION:

I. Why is the EPA taking this action?

On August 25, 2017, the EPA received a letter from the Idaho Department of Water Resources (IDWR), formally requesting that the EPA transfer and directly implement the Class II UIC program in Idaho, pursuant to the Code of Federal Regulations (CFR) at 40 CFR 145.34(a). Class II injection wells inject fluids (1) that are brought to the surface in connection with natural gas storage, or oil or natural gas production; or (2) for the purpose of enhanced oil or natural gas recovery; or (3) for the storage of hydrocarbons, which are liquid at standard temperature and pressure. Idaho received primary implementation and enforcement authority (primacy) for Class I, II, III, IV, and V injection wells under the Safe Drinking Water Act, section 1422, on July 22, 1985. Idaho has since maintained primacy for these injection well classes.

The voluntary transfer of authority for the UIC Class II program to the EPA will allow the EPA to issue Class II permits in Idaho. The EPA will be responsible for the direct implementation of the Class II underground injection control program in Idaho, including permitting, compliance, and enforcement responsibilities, pursuant to the SDWA and federal UIC regulations.

On November 27, 2017, the EPA published a Federal Register proposed rule (82 FR 55968), providing notice of the transfer of Idaho's UIC program for Class II injection wells from Idaho to the EPA and concurrently issuing a proposed rule to amend EPA's UIC regulations to reflect such transfer. The EPA stated that if requested, a public hearing would be held. After receiving multiple hearing requests, the EPA held the public hearing on January 8, 2018, in the city of Boise, Idaho, as detailed in the proposed rule. At the public hearing, and during the 45-day comment period, which ended on January 11, 2018, the EPA received 414 comments from 387 individual commenters. The EPA has reviewed all public testimony and comments on the proposed rule and has determined that the revisions to 40 CFR part 147 will be finalized in this rule as originally proposed.

II. Legal Authorities

A state with an approved primacy program may voluntarily transfer UIC program responsibilities to the EPA, pursuant to 40 CFR 145.34(a). The regulations require that the EPA provide notice of such transfer in the Federal Register at least 30 days before the transfer is to occur. 40 CFR 145.34(a)(3). The EPA published a Federal Register proposed rule (82 FR 55968) on November 27, 2017, containing that notice. The regulations do not provide for opportunity to comment on whether to transfer, and accordingly, the EPA did not take comment on such transfer.

EPA's regulations at 40 CFR part 147 set forth the applicable UIC programs for each of the states. This rule makes ministerial revisions to these regulations to reflect the transfer. Specifically, the rule revises 40 CFR part 147, subpart N, to indicate that the Class II UIC program for Idaho is to be directly implemented by the EPA and consists of the UIC program requirements of 40 CFR parts 124, 144, 146, and 148. The EPA took comment only on these revisions.

Section 553(d) of the Administrative Procedure Act, 5. U.S.C. 553(d), provides that the effective date of a substantive rule must be at least 30 days after publication of the rule in the Federal Register, except “as otherwise provided by the agency for good cause.” The EPA has determined that there is good cause for making this final rule effective immediately upon publication because the transfer of primacy back to the EPA simply returns direct implementation and enforcement authority of the UIC Program for Class II wells in Idaho to the EPA. There are currently no Class II permits in effect in Idaho and, therefore, there is no need to transfer or reissue any existing state-issued Class II UIC permits as federal Class II UIC permits. The EPA finds that this constitutes good cause under 5 U.S.C. 553(d).

III. Public Comments Received on the Proposed Rule and EPA's Response to Comments

On November 27, 2017, the EPA issued a proposed rule (82 FR 55968) and requested public comment. The public comment period was open for 45 days and ended on January 11, 2018. The EPA received 414 comments from 387 individual commenters, including comments given at the January 8, 2018, public hearing as well as one comment submitted after the close of the public comment period. Of these comments, only a minority were identified as containing material that was determined to be within the scope of the proposed rule revision. The comments the EPA received and EPA's responses are available in EPA's Docket No. EPA-HQ-OW-2017-0584.

IV. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review

This action is not a significant regulatory action and was therefore not submitted to the Office of Management and Budget (OMB) for review.

B. Executive Order 13771: Reducing Regulations and Controlling Regulatory Costs

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

C. Paperwork Reduction Act (PRA)

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 number 2040-0042.

D. Regulatory Flexibility Act (RFA)

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. This rule does not impose any requirements on small entities; this action withdraws a state program and therein transfers direct implementation of the Class II UIC program to the EPA. We have therefore concluded that this action will have no net regulatory burden for any directly regulated small entities.

E. Unfunded Mandates Reform Act (UMRA)

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. This rule does not impose any mandates on small entities; this action withdraws a state program and therein transfers direct implementation of the Class II UIC program to the EPA.

F. Executive Order 13132: Federalism

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 contains no federal mandates for state and local governments and does not impose any enforceable duties on state and local governments. This action merely withdraws a state program (at the voluntary request from Idaho) and therein transfers implementation of the Class II UIC program to the EPA.

G. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments

This action does not have tribal implications as specified in Executive Order 13175. This action contains no federal mandates for tribal governments and does not impose any enforceable duties on tribal governments. Thus, Executive Order 13175 does not apply to this action.

H. Executive Order 13045: Protection of Children From Environmental Health & Safety Risks

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 transfers a state program.

I. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use

This action is not subject to Executive Order 13211 because it is not a significant regulatory action under Executive Order 12866.

J. National Technology Transfer and Advancement Act (NTTAA)

This rulemaking does not involve technical standards.

K. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations

The EPA has determined that this action is not subject to Executive Order 12898 (59 FR 7629, February 16, 1994) because it does not establish an environmental health or safety standard. This rule does not impose any health or safety standards; this action transfers a state program and therein transfers direct implementation of the Class II UIC program to the EPA.

L. Congressional Review Act (CRA)

This action is subject to the CRA, and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. The CRA allows the issuing agency to make a rule effective sooner than otherwise provided by the CRA if the agency makes a good cause finding. The EPA has made a good cause finding for making this final rule effective immediately upon publication, per section 553(d)(3) of the Administrative Procedure Act, 5. U.S.C. 553(d)(3), as discussed in section II, including the basis for that finding.

List of Subjects in 40 CFR Part 147

Environmental protection, Indian—lands, Intergovernmental relations, Reporting and recordkeeping requirements, Water supply.

Dated: July 24, 2018. Andrew R. Wheeler, Acting Administrator.

For the reasons set out in the preamble, the Environmental Protection Agency amends 40 CFR part 147 as follows:

PART 147—STATE, TRIBAL, AND EPA-ADMINISTERED UNDERGROUND INJECTION CONTROL PROGRAMS 1. The authority citation for part 147 is revised to read as follows: Authority:

42 U.S.C. 300h et seq.; and 42 U.S.C. 6901 et seq.

Subpart N—Idaho 2. In § 147.650 revise the section heading and the introductory text to read as follows:
§ 147.650 State-administered program—Class I, III, IV, and V wells.

The UIC program for Class I, III, IV, and V wells in the state of Idaho, other than those on Indian lands, is the program administered by the Idaho Department of Water Resources, approved by the EPA pursuant to section 1422 of the Safe Drinking Water Act. Notice of this approval was published in the Federal Register on June 7, 1985; the effective date of this program is July 22, 1985. This program consists of the following elements, as submitted to the EPA in Idaho's program application. Note: Because the EPA subsequently transferred the Class II UIC program from the Idaho Department of Water Resources to the EPA, references to Class II in the following elements are no longer relevant or applicable for federal UIC purposes.

3. Revise § 147.651 to read as follows:
§ 147.651 EPA-administered program—Class II wells and all wells on Indian lands.

(a) Contents. The EPA administers the UIC program for all classes of wells on Indian lands and for Class II wells on non-Indian lands in the state of Idaho. This program consists of the UIC program requirements of 40 CFR parts 124, 144, 146, 148, and any additional requirements set forth in the remainder of this subpart. Injection well owners and operators, and the EPA shall comply with these requirements.

(b) Effective dates. The effective date of the UIC program for Indian lands in Idaho is June 11, 1984. The effective date of the UIC program for Class II wells on non-Indian lands in Idaho is July 30, 2018.

[FR Doc. 2018-16245 Filed 7-27-18; 8:45 am] BILLING CODE 6560-50-P
ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 257 [EPA-HQ-OLEM-2017-0286; FRL-9981-18-OLEM] RIN 2050-AG88 Hazardous and Solid Waste Management System: Disposal of Coal Combustion Residuals From Electric Utilities; Amendments to the National Minimum Criteria (Phase One, Part One) AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final rule.

SUMMARY:

On April 17, 2015, the Environmental Protection Agency (EPA or the Agency) promulgated national minimum criteria for existing and new coal combustion residuals (CCR) landfills and existing and new CCR surface impoundments. In March 2018, EPA proposed a number of revisions to the 2015 CCR rule and requested comment on additional issues. In this rulemaking EPA is acting to finalize certain revisions to those criteria. First, EPA is adopting two alternative performance standards that either Participating State Directors in states with approved CCR permit programs (participating states) or EPA where EPA is the permitting authority may apply to owners and operators of CCR units. Second, EPA is revising groundwater protection standards (GWPS) for four constituents which do not have an established Maximum Contaminant Level (MCL). Finally, the Agency is extending the deadline by which facilities must cease the placement of waste in CCR units closing for cause in two situations: Where the facility has detected a statistically significant increase above a GWPS from an unlined surface impoundment; and where the unit is unable to comply with the aquifer location restriction. Provisions from the proposed rule that are not addressed in this rule will be addressed in a subsequent action.

DATES:

This final rule is effective on August 29, 2018.

ADDRESSES:

The EPA has established a docket for this action under Docket ID No. EPA-HQ-OLEM-2017-0286. The EPA has previously established a docket for the April 17, 2015, CCR final rule under Docket ID No. EPA-HQ-RCRA-2009-0640. All documents in the docket are listed in the https://www.regulations.gov index. Although listed in the index, some information is not publicly available, e.g., Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy form. Publicly available docket materials are available either electronically at https://www.regulations.gov or in hard copy at the EPA Docket Center (EPA/DC), EPA WJC West Building, Room 3334, 1301 Constitution Ave. NW, Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the EPA Docket Center is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT:

For information concerning this final rule, contact Kirsten Hillyer, Office of Resource Conservation and Recovery, Environmental Protection Agency, 5304P, Washington, DC 20460; telephone number: (703) 347-0369; email address: [email protected] For more information on this rulemaking please visit https://www.epa.gov/coalash.

SUPPLEMENTARY INFORMATION: I. Executive Summary A. Purpose of the Regulatory Action

EPA is finalizing certain revisions to the 2015 regulations for the disposal of CCR in landfills and surface impoundments to: (1) Provide States with approved CCR permit programs under the Water Infrastructure Improvements for the Nation (WIIN) Act or EPA where EPA is the permitting authority the ability to use alternate performance standards; (2) revise the GWPS for four constituents in Appendix IV to part 257 1 for which maximum contaminant levels (MCLs) under the Safe Drinking Water Act have not been established; and (3) provide facilities which are triggered into closure by the regulations additional time to cease receiving waste and initiate closure. This additional time will, among other things, better align the CCR rule compliance dates with the upcoming Effluent Limitations Guidelines and Standards Rule for the Steam Electric Power Generating Point Source Category (ELG rule). The ELG rule is currently scheduled to be proposed in December 2018 and finalized in December 2019.

1 Unless other specified, all references to part 257 in this preamble are to title 40 of the Code of Federal Regulations (CFR).

B. Summary of the Provisions of the Regulatory Action

EPA is finalizing certain revisions to the regulations at 40 CFR part 257, subpart D. In the March 2018 proposal, the Agency proposed six alternative performance standards which participating states (i.e., those which have an EPA-approved CCR permit program under the WIIN Act) may adopt and sought comment on additional alternatives. This action finalizes two of the proposed alternative performance standards. These final revisions will allow a Participating State Director or EPA where EPA is the permitting authority to: (1) Suspend groundwater monitoring requirements if there is evidence that there is no potential for migration of hazardous constituents to the uppermost aquifer during the active life of the unit and post-closure care; and (2) issue technical certifications in lieu of the current requirement to have professional engineers issue certifications. The Agency is also finalizing a revision of the GWPSs for the four constituents in Appendix IV to part 257 without MCLs, in place of background levels under § 257.95(h)(2).

In the March 2018 proposal, the Agency also took comment on revisions to several provisions of the 2015 CCR rule. Of those proposed changes, the Agency is now revising the deadline by which two categories of CCR units closing for cause must initiate closure: (1) Where the facility has detected a statistically significant increase from an unlined surface impoundment above a GWPS; and (2) where the unit is unable to comply with the aquifer location restriction.

Of particular note, in the March 2018 action, the Agency proposed four changes from the 2015 CCR rule associated with the settlement agreement entered on April 18, 2016, which resolved four claims brought by two sets of plaintiffs against the final CCR rule. See USWAG et al v EPA, No. 15-1219 (DC Cir. 2015). In this action, Agency will not be taking final action on any of the proposed amendments. As explained previously, provisions from the proposed rule that are not addressed in this action will be addressed in a subsequent rule-making action.

1. Severability

EPA intends that the provisions of this rule be severable. In the event any individual provision or part of this rule is invalidated, EPA intends that this would not render the entire rule invalid, and that any provision that can continue to operate will be left in place.

II. General Information A. Does this action apply to me?

This rule applies to all CCR generated by electric utilities and independent power producers that fall within the North American Industry Classification System (NAICS) code 221112 and may affect the following entities: Electric utility facilities and independent power producers that fall under the NAICS code 221112. This discussion is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. This discussion lists the types of entities that EPA is now aware could potentially be regulated by this action. Other types of entities not described here could also be regulated. To determine whether your entity is regulated by this action, you should carefully examine the applicability criteria found in § 257.50 of title 40 of the Code of Federal Regulations. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the FOR FURTHER INFORMATION CONTACT section.

B. What action is the Agency taking?

EPA is finalizing the following: (1) A provision that authorizes the Participating State Director to issue certifications in lieu of a professional engineer (PE); (2) a provision that authorizes the Participating State Director to approve the suspension of groundwater monitoring if a “no migration” demonstration can be made; and (3) a revision of the GWPSs for the four constituents in Appendix IV to part 257 without MCLs, in place of background levels under § 257.95(h)(2). In addition, the Agency is finalizing an extension to the deadline by which facilities must cease the placement of waste in CCR units closing for cause in two situations: (1) Where the facility has detected a statistically significant increase over the groundwater protection standard from an unlined surface impoundment; and (2) where the unit is unable to comply with the aquifer location restriction. Provisions from the proposed rule that are not addressed in this rule will be addressed in a subsequent rulemaking action.

C. What is the Agency's authority for taking this action?

These regulations are established under the authority of sections 1006(b)(1), 1008(a), 2002(a), 4004, and 4005(a) and (d) of the Solid Waste Disposal Act of 1970, as amended by the Resource Conservation and Recovery Act of 1976 (RCRA), as amended by the Hazardous and Solid Waste Amendments of 1984 (HSWA) and the Water Infrastructure Improvements for the Nation (WIIN) Act of 2016, 42 U.S.C. 6905(b)(1), 6907(a), 6912(a), 6944, and 6945(a) and (d). These authorities are discussed in more detail in Section III.C of this preamble.

D. What are the incremental costs and benefits of this action?

This action is expected to result in net cost savings amounting to between $27.8 million and $31.4 million per year when discounting at 7 percent and annualized over 100 years. It is expected to result in net cost savings of between $15.5 million and $19.1 million per year when discounting at 3 percent and annualized over 100 years. Further information on the economic effects of this action can be found in Section V of this preamble.

III. Background A. The “2015 CCR Rule” and the March 2018 Proposal

On April 17, 2015, EPA finalized national minimum criteria for the disposal of CCR as solid waste under Subtitle D of the Resource Conservation and Recovery Act (RCRA) titled, “Hazardous and Solid Waste Management System; Disposal of Coal Combustion Residuals from Electric Utilities,” (80 FR 21302) (CCR rule). The CCR rule regulated existing and new CCR landfills and existing and new CCR surface impoundments and all lateral expansions of CCR units. It is codified in subpart D of part 257 of Title 40 of the Code of Federal Regulations. The criteria consist of location restrictions, design and operating criteria, groundwater monitoring and corrective action requirements, closure and post-closure care requirements, and record keeping, notification and internet posting requirements. These criteria were designed to be self-implementing. The rule also required any existing unlined CCR surface impoundment that is contaminating groundwater above a regulated constituent's groundwater protection standard to stop receiving wastes and either retrofit or close, except in certain circumstances.

The rule was challenged by several parties, including a coalition of regulated entities and a coalition of environmental organizations. See, USWAG et al. v. EPA, No. 15-1219 (D.C. Cir. 2015). Four of the claims, a subset of the provisions challenged by the industry and environmental Petitioners, were settled. The rest were briefed and are currently pending before the U.S. Court of Appeals for the D.C. Circuit, awaiting resolution. On November 7, 2017, EPA sought remand without vacatur of five additional subsections of the rule on the grounds that EPA intended to reconsider those provisions. That request is also pending before the court.

The WIIN Act, which amends Section 4005 of the Resource Conservation and Recovery Act (RCRA), was enacted in 2016 to provide EPA additional authorities including the authority to review and approve state CCR permit programs. It also requires EPA to establish and carry out a permit program for CCR units in Indian Country, and for units in nonparticipating States, to achieve compliance with the current CCR rule or successor regulations. The WIIN Act provided that EPA may use its information gathering and enforcement authorities under RCRA sections 3007 and 3008 to enforce the CCR rule or permit provisions.

On September 13, 2017, EPA granted petitions from the Utility Solid Waste Activities Group (USWAG) and AES Puerto Rico LLP, requesting the Agency initiate rulemaking to reconsider provisions of the 2015 final rule.2 EPA determined that it was appropriate and in the public interest to reconsider provisions of the final rule addressed in the petitions, in light of the issues raised in the petitions as well as the new authorities in the WIIN Act.

2 A copy of both rulemaking petitions are included in the docket to this final rule.

In October 2017, the D.C. Circuit Court of Appeals directed EPA to file a status report with the court indicating its schedule for addressing issues contained in the petitions for reconsideration. In the status report filed in November 2017, EPA stated that it anticipated it would complete its reconsideration of all provisions in two phases. The first phase would be proposed in March 2018 and finalized no later than June 2019 and the second phase would be proposed no later than September 30, 2018 and finalized no later than December 2019. EPA indicated that in the first phase, the March 2018 proposal, EPA would continue its process with respect to those provisions which were remanded back to EPA in June 2016. These are: (1) Requirements for use of vegetation as slope protection; (2) provisions to clarify the type and magnitude of non-groundwater releases that would require a facility to comply with some or all of the corrective action procedures set out in §§ 257.96 through 257.98; and (3) the addition of Boron to the list of constituents in Appendix IV of part 257, the detection of which triggers assessment monitoring and corrective action requirements. EPA's March 2018 action contained proposals covering these remanded provisions.

In March 2018, EPA also proposed certain provisions that would allow the approval of alternative performance standards by Participating State Directors. These proposed alternative performance standards would allow a state with an approved permit program or EPA to: (1) Use an alternative risk-based GWPS for Appendix IV constituents where no MCL exists; (2) modify the corrective action remedy in certain cases; (3) suspend groundwater monitoring requirements if a “no migration” demonstration can be made; (4) establish an alternate period of time to demonstrate compliance with the corrective action remedy; (5) modify the post-closure care period; and (6) allow Participating State Directors to issue technical certifications in lieu of the current requirement to have professional engineers issue certifications. For Tribal lands and in non-participating states where Congress has specifically provided appropriations for EPA, the proposal defined “State Director” to mean the “EPA Administrator or their designee”. EPA also requested comment on potential revisions to several other provisions of the CCR rule and on other issues.

One topic EPA took comment on in the March 2018 proposed rule was on the groundwater monitoring compliance dates and if 90-days was a sufficient amount of time. While the Agency is not taking any final action on this topic in this action, EPA wishes to ensure that all parties understand the current rule and the relevant implementation deadlines. The Agency responded to a letter from the Utility Solid Waste Activities Group clarifying the deadlines and timeframes related to detection monitoring and the necessary statistical analysis for the groundwater monitoring.3 EPA clarified that the alternate source demonstration in detection monitoring (§ 257.94(e)(2)) does not run concurrently with the 90-day time frame in § 257.94(e)(1) or § 257.95(b). EPA also clarified that, assuming a facility elected to take advantage of the 90-day option in § 257.94(e)(2) [to demonstrate that a source other than the CCR unit is the source of contamination], January 14, 2019 as the deadline for facilities to make their initial determination of whether there has been the detection of a statistically significant increase of an Appendix IV constituent above the relevant groundwater protection standard in the downgradient wells. EPA noted that conducting the statistical analysis on two sets of sampling occurs only in this first round of assessment monitoring. All other statistical analyses on subsequent rounds of on-going semi-annual or annual sampling under assessment monitoring must be conducted following the single set of samples obtained during that sampling event.

3 EPA responded to USWAG in letters dated January 26, 2018 and April 30, 2018.

EPA is taking final action on certain provisions in this rulemaking: (1) Allowing a Participating State Director to issue certifications in lieu of a professional engineer (PE); (2) allowing a Participating State Director to approve the suspension of groundwater monitoring if a demonstration of “no migration” can be made; and (3) establishing alternative GWPSs for four Appendix IV constituents without MCLs in place of the background levels required under § 257.95(h)(2). In addition, the Agency is extending the deadline by which facilities must cease the placement of waste in CCR units closing for cause in two situations: (1) Where the facility has detected a statistically significant increase over the GWPS from an unlined surface impoundment; and (2) where the unit is unable to comply with the aquifer location restriction. Provisions in the proposed rule that are not addressed in this rulemaking will be addressed in a subsequent rulemaking.

B. Comments Received on the Proposed Rule

The agency received over 160,000 comments on the proposed rule. The majority of commenters focused on the four provisions remanded back to the Agency in 2016, as well as the six provisions proposed in response to passage of the WIIN Act. A number of commenters argued that no revisions were necessary to the April 2015 final CCR rule.

The areas on which EPA received the most substantial industry and state comments were: Support for the establishment of risk-based alternative GWPSs for constituents that do not have an MCL, support for the extension of compliance deadlines, support for modification of the alternative closure provisions, and allowing certifications by a Participating State Director in lieu of a PE. Most of the environmental organizations and individual citizens commented that the proposals would decrease protection of human health and the environment, especially if the facilities allow CCR units to leak contaminants into groundwater. Other comments related to topics that will be discussed in future rulemaking actions. Discussions of the specific comments germane to this rulemaking are provided in the relevant sections of this rule.

1. Public Hearing

EPA conducted a public hearing on April 24, 2018, in Arlington, VA. There were 79 speakers and a total of 120 registered attendees. Testimony at the public hearing focused generally on the proposed amendments of allowing the use of alternative performance standards. Several speakers commented on: Allowing alternate performance standards for the groundwater protection standards where no MCL is established, allowing Participating State Directors to issue certifications in lieu of a PE, and the overall risks, especially health risks, related to CCR. In addition to the testimonies that were entered into the rulemaking record, over 25 additional documents were submitted in hard copy and entered into the docket (see EPA-HQ-OLEM-2017-0286).

C. Statutory Authority

RCRA section 1006(b)(1) directs EPA to integrate the provisions of RCRA for purposes of administration and enforcement and to avoid duplication, to the maximum extent practicable, with the appropriate provisions of other EPA statutes. Section 1006(b) conditions EPA's authority to reduce or eliminate RCRA requirements on the Agency's ability to demonstrate that the integration can be done in a manner consistent with the goals and policies expressed in the chapter and in the other acts referred to in this subsection. 42 U.S.C. 6005(b)(1). See Chemical Waste Management v. EPA, 976 F.2d 2, 23, 25 (D.C. Cir. 1992).

RCRA section 1008(a) authorizes EPA to publish “suggested guidelines for solid waste management.” 42 U.S.C. 6907(a). RCRA defines solid waste management as “the systematic administration of activities which provide for the collection, source separation, storage, transportation, transfer, processing, treatment, and disposal of solid waste.” 42 U.S.C. 6903(28).

Pursuant to section 1008(a)(3), the guidelines are to include the minimum criteria to be used by the states to define the solid waste management practices that constitute the open dumping of solid waste or hazardous waste and are prohibited as “open dumping” under section 4005. Only those requirements promulgated under the authority of section 1008(a)(3) are enforceable under section 7002 of RCRA.

RCRA section 4004(a) generally requires EPA to promulgate regulations containing criteria for determining which facilities shall be classified as sanitary landfills (and therefore not “open dumps”). The statute directs that, “at a minimum, the criteria are to ensure that units are classified as sanitary landfills only if there is no reasonable probability of adverse effects on health or the environment from disposal of solid wastes at such facility.” 42 U.S.C. 6944(a).

RCRA section 4005(a), entitled “Closing or upgrading of existing open dumps” generally establishes the key implementation and enforcement provisions applicable to EPA regulations issued under sections 1008(a) and 4004(a). Specifically, this section prohibits any solid waste management practices or disposal of solid waste that does not comply with EPA regulations issued under RCRA section 1008(a) and 4004(a). 42 U.S.C. 6944(a). See also 42 U.S.C. 6903(14) (definition of “open dump”). As a general matter, this means that facilities must be in compliance with any EPA rules issued under section 4004(a) or be subject to suit for “open dumping” 42 U.S.C. 6945. RCRA section 4005 also directs that open dumps, i.e., facilities out of compliance with EPA's criteria, must be “closed or upgraded”.

RCRA section 4005(d) provides that States may submit a program to EPA for approval, and permits issued pursuant to the approved state permit program operate in lieu of the Federal requirements 42 U.S.C. 6945(d)(1)(A). To be approved, a State program must require each CCR unit to achieve compliance with the part 257 regulations (or successor regulations) or alternative State criteria that EPA has determined are “at least as protective as” the part 257 regulations (or successor regulations). State permitting programs may be approved in whole or in part [42 U.S.C. 6945(d)(1)(B)]. States with approved CCR permitting programs are considered “participating states”.

In states without an approved program, EPA is to issue permits, subject to the availability of appropriations specifically provided to carry out this requirement 42 U.S.C. 6945(d)(2)(B). The FY 2018 Omnibus Appropriations Act provided $6 million to EPA for the purpose of developing and implementing a Federal permit program for the regulation of CCR in nonparticipating states. Public Law 115-141. In addition, EPA is the permitting authority for CCR units in Indian Country. The statute expressly provides that facilities are to continue to comply with the CCR rule or successor regulations until a permit (issued either by an approved state or by EPA) is in effect for that unit 42 U.S.C. 6945(d)(3), (6).

IV. What amendments is EPA finalizing?

During the rulemaking process for the 2015 CCR rule, EPA received numerous comments requesting that EPA authorize state permit programs and adopt alternative performance standards that would allow state regulators or facilities to “tailor” the requirements to particular site-specific conditions. Many requested EPA adopt particular alternative performance standards found in EPA's municipal solid waste landfill (MSWLF) regulations in 40 CFR part 258. 4 Although the CCR rule was largely modeled on the MSWLF regulations, as explained in both the 2010 proposed and 2015 final rules, under the statutory provisions relevant to the CCR rule, EPA lacked the authority to establish a program analogous to part 258, which relies on approved states to implement the federal criteria through a permitting program. See, e.g., 80 FR 21332-21334. In the absence of a state oversight mechanism to ensure that alternative standards would be appropriate, EPA concluded at that time it could not adopt many of the “more flexible” performance standards in part 258 that commenters requested. Id at 21333.

4 Unless other specified, all references to part 258 of this preamble are to title 40 of the Code of Federal Regulations (CFR).

However, in 2016, Congress, with the passage of the WIIN Act, amended RCRA to establish a permitting scheme, analogous to that established for MSWLFs. Under these new provisions, States may now apply to EPA for approval to operate a permit program to implement the CCR rule. As part of that process, a State program may also include alternative State standards, provided EPA has determined they are “at least as protective as” the CCR regulations in 40 CFR part 257. 42 U.S.C. 6945(d)(1)(B), 6945(d)(1)(C).

In light of the WIIN Act, EPA examined the existing 40 CFR part 258 regulations to evaluate the performance standards that rely on a state permitting authority, to determine whether any of them could now be incorporated into the part 257 CCR regulations. To develop the proposed rule, EPA evaluated whether there was sufficient evidence in the record for those regulations to support incorporating either the part 258 MSWLF provision or an analogue into the part 257 CCR regulations.

Based on the results of this evaluation, EPA proposed to adopt six alternative performance standards modeled after part 258, which would allow a Participating State Director to: (1) Establish alternative risk-based GWPS for constituents where no MCL exists; (2) Modify the corrective action remedy in certain cases; (3) Suspend groundwater monitoring requirements if a “no migration” demonstration can be made; (4) Establish an alternate period of time to demonstrate compliance with the corrective action remedy; (5) Modify the post-closure care period; and (6) Issue technical certifications in lieu of a professional engineers. Under the proposal, EPA would have the same authority to establish alternative performance standards in non-participating states, subject to appropriations, and in Tribal Country, as a Participating State Director would. EPA explained that these alternative performance standards were modeled after part 258 provisions in the MSWLF regulations that appeared to have been adopted based solely on a finding that they would protect human health and the environment; EPA believed that the facts supporting those original determinations would also support a finding that the provisions met the standard under RCRA section 4004(a).

EPA received a number of comments on this overall approach. Several commenters agreed that the record supporting any of the current provisions under the part 258 regulations would support revisions to the part 257 regulations. EPA also received comments stating that the proposed alternative protection standards failed to satisfy the requirements of RCRA section 4004(a). These commenters claimed that the record on which the proposals had relied was inadequate. Specifically, the commenters argued that EPA had in fact considered facilities' “practicable capability in developing every provision of the rule, and so none were based exclusively on addressing the risks to health and the environment. These commenters also criticized the risk assessment conducted to support the part 258 regulations, claiming that it failed to consider the risks to sensitive subpopulations, that the only impact it evaluated was the risk to human health from drinking MSWLF-contaminated groundwater, and only if drinking water wells were within one mile of the MSWLF, and that in any event the characteristics of (and therefore the risks posed by) MSWLF and CCR units are very different. These commenters also argued that EPA could not rely on the 2014 risk assessment conducted for the CCR rule to support the proposals without first evaluating whether the assumptions in that assessment are consistent with the results of the recently conducted groundwater monitoring, which they claim shows that the groundwater at almost all facilities is contaminated by at least one of the constituents in Appendix IV.

EPA is continuing to evaluate a number of technical issues raised in the comments. At the same time, the Agency recognizes the need to begin to implement the WIIN Act and to facilitate the transition to regulation of CCR through permit programs in a timely manner in order to address the urgent concerns presented by facilities that are faced with criteria that may be subject to change through this and other rulemaking actions and quickly approaching compliance deadlines that may require substantial investments and impact operational decision-making. EPA is also mindful that States are in the process of considering whether to seek approval or their regulatory programs, and in some cases, are in the process of developing those programs; greater certainty regarding the kinds of provisions that EPA currently has the record to approve would consequently be highly desirable in order to effectuate the purpose behind the WIIN Act. Accordingly, while EPA continues to evaluate the concerns raised regarding the 1991 and 2014 risk assessments, the Agency is finalizing at this time a select number of provisions that either do not rely on those materials for support to meet the standard in RCRA section 4004(a) or rely on portions that are not implicated by the technical issues under consideration.

EPA is adopting two of the proposals modeled after the existing provisions in 40 CFR part 258: (1) The Participating State Director may suspend groundwater monitoring requirements if there is evidence that there is no potential for migration of hazardous constituents to the uppermost aquifer during the active life of the unit and the post-closure care period; and (2) The Participating State Director may decide to certify that certain regulatory criteria have been met in lieu of the exclusive reliance on a qualified PE. EPA is also adopting revised GWPS for constituents without a MCL under § 257.95(h)(2). After consideration of comments received, EPA has set risk-based values using the methodology discussed in the proposal. In addition, the Agency is finalizing an extension to the deadline by which facilities must cease the placement of waste in CCR units closing for cause in two situations: (1) Where the facility has detected a statistically significant increase over the groundwater protection standard from an unlined surface impoundment; and (2) where the unit is unable to comply with the aquifer location restriction. Further discussion of these comments received on these provisions and the bases on which EPA is adopting them is in their respective sections of this preamble.

For any of the proposed performance standards, EPA requested comment on whether the facility or owner operator should be required to post the specific details of the modification of the performance standard to the facility's publicly accessible website or require any other recordkeeping options. Based on comments received, and to maintain transparency facilities with a site-specific performance standard, such as suspending groundwater monitoring in the event a no migration demonstration can be made, EPA is requiring posting of specific details of the modification to a publicly accessible website. This is discussed further below.

A. Extension to Certain Deadlines for the Closure or Retrofit of Existing CCR Surface Impoundments

The CCR rule requires existing CCR surface impoundments and landfills to cease receiving waste and initiate closure under certain circumstances. For existing CCR surface impoundments, these situations include unlined CCR surface impoundments whose groundwater monitoring shows an exceedance of a GWPS (§ 257.101(a)(1)); CCR surface impoundments that do not comply with the location criteria (§ 257.101(b)(1)); and CCR surface impoundments that are not designed and operated to achieve minimum safety factors (§ 257.101(b)(2)). The current CCR regulations also require existing CCR landfills that do not comply with the location criteria for unstable areas to close (§ 257.101(d)(1)). In all of these situations, also referred to as “closure for cause” in the preamble to 2015 CCR final rule, the current CCR regulations specify that the owner or operator of the unit must cease placing any waste into the CCR unit and initiate closure activities within six months of making the relevant determination that the CCR unit must close.

After considering comments received in response to the March 15, 2018 proposed rule, as well as information in the rulemaking petitions submitted by USWAG and AES Puerto Rico,5 the agency finds it appropriate to finalize an extension to the deadline by when owners or operators must cease the placement of waste in existing CCR surface impoundments closing for cause in two situations. The two situations include the deadlines applicable to: (1) Existing CCR surface impoundments that are unable to comply with the location restriction regarding placement above the uppermost aquifer; and (2) Existing unlined CCR surface impoundments whose groundwater monitoring shows an exceedance of a groundwater protection standard. The agency is not at this time making any revisions to the other deadlines that apply to existing CCR surface impoundments or to any of the deadline requirements that apply to new and existing CCR landfills and new CCR surface impoundments. The two subunits below explain the approach and rationale for the amendments to certain deadlines for these two situations.

5 “Utility Solid Waste Activities Group Petition for Rulemaking to Reconsider Provisions of the Coal Combustion Residuals Rule, 80 FR 21302 (April 17, 2015), and Request to Hold in Abeyance Challenge to Coal Combustion Residual Rule, No. 15-1219, et al. (D.C. Cir.)” dated May 12, 2017; and “AES Puerto Rico LP's Petition for Rulemaking to Reconsider Provisions of the Coal Combustion Residuals Rule, 80 FR 21302 (April 17, 2015), and Request to Hold in Abeyance Challenge to the Coal Combustion Residuals Rule, No. 15-1219, et al. (D.C. Cir.)” dated May 31, 2017.

1. Revision of § 257.101(b)(1) Regarding the Deadline for Waste Placement and Closure of Existing Surface Impoundments That Fail To Demonstrate Compliance With a Location Standard

In the March 15, 2018 proposed rule, EPA solicited public comment on whether the deadlines to comply with the location restrictions at §§ 257.60 through 257.64 are appropriate in light of the WIIN Act (83 FR 11598). The Agency sought comment on whether an alternative deadline, either through a permit program established under the WIIN Act or one that applies directly to the facility itself during an interim period, would be more appropriate to facilitate implementation of the WIIN Act. Owners and operators of existing CCR surface impoundments must complete the required demonstrations for five location restrictions 6 no later than October 17, 2018.7 An owner or operator that fails to complete any one of the demonstrations by the deadline would trigger the closure requirements of § 257.101(b)(1), which requires the owner or operator of the unit to cease placing CCR and non-CCR wastestreams into the impoundment and close the impoundment in accordance with the closure provisions of the regulations.

6 The five location restrictions are placement above the uppermost aquifer, wetlands, fault areas, seismic impact zones, and unstable areas.

7 Inactive CCR surface impoundments are subject to a different deadline as specified in § 257.100(e)(2).

EPA received numerous comments regarding the current deadlines associated with the location restrictions. Many commenters stated their support for extending the current deadlines to complete the required demonstrations for the location restrictions and, in particular, the location restriction for placement above the uppermost aquifer. These commenters stated that deadline extensions would allow time for both the proper implementation of the WIIN Act and the finalization of other substantive CCR rule revisions contemplated in the March 15, 2018 proposal, and would be consistent with the standard in RCRA section 4004(a), while limiting facilities' expenditure of significant resources and avoiding the initiation of irreversible operational changes, including the forced closure of impoundments (and potentially the power plants themselves) under the current compliance deadlines. Commenters also stated that extensions of the location restriction deadlines is necessary to ensure alignment of key implementation and operational decisions under the CCR rule with EPA's schedule for issuing revisions to the effluent limitations guidelines (ELGs) and pretreatment standards for the Steam Electric Power Generating Point Source Category.8 Some commenters recommended that the deadline for determining whether existing impoundments meet the aquifer separation location restriction should be keyed to a specific time following EPA's issuance of a final rule allowing for an alternative risk-based option for meeting this location restriction. Other commenters supported extending deadlines until after EPA finalizes the amendments contemplated in the March 15, 2018 proposal and states have time to adopt the rule revisions into their state regulations. Some commenters suggested that deadlines be extended a specific amount of time following the effective date of a final rule or to specific dates. These commenters recommended extensions ranging from 120 days to 12 months from the final rule's effective date and, while other commenters suggested deadlines be extended until November 2020. At a minimum, these commenters stated that EPA should extend the timeline related to the obligation to enter into forced closure under § 257.101. Finally, commenters stated that it is common practice for an agency to extend regulatory deadlines in circumstances where a regulation is under reconsideration.

8 On May 2, 2018, EPA issued the Final 2016 Effluent Guidelines Program Plan (83 FR 19281), which identifies new or existing industrial categories selected for effluent guidelines rulemakings and provides a schedule for such rulemakings. This 2016 Program Plan discusses that, in August 2017, EPA announced a rulemaking to potentially revise certain standards for existing sources in the Steam Electric Power Generating Point Source Category. The 2016 Program Plan also projects a schedule for such rulemaking, including a proposed rule in December 2018 and a final rule in December 2019. See page 6-1 of 2016 Program Plan.

Other commenters opposed any extension of the compliance deadlines associated with the location restrictions. These commenters stated that an extension is unwarranted due to the long history of delays in setting federal standards and the adverse impacts to human health and the environment from improperly sited CCR units. Commenters stated that facilities have had several years to prepare for meeting the location restrictions and that an extension of the deadline is unnecessary because the facilities should already have sufficient information to determine whether their CCR units comply with the location restrictions. Finally, these commenters point out that several utilities have already sought approval from state regulators to close CCR units that are not in compliance with the location restrictions. A compliance extension would thus penalize companies that have made good-faith efforts to comply with the current rule, while rewarding companies that have not prepared properly to comply.

EPA first considered whether to extend the deadlines by which owners or operators of CCR surface impoundments must complete the location restrictions demonstrations in §§ 257.60 through 257.64. Such a rule revision would have the effect of delaying the date that facilities would need to determine whether its CCR units are in compliance with the location restrictions. Most of the commenters raised concern about the current deadlines based on the assumption that the technical performance standards would subsequently be revised, either because EPA was reconsidering those criteria or because States would revise them as part of their permit programs. The commenters provided no data or other information to suggest that compliance with the existing location restriction demonstration deadlines presents technical difficulties or is otherwise infeasible. Rather the primary technical concern raised by the comments was the need for more time to develop or find alternative capacity to replace any units that cannot comply with the location criteria. As one commenter explained. in a typical state, the process to modify a major wastewater discharge permit as required to reroute non-CCR waste water streams can take more than a year to complete. This commenter also provided concrete examples to support their contention that it may take 18-36 months to find alternate capacity for their non-CCR wastes streams.

For a simple project—which the commenter described as a site that (1) does not provide base load generation, and thus there would be minimal impact to project timing due to planned unit outages to install the piping re-routes and associated mechanical and electrical connections; (2) has fewer streams to re-route, operates intermittently, and (3) has straightforward low volume waste steams (i.e., technically definable in terms of quantity and quality)—the overall duration (18 months) is three times the 6-month duration provided for by the existing regulations.

By contrast, a more complex site the overall duration is approximately 36 months—nearly six times longer in duration than currently provided for in the existing CCR rule. For a more complex site, the current water balance may indicate there are over 50 non-CCR individual waste streams which go to the CCR impoundment. Additionally, each unit utilizes an FGD that produces a waste stream, which also goes to the CCR impoundment. The FGD waste water stream has the most complex water chemistry and variability of any water stream in the plant. Complex project in terms of the number of streams to re-route, its more consistent operation (and scheduled outages), and its complex water chemistry associated with several of the non-CCR wastestreams. Additionally, the large number of streams to deal with, some of which only flow intermittently, further complicates the process design of what treatment system is needed. The water treatment process equipment alone requires a schedule of 13 months to procure, fabricate, and deliver to the plant site (excluding construction). When these efforts are properly stacked and staggered consistent with accepted engineering and project management practice, the overall duration is approximately 36 months.

In both examples discussed previously, the commenter explained that the current regulation also provides inadequate time for proper start-up and commissioning. Reports from industry indicate that it can take several months to properly tune and commission a large water treatment plant. The commenter stated that the six months in the existing rule is, at best, barely adequate to properly tune a complex wastewater treatment plant to steady state operation accounting for quantity and quality variations in the non-CCR water streams.

After considering all of the comments, EPA considers that the potential for revisions to the technical criteria themselves is too speculative at this stage to form the basis for a regulatory revision. EPA received no concrete proposals or suggestions for possible modifications to the technical criteria themselves. Nor does EPA currently have any potential options under consideration. And none of the States that have submitted applications (or with whom EPA has had discussions) for program authorization included any alternative location criteria. Accordingly, EPA has determined not to revise the deadlines to complete the requisite demonstrations.9

9 These deadlines are codified in §§ 257.60(c)(1), 257.61(c)(1), 257.62(c)(1), 257.63(c)(1), and 257.64(d)(1).

However, EPA acknowledges that legitimate concerns have been raised about the feasibility of complying with the current closure timeframes. EPA considers that the issues discussed above are not unique to the commenter, but are shared by facilities across the industry. And these concerns are equally relevant in this context, as units that do not comply with the location requirements must close pursuant to § 257.101(b)(1).

EPA also takes very seriously the concern that facilities not be prematurely compelled to make potentially irreversible operational changes or otherwise be forced to invest in compliance measures that may subsequently need to be modified. This was part of the reason that EPA originally chose to align key implementation and operational decisions under the CCR rule with EPA's schedule for issuing the effluent limitations guidelines and pretreatment standards (ELGs) for the Steam Electric Power Generating Point Source Category to be appropriate. The ELG requirements will be highly relevant to facility's decisions regarding the development of alternative capacity to manage non-CCR wastestreams. EPA is currently in the process of rulemaking to consider revising certain standards for existing ELGs sources; that rulemaking is projected to be completed by December 2019. EPA recently changed the earliest ELG compliance date for FGD and bottom ash wastewater to October 2020 to account for these potential revisions. See 82 FR 43494. EPA's original concern thus continues to be highly relevant.

To address these concerns, EPA therefore considered whether an extension of the deadline in the closure for cause provisions in § 257.101(b)(1) that would better coordinate the compliance and implementation deadlines between the CCR and ELGs rules, as suggested by many of the commenters, was warranted. Such a rule revision would still require facilities to make the requisite location restriction demonstrations by the deadlines specified earlier (i.e., October 17, 2018), but would extend the timeframe during which the facility could continue to use the unit, and thereby provide the facility with more time to adjust its operations. This approach would allow facilities to better coordinate their engineering, financial and permitting activities under the two rules, and would account for EPA's on-going ELG rulemaking. Therefore, EPA is extending the closure for cause trigger from the six-month period currently specified in the rule until October 31, 2020, which increases that time period by approximately 18 months. The agency selected the date to coordinate with the revised compliance date for the ELG requirements. The agency anticipates completing the ELGs rulemaking by December 2019 and providing nine months from the rule's likely publication in January 2020 would be sufficient for facilities to make informed decisions to meet the requirements of both rules. That 18-month period also corresponds with the lower end amount of time estimated to be needed to find alternative capacity for non-CCR watestreams.

Finally, EPA considered whether to apply a time extension to all location restrictions, or a subset of them. Commenters consistently identified the placement above the uppermost aquifer location restriction as the critical standard, and so EPA has limited its revision to address this specific concern. This time extension does not affect other deadlines in the regulations, and facilities therefore are required to comply with all requirements of an operating facility (e.g., inspections), which are designed to ensure that the facility operations will meet the statutory standard during this extension period.

2. Revision of § 257.101(a)(1) Regarding the Deadline for Waste Placement and Closure or Retrofit of Existing Unlined CCR Surface Impoundments

The agency solicited comment in the March 15, 2018, proposed rule on appropriate time frames for the assessment monitoring requirements (83 FR 11599). The 2015 regulation establishes a groundwater monitoring program consisting of detection monitoring, assessment monitoring and corrective action. Because the current assessment monitoring program includes a series of 90-day time periods in which an owner or operator is to perform the required analysis and demonstrations, EPA sought comment on whether 90 days is an appropriate time period for the assessment monitoring requirements in light of the WIIN Act. The agency specifically requested comment on whether alternative time periods are necessary to perform the required analysis and demonstrations and whether such alternative time periods would be more appropriate to facilitate implementation of the WIIN Act and any amendments to the CCR regulations as a result of the March 15, 2018 proposed rule.

The groundwater monitoring program requires an owner or operator of a CCR unit to install a system of monitoring wells and specify procedures for sampling these wells, in addition to methods for analyzing the groundwater data collected, to detect the presence of specified constituents and other monitoring parameters released from the units. Among other requirements, the 2015 regulations required facilities to have installed the groundwater monitoring system and initiated detection monitoring no later than October 17, 2017.10 Some CCR units are currently operating under the assessment monitoring provisions of the regulations. Facilities monitoring groundwater under the assessment monitoring program are required to close or retrofit an unlined CCR surface impoundment if the monitoring results show that the concentrations of one or more of the constituents listed in Appendix IV to part 257 are detected at statistically significant levels above any GWPS. § 257.101(b)(1).

10 Inactive CCR surface impoundments are subject to a different deadline as specified in § 257.100(e)(5).

EPA received numerous comments on this issue. The general theme of those comments supportive of an extension was similar to that summarized in the previous subsection addressing location restrictions. Many commenters emphasized that an extension is needed to properly implement the objectives of the WIIN Act. Commenters stated that without an extension of the assessment monitoring deadlines, there would be little to no practical effect from the proposed revisions because facilities will have to make irreversible decisions and investments based on the 2015 rule. Many of these commenters identified two proposals of greatest concern: (1) The ability of facilities to establish risk-based GWPSs for Appendix IV constituents without MCLs; and (2) the incorporation of risk-based flexibility into the corrective action program. These commenters stated that the current schedule of the assessment monitoring program does not provide time for these provisions to take effect before some facilities will be compelled to initiate corrective action and/or forced to close could qualify for the new alternative closure provision. Some commenters also argued that the existing deadline associated with implementing the GWPS, in particular those associated with assessment monitoring are too short to adequately identify the source and extent of an exceedance. Commenters urged the Agency to extend these deadlines or, at a minimum, to defer the obligation to establish groundwater protection standards until after EPA adopts these two proposals.

Commenters also stated that an extension is necessary to align key implementation and operational decisions under the CCR rule with EPA's schedule for revising the ELGs for the Steam Electric Power Generating Point Source Category. Other commenters suggested that deadlines be extended a specific amount of time following the effective date of a final rule. These commenters recommended extensions ranging from 120 days to 12 months from the final rule's effective date.

Other commenters opposed any extension of the deadlines associated with the assessment monitoring program. These commenters stated that an extension is unwarranted due to the long history of delays in setting federal standards and the adverse impacts to human health and the environment from improperly sited CCR units. Commenters stated their opposition to revising the regulations that would allow facilities to continue to CCR units that are unlined and already contaminating groundwater.

EPA first considered the request to extend the assessment monitoring deadlines to allow States the opportunity to establish alternate risk-based GWPS under § 257.95(h). Most of the commenters raised concern about the current deadlines based on the assumption that the GWPS would subsequently be revised as part of a State-approved permit program. But the requested extension would have delayed the initiation of closure under § 257.101(a)(1) and corrective action provisions of §§ 257.96 through 257.98 for all constituents, not merely for the four without MCLs that commenters believed were likely to be revised.

As discussed Unit IV.B of this preamble, EPA is establishing health-based GWPSs for all four of the constituents in Appendix IV without established MCLs. These revised standards, because they are health-based standards, are not expected to be affected by State programs, which alleviate the concern that facilities will be forced to take action in response to standards that are likely to be revised. EPA therefore has no basis to revise the assessment monitoring deadlines.

Nevertheless, as noted previously, numerous commenters raised concern that compliance with the current closure requirements is not technically feasible. These concerns, and the considerations motivating EPA to revise the deadlines for the aquifer location criterion, are equally relevant in this context, as unlined surface impoundments units that are leaking must close, in accordance with § 257.101(a)(1). EPA therefore considered whether an extension of the deadline in § 257.101(a)(1) to initiate the closure of unlined surface impoundments, similar to the extension of the deadlines for the location restrictions, would address the commenters' concerns. Such a provision would require facilities to follow the assessment monitoring procedures and determine whether any contaminants have been detected at statistically significant levels above the GWPS established under § 257.95(h). A facility that makes such a determination would still be required to initiate corrective action to clean up the contamination in the aquifer, but could continue to use the unit for an extended period, which would provide the facility with more time to adjust their operations. This approach would allow facilities to better coordinate their engineering, financial and permitting activities under the two rules, and would align with EPA's recent and on-going ELG rulemakings. Therefore, EPA has extended the closure for cause trigger by the same 18-month period granted for the location restrictions. The agency selected the date October 31, 2020, to coordinate with the revised earliest compliance date for the ELG requirements. The Agency anticipates completing the ELG rulemaking by December 2019 and providing nine months from the rule's likely publication in January 2020, for facilities to make appropriate decisions knowing the requirements of both rules.

This time extension does not affect other deadlines or any other requirement in the regulations, and facilities therefore remain obligated to comply with all requirements of an operating facility (e.g., inspections), which are designed to ensure that the facility operations will meet the statutory standard during this extension period.

B. Alternative Risk-Based Groundwater Protection Standards

The 2015 CCR rule required the CCR unit owner or operator to set the GWPS at the MCL or to background for all constituents in Appendix IV to part 257 that are detected at a statistically significant level above background. MCLs are levels of constituent concentrations promulgated under section 1412 of the Safe Drinking Water Act. If no MCL exists for a detected constituent, then the GWPS needed to be set at background. In cases where the background level is higher than the promulgated MCL for a constituent, the GWPS was to be set at the background level.

In March 2018, EPA proposed to amend the 2015 CCR rule to incorporate certain requirements from 40 CFR part 258 that would allow Participating State Directors, and EPA where it is the permitting authority, flexibility to approve an alternative GWPS, which was required to be derived in a manner consistent with Agency guidelines. Some of the risk guidelines used to support establishment of the part 258 regulations had since been replaced or supplemented, so the proposal referenced the updated versions. Specifically, EPA cited to the Supplementary Guidance for Conducting Health Risk Assessment of Chemical Mixtures, 11 which supplements 51 FR 34014 (September 24, 1986); the Guidelines for Developmental Toxicity Risk Assessment, 12 which amends 51 FR 34028 (September 24, 1986); and the Guidelines for Carcinogen Risk Assessment, 13 which amends 51 FR 33992 (September 24, 1986). Also, EPA proposed to add guidance on deriving a reference dose, Reference Dose (RfD): Description and Use in Health Risk Assessments. 14

11 USEPA, “Supplementary Guidance for Conducting Health Risk Assessment of Chemical Mixtures”, EPA/630/R-00/002, August 2000. This document can be accessed in the docket.

12 USEPA, “Guidelines for Developmental Toxicity Risk Assessment”, EPA/600/FR-91/001, December 1991. This document can be accessed at https://cfpub.epa.gov/ncea/risk/recordisplay.cfm?deid=23162.

13 USEPA, “Guidelines for Carcinogen Risk Assessment”, EPA/630/P-03/001F, March 2005. This document can be accessed at https://www.epa.gov/risk/guidelines-carcinogen-risk-assessment.

14 This document can be accessed at https://www.epa.gov/iris/reference-dose-rfd-description-and-use-health-risk-assessments.

EPA also proposed to incorporate the part 258 requirement that the alternative GWPS be based on scientifically valid studies conducted in accordance with the Toxic Substances Control Act Good Laboratory Practice Standards (40 CFR part 792) or the equivalent. For non-carcinogens, EPA proposed to require that States use a reference dose with a hazard quotient (HQ) of 1 as the upper bound on risk, to establish the alternative GWPS. This methodology was the same as that used to establish the technical criteria in the 2015 CCR regulation. EPA's proposal explained that reliance on this methodology was reasonable as it would ensure that this provision (and any alternative GWPS eventually established under this provision) would meet the requisite statutory standard. Examples of groundwater values consistent with the proposed requirements were provided, including Action Levels promulgated under the Safe Drinking Water Act and the Regional Screening Levels for Chemical Contaminants at Superfund Sites.15 EPA solicited comment on the revised approach to establishing an alternative GWPS.

15 This document can be accessed at https://www.epa.gov/risk/regional-screening-levels-rsls.

Significant comments were received in support of the proposal to allow States to approve an alternative GWPS. Commenters stated that States have robust regulatory frameworks to regulate groundwater protection, that allowing this flexibility is consistent with how requirements for MSWLFs are implemented under Subtitle D, and that the oversight and enforcement authorities provided in the WIIN Act allow EPA to ensure States will set protective standards. Commenters also stated that risk-based alternative GWPS would be more appropriate than the current requirement to use background levels where no MCL has been established for an Appendix IV constituent.

Comments were also received opposing the proposal to allow Participating State Directors to approve an alternative GWPS. Concerns raised included lack of resources or technical expertise at state agencies, and the failure to require any alternative GWPS to be protective of sensitive subgroups, which is included in the MSWLF regulations at 40 CFR 258.55(i). Commenters opposed to this proposal raised concerns that it would: Establish vague, unenforceable guidelines; fail to address ecological risk or cancer risk; ignore health-based exposure concentrations that are already developed; and would ultimately allow states to increase risks to human health and the environment above the statutory standard. Commenters also called attention to that allowing Participating State Directors to set alternative standards could result in variability in regulatory standards for chemicals that present the same health risks, regardless of geography. Commenters also raised concerns about protectiveness of the proposed approach and EPA's ability to use the part 258 record to support providing discretion to Participating State Directors. One group of commenters maintained that it is arbitrary and insufficiently protective to let states establish GWPS where EPA has already established risk-based levels for Appendix IV constituents with no established MCL, also citing the Superfund program's “Regional Screening Levels” (RSLs).

Some comments requesting that EPA consider established, available health-protective benchmarks for Appendix IV constituents, such as RSLs, and well-established assessment methodology for developing more site-specific GWPS. One industry commenter maintained that “Of particular relevance to the CCR Rule are the risk-based policies and resources for the protection and remediation of impacted groundwater that U.S. EPA has developed. Specifically, U.S. EPA has established Regional Screening Levels (RSLs) to assess potential human health risks from chemicals in soil, water, and air. . . . These values assist risk assessors in determining whether levels of constituents at a site may warrant further investigation or cleanup, or whether no further investigation is required.” The commenter goes on to explain that RSLs, while protective, are significantly higher than background concentrations of cobalt, lithium, and molybdenum collected by USGS. Using the RSLs instead of background would avoid corrective action costs of cleaning up to background levels without providing any health benefit. See EPA-HQ-OLEM-2017-0286-1314, Attachment 2, pp. 2. An environmental commenter, concerned about the potential for states to set their own standards, said, “In the case of EPA's coal ash regulations, not only is EPA in a better position to establish health-protective levels for each non-MCL constituent, but the Agency has already done so.” The commenter goes on to say that “If EPA chooses to allow groundwater protection standards other than background, those standards must be no less stringent than the EPA RSLs or health advisories.” See EPA-HQ-OLEM-2017-0286-2136 pp. 134-139.

In the proposal, EPA also solicited comment on whether an alternative risk-based GWPS could be established by an independent technical expert or experts where there is no approved permitting authority. Numerous commenters opposed this suggestion, for reasons including: (1) EPA previously rejected that approach in the 40 CFR part 258 regulations, which restricted this provision to Participating State Directors; (2) EPA does not provide an adequate record to support such a proposal; (3) Such a regulation, if finalized, would fail to satisfy the protectiveness standard in RCRA section 4004(a). Commenters in support of this primarily cited the pending compliance dates in the CCR rule as a reason to allow an alternative GWPS to be established under the self-implementing program. Commenters expressed concern that by the time States receive approval of permitting programs and EPA establishes its own permitting program, groundwater monitoring deadlines would have passed and it would be too late to establish alternative GWPSs. To illustrate this point, one industry commenter stated that half of its CCR units could be forced to initiate alternate source demonstrations or corrective action assessment based solely on having detected Appendix IV constituents with no MCLs above background levels. Commenters stated that the oversight and enforcement authorities provided to EPA by the WIIN Act would ensure that site-specific alternative GWPS established by independent experts are protective.

EPA agrees with commenters that State programs are unlikely to be developed and approved prior to the critical deadlines in the CCR rule. EPA continues to evaluate technical issues, and the various concerns raised by the commenters, but the Agency has developed the alternative adopted today that does not rely on the part 258 record for support, and also balances commenters' concerns. EPA has developed a specific GWPS for each of the four constituents in Appendix IV without an MCL, to be used in place of the default background concentrations currently required under § 257.95(h)(2). Adopting national criteria will provide health-based standards available to facilities now to use to compare against monitored groundwater concentrations and develop cleanup goals. Note that a State Director may always seek approval for alternative State criteria as part of the process under the WIIN Act; this could, for example, include the establishment of alternative GWPS for the constituents listed in Appendix IV. See 42 U.S.C. 6945(d)(1)(B)(ii), (C), requiring the Administrator to approve a State permit program that allows a State to include technical standards for individual permits or conditions of approval that differ from the criteria under part 257 of title 40, Code of Federal Regulations if, based on site-specific conditions, the Administrator determines that the technical standards established pursuant to a State permit program are at least as protective as the criteria under that part.

Specifically, the Agency is adopting the following health-based levels as the GWPSs for the four Appendix IV constituents without a designated MCL: 6 micrograms per liter (µg/L) for cobalt; 40 µg/L for lithium, and 100 µg/L for molybdenum. EPA is adopting the alternative GWPS for lead at 15 µg/L. These levels were derived using the same methodology that EPA proposed to require States to use to establish alternative GWPS (See, 83 FR 11598-11599, 11613). The methodology follows Agency guidelines for assessment of human health risks of an environmental pollutant. This means that these GWPSs are expected to be concentrations to which the human population could be exposed to on a daily basis without an appreciable risk of deleterious effects during a lifetime.

Specifically, EPA used the equations in the Risk Assessment Guidance for Superfund (RAGS) Part B to calculate these revised GWPS.16 RAGS Part B provides guidance on using drinking water ingestion rates and toxicity values to derive risk-based remediation goals. The use of these methods, consistent with EPA risk assessment guidelines addresses commenters' concerns about protecting sensitive populations. EPA relied upon relevant exposure information from the 2008 Child-Specific Exposure Factors Handbook, 17 the Exposure Factors Handbook: 2011 Edition18 and the 2014 Human Health Evaluation Manual, Supplemental Guidance: Update of Standard. 19 Values based on residential receptors were used to capture the range of current and future potential receptors. EPA identified toxicity values according to the hierarchy established in the 2003 Office of Solid Waste and Emergency Response Directive 9285.7-53,20 which encourages prioritization of values from sources that are current, transparent and publicly available, and that have been peer reviewed. Finally, EPA used the same toxicity values (reference doses) that were used in the risk assessment supporting the 2015 CCR Rule. Cancer slope factors (CSF) were not identified for any of the relevant constituents. The finalized GWPS for cobalt, lithium, and molybdenum were set using a target based on a HQ = 1 for Participating State Directors to follow.

16 Risk Assessment Guidance for Superfund (RAGS) Part B can be accessed at https://www.epa.gov/risk/risk-assessment-guidance-superfund-rags-part-b.

17 USEPA “Child-Specific Exposure Factors Handbook” can be accessed in the docket or at https://cfpub.epa.gov/ncea/risk/recordisplay.cfm?deid=199243.

18 USEPA “Exposure Facots Handbook: 2011 Edition” can be accessed in the docket or at https://cfpub.epa.gov/ncea/risk/recordisplay.cfm?deid=236252.

19 2014 Human Health Evaluation Manual, Supplemental Guidance: Update of Standard can be accessed in the docket or at https://www.epa.gov/risk/update-standard-default-exposure-factors.

20 Office of Solid Waste and Emergency Response Directive 9285.7-53 can be accessed in the docket or at https://nepis.epa.gov/Exe/ZyNET.exe/91015CKS.TXT?ZyActionD=ZyDocument&Client=EPA&Index=2000+Thru+2005&Docs=&Query=&Time=&EndTime=&SearchMethod=1&TocRestrict=n&Toc=&TocEntry=&QField=&QFieldYear=&QFieldMonth=&QFieldDay=&IntQFieldOp=0&ExtQFieldOp=0&XmlQuery=&File=D%3A%5Czyfiles%5CIndex%20Data%5C00thru05%5CTxt%5C00000030%5C91015CKS.txt&User=ANONYMOUS&Password=anonymous&SortMethod=h%7C-&MaximumDocuments=1&FuzzyDegree=0&ImageQuality=r75g8/r75g8/x150y150g16/i425&Display=hpfr&DefSeekPage=x&SearchBack=ZyActionL&Back=ZyActionS&BackDesc=Results%20page&MaximumPages=1&ZyEntry=1&SeekPage=x&ZyPURL.

Commenters noted that a reference dose (RfD) has not been established for lead because of the difficulty in identifying a “threshold” level, below which adverse effects are not known or anticipated to occur. EPA acknowledges the commenters' concern and has set the GWPS for lead at the Action Level established under section 1412 of the Safe Drinking Water Act, which addresses comments received supporting the use of existing EPA risk-based standards. Because transport through ground water is the primary risk pathway identified in the 2014 Risk Assessment, this revised GWPS is anticipated to be protective of human health at these sites.

C. Modification of Groundwater Monitoring Requirements

The current regulations at § 257.90 require all CCR units, without exception, to comply with the groundwater monitoring and corrective action requirements of §§ 257.90 through 257.98. The final CCR rule at § 257.91(a)(2) requires the installation of groundwater monitoring wells at the waste boundary of the CCR unit.

EPA is adopting a final provision that incorporates only minimal revisions from the proposal. The Agency recognizes that certain hydrogeologic settings may preclude the migration of hazardous constituents from CCR disposal units to groundwater resources. Requiring groundwater monitoring in these settings would provide little or no additional protection to human health and the environment. EPA considers that the final criteria are sufficiently precise and determinate that they will ensure that waivers are granted only in those rare situations, and therefore, EPA is incorporating the revised provision into the part 257 regulations.

As proposed, the Participating State Director would be allowed to suspend the groundwater monitoring requirements under §§ 257.90 through 257.95 if the owner or operator can demonstrate that there is no potential for migration of any CCR constituents from that CCR unit to the uppermost aquifer during the active life of the unit, closure, and the post-closure care period. The demonstration must be certified by a PE or approved by a Participating State Director or approved EPA where EPA is the permitting authority, and must be based upon:

(1) Site-specific field collected measurements, sampling, and analysis of physical, chemical, and biological processes affecting contaminant fate and transport, and

(2) Contaminant fate and transport predictions that maximize contaminant migration and consider impacts on human health and environment.

This would allow the Participating State Director or EPA where EPA is the permitting authority to suspend the groundwater monitoring requirements in §§ 257.91 through 257.95 for a CCR unit upon demonstration by the owner or operator that there is no potential for migration of hazardous constituents from the unit to the uppermost aquifer during the active life, closure, or post-closure periods. However, the requirements of §§ 257.96 through 257.98 would not be suspended. As discussed below, the provision being finalized for the part 257 regulations would be identical to that in the part 258 regulations with the exception for the requirement to periodically demonstrate that conditions have not changed, that is, there is still no migration of Appendix III or IV constituents from the CCR unit to the uppermost aquifer.

The proposal acknowledged the difficulties of meeting the “no potential for migration” standard (83 FR 11602). The suspension of monitoring requirements is intended only for those CCR units located in hydrogeologic settings in which the Appendix III and IV constituents will not migrate to groundwater during the active life of the unit, as well as closure and post-closure periods. The proposal also stressed that a “no migration” waiver from certain RCRA requirements has been a component of both the part 258 and the RCRA subtitle C groundwater monitoring programs for many years, and, based on its experience under these programs, the Agency expects that cases where the “no migration” criteria are met will be rare.

There were many general comments supporting the suspension of groundwater monitoring requirements if it can be demonstrated that there is no potential for migration of hazardous constituents from the CCR unit to the uppermost aquifer. These commenters supported this provision because it allows for more site-specific flexibility and prevents burdensome monitoring requirements that are unnecessary for protection of human health and the environment. A commenter also stated that it is unnecessary to incur ongoing monitoring costs if a unit has no impact to groundwater.

Supporters of the “no migration” waiver also stated that it should not be limited to facilities operating under a state or EPA CCR permit program, and should be broadened so that a qualified technical expert can make the no migration determination under the self-implementing CCR program. Commenters stated that the potential for abuse no longer exists due to the public notification requirements and EPA's inspection and enforcement authority provided by the WIIN Act.

Groundwater monitoring is one of the key provisions under the regulations that protect health and the environment, as it ensures that contamination is detected and remediated. If the unit does leak and contaminants migrate into the aquifer, without monitoring there is no guarantee that those contaminants will be detected quickly, or necessarily at all. The potential consequences of this provision are therefore significant. Moreover, the determinations required to support the waiver are highly technical, and thus not readily evaluated during an inspection, by an inspector who may be able to document that the supporting analyses exist but is unlikely to have the time or expertise necessary to evaluate their scientific adequacy. Consequently, this provision requires the additional layer of protection associated with having review by a regulatory authority, which would have the necessary technical expertise on staff, evaluate the request prior to its adoption.

Some commenters did not support the “no migration” proposal. One commenter explained that groundwater monitoring for CCR units had just barely taken effect and the first round of groundwater monitoring data was first published on March 2, 2018. This commenter also stated that all CCR facilities should be required to do groundwater monitoring to establish a baseline. Another commenter stated that due to the nature of sedimentary geological formations, fractures and fissures may exist throughout a coal-mined site, mined areas may settle and surface impoundments may leak. Therefore, suspension of groundwater monitoring should not be allowed.

EPA has determined that if a facility meets the criteria to demonstrate that there is no potential for migration at the unit, then the groundwater monitoring requirements of §§ 257.90 through 257.96 would not be necessary. However, the regulation requires that demonstrations of no potential for migration must be supported by both predictions that maximize contaminant migration and actual field data collected at the site. Field sampling is necessary to establish the site's hydrogeological characteristics and must include an evaluation of unsaturated and saturated zone characteristics to ascertain the flow rate and pathways by which contaminants may migrate to groundwater. Thus, facilities would be expected to collect site-specific data relating to conditions, geology, water levels, etc. as well as contaminant concentrations in the aquifer.

The proposal included four conditions that would be required for a facility to receive a waiver from groundwater monitoring. The first condition is that the suspension of groundwater monitoring requirements in §§ 257.91 through 257.95 is available only for owners and operators of CCR units located in participating states. As discussed previously the Agency has limited the availability of the waiver because of the need to review a no-migration demonstration prior to granting a waiver from groundwater monitoring. However, in this final action, the Agency is expanding this provision to allow EPA the ability to review a no-migration demonstration to grant a waiver from groundwater monitoring where EPA is the permitting authority.

The second condition is that the rule requires demonstrations of no potential for migration to be supported by both predictions that maximize contaminant migration and actual field data collected at the site. The proposal explained in great detail how the different properties should be measured, building on guidance developed for part 258 (83 FR 11602). EPA explained in the proposal that the site-specific information called for under the proposed regulation to make the demonstration must include, at a minimum, the following information to evaluate or interpret the effects of the following properties or processes on contaminant fate and transport:

(1) Aquifer Characteristics, including hydraulic conductivity, hydraulic gradient, effective porosity, aquifer thickness, degree of saturation, stratigraphy, degree of fracturing and secondary porosity of soils and bedrock, aquifer heterogeneity, groundwater discharge, and groundwater recharge areas;

(2) Waste Characteristics, including quantity, type, and origin;

(3) Climatic Conditions, including annual precipitation, leachate generation estimates, and effects on leachate quality;

(4) Leachate Characteristics, including leachate composition, solubility, density, the presence of immiscible constituents, Eh, and pH;

(5) Engineered Controls, including liners, cover systems, and aquifer controls (e.g., lowering the water table). These should be evaluated under design and failure conditions to estimate their long-term residual performance;

(6) Attenuation of contaminants in the subsurface, including adsorption/desorption reactions, ion exchange organic content of soil, soil water pH, and consideration of possible reactions causing chemical transformation or chelation; and

(7) Microbiological Degradation, which may attenuate target compounds or cause transformations of compounds, potentially forming more toxic chemical species.

No migration petitions will vary considerably. The petition content will be strongly influenced by the type of unit for which a variance is sought and the methods chosen to demonstrate that there is no potential for migration. EPA believes the categories listed above and other site-specific information as required by the Participating State Director or EPA where EPA is the permitting authority will provide the necessary information, data, and analyses to determine the physical, chemical, and biological processes affecting the migration of CCR constituents. As discussed below, these criteria have largely been included in the final rule, with modifications to account for the differences between the Part 258 constituents, which include organics, and Appendix IV CCR constituents, which are metals.

The third condition is that demonstrations be certified by a qualified PE and approved by the Participating State Director or EPA where EPA is the permitting authority to ensure that there is a high degree of confidence that no contamination will reach the uppermost aquifer.

The fourth condition requires the owner or operator of the CCR unit to remake the demonstration every 10 years or sooner, if there is evidence migration has occurred, as determined by the Participating State Director or EPA where EPA is the permitting authority. This new demonstration is required to be submitted to the Participating State Director or EPA where EPA is the permitting authority one year before the existing groundwater monitoring suspension is due to expire. If the suspension expires for any reason, the unit must begin groundwater monitoring according to § 257.90(a) within 90 days.

EPA received several public comments both supporting and opposing this 10-year demonstration clause. A commenter stated that the provisions for the suspension of groundwater monitoring depart from the part 258 provisions on which they were modeled, by limiting any such suspension to a maximum 10-year term and requiring a re-demonstration for subsequent suspension approvals.

One commenter stated that if any breakthrough occurs in the CCR unit, 10 years is too long and would allow contamination to move toward adjacent discharge points, including pumping wells at nearby homes, farms and businesses, as well as streams, potentially endangering human health and the environment.

As discussed in more detail below, any site-specific demonstration to satisfy the “no migration” threshold involves several distinct criteria relating to site conditions. Because, as the commenter notes, engineered controls do fail facilities will be required to demonstrate that site conditions will collectively work to ensure there is no potential for migration. For example, the regulation also requires the evaluation of Climatic Conditions such as annual precipitation and leachate generation estimates. All of the regulatory factors together work to ensure that, when considering a “no migration” determination, in the event of a leak from a CCR unit, the constituents will not migrate to the uppermost aquifer during the lifetime of the unit and post-closure care.

Another comment received on the 10-year interval is that if the existing monitoring wells remain in place during the 10-year interval, those wells may be neglected and not usable for sampling at the end of the 10-year interval. If the existing monitoring wells are filled and sealed and new monitoring wells are installed, the ability to effectively compare data at the same location over time may be lost. The commenter stated that EPA should consider either removing the 10-year recurring demonstration requirement or add some minimum monitoring requirements at shorter intervals (e.g., groundwater elevations) to ensure maintenance of the monitoring wells.

EPA does not agree that monitoring wells will necessarily be unused during the 10-year interval. The proposal discussed how the “no migration” demonstration involves complying with rigorous requirements. Modeling may be useful for assessing and verifying the potential for migration of hazardous constituents. Models used should be based on actual field collected data to adequately predict potential groundwater contamination. When owners or operators prepare to re-certify a no migration demonstration, they must verify that the unit continues to meet the standard—i.e., that there is still no potential for migration of contaminants from the unit to the uppermost aquifer. To support this demonstration some type of field data, such as groundwater elevation measurements, would normally be collected during the 10-year period. The 10-year requirement to renew a waiver ensures that no dramatic changes have occurred that may cause contamination.

One commenter stated that EPA should adopt separate standards for the suspension of groundwater monitoring for CCR landfills and CCR surface impoundments. The commenter stated that CCR landfills should not be required to conduct a new demonstration once every 10 years to show that suspension of groundwater monitoring continues to be appropriate. EPA disagrees with this comment as the “no migration” waiver is dependent upon site-specific hydrogeology, which can potentially change overtime, and the criteria for the waiver are not specific to either landfills or surface impoundments.

EPA considered the comments and is adopting the proposal with minor revisions to ensure that the regulatory language accurately reflects the principles reflected in the proposal. EPA discussed in the proposal why periodic renewals of “no migration” demonstrations were not required for MSW landfills. In part this is because the part 258 regulations apply only to landfills, while the CCR regulations apply to both landfills and surface impoundments. Surface impoundments by their very nature pose a potential for releases to groundwater that is different than landfills (e.g., presence of a hydraulic head). The risk assessment for the CCR rule found that, even when key variables are controlled (e.g., liner type, waste type) for the long-term risks from surface impoundments are greater than from landfills. Based on these factors, EPA is requiring an owner or operator to conduct a new demonstration once every 10 years to show that the suspension of groundwater monitoring continues to be appropriate. See § 257.90(g). This new demonstration must be submitted to the Participating State Director or EPA where EPA is the permitting authority one year before the existing groundwater monitoring suspension is due to expire. If the suspension expires for any reason, the unit must begin groundwater monitoring in accordance with § 257.90(a) within 90 days.

To address concerns that the proposed language was insufficiently prescriptive EPA has added the phrase, “based on the characteristics of the site in which the CCR unit is located,” to the regulatory text. This is intended to clarify that the site characteristics are the key component of any determination that a waiver can be granted, rather than unit characteristics, such as the type of liner, which can (and do) fail. This is consistent with both the proposal and the original part 258 regulation. See 83 FR 11602; 56 FR 51061. EPA provided examples of locations that might be able to demonstrate no potential for migration in the preamble to the final MSWLF rule, such as extremely dry areas with little rainfall and great depths to groundwater, but acknowledged that these would be extremely rare. 56 FR 51061. EPA expects this to be the case with respect to CCR units as well.

For the same reason, EPA included in the regulation four of the seven categories of properties or processes on contaminant fate and transport that were discussed in the preamble to the proposed rule at 83 FR 11602. EPA omitted two categories from this original list to account for the differences between the Part 258 constituents and the Appendix IV CCR constituents. The part 258 constituents include organic compounds, and so factors, such as natural attenuation, are relevant to evaluating the potential for migration at the site. But the CCR constituents are metals or metalloid compounds, which will remain in the environment if released. The remaining factors have been a component of the MSWLF program since the regulations were first adopted in 1991. 56 FR 51061. See OSWER Solid Waste Disposal Facility Criteria Technical Manual for MSWLFs (EPA530-R-93-017, 1993).21

21 USEPA OWSER “Solid Waste Disposal Facility Criteria Technical Manual for MSWLFs” (EPA530-R-93-017, 1993) can be found in the docket for this final rule.

The regulation does not include any consideration relating to current groundwater quality or potential future use of the aquifer EPA notes that, as with MSWLFs, this is not an appropriate factor for consideration under this provision. Further guidance for conducting these evaluations can be found in the OSWER Solid Waste Disposal Facility Criteria Technical Manual for MSWLFs (EPA530-R-93-017, 1993), the Ground-Water Monitoring Guidance Document for Owners and Operators of Interim Status Facilities (1983),22 and OSWER Preparing No-Migration Demonstration for Municipal Solid Waste Disposal Facilities: A Screening Tool (EPA530-R-99-008 1999).23

22 USEPA “Ground-Water Monitoring Guidance for Owners and Operators of Interim Status Facilities” (1983) can be found in the docket for this final rule.

23 USEPA OWER “Preparing No-Migration Demonstrations for Municipal Solid Waste Disposal facilities: A Screening Tool” (EPA530-R-99-008, 1999 can be found in the docket for this rule.

D. Allow Participating State Directors or EPA Where EPA Is the Permitting Authority To Issue Certifications in Lieu of Requiring a PE Certification

To ensure that the RCRA subtitle D requirements would achieve the statutory standard of “no reasonable probability of adverse effects on health and the environment” in the absence of regulatory oversight, the current CCR regulations require facilities to obtain third party certifications and to provide enhanced state and public notifications of actions taken to comply with the regulatory requirements. Specifically, in the final CCR rule EPA required numerous technical demonstrations made by the owner or operator be certified by a qualified professional engineer (PE) in order to provide verification of the facility's technical judgments and to otherwise ensure that the provisions of the rule were properly applied. While EPA acknowledged that relying upon a third-party certification was not the same as relying upon a state or federal regulatory authority and was not expected to provide the same level of independence as a state permit program, the availability of meaningful third-party verification provided critical support that the rule would achieve the statutory standard, as it would provide a degree of control over a facility's discretion in implementing the rule.

However, the situation has changed with the passage of the WIIN Act, which offers the opportunity for State oversight under an approved permit program. To reflect that, EPA proposed that the regulations allow a “State Director,” the Director of a state with an approved CCR permit program (i.e., a “participating state”), to certify that the regulatory criteria have been met in lieu of the exclusive reliance on a qualified PE. EPA expects that states will generally rely on the expertise of their own engineers to evaluate whether the technical criteria have been met. Alternatively, States might choose to retain the required certification by a qualified PE and use its own expertise to evaluate that certification. Finally, EPA noted that under the existing regulations, a facility may already rely on a certification provided by a qualified PE in a State agency, who reviews the facility actions as part of a purely State-law mandated process. Thus, EPA is confident that revising the regulation to authorize an approval from a Participating State Director will be at least as protective as the status quo under the existing regulations. To be clear an approved state may choose to provide certifications in lieu of a PE or may review and approve in addition to a PE. A participating state could also decide to solely rely on a certification by a facility's PE which would be the status quo based on the current regulations.

As a component of this proposal, EPA also proposed definitions of “State Director” and of a “participating state” in § 257.53. The definition made clear that these provisions were restricted to State Directors (or their delegates) with an approved CCR permit program. The definition also included EPA where EPA is the permitting authority (tribal lands and non-participating states). There are several changes to the proposed term of “State Director.” First, we are finalizing the term as “Participating State Director.” Currently there is a definition for State Director in 40 CFR 257.53 and EPA did not intend for our proposed definition to replace or amend the current definition. Therefore, we are finalizing the term “Participating State Director.” This language is used throughout the preamble and regulatory text accordingly.

Furthermore, EPA received numerous comments on state directors issuing certifications. The majority of comments supported granting a State Director this authority. One comment received from ASTSWMO suggested removing EPA from the definition of State Director. ASTSWMO felt it was not appropriate to include EPA in the definition because intermingling the State and EPA would lead to confusion on their implementation roles in CCR permit programs, and EPA agrees. EPA has therefore removed the sentence about EPA from the definition of Participating State Director and generally added “or approval from EPA where EPA is the permitting authority” after Participating State Director throughout the regulations.

The definition of Participating State Director has also been modified to reflect the statutory term of a “participating state” rather than the proposed term of “an approved state.” EPA has also adopted the proposed definition of a participating state, without modification. The final rule also incorporates the statutory definition of a non-participating state.

Finally, the regulatory text has been amended in 39 places to incorporate this change. These changes can be seen in the amended regulation text. Except for the regulations relating to structural stability, which continue to require the certification of a PE in all circumstances, the regulations have been modified to add the approval of Participating State Director or the approval from EPA where EPA is the permitting authority as an acceptable alternative. The structural stability evaluations, such as the periodic factors of safety assessment, require the specific expertise of a PE. As previously noted, EPA expects that a state will generally rely on the expertise of its own engineers to evaluate whether the technical criteria have been met, but to avoid any confusion, these regulations will continue to require certification by a PE. A state may, of course, require the facility to also obtain its approval as part of its own permit program.

E. Rationale for 30-Day Effective Date

The effective date of this rule is 30 days after publication in the Federal Register. The Administrative Procedure Act (APA) provides that publication of a substantive rule shall be made not less than 30 days before its effective date and that this provision applies in the absence of a specific statutory provision establishing an effective date. See 5 U.S.C. 553(d) and 559. EPA has determined there is no specific provision of RCRA addressing the effective date of regulations that would apply here, and thus the APA's 30-day effective date applies.

EPA has previously interpreted section 4004(c) of RCRA to generally establish a six-month effective date for rules issued under subtitle D. See 80 FR 37988, 37990. After further consideration, EPA interprets section 4004(c) to establish an effective date solely for the regulations that were required to be promulgated under subsection (a). Section 4004(c) is silent as to subsequent revisions to those regulations; EPA therefore believes section 4004(c) is ambiguous.

Section 4004(c) states that the prohibition in subsection (b) shall take effect six months after promulgation of regulations under subsection (a). Subsection (a), in turn provides that “[n]ot later than one year after October 21, 1976 . . . [EPA] shall promulgate regulations containing criteria for determining which facilities shall be classified as sanitary landfills and which shall be classified as open dumps within the meaning of this chapter.” As noted, section 4004(c) is silent as to revisions to those regulations.

In response to Congress's mandate in section 4004(a), EPA promulgated regulations on September 13, 1979. 44 FR 53438. EPA interprets section 4004(c) to establish an effective date applicable only to that action, and not to future regulations the Agency might issue under this section. In the absence of a specific statutory provision establishing an effective date for this rule, APA section 553(d) applies.

EPA considers that its interpretation is reasonable because there is no indication in RCRA or its legislative history that Congress intended for the agency to have less discretion under RCRA subtitle D than it would have under the APA to establish a suitable effective date for subsequent rules issued under section 4004(c). Consistent with EPA's interpretation of the express language of section 4004, EPA interprets statements in the legislative history explaining that section 4004(c) provides that the effective date is to be 6 months after the date of promulgate of regulations, as referring to the initial set of regulations required by Congress to be promulgated not later than 1 year after October 21, 1976, and does not mandate a 6 month effective date for every regulatory action that EPA takes under this section. This rule contains specific, targeted revisions to the 2015 rule and the legislative history regarding section 4004 speaks only to these initial 1976 mandated regulations.

This reading allows the agency to establish an effective date appropriate for the nature of the regulation promulgated, which is what EPA believes Congress intended. EPA further considers that the minimum 30-day effective date under the APA is reasonable in this circumstance where none of the provisions being finalized require an extended period of time for regulated entities to comply.

V. The Projected Economic Impacts of This Action A. Introduction

EPA estimated the costs and benefits of this action in a Regulatory Impact Analysis (RIA) which is available in the docket for this action. The RIA estimates costs and cost savings attributable to the provisions of this action against the baseline costs and cost savings of the 2015 CCR final rule. The RIA estimates that the net annualized impact of these five provisions over a 100-year period of analysis will be cost savings of between $27.8 million and $31.4 million when discounting at 7 percent and cost savings between $15.5 million and $19.1 million when discounting at 3 percent. This action is not considered an economically significant action under Executive Order 12866.

B. Affected Universe

The universe of affected entities for this rule consists of the same entities affected by EPA's 2015 CCR final rule. These entities are coal-fired electricity generating plants operated by the electric utility industry. They can be identified by their North American Industry Classification System (NAICS) designation 221112 “Fossil Fuel Electric Power Generation”. The RIA estimates that there are 414 coal-fired electricity generating plants operating 922 CCR management units (landfills, disposal impoundments, and storage impoundments) that will be affected by this rule.

C. Baseline Cost

The baseline costs for this rule are the costs of compliance with EPA's 2015 CCR final rule, as the provisions of this rule modify the provisions of the 2015 CCR final rule or modify the implementation of the 2015 CCR rule by WIIN Act participating states. The RIA for the 2015 CCR final rule estimated these costs at an annualized $509 million when discounting at 7 percent and an annualized $735 million when discounting at 3 percent.

D. Cost Savings, Other Benefits, and Adjustments to the Baseline

The RIA estimates costs and costs savings for two proposals concerning the compliance deadlines for certain aspects of the 2015 CCR rule, as well as the two alternative performance standards that will apply in participating states under the WIIN Act, and the revision of the GWPSs for the four constituents in Appendix IV to part 257 without MCLs. The RIA estimates that the net annualized impact of these five provisions over a 100-year period of analysis will be an annualized cost savings of between $27.8 million and $31.4 million when discounting at 7 percent, and an annualized cost savings of between $15.5 million and $19.1 million when discounting at 3 percent. The majority of cost savings attributable to the rule come from the provisions extending the date by which facilities must cease placing waste in CCR units. These provisions delay the large capital costs associated with ceasing to place waste in a unit. These capital costs include the cost of closure capping, post-closure monitoring, and converting to dry handling of CCR from wet handling.

The RIA also presents the adjustments to the baseline costs of the CCR final rule due to plant closures that occurred after the rule was published but before the effective date of the rule. The RIA accompanying the 2015 CCR final rule assigned compliance costs to these plants, which they are exempt from because they closed before the final rule's effective date. In all, 23 plants closed before the effective date of the final rule that were not accounted for in 2015 final rule RIA. The annualized compliance costs avoided for these plants equals between $21.4 million and $27.6 million per year when discounting at 7 percent and between $21.7 million and $32.4 million when discounting at 3 percent. This cost adjustment is detailed in the RIA that accompanies this rulemaking, however it is not factored into the baseline or the benefit estimates for this rule to keep comparisons with the 2015 CCR final rule straight forward. Also, the compliance costs not incurred by these plants would not be cost savings attributable to this rulemaking.

VI. Statutory and Executive Order (E.O.) Reviews A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review

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. The EPA prepared an analysis of the potential costs and benefits associated with this action. This Regulatory Impact Analysis (RIA), entitled Regulatory Impact Analysis; EPA's 2018 RCRA Final Rule; Disposal of Coal Combustion Residuals from Electric Utilities; Amendments to the National Minimum Criteria (Phase One), is summarized in Unit V of this preamble and the RIA is available in the docket for this final rule.

B. Executive Order 13771: Reducing Regulation and Controlling Regulatory Costs

This action is considered an Executive Order 13771 deregulatory action. Details on the estimated cost savings of this final rule can be found in EPA's analysis of the potential costs and benefits associated with this action.

C. Paperwork Reduction Act (PRA)

The information collection activities in this rule have been submitted for approval to the Office of Management and Budget (OMB) under the PRA. The Information Collection Request (ICR) document that the EPA prepared has been assigned EPA ICR number 1189.28, OMB control number 2050-0053. This is an amendment to the ICR approved by OMB for the Final Rule: Hazardous and Solid Waste Management System; Disposal of Coal Combustion Residuals from Electric Utilities published April 17, 2015 in the Federal Register at 80 FR 21302. You can find a copy of the ICR in the docket for this action, and it is briefly summarized here.

Respondents/affected entities: Coal-fired electric utility plants that will be affected by the rule.

Respondent's obligation to respond: The recordkeeping, notification, and posting are mandatory as part of the minimum national criteria being promulgated under sections 1008, 4004, and 4005(a) of RCRA.

Estimated number of respondents: 414.

Frequency of response: The frequency of response varies.

Total estimated burden: EPA estimates the total annual burden to respondents to be a reduction in burden of approximately 16,690 hours from the currently approved burden. Burden is defined at 5 CFR 1320.3(b).

Total estimated cost: The total estimated annual cost of this rule is a cost savings of approximately $4,752,588. This cost savings is composed of approximately $1,045,091 in annualized avoided labor costs and $3,707,497 in avoided capital or operation and maintenance costs.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for the EPA's regulations in 40 CFR are listed in 40 CFR part 9.

D. Regulatory Flexibility Act (RFA)

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. This action is expected to result in net cost savings amounting to approximately $27.8 million per year to $31.4 million per year when discounting at 7 percent and annualized over 100 years. It is expected to result in net cost savings of between $15.5 million and $19.1 million when discounting at 3 percent and annualized over 100 years. Savings will accrue to all regulated entities, including small entities. Further information on the economic effects of this action can be found in Unit V of this preamble and in the Regulatory Impact Analysis, which is available in the docket for this action. We have therefore concluded that this action will relieve regulatory burden for all directly regulated small entities.

E. Unfunded Mandates Reform Act (UMRA)

This action does not contain any 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 imposes no enforceable duty on any state, local or tribal governments or the private sector. The costs involved in this action are imposed only by participation in a voluntary federal program. UMRA generally excludes from the definition of “federal intergovernmental mandate” duties that arise from participation in a voluntary federal program.

F. Executive Order 13132: Federalism

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.

G. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments

This action does not have tribal implications as specified in Executive Order 13175. For the “Final Rule: Hazardous and Solid Waste Management System; Disposal of Coal Combustion Residuals from Electric Utilities” published April 17, 2015 in the Federal Register at 80 FR 21302, EPA identified three of the 414 coal-fired electric utility plants (in operation as of 2012) which are located on tribal lands; however, they are not owned by tribal governments. These are: (1) Navajo Generating Station in Coconino County, Arizona, owned by the Arizona Salt River Project; (2) Bonanza Power Plant in Uintah County, Utah, owned by the Deseret Generation and Transmission Cooperative; and (3) Four Corners Power Plant in San Juan County, New Mexico owned by the Arizona Public Service Company. The Navajo Generating Station and the Four Corners Power Plant are on lands belonging to the Navajo Nation, while the Bonanza Power Plant is located on the Uintah and Ouray Reservation of the Ute Indian Tribe. Under the WIIN Act, EPA is the permitting authority for CCR unites located in Indian Country. Moreover, since this action is expected to result in net cost savings to affected entities amounting to approximately $27.8 million per year to $31.4 million per year when discounting at 7 percent and annualized over 100 years, or in net cost savings of between $15.5 million per year and $19.1 million per year when discounting at 3 percent and annualized over 100 years, it will not have substantial direct effects on one or more Indian tribes. Thus, Executive Order 13175 does not apply to this action.

H. Executive Order 13045: Protection of Children From Environmental Health Risk and Safety Risks

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. This action's health and risk assessments are contained in the document titled “Human and Ecological Risk Assessment of Coal Combustion Residuals” which is available in the docket for the final rule as docket item EPA-HQ-RCRA-2009-0640-11993.

As ordered by E.O. 13045 Section 1-101(a), for the “Final Rule: Hazardous and Solid Waste Management System; Disposal of Coal Combustion Residuals from Electric Utilities” published April 17, 2015 in the Federal Register at 80 FR 21302, EPA identified and assessed environmental health risks and safety risks that may disproportionately affect children in the revised risk assessment. The results of the screening assessment found that risks fell below the criteria when wetting and run-on/runoff controls required by the rule are considered. Under the full probabilistic analysis, composite liners required by the rule for new waste management units showed the ability to reduce the 90th percentile child cancer and non-cancer risks for the groundwater to drinking water pathway to well below EPA's criteria. Additionally, the groundwater monitoring and corrective action required by the rule reduced risks from current waste management units.

I. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution or Use

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. For the 2015 CCR rule, EPA analyzed the potential impact on electricity prices relative to the “in excess of one percent” threshold. Using the Integrated Planning Model (IPM), EPA concluded that the 2015 CCR Rule may increase the weighted average nationwide wholesale price of electricity between 0.18 percent and 0.19 percent in the years 2020 and 2030, respectively. As the final rule represents a cost savings rule relative to the 2015 CCR rule, this analysis concludes that any potential impact on wholesale electricity prices will be lower than the potential impact estimated of the 2015 CCR rule; therefore, this final rule is not expected to meet the criteria of a “significant adverse effect” on the electricity markets as defined by Executive Order 13211.

J. National Technology Transfer and Advancement Act (NTTAA)

This rulemaking does not involve technical standards.

K. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations

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 documentation for this decision is contained in EPA's Regulatory Impact Analysis (RIA) for the CCR rule which is available in the docket for the 2015 CCR final rule as docket item EPA-HQ-RCRA-2009-0640-12034.

EPA's risk assessment did not separately evaluate either minority or low-income populations. However, to evaluate the demographic characteristics of communities that may be affected by the CCR rule, the RIA compares the demographic characteristics of populations surrounding coal-fired electric utility plants with broader population data for two geographic areas: (1) One-mile radius from CCR management units (i.e., landfills and impoundments) likely to be affected by groundwater releases from both landfills and impoundments; and (2) watershed catchment areas downstream of surface impoundments that receive surface water run-off and releases from CCR impoundments and are at risk of being contaminated from CCR impoundment discharges (e.g., unintentional overflows, structural failures, and intentional periodic discharges).

For the population as a whole 24.8 percent belong to a minority group and 11.3 percent falls below the Federal Poverty Level. For the population living within one mile of plants with surface impoundments 16.1 percent belong to a minority group and 13.2 percent live below the Federal Poverty Level. These minority and low-income populations are not disproportionately high compared to the general population. The percentage of minority residents of the entire population living within the catchment areas downstream of surface impoundments is disproportionately high relative to the general population, i.e., 28.7 percent, versus 24.8 percent for the national population. Also, the percentage of the population within the catchment areas of surface impoundments that is below the Federal Poverty Level is disproportionately high compared with the general population, i.e., 18.6 percent versus 11.3 percent nationally.

Comparing the population percentages of minority and low income residents within one mile of landfills to those percentages in the general population, EPA found that minority and low-income residents make up a smaller percentage of the populations near landfills than they do in the general population, i.e., minorities comprised 16.6 percent of the population near landfills versus 24.8 percent nationwide and low-income residents comprised 8.6 percent of the population near landfills versus 11.3 percent nationwide. In summary, although populations within the catchment areas of plants with surface impoundments appear to have disproportionately high percentages of minority and low-income residents relative to the nationwide average, populations surrounding plants with landfills do not. Because landfills are less likely than impoundments to experience surface water run-off and releases, catchment areas were not considered for landfills.

The CCR rule is risk-reducing with reductions in risk occurring largely within the surface water catchment zones around, and groundwater beneath, coal-fired electric utility plants. Since the CCR rule is risk-reducing and this action does not add to risks, this action will not result in new disproportionate risks to minority or low-income populations.

L. Congressional Review Act (CRA)

This action is subject to the CRA, and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

List of Subjects in 40 CFR Part 257

Environmental protection, Beneficial use, Coal combustion products, Coal combustion residuals, Coal combustion waste, Disposal, Hazardous waste, Landfill, Surface impoundment.

Dated: July 17, 2018. Andrew R. Wheeler, Acting Administrator.

For the reasons set out in the preamble, title 40, chapter I, of the Code of Federal Regulations is amended as follows:

PART 257—CRITERIA FOR CLASSIFICATION OF SOLID WASTE DISPOSAL FACILITIES AND PRACTICES 1. The authority citation for part 257 is revised to read as follows: Authority:

42 U.S.C. 6907(a)(3), 6912(a)(1), 6944(a), 6945(d); 33 U.S.C. 1345(d) and (e).

2. Section 257.53 is amended by adding the definitions of “Nonparticipating State”, “Participating State”, and “Participating State Director” in alphabetical order to read as follows:
§ 257.53 Definitions.

Nonparticipating State means a State—

(1) For which the Administrator has not approved a State permit program or other system of prior approval and conditions under RCRA section 4005(d)(1)(B);

(2) The Governor of which has not submitted to the Administrator for approval evidence to operate a State permit program or other system of prior approval and conditions under RCRA section 4005(d)(1)(A);

(3) The Governor of which provides notice to the Administrator that, not fewer than 90 days after the date on which the Governor provides the notice to the Administrator, the State will relinquish an approval under RCRA section 4005(d)(1)(B) to operate a permit program or other system of prior approval and conditions; or

(4) For which the Administrator has withdrawn approval for a permit program or other system of prior approval and conditions under RCRA section 4005(d)(1)(E).

Participating State means a state with a state program for control of CCR that has been approved pursuant to RCRA section 4005(d).

Participating State Director means the chief administrative officer of any state agency operating the CCR permit program in a participating state or the delegated representative of the Participating State Director. If responsibility is divided among two or more state agencies, Participating State Director means the chief administrative officer of the state agency authorized to perform the particular function or procedure to which reference is made.

3. Section 257.60 is amended by revising paragraph (b) to read as follows:
§ 257.60 Placement above the uppermost aquifer.

(b) The owner or operator of the CCR unit must obtain a certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority stating that the demonstration meets the requirements of paragraph (a) of this section.

4. Section 257.61 is amended by revising paragraph (b) to read as follows:
§ 257.61 Wetlands.

(b) The owner or operator of the CCR unit must obtain a certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority stating that the demonstration meets the requirements of paragraph (a) of this section.

5. Section 257.62 is amended by revising paragraph (b) to read as follows:
§ 257.62 Fault areas.

(b) The owner or operator of the CCR unit must obtain a certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority stating that the demonstration meets the requirements of paragraph (a) of this section.

6. Section 257.63 is amended by revising paragraph (b) to read as follows:
§ 257.63 Seismic impact zones.

(b) The owner or operator of the CCR unit must obtain a certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority stating that the demonstration meets the requirements of paragraph (a) of this section.

7. Section 257.64 is amended by revising paragraph (c) to read as follows:
§ 257.64 Unstable areas.

(c) The owner or operator of the CCR unit must obtain a certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority stating that the demonstration meets the requirements of paragraph (a) of this section.

8. Section 257.70 is amended by revising paragraphs (c)(2), (e), and (f) to read as follows:
§ 257.70 Design criteria for new CCR landfills and any lateral expansion of a CCR landfill.

(c) * * *

(2) The owner or operator must obtain certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority that the liquid flow rate through the lower component of the alternative composite liner is no greater than the liquid flow rate through two feet of compacted soil with a hydraulic conductivity of 1x10 7 cm/sec. The hydraulic conductivity for the two feet of compacted soil used in the comparison shall be no greater than 1x10 7 cm/sec. The hydraulic conductivity of any alternative to the two feet of compacted soil must be determined using recognized and generally accepted methods. The liquid flow rate comparison must be made using Equation 1 of this section, which is derived from Darcy's Law for gravity flow through porous media.

ER30JY18.002 Where: Q = flow rate (cubic centimeters/second); A = surface area of the liner (squared centimeters); q = flow rate per unit area (cubic centimeters/second/squared centimeter); k = hydraulic conductivity of the liner (centimeters/second); h = hydraulic head above the liner (centimeters); and t = thickness of the liner (centimeters).

(e) Prior to construction of the CCR landfill or any lateral expansion of a CCR landfill, the owner or operator must obtain a certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority that the design of the composite liner (or, if applicable, alternative composite liner) and the leachate collection and removal system meets the requirements of this section.

(f) Upon completion of construction of the CCR landfill or any lateral expansion of a CCR landfill, the owner or operator must obtain a certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority that the design of the composite liner (or, if applicable, alternative composite liner) and the leachate collection and removal system have been constructed in accordance with the requirements of this section.

9. Section 257.71 is amended by revising paragraph (b) to read as follows:
§ 257.71 Liner design criteria for existing CCR surface impoundments.

(b) The owner or operator of the CCR unit must obtain a certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority attesting that the documentation as to whether a CCR unit meets the requirements of paragraph (a) of this section is accurate.

10. Section 257.72 is amended by revising paragraphs (c) and (d) to read as follows:
§ 257.72 Liner design criteria for new CCR surface impoundments and any lateral expansion of a CCR surface impoundment.

(c) Prior to construction of the CCR surface impoundment or any lateral expansion of a CCR surface impoundment, the owner or operator must obtain certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority that the design of the composite liner or, if applicable, the design of an alternative composite liner complies with the requirements of this section.

(d) Upon completion, the owner or operator must obtain certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority that the composite liner or if applicable, the alternative composite liner has been constructed in accordance with the requirements of this section.

11. Section 257.80 is amended by revising paragraph (b)(7) to read as follows:
§ 257.80 Air criteria.

(b) * * *

(7) The owner or operator must obtain a certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority that the initial CCR fugitive dust control plan, or any subsequent amendment of it, meets the requirements of this section.

12. Section 257.81 is amended by revising paragraph (c)(5) to read as follows:
§ 257.81 Run-on and run-off controls for CCR landfills.

(c) * * *

(5) The owner or operator must obtain a certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority stating that the initial and periodic run-on and run-off control system plans meet the requirements of this section.

13. Section 257.82 is amended by revising paragraph (c)(5) to read as follows:
§ 257.82 Hydrologic and hydraulic capacity requirements for CCR surface impoundments.

(c) * * *

(5) The owner or operator must obtain a certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority stating that the initial and periodic inflow design flood control system plans meet the requirements of this section.

14. Section 257.90 is amended by revising paragraph (a) and adding paragraph (g) to read as follows:
§ § 257.90 Applicability.

(a) All CCR landfills, CCR surface impoundments, and lateral expansions of CCR units are subject to the groundwater monitoring and corrective action requirements under §§ 257.90 through 257.99, except as provided in paragraph (g) of this section.

(g) Suspension of groundwater monitoring requirements. (1) The Participating State Director or EPA where EPA is the permitting authority may suspend the groundwater monitoring requirements under §§ 257.90 through 257.95 for a CCR unit for a period of up to ten years, if the owner or operator provides written documentation that, based on the characteristics of the site in which the CCR unit is located, there is no potential for migration of any of the constituents listed in appendices III and IV to this part from that CCR unit to the uppermost aquifer during the active life of the CCR unit and the post-closure care period. This demonstration must be certified by a qualified professional engineer and approved by the Participating State Director or EPA where EPA is the permitting authority, and must be based upon:

(i) Site-specific field collected measurements, sampling, and analysis of physical, chemical, and biological processes affecting contaminant fate and transport, including at a minimum, the information necessary to evaluate or interpret the effects of the following properties or processes on contaminant fate and transport:

(A) Aquifer Characteristics, including hydraulic conductivity, hydraulic gradient, effective porosity, aquifer thickness, degree of saturation, stratigraphy, degree of fracturing and secondary porosity of soils and bedrock, aquifer heterogeneity, groundwater discharge, and groundwater recharge areas;

(B) Waste Characteristics, including quantity, type, and origin;

(C) Climatic Conditions, including annual precipitation, leachate generation estimates, and effects on leachate quality;

(D) Leachate Characteristics, including leachate composition, solubility, density, the presence of immiscible constituents, Eh, and pH; and

(E) Engineered Controls, including liners, cover systems, and aquifer controls (e.g., lowering the water table). These must be evaluated under design and failure conditions to estimate their long-term residual performance.

(ii) Contaminant fate and transport predictions that maximize contaminant migration and consider impacts on human health and the environment.

(2) The owner or operator of the CCR unit may renew this suspension for additional ten year periods by submitting written documentation that the site characteristics continue to ensure there will be no potential for migration of any of the constituents listed in Appendices III and IV of this part. The documentation must include, at a minimum, the information specified in paragraphs (g)(1)(i) and (g)(1)(ii) of this section and a certification by a qualified professional engineer and approved by the State Director or EPA where EPA is the permitting authority. The owner or operator must submit the documentation supporting their renewal request for the state's or EPA's review and approval of their extension one year before the groundwater monitoring suspension is due to expire. If the existing groundwater monitoring extension expires or is not approved, the owner or operator must begin groundwater monitoring according to paragraph (a) of this section within 90 days. The owner or operator may continue to renew the suspension for ten-year periods, provided the owner or operator demonstrate that the standard in paragraph (g)(1) of this section continues to be met for the unit. The owner or operator must place each completed demonstration in the facility's operating record.

(3) The owner or operator of the CCR unit must include in the annual groundwater monitoring and corrective action report required by § 257.90(e) or § 257.100(e)(5)(ii) any approved no migration demonstration.

15. Section 257.91 is amended by revising paragraph (f) to read as follows:
§ 257.91 Groundwater monitoring systems.

(f) The owner or operator must obtain a certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority stating that the groundwater monitoring system has been designed and constructed to meet the requirements of this section. If the groundwater monitoring system includes the minimum number of monitoring wells specified in paragraph (c)(1) of this section, the certification must document the basis supporting this determination.

16. Section 257.93 is amended by revising paragraph (f)(6) to read as follows:
§ 257.93 Groundwater sampling and analysis requirements.

(f) * * *

(6) The owner or operator of the CCR unit must obtain a certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority stating that the selected statistical method is appropriate for evaluating the groundwater monitoring data for the CCR management area. The certification must include a narrative description of the statistical method selected to evaluate the groundwater monitoring data.

17. Section 257.94 is amended by revising paragraphs (d)(3) and (e)(2) to read as follows:
§ 257.94 Detection monitoring program.

(d) * * *

(3) The owner or operator must obtain a certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority stating that the demonstration for an alternative groundwater sampling and analysis frequency meets the requirements of this section. The owner or operator must include the demonstration providing the basis for the alternative monitoring frequency and the certification by a qualified professional engineer or the approval from the Participating State Director or approval from EPA where EPA is the permitting authority in the annual groundwater monitoring and corrective action report required by § 257.90(e).

(e) * * *

(2) The owner or operator may demonstrate that a source other than the CCR unit caused the statistically significant increase over background levels for a constituent or that the statistically significant increase resulted from error in sampling, analysis, statistical evaluation, or natural variation in groundwater quality. The owner or operator must complete the written demonstration within 90 days of detecting a statistically significant increase over background levels to include obtaining a certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority verifying the accuracy of the information in the report. If a successful demonstration is completed within the 90-day period, the owner or operator of the CCR unit may continue with a detection monitoring program under this section. If a successful demonstration is not completed within the 90-day period, the owner or operator of the CCR unit must initiate an assessment monitoring program as required under § 257.95. The owner or operator must also include the demonstration in the annual groundwater monitoring and corrective action report required by § 257.90(e), in addition to the certification by a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority.

18. Section 257.95 is amended by revising paragraphs (c)(3), (g)(3)(ii), (h)(2) and (3) to read as follows:
§ 257.95 Assessment monitoring program.

(c) * * *

(3) The owner or operator must obtain a certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority stating that the demonstration for an alternative groundwater sampling and analysis frequency meets the requirements of this section. The owner or operator must include the demonstration providing the basis for the alternative monitoring frequency and the certification by a qualified professional engineer or the approval from the Participating State Director or the approval from EPA where EPA is the permitting authority in the annual groundwater monitoring and corrective action report required by § 257.90(e).

(g) * * *

(3) * * *

(ii) Demonstrate that a source other than the CCR unit caused the contamination, or that the statistically significant increase resulted from error in sampling, analysis, statistical evaluation, or natural variation in groundwater quality. Any such demonstration must be supported by a report that includes the factual or evidentiary basis for any conclusions and must be certified to be accurate by a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority. If a successful demonstration is made, the owner or operator must continue monitoring in accordance with the assessment monitoring program pursuant to this section, and may return to detection monitoring if the constituents in Appendix III and Appendix IV of this part are at or below background as specified in paragraph (e) of this section. The owner or operator must also include the demonstration in the annual groundwater monitoring and corrective action report required by § 257.90(e), in addition to the certification by a qualified professional engineer or the approval from the Participating State Director or the approval from EPA where EPA is the permitting authority.

(h) * * *

(2) For the following constituents:

(i) Cobalt 6 micrograms per liter (μg/l);

(ii) Lead 15 μg/l;

(iii) Lithium 40 μg/l; and

(iv) Molybdenum 100 μg/l.

(3) For constituents for which the background level is higher than the levels identified under paragraphs (h)(1) and (h)(2) of this section, the background concentration.

19. Section 257.96 is amended by revising paragraph (a) to read as follows:
§ 257.96 Assessment of corrective measures.

(a) Within 90 days of finding that any constituent listed in Appendix IV to this part has been detected at a statistically significant level exceeding the groundwater protection standard defined under § 257.95(h), or immediately upon detection of a release from a CCR unit, the owner or operator must initiate an assessment of corrective measures to prevent further releases, to remediate any releases and to restore affected area to original conditions. The assessment of corrective measures must be completed within 90 days, unless the owner or operator demonstrates the need for additional time to complete the assessment of corrective measures due to site-specific conditions or circumstances. The owner or operator must obtain a certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority attesting that the demonstration is accurate. The 90-day deadline to complete the assessment of corrective measures may be extended for no longer than 60 days. The owner or operator must also include the demonstration in the annual groundwater monitoring and corrective action report required by § 257.90(e), in addition to the certification by a qualified professional engineer or the approval from the Participating State Director or the approval from EPA where EPA is the permitting authority.

20. Section 257.97 is amended by revising paragraph (a) to read as follows:
§ 257.97 Selection of remedy.

(a) Based on the results of the corrective measures assessment conducted under § 257.96, the owner or operator must, as soon as feasible, select a remedy that, at a minimum, meets the standards listed in paragraph (b) of this section. This requirement applies in addition to, not in place of, any applicable standards under the Occupational Safety and Health Act. The owner or operator must prepare a semiannual report describing the progress in selecting and designing the remedy. Upon selection of a remedy, the owner or operator must prepare a final report describing the selected remedy and how it meets the standards specified in paragraph (b) of this section. The owner or operator must obtain a certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority that the remedy selected meets the requirements of this section. The report has been completed when it is placed in the operating record as required by § 257.105(h)(12).

21. Section 257.98 is amended by revising paragraph (e) to read as follows:
§ 257.98 Implementation of the corrective action program.

(e) Upon completion of the remedy, the owner or operator must prepare a notification stating that the remedy has been completed. The owner or operator must obtain a certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority attesting that the remedy has been completed in compliance with the requirements of paragraph (c) of this section. The report has been completed when it is placed in the operating record as required by § 257.105(h)(13).

22. Section 257.101 is amended by revising paragraphs (a)(1) and (b)(1) to read as follows:
§ 257.101 Closure or retrofit of CCR units.

(a) * * *

(1) Except as provided by paragraph (a)(3) of this section, if at any time after October 19, 2015, an owner or operator of an existing unlined CCR surface impoundment determines in any sampling event that the concentrations of one or more constituents listed in appendix IV of this part are detected at statistically significant levels above the groundwater protection standard established under § 257.95(h) for such CCR unit, within six months of making such determination or no later than October 31, 2020, whichever date is later, the owner or operator of the existing unlined CCR surface impoundment must cease placing CCR and non-CCR wastestreams into such CCR surface impoundment and either retrofit or close the CCR unit in accordance with the requirements of § 257.102.

(b) * * *

(1)(i) Location standard under § 257.60. Except as provided by paragraph (b)(4) of this section, the owner or operator of an existing CCR surface impoundment that has not demonstrated compliance with the location standard specified in § 257.60(a) must cease placing CCR and non-CCR wastestreams into such CCR unit no later than October 31, 2020, and close the CCR unit in accordance with the requirements of § 257.102.

(ii) Location standards under §§ 257.61 through 257.64. Except as provided by paragraph (b)(4) of this section, within six months of determining that an existing CCR surface impoundment has not demonstrated compliance with any location standard specified in §§ 257.61(a), 257.62(a), 257.63(a), and 257.64(a), the owner or operator of the CCR surface impoundment must cease placing CCR and non-CCR wastestreams into such CCR unit and close the CCR unit in accordance with the requirements of § 257.102.

23. Section 257.102 is amended by revising paragraphs (b)(4), (d)(3)(iii), (f)(3), (g), (h), (k)(2)(iv), (k)(4) and (k)(6) to read as follows:
§ 257.102 Criteria for conducting the closure or retrofit of CCR units.

(b) * * *

(4) The owner or operator of the CCR unit must obtain a written certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority that the initial and any amendment of the written closure plan meets the requirements of this section.

(d) * * *

(3) * * *

(iii) The owner or operator of the CCR unit must obtain a written certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority that the design of the final cover system meets the requirements of this section.

(f) * * *

(3) Upon completion, the owner or operator of the CCR unit must obtain a certification from a qualified professional engineer or approval from the Participating State Director or approval from EPA where EPA is the permitting authority verifying that closure has been completed in accordance with the closure plan specified in paragraph (b) of this section and the requirements of this section.

(g) No later than the date the owner or operator initiates closure of a CCR unit, the owner or operator must prepare a notification of intent to close a CCR unit. The notification must include the certification by a qualified professional engineer or the approval from the Participating State Director or the approval from EPA where EPA is the permitting authority for the design of the final cover system as required by § 257.102(d)(3)(iii), if applicable. The owner or operator has completed the notification when it has been placed in the facility's operating record as required by § 257.105(i)(7).

(h) Within 30 days of completion of closure of the CCR unit, the owner or operator must prepare a notification of closure of a CCR unit. The notification must include the certification by a qualified professional engineer or the approval from the Participating State Director or the approval from EPA where EPA is the permitting authority as required by § 257.102(f)(3). The owner or operator has completed the notification when it has been placed in the facility's operating record as required by § 257.105(i)(8).

(k) * * *

(2) * * *

(iv) The owner or operator of the CCR unit must obtain a written certification from a qualified professional engineer or an approval from the Participating State Director or an approval from EPA where EPA is the permitting authority that the activities outlined in the written retrofit plan, including any amendment of the plan, meet the requirements of this section.

(4) Upon completion, the owner or operator must obtain a written certification from a qualified professional engineer or an approval from the Participating State Director or an approval from EPA where EPA is the permitting authority verifying that the retrofit activities have been completed in accordance with the retrofit plan specified in paragraph (k)(2) of this section and the requirements of this section.

(6) Within 30 days of completing the retrofit activities specified in paragraph (k)(1) of this section, the owner or operator must prepare a notification of completion of retrofit activities. The notification must include the certification from a qualified professional engineer or an approval from the Participating State Director or an approval from EPA where EPA is the permitting authority has is required by paragraph (k)(4) of this section. The owner or operator has completed the notification when it has been placed in the facility's operating record as required by § 257.105(j)(6).

24. Section 257.104 is amended by revising paragraphs (d)(1)(iii), (d)(4) and (e) to read as follows:
§ 257.104 Post-closure care requirements.

(d) * * *

(1) * * *

(iii) A description of the planned uses of the property during the post-closure period. Post-closure use of the property shall not disturb the integrity of the final cover, liner(s), or any other component of the containment system, or the function of the monitoring systems unless necessary to comply with the requirements in this subpart. Any other disturbance is allowed if the owner or operator of the CCR unit demonstrates that disturbance of the final cover, liner, or other component of the containment system, including any removal of CCR, will not increase the potential threat to human health or the environment. The demonstration must be certified by a qualified professional engineer or approved by the Participating State Director or approved from EPA where EPA is the permitting authority, and notification shall be provided to the State Director that the demonstration has been placed in the operating record and on the owners or operator's publicly accessible internet site.

(4) The owner or operator of the CCR unit must obtain a written certification from a qualified professional engineer or an approval from the Participating State Director or an approval from EPA where EPA is the permitting authority that the initial and any amendment of the written post-closure plan meets the requirements of this section.

(e) Notification of completion of post-closure care period. No later than 60 days following the completion of the post-closure care period, the owner or operator of the CCR unit must prepare a notification verifying that post-closure care has been completed. The notification must include the certification by a qualified professional engineer or the approval from the Participating State Director or the approval from EPA where EPA is the permitting authority verifying that post-closure care has been completed in accordance with the closure plan specified in paragraph (d) of this section and the requirements of this section. The owner or operator has completed the notification when it has been placed in the facility's operating record as required by § 257.105(i)(13).

25. Section 257.105 is amended by adding paragraph (h)(14) to read as follows:
§ 257.105 Recordkeeping requirements.

(h) * * *

(14) The demonstration, including long-term performance data, supporting the suspension of groundwater monitoring requirements as required by § 257.90(g).

26. Section 257.106 is amended by adding paragraph (h)(11) to read as follows:
§ 257.106 Notification requirements.

(h) * * *

(11) Provide the demonstration supporting the suspension of groundwater monitoring requirements specified under § 257.105(h)(14).

27. Section 257.107 is amended by adding paragraph (h)(11) to read as follows:
§ 257.107 Publicly accessible internet site requirements.

(h) * * *

(11) The demonstration supporting the suspension of groundwater monitoring requirements specified under § 257.105(h)(14).

[FR Doc. 2018-16262 Filed 7-27-18; 8:45 am] BILLING CODE 6560-50-P
DEPARTMENT OF HEALTH AND HUMAN SERVICES 45 CFR Part 153 [CMS-9920-F] RIN 0938-AT65 Adoption of the Methodology for the HHS-Operated Permanent Risk Adjustment Program Under the Patient Protection and Affordable Care Act for the 2017 Benefit Year AGENCY:

Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS).

ACTION:

Final rule.

SUMMARY:

This final rule adopts the risk adjustment methodology that HHS previously established for the 2017 benefit year. In February 2018, a district court vacated the use of statewide average premium as a basis for the HHS-operated risk adjustment methodology for the 2014, 2015, 2016, 2017, and 2018 benefit years. Accordingly, HHS is issuing this final rule to allow charges to be collected and payments to be made for the 2017 benefit year. We hereby adopt the final rules set out in the publication in the Federal Register on March 23, 2012 and the publication in the Federal Register on March 8, 2016.

DATES:

These provisions of this final rule are effective on July 30, 2018.

FOR FURTHER INFORMATION CONTACT:

Abigail Walker, (410) 786-1725; Adam Shaw, (410) 786-1091; Jaya Ghildiyal, (301) 492-5149; or Adrianne Patterson, (410) 786-0686.

SUPPLEMENTARY INFORMATION:

I. Background A. Legislative and Regulatory Overview

The Patient Protection and Affordable Care Act (Pub. L. 111-148), was enacted on March 23, 2010; the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152) was enacted on March 30, 2010. These statutes are collectively referred to as “PPACA” in this final rule. Section 1343 of the PPACA established an annual permanent risk adjustment program under which payments are collected from health insurance issuers that enroll relatively low-risk populations, and payments are made to health insurance issuers that enroll relatively higher-risk populations. Consistent with section 1321(c)(1) of the PPACA, the Secretary is responsible for operating the risk adjustment program on behalf of any state that elected not to do so. For the 2017 benefit year, HHS is responsible for operation of the risk adjustment program in all 50 states and the District of Columbia.

HHS sets the risk adjustment methodology that it uses in states that elect not to operate the program in advance of each benefit year through a notice-and-comment rulemaking process with the intention that issuers will be able to rely on the methodology to price their plans appropriately (45 CFR 153.320; 76 FR 41930, 41932 through 41933; 81 FR 94058, 94702 (explaining the importance of setting rules ahead of time and describing comments supporting that practice)).

In the July 15, 2011 Federal Register (76 FR 41929), we published a proposed rule outlining the framework for the risk adjustment program. We implemented the risk adjustment program in a final rule, published in the March 23, 2012 Federal Register (77 FR 17219) (Premium Stabilization Rule). In the December 7, 2012 Federal Register (77 FR 73117), we published a proposed rule outlining the proposed Federally certified risk adjustment methodologies for the 2014 benefit year and other parameters related to the risk adjustment program (proposed 2014 Payment Notice). We published the 2014 Payment Notice final rule in the March 11, 2013 Federal Register (78 FR 15409). In the June 19, 2013 Federal Register (78 FR 37032), we proposed a modification to the HHS-operated methodology related to community rating states. In the October 30, 2013, Federal Register (78 FR 65046), we finalized the proposed modification to the HHS-operated methodology related to community rating states. We published a correcting amendment to the 2014 Payment Notice final rule in the November 6, 2013 Federal Register (78 FR 66653) to address how an enrollee's age for the risk score calculation would be determined under the HHS-operated risk adjustment methodology.

In the December 2, 2013 Federal Register (78 FR 72321), we published a proposed rule outlining the Federally certified risk adjustment methodologies for the 2015 benefit year and other parameters related to the risk adjustment program (proposed 2015 Payment Notice). We published the 2015 Payment Notice final rule in the March 11, 2014 Federal Register (79 FR 13743). In the May 27, 2014 Federal Register (79 FR 30240), the 2015 fiscal year sequestration rate for the risk adjustment program was announced.

In the November 26, 2014 Federal Register (79 FR 70673), we published a proposed rule outlining the proposed Federally certified risk adjustment methodologies for the 2016 benefit year and other parameters related to the risk adjustment program (proposed 2016 Payment Notice). We published the 2016 Payment Notice final rule in the February 27, 2015 Federal Register (80 FR 10749).

In the December 2, 2015 Federal Register (80 FR 75487), we published a proposed rule outlining the Federally certified risk adjustment methodology for the 2017 benefit year and other parameters related to the risk adjustment program (proposed 2017 Payment Notice). We published the 2017 Payment Notice final rule in the March 8, 2016 Federal Register (81 FR 12204).

In the September 6, 2016 Federal Register (81 FR 61455), we published a proposed rule outlining the Federally certified risk adjustment methodology for the 2018 benefit year and other parameters related to the risk adjustment program (proposed 2018 Payment Notice). We published the 2018 Payment Notice final rule in the December 22, 2016 Federal Register (81 FR 94058).

In the November 2, 2017 Federal Register (82 FR 51042), we published a proposed rule outlining the benefit and payment parameters for the 2019 benefit year, and to further promote stable premiums in the individual and small group markets. We proposed updates to the risk adjustment methodology and amendments to the risk adjustment data validation process (proposed 2019 Payment Notice). We published the 2019 Payment Notice final rule in the April 17, 2018 Federal Register (83 FR 16930). We published a correction to the 2019 risk adjustment coefficients in the 2019 Payment Notice final rule in the May 11, 2018 Federal Register (83 FR 21925).

B. The New Mexico Health Connections Court's Order

On February 28, 2018, in a suit brought by the health insurance issuer New Mexico Health Connections, the United States District Court for the District of New Mexico (the district court) vacated the use of statewide average premium in the HHS-operated risk adjustment methodology for the 2014, 2015, 2016, 2017, and 2018 benefit years. The district court reasoned that HHS had not adequately explained its decision to adopt a methodology that used the statewide average premium as the cost-scaling factor to ensure that amounts collected from issuers equal payments made to issuers for the applicable benefit year, that is, a methodology that maintains the budget neutrality of the program for the applicable benefit year.1 The district court otherwise rejected New Mexico Health Connections' arguments. HHS's reconsideration motion remains pending with the district court.

1New Mexico Health Connections v. United States Department of Health and Human Services et al., No. CIV 16-0878 JB/JHR (D.N.M. 2018).

HHS recently announced the collection and payment amounts for the 2017 benefit year as calculated under the HHS-operated risk adjustment methodology that uses the statewide average premium.2 However, without this administrative action (that is, issuing this final rule), HHS would be unable to make those collections or distribute the payments for the 2017 benefit year, which total billions of dollars.3 Uncertainty and delay in the distribution of those payments, which issuers anticipated when they set premiums for the 2017 benefit year, could add uncertainty to the market, as issuers are now in the process of determining the extent of their market participation and the rates and terms of plans they will offer for the 2019 benefit year.

2 See, Summary Report on Permanent Risk Adjustment Transfers for the 2017 Benefit Year, available at https://downloads.cms.gov/cciio/Summary-Report-Risk-Adjustment-2017.pdf.

3 See, July 7, 2018 United States District Court Ruling Puts Risk Adjustment On Hold, available at https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2018-Press-releases-items/2018-07-07.html and the July 9, 2018, Summary Report on Permanent Risk Adjustment Transfers for the 2017 Benefit Year https://downloads.cms.gov/cciio/Summary-Report-Risk-Adjustment-2017.pdf. Also see the CMS Memo: Implications of the Decision by United States District Court for the District of New Mexico on the Risk Adjustment and Related Programs (July 12, 2018), available at https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Implications-of-the-Decision-by-United-States-District-Court-for-the-District-of-New-Mexico-on-the-Risk-Adjustment-and-Related-Programs.pdf.

II. Provisions of the Final Rule

This final rule adopts the HHS-operated risk adjustment methodology previously published at 81 FR 12204 for the 2017 benefit year with an additional explanation regarding the use of statewide average premium and the budget neutral nature of the program. This rule does not make any changes to the previously published HHS-operated risk adjustment methodology for the 2017 benefit year.

The risk adjustment program provides payments to health insurance issuers that enroll higher risk populations, such as those with chronic conditions, thereby reducing incentives for issuers to structure their plan benefit designs or marketing strategies in order to avoid these enrollees and lessening the potential influence of risk selection on the premiums that issuers charge. Instead, issuers are expected to set rates based on average risk and compete based on plan features rather than selection of healthier enrollees. The program applies to any health insurance issuer offering plans in the individual or small group markets, with the exception of grandfathered health plans, group health insurance coverage described in 45 CFR 146.145(c), individual health insurance coverage described in 45 CFR 148.220, and any plan determined not to be a risk adjustment covered plan in the applicable Federally certified risk adjustment methodology.4 In 45 CFR part 153, subparts A, B, D, G, and H, HHS established standards for the administration of the permanent risk adjustment program. In accordance with § 153.320, any risk adjustment methodology used by a state, or by HHS on behalf of the state, must be a Federally certified risk adjustment methodology.

4 See the definition for “risk adjustment covered plan” at 45 CFR 153.20.

As stated in the 2014 Payment Notice final rule, the Federally certified risk adjustment methodology developed and used by HHS in states that elect not to operate the program is based on the premise that premiums for this market should reflect the differences in plan benefits, quality, and efficiency—not the health status of the enrolled population.5 HHS developed the risk adjustment payment transfer formula that calculates the difference between the revenues required by a plan based on the projected health risk of the plan's enrollees and the revenues that a plan can generate for those enrollees. These differences are then compared across plans in the state market risk pool and converted to a dollar amount based on the statewide average premium. HHS chose to use statewide average premium and normalize the risk adjustment transfer formula to reflect state average factors so that each plan's enrollment characteristics are compared to the state average and the total calculated payment amounts equal total calculated charges in each state market risk pool. Thus, each plan in the risk pool receives a risk adjustment payment or charge designed to compensate for risk for a plan with average risk in a budget neutral manner. This approach supports the overall goal of the risk adjustment program to encourage issuers to rate for the average risk in the applicable state market risk pool, and avoids the creation of incentives for issuers to operate less efficiently, set higher prices, develop benefit designs or create marketing strategies to avoid high risk enrollees. Such incentives could arise if HHS used each issuer's plan's own premium in the risk adjustment payment transfer formula, instead of statewide average premium.

5 See 78 FR 15409 at 15417.

As explained above, the district court vacated the use of statewide average premium in the HHS-operated risk adjustment methodology for the 2014 through 2018 benefit years on the ground that HHS did not adequately explain its decision to adopt that aspect of the risk adjustment methodology. The district court recognized that use of statewide average premium maintained the budget neutrality of the program, but concluded that HHS had not adequately explained the underlying decision to adopt a methodology that kept the program budget neutral, that is, that ensured that amounts collected from issuers would equal payments made to issuers for the applicable benefit year. Accordingly, HHS is providing additional explanation herein.

First, Congress designed the risk adjustment program to be implemented and operated by states if they choose to do so. Nothing in section 1343 of the PPACA requires a state to spend its own funds on risk adjustment payments or allows HHS to impose such a requirement. Thus, while section 1343 may have provided leeway for states to spend additional funding on the program if they voluntarily chose to do so, HHS could not have required additional funding within the HHS-operated risk adjustment methodology.

Second, while the PPACA did not include an explicit requirement that the risk adjustment program be operated in a budget-neutral manner, it also does not proscribe designing the program in a budget-neutral manner. In fact, although the statutory provisions for many other PPACA programs appropriated or authorized amounts to be appropriated from the U.S. Treasury, or provided budget authority in advance of appropriations,6 the PPACA neither authorized nor appropriated additional funding for risk adjustment payments beyond the amount of charges paid in, nor authorized HHS to obligate itself for risk adjustment payments in excess of charges collected.7 Indeed, unlike the Medicare Part D statute, which expressly authorizes the appropriation of funds and provides budget authority in advance of appropriations to make Part D risk-adjusted payments, the PPACA's risk adjustment statute makes no reference to additional appropriations whatsoever.8 Because Congress omitted from the PPACA any provision appropriating independent funding or creating budget authority in advance of an appropriation for the risk adjustment program, HHS could not—absent another source of appropriations—have designed the risk adjustment program in a way that required payments in excess of collections consistent with binding appropriations law. Thus, as a practical matter, Congress did not give HHS discretion to implement a program that was not budget neutral.

6 For examples of PPACA provisions appropriating funds, see PPACA secs. 1101(g)(1), 1311(a)(1), 1322(g), 1323(c). For examples of PPACA provisions authorizing the appropriation of funds, see PPACA secs. 1002, 2705(f), 2706(e), 3013(c), 3015, 3504(b), 3505(a)(5), 3505(b), 3506, 3509(a)(1), 3509(b), 3509(e), 3509(f), 3509(g), 3511, 4003(a), 4003(b), 4004(j), 4101(b), 4102(a), 4102(c), 4102(d)(1)(C), 4102(d)(4), 4201(f), 4202(a)(5), 4204(b), 4206, 4302(a), 4304, 4305(a), 4305(c), 5101(h), 5102(e), 5103(a)(3), 5203, 5204, 5206(b), 5207, 5208(b), 5210, 5301, 5302, 5303, 5304, 5305(a), 5306(a), 5307(a), 5309(b).

7See 42 U.S.C. 18063.

8Compare 42 U.S.C. 18063 (failing to specify source of funding other than risk adjustment charges), with 42 U.S.C. 1395w-116(c)(3) (authorizing appropriations for Medicare Part D risk adjusted payments); 42 U.S.C. 1395w-115(a) (establishing “budget authority in advance of appropriations Acts” for risk adjusted payments under Medicare Part D).

Furthermore, if HHS had elected to adopt a HHS-operated risk adjustment methodology that was contingent on appropriations from Congress in the annual appropriations process that would have created uncertainty for issuers in the amount of risk adjustment payments they could expect. That uncertainty would undermine one of the central objectives of the risk adjustment program, which is to assure issuers in advance that they will receive risk adjustment payments if, for the applicable benefit year, they enroll a high risk population compared to other issuers in the state market risk pool. The budget-neutral framework spreads the costs of covering higher-risk enrollees across issuers throughout a given state market risk pool, thereby reducing incentives for issuers to engage in risk-avoidance techniques such as designing or marketing their plans in ways that tend to attract healthier individuals, who cost less to insure. Moreover, relying on the possibility in each year's budget process for appropriation of additional funds to HHS that could be used to supplement risk adjustment transfers would have required HHS to delay setting the parameters for any risk adjustment payment proration rates until well after the plans were in effect for the applicable benefit year.9 Without the adoption of a budget-neutral framework, HHS would have needed to assess a charge or otherwise collect additional funds, or prorate risk adjustment payments to balance the calculated risk adjustment transfer amounts. The resulting uncertainty would have conflicted with one of the overall goals of the risk adjustment program—to reduce incentives for issuers to avoid enrolling individuals with higher than average actuarial risk.

9 It has been suggested that the annual lump sum appropriation to CMS for program management was potentially available for risk adjustment payments. The lump sum appropriation for each year was not enacted until after the applicable rule announcing the methodology to calculate payments for the applicable benefit year. Moreover, HHS does not believe that the lump sum is legally available for risk adjustment payments. As the underlying budget requests reflect, the lump sum is for program management expenses, such as administrative costs for various CMS programs such as Medicaid, Medicare, the Children's Health Insurance Program, and the PPACA's insurance market reforms—not for the program payments themselves. CMS would have elected to use the lump sum for these important program management expenses even if CMS had discretion to use all or part of the lump sum for risk adjustment payments.

In light of the budget-neutral framework discussed above, HHS also chose not to use a different parameter for the payment transfer formula under the HHS-operated methodology, such as each plan's own premium, that would not have automatically achieved equality between risk adjustment payments and charges in each benefit year. As set forth in prior discussions,10 use of the plan's own premium or some similar parameter would have required the application of a balancing adjustment in light of the program's budget neutrality—either reducing payments to issuers owed a payment, increasing charges on issuers due a charge, or splitting the difference in some fashion between issuers owed payments and issuers assessed charges. Such adjustments would have impaired the risk adjustment program's goals, discussed above, of encouraging issuers to rate for the average risk in the applicable risk pool and avoiding the creation of incentives for issuers to operate less efficiently, set higher prices, develop benefit designs or create marketing strategies to avoid higher-risk enrollees. Use of an after-the-fact balancing adjustment is also less predictable for issuers than a methodology that can be calculated in advance of a benefit year. Such predictability is important to serving the risk adjustment program's goals of premium stabilization and reducing issuer incentives to avoid enrolling higher-risk populations. Additionally, using a plan's own premium to scale transfers may provide additional incentive for plans with high-risk enrollees to increase premiums in order to receive additional risk adjustment payments. As noted by commenters to the 2014 Payment Notice proposed rule, transfers may be more volatile from year to year and sensitive to anomalous premiums if they were scaled to a plan's own premium instead of the statewide average premium. Scaling the risk adjustment transfers by the statewide average premium promotes premium stabilization by encouraging pricing to average risk in a risk pool, and results in a calculation of equal payments and charges.

10 See, e.g., September 12, 2011, Risk Adjustment Implementation Issues White Paper, available at: https://www.cms.gov/CCIIO/Resources/Files/Downloads/riskadjustment_whitepaper_web.pdf.

In the risk adjustment methodologies applicable to the 2018 and 2019 benefit years, HHS has adjusted statewide average premium by reducing it by 14 percent to account for an estimated proportion of administrative costs that do not vary with claims. HHS is not applying this adjustment retroactively to the 2017 benefit year, but is instead maintaining the definition of statewide average premium previously established for the 2017 benefit year. As discussed above, HHS has repeatedly stressed the importance of providing a risk adjustment methodology in advance of the benefit year to which it applies to provide issuers the opportunity to price their plans accordingly.11 To protect the settled expectations of issuers that have structured their pricing and offering decisions in reliance on the previously promulgated 2017 benefit year methodology, this rule maintains for the 2017 benefit year the description of statewide average premium set forth in the 2017 Payment Notice.

11 See 76 FR 41930, 41932-33. Also see 81 FR 94058, 94702.

Therefore, for the 2017 benefit year, we are issuing this final rule that adopts the HHS-operated risk adjustment methodology previously established for the 2017 benefit year in the Federal Register publications cited above, including use of statewide average premium. As set forth in reports previously issued, HHS has completed final risk adjustment calculations for the 2017 benefit year, but has not yet collected or paid risk adjustment amounts to issuers of risk adjustment covered plans. The provisions of this final rule adopt the methodology that applies to collection and payment of risk adjustment amounts for the 2017 benefit year. Because this final rule does not alter any previously announced risk adjustment methodology, the amounts previously calculated by HHS have not changed by virtue of this rule's issuance.

HHS will begin collection of the 2017 benefit year risk adjustment charge amounts announced in the Summary Report on Permanent Risk Adjustment Transfers for the 2017 Benefit Year12 through netting pursuant to 45 CFR 156.1215(b) and subsequently issuing invoices if an amount remains outstanding in the September 2018 monthly payment cycle. HHS will begin making the 2017 benefit year risk adjustment payments outlined in the Summary Report on Permanent Risk Adjustment Transfers for the 2017 Benefit Year as part of the October 2018 monthly payment cycle, continuing on a monthly basis as collections are received. Under this timeline, issuers would receive invoices on or about September 11-13, 2018 and payments would begin to be made around October 22, 2018.

12https://downloads.cms.gov/cciio/Summary-Report-Risk-Adjustment-2017.pdf.

III. Adoption of the Methodology for the HHS-Operated Permanent Risk Adjustment Program Under the Patient Protection and Affordable Care Act

This rule adopts the final rules set out in the publication in the March 23, 2012 Federal Register (77 FR 17220 through 17252) and publication in the March 8, 2016 Federal Register (81 FR 12204 through 12352). For the 2017 benefit year, in states where HHS is operating the risk adjustment program under section 1343 of the PPACA, HHS will use the criteria and methods as specified in the publication in the March 23, 2012 Federal Register (77 FR 17220 through 17252) and publication in the March 8, 2016 Federal Register (81 FR 12204 through 12352).

IV. Waiver of Proposed Rulemaking and Delay in Effective Date

Under the Administrative Procedure Act (APA) (5 U.S.C. 553), a notice of proposed rulemaking and an opportunity for public comment are generally required before issuing a regulation. We also ordinarily provide a 30-day delay in the effective date of the provisions of a rule in accordance with the APA (5 U.S.C. 553(d)), unless the rule is a major rule and subject to the 60-day delayed effective date required by the Congressional Review Act (5 U.S.C. 801(a)(3)). However, these procedures can be waived if the agency, for good cause, finds that notice and public comment and delay in effective date are impracticable, unnecessary, or contrary to public interest and incorporates a statement of the finding and its reasons in the rule issued. See 5 U.S.C. 553(d)(3); 5 U.S.C. 808(2).

HHS has determined that issuing this rule in proposed form, such that it would not become effective until after public comments are submitted, considered, and responded to in a final rule, would be impracticable, unnecessary, and contrary to the public interest. As discussed above, immediate administrative action is imperative to maintain the stability and predictability in the individual and small group insurance markets. It is also consistent with settled expectations in that this rule adopts the risk adjustment methodology previously established for the 2017 benefit year.13 Under normal operations, risk adjustment invoices for the 2017 benefit year would be issued beginning in August 2018 and risk adjustment payments for the 2017 benefit year would be made beginning in the September 2018 monthly payment cycle. Accordingly, it is now less than 2 months until risk adjustment payments for the 2017 benefit year, expected to total $5.2 billion, are due to begin. Immediate action is also necessary to maintain issuer confidence in the HHS-operated risk adjustment program. Issuers have already accounted for expected risk adjustment transfers in their rates for the 2017 benefit year and uncompensated payments for the 2017 benefit year could lead to higher premiums in future benefit years as issuers incorporate a risk premium into their rates. Issuers file rates for the 2019 benefit year in the summer of 2018, and if a projected $5.2 billion in risk adjustment payments is unavailable or there is uncertainty as to whether payments for the 2018 benefit year will be made, there is a serious risk issuers will substantially increase 2019 premiums to account for the uncompensated risk associated with high-risk enrollees. Consumers enrolled in certain plans could see a significant premium increase, which could make coverage in those plans particularly unaffordable for unsubsidized enrollees. Furthermore, issuers are currently making decisions on whether to offer qualified health plans (QHPs) through the Exchanges for the 2019 benefit year, and, for the Federally-facilitated Exchange (FFE), this decision must be made before the August 2018 deadline to finalize QHP agreements. In states with limited Exchange options, a QHP issuer exit would restrict consumer choice, and put additional upward pressure on Exchange premiums, thereby increasing the cost of coverage for unsubsidized individuals and federal spending for premium tax credits. The combination of these effects could lead to significant, involuntary coverage losses in certain state market risk pools.

13 The risk adjustment methodology for those benefit years was published at the February 27, 2015 Federal Register (80 FR 10749) and the March 8, 2016 Federal Register (81 FR 12203).

Additionally, HHS's failure to make timely risk adjustment payments could impact the solvency of plans providing coverage to sicker (and costlier) than average enrollees that require the influx of risk adjustment payments to continue operations. When state regulators determine issuer solvency, any uncertainty surrounding risk adjustment transfers jeopardizes regulators' ability to make decisions that protect consumers and support the long-term health of insurance markets. Therefore, HHS has determined that delaying the effective date of the use of statewide average premium in the payment transfer calculation under the HHS-operated risk adjustment methodology for the 2017 benefit year to allow for proposed rulemaking and comment is impracticable and contrary to the public interest because consumers would be negatively impacted by premium changes should risk adjustment payments be interrupted or confidence in the program undermined.

There is also good cause to proceed without notice and comment for the additional reason that such procedures are unnecessary here. HHS has received and considered comments in issuing the 2014 through 2017 Payment Notices. In each of these rulemaking processes, parties had the opportunity to comment on HHS's use of statewide average premium in the payment transfer formula under the HHS-operated risk adjustment methodology. Because this final rule adopts the same HHS-operated risk adjustment methodology issued in the 2017 Payment Notice final rule, the comments received in those rulemakings are sufficiently current to indicate a lack of necessity to engage in further notice and comment. In the 2014 Payment Notice final rule, we received a number of comments in support of our proposal to use the statewide average premium as the basis for risk adjustment transfers. In subsequent benefit year rulemakings, some commenters expressed a desire for HHS to use a plan's own premium. HHS addressed those comments by reiterating that we had considered the use of a plan's own premium instead of the statewide average premium and chose to use statewide average premium. As this approach supports the overall goal of the risk adjustment program to encourage issuers to rate for the average risk in the applicable state market risk pool, and avoids the creation of incentives for issuers to operate less efficiently, set higher prices, develop benefit designs or create marketing strategies to avoid high risk enrollees.

V. Collection of Information Requirements

This document does not impose information collection requirements, that is, reporting, recordkeeping, or third-party disclosure requirements. Consequently, there is no need for review by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et seq.).

VI. Regulatory Impact Analysis A. Statement of Need

This final rule adopts the HHS-operated risk adjustment methodology for the 2017 benefit year set forth in the 2017 Payment Notice final rule to ensure that the risk adjustment program works as intended to protect consumers from the effects of adverse selection and premium increases due to issuer uncertainty. The Premium Stabilization Rule and previous Payment Notices noted above provided detail on the implementation of the risk adjustment program, including the specific parameters applicable for the 2017 benefit year.

B. Overall Impact

We have examined the impact of this rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96- 354), section 1102(b) of the Social Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999), the Congressional Review Act (5 U.S.C. 804(2), and Executive Order 13771 on Reducing Regulation and Controlling Regulatory Costs. Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any one year).

OMB has determined that this final rule is “economically significant” within the meaning of section 3(f)(1) of Executive Order 12866, because it is likely to have an annual effect of $100 million in any 1 year. In addition, for the reasons noted above, OMB has determined that this is a major rule under the Congressional Review Act.

This final rule offers a further explanation on budget neutrality and the use of statewide average premium in the risk adjustment payment transfer formula when HHS is operating the permanent risk adjustment program established in section 1343 of the PPACA on behalf of a state for the 2017 benefit year. We note that we previously estimated transfers associated with the risk adjustment program in the Premium Stabilization Rule and the 2017 Payment Notice, and that the provisions of this final rule do not change the risk adjustment transfers previously estimated under the HHS-operated risk adjustment methodology established in those final rules. The approximate risk adjustment transfers for the 2017 benefit year are $5.179 billion. As such, we also adopt the RIA in the 2017 Payment Notice proposed and final rules.

Dated: July 23, 2018. Seema Verma, Administrator, Centers for Medicare & Medicaid Services. Dated: July 24, 2018. Alex M. Azar II, Secretary, Department of Health and Human Services.
[FR Doc. 2018-16190 Filed 7-25-18; 4:15 pm] BILLING CODE 4120-01-P
FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 1 [MD Docket Nos. 18-175; FCC 18-65] Assessment and Collection of Regulatory Fees for Fiscal Year 2018 AGENCY:

Federal Communications Commission.

ACTION:

Final action.

SUMMARY:

In this document, the Federal Communications Commission (Commission) makes decisions involving submarine cables, international bearer circuits, and the calculation of cable television subscribers.

DATES:

This final action is effective August 29, 2018.

FOR FURTHER INFORMATION CONTACT:

Roland Helvajian, Office of Managing Director at (202) 418-0444.

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's FY 2018 Report and Order (FY 2018 Report and Order), FCC 18-65, MD Docket No. 18-175 adopted on May 21, 2018 and released on May 22, 2018. The full text of this document is available for inspection and copying during normal business hours in the FCC Reference Center, 445 12th Street SW, Room CY-A257, Portals II, Washington, DC 20554, and may also be purchased from the Commission's copy contractor, BCPI, Inc., Portals II, 445 12th Street SW, Room CY-B402, Washington, DC 20554. Customers may contact BCPI, Inc. via their website, http://www.bcpi.com, or call 1-800-378-3160. This document is available in alternative formats (computer diskette, large print, audio record, and braille). Persons with disabilities who need documents in these formats may contact the FCC by email: [email protected] or phone: 202-418-0530 or TTY: 202-418-0432.

I. Procedural Matters A. Final Regulatory Flexibility Analysis

1. As required by the Regulatory Flexibility Act of 1980 (RFA),1 the Commission has prepared a Final Regulatory Flexibility Analysis (FRFA) relating to this Report and Order. The FRFA is located towards the end of this document.

1See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601-612, has been amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), Public Law 104-121, Title II, 110 Stat. 847 (1996). The SBREFA was enacted as Title II of the Contract with America Advancement Act of 1996 (CWAAA).

B. Final Paperwork Reduction Act of 1995 Analysis

2. This document does not contain new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, therefore, it does not contain any new or modified information collection burden for small business concerns with fewer than 25 employees, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).

C. Congressional Review Act

3. The Commission will send a copy of this Report & Order to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

II. Introduction

In this Report and Order, we address several regulatory fee issues raised in the Further Notice of Proposed Rulemaking that published after the Commission's FY 2017 Report and Order.2 More specifically, in this Report and Order, we (1) adopt new tiers for calculating regulatory fees for submarine cable systems; (2) decline to adopt a new regulatory fee for international section 214 authorizations; and (3) retain the optional bulk rate calculation for determining the number of subscribers in multiple dwelling units used in the calculation of cable television regulatory fees.

2See generally Assessment and Collection of Regulatory Fees for Fiscal Year 2017 (Final Rule), 82 FR 44322 (Sept. 22, 2017), 32 FCC Rcd 7057 (2017) (FY 2017 Report and Order) and Assessment and Collection of Regulatory Fees for Fiscal Year 2017 (Further Notice of Proposed Rulemaking), 82 FR 50598 (Nov. 1, 2017), 32 FCC Rcd 7057 (2017) (2017 FNPRM).

III. Report and Order A. Submarine Cable Regulatory Fees

1. In 2009, the Commission adopted a new methodology for calculating submarine cable regulatory fees, based on a proposal from the submarine cable industry.3 The methodology adopted was a tiered per-cable system, with higher fees for larger systems and lower fees for smaller systems. The Commission concluded that the methodology was in the public interest and competitively neutral because it included both common carriers and non-common carriers; all entities with cable landing licensees would be required to pay this regulatory fee.4 At that time, the Commission adopted a five-tier system for the submarine cable industry, but since that date the subsequent growth in the industry has moved all but two systems into the highest tier.5 In the 2017 FNPRM, we sought comment on revising the regulatory fee tiers for submarine cable systems.6 One commenter, the Submarine Cable Coalition, generally agrees with our proposal to revise the existing tiers.7

3Submarine Cable Order, 74 FR 22104 (May 12, 2009), 24 FCC Rcd at 4212-4216, paras. 7-18.

4Id., 24 FCC Rcd at 4212-13, paras. 8-9.

5FY 2017 Report and Order, 32 FCC Rcd at 7074, para. 46.

62017 FNPRM, 32 FCC Rcd at 7074-75, para. 46.

7 Coalition Reply Comments at 3-4, 7-8.

2. We adjust the tiers proposed in the 2017 FNPRM to reflect capacity growth since 2009 when the submarine cable tiers were first established. Specifically, the regulatory fee tiers for submarine cable systems we adopt below add higher thresholds to reflect capacity growth in the industry. Based on this increase in capacity, we believe the tiers better capture varying types of submarine cable operators.

• Systems with capacity equal to or greater than 4,000 Gbps will now pay 16 payment units.

• Systems with capacity equal to or greater than 1,000 Gbps but less than 4,000 Gbps will now pay 8 payment units.

• Systems with capacity equal to or greater than 250 Gbps but less than 1,000 Gbps will now pay 4 payment units.

• Systems with capacity equal to or greater than 50 Gbps but less than 250 Gbps, will pay 2 payment units.

• Systems with capacity less than 50 Gbps will pay 1 payment unit.

3. Under the revised regulatory fee tiers we adopt today, we estimate that approximately half of the submarine cable systems will be in the bottom or middle tiers, while the remaining systems will be in the new highest tier. The FCC will provide proposed rates for submarine cable systems for FY 2018 in future rulemaking.

4. Finally, while the Submarine Cable Coalition contends that non-common carrier submarine cable systems should pay lower fees than common carriers, we note that the Commission adopted a competitively neutral methodology that included both common carriers and non-common carriers in the Submarine Cable Order, based on a consensus proposal from a group of operators, including at least one member of the Coalition, GU Holdings, Inc., an indirect, wholly-owned subsidiary of Google, Inc.8 The Coalition has not provided any evidence to support its claim that we should depart from this competitively neutral methodology and treat non-common carrier submarine cable systems differently from common carrier systems at this time.

8Submarine Cable Order, 24 FCC Rcd at 4208, para. 1 & note 3.

B. International Bearer Circuits and Section 214 Authorizations

5. In the 2017 FNPRM, the Commission sought comment on a proposal raised by the Submarine Cable Coalition, that in lieu of regulatory fees for international bearer circuits (IBCs), we should assess a regulatory fee, based on International Bureau FTEs, on every holder of an international section 214 authorization.9 SIA supports replacing the satellite IBC fee with a fee on each international section 214 authorization and contends that such a fee for all entities with international section 214 authorizations would be appropriate because the holders of international section 214 authority are “directly involved in international common carrier services and benefit from associated Commission regulation. . . .” 10 The Submarine Cable Coalition contends that adopting a flat fee for all holders of international section 214 authorizations would be an efficient and equitable methodology for assessing regulatory fees.11

92017 FNPRM, 32 FCC Rcd at 7075, para. 48. This proposal was from the Submarine Cable Coalition.

10 SIA Comments at 6.

11 Coalition Reply Comments at 3.

6. Other commenters oppose this approach. CTIA argues that assessing a fee based on international section 214 authorizations would change the basis for the IBC fees, which is ownership and use of international circuits, because many international 214 authorization holders only provide resold service and do not have international facilities.12 AT&T agrees with CTIA and notes that this approach would impose a new IBC regulatory fee on hundreds of entities that do not currently pay IBC fees.13 These commenters also explain that because only common carriers hold international section 214 authorizations, this approach would essentially reverse our decision in the FY 2017 Report and Order to include non-common carrier terrestrial IBCs in the IBC regulatory fee methodology.14 For example, AT&T states that replacing all or part of the IBC fee with a flat fee on international section 214 authorizations would “effectively reverse the Commission's decisions to provide a competitively neutral IBC fee structure.” 15 CenturyLink argues that entities holding an international 214 authorization but that do not have active international circuits do not receive the benefits of Commission international activities, and therefore should not be subject to regulatory fees.16 CTIA also states that international section 214 applicants already pay a $1,155 filing fee with each application and there is no evidence of other International Bureau costs associated with international section 214 authorizations.17 Commenters also note that such an approach would present administrative difficulties since many carriers have multiple international 214 authorizations and can surrender them if the Commission adopted a per-international section 214 authorization regulatory fee.18

12 CTIA Comments at 2-3.

13 AT&T Reply Comments at 6; CTIA Comments at 2-3.

14 CTIA Comments at 4-5; CenturyLink Comments at 5; AT&T Reply Comments at 5-6.

15 AT&T Jan. 17, 2018 ex parte at 1.

16 CenturyLink Comments at 5. See also AT&T Reply Comments at 6.

17 CTIA Comments at 3-4.

18 CTIA Comments at 5; CenturyLink Comments at 5; AT&T Reply Comments at 6. The Submarine Cable Coalition contends that their proposal would reduce the burden on the International Bureau because of the costs associated with “overseeing redundant international Section 214 licensees.” Submarine Cable Coalition Reply Comments at 9. However, there is no evidence in the record that there are such costs to the International Bureau.

7. We decline to impose regulatory fees on international section 214 authorizations in lieu of our existing IBC regulatory fees for terrestrial and satellite IBCs and submarine cable systems. The record does not demonstrate that this approach is advantageous over the existing scheme established in section 9(g) of the Act to charge the IBC regulatory fee based on active international bearer circuits.19 The Submarine Cable Coalition's proposal is also problematic because it would exclude non-common carriers from paying the fee. However, the Commission concluded in the FY 2017 Report and Order that regulatory fees should be paid for non-common carrier satellite and terrestrial circuits, as well as submarine cable systems.20 Further, the Submarine Cable Coalition has not shown how a CMRS provider or an ITSP with an international section 214 authorization is subject to regulation or oversight by the International Bureau that would justify an additional annual regulatory fee based on International Bureau FTEs. We recognize that oversight or regulation by the International Bureau is not limited to the processing of international section 214 authorizations.21 We are, however, unconvinced at this time that such costs justify requiring hundreds of carriers regulated by other bureaus to pay additional regulatory fees 22 based on International Bureau FTEs. For these reasons, we decline to adopt a new regulatory fee category for international section 214 authorizations to replace IBC regulatory fees at this time.

19 47 U.S.C. 159(g).

20FY 2017 Report and Order, 32 FCC Rcd at 7071-2, paras. 34-35.

21 For example, International Bureau FTEs could be involved in an international section 214 rulemaking proceeding, a proceeding related to revocation of a carrier's international section 214 authorization, or other matters related to section 214 of the Act.

22 The holders of such authorization pay regulatory fees based on the service provided (e.g., CMRS or ITSP).

C. Cable Television Services—Calculation of Number of Subscribers

8. In the FY 2008 FNPRM, the Commission sought comment on the optional bulk rate calculation for determining the number of subscribers in a multiple dwelling unit or MDU.23 The methodology for calculating the number of cable subscribers has been the following:

23FY 2008 FNPRM, 73 FR 30563 (May 28, 2018), 24 FCC Rcd at 6407-6408, paras. 51-52.

Cable television system operators should compute their number of basic subscribers as follows: Number of single family dwellings + number of individual households in multiple dwelling unit (apartments, condominiums, mobile home parks, etc.) paying at the basic subscriber rate + bulk rate customers + courtesy and free service. Note: Bulk-Rate Customers = Total annual bulk-rate charge divided by basic annual subscription rate for individual households. Operators may base their count on “a typical day in the last full week” of December [year], rather than on a count as of December 31, [year].24

24 This is essentially the same methodology we sought comment on in the FY 2008 FNPRM.

9. In the 2017 FNPRM, we sought comment on whether we should keep the bulk rate calculation or if, due to the passage of time, we should modify the methodology to more accurately calculate the number of subscribers in a MDU.25 Commenters addressing this issue unanimously support retaining the current optional bulk rate calculation.26 In particular, commenters state that our methodology continues to be “a reasonable and feasible approach to determining the number of MDU subscribers for regulatory fee purposes, and should be retained.” 27 And, there is no evidence in the record to support revising or eliminating this optional bulk rate calculation. For these reasons, we retain the bulk rate calculation.

252017 FNPRM, 32 FCC Rcd at 7076, paras. 50-51.

26 ITTA Comments at 1-2; NCTA and ACA Comments at 1-3.

27 NCTA and ACA Comments at 2.

IV. Final Regulatory Flexibility Analysis

1. As required by the Regulatory Flexibility Act of 1980, as amended (RFA),28 an Initial Regulatory Flexibility Analysis (IRFA) was included in the 2017 FNPRM. 29 The Commission sought written public comment on these proposals including comment on the IRFA. This Final Regulatory Flexibility Analysis (FRFA) conforms to the IRFA.30

28 5 U.S.C. 603. The RFA, 5 U.S.C. 601-612 has been amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), Public Law 104-121, Title II, 110 Stat. 847 (1996).

29Assessment and Collection of Regulatory Fees for Fiscal Year 2017, 32 FCC Rcd 7057 (2017).

30 5 U.S.C. 604.

A. Need for, and Objectives of, the Report and Order

2. This Report and Order adopts a revision to the existing tiers for submarine cable regulatory fees.

B. Summary of the Significant Issues Raised by the Public Comments in Response to the IRFA

3. None.

C. Description and Estimate of the Number of Small Entities to Which the Rules Will Apply

4. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed rules and policies, if adopted.31 The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” 32 In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act.33 A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.34 Nationwide, there are a total of approximately 27.9 million small businesses, according to the SBA.35

31 5 U.S.C. 603(b)(3).

32 5 U.S.C. 601(6).

33 5 U.S.C. 601(3) (incorporating the definition of “small-business concern” from the Small Business Act, 15 U.S.C. 632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a small business applies “unless an agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and publishes such definition(s) in the Federal Register.”

34 15 U.S.C. 632.

35See SBA, Office of Advocacy, “Frequently Asked Questions,” https://www.sba.gov/sites/default/files/advocacy/SB-FAQ-2016_WEB.pdf.

5. Wired Telecommunications Carriers. The U.S. Census Bureau defines this industry as “establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired communications networks. Transmission facilities may be based on a single technology or a combination of technologies. Establishments in this industry use the wired telecommunications network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP services, wired (cable) audio and video programming distribution, and wired broadband internet services. By exception, establishments providing satellite television distribution services using facilities and infrastructure that they operate are included in this industry.” 36 The SBA has developed a small business size standard for Wired Telecommunications Carriers, which consists of all such companies having 1,500 or fewer employees.37 Census data for 2012 shows that there were 3,117 firms that operated that year. Of this total, 3,083 operated with fewer than 1,000 employees.38 Thus, under this size standard, most firms in this industry can be considered small.

36http://www.census.gov/cgi-bin/sssd/naics/naicsrch.

37See 13 CFR 120.201, NAICS code 517110.

38http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ5&prodType=table.

6. Local Exchange Carriers (LECs). Neither the Commission nor the SBA has developed a size standard for small businesses specifically applicable to local exchange services. The closest applicable NAICS code category is Wired Telecommunications Carriers as defined in paragraph 6 of this FRFA. Under the applicable SBA size standard, such a business is small if it has 1,500 or fewer employees.39 According to Commission data, census data for 2012 shows that there were 3,117 firms that operated that year. Of this total, 3,083 operated with fewer than 1,000 employees.40 The Commission therefore estimates that most providers of local exchange carrier service are small entities that may be affected by the rules adopted.

39 13 CFR 121.201, NAICS code 517110.

40http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ5&prodType=table.

7. Incumbent LECs. Neither the Commission nor the SBA has developed a small business size standard specifically for incumbent local exchange services. The closest applicable NAICS code category is Wired Telecommunications Carriers as defined in paragraph 6 of this FRFA. Under that size standard, such a business is small if it has 1,500 or fewer employees.41 According to Commission data, 3,117 firms operated in that year. Of this total, 3,083 operated with fewer than 1,000 employees.42 Consequently, the Commission estimates that most providers of incumbent local exchange service are small businesses that may be affected by the rules and policies adopted. Three hundred and seven (307) Incumbent Local Exchange Carriers reported that they were incumbent local exchange service providers.43 Of this total, an estimated 1,006 have 1,500 or fewer employees.44

41 13 CFR 121.201, NAICS code 517110.

42http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ5&prodType=table.

43See Trends in Telephone Service, Federal Communications Commission, Wireline Competition Bureau, Industry Analysis and Technology Division at Table 5.3 (Sept. 2010) (Trends in Telephone Service).

44Id.

8. Competitive Local Exchange Carriers (Competitive LECs), Competitive Access Providers (CAPs), Shared-Tenant Service Providers, and Other Local Service Providers. Neither the Commission nor the SBA has developed a small business size standard specifically for these service providers. The appropriate NAICS code category is Wired Telecommunications Carriers, as defined in paragraph 6 of this FRFA. Under that size standard, such a business is small if it has 1,500 or fewer employees.45 U.S. Census data for 2012 indicate that 3,117 firms operated during that year. Of that number, 3,083 operated with fewer than 1,000 employees.46 Based on this data, the Commission concludes that most Competitive LECS, CAPs, Shared-Tenant Service Providers, and Other Local Service Providers, are small entities. According to Commission data, 1,442 carriers reported that they were engaged in the provision of either competitive local exchange services or competitive access provider services.47 Of these 1,442 carriers, an estimated 1,256 have 1,500 or fewer employees.48 In addition, 17 carriers have reported that they are Shared-Tenant Service Providers, and all 17 are estimated to have 1,500 or fewer employees.49 Also, 72 carriers have reported that they are Other Local Service Providers.50 Of this total, 70 have 1,500 or fewer employees.51 Consequently, based on internally researched FCC data, the Commission estimates that most providers of competitive local exchange service, competitive access providers, Shared-Tenant Service Providers, and Other Local Service Providers are small entities.

45 13 CFR 121.201, NAICS code 517110.

46http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ5&prodType=table.

47See Trends in Telephone Service, at Table 5.3.

48Id.

49Id.

50Id.

51Id.

9. Interexchange Carriers (IXCs). Neither the Commission nor the SBA has developed a definition for Interexchange Carriers. The closest NAICS code category is Wired Telecommunications Carriers as defined in paragraph 6 of this FRFA. The applicable size standard under SBA rules is that such a business is small if it has 1,500 or fewer employees.52 U.S. Census data for 2012 indicates that 3,117 firms operated during that year. Of that number, 3,083 operated with fewer than 1,000 employees.53 According to internally developed Commission data, 359 companies reported that their primary telecommunications service activity was the provision of interexchange services.54 Of this total, an estimated 317 have 1,500 or fewer employees.55 Consequently, the Commission estimates that most interexchange service providers are small entities that may be affected by the rules adopted.

52 13 CFR 121.201, NAICS code 517110.

53http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ5&prodType=table.

54See Trends in Telephone Service, at Table 5.3.

55Id.

10. Prepaid Calling Card Providers. Neither the Commission nor the SBA has developed a small business definition specifically for prepaid calling card providers. The most appropriate NAICS code-based category for defining prepaid calling card providers is Telecommunications Resellers. This industry comprises establishments engaged in purchasing access and network capacity from owners and operators of telecommunications networks and reselling wired and wireless telecommunications services (except satellite) to businesses and households. Establishments in this industry resell telecommunications; they do not operate transmission facilities and infrastructure. Mobile virtual networks operators (MVNOs) are included in this industry.56 Under the applicable SBA size standard, such a business is small if it has 1,500 or fewer employees.57 U.S. Census data for 2012 show that 1,341 firms provided resale services during that year. Of that number, 1,341 operated with fewer than 1,000 employees.58 Thus, under this category and the associated small business size standard, the majority of these prepaid calling card providers can be considered small entities. According to Commission data, 193 carriers have reported that they are engaged in the provision of prepaid calling cards.59 All 193 carriers have 1,500 or fewer employees.60 Consequently, the Commission estimates that the majority of prepaid calling card providers are small entities that may be affected by the rules adopted.

56http://www.census.gov/cgi-bin/ssd/naics/naicsrch.

57 13 CFR 121.201, NAICS code 517911.

58http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ5&prodType=table.

59See Trends in Telephone Service, at Table 5.3.

60Id.

11. Local Resellers. Neither the Commission nor the SBA has developed a small business size standard specifically for Local Resellers. The SBA has developed a small business size standard for the category of Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees.61 Census data for 2012 show that 1,341 firms provided resale services during that year. Of that number, 1,341 operated with fewer than 1,000 employees.62 Under this category and the associated small business size standard, the majority of these local resellers can be considered small entities. According to Commission data, 213 carriers have reported that they are engaged in the provision of local resale services.63 Of this total, an estimated 211 have 1,500 or fewer employees.64 Consequently, the Commission estimates that the majority of local resellers are small entities that may be affected by the rules adopted.

61 13 CFR 121.201, NAICS code 517911.

62http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ5&prodType=table.

63See Trends in Telephone Service, at Table 5.3.

64Id.

12. Toll Resellers. The Commission has not developed a definition for Toll Resellers. The closest NAICS code Category is Telecommunications Resellers, and the SBA has developed a small business size standard for the category of Telecommunications Resellers.65 Under that size standard, such a business is small if it has 1,500 or fewer employees.66 Census data for 2012 show that 1,341 firms provided resale services during that year. Of that number, 1,341 operated with fewer than 1,000 employees.67 Thus, under this category and the associated small business size standard, the majority of these resellers can be considered small entities. According to Commission data, 881 carriers have reported that they are engaged in the provision of toll resale services.68 Of this total, an estimated 857 have 1,500 or fewer employees.69 Consequently, the Commission estimates that the majority of toll resellers are small entities.

65 13 CFR 121.201, NAICS code 517911.

66http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ5&prodType=table.

67Id.

68Trends in Telephone Service at Table 5.3.

69Id.

13.Other Toll Carriers. Neither the Commission nor the SBA has developed a definition for small businesses specifically applicable to Other Toll Carriers. This category includes toll carriers that do not fall within the categories of interexchange carriers, operator service providers, prepaid calling card providers, satellite service carriers, or toll resellers. The closest applicable NAICS code category is for Wired Telecommunications Carriers as defined in paragraph 6 of this FRFA. Under the applicable SBA size standard, such a business is small if it has 1,500 or fewer employees.70 Census data for 2012 shows that there were 3,117 firms that operated that year. Of this total, 3,083 operated with fewer than 1,000 employees.71 Thus, under this category and the associated small business size standard, most Other Toll Carriers can be considered small. According to internally developed Commission data, 284 companies reported that their primary telecommunications service activity was the provision of other toll carriage.72 Of these, an estimated 279 have 1,500 or fewer employees.73 Consequently, the Commission estimates that most Other Toll Carriers are small entities.

70 13 CFR 121.201, NAICS code 517110.

71http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ5&prodType=table.

72Trends in Telephone Service at Table 5.3.

73Id.

14. Wireless Telecommunications Carriers (except Satellite). This industry comprises establishments engaged in operating and maintaining switching and transmission facilities to provide communications via the airwaves. Establishments in this industry have spectrum licenses and provide services using that spectrum, such as cellular services, paging services, wireless internet access, and wireless video services.74 The appropriate size standard under SBA rules is that such a business is small if it has 1,500 or fewer employees. For this industry, Census data for 2012 show that there were 967 firms that operated for the entire year. Of this total, 955 firms had fewer than 1,000 employees. Thus, under this category and the associated size standard, the Commission estimates that the majority of wireless telecommunications carriers (except satellite) are small entities. Similarly, according to internally developed Commission data, 413 carriers reported that they were engaged in the provision of wireless telephony, including cellular service, Personal Communications Service (PCS), and Specialized Mobile Radio (SMR) services.75 Of this total, an estimated 261 have 1,500 or fewer employees.76 Thus, using available data, we estimate that the majority of wireless firms can be considered small.

74 NAICS code 517210. See http://www.census.gov/cgi-bin/ssd/naics/naiscsrch.

75Trends in Telephone Service at Table 5.3.

76Id.

15. Television Broadcasting. This Economic Census category “comprises establishments primarily engaged in broadcasting images together with sound. These establishments operate television broadcasting studios and facilities for the programming and transmission of programs to the public.” 77 These establishments also produce or transmit visual programming to affiliated broadcast television stations, which in turn broadcast the programs to the public on a predetermined schedule. Programming may originate in their own studio, from an affiliated network, or from external sources. The SBA has created the following small business size standard for Television Broadcasting firms: those having $38.5 million or less in annual receipts.78 The 2012 Economic Census reports that 751 television broadcasting firms operated during that year. Of that number, 656 had annual receipts of less than $25 million per year. Based on that Census data we conclude that most firms that operate television stations are small. The Commission has estimated the number of licensed commercial television stations to be 1,383.79 In addition, according to Commission staff review of the BIA Advisory Services, LLC's Media Access Pro Television Database, on March 28, 2012, about 950 of an estimated 1,300 commercial television stations (or approximately 73 percent) had revenues of $14 million or less.80 We therefore estimate that the majority of commercial television broadcasters are small entities.

77 U.S. Census Bureau, 2012 NAICS code Economic Census Definitions, http://www.census.gov.cgi-bin/sssd/naics/naicsrch.

78 13 CFR 121.201, NAICS code 515120.

79See FCC News Release, “Broadcast Station Totals as of March 31, 2017,” April 11, 2017; https://apps.fcc.gov/edocs_public/attachmatch/DOC-344256A1.pdf.

80 We recognize that BIA's estimate differs slightly from the FCC total.

16. In assessing whether a business concern qualifies as small under the above definition, business (control) affiliations 81 must be included. Our estimate, therefore, likely overstates the number of small entities that might be affected by our action, because the revenue figure on which it is based does not include or aggregate revenues from affiliated companies. In addition, an element of the definition of “small business” is that the entity not be dominant in its field of operation. We are unable at this time to define or quantify the criteria that would establish whether a specific television station is dominant in its field of operation. Accordingly, the estimate of small businesses to which rules may apply does not exclude any television station from the definition of a small business on this basis and is therefore possibly over-inclusive to that extent.

81 “[Business concerns] are affiliates of each other when one concern controls or has the power to control the other or a third party or parties controls or has to power to control both.” 13 CFR 21.103(a)(1).

17. In addition, the Commission has estimated the number of licensed noncommercial educational television stations to be 394.82 These stations are non-profit, and therefore considered to be small entities.83 There are also 2,382 low power television stations, including Class A stations.84 Given the nature of these services, we will presume that all LPTV licensees qualify as small entities under the above SBA small business size standard.

82See FCC News Release, “Broadcast Station Totals as of March 31, 2017,” April 11, 2017; https://apps.fcc.gov/edocs_public/attachmatch/DOC-344256A1.pdf.

83See generally 5 U.S.C. 601(4), (6).

84See FCC News Release, “Broadcast Station Totals as of March 31, 2017,” April 11, 2017; https://apps.fcc.gov/edocs_public/attachmatch/DOC-344256A1.pdf.

18. Radio Broadcasting.

This Economic Census category “comprises establishments primarily engaged in broadcasting aural programs by radio to the public. Programming may originate in their own studio, from an affiliated network, or from external sources.” 85 The SBA has established a small business size standard for this category, which is: such firms having $38.5 million or less in annual receipts.86 Census data for 2012 show that 2,849 radio station firms operated during that year. Of that number, 2,806 operated with annual receipts of less than $25 million per year.87 According to Commission staff review of BIA Advisory Services, LLC's Media Access Pro Radio Database, on March 28, 2012, about 10,759 (97 percent) of 11,102 commercial radio stations had revenues of $38.5 million or less. Therefore, most such entities are small entities.

85https://www.census.gov.cgi-bin/sssd/naics/naicsrch.

86 13 CFR 121.201, NAICS code 515112.

87http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ5&prodType=table.

19. In assessing whether a business concern qualifies as small under the above size standard, business affiliations must be included.88 In addition, to be determined to be a “small business,” the entity may not be dominant in its field of operation.89 We note that it is difficult at times to assess these criteria in the context of media entities, and our estimate of small businesses may therefore be over-inclusive.

88 “Concerns and entities are affiliates of each other when one controls or has the power to control the other, or a third party or parties controls or has the power to control both. It does not matter whether control is exercised, so long as the power to control exists.” 13 CFR 121.103(a)(1) (an SBA regulation).

89 13 CFR 121.102(b) (an SBA regulation).

20. Cable Television and Other Subscription Programming. This industry comprises establishments primarily engaged in operating studios and facilities for the broadcasting of programs on a subscription or fee basis. The broadcast programming is typically narrowcast in nature (e.g., limited format, such as news, sports, education, or youth-oriented). These establishments produce programming in their own facilities or acquire programming from external sources. The programming material is usually delivered to a third party, such as cable systems or direct-to-home satellite systems, for transmission to viewers.90 The SBA has established a size standard for this industry of $38.5 million or less. Census data for 2012 shows that there were 367 firms that operated that year. Of this total, 319 operated with annual receipts of less than $25 million.91 Thus under this size standard, most firms offering cable and other program distribution services can be considered small and may be affected by rules adopted.

90https://www.census.gov.cgi-bin/sssd/naics/naicsrch.

91http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US-51SSSZ5&prodType=Table.

21. Cable Companies and Systems. The Commission has developed its own small business size standards for the purpose of cable rate regulation. Under the Commission's rules, a “small cable company” is one serving 400,000 or fewer subscribers nationwide.92 Industry data indicate that there are currently 4,413 active cable systems in the United States.93 Of this total, all but ten cable operators nationwide are small under the 400,000-subscriber size standard.94 In addition, under the Commission's rate regulation rules, a “small system” is a cable system serving 15,000 or fewer subscribers.95 Current Commission records show 4,413 cable systems nationwide.96 Of this total, 3,900 cable systems have fewer than 15,000 subscribers, and 700 systems have 15,000 or more subscribers, based on the same records.97 Thus, under this standard as well, we estimate that most cable systems are small entities.

92 47 CFR 76.901(e).

93See Eighteenth Competition Report, 32 FCC Rcd at 584, para. 39 (citing the Commission's Cable Operations and Licensing Systems (COALS) database).

94See https://www.snl.com/web/client?auth=inherit#industry/topCableMSOs (last visited July 18, 2017).

95 47 CFR 76.901(c).

96See footnote 2, supra.

97 August 5, 2015 report from the Media Bureau based on its research in COALS. See www.fcc.gov/coals.

22. Cable System Operators (Telecom Act Standard). The Communications Act also contains a size standard for small cable system operators, which is “a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.” 98 There are approximately 53 million cable video subscribers in the United States today.99 Accordingly, an operator serving fewer than 524,037 subscribers shall be deemed a small operator if its annual revenues, when combined with the total annual revenues of all its affiliates, do not exceed $250 million in the aggregate.100 Based on available data, we find that all but nine incumbent cable operators are small entities under this size standard.101 We note that the Commission neither requests nor collects information on whether cable system operators are affiliated with entities whose gross annual revenues exceed $250 million.102 Although it seems certain that some of these cable system operators are affiliated with entities whose gross annual revenues exceed $250 million, we are unable at this time to estimate with greater precision the number of cable system operators that would qualify as small cable operators under the definition in the Communications Act.

98 47 CFR 76.901 (f) and notes ff. 1, 2, and 3.

99See NCTA Industry Data, Cable's Customer Base, available at https://www.ncta.com/industry-data (last visited July 6, 2017).

100 47 CFR 76.901(f) and notes ff. 1, 2, and 3.

101See https://www.snl.com/web/client?auth=inherit#industry/topCableMSOs (last visited July 18, 2018).

102 The Commission does receive such information on a case-by-case basis if a cable operator appeals a local franchise authority's finding that the operator does not qualify as a small cable operator pursuant to section 76.901(f) of the Commission's rules. See 47 CFR 76.901(f).

23. Direct Broadcast Satellite (DBS) Service. DBS Service is a nationally distributed subscription service that delivers video and audio programming via satellite to a small parabolic dish antenna at the subscriber's location. DBS is now included in SBA's economic census category “Wired Telecommunications Carriers.” The Wired Telecommunications Carriers industry comprises establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired telecommunications networks. Transmission facilities may be based on a single technology or combination of technologies. Establishments in this industry use the wired telecommunications network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP services, wired (cable) audio and video programming distribution; and wired broadband internet services. By exception, establishments providing satellite television distribution services using facilities and infrastructure that they operate are included in this industry.103 The SBA determines that a wireline business is small if it has fewer than 1500 employees.104 Census data for 2012 indicate that 3,117 wireline companies were operational during that year. Of that number, 3,083 operated with fewer than 1,000 employees.105 Based on that data, we conclude that most wireline firms are small under the applicable standard. However, currently only two entities provide DBS service, AT&T and DISH Network. AT&T and DISH Network each report annual revenues that are in excess of the threshold for a small business. Accordingly, we conclude that DBS service is provided only by large firms.

103http://www.census.gov/cgi-bin/sssd/naics/naicsrch.

104 NAICS code 517110; 13 CFR 121.201.

105http://factfinder.census.gov/faces/tableservices.jasf/pages/productview.xhtml?pid+ECN_2012_US.51SSSZ4&prodType=table.

24. All Other Telecommunications. “All Other Telecommunications” is defined as follows: This U.S. industry is comprised of establishments that are primarily engaged in providing specialized telecommunications services, such as satellite tracking, communications telemetry, and radar station operation. This industry also includes establishments primarily engaged in providing satellite terminal stations and associated facilities connected with one or more terrestrial systems and capable of transmitting telecommunications to, and receiving telecommunications from, satellite systems. Establishments providing internet services or voice over internet protocol (VoIP) services via client-supplied telecommunications connections are also included in this industry.106 The SBA has developed a small business size standard for “All Other Telecommunications,” which consists of all such firms with gross annual receipts of $32.5 million or less.107 For this category, census data for 2012 show that there were 1,442 firms that operated for the entire year. Of these firms, a total of 1,400 had gross annual receipts of less than $25 million.108 Thus, most “All Other Telecommunications” firms potentially affected by the rules adopted can be considered small.

106http://www.census.gov/cgi-bin/ssssd/naics/naicsrch.

107 13 CFR 121.201; NAICS code 517919.

108http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ4&prodType=table.

25. RespOrgs. RespOrgs, i.e., Responsible Organizations, are entities chosen by toll-free subscribers to manage and administer the appropriate records in the toll-free Service Management System for the toll-free subscriber.109 Although RespOrgs are often wireline carriers, they can also include non-carrier entities. Therefore, in the definition herein of RespOrgs, two categories are presented, i.e., Carrier RespOrgs and Non-Carrier RespOrgs.

109See 47 CFR 52.101(b).

26. Carrier RespOrgs. Neither the Commission, the U.S. Census, nor the SBA have developed a definition for Carrier RespOrgs. Accordingly, the Commission believes that the closest NAICS code-based definitional categories for Carrier RespOrgs are Wired Telecommunications Carriers110 and Wireless Telecommunications Carriers (except satellite).111

110 13 CFR 121.201, NAICS code 517110.

111 13 CFR 121.201, NAICS code 517210.

27. The U.S. Census Bureau defines Wired Telecommunications Carriers as establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired communications networks. Transmission facilities may be based on a single technology or a combination of technologies. Establishments in this industry use the wired telecommunications network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP services, wired (cable) audio and video programming distribution, and wired broadband internet services. By exception, establishments providing satellite television distribution services using facilities and infrastructure that they operate are included in this industry.112 The SBA has developed a small business size standard for Wired Telecommunications Carriers, which consists of all such companies having 1,500 or fewer employees.113 Census data for 2012 show that there were 3,117 Wired Telecommunications Carrier firms that operated for that entire year. Of that number, 3,083 operated with less than 1,000 employees.114 Based on that data, we conclude that most Carrier RespOrgs that operated with wireline-based technology are small.

112http://www.census.gov/cgi-bin/sssd/naics.naicsrch.

113 13 CFR 120,201, NAICS code 517110.

114http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ4&prodType=table.

28. The U.S. Census Bureau defines Wireless Telecommunications Carriers (except satellite) as establishments engaged in operating and maintaining switching and transmission facilities to provide communications via the airwaves, such as cellular services, paging services, wireless internet access, and wireless video services.115 The appropriate size standard under SBA rules is that such a business is small if it has 1,500 or fewer employees.116 Census data for 2012 show that 967 Wireless Telecommunications Carriers operated in that year. Of that number, 955 operated with less than 1,000 employees.117 Based on that data, we conclude that most Carrier RespOrgs that operated with wireless-based technology are small.

115http://www.census.gov/cgi-bin/sssd/naics.naicsrch.

116 13 CFR 120.201, NAICS code 517120.

117http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ4&prodType=table.

29. Non-Carrier RespOrgs. Neither the Commission, the Census, nor the SBA have developed a definition of Non-Carrier RespOrgs. Accordingly, the Commission believes that the closest NAICS code-based definitional categories for Non-Carrier RespOrgs are “Other Services Related To Advertising” 118 and “Other Management Consulting Services.” 119

118 13 CFR 120.201, NAICS code 541890.

119 13 CFR 120.201, NAICS code 541618.

30. The U.S. Census defines Other Services Related to Advertising as comprising establishments primarily engaged in providing advertising services (except advertising agency services, public relations agency services, media buying agency services, media representative services, display advertising services, direct mail advertising services, advertising material distribution services, and marketing consulting services.120 The SBA has established a size standard for this industry as annual receipts of $15 million dollars or less.121 Census data for 2012 show that 5,804 firms operated in this industry for the entire year. Of that number, 5,249 operated with annual receipts of less than $10 million.122 Based on that data we conclude that most Non-Carrier RespOrgs who provide TFN-related advertising services are small.

120http://www.census.gov/cgi-bin/sssd/naics.naicsrch.

121 13 CFR 120.201, NAICS code 541890.

122http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ4&prodType=table.

31. The U.S. Census defines Other Management Consulting Services as establishments primarily engaged in providing management consulting services (except administrative and general management consulting; human resources consulting; marketing consulting; or process, physical distribution, and logistics consulting). Establishments providing telecommunications or utilities management consulting services are included in this industry.123 The SBA has established a size standard for this industry of $15 million dollars or less.124 Census data for 2012 show that 3,683 firms operated in this industry for that entire year. Of that number, 3,632 operated with less than $10 million in annual receipts.125 Based on this data, we conclude that most non-carrier RespOrgs who provide TFN-related management consulting services are small.126

123http://www.census.gov/cgi-bin/sssd/naics.naicsrch.

124 13 CFR 120.201, NAICS code 514618.

125http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ4&prodType=table.

126 The four NAICS code-based categories selected above to provide definitions for Carrier and Non-Carrier RespOrgs were selected because as a group they refer generically and comprehensively to all RespOrgs. Therefore, all RespOrgs, including those not identified specifically or individually, must comply with the rules adopted in the Regulatory Fees Report and Order associated with this Final Regulatory Flexibility Analysis.

32. In addition to the data contained in the four (see above) U.S. Census NAICS code categories that provide definitions of what services and functions the Carrier and Non-Carrier RespOrgs provide, Somos, the trade association that monitors RespOrg activities, compiled data showing that as of July 1, 2016, there were 23 RespOrgs operational in Canada and 436 RespOrgs operational in the United States, for a total of 459 RespOrgs currently registered with Somos.127

127 Email from Jennifer Blanchard, Somos, July 1, 2016.

D. Description of Projected Reporting, Recordkeeping and Other Compliance Requirements

33. This Report and Order does not adopt any new reporting, recordkeeping, or other compliance requirements.

E. Steps Taken To Minimize Significant Economic Impact on Small Entities, and Significant Alternatives Considered

34. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its approach, which may include the following four alternatives, among others: (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.128

128 5 U.S.C. 603(c)(1)-(c)(4).

35. This Report and Order adopts new tiers in assessing regulatory fees for submarine cable systems. There should not be a significant impact on small entities because the fee is based on the number of systems and would therefore reflect the size of the entity. In keeping with the requirements of the Regulatory Flexibility Act, we have considered certain alternative means of mitigating the effects of fee increases to a particular industry segment. For example, the Commission has increased the de minimis threshold to $1,000, which will impact many small entities that pay regulatory fees. This increase in the de minimis threshold to $1,000 will relieve regulatees both financially and administratively. Regulatees may also seek waivers or other relief on the basis of financial hardship. See 47 CFR 1.1166.

F. Federal Rules That May Duplicate, Overlap, or Conflict

None.

V. Ordering Clause

36. Accordingly, it is ordered that, pursuant to Section 9(a), (b), (e), (f), and (g) of the Communications Act of 1934, as amended, 47 U.S.C. 159(a), (b), (e), (f), and (g), this Report and Order is hereby adopted.

Federal Communications Commission. Marlene Dortch, Secretary.
[FR Doc. 2018-15651 Filed 7-27-18; 8:45 am] BILLING CODE 6712-01-P
FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 63 [GN Docket No. 13-5; RM-11358; FCC 16-90] Technology Transitions; Policies and Rules Governing Retirement of Copper Loops by Incumbent Local Exchange Carriers AGENCY:

Federal Communications Commission.

ACTION:

Final rule; announcement of effective date.

SUMMARY:

In this document, the Commission announces that the Office of Management and Budget (OMB) has approved, for a period of three years, the information collection associated with the Commission's discontinuance rules. This document is consistent with the Technology Transitions et al. Declaratory Ruling, Second Report and Order, and Order on Reconsideration, FCC 16-90, which stated that the Commission would publish a document in the Federal Register announcing the effective date of those rules.

DATES:

The amendments to 47 CFR 63.19(a), 63.60(h), 63.71(a)(6)-(7), (f), (h), and 63.602, published at 81 FR 62632, September 12, 2016, are effective on July 30, 2018.

FOR FURTHER INFORMATION CONTACT:

Michele Levy Berlove, Attorney Advisor, Wireline Competition Bureau, at (202) 418-1477, or by email at [email protected] For additional information concerning the Paperwork Reduction Act information collection requirements, contact Nicole Ongele at (202) 418-2991 or [email protected]

SUPPLEMENTARY INFORMATION:

This document announces that, on July 2, 2018, OMB approved, for a period of three years, the information collection requirements relating to certain discontinuance rules contained in the Commission's Technology Transitions et al. Declaratory Ruling, Second Report and Order, and Order on Reconsideration, FCC 16-90, published at 81 FR 62632, September 12, 2016, as specified above.

The OMB Control Number is 3060-0149. The Commission publishes this document as an announcement of the effective date of the rules. If you have any comments on the burden estimates listed below, or how the Commission can improve the collections and reduce any burdens caused thereby, please contact Nicole Ongele, Federal Communications Commission, Room 1-A620, 445 12th Street SW, Washington, DC 20554. Please include the OMB Control Number, 3060-0149, in your correspondence. The Commission will also accept your comments via email at [email protected]

To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to [email protected] or call the Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

Synopsis

As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), the FCC is notifying the public that it received final OMB approval on July 2, 2018, for the information collection requirements contained in the modifications to the Commission's rules in 47 CFR part 63. Under 5 CFR part 1320, an agency may not conduct or sponsor a collection of information unless it displays a current, valid OMB Control Number.

No person shall be subject to any penalty for failing to comply with a collection of information subject to the Paperwork Reduction Act that does not display a current, valid OMB Control Number. The OMB Control Number is 3060-0149.

The foregoing notice is required by the Paperwork Reduction Act of 1995, Public Law 104-13, October 1, 1995, and 44 U.S.C. 3507.

The total annual reporting burdens and costs for the respondents are as follows:

OMB Control Number: 3060-0149.

OMB Approval Date: July 2, 2018.

OMB Expiration Date: July 31, 2021.

Title: Part 63, Application and Supplemental Information Requirement, Technology Transitions, GN Docket No. 13-5, et al.

Form Number: N/A.

Respondents: Business or other for-profit entities.

Number of Respondents and Responses: 63 respondents; 83 responses.

Estimated Time per Response: 5.3 hours.

Frequency of Response: One-time reporting requirement and third-party disclosure requirements.

Obligation to Respond: Required to obtain or retain benefits. Statutory authority for this collection of information is contained in 47 U.S.C. 214 and 402 of the Communications Act of 1934, as amended.

Total Annual Burden: 1,923 hours.

Total Annual Cost: $27,900.

Privacy Act Impact Assessment: No impact(s).

Nature and Extent of Confidentiality: The Commission is not requesting that the respondents submit confidential information to the FCC. Respondents may, however, request confidential treatment for information they believe to be confidential under 47 CFR 0.459 of the Commission's rules.

Needs and Uses: The Commission is seeking Office of Management and Budget (OMB) approval for a revision of a currently approved collection. The Commission will submit this information collection after this 60-day comment period. Section 214 of the Communications Act of 1934, as amended, requires that a carrier must first obtain FCC authorization either to (1) construct, operate, or engage in transmission over a line of communications; or (2) discontinue, reduce or impair service over a line of communications. Part 63 of Title 47 of the Code of Federal Regulations (CFR) implements Section 214. Part 63 also implements provisions of the Cable Communications Policy Act of 1984 pertaining to video which was approved under this OMB Control Number 3060-0149. In 2009, the Commission modified Part 63 to extend to providers of interconnected Voice of internet Protocol (VoIP) service the discontinuance obligations that apply to domestic non-dominant telecommunications carriers under Section 214 of the Communications Act of 1934, as amended. In 2014, the Commission adopted improved administrative filing procedures for domestic transfers of control, domestic discontinuances and notices of network changes, and among other adjustments, modified Part 63 to require electronic filing for applications for authorization to discontinue, reduce, or impair service under section 214(a) of the Act. In July 2016, the Commission concluded that applicants seeking to discontinue a legacy time division multiplexing (TDM)-based voice service as part of a transition to a new technology, whether internet Protocol (IP), wireless, or another type (technology transition discontinuance application) must demonstrate that an adequate replacement for the legacy service exists in order to be eligible for streamlined treatment and revised part 63 accordingly. For any other domestic service for which a discontinuance application is filed, the existing framework governs automatic grant procedures. Unlike traditional applicants, technology transition discontinuance applicants seeking streamlined treatment will be required to submit with their application either a certification or a showing as to whether an “adequate replacement” exists in the service area. Voice technology transition discontinuance applicants that decline to pursue this path are not eligible for streamlined treatment and will have their applications evaluated on a non-streamlined basis under the traditional five factor test. The Commission concluded that an applicant for a technology transition discontinuance may demonstrate that a service is an adequate replacement for a legacy voice service by certifying or showing that one or more replacement service(s) offers all of the following: (i) Substantially similar levels of network infrastructure and service quality as the applicant service; (ii) compliance with existing federal and/or industry standards required to ensure that critical applications such as 911, network security, and applications for individuals with disabilities remain available; and (iii) interoperability and compatibility with an enumerated list of applications and functionalities determined to be key to consumers and competitors. One replacement service must satisfy all the criteria to retain eligibility for automatic grant. The Commission also determined that information about the price of the legacy service and the proposed replacement service should be provided as part of the application. To reduce burdens on carriers, the Commission (1) adopted a more streamlined approach for legacy voice discontinuances involving services that are substantially similar to those for which a Section 214 discontinuance meeting the adequate replacement criteria has previously been approved, and (2) now allows Section 214 discontinuance applications to be eligible for automatic grant if the applicant seeks to discontinue a legacy voice service operating at speeds lower than 1.544 Mbps that either has zero customers in the relevant service area and no requests for service in the last 30 days, or if the applicant plans to grandfather existing customers of the service while ceasing to accept new customers. The Commission estimates that there will be five respondents submitting 25 applications/responses related to these revisions. The Commission also estimates that these revisions will result in a total of 1,575 annual burden hours and a total annual cost of $27,900. The Commission estimates that the total annual burden and annual cost of the entire collection, as revised, is 1,923 and $27,900, respectively.

Federal Communications Commission. Marlene Dortch, Secretary, Office of the Secretary.
[FR Doc. 2018-16198 Filed 7-27-18; 8:45 am] BILLING CODE 6712-01-P
DEPARTMENT OF THE INTERIOR Fish and Wildlife Service 50 CFR Chapter I [Docket No. FWS-HQ-ES-2015-0165; FXES11140900000-178; FF09E33000] Endangered and Threatened Wildlife and Plants; Endangered Species Act Compensatory Mitigation Policy AGENCY:

Fish and Wildlife Service, Interior.

ACTION:

Policy; withdrawal.

SUMMARY:

We, the U.S. Fish and Wildlife Service (Service), announce we are withdrawing the Endangered Species Act (ESA) Compensatory Mitigation Policy, published December 27, 2016 (ESA-CMP). In our document of November 6, 2017 we requested additional public comments regarding the policy's overall mitigation planning goal of net conservation gain. We are now withdrawing this policy. The Service does not have authority to require “net conservation gain” under the ESA, and the policy is inconsistent with current Executive branch policy. Except as otherwise specified, all policies or guidance documents that were superseded by ESA-CMP are reinstated.

DATES:

Withdrawal effective on July 30, 2018.

ADDRESSES:

Comments and materials received, as well as supporting documentation, are available on the internet at http://www.regulations.gov at Docket Number FWS-HQ-ES-2015-0165.

FOR FURTHER INFORMATION CONTACT:

Craig Aubrey, U.S. Fish and Wildlife Service, Division of Environmental Review, 5275 Leesburg Pike, Falls Church, VA 22041-3803, telephone 703-358-2442.

SUPPLEMENTARY INFORMATION:

The ESA-CMP (81 FR 95316, December 27, 2016) was developed to ensure consistency with existing directives in effect at the time of issuance, including former President Obama's Memorandum on Mitigating Impacts on Natural Resources From Development and Encouraging Related Private Investment (November 3, 2015). Under the memorandum, all Federal mitigation policies were directed to clearly set a net-benefit goal or, at minimum, a no-net-loss goal for natural resources, wherever doing so is allowed by existing statutory authority and is consistent with agency mission and established natural resource objectives. The Presidential Memorandum was subsequently rescinded by Executive Order 13783, “Promoting Energy Independence and Economic Growth” (March 28, 2017).

The ESA-CMP also described its consistency with the Secretary of the Interior's Order 3330 on Improving Mitigation Policies and Practices of the Department of the Interior (October 31, 2013), which established a Department-wide mitigation strategy to ensure consistency and efficiency in the review and permitting of infrastructure-development projects and in conserving natural and cultural resources. The Secretary's Order was subsequently revoked by Secretary of the Interior's Order 3349 on American Energy Independence (March 29, 2017). It directed Department of the Interior bureaus to reexamine mitigation policies and practices to better balance conservation strategies and policies with job creation for American families.

In light of the revocation of the 2015 Presidential Memorandum and Secretary's Order 3330, on November 6, 2017, the Service requested comment on the ESA-CMP, along with the Service-Wide Mitigation Policy (81 FR 83440, November 21, 2016), specifically “regarding whether to retain or remove net conservation gain as a mitigation planning goal within our mitigation policies.” Mitigation Policies of the U.S. Fish and Wildlife Service; Request for Comment (82 FR 51382, 51383, November 6, 2017). The comment period for this request ended on January 5, 2018.

Under Supreme Court precedent, the Takings Clause of the Fifth Amendment of the United States Constitution limits the ability of government to require monetary exactions as a condition of permitting private activities, particularly private activities on private property. In Koontz v. St. Johns River Water Management District, 570 U.S. 595 (2013), the Supreme Court held that a proposal to fund offsite mitigation proposed by the State of Florida as a condition of granting a land-use permit must satisfy the test established in Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994). Specifically, “a unit of government may not condition the approval of a land-use permit on the owner's relinquishment of a portion of his property unless there is a `nexus' and `rough proportionality' between the government's demand and the effects of the proposed land use.” Id. at 599. Compensatory mitigation raises serious questions of whether there is a sufficient nexus between the potential harm and the proposed remedy to satisfy constitutional muster.

Further, because by definition compensatory mitigation does not directly avoid or minimize the anticipated harm, its application is particularly ripe for abuse. At times the nexus between a proposed undertaking and compensatory mitigation requirements is far from clear. These concerns are particularly acute when coupled with a net conservation gain goal, which necessarily seeks to go beyond mitigating actual or anticipated harm to forcing participants to pay to address harms they, by definition, did not cause.

In light of the change in national policy reflected in Executive Order 13783 and Secretary's Order 3349, the comments received by the Service, and concerns regarding the legal and policy implications of a net conservation gain goal, the Service has concluded that it is no longer appropriate to retain a net conservation gain standard in the Service's overall mitigation planning goal within the ESA-CMP. Because the net conservation gain standard is so prevalent throughout the ESA-CMP, the Service is implementing this conclusion by withdrawing it.

Summary of Comments and Responses

Executive Order 13783—“Promoting Energy Independence and Economic Growth” (March 28, 2017)—rescinded the Presidential Memorandum on Mitigating Impacts on Natural Resources from Development and Encouraging Related Private Investment. The Secretary of the Interior subsequently issued Secretarial Order 3349 on American Energy Independence (March 29, 2017), which directed Department of the Interior (DOI) bureaus to reexamine mitigation policies and practices to better balance conservation strategies and policies with job creation for American families. Pursuant to Secretarial Order 3349, we published a notice on November 6, 2017 (82 FR 51382) requesting additional public comments specifically addressing the advisability of retaining or removing references to net conservation gain as a mitigation planning goal within our mitigation policies. In addition, in carrying out Executive Order 13777, “Enforcing the Regulatory Reform Agenda,” DOI published a document with the title “Regulatory Reform” in the Federal Register of June 22, 2017 (82 FR 28429). The document requested public comment on how DOI can improve implementation of regulatory reform initiatives and policies and identify regulations for repeal, replacement, or modification. This notice addresses comments that DOI has received in response to the regulatory reform docket that relates to the Service's use of mitigation.

During the combined comment periods, for the ESA-CMP we received approximately 335 public comment letters, including comments from Federal, State, and local government entities; industry; trade associations; conservation organizations; nongovernmental organizations; private citizens; and others. The range of comments varied from those that provided general statements of support or opposition to the draft and final 2016 ESA-CMP, to those that provided extensive comments and information supporting or opposing the draft and final 2016 ESA-CMP.

We considered all of the comments we received in the comment period beginning November 6, 2017 (82 FR 51382), and following the DOI's “Regulatory Reform” Federal Register announcement (June 22, 2017, 82 FR 28429); we respond to the substantive comments below.

A. Authority To Include Net Conservation Gain or No Net Loss Under the ESA

Comment (1): One commenter stated there were constitutional limits on requiring mitigation, referencing the Koontz v. St. Johns River Water Management District case decided by the U.S. Supreme Court, 570 U.S. 595 (2013). This commenter noted that any compensatory mitigation measures must have an essential nexus with the proposed impacts and be roughly proportional, or have a reasonable relationship between the permit conditions required and the impacts of the proposed development being addressed by those permit conditions.

Response: The Service agrees that the Koontz case, as well as predecessor cases including, but not limited to, Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994), raise serious constitutional concerns about the viability of some elements of compensatory-mitigation programs. These concerns are particularly acute for offsite compensatory-mitigation programs and programs that seek a net conservation gain. Offsite compensatory-mitigation programs raise concerns regarding an appropriate nexus between the anticipated impact and the mitigation requirement. As mitigation moves further away from the direct impacts of a project, the risk that the connection between required compensation and the initial project becomes more attenuated increases. Further, by seeking to err on the side of mitigating above and beyond the impacts of the specific project at issue, the net conservation gain standard raises inherent concerns about proportionality, as well as the appropriate nexus between project impacts and mitigation methods, particularly where mitigation is in essence being used to rectify past, unrelated harms. We, like all agencies, must implement our authorities consistent with any applicable case law as appropriate. Consideration of the Constitutional standard set forth in Koontz is one reason, though not the only reason, that the Service is withdrawing its previous Mitigation Policy and ESA-CMP. In light of the Koontz case and any other relevant court decisions, the Service, in using its previous guidance (e.g., 2003 guidance on the establishment, use, and operation of conservation banks (68 FR 24753, May 8, 2003) and 2008 recovery crediting guidance (73 FR 44761, July 31, 2008)), will make sure that any statutorily authorized mitigation measures will have a clear connection (i.e., have an essential nexus) and be commensurate (i.e., have rough proportionality) to the impact of the project or action under consideration.

Comment (2): Many commenters addressed the mitigation planning goal of improving (i.e., a net gain) or, at minimum, maintaining (i.e., no net loss) the current status of affected resources. A number of commenters supported the goal while a number of commenters opposed the inclusion of a net conservation gain. Of commenters opposed to net conservation gain, their specific reasons included:

(a) The Service lacks the statutory authority to implement the net conservation gain goal for mitigation planning;

(b) the net conservation gain goal imposes a new standard for mitigation and that mitigation requirements should be commensurate with the level of impacts;

(c) concern about the costs associated with achieving net conservation gain;

(d) questions about the ability to achieve net conservation gain and how it would be measured;

(e) the ESA-CMP does not provide the methodology to assess or measure the net conservation gain; and

(f) net conservation gain is incompatible with the standards of ESA sections 7 and 10.

Also, several commenters asserted that a mitigation planning goal of no net loss is inconsistent with the ESA and exceeds our authorities under the ESA.

Response: The ESA requires neither “net conservation benefit” nor “no net loss,” and the Service has not previous required a “net benefit” nor “no net loss” while implementing the ESA. Under the ESA, the standard for section 7 is that a “Federal agency shall, in consultation with and with the assistance of the Secretary, insure that any action . . . is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of habitat.” (§ 7(a)(2)); under section 10 the requirement is “to the maximum extent practicable, minimize and mitigate the impacts of such taking” (§ 10(a)(2)(B)(ii)). As one court has noted, “[t]he words `maximum extent practicable' signify that the applicant may do something less than fully minimize and mitigate the impacts of the take where to do more would not be practicable. Moreover, the statutory language does not suggest that an applicant must ever do more than mitigate the effect of its take of species.” National Wildlife Federation v. Norton, 306 F. Supp. 2d 920, 928 (E.D. Cal. 2004); see also Union Neighbors United, Inc. v. Jewell, 831 F.3d 564 (D.C. Cir. 2016) (holding that the obligation to minimize and mitigate to the maximum extent practicable was satisfied by a plan that the Service found to fully offset the impact of the proposed taking). Since what is “practicable” may not fully offset proposed take, the “maximum extent practicable” standard is inconsistent with both a general net conservation gain and no-net-loss mitigation objective. Nothing in the ESA requires that the Service apply a net conservation gain or no net loss standard.

Those commenters supporting the goal generally asserted, among other points, that the Service has the authority to require compensatory mitigation, found the measures to be clear, and thought the policy encouraged consistent implementation. While we appreciate these comments, for the reasons described above, we are not persuaded.

As noted above, because the concepts of “net conservation gain” and “no net loss” were central to and embedded throughout the policies, modifying the policies would likely have caused significant confusion. This fact, together with the more recently issued Executive and Secretarial Orders that questioned “net gain,” lead to our decision here to withdraw the ESA-CMP.

B. Landscape-Scale Approach

Comment (3): Several commenters described their concerns with the implications of the ESA-CMP's landscape-scale approach including:

(a) There is no statutory authority for taking a landscape-scale approach;

(b) Including a landscape-scale approach would lead to the Service seeking mitigation for impacts beyond a project under review, including impacts that happened in the past or in unrelated locations;

(c) A general concern that a landscape-scale approach would mean Federal overreach, including disregard for the plans, processes, and resource interests of States, Tribes, and local governments.

Response: We agree with commenters that proponents' and action agencies' responsibilities include the provisions of relevant authorities and that those responsibilities do not extend to impacts unrelated to their action. Requiring mitigation to impacts unrelated to a proponent's action would likely conflict with the “essential nexus” required under Koontz for property development (see Comment 1 above). Accordingly, any effort to apply a landscape-scale approach to mitigation must ensure that there is an essential nexus between the proposed activity and the contemplated mitigation and that mitigation is not being imposed to correct for past impacts by other actors.

C. Authority To Include Candidate or At-Risk Species

Comment (4): Several commenters stated that the Service has no statutory authority under the ESA to include candidate or at-risk species in compensatory-mitigation mechanisms.

Response: The commenter is correct that the Service cannot require the inclusion of compensatory mitigation for impacts to at-risk and candidate species. Including candidate or other at-risk species in mitigation would be voluntary on the part of the Federal agency or applicant, which may, if the species is listed, streamline future reinitiation of consultation or amendments to habitat conservation plans (HCPs). Under section 10 of the ESA, although the applicant voluntarily develops its HCPs in consultation with the Service, the applicant ultimately decides which candidate or non-listed at-risk species it desires to include in its HCP. Many applicants voluntarily include at-risk species in their HCPs to receive “no surprises” assurances and preclude the need to amend the associated incidental take permit, should the species become listed in the future. This is consistent with ESA goals of recovering listed species and, ideally, avoiding the need to list species because threats to them have been addressed. Furthermore, applicants may include candidate or other at-risk species to address State or other local requirements (e.g., California's Natural Community Conservation Planning Act). But in all cases, considerations of non-ESA-listed species are voluntary on the part of the Federal agency or applicant.

National Environmental Policy Act (NEPA)

We have analyzed the withdrawal of this policy in accordance with the criteria of the National Environmental Policy Act, as amended (NEPA) (42 U.S.C. 4332(c)), the Council on Environmental Quality's Regulations for Implementing the Procedural Provisions of NEPA (40 CFR parts 1500-1508), and the Department of the Interior's NEPA procedures (516 DM 2 and 8; 43 CFR part 46). Issuance of policies, directives, regulations, and guidelines that are of an administrative, financial, legal, technical, or procedural nature, or whose environmental effects are too broad, speculative, or conjectural to lend themselves to meaningful analysis and will later be subject to the NEPA process, either collectively or case-by-case may be categorically excluded under NEPA (43 CFR 46.210(i)). We have determined that a categorical exclusion applies to withdrawing this policy.

Paperwork Reduction Act of 1995

This policy withdrawal does not contain any new collections of information that require approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). OMB has reviewed and approved the information collection requirements for applications for incidental take permits, annual reports, and notifications of incidental take for native endangered and threatened species for safe harbor agreements, candidate conservation agreements with assurances, and habitat conservation plans under OMB Control Number 1018-0094, which expires on March 31, 2019. We 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.

Government-to-Government Relationship With Tribes

In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951), Executive Order 13175 “Consultation and Coordination with Indian Tribal Governments,” and the Department of the Interior Manual at 512 DM 2, we have considered possible effects on federally recognized Indian tribes and have determined that there are no potential adverse effects of withdrawing this policy. Our intent with withdrawing these policies is to reduce confusion of mitigation programs, projects, and measures, including those taken on Tribal lands. We will work with Tribes as applicants proposing mitigation as part of proposed actions and with Tribes as mitigation sponsors.

Authority

The multiple authorities for this action include the: Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq.); Fish and Wildlife Coordination Act, as amended, (16 U.S.C. 661-667(e)); and National Environmental Policy Act (42 U.S.C. 4371 et seq.).

Dated: July 24, 2018. Gregory J. Sheehan, Principal Deputy Director, U.S. Fish and Wildlife Service.
[FR Doc. 2018-16171 Filed 7-27-18; 8:45 am] BILLING CODE 4333-15-P
DEPARTMENT OF THE INTERIOR Fish and Wildlife Service 50 CFR Chapter I [Docket No. FWS-HQ-ES-2015-0126]; [FXHC11220900000-156-FF09E33000] U.S. Fish and Wildlife Service Mitigation Policy AGENCY:

Fish and Wildlife Service, Interior.

ACTION:

Policy; withdrawal.

SUMMARY:

We, the U.S. Fish and Wildlife Service (Service), announce we are withdrawing the Mitigation Policy published November 21, 2016, which guides Service recommendations on mitigating the adverse impacts of land and water developments on fish, wildlife, plants, and their habitats. In our document of November 6, 2017, we requested additional public comments regarding this policy's overall mitigation planning goal of net conservation gain. We are now withdrawing this policy as it is no longer appropriate to retain the “net conservation gain” standard throughout various Service-related activities and is inconsistent with current Executive branch policy. Until further notice, all policies that were superseded by the 2016 Mitigation Policy are reinstated, including the Fish and Wildlife Service Mitigation Policy (46 FR 7644-7663) published in the Federal Register on January 23, 1981.

DATES:

Withdrawal effective on July 30, 2018.

ADDRESSES:

Comments and materials received, as well as supporting documentation, are available on the internet at http://www.regulations.gov at Docket Number FWS-HQ-ES-2015-0126.

FOR FURTHER INFORMATION CONTACT:

Craig Aubrey, U.S. Fish and Wildlife Service, Division of Environmental Review, 5275 Leesburg Pike, Falls Church, VA 22041-3803, telephone 703-358-2442.

SUPPLEMENTARY INFORMATION:

The Mitigation Policy (81 FR 83440, November 21, 2016) was developed to ensure consistency with directives in effect at the time of issuance, including former President Obama's Memorandum on Mitigating Impacts on Natural Resources From Development and Encouraging Related Private Investment (November 3, 2015). Under the memorandum, all Federal mitigation policies were directed to clearly set a net-benefit goal or, at minimum, a no-net-loss goal for natural resources, wherever doing so is allowed by existing statutory authority and is consistent with agency mission and established natural resource objectives. The Presidential Memorandum was subsequently rescinded by Executive Order 13783, “Promoting Energy Independence and Economic Growth” (March 28, 2017).

The Mitigation Policy also described its consistency with the Secretary of the Interior's Order 3330 on Improving Mitigation Policies and Practices of the Department of the Interior (October 31, 2013), which established a Department-wide mitigation strategy to ensure consistency and efficiency in the review and permitting of infrastructure-development projects and in conserving natural and cultural resources. The Secretary's Order was subsequently revoked by Secretary of the Interior's Order 3349 on American Energy Independence (March 29, 2017). It directed Department of the Interior bureaus to reexamine mitigation policies and practices to better balance conservation strategies and policies with job creation for American families.

In light of the revocation of the 2015 Presidential Memorandum and Secretary's Order 3330, on November 6, 2017, the Service requested comment on the Mitigation Policy, as well as the Endangered Species Act—Compensatory Mitigation Policy (81 FR 95316, December 27, 2016), specifically “regarding whether to retain or remove net conservation gain as a mitigation planning goal within our mitigation policies.” Mitigation Policies of the U.S. Fish and Wildlife Service; Request for Comment (82 FR 51382, 51383, November 6, 2017). The comment period for this request ended on January 5, 2018.

Under Supreme Court precedent, the Takings Clause of the Fifth Amendment of the United States Constitution limits the ability of government to require monetary exactions as a condition of permitting private activities, particularly private activities on private property. In Koontz v. St. Johns River Water Management District, 570 U.S. 595 (2013), the Supreme Court held that a proposal to fund offsite mitigation proposed by the State of Florida as a condition of granting a land-use permit must satisfy the test established in Nollan v. California Coastal Commission, 483 U.S. 825 (1987) and Dolan v. City of Tigard, 512 U.S. 374 (1994). Specifically, “a unit of government may not condition the approval of a land-use permit on the owner's relinquishment of a portion of his property unless there is a `nexus' and `rough proportionality' between the government's demand and the effects of the proposed land use.” Id. at 599.

Compensatory mitigation requirements in particular raise serious questions of whether there is a sufficient nexus between the potential harm and the proposed remedy to satisfy constitutional muster. Further, because by definition compensatory mitigation does not directly avoid or minimize the anticipated harm, its application is particularly ripe for abuse. These concerns are particularly acute when coupled with a net conservation gain standard, which necessarily goes beyond mitigating actual or anticipated harm to forcing participants to pay to address harms they, by definition, did not cause.

In light of the change in national policy reflected in Executive Order 13783 and Secretary's Order 3349, the comments received by the Service, and concerns regarding the legal and policy implications of compensatory mitigation, particularly compensatory mitigation with a net conservation gain policy, the Service has concluded that it is no longer appropriate to retain references to or mandate a net conservation gain standard in the Service's overall mitigation planning goal within each document. Because the net conservation gain standard is so prevalent throughout the Mitigation Policy, the Service is implementing this conclusion by withdrawing the Mitigation Policy.

Summary of Comments and Responses

Executive Order 13783—“Promoting Energy Independence and Economic Growth” (March 28, 2017)—rescinded the Presidential Memorandum on Mitigating Impacts on Natural Resources from Development and Encouraging Related Private Investment. The Secretary of the Interior subsequently issued Secretarial Order 3349 on American Energy Independence (March 29, 2017), which directed Department of the Interior (DOI) bureaus to reexamine mitigation policies and practices to better balance conservation strategies and policies with job creation for American families. Pursuant to Secretarial Order 3349, we published a notice on November 6, 2017 (82 FR 51382), requesting additional public comments specifically addressing the advisability of retaining or removing references to net conservation gain as a mitigation planning goal within our mitigation policies. In addition, in carrying out Executive Order 13777, “Enforcing the Regulatory Reform Agenda,” DOI published a document with the title “Regulatory Reform” in the Federal Register of June 22, 2017 (82 FR 28429). The document requested public comment on how DOI can improve implementation of regulatory reform initiatives and policies and identify regulations for repeal, replacement, or modification. This notice addresses comments that DOI has received in response to the regulatory reform docket that relates to the Service's use of mitigation.

During the combined comment periods, for the Service-wide Mitigation Policy we received approximately 427 comments from Federal, State, and local government entities, industry, trade associations, conservation organizations, nongovernmental organizations, private citizens, and others. Two of those submissions transmitted the discrete comments from an additional 1,756 citizens expressing support for the Service's mitigation policy approach. The range of comments otherwise varied from those that provided general statements of support or opposition to the draft or final Policy, to those that provided extensive comments and information supporting or opposing the draft or final Policy, or specific aspects thereof. The majority of comments submitted included detailed suggestions for revisions addressing major concepts as well as editorial suggestions for specific wording or line edits.

We considered all of the comments we received in the comment period beginning November 6, 2017 (82 FR 51382), and following the DOI's “Regulatory Reform” Federal Register announcement (June 22, 2017, 82 FR 28429); we respond to the substantive comments below.

A. Policy Addresses Multiple Authorities

Comment (1): One commenter stated there were constitutional limits on requiring mitigation, referencing the Koontz v. St. Johns River Water Management District case decided by the U.S. Supreme Court, 570 U.S. 595 (2013). This commenter noted that any compensatory mitigation measures must have an essential nexus with the proposed impacts and be roughly proportional, or have a reasonable relationship between the permit conditions required and the impacts of the proposed development being addressed by those permit conditions.

Response: The Service agrees that the Koontz case, as well as predecessor cases including, but not limited to, Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994), raise serious constitutional concerns about the viability of some elements of the Service's mitigation programs. These concerns are particularly acute for offsite compensatory-mitigation programs and programs that seek a net conservation gain. Offsite compensatory-mitigation programs raise concerns regarding an appropriate nexus between the anticipated impact and the mitigation requirement. As mitigation moves further away from the direct impacts of a project, the risk that the connection between required compensation and the initial project becomes more attenuated increases. Further, by seeking to err on the side of mitigating above and beyond the impacts of the specific project at issue, a net conservation gain standard raises inherent concerns about proportionality, as well as the appropriate nexus between project impacts and mitigation methods, particularly where mitigation is in essence being used to rectify past, unrelated harms. We, like all agencies, must implement our authorities consistent with any applicable case law as appropriate. Consideration of the Constitutional standard set forth in Koontz is one reason, though not the only reason, that the Service is withdrawing its previous Mitigation Policy. In light of the Koontz case and any other relevant court decisions, the Service, in using its previous policies (e.g., 1981 Policy), will make sure that any statutorily authorized mitigation measures will have a clear connection (i.e., have an essential nexus) and be commensurate (i.e., have rough proportionality) to the impact of the project or action under consideration.

Comment (2): Several commenters addressed aspects of the Service's authority under the Bald and Golden Eagle Protection Act (Eagle Act). One commenter supported the acknowledgement that compensatory mitigation for bald and golden eagles may include preservation of those species' habitats and enhancing their prey base. The commenter noted that existing regulations establishing a permit program for the non-purposeful take of bald and golden eagles recognize these options but that these options have not been used. One commenter stated the Service was incorrect in stating in the proposed Policy: “the statute and implementing regulations allow the Service to require habitat preservation and/or enhancement as compensatory mitigation for eagle take.” The commenter said that Congress has not exercised jurisdiction over the habitats of eagles, meaning the Service lacks authority to require mitigation for impacts to eagle habitats. One commenter suggested the Policy should articulate whether compensatory mitigation would be in addition to current requirements of a 1-for-1 take offset.

Response: We agree that the authority of the Eagle Act is limited, and the Service has outlined its authority in its regulations (50 CFR part 22). Nothing in the Eagle Act directly addresses eagle habitat, or requires that the Service apply a net conservation gain standard. Accordingly, the withdrawal of the 2016 Mitigation Policy and reinstatement of the 1981 Mitigation Policy will not change our authority under the Eagle Act.

Comment (3): Several commenters addressed the Service's authority under the Migratory Bird Treaty Act (MBTA). One commenter said the Service was incorrect in describing implied authority to permit incidental take of migratory birds under the MBTA and noted that the Service has no authority to require compensatory mitigation for incidental take of migratory birds. Several commenters said that mitigation for migratory birds exceeds MBTA authority and that the Policy should exclude potential incidental impacts to migratory birds under the MBTA until the Service establishes statutory or regulatory authority to require landowners to obtain incidental take authorization prior to undertaking otherwise lawful activities. They added that the MBTA does not directly address mitigation or habitat impacts.

One commenter said the Service was incorrect in writing that the Fish and Wildlife Conservation Act implicitly provided for mitigation of impacts to migratory birds. The commenter said that the language does not authorize the Service to engage in any management activities associated with migratory birds, particularly over private parties, only directing the Service to monitor and assess population trends and species status of migratory nongame birds.

Response: DOI's Office of the Solicitor issued M-Opinion 37050, The Migratory Bird Treaty Act Does Not Prohibit Incidental Take (M-Opinion), on December 22, 2017, which concludes that the take of birds resulting from an activity is not prohibited by the MBTA when the underlying purpose of that activity is not to take birds. In addition, the Service does not have specific statutory authority pursuant to the MBTA to require Federal action agencies and/or their permittees to provide compensatory mitigation for unavoidable impacts to (loss of) migratory bird habitat resulting from federally conducted or approved, authorized, or funded projects or activities. Like the Eagle Act, the MBTA does not directly protect habitat. When the Service authorizes otherwise prohibited intentional take, however, it can make that authorization subject to appropriate conditions, including non-compensatory mitigation, such as measures to avoid, minimize, reduce, or rectify anticipated harm. In addition, Executive Order (E.O.) 13186 directs Federal agencies “taking actions that have, or are likely to have, a measurable negative effect on migratory bird populations” to sign a Memorandum of Understanding with the Service “that shall promote the conservation of migratory bird populations.”

Comment (4): One commenter specifically questioned the treatment of Natural Resource Damage Assessment actions conducted under the Comprehensive Environmental Response, Compensation, and Liability Act, Oil Pollution Act, and the Clean Water Act, stating that the Presidential Memorandum on Mitigating Impacts on Natural Resources from Development and Encouraging Related Private Investment, dated November 3, 2015, requires that separate guidance be developed for when restoration banking or advance restoration would be appropriate.

Response: The Presidential Memorandum on Mitigation was rescinded by Executive Order 13783, Promoting Energy Independence and Economic Growth (March 28, 2017). Furthermore, when a release of hazardous substance or oil injures natural resources subject to the natural resource damage assessment and restoration trusteeship of States, Tribes, or the Federal Government, appropriate restoration is determined by the scope and scale of the injury and the nexus of the restoration action to that specific injury.

B. Net Conservation Gain/No Net Loss

Comment (5): Many commenters addressed the Policy's mitigation planning goal of improving (i.e., a net gain) or, at minimum, maintaining (i.e., no net loss) the current status of affected resources. A number of commenters supported the goal while a number of commenters opposed the inclusion of a net conservation gain. Of commenters opposed to net conservation gain, their specific reasons included:

(a) The Service lacks the statutory authority to implement the net conservation gain goal for mitigation planning.

(b) The net conservation gain goal imposes a new standard for mitigation and that mitigation requirements should be commensurate with the level of impacts.

(c) Concern about the costs associated with achieving net conservation gain.

(d) Questions about the ability to achieve net conservation gain and how it would be measured.

(e) The Policy does not provide the methodology to assess or measure the net conservation gain.

(f) Net conservation gain is incompatible with the standards of the ESA sections 7 and 10. One commenter asked that we clarify that the net conservation gain goal does not modify or expand proponents' obligations under ESA sections 7 or 10 permitting programs. One commenter stated that the Policy's goal would have limited relevance to section 10 decisions other than serving as an aspiration or goal for negotiating conservation measures. One commenter asked that we specify how the Policy's goal will be applied to processing incidental take permit applications under section 10(a)(2)(B)(ii), especially for projects predicted to directly kill listed species. This commenter added that neither no net loss nor net gain is an appropriate goal under section 10 if the goal implies that impacts at the individual level will not be minimized to the maximum extent practicable.

Response: We agree with concerns expressed by commenters that the Service generally lacks the statutory authority to implement “net conservation gain” for mitigation planning. No statute within the Service's purview mandates that the Service directly apply a net conservation gain standard. For example, under the Endangered Species Act (ESA), the standard for section 7 is that a “Federal agency shall, in consultation with and with the assistance of the Secretary, insure that any action . . . is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of habitat” (§ 7(a)(2)); under section 10, the requirement is “to the maximum extent practicable, minimize and mitigate the impacts of such taking” (§ 10(a)(2)(B)(ii)). As one court has noted, “[t]he words `maximum extent practicable' signify that the applicant may do something less than fully minimize and mitigate the impacts of the take where to do more would not be practicable. Moreover, the statutory language does not suggest that an applicant must ever do more than mitigate the effect of its take of species.” National Wildlife Federation v. Norton, 306 F. Supp. 2d 920, 928 (E.D. Cal. 2004); see also Union Neighbors United, Inc. v. Jewell, 831 F.3d 564 (D.C. Cir. 2016) (holding that the obligation to minimize and mitigate to the maximum extent practicable was satisfied by a plan that the Service found to fully offset the impact of the proposed taking). Since what is “practicable” may not fully offset proposed take, the “maximum extent practicable” standard is inconsistent with both a general net conservation gain and a no-net-loss mitigation objective. Nothing in the ESA requires that the Service apply a net conservation gain or no-net-loss standard.

Those commenters supporting the goal generally asserted, among other points, that the Service has the authority to require compensatory mitigation, found the measures to be clear, and thought the policy encouraged consistent implementation. While we appreciate these comments, for the reasons described above, we are not persuaded.

As “net conservation gain” was central to and integrated throughout the policies, in addition to the more recently issued 2017 Executive and Secretarial Orders, modifying these policies would likely have caused even more confusion. Thus, we are withdrawing the 2016 Mitigation Policy, and restoring the policies and guidance that were superseded by the 2016 policies.

C. Landscape-Scale Approach

Comment (6): Several commenters described their concerns with the implications of the Policy's inclusion of a landscape-scale approach:

(a) There is no statutory authority for taking a landscape-scale approach.

(b) Including a landscape-scale approach would lead to the Service seeking mitigation for impacts beyond a project under review, including impacts that happened in the past or in unrelated locations. They said that meeting the standards of an applicable authority within the narrow geographic scope of their project is the proponent's only responsibility.

(c) General concern that a landscape-scale approach would mean Federal overreach, including disregard for the plans, processes, and resource interests of States, tribes, and local governments.

Response: We agree with commenters that proponents' and action agencies' responsibilities include the provisions of relevant authorities and that those responsibilities do not extend to impacts unrelated to their action. Requiring mitigation to impacts unrelated to a proponent's action would likely conflict with the “essential nexus” required under Koontz for property development (see Comment 1 above). Accordingly, any effort to apply a landscape-scale approach to mitigation must ensure that there is an essential nexus between the proposed activity and the contemplated mitigation and that mitigation is not being imposed to correct for past impacts by other actors.

Section 5 of the Mitigation Policy, “Mitigation Framework,” calls for both consideration of a landscape-scale approach in addition to “net conservation gain.” Because net conservation gain is integral to the policies, even though considerations of landscape-scale approaches may be useful in some cases, withdrawing these policies will reduce confusion over the net conservation gain goal. This notice does not affect the Service authorities that already allow the flexibility to consider landscape-scale approach. In some cases, taking the broader ecological context of both impacts and mitigation opportunities into account by applying a landscape-scale approach is an effective means of implementing the Service's mission in a way that also benefits proponents.

National Environmental Policy Act (NEPA)

We have analyzed the withdrawals of this policy in accordance with the criteria of the National Environmental Policy Act, as amended (NEPA) (42 U.S.C. 4332(c)), the Council on Environmental Quality's Regulations for Implementing the Procedural Provisions of NEPA (40 CFR parts 1500-1508), and the Department of the Interior's NEPA procedures (516 DM 2 and 8; 43 CFR part 46). Issuance of policies, directives, regulations, and guidelines that are of an administrative, financial, legal, technical, or procedural nature, or whose environmental effects are too broad, speculative, or conjectural to lend themselves to meaningful analysis and will later be subject to the NEPA process, either collectively or case-by-case may be categorically excluded under NEPA (43 CFR 46.210(i)). We have determined that a categorical exclusion applies to withdrawing this policy.

Paperwork Reduction Act of 1995

This policy withdrawal does not contain any new collections of information that require approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). OMB has reviewed and approved the information collection requirements for applications for incidental take permits, annual reports, and notifications of incidental take for native endangered and threatened species for safe harbor agreements, candidate conservation agreements with assurances, and habitat conservation plans under OMB Control Number 1018-0094, which expires on March 31, 2019. We 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.

Government-to-Government Relationship With Tribes

In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951), Executive Order 13175 “Consultation and Coordination with Indian Tribal Governments,” and the Department of the Interior Manual at 512 DM 2, we have considered possible effects on federally recognized Indian tribes and have determined that there are no potential adverse effects of withdrawing this policy. Our intent with withdrawing these policies is to reduce confusion of mitigation programs, projects, and measures, including those taken on Tribal lands. We will work with Tribes as applicants proposing mitigation as part of proposed actions and with Tribes as mitigation sponsors.

Authority

The multiple authorities for this action include the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq.); Fish and Wildlife Coordination Act, as amended, (16 U.S.C. 661-667(e)); and National Environmental Policy Act (42 U.S.C. 4371 et seq.).

Dated: July 24, 2018. Gregory J. Sheehan, Principal Deputy Director, U.S. Fish and Wildlife Service.
[FR Doc. 2018-16172 Filed 7-27-18; 8:45 am] BILLING CODE 4333-15-P
83 146 Monday, July 30, 2018 Proposed Rules DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 959 [Doc. No. AMS-SC-17-0067; SC17-959-4] Onions Grown in South Texas; Proposed Amendments to Marketing Order 959 and Referendum Order AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Proposed rule and referendum order.

SUMMARY:

This rulemaking proposes amendments to Marketing Order No. 959, which regulates the handling of onions grown in South Texas. The proposed amendments would reduce the size of the South Texas Onion Committee (Committee) and make conforming and clarifying amendments as needed.

DATES:

The referendum will be conducted from August 6, 2018 through August 27, 2018. The representative period for the referendum is August 1, 2016 through July 31, 2017.

ADDRESSES:

Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, Stop 0237, Washington, DC 20250-0237.

FOR FURTHER INFORMATION CONTACT:

Geronimo Quinones, Marketing Specialist, or Julie Santoboni, Rulemaking Branch Chief, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, Stop 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax: (202) 720-8938, or Email: [email protected] or [email protected]

Small businesses may request information on complying with this regulation by contacting Richard Lower, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax: (202) 720-8938, or Email: [email protected]

SUPPLEMENTARY INFORMATION:

This proposal, pursuant to 5 U.S.C. 553, proposes amendments to regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This proposal is issued under Marketing Order No. 959, as amended (7 CFR part 959), regulating the handling of onions grown in South Texas. Part 959 (referred to as the “Order”) is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Committee locally administers the Order and is comprised of onion producers and handlers operating within the area of production.

The Department of Agriculture (USDA) is issuing this proposed rule in conformance with Executive Orders 13563 and 13175. This action falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review. Additionally, because this proposed rule does not meet the definition of a significant regulatory action, it does not trigger the requirements contained in Executive Order 13771. See OMB's Memorandum titled “Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017, titled `Reducing Regulation and Controlling Regulatory Costs' ” (February 2, 2017).

This proposal has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have retroactive effect. This rule shall not be deemed to preclude, preempt, or supersede any State program covering onions grown in South Texas.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. A handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed no later than 20 days after the date of entry of the ruling.

Section 1504 of the Food, Conservation, and Energy Act of 2008 (2008 Farm Bill) (Pub. L. 110-246) amended section 8c(17) of the Act, which in turn required the addition of supplemental rules of practice to 7 CFR part 900 (73 FR 49307; August 21, 2008). The amendment of section 8c(17) of the Act and additional supplemental rules of practice authorize the use of informal rulemaking (5 U.S.C. 553) to amend Federal fruit, vegetable, and nut marketing agreements and orders. USDA may use informal rulemaking to amend marketing orders based on the nature and complexity of the proposed amendment, the potential regulatory and economic impacts on affected entities, and any other relevant matters.

AMS has considered these factors and has determined that the amendments proposed are not unduly complex and the nature of the proposed amendments is appropriate for utilizing the informal rulemaking process to amend the Order.

The proposed amendments were unanimously recommended by the Committee following deliberations at a public meeting held on June 7, 2017. The proposal would amend the Order by reducing the size of the Committee from 34 to 26 members. The change would remove one voting producer and one voting handler member, and one producer and one handler alternate member from each of the two districts. Conforming and clarifying changes would also be made to §§ 959.24, 959.26, 959.32, and §§ 959.110 and 959.111 would be removed and reserved.

A proposed rule soliciting comments on the proposed amendment was issued on February 23, 2018 and published in the Federal Register on March 1, 2018 (83 FR 8804). Two opposing comments were received. AMS will conduct a producer referendum to determine support for the proposed amendments. If appropriate, a final rule will then be issued to effectuate the amendment if it is favored by producers in the referendum.

The Committee's recommended amendments would amend the Order by reducing the size of the Committee from 34 to 26 members. The reduction would remove one voting producer and one voting handler member, and one producer and one handler alternate member from each of the two districts (eight members total).

Proposal—Reduce Committee Size

Section 959.22 provides that the Committee consists of seventeen members, ten of whom shall be producers and seven of whom shall be handlers. For each member of the Committee there shall be an alternate.

This proposal would amend § 959.22 by reducing the size of the Committee from 34 to 26 members. The Committee size is based on membership per district. The Order initially established five districts, which were reestablished as two districts in § 959.110. Section 959.111 reapportioned the 34 Committee members between the two districts so that District 1 was comprised of 20 members and alternates and District 1 was comprised of 14 members and alternates. However, due to contractions in the size of the industry, the Committee has had difficulties finding nominees to fill positions on the Committee. The change would remove one voting producer and one voting handler member, and one producer and handler alternate member from each of the two districts (eight members total).

This proposed action is necessary to adjust the number of handlers and producers on the Committee to reflect industry consolidation. There has been a decrease in the number of onion producers and handlers over the past 15 years. The current structure of the Committee requires 34 members, with half the members elected on biennial terms. Many seats remain vacant, as finding sufficient members to nominate has been challenging. Having a smaller size committee would enable it to fulfill membership and quorum requirements, thereby ensuring a more efficient and orderly flow of business.

For the reasons stated above, it is proposed that § 959.22 be modified to reduce the size of the Committee from 34 to 26 members. Conforming and clarifying changes would also be made to §§ 959.24, 959.26, 959.32, and §§ 959.110 and 959.111 would be removed and reserved.

Final Regulatory Flexibility Analysis

Pursuant to the requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of this action on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.

There are approximately 60 producers of onions in the production area and approximately 30 handlers subject to regulation under the marketing order. Small agricultural producers are defined by the Small Business Administration as those having annual receipts less than $750,000, and small agricultural service firms are defined as those whose annual receipts are less than $7,500,000 (13 CFR 121.201).

Based on information from the National Agricultural Statistics Service, the weighted grower price for South Texas onions during the 2015-16 season was approximately $12.30 per 50-pound equivalent. Furthermore, according to Committee data, total shipments were approximately three million 50-pound equivalents for the 2015-16 season with a total 2015-16 crop value estimated at $37 million. Dividing the crop value by the estimated number of producers (60) yields an estimated average receipt per producer of $617,000. This is below the $750,000 SBA definition of small producers. The average handler price for South Texas onions during the 2015-16 season was approximately $14.05 per 50-pound equivalent. Multiplying the average handler price by shipment information of 3 million 50-pound equivalent results in an estimated handler-level value of $42 million. Dividing this figure by the number of handlers (30) yields an estimated average annual handler receipts of $1.4 million, which is below the SBA definition of small agricultural service firms. Assuming a normal distribution, most producers and handlers of South Texas onions may be classified as small entities.

The amendment recommended by the Committee would reduce the size of the Committee from 34 to 26 members under the Order. The reduction would remove one voting producer and one voting handler member, and one producer and one handler alternate member from each of the two districts.

The Committee's proposed amendment was unanimously recommended at a meeting on June 7, 2017. If this proposal is approved in the referendum, there would be no direct financial effects on producers or handlers. Over the past 15 years there has been a 31-percent decrease in the number of onion producers, and a 34-percent decrease in the number of handlers in the production area. Many seats on the Committee remain vacant, as it has been challenging to find sufficient nominees. Having a smaller size Committee should enable it to fulfill those membership and quorum requirements.

AMS believes this change will serve the needs of the Committee and the industry thereby ensuring a more efficient and orderly flow of business. No economic impact is expected if the amendment is approved because it would not establish any regulatory requirements on handlers, nor does it contain any assessment or funding implications. There would be no change in financial costs, reporting, or recordkeeping requirements if this proposal is approved.

Alternatives to this proposal, including making no changes at this time, were considered. However, the Committee believes that given reductions in the size of the industry, a smaller Committee size is necessary in order to ensure its ability to locally administer the program. Reducing the size of the Committee would enable it to fulfill membership and quorum requirements, thereby ensuring a more efficient and orderly flow of business.

Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Order's information collection requirements have been previously approved by OMB and assigned OMB No. 0581-0178 (Vegetable and Specialty Crops). No changes in those requirements are necessary because of this action. Should any changes become necessary, they would be submitted to OMB for approval.

This proposed rule would impose no additional reporting or recordkeeping requirements on either small or large South Texas onion handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public-sector agencies.

AMS is committed to complying with the E-Government Act, to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this action.

The Committee's meeting was widely publicized throughout the South Texas onion production area. All interested persons were invited to attend the meeting and encouraged to participate in Committee deliberations on all issues. Like all Committee meetings, the June 7, 2017, meeting was public, and all entities, both large and small, were encouraged to express their views on the proposal.

A proposed rule concerning this action was published in the Federal Register on March 1, 2018 (83 FR 8804). Copies of the rule were mailed or sent via facsimile to all Committee members and South Texas onion handlers. Finally, the proposed rule was made available through the internet by USDA and the Office of the Federal Register. A 60-day comment period ending April 30, 2018, was provided to allow interested persons to respond to the proposal.

Two comments were received. The first comment suggested that decreasing the Committee size was an inefficient use of government resources and those resources should be allocated to other more important initiatives. The second comment contended that having more members on the Committee might lead to better discussions.

The reduction in Committee size was recommended by representatives responsible for locally administering the Order and representing the industry's best interest. As stated above, because of a consolidation within the industry, Committee seats have been left vacant. Without a full Committee or enough members to meet quorum requirements, Committee meetings are ineffective and an inefficient use of Committee and industry resources. Therefore, this amendment should increase efficient use of resources. Additionally, AMS is pursuing this amendment through informal rulemaking as opposed to formal rulemaking. This will spare resources being expended on a public hearing.

In response to the second comment, all Committee meetings are open to public and industry attendance. Attendees have an opportunity to ask questions and provide comments. Therefore, discussion is not limited by the number of Committee members.

Because of the above, no changes will be made to the proposed amendment based on the comments received.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any questions about the compliance guide should be sent to Richard Lower at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

Findings and Conclusions

The findings and conclusions and general findings and determinations included in the proposed rule set forth in the March 1, 2018, issue of the Federal Register are hereby approved and adopted.

Marketing Order

Annexed hereto and made a part hereof is the document entitled “Order Amending the Order Regulating the Handling of Onions Grown in South Texas.” This document has been decided upon as the detailed and appropriate means of effectuating the foregoing findings and conclusions. It is hereby ordered, that this entire proposed rule be published in the Federal Register.

Referendum Order

It is hereby directed that a referendum be conducted in accordance with the procedure for the conduct of referenda (7 CFR part 900.400-407) to determine whether the annexed order amending the Order regulating the handling of onions grown in South Texas is approved by growers, as defined under the terms of the Order, who during the representative period were engaged in the production of onions in the production area. The representative period for the conduct of such referendum is hereby determined to be August 1, 2016 through July 31, 2017.

The agents designated by the Secretary to conduct the referendum are Doris Jamieson and Christian D. Nissen, Southeast Marketing Field Office, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA; Telephone: (863) 324-3375, Fax: (863) 325-8793, or Email: [email protected] or [email protected], respectively.

Order Amending the Order Regulating the Handling of Onions Grown in South Texas 1

1 This order shall not become effective unless and until the requirements of § 900.14 of the rules of practice and procedure governing proceedings to formulate marketing agreements and marketing orders have been met.

Findings and Determinations

The findings hereinafter set forth are supplementary to the findings and determinations which were previously made in connection with the issuance of the Order; and all said previous findings and determinations are hereby ratified and affirmed, except insofar as such findings and determinations may be in conflict with the findings and determinations set forth herein.

1. The Order, as amended, and as hereby proposed to be further amended, and all the terms and conditions thereof, would tend to effectuate the declared policy of the Act;

2. The Order, as amended, and as hereby proposed to be further amended, regulates the handling of onions grown in South Texas in the same manner as, and is applicable only to, persons in the respective classes of commercial and industrial activity specified in the Order;

3. The Order, as amended, and as hereby proposed to be further amended, is limited in application to the smallest regional production area which is practicable, consistent with carrying out the declared policy of the Act, and the issuance of several orders applicable to subdivisions of the production area would not effectively carry out the declared policy of the Act;

4. The Order, as amended, and as hereby proposed to be further amended, prescribes, insofar as practicable, such different terms applicable to different parts of the production area as are necessary to give due recognition to the differences in the production and marketing of onions produced in the production area; and

5. All handling of onions produced or packed in the production area as defined in the Order is in the current of interstate or foreign commerce or directly burdens, obstructs, or affects such commerce.

Order Relative to Handling

It is therefore ordered, that on and after the effective date hereof, all handling of onions grown in South Texas shall be in conformity to, and in compliance with, the terms and conditions of the said Order as hereby proposed to be amended as follows:

The provisions of the proposed marketing order amending the Order contained in the proposed rule issued by the Administrator on February 23, 2018 and published in the Federal Register (83 FR 8804) on March 1, 2018, will be and are the terms and provisions of this order amending the Order and are set forth in full herein.

List of Subjects in 7 CFR Part 959

Onions, Marketing agreements, Reporting and recordkeeping requirements.

Dated: July 19, 2018. Bruce Summers, Administrator, Agricultural Marketing Service.

For the reasons set forth in the preamble, the Agricultural Marketing Service proposes to amend 7 CFR part 959 as follows:

PART 959—ONIONS GROWN IN SOUTH TEXAS 1. The authority citation for 7 CFR part 959 continues to read as follows: Authority:

7 U.S.C. 601-674.

2. Revise § 959.22 to read as follows:
§ 959.22 Establishment and membership.

The South Texas Onion Committee, consisting of thirteen members, eight of whom shall be producers and five of whom shall be handlers, is hereby established. For each member of the Committee there shall be an alternate. Producer members and alternates shall not have a proprietary interest in or be employees of a handler organization.

3. Revise § 959.24 to read as follows:
§ 959.24 Districts.

To determine a basis for selecting Committee members, the following districts of the production area are hereby established:

(a) District No. 1: (Coastal Bend-Lower Valley) The Counties of Victoria, Calhoun, Goliad, Refugio, Bee, Live Oak, San Patricio, Aransas, Jim Wells, Nueces, Kleberg, Brooks, Kenedy, Duval, McMullen, Cameron, Hidalgo, Starr, and Willacy in the State of Texas.

(b) District No. 2: (Laredo-Winter Garden) The Counties of Zapata, Webb, Jim Hogg De Witt, Wilson, Atascosa, Karnes Val Verde, Frio, Kinney, Uvalde, Medina, Maverick, Zavala, Dimmit, and La Salle in the State of Texas.

4. Revise § 959.26 to read as follows:
§ 959.26 Selection.

The Secretary shall select members and respective alternates from districts established pursuant to §§ 959.24 or 959.25. Selections shall be as follows:

(a) District No. 1: Five producer members and alternates; three handler members and alternates.

(b) District No. 2: Three producer members and alternates; two handler members and alternates.

5. Amend § 959.32 by revising paragraph (a) to read as follows:
§ 959.32 Procedure.

(a) Nine members of the Committee shall be necessary to constitute a quorum. Seven concurring votes, or two-thirds of the votes cast, whichever is greater, shall be required to pass any motion or approve any Committee action. At assembled meetings all votes shall be cast in person.

§§ 959.110 and 959.111 [Removed and Reserved]
6. Remove and reserve §§ 959.110 and 959.111.
[FR Doc. 2018-15793 Filed 7-27-18; 8:45 am] BILLING CODE 3410-02-P
DEPARTMENT OF ENERGY 10 CFR Part 430 [EERE-2011-BT-NOA-0013] Energy Conservation Program: Data Collection and Comparison With Forecasted Unit Sales of Five Lamp Types AGENCY:

Office of Energy Efficiency and Renewable Energy, Department of Energy.

ACTION:

Notice of data availability.

SUMMARY:

The U.S. Department of Energy (DOE) is informing the public of its collection of shipment data and creation of spreadsheet models to provide comparisons between 2016 and 2017 unit sales and benchmark estimate unit sales of five lamp types (i.e., rough service lamps, vibration service lamps, 3-way incandescent lamps, 2,601-3,300 lumen general service incandescent lamps, and shatter-resistant lamps). For 3-way incandescent lamps, 2,601-3,300 lumen general service incandescent lamps, and shatter-resistant lamps, the 2016 and 2017 sales are not greater than 200 percent of the forecasted estimates. The 2016 and 2017 unit sales for vibration service lamps are greater than 200 percent of the benchmark unit sales estimate. The 2016 unit sales for rough service lamps are greater than 200 percent of the benchmark unit sales estimate but the 2017 unit sales are below the benchmark unit sales estimate. DOE has prepared, and is making available on its website, a spreadsheet showing the comparisons of projected sales versus 2016 and 2017 sales, as well as the model used to generate the original sales estimates. The spreadsheet is available online at: https://www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=16.

DATES:

As of July 30, 2018, the DOE has determined that no regulatory action is necessary at this time.

ADDRESSES:

The docket, which includes Federal Register notices, comments, and other supporting documents/materials, is available for review at http://www.regulations.gov. All documents in the docket are listed in the http://www.regulations.gov index. However, some documents listed in the index, such as those containing information that is exempt from public disclosure, may not be publicly available.

A link to the docket web page can be found at https://www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=16. The docket web page contains simple instructions on how to access all documents, including public comments, in the docket.

FOR FURTHER INFORMATION CONTACT:

Ms. Lucy deButts, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies, EE-5B, 1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: (202) 287-1604. Email: [email protected]

Mr. Peter Cochran, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: (202) 586-9496. Email: [email protected]

SUPPLEMENTARY INFORMATION: Table of Contents I. Background II. Definitions A. Rough Service Lamps B. Vibration Service Lamps C. Three-Way Incandescent Lamps D. 2,601-3,300 Lumen General Service Incandescent Lamps E. Shatter-Resistant Lamps III. Comparison Methodology IV. Comparison Results A. Rough Service Lamps B. Vibration Service Lamps C. Three-Way Incandescent Lamps D. 2,601-3,300 Lumen General Service Incandescent Lamps E. Shatter-Resistant Lamps V. Conclusion I. Background

The Energy Independence and Security Act of 2007 (EISA 2007; Pub. L. 110-140) was enacted on December 19, 2007. Among the requirements of subtitle B (Lighting Energy Efficiency) of title III of EISA 2007 were provisions directing DOE to collect, analyze, and monitor unit sales of five lamp types (i.e., rough service lamps, vibration service lamps, 3-way incandescent lamps, 2,601-3,300 lumen general service incandescent lamps, and shatter-resistant lamps). In relevant part, section 321(a)(3)(B) of EISA 2007 amended section 325(l) of the Energy Policy and Conservation Act of 1975 (EPCA) by adding paragraph (4)(B), which generally directs DOE, in consultation with the National Electrical Manufacturers Association (NEMA), to: (1) Collect unit sales data for each of the five lamp types for calendar years 1990 through 2006 in order to determine the historical growth rate for each lamp type; and (2) construct a model for each of the five lamp types based on coincident economic indicators that closely match the historical annual growth rates of each lamp type to provide a neutral comparison benchmark estimate of future unit sales. (42 U.S.C. 6295(l)(4)(B)) Section 321(a)(3)(B) of EISA 2007 also amends section 325(l) of EPCA by adding paragraph (4)(C), which, in relevant part, directs DOE to collect unit sales data for calendar years 2010 through 2025, in consultation with NEMA, for each of the five lamp types. DOE must then compare the actual lamp sales in that year with the benchmark estimate. (42 U.S.C. 6295(l)(4)(C)) If DOE finds that the unit sales for a given lamp type in any year between 2010 and 2025 exceed the benchmark estimate of unit sales by at least 100 percent (i.e., are greater than 200 percent of the anticipated sales), DOE must issue a finding within 90 days of the end of the analyzed calendar year that the estimate has been exceeded. (42 U.S.C. 6295(l)(4)(D)(i)(I), (E)(i)(I), (F)(i)(I), and (H)(i)(I)).1

1 For 2,601-3,300 lumen general service incandescent lamps, EPCA does not specify a requirement to publish such findings, but as discussed further in this notice, EPCA does establish requirements upon the benchmark estimate being exceeded.

On December 18, 2008, DOE issued a notice of data availability (NODA) for the Report on Data Collection and Estimated Future Unit Sales of Five Lamp Types (hereafter the “2008 analysis”), which was published in the Federal Register on December 24, 2008. 73 FR 79072. The 2008 analysis presented the 1990 through 2006 shipment data collected in consultation with NEMA, the spreadsheet model DOE constructed for each lamp type, and the benchmark unit sales estimates for 2010 through 2025. On April 4, 2011, DOE published a NODA in the Federal Register announcing the availability of updated spreadsheet models presenting the benchmark estimates from the 2008 analysis and the collected sales data from 2010 for the first annual comparison. 76 FR 18425. Similarly, DOE published NODAs in the Federal Register in the following five years announcing the updated spreadsheet models and sales data for the annual comparisons. 77 FR 16183 (March 20, 2012); 78 FR 15891 (March 13, 2013); 79 FR 15058 (March 18, 2014); 80 FR 13791 (March 17, 2015); 81 FR 20261 (April 7, 2016). This NODA presents the seventh comparison; specifically, section IV of this report compares the actual unit sales against benchmark unit sales estimates for 2016 and 2017.2

2 The notices and related documents for the 2008 analysis and successive annual comparisons, including this NODA, are available through the DOE website at: https://www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=16.

EISA 2007 also amended section 325(l) of EPCA by adding paragraphs (4)(D) through (4)(H), which state that if DOE finds that the unit sales for a given lamp type in any year between 2010 and 2025 exceed the benchmark estimate of unit sales by at least 100 percent (i.e., are greater than 200 percent of the anticipated sales), then DOE must take regulatory action for such lamps. (42 U.S.C. 6295(l)(4)(D) through (H)) For 2,601-3,300 lumen general service incandescent lamps, DOE must impose a statutorily prescribed maximum-wattage level and packaging requirement. (42 U.S.C. 6295(l)(4)(G)) For the other four types of lamps, the statute requires DOE to initiate an accelerated rulemaking to establish energy conservation standards. If the Secretary does not complete the accelerated rulemakings within one year from the end of the previous calendar year, EPCA specifies maximum wattage and related requirements (i.e., a “backstop requirement”) for each lamp type. (42 U.S.C. 6295(l)(4)(D)(ii), (E)(ii), (F)(ii), and (H)(ii))

As in the 2008 analysis and previous comparisons, DOE uses manufacturer shipments as a surrogate for unit sales in this NODA because manufacturer shipment data are tracked and aggregated by the trade organization, NEMA. DOE believes that annual shipments track closely with actual unit sales of these five lamp types, as DOE presumes that retailer inventories remain constant from year to year. DOE believes this is a reasonable assumption because the markets for these five lamp types have existed for many years, thereby enabling manufacturers and retailers to establish appropriate inventory levels that reflect market demand. In addition, increasing unit sales must eventually result in increasing manufacturer shipments. This is the same methodology presented in DOE's 2008 analysis and subsequent annual comparisons, and DOE did not receive any comments challenging this assumption or the general approach.

II. Definitions A. Rough Service Lamps

Section 321(a)(1)(B) of EISA 2007 amended section 321(30) of EPCA by adding the definition of a “rough service lamp.” A “rough service lamp” means a lamp that—(i) has a minimum of 5 supports with filament configurations that are C-7A, C-11, C-17, and C-22 as listed in Figure 6-12 of the 9th edition of the IESNA [Illuminating Engineering Society of North America] Lighting handbook, or similar configurations where lead wires are not counted as supports; and (ii) is designated and marketed specifically for “rough service” applications, with—(I) the designation appearing on the lamp packaging; and (II) marketing materials that identify the lamp as being for rough service. (42 U.S.C. 6291(30)(X))

As noted above, rough service incandescent lamps must have a minimum of five filament support wires (not counting the two connecting leads at the beginning and end of the filament), and must be designated and marketed for “rough service” applications. This type of incandescent lamp can be used in applications where the lamp would be subject to mechanical shock or vibration while it is operating. Other incandescent lamps have only two support wires (which also serve as conductors), one at each end of the filament coil. When operating (i.e., when the tungsten filament is glowing so hot that it emits light), rough service applications could cause an incandescent lamp's filament to break prematurely. To address this problem, lamp manufacturers developed lamp designs that incorporate additional support wires along the length of the filament to ensure that it has support not just at each end, but at several other points as well. The additional support protects the filament during operation and enables longer operating life for incandescent lamps in rough service applications.

B. Vibration Service Lamps

Section 321(a)(1)(B) of EISA 2007 amended section 321(30) of EPCA by adding the definition of a “vibration service lamp.” A “vibration service lamp” means a lamp that—(i) has filament configurations that are C-5, C-7A, or C-9, as listed in Figure 6-12 of the 9th Edition of the IESNA Lighting Handbook or similar configurations; (ii) has a maximum wattage of 60 watts; (iii) is sold at retail in packages of 2 lamps or less; and (iv) is designated and marketed specifically for vibration service or vibration-resistant applications, with—(I) the designation appearing on the lamp packaging; and (II) marketing materials that identify the lamp as being vibration service only. (42 U.S.C. 6291(30)(AA))

The statute mentions three examples of filament configurations for vibration service lamps in Figure 6-12 of the IESNA Lighting Handbook, one of which, C-7A, is also listed in the statutory definition of “rough service lamp.” The definition of “vibration service lamp” requires that such lamps have a maximum wattage of 60 watts and be sold at a retail level in packages of two lamps or fewer. Vibration service lamps must be designated and marketed for vibration service or vibration-resistant applications. As the name suggests, this type of incandescent lamp can be used in applications where the incandescent lamp would be subject to a continuous low level of vibration, such as in a ceiling fan light kit. In such applications, incandescent lamps without additional filament support wires may not achieve the full rated life, because the filament wire is brittle and would be subject to breakage at typical operating temperature. To address this problem, lamp manufacturers typically use a more malleable tungsten filament to avoid damage and short circuits between coils.

C. Three-Way Incandescent Lamps

Section 321(a)(1)(B) of EISA 2007 amended section 321(30) of EPCA by adding the definition of a “3-way incandescent lamp.” A “3-way incandescent lamp” includes an incandescent lamp that—(i) employs 2 filaments, operated separately and in combination, to provide 3 light levels; and (ii) is designated on the lamp packaging and marketing materials as being a 3-way incandescent lamp. (42 U.S.C. 6291(30)(Y))

Three-way lamps are commonly found in wattage combinations such as 50, 100, and 150 watts or 30, 70, and 100 watts. These lamps use two filaments (e.g., a 30-watt and a 70-watt filament) and can be operated separately or together to produce three different lumen outputs (e.g., 305 lumens with one filament, 995 lumens with the other, or 1,300 lumens using the filaments together). When used in three-way sockets, these lamps allow users to control the light level. Three-way incandescent lamps are typically used in residential multi-purpose areas, where consumers may adjust the light level to be appropriate for the task they are performing.

D. 2,601-3,300 Lumen General Service Incandescent Lamps

The statute does not provide a definition of “2,601-3,300 Lumen General Service Incandescent Lamps;” however, DOE is interpreting this term to be a general service incandescent lamp 3 that emits light between 2,601 and 3,300 lumens. These lamps are used in general service applications when high light output is needed.

3 “The term ‘general service incandescent lamp’ means a standard incandescent or halogen type lamp that—(I) is intended for general service applications; (II) has a medium screw base; (III) has a lumen range of not less than 310 lumens and not more than 2,600 lumens or, in the case of a modified spectrum lamp, not less than 232 lumens and not more than 1,950 lumens; and (IV) is capable of being operated at a voltage range at least partially within 110 and 130 volts.” (42 U.S.C. 6291(30)(D)(i))

E. Shatter-Resistant Lamps

Section 321(a)(1)(B) of EISA 2007 amended section 321(30) of EPCA by adding the definition of a “shatter-resistant lamp, shatter-proof lamp, or shatter-protected lamp.” “Shatter-resistant lamp, shatter-proof lamp, and shatter-protected lamp” mean a lamp that—(i) has a coating or equivalent technology that is compliant with NSF/ANSI 51 [National Sanitation Foundation/American National Standards Institute] and is designed to contain the glass if the glass envelope of the lamp is broken; and (ii) is designated and marketed for the intended application, with—(I) the designation on the lamp packaging; and (II) marketing materials that identify the lamp as being shatter-resistant, shatter-proof, or shatter-protected. (42 U.S.C. 6291(30)(Z)) Although the definition provides three names commonly used to refer to these lamps, DOE simply refers to them collectively as “shatter-resistant lamps.”

Shatter-resistant lamps incorporate a special coating designed to prevent glass shards from being dispersed if a lamp's glass envelope breaks. Shatter-resistant lamps incorporate a coating compliant with industry standard NSF/ANSI 51,4 “Food Equipment Materials,” and are labeled and marketed as shatter-resistant, shatter-proof, or shatter-protected. Some types of the coatings can also protect the lamp from breakage in applications subject to heat and thermal shock that may occur from water, sleet, snow, soldering, or welding.

4 NSF/ANSI 51 applies specifically to materials and coatings used in the manufacturing of equipment and objects destined for contact with foodstuffs.

III. Comparison Methodology

In the 2008 analysis, DOE reviewed each of the five sets of shipment data that was collected in consultation with NEMA and applied two curve fits to generate unit sales estimates for the five lamp types after calendar year 2006. One curve fit applied a linear regression to the historical data and extended that line into the future. The other curve fit applied an exponential growth function to the shipment data and projected unit sales into the future. For this calculation, linear regression treats the year as a dependent variable and shipments as the independent variable. The linear regression curve fit is modeled by minimizing the differences among the data points and the best curve-fit linear line using the least squares function.5 The exponential curve fit is also a regression function and uses the same least squares function to find the best fit. For some data sets, an exponential curve provides a better characterization of the historical data, and, therefore, a better projection of the future data.

5 The least squares function is an analytical tool that DOE uses to minimize the sum of the squared residual differences between the actual historical data points and the modeled value (i.e., the linear curve fit). In minimizing this value, the resulting curve fit will represent the best fit possible to the data provided.

For 3-way incandescent lamps, 2,601-3,300 lumen general service incandescent lamps, and shatter-resistant lamps, DOE found that the linear regression and exponential growth curve fits produced nearly the same estimates of unit sales (i.e., the difference between the two forecasted values was less than 1 or 2 percent). However, for rough service and vibration service lamps, the linear regression curve fit projected lamp unit sales would decline to zero for both lamp types by 2018. In contrast, the exponential growth curve fit projected a more gradual decline in unit sales, such that lamps would still be sold beyond 2018, and it was, therefore, considered the more realistic forecast. While DOE was satisfied that either the linear regression or exponential growth spreadsheet model generated a reasonable benchmark unit sales estimate for 3-way incandescent lamps, 2,601-3,300 lumen general service incandescent lamps, and shatter-resistant lamps, DOE selected the exponential growth curve fit for these lamp types for consistency with the selection made for rough service and vibration service lamps.6 DOE examines the benchmark unit sales estimates and actual sales for each of the five lamp types in the following section and also makes the comparisons available in a spreadsheet online: https://www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=16.

6 This selection is consistent with the previous annual comparisons. See DOE's 2008 forecast spreadsheet models of the lamp types for greater detail on the estimates.

IV. Comparison Results A. Rough Service Lamps

On October 18, 2016, DOE published a notice announcing that the actual unit sales for rough service lamps were 219.7 percent of the benchmark estimate for the 2015 calendar year. 81 FR 71794, 71800.7 For the 2016 and 2017 calendar years, the exponential growth forecast projected the benchmark unit sales estimate for rough service lamps to be 4,722,000 and 4,489,000 units respectively. The NEMA-provided shipment data reported shipments of 9,674,000 units in 2016 and 5,860,000 units in 2017. These findings are 204.9 and 130.5 percent of the benchmark estimate.

7 The October 2016 finding for rough service lamps was the result of a correction by NEMA to the data it initially submitted and relied upon by DOE for the April 7, 2016 notice. See, https://www.regulations.gov/document?D=EERE-2013-BT-STD-0051-0075.

Since unit sales for rough service lamps exceeded 200 percent of the benchmark estimate in 2015, and DOE did not complete an energy conservation standards rulemaking for these lamps by the end of calendar year 2016, the backstop requirement was triggered. DOE published a final rule on December 26, 2017, to adopt the statutory backstop requirements for rough service lamps which require that rough service lamps: (I) Have a shatter-proof coating or equivalent technology that is compliant with NSF/ANSI 51 and is designed to contain the glass if the glass envelope of the lamp is broken and to provide effective containment over the life of the lamp; (II) have a maximum 40-watt limitation; and (III) be sold at retail only in a package containing 1 lamp. (42 U.S.C. 6295(l)(4)(D)(ii)) DOE will continue to collect and model data for rough service lamps for two years after the effective date of January 25, 2018, in accordance with 42 U.S.C. 6295(l)(4)(I)(ii).

B. Vibration Service Lamps

On April 7, 2016, DOE published a notice announcing that the actual unit sales for vibration service lamps were 272.5 percent of the benchmark estimate for the 2015 calendar year. 81 FR 20261. For the 2016 and 2017 calendar years, the exponential growth forecast projected the benchmark unit sales estimate for vibration service lamps to be 2,467,000 and 2,345,000 units respectively. The NEMA-provided shipment data reported shipments of 6,869,000 units in 2016 and 6,018,000 units in 2017. These findings are 278.5 and 256.6 percent of the benchmark estimate.

Similar to rough service lamps, since unit sales for vibration service lamps exceeded 200 percent of the benchmark estimate in 2015, and DOE did not complete an energy conservation standards rulemaking for these lamps by the end of calendar year 2016, the backstop requirement was triggered. DOE published a final rule on December 26, 2017 to adopt the statutory backstop requirements for vibration service lamps which require that vibration service lamps: (I) Have a maximum 40-watt limitation; and (II) be sold at retail only in a package containing 1 lamp. (42 U.S.C. 6295(l)(4)(E)(ii)) DOE will continue to collect and model data for vibration service lamps for two years after the effective date of January 25, 2018, in accordance with 42 U.S.C. 6295(l)(4)(I)(ii).

C. Three-Way Incandescent Lamps

For 3-way incandescent lamps, the exponential growth forecast projected the benchmark unit sales estimate for 2016 to be 48,104,000 units and for 2017 to be 47,610,000 units. The NEMA-provided shipment data reported shipments of 31,768,000 units in 2016 and 28,468,000 units in 2017. As these findings are only 66 percent and 60 percent of the benchmark estimate respectively, DOE will continue to track 3-way incandescent lamp sales data and will not initiate an accelerated standards rulemaking for this lamp type at this time.

D. 2,601-3,300 Lumen General Service Incandescent Lamps

For 2,601-3,300 lumen general service incandescent lamps, the exponential growth forecast projected the benchmark unit sales estimate for 2016 to be 34,241,000 units and for 2017 to be 34,307,000 units. The NEMA-provided shipment data reported shipments of 3,679,000 units in 2016 and 2,794,000 units in 2017. As these findings are 10.7 and 8.1 percent of the benchmark estimate respectively, DOE will continue to track 2,601-3,300 lumen general service incandescent lamp sales data and will not impose statutory requirements for this lamp type at this time.

E. Shatter-Resistant Lamps

For shatter-resistant lamps, the exponential growth forecast projected the benchmark unit sales estimate for 2016 to be 1,679,000 units and for 2017 to be 1,684,000 units. The NEMA-provided shipment data reported shipments of 548,000 units in 2016 and 474,000 units in 2017. As these findings are only 32.6 and 28.2 percent of the benchmark estimate respectively, DOE will continue to track shatter-resistant lamp sales data and will not initiate an accelerated standards rulemaking for this lamp type at this time.

V. Conclusion

This NODA compares the 2016 and 2017 shipments against benchmark unit sales estimates for rough service lamps, vibration service lamps, 3-way incandescent lamps, 2,601-3,300 lumen general service incandescent lamps, and shatter-resistant lamps. For 3-way incandescent lamps, 2,601-3,300 lumen general service incandescent lamps, and shatter-resistant lamps, the 2016 and 2017 sales are not greater than 200 percent of the forecasted estimates. The 2016 and 2017 unit sales for vibration service lamps are greater than 200 percent of the benchmark unit sales estimate. The 2016 unit sales for rough service lamps are greater than 200 percent of the benchmark unit sales estimate but the 2017 unit sales are below the benchmark unit sales estimate. DOE will continue to monitor these lamp types and will assess 2018 unit sales next year.

Signed in Washington, DC, on July 20, 2018. Kathleen B. Hogan, Deputy Assistant Secretary for Energy Efficiency Energy Efficiency and Renewable Energy.
[FR Doc. 2018-16097 Filed 7-27-18; 8:45 am] BILLING CODE 6450-01-P
DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2016-9442; Airspace Docket No. 16-ASO-15] RIN 2120-AA66 Proposed Establishment of Class E Airspace; Crystal Springs, MS AGENCY:

Federal Aviation Administration (FAA), DOT.

ACTION:

Notice of proposed rulemaking (NPRM).

SUMMARY:

This action proposes to establish Class E airspace extending upward from 700 feet above the surface at Copiah County Airport, Crystal Springs, MS, to accommodate new area navigation (RNAV) global positioning system (GPS) standard instrument approach procedures serving the airport. Controlled airspace is necessary for the safety and management of instrument flight rules (IFR) operations at this airport.

DATES:

Comments must be received on or before September 13, 2018.

ADDRESSES:

Send comments on this rule to: U. S. Department of Transportation, Docket Operations, 1200 New Jersey Avenue SE, West Bldg. Ground Floor Rm. W12-140, Washington, DC 20590; telephone: 1-800-647-5527, or (202)-366-9826. You must identify the Docket No. FAA-2016-9442; Airspace Docket No. 16-ASO-15, at the beginning of your comments. You may also submit and review received comments through the internet at http://www.regulations.gov. You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal holidays.

FAA Order 7400.11B, Airspace Designations and Reporting Points, and subsequent amendments can be viewed on line at http://www.faa.gov/air_traffic/publications/. For further information, you can contact the Airspace Policy Group, Federal Aviation Administration, 800 Independence Avenue SW, Washington, DC 20591; telephone: (202) 267-8783. The Order is also available for inspection at the National Archives and Records Administration (NARA). For information on the availability of FAA Order 7400.11B at NARA, call (202) 741-6030, or go to https://www.archives.gov/federal-register/cfr/ibr-locations.html.

FAA Order 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.

FOR FURTHER INFORMATION CONTACT:

John Fornito, Operations Support Group, Eastern Service Center, Federal Aviation Administration, 1701 Columbia Ave., College Park, GA 30337; telephone (404) 305-6364.

SUPPLEMENTARY INFORMATION:

Authority for This Rulemaking

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 would establish Class E airspace extending upward from 700 feet above the surface at Copiah County Airport, Crystal Springs, MS, to support standard instrument approach procedures for IFR operations at this airport.

Comments Invited

Interested persons are invited to comment on this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal.

Communications should identify both docket numbers (Docket No. FAA-2016-9442 and Airspace Docket No. 16-ASO-15) and be submitted in triplicate to DOT Docket Operations (see “ADDRESSES” section for the address and phone number.) You may also submit comments through the internet at http://www.regulations.gov.

Persons wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2016-9442; Airspace Docket No. 16-ASO-15.” The postcard will be date/time stamped and returned to the commenter.

All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this document may be changed in light of the comments received. All comments submitted will be available for examination in the public docket both before and after the comment closing date. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket. All communications received on or before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

Availability of NPRMs

An electronic copy of this document may be downloaded through the internet at http://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's web page at http://www.faa.gov/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received and any final disposition in person in the Dockets Office (see the ADDRESSES section for address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal holidays. An informal docket may also be examined between 8:00 a.m. and 4:30 p.m., Monday through Friday, except federal holidays at the office of the Eastern Service Center, Federal Aviation Administration, Room 350, 1701 Columbia Avenue, College Park, GA 30337.

Availability and Summary of Documents for Incorporation by Reference

This document proposes to amend 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 ADDRESSES section of this document. FAA Order 7400.11B lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The Proposal

The FAA is considering an amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 to establish Class E airspace extending upward from 700 Feet above the surface within a 7-mile radius of Copiah County Airport, Crystal Springs, MS, providing the controlled airspace required to support the new RNAV (GPS) standard instrument approach procedures for IFR operations at the airport.

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 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.

Regulatory Notices and Analyses

The FAA has determined that this proposed 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 will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Environmental Review

This proposal would be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

Lists of Subjects in 14 CFR Part 71

Airspace, Incorporation by reference, Navigation (air).

The Proposed Amendment

In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

PART 71—DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR TRAFFIC SERVICE ROUTES; AND REPORTING POINTS 1. The authority citation for part 71 continues to read as follows: Authority:

49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.

§ 71.1 [Amended]
2. The incorporation by reference in 14 CFR 71.1 of Federal Aviation Administration Order 7400.11B, Airspace Designations and Reporting Points, dated August 3, 2017, and effective September 15, 2017, is amended as follows: Paragraph 6005 Class E Airspace Areas Extending Upward from 700 Feet or More Above the Surface of the Earth ASO MS E5 Crystal Springs, MS [New] Copiah County Airport, MS (Lat. 31°54′09″ N, long. 90°22′00″ W)

That airspace extending upward from 700 feet above the surface within a 7-mile radius of Copiah County Airport.

Issued in College Park, Georgia, on July 19, 2018. Ryan W. Almasy, Manager, Operations Support Group, Eastern Service Center, Air Traffic Organization.
[FR Doc. 2018-16134 Filed 7-27-18; 8:45 am] BILLING CODE 4910-13-P
COMMODITY FUTURES TRADING COMMISSION 17 CFR Part 23 RIN 3038-AE78 Segregation of Assets Held as Collateral in Uncleared Swap Transactions AGENCY:

Commodity Futures Trading Commission.

ACTION:

Proposed rule.

SUMMARY:

The Commodity Futures Trading Commission (“Commission” or “CFTC”) is proposing to amend selected provisions of its regulations in order to simplify certain requirements for swap dealers (“SDs”) and major swap participants (“MSPs”) concerning notification of counterparties of their right to segregate initial margin for uncleared swaps, and to modify requirements for the handling of segregated initial margin (the “Proposal”).

DATES:

Comments must be received on or before September 28, 2018.

ADDRESSES:

You may submit comments, identified by RIN 3038-AE78, by any of the following methods:

CFTC Comments Portal: https://comments.cftc.gov. Select the “Submit Comments” link for this rulemaking and follow the instructions on the Public Comment Form.

Mail: Send to Christopher Kirkpatrick, Secretary of the Commission, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street NW, Washington, DC 20581.

Hand Delivery/Courier: Follow the same instructions as for Mail, above.

Please submit your comments using only one of these methods. To avoid possible delays with mail or in-person deliveries, submissions through the CFTC Comments Portal are encouraged.

All comments must be submitted in English, or if not, accompanied by an English translation. Comments will be posted as received to https://comments.cftc.gov. You should submit only information that you wish to make available publicly. If you wish the Commission to consider information that you believe is exempt from disclosure under the Freedom of Information Act (“FOIA”),1 a petition for confidential treatment of the exempt information may be submitted according to the procedures set forth in § 145.9 of the Commission's regulations.2

1 5 U.S.C. 552.

2 17 CFR 145.9 (2017). Commission regulations referred to herein are found at 17 CFR chapter I, and can be accessed through the Commission's website, www.cftc.gov.

The Commission reserves the right, but shall have no obligation, to review, pre-screen, filter, redact, refuse or remove any or all of your submission from https://comments.cftc.gov that it may deem to be inappropriate for publication, such as obscene language. All submissions that have been redacted or removed that contain comments on the merits of the rulemaking will be retained in the public comment file and will be considered as required under the Administrative Procedure Act and other applicable laws, and may be accessible under the FOIA.

FOR FURTHER INFORMATION CONTACT:

Matthew Kulkin, Director, (202) 418-5213, [email protected]; Erik Remmler, Deputy Director, (202) 418-7630, [email protected]; or Christopher Cummings, Special Counsel, (202) 418-5445, [email protected], Division of Swap Dealer and Intermediary Oversight, Commodity Futures Trading Commission, 1155 21st Street NW, Washington, DC 20581.

SUPPLEMENTARY INFORMATION: I. Introduction A. Existing Requirements

Subpart L of the Commission's regulations (“Segregation of Assets Held as Collateral in Uncleared Swap Transactions” consisting of Regulations 23.700 through 23.704) was published in the Federal Register on November 6, 2013 and became effective January 6, 2014.3 Subpart L implements the requirements for segregation of initial margin for uncleared swap transactions set forth in section 4s(l) of the Commodity Exchange Act (“CEA” or the “Act”).4

3See 78 FR 66621 (Nov. 6, 2013).

4 7 U.S.C. 6s(l) (2012 & Supp. 2015). Like the Commission's regulations, the CEA can be accessed through the Commission's website.

CEA section 4s(l) addresses segregation of initial margin held as collateral in certain uncleared swap transactions. The section applies only to swaps between a counterparty and an SD or MSP that are not submitted for clearing to a derivatives clearing organization (“DCO”). It requires that an SD or MSP notify a counterparty that the counterparty has the right to require that any funds or property the counterparty provides as initial margin be segregated in a separate account from the SD's or MSP's assets. The separate account must be held by an independent third-party custodian and designated as a segregated account for the counterparty. CEA section 4s(l) does not preclude the counterparty and the SD or MSP from agreeing to their own terms regarding investment of initial margin (subject to any regulations adopted by the Commission) or allocation of gains or losses from such investment. If the counterparty elects not to require segregation of margin, the SD or MSP is required to report quarterly to the counterparty that the SD's or MSP's back office procedures relating to margin and collateral are in compliance with the agreement between the counterparty and the SD or MSP.

In January 2016, the Commission adopted margin requirements for certain uncleared swaps applicable to SDs and MSPs for which there is no prudential regulator (“CFTC Margin Rule”).5 The prudential regulators (“Prudential Regulators”) include the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Farm Credit Administration, and the Federal Housing Finance Agency.6 The Prudential Regulators adopted margin requirements similar to the CFTC Margin Rule for swaps entered into by SDs and MSPs that they regulate (“Prudential Regulator Margin Rules”) in November 2015.7 The CFTC Margin Rule and the Prudential Regulator Margin Rules establish initial and variation margin requirements for SDs and MSPs.8

5 Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants, 81 FR 636 (Jan. 6, 2016). The CFTC Margin Rule, which became effective April 1, 2016, is codified in part 23 of the Commission's regulations. 17 CFR 23.150 through 23.159, 23.161.

6 7 U.S.C. 1a(39).

7See Margin and Capital Requirements for Covered Swap Entities, 80 FR 74840 (Nov. 30, 2015).

8See 17 CFR 23.151.

Prior to the CFTC Margin Rule effective date of April 1, 2016, if initial margin was to be exchanged by counterparties to uncleared swaps involving an SD or MSP, the requirements of subpart L applied. The CFTC Margin Rule amended Regulation 23.701 to clarify that from and after the effective date of the CFTC Margin Rule, the requirements of Regulations 23.702 and 23.703 did not apply in those circumstances where segregation is mandatory under the CFTC Margin Rule.9 As a result, Regulations 23.702 and 23.703 generally only apply when initial margin is to be exchanged between an SD or MSP and (i) a nonfinancial end-user, or (ii) a financial end-user without “material swaps exposure,” as defined in the CFTC Margin Rule.

9 81 FR 704 (Jan. 6, 2016). The amendment did not address the application of subpart L to swaps subject to mandatory segregation under the Prudential Regulator Margin Rules. As described below, this Proposal would clarify that the swaps subject to the Prudential Regulator Margin Rules are to be addressed in the same manner as swaps subject to the CFTC Margin Rule.

Regulation 23.700 defines certain terms used in subpart L. Regulation 23.701 requires an SD or MSP: (1) To notify each counterparty to a swap that is not submitted for clearing, that the counterparty has the right to require that any initial margin it provides be segregated; (2) to identify a creditworthy custodian that is a non-affiliated legal entity, independent of the SD or MSP and the counterparty, to act as depository for segregated margin assets; and (3) to provide information regarding the costs of such segregation. The regulation specifies that the notification is to be made (with receipt confirmed in writing) to an officer (of the counterparty) responsible for management of collateral (or to specified alternative person(s)), and that it need only be made once in any calendar year. Finally, the regulation provides that a counterparty can change its election to require (or not to require) segregation of initial margin by written notice to the SD or MSP.

Regulation 23.702 reiterates the requirement that the custodian be a legal entity independent of the SD or MSP and the counterparty. It also requires that segregated initial margin be held in an account segregated for, and on behalf of, the counterparty and designated as such. Finally, the regulation specifies that the segregation agreement is to provide that: (1) Withdrawals from the segregated account be made pursuant to agreement of both the counterparty and the SD or MSP, with notification to the non-withdrawing party; and (2) the custodian can turn over segregated assets upon presentation of a sworn statement that the presenting party is entitled to control of the assets pursuant to agreement among the parties.

Regulation 23.703 restricts investment of segregated assets to investments permitted under Regulation 1.25, and (subject to that restriction) permits the SD or MSP and the counterparty to agree in writing as to investment of margin and allocation of gains and losses.

Regulation 23.704 requires the SD's or MSP's chief compliance officer (“CCO”) to report quarterly to any counterparty that does not elect to segregate initial margin whether or not the SD's or MSP's back office procedures regarding margin and collateral requirements were, at any point in the previous calendar quarter, not in compliance with the agreement of the counterparties.

B. Factors Considered by the Commission

After more than four years of administering subpart L of part 23, the Commission has observed that the detailed requirements of those regulations have proven difficult for SDs and MSPs to implement and to satisfy in a reasonably efficient manner. These observations have been buttressed by suggestions submitted in response to the Commission's Project KISS initiative as described below. In addition, the Commission understands that very few swap counterparties have exercised their rights to elect to segregate initial margin collateral pursuant to subpart L during the four years the regulations have been effective.

Early in the implementation period, in response to multiple inquiries, Commission staff issued Staff Letter 14-132 (October 31, 2014) 10 providing interpretative guidance to SDs and MSPs regarding application of certain of the segregated margin requirements. In particular, the letter noted concerns expressed by SDs and MSPs that despite their earnest efforts to obtain confirmation of receipt of notification and election regarding segregation, failure by a counterparty to respond to the SD or MSP could bar any further swap transactions with the counterparty until a response was received.11 However, notwithstanding the issuance of Staff Letter 14-132, issues regarding compliance with subpart L continue to be raised.12

10See CFTC Staff Letter No. 14-132 (October 31, 2014), available at https://www.cftc.gov/sites/default/files/idc/groups/public/@lrlettergeneral/documents/letter/14-132.pdf.

11 The Proposal would address generally some of the confusion that prompted the issuance of Staff Letter 14-132 in the context of other changes to subpart L that are proposed.

12 For example, issues regarding compliance with these regulations have been raised with the National Futures Association as recently as January 2018, indicating ongoing uncertainty. See pp. 6-7 of the transcript of the NFA Swap Dealer Examination Webinar, January 18, 2018, available at https://www.nfa.futures.org/members/member-resources/files/transcripts/sdexamswebinartranscriptjan2018.pdf.

On May 9, 2017, the Commission published in the Federal Register a request for information 13 pursuant to the Commission's Project KISS initiative seeking suggestions from the public for simplifying the Commission's regulations and practices, removing unnecessary burdens, and reducing costs. A number of suggestions received addressed various provisions of subpart L. In general, the suggestions echoed Commission staff concerns that the requirements in subpart L may be more burdensome than is necessary to achieve the purposes of the statute and that the requirements may be counterproductive by discouraging the use of individual segregation accounts.14 Persons responding to Project KISS also noted that some requirements cause confusion because they overlap with segregation requirements in the margin regulations more recently adopted by the CFTC and Prudential Regulators.15 Furthermore, responders noted that the requirements in subpart L are overly prescriptive eliminating the possibility for reasonable bilateral negotiation of certain terms that takes place in the normal course to determine appropriate collateral arrangements based on the circumstances of the broader counterparty relationship.16

13See 82 FR 21494 (May 6, 2017) and 82 FR 23765 (May 24, 2017).

14See, e.g. letter from the Financial Services Roundtable (“FSR Letter”), dated September 30, 2017 at 55 (noting that “compliance with these regulations has proven to be unduly burdensome for swap dealers when weighed against the protections afforded to swap counterparties thereunder”), https://comments.cftc.gov/PublicComments/ViewComment.aspx?id=61427&SearchText=.

15Id. See also letter from the Securities Industry and Financial Markets Association (“SIFMA Letter”) dated September 29, 2017 at 2 (“These requirements create unnecessarily burdensome obligations, which in many instances are duplicative or create confusion due to parallel mandatory collateral segregation requirements found within the CFTC and [prudential regulator] rules on margin requirements for non-centrally cleared swaps, and similar requirements in foreign jurisdictions.”).

16See SIFMA Letter at 2. See also letter from the Global Foreign Exchange Division of the Global Financial Markets Association, dated September 29, 2017.

Responders also asserted that counterparties to uncleared swaps rarely elect to require segregation of margin pursuant to the existing provisions of subpart L.17 Commission staff has observed evidence of minimal uptake of the election to segregate. In addition, Commission staff has discussed this issue with the National Futures Association (“NFA”) to ascertain NFA's observations from examining a substantial number of SDs in connection with the implementation of subpart L. Based on this experience, it appears that for nearly every SD examined, fewer than five counterparties elected segregation pursuant to subpart L since registration. For some SDs, not a single counterparty has elected to segregate pursuant to subpart L.

17See FSR Letter at 55 (“Our members have advised that counterparties (i) rarely, if ever, elect to segregate [initial margin] and (ii) have found little use for receiving the notices.”).

In light of these considerations, the Commission is proposing to amend the regulations governing segregation of margin for uncleared swaps. The Commission believes that the amendments proposed today will reduce unnecessary burdens on registrants and market participants by simplifying some overly detailed provisions, thereby reducing the intricate and prescriptive requirements that have been found during implementation to provide little or no benefit. These changes will also facilitate more efficient swap execution by eliminating complexity and confusion that slows down documentation and negotiation of hedging and other swap transactions. Finally, the amendments, by reducing the prescriptive elements of the rule, potentially could encourage more segregation (as was intended by the statute) by providing flexibility for the parties to establish segregation arrangements that better suit their specific needs.

At the same time that the Commission is proposing specific changes, it is seeking comment from the public on the appropriateness of these changes, as well as suggestions for other amendments that can streamline, simplify, and reduce the costs of these regulations without sacrificing the protections called for by CEA section 4s(l).

II. The Proposal A. Regulation 23.700—Definitions

Section 23.700 defines “Margin” as “both Initial Margin and Variation Margin.” 18 As proposed to be amended, subpart L would no longer refer collectively to initial margin and variation margin, since the right to require segregation applies only to initial margin, and not to variation margin. Thus, there is no need for the separate defined term “Margin.” The Commission therefore proposes to eliminate the definition of Margin from Regulation 23.700, and to make conforming changes to subpart L by replacing the term “Margin” with “Initial Margin” in Regulations 23.701, 23.702, and 23.703.19

18See 17 CFR 23.700.

19 A grammatical change is also proposed for the definition of the term “segregate.”

B. Regulation 23.701—Notification of the Right To Require Segregation

Paragraphs (a) and (b) of Regulation 23.701 direct an SD or MSP to notify each counterparty of the right to require segregation of initial margin. The language used is consistent with CEA section 4s(l). Paragraphs (c), (d) and (e) add specific requirements not expressly established in the statute. Paragraph (c) requires the SD or MSP to furnish the required notification to an officer of the counterparty responsible for management of collateral, or if no such person is identified by the counterparty, then to the chief risk officer, or if there is no such officer, to the chief executive officer, or if none, the highest-level decision-maker for the counterparty. Paragraph (d) requires the SD or MSP, “prior to confirming the terms of any such swap,” to obtain confirmation of receipt of the notification, and the counterparty's election to require or not require segregation of initial margin (such confirmation to be retained in accordance with Regulation 1.31). Paragraph (e) provides that the notification need be made only once in any calendar year.20 Finally, paragraph (f) provides that the counterparty may change the segregation election at its discretion by providing a written notice to the SD or MSP. Paragraph (f) is not being amended in this Proposal except to redesignate it as paragraph (d).

20 Some confusion has been caused by the requirement in paragraph (d) to provide the notice “prior to confirming the terms of any such swap,” and the requirement in paragraph (e) to provide the notice once in any calendar year.

Based on staff's implementation experience and on suggestions received in connection with Project KISS, the Commission believes that these requirements are unnecessarily prescriptive and that they do not reflect the practical realities of how over-the-counter swap transactions are negotiated and managed by the parties. Accordingly, the Commission is proposing to modify the notification requirement in paragraph (a) and to remove the requirements in existing paragraphs (c), (d) and (e).

Under the Proposal, paragraph (a) would be revised to require that the notification to a counterparty be made prior to execution of the first uncleared swap transaction that provides for the exchange of initial margin,21 not prior to each transaction or annually as currently prescribed by paragraphs (d) and (e).22 CEA section 4s(l) requires notification of the right to segregate “at the beginning of a swap transaction.” The Commission is interpreting that phrase to mean at the beginning of an SD's or MSP's swap transaction relationship with each counterparty.

21 This revision is consistent with guidance provided in Staff Letter 14-132, cited above.

22 Thus, under the Proposal paragraph (e) of Regulation 23.701 (providing that the notification need only be made once in any calendar year) would become unnecessary, and is proposed to be deleted.

This interpretation is consistent with the Commission's stated view when it originally proposed and adopted Regulation 23.701(e), which only requires notice once a year. With respect to the phrase in the statute “at the beginning of a swap transaction,” the Commission noted that “[w]hile this language could be read to require transaction-by-transaction notification, where the parties have a pre-existing or on-going relationship, such repetitive notification could be redundant, costly and needlessly burdensome.” 23

23 78 FR 66625.

When adopting final Regulation 23.701(e), the Commission considered comments requesting a loosening of the once-per-year notice requirement and rejected the requests in the belief that requiring notification once each year would balance the burden of providing notices and getting responses with the importance of the right to segregate initial margin.24 At this time, based on implementation experience, the Commission is proposing to require notification at the beginning of a swap trading relationship that provides for exchange of initial margin. The importance of the notification informing the counterparty of the right to segregate is paramount at the beginning of the SD/MSP—counterparty relationship. It is at the time the parties initiate the first transaction that the decision to segregate initial margin will typically be made.25 Subsequent notifications are repetitive to the initial notification and risk adding confusion over the duration of the contractual relationship of the parties. In this regard, the Commission understands that counterparties rarely change their election, once made. Accordingly, in addition to modifying the notification requirement in paragraph (a), the Commission proposes to eliminate paragraph (e)'s annual notification requirement in lieu of the proposed notification at the beginning of the first uncleared swap transaction that provides for exchange of initial margin.

24Id.

25 For existing master netting agreements for which the SD has already sent a segregation notice, the Commission is of the view that such notice would be sufficient for purposes of complying with the amended regulations, if adopted, and therefore the SD would not be required to send a new notice.

Paragraph (a) would also be revised to eliminate the notification requirement where segregation is mandatory under Regulation 23.157 and where it is mandated under applicable rules adopted by a Prudential Regulator under CEA section 4s(e)(3). Paragraph (a)(2) (the requirement that the notification identify one or more creditworthy, independent custodians) would be deleted because selection of a custodian can be made when and if the counterparty elects to require segregation. Because very few counterparties elect to require segregation, it is unnecessarily burdensome to require an SD or MSP to confirm which custodians are available and continually update its notification form with the name of the custodian(s) available. Moreover, the Commission understands that a counterparty's initial decision to consider requiring (or not requiring) segregation is driven principally by whether the counterparty is concerned about protecting its initial margin and the terms of the segregation agreement, and not by the identity of the custodian. Similarly, paragraph (a)(3) (information regarding the price for segregation for each custodian) would be deleted because such pricing may vary for each segregation arrangement and would normally be subject to negotiation. To the extent pricing would be a factor in the decision to segregate, counterparties can and do discuss pricing as a term of the custodial arrangement when the counterparty indicates an interest in segregation. Moreover, the requirements in paragraphs (a)(2) and (a)(3) are not found in CEA section 4s(l).

Similarly, the Proposal would eliminate the requirement in current paragraph (c) that the SD or MSP provide the notification to a person at the counterparty with a specific job title. Based on implementation experience, the Commission is of the view that the regulation as initially adopted is unnecessarily prescriptive in dictating who must receive the notification. For example, in many cases, the person at the counterparty best situated to evaluate the notification and the decision to segregate will be a person directly involved in negotiating the swap regardless of that person's title. The Commission notes that in removing the specific designation of officers to receive the notification it is not eliminating the expectation that each registrant will use reasonable judgment in identifying an appropriate person at the counterparty who can evaluate the right to elect segregation (and either act on it or bring it to the attention of someone in a position to act on it). The Commission continues to believe that, to be effective, the notification must be made to a person at the counterparty who understands its meaning and, to the extent necessary, can direct it to the appropriate personnel at the counterparty. The proposed change seeks to advance the same underlying policy objective as the current requirement (namely that the notification be given to appropriate personnel at the counterparty), but would recognize that dictating how counterparties communicate the information in question creates unnecessary burdens and potentially hinders the ability of the parties to direct the information to the person(s) best situated to evaluate it.

As proposed, new paragraph (c) would simplify requirements in existing Regulation 23.701 by providing that “[i]f the counterparty elects to segregate initial margin, the terms of segregation shall be established by written agreement.”

As noted above, the Commission is proposing to eliminate the additional requirements in existing paragraph (d), which are more extensive than the notification requirements set forth in CEA section 4s(l). Subsequent to adoption of subpart L, experience with implementation of the requirements of Regulation 23.701 has made the Commission aware of problems experienced by registrants in complying with these additional requirements. For example, persons seeking guidance have noted that paragraph (d)'s current requirement that the SD not execute a swap with the counterparty until it receives confirmation of the counterparty's receipt of the notification has the potential to block swap trading in some circumstances.26 Instances of forestalled trading caused by this requirement could be particularly harmful for nonfinancial end-users that have ongoing, dynamic hedging programs (to hedge, for example, commodity price risk or foreign exchange risk).

26See Staff Letter 14-132, cited above.

Based on implementation experience, compliance with the existing segregation notification requirements in the regulation necessitates lengthy explanations and instructions from SDs and MSPs to their counterparties and imposes additional administrative processes requiring counterparties to take steps that are outside of the normal course of transacting in swaps. Some of these steps cause transaction delays and deviations from established business procedures for collateral custodial arrangements and disclosure of counterparty rights generally, and do not advance the counterparty's right to segregate initial margin. For nonfinancial end-user counterparties who tend to use swaps primarily for hedging purposes, these added compliance steps often cause confusion and uncertainty that can inhibit opportune, timely hedging. For counterparties that execute swaps frequently and have determined that they wish to segregate, the additional requirements merely add unnecessary hurdles to the transaction process. Accordingly, the Commission does not believe that the burdens imposed by these prescriptive requirements provide meaningful regulatory benefits beyond those provided by the provisions in proposed amended Regulation 23.701.

C. Regulation 23.702—Requirements for Segregated Margin

Existing Regulation 23.702 sets forth requirements for the custody of initial margin segregated pursuant to a counterparty's election under Regulation 23.701. Paragraph (c)(2) of Regulation 23.702 provides specific requirements for the withdrawal and turnover of control of initial margin. In particular, paragraph (c)(2) requires the custodian to turn over control of initial margin upon presentation of a written statement made by an authorized representative under oath or under penalty of perjury as specified in 28 U.S.C. 1746. The Statement must state that the counterparty, SD or MSP, as the case may be, is entitled to assume control of the initial margin pursuant to the parties' agreement. The other party must be immediately notified of the turnover of control.

The Commission believes that, while paragraph (c)(2) may generally be consistent with the manner in which custodial arrangements work, the prescriptive requirements of the regulation, including requiring a specific form, the language used, and the certification needed, do not account for change in control arrangements in custodial agreements that are sometimes customized to reflect the unique business facts and circumstances that may exist between any two parties and the custodian. For example, the unique nature of the collateral posted or the specific terms of change in control triggers may warrant different notice procedures than those specified by paragraph (c)(2). Alternative notice procedures may allow for more timely and effective change in control under real-world circumstances and better protect each party's interests. Accordingly, the Commission believes that more flexibility is warranted, and that it is more appropriate to leave these matters up to negotiation by the parties.

D. Regulation 23.703—Investment of Segregated Margin

Regulation 23.703 requires initial margin segregated pursuant to subpart L to be invested consistent with Commission Regulation 1.25. Regulation 1.25 sets forth standards for investment of customer funds by a futures commission merchant or derivatives clearing organization in the context of exchange-traded futures and cleared swaps. When proposing Regulation 23.703, the Commission expressed its view that Regulation 1.25 “has been designed to permit an appropriate degree of flexibility in making investments with segregated property, while safeguarding such property for the parties who have posted it, and decreasing the credit, market, and liquidity risk exposures of the parties who are relying on that margin.” 27

27See 75 FR 75432, 75434 (Dec. 3, 2010).

A suggestion in response to the Project KISS initiative noted that Regulation 1.25 is designed to protect exchange customers for which margin investment decisions are outside of their control.28 Regulation 1.25 includes fairly extensive and specific requirements as to the mechanisms for holding and investing margin and the qualitative aspects of the investments held. With respect to initial margin for uncleared swaps that is not held in accordance with Regulation 23.157 or with the Prudential Regulator Margin Rules, the margin investment decisions are typically a matter of contract subject to negotiation between the parties. As such, each counterparty has a voice in how the initial margin may be invested.

28See SIFMA Letter at 4.

In addition, the terms of most exchange-traded and cleared products are standardized and the customer's primary relationship with the FCM or DCO centers upon the trading and clearing of those standardized products. Conversely, over-the-counter swaps, by their nature, tend to be more customized and are often part of a broader financial relationship. For example: Interest rate swaps with end-users are often designed to match maturities of loans or bonds, with the rate of the swap tied to the rate on the loan or bond; commodity swaps often hedge the counterparty's physical commodity production or consumption risks that arise from a particular commercial enterprise; and foreign exchange swaps often hedge an entity's exposure to cross-border commercial transactions. In each case, the SD or MSP sometimes plays additional financial roles, such as providing a loan or other credit or liquidity support, brokering physical commodity purchases or sales, or acting as a correspondent bank. Accordingly, each counterparty, particularly nonfinancial end-user counterparties, may find better transactional efficiencies and may be better served and protected in related credit transactions if the types of collateral and the investment procedures and mechanisms used are determined through bilateral negotiation of the terms thereof by the parties.

Given the greater breadth and variability, both in the terms and purposes of uncleared swaps and in the nature of the relationship between the counterparty and the SD or MSP, the Commission believes a regulation that provides greater flexibility for the parties to negotiate appropriate initial margin investment terms will, in most cases, better serve the interests of the parties. For the same reasons, allowing greater flexibility may also encourage more counterparties to elect to segregate pursuant to subpart L.

The Commission recognizes that in some circumstances, nonfinancial end-user counterparties might have less negotiating leverage with a sophisticated SD or MSP. However, the regulations as originally adopted give little or no flexibility for counterparties and SDs or MSPs to negotiate mutually beneficial terms and to consider other factors such as the broader financial relationship between the parties. For nonfinancial end-user counterparties the segregation of initial margin is at their discretion. If these counterparties have a voice in how segregated initial margin is invested, the returns of which they will often receive, they may be more likely to elect to require segregation.

E. Regulation 23.704—Requirements for Non-Segregated Margin

Existing Regulation 23.704(a) requires the CCO of each SD or MSP to report quarterly to each counterparty that does not elect segregation of initial margin on whether or not the SD's or MSP's back office procedures relating to margin and collateral requirements failed at any time during the previous calendar quarter to comply with the agreement of the counterparties.29 The Commission believes it is unnecessary to specify that the CCO be the individual that makes such reports, so long as the information is provided to counterparties. For many firms, middle or back office staff, not the CCO, implement collateral management pursuant to the terms of each collateral management agreement. Those staff people are therefore better situated to assess compliance with agreements and to provide the quarterly report. Accordingly, there are likely personnel at each SD other than the CCO who are better situated to more accurately and efficiently provide the report.30 The Commission therefore proposes to require that the SD or MSP make the reports without specifying any particular person to perform that requirement. The Commission further proposes to simplify the language regarding timing of the required reports to eliminate uncertainty as to the regulation's meaning. With respect to paragraph (b) of the regulation, the Commission is proposing to specify that the reports required under paragraph (a) need be delivered only to counterparties who choose not to require segregation (as opposed to the current wording that simply says “with respect to each counterparty”) to more closely follow the statutory language underlying this requirement.

29 Consistent with Staff Letter 14-132, the Commission confirms that the reporting requirement under Regulation 23.704 does not apply if no initial margin will be required as part of the swap transaction.

30 The Commission notes that the CCO continues to be responsible, under Commission regulation 3.3, to report in the CCO annual report any material non-compliance issues involving back office procedure relating to margin and collateral requirements.

III. Request for Comment

The Commission requests comments, generally, regarding the proposed changes to Regulations 23.700, 23.701, 23.702, 23.703, and 23.704. The Commission also specifically requests comment on the following questions:

• Are the proposed amendments to subpart L appropriate in light of the requirements of CEA section 4s(l) and in light of the commercial realities encountered by SDs, MSPs, and counterparties engaging in uncleared swap transactions?

• Should the Commission revise or eliminate any other provisions of subpart L? Are there additional ways in which the Commission can simplify, streamline, and reduce the costs of these regulations without impairing the rights and safeguards intended by CEA section 4s(l)?

• Do the proposed amendments appropriately preserve the rights of counterparties articulated in CEA section 4s(l)? Is the Commission's proposed interpretation of CEA section 4s(l)(1)(A) reasonable given the commercial realities of uncleared swaps transactions and relationships between SDs and MSPs and their counterparties?

• As proposed, Regulation 23.701(a) provides that “[a]t the beginning of the first swap transaction that provides for the exchange of Initial Margin” an SD or MSP must notify the counterparty of its right to require segregation of initial margin. Should the Commission provide specific benchmark events that call for delivery of a segregation notification? If so, would entering into a master netting agreement or other contractual relationship be appropriate? What other events may be relevant for marking “the beginning of the first swap transaction”? Should the Commission provide that the counterparty may request or opt to continue to receive an annual or some other periodic notification? Should the Commission provide that the counterparty may request or opt to receive notification at the beginning of each swap transaction?

• The Commission notes that the proposed deletion of paragraph (a)(2) of Regulation 23.701 (requirement to identify one or more custodians as an acceptable depository for segregated initial margin) also removes language specifying that one of the identified custodians “be a creditworthy non-affiliate.” Under the Proposal, Regulation 23.702(a) would continue to require that the custodian “must be a legal entity independent of both the swap dealer or major swap participant and the counterparty.” Should the Commission adopt more specific financial or affiliation qualifications for the custodian that an SD or MSP uses as a depository for segregated initial margin, and if so, what should those qualifications be?

• Under Regulation 23.703(a), margin that is segregated pursuant to an election under Regulation 23.701 may only be invested consistent with Regulation 1.25. How has the limitation impacted counterparties' decisions to make an election under Regulation 23.701?

IV. Related Matters A. Regulatory Flexibility Act

The Regulatory Flexibility Act (“RFA”) requires Federal agencies to consider whether the regulations they propose will have a significant economic impact on a substantial number of small entities and, if so, provide a regulatory flexibility analysis respecting the impact.31 Whenever an agency publishes a general notice of proposed rulemaking for any regulation, pursuant to the notice-and-comment provisions of the Administrative Procedure Act,32 a regulatory flexibility analysis or certification typically is required.33 The Commission previously has established certain definitions of “small entities” to be used in evaluating the impact of its regulations on small entities in accordance with the RFA.34 The Commission has previously established that SDs, and MSPs and ECPs 35 are not small entities for purposes of the RFA.36

31 5 U.S.C. 601 et seq.

32 5 U.S.C. 553. The Administrative Procedure Act is found at 5 U.S.C. 500 et seq.

33See 5 U.S.C. 601(2), 603, 604, and 605.

34See Registration of Swap Dealers and Major Swap Participants, 77 FR 2613 (Jan. 19, 2012).

35 Eligible contract participants, as defined in CEA section 1a(18), 7 U.S.C. 1a(18).

36See Further Definition of “Swap Dealer,” “Security-Based Swap Dealer,” “Major Swap Participant,” “Major Security-Based Swap Participant” and “Eligible Contract Participant,” 77 FR 30596, 30701 (May 23, 2012).

Accordingly, the Chairman, on behalf of the Commission, hereby certifies pursuant to 5 U.S.C. 605(b) that the Proposal will not have a significant economic impact on a substantial number of small entities.

B. Paperwork Reduction Act 1. Background

The Paperwork Reduction Act of 1995 (“PRA”) 37 imposes certain requirements on Federal agencies (including the Commission) in connection with their conducting or sponsoring a collection of information as defined by the PRA. The Proposal would result in such a collection, as discussed below. A person is not required to respond to a collection of information unless it displays a currently valid control number issued by the Office of Management and Budget (“OMB”). The Proposal contains a collection of information for which the Commission has previously received a control number from OMB. The title for this collection of information is “Disclosure and Retention of Certain Information Relating to Swaps Customer Collateral, OMB control number 3038-0075.” 38 Collection 3038-0075 is currently in force with its control number having been provided by OMB.

37 44 U.S.C. 3501 et seq.

38See OMB Control No. 3038-0075, https://www.reginfo.gov/public/do/PRAOMBHistory?ombControlNumber=3038-0075# (last visited June 29, 2017).

The Commission is proposing to revise collection 3038-0075 to incorporate proposed changes to reduce the number of notices a SD or MSP must provide to its counterparties with respect to the rights of such counterparties to segregate initial margin for uncleared swaps. The Commission does not believe the Proposal would impose any other new collections of information that require approval of OMB under the PRA.

2. Modification of Collection 3038-0075

The Proposal would modify collection 3038-0075 by eliminating the requirement that the notification of the right to segregate be provided on an annual basis to a specified officer of the counterparty such that the notice would only need to be provided once to each counterparty at the beginning of the first non-cleared swap transaction that provides for the exchange of initial margin. The Commission originally estimated that each SD and MSP would, on average, provide the segregation notice to approximately 1,300 counterparties each year and that the burden for preparing and furnishing the notice would be 2 hours, for an annual burden of 2,600 hours.39 The Commission is estimating that each SD and MSP would, on average, have approximately 300 new counterparties each year for a total burden of 600 hours per registrant. Accordingly, the Commission is proposing to revise its overall burden estimate associated with Regulation 23.701 for this collection by reducing the per registrant annual burden by 2,000 hours.

39See 78 FR at 66631.

C. Cost-Benefit Considerations 1. Background

Section 15(a) of the CEA requires the Commission to consider the costs and benefits of its actions before promulgating a regulation under the CEA or issuing certain orders.40 Section 15(a) further specifies that the costs and benefits shall be evaluated in light of five broad areas of market and public concern: (1) Protection of market participants and the public; (2) efficiency, competitiveness, and financial integrity of futures markets; (3) price discovery; (4) sound risk management practices; and (5) other public interest considerations. With respect to the proposed regulation changes discussed above, the Commission considers the costs and benefits resulting from its discretionary determinations with respect to the section 15(a) factors, and seeks comments from interested persons regarding the nature and extent of such costs and benefits.

40 7 U.S.C. 19(a).

2. Regulations 23.700, 23.701, 23.702 and 23.703—Notification of Right to Initial Margin Segregation

The baseline for these cost and benefit considerations is the status quo, which is existing market conditions and practice in response to the requirements of current §§ 23.700, 23.701, 23.702, and 23.703.41 Subpart L: (1) Requires SDs or MSPs to notify counterparties of the right to segregate initial margin; (2) establishes certain procedures regarding the notification; and (3) establishes certain requirements for the initial margin segregation arrangements.

41See 78 FR at 66632-36 (discussing the cost-benefit considerations with regard to the segregation regulation).

The Commission is proposing a more flexible approach that reduces some regulatory burdens that provide little or no corresponding benefit. The Proposal would eliminate the definition of “Margin” because it would no longer be needed. The Proposal would also revise when the segregation notice is required. Additionally, the Proposal would eliminate the requirements that (1) the SD or MSP provide the segregation notice to an officer of the counterparty with specific qualifications, and (2) the SD or MSP obtain the counterparty's confirmation of receipt of the segregation notice. Finally, the Proposal would allow the parties to establish the notice of change of control provisions and the commercial arrangements for investment of segregated collateral by contract instead of imposing specific requirements.

(i) Cost and Benefit Considerations

The general purpose of the changes proposed is to reduce burdens and improve the benefits intended by subpart L. The Commission preliminarily believes the proposed changes to subpart L would not impose any new requirements on registrants and instead would reduce or make the regulations more flexible allowing market participants to use standard market practices regarding the implementation of the initial margin segregation requirements. The simplification of the notification requirements would likely reduce the time needed to complete the notification process and may facilitate more efficient and timely trading for new customer relationships. The proposed changes would also reduce costs by eliminating the requirements for those swaps that must comply with the Prudential Regulator Margin Rules mandatory margin requirements. In addition, the changes will provide benefits to the parties to swaps by allowing the parties to establish by contract the terms for collateral management and for change in control and investment of segregated initial margin in a manner that better suits their business needs. To the extent the parties would be able to negotiate more efficient segregation agreements and agree to investment arrangements that generate higher returns that are passed on to the counterparty, as is most often the case for uncleared swaps, the parties would benefit. The Commission believes that the simplification of the requirements and greater flexibility will therefore encourage more counterparties to elect to segregate initial margin.

As noted above, in some circumstances, nonfinancial end-user counterparties might have less negotiating leverage when negotiating the terms of segregation agreements with experienced SDs or MSPs. Reducing the prescriptive requirements in the current rule could therefore reduce protections for the counterparties. However, it is not clear how incentives or disincentives may impact the negotiating choices of SDs and MSPs as well as the counterparties and therefore the extent to which the requirements provide protections. For example, regarding the choice of investments, the SD or MSP may seek to restrict investments to the most liquid investments that would be easily liquidated if the counterparty defaults. Those liquid investments, which would likely be similar to the investments permitted under Regulation 1.25, may in turn generate lower returns passed on to the SD/MSP's counterparties. Conversely, the current regulations give little or no flexibility for counterparties and SDs or MSPs to negotiate mutually beneficial terms and consider other factors such as the broader financial relationship between the parties. Furthermore, for nonfinancial end-user counterparties, the segregation of initial margin is discretionary. If the counterparties have no voice in how segregated initial margin is invested, there may be less incentive for the counterparty to elect to require segregation.

The Commission believes that the proposed changes to subpart L might lead to reduced costs for registrants, because they would no longer have to comply with some of the more prescriptive requirements imposed by the regulations. The Commission is, however, unable to quantify the potential cost savings because the cost savings depend on numerous factors that are particular to each SD or MSP and each counterparty relationship. For example, the factors affecting the costs involved could include: The size and complexity of an SD's dealing activities, the complexity of the swap transactions, the level of sophistication of each counterparty, the degree to which automated notice technologies may be used to satisfy these requirements, and the nature of the custodial and investment documents in particular segregation arrangements.

(ii) Section 15(a) Considerations a. Protection of Market Participants and the Public

Subpart L is intended to provide counterparties to SDs and MSPs with notice of the right to elect to segregate initial margin. The Commission recognizes that the proposed changes to make the regulations less prescriptive might potentially negatively impact the goal of protecting market participants by removing specific requirements for the segregation agreements. However, the Commission is of the view that the intended purpose and benefits of subpart L remain in place because the Proposal continues to implement the statutory requirements. In addition, the parties and the selected custodian would now have the flexibility to establish requirements for margin segregation through negotiated contracts that meet their respective needs, thereby providing market participants with the flexibility and opportunity to protect themselves better by contract. Finally, the greater flexibility provided by the amended regulations may increase the voluntary use of initial margin segregation by counterparties, a process that was intended to provide better protection for the counterparty in the event of default by the SD or MSP.

b. Efficiency, Competitiveness, and Financial Integrity of Markets

Subpart L promotes the financial integrity of markets by providing for the protection of counterparty collateral and by mitigating systemic risk that may result from the loss of access to the collateral in the event of a counterparty default. As discussed above, given that registrants would still be expected to enter into segregation arrangements with counterparties that elect to segregate, and, with the amendments, registrants would now be able to develop segregation arrangements tailored to their businesses and swap transactions, the Commission is of the view that the proposed changes likely would have a positive impact on market integrity.

The Commission preliminarily believes that the proposed amendments will not have a significant impact on the competiveness or efficiency of markets because this rulemaking only affects how collateral is protected and segregated but not how market participants elect to trade.

c. Price Discovery

The Commission believes the proposed amendments to subpart L will not have a significant effect on price discovery.

d. Sound Risk Management

Subpart L provides for the management and protection of counterparty collateral and therefore mitigates the risk of loss of access to the collateral, which loss can have an adverse impact on registrants, counterparties and the U.S. financial markets. As discussed, the proposed changes remove certain prescriptive requirements, but do not alter the overall principles of the existing requirements of subpart L. Therefore, the Commission is of the view that sound risk management practices will not be adversely impacted by the proposed changes.

e. Other Public Interest Considerations

The Commission has not identified any other public purpose considerations for the proposed changes to subpart L.

(iii) Request for Comment

The Commission invites comment on its preliminary consideration of the costs and benefits associated with the proposed changes to subpart L, especially with respect to the five factors the Commission is required to consider under CEA section 15(a). In addressing these areas and any other aspect of the Commission's preliminary cost-benefit considerations, the Commission encourages commenters to submit any data or other information they may have quantifying and/or qualifying the costs and benefits of the proposal. The Commission also specifically requests comment on the following questions:

• To what extent do the proposed amendments reduce or increase burdens and costs for SDs or MSPs or their counterparties?

• To what extent do the proposed amendments impact collateral management risk considerations?

• Will there be any effects on the financial system if initial margin is not invested pursuant to Regulation 1.25? If yes, please explain.

• Are counterparties to SDs or MSPs at a substantial disadvantage when negotiating the terms for segregation arrangements that would no longer be required if the proposed amendments are adopted? Would that disadvantage cause them to receive unfair terms on those segregation arrangements? Are there mitigating factors?

• Would the elimination of the requirement to list at least one non-affiliated custodian and the cost of the custodial services have an effect on the selection of an independent custodian and the cost of the services to the non-SD/MSP counterparty? If yes, please explain.

D. Antitrust Considerations

Section 15(b) of the CEA requires the Commission to take into consideration the public interest to be protected by antitrust laws and endeavor to take the least anticompetitive means of achieving the purposes of the CEA, in issuing any order or adopting any Commission rule or regulation (including any exemption under section 4(c) or 4c(b)), or in requiring or approving any bylaw, rule, or regulation of a contract market or registered futures association established pursuant to section 17 of the CEA.42

42See 7 U.S.C. 19(b).

The Commission believes that the public interest to be protected by the antitrust laws is generally to protect competition. The Commission requests comment on whether the proposed rule implicates any other specific public interest to be protected by the antitrust laws.

The Commission has considered the proposed rule to determine whether it is anticompetitive and has preliminarily identified no anticompetitive effects. The Commission requests comment on whether the proposed rule is anticompetitive and, if it is, what the anticompetitive effects are.

Because the Commission has preliminarily determined that the proposed rule is not anticompetitive and has no anticompetitive effects, the Commission has not identified any less anticompetitive means of achieving the purposes of the Act. The Commission requests comment on whether there are less anticompetitive means of achieving the relevant purposes of the Act that would otherwise be served by adopting the proposed rule.

List of Subjects in 17 CFR Part 23

Custodians, Major swap participants, Margin, Segregation, Swap dealers, Swaps, Uncleared swaps.

For the reasons stated in the preamble, the Commodity Futures Trading Commission proposes to amend 17 CFR part 23 as follows:

PART 23—SWAP DEALERS AND MAJOR SWAP PARTICIPANTS 1. The authority citation for part 23 continues to read as follows: Authority:

7 U.S.C. 1a, 2, 6, 6a, 6b, 6b-1, 6c, 6p, 6r, 6s, 6t, 9, 9a, 12, 12a, 13b, 13c, 16a, 18, 19, 21.

Section 23.160 also issued under 7 U.S.C. 2(i); Sec. 721(b), Pub. L. 111-203, 124 Stat. 1641 (2010).

2. Revise subpart L to read as follows: Subpart L—Segregation of Assets Held as Collateral in Uncleared Swap Transactions Sec. 23.700 Definitions. 23.701 Notification of right to segregation. 23.702 Requirements for segregated initial margin. 23.703 Investment of segregated initial margin. 23.704 Requirements for non-segregated margin. Subpart L—Segregation of Assets Held as Collateral in Uncleared Swap Transactions
§ 23.700 Definitions.

As used in this subpart:

Initial Margin means money, securities, or property posted by a party to a swap as performance bond to cover potential future exposures arising from changes in the market value of the position.

Segregate means to keep two or more items in separate accounts, and to avoid combining them in the same transfer between two accounts.

Variation Margin means a payment made by or collateral posted by a party to a swap to cover the current exposure arising from changes in the market value of the position since the trade was executed or the previous time the position was marked to market.

§ 23.701 Notification of right to segregation.

(a) At the beginning of the first swap transaction that provides for the exchange of Initial Margin, a swap dealer or major swap participant must notify the counterparty that the counterparty has the right to require that any Initial Margin the counterparty provides in connection with such transaction be segregated in accordance with §§ 23.702 and 23.703, except in those circumstances where segregation is mandatory pursuant to § 23.157 or rules adopted by the prudential regulators pursuant to section 4s(e)(2)(A) of the Act.

(b) The right referred to in paragraph (a) of this section does not extend to Variation Margin.

(c) If the counterparty elects to segregate Initial Margin, the terms of segregation shall be established by written agreement.

(d) A counterparty's election, if applicable, to require segregation of Initial Margin or not to require such segregation, may be changed at the discretion of the counterparty upon written notice delivered to the swap dealer or major swap participant, which changed election shall be applicable to all swaps entered into between the parties after such delivery.

§ 23.702 Requirements for segregated initial margin.

(a) The custodian of Initial Margin, segregated pursuant to an election under § 23.701, must be a legal entity independent of both the swap dealer or major swap participant and the counterparty.

(b) Initial Margin that is segregated pursuant to an election under § 23.701 must be held in an account segregated for, and on behalf of, the counterparty, and designated as such. Such an account may, if the swap dealer or major swap participant and the counterparty agree, also hold Variation Margin.

(c) Any agreement for the segregation of Initial Margin pursuant to this section shall be in writing, shall include the custodian as a party, and shall provide that any instruction to withdraw Initial Margin shall be in writing and that notification of the withdrawal shall be given immediately to the non-withdrawing party.

§ 23.703 Investment of segregated initial margin.

The swap dealer or major swap participant and the counterparty may enter into any commercial arrangement, in writing, regarding the investment of Initial Margin segregated pursuant to § 23.701 and the related allocation of gains and losses resulting from such investment.

§ 23.704 Requirements for non-segregated margin.

(a) Each swap dealer or major swap participant shall report to each counterparty that does not choose to require segregation of Initial Margin pursuant to § 23.701(a), on a quarterly basis, no later than the fifteenth business day after the end of the quarter, that the back office procedures of the swap dealer or major swap participant relating to margin and collateral requirements are in compliance with the agreement of the counterparties.

(b) The obligation specified in paragraph (a) of this section shall apply no earlier than the 90th calendar day after the date on which the first swap is transacted between the counterparty and the swap dealer or major swap participant.

Issued in Washington, DC, on July 24, 2018, by the Commission. Christopher Kirkpatrick, Secretary of the Commission. Note:

The following appendices will not appear in the Code of Federal Regulations.

Appendices to Segregation of Assets Held as Collateral in Uncleared Swap Transactions—Commission Voting Summary, Chairman's Statement, and Commissioner's Statement Appendix 1—Commission Voting Summary

On this matter, Chairman Giancarlo and Commissioners Quintenz and Behnam voted in the affirmative. No Commissioner voted in the negative.

Appendix 2—Statement of Chairman J. Christopher Giancarlo

After more than four years of administering the final rules in subpart L of part 23 (Commission Regulations 23.700-23.704), CFTC staff have observed that the detailed requirements of these regulations have been difficult and burdensome for swap dealers to satisfy. The requirements have also caused some confusion by end user counterparties who rely on our markets to hedge commercial risk. These observations were supported by comments made in response to the Commission's Project KISS initiative.

Congress mandated that counterparties of swap dealers be given a choice regarding whether or not they elect the protections that come from segregation of initial margin collateral, which I support. Part of this important decision is protected by making sure the counterparty clearly, and easily, understands its rights. It appears that very few swap counterparties have exercised their right to make that choice. Part of the reluctance may be because that choice is accompanied by a range of overly complicated regulatory requirements and obligations.

The swaps market is a marketplace of professional market participants. It is closed to retail participation. Public policy is not well served by imposing prescriptive consumer and investor protections in markets that exclusively serve professional market participants.

This proposal looks to reduce the burdens, costs and confusion that have proved counterproductive and discouraged the election of segregation. This proposal will also make it more efficient for counterparties, such as pension funds, insurance companies, and community banks, to be able to elect segregation and receive those protections while hedging their risk in the swaps markets.

As part of the proposal, the Commission would permit more flexibility in custodial arrangements and margin investment. Rather than the current prescriptive requirements of the regulation, it would leave it up to commercial negotiation by professional trading counterparties. Another change is removing the overly prescriptive requirement that initial margin segregation be invested pursuant to Commission Regulation 1.25, in the anticipation that doing so could encourage more segregation elections.

Enabling the election of segregation is a bipartisan goal, starting with a unanimous Commission rulemaking by a previous commission. Now with time and experience, we see that this goal could be more easily met, and changes to the rules are appropriate to better further these important public policy objectives.

I support this proposed rule from the Division of Swap Dealer & Intermediary Oversight. I look forward to hearing comments on the proposal.

Appendix 3—Concurring Statement of Commissioner Rostin Behnam

I respectfully concur with the Commodity Futures Trading Commission's (the “Commission” or “CFTC”) approval of its proposed rule (the “Proposal”) regarding amendments to subpart L of the Commission's Regulations (“Segregation of Assets Held as Collateral in Uncleared Swap Transactions” consisting of Regulations 23.700 through 23.704), which implement Section 4s(l) of the Commodity Exchange Act (“CEA” or the “Act”). While I have strong reservations about the Commission's proposed interpretation of CEA section 4s(l) and its slash and burn approach to “simplify” requirements for swap dealers (“SDs”) and major swap participants (“MSPs”) absent meaningful consideration of the impact on swap counterparties, I am hopeful that the Proposal's solicitation of comments on these key points will produce a balanced record from which to adopt a final rule that more precisely simplifies the current requirements and provides tailored regulatory relief.

Since joining the Commission, I have emphasized both my strong opposition to any rollbacks of Dodd-Frank initiatives and my belief that, while a more principles-based approach may be suitable in certain situations, any changes must be narrowly targeted to ensure that core reforms remain whole and intact. I am concerned that this Proposal forgoes a surgical approach in favor of a blunt, insensitive strike at the purpose of the statute and implementing regulations.

While the preamble purports that the Proposal is supported by Commission experience, in reality the Commission heavily relies on a few comment letters from a limited segment of the market submitted in response to its “Project KISS” initiative. In the absence of corroborative evidence from those most impacted by the Proposal—non-financial end-users and financial end-users without “material swaps exposure,” as defined in the CFTC Margin Rule 1 —I am concerned that the Commission's proposed amendments take too much of a shoot first, ask questions later tactic. While I am supportive of the Project KISS initiative, I believe that the exercise requires a more diligent approach to evaluating the potential impact of proposing amendments to existing rules.

1 17 CFR 23.150-23.159, 23.161.

My greatest concerns with the Proposal relate to the Commission's proposed interpretation of the notice requirement in CEA section 4s(l)(1) and the proposed removal of all limitations on the investment of margin that is segregated pursuant to an election under Regulation 23.701. As I explain below, I am concerned that the Proposal's focus on reducing burdens to SDs and MSPs through amending the rules in subpart L may obscure valid issues regarding implementation—matters which may be resolved through more precise amendments with less chance of negatively impacting market participants.

The Commission previously interpreted the language in CEA section 4s(l)(1)(A) “as a segregation right that can be elected or renounced by the SD's or MSP's counterparty.” 2 Citing the plain language of the statute, the Commission noted Congress's emphasis on the importance of the ability of a counterparty to elect to have its collateral segregated by describing segregation as a “right.” 3 Regarding this “right,” the Commission understood that, “the statute does not merely grant counterparties the legal right to segregation; it specifically requires that the existence of this right be communicated to them.” 4 At a minimum, the Commission determined that this requirement is met when an SD or MSP provides notification to a counterparty at least once in each calendar year in which the SD or MSP enters a swap with the counterparty.5 At the time, the Commission recognized that requiring notification on a transaction-by-transaction basis—e.g., “at the beginning of a swap transaction,” 6 may be overly costly and burdensome, and that annual notification “ensures that the right to segregation is called to the attention of the counterparties reasonably close in time to the point at which they make decisions regarding the handling of collateral for particular swaps transactions.” 7 While the Commission considered requiring only an initial notification, it rejected that approach, noting the importance of the counterparty's right to elect to have its collateral segregated, and the minimal administrative burden on SDs and MSPs.8

2 Protection of Collateral of Counterparties to Uncleared Swaps; Treatment of Securities in a Portfolio Margining Account in a Commodity Broker Bankruptcy, 78 FR 66621, 66623 (Nov. 6, 2013).

3Id. at 66623 and 66625.

4Id. at 66625.

5Id.; 17 CFR 23.701(e).

6 7 U.S.C. 6s(l)(1)(A) (emphasis added).

7 78 FR at 66635 (emphasis added); see also 78 FR at 66633 (adding that annual notice offers this benefit “without requiring excessive or repetitive notification in cases where a counterparty engages in multiple swaps with a particular SD or MSP over the course of a year.”).

8 78 FR at 66633 (“The Commission believes that the cost of requiring SDs and MSPs to deliver one notification per year to each counterparty is not overly burdensome, particularly when one considers the importance of the counterparty's decision to require segregation and the large dollar volume of business that is typically done by SDs and MSPs.”).

The Commission and subpart L are largely silent with regard to content and delivery manner and method of the notice required by CEA section 4s(l)(1)(A) other than provisions in Regulation 23.701(a)(1) and (2) requiring the notification to identify one or more creditworthy, independent custodians and to include information regarding the price of segregation for each custodian, to the extent the SD or MSP has such information.9 Though not specifically required by CEA section 4s(l)(1)(A), the Commission determined that this limited set of disclosures represents information material to a counterparty's informed decision making process regarding exercise of the right to segregation and when considering a segregation package offered by an SD or MSP.10

9 17 CFR 23.701(a)(2) and (3). While Commission Regulation 23.701(d) requires the SD or MSP to obtain confirmation of receipt of the segregation notification, since 2014, the Commission has permitted SDs and MSPs to rely on negative consent for purposes of Regulation 23.701(d), provided that the notice under Regulation 23.701(a) includes a prominent and unambiguous statement to that effect. See CFTC Staff Letter No. 14-132 (Oct. 31, 2014) at 7, available at https://www.cftc.gov/sites/default/files/idc/groups/public/@lrlettergeneral/documents/letter/14-132.pdf; See also Transcript of the NFA Swap Dealer Examinations Webinar at 6 (Jan. 18, 2018), available at https://www.nfa.futures.org/members/member-resources/files/transcripts/sdexamswebinartranscriptjan2018.pdf.

10See 78 FR at 66624.

The Proposal would amend subpart L, in part, to require a single, one-time notification to a counterparty of their right to require segregation of any initial margin the counterparty provides in connection with all transactions following the first transaction that provides for the exchange of initial margin. The Proposal would also entirely remove Regulations 23.701(a)(2) and (3), generally finding that, since very few counterparties elect to require segregation, the underlying activity of “confirming which custodians are available” is “unnecessarily burdensome” and that pricing for segregation may vary, is normally subject to negotiation, and can be discussed when the counterparty indicates an interest in segregation. Consistent with CEA section 4s(l)(1)(B), the Proposal preserves the ability of a counterparty to change its election upon written notice.

In proposing these amendments, the Commission appears to be taking the view that a counterparty's decision with regard to segregation is made with respect to a trading relationship with a particular SD or MSP at the relationship's inception, and that while these types of counterparties are sophisticated enough to elect segregation and negotiate the terms of segregation arrangements, the annual receipt of a notice reminding them that they may change their election at any time is confusing. It also assumes that evidence of minimal uptake of the election to segregate indicates that subpart L is largely superfluous.

While it may be true that swap counterparties have not elected segregation in droves, CEA section 4s(l) and subpart L are not intended to advance any particular outcome. Rather they concern the rights of counterparties to SDs and MSPs and aim to increase the safety in the market for uncleared swaps by creating a self-effectuating requirement for the segregation of counterparty initial margin in an entity legally separate from the SD or MSP.11 As previously noted by the Commission in proposing subpart L, a goal of the regulation was to “increase the likelihood that any lack of use of segregated collateral accounts by uncleared swaps counterparties is the result of genuine choices by counterparties and reduce the likelihood that it is the result of inertia, market power, or other market imperfections.” 12 Indeed, based on some of the preamble discussion, it may be that we should consider the possibility that swap counterparties are not electing segregation specifically because the current system of annual notification does not provide them adequate notice of their ongoing right to segregation. If that is the case, the appropriate Commission response may be more (or clearer) notification, rather than the reduction in notification proposed today.

11Id. at 66621 and 66632.

12 Protection of Collateral of Counterparties to Uncleared Swaps; Treatment of Securities in a Portfolio Margining Account in a Commodity Broker Bankruptcy, 75 FR 75432, 75437 (proposed Dec. 3, 2010).

I am concerned that the Commission's proposal could undermine the right to segregation as well as Congressional intent by removing the periodic notification and minimal disclosures currently required by subpart L. I believe there are prescriptive elements of subpart L that can be removed with little impact to counterparties.13 However, I am concerned by the Proposal's reliance on representations by SDs and unverified assumptions regarding counterparty behavior to justify regulatory rollbacks in the absence of further examination of whether and how the manner in which the annual notice requirement is currently implemented has contributed to claims of confusion and burden. I am also concerned that the Proposal may discourage commenters from suggesting alternative means of complying with the current language in Regulation 23.701(a) which may better preserve Congressional intent.14

13 I also believe that the Commission can respond to specific burdens identified by SDs and MSPs by, for example, codifying staff interpretive guidance. See, e.g. Letter from the Financial Services Roundtable at 56 (Sept. 30, 2017) (urging the Commission to codify its interpretation in CFTC Staff Letter No. 14-132 with respect to SDs' ability to rely on negative consent), https://comments.cftc.gov/PublicComments/ViewComment.aspx?id=61427&SearchText=.

14 For example, through the use of additional clauses in customer onboarding or relationship documentation as a means to append the required notification and disclosures to each new swap confirmation thereby ensuring and simultaneously documenting that the counterparty is notified of their right to require segregation at least at the beginning of each swap transaction.

I am similarly concerned that the Proposal's removal of the requirement in Regulation 23.703 that limits the investment of initial margin segregated pursuant to subpart L to be invested consistent with Commission Regulation 1.25 is a knee-jerk response to a single Project KISS comment letter that ignores current practice and presupposes that the rollback will encourage more counterparties to elect to segregate pursuant to subpart L, which, as stated above, is not the goal of the statute or implementing regulation. While I am not opposed to permitting greater flexibility with regard to the investment of initial margin, I would have preferred that the Commission seek additional information regarding whether and how the current limitations in Regulation 23.703 have impacted counterparties and their decision making under subpart L before proposing alternative regulatory language.

I commend the Commission and its staff for engaging through Project KISS in efforts to identify and reduce unnecessary burdens in the Commission regulations. I appreciate staff's consideration and inclusion of several of my suggested edits to this Proposal. To be clear, I believe the Proposal provides for many sound improvements to subpart L that respond to ongoing concerns and confusion created by the finalization of the CFTC and Prudential Regulator Margin Rules and CFTC interpretive guidance.15 However, where the Proposal aims to strip out regulatory provisions that the Commission previously determined were essential to effectuating the language and purpose of CEA section 4s(l), I believe the Commission may be engaging in shortsighted and unnecessary rollbacks to the detriment of the swap counterparties subpart L is intended to protect.

15See CFTC Staff Letter No. 14-132, supra note 9.

[FR Doc. 2018-16176 Filed 7-27-18; 8:45 am] BILLING CODE 6351-01-P
DEPARTMENT OF LABOR Occupational Safety and Health Administration 29 CFR Part 1904 [Docket No. OSHA-2013-0023] RIN 1218-AD17 Tracking of Workplace Injuries and Illnesses AGENCY:

Occupational Safety and Health Administration (OSHA), Labor.

ACTION:

Proposed rule.

SUMMARY:

This proposed rule would amend OSHA's recordkeeping regulation by rescinding the requirement for establishments with 250 or more employees to electronically submit information from OSHA Forms 300 and 301. These establishments will continue to be required to submit information from their Form 300A summaries. OSHA is amending its recordkeeping regulations to protect sensitive worker information from potential disclosure under the Freedom of Information Act (FOIA). OSHA has preliminarily determined that the risk of disclosure of this information, the costs to OSHA of collecting and using the information, and the reporting burden on employers are unjustified given the uncertain benefits of collecting the information. OSHA believes that this proposal maintains safety and health protections for workers while also reducing the burden to employers of complying with the current rule. OSHA seeks comment on this proposal, particularly on its impact on worker privacy, including the risks posed by exposing workers' sensitive information to possible FOIA disclosure. In addition, OSHA is proposing to require covered employers to submit their Employer Identification Number (EIN) electronically along with their injury and illness data submission.

DATES:

Comments must be submitted by September 28, 2018.

ADDRESSES:

You may submit comments, identified by docket number OSHA-2013-0023, or regulatory information number (RIN) 1218-AD17, by any of the following methods:

Electronically: You may submit comments electronically at https://www.regulations.gov/, which is the federal e-rulemaking portal. Follow the instructions on the website for making electronic submissions;

Fax: If your submission, including attachments, does not exceed 10 pages, you may fax it to the OSHA docket office at (202) 693-1648;

Regular mail, express mail, hand delivery, or messenger/courier service (hard copy): You may submit your materials to the OSHA Docket Office, Docket No. OSHA-2013-0023, Room N-3653, U.S. Department of Labor, 200 Constitution Avenue NW, Washington, DC 20210; telephone: (202) 693-2350 (TTY (887) 889-5627). OSHA's Docket Office accepts deliveries (hand deliveries, express mail, and messenger/courier service) from 10 a.m. to 3 p.m. ET, weekdays.

Instructions for submitting comments: All submissions must include the docket number (Docket No. OSHA-2013-0023) or the RIN (RIN 1218-AD17) for this rulemaking. Because of security-related procedures, submission by regular mail may result in significant delay. Please contact the OSHA docket office (telephone: (202) 693-2350; email: [email protected]) for information about security procedures for making submissions by hand delivery, express delivery, and messenger or courier service.

All comments, including any personal information you provide, are placed in the public docket without change and will be made available online at https://www.regulations.gov. Therefore, OSHA cautions you about submitting personal information such as Social Security Numbers and birthdates.

Docket: To read or download submissions in response to this Federal Register document, go to docket number OSHA-2013-0023, at https://www.regulations.gov. All submissions are listed in the https://www.regulations.gov index. However, some information (e.g., copyrighted material) is not publicly available to read or download through that website. All submissions, including copyrighted material, are available for inspection at the OSHA docket office.

Electronic copies of this Federal Register document are available at https://www.regulations.gov. This document, as well as news releases and other relevant information, is available at OSHA's website at http://www.osha.gov.

FOR FURTHER INFORMATION CONTACT:

For press inquiries: Frank Meilinger, OSHA Office of Communications, telephone: (202) 693-1999; email: [email protected]

For general and technical information on the proposed rule: Amanda Edens, Director, Directorate of Technical Support and Emergency Management, telephone: (202) 693-2300; email: [email protected]

SUPPLEMENTARY INFORMATION:

Table of Contents I. Background A. Introduction B. Regulatory History II. Legal Authority III. Summary and Explanation of the Proposed Rule A. Description of Proposed Revisions to Section 1904.41 1. Section 1904.41(a)(1)—Annual Electronic Submission of OSHA Part 1904 Records by Establishments With 250 or More Employees 2. Section 1904.41, Paragraphs (b)(1)-(8)—Implementation 3. Employer Identification Number B. Additional Questions IV. Preliminary Economic Analysis and Regulatory Flexibility Certification A. Introduction B. Cost Savings C. New Costs (From the EIN Collection) D. Net Cost Savings E. Benefits F. Economic Feasibility G. Regulatory Flexibility Certification V. Office of Management and Budget (OMB) Review Under the Paperwork Reduction Act of 1995 VI. Unfunded Mandates VII. Federalism VIII. State Plan States IX. Public Participation A. Public Submissions B. Access to Docket Amendments to Part 1904 References and Exhibits

In this preamble, OSHA references documents in Docket No. OSHA-2013-0023, the docket for this rulemaking. The docket is available at https://www.regulations.gov, the Federal e-rulemaking Portal.

References to documents in this rulemaking docket are given as “Ex.” followed by the document number. The document number is the last sequence of numbers in the Document ID Number on https://www.regulations.gov.

The exhibits in the docket, including public comments, supporting materials, meeting transcripts, and other documents, are listed on https://www.regulations.gov. All exhibits are listed in the docket index on https://www.regulations.gov. However, some exhibits (e.g., copyrighted material) are not available to read or download from that web page. All materials in the docket are available for inspection at the OSHA Docket Office, Room N-3653, U.S. Department of Labor, 200 Constitution Avenue NW, Washington, DC 20210; telephone (202) 693-2350.

I. Background A. Introduction

OSHA's regulation at 29 CFR part 1904 requires employers to collect a variety of information on occupational injuries and illnesses. Much of this information may be sensitive for workers, including descriptions of their injuries and the body parts affected. Under OSHA's regulation, employers with more than 10 employees in most industries must keep those records at their establishments. Employers covered by these rules must record each recordable employee injury and illness on an OSHA Form 300, the “Log of Work-Related Injuries and Illnesses,” or equivalent. Covered employers must also prepare a supplementary OSHA Form 301, the “Injury and Illness Incident Report” or equivalent, to provide additional details about each case recorded on the OSHA Form 300. OSHA requires employers to provide these records to others under certain circumstances, but imposes limits on the disclosure of personally identifying information.1 Finally, at the end of each year, these employers are required to prepare a summary report of all injuries and illnesses on the OSHA Form 300A, the “Summary of Work-Related Injuries and Illnesses,” and post the form in a visible location in the workplace.

1 OSHA's regulation at 29 CFR 1904.35(b)(2) requires employers to provide employees, former employees, their personal representatives, and their authorized employee representatives access to the OSHA Form 300. Employers must include the names of the employees with recorded cases, except for certain “privacy concern cases” as specified in 29 CFR 1904.29(b)(6)-(9). In addition, OSHA's regulation at 29 CFR 1904.29(b)(10) requires employees to remove or hide employee names and other personally identifying information when voluntarily disclosing the Form 300 or 301 to persons other than government representatives, employees, former employees or authorized representatives, except when disclosing the forms to an auditor or consultant hired by the employer to evaluate the safety and health program, or to the extent necessary for processing a claim for workers' compensation or other insurance benefits, or to a public health authority or law enforcement agency per 45 CFR 164.512. Finally, for the Form 301, OSHA's regulation at 29 CFR 1904.35(b)(2)(v) requires employers to provide an employee, former employee, or the employee's personal representative access to the Form 301 Incident Report describing an injury or illness to that employee or former employee; for authorized employee representatives, employers are required to provide the information in “tell us about the case” for any incident report and to remove all of the other information.

Form 301 in particular requires the collection of much sensitive information about each individual worker's job-linked illness or injury, information an employer must collect with or without the worker's consent. While some of the information is likelier to be regarded as particularly sensitive—namely, descriptions of injuries and the body parts affected—most of the form's questions seek answers that should not be lightly disclosed, including:

• Was employee treated in an emergency room?

• Was employee hospitalized overnight as an in-patient?

• Date of birth.

• Date of injury.

• What was the employee doing just before the incident occurred? Describe the activity, as well as the tools, equipment, or material the employee was using. Be specific. Examples: “climbing a ladder while carrying roofing materials”; “spraying chlorine from hand sprayer”; “daily computer key-entry.”

• What happened? Tell us how the injury occurred. Examples: “When ladder slipped on wet floor, worker fell 20 feet”; “Worker was sprayed with chlorine when gasket broke during replacement”; “Worker developed soreness in wrist over time.”

• What was the injury or illness? Tell us the part of the body that was affected and how it was affected; be more specific than “hurt,” “pain,” or “sore.” Examples: “strained back”; “chemical burn, hand”; “carpal tunnel syndrome.”

• What object or substance directly harmed the employee? Examples: “concrete floor”; “chlorine”; “radial arm saw . . . ”

Form 300 requires employers to log much of this individual information—notably, descriptions of injuries and the body parts affected—for each individual worker and incident. Form 300A, by contrast, merely summarizes incident data without any traceable connection to individual workers.

In the May 2016 final rule (81 FR 29624), the recordkeeping regulation was revised to require establishments with 250 or more employees to electronically submit information from the OSHA Forms 300, 300A, and 301 to OSHA annually. Establishments in certain industries with 20-249 employees are required only to electronically submit information from only the OSHA Form 300A—the summary form. This proposed rule would amend OSHA's recordkeeping regulation by rescinding the requirement for establishments with 250 or more employees to electronically submit information from the OSHA Forms 300 and 301—the individual forms.

As discussed below, OSHA proposes this amendment to the 2016 rule to protect worker privacy, having re-evaluated the utility of routinely collecting Form 300 and 301 data. The injury and illness data electronically submitted to OSHA from Form 300A (which submission the 2016 rule requires, and which this proposal would not change) gives OSHA a great deal of information to use in identifying high-hazard establishments for enforcement targeting. To that end, OSHA has designed a targeted enforcement mechanism for industries experiencing higher rates of injuries and illnesses based on the summary data. By contrast, OSHA has provisionally determined that electronic submission of Forms 300 and 301 adds uncertain enforcement benefits, while significantly increasing the risk to worker privacy, considering that those forms, if collected by OSHA, could be found disclosable under FOIA. In addition, to gain (uncertain) enforcement value from the case-specific data, OSHA would need to divert resources from other priorities, such as the utilization of Form 300A data, which OSHA's experience has shown to be useful.

OSHA seeks comment on this proposal. In addition, OSHA asks for public comment on whether to require covered employers to submit their EIN along with their injury and illness data submission.

This proposed rule is expected to be an E.O. 13771 deregulatory action, with annualized net cost savings estimated at $8.2 million. Details on OSHA's cost and cost savings estimates for this proposed rule can be found in the Preliminary Economic Analysis (PEA).

Under the current recordkeeping rule, the initial deadline for electronic submission of information from OSHA Forms 300 and 301 by covered establishments with 250 or more employees was July 1, 2018. However, OSHA will not enforce this deadline without further notice while this rulemaking is underway.

B. Regulatory History

OSHA's regulations on recording and reporting occupational injuries and illnesses (29 CFR part 1904) were first issued in 1971 (36 FR 12612, July 2, 1971). These regulations require the recording of work-related injuries and illnesses that involve death, loss of consciousness, days away from work, restriction of work, transfer to another job, medical treatment other than first aid, or diagnosis of a significant injury or illness by a physician or other licensed health care professional (29 CFR 1904.7).

On July 29, 1977, OSHA amended these regulations to partially exempt businesses having ten or fewer employees during the previous calendar year from the requirement to record occupational injuries and illnesses (42 FR 38568). On December 28, 1982, OSHA amended these regulations to partially exempt establishments in certain lower-hazard industries from the requirement to record occupational injuries and illnesses (47 FR 57699). OSHA also amended the recordkeeping regulations in 1994 (Reporting of Fatality or Multiple Hospitalization Incidents, 59 FR 15594) and 1997 (Reporting Occupational Injury and Illness Data to OSHA, 62 FR 6434). Under the authority in Section 1904.41 added by the 1997 final rule, OSHA began requiring certain employers to submit only their 300A data to OSHA annually through the OSHA Data Initiative (ODI). The purpose of the ODI was to collect data on injuries and acute illnesses attributable to work-related activities in the private sector from approximately 80,000 establishments in selected high-hazard industries. The Agency used these data to calculate establishment-specific injury and illness rates and, in combination with other data sources, to target enforcement and compliance assistance activities.

On January 19, 2001, OSHA issued a final rule amending its requirements for the recording and reporting of occupational injuries and illnesses (29 CFR parts 1904 and 1902), along with the forms employers use to record those injuries and illnesses (66 FR 5916). The final rule also updated the list of industries that were partially exempt from recording occupational injuries and illnesses.

On September 18, 2014, OSHA again amended the regulations to require employers to report work-related fatalities and severe injuries—in-patient hospitalizations, amputations, and losses of an eye—to OSHA and to allow electronic reporting of these events (79 FR 56130). The final rule also revised the list of industries that are partially exempt from recording occupational injuries and illnesses.

On May 12, 2016, OSHA amended the regulations on recording and reporting occupational injuries and illness to require employers to annually submit injury and illness information that employers were already required to keep under part 1904 (81 FR 29624) to OSHA electronically. Establishments with 250 or more employees in industries that are routinely required to keep records are required to electronically submit information from their OSHA Forms 300, 300A, and 301 to OSHA or OSHA's designee once a year, and establishments with 20 to 249 employees in certain designated industries are required to electronically submit information from their OSHA annual summary (Form 300A) to OSHA or OSHA's designee once a year. In addition, that final rule requires employers, upon notification, to electronically submit information from part 1904 recordkeeping forms to OSHA or OSHA's designee. These provisions became effective on January 1, 2017.

On November 24, 2017, OSHA amended the recordkeeping regulation to extend the initial submission deadline for 2016 Form 300A data described in 29 CFR 1904.41(c)(1) from July 1, 2017, to December 15, 2017 (82 FR 55761).

II. Legal Authority

OSHA is issuing this proposed rule pursuant to authority expressly granted by sections 8 and 24 of the Occupational Safety and Health Act (the “OSH Act” or “Act”) (29 U.S.C. 657, 673). Section 8(c)(1) of the Act requires each employer to “make, keep and preserve, and make available to the Secretary [of Labor] or the Secretary of Health and Human Services, such records regarding his activities relating to this Act as the Secretary . . . may prescribe by regulation as necessary or appropriate for the enforcement of this Act or for developing information regarding the causes and prevention of occupational accidents and illnesses” (29 U.S.C. 657(c)(1)). Section 8(c)(2) directs the Secretary to prescribe regulations “requiring employers to maintain accurate records of, and to make periodic reports on, work-related deaths, injuries and illnesses other than minor injuries requiring only first aid treatment and which do not involve medical treatment, loss of consciousness, restriction of work or motion, or transfer to another job” (29 U.S.C. 657(c)(2)). Finally, section 8(g)(2) of the OSH Act broadly empowers the Secretary to “prescribe such rules and regulations as he may deem necessary to carry out [his] responsibilities under this Act” (29 U.S.C. 657(g)(2)).

Section 24 of the OSH Act (29 U.S.C. 673) contains a similar grant of authority. This section requires the Secretary to “develop and maintain an effective program of collection, compilation, and analysis of occupational safety and health statistics” and “compile accurate statistics on work injuries and illnesses which shall include all disabling, serious, or significant injuries and illnesses” (29 U.S.C. 673(a)). Section 24 also requires employers to “file such reports with the Secretary as he shall prescribe by regulation” (29 U.S.C. 673(e)). These reports are to be based on “the records made and kept pursuant to section 8(c) of this Act” (29 U.S.C. 673(e)).

Further support for the Secretary's authority to require employers to keep and submit records of work-related illnesses and injuries can be found in the Congressional Findings and Purpose at the beginning of the OSH Act (29 U.S.C. 651). In this section, Congress declares the overarching purpose of the Act is “to assure so far as possible every working man and woman in the Nation safe and healthful working conditions” (29 U.S.C. 651(b)). One of the ways in which the Act is meant to achieve this goal is “by providing for appropriate reporting procedures . . . [that] will help achieve the objectives of this Act and accurately describe the nature of the occupational safety and health problem” (29 U.S.C. 651(b)(12)). Importantly, the statute does not require this information to be reported to OSHA.

The OSH Act authorizes the Secretary of Labor to issue two types of occupational safety and health rules: Standards and regulations. Standards aim to correct particular identified workplace hazards, while regulations further the general enforcement and detection purposes of the OSH Act (see Workplace Health & Safety Council v. Reich, 56 F.3d 1465, 1468 (D.C. Cir. 1995) (citing Louisiana Chemical Ass'n v. Bingham, 657 F.2d 777, 781-82 (5th Cir. 1981)); United Steelworkers of America v. Auchter, 763 F.2d 728, 735 (3d Cir. 1985)). Recordkeeping requirements promulgated under the Act are characterized as regulations (see 29 U.S.C. 657 (using the term “regulations” to describe recordkeeping requirements)). An agency may revise a prior rule if it provides a reasoned explanation for the change. See Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 42 (1983).

III. Summary and Explanation of the Proposed Rule

OSHA proposes to protect worker privacy by ending the electronic collection of case-specific forms (which OSHA has preliminarily determined adds uncertain enforcement value, but poses a potential privacy risk under FOIA) while continuing the collection of summary forms (which adds significant enforcement value, with little privacy risk). OSHA has reevaluated the utility of the Form 300 and 301 data for OSHA enforcement efforts and preliminarily determined that its (uncertain) enforcement value does not justify the reporting burden on employers, the burden on OSHA to collect, process, analyze, distribute, and programmatically apply the data, and—especially—the risks posed to worker privacy. Specifically, OSHA is proposing to amend its recordkeeping regulations by removing the part 1904 requirement that became effective on January 1, 2017, for the annual electronic submission of injury and illness information contained in OSHA Forms 300 and 301. This amendment would avoid the risks posed by making those forms into government records that could be found disclosable under FOIA.

OSHA is only seeking comment on the proposed changes to § 1904.41, and not on any other aspects of part 1904.

A. Description of Proposed Revisions to Section 1904.41 1. Section 1904.41(a)(1)—Annual Electronic Submission of Part 1904 Records by Establishments With 250 or More Employees

OSHA proposes to amend § 1904.41(a)(1) to remove the requirement for establishments with 250 or more employees that are required to routinely keep injury and illness records to electronically submit information from the OSHA Form 300 (Log of Work-Related Injuries and Illnesses) and OSHA Form 301 (Injury and Illness Incident Report) to OSHA or OSHA's designee once a year. Under the proposed rule, § 1904.41(a)(1) would only require these establishments to electronically submit information from the OSHA Form 300A (Summary of Work-Related Injuries and Illnesses). As explained below, OSHA believes that this change would better protect worker privacy from the risk of FOIA disclosure, while retaining the lion's share of the enforcement benefits realized by the 2016 rule.

a. Collecting Forms 300 and 301's Individual Injury and Illness Data Risks Worker Privacy

Electronic submission of Forms 300 and 301 puts the federal government in the position of collecting information that workers may deem quite sensitive, including descriptions of their injuries and the body parts affected. OSHA has preliminarily determined that its collection of these individual forms' information poses a non-trivial risk of compelled disclosure—endangering worker privacy—under FOIA.

As records in federal possession, Forms 300, 300A, and 301 could be subject to disclosure under FOIA if a court determines that no exemptions to FOIA apply. Although the Department believes that the information in these forms should be held exempt under FOIA, there remains a meaningful risk that a court may ultimately disagree and require disclosure. That risk remains so long as there is a non-trivial chance that any court in any of the nation's 94 federal judicial districts might issue a final disclosure order after the exhaustion of all available appeals. In the Department's view, that risk is not a reason to stop collecting Form 300A summaries, because their collection offers significant enforcement value with little privacy risk. However, OSHA has re-evaluated the utility of routinely collecting the Form 300 and 301 data for enforcement purposes, given that it has already designed a targeted enforcement mechanism using the summary data, and given the resources that would be required to collect, process, analyze, distribute, and programmatically apply the case-specific data in a meaningful way. Therefore, OSHA believes that the risk of disclosure under FOIA is a persuasive reason not to collect individual case information from Forms 300 and 301, as that collection offers only uncertain enforcement value while putting workers' privacy at risk.

Nor is that risk speculative. In 2017, an organization invoked FOIA to request that the Department produce electronically-submitted information from Forms 300, 300A, and 301. The Department explained to the requester that it had not begun collecting Forms 300 and 301, and that Form 300A is exempt from disclosure under FOIA. The requester then sued the Department to compel disclosure of electronic information from Form 300A (and presumably would have demanded production of information from Forms 300 and 301, had the Department started collecting them). Although the Department strongly believes that Form 300A is exempt from disclosure under FOIA, the plaintiff's complaint is non-frivolous (cf. Fed. R. Civ. P. 11). It is accordingly possible that the adjudicating court could order disclosure of information in Form 300A. After the exhaustion of any appeals, that order would establish a precedent that other courts may find persuasive in potential future litigation over information in Forms 300 and 301.

That risk of potential compelled disclosure is illustrated by a case in which the Department was ordered to disclose OSHA records collecting its individual inspectors' exposures to beryllium. Finkel v. U.S. Dep't of Labor, No. 05-5525, 2007 WL 1963163 (D.N.J. June 29, 2007). In that case, the Department produced de-identified test results, but the court ultimately determined that more identifying information needed to be disclosed, despite FOIA's exemption for “information . . . in personnel, medical or similar files . . . [whose] release would constitute a clearly unwarranted invasion of personal privacy.” Arieff v. U.S. Dep't of Navy, 712 F.2d 1462, 1466 (D.C. Cir. 1983), quoted in Finkel, 2007 WL 1963163, at *8. While the Department believes that Finkel would be distinguishable from any future cases seeking FOIA disclosure of information from individual Forms 300 and 301, it is reasonably foreseeable that a court could find it persuasive nonetheless.

And as the Finkel case suggests, it may not be possible to fully redact all identifying information in a way that would eliminate privacy risk. Releasing case-specific data to a member of the public could result in the inadvertent release of personally identifiable information (PII) or re-identification of the data with a particular individual. Although automated systems exist to scrub PII from the data (see “Text De-Identification For Privacy Protection: A Study of its Impact on Clinical Text Information Content,” Stéphane M. Meystre et al., Journal of Biomedical Informatics 50 (2014) 142-150, Ex. 2061), it is not possible to guarantee the non-release of PII. Simson L. Garfinkel states “de-identification approaches based on suppressing or generalizing specific fields in a database cannot provide absolute privacy guarantees, because there is always a chance that the remaining data can be re-identified using an auxiliary dataset.” (see “De-Identification of Personal Information,” p. 5, Simson L. Garfinkel, NISTIR 8053, October 2015, Ex. 2060). Similarly, Mehmet Kayaalp observed, “The de-identification process minimizes the risk of re-identification but has no claim to make it impossible.” (see “Modes of De-identification,” p. 2, Mehmet Kayaalp, MD, Ph.D., U.S. National Library of Medicine, National Institutes of Health, 2017, Ex. 2062). In addition, de-identification is not the same as anonymization. That is, even after all PII has been removed, there is the chance that somebody could re-identify some of the data by linking the fully de-identified data back to the specific person.

Unless the U.S. Supreme Court (or sufficient circuit-court precedent, at least) were to definitively affirm that the information in Forms 300 and 301 is exempt from FOIA disclosure, there remains a real risk that the private, sensitive information from those forms could be disclosed regardless of the Department's attempts to keep it private.2 In the Department's view, that risk to worker privacy is unacceptable.

2 The gathering of such data also may incentivize cyber-attacks on the Department's IT system. For example, on August 14, 2017, OSHA received an alert from the United States Computer Emergency Readiness Team (US-CERT) in the Department of Homeland Security that indicated a potential compromise of user information for OSHA's Injury Tracking Application (ITA). The ITA was taken off-line as a precaution. A complete scan was conducted by the National Information Technology Center (NITC). The NITC confirmed that there was no breach of the data in the ITA and that no information in the ITA was compromised. Public access to the ITA was restored on August 25, 2017. While this episode showed the security provisions of the ITA to work as designed, it also demonstrated that such a large data collection will inevitably encounter malware.

b. Collecting Forms 300 and 301 Has Uncertain Enforcement Benefits

As its preamble explains, two of the benefits of the May 2016 final rule are more effective identification and targeting of workplace hazards by OSHA and better evaluations of OSHA interventions. See 81 FR 29685. According to the preamble, establishment-specific injury and illness data would allow for analyses that were not possible with the data available before the 2016 rule took effect. The establishment-specific data, the preamble concluded, would allow OSHA to evaluate different types of programs, initiatives, and interventions in different industries and geographic areas, enabling the agency to become more effective and efficient.

OSHA reaffirms those benefits—as to the collection of information from the summary Form 300A. Collection of the summary data gives OSHA the information it needs to identify and target establishments with high rates of work-related injuries and illnesses. OSHA has collected summary 300A data for 2016 from 214,574 establishments. With those data, OSHA has already designed a targeted enforcement mechanism for industries experiencing higher rates of injuries and illnesses. OSHA plans to further refine this approach by using the greater volume of 2017 summary data OSHA expects to collect, as explained in the margin.3

3 OSHA expects many more establishments to respond with 2017 summary data this year, for at least two reasons. First, OSHA has analyzed the responses for 2016, has identified thousands of non-responders who were obligated to respond for 2016, and is in the process of informing them of their obligation to respond for 2017. Second, OSHA recently discovered that employers did not receive clear notice of their obligation to respond for 2016, if they were located in state plan states that had not completed adoption of their own state rules. In 2018, OSHA issued a correction clarifying that those employers were indeed obligated to submit Form 300A data for 2017.

OSHA's use of summary data has a lengthy track record in enforcement, as well. Before the 2016 rule, OSHA had collected these data for 17 years under its OSHA Data Initiative (ODI) and used them to identify and target high-rate establishments through the Site-Specific Targeting (SST) Program. OSHA stopped the ODI in 2013 and the SST in 2014, but those prior programs have still given it considerable experience with using 300A data for targeting.

Conversely, OSHA has no prior experience with using the case-specific Form 300 and 301 data to identify and target establishments. OSHA is unsure as to how much benefit such data would have for targeting, or how much effort would be required to realize those benefits. OSHA estimates 4 that establishments with 250 employees or more would report data from approximately 775,210 Form 301s annually, a total volume three times the number of Form 300As whose data was uploaded for 2016, while also presenting finer-grained information than that captured by Form 300A. To gain (speculative, uncertain) enforcement value from the case-specific data, OSHA would need to divert resources from other priorities, such as the utilization of Form 300A data, which OSHA's long experience has shown to be useful.5

4 See “PEA calculations,” Ex. 2067.

5 Forms 300 and 301 continue to offer substantial enforcement value in the context of on-site inspections. Compliance officers routinely review them as part of those inspections, and the information recorded in those forms can provide a roadmap for the compliance officer to focus the inspection on the most hazardous aspects of the operation.

OSHA's current priority is to assure better compliance with the existing reporting requirements for severe injuries and fatalities and for 300A data, and to develop and assess intervention programs based on these data. OSHA estimates, for example, that over 100,000 establishments failed to submit their 2016 Form 300A data as required by the 2016 rule, and is currently taking steps aimed at reducing the number of non-responders for the 2017 reporting year.6 Similarly, in the September 18, 2014, final rule that updated the severe injury reporting requirements under 29 CFR part 1904.39, OSHA estimated that more than 100,000 reports of in-patient hospitalizations and amputations would be made to the Agency. In calendar year 2017, fewer than 16,000 incidents were reported.7 8 OSHA intends to use available data sources (e.g., workers compensation records) to identify and categorize employers who are non-compliant with the reporting requirements. This information can then be used to focus training and outreach efforts for improving compliance with these reporting requirements. But for the time being, given OSHA's enforcement focus on its readily-usable 300A and severe injury data and its uncertainty about the extent of the benefits from collecting 300 and 301 data, the Department has re-evaluated the utility of the Form 300 and 301 data to OSHA for enforcement purposes and preliminarily determined that its (uncertain) enforcement value does not justify the reporting burden on employers, the burden on OSHA to collect, process, analyze, distribute, and programmatically apply the data, and—especially—the risks posed to worker privacy.

6 In addition to the privacy risks and uncertain enforcement benefits outlined above, electronic collection of the case-specific forms would also cause regulated employers and OSHA to incur financial costs. As explained in the Preliminary Economic Analysis, the annualized cost to employers is estimated at approximately $8.7 million per year. It would also cost OSHA significant sums to make case-specific data ready for enforcement use. In addition to the $450,000 required to add functionality to collect these data through the Injury Tracking Application (ITA), OSHA believes it would require several dedicated full-time employees to collect, process, analyze, distribute, and programmatically apply these data in a meaningful way.

7 Employers covered by the OSH Act must report certain severe injuries or in-patient hospitalizations within 24 hours, and fatalities within 8 hours, chiefly to “allow OSHA to carry out timely investigations of these events as appropriate.” 79 FR 56156. The reported information, which OSHA retains in its records, resembles the information recorded in the case-specific Form 301. But these severe injury/fatality reports constitute a very small percentage of the total universe of Form 301s. In calendar year 2017, fewer than 16,000 incidents were reported. By contrast, OSHA estimates that approximately 775,000 cases would be submitted to OSHA as a result of the existing regulation. (See the Preliminary Economic Analysis.) Requiring electronic submission of Form 301 data would therefore increase almost 48-fold the universe of data potentially susceptible to FOIA.

8 The Department also collects Form 301 data in two other ways, but neither offers a material precedent for collecting millions of Form 301s' data in a form potentially exposed to FOIA.

First, BLS collects approximately 250,000 Form 301s from private establishments for the annual Survey of Occupational Injury and Illness. But under the Confidential Information Protection and Statistical Efficiency Act, BLS is prohibited from releasing in identifiable form information acquired under a pledge of confidentiality for exclusively statistical purposes.

Second, the forms are occasionally retained in inspection case files, primarily in cases where OSHA issues a recordkeeping citation and the Form 301 is needed as evidence. In fiscal year 2017, OSHA issued 1,472 recordkeeping citations, 769 of which were for failure to report a fatality or severe injury, citations which were unlikely to result in Form 301 being entered into the case file. So in one year, approximately 703 citations represent possible cases where OSHA inspectors were likely to have retained Form 301 for agency records.

c. Comments

OSHA welcomes comments from the public on the benefits and disadvantages of removing the requirement for employers with 250 or more employees to submit the data from OSHA Forms 300 and 301 to OSHA electronically on an annual basis, including the usefulness of the data for enforcement targeting, the burden on employers of submitting that data, and the risks its collection poses to worker privacy.

2. Section 1904.41, Paragraphs (b)(1)-(8)

Paragraphs (b)(1) through (8) of § 1904.41 currently address implementation of the electronic submission requirements for the information on OSHA Forms 300, 301, and 300A. OSHA is proposing to reconcile these provisions with the removal of the annual electronic submission requirement for the information on OSHA Forms 300 and 301 in proposed § 1904.41(a), as explained above. Therefore, the proposed provisions in paragraphs (b)(1)-(8) would provide for the implementation of electronic submission requirements only for the information on OSHA Form 300A.

OSHA invites public comment on these proposals during the comment period.

3. Employer Identification Number

OSHA limited the proposed data collection in its 2013 NPRM (78 FR 67254) to Improve Tracking of Workplace Injuries and Illnesses to records that employers were already required to collect under part 1904. Accordingly, the May 2016 final rule only required the electronic submission of such records. These records do not include the EIN.

OSHA now seeks comment on this proposal to add a requirement for employers to submit their EIN along with their injury and illness data because the Agency believes such a requirement could reduce or eliminate duplicative reporting. Collecting EINs would increase the likelihood that the Bureau of Labor Statistics (BLS) would be able to match data collected by OSHA under the electronic reporting requirements to data collected by BLS for the Survey of Occupational Injury and Illness (SOII). The BLS records contain the EINs for establishments, and including the EIN in the OSHA collection will increase the accuracy of matching the OSHA-collected data to the BLS-collected data. The ability to accurately match the data is critical for evaluating how BLS might use OSHA-collected data to supplement the SOII, which in turn would enhance the ability of OSHA and other users of the SOII data to identify occupational injury and illness trends and emerging issues. Furthermore, the ability of BLS to match the OSHA-collected data also has the potential to reduce the burden on employers who are required to report injury and illness data both to OSHA (for the electronic recordkeeping requirement) and to BLS (for the SOII). OSHA and BLS are also collaborating to identify technological approaches to reduce respondent burden. This collaboration includes exploring changes to both data collection systems as well as real-time sharing of OSHA data with BLS, with the goal of streamlining the reporting process for respondents covered under both collections.

The SOII is an establishment survey and is a comprehensive source of national estimates of nonfatal injuries and illnesses that occur in the workplace. The SOII collects data on non-fatal injuries and illnesses for each calendar year from a sample of employers based on recordable injuries and illnesses as defined by OSHA in 29 CFR part 1904. Using data from the survey, BLS estimates annual counts and rates by industry and state for workers in private industry and state and local government. In addition, the SOII provides details about the most severe injuries and illnesses (those involving days away from work), including characteristics of the workers involved and details of the circumstances surrounding the incident, using data collected on Forms 300A and 301 from the sampled establishments (see BLS Handbook of Methods: https://www.bls.gov/opub/hom/soii/home.htm).

Given the limitations of matching establishments across databases, there is currently no methodological approach to completely match establishments that currently submit data under both OSHA's collection of injury and illness data under § 1904.41 and the BLS data collection for the SOII. BLS cannot provide its collected data to OSHA because the Confidential Information Protection and Statistical Efficiency Act of 2002 (Pub. L. 107-347, 116 Stat. 2899 (2002)) prohibits BLS from releasing establishment-specific data to either OSHA or the general public. Although OSHA can provide the data it collects to BLS, without the EIN it is very difficult to match the establishments in OSHA's data collection to the establishments in BLS's data collection. Not having the EIN increases the resources necessary to produce the match and reduces the accuracy of the match.

Including the EIN in the electronic reporting to OSHA would improve BLS's ability to accurately match the OSHA-collected data with the SOII data. After evaluation of the accuracy of the data matching, it may be possible for BLS to use the OSHA-collected data in the generation of occupational injuries and illnesses estimates, reducing burden on employers. If the EIN is not collected and the data from the two sources cannot be accurately matched, reducing this burden becomes nearly impossible. Collecting the EIN would thus accord with a recommendation in the 2018 National Academy of Sciences, Engineering, and Medicine report on A Smarter National Surveillance System for Occupational Safety and Health in the 21st Century: “To avoid duplicate reporting, OSHA and BLS should integrate data-collection efforts so that employers selected in the annual BLS sample for SOII but reporting electronically to OSHA need not make separate reports to BLS” (see Ex. 2063).

Including the EIN as part of electronic reporting might also improve the quality and utility of the collected data. For example, OSHA could use the EIN to identify errors such as multiple submissions of data from the same establishment and to link multiple years of data submissions from the same establishment. The EIN could also be used to match against other databases that contain this identifier to add additional characteristics to the data. For example, submissions could be linked to the OSHA Information System (OIS) to identify the previous enforcement history of the establishment when the inspection records contain the EIN.

OSHA notes that EINs do not have the same level of protection as Social Security numbers. For example, any publicly-traded company must put its EIN on public filings with the U.S. Securities and Exchange Commission. Within DOL, the Employee Benefits Security Administration (EBSA) discloses EINs associated with filings of the Annual Returns/Reports of Employee Benefit Plans (Form 5500); EIN is a searchable field on EBSA's “Form 5500/5000-SF Filing Search” web page (see https://www.efast.dol.gov/welcome.html), and the search results are listed in ascending order by EIN. Other agencies also make EINs public in filings, such as the Federal Communications Commission's Commission Registration System (CORES). Businesses also have to share EINs with contractors and clients for tax reporting, such as filing an IRS Form 1099. As a result, DOL has not generally withheld EINs from disclosure.

OSHA invites public comment on the advantages and disadvantages of requiring employer submission of EINs and on whether employers required to electronically report information to OSHA under part 1904 would consider the EIN to be exempt from disclosure, either as confidential business information or for another reason.

B. Additional Questions

OSHA seeks comments and data from the public regarding the proposed rule to remove the requirement for establishments with 250 or more employees that are required to routinely keep injury and illness records to electronically submit information from the OSHA Form 300 and 301 and to add the requirement for covered establishments to submit their EIN. More specifically, the following questions are relevant to this rulemaking:

1. What risks to worker privacy are posed by the electronic collection of information from Forms 300 and 301 from establishments with 250 or more workers? How likely are these risks to materialize? How could OSHA make them less likely, and what resources would be required? Given the limitations identified above, what are the benefits of electronically collecting this information?

2. Besides the Bureau of Labor Statistics, what other agencies or organizations in the public and private sectors use automated coding (autocoding) systems for text data in data collections?

3. Besides the Department of Health and Human Services, what other agencies and organizations in the public and private sectors use automated de-identification systems to remove PII from text data before making the data available to the public? What challenges have they faced in using those systems to keep PII protected?

4. Would employers required to electronically report information to OSHA under part 1904 consider the EIN to be exempt from disclosure, either as confidential business information or for another reason? Are there any circumstances where the EIN would be considered Personally Identifiable Information (PII)? OSHA also seeks comments on privacy concerns that might arise from employers submitting their EIN.

OSHA is only seeking comment on the proposed changes to § 1904.41 in this NPRM, and not on any other aspects of part 1904.

IV. Preliminary Economic Analysis and Regulatory Flexibility Certification A. Introduction

E.O. 12866 and E.O. 13563 require that OSHA estimate the benefits, costs, and net benefits of proposed and final regulations. Executive Orders 12866 and 13563, the Regulatory Flexibility Act (5 U.S.C. 601-612) and the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501-1571) also require OSHA to estimate the costs, assess the benefits, and analyze the impacts of certain rules that the Agency promulgates. Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other effects; distributive impacts; and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility.

This proposed rule would protect worker privacy and reduce costs for employers and OSHA by amending OSHA's recordkeeping regulation to remove the requirement for the annual electronic collection of information from OSHA Forms 300 and 301. OSHA estimates that the rule would have net cost savings of $8.28 million per year at a 3 percent discount rate, including $8.23 million per year for the private sector and $52,754 per year for the government. Annualized at a 7 percent discount rate, the proposed rule would have net cost savings of $8.25 million per year, including $8.18 million per year for the private sector and $64,070 per year for the government. Annualized at a perpetual 7 percent discount rate, the proposed rule would have net cost savings of $8.35 million per year. As explained above, OSHA has preliminarily determined that the electronic collection of information in the OSHA 300 and 301 forms poses risks to worker privacy and additional cost to employers and OSHA that outweigh the uncertain enforcement benefits of collecting it.

The proposed rule is not an “economically significant regulatory action” under E.O. 12866 or UMRA (2 U.S.C. 1532(a)), and it is not a “major rule” under the Congressional Review Act (CRA) (5 U.S.C. 801 et seq.). The Agency estimates that the rulemaking imposes far less than $100 million in annual economic costs. In addition, it does not meet any of the other criteria specified by UMRA or CRA for a significant regulatory action or major rule.

B. Cost Savings

For this PEA, OSHA relied on the Final Economic Analysis (FEA) in the May 2016 final rule (81 FR 29624), updated to include more recent data and some modifications in OSHA's methodology. OSHA obtained the estimated cost of electronic data submission by multiplying the compensation per hour of the person expected to perform the task of electronic data submission by the time required to submit the data.

As in the 2016 FEA, OSHA selected an employee in the occupation of Industrial Health and Safety Specialist and Technician as being at the appropriate salary level. The mean hourly wage for Standard Occupational Classification (SOC) code 29-9011, Industrial Health and Safety Specialists, in the May 2016 data from the BLS Occupational Employment Survey (OES), was $34.85.9 (The mean hourly wage used in the 2016 FEA was $33.88, using May 2014 data from OES.) This was the raw wage and did not include the other fringe benefits that make up full hourly compensation or overhead costs calculated in this document. Through the current electronic collection of 300A data, OSHA is collecting data on the occupations of employees responsible for submitting data. This information is collected as a part of the sign-up process where establishments create their user accounts; one of the fields for a new user is their job title. OSHA may use these data to revise the estimates in the final rule. In addition, OSHA welcomes comment on whether “Industrial Health and Safety Specialist and Technician” is the appropriate salary level for the employee performing this task.

9 See https://www.bls.gov/oes/current/oes299011.htm.

The June 2017 data from the BLS National Compensation Survey 10 reported a mean fringe benefit factor of 1.44 for workers in private industry. (The mean fringe benefit factor used in the 2016 FEA was the same, using December 2014 data from the BLS National Compensation Survey.) OSHA multiplied the mean hourly wage by the mean fringe benefit factor to obtain an estimated total compensation (wages and benefits) for Industrial Health and Safety Specialists of $50.18 per hour ($34.85 × 1.44). The estimated total compensation (wages and benefits) used in the 2016 FEA was $48.78 per hour, so this estimate in this PEA represents an increase of 3 percent, due to the increase in the mean hourly wage.

10 See https://www.bls.gov/web/ecec/ececqrtn.txt.

OSHA recognizes that not all firms assign the responsibility for recordkeeping to an Industrial Health and Safety Specialist. For example, a smaller firm may use a bookkeeper or a plant manager, while a larger firm may use a higher-level specialist. However, OSHA believes that the calculated cost of $50.18 per hour is a reasonable estimated total hourly compensation for a typical record keeper.

Additionally, after publishing the May 2016 final rule, the Department of Labor determined that it is appropriate in some circumstances to account for overhead expenses as part of the methodology used to estimate the costs and economic impacts of OSHA regulations. Therefore, for this PEA, OSHA is updating the projected costs of the requirement for establishments with 250 or more employees to submit the information from OSHA Forms 300 and 301 to OSHA, as reflected in the 2016 FEA, by adding an overhead rate equivalent to 17 percent of base wages. For this PEA, OSHA included an overhead rate when estimating the marginal cost of labor in its primary cost calculation. Overhead costs are indirect expenses that cannot be tied to producing a specific product or service. Common examples include rent, utilities, and office equipment. Unfortunately, there is no general consensus on the cost elements that fit this definition. The lack of a common definition has led to a wide range of overhead estimates. Consequently, the treatment of overhead costs needs to be case-specific. OSHA adopted an overhead rate of 17 percent of base wages. This is consistent with the overhead rate used for sensitivity analyses in the FEA in support of the 2017 final rule delaying the deadline for submission of 300A data (82 FR 55761) and the FEA in support of OSHA's 2016 final standard on Occupational Exposure to Respirable Crystalline Silica.11 For example, to calculate the total labor cost for an Industrial Health and Safety Specialist, Standard Occupational Classification (SOC) code 29-9011, three components are added together: base wage ($34.85) + fringe benefits ($15.33, derived as 44% of $34.85) + applicable overhead costs ($5.92, derived as 17% of $34.85). This increases the labor cost of the fully-loaded hourly wage for an Industrial Health and Safety Specialist to $56.10.

11 See the sensitivity analyses in the Improved Tracking FEA (https://www.thefederalregister.org/fdsys/pkg/FR-2017-11-24/pdf/2017-25392.pdf, page 55765) and the FEA in support of OSHA's 2016 final standard on Occupational Exposure to Respirable Crystalline Silica (81 FR 16285) (https://www.thefederalregister.org/fdsys/pkg/FR-2016-03-25/pdf/2016-04800.pdf pp.16488-16492.). The methodology was modeled after an approach used by the Environmental Protection Agency. More information on this approach can be found at: U.S. Environmental Protection Agency, “Wage Rates for Economic Analyses of the Toxics Release Inventory Program,” June 10, 2002 (Ex. 2066). This analysis itself was based on a survey of several large chemical manufacturing plants: Heiden Associates, Final Report: A Study of Industry Compliance Costs Under the Final Comprehensive Assessment Information Rule, Prepared for the Chemical Manufacturers Association, December 14, 1989, Ex. 2065.

For time required for the data submission in this PEA, OSHA uses the same estimated unit time requirements as reported by BLS in its paperwork burden analysis for the Survey of Occupational Injuries and Illnesses (SOII) (OMB Control Number 1220-0045, expires December 31, 2018). BLS estimated 10 minutes per recordable injury/illness case for electronic submission of the information on Form 300 (Log of Work-Related Injuries and Illnesses) and Form 301 (Injury and Illness Incident Report). In addition, in the 2016 FEA, OSHA estimated 2 minutes more time than the BLS paperwork burden, for a total of 12 minutes per recordable case (10 minutes per case for Form 301 entries plus 2 minutes per case for entry of Form 300 log entries), to account for the differences between BLS and OSHA submission requirements.

The proposed rule would remove the requirement for establishments with 250 or more employees to report information from OSHA Forms 300 and 301. To estimate the number of injuries and illnesses that would be reported by covered establishments with 250 or more employees under the current rule, OSHA assumed that the total number of recordable cases in establishments with 250 or more employees is proportional to the establishments' share of employment within each industry.12 OSHA then used the most recent SOII data to estimate that, without the proposed rule, covered establishments with 250 or more employees would report 775,210 injury and illness cases per year.13 The cost per case is estimated at $11.22 (12/60 × $56.10), and the total cost is $8,699,173 ($11.22 per case × 775,210 cases).14 Therefore, the proposal to remove the requirement to submit the information from OSHA Form 300 and 301 to OSHA electronically would result in a total cost savings to the private sector of $8,699,173.15

12 OSHA welcomes comments on this assumption.

13 The 2016 FEA estimated 713,397 injury and illness cases per year using the same methodology and the most recent SOII data then available (see “PEA calculations,” Ex. 2067).

14 In addition, note that the totals in tables in this chapter, as well as totals summarized in the text, may not precisely sum from underlying elements due to rounding. The precise calculation of the numbers in the PEA appears in the spreadsheet (see “PEA calculations,” Ex. 2067).

15 Overall, the estimated cost savings of this proposal to remove the provision for electronic reporting of case data is 25 percent greater than the 2016 estimated cost of promulgating the provision ($6,948,487). There are three reasons for this 25 percent increase: The number of establishments with more than 250 employees has grown, the mean hourly wage has increased, and OSHA is now including a 17 percent overhead estimate in the cost estimates.

The 2016 FEA also included government costs for the rule because creating a reporting and data collection system was a significant fraction of the total costs of the regulation. Not collecting the case-specific data from OSHA Form 300 and 301 would generate a small additional cost savings for the government because that portion of the reporting and data collection system has not yet been created and would not have to be created under the proposed rule. OSHA estimates a lump sum savings from not creating the software to collect the 300 and 301 data to be $450,000. Annualized at 3 percent over 10 years, this would represent a savings to the government of $52,754 per year. OSHA also annualized the cost savings at 7 percent over 10 years, and using this discount rate, the cost savings would be slightly higher: $64,070.

C. New Costs (From the EIN Collection)

Establishments would be newly required to submit the employer's EIN along with the employer's electronic data submission. Some employees given this task would already know their employer's EIN from their other duties, but others would need to spend some time finding out this information. OSHA estimates an average of 5 minutes for an employee to find out his or her employer's EIN and to enter it on the submission form. Hence the unit cost for a submission would be the wage of the employee who submitted the information multiplied by his or her time plus overhead, or $4.68 [(5/60) × $56.10].

The electronic reporting system is designed to retain information about each establishment based on the login information, including the EIN. Therefore, employers would only have to provide OSHA their EIN once, so this would not be a recurring cost. However, it would be an additional one-time cost for employers who are newly reporting data because, for example, the establishment is new or the employer newly reached the reporting threshold for employment size. OSHA has estimated that each year there will be about 10.15 percent more establishments that will be required to report their EIN. This 10.15 percent figure is derived from the U.S. Census Bureau Statistics of U.S. Businesses (SUSB), specifically the employment change data set 16 which show the increase in U.S. business establishments from 2014 to 2015. In 2015 there were 689,819 new establishments, out of a total 6,795,201 establishments. Dividing the first figure by the second gives a change of about 10.15 percent.

16 Source: https://www2.census.gov/programssurveys/susb/datasets/2015/us_state_emplchange_2014-2015.txt.

To calculate the total estimated costs for covered establishments to provide their EINs, OSHA used establishment and employment data from the U.S. Census County Business Patterns (CBP).17 The three categories of included establishments are (1) all establishments with 250 or more employees in industries that are required to routinely keep OSHA injury and illness records, (2) establishments with 20-249 employees in certain high-hazard industries, as defined in the Appendix to the May 2016 final rule, and (3) farms and ranches with 20 or more employees. CBP data do not include numbers of farms and ranches with 20 or more employees, so in the May 2016 final rule, OSHA used data from the 2012 Census of Agriculture. Updated data from the 2017 Census of Agriculture are not available at this time, so OSHA will continue to use a count of 20,623 farms with 20 or more employees. CBP data show that there are 36,903 establishments with 250 or more employees in industries required to routinely keep records and 405,666 establishments with 20-249 employees in the designated high-hazard industries. Combining these figures with 20,623 farms and ranches results in a total of 463,192 establishments that would be required to submit an EIN under the proposed rule. With a cost per establishment of $4.68, the total first year cost of providing EINs would be $2,165,751 (463,192 × $4.68).18 When this cost is annualized over ten years, the annualized cost at a 3 percent discount rate is $253,892 and at a 7 percent discount rate the cost is $308,354.

17 For the CBP see: https://www.census.gov/programs-surveys/cbp.html.

18 In addition, note that the totals in tables in this chapter, as well as totals summarized in the text, may not precisely sum from underlying elements due to rounding. The precise calculation of the numbers in the PEA appears in the spreadsheet (see “PEA calculations,” Ex. 2067).

There are 463,192 establishments (including establishments with more than 250 employees, those with 20-249 employees in certain NAICS codes, and farms with more than 20 employees) that would be subject to reporting their EIN in the first year under this proposal. With 10.15 percent new establishments each year, there will be an additional 47,012 establishments each year. The cost for those establishments will be $4.68 × 47,012 or $219,858. This cost does not occur in the first year. OSHA annualized 9 years of new establishment costs over ten years, which results in annualized costs of $213,262 at a discount rate of 3 percent and $204,468 at a 7 percent discount rate.

The EIN data field is already included in the reporting system design, so there would be no additional government costs associated with submittal of the EIN.

D. Net Cost Savings

The cost savings of the proposed rule, the new costs associated with collecting the EIN, and the net total cost savings are shown in Table 1. Combining the cost savings to the private sector and to the government, the estimated total annual cost savings from the proposed rule would be $8,751,927 at a 3 percent discount rate and $8,763,243 at 7 percent discount rate. The additional costs to the private sector from collection of the EIN are estimated to be $467,194 at a 3 percent discount rate and $512,822 at 7 percent discount rate. The net cost savings for this proposal are estimated to be $8,284,733 at a 3 percent discount rate and $8,250,421 at 7 percent discount rate.

Table I—Total Cost Savings and Total Additional Costs of the Proposed Rule Cost savings element Annual cost
  • savings
  • Cost savings for eliminating electronic submission of part 1904 records by establishments with 250 or more employees (Total Private Sector Savings) $8,699,173 Total Government Cost Savings, 3 percent discount rate over ten years 52,754 Total Government Cost Savings, 7 percent discount rate over ten years 64,070 Total Cost Savings per year, 3 percent discount rate over ten years 8,751,927 Total Cost Savings per year, 7 percent discount rate over ten years 8,763,243
    New costs from EIN collection Cost First Year EIN Cost $2,165,751 Annualized First Year Costs, 3 percent discount rate over ten years 253,892 Annualized First Year Costs, 7 percent discount rate over ten years 308,354 Subsequent Annual EIN Costs (from new establishments), starting in second year 219,858 Subsequent annual EIN Cost Annualized at a 3 percent discount rate over ten years 213,262 Subsequent annual EIN Cost Annualized at a 7 percent discount rate over ten years 204,468 Annualized Total EIN Cost, 3 percent discount rate over ten years 467,194 Annualized Total EIN Cost, 7 percent discount rate over ten years 512,822 Net Cost Savings, 3 percent discount rate over ten years 8,284,733 Net Cost Savings, 7 percent discount rate over ten years 8,250,421

    There could be substantial cost savings from requiring covered employers to include the EIN in their reporting. There is roughly a 40% overlap between the BLS SOII sample and private sector establishments required to report to OSHA. If OSHA collected Form 300A from all covered private sector units and BLS were able to fully match these units and use them in generating SOII estimates, the reduction in duplication would represent approximately 15,000 hours of respondent burden. In its SOII paperwork burden analysis, BLS estimates the total cost of submitting this form for private sector establishments to be $891,000. The potential cost savings for avoiding duplication is 40 percent of this value—$356,000. Considering that the cost savings for avoiding duplication is perpetual, the total net savings for adding the EIN is estimated to be $2,648,850 at a 3 percent discount rate and $126,294 at 7 percent discount rate in a perpetual time horizon.

    E. Benefits

    The value of worker privacy is impossible to quantify, but no less significant because of that fact. This proposed rule would protect worker privacy by preventing routine government collection of information that may be quite sensitive, including descriptions of workers' injuries and the body parts affected, and thereby avoiding the risk that such information might be publicly disclosed under FOIA.

    OSHA further believes that the collection of individual information from Forms 300 and 301 could add enforcement benefits, but those benefits are uncertain and difficult to quantify. As noted above, these benefits are uncertain because OSHA lacks experience with the use of that information and is not sure about how many resources it would take to make meaningful use of that information. The loss of these uncertain benefits is also impossible to quantify.

    OSHA has preliminarily determined that the (substantial) benefits to worker privacy outweigh the (uncertain) foregone benefits to enforcement. It welcomes public comment on this determination, including on its preliminary conclusions that neither worker privacy nor enforcement benefits can be meaningfully quantified.

    F. Economic Feasibility

    Removing the requirement for establishments with 250 or more employees to submit the information from OSHA Forms 300 and 301 to OSHA annually would reduce costs and so would have no negative feasibility effects. The EIN requirement would cost an estimated $4.68 per establishment, still leaving a large overall reduction in costs, and so would be economically feasible. Hence, OSHA concludes that the proposed rule is economically feasible.

    G. Regulatory Flexibility Certification

    The current requirement for annual electronic submission of information from OSHA Forms 300 and 301 affects only a very small minority of small firms. In many industry sectors, there are no small firms with at least 250 employees. Even in those industry sectors where the definition of small firm includes some firms with at least 250 employees, the overwhelming majority of small firms have fewer than 250 employees. However, there will be some small firms affected in some industries. Removing this requirement as proposed would result in a cost savings of, on average, $236 per establishment for each establishment with 250 or more employees affected by the 2016 Final Rule. This number is derived by dividing the total cost savings of $8,699,173 by 36,903 affected establishments with 250 or more employees. Such a small amount of cost savings would not have a significant impact on a firm with 250 or more employees.

    As above, removing the requirement for establishments with 250 or more employees to submit the information from OSHA Forms 300 and 301 annually to OSHA would reduce costs, and the estimated cost of the EIN requirement is $4.68 per establishment, a negligible amount. Hence, per § 605 of the Regulatory Flexibility Act, OSHA certifies that this proposed rule will not have a significant economic impact on a substantial number of small entities.

    V. OMB Review Under the Paperwork Reduction Act of 1995

    This proposed rule would revise an existing collection of information, as defined and covered by the Paperwork Reduction Act of 1995 (PRA) and its implementing regulations, that is subject to review by OMB under the PRA (44 U.S.C. 3501-3521) and OMB regulations (5 CFR part 1320). The PRA requires that agencies obtain approval from OMB before conducting any collection of information (44 U.S.C. 3507). The PRA defines a “collection of information” as “the obtaining, causing to be obtained, soliciting, or requiring the disclosure to third parties or the public of facts or opinions by or for an agency regardless of form or format” (44 U.S.C. 3502(3)(A)).

    OSHA's existing recordkeeping forms consist of the OSHA 300 Log, the 300A Summary, and the 301 Incident Report. These forms are contained in the Information Collection Request (ICR) (paperwork package) titled 29 CFR part 1904 Recording and Reporting Occupational Injuries and Illnesses, which OMB approved under OMB Control Number 1218-0176.

    The proposed rule would affect the ICR estimates as follows:

    1. Establishments that are subject to the part 1904 requirements and have 250 or more employees would no longer be required to electronically submit information recorded on their OSHA Forms 300 and 301 to OSHA once a year.

    2. Establishments subject to the data collection would provide one additional data element, the EIN.

    The burden hours for the electronic reporting requirements under § 1904.41 if revised as proposed are estimated to be 136,641 per year. There are no capital costs for this collection of information.

    More specifically, this action proposes to amend the recordkeeping regulation to remove the requirement for establishments that are required to keep injury and illness records under part 1904, and that had 250 or more employees in the previous year, to electronically submit to OSHA or OSHA's designee case characteristic information from the OSHA Form 300 (Log of Work-Related Injuries and Illnesses) and OSHA Form 301 (Injury and Illness Incident Report) once a year. Under the proposed rule, these establishments would only be required to submit summary information from the OSHA Form 300A. There are approximately 37,000 establishments that would no longer be subject to a requirement to submit the information on OSHA Forms 300 and 301 for approximately 775,000 injury and illness cases under the proposed rule. OSHA used 2015 SOII data (https://www.bls.gov/iif/oshwc/osh/os/ostb4734.pdf) to estimate that, without the proposed rule, covered establishments with 250 or more employees would report 775,210 injury and illness cases per year.) Also, OSHA requests comment on requiring 463,000 employers to submit their EIN to OSHA.

    The table below presents the components of the collection that comprise the ICR estimates.

    Estimated burden under current reporting requirements Number of
  • cases
  • Unit hours
  • per case
  • Total
  • burden
  • hours
  • Estimated burden under proposed
  • reporting requirements
  • Number of
  • cases
  • Unit hours
  • per case
  • Total
  • burden
  • hours
  • § 1904.41(a)(1)—Create a new account 3,690 0.167 616 3,690 0.167 616 § 1904.41(a)(1)—provide EIN 0 0.083 0 36,903 0.083 3,063 § 1904.41(a)(1)—electronic submission of OSHA Form 300A data by establishments with 250 or more employees 36,903 0.167 6,163 36,903 0.167 6,163 § 1904.41(a)(1)—electronic submission of injury and illness case data by establishments with 250 or more employees 775,210 0.2 155,042 0 0.2 0 § 1904.41(a)(2)—Create a new account 40,567 0.167 6,775 40,567 0.167 6,775 § 1904.41(a)(2)—provide EIN 0 0.083 0 426,285 0.083 35,382 § 1904.41(a)(2)—electronic submission of OSHA Form 300A data by establishments with 20 or more employees but fewer than 250 employees in designated industries 385,383 0.167 64,359 385,383 0.167 64,359 § 1904.41(a)(2)—electronic submission of OSHA Form 300A data by establishments with 20 or more employees but fewer than 250 employees in designated industries—with no internet connection 20,283 1 20,283 20,283 1 20,283 § 1904.41(a)(3)—Electronic submission of part 1904 records upon notification 0 0 0 0 0 0 Total burden hours 253,238 136,641

    As required by 5 CFR 1320.5(a)(1)(iv) and 1320.8(d)(2), the following paragraphs provide information about this ICR.

    1. Title: Recording and Reporting Occupational Injuries and Illnesses (29 CFR part 1904).

    2. Number of respondents: 1,002,912.

    3. Frequency of responses: Annually.

    4. Number of responses: 5,839,692.

    5. Average time per response: 22 minutes.

    6. Estimated total burden hours: 2,136,953 hours.

    7. Estimated costs (capital-operation and maintenance): $0.

    Members of the public may comment on the paperwork requirements in this proposed regulation by sending their written comments to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for the Department of Labor, OSHA (Regulation Identifier Number (RIN) 1218-AD17), Office of Management and Budget, Room 10235, Washington, DC 20503; telephone: 202-395-6929; fax: 202-395-6881 (these are not toll-free numbers); email: [email protected] Please limit the comments to only the proposed changed provisions of the recordkeeping rule related to information collection (i.e., proposed § 1904.41).

    OSHA also encourages commenters to submit their comments on these paperwork requirements to the rulemaking docket (OSHA-2013-0023), along with their comments on other parts of the proposed regulation. For instructions on submitting these comments to the docket, see the sections of this Federal Register document titled DATES and ADDRESSES.

    Comments submitted in response to this document are public records; therefore, OSHA cautions commenters about submitting personal information such as Social Security numbers and dates of birth. To access the docket to read or download comments and other materials related to this paperwork determination, including the complete ICR, use the procedures described under the section of this document titled ADDRESSES. You may obtain an electronic copy of the complete ICR by going to the website at http://www.reginfo.gov/public/do/PRAMain, then selecting “Department of Labor” under “Currently Under Review,” then clicking on “submit.” This will show all of the Department's ICRs currently under review, including the ICRs submitted for proposed rulemakings. To make inquiries, or to request other information, contact Mr. Charles McCormick, Directorate of Standards and Guidance, OSHA, telephone: (202) 693-1740; email: [email protected]

    OSHA and OMB are particularly interested in comments that:

    • Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;

    • Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;

    • Enhance the quality, utility, and clarity of the information to be collected; and

    • Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses.

    OSHA notes that a federal agency cannot conduct or sponsor a collection of information unless OMB approves it under the PRA, and the information collection displays a currently-valid OMB control number. Also, notwithstanding any other provision of law, no party shall be subject to penalty for failing to comply with a collection of information if the collection of information does not display a currently-valid OMB control number. OSHA will publish a notice of OMB's action when it publishes the final regulation, or, if not approved by then, when OMB authorizes the information collection requirements under the PRA.

    VI. Unfunded Mandates

    For purposes of the UMRA (2 U.S.C. 1501-1571), as well as E.O. 13132 (64 FR 43255 (Aug. 4, 1999)), this rule does not include any federal mandate that may result in increased expenditures by state, local, and tribal governments, or increased expenditures by the private sector of more than $100 million.

    VII. Federalism

    The proposed rule has been reviewed in accordance with Executive Order 13132, regarding federalism. Because this rulemaking involves a “regulation” issued under Sections 8 and 24 of the OSH Act, and is not an “occupational safety and health standard” issued under Section 6 of the OSH Act, the rule will not preempt state law (29 U.S.C. 667(a)). The effect of the proposed rule on states is discussed in Section VIII, State Plan States.

    VIII. State Plan States

    Pursuant to section 18 of the OSH Act (29 U.S.C. 667) and the requirements of 29 CFR 1904.37 and 1902.7, within 6 months after publication of the final OSHA rule, state-plan states must promulgate occupational injury and illness recording and reporting requirements that are substantially identical to those in 29 CFR part 1904 “Recording and Reporting Occupational Injuries and Illnesses.” All other injury and illness recording and reporting requirements (for example, industry exemptions, reporting of fatalities and hospitalizations, record retention, or employee involvement) that are promulgated by state-plan states may be more stringent than, or supplemental to, the federal requirements, but, because of the unique nature of the national recordkeeping program, states must consult with OSHA and obtain approval of such additional or more stringent reporting and recording requirements to ensure that they will not interfere with uniform reporting objectives (29 CFR 1904.37(b)(2), 29 CFR 1902.7). Also because of the need for a consistent national data system, employers in state-plan states must comply with federal requirements for the submission of data under part 1904 whether or not the state plan has implemented a substantially identical requirement by the time the federal requirement goes into effect. Therefore, although states will need to update their plans to match the Federal plan, there is no discretion involved, so this change should be relatively simple to make.

    There are 28 state plan states and territories. The states and territories that cover private sector employers are Alaska, Arizona, California, Hawaii, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Oregon, Puerto Rico, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, and Wyoming. Connecticut, Illinois, Maine, New Jersey, New York, and the Virgin Islands have OSHA-approved state plans that apply to state and local government employees only.

    IX. Public Participation

    Because this rulemaking involves a regulation rather than a standard, it is governed by the notice and comment requirements in the Administrative Procedure Act (APA) (5 U.S.C. 553) rather than section 6 of the OSH Act (29 U.S.C. 655) and 29 CFR part 1911 (both of which only apply to “promulgating, modifying or revoking occupational safety or health standards” (29 CFR 1911.1)). Therefore, the OSH Act requirement to hold an informal public hearing (29 U.S.C. 655(b)(3)) on a proposed standard, when requested, does not apply to this rulemaking.

    A. Public Submissions

    OSHA invites comment on all aspects of the proposed rule. OSHA specifically encourages comment on the issues raised in the questions subsection. OSHA is not seeking comment on any other aspects of part 1904. Interested persons must submit comments by September 28, 2018. The Agency will carefully review and evaluate all comments, information, and data, as well as all other information in the rulemaking record, to determine how to proceed.

    You may submit comments in response to this document (1) electronically at https://www.regulations.gov, which is the federal e-rulemaking portal; (2) by fax; or (3) by hard copy. All submissions must identify the agency name and the OSHA docket number (Docket No. OSHA-2013-0023) or RIN (RIN 1218-AD17) for this rulemaking. You may supplement electronic submissions by uploading document files electronically. If, instead, you wish to mail additional materials in reference to an electronic or fax submission, you must submit three copies to the OSHA docket office (see ADDRESSES section). The additional materials must clearly identify your electronic comments by name, date, and docket number, so that OSHA can attach them to your comments.

    Because of security-related procedures, the use of regular mail may cause a significant delay in the receipt of submissions. For information about security procedures concerning the delivery of materials by hand, express delivery, messenger, or courier service, please contact the OSHA docket office at (202) 693-2350 (TTY (877) 889-5627).

    B. Access to Docket

    Comments in response to this Federal Register document are posted at https://www.regulations.gov, the federal e-rulemaking portal. Therefore, OSHA cautions individuals about submitting personal information such as Social Security numbers and birthdates. Although submissions are listed in the https://www.regulations.gov index, some information (e.g., copyrighted material) is not publicly available to read or download through that website. All comments and exhibits, including copyrighted material, are available for inspection at the OSHA docket office. Information on using https://www.regulations.gov to submit comments and access dockets is available on that website. Contact the OSHA docket office for information about materials not available through the website and for assistance in using the internet to locate docket submissions.

    Electronic copies of this Federal Register document are available at https://www.regulations.gov. This document, as well as news releases and other relevant information, also are available at OSHA's web page at http://www.osha.gov. For specific information about OSHA's Recordkeeping rule, go to the Recordkeeping page on OSHA's web page.

    List of Subjects in 29 CFR Part 1904

    Health statistics, Occupational safety and health, Reporting and recordkeeping requirements, State plans.

    Signed at Washington, DC, on July 23, 2018. Loren E. Sweatt, Deputy Assistant Secretary of Labor for Occupational Safety and Health. Amendments to Regulations

    For the reasons stated in the preamble, OSHA proposes to amend part 1904 of chapter XVII of title 29 as follows:

    PART 1904—[AMENDED] Subpart E—Reporting Fatality, Injury and Illness Information to the Government 1. The authority citation for subpart E of 29 CFR part 1904 continues to read as follows: Authority:

    29 U.S.C. 657, 673, 5 U.S.C. 553, and Secretary of Labor's Order 1-2012 (77 FR 3912, Jan. 25, 2012).

    2. In § 1904.41, revise the section heading and paragraph (a)(1), add paragraph (a)(4), and revise paragraph (b) to read as follows:
    § 1904.41 Electronic submission of Employer Identification Number (EIN) and injury and illness records to OSHA.

    (a) * * *

    (1) Annual electronic submission of OSHA Form 300A Summary of Work-Related Injuries and Illnesses by establishments with 250 or more employees. If your establishment had 250 or more employees at any time during the previous calendar year, and this part requires your establishment to keep records, then you must electronically submit information from OSHA Form 300A Summary of Work-Related Injuries and Illnesses to OSHA or OSHA's designee. You must submit the information once a year, no later than the date listed in paragraph (c) of this section of the year after the calendar year covered by the form (for example, 2019 for the 2018 form).

    (4) Electronic submission of the Employer Identification Number (EIN). For each establishment that is subject to these reporting requirements, you must provide the EIN used by the establishment.

    (b) Implementation—(1) Does every employer have to routinely submit this information to OSHA? No, only two categories of employers must routinely submit this information. First, if your establishment had 250 or more employees at any time during the previous calendar year, and this part requires your establishment to keep records, then you must submit the required information to OSHA once a year. Second, if your establishment had 20 or more employees but fewer than 250 employees at any time during the previous calendar year, and your establishment is classified in an industry listed in appendix A to subpart E of this part, then you must submit the required information to OSHA once a year. Employers in these two categories must submit the required information by the date listed in paragraph (c) of this section of the year after the calendar year covered by the form (for example, 2019 for the 2018 form). If you are not in either of these two categories, then you must submit the information to OSHA only if OSHA notifies you to do so for an individual data collection.

    (2) Do part-time, seasonal, or temporary workers count as employees in the criteria for number of employees in paragraph (a) of this section? Yes, each individual employed in the establishment at any time during the calendar year counts as one employee, including full-time, part-time, seasonal, and temporary workers.

    (3) How will OSHA notify me that I must submit information as part of an individual data collection under paragraph (a)(3) of this section? OSHA will notify you by mail if you will have to submit information as part of an individual data collection under paragraph (a)(3). OSHA will also announce individual data collections through publication in the Federal Register and the OSHA newsletter, and announcements on the OSHA website. If you are an employer who must routinely submit the information, then OSHA will not notify you about routine submittal.

    (4) When do I have to submit the information? If you are required to submit information under paragraph (a)(1) or (2) of this section, then you must submit the information once a year, by the date listed in paragraph (c) of this section of the year after the calendar year covered by the form (for example, 2019 for the 2018 form). If you are submitting information because OSHA notified you to submit information as part of an individual data collection under paragraph (a)(3) of this section, then you must submit the information as specified in the notification.

    (5) How do I submit the information? You must submit the information electronically. OSHA will provide a secure website for the electronic submission of information. For individual data collections under paragraph (a)(3) of this section, OSHA will include the website's location in the notification for the data collection.

    (6) Do I have to submit information if my establishment is partially exempt from keeping OSHA injury and illness records? If you are partially exempt from keeping injury and illness records under §§ 1904.1 and/or 1904.2, then you do not have to routinely submit information under paragraphs (a)(1) and (2) of this section. You will have to submit information under paragraph (a)(3) of this section if OSHA informs you in writing that it will collect injury and illness information from you. If you receive such a notification, then you must keep the injury and illness records required by this part and submit information as directed.

    (7) Do I have to submit information if I am located in a State Plan State? Yes, the requirements apply to employers located in State Plan States.

    (8) May an enterprise or corporate office electronically submit information for its establishment(s)? Yes, if your enterprise or corporate office had ownership of or control over one or more establishments required to submit information under paragraph (a) of this section, then the enterprise or corporate office may collect and electronically submit the information for the establishment(s).

    [FR Doc. 2018-16059 Filed 7-27-18; 8:45 am] BILLING CODE 4510-26-P
    DEPARTMENT OF LABOR Occupational Safety and Health Administration 29 CFR Part 1926 [Docket ID-OSHA-2018-0009] RIN 1218-AC96 Information Collection Request; Cranes and Derricks in Construction: Operator Qualification AGENCY:

    Occupational Safety and Health Administration (OSHA), Labor.

    ACTION:

    Proposed rule, limited reopening of comment period.

    SUMMARY:

    OSHA is providing the public an additional 30 days to comment on only the information collection requirements contained in the proposed updates to its standard for cranes and derricks in construction published on May 21, 2018.

    DATES:

    The comment period for only the information collection requirements published on May 21, 2018 at 83 FR 23534, is reopened. Comments must be submitted (postmarked, sent, or received) by August 29, 2018.

    ADDRESSES:

    Electronically: You may submit comments and attachments electronically at http://www.regulations.gov, which is the Federal eRulemaking Portal. Follow the instructions online for submitting comments.

    Facsimile: If your comments, including attachments, are not longer than 10 pages you may fax them to the OSHA Docket Office at (202) 693-1648.

    Regular mail, express delivery, hand delivery, and messenger (courier) service: When using this method, you must submit a copy of your comments and attachments to the OSHA Docket Office, Docket No. OSHA-2018-0009, Occupational Safety and Health Administration, U.S. Department of Labor, Room N-3653, 200 Constitution Avenue NW, Washington, DC 20210. Deliveries (hand, express mail, messenger, and courier service) are accepted during the OSHA Docket Office's normal business hours, 10:00 a.m. to 3:00 p.m., ET.

    Instructions: All submissions must include the agency name, the title of this document “Information Collection Request; Cranes and Derricks in Construction: Operator Qualification,” and the OSHA docket number for this document (OSHA-2018-0009). All comments, including any personal information you provide, are placed in the public docket without change, and may be made available online at http://www.regulations.gov. For further information on submitting comments, see the “Public Participation” heading in the section of this document titled SUPPLEMENTARY INFORMATION. Because of security procedures, the use of regular mail may cause a significant delay in the receipt of comments. For information about security procedures concerning the delivery of materials by hand, express delivery, messenger, or courier service, please contact the OSHA Docket Office at (202) 693-2350; TTY (877) 889-5627.

    Docket: To read or download comments or other material in the docket, go to http://www.regulations.gov or the OSHA Docket Office at the above address. All documents in the docket (including this Federal Register document) are listed in the http://www.regulations.gov index; however, some information (e.g., copyrighted material) is not publicly available to read or download through the website. All submissions, including copyrighted material, are available for inspection at the OSHA Docket Office.

    FOR FURTHER INFORMATION CONTACT:

    Mr. Vernon Preston, Directorate of Construction; telephone: (202) 693-2020; fax: (202) 693-1689; email: [email protected]

    SUPPLEMENTARY INFORMATION: A. Background

    OSHA published a notice of proposed rulemaking “Cranes and Derricks in Construction: Operator Qualification” (the NPRM or the proposed rule) on May 21, 2018, in the Federal Register (83 FR 23534) proposing regulations to update the standard for cranes and derricks in construction. In the NPRM, OSHA proposes to amend 29 CFR 1926, subpart CC to revise sections that address crane operator training, certification/licensing,1 and competency. The purpose of these amendments are to: Require comprehensive training of operators; remove certification by capacity from certification requirements; clarify and permanently extend the employer duty to evaluate potential operators for their ability to safely operate equipment covered by subpart CC; and require documentation of that evaluation.

    1 The term “certification/licensing” covers each of the certification options in the proposed rule (third-party certification or an audited employer certification program) as well as state or local operator licensing requirements.

    The proposed rule provided the public 30 days to comment on the proposed regulations including the information collection requirements contained in the proposed rule. Under the Paperwork Reduction Act (the PRA), Federal agencies are required to publish a notice in the Federal Register concerning each proposed information collection requirement and to allow 60 days for public comment on those requirements (44 U.S.C. 3506(c)(2)(A); see also 5 CFR 1320.8(d)(1)). Accordingly this document allows the public an additional 30 days, as required by the PRA, to comment on the information collection requirements contained in the proposed rule.

    Concurrent with publication of the proposed rule, OSHA submitted the new Cranes and Derricks in Construction Standard (29 CFR part 1926, subpart CC): Operator Qualification Information Collection Request (ICR) to the Office of Management and Budget (OMB) for review with a request for a new control number (ICR Reference Number 201710-1218-002). If a final rule is published, OSHA will submit the final ICR for the final Cranes and Derricks in Construction Standard: Operator Qualification to OMB for approval. If the final ICR is approved, OSHA will request to amend the comprehensive Cranes and Derricks in Construction Information Collection (OMB control number 1218-0261) to incorporate the ICR analysis associated with the final Cranes and Derricks in Construction Standard: Operator Qualification and to discontinue the new control number.

    The purpose of the PRA, 44 U.S.C. 3501 et seq., includes enhancing the quality and utility of information the Federal government requires and minimizing the paperwork and reporting burden on affected entities. The PRA requires certain actions before an agency can adopt or revise a collection of information requirement (also referred to as a “paperwork” or “information collection” requirement), including publishing a summary of the information collection requirements and a brief description of the need for, and proposed use of, the information. The PRA defines “collection of information” as “the obtaining, causing to be obtained, soliciting, or requiring the disclosure to third parties or the public, of facts or opinions by or for an agency, regardless of form or format.” (44 U.S.C. 3502(3)(A)). Under the PRA, a Federal agency may not conduct or sponsor a collection of information, and the public is not required to respond to a collection of information, unless it is approved by OMB and displays a currently valid OMB control number (44 U.S.C. 3507). Also, notwithstanding any other provisions of law, no person shall be subject to penalty for failing to comply with a collection of information if the collection of information does not display a currently valid OMB control number (44 U.S.C. 3512).

    B. Desired Focus of Comments

    The “Cranes and Derricks in Construction: Operator Qualification” proposed rule would establish new information collection requirements. The NPRM would also modify a small number of information collection requirements in the existing Cranes and Derricks in Construction Standard (29 CFR part 1926, subpart CC) Information Collection (IC) approved by OMB. OSHA submitted a new ICR (that modifies the existing Cranes and Derricks in Construction package) to OMB to reflect the NPRM's new or revised information collection requirements.

    Some of these revisions, if adopted, would result in changes to the existing burden hour and/or cost estimates associated with the current, OMB-approved information collection requirements contained in the Cranes and Derricks in Construction Standard Information Collection. Other revisions would not change burden hour or cost estimates, but would substantively modify language contained in the currently OMB-approved ICR. Still others would revise existing standard provisions that are not information collection requirements, will not change burden hour or cost estimates, and will not modify any language in the ICR. This document summarizes the first two categories to ensure that the ICR reflects the updated regulatory text, but does not summarize or seek comment on the last category of revisions that are not related to information collections. In addition, this document does not address the proposed provisions that are substantively unchanged from the current, OMB-approved information collection requirements. Discussion and justification of these provisions can be found in the preamble to the final crane standard (75 FR 48017) and also in the Supporting Statements for the proposed rule (83 FR 23534) as well as the approved Information Collection.

    The agency solicits comments on the Cranes and Derricks Standard information collection requirements as they would be revised by the proposed rule. Particularly, comments are sought by OSHA to:

    • Evaluate whether the proposed information collection requirements are necessary for the proper performance of the agency's functions, including whether the information will have practical utility;

    • Evaluate the accuracy of OSHA's estimate of the time and cost burden of the proposed information collection requirements, including the validity of the methodology and assumptions used;

    • Enhance the quality, utility, and clarity of the information to be collected; and

    • Minimize the burden of the information collection requirements 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, e.g., permitting electronic submission of responses.

    A copy of the ICR for the proposed rule, with applicable supporting documentation, including a description of the likely respondents, estimated frequency of response, and estimated total burden, may be obtained free of charge from the RegInfo.gov website at: http://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201710-1218-002 or contact Vernon Preston at (202) 693-2020 to obtain a copy of the ICR.

    C. Proposed Revisions to the Information Collection Requirements

    As required by 5 CFR 1320.5(a)(1)(iv) and 1320.8(d)(1), OSHA is providing the following summary information about the information collection requirements identified in the NPRM. The proposed rule creates new information collection requirements and modifies approved information collection requirements in the existing “Cranes and Derricks in Construction Standard” Information Collection. The major differences in the information collection requirements contained in the proposed rule from the information collection requirements currently approved in the Information Collection are discussed below and in more specific detail in Section III: Summary and Explanation of the Proposed Amendments to Subpart CC of the NPRM.

    Proposed Section 1926.1427(a)—Operator Training, Certification, and Evaluation

    The introductory text in proposed paragraph (a) sets out the employer's responsibility to ensure that each operator is certified/licensed in accordance with subpart CC, and is evaluated on his or her competence to safely operate the equipment that will be used, before the employer permits an individual to operate equipment covered by subpart CC without continuous monitoring. The proposed new approach provides a clearer structure than the existing standard, which was not designed to accommodate both certification and evaluation.

    Proposed Section 1926.1427(c)—Certification and Licensing

    Under paragraph (c), the employer must ensure that each operator is certified or licensed to operate the equipment. Proposed paragraph (c) retains the certification and licensing structure of the existing standard with only a few minor modifications intended to improve comprehension of certification/licensing requirements. For example, OSHA proposes to remove the somewhat misleading reference to an “option” with respect to mandatory compliance with existing state and local licensing requirements that meet the minimum requirements under federal law.

    Proposed Section 1926.1427(d)—Certification by an Accredited Crane Operator Testing Organization

    Proposed paragraph (d) retains the requirements of existing § 1926.1427(b), except that the proposed rule removes the requirement for certification by capacity of crane, as required in existing paragraph (b)(1)(ii)(B) and (b)(2). The need for this change is explained in the “Need for a Rule” section of the NPRM. The proposed rule also makes some non-substantive language clarifications. Compliance with the requirements of proposed paragraph (d) is the option that OSHA expects the vast majority of employers to use.

    Proposed Section 1926.1427(f)—Evaluation

    Proposed paragraph (f) sets out new specific requirements that employers must follow to conduct an operator evaluation and reevaluation, including documentation requirements. Proposed paragraph (f)(4) requires the employer to document the evaluation of each operator and to ensure that the documentation is available at the worksite. This paragraph also specifies the information that the documentation would need to include: The operator's name, the evaluator's name, the date of the evaluation, and the make, model and configuration of the equipment on which the operator was evaluated. However, the documentation would not need to be in any particular format.

    Under the NPRM, not all operators exempted from certification requirements would also be exempted from the evaluation requirements. Proposed § 1926.1427(a)(2) continues the existing exemption from the training and certification requirements in that section for operators of three types of equipment: Derricks, sideboom cranes, and equipment with a maximum manufacturer-rated hoisting/lifting capacity of 2,000 pounds or less. In the current crane standard, these three types of equipment are exempt from all of the requirements in § 1926.1427 as the result of language in § 1926.1427(a) and specific exemptions in §§ 1926.1436(q), 1440(a), and 1441(a). The proposed rule would not, however, exempt employers from the requirements in § 1926.1427(f) to evaluate the potential operators of those types of equipment to ensure that they have sufficient knowledge and skills to perform the assigned tasks with the assigned equipment. Accordingly, OSHA proposes to preserve the evaluation requirements through the revision of the language in § 1926.1427(a) and corresponding edits to narrow the exemptions in §§ 1926.1436(q), 1440(a), and 1441(a).

    Proposed Section 1926.1427(h)—Language and Literacy

    Existing § 1926.1427(h) allows operators to be certified in a language other than English, provided that the operator understands that language. Proposed paragraph (h) is nearly identical to existing paragraph (h) with the exception that it removes the reference to the existing qualification language in paragraph (b)(2), which has been replaced.

    Proposed Sections 1926.1436(q)—Derricks, 1926.1440(a)—Sideboom Cranes, and 1926.1441(a)—Equipment With a Rated Hoisting/Lifting Capacity of 2,000 Pounds or Less

    As discussed earlier, OSHA proposed to amend paragraphs §§ 1926.1436(q), 1926.1440(a), and 1926.1441(a) to ensure that the evaluation requirements in § 1926.1427(f) apply to employers using derricks, sideboom cranes, and equipment with a rated capacity of 2,000 pounds or less.

    Type of Review: New.

    Agency: DOL-OSHA.

    Title: Cranes and Derricks in Construction: Operator Qualification.

    ICR Reference Number: 201710-1218-002.

    Total Estimated Number of Annualized Respondents: 117,130.

    Total Estimated Number of Annualized Responses: 75,591.

    Total Estimated Number of Annual Burden Hours: 4,773.

    Response Frequency: Various.

    Total Number of Annual Other Costs Burden: $71.

    D. Public Participation—Submission of Comments on This Document and Internet Access to Comments and Submissions

    The agency encourages commenters to submit their comments related to the agency's clarification of the information collection requirements to the docket for this document (Docket Number OSHA-2018-0009). For instructions on submitting these comments to the docket for this document, see the sections of this Federal Register document titled DATES and ADDRESSES. Please note that comments on the information collection requirements already submitted to the agency in response to the NPRM will be considered; the public need not resubmit those comments in response to this solicitation. (See: https://www.regulations.gov/document?D=OSHA-2007-0066-0679.) Please also note that the docket for this document, Docket Number OSHA-2018-0009, exists solely to collect comments on the information collection requirements in the NPRM. The NPRM and the other relevant documents for that rulemaking are in Docket Number OSHA-2007-0066, available on http://www.regulations.gov.

    E. Authority and Signature

    Loren Sweatt, Deputy Assistant Secretary of Labor for Occupational Safety and Health, directed the preparation of this document. The authority for this document is the Paperwork Reduction Act of 1995 (44 U.S.C. 3506 et seq.) and Secretary of Labor's Order No. 1-2012 (77 FR 3912).

    Signed at Washington, DC, on July 17, 2018. Loren Sweatt, Deputy Assistant Secretary of Labor for Occupational Safety and Health.
    [FR Doc. 2018-15687 Filed 7-27-18; 8:45 am] BILLING CODE 4510-26-P
    LIBRARY OF CONGRESS Copyright Royalty Board 37 CFR Part 387 [Docket No. 15-CRB-0010-CA-S] Adjustment of Cable Statutory License Royalty Rates AGENCY:

    Copyright Royalty Board, Library of Congress.

    ACTION:

    Proposed rule; modified.

    SUMMARY:

    The Copyright Royalty Judges (Judges) publish for comment modified proposed regulations to require affected cable systems to pay a separate per-telecast royalty (a Sports Surcharge) in addition to the other royalties that those cable systems must pay under Section 111 of the Copyright Act.

    DATES:

    Comments and objections are due no later than August 29, 2018.

    ADDRESSES:

    You may submit comments and objections, identified by docket number 17-CRB-0001-BER (2019-2023), by any of the following methods:

    CRB's electronic filing application: Submit comments online in eCRB at https://app.crb.gov/.

    U.S. mail: Copyright Royalty Board, P.O. Box 70977, Washington, DC 20024-0977; or

    Overnight service (only USPS Express Mail is acceptable): Copyright Royalty Board, P.O. Box 70977, Washington, DC 20024-0977; or

    Commercial courier: Address package to: Copyright Royalty Board, Library of Congress, James Madison Memorial Building, LM-403, 101 Independence Avenue SE, Washington, DC 20559-6000. Deliver to: Congressional Courier Acceptance Site, 2nd Street NE and D Street NE, Washington, DC; or

    Hand delivery: Library of Congress, James Madison Memorial Building, LM-401, 101 Independence Avenue SE, Washington, DC 20559-6000.

    Instructions: Unless submitting online, commenters must submit an original, two paper copies, and an electronic version on a CD. All submissions must include a reference to the CRB and this docket number. All submissions will be posted without change to eCRB at https://app.crb.gov/ including any personal information provided.

    Docket: For access to the docket to read submitted background documents or comments, go to eCRB, the Copyright Royalty Board's electronic filing and case management system, at https://app.crb.gov/ and search for docket number 15-CRB-0010-CA-S.

    FOR FURTHER INFORMATION CONTACT:

    Anita Blaine, CRB Program Specialist, by telephone at (202) 707-7658 or email at [email protected]

    SUPPLEMENTARY INFORMATION:

    On July 2, 2018, the Copyright Royalty Judges (Judges) received a motion from the Joint Sports Claimants (JSC),1 the NCTA—The internet and Television Association, and the American Cable Association, notifying the Judges that they reached agreement on a modified sports surcharge rule and requesting the Judges adopt the rule. Joint Motion of the Participating Parties to Suspend Procedural Schedule and to Adopt Modified Settlement at 1 (Jul. 2, 2018) (Joint Motion). The Judges had published an earlier version of the proposed rule in the Federal Register at 82 FR 24611 (May 30, 2017) and a request for reply and surreply comments regarding that version at 82 FR 44368 (Sept. 22, 2017).

    1 The Joint Sports Claimants are the Office of the Commissioner of Baseball, the National Football League, the National Basketball Association, the Women's National Basketball Association, the National Hockey League, and the National Collegiate Athletic Association.

    The moving parties also requested that the Judges suspend, pending resolution of the Joint Motion, the procedural schedule set forth in the Order Reinstating Case Schedule dated January 18, 2018, and that the Judges publish the modified proposed rule expeditiously. On July 20, 2018, the Judges issued an order suspending the proceeding schedule, pending their review of the moving parties' agreement and publication of the modified proposed rule for public comment. The Judges stated that they would defer decision on adoption of the settlement agreement and termination of the proceeding until after they consider comments, if any, filed in response to publication of the modified proposed rule.

    A. Background

    Section 111(d)(1)(B) of the Copyright Act (the Act), 17 U.S.C. 111(d)(1)(B), sets forth the royalty rates that “Form 3” cable systems must pay to retransmit broadcast signals pursuant to the Section 111(c) statutory license. Form 3 systems are those with semi-annual “gross receipts” greater than $527,600. See id. §§ 111(d)(1)(B), (E) & (F); 37 CFR 201.17(d). Section 801(b)(2)(C) of the Act provides:

    In the event of any change in the rules and regulations of the Federal Communications Commission [“FCC”] with respect to syndicated and sports program exclusivity after April 15, 1976, the rates established by section 111(d)(1)(B) may be adjusted to assure that such rates are reasonable in light of the changes to such rules and regulations, but any such adjustment shall apply only to the affected television broadcast signals carried on those systems affected by the change.

    17 U.S.C. 801(b)(2)(C).

    Section 804(b)(1)(B) of the Copyright Act states that, in “order to initiate proceedings under section [801(b)(2)(C)],” an interested party must file a petition with the Judges requesting a rate change within twelve months of the FCC's action. 17 U.S.C. 804(b)(1)(B); see H.R. Rep. No. 94-1476 at 178 (1976) (right to seek review “exercisable for a 12 month period following the date such changes are finally effective”). The FCC adopted sports exclusivity rules for cable systems in 1975. See Report and Order in Doc. No. 19417, 54 F.C.C.2d 265 (1975) (“Sports Rules”). The FCC repealed the Sports Rules effective November 24, 2014. See Sports Blackout Rules, 79 FR 63547 (Oct. 24, 2014) (Sports Rule Repeal). At the time of the Sports Rule Repeal, the Sports Rules were codified at 47 CFR 76.111 (2014).

    On November 23, 2015, JSC filed a rate adjustment petition pursuant to Section 801(b)(2)(C) of the Copyright Act. In June 2016 the Judges established a procedural schedule for ruling on the JSC petition. Order of Bifurcation . . . and Scheduling Order (June 2016 Order). While the moving parties were unable to settle this matter during the voluntary negotiation period established by the June 2016 Order, they continued negotiations and agreed that this proceeding should be terminated with the adoption of a proposed rule.

    Upon motion of the Participants in January 2017, the Judges published the proposed rule and received comments. See 82 FR 24611 (May 30, 2017). The Judges then published, in September 2017, a request for further comments on the proposed rule. See 82 FR 44368. After reviewing reply and surreply comments, they declined to adopt the proposed rates and reinstated a case schedule. Order Reinstating Case Schedule (Jan. 12, 2018).

    In declining to adopt the proposed settlement the Judges noted that

    The applicable license in this proceeding is the license to retransmit by cable beyond the local service area the works of “any . . . owner whose work was included in a secondary transmission made by a cable system . . . in whole or in part. . . .” 17 U.S.C. 111 (d)(3). [Major League Soccer (MLS)] and potentially other professional sports leagues are owners of, or represent owners of, copyrights to televised professional team sports events. The regulations proposed by the JSC define an “eligible professional sports event” to include only professional baseball, basketball (men and women), football, and hockey. By definition, MLS and any other professional league scheduling team sports events for telecast (and retransmission by those affected cable systems) would be ineligible to receive any portion of the sports programming surcharge negotiated by the JSC and cable providers. This proposed regulatory configuration provides for licensing royalties from Form 3 cable systems for some sports leagues to the express exclusion of other leagues that own or represent owners of protected works.

    As proposed, the regulation for the exclusive benefit of Major League Baseball, the National Basketball Association, the National Football League, the National Hockey League, and the Women's National Basketball Association is contrary to the applicable section 111 license. The Judges decline to adopt the proposed settlement as a basis for regulations that would bind non-participants to a zero rate.

    Order Reinstating Case Schedule at 2.

    In April 2018, MLS filed a late Petition to Participate (PTP) and accompanying motion for the Judges to accept it. The Judges granted the motion and accepted the PTP on July 20, 2018.

    In July 2018, the participants filed a modified proposed rule that addressed the Judges' concerns regarding the proposed rule. Joint Motion at 4, 8. MLS does not object to the modified proposed rule. Id. at 2. The Judges hereby publish it for comment.

    B. Scope of the Modified Proposed Rule

    According to the moving parties, the modified proposed Sports Surcharge differs from the January 2017 proposal in two key respects: A cable operator's obligation to pay a Sports Surcharge royalty is not limited to retransmissions of sports events affiliated with specific JSC members; 2 and the modified Sports Surcharge includes language expressly stating that no copyright owner of a retransmitted telecast of a sports event is precluded from seeking Sports Surcharge royalties if the retransmission would have been subject to deletion under the former FCC Sports Blackout Rule. Joint Motion at 2.

    2 Under the January 2017 proposal the cable operator's obligation to pay Sports Surcharge royalties was limited to retransmissions of telecasts of sports events affiliated with specific JSC members. Joint Motion at 5.

    The moving parties also state that “nothing in the proposed rule would require the Judges to distribute the Sports Surcharge royalties” only to sports organizations whose telecasts trigger the “pay-in” obligation. Rather, “[t]he determination of the recipients of those royalties (and the amount of royalties those recipients should receive) would be addressed by the Judges in future allocation and distribution proceedings” absent a settlement. Id. at 4. As modified, the rule draws a bright line between the “pay-in” methodology by which affected cable systems will compute their surcharge royalty payment obligations and the “pay out” process by which those royalty payments are distributed. Id. at 5.

    According to the moving parties, the modified Sports Surcharge does not change the previously agreed upon per event royalty rate of 0.025 percent of an affected cable system's gross receipts. Moreover, the definition of which cable systems may have to pay the surcharge has not changed (i.e., systems that would have been subject to the FCC Sports Blackout Rule prior to its repeal).

    Under the modified rule, a cable system's retransmission of a sports event telecast that would have been subject to deletion under the FCC Sports Blackout Rule triggers a Sports Surcharge pay-in by the system's operator—as long as the holder of the broadcast rights in the event (or its agent) provides the affected system: (1) Written notice containing information comparable to that required to invoke the former FCC Sports Blackout Rule; and (2) documentary evidence that the sports entity giving the notice required to trigger the Sports Surcharge pay-in provision previously invoked the FCC Sports Blackout Rule between January 1, 2012 and November 23, 2014 (the day before the repeal of the rule took effect). Joint Motion at 6.

    With respect to certain collegiate events, the pay-in rule caps the maximum number of events involving a specific team that can trigger an affected cable system's surcharge payment obligation in a particular accounting period based on the largest number of events as to which the FCC Sports Blackout Rule was invoked by that specific sports entity during any of the accounting periods occurring during the January 1, 2012 through November 23, 2014 period. Id. at n.12.

    In addition, the Joint Motion proposes a new effective date in 2019 and points out that the rule proposal can be reconsidered in 2020 pursuant to statute. Id. at 2 n.6; see 17 U.S.C. 804(b)(1)(B).

    According to the moving parties, the royalty rate reflected in the modified proposed rule represents a negotiated compromise regarding adoption of a royalty surcharge and limiting when licensors must pay it, but not regulating the method of determining how the funds should be distributed. Id. at 6-7.

    The moving parties state that they do not intend for the agreed-upon methodology for calculating a cable system's pay-in obligation to be accorded any precedential effect or to be regarded as representing any agreement as to the fair market value, now or in the future, of the secondary transmission of any sports event or of the economic or other impact of the repeal of the FCC Sports Blackout Rule. Joint Motion at 6. The moving parties state that if the Judges do not adopt the proposed rule, each of the moving parties reserves the right to seek to demonstrate that the Sports Surcharge originally proposed is not contrary to law and/or that the Judges should adopt a different rate adjustment to account for the repeal of the FCC Sports Blackout Rule. Id. at 8 n.13.

    C. The Judges' Authority To Adopt the Proposed Rule

    According to the moving parties, “a key Congressional objective underlying the Judges' rate-setting authority is the promotion of voluntary settlements rather than litigation.” Id. at 7, citing H.R. Rep. No. 108-408 at 24 (2004) (referring to the legislative policy of “facilitating and encouraging settlement agreements for determining royalty rates”). Consistent with that objective, the Judges may accept a settlement reached by “some or all of the participants” in a rate proceeding “at any time during the proceeding.” 17 U.S.C. 801(b)(7)(A).

    The Act requires that the Judges afford those who “would be bound by the terms, rates or other determination” in a settlement agreement “an opportunity to comment on the agreement.” 17 U.S.C. 801(b)(7)(A)(i). The Copyright Royalty Board rules also require that the Judges “publish the settlement in the Federal Register for notice and comment from those bound by the terms, rates, or other determination set by the agreement.” 37 CFR 351.2(b)(2).

    D. Solicitation of Comments

    The Judges seek comments on the moving parties' proposal. In particular, the Judges seek comment on whether the proposal is consistent with Section 111 of the Copyright Act which provides that the applicable license granted in that section is the license to retransmit by cable beyond the local service area the works of “any . . . owner whose work was included in a secondary transmission made by a cable system . . . in whole or in part. . . .” 17 U.S.C. 111(d)(3), and consistent with the Judges' interpretation of that section as elaborated in the Order Reinstating Case Schedule.

    In addition to general comments for or against the proposal, the Judges seek comment on whether the proposed provision in section 387.2(e)(9) (“Nothing herein shall preclude any copyright owner of a live television broadcast, the secondary transmission of which would have been subject to deletion under the FCC Sports Blackout Rule, from receiving a share of royalties paid pursuant to this paragraph.”) could apply to the secondary transmissions of the live television broadcasts of any entity other than a current member of the JSC.3 In other words, would the phrase “the secondary transmission of which would have been subject to deletion under the FCC Sports Blackout Rule” enable any entity beyond the current members of the JSC to qualify for a share of royalties from the Sports Surcharge? If the answer is yes, which entities' transmissions would qualify for a share? If the answer is no (i.e., only JSC members could qualify), then is the current proposal nevertheless still consistent with the Section 111 license? If so, why?

    3See note 1, supra.

    Interested parties may comment and object to the modified proposed regulations contained in this notice. Such comments and objections must be submitted no later than August 29, 2018.

    List of Subjects in 37 CFR Part 387

    Copyright, Cable television, Royalties.

    Modified Proposed Regulations

    For the reasons set forth in the preamble, and under the authority of chapter 8, title 17, United States Code, the Copyright Royalty Judges proposes to amend 37 CFR chapter III as follows:

    PART 387—ADJUSTMENT OF ROYALTY FEE FOR CABLE COMPULSORY LICENSE 1. The authority citation for part 387 continues to read as follows: Authority:

    17 U.S.C. 801(b)(2), 803(b)(6).

    2. Amend § 387.2 by: a. Redesignating paragraph (e) as paragraph (f) and b. Adding a new paragraph (e) to read as follows:
    § 387.2 Royalty fee for compulsory license for secondary transmission by cable systems.

    (e) Sports programming surcharge. Commencing with the first semiannual accounting period of 2019 and for each semiannual accounting period thereafter, in the case of an affected cable system filing Form SA3 as referenced in 37 CFR 201.17(d)(2)(ii) (2014), the royalty rate shall be, in addition to the amounts specified in paragraphs (a), (c) and (d) of this section, a surcharge of 0.025 percent of the affected cable system's gross receipts for the secondary transmission to subscribers of each live television broadcast of a sports event where the secondary transmission of such broadcast would have been subject to deletion under the FCC Sports Blackout Rule. For purposes of this paragraph,

    (1) The term “cable system” shall have the same meaning as in 17 U.S.C. 111(f)(3);

    (2) An “affected cable system” (i) is a “community unit,” as the comparable term is defined or interpreted in accordance with § 76.5(dd) of the rules and regulations of the Federal Communications Commission in effect as of November 23, 2014, 47 CFR 76.5(dd) (2014);

    (ii) that is located in whole or in part within the 35-mile specified zone of a television broadcast station licensed to a community in which a sports event is taking place, provided that if there is no television broadcast station licensed to the community in which a sports event is taking place, the applicable specified zone shall be that of the television broadcast station licensed to the community with which the sports event or team is identified, or, if the event or local team is not identified with any particular community, the nearest community to which a television station is licensed; and

    (iii) whose royalty fee is specified by 17 U.S.C. 111(d)(1)(B);

    (3) A “television broadcast” of a sports event must qualify as a “non-network television program” within the meaning of 17 U.S.C. 111(d)(3)(A);

    (4) The term “specified zone” shall be defined as the comparable term is defined or interpreted in accordance with § 76.5(e) of the rules and regulations of the Federal Communications Commission in effect as of November 23, 2014, 47 CFR 76.5(e) (2014);

    (5) The term “gross receipts” shall have the same meaning as in 17 U.S.C. 111(d)(1)(B) and shall include all gross receipts of the affected cable system during the semiannual accounting period except those from the affected cable system's subscribers who reside in (i) the local service area of the primary transmitter, as defined in 17 U.S.C. 111(f)(4);

    (ii) any community where the cable system has fewer than 1,000 subscribers;

    (iii) any community located wholly outside the specified zone referenced in paragraph (e)(4) above; and

    (iv) any community where the primary transmitter was lawfully carried prior to March 31, 1972;

    (6) The term “FCC Sports Blackout Rule” refers to § 76.111 of the rules and regulations of the Federal Communications Commission in effect as of November 23, 2014, 47 CFR 76.111 (2014);

    (7) Subject to paragraph (e)(8) of this section, the surcharge will apply to the secondary transmission of a primary transmission of a live television broadcast of a sports event only where the holder of the broadcast rights to the sports event or its agent has provided the affected cable system

    (i) Advance written notice regarding such secondary transmission as required by § 76.111(b) and (c) of the FCC Sports Blackout Rule and

    (ii) documentary evidence that the specific team on whose behalf the notice is given had invoked the protection afforded by the FCC Sports Blackout Rule during the period from January 1, 2012, through November 23, 2014;

    (8) In the case of collegiate sports events, the number of events involving a specific team as to which an affected cable system must pay the surcharge will be no greater than the largest number of events as to which the FCC Sports Blackout Rule was invoked in a particular geographic area by such team during any one of the accounting periods occurring between January 1, 2012, and November 23, 2014;

    (9) Nothing herein shall preclude any copyright owner of a live television broadcast, the secondary transmission of which would have been subject to deletion under the FCC Sports Blackout Rule, from receiving a share of royalties paid pursuant to this paragraph.

    Dated: July 24, 2018. Jesse M. Feder, Copyright Royalty Judge.
    [FR Doc. 2018-16175 Filed 7-27-18; 8:45 am] BILLING CODE 1410-72-P
    83 146 Monday, July 30, 2018 Notices DEPARTMENT OF AGRICULTURE Submission for OMB Review; Comment Request July 25, 2018.

    The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding (1) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.

    Comments regarding this information collection received by August 29, 2018 will be considered. Written comments should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), [email protected] or fax (202) 395-5806 and to Departmental Clearance Office, USDA, OCIO, Mail Stop 7602, Washington, DC 20250-7602. Copies of the submission(s) may be obtained by calling (202) 720-8958.

    An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.

    Food and Nutrition Service

    Title: Contact Information of Schools That Participate in the National School Lunch Program and Organizations That Participate in the USDA's Child and Adult Care Food Program.

    OMB Control Number: 0584-NEW.

    Summary of Collection: The purpose of this collection is to support the mission of the United States Department of Agriculture's (USDA's) Team Nutrition Initiative, which supports national efforts to promote lifelong healthy food choices and physical activity by improving the nutrition practices of the Child Nutrition Programs. The Team Nutrition Initiative is covered under Section 19 of the Child Nutrition Act of 1966 (42 U.S.C. 1788). By collecting contact information from schools and organizations that participate in the National School Lunch Program (NSLP) and the Child and Adult Care Food Program (CACFP), the Food and Nutrition Service (FNS) can establish and maintain a database that will enable schools and organizations to network, coordinate, and collaborate with each other to identify and share innovative programs that will help children maintain healthy eating and lifestyle habits. Through this database, FNS also seeks to provide assistance to States in the development of comprehensive and integrated nutrition education and active living programs in schools and facilities that participate in NSLP and CACFP, to assist States in establishing systems to promote the nutritional health and encourage regular physical activity of school children in the United States, and to provide training and technical assistance to the States.

    Need and Use of the Information: The Food and Nutrition Service (FNS) will collect contact and other information on a voluntary basis from schools and organizations that participate in NSLP and CACFP in order to enter these schools and organizations into the team nutrition database. The schools and organizations can use the team nutrition database to develop peer collaboration and to keep up-to-date on the available resources developed under the Team Nutrition Initiative. FNS will also use the contact information to send electronic notifications to schools and organizations concerning the availability of new and updated Team Nutrition materials and to provide technical assistance. The collected information will be publicly available and upon request, Team Nutrition will share information with stakeholders.

    Description of Respondents: Businesses or Other for Profit; Not-for profit institutions; and State, Local, or Tribal Government.

    Number of Respondents: 122,664.

    Frequency of Responses: Reporting: Annually.

    Total Burden Hours: 35,914.

    Ruth Brown, Departmental Information Collection Clearance Officer.
    [FR Doc. 2018-16193 Filed 7-27-18; 8:45 am] BILLING CODE 3410-30-P
    DEPARTMENT OF AGRICULTURE Food Safety and Inspection Service [Docket No. FSIS-2018-0022] Availability of Guideline for Minimizing the Risk of Campylobacter and Salmonella Illnesses Associated With Chicken Liver AGENCY:

    Food Safety and Inspection Service, USDA.

    ACTION:

    Notice of availability and request for comment.

    SUMMARY:

    The Food Safety and Inspection Service (FSIS) is announcing the availability of and requesting comments on a guideline to assist FSIS-regulated establishments, retail food outlets, and foodservice entities in minimizing public health risks associated with raw or partially-cooked chicken liver. FSIS developed the guideline because there have been several recent Campylobacter and Salmonella illness outbreaks linked to chicken liver dishes like pâté. The guideline represents FSIS's current thinking on this topic and FSIS encourages all affected operations to use it. This document does not present or describe any new regulatory requirements.

    DATES:

    Submit Comments on or before September 28, 2018.

    ADDRESSES:

    A downloadable version of the guideline is available to view and print at https://www.fsis.usda.gov/wps/portal/fsis/topics/regulatory-compliance/compliance-guides-index once copies of the guideline have been published.

    FSIS invites interested persons to submit comments on this notice. Comments may be submitted by one of the following methods:

    Federal eRulemaking Portal: This website provides the ability to type short comments directly into the comment field on this web page or attach a file for lengthier comments. Go to http://www.regulations.gov. Follow the on-line instructions at that site for submitting comments.

    Mail, including CD-ROMs, etc.: Send to Docket Clerk, U.S. Department of Agriculture, Food Safety and Inspection Service, 1400 Independence Avenue SW, Mailstop 3758, Room 6065, Washington, DC 20250-3700.

    Hand- or courier-delivered submittals: Deliver to 1400 Independence Avenue SW, Room 6065, Washington, DC 20250-3700.

    Instructions: All items submitted by mail or electronic mail must include the Agency name and docket number FSIS-2018-0022. Comments received in response to this docket will be made available for public inspection and posted without change, including any personal information, to http://www.regulations.gov.

    Docket: For access to background documents or comments received, call (202)720-5627 to schedule a time to visit the FSIS Docket Room at 1400 Independence Avenue SW, Room 6065, Washington, DC 20250-3700.

    For Further Information Contact:

    Roberta Wagner, Assistant Administrator, Office of Policy and Program Development; Telephone: (202) 205-0495.

    SUPPLEMENTARY INFORMATION:

    Background

    FSIS is responsible for verifying that the nation's commercial supply of meat, poultry, and egg products is safe, wholesome, and properly labeled and packaged.

    Salmonella and Campylobacter bacteria are among the most frequent causes of human foodborne illness in the United States. Currently, contamination of raw poultry carcasses and parts cannot be eliminated through the commercial production and slaughter practices employed by U.S. industry. Contamination can be minimized, however, with the use of proper sanitary dressing procedures and by the application of interventions during slaughter and subsequent fabrication.

    Salmonella and Campylobacter present on raw poultry carcasses and parts will survive if the contaminated products are not subjected to a full lethality treatment, such as thorough cooking. In addition, cross contamination will occur during preparation when the bacteria are spread from the contaminated poultry to food handlers, other foods, or objects in the environment.

    There have been several recent Salmonella and Campylobacter illness outbreaks linked to chicken liver. From 2000 to 2015, 22 chicken liver-associated illness outbreaks, with 331 total illnesses, were reported to public health authorities in the United States 1 2 3 4 . Over half of these outbreaks occurred from 2014 to 2015, and represented 21 to 34 percent of chicken-related outbreaks.5 6 Commonly reported illness outbreak features included:

    1See FSIS Recall 090-2011 available on FSIS's website at https://www.fsis.usda.gov/wps/wcm/connect/fsis-archives-content/internet/main/topics/recalls-and-public-health-alerts/recall-case-archive/archives/ct_index211a.

    2 Centers for Disease Control and Prevention (CDC). 2013. Multistate outbreak of Campylobacter jejuni infections associated with undercooked chicken livers—northeastern United States, 2012. MMWR Morb Mortal Wkly Rep 62(44):874-6. Available at: http://www.cdc.gov/mmwr/preview/mmwrhtml/mm6244a2.htm.

    3 Centers for Disease Control and Prevention (CDC). 2015. Notes from the field: campylobacteriosis outbreak associated with consuming undercooked chicken liver pâté — Ohio and Oregon, December 2013-January 2014. MMWR Morb Mortal Wkly Rep 64(14):399. Available at: http://www.cdc.gov/mmwr/preview/mmwrhtml/mm6414a7.htm.

    4 Centers for Disease Control and Prevention. 2017. Notes from the field: outbreak of Campylobacter jejuni associated with consuming undercooked chicken liver mousse—Clark County, Washington, 2016. MMWR Morb Mortal Wkly Rep. 2017 Sep 29;66(38):1027. DOI PubMed.

    5 Centers for Disease Control and Prevention (CDC). 2016. Surveillance for foodborne disease outbreaks United States, 2014, Annual Report. Available at: https://www.cdc.gov/foodsafety/pdfs/foodborne-outbreaks-annual-report-2014-508.pdf.

    6 Centers for Disease Control and Prevention (CDC). 2017. Surveillance for foodborne disease outbreaks United States, 2015, Annual Report. Available at: https://www.cdc.gov/foodsafety/pdfs/2015FoodBorneOutbreaks_508.pdf.

    (1) Consumption of a blended chicken liver dish (e.g., pâté);

    (2) Inadequate cooking of a chicken liver dish; and/or

    (3) Consumption of a chicken liver dish outside the home (e.g., in a restaurant).

    FSIS is announcing the availability of a guideline to assist FSIS-regulated establishments, retail food outlets, and foodservice entities in minimizing public health risks associated with raw or partially-cooked chicken livers and products made from them. The guideline represents best practice recommendations by FSIS, based on available scientific evidence and practical considerations. FSIS will update the guideline as necessary to reflect comments received and any additional information that becomes available.

    Additional Public Notification

    Public awareness of all segments of rulemaking and policy development is important. Consequently, FSIS will announce this Federal Register publication on-line through the FSIS web page located at: http://www.fsis.usda.gov/federal-register.

    FSIS also will make copies of this publication available through the FSIS Constituent Update, which is used to provide information regarding FSIS policies, procedures, regulations, Federal Register notices, FSIS public meetings, and other types of information that could affect or would be of interest to our constituents and stakeholders. The Constituent Update is available on the FSIS web page. Through the web page, FSIS is able to provide information to a much broader, more diverse audience. In addition, FSIS offers an email subscription service which provides automatic and customized access to selected food safety news and information. This service is available at: http://www.fsis.usda.gov/subscribe. Options range from recalls to export information, regulations, directives, and notices. Customers can add or delete subscriptions themselves, and have the option to password protect their accounts.

    USDA Non-Discrimination Statement

    No agency, officer, or employee of the USDA shall, on the grounds of race, color, national origin, religion, sex, gender identity, sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, or political beliefs, exclude from participation in, deny the benefits of, or subject to discrimination any person in the United States under any program or activity conducted by the USDA.

    How To File a Complaint of Discrimination

    To file a complaint of discrimination, complete the USDA Program Discrimination Complaint Form, which may be accessed online at http://www.ocio.usda.gov/sites/default/files/docs/2012/Complain_combined_6_8_12.pdf, or write a letter signed by you or your authorized representative.

    Send your completed complaint form or letter to USDA by mail, fax, or email:

    Mail: U.S. Department of Agriculture, Director, Office of Adjudication, 1400 Independence Avenue SW, Washington, DC 20250-9410.

    Fax: (202) 690-7442.

    Email: [email protected]

    Persons with disabilities who require alternative means for communication (Braille, large print, audiotape, etc.), should contact USDA's TARGET Center at (202) 720-2600 (voice and TDD).

    Done at Washington, DC.

    Paul Kiecker, Acting Administrator.
    [FR Doc. 2018-16197 Filed 7-27-18; 8:45 am] BILLING CODE 3410-DM-P
    DEPARTMENT OF AGRICULTURE Food and Nutrition Service Agency Information Collection Activities: Evaluation of Technology Modernization for SNAP Benefit Redemption Through Online Transactions for the USDA Food and Nutrition Service AGENCY:

    Food and Nutrition Service (FNS), USDA.

    ACTION:

    Notice and request for comments.

    SUMMARY:

    In accordance with the Paperwork Reduction Act of 1995, this notice invites the general public and other public agencies to comment on this proposed information collection. This collection is a new collection to test the feasibility of online purchasing for SNAP through Evaluation of Technology Modernization for SNAP Benefit Redemption through Online Transactions for the USDA. The final report will synthesize findings across pilots and detailed appendix chapters will integrate implementation and integrity evaluation findings for each pilot. This collection includes in-depth interviews with key informants, including SNAP online retailers and their web service providers, the designated third-party processor for the pilots, EBT processors, and State Agency EBT coordinators; and preparation and transmission of data from retailers and their web service providers, EBT processors, the third-party processor, and state SNAP agencies.

    DATES:

    Written comments must be received on or before September 28, 2018.

    ADDRESSES:

    Comments may be sent to: Eric Williams, Food and Nutrition Service, U.S. Department of Agriculture, 3101 Park Center Drive, Room 1014, Alexandria, VA 22302. Comments may also be submitted via fax to the attention of Eric Williams at 703-305-2576 or via email to [email protected] Comments will also be accepted through the Federal eRulemaking Portal. Go to http://www.regulations.gov, and follow the online instructions for submitting comments electronically.

    All responses to this notice will be summarized and included in the request for Office of Management and Budget approval. All comments will be a matter of public record.

    FOR FURTHER INFORMATION CONTACT:

    Requests for additional information or copies of this information collection should be directed to Eric Williams at 703-305-2576.

    SUPPLEMENTARY INFORMATION:

    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 of the proposed collection of information, including the validity of the methodology and assumptions that were used; (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 those who are to respond, including use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.

    Title: Evaluation of Technology Modernization for SNAP Benefit Redemption through Online Transactions for the USDA Food and Nutrition Service.

    OMB Number: Not Yet Assigned.

    Expiration Date: Not Yet Determined.

    Type of Request: New collection.

    Abstract: The Supplemental Nutrition Assistance Program (SNAP) offers nutrition assistance to low-income individuals and families and provides economic benefits to communities. The Agricultural Act of 2014 (Farm Bill) mandated the Online Purchasing Pilots to test the feasibility and implications of allowing retail food stores to accept SNAP benefits through online transactions. Prior to the pilots, SNAP benefits could only be redeemed in person. The Farm Bill provided FNS and its stakeholders an opportunity to begin modernizing benefit redemption through online purchasing for SNAP. For customers using SNAP, online shopping may increase access to healthy and affordable foods, save time, and reduce other barriers to better nutrition. Current participating retailers can offer online shopping, and online merchants can gain the opportunity to serve SNAP customers. For program integrity, online shopping represents opportunities to identify suspicious behavior, but also new ways that benefit misuse and fraud may occur.

    To test the feasibility of online purchasing for SNAP, FNS established eight online purchasing pilots and requested volunteers on September 15, 2016 (OMB Control No.: 0584-0606, expiration date 3/31/2019) for the Evaluation of Technology Modernization for SNAP Benefit Redemption through Online Transactions (Evaluation of Online Purchasing Pilots). Through this evaluation, FNS seeks to learn how the pilots operate, the implementation challenges and lessons learned, the characteristics of SNAP online customers, the risks and benefits of online purchasing for the integrity of SNAP, and the requirements for expansion.

    Through the Evaluation of Online Purchasing Pilots, the research team will address FNS' two interrelated objectives: the analyses of the pilots' (1) implementation and (2) integrity. Implementation study questions relate to: The SNAP online transaction approaches; the process, challenges, and lessons of implementation; the characteristics of SNAP households that shop online; and the level of effort for stakeholders (e.g., retailers, states, EBT processors). Integrity study questions focus on: Delivery patterns and their relationship to customer addresses and retailer locations; customer profiles and their relationship to EBT cards and SNAP households; customer shopping patterns; and problems such as refunds and cart abandonment. To meet these two overarching objectives, the research team will collect and analyze qualitative data from key informants and quantitative administrative data about online transactions, retailers, and SNAP households that will be provided by FNS, retailers, and state SNAP agencies. The implementation and integrity analyses will inform FNS' decisions about whether and how to make SNAP online purchases more widely available, and how to ensure that protections against abuse remain strong or grow stronger. Eight retailers in eight states are participating in the pilot, we anticipate 100 percent participation.

    Affected Public: State, Local and Tribal Agencies; Business-for-profit.

    Respondent Types: The study includes in-depth interviews with a total of four respondent groups. Three are business respondents: (1) Personnel from online retailers, including project managers, customer service managers, staff who handle fulfillment of orders, IT personnel or third-party web service providers; (2) EBT processor staff; and (3) third-party processor staff. The fourth state SNAP agency staff, including State Agency EBT coordinators. Staff from two of these respondent groups (retailers or their third-party web service providers and state SNAP agencies) will also provide data files for the quantitative analysis.

    Estimated Number of Respondents: The total estimated number of respondents is 177. This includes: 24 retailer staff who handle the fulfillment, shipping, and delivery of EBT customer orders; 24 retailer customer service managers; 16 retailer IT personnel or third-party web service providers; 32 retailer project managers; 16 retailer personnel who completed the pilot application; 8 retailer/web provider data managers; 8 retailer/web provider staff who will prepare and transfer the detailed transaction file; 8 retailer/web provider staff who will prepare and transfer the aggregated file; 6 EBT processor managers; 3 third-party processor personnel; 16 State agency EBT coordinators; 8 State Agency SNAP program or data staff.

    Estimated Number of Responses per Respondent: The total estimated number of responses is 2.232 responses per respondent. Retailer personnel (personnel who handle the fulfillment, shipping, and delivery of EBT customer orders, customer service managers, IT personnel or third-party web service providers, project managers, and personnel who completed the pilot application) will respond to one in-person interview or one telephone interview. Managers for two EBT processors will respond to one in-person interview and two telephone interviews for a total of three responses each. Third-party processor managers will respond to one in-person interview and two telephone interviews. State EBT coordinators will respond to one in-person interview. Retailer or web provider data managers will participate in three meetings to discuss the format and transfer of each of two types of files (detailed transaction file and aggregated file). These respondents will transmit detailed and aggregated data files nine times. State agency SNAP program or data staff will each participate in discussion and initial programming of the SNAP case record file data transfer once and provide eight update files.

    Estimated Total Annual Responses: 395.

    Estimated Time per Response: 1.6 hours is the average estimated time per participant. However, response times varies from 1 hour to 21 hours per response and depending on respondent group, as shown in the table below.

    Estimated Total Annual Burden on Respondents: 37,800 minutes (630 hours). See the table below for estimated total annual burden for each type of respondent.

    Respondent Estimated number respondent Responses annually per respondent Total annual responses Estimated
  • average number of hours
  • per response
  • Estimated total hours
    Retailer personnel who handle the fulfillment, shipping, and delivery of EBT customer orders 24 1.00 24.00 1.00000 24.000 Retailer customer service managers 24 1.00 24.00 1.00000 24.000 Retailer IT personnel or third-party web service provider personnel 16 1.00 16.00 1.00000 16.000 Retailer project managers 32 1.00 32.00 1.50000 48.000 Retailer personnel who completed the pilot application 16 1.00 16.00 1.00000 16.000 Retailer/web provider data managers who will participate in file transfer discussion 8 3.00 24.00 2.00000 48.000 Retailer/web provider staff who will prepare and transfer the detailed transaction file 8 9.00 72.00 1.00000 72.000 Retailer/web provider staff who will prepare and transfer the aggregated file 8 9.00 72.00 1.00000 72.000 Third-Party processor personnel 3 3.00 9.00 2.00000 18.000 EBT processor managers 6 3.00 18.00 2.00000 36.000 State agency EBT coordinators 16 1.00 16.00 1.00000 16.000 State agency SNAP program/data staff who will participate in file transfer discussion and initial programming 8 1.00 8.00 21.00000 168.000 State agency SNAP program/data staff 8 8.00 64.00 1.00000 64.000 Total Reporting Burden 177 395 622
    Dated: July 19, 2018. Brandon Lipps, Administrator, Food and Nutrition Service.
    [FR Doc. 2018-16220 Filed 7-27-18; 8:45 am] BILLING CODE 3410-30-P
    DEPARTMENT OF AGRICULTURE Food and Nutrition Service Request for Information: State Administrative Expense Allocation Formula for Child Nutrition Programs AGENCY:

    Food and Nutrition Service (FNS), USDA.

    ACTION:

    Notice; request for information.

    SUMMARY:

    This is a request for information from State agencies administering Child Nutrition programs and State distributing agencies to learn about the successes, challenges, and needs for the State Administrative Expense (hereafter referred to as “SAE”) allocation formula. It is not a request for proposal and does not commit the Government to issue a solicitation, make an award, or pay any costs associated with responding to this announcement. All submitted information shall remain with the Government and will not be returned. All responses will become part of the public record and will not be held confidential.

    The Food and Nutrition Service (FNS) is seeking information on the SAE allocation formula for the Department's oversight and management of Child Nutrition Programs (CNP), specifically the National School Lunch Program (NSLP), School Breakfast Program (SBP), Child and Adult Care Food Program (CACFP), Special Milk Program (SMP) and the Food Distribution Program for schools (FDP). To better understand the availability and use of SAE funds, FNS is requesting information from CNP State administering agencies, State distributing agencies, and CNP affiliate associations about SAE allocation, reallocation, fund uses, and fund restrictions at the State level.

    The objectives of this request for information are to:

    1. Identify ways that the formula meets or fails to meet State spending needs.

    2. Identify if additional flexibilities in SAE funding levels and rules could improve program administration.

    FNS will use the comments in response to this Request for Information to inform a larger study on the SAE formula entitled, Assessing the Child Nutrition State Administrative Expense (SAE) Allocation Formula. This study will assess the effectiveness of the current formula used for SAE allocations, identify and examine factors that influence State spending, and develop and test a range of possible alternatives to improve the SAE allocation formula.

    DATES:

    (if applicable): To be assured of consideration, written comments must be submitted or postmarked on or before September 28, 2018.

    ADDRESSES:

    The Food and Nutrition Service, USDA, invites the submission of the requested information through one of the following methods:

    Preferred method: Submit information through the Federal eRulemaking Portal at http://www.regulations.gov. Follow the online instructions for submissions.

    Mail: Submissions should be addressed to Jinee Burdg, Social Science Policy Analyst, Office of Policy Support, FNS, U.S. Department of Agriculture, 3101 Park Center Drive, Room 1014, Alexandria, VA 22302. Comments may also be emailed to [email protected]

    All information properly and timely submitted, using one of the three methods described above, in response to this request for information will be included in the record and will be made available to the public on the internet at http://www.regulations.gov. Please be advised that the substance of the information provided and the identity of the individuals or entities submitting it will be subject to public disclosure.

    All written comments will be open for public inspection at the FNS office located at 3101 Park Center Drive, Alexandria, Virginia 22302, Room 1014, during regular business hours (8:30 a.m. to 5:00 p.m., Monday through Friday). All responses to this notice will be summarized and included in the request for Office of Management and Budget (OMB) approval. All comments will be a matter of public record.

    FOR FURTHER INFORMATION CONTACT:

    Requests for additional information or copies of this request for information should be directed to Jinee Burdg at [email protected]

    SUPPLEMENTARY INFORMATION:

    CNPs are operated by a wide variety of local public and private providers that enter into agreements with State agencies, which are responsible for oversight and administration, including monitoring program operations and distributing federal cash reimbursements and USDA Foods. The number of agreements the State has with local CNP entities contributes significantly to the level of effort needed in State administration. Local organizations that have agreements with the State to operate NSLP, SBP, and SMP are referred to as school food authorities (SFAs). SFAs are public and private nonprofit local educational agencies (including charter schools) that operate the programs in schools under their jurisdiction, as well as residential child care institutions. The number of SFAs across States varies widely, often depending on the educational structure of local educational agencies in the State (i.e., county-based programs vs. single-site SFAs).

    Under the FDP for schools, USDA accepts food orders from States and then purchases food for States to provide to SFAs for use in their meal service (USDA Foods). States are responsible for the ordering, storage and distribution of the USDA Foods to the local “recipient agencies” (i.e., SFAs).

    In CACFP, States enter into agreements with “institutions,” which include independent (i.e., single-site) child care centers, adult care centers, and sponsoring organizations of family day care homes and/or centers. Similar to the NSLP, SBP, and SMP, the number of CACFP institutions across States varies widely, based on a variety of factors such as the popularity of family day care homes vs. centers and the number of afterschool care programs. The adult care component of CACFP is very small, with the majority of meals served in a small number of States.

    The State agencies that administer these CNPs include Education, Health, Human/Social Services, and Agriculture departments. In total, there are 85 State agencies in 54 States and territories that administer the programs and receive SAE from FNS. In 31 States, there is one agency (either Education or Agriculture) administering School Programs, FDP, and CACFP; 16 States have two agencies; and the remaining 7 States have three agencies.

    In fiscal year 2017, State agencies received over $282 million in federal grants to administer certain CNPs. The amount of funding allocated to each State agency is based on the SAE allocation formula, which was last revised in the 1990s. FNS is interested in learning in what ways the formula meets or fails to meet State spending needs; some State Agencies return excess funds year after year whereas other States request additional funds year after year. The Assessing the Child Nutrition State Administrative Expense (SAE) Allocation Formula study will evaluate the effectiveness of the current formula used for SAE allocations, examine factors that influence State spending, and develop and test a range of possible alternatives for the SAE allocation formula and for reallocation.

    The current SAE allocation formula consists of nondiscretionary funds (i.e., those funds required to be allocated as prescribed by statute) and discretionary funds (i.e., funds remaining after the nondiscretionary allocations are made). The first step in the allocation process is to determine the total amount of SAE funds available for allocation to State agencies. This amount, prescribed in Section 7(a)(1) of the Child Nutrition Act, is an amount equal to not less than 11/2 percent of program expenditures for the second preceding fiscal year for the NSLP, SBP, SMP, and CACFP. Once the amount of funds available is determined, the nondiscretionary funds are allocated among state agencies based on a formula using the percentage of the second preceding fiscal year's program expenditures, in accordance with 7 CFR 235.4(a). Discretionary funds are partially distributed in equal shares to states that administer specific programs and partially prorated based on number of program participants per state under 7 CFR 235.4(b). Residual funds are prorated among state agencies administering CACFP and FDP. In addition, FNS uses funds returned to it to provide funds to SAs through reallocations (7 CFR 235.5(d)) and to provide for start-up costs to SAs assuming administration of program currently administered by FNS.

    FNS requests that CNP State administering agencies, State distributing agencies, CNP affiliate associations, and other interested parties respond in detail to any or all of the items below. Please provide any material that addresses the information requested or any other information that may be pertinent. FNS will consider comments that may require regulatory or statutory changes. Additional references or links to materials are welcome.

    1. What challenges, if any, does your State have with SAE? Please discuss processes, timing, Federally-imposed requirements/restrictions, State-imposed requirements/restrictions, the Maintenance of Effort requirement or other requirements, issues around reallocation, changes in the indirect cost rate, and other challenges/barriers. If your State has successfully overcome these challenges, can you please share any best practices that may be helpful for other States?

    2. What aspects of SAE work well for your State? Please identify the aspect that works well and why it works well for your particular State.

    3. Does the current SAE funding methodology and regulations provide you with levels of funding and flexibility commensurate with your program administration needs (including NSLP/SBP, CACFP, and FDP)?

    4. Please identify whether your State transfers funds among State agencies, receives reallocations, or neither. Please discuss why your funding levels are or are not appropriate.

    5. What funding level (e.g., percentage increase or decrease) or basis for funding level would be appropriate?

    6. Please discuss how the availability of other program-specific funds such as the Summer Food Service Program State Administrative Fund and CACFP Audit Funds affect your State's ability to support the overall administration of CNPs.

    7. Please provide any other comments applicable to the SAE requirements and processes.1

    1 See 42 U.S.C. 1776. https://www.thefederalregister.org/fdsys/pkg/USCODE-2010-title42/pdf/USCODE-2010-title42-chap13A-sec1776.pdf

    Dated: July 23, 2018. Brandon Lipps, Administrator, Food and Nutrition Service.
    [FR Doc. 2018-16196 Filed 7-27-18; 8:45 am] BILLING CODE 3410-30-P
    COMMISSION ON CIVIL RIGHTS Notice of Public Meeting of the Ohio Advisory Committee to the U.S. Commission on Civil Rights AGENCY:

    U.S. Commission on Civil Rights.

    ACTION:

    Announcement of meeting.

    SUMMARY:

    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 Ohio Advisory Committee (Committee) will hold a meeting via teleconference on Thursday August 9, 2018, from 12-1 p.m. EDT for the purpose of continuing planning for their upcoming hearing on education funding in the State.

    DATES:

    The meeting will be held on Thursday August 9, 2018, at 12:00 p.m. EDT.

    Public Call Information: Dial: 877-604-9673, Conference ID: 1551373.

    FOR FURTHER INFORMATION CONTACT:

    Melissa Wojnaroski, DFO, at [email protected] or 312-353-8311.

    SUPPLEMENTARY INFORMATION:

    Members of the public can listen to the discussion. This meeting is available to the public through the above listed toll free number. 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 meeting. Written comments may be mailed to the Regional Programs Unit Office, 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 Carolyn Allen at [email protected] Persons who desire additional information may contact the Regional Programs Unit Office at (312) 353-8311.

    Records generated from this meeting 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 www.facadatabase.gov under the Commission on Civil Rights, Ohio Advisory Committee link (http://www.facadatabase.gov/committee/meetings.aspx?cid=268). Persons interested in the work of this Committee are directed to the Commission's website, http://www.usccr.gov, or may contact the Regional Programs Unit Office at the above email or street address.

    Agenda Welcome and Roll Call Discussion: Education Funding in Ohio Public Comment Adjournment

    Exceptional Circumstance: Pursuant to 41 CFR 102-3.150, the notice for this meeting is given less than 15 calendar days prior to the meeting because of the exceptional circumstance of this Committee preparing for a forthcoming hearing, September 2018.

    Dated: July 25, 2018. David Mussatt, Supervisory Chief, Regional Programs Unit.
    [FR Doc. 2018-16181 Filed 7-27-18; 8:45 am] BILLING CODE P
    COMMISSION ON CIVIL RIGHTS Agenda and Notice of Public Meeting of the Rhode Island Advisory Committee AGENCY:

    Commission on Civil Rights.

    ACTION:

    Announcement of meeting.

    SUMMARY:

    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 (FACA), that a roundtable meeting of the Rhode Island Advisory Committee to the Commission will convene at 10:00 a.m. (EDT) on Tueday, August 7, 2018, in Room 222 at the Rhode Island State House, 82 Smith Street, Providence, RI 02903. The purpose of the roundtable will be to hear from experts about varied civil rights topics.

    DATES:

    Tuesday, August 7, 2018 (EDT).

    Time: 10:00 a.m.—Roundtable Meeting and Public Session.

    ADDRESSES:

    Room 222 at the Rhode Island State House, 82 Smith Street, Providence, RI 02903.

    FOR FURTHER INFORMATION CONTACT:

    Barbara Delaviez at [email protected], or 202-376-7533.

    SUPPLEMENTARY INFORMATION:

    The purpose of the roundtable meeting is to examine topical civil rights issues in Rhode Island. The Committee will hear from elected officials, advocates and experts. The public is invited to the meeting and encouraged to address the committee following the presentations.

    If other persons who plan to attend the meeting require other accommodations, please contact Evelyn Bohor at [email protected] at the Eastern Regional Office at least ten (10) working days before the scheduled date of the meeting.

    Time will be set aside at the end of the briefing so that members of the public may address the Committee after the formal presentations have been completed. Persons interested in the issue are also invited to submit written comments; the comments must be received in the regional office by Friday, September 7, 2018. Written comments may be mailed to the Eastern Regional Office, U.S. Commission on Civil Rights, 1331 Pennsylvania Avenue, Suite 1150, Washington, DC 20425, faxed to (202) 376-7548, or emailed to Evelyn Bohor at [email protected] Persons who desire additional information may contact the Eastern Regional Office at (202) 376-7533.

    Records and documents discussed during the meeting will be available for public viewing as they become available at http://facadatabase.gov/committee/meetings.aspx?cid=272 and clicking on the “Meeting Details” and “Documents” links. Records generated from this meeting may also be inspected and reproduced at the Eastern Regional Office, as they become available, both before and after the meeting. Persons interested in the work of this advisory committee are advised to go to the Commission's website, www.usccr.gov, or to contact the Eastern Regional Office at the above phone number, email or street address.

    Agenda Welcome and Introductions Jennifer Steinfeld, Chair, Rhode Island Advisory Committee Opening Statement Jennifer Steinfeld, Chair, Rhode Island Advisory Committee Roundtable Meeting Invited Experts to Present Topical Civil Rights Issues Open Comment Dated: July 25, 2018. David Mussatt, Supervisory Chief, Regional Programs Unit.
    [FR Doc. 2018-16179 Filed 7-27-18; 8:45 am] BILLING CODE P
    DEPARTMENT OF COMMERCE Submission for OMB Review; Comment Request

    The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.

    Agency: U.S. Census Bureau.

    Title: Manufacturers' Unfilled Orders Survey.

    OMB Control Number: 0607-0561.

    Form Number(s): MA-3000.

    Type of Request: Extension of a currently approved collection.

    Number of Respondents: 6,000.

    Average Hours per Response: 30 minutes.

    Burden Hours: 3,000.

    Needs and Uses: The data collected in the Manufacturers' Unfilled Orders (M3UFO) Survey will be used to benchmark the new and unfilled orders information published in the monthly Manufacturers' Shipments, Inventories, and Orders (M3) Survey. The M3 Survey collects monthly data on the value of shipments, inventories, and new and unfilled orders from manufacturing companies. The data are used by the Bureau of Economic Analysis, the Council of Economic Advisers, the Federal Reserve Board, the Conference Board, and members of the business community such as trade associations and the media to analyze business conditions in the manufacturing sector.

    The associated monthly M3 Survey estimates are based on a panel of approximately 5,000 reporting units that represent approximately 3,100 companies and provide an indication of month-to-month change for the Manufacturing Sector. These reporting units may be divisions of diversified large companies, large homogenous companies, or single-unit manufacturers. The M3 estimates are periodically benchmarked to comprehensive data on the manufacturing sector from the Annual Survey of Manufactures (ASM), the Economic Census (shipments and inventories) and the M3UFO Survey, which is the subject of this notice. Unfilled orders data are not collected in the ASM or the Economic Census. To obtain more accurate M3 estimates of unfilled orders, which are also used in deriving M3 estimates of new orders, we conduct the M3UFO Survey annually to be used as the source for benchmarking M3 unfilled orders data. Industries that maintain unfilled orders cannot fulfill the order in the same month in which the order is received. This is not true for each industry, and occurs mainly in industries where production takes longer than one month. In order to reduce burden from our respondents, the M3UFO data are used to determine which North American Industry Classification System (NAICS) industries continue to maintain unfilled orders. We then utilize that information to only request unfilled orders on the monthly M3 survey from the NAICS industries that actually have unfilled orders which cannot be completed within the same month that the order was placed.

    There are no changes to the MA-3000 form, which is used to conduct the M3UFO survey.

    The Census Bureau will use mail out/mail back survey forms to collect the data with online reporting encouraged. Online response for the survey is typically 70 percent. Companies are asked to respond to the survey within 30 days of receipt. The Census Bureau mails letters encouraging participation to companies that have not responded within 30 days and later uses telephone follow-up to seek response from delinquent companies.

    Affected Public: Businesses or other for-profit.

    Frequency: Annually.

    Respondent's Obligation: Mandatory.

    Legal Authority: Title 13 U.S.C., Sections 131 and 182.

    This information collection request may be viewed at www.reginfo.gov. Follow the instructions to view Department of Commerce collections currently under review by OMB.

    Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to [email protected] or fax to (202)395-5806.

    Sheleen Dumas, Departmental Lead PRA Officer, Office of the Chief Information Officer.
    [FR Doc. 2018-16182 Filed 7-27-18; 8:45 am] BILLING CODE 3510-07-P
    DEPARTMENT OF COMMERCE International Trade Administration [A-583-863] Forged Steel Fittings From Taiwan: Final Determination of Sales at Less Than Fair Value AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    SUMMARY:

    The Department of Commerce (Commerce) determines that imports of forged steel fittings from Taiwan are being, or are likely to be, sold in the United States at less than fair value (LTFV). The period of investigation (POI) is October 1, 2016, through September 30, 2017. The final margins of sales at LTFV are listed below in the “Final Determination” section of this notice.

    DATES:

    Applicable July 30, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Robert Palmer (202) 482-9068 or Suzanne Lam at (202) 482-0783, AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230.

    SUPPLEMENTARY INFORMATION: Background

    On May 17, 2018, Commerce published in the Federal Register the Preliminary Determination of sales at LTFV of forged steel fittings from Taiwan and invited interested parties to comment.1 The only comment received was from Bonney Forge Corporation and United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (USW) (collectively, the petitioners) agreeing with our affirmative preliminary determination to apply total adverse facts available (AFA) to the non-responsive companies.2 Accordingly, we made no changes to the Preliminary Determination.

    1See Forged Steel Fittings from Taiwan: Affirmative Preliminary Determination of Sales at Less Than Fair Value, 83 FR 22957 (May 17, 2018) (Preliminary Determination) and accompanying Preliminary Decision Memorandum.

    2See letter from the petitioners re: Petitioners' Case Brief, dated June 15, 2018.

    Scope of the Investigation

    The products covered by this investigation are forged steel fittings from Taiwan. For a full description of the scope of this investigation, see the “Scope of the Investigation,” at the Appendix to this notice.

    Scope Comments

    During the course of this investigation and the concurrent investigations of forged steel fittings from the People's Republic of China (China) and Italy, Commerce received numerous scope comments from interested parties. Commerce issued a Preliminary Scope Decision Memorandum 3 and a Second Preliminary Scope Decision Memorandum 4 to address these comments. In the Second Preliminary Scope Decision Memorandum, Commerce preliminarily found that outlets are fittings and are included in the scope of the investigations and that butt weld outlets are butt weld fittings and are excluded from the scope of the investigations. Following the Preliminary Determination, Commerce received scope case and rebuttal briefs from the petitioners and M.E.G.A S.p.A. (MEGA) concerning outlets and butt weld outlets as specified in the scope.5 Based on these parties' comments and our analysis of them, we made no changes to the scope of the investigations, as it appeared in the Preliminary Determination. Further, we continued to find that outlets are fittings and are therefore covered by the scope of this investigation and the concurrent investigation of forged steel fittings from China and Italy, while butt weld outlets are butt weld fittings and are excluded from the scope of the investigation. For a summary of the product coverage comments and rebuttals submitted to the records of this investigation and the concurrent investigations of forged steel fittings from China and Italy, and our accompanying discussion and analysis of them, see the Final Scope Decision Memorandum.6

    3See Memorandum to the File, “Scope Comments Decision Memorandum for the Preliminary Determinations,” dated March 7, 2018 (Preliminary Scope Decision Memorandum).

    4See Memorandum to the File, “Second Preliminary Scope Decision Memorandum,” dated May 7, 2018 (Second Preliminary Scope Decision Memorandum).

    5See letter from MEGA re: Brief of MEGA in Response to Scope Issues Raised by the Preliminary Determination Regarding the Expansion of the Scope of the Investigations to Include Outlets, dated May 29, 2018; letter from the petitioners re: Case Brief on Scope, dated May 29, 2018; letter from MEGA re: Rebuttal Brief of MEGA in Response to Scope Issues Raised by the Preliminary Determination Regarding the Expansion of the Scope of the Investigations to Include Outlets, dated June 4, 2018; and letter from the petitioners re: Scope Rebuttal Brief, dated June 4, 2018.

    6See Memorandum to the File, “Forged Steel Fittings from China, Italy and Taiwan: Final Scope Determination Decision Memorandum,” dated concurrently with this notice (Final Scope Decision Memorandum).

    Verification

    As stated in the Preliminary Determination, Kopex Industrial Co. (Kopex), a mandatory respondent in this investigation, claimed that it did not produce or export forged steel fittings from Taiwan during the POI.7 As provided in section 782(i) of the Tariff Act of 1930, as amended (the Act), on May 30, 2018, we conducted verification of Kopex's claim using standard verification procedures, including an examination of relevant accounting records and original source documents provided by Kopex. As a result of the verification, we confirmed that Kopex did not produce or sell forged steel fittings from Taiwan during the POI.8 Because the other mandatory respondents, Both Well Steel Fittings Co., Ltd. (Bothwell) and Luchu Shin Yee Works Co., Ltd. (Luchu), failed to participate in the investigation, there was no information to verify with respect to either company.9

    7See Preliminary Determination Memorandum at 3-4.

    8See Memorandum to the File, “Verification of Kopex Industrial Co., Ltd.,” dated June 8, 2018.

    9See Preliminary Determination, 83 FR at 22958.

    Use of Adverse Facts Available

    The mandatory respondents Bothwell and Luchu failed to participate in this investigation.10 Therefore, in the Preliminary Determination, pursuant to sections 776(a)(1), 776(a)(2)(A)-(C), and 776(b) of the Act, we assigned Bothwell and Luchu a dumping rate based on AFA. No parties filed comments in opposition to our Preliminary Determination with respect to Bothwell and Luchu and there is no new information on the record that would cause us to revisit our preliminary AFA determination. Accordingly, we continue to find that the application of AFA pursuant to section 776(a) and (b) of the Act is warranted with respect to Bothwell and Luchu. In applying total AFA, we assigned to Bothwell's and Luchu's exports of the subject merchandise a rate of 116.17 percent, which is the only rate calculated in the Petition Amendment 11 and which has been corroborated to the extent practicable within the meaning of section 776(c) of the Act.12

    10See Preliminary Determination Memorandum at 4-8.

    11See Petitions for the Imposition of Antidumping and Countervailing Duties: Forged Steel Fittings from the People's Republic of China, Italy, and Taiwan, Volume V, dated October 5, 2017 (the Petition); see also letter from the petitioners' re: Response to Supplemental Questionnaire, dated October 11, 2017 at 1-2 (Petition Amendment).

    12See Preliminary Determination Memorandum at 6-8.

    All-Others Rate

    As discussed in the Preliminary Determination, Commerce based the “All-Others” rate on the, as noted above, only dumping margin alleged in the Petition Amendment,13 in accordance with section 735(c)(5)(B) of the Act. We made no changes to the selection of this rate for this final determination.

    13See Petition and Petition Amendment; see also Preliminary Determination Memorandum at 8-9.

    Final Determination

    The final estimated weighted-average dumping margins are as follows:

    Exporter or producer Estimated weighted-
  • average
  • dumping margin
  • (percent)
  • Both Well Steel Fittings Co., Ltd 116.17 Luchu Shin Yee Works Co., Ltd 116.17 All-Others 116.17
    Continuation of Suspension of Liquidation

    In accordance with section 735(c)(1)(B) of the Act, for this final determination, we will direct U.S. Customs and Border Protection (CBP) to continue to suspend liquidation of all entries of forged steel fittings from Taiwan, as described in the Appendix to this notice, which are entered, or withdrawn from warehouse, for consumption on or after May 17, 2018, the date of publication in the Federal Register of the affirmative Preliminary Determination.

    Pursuant to section 735(c)(1)(B)(ii) of the Act and 19 CFR 351.210(d), Commerce will instruct CBP to require a cash deposit for such entries of merchandise equal to the estimated weighted-average dumping margin or the estimated all-others rate, as follows: (1) The cash deposit rate for the respondents listed above will be equal to the respondent-specific estimated weighted-average dumping margin determined in this final determination; (2) if the exporter is not a respondent identified above but the producer is, then the cash deposit rate will be equal to the respondent-specific estimated weighted-average dumping margin established for that producer of the subject merchandise; and (3) the cash deposit rate for all other producers and exporters will be equal to the all-others estimated weighted-average dumping margin.

    Disclosure

    The estimated weighted-average dumping margins assigned to the mandatory respondents in this investigation in the Preliminary Determination were based on AFA. As these margins are based on the rate calculated in the Petition Amendment, and because we made no changes to these margins since the Preliminary Determination, no disclosure of calculations is necessary for this final determination.

    International Trade Commission Notification

    In accordance with section 735(d) of the Act, we will notify the International Trade Commission (ITC) of the final affirmative determination of sales at LTFV. Because Commerce's final determination is affirmative, in accordance with section 735(b)(2) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports or sales (or the likelihood of sales) for importation of forged steel fittings, no later than 45 days after this final determination. If the ITC determines that such injury does not exist, this proceeding will be terminated and all cash deposits posted will be refunded. If the ITC determines that such injury does exist, Commerce will issue an antidumping duty order directing CBP to assess, upon further instruction by Commerce, antidumping duties on all imports of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation, as discussed above in the “Continuation of Suspension of Liquidation” section.

    Notification Regarding Administrative Protective Orders

    This notice will serve as a reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the disposition of propriety information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and terms of an APO is a sanctionable violation.

    Notification to Interested Parties

    This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act and 19 CFR 351.210(c).

    Dated: July 23, 2018. Gary Taverman, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, performing the non-exclusive functions and duties of the Assistant Secretary for Enforcement and Compliance. Appendix Scope of the Investigation

    The merchandise covered by this investigation is carbon and alloy forged steel fittings, whether unfinished (commonly known as blanks or rough forgings) or finished. Such fittings are made in a variety of shapes including, but not limited to, elbows, tees, crosses, laterals, couplings, reducers, caps, plugs, bushings, unions, and outlets. Forged steel fittings are covered regardless of end finish, whether threaded, socket-weld or other end connections.

    While these fittings are generally manufactured to specifications ASME B16.11, MSS SP-79, MSS SP-83, MSS SP-97, ASTM A105, ASTM A350, and ASTM A182, the scope is not limited to fittings made to these specifications.

    The term forged is an industry term used to describe a class of products included in applicable standards, and does not reference an exclusive manufacturing process. Forged steel fittings are not manufactured from casting. Pursuant to the applicable specifications, subject fittings may also be machined from bar stock or machined from seamless pipe and tube.

    All types of fittings are included in the scope regardless of nominal pipe size (which may or may not be expressed in inches of nominal pipe size), pressure rating (usually, but not necessarily expressed in pounds of pressure/PSI, e.g., 2,000 or 2M; 3,000 or 3M; 6,000 or 6M; 9,000 or 9M), wall thickness, and whether or not heat treated.

    Excluded from this scope are all fittings entirely made of stainless steel. Also excluded are flanges, butt weld fittings, butt weld outlets, nipples, and all fittings that have a maximum pressure rating of 300 pounds of pressure/PSI or less.

    Also excluded are fittings certified or made to the following standards, so long as the fittings are not also manufactured to the specifications of ASME B16.11, MSS SP-79, MSS SP-83, MSS SP-97, ASTM A105, ASTM A350, and ASTM A182:

    • American Petroleum Institute (API) API 5CT, API 5L, or API 11B • Society of Automotive Engineering (SAE) SAE J476, SAE J514, SAE J516, SAE J517, SAE J518, SAE J1026, SAE J1231, SAE J1453, SAE J1926, J2044 or SAE AS 35411 • Underwriter's Laboratories (UL) certified electrical conduit fittings • ASTM A153, A536, A576, or A865 • Casing Conductor Connectors 16-42 inches in diameter made to proprietary specifications • Military Specification (MIL) MIL-C-4109F and MIL-F-3541 • International Organization for Standardization (ISO) ISO6150-B

    To be excluded from the scope, products must have the appropriate standard or pressure markings and/or accompanied by documentation showing product compliance to the applicable standard or pressure, e.g., “API 5CT” mark and/or a mill certification report.

    Subject carbon and alloy forged steel fittings are normally entered under Harmonized Tariff Schedule of the United States (HTSUS) 7307.99.1000, 7307.99.3000, 7307.99.5045, and 7307.99.5060. They also may be entered under HTSUS 7307.92.3010, 7307.92.3030, 7307.92.9000, and 7326.19.0010. The HTSUS subheadings and specifications are provided for convenience and customs purposes; the written description of the scope is dispositive.

    [FR Doc. 2018-16194 Filed 7-27-18; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration RIN 0648-XG107 Takes of Marine Mammals Incidental to Specified Activities; Taking Marine Mammals Incidental to the Parallel Thimble Shoal Tunnel Project in Virginia Beach, Virginia AGENCY:

    National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Notice; issuance of an incidental harassment authorization.

    SUMMARY:

    In accordance with the regulations implementing the Marine Mammal Protection Act (MMPA), as amended, notification is hereby given that NMFS has issued an incidental harassment authorization (IHA) to Chesapeake Tunnel Joint Venture (CTJV) to incidentally take, by Level A and/or Level B harassment, four species of marine mammals during the Parallel Thimble Shoal Tunnel Project (PTST) in Virginia Beach, Virginia.

    DATES:

    This Authorization is effective from August 1, 2018, through July 31, 2019.

    FOR FURTHER INFORMATION CONTACT:

    Rob Pauline, Office of Protected Resources, NMFS, (301) 427-8401. Electronic copies of the application and supporting documents, as well as a list of the references cited in this document, may be obtained online at: https://www.fisheries.noaa.gov/national/marine-mammal-protection/incidental-take-authorizations-construction-activities. In case of problems accessing these documents, please call the contact listed above.

    SUPPLEMENTARY INFORMATION: Background

    Sections 101(a)(5)(A) and (D) of the MMPA (16 U.S.C. 1361 et seq.) direct the Secretary of Commerce (as delegated to NMFS) to allow, upon request, the incidental, but not intentional, taking of small numbers of marine mammals by United States citizens who engage in a specified activity (other than commercial fishing) within a specified geographical region if certain findings are made and either regulations are issued or, if the taking is limited to harassment, a notice of a proposed authorization is provided to the public for review.

    An authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s), will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant), and if the permissible methods of taking and requirements pertaining to the mitigation, monitoring and reporting of such takings are set forth.

    NMFS has defined “negligible impact” in 50 CFR 216.103 as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.

    The MMPA states that the term “take” means to harass, hunt, capture, kill or attempt to harass, hunt, capture, or kill any marine mammal.

    Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).

    Summary of Request

    On January 11, 2018, NMFS received a request from the CTJV for an IHA to take marine mammals incidental to pile driving at the Chesapeake Bay Bridge and Tunnel (CBBT) near Virginia Beach, Virginia. CTJV's request is for take of small numbers of harbor seal (Phoca vitulina), gray seal (Halichoerus grypus), bottlenose dolphin (Tursiops spp.), harbor porpoise (Phocoena phocoena), and humpback whale (Megaptera novaeangliae) by Level A and Level B harassment. Neither the CTJV nor NMFS expect serious injury or mortality to result from this activity and, therefore, an IHA is appropriate.

    NMFS has issued an IHA to CTJV authorizing the take of five species by Level A and Level B harassment. Pile driving and removal will take up to 202 days. The IHA is effective from August 1, 2018 through July 31, 2019.

    Description of Planned Activity

    The PTST project consists of the construction of a two-lane parallel tunnel to the west of the existing Thimble Shoal Tunnel, connecting Portal Island Nos. 1 and 2 (Figure 1 in application). Upon completion, the new tunnel will carry two lanes of southbound traffic and the existing tunnel will remain in operation and carry two lanes of northbound traffic. The PTST project will address existing constraints to regional mobility based on current traffic volume along the Chesapeake Bay Bridge-Tunnel (CBBT) facility; improve safety by minimizing one lane, two-way traffic in the tunnel; improve the ability to conduct necessary maintenance with minimal impact to traffic flow; and ensure a reliable southwest hurricane evacuation route for residents of the eastern shore and/or a northern evacuation route for residents of the eastern shore, Norfolk, and Virginia Beach. The CBBT is a 23 mile fixed link crossing the mouth of the Chesapeake Bay which connects Northampton County on the Delmarva Peninsula with Virginia Beach, which is part of the Hampton Roads metropolitan area.

    The new parallel tunnel will be bored under the Thimble Shoal Channel. The 6,525 linear feet (ft) of new tunnel will be constructed with a top of tunnel depth/elevation of 100 ft below Mean Low Water (MLW) within the width of the 1,000-ft-wide navigation channel. Impact pile driving will be used to install steel piles and vibratory pile driving will be utilized to install sheet piles. This issued IHA would cover one year of a larger project for which will run through 2022. The larger project, which does not employ pile driving and does not require additional IHAs, involves tunnel excavation with a tunnel boring machine and construction of a roadway within the tunnel. The type and numbers of piles to be installed, as well as those that will be removed during the effective period are summarized in Table 1.

    Table 1—Anticipated Pile Installation Schedule Pile location Pile function Pile type Number of piles
  • (upland/
  • In-water)
  • Anticipated
  • installation
  • date
  • Portal Island Nos. 1 and 2 Mooring dolphins (in-water) 36-inch diameter hollow steel 30 15 July to 15 August 2018. West of Portal Island No. 1 Berm construction trestle (in-water) 36-inch diameter hollow steel 80 15 July 2018 through 1 January 2019. West of Portal Island No. 2 Berm construction trestle (in-water) 36-inch diameter hollow steel 80 15 July 2018 through 1 January 2019. Portal Island No. 1 Temporary docks (upland) 36-inch diameter hollow steel 50 1 May 2018 through 30 June 2018. Portal Island No. 1 Temporary docks (in- water) 36-inch diameter hollow steel 82 15 July 2018 to 30 August 2018. Portal Island No. 2 (above MHW) Temporary roadway trestle (upland) 36-inch diameter hollow steel 12 1 May to 31 May 2018. Portal Island No. 1 (above MHW) Excavated TBM material containment holding (muck) bin (upland) 28 and 18-inch steel sheet 1,110 1 May 2018 to 30 September 2018. Portal Island Nos. 1 and 2 (above and below MHW) Settlement mitigation and flowable fill containment 28-inch steel sheet 2,554 1 August 2018 to 30 March 2019. Portal Island Nos. 1 and 2 (above MHW) Portal excavation Steel sheet 1,401 1 June 2018 to 30 September 2018, 1 January to 30 March 2019. Portal Island Nos. 1 and 2 (above MHW) Excavation Support Steel sheet 240 1 April 2018 to 30 August 2019 to 1 January 2019 to 30 March 2019. Total (above and below water) 5,305 Sheet Piles 334 Round Piles

    CTJV will install up to 272 in-water 36-in steel pipe piles by impact driving and 1,936 in-water sheet piles by vibratory installation and expects activities to take up to 202 days. These actions could produce underwater sound at levels that could result in the injury or behavioral harassment of marine mammal species. A detailed description of CTJV's planned project is provided in the Federal Register notice for the proposed IHA (83 FR 18777; April 30, 2018). Since that time, the project start date has been delayed by approximately one month. No additional changes have been made to the planned project activities. Therefore, a detailed description is not provided here. Please refer to that Federal Register notice for the description of the specific activity.

    Comments and Responses

    A notice of NMFS's proposal to issue an IHA to CTJV was published in the Federal Register on April 30, 2018 (83 FR 18777). That notice described, in detail, CTJV's activity, the marine mammal species that may be affected by the activity, the anticipated effects on marine mammals and their habitat, proposed amount and manner of take, and proposed mitigation, monitoring and reporting measures. During the 30-day public comment period, NMFS received one comment letter from the Marine Mammal Commission (Commission); the Commission's recommendations and our responses are provided here, and the comments have been posted online at: https://www.fisheries.noaa.gov/national/marine-mammal-protection/incidental-take-authorizations-construction-activities.

    Comment 1: The Commission recommended that NMFS review more thoroughly both the applications prior to deeming them complete and its notices prior to submitting them for publication in the Federal Register and that NMFS better evaluate the proposed exclusion/shut-down zones that are to be implemented for each proposed incidental take authorization. Further, the Commission references several specific minor errors that were in the proposed notice (for example, incorrect numbers in Tables).

    Response: NMFS thanks the Commission for its recommendation. NMFS makes every effort to read the notices thoroughly prior to publication and will continue this effort to publish the best possible product for public comment. NMFS will be diligent when considering the appropriateness of proposed exclusion and shutdown zones for future IHAs. Further, NMFS has corrected the errors the Commission noted.

    Comment 2: The Commission noted that NMFS used the lower reported source level for estimating the various Level A and B harassment zones during vibratory pile driving, which resulted in underestimating the Level A and B harassment zones, associated ensonified areas, and number of takes of bottlenose dolphins.

    Response: Note that in the Federal Register notice of proposed IHA (83 FR 18777; April 30, 2018) a source value of 154 dB RMS SPL was applied for vibratory installation of 28-inch sheet. NMFS used a higher source level of 155 dB RMS SPL in this notice. The vibratory source levels based on root-mean-square sound pressure levels (SPLrms) and sound exposure levels metrics were not the same value according to NAVFAC 2017 which was cited as the refere