Federal Register Vol. 83, No.149,

Federal Register Volume 83, Issue 149 (August 2, 2018)

Page Range37735-38010
FR Document

83_FR_149
Current View
Page and SubjectPDF
83 FR 37993 - To Take Certain Actions Under the African Growth and Opportunity Act and for Other PurposesPDF
83 FR 37812 - Sunshine Act MeetingPDF
83 FR 37825 - Notice of Crude Helium Auction and Sale for Fiscal Year 2019 DeliveryPDF
83 FR 37808 - Sunshine Act Meeting; Farm Credit Administration BoardPDF
83 FR 37880 - Railroad Revenue Adequacy-2017 Determination; Railroad Cost of Capital-2017; Uniform Railroad Costing System-2017 CalculationsPDF
83 FR 37822 - Notice of Establishment of the Bureau of Indian Education Standards, Assessments, and Accountability System Negotiated Rulemaking Committee; Notice of MeetingsPDF
83 FR 37824 - Proclaiming Certain Lands as Reservation for the Rincon Band of Luiseno Mission Indians of the Rincon Reservation, CaliforniaPDF
83 FR 37824 - Proclaiming Certain Lands as Reservation for the Bois Forte Band of the Minnesota Chippewa Tribe of MinnesotaPDF
83 FR 37802 - Annual Updates to the Income Contingent Repayment (ICR) Plan Formula for 2018-William D. Ford Federal Direct Loan ProgramPDF
83 FR 37795 - Atlantic Highly Migratory Species; Meeting of the Atlantic Highly Migratory Species Advisory PanelPDF
83 FR 37807 - Application to Export Electric Energy; ADG Group Inc.PDF
83 FR 37807 - Notice of Request for Information (RFI) on [email protected] (Hydrogen at Scale): Determining Opportunities To Facilitate Wide-Scale Hydrogen Adoption for Energy Security and Economic GrowthPDF
83 FR 37806 - Notice of Request for Information (RFI) on Understanding Catalyst Production and Development Needs at National LaboratoriesPDF
83 FR 37827 - Advisory Council on Employee Welfare and Pension Benefit Plans; Nominations for VacanciesPDF
83 FR 37882 - Notice of Final Federal Agency Actions on Proposed Highway in CaliforniaPDF
83 FR 37790 - Certain Cold-Rolled Steel Flat Products From the Republic of Korea: Initiation of Anti-Circumvention Inquiries on the Antidumping Duty and Countervailing Duty OrdersPDF
83 FR 37785 - Certain Corrosion-Resistant Steel Products From the Republic of Korea and Taiwan: Initiation of Anti-Circumvention Inquiries on the Antidumping Duty and Countervailing Duty OrdersPDF
83 FR 37784 - Certain Frozen Warmwater Shrimp From India: Initiation and Preliminary Results of Antidumping Duty Changed Circumstances ReviewPDF
83 FR 37881 - WTO Dispute Settlement Proceeding Regarding United States-Anti-Dumping Measures on Fish Fillets From VietnamPDF
83 FR 37813 - Announce the Intent To Award an Administrative SupplementPDF
83 FR 37783 - Notice of New Fee SitesPDF
83 FR 37878 - Data Collection Available for Public CommentsPDF
83 FR 37812 - Availability of Set 29 Draft Toxicological ProfilesPDF
83 FR 37882 - Petition for Exemption; Summary of Petition Received; Honeywell AerospacePDF
83 FR 37827 - Advisory Committee for Mathematical and Physical Sciences; Notice of MeetingPDF
83 FR 37780 - Regulated Navigation Area; Straits of Mackinac, Mackinaw City, MIPDF
83 FR 37747 - Medicare, Medicaid, and Children's Health Insurance Programs: Announcement of the Extension of Temporary Moratoria on Enrollment of Part B Non-Emergency Ground Ambulance Suppliers and Home Health Agencies in Designated Geographic LocationsPDF
83 FR 37828 - Notice of Hearing (Notice of Evidentiary Hearing and Opportunity To Provide Oral, Written, and Audio-Recorded Limited Appearance Statements); In the Matter of Crow Butte Resources, Inc. (Marsland Expansion Area)PDF
83 FR 37828 - Notice (Regarding Weapons at Atomic Safety and Licensing Board Proceeding); In the Matter of Crow Butte Resources, Inc. (Marsland Expansion Area)PDF
83 FR 37879 - Administrative Declaration of a Disaster for the Commonwealth of PennsylvaniaPDF
83 FR 37880 - Administrative Declaration of a Disaster for the Commonwealth of PennsylvaniaPDF
83 FR 37880 - Administrative Declaration of a Disaster for the State of MarylandPDF
83 FR 37879 - Administrative Declaration of a Disaster for the State of CaliforniaPDF
83 FR 37797 - Applications for New Awards; Grants to States for School Emergency Management ProgramPDF
83 FR 37817 - Agency Information Collection Activities; Proposed Collection; Comment Request; Food and Drug Administration's Research and Evaluation Survey for the Public Education Campaign on Tobacco Among the Lesbian Gay Bisexual Transgender CommunityPDF
83 FR 37813 - Revocation of Authorization of Emergency Use of an In Vitro Diagnostic Device for Detection of Ebola VirusPDF
83 FR 37831 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Amendment No. 1 and Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change as Modified by Amendment No. 1 Thereto Regarding the Continued Listing and Trading of Shares of the Natixis Loomis Sayles Short Duration Income ETFPDF
83 FR 37839 - Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing of Amendments No. 1 and 2 to Proposed Rule Change Concerning Enhanced and New Tools for Recovery ScenariosPDF
83 FR 37870 - Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Codify the Definitions of the Protocols That Members Can Use To Enter Quotes and OrdersPDF
83 FR 37864 - Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing of Partial Amendments No. 1 and 2 to Proposed Rule Change Concerning Updates to and Formalization of OCC's Recovery and Orderly Wind-Down PlanPDF
83 FR 37875 - Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Definition of Flexibly Structured OptionsPDF
83 FR 37853 - Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule on the BOX Market LLC (“BOX”) Options Facility To Establish BOX Connectivity Fees for Participants and Non-Participants Who Connect to the BOX NetworkPDF
83 FR 37867 - Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Codify the Protocol Definitions That Members Use To Enter Quotes and OrdersPDF
83 FR 37855 - Self-Regulatory Organizations; The Options Clearing Corporation; Order Approving Proposed Rule Change, as Modified by Amendments No. 1 and 2, Related to The Options Clearing Corporation's Stress Testing and Clearing Fund MethodologyPDF
83 FR 37849 - Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 518, Complex OrdersPDF
83 FR 37855 - Notice of Applications for Deregistration Under Section 8(f) of the Investment Company Act of 1940PDF
83 FR 37873 - Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Codify the Definitions of the Protocols That Members Can Use To Enter Quotes and OrdersPDF
83 FR 37830 - Product Change-Priority Mail and First-Class Package Service Negotiated Service AgreementPDF
83 FR 37816 - Advancing the Development of Pediatric Therapeutics 5: Advancing Pediatric Pharmacovigilance; Public WorkshopPDF
83 FR 37830 - Product Change-Priority Mail Negotiated Service AgreementPDF
83 FR 37831 - Product Change-Priority Mail Express, Priority Mail, & First-Class Package Service Negotiated Service AgreementPDF
83 FR 37831 - Product Change-Priority Mail Negotiated Service AgreementPDF
83 FR 37831 - Product Change-Parcel Select Negotiated Service AgreementPDF
83 FR 37821 - Accreditation and Approval of Laboratory Service, Inc., as a Commercial Gauger and LaboratoryPDF
83 FR 37809 - Information Collection Being Reviewed by the Federal Communications Commission Under Delegated AuthorityPDF
83 FR 37810 - Information Collection Being Reviewed by the Federal Communications CommissionPDF
83 FR 37760 - Cellular Service, Including Changes in Licensing of Unserved AreaPDF
83 FR 37808 - Information Collection Being Submitted for Review and Approval to the Office of Management and BudgetPDF
83 FR 37797 - Submission for OMB Review; Comment Request; “Post Registration (Trademark Processing)”PDF
83 FR 37783 - Agenda and Notice of Public Meeting of the Massachusetts Advisory CommitteePDF
83 FR 37820 - Center for Scientific Review; Notice of Closed MeetingPDF
83 FR 37820 - Office of the Secretary; Notice of MeetingPDF
83 FR 37778 - Proposed Modification of Class E Airspace for the Following Alaska Towns; Toksook Bay, AK; Unalakleet, AK; Wainwright, AK; and Yakutat, AKPDF
83 FR 37796 - Proposed Information Collection; Comment Request; Alaska Quota Cost Recovery ProgramsPDF
83 FR 37795 - Submission for OMB Review; Comment RequestPDF
83 FR 37764 - Airworthiness Directives; Bell Helicopter Textron Inc. HelicoptersPDF
83 FR 37820 - National Cancer Institute; Notice of MeetingPDF
83 FR 37771 - Airworthiness Directives; Gulfstream Aerospace Corporation AirplanesPDF
83 FR 37768 - Airworthiness Directives; Viking Air Limited (Type Certificate Previously Held by Bombardier, Inc.; Canadair Limited) AirplanesPDF
83 FR 37773 - Proposed Modification of Class E Airspace for the Following Alaska Towns; St. Michael, AK; Shaktoolik, AK; and Tatitlek, AKPDF
83 FR 37766 - Airworthiness Directives; Airbus SAS AirplanesPDF
83 FR 37774 - Proposed Modification of Class E Airspace for the Following Alaska Towns; Barrow, AK; Chevak, AK; Clarks Point, AK; Elim, AK; and Golovin, AKPDF
83 FR 37776 - Proposed Modification of Class E Airspace for the Following Alaska Towns; Nuiqsut, AK; Perryville, AK; Pilot Point, AK; and Point Lay, AKPDF
83 FR 37821 - First Responders Community of PracticePDF
83 FR 37886 - Modernized DrawbackPDF
83 FR 37735 - Renewable Fuel Standard Program: Grain Sorghum Oil PathwayPDF
83 FR 37750 - Emergency Alert SystemPDF

Issue

83 149 Thursday, August 2, 2018 Contents Agency Toxic Agency for Toxic Substances and Disease Registry NOTICES Set 29 Draft Toxicological Profiles, 37812-37813 2018-16557 Agriculture Agriculture Department See

Forest Service

Centers Medicare Centers for Medicare & Medicaid Services RULES Medicare, Medicaid, and Children's Health Insurance Programs: Announcement of Extension of Temporary Moratoria on Enrollment of Part B Non-Emergency Ground Ambulance Suppliers and Home Health Agencies in Designated Geographic Locations, 37747-37750 2018-16547 Civil Rights Civil Rights Commission NOTICES Meetings: Massachusetts Advisory Committee, 37783-37784 2018-16507 Coast Guard Coast Guard PROPOSED RULES Regulated Navigation Areas: Straits of Mackinac, Mackinaw City, MI, 37780-37782 2018-16549 Commerce Commerce Department See

International Trade Administration

See

National Oceanic and Atmospheric Administration

See

Patent and Trademark Office

Community Living Administration Community Living Administration NOTICES Administrative Supplements, 37813 2018-16561 Education Department Education Department NOTICES Annual Updates to Income Contingent Repayment Plan Formula for 2018—William D. Ford Federal Direct Loan Program, 37802-37806 2018-16582 Applications for New Awards: Grants to States for School Emergency Management Program, 37797-37802 2018-16540 Employee Benefits Employee Benefits Security Administration NOTICES Requests for Nominations: Advisory Council on Employee Welfare and Pension Benefit Plans, 37827 2018-16571 Energy Department Energy Department NOTICES Applications to Export Electric Energy: ADG Group, Inc., 37807 2018-16579 Requests for Information: H2 at Scale (Hydrogen at Scale): Determining Opportunities to Facilitate Wide-Scale Hydrogen Adoption for Energy Security and Economic Growth, 37807-37808 2018-16578 Understanding Catalyst Production and Development Needs at National Laboratories, 37806-37807 2018-16577 Environmental Protection Environmental Protection Agency RULES Renewable Fuel Standard Program: Grain Sorghum Oil Pathway, 37735-37746 2018-16246 Farm Credit Farm Credit Administration NOTICES Meetings; Sunshine Act, 37808 2018-16629 Federal Aviation Federal Aviation Administration PROPOSED RULES Airworthiness Directives: Airbus SAS Airplanes, 37766-37768 2018-16488 Bell Helicopter Textron Inc. Helicopters, 37764-37766 2018-16495 Gulfstream Aerospace Corporation Airplanes, 37771-37773 2018-16491 Viking Air Limited (Type Certificate Previously Held by Bombardier, Inc.; Canadair Limited) Airplanes, 37768-37770 2018-16490 Modification of Class E Airspace: Alaska Towns; Barrow, Chevak, Clarks Point, Elim, and Golovin, 37774-37776 2018-16482 Alaska Towns; Nuiqsut, Perryville, Pilot Point, and Point Lay, 37776-37778 2018-16480 Alaska Towns; St. Michael, Shaktoolik, and Tatitlek, 37773-37774 2018-16489 Alaska Towns; Toksook Bay, AK; Unalakleet, AK; Wainwright, AK; and Yakutat, AK, 37778-37779 2018-16503 NOTICES Petitions for Exemptions; Summaries: Honeywell Aerospace, 37882 2018-16554 Federal Communications Federal Communications Commission RULES Cellular Service, Including Changes in Licensing of Unserved Area, 37760-37763 2018-16512 Emergency Alert System, 37750-37760 2018-15818 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 37808-37812 2018-16511 2018-16513 2018-16514 Federal Election Federal Election Commission NOTICES Meetings; Sunshine Act, 37812 2018-16700 Federal Highway Federal Highway Administration NOTICES Federal Agency Actions: Proposed Highway in California, 37882-37883 2018-16569 Food and Drug Food and Drug Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Food and Drug Administration's Research and Evaluation Survey for Public Education Campaign on Tobacco among Lesbian Gay Bisexual Transgender Community, 37817-37819 2018-16538 Emergency Use Authorizations: In Vitro Diagnostic Device for Detection of Ebola Virus, Zalgen Labs, LLC for ReEBOV Antigen Rapid Test; Revocation, 37813-37816 2018-16537 Meetings: Advancing Development of Pediatric Therapeutics 5: Advancing Pediatric Pharmacovigilance; Public Workshop, 37816-37817 2018-16524 Forest Forest Service NOTICES New Fee Sites, 37783 2018-16560 Health and Human Health and Human Services Department See

Agency for Toxic Substances and Disease Registry

See

Centers for Medicare & Medicaid Services

See

Community Living Administration

See

Food and Drug Administration

See

National Institutes of Health

Homeland Homeland Security Department See

Coast Guard

See

U.S. Customs and Border Protection

NOTICES First Responders Community of Practice, 37821-37822 2018-16452
Indian Affairs Indian Affairs Bureau NOTICES Meetings: Establishment of Bureau of Indian Education Standards, Assessments, and Accountability System Negotiated Rulemaking Committee, 37822-37823 2018-16588 Proclaiming Certain Lands as Reservations: Bois Forte Band of Minnesota Chippewa Tribe of Minnesota, 37824 2018-16583 Rincon Band of Luiseno Mission Indians of Rincon Reservation, CA, 37824-37825 2018-16584 Interior Interior Department See

Indian Affairs Bureau

See

Land Management Bureau

International Trade Adm International Trade Administration NOTICES Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Cold-Rolled Steel Flat Products from Republic of Korea, 37790-37795 2018-16566 Certain Corrosion-Resistant Steel Products from Republic of Korea and Taiwan, 37785-37790 2018-16565 Certain Frozen Warmwater Shrimp from India, 37784-37785 2018-16563 Labor Department Labor Department See

Employee Benefits Security Administration

Land Land Management Bureau NOTICES Crude Helium Auction and Sale for Fiscal Year 2019 Delivery, 37825-37827 2018-16685 National Institute National Institutes of Health NOTICES Meetings: Center for Scientific Review, 37820 2018-16506 National Cancer Institute, 37820 2018-16492 National Institutes of Health, 37820-37821 2018-16505 National Oceanic National Oceanic and Atmospheric Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 37795 2018-16500 Agency Information Collection Activities; Proposals, Submissions, and Approvals: Alaska Quota Cost Recovery Programs, 37796-37797 2018-16502 Meetings: Atlantic Highly Migratory Species Advisory Panel, 37795-37796 2018-16580 National Science National Science Foundation NOTICES Meetings: Advisory Committee for Mathematical and Physical Sciences, 37827-37828 2018-16551 Nuclear Regulatory Nuclear Regulatory Commission NOTICES Hearings: Crow Butte Resources, Inc.; Marsland Expansion Area, 37828-37830 2018-16546 Weapons at Atomic Safety and Licensing Board Proceeding: Crow Butte Resources, Inc.; Marsland Expansion Area, 37828 2018-16545 Patent Patent and Trademark Office NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 37797 2018-16508 Postal Service Postal Service NOTICES Product Changes: Parcel Select Negotiated Service Agreement, 37831 2018-16520 Priority Mail and First-Class Package Service Negotiated Service Agreement, 37830-37831 2018-16525 Priority Mail Express, Priority Mail, and First-Class Package Service Negotiated Service Agreement, 37831 2018-16522 Priority Mail Negotiated Service Agreement, 37830-37831 2018-16519 2018-16521 2018-16523 Presidential Documents Presidential Documents PROCLAMATIONS Trade: African Growth and Opportunity Act; Beneficiary Country Designations (Proc. 9771), 37991-38010 2018-16725 Securities Securities and Exchange Commission NOTICES Applications: Deregistration under Investment Company Act, 37855 2018-16527 Self-Regulatory Organizations; Proposed Rule Changes: BOX Options Exchange, LLC, 37853-37854 2018-16531 Miami International Securities Exchange, LLC, 37849-37853 2018-16528 Nasdaq GEMX, LLC, 37867-37870 2018-16530 Nasdaq ISE, LLC, 37870-37873 2018-16534 Nasdaq MRX, LLC, 37873-37875 2018-16526 NYSE Arca, Inc., 37831-37839 2018-16536 Options Clearing Corp., 37839-37849, 37855-37867, 37875-37878 2018-16529 2018-16532 2018-16533 2018-16535 Small Business Small Business Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals:, 37878-37879 2018-16558 Disaster Declarations: California, 37879 2018-16541 Maryland, 37880 2018-16542 Pennsylvania, 37879-37880 2018-16543 2018-16544 Surface Transportation Surface Transportation Board NOTICES Railroad Revenue Adequacy—2017 Determination; Railroad Cost of Capital—2017; Uniform Railroad Costing System—2017 Calculations, 37880-37881 2018-16624 Trade Representative Trade Representative, Office of United States NOTICES WTO Dispute Settlement Proceeding Regarding United States: Anti-Dumping Measures on Fish Fillets from Vietnam, 37881-37882 2018-16562 Transportation Department Transportation Department See

Federal Aviation Administration

See

Federal Highway Administration

Treasury Treasury Department PROPOSED RULES Modernized Drawback, 37886-37990 2018-16279 Customs U.S. Customs and Border Protection PROPOSED RULES Modernized Drawback, 37886-37990 2018-16279 NOTICES Commercial Gaugers and Laboratories; Accreditations and Approvals: Laboratory Service, Inc., 37821 2018-16516 Separate Parts In This Issue Part II Homeland Security Department, U.S. Customs and Border Protection, 37886-37990 2018-16279 Treasury Department, 37886-37990 2018-16279 Part III Presidential Documents, 37991-38010 2018-16725 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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83 149 Thursday, August 2, 2018 Rules and Regulations ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 80 [EPA-HQ-OAR-2017-0655; FRL-9981-57-OAR] RIN 2060-AT82 Renewable Fuel Standard Program: Grain Sorghum Oil Pathway AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final rule.

SUMMARY:

In this action, the Environmental Protection Agency (EPA) determines that biodiesel and heating oil produced from distillers sorghum oil via a transesterification process, and renewable diesel, jet fuel, heating oil, naphtha, and liquefied petroleum gas (LPG) produced from distillers sorghum oil via a hydrotreating process, meet the lifecycle GHG emissions reduction threshold of 50 percent required for advanced biofuels and biomass-based diesel under the Renewable Fuel Standard (RFS) program. Based on these analyses, EPA is adding these pathways to the list of approved renewable fuel production pathways in the RFS regulations. EPA is also amending the RFS regulations by adding a new definition of “distillers sorghum oil,” and replacing existing references to “non-food grade corn oil” with the newly defined term “distillers corn oil.”

DATES:

The final rule is effective October 1, 2018.

ADDRESSES:

The EPA has established a docket for this action under Docket ID No. EPA-HQ-OAR-2017-0655. All the 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:

Diana Galperin, Office of Air and Radiation, Office of Transportation and Air Quality, Mail Code: 6401A, U.S. Environmental Protection Agency, 1200 Pennsylvania Avenue NW, Washington, DC 20460; telephone number: 202-564-5687; email address: [email protected].

SUPPLEMENTARY INFORMATION: Outline of This Preamble I. General Information A. Does this action apply to me? B. What action is the agency taking? C. What is the agency's authority for taking this action? D. What are the incremental costs and benefits of this action? II. Introduction III. Analysis of GHG Emissions Associated With Production of Biofuels From Distillers Sorghum Oil A. Overview of Distillers Sorghum Oil B. Analysis of Lifecycle GHG Emissions 1. Livestock Sector Impacts a. Nutritional Impacts b. Mass Loss 2. Feedstock Production 3. Feedstock Transport 4. Feedstock Pretreatment 5. Fuel Production 6. Fuel Distribution 7. Fuel Use 8. Results of GHG Lifecycle Analysis IV. Definition of Distillers Corn Oil V. Summary VI. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review B. Executive Order 13771: Reducing Regulations and Controlling Regulatory Costs C. Paperwork Reduction Act (PRA) D. Regulatory Flexibility Act (RFA) E. Unfunded Mandates Reform Act (UMRA) F. Executive Order 13132: Federalism G. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments H. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks I. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use J. National Technology Transfer Advancement Act (NTTAA) K. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations L. Congressional Review Act (CRA) I. General Information A. Does this action apply to me?

Entities potentially affected by this action are those involved with the production, distribution, and sale of transportation fuels, including gasoline and diesel fuel or renewable fuels such as ethanol, biodiesel, heating oil, renewable diesel, naphtha and liquefied petroleum gas. Potentially regulated categories include:

1 North American Industry Classification System.

Examples of potentially affected entities NAICS1 codes Petroleum refineries (including importers) 324110 Ethyl alcohol manufacturing 325193 Other basic organic chemical manufacturing 325199 Chemical and allied products merchant wholesalers 424690 Petroleum bulk stations and terminals 424710, 424720 Other fuel dealers 454310

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. This table lists the types of entities that the EPA is now aware could potentially be affected by this action. Other types of entities not listed in the table could also be affected. To determine whether your entity is regulated by this action, you should carefully examine the applicability criteria in the referenced regulations. If you have any 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 amending the RFS regulations to add a new definition of “distillers sorghum oil” and to replace existing references to “non-food grade corn oil” with the newly defined term “distillers corn oil.” This rule also adds the following pathways to rows F and H of Table 1 to 80.1426: (1) Biodiesel and heating oil produced from distillers sorghum oil and commingled distillers sorghum and corn oil via a transesterification process; and (2) renewable diesel, jet fuel, and heating oil produced from distillers sorghum oil and commingled distillers sorghum and corn oil via a hydrotreating process. Pathways for naphtha and LPG produced from distillers sorghum oil via a hydrotreating process are also added to row I of Table 1 to 40 CFR 80.1426. These pathways are approved for biomass-based diesel (D-code 4) or advanced biofuel (D-code 5) renewable identification numbers (RINs), depending on the fuel type and whether the production process involves co-processing renewable biomass and petroleum.2

2 The term “biomass-based diesel” is defined in the statute to exclude any renewable fuels derived from co-processing biomass with a petroleum feedstock. CAA Section 211(o)(1)(D).

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

Statutory authority for this action comes from Clean Air Act sections 114, 208, 211, and 301.

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

There are no incremental costs from this action. This action allows for additional flexibility and feedstock production options for participating in the Renewable Fuel Standard (RFS) program.

II. Introduction

Section 211(o) of the Clean Air Act (CAA) establishes the RFS program, under which EPA sets annual percentage standards specifying the amount of renewable fuel, as well as three subcategories of renewable fuel, that must be used to reduce or replace fossil fuel present in transportation fuel, heating oil, or jet fuel. Non-exempt renewable fuels must achieve at least a 20 percent reduction in lifecycle greenhouse gas (GHG) emissions as compared to a 2005 petroleum baseline.3 Advanced biofuel and biomass-based diesel must achieve at least a 50 percent reduction, and cellulosic biofuel must achieve at least a 60 percent reduction.

3 A baseline volume of renewable fuel produced from facilities that commenced construction on or before December 19, 2007, and which completed construction by December 19, 2010, without an 18-month hiatus in construction, is exempt from the minimum 20 percent GHG reduction requirement that otherwise applies to renewable fuel. In addition, a baseline volume of ethanol from facilities that commenced construction after December 19, 2007, and on or before December 31, 2009, qualifies for the same exemption if construction was completed within 36 months without an 18-month hiatus in construction; the facility was fired with natural gas, biomass, or any combination thereof, at all times the facility operated between December 19, 2007, and December 31, 2009; and the baseline volume continues to be produced through processes fired with natural gas, biomass, or any combination thereof.

In addition to the lifecycle GHG reduction requirements, there are other definitional criteria for renewable fuel (e.g., produced from renewable biomass as defined in the statute and regulations, and used to reduce or replace the quantity of fossil fuel present in transportation fuel, heating oil, or jet fuel) in CAA section 211(o) and the RFS regulations at 40 CFR part 80 subpart M.

Since the formation of the RFS program, EPA has periodically promulgated rules to add new pathways to the regulations.4 In addition, EPA has approved facility-specific pathways through the petition process in 40 CFR 80.1416. There are three critical components of approved fuel pathways under the RFS program: (1) Fuel type; (2) feedstock; and (3) production process. Each pathway is associated with a specific “D-code” that corresponds to one of the four categories of renewable fuel—general renewable fuel, advanced biofuel, cellulosic biofuel, or biomass-based diesel.

4 Please see information on Pathways I and Pathways II in 40 CFR part 80 subpart M, and in the Federal Register at 78 FR 14190 (March 5, 2013) and 79 FR 42128 (July 18, 2014). More information on these can be found at: https://www.epa.gov/renewable-fuel-standard-program/final-rule-identify-additional-fuel-pathways-under-renewable-fuel and https://www.epa.gov/renewable-fuel-standard-program/renewable-fuel-pathways-ii-final-rule-identify-additional-fuel.

EPA's lifecycle analyses are used to assess the overall GHG emissions of a fuel throughout each stage of its production and use. The results of these analyses, considering uncertainty and the weight of available evidence, are used to determine whether a fuel meets the necessary GHG reductions required under the CAA. Lifecycle analysis includes an assessment of emissions related to the full fuel lifecycle, including feedstock production, feedstock transportation, fuel production, fuel transportation and distribution, and tailpipe emissions. Per the CAA definition of lifecycle GHG emissions, EPA's lifecycle analyses also include an assessment of significant indirect emissions, such as those from land use changes and agricultural sector impacts.

EPA received a petition from the National Sorghum Producers (NSP), submitted under partial claims of confidential business information (CBI), requesting that EPA evaluate the GHG emissions associated with biofuels produced using as a feedstock grain sorghum oil derived from dry mill ethanol production, and that EPA provide a determination of the renewable fuel categories, if any, for which such biofuels may be eligible. EPA issued a proposed rule in December 2017 5 to establish approved pathways for the use of grain sorghum oil, and received comments on this proposal. In this action, EPA is amending the RFS program regulations to define the term “distillers sorghum oil.” We are also adding pathways to rows F, H and I of Table 1 to 40 CFR 80.1426 for biodiesel, renewable diesel, heating oil, naphtha, and LPG produced from distillers sorghum oil, via transesterification or hydrotreating processes.

5 82 FR 61205 (December 27, 2017).

This preamble describes EPA's analysis of the GHG emissions associated with distillers sorghum oil when used to produce specified biofuels via particular processes. The analysis considers a scenario where distillers sorghum oil is recovered from distillers grains with solubles (DGS) at dry mill plants that produce biofuel from grain sorghum and where the remaining reduced-oil DGS co-product is used as animal feed. The distillers sorghum oil is then used as a feedstock for conversion into certain biofuels. As described in section III.B.8 of this preamble, we find that, under these circumstances, biodiesel and heating oil produced from distillers sorghum oil via a transesterification process meets the 50 percent GHG reduction threshold required for advanced biofuel and biomass-based diesel. We also find that, under these circumstances, renewable diesel, jet fuel, naphtha, and LPG produced from distillers sorghum oil via a hydrotreating process meets the 50 percent GHG emission reduction threshold required for advanced biofuel.

As discussed in section IV of this preamble, EPA is also amending the RFS regulations to add a new definition for “distillers corn oil” that is consistent with the new definition of distillers sorghum oil. The definitional change for distillers corn oil was proposed in the November 2016 Renewable Enhancement and Growth Support proposed rule (the “November 2016 REGS proposed rule”).6 Although that rule proposed to revise the definition of corn oil extraction, after considering the comments received, we decided it was more appropriate to leave the definition of corn oil extraction unchanged, and instead add and define the term distillers corn oil. This new term, distillers corn oil, will replace the existing term, non-food grade corn oil (which some parties have found unclear) in rows F and H of Table 1 to 40 CFR 80.1426. The primary difference between the existing and new terms is that the new definition of distillers corn oil allows for the recovery of corn oil at additional points in the ethanol production process (provided certain conditions are met). Thus, although the new definition allows additional corn oil to be used as a feedstock in the relevant pathways, the same life cycle considerations apply and the analyses for those pathways are unaffected.7 The purpose and practical effect of this final rule, to allow corn oil extraction at more stages of ethanol production, closely match the notice of proposed rulemaking on this topic. In light of the practical similarity between “non-food grade corn oil” and “distillers corn oil” and to avoid implementation difficulties from continuing to administer registrations with obsolete terms, fuel producers who are currently registered for pathways that include non-food grade corn oil as a feedstock will need to update their registration to include distillers corn oil feedstock through a company update in EPA's Central Data Exchange (CDX). After the effective date of this final rule, including a reasonable transition period to allow for adequate time for registration updates to be initiated and processed, the non-food grade corn oil feedstock code will be removed and RINs will not be able to be generated using that feedstock code.8 Fuel producers will be instructed on how and when to remove the non-food grade corn oil feedstock from their registration.

6 81 FR 80828 (November 16, 2016).

7See 81 FR 80828, 80900 (“[W]e believe that the precise timing and method of corn oil extraction is not relevant for GHG reductions to be accomplished pursuant to pathways F and H, provided that: (1) The corn is converted to ethanol; (2) The corn oil is extracted at a point in the dry mill ethanol production process that renders it unfit for food uses without further refining; and (3) The resulting DGS from the dry mill operation is marketable as animal feed.”)

8 For more information on EPA's guidelines for registration updates see memo to the docket, “Registration Approach for Fuel Producers Transitioning from Non-Food Grade Corn Oil to Distillers Corn Oil Feedstock,” in Air Docket EPA-HQ-OAR-2017-0655.

With no known exceptions, ethanol plants that recover grain sorghum oil also, and in most cases simultaneously, recover corn oil by the same methods. Thus, for practical implementation purposes, it is important to finalize the distillers corn oil definitional changes in this rulemaking, to provide consistency between these regulatory definitions. Finally, we also include in this rulemaking pathways for biodiesel and heating oil produced from commingled distillers sorghum oil and distillers corn oil via a transesterification process, and renewable diesel, jet fuel, and, heating oil produced from commingled distillers sorghum and corn oil via hydrotreating processes.

III. Analysis of GHG Emissions Associated With Production of Biofuels From Distillers Sorghum Oil A. Overview of Distillers Sorghum Oil

Sorghum is native to Africa, but was introduced to the U.S. in the early 17th century. Grain sorghum belongs to the species Sorghum bicolor (L.) Moench,9 which has been bred for different purposes including use as a grain (grain sorghum), a source of sugar (sweet sorghum), and animal forage (biomass sorghum). In the U.S., grain sorghum is commonly used as animal feed similar to feed corn, although in some parts of the world it is more often grown for human consumption. Pathways for ethanol produced from grain sorghum were approved in a rule published on December 17, 2012 (77 FR 74592). We also discussed biomass sorghum in a Federal Register Notice published on December 31, 2014 (79 FR 78857). In that notice, we stated that EPA does not consider hybrids of Sorghum bicolor and Johnsongrass (Sorghum halepense) to be biomass sorghum. We would also not consider such hybrids to be grain sorghum. Johnsongrass hybrids are explicitly excluded due to concerns regarding their potential to behave as an invasive species.

9 See, U.S. Department of Agriculture Natural Resource Conservation Service, https://plants.sc.egov.usda.gov/core/profile?symbol=SOBI2, accessed July 02, 2018.

Dry mill ethanol and butanol 10 plants grind and ferment grain sorghum,11 produce ethanol or butanol from the fermented grain sorghum starch, and also produce a DGS co-product (made of non-fermentable solids, solubles syrup, and sorghum oil) that is sold as a type of livestock feed. A portion of the oil that would otherwise reside in the DGS can be recovered at the biofuel plant, typically through mechanical extraction. Sorghum oil is recovered through methods identical to that of corn oil recovered from DGS, and corn and sorghum oil recovery can occur at the same facilities.

10 Given that ethanol production far exceeds that of butanol, for the sake of brevity, this preamble often refers only to dry mill ethanol plants, but butanol plants are implied to be included in such references, unless stated otherwise.

11 Grain sorghum refers to Sorghum bicolor (L.) Moench ssp. Bicolor, see: https://plants.usda.gov/core/profile?symbol=sobib.

The recovered distillers corn and sorghum oils contain a high concentration of free-fatty acids, greater than ten percent by weight,12 and are unsuitable for human consumption without further refining. It can, however, be used without further refining as a biofuel feedstock or as an ingredient in animal feed. There are existing approved RFS fuel pathways for biofuels produced from distillers corn oil 13 to qualify for advanced biofuel (D-code 5) or biomass-based diesel (D-code 4) RINs, depending on the production process used (see rows F and H of Table 1 to 40 CFR 80.1426). This rulemaking establishes similar pathways for the use of distillers sorghum oil as currently exist for the use of distillers corn oil, and also establishes an additional pathway in row I of Table 1 to 40 CFR 80.1426, as discussed further below.

12 A Moreau, Robert & B Hicks, Kevin & Johnston, David & P. Laun, Nathan. (2010). The Composition of Crude Corn Oil Recovered after Fermentation via Centrifugation from a Commercial Dry Grind Ethanol Process. Journal of the American Oil Chemists' Society. 87. 10.1007/s11746-010-1568-z.

13 This rulemaking replaces the term “non-food grade corn oil” in the feedstock column of rows F and H of Table 1 to 40 CFR 80.1426 with “distillers corn oil.” See section VI of this preamble for further discussion.

In previous actions, EPA has approved pathways for the production of ethanol from grain sorghum made through a dry mill process as qualifying for renewable fuel (D-code 6) RINs, and in some cases advanced biofuel (D-code 5) RINs, depending on process energy sources used during production.14 In December 2016, EPA also approved (with conditions) a facility-specific pathway for advanced butanol (qualifying for (D-code 5) RINs) produced from grain sorghum as a feedstock.15

14 Table 1 to 40 CFR 80.1426, Rows R and S.

15 December 22, 2016 pathway approval for Gevo, Inc., https://www.epa.gov/renewable-fuel-standard-program/gevo-inc-approval.

Currently about 30 percent of grain sorghum grown, or 120 million bushels a year, goes towards ethanol production.16 Most of this production occurs in Texas, Oklahoma, and Kansas.17 For comparison, in recent years over 5,200 million bushels of corn have been used for ethanol production annually.18 Distillers sorghum oil can be produced at these facilities and used for biofuel production or other uses. However, it is still a relatively niche product, and the NSP petition anticipates that with approval of an RFS pathway, a potential of 12 to 21 million ethanol-equivalent gallons of biofuel would be produced from the distiller sorghum oil per year.

16 Sorghum Checkoff, “Renewables,” http://www.sorghumcheckoff.com/market-opportunities/renewables, accessed 09-05-2017, (EPA-HQ-OAR-2017-0655-0015).

17 USDA, NASS, “Sorghum for Grain 2016 Harvested Acres by County for Selected States,” https://www.nass.usda.gov/Charts_and_Maps/graphics/AS-HA-RGBChor.pdf, (EPA-HQ-OAR-2017-0655-0019).

18 USDA, ERS, “Table 5—Corn supply, disappearance, and share of total corn used for ethanol,” U.S. Bioenergy Statistics, https://www.ers.usda.gov/data-products/us-bioenergy-statistics/us-bioenergy-statistics/#Feedstocks, accessed 09-05-2017, (EPA-HQ-OAR-2017-0655-0021).

To the extent that distillers sorghum oil is used as a biofuel feedstock, it will often be produced together with distillers corn oil at ethanol plants using a combination of grain sorghum and corn as feedstocks for ethanol production. The commingled distiller sorghum and corn oils will then be shipped as a mixture to a different biofuel production facility for use as a feedstock.19 Due to the recovery process of the oils from the DGS, where the ethanol plant is using a feedstock that combines grain sorghum and corn, it is not possible to physically separate the distillers sorghum and corn oils into two streams, nor is it possible to account for the volume of sorghum oil or corn oil in this mixture. Due to this specific recovery process and inability to separate or allocate volume associated with each oil in the mixture, we are allowing the mixture of distiller sorghum and corn oil to be reported together as one volume. For example, the RFS regulations at 40 CFR 80.1451(b)(ii)(K) require renewable fuel producers to submit RIN generation reports that include the “types and quantities of feedstocks used” for each batch of renewable fuel produced or imported. The regulations do not specify a method for fuel producers to use in determining the quantity of each feedstock when the feedstocks are received as a commingled shipment, as would likely be the case for distillers corn oil and distillers sorghum oil. A number of commenters recommended that EPA clarify the treatment of mixed distillers corn and sorghum oil in the final rule. Based on these comments, we believe it is appropriate to clarify the treatment of commingled distillers corn and sorghum oils in this rule. Given our expectation that a large share of distillers sorghum oil will be mixed with distillers corn oil when it is recovered, from a practical standpoint, approving a distillers sorghum oil pathway without clearly allowing for the use of commingled shipments would unnecessarily constrain the use of these potential feedstocks. Further, we acknowledge that it is not practical to require parties to separate the oils from this mixture and report the distillers sorghum and corn oils as individual feedstocks. Taking these factors into consideration and for ease of implementation, we are adding “Commingled distillers corn and sorghum oils” as a feedstock to rows F and H of Table 1 to 40 CFR 80.1426. Thus, facilities producing fuel through these pathways can treat commingled distillers corn oil and distillers sorghum oil as a single feedstock and report the combined volume of these oils in RIN generation reports under 40 CFR 80.1451(b)(ii)(K). They may also generate RINs in accordance with the formula in 40 CFR 80.1426(f)(2) for renewable fuel that can be described by a single pathway.

19 See comment from the Renewable Fuels Association (EPA-HQ-OAR-2017-0655-0039) and NSP petition, (EPA-HQ-OAR-2017-0655-0005), pp. 8.

At this time, EPA is not adding “commingled distillers corn and sorghum oil” as a feedstock to row I of Table 1 to 40 CFR 80.1426 for the production of naphtha and LPG via a hydrotreating process. Non-food grade corn oil is not currently listed in that row, nor has EPA proposed to add it (or distillers corn oil). Thus, it would be premature for EPA to add either distillers corn oil or commingled distillers corn and sorghum oil as feedstocks in row I. Through the fuel pathway petition process, EPA previously approved two petitions allowing the generation of advanced biofuel (D-code 5) RINs for naphtha and LPG produced from non-food grade corn oil via a hydrotreating process.20 We intend to inform companies with existing facility-specific pathway approvals for non-food grade corn oil, granted through the 40 CFR 80.1416 petition process, that such pathway approvals will be interpreted by EPA as approvals for distillers corn oil. (This gives such producers the same treatment as producers who registered for non-food grade corn oil feedstock without first being approved for a facility-specific petition.) In order to generate (D-code 5) RINs for naphtha and/or LPG produced from distillers corn oil and/or commingled distillers corn and sorghum oil, a fuel producer would first need to petition EPA pursuant to 40 CFR 80.1416, have EPA review and approve their requested pathway, and then submit and have EPA accept the registration for the new pathway.

20 Renewable Energy Group's facility in Geismar, LA (https://www.epa.gov/renewable-fuel-standard-program/reg-geismar-approval-0) and Diamond Green Diesel's facility in Norco, LA (https://www.epa.gov/renewable-fuel-standard-program/diamond-green-diesel-llc-approval).

EPA sought comment in the December 2017 sorghum oil proposed rule on a proposed definition for distillers sorghum oil. We summarize comments received below, with a more detailed summary and analysis included in the docket for this rulemaking. EPA received one comment on the proposed definition, asking that EPA clarify the phrase “rendered unfit for food uses” to specify that this means human food uses and not animal food uses. In this comment EPA was also asked to finalize revisions to the definition of corn oil extraction that was proposed in the November 2016 REGS proposed rule. The requested clarification is consistent with EPA's intended meaning, and we are finalizing a definition that says, “the oil is unfit for human food use without further refining.” We are also removing the word “rendered” from this part of the definition, as it is unnecessary and seemed to raise questions for commenters without any clear benefit.

EPA received a number of comments on the November 2016 REGS proposed rule related to the proposed changes to the definition of corn oil extraction contained in that proposed rule. Based on these comments, we have made a number of changes to the proposed definition of distillers sorghum oil to ensure that it aligns with the definition of distillers corn oil. These comments and associated changes are discussed in section IV, and in more detail in a response to comment document in the docket for this rulemaking.

As part of this rule, we are adding a definition of distillers sorghum oil in 40 CFR 80.1401. So long as the criteria in the definition are met, a variety of recovery methods could be implemented. For example, this would include recovery of sorghum oil before fermentation from the slurry or from liquefaction tanks. It would also include recovery of sorghum oil after fermentation from the thin stillage and/or DGS. Further, it would also include recovery of sorghum oil by a third-party, and/or at a separate location from the biofuel plant. The definition of distillers sorghum oil is consistent with the definition of distillers corn oil, which is also being finalized in this rule (see section IV of this preamble).

B. Analysis of Lifecycle GHG Emissions

EPA evaluated the GHG emissions associated with using distillers sorghum oil as a biofuel feedstock based on information provided by the petitioner, input from the U.S. Department of Agriculture (USDA), public comments, and other available data sources. GHG emissions include emissions from production and transport of grain sorghum, the production and transport of distillers sorghum oil; the processing of the oil into biofuel; transport of the biofuel from the production facility to the fuel-blender; and, ultimately the use of the biofuel by the end consumer.

EPA's lifecycle analyses include significant direct and indirect GHG emissions (including such emissions from land use changes) associated with producing a feedstock and transporting it to the processing facility. All of the emissions associated with growing, harvesting, and transporting grain sorghum as a biofuel feedstock were calculated and taken into account in EPA's evaluation of the lifecycle GHG emissions associated with grain sorghum ethanol and butanol.21

21 See the December 17, 2012 grain sorghum ethanol final rule (77 FR 74592).

In the proposed rule we described our preliminary finding that biofuels produced from distillers sorghum oil reduce lifecycle GHG emissions by approximately 80 percent compared to the petroleum baseline. These results assumed zero indirect GHG emissions related to compensating for oil removal from DGS, based on the premise that certain types of livestock benefit from lower-fat DGS and therefore removing the sorghum oil would not result in significant indirect impacts. EPA received two comments arguing that extracting distillers sorghum oil from DGS reduces the mass, calorific, and fat content of the DGS, and that there would be significant indirect GHG emissions associated with replacing these losses with other sources of livestock feed. As discussed below, we have adjusted our analysis based on these comments and conducted further analysis to estimate the potential indirect GHG emissions associated with replacing the extracted distillers sorghum oil. After accounting for these emissions, based on available information and reasonable assumptions to account for uncertainties, our revised analysis continues to show that biofuels produced from distillers sorghum oil satisfy the 50 percent lifecycle GHG reduction threshold required to qualify as advanced biofuel or biomass-based diesel. Finally, some commenters on the proposed distillers sorghum oil rule suggested that EPA has an obligation to engage in consultation with the United States Fish and Wildlife Service and/or that National Marine Fisheries Service under Section 7 of the Endangered Species Act prior to finalizing the rule. Such consultation is required for actions in which the Agency has discretion to tailor its actions for the benefit of threatened or endangered species, or their critical habitat, and where the action in question “may effect” listed species. However, as described in the Response to Comments Document accompanying this rule, EPA does not have discretion under the statute to take into consideration possible impacts to threatened or endangered species or their critical habitat in determining which biofuels qualify under the renewable fuel standard program as advanced biofuel or biomass-based diesel and, even if it did have such discretion, today's rule will have no effect on threatened or endangered species. As a result, Section 7 consultation is not required.

1. Livestock Sector Impacts

During a typical dry mill fermentation process, DGS are produced. These DGS are then used as animal feed, thereby displacing feed crops and the GHG emissions associated with growing and transporting those feed crops. After distillers sorghum oil is removed, DGS continue to be produced and sold as livestock feed, but with reduced oil content.

We do not expect sorghum oil removal to have significant impact on the types and quantities of feed used in the livestock market. EPA's modeling for the December 2012 grain sorghum ethanol final rule assumed average dried DGS yield of 17 pounds per bushel of grain sorghum feedstock.22 The oil content of full oil DGS is approximately 1.71 pounds per bushel,23 of which approximately 0.67-0.88 pounds per bushel of grain sorghum feedstock can be recovered using commercially available mechanical extraction technologies.24 When oil is recovered from the DGS, the total mass of DGS produced could be reduced by up to approximately 6 percent. However, DGS from grain sorghum represents less than 3 percent of DGS fed to domestic livestock.25 Even if all distillers sorghum oil were removed from livestock feed, the overall impact on the livestock sector would be extremely small. To the extent that sorghum DGS are likely to be fed in combination with corn DGS and other livestock feed ingredients, the changes in oil content on the combined feed could potentially be too small to discern.26 In that case, it is unlikely that feedstock suppliers would find a need to replace the distillers sorghum oil with other oils. As mentioned previously, EPA has an existing pathway approved for non-food grade corn oil, now referred to as distillers corn oil. Much of the current corn DGS on the feed market is already de-oiled, and because all known current facilities using sorghum blend with corn DGS, we do not expect any significant changes in oil concentrations from what already exists on the market. However, based on the comments received, we have conducted additional analysis on the potential indirect GHG emissions impacts on a per pound of oil extracted basis.

22 See 77 FR 74592 (December 17, 2012).

23 NSP petition (EPA-HQ-OAR-2017-0655-0005), Attachment 4, pp. 7.

24 0.88 pounds removal is at the highest end of the information NSP provided and corresponds to a fat content in reduced-oil distillers grains of 3.91% rather than 7.2% which NSP considers as a more likely outcome.

25 NSP petition (EPA-HQ-OAR-2017-0655-0005), pp. 19. And, AgMRC, “Estimated U.S. Dried Distillers Grains with Solubles (DDGS) Production & Use,” https://www.extension.iastate.edu/agdm/crops/outlook/dgsbalancesheet.pdf, (EPA-HQ-OAR-2017-0655-0006).

26 See Air Docket EPA-HQ-OAR-2017-0655, U.S. Department of Agriculture, Office of the Chief Scientist and Office of the Chief Economist, “Memorandum: Technical responses on EPA assumptions related to the lifecycle GHG assessment of the proposed grain oil sorghum biofuel pathway,” March 15, 2018, pp. 4.

Chemically, full-oil and reduced-oil sorghum DGS share similar compositions; they are primarily made up of crude protein, fat, and natural and acid detergent fibers.27 Where the two products differ most significantly is in their acid detergent fiber and fat concentrations.

27 Neutral detergent fibers measure the amount of structural component of plants, while acid detergent fibers measure the least digestible plant components.

Table III.1 shows the key constituents that make up dried full-oil and reduced-oil DGS.

28 The chart lists the most prominent constituents in distillers grains. Data provided by the National Sorghum Producers, see Air docket EPA-HQ-OAR-2017-0655. Data for full-oil sorghum DDGS is sourced from Nutrient Requirements of Swine, 2012 National Academies Press, Washington, DC, pp 329. Data for reduced-oil Sorghum DDGS was calculated by National Sorghum Producers using the ratio of (1) corn DDGS, between 6 to 9 percent Oil; and (2) corn DDGS, less than 4 percent oil from Nutrient Requirements of Swine, 2012 National Academies Press, Washington, DC, pp. 266 and 267.

Table III.1—Key Nutrient Make-Up of Full-Oil and Reduced-Oil Dried Distillers Grains With Solubles (DDGS) Derived From Grain Sorghum 28 Nutrient Full-oil
  • sorghum
  • DDGS
  • Reduced-oil
  • sorghum
  • DDGS
  • Crude Protein, % 30.80 31.36 Crude Fat, % (aka Ether Extract) 9.75 3.91 Neutral Detergent Fiber (NDF), % 33.60 37.23 Acid Detergent Fiber (ADF), % 22.68 31.91 Ash, % 6.62 7.60 Calcium, % 0.12 0.08 Phosphorus, % 0.76 0.96 Lysine, % 0.82 0.62 Methionine, % 0.54 0.47 Cystine, % 0.53 0.61 Tryptophan, % 0.25 0.23

    EPA received two comments 29 regarding the potential greenhouse gas impacts on the livestock sector if the distillers oil is removed. One potential impact is based on whether a lower crude fat concentration would require changes in the livestock feed composition to make up for the nutritional loss to the livestock (nutritional impacts). The second potential impact is related to the physical reduction in DGS mass resulting from the oil recovery (mass loss). We address both of these potential impacts in the following sections.

    29 EPA-HQ-OAR-2017-0655-0041, 0042.

    a. Nutritional Impacts

    The key issue associated with the first potential impact is whether the reduced calories would impact the amount of feed displaced through the use of sorghum DGS. Should fat content not be at sufficient levels, livestock producers might need to add nutrients or other types of feed to meet appropriate nutritional targets. This is reflected in the “displacement rate” of a DGS, which indicates how much weight a pound of distillers grain can replace of another feed. A lower feed displacement rate for a reduced-oil distillers grain as compared to a full-oil distillers grain could result in additional GHG emissions as it suggests that additional feed is required to replace the missing oil. Displacement rates are calculated by taking into account nutrient and energy requirements of livestock and their respective recommended DGS inclusion rates to maintain animal performance.30 The next section (III.B.1.b. Mass Loss), describes how we used the displacement rate to analyze the emissions impacts associated with the removal of oil from sorghum DGS.

    30 For more detail see, Arora et al., (2008). Argonne National Laboratory. “Update of distillers grains displacement ratios for corn ethanol life‐cycle analysis” (EPA-HQ-OAR-2017-0655-0007).

    Research suggests that for several livestock types there are performance improvements, per pound of DGS, when oil content of fed-DGS is removed. For instance, for poultry and swine, “increased concentrations of free fatty acids have a negative impact on lipid digestion and energy content.” 31 Free fatty acids are a class of acids that form part of a lipid molecule. Full-oil DGS typically contain higher levels of free fatty acids and thus may have a negative impact on the fat digestion of poultry and swine. Thus, while the fat content may be lower for reduced-oil DGS, per pound feeding values of this product may not be lower than full-oil DGS for poultry and swine and the feed displacement rate may not be lower for reduced-oil versus full-oil DGS.

    31 Kerr, B.J., W.A. Dozier, and G.C. Shurson. (2016). “Lipid digestibility and energy content of distillers' corn oil in swine and poultry,” Journal of Animal Science. 94:2900-2908. doi:10.2527/jas.2016-0440, pp. 2905 (EPA-HQ-OAR-2017-0655-0010).

    For dairy, there are also benefits from feeding reduced-oil DGS as compared to full-oil DGS. Research on dairy cows shows that reduced-oil DGS produce a lessened likelihood of the onset of milk fat depression.32 Milk fat depression occurs when milk fat is reduced by 0.2 percent or more.33 If milk fat depression occurs over the long term, a decline in overall milk production may occur as well as worsened health conditions of the herd. High fat diets have been linked with this condition and have been shown to worsen the rumen environment of dairy cattle.34 Therefore, dairy producers seek to avoid high fat diets. Given the benefits of reduced-oil DGS over full-oil DGS for milk fat production, it is expected that reduced-oil DGS will be preferred over full-oil DGS by dairy producers and that feed displacement rates will be no lower than those of full-oil DGS.

    32 H.A. Ramirez-Ramirez, E. Castillo Lopez, C.J.R. Jenkins, N.D. Aluthge, C. Anderson, S.C. Fernando, K.J. Harvatine, P.J. Kononoff, (2016). “Reduced-fat dried distillers grains with solubles reduces the risk for milk fat depression and supports milk production and ruminal fermentation in dairy cows,” Journal of Dairy Science, Volume 99, Issue 3, Pages 1912-1928, ISSN 0022-0302, http://dx.doi.org/10.3168/jds.2015-9712. (http://www.sciencedirect.com/science/article/pii/S0022030216000515), (EPA-HQ-OAR-2017-0655-0014).

    33 University of Kentucky, “Preventing Milk Fat Depression in Dairy Cows,” https://afs.ca.uky.edu/dairy/preventing-milk-fat-depression-dairy-cows. Accessed September 08, 2018, (EPA-HQ-OAR-2017-0655-0017). On the herd level milk fats range from 3 to 5 percent normally. Oetzel, Garret R., “Subacute Ruminal Acidosis in Dairy Herds: Physiology, Pathophysiology, Milk Fat Responses, and Nutritional Management.” Preconference Seminar 7A: Dairy Herd Problem Investigation Strategies: Lameness, Cow Comfort, and Ruminal Acidosis, American Association of Bovine Practitioners, 40th Annual Conference, September 17, 2007—Vancouver, BC, Canada, https://www.vetmed.wisc.edu/dms/fapm/fapmtools/2nutr/sara1aabp.pdf pp.98. (EPA-HQ-OAR-2017-0655-0012).

    34 Penn State Extension, “Troubleshooting Problems with Milkfat Depression,” August 14, 2017, https://extension.psu.edu/troubleshooting-problems-with-milkfat-depression. Accessed September 08, 2017, (EPA-HQ-OAR-2017-0655-0016).

    An impact on displacement rates may occur when reduced-oil instead of full-oil DGS are used for beef cattle, which require additional fat. Table III.2 shows the displacement ratios for the livestock sectors where dried DGS (DDGS) are used. In this table, for instance, 1 pound of reduced-oil DDGS fed to beef cattle displaces 1.173 pounds of corn, as opposed to 1.196 pounds of corn for full-oil DDGS. A pound of full-oil and reduced-oil DDGS also displaces equal amounts (0.056 pounds) of urea. Urea is a non-protein nitrogen compound that is typically fed to cattle for aiding the production of protein by rumen microbes.35 These values show that for dairy, swine, and poultry, reduced-oil DDGS replace the same amounts of alternative feed despite containing less oil than full-oil DDGS. This is not the case, however, with respect to beef cattle.

    35 Penn State Extension, “Urea in Beef Cattle Rations,” August 08, 2017, https://extension.psu.edu/urea-in-beef-cattle-rations. Accessed October 18, 2017, (EPA-HQ-OAR-2017-0655-0018).

    Table III.2—Full-Oil and Reduced-Oil Sorghum Distillers Grains With Solubles Displacement Ratios 36 [lb of ingredient/lb of sorghum distillers grains with solubles, dry matter basis] Ingredient Beef cattle Full-oil Reduced-oil Dairy cattle Full-oil Reduced-oil Swine Full-oil Reduced-oil Poultry 37 Full-oil Reduced-oil Corn 1.196 1.173 0.731 0.731 0.890 0.890 0.292 0.292 Soybean Meal 0.633 0.633 0.095 0.095 Urea 0.056 0.056 b. Mass Loss

    The second issue raised by the commenters on potential livestock indirect GHG impacts 38 relates to the potential impacts of mass reduction from the removal of oil from sorghum DGS. The commenters also suggested that EPA consider the impacts of feeding reduced-oil sorghum DGS to all types of livestock rather than those where performance gains were likely to be seen. In evaluating these comments, EPA has undertaken additional analysis to account for the potential indirect GHG emissions associated with this “mass loss” effect. Since sorghum accounts for less than 3 percent of the domestically consumed distillers grains, there is very little market data on the impacts of removing oil from the sorghum DGS on the livestock sector. EPA, therefore, has relied on the expertise of USDA to inform the livestock sector impact analysis described below.39

    36 Information provided by National Sorghum Producers, see Air docket EPA-HQ-OAR-2017-0655, using the following sources Arora et al., (2008). Argonne National Laboratory. “Update of distillers grains displacement ratios for corn ethanol life‐cycle analysis,” (EPA-HQ-OAR-2017-0655-0007); Kerr et al., (2016). “Lipid digestibility and energy content of distillers' corn oil in swine and poultry,” Journal of Animal Science 94:2900-8, (EPA-HQ-OAR-2017-0655-0010); Opheim et al., (2016). “Biofuel feedstock and blended coproducts compared with deoiled corn distillers grains in feedlot diets: Effects on cattle growth performance, apparent total tract nutrient digestibility, and carcass characteristics,” Journal of Animal Science 94:227, (EPA-HQ-OAR-2017-0655-0013); Ramirez et al., (2016). “Reduced-fat dried distillers grains with solubles reduces the risk for milk fat depression and supports milk production and ruminal fermentation in dairy cows,” Journal of Dairy Science 99:1912-28, (EPA-HQ-OAR-2017-0655-0014). Poultry displacement ratios were provided by the National Sorghum Producers and calculated based on data from the Iowa State Extension Services, Agricultural Marketing and Resources Center, “Estimated U.S. Dried Distillers Grains with Solubles (DDGS) Production and Use,” https://www.extension.iastate.edu/agdm/crops/outlook/dgsbalancesheet.pdf (EPA-HQ-OAR-2017-0655-0006).

    37 Protein sources such as soybean meal can be used to supplement sorghum DGS for poultry.

    38 EPA-HQ-OAR-2017-0655-0041, 0042.

    39 See, U.S. Department of Agriculture, Office of the Chief Scientist and Office of the Chief Economist, “Memorandum: Technical responses on EPA assumptions related to the lifecycle GHG assessment of the proposed grain oil sorghum biofuel pathway,” March 15, 2018, Air Docket EPA-HQ-OAR-2017-0655.

    When oil is removed from the sorghum DGS, the distillers grains decrease in mass. Although feed rations are complex, for the purposes of conducting this analysis, in USDA's judgement it is a reasonable assumption to use corn to substitute for the mass loss due to sorghum oil recovery. Corn is a relatively low cost primary product that is readily available in the locations where sorghum oil is produced.40 Furthermore, USDA experts noted that to the extent that other materials such as crop residues or waste from the human food supply system were available and used instead, they would likely have a lower GHG profile than corn.41 To the extent that these other materials may be used, assuming corn substitutes for mass loss is a conservative assumption for a GHG emissions perspective.42

    40 Corn is demonstrably cheaper than other feedstock replacements. For instance, in the U.S. corn in the 2016/2017 season averaged $0.06/lb whereas, soy oil in 2017 averaged $0.32/lb and corn oil averaged $0.28. See USDA ERS, Feed Grains Yearbook, https://www.ers.usda.gov/data-products/feed-grains-database/feed-grains-yearbook-tables.aspx (accessed on June 14, 2018) and USDA Vegetable Oils and Animal Fats, Oil Crop Yearbook, https://www.ers.usda.gov/data-products/oil-crops-yearbook.aspx (accessed on June 06, 2018).

    41 See, U.S. Department of Agriculture, Office of the Chief Scientist and Office of the Chief Economist, “Memorandum: Technical responses on EPA assumptions related to the lifecycle GHG assessment of the proposed grain oil sorghum biofuel pathway,” March 15, 2018, Air Docket EPA-HQ-OAR-2017-0655.

    42 The purpose of lifecycle assessment under the RFS program is not to precisely estimate lifecycle GHG emissions associated with particular biofuels, but instead to determine whether or not the fuels satisfy specified lifecycle GHG emissions thresholds to qualify as one or more of the four types of renewable fuel specified in the statute. Where there are a range of possible outcomes and the fuel satisfies the GHG reduction requirements when “conservative” assumptions are used, then a more precise quantification of the matter is not required for purposes of a pathway determination.

    To calculate the impact of the mass loss and the greenhouse gas emission impacts from the substitution of corn for sorghum DGS, EPA used data obtained from a study conducted by Argonne National Laboratory and estimates from NSP for the displacement of feed by DGS by livestock type (see Table III.2). Using these data, we calculated a substitution rate for how much corn would be needed for every pound of grain sorghum oil diverted to biofuel production, by livestock type (see Table III.3 below).43

    43 See, Summary for the Final Rule of Key Assumptions for EPA's Analysis of the Lifecycle Greenhouse Gas Emissions Associated with Biofuels Produced from Distillers Sorghum Oil and Distiller Sorghum Oil LCA Spreadsheet, Air Docket EPA-HQ-OAR-2017-0655.

    Table III.3—Feed Substitution Ratio Livestock type Feed
  • substitute
  • Substitution
  • ratio
  • (lb feed
  • substitute/lb
  • oil extracted)
  • Beef Corn 1.551 Dairy Corn 0.731 Swine Corn 0.890 Poultry Corn 0.292

    Using the national average shares for DDGS use by livestock type,44 we calculated a weighted average 1.2 pounds of corn substituted per pound of distillers sorghum oil removed. Based on our modeling for the March 2010 RFS rule, we have used an emissions factor of 0.27 kgCO2e per pound of corn produced, transported and consumed.45 The product of these values gives a livestock sector impact of 0.31 kgCO2e per pound of distillers sorghum oil, which represents the potential indirect emissions resulting from additional corn produced to substitute for a loss in sorghum DGS on a per pound of oil extracted basis. The product of this value and the yield for each type of biofuel (pounds of distillers sorghum oil per mmBtu of fuel) results in the livestock sector GHG impacts listed in the results table in section III.B.8 of this preamble.

    44 The data comes from the medium projections for the year 2016-2017 from AgMRC, “Estimated U.S. Dried Distillers Grains with Solubles (DDGS) Production & Use,” https://www.extension.iastate.edu/agdm/crops/outlook/dgsbalancesheet.pdf, (EPA-HQ-OAR-2017-0655-0006).

    45 See the docket memo “Summary for the Final Rule of Key Assumptions for EPA's Analysis of the Lifecycle Greenhouse Gas Emissions Associated with Biofuels Produced from Distillers Sorghum Oil,” Air Docket EPA-HQ-OAR-2017-0655, for more details.

    2. Feedstock Production

    Distillers sorghum oil is removed from DGS at dry mill biofuel plants using the same equipment and technologies used for distillers corn oil recovery. Oil recovery requires thermal energy to heat the DGS and electricity to power centrifuges, pumps and other oil recovery equipment. Our analysis for the March 2010 RFS final rule,46 the NSP petition, and two studies,4748 indicate that although extracting oil from DGS uses thermal energy, it also leads to relatively less thermal energy being used later in the process to dry the DGS, resulting in an overall negligible change in thermal energy requirements for plants that dry their DGS. Our analysis here includes both the thermal and electrical energy requirements to remove the distillers sorghum oil. We do not account for the reduction in thermal energy needed for DGS drying mentioned above, so this can be viewed as a conservative approach (i.e., resulting in higher estimated GHG emissions) for plants that dry their DGS. Based on our review of the data,49 we assume 200 Btu (British thermal units) of grid electricity and 800 Btu of natural gas are used to recover distillers sorghum oil from DGS, per pound of distillers sorghum oil recovered. These parameters are based on energy requirements associated with extracting oil from DGS at dry mill ethanol plants, but we believe they are also appropriate and conservative in cases where the oil is recovered at any point downstream from sorghum grinding.50

    46 See section 1.4.1.3 of USEPA (2010). Renewable fuel standard program (RFS2) regulatory impact analysis. U.S. Environmental Protection Agency Office of Transportation Air Quality, EPA-420-R-10-006. Washington, DC. https://www.epa.gov/sites/production/files/2015-08/documents/420r10006.pdf.

    47 Wang, Z., et al. (2015). “Influence of corn oil recovery on life-cycle greenhouse gas emissions of corn ethanol and corn oil biodiesel.” Biotechnology for Biofuels 8(1): 178, (EPA-HQ-OAR-2017-0655-0020).

    48 Mueller, S., Kwik, J. (2013). “2012 Corn Ethanol: Emerging Plant Energy and Environmental Technologies.”

    49 See sources referenced in footnotes 20 and 21 for energy use associated with oil extraction, and California Air Resources Board (2014), (EPA-HQ-OAR-2017-0655-0011). “California-Modified GREET Fuel Pathway: Biodiesel Produced in the Midwestern and the Western U.S. from Corn Oil Extracted at Dry Mill Ethanol Plants that Produce Wet Distiller's Grains with Solubles.” Staff Summary, Method 1 Fuel Pathway (EPA-HQ-OAR-2017-0655-0009).

    50 There are limited data on the energy efficiency of alternative oil extraction technologies. Oil extraction earlier in the dry mill process would offer energy efficiency benefits later in the process, as moving oil through the fermentation and ethanol recovery processes tends to increase energy requirements. Recovery further downstream at a separate location would likely include chemical extraction techniques that would yield higher levels of oil. Overall, we expect any differences to be small in the context of this distillers sorghum oil analysis.

    3. Feedstock Transport

    In our analysis, distillers sorghum oil is transported 50 miles by heavy duty truck from the dry mill ethanol plant to the biodiesel or hydrotreating facility where it is converted to transportation fuel. GHG emissions associated with feedstock transport are relatively small, and modest changes in transport distance would not affect the threshold determinations based on our analysis.

    4. Feedstock Pretreatment

    For emissions from feedstock pretreatment and fuel production, we perform two analyses. In the first analysis, we calculate the emissions from biodiesel and heating oil produced using transesterification. In the second analysis, we calculate the emissions from renewable diesel, jet fuel, LPG, and naphtha, produced using hydrotreating.

    Before distillers sorghum oil is converted to biodiesel via transesterification, it is processed to remove free-fatty acids. This process requires thermal energy. Our evaluation of yellow grease for the March 2010 RFS final rule included 14,532 Btu of natural gas per gallon of biodiesel produced for pretreatment, and we have applied the same assumption for this analysis. According to the NSP petition, distillers sorghum oil has free fatty acid content near or below 15 percent, which is in the range of yellow grease free fatty acid contents (<15 percent).51 Our assumption on pretreatment thermal energy use for distillers sorghum oil is higher than thermal energy use in other (non-EPA) lifecycle assessments of high free-fatty acid biodiesel feedstocks that we have reviewed,52 and can be viewed as a conservative assumption (i.e., resulting in higher GHG emissions).

    51 See Table 15 in the January 5, 2012 Pathways I direct final rule (77 FR 722).

    52 See for example: California Environmental Protection Agency Air Resources board, https://www.arb.ca.gov/fuels/lcfs/2a2b/apps/co_bd_wdgs-rpt-102414.pdf, (EPA-HQ-OAR-2017-0655-0008).

    Pretreatment to remove free-fatty acids is not required when distillers sorghum oil is used to produce renewable diesel, jet fuel, LPG and naphtha through a hydrotreating process.

    5. Fuel Production

    For biodiesel production, we used the transesterification analysis for the March 2010 RFS rule for yellow grease biodiesel.53 Based on comparison of this yellow grease analysis and the mass and energy balance data in the NSP petition, submitted under claim of CBI, the conversion of yellow grease and distillers sorghum oil are expected to require similar energy inputs and yield similar amounts of biodiesel as output.

    53 For details see section 2.4 of the RIA for the March 2010 RFS final rule.

    For production of renewable diesel, jet fuel, naphtha and LPG via a hydrotreating process, we used the same data and approach as used in the March 2013 Pathways I rule,54 and subsequent facility-specific petitions involving hydrotreating processes.55 The March 2013 Pathways I rule evaluated two hydrotreating configurations: One optimized for renewable diesel production and one optimized for jet fuel production. For this analysis we evaluated a hydrotreating process maximized for renewable diesel production, as that is the most common configuration. The jet fuel configuration results in higher emissions (approximately 5 kgCO2e/mmBtu higher), but the threshold GHG reduction results discussed below are not sensitive to this assumption.

    54 See 78 FR 14190 (March 5, 2013).

    55 For determination documents responding to facility specific petitions, see: https://www.epa.gov/renewable-fuelstandard-program/approved-pathways-renewable-fuel.

    Our previous analyses of hydrotreating processes have applied an energy allocation approach for RIN-generating co-products that qualify as renewable fuel.56 This approach results in higher lifecycle GHG emissions for each of the fuel products than other approaches considered, such as a displacement approach, and thus can be viewed as a conservative approach. We have used this approach in assessing GHG emissions impacts of fuels derived from distillers sorghum oil.

    56 See the March 2013 Pathways I rule, specifically 78 FR 14198-14200 (March 5, 2013).

    In the allocation approach, all the emissions from the hydrotreating process are allocated across all co-products. There are a number of ways to do the allocation, for example on the basis of energy, mass, or economic value. Consistent with the approach taken in the hydrotreating analysis for the March 2013 RFS rule, for this analysis of fuels produced from distillers sorghum oil feedstock through a hydrotreating process, we allocated emissions to the renewable diesel, naphtha and LPG based on the energy content (using lower-heating values) of the products produced. Emissions from the process were allocated equally to all of the Btus of fuel produced. Therefore, on a per Btu basis, all of the primary products coming from the hydrotreating facility have the same emissions from the fuel production stage of the lifecycle. For this analysis, the energy content was the most appropriate basis for allocating emissions because all of the fuel products are used as sources of energy. Energy content also has the advantage of being a fixed factor as opposed to market prices which fluctuate over time.

    6. Fuel Distribution

    We used the fuel distribution results from the biodiesel analysis for the March 2010 RFS rule. Fuel distribution emissions are relatively small compared to baseline lifecycle GHG emissions (see Table III.4: Lifecycle GHG Emissions Associated With Biofuels Produced From Distillers Sorghum Oil (kgCO2-eq/MJ) below), and although they may be different for different types of fuel, for the purposes of this analysis we assumed that heating oil, renewable diesel, jet fuel, LPG, and naphtha have the same fuel distribution emissions as biodiesel per mmBtu of fuel used.

    7. Fuel Use

    For this analysis we applied fuel use emissions factors developed for the March 2010 RFS final rule. We used the biodiesel emissions factor for biodiesel and biodiesel used as heating oil. For renewable diesel and jet fuel we used the emissions factors for non-CO2 GHGs for baseline diesel fuel. For naphtha we used the emissions factors for non-CO2 GHGs for baseline gasoline fuel. For LPG we used the LPG non-CO2 emissions factor developed for the March 2010 RFS rule. The tailpipe emissions are relatively small, and the threshold GHG reduction results are not sensitive to these assumptions. More details on our analysis of fuel use emissions are described in a memo 57 to the rulemaking docket.

    57 See, “Summary of Key Assumptions for EPA's Analysis of the Lifecycle Greenhouse Gas Emissions Associated with Biofuels Produced from Distillers Sorghum Oil,” Air Docket EPA-HQ-OAR-2017-0655.

    8. Results of GHG Lifecycle Analysis

    Table III.4 shows the lifecycle GHG emissions associated with biofuels produced from distillers sorghum oil that result from our assessment. The table also shows the percent reduction relative to the petroleum baseline. All of the fuels are compared to the diesel baseline, except for naphtha which is compared to the gasoline baseline. Based on the lifecycle GHG emissions results presented above, all of the pathways evaluated meet the 50 percent GHG reduction threshold required for advanced biofuel and biomass-based diesel.

    Table III.4—Lifecycle GHG Emissions Associated With Biofuels Produced From Distillers Sorghum Oil [kgCO2-eq/MJ] Fuel Biodiesel,
  • heating oil
  • Renewable
  • diesel,
  • jet fuel
  • Naphtha LPG 2005 Diesel
  • baseline
  • 2005 Gasoline
  • baseline
  • Production process Transesterification Hydrotreating Refining Livestock Sector Impacts 20.7 19.4 19.4 19.4 Feedstock Production 6.6 6.2 6.2 6.2 18.0 19.2 Feedstock Transport 0.3 0.3 0.3 0.3 Feedstock Pretreatment 8.4 Fuel Production 1.2 8.0 8.0 8.0 Fuel Distribution 0.8 0.8 0.8 0.8 Fuel Use 0.7 0.7 1.7 1.5 79.0 79.0 Total 38.7 35.4 36.4 36.2 97.0 98.2 Percent Reduction 60 64 63 63
    .IV. Definition of Distillers Corn Oil

    In the March 2010 RFS final rule, EPA established two pathways (pathways F and H in Table 1 to 40 CFR 80.1426) for biomass-based diesel (D-code 4) or advanced biofuel (D-code 5) made from “non-food grade corn oil.” The lifecycle GHG analyses for these pathways were based on the EPA's modeling of corn oil recovered from DGS produced by a dry-mill corn ethanol plant through corn oil extraction. In the November 2016 REGS proposed rule, EPA proposed to revise pathways F and H in Table 1 to 40 CFR 80.1426 to specify that the feedstock is “oil from corn oil extraction,” rather than “non-food grade corn oil,” and to include a revised and somewhat broadened definition of “corn oil extraction” relative to the 2010 definition.58

    58 See section VII.B of the November 2016 REGS proposed rule (81 FR 80900-01).

    The proposed definitional change was motivated by the evolution of corn oil extraction technology within the ethanol industry, which allows ethanol producers to recover corn oil at different locations in the ethanol production process, with potential energy efficiency and ethanol yield benefits.

    In the November 2016 REGS proposed rule, EPA reasoned that the precise timing and method of corn oil extraction are not relevant for meeting the 50 percent GHG reduction threshold associated with pathways F and H, provided that a number of conditions are satisfied. Specifically, EPA proposed the following definition for corn oil extraction: “Corn oil extraction means the recovery of corn oil at any point downstream of when a dry mill corn ethanol plant grinds the corn, provided that the corn is converted to ethanol, the oil is rendered unfit for food uses without further refining, and the oil extraction results in distillers grains marketable as animal feed.” This definitional change was intended to both address the developments in corn oil extraction and to define the conditions under which corn oil qualifies as a feedstock for the purposes of Table 1.

    As explained below, rather than the approach proposed in the 2016 REGS proposed rule, which would have revised the term “corn oil extraction” and replaced “non-food grade corn oil” with “oil from corn oil extraction” in rows F and H, EPA is instead leaving the definition of “corn oil extraction” as-is and is finalizing a definition for the term “distillers corn oil” that will be used in Table 1. The substance of the definition of “distillers corn oil” finalized here is consistent with the proposed definition for “corn oil extraction,” other than changes made in response to comments. Thus, based on the comments received on the November 2016 REGS proposed rule, EPA is taking the following actions in this rulemaking: (1) Table 1 to 40 CFR 80.1426 is revised to replace the term “Non-food grade corn oil” with “Distillers corn oil” in rows F and H; and (2) 40 CFR 80.1401 is revised to add a definition of “distillers corn oil”.

    The approach taken in this rule preserves the existing meaning of corn oil extraction for the purpose of the second row of Table 2 to 40 CFR 80.1426 (the “corn oil extraction advanced technology”); our intent was to broaden the non-food grade corn oil pathways listed in Table 1 to 40 CFR 80.1426, not to modify the corn oil extraction advanced technology specified in Table 2, which is relevant for corn starch ethanol pathways. The corn oil extraction advanced technology was included in the regulations based on analysis completed in the March 2010 RFS rule for pathways in rows A and B of Table 1 that can include extracting oil from whole stillage and/or derivatives of whole stillage, thus reducing energy use at dry mill ethanol plants.59 In order to avoid altering the scope of corn oil extraction for the purpose of Table 2 (which involves different pathways than rows F and H), it is most appropriate to create a new definition for distillers corn oil and to preserve the existing definition of corn oil extraction. Incidentally, we generally anticipate that corn oil recovered through corn oil extraction as listed in Table 2 to 40 CFR 80.1426 should be able to qualify as distillers corn oil (provided it satisfied all of the definitional requirements) for the purpose of the pathways in rows F and H in Table 1; however, not all distillers corn oil will necessarily be recovered by processes that qualify as corn oil extraction. The comments received on EPA's proposed corn oil definitional changes are summarized below, with a more detailed summary and analysis included in the docket for this rulemaking.

    59 EPA has consistently viewed the non-food grade corn oil pathways as only available for facilities that extract corn oil produced at dry mill corn ethanol plants (see letter from Karl Simon of EPA to John W. Bode of the Corn Refiners Association, dated October 24, 2013). The change from “non-food grade corn oil” to “distillers corn oil” and the associated definition will more clearly articulate this and other requirements for purposes of Table 1.

    Four commenters on the November 2016 REGS proposed rule supported EPA's proposed revision to the definition of corn oil extraction.60 They said the proposed changes were needed to update the definition based on technological changes in the industry, and to provide a level playing field for new oil extraction methods. Seven commenters supported the proposed revisions and recommended the relatively small revisions discussed below.61 EPA also received four comments on the December 2017 sorghum oil proposed rule that supported finalizing the expanded definition of corn oil as part of this rulemaking.62 While EPA is not finalizing the definition of “corn oil extraction” that was proposed in the REGS rule, EPA believes that the approach being finalized today addresses the concerns of these commenters, as well as those of other commenters who raised questions about continued use of the term “non-food grade corn oil.”

    60 EPA-HQ-OAR-2016-0041-0231, 0296, 0307 and 0313. For convenience, EPA is providing citations to the docket for the REGS proposed rule for comments that were filed in that docket on proposed changes to the regulations for corn oil, but these comments have also been included in the docket for this action.

    61 EPA-HQ-OAR-2016-0041-0243, 0246, 0260, 0266, 0267, 0277 and 0286.

    62 EPA-HQ-OAR-2017-0655-0034, 0039, 0028, 0038.

    While no commenters objected to EPA's overall proposal to revise and expand the types of extracted corn oil that qualify as approved feedstocks in rows F and H of Table 1 to 40 CFR 80.1426, a number of commenters requested clarifications or modifications to EPA's proposed definition. Four commenters suggested that EPA should expand the definition of corn oil extraction even further to include corn oil recovered at butanol plants, because the dry mill process for butanol is very similar to those for dry mill ethanol with respect to conversion of corn to liquefied mash and recovery of distillers grains and thin stillage.63 Five commenters suggested that EPA should expand the definition of corn oil extraction to include corn oil from wet milling.64 These commenters stated that all corn oil meets the requirements of the RFS program and thus should be eligible feedstocks under the program. Four commenters requested that EPA expand the definition of corn oil extraction to include corn oil extracted after corn fractionation.65 These commenters stated that the fractionation process can be set up at a dry grind ethanol plant and the resulting extracted corn oil will still meet all the requirements for corn oil extraction. Two commenters requested that EPA clarify the proposed definition of corn oil extraction by stating that “the oil is rendered unfit for human food uses without further refining.” 66 One commenter requested that EPA clarify the proposed definition of corn oil extraction to state that the resulting distillers grains include those that have been subjected to further oil recovery by a dry mill or third party.67 Three commenters stated that EPA's proposed addition of the phrase “at any point downstream” is inconsistent with its proposed approach for biointermediates and should be clarified.68 The commenters also state that the phrase “oil is rendered unfit” is unnecessary since all corn oil obtained from extraction is unfit for food uses. One commenter recommended using the term “distillers corn oil” as that term is better understood in the industry, and USDA reporting, to reference corn oil from dry mills.

    63 EPA-HQ-OAR-2016-0041-0243, 0246, 0267 and 0286.

    64 EPA-HQ-OAR-2016-0041-0259, 0270, 0282, 0300 and 0311.

    65 EPA-HQ-OAR-2016-0041-0278, 0282, 0300 and 0311.

    66 EPA-HQ-OAR-2016-0041-0266 and 0277.

    67 EPA-HQ-OAR-2016-0041-0260.

    68 EPA-HQ-OAR-2016-0041-0282, 0300 and 0311.

    Based on these comments, EPA is finalizing a definition that has been modified in several ways compared to the one proposed in the November 2016 REGS proposed rule. First, EPA has decided to use the term “distillers corn oil” because we agree with the commenter that the term is better understood in the industry and thus enhances the clarity of the regulations. Second, the definition has been revised to include corn oil recovered at dry mill butanol plants, given their similarities in terms of the oil recovery technologies used, the characteristics of the oil recovered and the resulting DGS co-products. Third, we have clarified that distillers corn oil is limited to oil that is unfit for human food use without further refining. Fourth, we have removed the word “rendered” from the definition as it is unnecessary and seemed to raise questions for commenters. Finally, we replaced the word “extraction” with “recovery” to avoid any confusion about how the definition interacts with the term “corn oil extraction” in 40 CFR 80.1401 and Table 2 to 40 CFR 80.1426.

    Other modifications recommended by commenters have not been incorporated into the definition finalized by this rulemaking. Corn oil from wet milling remains excluded from the definition. Corn oil produced at wet mills is commonly sold as cooking oil for human food uses, and thus may have significantly different impacts than distillers corn oil. The GHG emissions associated with substituting for oil removed from animal feed, and specifically DGS, may be significantly different than the GHG emissions associated with substituting for oil removed from cooking oil markets. Thus, we believe the current LCA is insufficient to extend the pathway to corn oil produced at wet mills and it would be more appropriate to address wet mill corn oil through a separate action, such as a new fuel pathway petition submitted pursuant to 40 CFR 80.1416. Fractionation is also not explicitly included, or otherwise mentioned, in the revised definition, as EPA has previously found that oil recovered through fractionation is likely to be sold for human food use; 69 use of such oil for biofuel production would require a modified lifecycle assessment that is beyond the scope of this rule. Finally, EPA does not believe the definition finalized in this rulemaking contradicts the biointermediate provisions in the November 2016 REGS proposed rule. Because it is listed as a feedstock in Table 1 to 40 CFR 80.1426, the current regulations accommodate distillers corn oil used through the pathways in rows F and H unless it is substantially altered at a separate facility before delivery to the fuel production facility.

    69 See the Regulatory Impact Analysis for the March 2010 RFS rule, section 1.1.3.2 (Corn Oil Extracted During Ethanol Production).

    V. Summary

    Based on our GHG lifecycle evaluation described above, we find that biodiesel and heating oil produced from distillers sorghum oil via a transesterification process, and renewable diesel, jet fuel and heating oil produced from distillers sorghum oil via a hydrotreating process meet the 50 percent GHG reduction threshold requirement for advanced biofuel and biomass-based diesel. Based on this finding, and providing that all regulatory requirements are satisfied, these fuels are eligible for biomass-based diesel (D-code 4) RINs if they are produced through a process that does not co-process renewable biomass and petroleum, and for advanced biofuel (D-code 5) RINs if they are produced through a process that does co-process renewable biomass and petroleum. The RFS regulations are also amended to add new and consistent definitions for “distillers sorghum oil” and “distillers corn oil.” As discussed above, we are allowing commingled distillers sorghum and corn oil to be reported as one volume under the existing registration, reporting and recordkeeping requirements, and therefore are not amending these sections.

    VI. 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 expected to be 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 provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., and therefore is not subject to these requirements.

    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. This action will not impose any requirements 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 enables distillers sorghum oil producers and producers of biofuels from distillers sorghum oil to participate in the RFS program, see CAA section 211(o), if they choose to do so in order to obtain economic benefits.

    E. Unfunded Mandates Reform Act (UMRA)

    This action does not contain an unfunded mandate of $100 million or more as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local or tribal governments or the private sector.

    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. This final rule would affect only producers of distillers sorghum oil and producers of biofuels made from distillers sorghum oil. Thus, Executive Order 13175 does not apply to this action.

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

    The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that 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 because it does not concern an environmental health risk or safety risk.

    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 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). This final rule does not affect the level of protection provided to human health or the environment by applicable air quality standards. This action does not relax the control measures on sources regulated by the fuel programs and RFS regulations and therefore will not cause emissions increases from these sources.

    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 80

    Environmental protection, Administrative practice and procedure, Air pollution control, Diesel Fuel, Fuel additives, Gasoline, Imports, Oil imports, Petroleum, Renewable fuel.

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

    For the reasons set forth in the preamble, EPA amends 40 CFR part 80 as follows:

    PART 80—REGULATION OF FUEL AND FUEL ADDITIVES 1. The authority citation for part 80 continues to read as follows: Authority:

    42 U.S.C. 7414, 7521, 7542, 7545, and 7601(a).

    Subpart M—Renewable Fuel Standard 2. Section 80.1401 is amended by adding, in alphabetical order, definitions for “distillers corn oil” and “distillers sorghum oil” to read as follows:
    § 80.1401 Definitions.

    Distillers corn oil means corn oil recovered at any point downstream of when a dry mill ethanol or butanol plant grinds the corn, provided that the corn starch is converted to ethanol or butanol, the recovered oil is unfit for human food use without further refining, and the distillers grains remaining after the dry mill and oil recovery processes are marketable as animal feed.

    Distillers sorghum oil means grain sorghum oil recovered at any point downstream of when a dry mill ethanol or butanol plant grinds the grain sorghum, provided that the grain sorghum is converted to ethanol or butanol, the recovered oil is unfit for human food use without further refining, and the distillers grains remaining after the dry mill and oil recovery processes are marketable as animal feed.

    3. Section 80.1426 is amended in paragraph (f)(1), in Table 1 to § 80.1426, by revising entries “F”, “H”, and “I” to read as follows:
    § 80.1426 How are RINs generated and assigned to batches of renewable fuel by renewable fuel producers or importers?

    (f) * * *

    (1) * * *

    Table 1 to § 80.1426—Applicable D Codes for Each Fuel Pathway for Use in Generating RINs Fuel type Feedstock Production process requirements D-code *         *         *         *         *         *         * F Biodiesel, renewable diesel, jet fuel and heating oil Soy bean oil; Oil from annual covercrops; Oil from algae grown photosynthetically; Biogenic waste oils/fats/greases; Camelina sativa oil; Distillers corn oil; Distillers sorghum oil; Commingled distillers corn oil and sorghum oil One of the following: Trans-Esterification Hydrotreating Excluding processes that co-process renewable biomass and petroleum 4 *         *         *         *         *         *         * H Biodiesel, renewable diesel, jet fuel and heating oil Soy bean oil; Oil from annual covercrops; Oil from algae grown photosynthetically; Biogenic waste oils/fats/greases; Camelina sativa oil; Distillers corn oil; Distillers sorghum oil; Commingled distillers corn oil and sorghum oil One of the following: Trans-Esterification Hydrotreating Includes only processes that co-process renewable biomass and petroleum 5 I Naphtha, LPG Camelina sativa oil; Distillers sorghum oil Hydrotreating 5 *         *         *         *         *         *         *
    [FR Doc. 2018-16246 Filed 8-1-18; 8:45 am] BILLING CODE 6560-50-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Part 424 [CMS-6059-N9] Medicare, Medicaid, and Children's Health Insurance Programs: Announcement of the Extension of Temporary Moratoria on Enrollment of Part B Non-Emergency Ground Ambulance Suppliers and Home Health Agencies in Designated Geographic Locations AGENCY:

    Centers for Medicare & Medicaid Services (CMS), HHS.

    ACTION:

    Extension of temporary moratoria.

    SUMMARY:

    This document announces the extension of statewide temporary moratoria on the enrollment of new Medicare Part B non-emergency ground ambulance providers and suppliers and Medicare home health agencies and branch locations in Florida, Illinois, Michigan, Texas, Pennsylvania, and New Jersey, as applicable, to prevent and combat fraud, waste, and abuse. This extension also applies to the enrollment of new non-emergency ground ambulance suppliers and home health agencies and branch locations in Medicaid and the Children's Health Insurance Program in those states.

    DATES:

    Applicable July 29, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Jung Kim, (410) 786-9370.

    News media representatives must contact CMS' Public Affairs Office at (202) 690-6145 or email them at [email protected]

    SUPPLEMENTARY INFORMATION: I. Background A. CMS' Implementation of Temporary Enrollment Moratoria

    The Social Security Act (the Act) provides the Secretary with tools and resources to combat fraud, waste, and abuse in Medicare, Medicaid, and the Children's Health Insurance Program (CHIP). In particular, section 1866(j)(7) of the Act provides the Secretary with authority to impose a temporary moratorium on the enrollment of new Medicare, Medicaid, or CHIP providers and suppliers, including categories of providers and suppliers, if the Secretary determines a moratorium is necessary to prevent or combat fraud, waste, or abuse under these programs. Regarding Medicaid, section 1902(kk)(4) of the Act requires States to comply with any moratorium imposed by the Secretary unless the State determines that the imposition of such moratorium would adversely impact Medicaid beneficiaries' access to care. In addition, section 2107(e)(1)(F) of the Act provides that the Medicaid provisions in section 1902(kk) are also applicable to CHIP.

    In the February 2, 2011 Federal Register (76 FR 5862), CMS published a final rule with comment period titled, “Medicare, Medicaid, and Children's Health Insurance Programs; Additional Screening Requirements, Application Fees, Temporary Enrollment Moratoria, Payment Suspensions and Compliance Plans for Providers and Suppliers,” which implemented section 1866(j)(7) of the Act by establishing new regulations at 42 CFR 424.570. Under § 424.570(a)(2)(i) and (iv), CMS, or CMS in consultation with the Department of Health and Human Services' Office of Inspector General (HHS OIG) or the Department of Justice (DOJ), or both, may impose a temporary moratorium on newly enrolling Medicare providers and suppliers if CMS determines that there is a significant potential for fraud, waste, or abuse with respect to a particular provider or supplier type, or particular geographic locations, or both. At § 424.570(a)(1)(ii), CMS stated that it would announce any temporary moratorium in a Federal Register document that includes the rationale for the imposition of such moratorium. This document fulfills that requirement.

    In accordance with section 1866(j)(7)(B) of the Act, there is no judicial review under sections 1869 and 1878 of the Act, or otherwise, of the decision to impose a temporary enrollment moratorium. A provider or supplier may use the existing appeal procedures at 42 CFR part 498 to administratively appeal a denial of billing privileges based on the imposition of a temporary moratorium; however, the scope of any such appeal is limited solely to assessing whether the temporary moratorium applies to the provider or supplier appealing the denial. Under § 424.570(c), CMS denies the enrollment application of a provider or supplier if the provider or supplier is subject to a moratorium. If the provider or supplier was required to pay an application fee, the application fee will be refunded if the application was denied as a result of the imposition of a temporary moratorium (see § 424.514(d)(2)(v)(C)).

    Based on this authority and our regulations at § 424.570, we initially imposed moratoria to prevent enrollment of new home health agencies, subunits, and branch locations 1 (hereafter referred to as HHAs) in Miami-Dade County, Florida and Cook County, Illinois, as well as surrounding counties, and Medicare Part B ground ambulance suppliers in Harris County, Texas and surrounding counties, in a notice issued on July 31, 2013 (78 FR 46339).2 We exercised this authority again in a notice published on February 4, 2014 (79 FR 6475) when we extended the existing moratoria for an additional 6 months and expanded them to include enrollment of HHAs in Broward County, Florida; Dallas County, Texas; Harris County, Texas; and Wayne County, Michigan and surrounding counties, and enrollment of ground ambulance suppliers in Philadelphia, Pennsylvania and surrounding counties.

    1 As noted in the preamble to the final rule with comment period implementing the moratorium authority (February 2, 2011, 76 FR 5870), home health agency subunits and branch locations are subject to the moratoria to the same extent as any other newly enrolling home health agency.

    2 CMS has identified an error in the provider and beneficiary saturation data described in our July 31, 2013 Federal Register notice (78 FR 46339). We have subsequently revised the methodology by which we determine provider and beneficiary saturation. Following these revisions to the methodology, we simulated application of our current 2016 methodology to the 2013 data, and determined that the 2013 decision to impose the moratorium would not have been impacted had the revised methodology been applied. Provider saturation remains one of the criteria used to determine whether to implement a moratorium. CMS has made market saturation data publicly available at https://data.cms.gov/market-saturation.

    Then, we further extended these moratoria in documents issued on August 1, 2014 (79 FR 44702), February 2, 2015 (80 FR 5551), July 28, 2015 (80 FR 44967), and February 2, 2016 (81 FR 5444). On August 3, 2016 (81 FR 51120), we extended the current moratoria for an additional 6 months and expanded them to statewide for the enrollment of new HHAs in Florida, Illinois, Michigan, and Texas, and Part B non-emergency ambulance suppliers in New Jersey, Pennsylvania, and Texas. Our August 3, 2016 publication also announced the lifting of temporary moratoria for all Part B emergency ambulance suppliers.3 On January 9, 2017 (82 FR 2363) and July 28, 2017 (82 FR 35122), CMS again issued a document to extend the temporary moratoria for a period of 6 months.

    3 CMS also concurrently announced a demonstration under the authority provided in section 402(a)(l)(J) of the Social Security Amendments of 1967 (42 U.S.C. 1395b-l(a)(l)(J)) that allows for access to care-based exceptions to the moratoria in certain limited circumstances after a heightened review of that provider has been conducted. This exception process also applies to Medicaid and CHIP providers in each state. This announcement may be found in the Federal Register document issued on August 3, 2016 (81 FR 51116).

    On September 1, 2017, CMS lifted the statewide temporary moratorium on the enrollment of new Medicare Part B non-emergency ground ambulance suppliers in Texas under the authority of § 424.570(d). This lifting of the moratorium also applied to Medicaid and CHIP in Texas. This decision was a result of the Presidential Disaster Declaration signed on August 25, 2017 for several counties in the State of Texas due to Hurricane Harvey. Upon declaration of the disaster, CMS carefully reviewed the potential impact of continued moratoria in Texas, and decided to lift the temporary enrollment moratorium on non-emergency ground ambulance suppliers in Texas in order to aid in the disaster response. CMS published a formal announcement of this decision on November 3, 2017 (82 FR 51274).

    Most recently, on January 30, 2018 (83 FR 4147), CMS announced the extension of the temporary moratoria for an additional six months.

    B. Determination of the Need for Moratoria

    In imposing these enrollment moratoria, CMS considered both qualitative and quantitative factors suggesting a high risk of fraud, waste, or abuse. CMS relied on law enforcement's longstanding experience with ongoing and emerging fraud trends and activities through civil, criminal, and administrative investigations and prosecutions. CMS' determination of a high risk of fraud, waste, or abuse in these provider and supplier types within these geographic locations was then confirmed by CMS' data analysis, which relied on factors the agency identified as strong indicators of risk. (For a more detailed explanation of this determination process and of these authorities, see the July 31, 2013 notice (78 FR 46339) or February 4, 2014 moratoria document (79 FR 6475)).

    Because fraud schemes are highly migratory and transitory in nature, many of CMS' program integrity authorities and anti-fraud activities are designed to allow the agency to adapt to emerging fraud in different locations. The laws and regulations governing CMS' moratoria authority give us flexibility to use any and all relevant criteria for future moratoria, and CMS may rely on additional or different criteria as the basis for future moratoria.

    1. Application to Medicaid and the Children's Health Insurance Program (CHIP)

    The February 2, 2011, final rule also implemented section 1902(kk)(4) of the Act, establishing new Medicaid regulations at § 455.470. Under § 455.470(a)(1) through (3), the Secretary may impose a temporary moratorium, in accordance with § 424.570, on the enrollment of new providers or provider types after consulting with any affected State Medicaid agencies. The State Medicaid agency must impose a temporary moratorium on the enrollment of new providers or provider types identified by the Secretary as posing an increased risk to the Medicaid program unless the State determines that the imposition of such moratorium would adversely affect Medicaid beneficiaries' access to medical assistance and so notifies the Secretary. The final rule also implemented section 2107(e)(1)(D) of the Act by providing, at § 457.990 of the regulations, that all of the provisions that apply to Medicaid under sections 1902(a)(77) and 1902(kk) of the Act, as well as the implementing regulations, also apply to CHIP.

    Section 1866(j)(7) of the Act authorizes imposition of a temporary enrollment moratorium for Medicare, Medicaid, and/or CHIP, “if the Secretary determines such moratorium is necessary to prevent or combat fraud, waste, or abuse under either such program.” While there may be exceptions, CMS believes that generally, a category of providers or suppliers that poses a risk to the Medicare program also poses a similar risk to Medicaid and CHIP. Many of the anti-fraud provisions in the Act reflect this concept of “reciprocal risk” in which a provider that poses a risk to one program poses a risk to the other programs. For example, section 1902(a)(39) of the Act requires State Medicaid agencies to terminate the participation of an individual or entity if such individual or entity is terminated under Medicare or any other State Medicaid plan. Additional provisions in the Act also support the determination that categories of providers and suppliers pose the same risk to Medicaid as to Medicare. Section 1866(j) of the Act requires us to establish levels of screening for categories of providers and suppliers based on the risk of fraud, waste, and abuse determined by the Secretary. Section 1902(kk) of the Act requires State Medicaid agencies to screen providers and suppliers based on the same levels established for the Medicare program. This reciprocal concept is also reflected in the Medicare moratoria regulations at § 424.570(a)(2)(ii) and (iii), which permit CMS to impose a Medicare moratorium based solely on a State imposing a Medicaid moratorium. Accordingly, CMS has determined that there is a reasonable basis for concluding that a category of providers or suppliers that poses a risk to Medicare also poses a similar risk to Medicaid and CHIP, and that a moratorium in all of these programs is necessary to effectively combat this risk.

    2. Consultation With Law Enforcement

    In consultation with the HHS Office of Inspector General (OIG) and the Department of Justice (DOJ), CMS previously identified two provider and supplier types in nine geographic locations that warrant a temporary enrollment moratorium. For a more detailed discussion of this consultation process, see the July 31, 2013 notice (78 FR 46339) or February 4, 2014 moratoria document (79 FR 6475).

    3. Data Analysis

    In addition to consulting with law enforcement, CMS also analyzed its own data to identify specific provider and supplier types within geographic locations with significant potential for fraud, waste or abuse, therefore warranting the imposition of enrollment moratoria.

    4. Beneficiary Access to Care

    Beneficiary access to care in Medicare, Medicaid, and CHIP is of critical importance to CMS and its State partners, and CMS carefully evaluated access for the target moratorium locations with every imposition and extension of the moratoria. Prior to imposing and extending these moratoria, CMS reviewed Medicare data for these areas and found no concerns with beneficiary access to HHAs or ground ambulance suppliers. CMS also consulted with the appropriate State Medicaid Agencies and with the appropriate State Departments of Emergency Medical Services to determine if the moratoria would create access to care concerns for Medicaid and CHIP beneficiaries. All of CMS' State partners were supportive of CMS' analysis and proposals, and together with CMS, determined that continuation of these moratoria would not create access to care issues for Medicaid or CHIP beneficiaries.

    5. When a Temporary Moratorium Does Not Apply

    Under § 424.570(a)(1)(iii), a temporary moratorium does not apply to any of the following: (1) Changes in practice location (2) changes in provider or supplier information, such as phone number or address; or (3) changes in ownership (except changes in ownership of HHAs that require initial enrollment under § 424.550). Also, in accordance with § 424.570(a)(1)(iv), a temporary moratorium does not apply to any enrollment application that a Medicare contractor has already approved, but has not yet entered into the Provider Enrollment, Chain, and Ownership System (PECOS) at the time the moratorium is imposed.

    6. Lifting a Temporary Moratorium

    In accordance with § 424.570(b), a temporary enrollment moratorium imposed by CMS will remain in effect for 6 months. If CMS deems it necessary, the moratorium may be extended in 6-month increments. CMS will evaluate whether to extend or lift the moratorium before the end of the initial 6-month period and, if applicable, any subsequent moratorium periods. If one or more of the moratoria announced in this document are extended, CMS will publish a document regarding such extensions in the Federal Register.

    As provided in § 424.570(d), CMS may lift a moratorium at any time if the President declares an area a disaster under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, if circumstances warranting the imposition of a moratorium have abated, if the Secretary has declared a public health emergency, or if, in the judgment of the Secretary, the moratorium is no longer needed.

    Once a moratorium is lifted, the provider or supplier types that were unable to enroll because of the moratorium will be designated to the “high” screening level in accordance with §§ 424.518(c)(3)(iii) and 455.450(e)(2) if such provider or supplier applies at any time within 6 months from the date the moratorium was lifted.

    II. Extension of Home Health and Ambulance Moratoria—Geographic Locations

    CMS currently has in place statewide moratoria on newly enrolling HHAs in Florida, Illinois, Michigan, and Texas and Part B non-emergency ambulance suppliers in New Jersey and Pennsylvania.

    As provided in § 424.570(b), CMS may deem it necessary to extend previously-imposed moratoria in 6-month increments. Under this authority, CMS is extending the temporary moratoria on the Medicare enrollment of HHAs and Part B non-emergency ground ambulance providers and suppliers in the geographic locations discussed herein. Under the regulations at § 455.470 and § 457.990, these moratoria also apply to the enrollment of HHAs and non-emergency ground ambulance providers and suppliers in Medicaid and CHIP in those locations. Under § 424.570(b), CMS is required to publish a document in the Federal Register announcing any extension of a moratorium, and this extension of moratoria document fulfills that requirement.

    CMS consulted with the HHS-OIG regarding the extension of the moratoria on new HHAs and Part B non-emergency ground ambulance providers and suppliers in all of the moratoria states, and HHS-OIG agrees that a significant potential for fraud, waste, and abuse continues to exist regarding those provider and supplier types in these geographic areas. The circumstances warranting the imposition of the moratoria have not yet abated, and CMS has determined that the moratoria are still needed as we monitor the indicators and continue with administrative actions to combat fraud and abuse, such as payment suspensions and revocations of provider/supplier numbers. (For more information regarding the monitored indicators, see the February 4, 2014 moratoria document (79 FR 6475)).

    Based upon CMS' consultation with the relevant State Medicaid agencies, CMS has concluded that extending these moratoria will not create an access to care issue for Medicaid or CHIP beneficiaries in the affected states at this time. CMS also reviewed Medicare data for these states and found there are no current problems with access to HHAs or ground ambulance providers or suppliers. Nevertheless, the agency will continue to monitor these locations to make sure that no access to care issues arise in the future.

    Based upon our consultation with law enforcement and consideration of the factors and activities described previously, CMS has determined that the current temporary enrollment moratoria should be extended for an additional 6 months.

    III. Summary of the Moratoria Locations

    CMS is executing its authority under sections 1866(j)(7), 1902(kk)(4), and 2107(e)(1)(D) of the Act to extend and implement temporary enrollment moratoria on HHAs for all counties in Florida, Illinois, Michigan, and Texas, as well as Part B non-emergency ground ambulance providers and suppliers for all counties in New Jersey and Pennsylvania.

    IV. Clarification of Right to Judicial Review

    Section 1866(j)(7)(B) of the Act states that there shall be no judicial review under section 1869, section 1878, or otherwise, of a temporary moratorium imposed on the enrollment of new providers of services and suppliers if the Secretary determines that the moratorium is necessary to prevent or combat fraud, waste, or abuse. Accordingly, our regulations at 42 CFR 498.5(l)(4) state that for appeals of denials based on a temporary moratorium, the scope of review will be limited to whether the temporary moratorium applies to the provider or supplier appealing the denial. The agency's basis for imposing a temporary moratorium is not subject to review. Our regulations do not limit the right to seek judicial review of a final agency decision that the temporary moratorium applies to a particular provider or supplier. In the preamble to the February 2, 2011 (76 FR 5918) final rule with comment period establishing this regulation, we explained that “a provider or supplier may administratively appeal an adverse determination based on the imposition of a temporary moratorium up to and including the Department Appeal Board (DAB) level of review.” We are clarifying that providers and suppliers that have received unfavorable decisions in accordance with the limited scope of review described in § 498.5(l)(4) may seek judicial review of those decisions after they exhaust their administrative appeals. However, we reiterate that section 1866(j)(7)(B) of the Act precludes judicial review of the agency's basis for imposing a temporary moratorium.

    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 Statement

    CMS has examined the impact of this document 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) and the Congressional Review Act (5 U.S.C. 804(2)). Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health, and safety effects, distributive impacts, and equity). A regulatory impact analysis (RIA) must be prepared for major regulatory actions with economically significant effects ($100 million or more in any 1 year). This document will prevent the enrollment of new home health providers and Part B non-emergency ground ambulance suppliers in Medicare, Medicaid, and CHIP in certain states. Though savings may accrue by denying enrollments, the monetary amount cannot be quantified. Since the imposition of the initial moratoria on July 31, 2013, more than 1204 HHAs and 26 ambulance companies in all geographic areas affected by the moratoria had their applications denied. We have found the number of applications that are denied after 60 days declines dramatically, as most providers and suppliers will not submit applications during the moratoria period. Therefore, this document does not reach the economic threshold, and thus is not considered a major action.

    The RFA requires agencies to analyze options for regulatory relief of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of less than $7.5 million to $38.5 million in any one year. Individuals and states are not included in the definition of a small entity. CMS is not preparing an analysis for the RFA because it has determined, and the Secretary certifies, that this document will not have a significant economic impact on a substantial number of small entities.

    In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if an action may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, CMS defines a small rural hospital as a hospital that is located outside of a metropolitan statistical area (MSA) for Medicare payment purposes and has fewer than 100 beds. CMS is not preparing an analysis for section 1102(b) of the Act because it has determined, and the Secretary certifies, that this document will not have a significant impact on the operations of a substantial number of small rural hospitals.

    Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any regulatory action whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2018, that threshold is approximately $150 million. This document will have no consequential effect on state, local, or tribal governments or on the private sector.

    Executive Order 13771, titled “Reducing Regulation and Controlling Regulatory Costs,” was issued on January 30, 2017 (82 FR 9339, February 3, 2017). It has been determined that this notice is a transfer notice that does not impose more than de minimis costs and thus is not a regulatory action for the purposes of E.O. 13771.

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

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

    Dated: July 17, 2018. Seema Verma, Administrator, Centers for Medicare & Medicaid Services.
    [FR Doc. 2018-16547 Filed 7-30-18; 11:15 am] BILLING CODE 4120-01-P
    FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 11 [PS Docket No. 15-94; FCC 18-39] Emergency Alert System AGENCY:

    Federal Communications Commission.

    ACTION:

    Final rule.

    SUMMARY:

    In this document, the Commission amends its rules governing the Emergency Alert System (EAS) by establishing the Alert Reporting System (ARS), a comprehensive online filing system for EAS that combines the existing EAS Test Reporting System (ETRS) with a new, streamlined electronic system for the filing of State EAS Plans. By replacing paper-based State EAS Plans with an online filing system, the ARS will minimize the burdens on State Emergency Communications Committees (SECCs), and allow the FCC, the Federal Emergency Management Agency (FEMA), and other authorized entities to better access and use up-to-date information about the EAS, thus increasing its value as a tool to protect life and property for all Americans.

    DATES:

    Effective September 4, 2018. Mandatory compliance dates: FCC will publish a document in the Federal Register announcing dates as outlined in paragraphs 54-55 and 72-73 in SUPPLEMENTARY INFORMATION.

    FOR FURTHER INFORMATION CONTACT:

    Austin Randazzo, Attorney Advisor, Policy and Licensing Division, Public Safety and Homeland Security Bureau, at 202-418-1462, or by email at [email protected]. For additional information concerning the information collection requirements contained in this document, send an email to [email protected] or contact Nicole Ongele, Office of Managing Director, Performance Evaluation and Records Management, 202-418-2991, or by email to [email protected].

    SUPPLEMENTARY INFORMATION:

    This is a summary of the Commission's Report and Order (Report and Order) in PS Docket No. 15-94, FCC 18-39, released on April 10, 2018. The full text of this document is available for inspection and copying during normal business hours in the FCC Reference Center (Room CY-1257), 445 12th Street SW, Washington, DC 20554, or online at: https://www.fcc.gov/document/fcc-make-emergency-alert-system-more-effective.

    Synopsis

    1. This Report and Order revises the Commission's EAS rules to establish the Alert Reporting System (ARS), a comprehensive online filing system that will combine the existing EAS Test Reporting System (ETRS) with a new, streamlined electronic system for the filing of State EAS Plans. Further, to ensure that the rules for State EAS Plans are clear and unambiguous, the Report and Order combines all State EAS Plan related rules into a single section (11.21) of part 11.

    I. Background

    2. The EAS is a national public warning system used by EAS Participants to deliver emergency alerts to the public. The primary purpose of the EAS is to allow the President of the United States (President) to provide information to the general public during periods of national emergency. State and local authorities also use the common distribution architecture of the EAS to distribute voluntary weather-related and other emergency alerts to the public.

    3. There are two distribution methods for EAS alerts. The traditional method distributes alerts through a hierarchical, broadcast-based distribution system, in which an alert originator formats an alert using the EAS Protocol and initiates its transmission at a designated entry point. This “daisy chain” process relays the alert from one designated station to another until it is fully distributed. EAS alerts also are distributed over the internet through the Integrated Public Alert and Warning System (IPAWS), a national alerting system administered by FEMA. Under the IPAWS, EAS Participants monitor a FEMA-administered website for EAS messages that are written in the Common Alerting Protocol (CAP).

    4. While IPAWS relies upon the centralized distribution of alerts using an alert aggregator and an internet-based interface, the EAS's “daisy chain” leverages the broadcast-based EAS distribution architectures in each of the states. The Commission's rules require each state to file a State EAS Plan with the Commission documenting its EAS distribution architecture. State Emergency Communications Committees (SECCs), along with associated Local Emergency Communications Committees (LECCs), draft and file these plans on behalf of the states. The SECCs and LECCs are volunteer organizations composed of state broadcast associations, EAS Participants, emergency management personnel, and other stakeholders. SECCs grew out of a 1963 Executive Order that directed the Commission to cooperate with other governmental entities to develop emergency communications plans related to the Emergency Broadcast System (EBS). At that time, the Commission provided SECCs with templates for State EAS Plans that described the kinds of information that their plans should provide.

    5. Nationwide EAS Tests. On September 28, 2016 and September 27, 2017, FEMA, in collaboration with the Commission, conducted the second and third nationwide tests of the EAS, respectively. The purpose of the tests was to assess the reliability and effectiveness of the EAS, with a particular emphasis on testing IPAWS. On April 21, 2017, the Public Safety and Homeland Security Bureau (PSHSB) released a public version of the second test's results, which indicated that although the test had satisfied its primary purposes, there remained “strong evidence that many test participants do not understand their roles in the EAS structure and are unfamiliar with the State EAS Plans that inform them of those roles.”

    6. EAS Test Reporting System (ETRS). In connection with the test, the Commission launched the ETRS, an electronic filing system and related database that upgraded the system the Commission used for the first nationwide EAS test. The ETRS requires EAS Participants to submit detailed information regarding their receipt and propagation, if applicable, of the alert code, including an explanation of any complications in receiving and propagating the code. The ETRS enables the Commission to maintain a centralized database of all EAS monitoring assignments and alert distribution pathways.

    II. Discussion

    7. Online State EAS Plan Filing in the Alert Reporting System. State EAS Plans must describe state and local EAS operations and “contain guidelines which must be followed by EAS Participants' personnel, emergency officials, and [NWS] personnel to activate the EAS.” State EAS Plans must be reviewed and approved by the Chief, PSHSB, prior to their implementation “to ensure that they are consistent with national plans, FCC regulations, and EAS operation.”

    8. Following the first nationwide EAS test in 2011, PSHSB recommended converting the State EAS Plan filing process into an online system in light of inconsistencies identified in a post-test analysis of the structure of State EAS Plans. Subsequently, the Communications Security, Reliability and Interoperability Council (CSRIC) IV recommended that State EAS Plans also be filed online and recommended that the Commission revise its rules to adopt an online platform, State EAS Plan template design, and identification mechanisms for facilities and geographic areas contained within State EAS Plans. In the document, the Commission noted the CSRIC's recommendations and proposed converting the paper-based filing process for State EAS Plans into a secure online process that would interface with the ETRS.

    9. Online Filing. The Commission revises its Part 11 EAS rules to require SECCs to file State EAS Plans electronically via an online filing system. This will provide a baseline level of uniformity across State EAS Plans, in terms of both format and terminology, while affording sufficient flexibility to accommodate filers' unique needs. This online State EAS filing platform, combined with the existing ETRS, will form the Alert Reporting System. The Commission believes that the ARS will ensure more efficient and effective delivery of Presidential as well as state, local and weather-related alerts as it will provide the Commission, FEMA, and other authorized entities with the means to more easily review and identify gaps in the EAS architectures, detect problems, and take measures to address these shortcomings.

    10. The Commission agrees with the many commenters that note the benefits of the online filing system. For example, broadcast engineer Sean Donelan (Donelan) states that a well-implemented electronic filing system for EAS data will reduce the burden on state and local EAS committee volunteers. Use of an online filing system will also benefit EAS Participants, SECCs, and other EAS stakeholders by facilitating the Commission's swift and efficient review of State EAS Plans. As the Washington State SECC notes, a standardized filing system “is long overdue” and will aid the Commission's effort to review State EAS Plans. The Commission believes, as does Wisconsin SECC Broadcast Chair Gary Timm, commenting in his individual capacity (Timm), that the time required for SECCs to fill out a monitoring matrix would be minimal, and that other FCC databases could help keep the information updated. The online filing system will be an efficient tool for reviewing alerting architecture, as it will provide an end-to-end picture of the EAS distribution architecture for each state. Further, cross-referencing data from electronically filed State EAS Plans with data collected from the ETRS will make it easier to identify problems such as single points of failure. Finally, moving to an online system will reduce burdens on SECCs by pre-populating data fields in State EAS Plans with information from other FCC databases, enabling SECCs to readily update and revise their plans.

    11. The Commission believes that the efficient and effective administration of the EAS, i.e., its ability to deliver a Presidential Alert nationwide, requires some level of standardization of State EAS Plans. State EAS Plans currently lack consistent structure and content. An online filing system using uniform and consistent terminology will facilitate the input, analysis, and related uses of the Plan information. During the first nationwide EAS test, a lack of uniformity among State EAS Plans “made it very difficult for the Commission and FEMA to create a national propagation map.” Similarly, the Commission agrees with CSRIC IV that the lack of uniform format in State EAS Plans “makes it difficult for the FCC to determine if a proper distribution network exists for . . . distribution [of the Presidential Alert] in each state.” Further, an online State EAS Plan filing system with consistent terminology and format will allow SECCs to “report changes to state plans and EAS EAN Event Code distribution in the least demanding and most efficient manner possible that still provides the Commission with current and accurate information.”

    12. Template. The Commission requires State EAS Plan data to be entered into a pre-configured online template. As the Commission discusses below, it is designed to be minimally burdensome, secure, and to offer clear guidance to SECCs. The template will standardize monitoring and other common elements of EAS State Plans, while offering sufficient flexibility to avoid SECCs' concerns that a “one size fits all” template for State EAS Plans would be unworkable. It will address all elements of State EAS Plans, including a monitoring assignment matrix similar to the one used by the Washington State SECC and supported by commenters, so that SECCs may input monitoring data into the ARS in a structured and consistent manner. Where feasible, the Commission will ensure that this matrix and other parts of the template will pre-populate elements of State EAS Plans by cross-referencing data already collected by the Commission, as recommended by CSRIC IV. The Commission directs PSHSB to develop and implement the template in Appendix D of the Report and Order to include these functionalities and to minimize unnecessary and redundant filing burdens on SECCs.

    13. The Commission traditionally has provided SECCs with templates describing the kinds of information to be included in State EAS Plans, and the template the Commission adopts today is consistent with that practice. To be both effective and minimally burdensome, the State EAS Plan template must address all state plan elements. The Commission thus disagrees with suggestions that the online database and template apply only to the monitoring assignment matrix, or to what some commenters characterize as the “federal” aspects of State EAS Plans. State EAS Plans are not limited to monitoring assignment data, but rather include other elements which, taken together, form the EAS activation guidelines that EAS stakeholders follow. Similarly, the use and testing of the EAS at the state and local level provide insight into its functionality and effectiveness at the federal level.

    14. Finally, the Commission disagrees with commenters who suggest that a State EAS Plan template is unworkable because there is no “one size fits all” framework for State EAS Plans. The template will afford SECCs flexibility to provide information they deem relevant to design and maintain their states' EAS distribution architectures and relay networks. It will be configured in a manner that accommodates variations in state alerting architectures, including areas where alerts are transmitted across state borders.

    15. Access. The Commission agrees with commenters that State EAS Plan information concerning the placement of broadcast towers and other vital alert distribution architecture infrastructure is sensitive, particularly when aggregated with similar information from other states. Accordingly, the Commission adopts safeguards to ensure only authorized entities access this data. The Commission requires SECCs to provide an SECC ID, an individual user ID, and a password to input State EAS Plan data into the ARS. Commenters generally support limiting access to State EAS Plans filed in this manner. NSBA observes that the security risks of aggregating State EAS Plans online justify the use of password or log-in protection. Further, the Alaska Broadcasters Association, Alaska State Emergency Communications Committee, and the State of Alaska Department of Military and Veterans Affairs, the Division of Homeland Security and Emergency Management (Alaska Commenters) assert that online data that includes specific station and equipment information (e.g., make, model, manufacturer, and firmware versions of the encoder, decoder, and translator equipment) should be considered sensitive and protected from disclosure as necessary. To address these concerns, the Commission adopts CSRIC IV's recommendation to follow the Disaster Information Reporting System (DIRS) two-layer access model. This model will require a user to input both an SECC ID and an individual user ID before accessing the database. The Commission agrees with the Alaska Commenters that, similar to DIRS and ETRS, the Commission should handle user and account management for this system, and the Commission directs PSHSB to determine the details of designing and setting up ARS account management.

    16. Several commenters provide useful suggestions about access to State EAS Plan data that the Commission adopts as elements of ARS access. The Commission agrees with Nevada SECC Chairwoman Adrienne Abbott, commenting in her individual capacity (Abbott), that only individuals with significant roles in SECCs should have access to this data, and, further, that such access should be limited to data about an SECC's individual state. The Commission disagrees with Monroe Electronics, however, that EAS equipment manufacturers and planning consultants should have access to State EAS Plan data to confirm proper configuration of system hardware and software. As noted above, the ARS will contain sensitive data and, for this reason, the Commission believes it serves the public interest to limit access to the ARS. EAS equipment manufacturers and other third-party vendors may request a particular client's data from that client.

    17. Confidentiality. Finally, the Commission affords confidentiality protection to State EAS Plan data. Most commenters agree that some of the information in State EAS Plans, such as the call signs and locations of key EAS sources, is sensitive or could become sensitive if aggregated in a single location. The Commission notes that details regarding equipment configurations, EAS equipment vendor market share, and relationships between EAS Participants themselves could be commercially sensitive. Aggregated information in State EAS Plans, such as configurations and vulnerabilities as demonstrated by tests, could also implicate national security. Further, nothing in the record indicates a need for public access to State EAS Plan information. Accordingly, the Commission concludes that State EAS Plan data and any aggregation of such data will have the same level of confidentiality as data filed in the ETRS, i.e., the Commission will share individual and aggregated data on a confidential basis with other federal agencies and state governmental emergency management agencies that have confidentiality protection at least equal to that provided by the Freedom of Information Act (FOIA). The Commission notes that some SECCs may be subject to state-based requirements that require disclosure of some or all of the same data that it will file in the ARS. Although the rules the Commission adopts today will prevent unauthorized State EAS Plan data disclosure filed by an SECC via ARS, the rules will not prevent or preclude SECCs from independently filing with its state the same data that it files with the ARS.

    18. EAS Designations. The Commission's part 11 rules provide designations for “key EAS sources.” In the document, the Commission observed that SECCs have inconsistently used these designations. This inconsistency inhibits the Commission's ability to determine the quality of the state and national level broadcast-based EAS, and may inhibit delivery of a Presidential Alert. Accordingly, the Commission proposed refining its EAS designations in a way that would accommodate variations in but also promote uniformity among State EAS Plans. The Commission also sought comment on whether additional designations may be necessary.

    19. The Commission amends section 11.18 to define all its current EAS designations. Although SECCs' use of EAS designations may vary, commenters support retaining the current designations to support the SECCs' abilities to assign roles and responsibilities. Accordingly, the Commission keeps these designations as tools to help SECCs describe their states' EAS alert distribution hierarchies in their State EAS Plans “using common language.” These universal designations also will allow the Commission to create an EAS Mapbook as contemplated by the EAS rules. The Mapbook will provide an accurate and dynamic nationwide propagation map for the Presidential Alert, as well as state, county, and local propagation maps. The Commission agrees with Abbott that it would be difficult to implement standardized terminology if its definitions did not provide sufficient flexibility to accommodate states' varying approaches to establishing EAS monitoring assignments. However, the EAS designation definitions the Commission adopts today are designed to provide a level of uniformity that will allow SECCs to establish EAS monitoring assignments that accommodate their unique situations. Accordingly, the Commission will define the EAS designations as follows.

    20. Primary Entry Point (PEP): A private or commercial radio broadcast station that cooperatively participates with FEMA to provide EAS alerts to the public. PEPs are the primary source of initial broadcast for a Presidential Alert. A PEP is equipped with back-up communications equipment and power generators designed to enable it to continue broadcasting information to the public during and after disasters of national significance. The PEP System is a nationwide network of such broadcast stations used to distribute EAS alerts formatted in the EAS Protocol. FEMA is responsible for designating broadcast stations as PEPs.

    21. National Primary (NP): An entity tasked with the primary responsibility of receiving the Presidential Alert from a PEP and delivering it to an individual state or portion of a state. In states without a PEP, the NP is responsible for receiving the Presidential Alert from an out-of-state PEP and transmitting it to the public and other EAS Participants in the state. Multiple entities may be charged with primary responsibility for delivering the Presidential Alert.

    22. PEP and NP are the only designations that are solely relevant to the transmission of the Presidential Alert.

    23. State Primary (SP): An entity tasked with initiating the delivery of EAS alerts other than the Presidential Alert.

    24. SPs may, for example, be designated by SECCs to initially transmit AMBER alerts or alerts related to incidents of severe weather to the public and to other EAS Participants that voluntarily monitor for and retransmit such alerts.

    25. Local Primary (LP): An entity that serves as a monitoring assignment for other EAS Participants within the state. LP sources may be assigned numbers (e.g., LP-1, LP-2) and are relied on as monitoring sources by other EAS Participants in the local area. An LP may monitor any other station, including another LP, so long as doing so avoids creating a single point of failure in the alert distribution hierarchy.

    26. Participating National (PN): An EAS Participant that transmits national, state, or local area EAS messages, and is not otherwise designated within the State EAS Plan.

    27. State Relay (SR): An entity not otherwise designated that is charged with retransmitting EAS alerts for the purpose of being monitored by an LP or PN.

    28. Commenters assert that SR properly describes the relay function and is used extensively in some State EAS Plans. While the Commission anticipates that the EAS alert distribution hierarchy described above will be sufficient to define the roles and responsibilities for all EAS Participants in many states, in some states, SRs may be necessary to ensure that EAS alerts are available to everyone in the state. In these instances, especially when SRs are used as alternative monitoring assignments, the Commission recognizes that it may be appropriate to use special designations for entities responsible for relaying alerts from a PEP, NP, or SP to an LP or PN.

    29. State Relay Network (SRN): A network composed of State Relay (SR) sources, leased common carrier communications facilities or any other available communication facilities. The network distributes State EAS messages originated by the Governor or designated official. In addition to EAS monitoring, satellites, microwave, FM subcarrier or any other communications technology may be used to distribute State emergency messages.

    30. The Commission understands that in some states, such as Washington, the SRN serves as an alternative, redundant system for ensuring the successful delivery of EAS alerts. The Commission also understands that some State EAS Plans, such as Nevada's, do not rely on SRNs because “[s]mall and rural broadcasters cannot afford the monthly cost of these services.” To the extent that SRNs enhance system reliability and resiliency, the Commission finds them to be desirable, and encourage SECCs to specify in their state plans the extent to which they rely on SRNs as a secondary alert distribution mechanism. The Commission does not require any state to utilize a SRN, because it recognizes the maintenance burdens that SRNs may pose for small entities.

    31. The Commission agrees with commenters that additional EAS designations are unnecessary and therefore declinesto adopt the additional designations or sub-designations proposed in the document based on the entities responsible for particular types of alerts (e.g., State AMBER Alert Primary) or based on the type of transmission facility used (e.g., State Satellite Primary). The Commission will continue to monitor whether establishing additional roles and responsibilities within State EAS Plans may be necessary in the future to improve emergency preparedness.

    32. State EAS Plan Contents. EAS Participants must conduct EAS operations as specified in State EAS Plans to ensure effective delivery of the Presidential Alert, yet EAS Participants lack consistent knowledge of their roles under State EAS Plans, and State EAS Plans lack the uniformity essential for dependable dissemination of a Presidential Alert. The EAS Deployment Report and Order communicated expectations for the structure and administration of State EAS Plans and SECCs, but current State EAS Plan rules do not consistently address SECCs' administration and governance practices. Some states' SECCs and State EAS Plans have not met the Commission's expectations for several reasons, including the failure of some states to file or update State EAS Plans. Moreover, since the adoption of State EAS Plan rules in 1994, the alerting landscape has changed dramatically. Local alerts now originate from a wider array of sources and continue to increase in frequency. Many EAS Participants use alternative distribution systems such as satellite-based systems to supplement or replace the traditional “daisy chain” alert distribution architecture.

    33. In the EAS Nationwide Test Report, PSHSB observed a lack of clarity in State EAS Plans that precluded end-to-end analysis and review of the EAS system. First, it noted that the Commission's rules do not require EAS Participants to provide monitoring assignment data below the LP level. Second, it observed that many State EAS Plans did not identify the alternative monitoring sources that EAS Participants relied upon to receive the EAN during the first nationwide EAS test. Additionally, PSHSB observed that many EAS Participants used the satellite-based National Public Radio (NPR) News Advisory Channel (Squawk Channel) to receive the EAN, as opposed to their “daisy chain” monitoring assignments. Based on these findings, PSHSB recommended review of the State EAS Plan rules. CSRIC IV recommended that “SECCs must be free to design and maintain their respective state's own robust and redundant EAS relay networks in the best and most practical ways possible.”

    34. To address these concerns, in the document, the Commission proposed that each State EAS Plan include: (1) A list of header codes and messages to be transmitted by key EAS sources; (2) a description of all of the state's procedures for transmitting emergency information to the public, including by EAS, WEA, social media, highway signs, and other alerting procedures; (3) the extent to which the state's dissemination strategy for state and local alerts differs from its strategy for disseminating the Presidential Alert; (4) a list of all entities authorized to activate EAS for state and local emergencies; (5) monitoring assignments for key alerting sources; (6) EAS testing procedures; (7) the extent to which alert originators coordinate alerts with “many-to-one” feedback mechanisms, such as 911; (8) procedures for authenticating state EAS messages formatted in CAP and signed with digital signatures; and (9) a description of the SECC governance structure used by the state, including the duties, membership selection process, and administrative structure of the SECC.

    35. The Commission amends the Commission's rules to specify and standardize the organizational and operational aspects of State EAS Plans to provide State EAS Plans with the level of order and consistency necessary for efficient and reliable distribution of emergency information to the public.

    36. Uniform Designations. The Commission requires that SECCs input State EAS Plan monitoring assignment data into the ARS using the uniform designations for key EAS sources. As explained in the Nationwide EAS Test Report, and as supported by the record, the use of consistent terminology in State EAS Plans will assist the Commission in reviewing plans; understanding EAS architecture on a nationwide, statewide, and local basis; and determining how the states' distribution systems can be aggregated into a single, comprehensive distribution mechanism for the Presidential Alert.

    37. List of Entities Authorized to Activate EAS. The Commission allows, but does not require, that State EAS Plans include a list of all entities authorized to activate the EAS for state and local emergency messages (e.g., PSAPs) whose transmissions might be interrupted by a Presidential Alert. Commission rules already require State EAS Plans to have a list of authorized entities participating in the state or local EAS. Thus, State EAS Plans already may include, as a component of that list, all entities authorized to activate the EAS for state and local emergency messages. The Commission will prepopulate the online State EAS Plan template with FEMA-approved alert originators, but SECCs may add any state-based alert originators not listed by FEMA as authorized to initiate an IPAWS alert.

    38. A Description of SECC Governance Structure. To ensure the efficient and effective delivery of a Presidential Alert, the Commission requires SECCs to specify in the State EAS Plans their governance structure, including the duties, membership selection process, and administrative structure of the SECC. Most commenters support the Commission providing additional guidance to SECCs, but few commenters provide suggestions on SECC governance, and very few address whether basic data regarding SECC governance should be included in State EAS Plans. Because State EAS Plans detail the distribution architecture for delivery of a Presidential Alert, SECCs should have a governance and oversight structure to support this function. The Commission requires this baseline information about SECCs to verify that State EAS Plans provide the framework for effective transmission of the Presidential Alert. The Commission agrees with commenters that the Commission should continue to provide the guidance it historically has supplied to SECCs. Obtaining initial information on an SECC's structure and functions is an essential part of that process. Accordingly, SECCs must, at a minimum, specify their contact points, and whether they represent all alert originators, and their decision-making structures. This baseline information will help us contact relevant staff, identify SECCs that are less active or have fewer resources, and formulate strategies for addressing all SECCs' needs. The Commission does not require, however, that SECCs adopt a particular governance structure. For these reasons, the Commission disagrees with commenters that oppose these requirements as unnecessary or beyond the scope of many SECCs.

    39. LECCs and Local Area EAS Plans. The Commission maintains the existing language of section 11.21(b), which provides for the development of a Local Area Plan containing procedures for local emergencies. CSRIC IV observed that the EAS depends on local distribution and recommended developing policies to “encourage local communications distribution systems to participate in the emergency warning process.” Timm comments that LECCs have “local expertise to best manage EAS alerting in a given area, and Local Area EAS Plans are still viable for addressing EAS procedures at a local level of detail beyond that possible to devote room to in the full State EAS Plan.” Abbott asserts that LECCs and local plans are a necessary component of EAS Plans in large states where no one single broadcast station covers an entire state and no end-to-end “daisy chains” connect operational areas in the state. The Commission concludes that Local Area Plans are still useful in some states and that SECCs should have the option of including them in their State EAS Plans.

    40. The EAS's primary purpose is transmitting a message from the President to the public during a national emergency. To do so, EAS information must be properly coordinated and understood by relevant stakeholders. Accordingly, the Commission requires State EAS Plans to include transmission procedures for an EAS alert and accurate, up-to-date monitoring assignments for each key EAS source to reflect how they receive alerts.

    41. Emergency Alerting Procedures. The Commission concludes that State EAS Plans should contain an accurate and comprehensive listing of procedures used for transmitting information to the public via the EAS. This listing should include the monitoring obligations already required under the rules to transmit the Presidential alert. Non-Presidential use of the “daisy chain” distribution structure facilitates equipment readiness and maintains user proficiency in the system. Accordingly, the Commission requires that SECCs disclose in their State EAS Plan the extent to which the state's dissemination strategy for state and local alerts differs (if at all) from its strategy for disseminating the Presidential Alert. Consistent with CSRIC IV's recommendations, this information will help the Commission and SECCs obtain a baseline of information upon which to create a plan for more effective use and development of the EAS in each state. The Commission provides flexibility to SECCs regarding how this information is provided in State EAS Plans, as well as the frequency with which it is updated.

    42. Satellite-based Sources of EAS Messages. The Commission requires that State EAS Plans specify satellite-based communications resources that are used as alternate monitoring assignments and present a reliable source of EANs and other EAS messages. Many EAS Participants currently use satellite-based communications technologies as monitoring sources because of incomplete PEP coverage, broadcast monitoring source difficulties, or other reasons. Most commenters support requiring the inclusion of this information in State EAS Plans and note that satellite-based resources may be fast, secure, and reliable.

    43. Some commenters recommend that the Commission remain technologically neutral in light of the availability of alternative dissemination technologies for EAS alerts. The Commission's satellite-based sources requirement does not mandate any particular technology, but rather requires that State EAS Plans reflect the monitoring sources used. Thus, its rules maintain technological neutrality while ensuring that State EAS Plans accurately identify each state's entire EAS distribution system. As Abbott suggests, states will determine independently whether they will use satellite-based resources. The Commission notes that many state plans include satellite monitoring information. Requiring its inclusion in all State EAS Plans benefits the industry by bringing consistency to the process. To the extent that some State EAS Plans will supply it for the first time, the Commission expects the incremental cost to be minimal.

    44. Monitoring Assignments. The Commission requires State EAS Plans to include “[m]onitoring assignments to receive the Presidential Alert, and the primary and back-up paths for the dissemination of the Presidential Alert to all key EAS sources organized by operational areas within the state.” The Commission finds that State EAS Plans should continue to divide their respective states into geographically based operational areas, specifying primary and backup monitoring assignments in each operational area. CSRIC IV noted a lack of uniformity among State EAS Plan definitions of “operational areas” and recommended that, where possible, such service areas should be uniformly identified. Most commenters, however, oppose a standardized definition of “operational areas.” These commenters note that the definition of “operational areas” must be flexible to accommodate the different reasons for their existence, and that such areas are best defined by the local or state entities most familiar with them. To facilitate this flexibility, the Commission will include a drop-down menu in ARS that contains the most common ways SECCs have described their operational areas in previously-approved State EAS Plans as well as an opportunity for SECCs to describe operational areas that do not comport with the drop-down menu choices.

    45. The Commission also removes the current restriction that State EAS Plans include monitoring assignments for Presidential Alerts formatted only in the EAS Protocol. Several commenters support removing this restriction. The Commission finds that doing so will permit states to provide additional information in their plans. Technologies are evolving, and a Presidential Alert may not necessarily be issued using the EAS Protocol; for example, a new generation of Presidential Alert may be introduced using the CAP standard only. The Commission believes that removing this restriction will ensure that state plans remain flexible and responsive to both changes in technology and changes FEMA may make in the future to the format of Presidential Alerts. The Commission disagrees with Timm, who asserts that the Commission should not remove the restriction yet because doing so could “lead to imperiling” the EAS Protocol distribution system and diminish the redundancy of having EAS Participants monitor multiple sources of the Presidential Alert. The Commission continues to require State EAS Plans to contain the EAS Header Code and other EAS Protocol distribution information required under the part 11 rules. The Commission also concludes that it also should allow State EAS Plans to include additional non-EAS Protocol (e.g., CAP) distribution information.

    46. Organization of section 11.21. To address all State EAS Plan monitoring requirements in the same section of part 11, the Commission merges sections 11.52 (“EAS code and Attention Signal Monitoring requirements”) and 11.55 (“EAS operation during a State or Local Area emergency”) into section 11.21 by: (1) Amending section 11.21 to state that EAS Participant monitoring assignments and EAS operations must be implemented in a manner consistent with guidelines established in the applicable State EAS Plan submitted to the Commission, and (2) removing that language from sections 11.52 and 11.55. All three of these sections address State EAS Plan content. The Commission agrees with Abbott that these changes will help SECCs apply the State EAS Plan rules. The Commission also agrees, however, with commenters who assert that removing all state plan terminology from sections 11.52 and 11.55 could make the rules unclear; therefore, the Commission does not adopt that proposal.

    47. The Commission finds that this change is supported by CSRIC IV's recommendation that the Commission amend section 11.21 to provide that “[s]tates that want to use the EAS shall submit a State EAS Plan.” The Commission also agrees with several commenters who suggest that it would be helpful to specify in section 11.21 that SECCs develop and maintain state plans, and the Commission adds this language to the rule. Finally, the Commission agrees with Timm that the language in section 11.21(c) should refer to the state monitoring assignment matrix rather than the state “data table” and revise section 11.21(c) accordingly.

    48. Testing/Outreach Elements. The Commission allows State EAS Plans to include procedures for live code tests and Required Weekly Tests (RWTs). Commenters generally agree that State EAS Plans should include information on EAS testing. Some commenters assert that requiring this information would be impractical or overly burdensome, but other commenters note that this information would help organize test scheduling and prevent confusion. The Commission believes that including information on state testing programs can help ensure that the EAS functions effectively and efficiently. The Commission also notes that State EAS Plans already must include information on Required Monthly Tests (RMTs) and special tests. To the extent it is useful to include and memorialize all test procedures, including procedures for live code tests or RWTs, in a consolidated manner, SECCs may use State EAS Plans and ARS as a vehicle for doing so. The Commission notes that SECCs and EAS Participants will benefit from SECCs voluntarily providing this information in the ARS, as EAS Participants will be able to readily review plan information relevant to them.

    49. Other Proposed Contents. The Commission declines to adopt the proposals in the document that State EAS Plans include a description of the procedures for transmitting emergency information to the public via WEA, social media, highway signs, and other alerting procedures, as well as a description of the extent to which alert originators coordinate alerts with “many-to-one” community feedback mechanisms, such as 911. Although several commenters support the inclusion of some of these capabilities in alerts, commenters generally oppose the incorporation of these elements into State EAS Plans. The Commission agrees with the majority of commenters that this information is unnecessary at this time to ensure the effective delivery of the EAN, and that its inclusion would be unduly burdensome. The Commission also shares commenters' concern that these requirements may cause confusion or conflict with community warning plans, and that they may require the provision of information outside of the SECCs' purview.

    50. The National Advisory Committee and Additional Guidance for SECCs. CSRIC IV recommended that the Commission reestablish the National Advisory Committee (NAC). The NAC was the federal advisory committee responsible for assisting the Commission with administrating the EAS, promoting stakeholder and Commission interaction with SECCs, and providing information for the development and maintenance of State and Local EAS Plans. The document sought comment on CSRIC IV's recommendation to reinstate the NAC as well as whether there is a need for a consistent, uniform governance structure for SECCs nationwide to ensure effective functioning of the EAS. Noting that CSRIC IV discouraged a “one size fits all” approach to SECC governance, the Commission asked whether it could issue guidance or work with SECCs to clarify the roles and responsibilities of SECCs in a manner that would be useful in each state. The Commission also sought comment on whether information on SECC governance in State EAS Plans could help develop best practices or other guidance for SECCs.

    51. Based on the record, the Commission believes it would serve the public interest to provide SECCs with further guidance on their roles and responsibilities. The record demonstrates support for reinstating the NAC, and commenters generally support the Commission adopting rules or providing guidance or best practices on SECC governance. The Commission notes, however, that under the IPAWS Modernization Act of 2015, FEMA recently established the IPAWS Subcommittee to its National Advisory Council, which will consider changes to improve the IPAWS and develop technologies that may be beneficial to the public alert and warning system. NSBA observes that “it would not be unreasonable” for the IPAWS Subcommittee to address issues raised in the document. Thus, rather than establishing a separate advisory committee, the Commission concludes that the IPAWS Subcommittee is best positioned to efficiently and effectively address issues related to SECC governance and best practices. Accordingly, the Commission will coordinate with FEMA to ensure that SECC administration and governance are addressed within the scope of the IPAWS Subcommittee, which transmits its recommendations to FEMA's National Advisory Council for review. The Commission believes that working through these existing mechanisms will be the most efficient way to generate recommendations that the Commission may evaluate in formulating its own guidance to improve communication among the Commission, SECCs, FEMA, NWS, and other EAS stakeholders.

    52. Although a few commenters suggest amending part 11 to regulate SECCs, the Commission declines to adopt any rules regulating SECCs. Rather, by way of guidance, the Commission provides the SECCs with an online filing template for State EAS Plans and specify the required contents of those plans.

    53. Compliance Timeframes. To conform to section 18.17 of the rules of the Administrative Committee of the Federal Register, 1 CFR 18.17, the above Dates field and this summary, at paragraphs 54-55 and 72-73 below, describe the compliance timeframes for the new and revised rules. In the Notice of Proposed Rulemaking, the Commission proposed requiring compliance with the amended rules on information collection requirements (i.e., the State EAS Plan rules) within six months from the release of a Public Notice announcing Office of Management and Budget (OMB) approval of related information collection requirements or within 60 days of a Public Notice announcing the availability of the Commission's relevant database to receive such information, whichever is later. The Commission also noted that its proposed EAS designation rules did not constitute a collection and required no action by EAS Participants and accordingly proposed that those rules would become effective 30 days from the date of their publication in the Federal Register.

    54. State EAS Plans. The Commission requires compliance with its rules regarding State EAS Plan content and electronic submission within one year of publication in the Federal Register of a Public Notice announcing: (i) OMB approval of ARS information collection requirements or (ii) the availability of the ARS to receive such information, whichever is later. The Commission acknowledges commenters' concerns that the proposed 6-month deadline imposed a significant burden on SECCs' and LECCs' limited resources. Accordingly, the Commission extends its proposed 6-month compliance timeframe to a one-year compliance timeframe. The Commission believes the one-year compliance timeframe that is supported by the majority of commenters will afford SECCs sufficient time to implement its State EAS Plan requirements effectively and conduct any necessary outreach, training, and planning. The Commission further requires that State EAS Plans will continue to be updated on a yearly basis, but note that SECCs may satisfy this requirement by simply indicating on the form each year that the plan is up-to-date.

    55. EAS Designations. The Commission agrees with Timm that the new designations should become effective at the same time as the State EAS Plan rule changes because designation changes likely would need to be reflected in most state plans. SECCs may need to engage with key EAS sources in their states to apply its designations. The Commission concludes that aligning the implementation timeframes of the state plan and designation changes will promote efficiency and avoid burdening SECCs with the need to draft multiple versions of their State EAS Plans to comply with the new requirements.

    56. Legal Authority. The Communications Act gives the President authority to broadcast alerts during times of national emergency and prohibits broadcasters from issuing false alerts. Congress has also directed that cable systems afford their viewers the same opportunities to receive emergency alerts “as is afforded by” broadcasters “pursuant to Commission regulations.” The Act further requires the Commission to “investigate and study” how to “obtain[] maximum effectiveness from the use of radio and wire communications in connection with safety of life and property.” The Act empowers us to “make such rules and regulations” as necessary to carry out all of these statutory requirements. Together, these provisions have allowed the Commission to oversee the EAS. Although the Commission only requires use of EAS for Presidential Alerts, state and local authorities may use EAS to disseminate information to the public regarding more localized emergencies.

    57. In the document, the Commission sought comment on its sources of legal authority over the EAS, including those provisions that the Commission highlights above, and noted that its proposals are “primarily intended to prepare the nation's alerting infrastructure for successful transmission of a Presidential Alert.” To enable the President to reliably execute this authority in the public interest, the Commission has long considered it necessary to ensure that the national alerting architecture is ready to transmit a Presidential Alert in an appropriate situation. The rules the Commission adopts here provide more consistent and reliable access to state plans so that the Commission and EAS participants will be better prepared to ensure the successful transmission of a Presidential Alert. No commenters opposed the Commission's authority to adopt any of the proposals contained in the document.

    58. The Commission notes that the overall goal of the EAS system is to serve as an effective integral part of a “comprehensive system to alert and warn the American people.” Today's actions contribute to that goal by “adopt[ing] rules to ensure that communications systems have the capacity to transmit alerts and warnings to the public as part of the public alert and warning system.”

    59. Cost-Benefit Analysis. In this section, the Commission finds that its rules generally reduce recurring burdens on SECCs. The Commission estimates that they impose a one-time collective transitional cost on all SECCs totaling approximately $236,000. The Commission shows that its rules present sufficient benefits to justify these costs.

    60. Costs. The cost estimates the Commission discusses below are associated with the decisions adopted in this Report and Order, as opposed to the more expansive proposals in the document. The Commission estimates the reasonable one-time cost burden these rules could present to EAS Participants is approximately $236,000. Specifically, SECCs collectively will incur one-time approximate costs of a $235,000 recordkeeping cost for producing State EAS Plans consistent with its updated State EAS Plan requirements and EAS designations and a $1,000 reporting cost for electronically filing those plans. The Commission notes that this is a significantly smaller estimated total burden than that described in the document, which estimated a one-time $5.3 million and an annual cost of $596,560. The Commission also notes that the Commission sought comment on the specific costs of compliance with the proposed rules, but received no dollar figure estimates in response. Accordingly, the following estimate leverages publicly available data on the financial burdens associated with its requirements.

    61. The Commission concludes that producing State EAS Plans consistent with its rules will result in approximately $235,000 as a one-time recordkeeping cost. In the document, the Commission estimated that implementing these changes would result in a one-time cost of approximately $25,000 and that it would take each SECC approximately 20 hours to comply with the new State EAS Plan requirements. Commenters observe that this cost assessment, as well as the Commission's assessment of the total hourly burden required to update State EAS Plans, was too low. In response to these concerns, the Commission is not requiring SECCs to include certain proposed elements in State EAS Plans, which the Commission concludes will reduce the amount of time required to revise their plans. Notwithstanding this revision, the Commission uses a quantification of commenters' assessment of the time that it would take SECCs to write their plans from scratch (100 hours) as a reasonable ceiling for the time needed to update those plans consistent with its rules. Based on submissions of State EAS Plans to date, the Commission expects that 54 entities will file such plans. The record shows that the individuals most likely to update those plans are broadcast engineers. Crowdsourced employee compensation data indicates that the median hourly compensation for a broadcast engineer is approximately $29. According to the Bureau of Labor Statistics, employee overhead benefits (including paid leave, supplementary pay, insurance, retirement and savings, and legally required benefits) add 50 percent to an employer's cost of labor. Thus, the Commission quantifies the value of an hour spent updating a State EAS Plan as approximately $43.50. The Commission concludes that the reasonable estimated cost of updating a single State EAS Plan consistent with this Report and Order would be approximately $4,350 and the estimated total cost of compliance with its State EAS Plan rules would be approximately $235,000.

    62. Additionally, the Commission anticipates that SECC representatives also will incur a one-time estimated $1,000 reporting cost to file their revised State EAS Plans in the ARS. The Commission concludes that the time burden of filing State EAS Plans in the ARS will be one hour, the same burden that OMB approved for filing data in ETRS. Both filing systems present filers with the same user interface, and while State EAS Plans may include more data points than ETRS filings, entering state plan data in the ARS will be simpler because SECCs already have the relevant information on-hand from the process of creating a State EAS Plan. The Commission values the cost of an SECC representative's time spent on this task as approximately $19, the median hourly salary of a clerical employee plus benefits. Thus, filing state plan data in the ARS will cost approximately $1,000.

    63. Therefore, based on the foregoing analysis, the Commission finds it reasonable to conclude that the benefits of the rules the Commission adopts today will exceed the costs of their implementation. The Commission's rule changes will improve alerting organization, support greater testing and awareness of the EAS, and promote the security of the EAS. The Commission believes these benefits easily outweigh the one-time $236,000 total compliance cost. The Commission also find that these rules likely will continue to accrue value to the public while reducing recurring costs.

    64. Benefits. The rules the Commission adopts today will improve the nation's alert and warning capability by modernizing alerting recordkeeping and reducing recurring filing burdens on SECCs. For over two decades, the EAS has proven to be an effective method of alerting the public and saving lives and property. It continues to stand ready to serve its primary purpose of allowing the President to contact the public across the nation quickly and reliably, while at the same time providing the vital service of alerting the public about weather and other emergencies. A majority of the public continues to rely on the EAS to receive emergency information.

    65. However, there remain weaknesses in conveying this critical information to the public via the EAS. Recent nationwide testing of the EAS has shown “shortfalls in some state EAS plans,” including confusion and difficulties in understanding and implementing monitoring assignments. The current paper-based State EAS Plan filing system, EAS designations, and State EAS Plan contents collectively make it difficult for the Commission and other EAS stakeholders to detect problems or map the propagation of EAS alerts. This inability to detect and resolve problems, in turn, makes it more likely that some members of the public may not receive emergency alerts. The Commission's new requirements address this difficulty by creating a uniform online filing system that will utilize specific State EAS Plan contents and uniform EAS designations. These improvements will allow the Commission, FEMA, and localities to more easily review and identify gaps in the EAS architectures, detect problems, and take measures to address these shortcomings. In doing so, and by helping to facilitate measures to improve the reach of EAS messages, the Commission improves the likelihood that a greater segment of the public will receive emergency alerts on a timely basis and take emergency preparedness measures, thereby providing benefits that include potentially reducing the incidence of injuries and preserving property.

    66. The improvements to the EAS that the Commission adopts today will contribute to its ability to prevent injuries. The Commission notes that in 2016, there were 1,276 injuries resulting from weather events in the United States. If the improvements to the EAS the Commission adopts today prevent just 15 injuries, they will produce a public value of at least $400,000. This analysis illustrates that injury prevention alone, which will continue in years to come, is likely to produce benefits that outweigh those one-time costs.

    67. Additionally, the Commission anticipates that, after the initial one-time cost of compliance with its rules, EAS Participants, SECCs, and state emergency alerting authorities will realize long-term cost savings. In the Second Report and Order, the Commission required “state and local entities to annually confirm their plans.” Prior to the current Report and Order, when an SECC updated its plan, it would refile its entire plan. The ARS will reduce this filing burden by allowing filers to instantaneously update elements of their plans, by saving previously entered data, and by obviating the need to re-file an entire plan every time a change is made. Converting the State EAS Plan filing system to an online filing system will streamline the state plan approval process and reduce the recurring costs of revising, updating, and resubmitting state plans (e.g., printing and mailing costs).

    III. Procedural Matters

    68. Regulatory Flexibility Analysis. As required by the Regulatory Flexibility Act of 1980, the Commission has prepared a Final Regulatory Flexibility Analysis (FRFA) of the significant economic impact on small entities of the policies and rules adopted in this document. The FRFA is set forth in Appendix B of the Report and Order.

    69. Paperwork Reduction Analysis. The Report and Order contains modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It will be submitted to the OMB for review under section 3507(d) of the PRA. OMB, the general public, and other federal agencies will be invited to comment on the new information collection requirements contained in this proceeding. The Commission notes that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, the Commission previously sought specific comment on how the Commission might “further reduce the information collection burden for small business concerns with fewer than 25 employees.” In addition, the Commission has described impacts that might affect small businesses, which includes most businesses with fewer than 25 employees, in the FRFA in Appendix B of the Report and Order.

    70. Congressional Review Act. The Commission will send a copy of this Report & Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

    IV. Ordering Clauses

    71. Accordingly, it is ordered, pursuant to sections 1, 2, 4(i), 4(o), 301, 303(r), 303(v), 307, 309, 335, 403, 624(g), 706, and 713of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 154(o), 301, 303(r), 303(v), 307, 309, 335, 403, 544(g), 606, and 613, as well as the Twenty-First Century Communications and Video Accessibility Act of 2010, Pub. L. 111-260 and Pub. L. 111-265, that the Report and Order in PS Docket No. 15-94 is hereby adopted.

    72. It is further ordered that the Commission's rules are hereby amended as set forth in Appendix A of the Report and Order.

    73. It is further ordered that the rules adopted herein will become effective on the dates set forth in paragraphs 54-55 above.

    74. It is further ordered that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, SHALL SEND a copy of this Report and Order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

    This part contains rules and regulations providing for an Emergency Alert System (EAS). The EAS provides the President with the capability to provide immediate communications and information to the general public at the National, State and Local Area levels during periods of national emergency. The rules in this part describe the required technical standards and operational procedures of the EAS for analog AM, FM, and TV broadcast stations, digital broadcast stations, analog cable systems, digital cable systems, wireline video systems, wireless cable systems, Direct Broadcast Satellite (DBS) services, Satellite Digital Audio Radio Service (SDARS), and other participating entities. The EAS may be used to provide the heads of State and local government, or their designated representatives, with a means of emergency communication with the public in their State or Local Area. [72 FR 62132, Nov. 2, 2007]

    List of Subjects in 47 CFR Part 11

    Radio, Television.

    Federal Communications Commission. Marlene Dortch, Secretary. Final Rules

    For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 11 as follows:

    PART 11—EMERGENCY ALERT SYSTEM (EAS) 1. The authority citation for part 11 continues to read as follows: Authority:

    . 47 U.S.C. 151, 154(i) and (o), 303(r), 544(g) and 606.

    § 11.2 [Amended]
    2. Amend § 11.2 by removing paragraphs (b), (c), (f), (g) and (h), and redesignating paragraphs (d), (e), and (i) as paragraphs (b), (c), and (d) respectively. 3. Revise § 11.18 to read as follows:
    § 11.18 EAS Designations.

    (a) A Primary Entry Point (PEP) is a private or commercial radio broadcast station that cooperatively participates with FEMA to provide EAS alerts to the public. PEPs are the primary source of initial broadcast for a Presidential Alert. A PEP is equipped with back-up communications equipment and power generators designed to enable it to continue broadcasting information to the public during and after disasters of national significance. The Primary Entry Point System is a nationwide network of such broadcast stations used to distribute EAS alerts formatted in the EAS Protocol. FEMA is responsible for designating broadcast stations as PEPs.

    (b) A National Primary (NP) is an entity tasked with the primary responsibility of receiving the Presidential Alert from a PEP and delivering it to an individual state or portion of a state. In states without a PEP, the NP is responsible for receiving the Presidential Alert from an out-of-state PEP and transmitting it to the public and other EAS Participants in the state. Multiple entities may be charged with primary responsibility for delivering the Presidential Alert.

    (c) A State Primary (SP) is an entity tasked with initiating the delivery of EAS alerts other than the Presidential Alert.

    (d) A State Relay (SR) is an entity not otherwise designated that is charged with retransmitting EAS alerts for the purpose of being monitored by a Local Primary or Participating National.

    (e) State Relay Network (SRN) is a network composed of State Relay (SR) sources, leased common carrier communications facilities or any other available communication facilities. The network distributes State EAS messages originated by the Governor or designated official. In addition to EAS monitoring, satellites, microwave, FM subcarrier or any other communications technology may be used to distribute State emergency messages.

    (f) A Local Primary (LP) is an entity that serves as a monitoring assignment for other EAS Participants within the state. LP sources may be assigned numbers (e.g., LP-1, 2, 3) are relied on as monitoring sources by other EAS Participants in the Local Area. An LP may monitor any other station, including another LP, so long as doing so avoids creating a single point of failure in the alert distribution hierarchy.

    (g) A Participating National (PN) is an EAS Participant that transmits national, state, or Local Area EAS messages, and is not otherwise designated within the State EAS Plan.

    § 11.20 [Removed]
    4. Remove § 11.20. 5. Amend § 11.21 by revising paragraphs (a) and (c) to read as follows:
    § 11.21 State and Local Area Plans and FCC Mapbook.

    (a) State EAS Plans contain guidelines that must be followed by EAS Participants' personnel, emergency officials, and National Weather Service (NWS) personnel to activate the EAS. The Plans include information on actions taken by EAS Participants, in coordination with state and local governments, to ensure timely access to EAS alert content by non-English speaking populations. State EAS Plans must be updated on an annual basis. The plans must be reviewed and approved by the Chief, Public Safety and Homeland Security Bureau, prior to implementation to ensure that they are consistent with national plans, FCC regulations, and EAS operation. State EAS Plans must include the following elements:

    (1) A list of the EAS header codes and messages that will be transmitted by key EAS sources (NP, LP, SP, and SR);

    (2) Procedures for state emergency management officials, the National Weather Service, and EAS Participant personnel to transmit emergency information to the public during an emergency via the EAS, including the extent to which the state's dissemination strategy for state and local emergency alerts differs from its Presidential Alerting strategy;

    (3) Procedures for state and local activations of the EAS, including a list of all authorized entities participating in the State or Local Area EAS;

    (4) A monitoring assignment matrix, in computer readable form, clearly showing monitoring assignments and the specific primary and backup path for emergency action notification (EAN)/Presidential Alert messages from the PEP to all key EAS sources (using the uniform designations specified in § 11.18) and to each station in the plan, organized by operational areas within the state. If a state's emergency alert system is capable of initiating EAS messages formatted in the Common Alerting Protocol (CAP), its EAS State Plan must include specific and detailed information describing how such messages will be aggregated and distributed to EAS Participants within the state, including the monitoring requirements associated with distributing such messages;

    (5) State procedures for conducting special EAS tests and Required Monthly Tests (RMTs);

    (6) A list of satellite-based communications resources that are used as alternate monitoring assignments and present a reliable source of EAS messages; and

    (7) The SECC governance structure utilized by the state in order to organize state and local resources to ensure the efficient and effective delivery of a Presidential Alert, including the duties of the SECC, the membership selection process utilized by the SECC, and the administrative structure of the SECC.

    (c) The FCC Mapbook is based on the consolidation of the monitoring assignment matrices required in each State EAS Plan with the identifying data contained in the ETRS. The Mapbook organizes all EAS Participants according to their State, EAS Local Area, and EAS designation. EAS Participant monitoring assignments and EAS operations must be implemented in a manner consistent with guidelines established in a State EAS Plan submitted to the Commission in order for the Mapbook to accurately reflect actual alert distribution.

    § 11.52 [Amended]
    6. Amend § 11.52 by removing paragraph (d)(3), and redesignating paragraphs (d)(4) and (5) as paragraphs (d)(3) and (4), respectively. 7. Amend § 11.55 by revising paragraphs (b), (c) introductory text, and (c)(1) through (3) to read as follows:
    § 11.55 EAS operation during a State or Local Area emergency.

    (b) EAS operations must be conducted as specified in State and Local Area EAS Plans.

    (c) Immediately upon receipt of a State or Local Area EAS message that has been formatted in the EAS Protocol or the Common Alerting Protocol, EAS Participants participating in the State or Local Area EAS must do the following:

    (1) State Relays (SR) monitor or deliver EAS alerts as required by the State EAS Plan.

    (2) Local Primary (LP) entities monitor SPs, SRs, or other sources as set forth in the State EAS Plan.

    (3) Participating National (PN) sources monitor LPs or other sources as set forth in the State EAS Plan.

    [FR Doc. 2018-15818 Filed 8-1-18; 8:45 am] BILLING CODE 6712-01-P
    FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 22 [WT Docket Nos. 12-40, 16-138; RM-11510, RM-11660; FCC 18-92] Cellular Service, Including Changes in Licensing of Unserved Area AGENCY:

    Federal Communications Commission.

    ACTION:

    Final rule.

    SUMMARY:

    In this document, the Federal Communications Commission (Commission) adopts revised rules governing the 800 MHz Cellular Radiotelephone (Cellular) Service and other commercial mobile radio services (CMRS) governed by Part 22 of the Commission's rules. These steps to remove unnecessary regulatory burdens for Cellular Service and other Part 22 licensees will free up more resources for investment in new technologies and greater spectrum efficiency to meet increasing consumer demand for advanced wireless services. Specifically, the Commission modernizes its rules by eliminating several Part 22 recordkeeping and reporting obligations that were adopted more than two decades ago—obligations for which there is no longer a benefit to outweigh the compliance costs and burdens imposed on licensees. It also eliminates certain Cellular Service-specific rules that are no longer necessary. These reforms will provide Cellular Service and other Part 22 licensees with enhanced flexibility and advance the goal of ensuring more consistency in licensing across commercial wireless services, while taking into account unique features of each service. With this document, the Commission terminates the Cellular Reform proceeding in WT Docket No. 12-40, including RM Nos. 11510 and 11660.

    DATES:

    Effective September 4, 2018, except for the amendment to 47 CFR 22.303, which contains modified information collection requirements that have not yet been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act. The Commission will publish a document in the Federal Register announcing the effective date of that amendment.

    FOR FURTHER INFORMATION CONTACT:

    Nina Shafran, (202) 418-2781, in the Mobility Division, Wireless Telecommunications Bureau. She may also be contacted at (202) 418-7233 (TTY).

    SUPPLEMENTARY INFORMATION:

    This is a summary of the Commission's Third Report and Order in the Cellular Reform proceeding (Cellular Third R&O), WT Docket No. 12-40, RM Nos. 11510 and 11660, FCC 18-92 adopted July 12, 2018 and released July 13, 2018. The full text of the Cellular Third R&O, including all Appendices, is available for inspection and copying during normal business hours in the FCC Reference Center, 445 12th Street SW, Room CY-A157, Washington, DC 20554, or by downloading the text from the Commission's website at https://docs.fcc.gov/public/attachments/FCC-18-92A1.pdf. Alternative formats are available for people with disabilities (Braille, large print, electronic files, audio format), by sending an email to [email protected] or calling the Consumer and Government Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

    Synopsis I. Background

    1. In a Second Report and Order released March 24, 2017, in the Cellular Reform proceeding (Second R&O), the Commission modernized numerous Cellular technical rules, including outdated radiated power and related rules, to permit power measurement using power spectral density. These changes facilitate the use of Cellular spectrum to provide advanced mobile broadband services, such as 4G long term evolution (LTE), while protecting public safety communications from increased potential for unacceptable interference. The Second R&O also revised rules to further eliminate unnecessary filings and other regulatory burdens for Cellular licensees. The Commission's reforms resulted in Cellular Service rules more akin to the flexible licensing schemes found in other similar mobile services, such as the Broadband Personal Communications Service (PCS), the commercial service in the 700 MHz band, the 600 MHz Service, and the Advanced Wireless Services (AWS), to help ensure that carriers are treated similarly regardless of technology choice.

    2. To build on the adopted reforms and to respond to certain submissions by commenters in the Commission's 2016 Biennial Review of Telecommunications Regulations proceeding (WT Biennial Review proceeding), the Commission also released a companion Second Further Notice of Proposed Rulemaking (Second Further Notice) in the Cellular Reform proceeding on March 24, 2017. In the Second Further Notice, the Commission proposed and sought comment on additional reforms of its Part 22 rules governing the Cellular Service and other Part 22 Public Mobile Services (PMS). The Commission also invited comment on whether other measures could be taken to allow Part 22 licensees to benefit from the same level of flexibility available to other commercial wireless licensees. In that context, the Commission raised the possibility of relocating—to Part 27 of the Commission's rules—certain Part 22 rules, as well as the Part 24 PCS rules and other rules governing geographically licensed wireless services.

    3. In response to the Second Further Notice, interested parties submitted comments, reply comments, and ex parte letters. The specific reforms adopted by the Commission in the Third R&O are described below.

    II. Elimination of Unnecessary Rules A. Deletion of 47 CFR 22.301 and 22.303 Concerning Station Inspection, Retention of Station Authorizations

    4. Commission Rules 22.301 and 22.303 collectively require that hard copies of license authorizations and other records be maintained by all Part 22 licensees for each station and that such records and the station itself be made available for inspection upon request. The Commission finds that both rules have outlived the usefulness they may have had in the past and now impose administrative burdens without any corresponding public benefit.1 Because the Commission no longer routinely mails printed authorizations, licensees cannot comply with the hard-copy requirement unless they themselves print, or request that the Commission's Wireless Telecommunications Bureau print and mail, an authorization every time an application is granted. Such a requirement does not serve the public interest. The Commission's Universal Licensing System (ULS) is available electronically at all times: licensees have access in ULS to their official authorizations, while members of the public have access in ULS to reference copies reflecting the most up-to-date information concerning all authorizations. The movement away from site-specific filings renders on-site comparison of paper records and operating parameters unnecessary and largely infeasible. Moreover, the Commission has not imposed the recordkeeping and station inspection requirements of Rules 22.301 and 22.303 on licensees in competing wireless services governed by Parts 24 and 27 of its rules. For these reasons, the Commission deletes 47 CFR 22.301 and 22.303.

    1 The Commission retains in any event its general station inspection authority under the Communications Act of 1934, as amended. See 47 U.S.C. 303(n).

    B. Deletion of 47 CFR 22.325 Concerning Control Points

    5. Commission Rule 22.325 requires that “[e]ach station in the Public Mobile Services [ ] have at least one control point and a person on duty who is responsible for station operation.” The Commission finds that this rule no longer serves the public interest; it is technologically obsolete, as licensees today routinely monitor their network operations by automatic and remote mechanisms. As with Rules 22.301 and 22.303, discussed above, there is no similar provision governing competing CMRS in the Commission's Part 24 or Part 27 rules. Part 22 licensees should have the same flexibility as Part 24 and Part 27 commercial wireless licensees to determine how to manage their networks to ensure compliance with the Commission's rules, including how best to avoid interference. Accordingly, the Commission deletes 47 CFR 22.325.

    C. Deletion of 47 CFR 22.321 Concerning Equal Employment Opportunity Programs and Reports

    6. Commission Rule 22.321 sets forth licensee obligations for equal employment opportunity (EEO) programs and policies to assure nondiscriminatory practices in recruitment, placement, promotion, and other areas of employment practices. Paragraph (c) of the rule requires all Part 22 licensees (i.e., PMS licensees), regardless of their size, to submit an annual report to the Commission indicating whether any EEO complaints have been filed at the federal, state, or local level against the licensee. Commission Rule 90.168, titled Equal Employment Opportunities, contains the same provisions as Rule 22.321. This includes paragraph 90.168(c) which, like 22.321(c), requires that a complaints report be filed annually regardless of the licensee's size. Rule 90.168 states that it applies to all CMRS (which includes the Part 22 PMS), and thus it entirely subsumes Rule 22.321. Given that all CMRS licensees are subject to 47 CFR 90.168, including 90.168(c), 47 CFR 22.321 is duplicative and, accordingly, the Commission deletes 47 CFR 22.321 in its entirety. As to the Part 90 reporting requirement, the Commission did not propose to remove that requirement, nor did any commenters suggest doing so. Part 90 rules are therefore beyond the scope of this proceeding and the Commission declines at this time to eliminate the complaints reporting requirement in 47 CFR 90.168.

    D. Deletion of 47 CFR 22.927 Concerning Responsibility for Mobile Stations, and 47 CFR 22.3 Concerning Authorization Required

    7. Under 47 CFR 22.927, Cellular licensees are “responsible for exercising effective operational control over mobile stations receiving service through their Cellular systems,” including mobile stations operated by subscribers to a different Cellular licensee. Pursuant to 47 CFR 1.903(c), the “[a]uthority for subscribers to operate mobile or fixed stations in the Wireless Radio Services [WRS],” which includes the Cellular Service, “is included in the authorization held by the licensee providing service to them.” Thus, when a WRS licensee, as the host carrier, provides service to a subscriber of another carrier (i.e., a subscriber that is outside its own provider's service area), the subscriber's use of his or her mobile phone to access the spectrum falls under that host carrier's authorization. Rule 1.903(c) thus captures the purpose underlying Rule 22.927, albeit with less detail. While the detailed provision in Rule 22.927 regarding the host carrier's responsibility under its authorization may have been warranted when the Cellular Service was in its nascency, the Commission finds that this additional rule is unnecessary these many decades later. Moreover, the rule creates asymmetry, as the rules for commercial wireless services established much later than the Cellular Service—such as PCS and AWS—do not have a counterpart to 47 CFR 22.927. Consistent with a key goal in this proceeding to eliminate unnecessary asymmetric regulations, the Commission deletes 47 CFR 22.927.

    8. The Commission concludes that a related legacy rule that applies to all Part 22 licensees, 47 CFR 22.3, is also no longer necessary. This rule specifies that PMS stations must be used and operated only in accordance with applicable Commission rules and only with a valid authorization granted by the Commission. It further specifies that authority for subscribers to operate mobile or fixed PMS stations is included in the authorization of the licensee providing service to them. The same provisions are included in the later-adopted 47 CFR 1.903, which applies more broadly to numerous wireless services in addition to the PMS. Accordingly, the Commission deletes 47 CFR 22.3 as duplicative.

    III. Possible Relocation of Rules to Part 27

    9. The Commission sought comment in the Second Further Notice on whether to migrate the Part 22 Cellular and Part 24 PCS rules to Part 27, and on possible reorganization of the Part 27 rules, either in this proceeding or by initiating a separate rulemaking. In addition, the Commission noted that there are other geographically-licensed, auctioned services that are not included in Part 27, including Public Coast (Part 80), Specialized Mobile Radio (SMR), Location and Monitoring, and 220 MHz (Part 90), and 218-219 MHz (Part 95), and that of these, only SMR is used today by wireless carriers to provide services directly to consumers nationwide. The Commission sought comment on whether it should move the Part 22 Cellular and Part 24 PCS rules to Part 27 in conjunction with moving those other service rule parts to Part 27 as well.

    10. Only two commenters addressed the issue, and one of them opposes the idea, highlighting the fact that disparate types of operations found in certain rule parts would make it challenging to consolidate Part 22 Cellular, Part 24 PCS, and other wireless mobile service rules into a single set of regulations. Such an exercise would entail painstaking review of numerous rules to determine those that can be consolidated and those that must be retained for individual services. In the absence of strong support on the record for this endeavor, which would require a significant investment of staff resources to complete, the Commission declines to pursue the issue at this time.

    IV. Other Regulations Raised by Commenters

    11. In response to the Commission's query in the Second Further Notice as to whether any other Part 22 rules are ripe for removal in light of changed technology, electronic licensing/recordkeeping, or other modernizations that have occurred over the past two decades, a few commenters requested deletion of three Part 22 rules. These rules and the Commission's decisions not to delete them at this time are explained below.

    12. 47 CFR 22.921—911 Call Processing Procedures. One commenter argued that Rule 22.921, pursuant to which certain Cellular Service mobile telephones that are capable of operating in the analog mode must incorporate a special procedure for processing 911 calls, is now obsolete because, among other reasons, it is unaware of any carrier that still offers analog devices or operates an analog Cellular system. Commission data show that, on the contrary, some carriers are still using analog technology in the Cellular Service band—and Rule 22.921 ensures that 911 calls get through in those circumstances. Accordingly, the Commission concludes that deletion of 47 CFR 22.921 would not serve the public interest and declines to take such action in this proceeding

    13. 47 CFR 22.925—Prohibition on Airborne Operation of Cellular Telephones. Two commenters raised issues regarding the use of Cellular Service spectrum for communications to, from, and onboard aircraft and argued that Rule 22.925, which prohibits the operation of Cellular Service telephones aboard “airplanes, balloons or any other type of aircraft . . . while such aircraft are airborne . . .,” should be eliminated, or at least modified. The issues raised by the two commenters are being dealt with in a separate Commission proceeding that remains open (WT Docket No. 13-301), and the Commission therefore declines to consider the issues in this Cellular Reform proceeding.

    14. 47 CFR 22.143(a)—Commencement of Construction Prior to Grant of Application. Rule 22.143 permits applicants to begin construction of PMS facilities prior to grant of their applications; paragraph (a) of the Rule specifies that such construction may begin “35 days after the date of the Public Notice listing the application for that facility as acceptable for filing.” One commenter argues that paragraph (a) of the Rule should be deleted, asserting that comparable provisions do not exist for other wireless services, and that other portions of the Rule put applicants on notice that they assume the risk of constructing prior to grant. The Commission disagrees that the provision should be deleted, noting that the same Public-Notice-plus-35-day period is specified in 47 CFR 90.169 of Commission rules for several other commercial wireless radio services.2 In addition, pre-grant construction under Rule 22.143 is subject to several conditions, including, among others, that no petitions to deny or mutually exclusive (competing) applications have been filed. When the Commission reduced the waiting period from the original 60-day and 90-day post-Public Notice periods to the existing Public-Notice-plus-35-days provision, it agreed that applicants should know within that timeframe whether any petition to deny or competing application had been filed, and retained these conditions to disallow construction when it cannot be reasonably certain of being able to grant the application. The Commission has also recognized that construction of PMS facilities entails not only the financial risk to the applicant, but also environmental and other consequences affecting the public, and it would not be in the public interest to allow construction until the Commission is reasonably certain that the facilities can be authorized. In a similar vein, it is in the public interest to minimize the Commission's risk of having to expend taxpayer resources to issue notification to the applicant, pursuant to 47 CFR 22.143(b), to stop construction. For all these reasons, the Commission declines to delete 47 CFR 22.143(a) at this time.

    2 The Commission also notes that, for applicants for licenses awarded by competitive bidding, which includes commercial wireless services such as PCS and AWS, the Commission has also established a waiting period, tailored to our competitive bidding process: Pre-grant construction is permitted only upon release of the Public Notice listing the post-auction long-form application for that facility as acceptable for filing (by which time, mutual exclusivity has been eliminated and the Commission is reasonably certain that the application can be granted). See 47 CFR 1.2113.

    V. Procedural Matters

    15. Paperwork Reduction Act Analysis. One rule amendment adopted in the Third R&O—specifically, 47 CFR 22.303, contains modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. That rule amendment will be submitted to OMB for review under section 3507(d) of the PRA. OMB, the general public, and other Federal agencies will be invited to comment on the modified information collection requirements. In addition, the Commission notes that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the Commission previously sought specific comment on how the Commission might further reduce the information collection burden for small business concerns with fewer than 25 employees. The Commission has assessed the effects on small business concerns of the rule changes it is adopting by this Third R&O and finds that businesses with fewer than 25 people will benefit from being subject to fewer recordkeeping, reporting, and compliance burdens.

    16. Congressional Review Act. The Commission will send a copy of this Third R&O to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

    17. Final Regulatory Flexibility Analysis. The Regulatory Flexibility Act of 1980 (RFA) requires that an agency prepare a regulatory flexibility analysis for notice and comment rulemakings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” Accordingly, the Commission has prepared a Final Regulatory Flexibility Analysis (FRFA), set forth in Appendix B of the Third R&O, concerning the possible impact of the rule changes.

    18. People with Disabilities. 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 & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).

    VI. Ordering Clauses

    19. Accordingly, it is ordered, pursuant to sections 1, 2, 4(i), 4(j), 7, 301, 303, 307, 308, 309, and 332 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 154(j), 157, 301, 303, 307, 308, 309, and 332, that this third report and order in WT Docket No. 12-40 is adopted.

    20. It is further ordered that the third report and order shall be effective September 4, 2018.

    21. It is further ordered that Part 22 of the Commission's rules, 47 CFR part 22, is amended as specified in Appendix A of the third report and order, effective September 4, 2018 except as otherwise provided herein.

    22. It is further ordered that the amendment adopted in the third report and order, and specified in Appendix A of the third report and order, to 47 CFR 22.303, which contains new or modified information collection requirements that require approval by the Office of Management and Budget under the Paperwork Reduction Act, will become effective after the Commission publishes a document in the Federal Register announcing such approval and the relevant effective date.

    23. It is further ordered that this Cellular Reform proceeding in WT Docket No. 12-40, including RM Nos. 11510 and 11660, is hereby terminated.

    24. It is further ordered, pursuant to Section 801(a)(1)(A) of the Congressional Review Act, 5 U.S.C. 801(a)(1)(A), that the Commission shall send a copy of the third report and order to Congress and to the Government Accountability Office.

    25. It is further ordered that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of the third report and order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

    List of Subjects in 47 CFR Part 22

    Communications common carriers, Reporting and recordkeeping requirements.

    Federal Communications Commission. Marlene Dortch, Secretary. Final Rules

    For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 22 as follows:

    PART 22—PUBLIC MOBILE SERVICES 1. The authority citation for part 22 continues to read as follows: Authority:

    47 U.S.C. 154, 222, 303, 309 and 332.

    § 22.3 [Removed and Reserved]
    2. Section 22.3 is removed and reserved.
    § 22.301 [Removed and Reserved]
    3. Section 22.301 is removed and reserved.
    § 22.303 [Removed and Reserved]
    4. Section 22.303 is removed and reserved.
    § 22.321 [Removed and Reserved]
    5. Section 22.321 is removed and reserved.
    § 22.325 [Removed and Reserved]
    6. Section 22.325 is removed and reserved.
    § 22.927 [Removed and Reserved]
    7. Section 22.927 is removed and reserved.
    [FR Doc. 2018-16512 Filed 8-1-18; 8:45 am] BILLING CODE 6712-01-P
    83 149 Thursday, August 2, 2018 Proposed Rules DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2017-0052; Product Identifier 2016-SW-081-AD] RIN 2120-AA64 Airworthiness Directives; Bell Helicopter Textron Inc. Helicopters AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    We propose to supersede airworthiness directive (AD) 2015-04-04 for Bell Helicopter Textron Inc. (Bell) Model 412 and 412EP helicopters. AD 2015-04-04 requires revising the Rotorcraft Flight Manual (RFM) and installing a placard to limit flights to visual flight rules (VFR) and prohibiting night operations because of failing inverters. This proposed AD would require replacing the inverters with a new inverter. The actions in this proposed AD are intended to correct an unsafe condition on these products.

    DATES:

    We must receive comments on this proposed AD by October 1, 2018.

    ADDRESSES:

    You may send comments by any of the following methods:

    Federal eRulemaking Docket: Go to http://www.regulations.gov. Follow the online instructions for sending your comments electronically.

    Fax: 202-493-2251.

    Mail: Send comments to the U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590-0001.

    Hand Delivery: Deliver to the “Mail” address between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    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-2017-0052; or in person at Docket Operations between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the economic evaluation, any comments received and other information. The street address for Docket Operations (telephone 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

    For service information identified in this proposed rule, contact Bell Helicopter Textron, Inc., P.O. Box 482, Fort Worth, TX 76101; telephone (817) 280-3391; fax (817) 280-6466; or at http://www.bellcustomer.com/files/. You may review service information at the FAA, Office of the Regional Counsel, Southwest Region, 10101 Hillwood Pkwy, Room 6N-321, Fort Worth, TX 76177.

    FOR FURTHER INFORMATION CONTACT:

    Tim Beauregard, Aviation Safety Engineer, DSCO Branch, AIR-7J0, FAA, 10101 Hillwood Pkwy, Fort Worth, TX 76177; telephone (817) 222-4357; email [email protected]

    SUPPLEMENTARY INFORMATION: Comments Invited

    We invite you to participate in this rulemaking by submitting written comments, data, or views. We also invite comments relating to the economic, environmental, energy, or federalism impacts that might result from adopting the proposals in this document. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should send only one copy of written comments, or if comments are filed electronically, commenters should submit only one time.

    We will file in the docket all comments that we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, we will consider all comments we receive on or before the closing date for comments. We will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. We may change this proposal in light of the comments we receive.

    Discussion

    We issued AD 2015-04-04, Amendment 39-18106 (80 FR 9594, February 24, 2015), for Bell Model 412 and 412EP helicopters with an inverter part number (P/N) 412-375-079-101 or 412-375-079-103 with a serial number 29145 or higher. AD 2015-04-04 was prompted by numerous failures of inverters. The failure of one inverter can result in smoke in the cockpit, making landing at night and during instrument meteorological conditions difficult. If two inverters fail, then the pilot will lose primary flight and navigation displays, autopilot, and alternate current powered engine and transmission indicators.

    To address this condition, Bell issued Alert Service Bulletin (ASB) 412-13-156, dated April 25, 2013, which specifies inspecting inverter part number (P/N) 412-375-079-101 and either repairing it or replacing it with inverter P/N 412-375-079-103 to prevent failure. Because the specific cause of the inverter failures had not been verified, and since inverter failures continued after Bell issued the ASB, we determined the actions specified in the ASB did not correct the unsafe condition. Therefore, AD 2015-04-04 requires revising the RFM and installing a placard in full view of the pilot to limit flights to VFR only and prohibit night operations.

    Actions Since AD 2015-04-04 Was Issued

    Since we issued AD 2015-04-04, Bell determined the root causes of the failures were an external connector that caused a short circuit inside inverter P/N 412-375-079-101 and components chafing because of variations in the assembly process and packaging tolerances for inverter P/N 412-375-079-103. Bell introduced an improved inverter, P/N 412-375-079-105, and retrofit kits to replace inverter P/N 412-375-079-101 or 412-375-079-103 on helicopters with serial numbers 33001 or higher. These replacements and repairs correct the unsafe condition by providing 250 voltage amperes (VA) of total power instead of 500 VA, thereby reducing the input power to the inverter.

    FAA's Determination

    We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of these same type designs.

    Related Service Information

    We reviewed Bell Alert Service Bulletin (ASB) 412-15-164, dated March 13, 2015 (ASB 412-15-164), which specifies an alternate means of compliance (AMOC) approved by the FAA for AD 2015-04-04 (80 FR 9594, February 24, 2015). Instead of the flight limitations mandated by AD 2015-04-04, ASB 412-15-164 limits allow operation under instrument flight rules (IFR) and night operations with two pilots.

    We also reviewed Bell ASB 412-16-171, dated March 22, 2016 (ASB 412-16-171), which specifies replacing certain serial-numbered inverters P/N 412-375-079-101 and 412-375-079-103 with inverter P/N 412-375-079-105 as a direct replacement or with a retrofit kit. Bell specifies that completing the actions specified by the ASB constitute terminating action for Bell ASB 412-15-164.

    Lastly, we reviewed Bell Service Instruction for Inverter Retrofit Kit BHT-412-SI-93, dated February 15, 2016, which provides instructions for installing retrofit kit P/N 412-704-058-103.

    Proposed AD Requirements

    The proposed AD would require, within 25 hours time-in-service (TIS), replacing the inverter with inverter P/N 412-375-079-105 and, for some helicopters, installing retrofit kit P/N 412-704-058-103.

    After accomplishing the previous actions, the proposed AD would allow removing the placard and Rotorcraft Flight Manual limitations that prohibit night operations and restrict flights to visual flight rules.

    After the effective date of this AD, this proposed AD would prohibit installing an inverter P/N 412-375-079-101 or 412-375-079-103 on any helicopter.

    Differences Between This Proposed AD and the Service Information

    Bell ASB 412-16-171 requires compliance no later than January 1, 2017, while this proposed AD would require compliance within 25 hours TIS. Bell ASB 412-16-171 makes an electrical load analysis a determining factor for corrective actions. This proposed AD would make no such requirement. Bell ASB 412-16-171 provides instructions for helicopters with serial numbers 36649, 36658, 36659, 36673, 36681 through 36684, 36686, 36688, 36690, 36692, 36694, and 36696 through 36704, and this proposed AD would not. Bell has notified us of errors in the S/Ns listed for Part B of ASB 412-16-171. Accordingly, this proposed AD would only be applicable to those serial-numbered helicopters subject to the unsafe condition.

    Costs of Compliance

    We estimate that this proposed AD would affect 73 helicopters of U.S. Registry and that labor costs average $85 per work-hour. Based on these estimates, we expect that installing a new inverter or retrofit kit would require about 3 work-hours and a parts cost of $15,749, for a total cost of $16,004 per helicopter and $1,168,292 for the U.S. fleet.

    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.

    Regulatory Findings

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

    For the reasons discussed, I certify this proposed regulation:

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

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

    3. Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction; 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.

    We prepared an economic evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket.

    List of Subjects in 14 CFR Part 39

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

    The Proposed Amendment

    Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 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 removing Airworthiness Directive (AD) 2015-04-04, Amendment 39-18106 (80 FR 9594, February 24, 2015), and adding the following new AD: Bell Helicopter Textron Inc.: Docket No. FAA-2017-0052; Product Identifier 2016-SW-081-AD. (a) Applicability

    This AD applies to Model 412 and 412EP helicopters with a serial number (S/N) 33001 through 33213, 34001 through 34036, 36001 through 36648, 36650 through 36657, 36660 through 36672, 36674 through 36680, 36685, 36687, 36689, 36691, 36693, 36695, and 37002 through 37012, certificated in any category, with a static inverter (inverter) part number (P/N) 412-375-079-101 or 412-375-079-103 installed.

    (b) Unsafe Condition

    This AD defines the unsafe condition as the failure of an inverter under instrument meteorological conditions or night flight. This condition could result in smoke in the cockpit, increased pilot workload due to the loss of primary flight and navigation displays, alternating current powered engine and transmission indicators, and autopilot, and subsequent loss of control of the helicopter.

    (c) Affected ADs

    This AD replaces AD 2015-04-04, Amendment 39-18106 (80 FR 9594, February 24, 2015).

    (d) Comments Due Date

    We must receive comments by October 1, 2018.

    (e) Compliance

    You are responsible for performing each action required by this AD within the specified compliance time unless it has already been accomplished prior to that time.

    (f) Required Actions

    (1) Within 25 hours time-in-service:

    (i) For helicopters with a S/N 33001 through 33213, 34001 through 34036, and 36001 through 36086, replace the inverter with inverter P/N 412-375-079-105.

    (ii) For helicopters with a S/N 36087 through 36648, 36650 through 36657, 36660 through 36672, 36674 through 36680, 36685, 36687, 36689, 36691, 36693, 36695, and 37002 through 37012, install retrofit kit P/N 412-704-058-103 and replace the inverter with inverter P/N 412-375-079-105.

    (2) After accomplishing the actions required by paragraph (f)(1) of this AD, you may remove the placard and Rotorcraft Flight Manual limitations, required by AD 2015-04-04, prohibiting night operations and restricting flights to visual flight rules.

    (3) After the effective date of this AD, do not install an inverter P/N 412-375-079-101 or 412-375-079-103 on any helicopter.

    (g) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, DSCO, FAA, may approve AMOCs for this AD. Send your proposal to: Tim Beauregard, Aviation Safety Engineer, DSCO Branch, AIR-7J0, FAA, 10101 Hillwood Pkwy, Fort Worth, TX 76177; telephone 817-222-5190; email [email protected]

    (2) For operations conducted under a 14 CFR part 119 operating certificate or under 14 CFR part 91, subpart K, we suggest that you notify your principal inspector, or lacking a principal inspector, the manager of the local flight standards district office or certificate holding district office before operating any aircraft complying with this AD through an AMOC.

    (h) Additional Information

    Bell Alert Service Bulletin 412-15-164, dated March 13, 2015, and Bell Alert Service Bulletin 412-16-171, dated March 22, 2016, which are not incorporated by reference, contain additional information about the subject of this AD. For service information identified in this AD, contact Bell Helicopter Textron, Inc., P.O. Box 482, Fort Worth, TX 76101; telephone (817) 280-3391; fax (817) 280-6466; or at http://www.bellcustomer.com/files/. You may review this service information at the FAA, Office of the Regional Counsel, Southwest Region, 10101 Hillwood Pkwy., Room 6N-321, Fort Worth, TX 76177.

    (i) Subject

    Joint Aircraft Service Component (JASC) Code: 2422, AC Inverter.

    Issued in Fort Worth, Texas, on June 19, 2018. Scott A. Horn, Deputy Director for Regulatory Operations, Compliance and Airworthiness Division, Aircraft Certification Service.
    [FR Doc. 2018-16495 Filed 8-1-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0637; Product Identifier 2018-NM-091-AD] RIN 2120-AA64 Airworthiness Directives; Airbus SAS Airplanes AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    We propose to adopt a new airworthiness directive (AD) for certain Airbus SAS Model A350-941 airplanes. This proposed AD was prompted by leakage of shrouded pipe T-boxes in the potable water system. This proposed AD would require replacement of the affected potable water T-boxes and clamps with new parts. We are proposing this AD to address the unsafe condition on these products.

    DATES:

    We must receive comments on this proposed AD by September 17, 2018.

    ADDRESSES:

    You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:

    Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.

    Fax: 202-493-2251.

    Mail: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590.

    Hand Delivery: Deliver to Mail address above between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    For service information identified in this NPRM, contact Airbus SAS, Airworthiness Office—EAL, Rond-Point Emile Dewoitine No: 2, 31700 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 45 80; email [email protected]; internet http://www.airbus.com. You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.

    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-2018-0637; or in person at Docket Operations between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this NPRM, the regulatory evaluation, any comments received, and other information. The street address for Docket Operations (phone: 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

    FOR FURTHER INFORMATION CONTACT:

    Kathleen Arrigotti, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3218.

    SUPPLEMENTARY INFORMATION:

    Comments Invited

    We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2018-0637; Product Identifier 2018-NM-091-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. We will consider all comments received by the closing date and may amend this NPRM because of those comments.

    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this NPRM.

    Discussion

    The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2018-0111R1, dated May 30, 2018 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus SAS Model A350-941 airplanes. The MCAI states:

    During a pressure test on the A350 Final Assembly Line (FAL), leakage was observed on the potable water system shrouded pipes, due to a crack failure on the T-Boxes. Leakage of a primary pipe may cause water ingress into the avionics bay. Additionally, during another pressure proof test on the A350 FAL, loss of torque was detected on the clamps used to attach the shrouded pipes on the T-Boxes.

    This condition, if not corrected, could lead to loss of systems/equipment located inside the avionics bay, possibly resulting in an unsafe condition.

    Prompted by these findings, Airbus developed improved potable water T-Boxes and clamps, which are embodied in production through Airbus mod 111435 or mod 111440, and introduced in service through the SB [Service Bulletin].

    For the reasons described above, this [EASA] AD requires replacement of the affected potable water shrouded pipe T-Boxes and clamps with new parts.

    This [EASA] AD was revised to exclude post-mod 111440 aeroplanes from the Applicability.

    This condition, if not corrected, could lead to the loss of systems/equipment located inside the avionics bay and possible loss of control of the airplane. You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0637.

    Related Service Information Under 1 CFR Part 51

    Airbus SAS has issued Service Bulletin A350-38-P004, dated April 11, 2018. This service information describes procedures for replacing the affected potable water T-boxes and clamps with new parts. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

    FAA's Determination

    This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop on other products of the same type design.

    Proposed Requirements of This NPRM

    This proposed AD would require accomplishing the actions specified in the service information described previously.

    Explanation of Change to Applicability

    We have revised the applicability of this AD to identify model designations as published in the most recent type certificate data sheet for the affected model.

    Costs of Compliance

    We estimate that this proposed AD affects 7 airplanes of U.S. registry. We estimate the following costs to comply with this proposed AD:

    Estimated Costs Labor cost Parts cost Cost per product Cost on U.S. operators Up to 16 work-hours × $85 per hour = $1,360 Up to $2,050 Up to $3,410 Up to $23,870.

    According to the manufacturer, some or all of the costs of this proposed AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all known costs in our cost estimate.

    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 proposed AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes to the Director of the System Oversight Division.

    Regulatory Findings

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

    For the reasons discussed above, I certify this proposed regulation:

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

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

    3. Will not affect intrastate aviation in Alaska; and

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

    List of Subjects in 14 CFR Part 39

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

    The Proposed Amendment

    Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 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): Airbus SAS: Docket No. FAA-2018-0637; Product Identifier 2018-NM-091-AD. (a) Comments Due Date

    We must receive comments by September 17, 2018.

    (b) Affected ADs

    None.

    (c) Applicability

    This AD applies to Airbus SAS Model A350-941 airplanes, certificated in any category, except those on which Airbus SAS modification (mod) 111435 or mod 111440 has been embodied in production.

    (d) Subject

    Air Transport Association (ATA) of America Code 38, Water/waste.

    (e) Reason

    This AD was prompted by leakage of shrouded pipe T-boxes in the potable water system. We are issuing this AD to address the possible leakage of water into the avionics bay. This condition, if not corrected, could lead to the loss of systems/equipment located inside the avionics bay and possible loss of control of the airplane.

    (f) Compliance

    Comply with this AD within the compliance times specified, unless already done.

    (g) Required Actions

    Within 36 months after the effective date of this AD: Replace the affected potable water T-boxes and clamps with new parts in accordance with the Accomplishment Instructions of Airbus Service Bulletin A350-38-P004, dated April 11, 2018.

    (h) Other FAA AD Provisions

    The following provisions also apply to this AD:

    (1) Alternative Methods of Compliance (AMOCs): The Manager, International Section, Transport Standards Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the International Section, send it to the attention of the person identified in paragraph (i)(2) of this AD. Information may be emailed to: [email protected] Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

    (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, International Section, Transport Standards Branch, FAA; or the European Aviation Safety Agency (EASA); or Airbus SAS's EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.

    (3) Required for Compliance (RC): If any service information contains procedures or tests that are identified as RC, those procedures and tests must be done to comply with this AD; any procedures or tests that are not identified as RC are recommended. Those procedures and tests that are not identified as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the procedures and tests identified as RC can be done and the airplane can be put back in an airworthy condition. Any substitutions or changes to procedures or tests identified as RC require approval of an AMOC.

    (i) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA Airworthiness Directive 2018-0111R1, dated May 30, 2018, for related information. This MCAI may be found in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0637.

    (2) For more information about this AD, contact Kathleen Arrigotti, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3218.

    (3) For service information identified in this AD, contact Airbus SAS, Airworthiness Office—EAL, Rond-Point Emile Dewoitine No: 2, 31700 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 45 80; email [email protected]; internet http://www.airbus.com. You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.

    Issued in Des Moines, Washington, on July 23, 2018. James Cashdollar, Acting Director, System Oversight Division, Aircraft Certification Service.
    [FR Doc. 2018-16488 Filed 8-1-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0638; Product Identifier 2018-NM-016-AD] RIN 2120-AA64 Airworthiness Directives; Viking Air Limited (Type Certificate Previously Held by Bombardier, Inc.; Canadair Limited) Airplanes AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    We propose to supersede Airworthiness Directive (AD) 2013-11-03, which applies to certain Viking Air Limited Model CL-215-1A10 and CL-215-6B11 (CL-215T Variant) airplanes. AD 2013-11-03 requires repetitive detailed inspections for cracking of the left-hand (LH) and right-hand (RH) wing lower skin, and repair if necessary. AD 2013-11-03 was prompted by reports of a fractured wing lower rear spar cap and reinforcing strap. Since we issued AD 2013-11-03, further analysis has indicated the need for repetitive eddy current and borescope inspections. This proposed AD would require repetitive borescope inspections of the LH and RH wing lower skin and repetitive eddy current inspections of the LH and RH wing front and rear lower spar caps. We are proposing this AD to address the unsafe condition on these products.

    DATES:

    We must receive comments on this proposed AD by September 17, 2018.

    ADDRESSES:

    You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:

    Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.

    Fax: 202-493-2251.

    Mail: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590.

    Hand Delivery: Deliver to Mail address above between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    For service information identified in this NPRM, contact Viking Air Limited, 1959 de Havilland Way, Sidney, British Columbia V8L 5V5, Canada; telephone +1-250-656-7227; fax +1-250-656-0673; email [email protected]; internet http://www.vikingair.com. You may view this referenced service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.

    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-2018-0638; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

    FOR FURTHER INFORMATION CONTACT:

    Andrea Jimenez, Aerospace Engineer, Airframe and Mechanical Systems Section, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7330; fax 516-794-5531.

    SUPPLEMENTARY INFORMATION:

    Comments Invited

    We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2018-0638; Product Identifier 2018-NM-016-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD based on those comments.

    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

    Discussion

    We issued AD 2013-11-03, Amendment 39-17463 (78 FR 32353, May 30, 2013) (“AD 2013-11-03”), for certain Viking Air Limited Model CL-215-1A10 and CL-215-6B11 (CL-215T Variant) airplanes. AD 2013-11-03 requires repetitive detailed inspections for cracking of the LH and RH wing lower skin, and repair if necessary. AD 2013-11-03 resulted from reports of a fractured wing lower rear spar cap and reinforcing strap. We issued AD 2013-11-03 to detect and correct cracked wing structure, which could result in failure of the wing.

    Actions Since AD 2013-11-03 Was Issued

    Since we issued AD 2013-11-03, an operator reported damage to the wing lower skin and rear spar of an airplane. This damage was noticed 95 flight hours after an ultrasonic inspection. Further analysis by the airplane manufacturer and the FAA has determined that the ultrasonic inspection might not have been adequate to detect a crack in the spar cap, and there is a need for repetitive eddy current and borescope inspections.

    Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive, CF-2013-11R1, dated October 30, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Viking Air Limited Model CL-215-1A10 and CL-215-6B11 (CL-215T Variant) airplanes. The MCAI states:

    While performing modifications on a CL-215-1A10 aeroplane, an operator discovered that the wing lower rear spar cap and reinforcing strap were fractured at Wing Stations (WS) 49.5 and 50 respectively and the rear spar web and wing lower skin were also cracked. It is suspected that a crack initiated at the wing lower spar cap, leading to its failure, the subsequent failure of the reinforcing strap and cracking of the spar web and wing lower skin. The damage was outside of the area addressed by the repetitive ultrasonic inspections required by [Canadian] AD CF-1992-26R2 [which corresponds to FAA AD 2012-11-04, Amendment 39-17067 (77 FR 32892, June 4, 2012)] and was found 95 hours air time after the last ultrasonic inspection.

    Failure and cracking of the above-noted wing structure, if not detected, could result in failure of the wing.

    In order to mitigate the unsafe condition, [Canadian] AD CF-2013-11 [which corresponds to FAA AD 2013-11-03] was released. However, further analysis has indicated the need for repetitive eddy current and borescope inspections. Therefore, Revision 1 of this [Canadian] AD mandates a repetitive detailed inspection of the wing lower skin using a borescope, changes the one-time eddy current inspection of the lower front and rear spar caps to a repetitive inspection and eliminates the one-time detailed inspection with fuel bladders removed.

    The requirements of [Canadian] AD CF-1992-26R2 remain applicable.

    You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0638.

    Related Service Information Under 1 CFR Part 51

    Bombardier has issued Alert Service Bulletin 215-A558, Revision 3, dated June 3, 2016. This service information describes procedures for detecting cracks using repetitive borescope inspections of the LH and RH wing lower skin and repetitive eddy current inspections of the LH and RH wing front and rear lower spar caps. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

    FAA's Determination and Requirements of This Proposed AD

    This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of these same type designs.

    Costs of Compliance

    We estimate that this proposed AD affects 4 airplanes of U.S. registry. We estimate the following costs to comply with this proposed AD:

    Estimated Costs Action Labor cost Parts cost Cost per product Cost on U.S. operators Borescope and eddy current inspections 8 work-hours × $85 per hour = $680 per inspection cycle $0 $680 per inspection cycle $2,720 per inspection cycle.

    We have received no definitive data that would enable us to provide cost estimates for the on-condition actions specified in this proposed AD.

    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 proposed AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes to the Director of the System Oversight Division.

    Regulatory Findings

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

    For the reasons discussed above, I certify this proposed regulation:

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

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

    3. Will not affect intrastate aviation in Alaska, and

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

    List of Subjects in 14 CFR Part 39

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

    The Proposed Amendment

    Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 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 removing Airworthiness Directive (AD) 2013-11-03, Amendment 39-17463 (78 FR 32353, May 30, 2013), and adding the following new AD: Viking Air Limited (Type Certificate Previously Held by Bombardier, Inc.; Canadair Limited): Docket No. FAA-2018-0638; Product Identifier 2018-NM-016-AD. (a) Comments Due Date

    We must receive comments by September 17, 2018.

    (b) Affected ADs

    This AD replaces AD 2013-11-03, Amendment 39-17463 (78 FR 32353, May 30, 2013) (“AD 2013-11-03”).

    (c) Applicability

    This AD applies to the Viking Air Limited (Type Certificate previously held by Bombardier, Inc.; Canadair Limited) airplanes identified in paragraphs (c)(1) and (c)(2) of this AD, certificated in any category.

    (1) Model CL-215-1A10 airplanes, serial numbers (S/Ns) 1001 through 1125 inclusive.

    (2) Model CL-215-6B11 (CL-215T Variant) airplanes, S/Ns 1056 through 1125 inclusive.

    (d) Subject

    Air Transport Association (ATA) of America Code 57, Wings.

    (e) Reason

    This AD was prompted by reports of cracking of the wing lower skin and rear spar. We are issuing this AD to address cracked wing structure, which could result in failure of the wing.

    (f) Compliance

    Comply with this AD within the compliance times specified, unless already done.

    (g) Repetitive Borescope Inspection

    Within 50 flight hours after the effective date of this AD: Using a borescope, do a detailed inspection for cracking of the left-hand (LH) and right-hand (RH) wing lower skin between wing station (WS) 45.00 and 51.00, in accordance with Part A of Bombardier Alert Service Bulletin 215-A558, Revision 3, dated June 3, 2016. Repeat the inspection thereafter at intervals not to exceed 50 flight hours until the initial eddy current inspection required by paragraph (h) of this AD has been accomplished. After accomplishment of the initial eddy current inspection required by paragraph (h) of this AD, the borescope inspection interval required by this paragraph may be extended to 300 flight hours.

    (h) Repetitive Eddy Current Inspections

    Within 300 flight hours after the effective date of this AD: Do an eddy current inspection for cracking of the LH and RH wing front and rear lower spar caps, in accordance with Parts C-1 and C-2 of Bombardier Alert Service Bulletin 215-A558, Revision 3, dated June 3, 2016. Repeat the inspection thereafter at intervals not to exceed 300 flight hours.

    (i) Corrective Actions

    If any crack, as defined in Bombardier Alert Service Bulletin 215-A558, Revision 3, dated June 3, 2016, is found during any inspection required by paragraph (g) or paragraph (h) of this AD: Before further flight, repair using a method approved by the FAA; or Transport Canada Civil Aviation (TCCA); or Viking Air Limited's TCCA Design Approval Organization (DAO). If approved by the DAO, the approval must include the DAO-authorized signature.

    (j) Credit for Previous Actions

    This paragraph provides credit for the initial inspections required by paragraphs (g) and (h) of this AD if those actions were performed before the effective date of this AD using Bombardier Alert Service Bulletin 215-A558, Revision 1, dated January 10, 2014; or Bombardier Alert Service Bulletin 215-A558, Revision 2, dated January 17, 2014.

    (k) No Reporting Requirement

    Although Bombardier Alert Service Bulletin 215-A558, Revision 3, dated June 3, 2016, specifies to submit certain information to the manufacturer, this AD does not include that requirement.

    (l) Other FAA AD Provisions

    (1) Alternative Methods of Compliance (AMOCs): The Manager, New York ACO Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the certification office, send it to ATTN: Program Manager, Continuing Operational Safety, FAA, New York ACO Branch.

    (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, New York ACO Branch, FAA; or TCCA; or Viking Air Limited's TCCA DAO. If approved by the DAO, the approval must include the DAO-authorized signature.

    (m) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information (MCAI) Canadian Airworthiness Directive CF-2013-11R1, dated October 30, 2017, for related information. This MCAI may be found in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0638.

    (2) For more information about this AD, contact Andrea Jimenez, Aerospace Engineer, Airframe and Mechanical Systems Section, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7330; fax 516-794-5531.

    (3) For service information identified in this AD, contact Viking Air Limited, 1959 de Havilland Way, Sidney, British Columbia V8L 5V5, Canada; telephone +1-250-656-7227; fax +1-250-656-0673; email [email protected]; internet http://www.vikingair.com. You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.

    Issued in Des Moines, Washington, on July 23, 2018. James Cashdollar, Acting Director, System Oversight Division, Aircraft Certification Service.
    [FR Doc. 2018-16490 Filed 8-1-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0690; Product Identifier 2018-CE-022-AD] RIN 2120-AA64 Airworthiness Directives; Gulfstream Aerospace Corporation Airplanes AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    We propose to adopt a new airworthiness directive (AD) for certain Gulfstream Aerospace Corporation Models G-IV and GIV-X airplanes. This proposed AD was prompted by a revision to the airworthiness limitations section (ALS) of the aircraft maintenance manual (AMM) based on fatigue and damage tolerance testing and updated analysis. This proposed AD would require revising the maintenance or inspection program to incorporate updated inspection requirements and life limits that address fatigue cracking of principal structural elements (PSEs). We are proposing this AD to address the unsafe condition on these products.

    DATES:

    We must receive comments on this proposed AD by September 17, 2018.

    ADDRESSES:

    You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:

    Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.

    Fax: 202-493-2251.

    Mail: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590.

    Hand Delivery: Deliver to Mail address above between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    For service information identified in this NPRM, contact Gulfstream Aerospace Corporation, Technical Publications Dept., 500 Gulfstream Road, Savannah, GA 31402-2206; telephone: 800-810-4853; fax: 912-965-3520; email: [email protected]; internet: http://www.gulfstream.com/product_support/technical_pubs/pubs/index.htm. You may view this service information at the FAA, Policy and Innovation Division, 901 Locust, Kansas City, Missouri 64106. For information on the availability of this material at the FAA, call (816) 329-4148.

    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-2018-0690; or in person at Docket Operations between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this NPRM, the regulatory evaluation, any comments received, and other information. The street address for Docket Operations (phone: 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

    FOR FURTHER INFORMATION CONTACT:

    Ronald “Ron” Wissing, Airframe Engineer, Atlanta ACO Branch, FAA, 1701 Columbia Avenue, College Park, Georgia 30337; phone: 404-474-5552; fax: 404-474-5606; email: [email protected]

    SUPPLEMENTARY INFORMATION:

    Comments Invited

    We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2018-0690; Product Identifier 2018-CE-022-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. We will consider all comments received by the closing date and may amend this NPRM because of those comments.

    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this NPRM.

    Discussion

    We received a revision to the ALS of the maintenance manual for Gulfstream Aerospace Corporation Models G-IV and GIV-X airplanes based on fatigue and damage tolerance testing and updated analysis that indicates current inspection programs may not be identifying cracks before reaching critical size. The revised ALS updates inspection requirements and life limits that address fatigue cracking of PSEs. We determined that these actions are necessary to address the identified unsafe condition. This condition, if not corrected, could result in fatigue cracking of PSEs, which could result in reduced structural integrity of the PSEs and critical components with consequent loss of control of the airplane.

    Related Service Information Under 1 CFR Part 51

    We reviewed Gulfstream Document No. GIV-GER-0008, Summary of Changes to the GIV Series and GIV-X Series Airworthiness Limitations, Revision B, dated March 12, 2018. The service information describes more restrictive inspection intervals or altered NDT inspection requirements and updated life limits that address fatigue cracking of the PSEs. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

    FAA's Determination

    We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

    Proposed AD Requirements

    This proposed AD would require revising the AMM, Chapter 5 “Life Limits” and “Airworthiness Limitations” sections, to incorporate new inspections and life limits based on fatigue and damage tolerance (FTD) testing and updated analysis.

    Costs of Compliance

    We estimate that this proposed AD affects 711 airplanes of U.S. registry.

    We estimate the following costs to comply with this proposed AD:

    Estimated Costs Action Labor cost Parts cost Cost per
  • product
  • Cost on U.S. operators
    Revise ALS and AMM 20 work-hour × $85 per hour = $1,700 Not applicable $1,700 $1,208,700
    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 proposed AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to 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 proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

    For the reasons discussed above, I certify this proposed regulation:

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

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

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

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

    List of Subjects in 14 CFR Part 39

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

    The Proposed Amendment

    Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 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): Gulfstream Aerospace Corporation: Docket No. FAA-2018-0690; Product Identifier 2018-CE-022-AD. (a) Comments Due Date

    We must receive comments by September 17, 2018.

    (b) Affected ADs

    None.

    (c) Applicability

    This AD applies to Gulfstream Aerospace Corporation Model G-IV airplanes, certificated in any category, serial numbers 1000 through 1535; and Model GIV-X airplanes, certificated in any category, serial numbers 4001 through 4363.

    Note 1 to paragraph (c) of this AD: Model G-IV airplanes are also referred to by the marketing designations G300 and G400. Model GIV-X airplanes are also referred to by the marketing designations G350 and G450.

    (d) Subject

    Joint Aircraft System Component (JASC)/Air Transport Association (ATA) of America Code 27, Flight Controls; 32, Landing Gear; 52, Doors; 53, Fuselage; 55, Stabilizers; 57, Wings; 71, Power Plant-General; and 78, Engine Exhaust.

    (e) Unsafe Condition

    This AD was prompted by a revision to the airworthiness limitations section (ALS) of the Model G-IV and Model GIV-X maintenance manuals based on fatigue and damage tolerance testing and updated analysis. We are issuing this AD to detect and correct fatigue cracking of principal structural elements (PSEs). This unsafe condition, if unaddressed, could result in reduced structural integrity of a PSE or critical component and lead to loss of control of the airplane.

    (f) Compliance

    Comply with this AD within the compliance times specified, unless already done.

    (g) Airplane Maintenance Manual Revisions

    Within 12 months after the effective date of this AD, revise the ALS of your maintenance or inspection program (e.g., maintenance manual) to incorporate the airworthiness limitations specified in Gulfstream Document No. GIV-GER-0008, Summary of Changes to the GIV Series and GIV-X Series Airworthiness Limitations, Revision B, dated March 12, 2018, as applicable to your model and serial number airplane.

    (h) No Alternative Actions or Intervals

    After the maintenance or inspection program (e.g., maintenance manual) has been revised as required by paragraph (g) of this AD, no alternative inspections or intervals may be used unless approved as an alternative method of compliance in accordance with the procedures specified in paragraph (i) of this AD.

    (i) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Atlanta ACO Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the certification office, send it to the attention of the person identified in paragraph (j)(1) of this AD.

    (2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

    (j) Related Information

    (1) For more information about this AD, contact Ronald “Ron” Wissing, Airframe Engineer, Atlanta ACO Branch, FAA, 1701 Columbia Avenue, College Park, Georgia 30337; phone: 404-474-5552; fax: 404-474-5606; email: [email protected]

    (2) For service information identified in this AD, contact Gulfstream Aerospace Corporation, P.O. Box 2206, Savannah, Georgia 31402-2206; telephone: (800) 810-4853; fax 912-965-3520; email: [email protected]; internet: http://www.gulfstream.com/product_support/technical_pubs/pubs/index.htm. You may view this referenced service information at the FAA, Policy and Innovation Division, 901 Locust, Kansas City, Missouri 64106. For information on the availability of this material at the FAA, call (816) 329-4148.

    Issued in Kansas City, Missouri, on July 25, 2018. Pat Mullen, Aircraft Certification Service, Acting Deputy Director, Policy and Innovation Division, AIR-601.
    [FR Doc. 2018-16491 Filed 8-1-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2017-0349; Airspace Docket No. 17-AAL-5] RIN-2120-AA66 Proposed Modification of Class E Airspace for the Following Alaska Towns; St. Michael, AK; Shaktoolik, AK; and Tatitlek, AK AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    This action proposes to modify Class E airspace extending upward from 1,200 feet above the surface at St. Michael Airport, AK; Shaktoolik Airport, AK; and Tatitlek Airport, AK. This proposal would add exclusionary language to the legal descriptions of these airports to exclude Class E airspace extending beyond 12 miles from the shoreline, and would ensure the safety and management of aircraft within the National Airspace System.

    DATES:

    Comments must be received on or before September 17, 2018.

    ADDRESSES:

    Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, 1200 New Jersey Avenue SE, West Building Ground Floor, Room W12-140, Washington, DC 20590; telephone: 1-800-647-5527, or (202) 366-9826. You must identify FAA Docket No. FAA-2017-0349; Airspace Docket No. 17-AAL-5, at the beginning of your comments. You may also submit comments through the internet at http://www.regulations.gov.

    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 7400.11A 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:

    Richard Roberts, Federal Aviation Administration, Operations Support Group, Western Service Center, 2200 S. 216th St., Des Moines, WA, 98198-6547; telephone (206) 231-2245.

    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 would amend Class E airspace extending upward from 1,200 feet above the surface at St. Michael Airport, AK; Shaktoolik Airport, AK; and Tatitlek Airport, AK to support IFR operations in standard instrument approach and departure procedures at these airports.

    Comments Invited

    Interested parties are invited to participate in 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 and be submitted in triplicate to the address listed above. Persons wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2017-0349/Airspace Docket No. 17-AAL-5”. 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 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 the 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 during normal business hours at the Northwest Mountain Regional Office of the Federal Aviation Administration, Air Traffic Organization, Western Service Center, Operations Support Group, Western Service Center, 2200 S 216th St., Des Moines, WA 98198-6547.

    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 proposing an amendment to Title 14 Code of Federal Regulations (14 CFR) part 71 by modifying Class E airspace extending upward from 1,200 feet above the surface at St. Michael Airport, AK; Shaktoolik Airport, AK; and Tatitlek Airport, AK. This action would add language to the legal descriptions of these airports that reads “excluding that airspace that extends beyond 12 miles from the shoreline”.

    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 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, and is non-controversial and unlikely to result in adverse or negative comments. 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 rule, when promulgated, would 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.

    List of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (air).

    The Proposed Amendment

    Accordingly, pursuant to the authority delegated to me, 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 14 CFR 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, and effective September 15, 2017, is amended as follows: Paragraph 6005 Class E Airspace Areas Extending Upward From 1,200 Feet or More Above the Surface of the Earth. AAL AK E5 Shaktoolik, AK [Amended] Shaktoolik Airport, AK (Lat. 64°22′16″ N, long. 161°13′26″ W)

    That airspace extending upward from 700 feet above the surface within a 6.4-mile radius of Shaktoolik Airport; and that airspace extending upward from 1,200 feet above the surface within a 73-mile radius of Shaktoolik Airport, AK, excluding that airspace that extends beyond 12 miles of the shoreline.

    AAL AK E5 St. Michael, AK [Amended] St. Michael Airport, AK (Lat. 63°29′24″ N, long. 162°06′37″ W)

    That airspace extending upward from 700 feet above the surface within an 8.4-mile radius of St. Michael Airport; and that airspace extending upward from 1,200 feet above the surface within a 73-mile radius of the St. Michael Airport, excluding that airspace that extends beyond 12 miles of the shoreline.

    AAL AK E5 Tatitlek, AK [Amended] Tatitlek Airport, AK (Lat. 60°52′21″ N, long. 146°41′28″ W)

    That airspace extending upward from 700 feet above the surface within a 6.4-mile radius of Tatitlek Airport, and within 2 miles southwest and 3.4 miles northeast of the 149° radial from Tatitlek Airport extending from the 6.4-mile radius to 11.8 miles southeast of the airport; and that airspace extending upward from 1,200 feet above the surface within a 60-mile radius of the Tatitlek Airport, excluding that airspace that extends beyond 12 miles of the shoreline.

    Issued in Seattle, Washington, on July 25, 2018. Shawn M. Kozica, Group Manager, Operations Support Group, Western Service Center.
    [FR Doc. 2018-16489 Filed 8-1-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2017-0345; Airspace Docket No. 17-AAL-1] RIN-2120-AA66 Proposed Modification of Class E Airspace for the Following Alaska Towns; Barrow, AK; Chevak, AK; Clarks Point, AK; Elim, AK; and Golovin, AK AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    This action proposes to modify Class E airspace extending upward from 1,200 feet above the surface in Alaska at Wiley Post/Will Rogers Memorial Airport, Barrow; Chevak Airport; Clarks Point Airport; Elim Airport; and Golovin Airport. This proposal would add exclusionary language to the legal descriptions of these airports to exclude Class E airspace extending beyond 12 miles from the shoreline, and would ensure the safety and management of aircraft within the National Airspace System. Also, an editorial change would be made in the associated airspace designation for Chevak Airport.

    DATES:

    Comments must be received on or before September 17, 2018.

    ADDRESSES:

    Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, 1200 New Jersey Avenue SE, West Building Ground Floor, Room W12-140, Washington, DC 20590; telephone: (800) 647-5527, or (202) 366-9826. You must identify FAA Docket No. FAA-2017-0345; Airspace Docket No. 17-AAL-1, at the beginning of your comments. You may also submit comments through the internet at http://www.regulations.gov.

    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:

    Richard Roberts, Federal Aviation Administration, Operations Support Group, Western Service Center, 2200 S 216th St., Des Moines, WA 98198-6547; telephone (206) 231-2245.

    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 would amend Class E airspace extending upward from 1,200 feet above the surface at Wiley Post/Will Rogers Memorial Airport, Barrow; Chevak Airport, Clarks Point Airport, Elim Airport, and Golovin Airport, AK, to support IFR operations in standard instrument approach and departure procedures at these airports.

    Comments Invited

    Interested parties are invited to participate in 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 and be submitted in triplicate to the address listed above. Persons wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2017-0345; Airspace Docket No. 17-AAL-1.” 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 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 the 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 during normal business hours at the Northwest Mountain Regional Office of the Federal Aviation Administration, Air Traffic Organization, Western Service Center, Operations Support Group, 2200 S 216th St., Des Moines, WA 98198-6547.

    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 proposing an amendment to Title 14 Code of Federal Regulations (14 CFR) part 71 by modifying Class E airspace extending upward from 1,200 feet above the surface at Wiley Post/Will Rogers Memorial Airport, Barrow, AK; Chevak Airport, Clarks Point Airport, Elim Airport, and Golovin Airport, AK. This action would add language to the legal descriptions of these airports that reads “excluding that airspace that extends beyond 12 miles from the shoreline”.

    An editorial change also would be made to the Chevak airspace designation removing the city from the airport name to comply with a change to FAA Order 7400.2L, Procedures for Handling Airspace Matters.

    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 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, and is non-controversial and unlikely to result in adverse or negative comments. 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 rule, when promulgated, would 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.

    List of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (air).

    The Proposed Amendment

    Accordingly, pursuant to the authority delegated to me, 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 14 CFR 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, 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. AAL AK E5 Barrow, AK [Amended] Wiley Post/Will Rogers Memorial Airport, AK (Lat. 71°17′06″ N, long. 156°46′07″ W)

    That airspace extending upward from 700 feet above the surface within a 6.6-mile radius of the Wiley Post/Will Rogers Memorial Airport; and that airspace extending upward from 1,200 feet above the surface within a 73-mile radius of the Wiley Post/Will Rogers Memorial Airport, excluding that airspace extending beyond 12 miles of the shoreline.

    AAL AK E5 Chevak, AK [Amended] Chevak Airport, AK (Lat. 61°32′27″ N, long. 165°36′03″ W)

    That airspace extending upward from 700 feet above the surface within a 7.0-mile radius of Chevak Airport; and that airspace extending upward from 1,200 feet above the surface within a 73-mile radius of Chevak Airport, excluding that airspace extending beyond 12 miles of the shoreline.

    AAL AK E5 Clarks Point, AK [Amended] Clarks Point Airport, AK (Lat. 58°50′01″ N, long. 158°31′46″ W)

    That airspace extending upward from 700 feet above the surface within a 6.3-mile radius of Clarks Point Airport; and that airspace extending upward from 1,200 feet above the surface within a 73-mile radius of the Clarks Point Airport, excluding that airspace extending beyond 12 miles of the shoreline.

    AAL AK E5 Elim, AK [Amended] Elim Airport, AK (Lat. 64°36′54″ N, long. 162°16′14″ W)

    That airspace extending upward from 700 feet above the surface within a 6.8-mile radius of Elim Airport, and within 3.7 miles either side of the 015° bearing from the Elim Airport, extending from the 6.8-mile radius, to 12.6 miles north of Elim Airport; and that airspace extending upward from 1,200 feet above the surface within a 74-mile radius of the Elim Airport, excluding that airspace extending beyond 12 miles of the shoreline.

    AAL AK E5 Golovin, AK [Amended] Golovin Airport, AK (Lat. 64°33′02″ N, long. 163°00′26″ W)

    That airspace extending upward from 700 feet above the surface within a 7.4-mile radius of Golovin Airport, and that airspace extending upward from 1,200 feet above the surface within a 30-mile radius of lat. 64°43′47″ N, long. 163°15′17″ W and a 30-mile radius of lat. 64°17′57″ N, long. 163°01′41″ W, excluding that airspace extending beyond 12 miles of the shoreline.

    Issued in Seattle, Washington, on July 25, 2018. Shawn M. Kozica, Group Manager, Operations Support Group, Western Service Center.
    [FR Doc. 2018-16482 Filed 8-1-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2017-0348; Airspace Docket No. 17-AAL-4] RIN-2120-AA66 Proposed Modification of Class E Airspace for the Following Alaska Towns; Nuiqsut, AK; Perryville, AK; Pilot Point, AK; and Point Lay, AK AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    This action proposes to modify Class E airspace extending upward from 1,200 feet above the surface in Alaska at Nuiqsut Airport; Oooguruk Island Heliport Nuiqsut; Pioneer Heliport, Nuiqsut; Perryville Airport; Pilot Point Airport; and Point Lay Airport. This proposal would add exclusionary language to the legal descriptions of these airports to exclude Class E airspace extending beyond 12 miles from the shoreline, and would ensure the safety and management of aircraft within the National Airspace System. Also, this action would remove the heliport name from the airspace designation of Oooguruk Island Heliport and Pioneer Heliport.

    DATES:

    Comments must be received on or before September 17, 2018.

    ADDRESSES:

    Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, 1200 New Jersey Avenue SE, West Building Ground Floor, Room W12-140, Washington, DC 20590; telephone: (800) 647-5527, or (202) 366-9826. You must identify FAA Docket No. FAA-2017-0348; Airspace Docket No. 17-AAL-4, at the beginning of your comments. You may also submit comments through the internet at http://www.regulations.gov.

    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:

    Richard Roberts, Federal Aviation Administration, Operations Support Group, Western Service Center, 2200 S. 216th St., Des Moines, WA, 98198-6547; telephone (206) 231-2245.

    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 would amend Class E airspace extending upward from 1,200 feet above the surface at Nuiqsut Airport, Oooguruk Island Heliport, Pioneer Heliport, Perryville Airport, Pilot Point Airport, Point Hope Airport, Point Lay Airport, and Port Heiden Airport, AK, to support IFR operations in standard instrument approach and departure procedures at these airports.

    Comments Invited

    Interested parties are invited to participate in 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 and be submitted in triplicate to the address listed above. Persons wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2017-0348; Airspace Docket No. 17-AAL-4”. 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 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 the 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 during normal business hours at the Northwest Mountain Regional Office of the Federal Aviation Administration, Air Traffic Organization, Western Service Center, Operations Support Group, 2200 S. 216th St., Des Moines, WA, 98198-6547.

    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 proposing an amendment to Title 14 Code of Federal Regulations (14 CFR) part 71 by modifying Class E airspace extending upward from 1,200 feet above the surface at Nuiqsut Airport, Nuiqsut, AK; Oooguruk Island Heliport, Nuiqsut, AK; Pioneer Heliport, Nuiqsut, AK; Perryville Airport, Perryville, AK; Pilot Point Airport, Pilot Point, AK; and Point Lay Airport, Point Lay, AK. This action would add language to the legal descriptions of these airports that reads “excluding that airspace that extends beyond 12 miles from the shoreline.”

    Also, this action would remove the airport name from the airspace designation for Oooguruk Island Heliport and Pioneer Heliport, to conform with recent change to FAA Order 7400.2L, Procedures for Handling Airspace Matters.

    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 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, and is non-controversial and unlikely to result in adverse or negative comments. 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 rule, when promulgated, would 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.

    List of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (air).

    The Proposed Amendment

    Accordingly, pursuant to the authority delegated to me, 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 14 CFR 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, and effective September 15, 2017, is amended as follows: Paragraph 6005 Class E Airspace Areas Extending Upward From 1,200 Feet or More Above the Surface of the Earth. AAL AK E5 Nuiqsut AK [Amended] Nuiqsut Airport, AK (Lat. 70°12′35″ N, long. 151°00′23″ W)

    That airspace extending upward from 700 feet above the surface within a 6.4-mile radius of the Nuiqsut Airport, and that airspace extending upward from 1,200 feet above the surface within a 73-mile radius of Nuiqsut Airport, excluding that airspace which overlies Control 1485L, and excluding that airspace that extends beyond 12 miles of the shoreline.

    AAL AK E5 Nuiqsut, AK [Amended] Oooguruk Island Heliport, AK (Lat. 70°29′44″ N, long. 150°15′12″ W)

    That airspace extending upward from 700 feet above the surface within a 6-mile radius of Oooguruk Island Heliport; and that airspace extending upward from 1,200 feet above the surface within a 73-mile radius of Oooguruk Island Heliport, excluding that airspace that extends beyond 12 miles of the shoreline.

    AAL AK E5 Nuiqsut, AK [Amended] Pioneer Heliport, AK (Lat. 70°24′51″ N, long. 150°01′07″ W)

    That airspace extending upward from 700 feet above the surface within a 6-mile radius of Pioneer Heliport; and that airspace extending upward from 1,200 feet above the surface within a 73-mile radius of Pioneer Heliport, excluding that airspace that extends beyond 12 miles of the shoreline.

    AAL AK E5 Perryville, AK [Amended] Perryville Airport, AK (Lat. 55°54′24″ N, long. 159°09′39″ W)

    That airspace extending upward from 700 feet above the surface within a 14.7-mile radius of Perryville Airport; and that airspace east of long. 160°00′00″ W extending upward from 1,200 feet above the surface within an 81.2-mile radius of Perryville Airport, excluding that airspace that extends beyond 12 miles of the shoreline.

    AAL AK E5 Pilot Point, AK [Amended] Pilot Point Airport, AK (Lat. 57°34′49″ N, long. 157°34′19″ W)

    That airspace extending upward from 700 feet above the surface within a 6.3-mile radius of Pilot Point Airport; and that airspace extending upward from 1,200 feet above the surface within an area bounded by lat. 57°51′00″ N, long. 158°03′00″ W, to lat. 57°51′00″ N, long. 157°05′00″ W, to lat. 57°24′45″ N, long. 157°05′00″ W, to lat. 57°24′45″ N, long. 158°03′00″ W, to the point of beginning, excluding that airspace that extends beyond 12 miles of the shoreline.

    AAL AK E5 Point Lay, AK [Amended] Point Lay Airport, AK (Lat. 69°43′58″ N, long. 163°00′19″ W)

    That airspace extending upward from 700 feet above the surface within an 8-mile radius of Point Lay Airport; and that airspace extending upward from 1,200 feet above the surface within a 46-mile radius of the Point Lay Airport, excluding that airspace that extends beyond 12 miles from the shoreline.

    Issued in Seattle, Washington, on July 25, 2018. Shawn M. Kozica, Group Manager, Operations Support Group, Western Service Center.
    [FR Doc. 2018-16480 Filed 8-1-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2017-0350; Airspace Docket No. 17-AAL-6] RIN-2120-AA66 Proposed Modification of Class E Airspace for the Following Alaska Towns; Toksook Bay, AK; Unalakleet, AK; Wainwright, AK; and Yakutat, AK AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    This action proposes to modify Class E airspace extending upward from 1,200 feet above the surface at Toksook Bay Airport, Toksook Bay, AK; Unalakleet Airport, Unalakleet, AK; Wainwright Airport, Wainwright, AK; and Yakutat Airport, Yakutat, AK. This proposal would add exclusionary language to the legal descriptions of these airports for Class E airspace extending beyond 12 miles from the shoreline, and would ensure the safety and management of aircraft within the National Airspace System.

    DATES:

    Comments must be received on or before September 17, 2018.

    ADDRESSES:

    Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, 1200 New Jersey Avenue SE, West Building Ground Floor, Room W12-140, Washington, DC 20590; telephone: 1-800-647-5527, or (202) 366-9826. You must identify FAA Docket No. FAA-2017-0350; Airspace Docket No. 17-AAL-6, at the beginning of your comments. You may also submit comments through the internet at http://www.regulations.gov.

    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 7400.11A 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:

    Richard Roberts, Federal Aviation Administration, Operations Support Group, Western Service Center, 2200 S 216th St., Des Moines, WA 98198-6547; telephone (206) 231-2245.

    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 would amend Class E airspace extending upward from 1,200 feet above the surface at Toksook Bay Airport, AK; Unalakleet Airport, AK; Wainwright Airport, AK; and Yakutat Airport, AK, to support IFR operations in standard instrument approach and departure procedures at these airports and to limit Class E airspace to within 12 miles of the shoreline.

    Comments Invited

    Interested parties are invited to participate in 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 and be submitted in triplicate to the address listed above. Persons wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2017-0350, Airspace Docket No. 17-AAL-6”. 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 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 the 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 during normal business hours at the Northwest Mountain Regional Office of the Federal Aviation Administration, Air Traffic Organization, Western Service Center, Operations Support Group, Western Service Center, 2200 S 216th St., Des Moines, WA 98198-6547.

    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 proposing an amendment to Title 14 Code of Federal Regulations (14 CFR) part 71 by modifying Class E airspace extending upward from 1,200 feet above the surface at Toksook Bay Airport, Toksook, AK; Unalakleet Airport, Unalakleet, AK; Wainwright Airport, Wainwright, AK; and Yakutat Airport, Yakutat, AK. This action would add language to the legal descriptions of these airports that reads “ excluding that airspace extending beyond 12 miles of the shoreline”, and would support IFR operations in standard instrument approach and departure procedures at these airports.

    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 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, and is non-controversial and unlikely to result in adverse or negative comments. 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 rule, when promulgated, would 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.

    List of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (air).

    The Proposed Amendment

    Accordingly, pursuant to the authority delegated to me, 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 14 CFR 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, 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. AAL AK E5 Toksook Bay, AK [Amended] Toksook Bay Airport, AK (Lat. 60°32′29″ N, long. 165°05′14″ W)

    That airspace extending upward from 700 feet above the surface within a 6.3-mile radius of Toksook Bay Airport; and that airspace extending upward from 1,200 feet above the surface within a 73-mile radius of the Toksook Bay Airport, excluding that airspace that extends beyond 12 miles of the shoreline.

    AAL AK E5 Unalakleet, AK [Amended] Unalakleet Airport, AK (Lat. 63°53′19″ N, long. 160°47′57″ W)

    That airspace extending upward from 700 feet above the surface within a 7-mile radius of Unalakleet Airport beginning at the 360° bearing of the airport clockwise to the 260° bearing of the airport, and within a 13.5-mile radius of the airport beginning at the 260° bearing of the airport clockwise to the 360° bearing of the airport, and within 6 miles each side of the Unalakleet Airport 185° bearing of the airport extending from the 7-mile radius to 10 miles south of the airport; and that airspace extending upward from 1,200 feet above the surface within a 74-mile radius of Unalakleet Airport, excluding that airspace that extends beyond 12 miles of the shoreline.

    AAL AK E5 Wainwright, AK [Amended] Wainwright Airport, AK (Lat. 70°38′17″ N, long. 159°59′41″ W)

    That airspace extending upward from 700 feet above the surface within an 8.5-mile radius of Wainwright Airport; and that airspace extending upward from 1,200 feet above the surface within a 73-mile radius of the Wainwright Airport, AK, excluding that portion extending outside the Anchorage Arctic CTA/FIR (PAZA) boundary, and excluding that airspace that extends beyond 12 miles of the shoreline.

    AAL AK E5 Wales, AK [Amended] Wales Airport, AK (Lat. 65°37′21″ N, long. 168°05′42″ W)

    That airspace extending upward from 700 feet above the surface within a 6.35-mile radius of Wales Airport; and that airspace extending upward from 1,200 feet above the surface within an area bounded by lat. 65°24′00″ N, long.168°30′00″ W, to lat. 65°53′00″ N, long. 168°30′00″ W, to lat. 66°00′00″ N, long. 167°50′00″ W, to lat. 65°24′00″ N, 167°50′00″ W, to point of beginning, excluding that airspace within the Tin City Class E airspace area, and excluding that airspace that extends beyond 12 miles of the shoreline.

    AAL AK E5 Yakutat, AK [Amended] Yakutat Airport, AK (Lat. 59°30′12″ N, long. 139°39′37″ W) Yakutat VOR/DME (Lat. 59°30′39″ N, long. 139°38′53″ W)

    That airspace extending upward from 700 feet above the surface within the area bounded by lat. 59°47′42″ N, 139°58′48″ W, to lat. 59°37′33″ N, long. 139°40′54″ W, then along the 7 mile radius of the Yakutat VOR/DME clockwise to lat. 59°28′54″ N, long. 139°25′36″ W, to lat. 59°20′16″ N, long. 139°10′20″ W, to lat. 59°02′49″ N, long. 139°47′45″ W, to lat. 59°30′15″ N, long. 140°36′43″ W, to the point of beginning, excluding that area beyond 12 miles from the shoreline within Gulf of Alaska Low Control Area; and that airspace extending upward from 1,200 feet above the surface within a 75-mile radius of the Yakutat VOR/DME, excluding that area extending over Canada, and that airspace that extends beyond 12 miles of the shoreline within Control 1487L.

    Issued in Seattle, Washington, on July 25, 2018. Shawn M. Kozica, Group Manager, Operations Support Group, Western Service Center.
    [FR Doc. 2018-16503 Filed 8-1-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket Number USCG-2018-0563] RIN 1625-AA11 Regulated Navigation Area; Straits of Mackinac, Mackinaw City, MI AGENCY:

    Coast Guard, DHS.

    ACTION:

    Notice of proposed rulemaking.

    SUMMARY:

    The Coast Guard is proposing to establish a Regulated Navigation Area (RNA) for certain waters of the Straits of Mackinac. This action is necessary to provide for the safety of life and protection of property on these navigable waters near Mackinaw City, MI. This proposed rulemaking would prohibit persons and vessels from anchoring or loitering within the RNA unless authorized by the Captain of the Port of Sault Sainte Marie, Michigan or a designated representative. We invite your comments on this proposed rulemaking.

    DATES:

    Comments and related material must be received by the Coast Guard on or before September 4, 2018.

    ADDRESSES:

    You may submit comments identified by docket number USCG-2018-0563 using the Federal eRulemaking Portal at http://www.regulations.gov. See the “Public Participation and Request for Comments” portion of the SUPPLEMENTARY INFORMATION section for further instructions on submitting comments.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions about this proposed rulemaking, call or email Lieutenant Jason Radcliffe, Ninth District Waterways Management, U.S. Coast Guard; telephone 216-902-6060, email [email protected]

    SUPPLEMENTARY INFORMATION:

    I. Table of Abbreviations CFR Code of Federal Regulations RNA Regulated Navigation Area COTP Captain of the Port DHS Department of Homeland Security FR Federal Register NPRM Notice of proposed rulemaking § Section U.S.C. United States Code II. Background, Purpose, and Legal Basis

    The northwest part of Lake Huron forms the approach to, and the east part of the, Straits of Mackinac. At the extreme northwest end, the lake narrows abruptly to a width of 4 miles. Spanning this divide is the Mackinac Bridge. Two main shipping lanes lead north and south of Bois Blanc Island and pass under the bridge. Numerous shoals and several islands obstruct the Straits Area. Located approximately a mile west of the Mackinac Bridge are submerged electrical cables and the Enbridge Line 5 Pipeline. Posted on NOAAs navigation charts are cautionary notes advising mariners of the cable and pipeline area. There is no prohibition nor is there an enforcement mechanism to discourage anchoring in this area. The Captain of the Port (COTP) of Sault Sainte Marie has determined that the high volume of vessel transits and the potential for damage to submerged infrastructure warrants the creation of a regulatory measure to specifically outline an area of regulated navigation that prohibits certain vessels from anchoring or loitering.

    The purpose of this rulemaking is to better enhance the safety of vessels and protection of sub-surface cables and pipelines within the navigable waters of the Straits of Mackinac. The Coast Guard proposes this rulemaking under authority in 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.

    III. Discussion of Proposed Rule

    On the behalf of COTP Sector Sault Sainte Marie, the Ninth Coast Guard District proposes the creation of a Regulated Navigation Area that mandates transiting vessels to make a direct passage with no anchoring or loitering, unless expressly granted permission from the COTP or designated representative. Vessels that would be required to comply with this RNA include vessels of 40 meters or more in length, towing vessels of 20 meters or more in length while engaged in towing another vessel, vessels certificated to carry 50 or more passengers for hire, when engaged in trade, or any dredge or floating plant.

    Within the RNA, the District Commander or COTP may establish temporary traffic rules that include but are not limited to channel obstructions, winter navigation, unusual weather conditions, or unusual water levels. This proposed rule will ensure transiting mariners are fully aware of existing and emergent hazards to navigation on or below the navigable waterways and provide the Coast Guard with greater situational awareness and oversight. The regulatory text we are proposing appears at the end of this document.

    IV. Regulatory Analyses

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

    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 NPRM has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, the NPRM has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.

    This regulatory action determination is based on the fact that no part of this proposed rulemaking and its stipulations will require any additional equipment purchases or create an undue burden to marine operations. This proposed rule will increase communication and situational awareness of the specified area.

    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 proposed rule would not have a significant economic impact on a substantial number of small entities.

    While some owners or operators of vessels intending to transit the Regulated Navigation Area may be small entities, for the reasons stated in section IV.A above, this proposed rule would not have a significant economic impact on any vessel owner or operator. The majority of this proposed rule applies to vessels typically larger than those operated by small entities. The size and operational applicability of this proposed rule is found at the end of this document.

    If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

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

    C. Collection of Information

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

    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 proposed rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

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

    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 proposed rule would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

    F. Environment

    We have analyzed this proposed 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 made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves creating a permanent Regulated Navigation Area detailing how mariners shall transit through the Straits of Mackinac. Normally such actions are categorically excluded from further review under paragraph L61 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A preliminary Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

    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.

    V. Public Participation and Request for Comments

    We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.

    We encourage you to submit comments through the Federal eRulemaking Portal at http://www.regulations.gov. If your material cannot be submitted using http://www.regulations.gov, contact the person in the FOR FURTHER INFORMATION CONTACT section of this document for alternate instructions.

    We accept anonymous comments. All comments received will be posted without change to http://www.regulations.gov and will include any personal information you have provided. For more about privacy and the docket, visit http://www.regulations.gov/privacyNotice.

    Documents mentioned in this NPRM as being available in the docket, and all public comments, will be in our online docket at http://www.regulations.gov and can be viewed by following that website's instructions. Additionally, if you go to the online docket and sign up for email alerts, you will be notified when comments are posted or a final rule is published.

    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 proposes to amend 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 § 165.944 above the heading “Eleventh Coast Guard District” to read as follows:
    § 165.944 Regulated Navigation Area; Straits of Mackinac.

    (a) Location. All navigable waters of the Straits of Mackinac bounded by longitude 084°20′ W and 085°10′ W, including Grays Reef Passage, the South Channel between Bois Blanc Island and Cheboygan, MI, and the waters between Mackinac Island and St. Ignace, MI.

    (b) Applicability. Unless otherwise stated, the provisions of this RNA apply to the following vessels:

    (1) Vessels of 40 meters (approx. 131 feet) or more in length, while navigating;

    (2) Towing vessels of 20 meters (approx. 65 feet) or more in length, while engaged in towing another vessel astern, alongside or by pushing ahead; or

    (3) Vessels certificated to carry 50 or more passengers for hire, when engaged in trade; or

    (4) Each dredge or floating plant.

    (c) Regulations. The general regulations contained in 33 CFR 165.10, 165.11, and 165.13 apply within this RNA.

    (1) Nothing in this regulation relieves any vessel, owner, operator, charterer, master, or person directing the movement of a vessel, from the consequences of any neglect to comply with this part or any other applicable law or regulation. (i.e., the International Regulations for Prevention of Collisions at Sea, 1972 (72 COLREGS) or the Inland Navigation Rules) or of the neglect of any precaution which may be required by the ordinary practice of seamen, or by the special circumstances of the case.

    (2) Vessels transiting in the RNA must comply with all directions given to them by the COTP, or a designated representative. The “designated representative” of the COTP is any Coast Guard commissioned, warrant or petty officer who designated by the COTP to act on their behalf. The designated representative may be on a Coast Guard vessel; or other designated craft; or on shore and communicating via VHF-16 or telephone 906-635-3319.

    (3) Vessels transiting through the RNA must make a direct passage. No vessel may anchor or loiter within the RNA at any time without the expressed permission of the COTP or a designated representative.

    (4) Vessels desiring to anchor within the confines of the RNA must contact the COTP or a designated representative one (1) hour in advance of anchoring via VHF-16 or telephone 906-635-3319. The person directing the movement of the vessel desiring to anchor will provide the time and purpose for anchoring, plus the anchoring location. Vessels getting underway from anchor will notify the COTP or a designated representative no less than 15 minutes prior to sailing via VHF-16 or telephone 906-635-3319.

    (5) The owner, operator, charterer, master or person directing the movement of a vessel desiring to loiter within the prescribed RNA for the purposes of work, dredging, or survey must receive permission from the COTP or a designated representative a minimum of 72 hours in advance of the desired activity.

    (6) In the RNA, the District Commander or COTP may establish temporary traffic rules for reasons that include but are not limited to channel obstructions, winter navigation, unusual weather conditions, or unusual water levels.

    (7) There may be times that the Ninth District Commander or the COTP finds it necessary to close the RNA to vessel traffic. During times of limited closure, persons and vessels may request permission to enter the RNA by contacting the COTP or a designated representative via VHF-16 or telephone 906-635-3319.

    (d) Definitions. As used in this RNA:

    (1) Captain of the Port means the United States Coast Guard Captain of the Port (COTP) of Sault Sainte Marie, Michigan.

    (2) Straits of Mackinac means the navigable waters of the Great Lakes connecting Lake Huron to Lake Michigan passing between the upper and lower peninsulas of Michigan.

    (e) Notification. The Coast Guard will rely on the methods described in 33 CFR 165.7 to notify the public of the time and duration of any closure of the RNA. Reports of violations of this RNA should go to COTP Sault Sainte Marie at 906-635-3319 or on VHF-Channel 16.

    (f) Waiver. For any vessel, the COTP or a designated representative may waive any of the requirements of this section, upon finding that circumstances are such that application of this section is unnecessary or impractical for the purposes of safety or environmental safety.

    Dated: July 27, 2018. J.M. Nunan, Rear Admiral, U.S. Coast Guard, Commander, Ninth Coast Guard District.
    [FR Doc. 2018-16549 Filed 8-1-18; 8:45 am] BILLING CODE 9110-04-P
    83 149 Thursday, August 2, 2018 Notices DEPARTMENT OF AGRICULTURE Forest Service Notice of New Fee Sites AGENCY:

    Helena—Lewis & Clark National Forest, USDA Forest Service.

    ACTION:

    Notice of new fee sites.

    SUMMARY:

    The Helena—Lewis & Clark National Forest is proposing to implement new fees at the following sites: Three rental cabins, one campground, and one group campground. The Forest is proposing to charge at the following sites:

    • Indian Meadows Cabin; Lincoln Ranger District: Proposed fee of $65 per night.

    • Mergenthaler Cabin; Helena Ranger District: Proposed fee of $60 per night.

    • Nevada Creek Cabin; Lincoln Ranger District: Proposed fee of $45 per night.

    • Quigley Group Campground; Helena Ranger District: Proposed fee of $50 per night.

    • Hay Canyon Campground; Musselshell Ranger District: Proposed Fee of $10 per night

    These fees are only proposed and will be determined upon further analysis and public comment.

    DATES:

    Send any comments about these fee proposals by September 4, 2018 so comments can be compiled, analyzed, and shared with the Western Montana (or North-Central for Hay Canyon Campground) Bureau of Land Management (BLM) Recreation Resource Advisory Committees. The proposed effective date of implementation of proposed new fees will be no earlier than six months after publication of this notice.

    ADDRESSES:

    William Avey, Forest Supervisor, Helena—Lewis & Clark National Forest, 2880 Skyway Drive, Helena, MT 59602 or Email to [email protected]

    FOR FURTHER INFORMATION CONTACT:

    Rory Glueckert, Forest Recreation Program Manager, Helena—Lewis & Clark National Forest at 406-495-3761 or [email protected]; Information about proposed fee changes can also be found on the Helena—Lewis & Clark National Forest website at http://www.fs.usda.gov/main/helena.

    SUPPLEMENTARY INFORMATION:

    The Federal Recreation Lands Enhancement Act (Title VII, P.L. 108-447) directed the Secretary of Agriculture to publish a six month advance notice in the Federal Register whenever new recreation fee areas are established.

    Once public involvement is complete, these new fees will be reviewed by the BLM Western or North Central Montana Recreation Resource Advisory Committees (depending on site location) prior to a final decision and implementation.

    Reasonable fees, paid by users of these sites and services, will help ensure that the Forest can continue maintaining and improving the sites for future generations. A market analysis of surrounding recreation sites with similar amenities indicates that the proposed fees are comparable and reasonable.

    Advance reservations for the Indian Meadows, Mergenthaler, and Nevada Creek Cabins and the Quigley Group Campground will be available through www.recreation.gov or by calling 1-877-444-6777. The reservation service charges a $10 fee for reservations.

    Dated: January 10, 2018. Chris French, Associate Deputy Chief, National Forest System. Editorial note:

    This document was received for publication by the Office of the Federal Register on July 30, 2018.

    [FR Doc. 2018-16560 Filed 8-1-18; 8:45 am] BILLING CODE 3411-15-P
    COMMISSION ON CIVIL RIGHTS Agenda and Notice of Public Meeting of the Massachusetts Advisory Committee AGENCY:

    Commission on Civil Rights.

    ACTION:

    Announcement of monthly planning meetings.

    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 planning meeting of the Massachusetts Advisory Committee to the Commission will convene on Thursday, August 15, 2017 at 1:00 p.m. (EDT) at McCarter & English, LLP, 265 Franklin Street, Boston, MA 02110. The purpose of the meeting is to hear testimony on human trafficking to consider it as a civil rights topic of study.

    DATES:

    Thursday, August 15, 2018 (EDT) at 1:00 p.m. (EDT).

    ADDRESSES:

    McCarter & English, LLP, 265 Franklin Street, Boston, MA 02110.

    FOR FURTHER INFORMATION CONTACT:

    Evelyn Bohor, at [email protected] or by phone at 303-866-1040.

    SUPPLEMENTARY INFORMATION:

    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 meeting so that members of the public may address the Committee after the planning meeting. Persons interested in the issue are also invited to submit written comments; the comments must be received in the regional office by Monday, September 17, 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 https://facadatabase.gov/committee/meetings.aspx?cid=254 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 Thursday, August 15, 2018 at 1:00 p.m. (EDT) I. Roll Call II. Hear testimony of human trafficking III. Discussion on topic of study IV. Other Business V. Open Comment VI. Adjournment Dated: July 27, 2018. David Mussatt, Supervisory Chief, Regional Programs Unit.
    [FR Doc. 2018-16507 Filed 8-1-18; 8:45 am] BILLING CODE 6335-01-P
    DEPARTMENT OF COMMERCE International Trade Administration [A-533-840] Certain Frozen Warmwater Shrimp From India: Initiation and Preliminary Results of Antidumping Duty Changed Circumstances Review AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    SUMMARY:

    The Department of Commerce (Commerce) is initiating a changed circumstances review and preliminarily determining that Coastal Aqua Private Limited (CAPL) is the successor-in-interest to Coastal Aqua in the context of the antidumping duty order on certain frozen warmwater shrimp (shrimp) from India.

    DATES:

    Applicable August 2, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Brittany Bauer, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: 202-482-3860.

    SUPPLEMENTARY INFORMATION:. Background

    On February 1, 2005, Commerce published in the Federal Register an antidumping duty order on shrimp from India.1 On June 13, 2018, CAPL requested that, pursuant to section 751(b)(1) of the Tariff Act of 1930, as amended (the Act) and 19 CFR 351.216(b), Commerce conduct an expedited changed circumstances review of the Order to confirm that CAPL is the successor-in-interest to Coastal Aqua and, accordingly, to assign it the cash deposit rate of Coastal Aqua.2 In its submission, CAPL explained that Coastal Aqua undertook a business reorganization and transferred its shrimp business to CAPL.3 The domestic industry did not file any comments on this request.

    1See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Certain Frozen Warmwater Shrimp from India, 70 FR 5147 (February 1, 2005) (Order).

    2See CAPL's Letter re: Certain Frozen Warmwater Shrimp form India: Request to Initiate a Successor-in-Interest Changed Circumstances Review for Coastal Aqua Private Limited, dated June 13, 2018 (CAPL CCR Request).

    3Id. at 1.

    Scope of the Order

    The merchandise subject to the order is certain frozen warmwater shrimp.4 The product is currently classified under the following Harmonized Tariff Schedule of the United States (HTSUS) item numbers: 0306.17.00.03, 0306.17.00.06, 0306.17.00.09, 0306.17.00.12, 0306.17.00.15, 0306.17.00.18, 0306.17.00.21, 0306.17.00.24, 0306.17.00.27, 0306.17.00.40, 1605.21.10.30, and 1605.29.10.10. Although the HTSUS numbers are provided for convenience and customs purposes, the written product description remains dispositive.

    4 For a complete description of the Scope of the Order, see 12th AR, and accompanying Issues and Decision Memorandum at “Scope of the Order.”

    Initiation and Preliminary Results

    Pursuant to section 751(b)(1) of the Act, Commerce will conduct a changed circumstances review upon receipt of information concerning, or a request from, an interested party for a review of an antidumping duty order which shows changed circumstances sufficient to warrant a review of the order. As indicated in the “Background” section, we received information indicating that Coastal Aqua transferred its shrimp business to CAPL. This constitutes changed circumstances warranting a review of the order.5 Therefore, in accordance with section 751(b)(1) of the Act and 19 CFR 351.216(d) and (e), we are initiating a changed circumstances review based upon the information contained in CAPL's submission.

    5See 19 CFR 351.216(d).

    Section 351.221(c)(3)(ii) of Commerce's regulations permits Commerce to combine the notice of initiation of a changed circumstances review and the notice of preliminary results if Commerce concludes that expedited action is warranted.6 In this instance, because the record contains information necessary to make a preliminary finding, we find that expedited action is warranted and have combined the notice of initiation and the notice of preliminary results.7

    6See 19 CFR 351.221(c)(3)(ii). See also Certain Pasta from Italy: Initiation and Preliminary Results of Antidumping Duty Changed Circumstances Review, 80 FR 33480, 33480-41 (June 12, 2015) (Pasta from Italy Preliminary Results) (unchanged in Certain Pasta from Italy: Final Results of Changed Circumstances Review, 80 FR 48807 (August 14, 2015) (Pasta from Italy Final Results).

    7See, e.g., Pasta from Italy Preliminary Results, 80 FR at 33480-41 (unchanged in Pasta from Italy Final Results, 80 FR at 48807).

    In this changed circumstances review, pursuant to section 751(b) of the Act, Commerce conducted a successor-in-interest analysis. In making a successor-in-interest determination, Commerce examines several factors, including, but not limited to, changes in the following: (1) Management; (2) production facilities; (3) supplier relationships; and (4) customer base.8 While no single factor or combination of factors will necessarily provide a dispositive indication of a successor-in-interest relationship, generally, Commerce will consider the new company to be the successor to the previous company if the new company's resulting operation is not materially dissimilar to that of its predecessor.9 Thus, if the record evidence demonstrates that, with respect to the production and sale of the subject merchandise, the new company operates as the same business entity as the predecessor company, Commerce may assign the new company the cash deposit rate of its predecessor.10

    8See, e.g., Certain Frozen Warmwater Shrimp from India: Initiation and Preliminary Results of Antidumping Duty Changed Circumstances Review, 81 FR 75376 (October 31, 2016) (Shrimp from India Preliminary Results) (unchanged in Certain Frozen Warmwater Shrimp from India: Notice of Final Results of Antidumping Duty Changed Circumstances Review, 81 FR 90774 (December 15, 2016) (Shrimp from India Final Results))

    9See, e.g., Shrimp from India Preliminary Results, 81 FR at 75377 (unchanged in Shrimp from India Final Results, 81 FR at 90774).

    10Id.; see also Notice of Final Results of Changed Circumstances Antidumping Duty Administrative Review: Polychloroprene Rubber from Japan, 67 FR 58, 59 (January 2, 2002); Ball Bearings and Parts Thereof from France: Final Results of Changed-Circumstances Review, 75 FR 34688, 34689 (June 18, 2010); and Circular Welded Non-Alloy Steel Pipe from the Republic of Korea; Preliminary Results of Antidumping Duty Changed Circumstances Review, 63 FR 14679 (March 26, 1998), unchanged in Circular Welded Non-Alloy Steel Pipe from Korea; Final Results of Antidumping Duty Changed Circumstances Review, 63 FR 20572 (April 27, 1998), in which Commerce found that a company which only changed its name and did not change its operations is a successor-in-interest to the company before it changed its name.

    In accordance with 19 CFR 351.216, we preliminarily determine that CAPL is the successor-in-interest to Coastal Aqua. Record evidence, as submitted by CAPL, indicates that CAPL operates as essentially the same business entity as Coastal Aqua with respect to the subject merchandise.11 For the complete successor-in-interest analysis, including discussion of business proprietary information, refer to the accompanying successor-in-interest memorandum.12

    11See CAPL CCR Request.

    12See Memorandum, “Certain Frozen Warmwater Shrimp from India: Initiation and Preliminary Results of Changed Circumstances Review,” dated concurrently with this notice.

    Public Comment

    Pursuant to 19 CFR 351.310(c), any interested party may request a hearing within 30 days of publication of this notice. In accordance with 19 CFR 351.309(c)(1)(ii), interested parties may submit case briefs not later than 30 days after the date of publication of this notice. Rebuttal briefs, limited to issues raised in the case briefs, may be filed no later than five days after the case briefs, in accordance with 19 CFR 351.309(d). Parties who submit case or rebuttal briefs are encouraged to submit with each argument: (1) A statement of the issue; (2) a brief summary of the argument; and (3) a table of authorities.13 All comments are to be filed electronically using Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS) available to registered users at https://access.trade.gov and in the Central Records Unit, Room B8024 of the main Department of Commerce building, and must also be served on interested parties. An electronically filed document must be received successfully in its entirety by ACCESS by 5:00 p.m. Eastern Time on the day it is due.14

    13See 19 CFR 351.309(c)(2).

    14See 19 CFR 351.303(b).

    Consistent with 19 CFR 351.216(e), we will issue the final results of this changed circumstances review no later than 270 days after the date on which this review was initiated, or within 45 days if all parties agree to our preliminary finding. This notice is published in accordance with sections 751(b)(1) and 777(i) of the Act and 19 CFR 351.216(b), 351.221(b) and 351.221(c)(3).

    Dated: July 26, 2018. Gary Taverman, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, performing the non-exclusive duties and functions of the Assistant Secretary for Enforcement and Compliance.
    [FR Doc. 2018-16563 Filed 8-1-18; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE International Trade Administration [A-580-878; C-580-879; A-583-856] Certain Corrosion-Resistant Steel Products From the Republic of Korea and Taiwan: Initiation of Anti-Circumvention Inquiries on the Antidumping Duty and Countervailing Duty Orders AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    SUMMARY:

    In response to requests from ArcelorMittal USA LLC, Nucor Corporation, United States Steel Corporation, Steel Dynamics, Inc. and California Steel Industries (collectively, the domestic producers), the Department of Commerce (Commerce) is initiating a country-wide anti-circumvention inquiries to determine whether imports of certain corrosion-resistant steel products (CORE), which are completed in the Socialist Republic of Vietnam (Vietnam) from hot-rolled steel (HRS) and/or cold-rolled steel (CRS) products (i.e., substrate) produced in Taiwan and the Republic of Korea (Korea), are circumventing the antidumping duty (AD) and countervailing duty (CVD) orders on CORE from Korea and the AD order on CORE from Taiwan.

    DATES:

    Applicable August 2, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Chien-Min Yang (Korea) and Shanah Lee (Taiwan), AD/CVD Operations, Office VII and III, respectively, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-5484 and (202) 482-6386, respectively.

    SUPPLEMENTARY INFORMATION: Background

    On June 3, 2015, the domestic producers filed petitions seeking the imposition of antidumping and countervailing duties on imports of CORE from Korea and Taiwan.1 In response to these petitions, Commerce initiated AD and CVD investigations on June 23, 2015.2 Following Commerce's final affirmative determinations of dumping and countervailable subsidies,3 and the U.S. International Trade Commission (ITC)'s finding of material injury,4 Commerce issued AD and CVD orders on imports of CORE from Korea and an AD order on imports of CORE from Taiwan (collectively, Orders).5

    1See the domestic producers' letter, “Petitions for the Imposition of Antidumping and Countervailing Duties: Certain Corrosion-Resistant Steel Products from the People's Republic of China, the Republic of Korea, India, Italy, and Taiwan,” dated June 3, 2015 (collectively, petitions).

    2 See Certain Corrosion-Resistant Steel Products from Italy, India, the People's Republic of China, the Republic of Korea, and Taiwan: Initiation of Less-Than-Fair-Value Investigations, 80 FR 37228 (June 30, 2015).

    3 See Certain Corrosion-Resistant Steel Products from the Republic of Korea: Final Determination of Sales at Less Than Fair Value and Final Affirmative Determination of Critical Circumstances, 81 FR 35303 (June 2, 2016); see also Certain Corrosion-Resistant Steel Products from India, Italy, Republic of Korea and the People's Republic of China: Countervailing Duty Order, 81 FR 48387 (July 25, 2016); Certain Corrosion-Resistant Steel Products from India, Italy, the People's Republic of China, the Republic of Korea and Taiwan: Amended Final Affirmative Antidumping Determination for India and Taiwan, and Antidumping Duty Orders, 81 FR 48390 (July 25, 2016); Countervailing Duty Investigation of Certain Corrosion-Resistant Steel Products from Taiwan: Final Negative Countervailing Duty Determination, 81 FR 35299 (June 2, 2016).

    4See Certain Corrosion-Resistant Steel Products from China, India, Italy, Korea, and Taiwan; Determinations, 81 FR 47177 (July 20, 2016).

    5See Certain Corrosion-Resistant Steel Products from India, Italy, the People's Republic of China, the Republic of Korea and Taiwan: Amended Final Affirmative Antidumping Determination for India and Taiwan, and Antidumping Duty Orders, 81 FR 48390 (July 25, 2016); Certain Corrosion-Resistant Steel Products from India, Italy, Republic of Korea and the People's Republic of China: Countervailing Duty Order, 81 FR 48387 (July 25, 2016) (Orders).

    On June 12, 2018, pursuant to section 781(b) of the Tariff Act of 1930, as amended (the Act) and 19 CFR 351.225(h), the domestic producers submitted a request for Commerce to initiate anti-circumvention inquiries to determine whether entities in Vietnam are circumventing the Orders by exporting, to the United States, CORE which is completed or assembled in Vietnam using HRS and/or CRS sourced from Korea and Taiwan.6 Further, pursuant to 19 CFR 351.225(f), the domestic producers request that Commerce initiate anti-circumvention inquiries and issue in conjunction with initiation of the inquiries a preliminary determination of circumvention of the Orders to suspend liquidation of imports of CORE from Vietnam.7

    6See the domestic producers' letters, “Certain Corrosion-Resistant Steel Products from Taiwan: Request for Circumvention Ruling,” dated June 12, 2018 (Anti-Circumvention Ruling Request—Taiwan); “Certain Corrosion-Resistant Steel Products from the Republic of Korea: Request for Circumvention Ruling Pursuant to Section 781(b) of the Tariff Act of 1930,” dated June 12, 2018 (Anti-Circumvention Ruling Request—Korea).

    7See Anti-Circumvention Ruling Request—Taiwan at 22; Anti-Circumvention Ruling Request—Korea at 25.

    Scope of the Orders

    The products covered by these orders are certain flat-rolled steel products, either clad, plated, or coated with corrosion-resistant metals such as zinc, aluminum, or zinc-, aluminum-, nickel- or iron-based alloys, whether or not corrugated or painted, varnished, laminated, or coated with plastics or other non-metallic substances in addition to the metallic coating. The products covered include coils that have a width of 12.7 mm or greater, regardless of form of coil (e.g., in successively superimposed layers, spirally oscillating, etc.). The products covered also include products not in coils (e.g., in straight lengths) of a thickness less than 4.75 mm and a width that is 12.7 mm or greater and that measures at least 10 times the thickness. The products covered also include products not in coils (e.g., in straight lengths) of a thickness of 4.75 mm or more and a width exceeding 150 mm and measuring at least twice the thickness. The products described above may be rectangular, square, circular, or other shape and include products of either rectangular or non-rectangular cross-section where such cross-section is achieved subsequent to the rolling process, i.e., products which have been “worked after rolling” (e.g., products which have been beveled or rounded at the edges). For purposes of the width and thickness requirements referenced above:

    (1) Where the nominal and actual measurements vary, a product is within the scope if application of either the nominal or actual measurement would place it within the scope based on the definitions set forth above, and

    (2) where the width and thickness vary for a specific product (e.g., the thickness of certain products with non-rectangular cross-section, the width of certain products with non-rectangular shape, etc.), the measurement at its greatest width or thickness applies.

    Steel products included in the scope of these orders are products in which: (1) Iron predominates, by weight, over each of the other contained elements; (2) the carbon content is 2 percent or less, by weight; and (3) none of the elements listed below exceeds the quantity, by weight, respectively indicated:

    • 2.50 percent of manganese, or

    • 3.30 percent of silicon, or

    • 1.50 percent of copper, or

    • 1.50 percent of aluminum, or

    • 1.25 percent of chromium, or

    • 0.30 percent of cobalt, or

    • 0.40 percent of lead, or

    • 2.00 percent of nickel, or

    • 0.30 percent of tungsten (also called wolfram), or

    • 0.80 percent of molybdenum, or

    • 0.10 percent of niobium (also called columbium), or

    • 0.30 percent of vanadium, or

    • 0.30 percent of zirconium

    Unless specifically excluded, products are included in this scope regardless of levels of boron and titanium.

    For example, specifically included in this scope are vacuum degassed, fully stabilized (commonly referred to as interstitial-free (IF)) steels and high strength low alloy (HSLA) steels. IF steels are recognized as low carbon steels with micro-alloying levels of elements such as titanium and/or niobium added to stabilize carbon and nitrogen elements. HSLA steels are recognized as steels with micro-alloying levels of elements such as chromium, copper, niobium, titanium, vanadium, and molybdenum.

    Furthermore, this scope also includes Advanced High Strength Steels (AHSS) and Ultra High Strength Steels (UHSS), both of which are considered high tensile strength and high elongation steels.

    Subject merchandise also includes corrosion-resistant steel that has been further processed in a third country, including but not limited to annealing, tempering, painting, varnishing, trimming, cutting, punching and/or slitting or any other processing that would not otherwise remove the merchandise from the scope of the orders if performed in the country of manufacture of the in-scope corrosion resistant steel.

    All products that meet the written physical description, and in which the chemistry quantities do not exceed any one of the noted element levels listed above, are within the scope of these orders unless specifically excluded. The following products are outside of and/or specifically excluded from the scope of these orders:

    • Flat-rolled steel products either plated or coated with tin, lead, chromium, chromium oxides, both tin and lead (“terne plate”), or both chromium and chromium oxides (“tin free steel”), whether or not painted, varnished or coated with plastics or other non-metallic substances in addition to the metallic coating;

    • Clad products in straight lengths of 4.7625 mm or more in composite thickness and of a width which exceeds 150 mm and measures at least twice the thickness; and

    • Certain clad stainless flat-rolled products, which are three-layered corrosion-resistant flat-rolled steel products less than 4.75 mm in composite thickness that consist of a flat-rolled steel product clad on both sides with stainless steel in a 20%-60%-20% ratio.

    The products subject to these orders are currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under item numbers: 7210.30.0030, 7210.30.0060, 7210.41.0000, 7210.49.0030, 7210.49.0091, 7210.49.0095, 7210.61.0000, 7210.69.0000, 7210.70.6030, 7210.70.6060, 7210.70.6090, 7210.90.6000, 7210.90.9000, 7212.20.0000, 7212.30.1030, 7212.30.1090, 7212.30.3000, 7212.30.5000, 7212.40.1000, 7212.40.5000, 7212.50.0000, and 7212.60.0000.

    The products subject to these orders may also enter under the following HTSUS item numbers: 7210.90.1000, 7215.90.1000, 7215.90.3000, 7215.90.5000, 7217.20.1500, 7217.30.1530, 7217.30.1560, 7217.90.1000, 7217.90.5030, 7217.90.5060, 7217.90.5090, 7225.91.0000, 7225.92.0000, 7225.99.0090, 7226.99.0110, 7226.99.0130, 7226.99.0180, 7228.60.6000, 7228.60.8000, and 7229.90.1000.

    The HTSUS subheadings above are provided for convenience and customs purposes only. The written description of the scope of these orders is dispositive.

    Merchandise Subject to the Anti-Circumvention Inquiries

    These anti-circumvention inquiries cover imports of CORE exported from Vietnam manufactured from HRS and/or CRS inputs produced in Korea and Taiwan.

    The domestic producers request that Commerce treat CORE imports from Vietnam as subject merchandise under the scope of the Orders and impose cash deposit requirements for estimated AD and CVD duties on all imports of CORE from Vietnam.8

    8See Anti-Circumvention Ruling Request—Korea at 3; Anti-Circumvention Ruling Request—Taiwan at 22.

    Initiation of Anti-Circumvention Inquiries

    Section 781(b)(1) of the Act provides that Commerce may find circumvention of an AD or CVD order when merchandise of the same class or kind subject to the order is completed or assembled in a foreign country other than the country to which the order applies. In conducting an anti-circumvention inquiry, under section 781(b)(1) of the Act, Commerce relies on the following criteria: (A) Merchandise imported into the United States is of the same class or kind as any merchandise produced in a foreign country that is the subject of an antidumping or countervailing duty order or finding; (B) before importation into the United States, such imported merchandise is completed or assembled in another foreign country from merchandise which is subject to the order or merchandise which is produced in the foreign country that is subject to the order; (C) the process of assembly or completion in the foreign country referred to in section (B) is minor or insignificant; (D) the value of the merchandise produced in the foreign country to which the AD or CVD order applies is a significant portion of the total value of the merchandise exported to the United States; and (E) the administering authority determines that action is appropriate to prevent evasion of such order or finding. As discussed below, domestic producers provided evidence with respect to these criteria.

    A. Merchandise of the Same Class or Kind

    The domestic producers claim that CORE exported to the United States is the same class or kind as that covered by the Orders in these inquiries.9 The domestic producers provided evidence to show that the merchandise from Vietnam enters the United States under the same tariff classification as subject merchandise.10

    9See Anti-Circumvention Ruling Request—Taiwan at 8; Anti-Circumvention Ruling Request—Korea at 8. See also sections 781(b)(1)(A)(i) and (iii) of the Act.

    10See Anti-Circumvention Ruling Request—Taiwan at Exhibit 4; Anti-Circumvention Ruling Request—Korea at Exhibit 1.

    B. Completion of Merchandise in a Foreign Country

    The domestic producers presented evidence demonstrating how CORE in Vietnam is produced from HRS or CRS produced and imported from Taiwan and Korea.11 Further, the domestic producers provided evidence that Vietnam had no capacity to produce hot-rolled steel until very recently, May 2017.12 The domestic producers claim that this mill is “still in the ramp-up phase,” and thus, “most CORE that is produced in Vietnam must still be made from imported substrate.” 13

    11See Anti-Circumvention Ruling Request—Taiwan at 4-5, 8-9; Anti-Circumvention Ruling Request—Korea at 9-10.

    12See Anti-Circumvention Ruling Request—Taiwan at 9-10, Exhibits 5-7; Anti-Circumvention Ruling Request—Korea at 9, Exhibit 3.

    13See Anti-Circumvention Ruling Request—Taiwan at 9-10, Exhibits 6-8; Anti-Circumvention Ruling Request—Korea at 9, Exhibit 3.

    Regarding Taiwan, the domestic producers note that China Sumikin Vietnam (CSVC), one of Vietnam's principle manufacturers and exporters of CORE, stated in a response to Commerce in the previously completed anti-circumvention inquiry with regard to Chinese substrate finished in Vietnam that it “produces its CORE only with hot-rolled steel from Japan and Taiwan.” 14 The domestic producers assert that Commerce's recent affirmative decision in CORE China Circumvention Final that Chinese HRS and CRS are used to produce CORE in Vietnam provides more incentive for Vietnamese CORE producers to shift to Taiwanese-produced inputs.15

    14See Anti-Circumvention Ruling Request—Taiwan at 8, citing CSVC's letter, “Certain Corrosion-Resistant Steel Products from China—Response to Petitioners' Circumvention Allegations,” dated October 20, 2016.

    15See Anti-Circumvention Ruling Request—Taiwan at 8 (citing Certain Corrosion-Resistant Steel Products from the People's Republic of China: Affirmative Final Determination of Circumvention of the Antidumping Duty and Countervailing Duty Orders, 83 FR 23895 (May 23, 2018) (CORE China Circumvention Final) and accompanying Issues and Decision Memorandum (CORE China Circumvention IDM).

    As discussed above, the domestic producers assert that because Vietnam has little capacity to produce HRS domestically, Vietnamese CORE producers rely heavily on HRS imports. In support of this assertion, the domestic producers presented evidence showing increasing and substantial imports of Korean and Taiwanese HRS into Vietnam between 2015 and 2017.16 Specifically, the domestic producers contend that the surge in imports of HRS from Taiwan is evidence that, as Commerce began its anti-circumvention investigation of Vietnamese CORE produced from Chinese substrate, Taiwanese steel producers stepped in to fill that gap.17

    16 . See Anti-Circumvention Ruling Request—Taiwan at 10-11, Exhibit 9; Anti-Circumvention Ruling Request—Korea at 8-10, Exhibits 2, 4.

    17See Anti-Circumvention Ruling Request—Taiwan at 10.

    As to the imports of HRS and CRS to Vietnam from Korea, the domestic producers provided information showing those shipments increased from 879,537 tons in 2014 to nearly 1.1 million tons in 2015, continued to grow in 2016, and remained substantial in 2017.18 Additionally, the domestic producers also provided information demonstrating that imports into the United States of CORE from Korea and Taiwan significantly decreased after the imposition of the Orders. Simultaneously, the domestic producers provided information demonstrating that imports into the United States of CORE from Vietnam increased more than ten-fold between 2015 and 2016.19

    18See Anti-Circumvention Ruling Request—Korea at 8-9; Exhibit 2.

    19See Anti-Circumvention Ruling Request—Taiwan at 9-11, Exhibit 1; Anti-Circumvention Ruling Request—Korea at 24, Exhibit 2.

    C. Minor or Insignificant Process

    The domestic producers maintain that the process for completing CORE from HRS and CRS is minor or insignificant. Under section 781(b)(2) of the Act, Commerce considers five factors to determine whether the process of assembly or completion in the foreign country is minor or insignificant: (A) The level of investment in the foreign country in which the merchandise is completed or assembled; (B) the level of research and development in the foreign country in which the merchandise is completed or assembled; (C) the nature of the production process in the foreign country in which the merchandise is completed or assembled; (D) the extent of production facilities in the foreign country in which the merchandise is completed or assembled, and (E) whether the value of the processing performed in the foreign country in which the merchandise is completed or assembled represents a small proportion of the value of the merchandise imported into the United States.

    (1) Level of Investment

    The domestic producers contend that the level of investment necessary to complete CORE in Vietnam is less than the level of investment required to construct a factory that can produce HRS and CRS in Korea and Taiwan.20 In support of their contention, the domestic producers compared the investment necessary to install a cold-rolling and coating facility with the investment necessary to produce HRS using a fully-integrated production process for melting iron and casting steel.21 The domestic producers rely on Commerce's level of investment findings in CORE China Circumvention Final, which found that Vietnamese CORE that uses Chinese substrate circumvents the Chinese CORE order.22 In that proceeding, Commerce pointed to record evidence showing the cost to build an integrated steel mill in China to produce HRS was in the range of 250 million to 10 billion U.S. dollars (USD) and that the cost to build a cold-rolling mill in Vietnam to produce CRS from HRS substrate was as low as 28 million USD.23 Regarding Taiwan, the domestic producers also rely on Commerce's findings in CORE China Circumvention Final to explain that the cost of building a basic steel mill in Taiwan is as great as China, or much larger given Taiwan's higher level of development and GDP.24 Specifically, the domestic producers explain that the property, plant, and equipment of China Steel Corporation (CSC), a Taiwanese steel manufacturer that owns 56 percent of Vietnamese CORE producer, CSVC, was valued at $14 billion USD at the end of 2014.25 Conversely, the domestic producers provide evidence to demonstrate that a smaller level of investment, ranging from $70 million to $1.15 billion USD, is needed to build a coating mill in Vietnam.26 Relying on the cost of building an integrated steel mill in Korea—for example, Hyundai Steel invested 5 billion USD in 2010 for its integrated steel mill—the domestic producers claim that the level of investment required in Vietnam to complete the production of CORE by rolling and coating is far less than the investment required to establish an integrated mill to produce the hot-rolled steel substrate.27

    20See Anti-Circumvention Ruling Request—Taiwan at 11; Anti-Circumvention Ruling Request—Korea at 11-14.

    21See Anti-Circumvention Ruling Request—Taiwan at 11-12, Exhibits 9-18; Anti-Circumvention Ruling Request—Korea at 11-14, Exhibits 9-11.

    22See Anti-Circumvention Ruling Request—Taiwan at 11-12, Exhibits 9-18; Anti-Circumvention Ruling Request—Korea at 11-14, Exhibits 9-11.

    23See Anti-Circumvention Ruling Request—Taiwan at 12-13, citing Certain Corrosion-Resistant Steel Products from the People's Republic of China: Affirmative Preliminary Determination of Anti-Circumvention Inquiries on the Antidumping Duty and Countervailing Duty Orders, 82 FR 58170 (December 11, 2017) (CORE China Circumvention Prelim) and accompanying Preliminary Decision Memorandum (CORE China Circumvention PDM) at 17; see also CORE China Circumvention IDM at 32.

    24See Anti-Circumvention Ruling Request—Taiwan at 13, Exhibits 10, 12, and 13.

    25Id.

    26See Anti-Circumvention Ruling Request—Taiwan at 14, Exhibits 14, 15; Anti-Circumvention Ruling Request—Korea at 11-14, Exhibits 9-11.

    27See Anti-Circumvention Ruling Request—Korea at 13-14, Exhibits 8-11.

    Finally, the domestic producers provide evidence that the cost of building a coated steel sheet factory in Vietnam was a fraction of the amount of investment needed to build a basic steel mill.28 The domestic producers therefore conclude that in comparison to the level of investment necessary to build an integrated steel mill in Korea and Taiwan, the level of investment to build a cold-rolling mill in Vietnam is insignificant.29

    28See Anti-Circumvention Ruling Request—Taiwan at 14 Exhibit 16.

    29See Anti-Circumvention Ruling Request—Korea at 14, Exhibits 9-11.

    (2) Level of Research and Development

    The domestic producers assert that the level of research and development (R&D) needed to produce steel substrate, such as HRS, is greater than the R&D specifically needed to produce CORE from the substrate.30 The domestic producers cite to Commerce's findings in CORE China Circumvention Prelim, where Commerce found that the evidence provided by Vietnamese CORE producers “did not support their claims that their R&D programs and level of expenditures are significant.” 31 The domestic producers contend that, rather than developing its own technology, the Vietnamese steel industry uses technology developed abroad.32 As an example of Vietnamese producers using technology developed abroad, the domestic producers provided evidence that Vietnamese producer Ton Dong A Corp installed European and Japanese equipment in its new CORE facility.33 Furthermore, the domestic producers explain that CSVC, the sole mill in Vietnam with galvanneal (the process of galvanizing followed by annealing) capability needed for auto and appliance use, is a joint venture between Taiwanese and Japanese parent companies.34 The domestic producers provide various evidence to support the contention that steel mills in Vietnam relied on foreign technology and cheap domestic labor.35 Moreover, the domestic producers contend that, because there is greater focus in producing products for building construction in Vietnam, there is little incentive for Vietnamese CORE producers to invest in R&D for more advanced products.36 In contrast, the domestic producers point to global R&D efforts on behalf of CSC, the largest steel company in Taiwan, including employing highly-skilled researchers and collaborating with Taiwan's leading universities.37 Similarly, the domestic producers compare the R&D expenditures of POSCO Korea, the largest steel producer in Korea, and suggest that the level of R&D in Vietnam for CORE production is minimal to non-existent.38

    30See Anti-Circumvention Ruling Request—Taiwan at 14.

    31Id. at 15, citing CORE China Anticircumvention PDM at 19.

    32See Anti-Circumvention Ruling Request—Taiwan at 15-16, Exhibits 5, 8, 14; Anti-Circumvention Ruling Request—Korea at 14-16 and Exhibits 10, 12-15.

    33See Anti-Circumvention Ruling Request—Taiwan at 15, Exhibit 14; Anti-Circumvention Ruling Request—Korea at 14-16, Exhibits 10, 12-15. The domestic producers cited several other examples, including CSVC, Hoa Phat Group (HPG) and Thai Nguyen Iron and Steel Corporation (TISCO).

    34See Anti-Circumvention Ruling Request—Taiwan at 15, Exhibit 14; Anti-Circumvention Ruling Request—Korea at 14-16, Exhibits 10, 12-15.

    35See Anti-Circumvention Ruling Request—Taiwan at Exhibit 4; Anti-Circumvention Ruling Request—Korea at 15 and Exhibit 13.

    36See Anti-Circumvention Ruling Request—Taiwan at Exhibit 5.

    37Id. at 16, Exhibits 15,16.

    38See Anti-Circumvention Ruling Request—Korea at 15-16, Exhibit 15.

    (3) Nature of Production Process

    According to the domestic producers, the completion process undertaken by Vietnamese producers of CORE is less complex and significant than manufacturing the steel substrate in Taiwan and Korea.39 Citing Commerce's finding in CORE China Circumvention Final, the domestic producers contend that while the process of galvanizing steel is not trivial, it is insignificant compared to the greater steel-making processes that include smelting iron, making, casting, and hot-rolling steel.40 The galvanizing process is the end of the production line, and it adds a small part of the total value, requires little capital and a small proportion of input by weight and volume.41 Thus, the domestic producers explain that even relatively sophisticated galvanizing operations will involve less intensive processing than processing steel substrate.42

    39See Anti-Circumvention Ruling Request—Taiwan at 16-18; Anti-Circumvention Ruling Request—Korea at 16-21.

    40See Anti-Circumvention Ruling Request—Taiwan at 17; see also CORE China Circumvention IDM at 20-21.

    41See Anti-Circumvention Ruling Request—Taiwan at 17.

    42Id.

    (4) Extent of Production Facilities in Vietnam

    Moreover, the domestic producers contend that more capital is required to build an integrated steel mill that includes blast furnace, casting, and hot rolling, as compared to building a cold-rolling and coating facility.43 A larger amount of capital also represent larger production facilities, more equipment and workers. As an example, the domestic producers explain that CSVC employs 800 employees in Vietnam whereas its Taiwanese parent, CSC, has 7949 employees.44

    43See Anti-Circumvention Ruling Request—Taiwan at 17-18 (Taiwan); Anti-Circumvention Ruling Request—Korea at 17-20.

    44See Anti-Circumvention Ruling Request—Taiwan at 18 and Exhibit 21.

    (5) Value of Processing in Vietnam

    The domestic producers point to Commerce's finding in CORE China Circumvention Prelim to contend that “the value of the materials, labor, energy, overhead, and other items consumed in the production of CORE represents an insignificant value when compared to the value of the merchandise sold to the United States.” 45 Moreover, the domestic producers maintain that Commerce's quantitative and qualitative finding that the finishing process in Vietnam adds only a small part of the total value of the CORE exported to the United States applies to Korean and Taiwanese substrate.46 As the Korean and Taiwanese steel industries have more sophisticated and advanced technology than those in either China and Vietnam, the domestic producers assert that the percentage of value added in Vietnam to Taiwanese and Korean substrate is likely to be lower than it was in CORE China Circumvention Final. 47 Based on these assertions, the domestic producers contend that every statutory factor that Commerce has considered in making its affirmative finding in CORE China Circumvention Final similarly applies to both Korea and Taiwan.48

    45Id. at 18, citing CORE China Circumvention PDM at 21.

    46See Anti-Circumvention Ruling Request—Taiwan at 19, citing CORE China Circumvention PDM at 22 and CORE China Circumvention IDM at 23; Anti-Circumvention Ruling Request—Korea at 21-22, citing CORE China Circumvention IDM at 9 and CORE China Circumvention PDM at 21.

    47See Anti-Circumvention Ruling Request—Taiwan at 20 and Exhibit 8; Anti-Circumvention Ruling Request—Korea at 22-24, Exhibits 14, 17.

    48See Anti-Circumvention Ruling Request—Taiwan at 21; Anti-Circumvention Ruling Request—Korea at 24.

    Additionally, the domestic producers cite the recent ITC investigation of CORE from China, India, Italy, Korea and Taiwan, stating that the information contained therein demonstrates that the cost of Taiwanese and Korean HRS inputs accounts for 69 to 79 percent of the price of CORE.49 Additionally, the domestic producers explain that the price of Taiwanese and Korean CRS inputs accounts for 84 to 90 percent of the price of CORE.50

    49See Anti-Circumvention Ruling Request—Taiwan at 20, Exhibit 1; Anti-Circumvention Ruling Request—Korea at 23-24.

    50See Anti-Circumvention Ruling Request—Taiwan at 20, Exhibit 1; Anti-Circumvention Ruling Request—Korea at 23-24.

    D. Additional Factors To Consider in Determining Whether Action Is Necessary

    Section 781(b)(3) of the Act directs Commerce to consider additional factors in determining whether to include merchandise assembled or completed in a foreign country within the scope of the order, such as: “(A) The pattern of trade, including sourcing patterns, (B) whether the manufacturer or exporter of the merchandise . . . is affiliated with the person who uses the merchandise . . . to assemble or complete in the foreign country the merchandise that is subsequently imported into the United States, and (C) whether imports into the foreign country of the merchandise . . . have increased after the initiation of the investigation which resulted in the issuance of such order or finding.”

    Regarding patterns of trade, the domestic producers contend that exports of CORE from Vietnam to the United States skyrocketed as exports from Korea and Taiwan declined in the period after the filing of the petition in the underlying investigations, as compared to the period before it.51 The domestic producers further explain that while recently exports of CORE from Vietnam to the United States have declined slightly, this decline is largely due to Commerce's investigation of circumvention of the AD and CVD orders on CORE the China.52 The domestic producers also point to the fact that exports of HRS from Korea and Taiwan to Vietnam also increased after the underlying investigations commenced.53 Finally, regarding affiliation, the domestic producers point out that major Vietnamese CORE producer CVSC is majority-owned by Taiwan's largest steel manufacturer, CSC.54 Similarly, the domestic producers assert that Korea's largest steel manufacturer POSCO has 13 Vietnamese affiliates and offices, including POSCO VIETNAM, and has the capacity to produce 700,000 tons of cold-rolled steel.55

    51See Anti-Circumvention Ruling Request—Taiwan at 21; Anti-Circumvention Ruling Request—Korea at 24, Exhibit 2.

    52See Anti-Circumvention Ruling Request—Taiwan at 21; Anti-Circumvention Ruling Request—Korea at 24, Exhibit 2.

    53See Anti-Circumvention Ruling Request—Taiwan at 21; Anti-Circumvention Ruling Request—Korea at 24, Exhibit 2.

    54See Anti-Circumvention Ruling Request—Taiwan at 21; Anti-Circumvention Ruling Request—Korea at 24, Exhibit 2.

    55See Anti-Circumvention Ruling Request—Korea at 24-25.

    Analysis of the Allegations

    Based on our analysis of the domestic producer's anti-circumvention allegations and the information provided therein, Commerce determines that anti-circumvention inquiries of the AD and CVD orders on CORE from Korea and Taiwan are warranted.

    With regard to whether the merchandise from Vietnam is of the same class or kind as the merchandise produced in Korea and Taiwan, the domestic producers presented information to Commerce indicating that, pursuant to section 781(b)(1)(A) of the Act, the merchandise being produced in and/or exported from Vietnam is of the same class or kind as CORE produced in Korea and Taiwan, which is subject to the Orders. 56 Consequently, Commerce finds that the domestic producers provided sufficient information in their requests regarding the class or kind of merchandise to support the initiation of these anti-circumvention inquiries.

    56See Anti-Circumvention Ruling Request—Taiwan at 8-10, Exhibit 4; Anti-Circumvention Ruling Request—Korea at 8, Exhibit 1.

    With regard to completion or assembly of merchandise in a foreign country, pursuant to section 781(b)(1)(B) of the Act, the domestic producers also presented information to Commerce indicating that the CORE exported from Vietnam to the United States is produced in Vietnam using HRS and CRS from Korea and Taiwan.57 We find that the information presented by the domestic producers regarding this criterion supports its request to initiate these anti-circumvention inquiries.

    57See Anti-Circumvention Ruling Request—Taiwan at 20-21, Exhibits 1, 4, 9; Anti-Circumvention Ruling Request—Korea at 8-10, Exhibits 2-4.

    Commerce finds that the domestic producers sufficiently addressed the factors described in sections 781(b)(1)(C) and 781(b)(2) of the Act regarding whether the process of assembly or completion of CORE in Vietnam is minor or insignificant. In particular, information in the domestic producers' submission indicates that: (1) The level of investment in coating facilities is minimal when compared with the level of investment for basic steel making facilities; 58 (2) there is little or no research and development taking place in Vietnam; 59 (3) the CORE production processes involve the simple processing of HRS or CRS from a country subject to the Orders, (4) the CORE production facilities in Vietnam are more limited compared to HRS facilities in Korea and Taiwan; 60 and (5) the value of the processing performed in Vietnam is a small proportion of the value of the CORE imported into the United States.61

    58See Anti-Circumvention Ruling Request—Taiwan at 11-14; Anti-Circumvention Ruling Request—Korea at 10-11.

    59See Anti-Circumvention Ruling Request—Taiwan at 14-16; Anti-Circumvention Ruling Request—Korea at 14-16.

    60See Anti-Circumvention Ruling Request—Taiwan at 16-18; Anti-Circumvention Ruling Request—Korea at 16-21.

    61See Anti-Circumvention Ruling Request—Taiwan at 18-21; Anti-Circumvention Ruling Request—Korea at 21-24.

    With respect to the value of the merchandise produced in Korea and Taiwan, pursuant to section 781(b)(1)(D) of the Act, the domestic producers relied on published sources, Commerce's prior conclusions in CORE China Circumvention Final, and information presented in the “minor or insignificant process” portion of their anti-circumvention allegations to indicate that the value of the substrate (HRS and CRS manufactured in Korea and Taiwan) is a significant portion of the total value of the CORE exported from Vietnam to the United States.62 We find that this information adequately meets the requirements of this factor, as discussed above, for the purposes of initiating these anti-circumvention inquiries.

    62See Anti-Circumvention Ruling Request—Taiwan at Exhibits 1, 4, and 9; Anti-Circumvention Ruling Request—Korea at Exhibits 14, 17.

    Finally, with respect to the additional factors listed under section 781(b)(3) of the Act, we find that the domestic producers presented evidence indicating that shipments of CORE from Vietnam to the United States increased since the imposition of the Orders63 and that shipments of HRS from Korea and Taiwan to Vietnam also increased since the Orders took effect.64 Furthermore, we find that the domestic producers have presented evidence that the largest Korean manufacturer of CRS (POSCO) is affiliated with a company in Vietnam that completes the merchandise.65 We also find that the domestic producers provided sufficient evidence to demonstrate that a Taiwanese steel manufacturer, CSC, owns 56 percent of Vietnamese CORE producer, CSVC.66 Accordingly, we are initiating formal anti-circumvention inquiries concerning the AD and CVD orders on CORE from Korea and the AD order on CORE from Taiwan, pursuant to section 781(b) of the Act.

    63See Anti-Circumvention Ruling Request—Taiwan at 9-10, Exhibit 4; Anti-Circumvention Ruling Request—Korea at 24 and Exhibit 2.

    64See Anti-Circumvention Ruling Request—Taiwan. at 10-11, Exhibit 9; Anti-Circumvention Ruling Request—Korea at 24, Exhibit 2.

    65See Anti-Circumvention Ruling Request—Korea at 24-25, Exhibit 19.

    66See Anti-Circumvention Ruling Request—Taiwan at 11, Exhibit 10.

    As these inquiries are initiated on a country-wide basis (i.e., not exclusive to the producers mentioned immediately above), Commerce intends to issue questionnaires to solicit information from the Vietnamese producers and exporters concerning their shipments of CORE to the United States and the origin of any imported HRS and CRS being processed into CORE. A company's failure to respond completely to Commerce's requests for information may result in the application of partial or total facts available, pursuant to section 776(a) of the Act, which may include adverse inferences, pursuant to section 776(b) of the Act.

    While we believe sufficient factual information has been submitted by the domestic producers supporting their request for inquiries, we do not find that the record supports the simultaneous issuance of a preliminary ruling. Such inquiries are by their nature typically complicated and can require information regarding production in both the country subject to the order and the third country completing the product. As noted above, Commerce intends to request additional information regarding the statutory criteria to determine whether shipments of CORE from Vietnam are circumventing the AD and CVD orders on CORE from Korea and the AD order on CORE from Taiwan. Thus, with further development of the record required before a preliminary ruling can be issued, Commerce does not find it appropriate to issue a preliminary ruling at this time.

    Notification to Interested Parties

    In accordance with 19 CFR 351.225(e), Commerce finds that the issue of whether a product is included within the scope of an order cannot be determined based solely upon the application and the descriptions of the merchandise. Accordingly, Commerce will notify by mail all parties on Commerce's scope service list of the initiation of these anti-circumvention inquiries. In addition, in accordance with 19 CFR 351.225(f)(1)(i) and (ii), in this notice of initiation issued under 19 CFR 351.225(e), we have included a description of the product that is the subject of these anti-circumvention inquiries (i.e., CORE that contains the characteristics as provided in the scope of the Orders) and an explanation of the reasons for Commerce's decision to initiate an anti-circumvention inquiry, as provided above.

    In accordance with 19 CFR 351.225(l)(2), if Commerce issues a preliminary affirmative determination, we will then instruct U.S. Customs and Border Protection to suspend liquidation and require a cash deposit of estimated antidumping and countervailing duties, at the applicable rate, for each unliquidated entry of the merchandise at issue, entered or withdrawn from warehouse for consumption on or after the date of initiation of the inquiry. Commerce will establish a schedule for questionnaires and comments on the issues. In accordance with section 781(f) of the Act and 19 CFR 351.225(f)(5), Commerce intends to issue its final determination within 300 days of the date of publication of this initiation.

    This notice is published in accordance with 19 CFR 351.225(f).

    Dated: July 27, 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.
    [FR Doc. 2018-16565 Filed 8-1-18; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE International Trade Administration [A-580-881, C-580-882] Certain Cold-Rolled Steel Flat Products From the Republic of Korea: Initiation of Anti-Circumvention Inquiries on the Antidumping Duty and Countervailing Duty Orders AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    SUMMARY:

    In response to requests from ArcelorMittal USA LLC, Nucor Corporation, United States Steel Corporation, Steel Dynamics, Inc. and California Steel Industries (collectively, the domestic producers), the Department of Commerce (Commerce) is initiating a country-wide anti-circumvention inquiries to determine whether imports of certain cold-rolled steel flat products (CRS), which are completed in the Socialist Republic of Vietnam (Vietnam) from hot-rolled steel (HRS) produced in the Republic of Korea (Korea), are circumventing the antidumping duty (AD) and countervailing duty (CVD) orders on CRS from Korea.

    DATES:

    Applicable August 2, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Tyler Weinhold or Fred Baker, AD/CVD Operations, Office VI, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-1121 or (202) 482-2924, respectively.

    SUPPLEMENTARY INFORMATION: Background

    On July 28, 2015, AK Steel Corporation, ArcelorMittal USA LLC, Nucor Corporation, Steel Dynamics, Inc., and the United States Steel Corporation (the domestic producers) filed petitions seeking the imposition of antidumping and countervailing duties on imports of CRS from Brazil, the People's Republic of China, India, Japan, Korea, the Netherlands, Russia, and the United Kingdom.1 In response to these petitions, Commerce initiated AD and CVD investigations on August 24, 2015.2 Following Commerce's final affirmative determinations of dumping and countervailable subsidies,3 and the U.S. International Trade Commission (ITC)'s finding of material injury,4 Commerce issued AD and CVD orders on imports of CRS from Korea (collectively, Orders).5

    1See Petitioners' Letter, “Certain Cold-Rolled Steel Flat Products from Brazil, China, India, Japan, Korea, Netherlands, Russia, and the United Kingdom,” dated July 28, 2015.

    2See Certain Cold-Rolled Steel Flat Products from Brazil, India, the People's Republic of China, the Republic of Korea, and the Russian Federation: Initiation of Countervailing Duty Investigations, 80 FR 51206 (August 24, 2015); and Certain Cold-Rolled Steel Flat Products from Brazil, the People's Republic of China, India, Japan, the Republic of Korea, the Netherlands, the Russian Federation, and the United Kingdom: Initiation of Less-Than-Fair-Value Investigations, 80 FR 51198 (August 24, 2015).

    3See Certain Cold-Rolled Steel Flat Products from the Republic of Korea: Final Determination of Sales at Less Than Fair Value, 81 FR 49953 (July 29, 2016); and Countervailing Duty Investigation of Certain Cold-Rolled Steel Flat Products from the Republic of Korea: Final Affirmative Determination, 81 FR 49943 (July 29, 2016).

    4See Cold-Rolled Steel Flat Products from Brazil, India, Korea, Russia, and the United Kingdom; Determinations, 81 FR 63806 (September 16, 2016).

    5See Certain Cold-Rolled Steel Flat Products from Brazil, India, the Republic of Korea, and the United Kingdom: Amended Final Affirmative Antidumping Determinations for Brazil and the United Kingdom and Antidumping Duty Orders, 81 FR 64432 (September 20, 2016) (AD Order); see also Certain Cold-Rolled Steel Flat Products from Brazil, India, and the Republic of Korea: Amended Final Affirmative Countervailing Duty Determination and Countervailing Duty Order (the Republic of Korea) and Countervailing Duty Orders (Brazil and India), 81 FR 64436 (September 20, 2016) (CVD Order) (collectively Orders).

    On June 12, 2018, pursuant to section 781(b) of the Tariff Act of 1930, as amended (the Act) and 19 CFR 351.225(h), the domestic producers submitted a request for Commerce to initiate anti-circumvention inquiries to determine whether entities in Vietnam are circumventing the Orders by exporting, to the United States, CRS which is completed or assembled in Vietnam using HRS sourced from Korea.6 Further, pursuant to 19 CFR 351.225(f), the domestic producers request that Commerce initiate anti-circumvention inquiries and issue in conjunction with initiation of the inquiries a preliminary determination of circumvention of the Orders to suspend liquidation of imports of CRS from Vietnam.7

    6See the Domestic Producers' Letter, “Certain Cold-Rolled Steel Flat Products from the Republic of Korea: Request for Circumvention Ruling Pursuant to Section 781(b) of the Tariff Act of 1930,” dated June 12, 2018 (Anti-Circumvention Ruling Request).

    7Id., at 25.

    Scope of the Orders

    The products covered by the orders are certain cold-rolled (cold-reduced), flat-rolled steel products, whether or not annealed, painted, varnished, or coated with plastics or other non-metallic substances. The products covered do not include those that are clad, plated, or coated with metal. The products covered include coils that have a width or other lateral measurement (“width”) of 12.7 mm or greater, regardless of form of coil (e.g., in successively superimposed layers, spirally oscillating, etc.). The products covered also include products not in coils (e.g., in straight lengths) of a thickness less than 4.75 mm and a width that is 12.7 mm or greater and that measures at least 10 times the thickness. The products covered also include products not in coils (e.g., in straight lengths) of a thickness of 4.75 mm or more and a width exceeding 150 mm and measuring at least twice the thickness. The products described above may be rectangular, square, circular, or other shape and include products of either rectangular or non-rectangular cross-section where such cross-section is achieved subsequent to the rolling process, i.e., products which have been “worked after rolling” (e.g., products which have been beveled or rounded at the edges). For purposes of the width and thickness requirements referenced above:

    (1) Where the nominal and actual measurements vary, a product is within the scope if application of either the nominal or actual measurement would place it within the scope based on the definitions set forth above, and

    (2) where the width and thickness vary for a specific product (e.g., the thickness of certain products with non-rectangular cross-section, the width of certain products with non-rectangular shape, etc.), the measurement at its greatest width or thickness applies.

    Steel products included in the scope of the orders are products in which: (1) Iron predominates, by weight, over each of the other contained elements; (2) the carbon content is 2 percent or less, by weight; and (3) none of the elements listed below exceeds the quantity, by weight, respectively indicated:

    • 2.50 percent of manganese, or

    • 3.30 percent of silicon, or

    • 1.50 percent of copper, or

    • 1.50 percent of aluminum, or

    • 1.25 percent of chromium, or

    • 0.30 percent of cobalt, or

    • 0.40 percent of lead, or

    • 2.00 percent of nickel, or

    • 0.30 percent of tungsten (also called wolfram), or

    • 0.80 percent of molybdenum, or

    • 0.10 percent of niobium (also called columbium), or

    • 0.30 percent of vanadium, or

    • 0.30 percent of zirconium

    Unless specifically excluded, products are included in this scope regardless of levels of boron and titanium.

    For example, specifically included in this scope are vacuum degassed, fully stabilized (commonly referred to as interstitial-free (IF)) steels, high strength low alloy (HSLA) steels, motor lamination steels, Advanced High Strength Steels (AHSS), and Ultra High Strength Steels (UHSS). If steels are recognized as low carbon steels with micro-alloying levels of elements such as titanium and/or niobium added to stabilize carbon and nitrogen elements. HSLA steels are recognized as steels with micro-alloying levels of elements such as chromium, copper, niobium, titanium, vanadium, and molybdenum. Motor lamination steels contain micro-alloying levels of elements such as silicon and aluminum. AHSS and UHSS are considered high tensile strength and high elongation steels, although AHSS and UHSS are covered whether or not they are high tensile strength or high elongation steels.

    Subject merchandise includes cold-rolled steel that has been further processed in a third country, including but not limited to annealing, tempering, painting, varnishing, trimming, cutting, punching, and/or slitting, or any other processing that would not otherwise remove the merchandise from the scope of the orders if performed in the country of manufacture of the cold-rolled steel.

    All products that meet the written physical description, and in which the chemistry quantities do not exceed any one of the noted element levels listed above, are within the scope of the orders unless specifically excluded. The following products are outside of and/or specifically excluded from the scope of the orders:

    • Ball bearing steels; 8

    8 Ball bearing steels are defined as steels which contain, in addition to iron, each of the following elements by weight in the amount specified: (i) Not less than 0.95 nor more than 1.13 percent of carbon; (ii) not less than 0.22 nor more than 0.48 percent of manganese; (iii) none, or not more than 0.03 percent of sulfur; (iv) none, or not more than 0.03 percent of phosphorus; (v) not less than 0.18 nor more than 0.37 percent of silicon; (vi) not less than 1.25 nor more than 1.65 percent of chromium; (vii) none, or not more than 0.28 percent of nickel; (viii) none, or not more than 0.38 percent of copper; and (ix) none, or not more than 0.09 percent of molybdenum.

    • Tool steels; 9

    9 Tool steels are defined as steels which contain the following combinations of elements in the quantity by weight respectively indicated: (i) More than 1.2 percent carbon and more than 10.5 percent chromium; or (ii) not less than 0.3 percent carbon and 1.25 percent or more but less than 10.5 percent chromium; or (iii) not less than 0.85 percent carbon and 1 percent to 1.8 percent, inclusive, manganese; or (iv) 0.9 percent to 1.2 percent, inclusive, chromium and 0.9 percent to 1.4 percent, inclusive, molybdenum; or (v) not less than 0.5 percent carbon and not less than 3.5 percent molybdenum; or (vi) not less than 0.5 percent carbon and not less than 5.5 percent tungsten.

    • Silico-manganese steel; 10

    10 Silico-manganese steel is defined as steels containing by weight: (i) Not more than 0.7 percent of carbon; (ii) 0.5 percent or more but not more than 1.9 percent of manganese, and (iii) 0.6 percent or more but not more than 2.3 percent of silicon.

    • Grain-oriented electrical steels (GOES) as defined in the final determination of the U.S. Department of Commerce in Grain-Oriented Electrical Steel From Germany, Japan, and Poland.11

    11Grain-Oriented Electrical Steel from Germany, Japan, and Poland: Final Determinations of Sales at Less Than Fair Value and Certain Final Affirmative Determination of Critical Circumstances, 79 FR 42501, 42503 (July 22, 2014). This determination defines grain-oriented electrical steel as “a flat-rolled alloy steel product containing by weight at least 0.6 percent but not more than 6 percent of silicon, not more than 0.08 percent of carbon, not more than 1.0 percent of aluminum, and no other element in an amount that would give the steel the characteristics of another alloy steel, in coils or in straight lengths.”

    • Non-Oriented Electrical Steels (NOES), as defined in the antidumping orders issued by the U.S. Department of Commerce in Non-Oriented Electrical Steel From the People's Republic of China, Germany, Japan, the Republic of Korea, Sweden, and Taiwan.12

    12Non-Oriented Electrical Steel from the People's Republic of China, Germany, Japan, the Republic of Korea, Sweden, and Taiwan: Antidumping Duty Orders, 79 FR 71741, 71741-42 (December 3, 2014). The orders define NOES as “cold-rolled, flat-rolled, alloy steel products, whether or not in coils, regardless of width, having an actual thickness of 0.20 mm or more, in which the core loss is substantially equal in any direction of magnetization in the plane of the material. The term `substantially equal' means that the cross grain direction of core loss is no more than 1.5 times the straight grain direction (i.e., the rolling direction) of core loss. NOES has a magnetic permeability that does not exceed 1.65 Tesla when tested at a field of 800 A/m (equivalent to 10 Oersteds) along (i.e., parallel to) the rolling direction of the sheet (i.e., B800 value). NOES contains by weight more than 1.00 percent of silicon but less than 3.5 percent of silicon, not more than 0.08 percent of carbon, and not more than 1.5 percent of aluminum. NOES has a surface oxide coating, to which an insulation coating may be applied.”

    The products subject to the orders are currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under item numbers: 7209.15.0000, 7209.16.0030, 7209.16.0060, 7209.16.0070, 7209.16.0091, 7209.17.0030, 7209.17.0060, 7209.17.0070, 7209.17.0091, 7209.18.1530, 7209.18.1560, 7209.18.2510, 7209.18.2520, 7209.18.2580, 7209.18.6020, 7209.18.6090, 7209.25.0000, 7209.26.0000, 7209.27.0000, 7209.28.0000, 7209.90.0000, 7210.70.3000, 7211.23.1500, 7211.23.2000, 7211.23.3000, 7211.23.4500, 7211.23.6030, 7211.23.6060, 7211.23.6090, 7211.29.2030, 7211.29.2090, 7211.29.4500, 7211.29.6030, 7211.29.6080, 7211.90.0000, 7212.40.1000, 7212.40.5000, 7225.50.6000, 7225.50.8080, 7225.99.0090, 7226.92.5000, 7226.92.7050, and 7226.92.8050.

    The products subject to the orders may also enter under the following HTSUS numbers: 7210.90.9000, 7212.50.0000, 7215.10.0010, 7215.10.0080, 7215.50.0016, 7215.50.0018, 7215.50.0020, 7215.50.0061, 7215.50.0063, 7215.50.0065, 7215.50.0090, 7215.90.5000, 7217.10.1000, 7217.10.2000, 7217.10.3000, 7217.10.7000, 7217.90.1000, 7217.90.5030, 7217.90.5060, 7217.90.5090, 7225.19.0000, 7226.19.1000, 7226.19.9000, 7226.99.0180, 7228.50.5015, 7228.50.5040, 7228.50.5070, 7228.60.8000, and 7229.90.1000.

    The HTSUS subheadings above are provided for convenience and U.S. Customs purposes only. The written description of the scope of the orders is dispositive.

    Merchandise Subject to the Anti-Circumvention Inquiries

    These anti-circumvention inquiries cover imports of CRS exported from Vietnam manufactured from HRS produced in Korea.

    Initiation of Anti-Circumvention Inquiries

    Section 781(b)(1) of the Act provides that Commerce may find circumvention of an AD or CVD order when merchandise of the same class or kind subject to the order is completed or assembled in a foreign country other than the country to which the order applies. In conducting an anti-circumvention inquiry, under section 781(b)(1) of the Act, Commerce relies on the following criteria: (A) Merchandise imported into the United States is of the same class or kind as any merchandise produced in a foreign country that is the subject of an antidumping or countervailing duty order or finding; (B) before importation into the United States, such imported merchandise is completed or assembled in another foreign country from merchandise which is subject to the order or merchandise which is produced in the foreign country that is subject to the order; (C) the process of assembly or completion in the foreign country referred to in section (B) is minor or insignificant; (D) the value of the merchandise produced in the foreign country to which the AD or CVD order applies is a significant portion of the total value of the merchandise exported to the United States; and (E) the administering authority determines that action is appropriate to prevent evasion of such order or finding. As discussed below, the domestic producers provided evidence with respect to these criteria.

    A. Merchandise of the Same Class or Kind

    The domestic producers claim that CRS exported to the United States is the same class or kind as that covered by the Orders in these inquiries.13 The domestic producers provided evidence to show that the merchandise from Vietnam enters the United States under the same tariff classification as subject merchandise.14

    13See Anti-Circumvention Ruling Request at 7. See also sections 781(b)(1)(A)(i) and (iii) of the Act.

    14See Anti-Circumvention Ruling Request at Exhibit 1.

    B. Completion of Merchandise in a Foreign Country

    The domestic producers note that section 781(b)(l)(B)(ii) of the Act requires that Commerce “must determine whether, prior to importation into the United States, the merchandise in the third country is completed from merchandise produced in the country subject to the antidumping or countervailing duty order.” 15 The domestic producers presented evidence showing substantial imports of Korean HRS into Vietnam following Commerce's August 2015 initiation of AD and CVD investigations concerning CRS from Korea.16 Additionally, the domestic producers provide evidence that, from 2015 through 2017, little to no capacity existed in Vietnam to produce HRS, and that HRS production in Vietnam did not begin until 2017.17 Nevertheless, the domestic producers maintain that despite Vietnamese imports of HRS being significant even before the initiation of AD and CVD investigations on CRS from Korea in mid-2015, imports increased by 26 percent between 2014 and 2016, before dropping only slightly in 2017.18 The domestic producers also provide information reflecting the fact that imports into the United States of CRS from Korea significantly decreased after the imposition of the Orders, and that imports into the United States of CRS from Vietnam, as well as imports into Vietnam of Korean HRS, also increased significantly.19

    15Id. at 7. See also section 781(b)(1)(B)(ii) of the Act.

    16Id. at 7-8 and Exhibit 3

    17Id. at 8, Exhibit 4, and Exhibit 5.

    18Id. at 8 and Exhibit 3.

    19Id. at 5-6, 8-9, and Exhibit 1.

    C. Minor or Insignificant Process

    The domestic producers maintain that the process for completing CRS from HRS is minor or insignificant. Under section 781(b)(2) of the Act, Commerce considers five factors to determine whether the process of assembly or completion in the foreign country in which the merchandise is completed or assembled is minor or insignificant: (A) The level of investment in the foreign country in which the merchandise is completed or assembled; (B) the level of research and development in the foreign country in which the merchandise is completed or assemble; (C) the nature of the production process in the foreign country in which the merchandise is completed or assembled; (D) the extent of production facilities in the foreign country in which the merchandise is completed or assembled, and (E) whether the value of the processing performed in the foreign country in which the merchandise is completed or assembled represents a small proportion of the value of the merchandise imported into the United States.

    (1) Level of Investment

    The domestic producers contend that the level of investment necessary to construct a factory that can produce CRS from HRS in Vietnam is insignificant. In support of its contention, the domestic producers compare the investment necessary to install a cold-rolling facility with the investment necessary to produce HRS using a fully-integrated production process.20 The domestic producers cite Commerce's findings in the earlier anti-circumvention ruling regarding Vietnamese CRS using Chinese HRS inputs (i.e., substrate).21 There, Commerce pointed to record evidence showing the cost to build an integrated steel mill in China to produce HRS was in the range of 250 million to 10 billion U.S. dollars (USD) and that the cost to build a cold-rolling mill in Vietnam to produce CRS from HRS substrate was as low as 28 million USD.22 The domestic producers also provide evidence that the cost to build one integrated steel mill in Korea was 5 billion USD, and that the cost of building an integrated steel mill in Vietnam to one Vietnamese firm, Formosa Ha Tinh, was 10.6 billion USD.23 Finally, the domestic producers provided evidence that the cost of building a coated steel sheet factory, including a cold-rolling mill, was only 70 million USD.24 The domestic producers, therefore, conclude that in comparison to the investment necessary for an integrated steel mill in Korea, the cost of a cold-rolling mill in Vietnam is insignificant.25

    20Id. at 10-11.

    21Id.

    22Id. (citing Certain Cold-Rolled Steel Flat Products from the People's Republic of China: Affirmative Preliminary Determination of Anti Circumvention Inquiries on the Antidumping Duty and Countervailing Duty Orders, 82 FR 58178 (December 11, 2017) (CRS China Circumvention Preliminary) and accompanying Preliminary Decision Memorandum at 16-17; and Certain Cold-Rolled Steel Flat Products from the People's Republic of China: Affirmative Final Determination of Circumvention of the Antidumping Duty and Countervailing Duty Orders, 83 FR 23891 (May 23, 2018) (CRS China Circumvention Final), and the accompanying Issues and Decision Memorandum at 32).

    23See Anti-Circumvention Ruling Request at 11-12.

    24Id. at 12.

    25Id.

    (2) Level of Research and Development

    The domestic producers assert that the level of research and development (R&D) in Vietnam is either minimal or non-existent.26 The domestic producers cite to Commerce's findings in CRS China Circumvention Final, where Commerce found that no R&D investments had been made by mandatory respondents POSCO Vietnam and VNSteel Phu My Flat Steel Limited.27 The domestic producers contend that rather than developing its own technology, CRS producers in Vietnam are using technology developed abroad.28 As an example of Vietnamese producers using technology developed abroad, the domestic producers provided evidence that Dong A, a Vietnamese steel company, uses European and Japanese equipment in its coated sheet facility (which includes a pickling and cold-rolling mill).29 In contrast, the domestic producers point to POSCO's R&D activities in Korea, which included employing an R&D laboratory staff of 934 personnel as of December 31, 2017, as well as total R&D expenses of hundreds of billions of Korean Won from 2015 through 2017.30

    26Id. at 12-14.

    27Id. at 12-13 (citing CRS China Circumvention Final and the accompanying Issues and Decision Memorandum at 37-38).

    28Id. at 13.

    29Id.

    30Id. at 13-14.

    (3) Nature of Production Process

    According to the domestic producers, the production process undertaken by Vietnamese producers of CRS is less complex than steelmaking, and it is minimal in nature.31 Citing the ITC report in the underlying investigation of CRS from Korea, the domestic producers describe the process to produce HRS as consisting of three distinct stages (melting and refining steel, casting molten steel into semi-finished forms, and hot-rolling the semi-finished forms into HRS).32 In contrast, the domestic producers provide information indicating that the production of CRS from HRS involves less processing (cleaning and pickling, rolling, annealing, and tempering).33 Further, the domestic producers cite Commerce's findings in CRS China Circumvention Final, where Commerce found the production process to produce CRS from HRS inputs in Vietnam to be comparatively minor.34

    31Id. at 14-18.

    32Id. at 15-18 (citing Certain Hot-Rolled Steel Flat Products from Australia, Brazil, Japan, Korea, the Netherlands, Turkey, and The United Kingdom, Inv. Nos. 701-TA-545-547 and 73l-TA-1291-1297, USITC Publication 4570 (Oct. 2015) (Preliminary) at I-18 to I-22).

    33See id. at 17 (citing Cold-Rolled Steel Flat Products from Brazil, China, India, Japan, Korea, Netherlands, Russia and the United Kingdom, Inv. Nos. 701-TA-540-544 and 731-TA-1283-1290, USITC Publication 4564 (Sept. 2015) (Preliminary) at 1-21).

    34See id. at 14-15 (citing CRS China Circumvention Final and the accompanying Issues and Decision Memorandum at 39).

    (4) Extent of Production Facilities in Vietnam

    The domestic producers provide information indicating that production facilities in Vietnam are more limited compared to facilities in Korea.35 They maintain that Vietnam had little to no HRS capacity during the relevant period. The domestic producers also point to CRS China Circumvention Final, where Commerce found that “the vast majority of production activities necessary to produce CRS occur at the molten steel, semi-finished steel, and hot-rolling stages.” 36 The domestic producers conclude that the extent of production facilities in Vietnam required to convert Korean HRS to CRS are no greater than those facilities required to convert Chinese HRS to CRS.37

    35Id. at 18-19 (citing CRS China Circumvention Final and the accompanying Issues and Decision Memorandum at 39).

    36Id. at 18-19 (citing CRS China Circumvention Final and the accompanying Issues and Decision Memorandum at 39).

    37Id. at 19.

    (5) Value of Processing in Vietnam

    The domestic producers assert that producing HRS in Korea accounts for a large percentage of the total value of CRS that is produced in Vietnam using HRS from Korea. As support, the domestic producers again point to CRS China Circumvention Final, where Commerce found that CRS producers did not incur significant additional costs in the production of CRS, beyond the cost of HRS substrate inputs, that the value of further processing in Vietnam comprised only a small proportion of the total export value, and that the value of HRS produced in China constituted a significant portion of the value of the CRS exported to the United States.38 Additionally, the domestic producers cite the recent ITC investigation of CRS from China and Japan, stating that the information contained therein demonstrates that the cost of Korean HRS inputs account for “roughly 81 to 89 percent” of the value of CRS.39 Finally, citing a 2017 Financial Times article, the domestic producers further argue that the cost of producing HRS in Korea is higher than the cost of producing HRS in China.40

    38Id. at 19-20 (citing CRS China Circumvention Final and the accompanying Issues and Decision Memorandum at 10, 21, and 21).

    39Id. at 21 (citing Cold-Rolled Steel Flat Products from China and Japan, Inv. Nos. 701-TA-541 and 731-TA-1284 and 1286, USITC Publication 4619 (July 2016) (Final) at VII-30 (Table VII-41)).

    40Id. at 20-21 and exhibit 13.

    D. Additional Factors To Consider in Determining Whether Action Is Necessary

    Section 781(b)(3) of the Act directs Commerce to consider additional factors in determining whether to include merchandise assembled or completed in a foreign country within the scope of the order, such as: “(A) the pattern of trade, including sourcing patterns, (B) whether the manufacturer or exporter of the merchandise . . . is affiliated with the person who uses the merchandise . . . to assemble or complete in the foreign country the merchandise that is subsequently imported into the United States, and (C) whether imports into the foreign country of the merchandise . . . have increased after the initiation of the investigation which resulted in the issuance of such order or finding.”

    Regarding patterns of trade, the domestic producers contend that exports of CRS from Vietnam to the United States skyrocketed as exports from Korea declined in the period after the initiation of the underlying investigation, as compared to the period before it.41 The domestic producers further explain that while recent exports of CRS from Vietnam to the United States have declined slightly, this decline is largely due to Commerce's investigation of circumvention of the AD and CVD orders on CRS from the China.42 The domestic producers also point to the fact that exports of HRS from Korea to Vietnam also increased after the original investigations commenced.43 Finally, regarding affiliation, the domestic producers point out that major Vietnamese CRS producer POSCO Vietnam is wholly owned by Korea's largest steel manufacturer, POSCO.44

    41Id. at 22.

    42Id.

    43Id.

    44Id.

    Analysis of the Allegations

    Based on our analysis of the domestic producer's anti-circumvention allegations and the information provided therein, Commerce determines that anti-circumvention inquiries of the AD and CVD orders on CRS from Korea are warranted.

    With regard to whether the merchandise from Vietnam is of the same class or kind as the merchandise produced in Korea, the domestic producers presented information to Commerce indicating that, pursuant to section 781(b)(1)(A) of the Act, the merchandise being produced in and/or exported from Vietnam is of the same class or kind as CRS produced in Korea, which is subject to the Orders.45 Consequently, Commerce finds that the domestic producers provided sufficient information in their requests regarding the class or kind of merchandise to support the initiation of these anti-circumvention inquiries.

    45Id. at 7 and Attachment 1.

    With regard to completion or assembly of merchandise in a foreign country, pursuant to section 781(b)(1)(B) of the Act, the domestic producers also presented information to Commerce indicating that the CRS exported from Vietnam to the United States is produced in Vietnam using HRS from Korea.46 We find that the information presented by the domestic producers regarding this criterion supports its request to initiate these anti-circumvention inquiries.

    46Id. at 5-9, Exhibit 3, Exhibit 4, and Exhibit 5.

    Commerce finds that the domestic producers sufficiently addressed the factors described in sections 781(b)(1)(C) and 781(b)(2) of the Act regarding whether the process of assembly or completion of CRS in Vietnam is minor or insignificant. In particular, information in the domestic producers' submission indicates that: (1) The level of investment in cold-rolling facilities is minimal when compared with the level of investment for basic steel making facilities; 47 (2) there is little or no research and development taking place in Vietnam; 48 (3) the CRS production processes involve the simple processing of HRS from a country subject to the Orders; 49 (4) the CRS production facilities in Vietnam are more limited compared to facilities in Korea; 50 and (5) the value of the processing performed in Vietnam is a small proportion of the value of the CRS imported into the United States.51

    47Id. at 10-12.

    48Id. at 12-13.

    49Id. at 14-18.

    50Id. at 18-19.

    51Id. at 19-21.

    With respect to the value of the merchandise produced in Korea, pursuant to section 781(b)(1)(D) of the Act, the domestic producers relied on published sources, Commerce's prior conclusions in CRS China Circumvention Final, and information presented in the “minor or insignificant process” portion of its anti-circumvention allegation to indicate that the value of the key material, HRS, produced in Korea is significant relative to the total value of the CRS exported to the United States.52 We find that this information adequately meets the requirements of this factor, as discussed above, for the purposes of initiating these anti-circumvention inquiries.

    52Id. at 14-18.

    Finally, with respect to the additional factors listed under section 781(b)(3) of the Act, we find that the domestic producers presented evidence indicating that shipments of CRS from Vietnam to the United States increased since the imposition of the Orders53 and that shipments of HRS from Korea to Vietnam also increased since the Orders took effect.54 Furthermore, we find that the domestic producers have presented evidence that the largest Korean manufacturer of CRS (POSCO) is affiliated with a company in Vietnam that completes the merchandise.55 Accordingly, we are initiating formal anti-circumvention inquiries concerning the AD and CVD orders on CRS from Korea, pursuant to section 781(b) of the Act.

    53Id. at 5.

    54Id. at 6.

    55Id. at 6 and Exhibit 2.

    As these inquiries are initiated on a country-wide basis (i.e., not exclusive to the producers mentioned immediately above), Commerce intends to issue questionnaires to solicit information from the Vietnamese producers and exporters concerning their shipments of CRS to the United States and the origin of the imported HRS being processed into CRS. A company's failure to respond completely to Commerce's requests for information may result in the application of partial or total facts available, pursuant to section 776(a) of the Act, which may include adverse inferences, pursuant to section 776(b) of the Act.

    While we believe sufficient factual information has been submitted by the domestic producers supporting their request for inquiries, we do not find that the record supports the simultaneous issuance of a preliminary ruling. Such inquiries are by their nature typically complicated and can require information regarding production in both the country subject to the order and the third country completing the product. As noted above, Commerce intends to request additional information regarding the statutory criteria to determine whether shipments of CRS from Vietnam are circumventing the AD and CVD orders on CRS from Korea. Thus, with further development of the record required before a preliminary ruling can be issued, Commerce does not find it appropriate to issue a preliminary ruling at this time.

    Notification to Interested Parties

    In accordance with 19 CFR 351.225(e), Commerce finds that the issue of whether a product is included within the scope of an order cannot be determined based solely upon the application and the descriptions of the merchandise. Accordingly, Commerce will notify by mail all parties on Commerce's scope service list of the initiation of these anti-circumvention inquiries. In addition, in accordance with 19 CFR 351.225(f)(1)(i) and (ii), in this notice of initiation issued under 19 CFR 351.225(e), we have included a description of the product that is the subject of these anti-circumvention inquiries (i.e., CRS that contains the characteristics as provided in the scope of the Orders) and an explanation of the reasons for Commerce's decision to initiate an anti-circumvention inquiry, as provided above.

    In accordance with 19 CFR 351.225(l)(2), if Commerce issues a preliminary affirmative determination, we will then instruct U.S. Customs and Border Protection to suspend liquidation and require a cash deposit of estimated antidumping and countervailing duties, at the applicable rate, for each unliquidated entry of the merchandise at issue, entered or withdrawn from warehouse for consumption on or after the date of initiation of the inquiry. Commerce will establish a schedule for questionnaires and comments on the issues. In accordance with section 781(f) of the Act and 19 CFR 351.225(f)(5), Commerce intends to issue its final determination within 300 days of the date of publication of this initiation.

    This notice is published in accordance with 19 CFR 351.225(f).

    Dated: July 27, 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.
    [FR Doc. 2018-16566 Filed 8-1-18; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 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 (44 U.S.C. Chapter 35).

    Agency: National Oceanic and Atmospheric Administration (NOAA).

    Title: Documentation of fish harvest.

    OMB Control Number: 0648-0365.

    Form Number(s): None.

    Type of Request: Regular (extension of a currently approved information collection).

    Number of Respondents: 414.

    Average Hours per Response: 10 minutes.

    Burden Hours: 69.

    Needs and Uses: The seafood dealers who process red porgy, greater amberjack, gag grouper, black grouper, red grouper, scamp, red hind, rock hind, yellowmouth grouper, yellowfin grouper, graysby or coney during seasonal fishery closures for applicable species must maintain documentation, as specified in 50 CFR part 300 subpart K and 50 CFR 622.192(i), that such fish were harvested from areas other than state or Federal waters in the South Atlantic. The documentation includes information on the vessel that harvested the fish, and where and when the fish were offloaded. NMFS requires the information for the enforcement of fishery regulations.

    Affected Public: Business or other for-profit organizations; individuals or households.

    Frequency: On occasion.

    Respondent's Obligation: Mandatory.

    This information collection request may be viewed at 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.

    Dated: July 27, 2018. Sarah Brabson, NOAA PRA Clearance Officer.
    [FR Doc. 2018-16500 Filed 8-1-18; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration RIN 0648-XG353 Atlantic Highly Migratory Species; Meeting of the Atlantic Highly Migratory Species Advisory Panel AGENCY:

    National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Notice of public meeting and webinar/conference call.

    SUMMARY:

    NMFS will hold a 2-day Atlantic Highly Migratory Species (HMS) Advisory Panel (AP) meeting in September 2018. The intent of the meeting is to consider options for the conservation and management of Atlantic HMS. The meeting is open to the public.

    DATES:

    The AP meeting and webinar will be held from 8:30 a.m. to 6 p.m. on Wednesday, September 5, and from 8:30 a.m. to 3 p.m. on Thursday, September 6.

    ADDRESSES:

    The meeting will be held at the Sheraton Silver Spring Hotel, 8777 Georgia Avenue, Silver Spring, MD 20910.

    The meeting on Wednesday, September 5, and Thursday, September 6, will also be accessible via conference call and webinar. Conference call and webinar access information are available at: https://www.fisheries.noaa.gov/event/september-2018-hms-advisory-panel-meeting. Once finalized, the meeting agenda, presentations/supplemental materials, and the meeting transcripts will be posted to this same site.

    Participants are strongly encouraged to log/dial in 15 minutes prior to the meeting. NMFS will show the presentations via webinar and allow public comment during identified times on the agenda.

    FOR FURTHER INFORMATION CONTACT:

    Peter Cooper or Brad McHale at (301) 427-8503.

    SUPPLEMENTARY INFORMATION:

    The Magnuson-Stevens Fishery Conservation and Management Act, 16 U.S.C. 1801 et seq., as amended by the Sustainable Fisheries Act, Public Law 104-297, provided for the establishment of an AP to assist in the collection and evaluation of information relevant to the development of any FMP or FMP amendment for Atlantic HMS. NMFS consults with and considers the comments and views of AP members when preparing and implementing FMPs or FMP amendments for Atlantic tunas, swordfish, billfish, and sharks.

    The AP has previously consulted with NMFS on: Amendment 1 to the Billfish FMP (April 1999); the HMS FMP (April 1999); Amendment 1 to the HMS FMP (December 2003); the Consolidated HMS FMP (October 2006); and Amendments 1, 2, 3, 4, 5a, 5b, 6, 7, 8, 9, 10, and 11 to the 2006 Consolidated HMS FMP (April and October 2008, February and September 2009, May and September 2010, April and September 2011, March and September 2012, January and September 2013, April and September 2014, March and September 2015, and March, September, and December 2016, and May and September 2017), among other things.

    The intent of this meeting is to consider alternatives for the conservation and management of all Atlantic tunas, swordfish, billfish, and shark fisheries. We anticipate discussing:

    • Short- and long-term management of Atlantic shortfin mako (emergency rule extension and Draft Amendment 11);

    • Bluefin tuna management (Three-year review of Amendment 7 measures and next steps)

    • Progress updates on a number of other actions such as Ecosystem-Based Fisheries Management; Amendment 12 (rulemaking to implement NMFS national policy directives); weak-hook and area based management; cross-regional vessel electronic reporting (e.g., eVTR, SEFHIER, eTrips); and spatial management options.

    • Shark management in general (Amendment 14 regarding quota management; catch-per-unit-effort for sharks; and shark stock assessments)

    We also anticipate inviting other NMFS offices to provide updates, if available, on their activities relevant to HMS fisheries such as updates to the Marine Recreational Information Program. The State Department will be invited to provide updates on U.S./Bahama EEZ boundary negotiations. Finally, we intend to invite other NMFS offices and the United States Coast Guard to provide updates on their activities relevant to HMS fisheries.

    Additional information on the meeting and a copy of the draft agenda will be posted prior to the meeting at: https://www.fisheries.noaa.gov/event/september-2018-hms-advisory-panel-meeting.

    Special Accommodations

    This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Peter Cooper at (301) 427-8503 at least 7 days prior to the meeting.

    Dated: July 30, 2018. Margo B. Schulze-Haugen, Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service.
    [FR Doc. 2018-16580 Filed 8-1-18; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration Proposed Information Collection; Comment Request; Alaska Quota Cost Recovery Programs AGENCY:

    National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Notice.

    SUMMARY:

    The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995.

    DATES:

    Written comments must be submitted on or before October 1, 2018.

    ADDRESSES:

    Direct all written comments to Jennifer Jessup, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6616, 14th and Constitution Avenue NW, Washington, DC 20230 (or via the internet at [email protected]).

    FOR FURTHER INFORMATION CONTACT:

    Requests for additional information or copies of the information collection instrument and instructions should be directed to Kurt Iverson (907) 586-7228 or [email protected]

    SUPPLEMENTARY INFORMATION:

    I. Abstract

    This request is an extension of a currently approved information collection.

    The Magnuson-Stevens Fishery and Conservation Act both authorizes and requires the collection of cost recovery fees for Limited Access Privilege (LAP) programs and Western Alaska Community Development Quota (CDQ) programs. The cost recovery fees may not exceed three percent of the ex-vessel value, and must recover costs associated with the management, data collection, and enforcement of these programs that are directly incurred by government agencies tasked with overseeing these fisheries.

    In addition, NMFS collects observer coverage fees to support the funding and deployment of observers on vessels and in plants in the partial observer coverage category. The observer coverage fee must be paid by permit holders in the partial observer coverage category, i.e., small catcher/processors, catcher vessels, shoreside processors, and stationary floating processors named on a Federal Fisheries Permit, or a person named on a Registered Buyer permit.

    Processors that receive and purchase landings of IFQ halibut or sablefish, rockfish, groundfish, and crab subject to observer and/or cost recovery fees must submit an Ex-vessel Value and Volume report under 50 CFR 679.5 or 50 CFR 680.5 that provides information on the pounds purchased and value paid. NMFS uses this information to establish the total ex-vessel value of the fishery, to calculate standard prices, and to establish annual fee percentages in each fishery.

    In 2016, due to an associated rule, revisions to the payment collection methods were approved under OMB control number 0648-0727. The extension of the current collection, OMB control number 0648-0711, will incorporate these 2016 revisions, and 0648-0727 will be discontinued.

    II. Method of Collection

    Payment must be submitted online through eFISH at https://alaskafisheries.noaa.gov/webapps/efish/login for the following:

    • Observer coverage fee; and

    • cost recovery fees for the Western Alaska Community Development Quota Groundfish and Halibut, American Fisheries Act Bering Sea Pollock, Aleutian Islands Pollock, Amendment 80, and Rockfish Programs.

    Payment for the Individual Fishing Quota (IFQ) Program cost recovery fee is submitted online through eFISH, or by mail or courier if paying with a check. Payment for the Crab Rationalization (CR) Program cost recovery fee is submitted online through eFISH, or by mail or courier if paying with a check. After December 2019, NMFS will no longer accept paper checks for cost recovery program fees. All payments will have to be made online.

    The IFQ Registered Buyer Ex-Vessel Volume and Value Report is submitted online through eFISH, or by mail or fax. The Rockfish Ex-Vessel, CR Registered Crab Receiver Ex-Vessel, Pacific Cod Ex-Vessel, and First Wholesale Volume and Value Reports must be submitted online through eFISH. Appeals may be submitted by mail or fax.

    III. Data

    OMB Control Number: 0648-0711.

    Form Number(s): None.

    Type of Review: Regular submission (extension of a currently approved collection).

    Affected Public: Individuals or households; Business or other for-profit organizations.

    Estimated Number of Respondents: 2,182.

    Estimated Time per Response: 1 minute for cost recovery fee, observer coverage fee, and Value and Volume Report; 4 hours for Appeals for any person who receives an IAD for incomplete payment of a fee liability.

    Estimated Total Annual Burden Hours: 43 hours.

    Estimated Total Annual Cost to Public: $416 in recordkeeping/reporting costs.

    IV. Request for Comments

    Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.

    Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they also will become a matter of public record.

    Dated: July 26, 2018. Sarah Brabson, NOAA PRA Clearance Officer.
    [FR Doc. 2018-16502 Filed 8-1-18; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE Patent and Trademark Office Submission for OMB Review; Comment Request; “Post Registration (Trademark Processing)”

    The United States Patent and Trademark Office (USPTO) will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the 1995 Paperwork Reduction Act. This notice includes adjustments to the collection showing an increase in the respondents and hourly burdens associated with recent approved fee adjustments.

    Agency: United States Patent and Trademark Office, Commerce.

    Title: Post Registration (Trademark Processing).

    OMB Control Number: 0651-0055.

    Form Number(s):

    • PTO Form 1563 • PTO Form 1573 • PTO Form 1583 • PTO Form 1597 • PTO Form 1963 • TEAS Global Form

    Type of Request: Regular.

    Number of Respondents: 220,272 responses per year.

    Average Hours Per Responses: The USPTO estimates that it will take between approximately 5 minutes (0.08 hours) and 1 hour to complete the information in this collection. This includes the time to gather the necessary information, create the documents, and submit the completed request to the USPTO.

    Burden Hours: 71,575.70 hours per year.

    Cost Burden: $63,862,183 per year.

    Needs and Uses: The USPTO uses the information described in this collection to process post registration submissions, which include declarations of continued use (or excusable non-use) of a mark in commerce and renewal applications, with the purpose of maintaining the quality of the trademark register. The information in this collection is used by the public for a variety of private business purposes related to establishing and enforcing trademark rights. The information collected is a matter of public record, and thus is available at USPTO facilities and on the USPTO website. Additionally, the USPTO provides the information to other entities, including Patent and Trademark Resource Centers (PTRCs). The PTRCs maintain the information for use by the public.

    Affected Public: Businesses or other for-profits; not-for-profit institutions.

    Frequency: On occasion.

    Respondent's Obligation: Required to Obtain or Retain Benefits.

    OMB Desk Officer: Nicholas A. Fraser, email: [email protected]Once submitted, the request will be publicly available in electronic format through www.reginfo.gov. Follow the instructions to view Department of Commerce collections currently under review by OMB.

    Further information can be obtained by:

    Email: [email protected] Include “0651-0055 information request” in the subject line of the message.

    Mail: Catherine Cain, Attorney Advisor, Office of the Commissioner for Trademarks, United States Patent and Trademark Office, PO Box 1450, Alexandria, VA 22313-1450.

    Written comments and recommendations for the proposed information collection should be sent on or before September 4, 2018 to [email protected], or by fax to 202-395-5167, marked to the attention of Nicholas A. Fraser.

    Marcie Lovett, Director, Records and Information Governance Division, Office of the Chief Technology Officer, United States Patent and Trademark Office.
    [FR Doc. 2018-16508 Filed 8-1-18; 8:45 am] BILLING CODE 3510-16-P
    DEPARTMENT OF EDUCATION Applications for New Awards; Grants to States for School Emergency Management Program AGENCY:

    Office of Elementary and Secondary Education, Department of Education.

    ACTION:

    Notice.

    SUMMARY:

    The Department of Education (Department) is issuing a notice inviting applications for new awards for fiscal year (FY) 2018 for Grants to States for School Emergency Management (GSEM) program, Catalog of Federal Domestic Assistance (CFDA) number 84.184Q.

    DATES:

    Applications Available: August 2, 2018.

    Deadline for Transmittal of Applications: September 4, 2018.

    ADDRESSES:

    For the addresses for obtaining and submitting an application, please refer to our Common Instructions for Applicants to Department of Education Discretionary Grant Programs, published in the Federal Register on February 12, 2018 (83 FR 6003) and available at www.thefederalregister.org/fdsys/pkg/FR-2018-02-12/pdf/2018-02558.pdf.

    FOR FURTHER INFORMATION CONTACT:

    Hamed Negron-Perez, U.S. Department of Education, 400 Maryland Avenue SW, Room 3C130, Washington, DC 20202-6450. Telephone: (202) 453-6725. Email: [email protected]

    If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-800-877-8339.

    SUPPLEMENTARY INFORMATION:

    Full Text of Announcement I. Funding Opportunity Description

    Purpose of Program: The GSEM program provides grants to State educational agencies (SEAs) to increase their capacity to assist local educational agencies (LEAs) by providing training and technical assistance in the development and implementation of high-quality school emergency operations plans (EOPs), as defined in this notice.

    Background: Lessons learned from school emergencies highlight the importance of preparing school officials and first responders to implement EOPs. By having plans in place to keep students and staff safe, schools play a key role in taking preventive and protective measures to stop an emergency from occurring or reduce its impact.1 High-quality school EOPs can make our schools safer by supporting efforts to prevent, protect against, mitigate, respond to, and recover from all threats and hazards, both natural and man-made. The GSEM program will help schools address violence and foster safer school environments by increasing the capacity of SEAs to assist LEAs in the development, implementation, and review of high-quality and comprehensive school EOPs.

    1 “Guide for Developing High-Quality School Emergency Operations Plans,” June 2013. Available at: https://rems.ed.gov/docs/REMS_K-12_Guide_508.pdf.

    It is critical for SEAs and LEAs to ensure that every school has an effective, high-quality school EOP in place and that students and staff are prepared to follow it. A 2016 report from the Government Accountability Office (GAO) notes that in a survey of 51 SEAs, over 60 percent required their LEAs to have EOPs and conduct emergency exercises; however, fewer than half of those States surveyed reported they also required their districts or State to review these district or school plans. Additionally, an estimated 59 percent of the surveyed LEAs reported having limited resources available to implement and sustain emergency management planning efforts, thus reinforcing the value of State and Federal support.2

    2 “Improved Federal Coordination Could Better Assist K-12 Schools Prepare for Emergencies,” GAO-16-144, March 2016. Available at: www.gao.gov/assets/680/675737.pdf.

    Generally, SEAs share with their LEAs information about applicable laws and requirements related to school emergency management planning; they also may support LEAs in fulfilling these obligations. For example, SEAs may provide training, resources, and tools to support school safety and security, including emergency management planning. SEAs may also work with other State agencies or organizations to provide emergency management services to LEAs.

    In order to develop and implement high-quality school EOPs, LEA staff must have access to training and technical assistance on developing, implementing, and refining their plans. SEAs can play a critical role in providing the necessary training and technical assistance to LEAs.

    In 2014, the Department awarded GSEM grants to 26 SEAs, which allowed SEAs to increase their capacity to provide high-quality technical assistance to their LEAs, while increasing the number of high-quality school EOPs in each district. The Department will build on the prior success of this program by awarding new grants of up to five years to SEAs to further support their LEAs through training and technical assistance. While the new competition will give priority to SEAs that have not previously received GSEM grants, previous GSEM grantees are also eligible for awards.

    Priorities: We are establishing these priorities for the FY 2018 grant competition and any subsequent year in which we make awards from the list of unfunded applications from this competition, in accordance with section 437(d)(1) of the General Education Provisions Act (GEPA), 20 U.S.C. 1232(d)(1).

    Absolute Priority: This priority is an absolute priority. Under 34 CFR 75.105(c)(3) we consider only applications that meet this priority.

    This priority is:

    Projects that expand the capacity of SEAs to provide training and technical assistance to LEAs.

    Projects to increase the long-term internal capacity of SEAs to provide training and technical assistance to LEAs for the development and implementation of high-quality school EOPs.

    Competitive Preference Priority: For FY 2018 and any subsequent year in which we make awards from the list of unfunded applications from this competition, this priority is a competitive preference priority. Under 34 CFR 75.105(c)(2)(1) we award an additional 5 points to an application that meets this priority.

    This priority is:

    Applications from SEAs that have not previously received a grant under the GSEM program (5 points).

    Projects proposed by applicants that have not previously received a grant under this program. A list of former recipients of this grant may be found at https://www2.ed.gov/programs/schlemergmgt-sea/2014awards.html.

    Requirements: We are establishing these program requirements and application requirements for the FY 2018 grant competition and any subsequent year in which we make awards from the list of unfunded applications from this competition, in accordance with section 437(d)(1) of GEPA, 20 U.S.C. 1232(d)(1).

    Program Requirements: Applicants that receive grants under this program must:

    (1) Provide an established point of contact (e.g., person or office) for school emergency management issues and submit that information to the Department no later than the project start date;

    (2) Provide training and technical assistance to LEAs on best practices for developing and implementing school EOPs including, but not limited to, the process described in the “Guide for Developing High-Quality School Emergency Operations Plans”; 3

    3 Available at: https://rems.ed.gov/docs/REMS_K-12_Guide_508.pdf. Plans must comply with the Americans with Disabilities Act (ADA), among other prohibitions on disability discrimination, across the spectrum of emergency management services, programs, and activities, including preparation, testing, notification and alerts, evacuation, transportation, sheltering, emergency medical care and services, transitioning back, recovery, and repairing and rebuilding. Plans should include students, staff, and parents with disabilities. Among other things, school emergency plans must address the provision of appropriate auxiliary aids and services to ensure effective communication with individuals with disabilities (e.g., interpreters, captioning, and accessible information technology); ensure individuals with disabilities are not separated from service animals and assistive devices, and can receive disability-related assistance throughout emergencies (e.g., assistance with activities of daily living and administration of medications); and comply with the law's architectural and other requirements. Information and technical assistance about the ADA is available at www.ada.gov.

    (3) Provide training and technical assistance to LEAs on developing or enhancing memoranda of understanding with community partners (e.g., local government, law enforcement, public safety or emergency management, public health, and mental health agencies); and

    (4) Provide training and technical assistance to LEAs on the implementation of the National Incident Management System (NIMS). Information about current NIMS requirements for States may be accessed at: www.fema.gov/national-incident-management-system.

    Application Requirements: Each application must contain a plan that includes the following:

    (1) Information on:

    (a) Training, technical assistance, and resources the applicant currently provides to LEAs on emergency management;

    (b) The current number of LEAs served;

    (c) The proposed number of LEAs, including rural LEAs that might not otherwise have full access to school emergency management training and resources, that would receive training and technical assistance to improve their school EOPs under the applicant's proposal.

    (d) A description of how the SEA will evaluate the quality of training and technical assistance events administered to their LEAs, which should incorporate feedback from LEAs and other stakeholders (e.g. parents, students, teachers, first-responders, etc.)

    (2) A long-term strategy for improving the applicant's:

    (a) Capacity to provide training and technical assistance to LEAs, including rural LEAs that might not otherwise have full access to school emergency management training and resources; and capacity to address the unique needs of students, staff, and visitors with disabilities and other access and functional needs, including individuals with limited English proficiency;

    (b) Existing training and technical assistance activities for their LEAs;

    (c) Catalog of emergency management resources; and

    (d) Alignment of emergency management training, technical assistance, and resources with emergency management planning at the Federal, State, and local levels.

    (3) A description of a process for the coordination and sustainability of support that will be provided to LEAs so that they can continue to improve their schools' EOPs beyond the period of Federal financial assistance.

    Definitions: We are establishing the definitions for “high-quality school emergency operations plan (EOP),” “rural LEA,” “technical assistance,” and “training” in this notice for the FY 2018 grant competition and any subsequent year in which we make awards from the list of unfunded applications from this competition, in accordance with section 437(d)(1) of GEPA, 20 U.S.C. 1232(d)(1). The remaining definitions are from 20 U.S.C. 7801(30), 7801(36), 7801(48), and 7801(49).

    These definitions are:

    High-Quality School Emergency Operations Plan (EOP) means a comprehensive emergency operations plan that encompasses the five mission areas—(1) prevention, (2) protection, (3) mitigation, (4) response, and (5) recovery—and that is (a) adequate, (b) feasible, (c) acceptable, (d) complete, and (e) compliant.4

    4 Derived from: (1) Presidential Policy Directive 8, available at www.dhs.gov/presidential-policy-directive-8-national-preparedness; and (2) “Guide for Developing High-Quality Emergency Operations Plans,” available at https://rems.ed.gov/docs/REMS_K-12_Guide_508.pdf.

    For the purpose of this definition, the following terms are as defined below:

    (1) Prevention means the capabilities necessary to avoid, deter, or stop an imminent crime or threatened or actual mass casualty incident. Prevention is also the action schools take to prevent a threatened or actual incident from occurring; and includes those capabilities necessary to avoid, prevent, or stop a threatened or actual act of terrorism, and it includes preventing imminent threats.

    (2) Protection means the capabilities to secure schools against acts of violence and manmade or natural disasters. Protection focuses on ongoing actions that protect students, teachers, staff, visitors, networks, and property from a threat or hazard.

    (3) Mitigation means the capabilities necessary to eliminate or reduce the loss of life and property damage by lessening the impact of an event or emergency. It also means reducing the likelihood that threats and hazards will happen.

    (4) Response means the capabilities necessary to stabilize an emergency once it has already happened or is certain to happen in an unpreventable way; establish a safe and secure environment; save lives and property; and facilitate the transition to recovery.

    (5) Recovery means the capabilities necessary to assist schools affected by an event or emergency in restoring the learning environment.

    (a) Adequate means the plan identifies and addresses critical courses of action effectively; the plan can accomplish the assigned function; and the assumptions are valid and reasonable.

    (b) Feasible means the school can accomplish the assigned function and critical tasks by using available resources within the time contemplated by the plan, and that the plan explains where or how the district and school will obtain the resources to support the execution of a course of action or to meet a requirement established in the plan.

    (c) Acceptable means the plan meets the requirements driven by a threat or hazard, meets cost and time limitations, and is consistent with the law.

    (d) Complete means the plan:

    (i) Incorporates all courses of action to be accomplished for all selected threats and hazards and identified functions;

    (ii) Integrates the needs of the whole school community;

    (iii) Provides a complete picture of what should happen, when, and at whose direction;

    (iv) Estimates time for achieving objectives, with safety remaining as the utmost priority;

    (v) Identifies success criteria and a desired end state; and

    (vi) Conforms with the planning principles outlined in the “Guide for Developing High-Quality School Emergency Operations Plans.”

    (e) Compliant means the plan complies with applicable State and local requirements because these provide a baseline that facilitates both planning and execution.

    LEA means a local educational agency as defined by section 8101(30) of the Elementary and Secondary Education Act of 1965, as amended (ESEA) (20 U.S.C. 7801(30)).

    Outlying areas means the United States Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Federated States of Micronesia, and the Republic of the Marshall Islands. (ESEA section 8101(36), 20 U.S.C. 7801(36)).

    Rural LEA means an LEA with one of the following district locale codes as assigned by the National Center for Education Statistics' Common Core of Data: Code 33 (Remote Town); Code 41 (Fringe Rural); Code 42 (Distant Rural); and Code 43 (Remote Rural). LEA locale codes may be obtained by searching the Common Core of Data database at: http://nces.ed.gov/ccd/districtsearch/.

    SEA means a State educational agency as defined by section 8101(49) of the ESEA (20 U.S.C. 7801(49)).

    State means any of the 50 States, the District of Columbia, and the Commonwealth of Puerto Rico, and each of the outlying areas as defined in this notice. (ESEA section 8101(48), 20 U.S.C. 7801(48)).

    Technical assistance means consultations, information, referrals, logistical support, and other assistance on specific issues, topics, or problems as requested by the LEAs and other stakeholders. The grantee disseminates materials collected, developed, adapted, and adopted for this assistance. Technical assistance may proceed, follow, or be combined with training activities.

    Training means instruction directed toward imparting knowledge, skills, and attitudes supportive of change by engaging, informing, equipping, and motivating trainees toward the development and implementation of action plans responsive to the specific need or circumstances of the trainees. Training may consist of various formats (e.g., workshops, seminars, or computer-assisted tutorials).

    Waiver of Proposed Rulemaking: Under the Administrative Procedure Act (5 U.S.C. 553) the Department generally offers interested parties the opportunity to comment on proposed priorities, requirements, and definitions. Section 437(d)(1) of GEPA (20 U.S.C. 1232(d)(1)), however, allows the Secretary to exempt from rulemaking requirements, regulations governing the first grant competition under a new or substantially revised program authority. This is the first grant competition for this program under title IV, part F, subpart 3 of the ESEA (20 U.S.C. 7281), and therefore qualifies for this exemption. In order to ensure timely grant awards, the Secretary has decided to forgo public comment on the priorities, requirements, and definitions in this notice under section 437(d)(1) of GEPA. These priorities, requirements, and definitions will apply to the FY 2018 grant competition and any subsequent year in which we make awards from the list of unfunded applications from this competition.

    Program Authority:

    Title IV, part F, subpart 3 of the ESEA (20 U.S.C. 7281).

    Applicable Regulations: (a) The Education Department General Administrative Regulations in 34 CFR parts 75, 77, 79, 81, 82, 84, 86, 97, 98, and 99. (b) The Office of Management and Budget (OMB) Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) in 2 CFR part 180, as adopted and amended as regulations of the Department in 2 CFR part 3485. (c) The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR part 200, as adopted and amended as regulations of the Department in 2 CFR part 3474. (d) The regulations in 34 CFR part 299.

    II. Award Information

    Type of Award: Discretionary grants.

    Estimated Available Funds: $8,000,000.

    Contingent upon the availability of funds and the quality of applications, we may make additional awards in subsequent years from the list of unfunded applications from this competition.

    Estimated Range of Awards: $250,000 to $750,000 per year for up to 5 years.

    Estimated Average Size of Awards: $500,000.

    Maximum Award: We will not make an award exceeding $750,000 for a single budget period of 12 months.

    Estimated Number of Awards: 16.

    Note: The Department is not bound by any estimates in this notice.

    Project Period: Up to 60 months.

    III. Eligibility Information

    1. Eligible Applicants: SEAs.

    Note: Consistent with the definitions in this notice, eligible applicants include SEAs in the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Federated States of Micronesia, and the Republic of the Marshall Islands. Eligible applicants may collaborate informally or contract with other agencies to provide services to LEAs, including agencies such as:

    • A State school safety center;

    • The State emergency management agency; and

    • The State homeland security department.

    2. Cost Sharing or Matching: This program does not require cost sharing or matching.

    3. Subgrantees: A grantee under this competition may not award subgrants to entities to directly carry out project activities described in its application.

    4. Administrative Direction and Control: Administrative direction and control over grant funds must remain with the grantee.

    5. Limitation on Applications: The Department will accept only one application per SEA.

    IV. Application and Submission Information

    1. Application Submission Instructions: For information on how to submit an application please refer to our Common Instructions for Applicants to Department of Education Discretionary Grant Programs, published in the Federal Register on February 12, 2018 (83 FR 6003) and available at www.thefederalregister.org/fdsys/pkg/FR-2018-02-12/pdf/2018-02558.pdf.

    2. Intergovernmental Review: This program is subject to Executive Order 12372 and the regulations in 34 CFR part 79. However, under 34 CFR 79.8(a), we waive intergovernmental review in order to make awards by the end of FY 2018.

    V. Application Review Information

    1. Selection Criteria: The selection criteria for this program are from 34 CFR 75.210. The maximum score for all selection criteria is 100 points. The points or weights assigned to each criterion are indicated in parentheses. Non-Federal peer reviewers will review each application and will evaluate and score each program narrative against the following selection criteria:

    (a) Significance. (20 points)

    The Secretary considers the significance of the proposed project. In determining the significance of the proposed project, the Secretary considers the following factors:

    (i) The likelihood that the proposed project will result in system change or improvement. (10 points)

    (ii) The extent to which the proposed project is likely to build local capacity to provide, improve, or expand services that address the needs of the target population. (10 points)

    (b) Quality of the Project Design. (30 points)

    The Secretary considers the quality of the design of the proposed project. In determining the quality of the design of the proposed project, the Secretary considers the following factors:

    (i) The extent to which the design of the proposed project is appropriate to, and will successfully address, the needs of the target population or other identified needs. (15 points)

    (ii) The extent to which the design of the proposed project reflects up-to-date knowledge from research and effective practice. (15 points)

    (c) Quality of Project Services. (30 points)

    The Secretary considers the quality of the services to be provided by the proposed project.

    (i) In determining the quality of the services to be provided by the proposed project, the Secretary considers the quality and sufficiency of strategies for ensuring equal access and treatment for eligible project participants who are members of groups that have traditionally been underrepresented based on race, color, national origin, gender, age, or disability. (5 points)

    In addition, the Secretary considers the following factors:

    (ii) The extent to which the services to be provided by the proposed project are appropriate to the needs of the intended recipients or beneficiaries of those services. (10 points)

    (iii) The extent to which the training or professional development services to be provided by the proposed project are of sufficient quality, intensity, and duration to lead to improvements in practice among the recipients of those services. (10 points)

    (iv) The extent to which the services to be provided by the proposed project involve the collaboration of appropriate partners for maximizing the effectiveness of project services. (5 points)

    (d) Adequacy of Resources. (20 points)

    The Secretary considers adequacy of resources for the proposed project. In determining the adequacy of resources for the proposed project, the Secretary considers the potential for continued support for the project after Federal funding ends, including as appropriate, the demonstrated commitment of appropriate entities to such support. (20 points)

    2. Review and Selection Process: We remind potential applicants that in reviewing applications in any discretionary grant competition, the Secretary may consider, under 34 CFR 75.217(d)(3), the past performance of the applicant in carrying out a previous award, such as the applicant's use of funds, achievement of project objectives, and compliance with grant conditions. The Secretary may also consider whether the applicant failed to submit a timely performance report or submitted a report of unacceptable quality.

    In addition, in making a competitive grant award, the Secretary also requires various assurances, including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).

    3. Risk Assessment and Specific Conditions: Consistent with 2 CFR 200.205, before awarding grants under this program the Department conducts a review of the risks posed by applicants. Under 2 CFR 3474.10, the Secretary may impose specific conditions and, in appropriate circumstances, high-risk conditions on a grant if the applicant or grantee is not financially stable; has a history of unsatisfactory performance; has a financial or other management system that does not meet the standards in 2 CFR part 200, subpart D; has not fulfilled the conditions of a prior grant; or is otherwise not responsible.

    4. Integrity and Performance System: If you are selected under this competition to receive an award that over the course of the project period may exceed the simplified acquisition threshold (currently $150,000), under 2 CFR 200.205(a)(2) we must make a judgment about your integrity, business ethics, and record of performance under Federal awards—that is, the risk posed by you as an applicant—before we make an award. In doing so, we must consider any information about you that is in the integrity and performance system (currently referred to as the Federal Awardee Performance and Integrity Information System (FAPIIS)), accessible through the System for Award Management. You may review and comment on any information about yourself that a Federal agency previously entered and that is currently in FAPIIS.

    Please note that, if the total value of your currently active grants, cooperative agreements, and procurement contracts from the Federal Government exceeds $10,000,000, the reporting requirements in 2 CFR part 200, Appendix XII, require you to report certain integrity information to FAPIIS semiannually. Please review the requirements in 2 CFR part 200, Appendix XII, if this grant plus all the other Federal funds you receive exceed $10,000,000.

    VI. Award Administration Information

    1. Award Notices: If your application is successful, we notify your U.S. Representative and U.S. Senators and send you a Grant Award Notification (GAN); or we may send you an email containing a link to access an electronic version of your GAN. We may notify you informally, also.

    If your application is not evaluated or not selected for funding, we notify you.

    2. Administrative and National Policy Requirements: We identify administrative and national policy requirements in the application package and reference these and other requirements in the Applicable Regulations section of this notice.

    We reference the regulations outlining the terms and conditions of an award in the Applicable Regulations section of this notice and include these and other specific conditions in the GAN. The GAN also incorporates your approved application as part of your binding commitments under the grant.

    3. Open Licensing Requirements: Unless an exception applies, if you are awarded a grant under this competition, you will be required to openly license to the public grant deliverables created in whole, or in part, with Department grant funds. When the deliverable consists of modifications to pre-existing works, the license extends only to those modifications that can be separately identified and only to the extent that open licensing is permitted under the terms of any licenses or other legal restrictions on the use of pre-existing works. Additionally, a grantee or subgrantee that is awarded competitive grant funds must have a plan to disseminate these public grant deliverables. This dissemination plan can be developed and submitted after your application has been reviewed and selected for funding. For additional information on the open licensing requirements please refer to 2 CFR 3474.20.

    4. Reporting: (a) If you apply for a grant under this competition, you must ensure that you have in place the necessary processes and systems to comply with the reporting requirements in 2 CFR part 170 should you receive funding under the competition. This does not apply if you have an exception under 2 CFR 170.110(b).

    (b) At the end of your project period, you must submit a final performance report, including financial information, as directed by the Secretary. If you receive a multiyear award, you must submit an annual performance report that provides the most current performance and financial expenditure information as directed by the Secretary under 34 CFR 75.118. The Secretary may also require more frequent performance reports under 34 CFR 75.720(c). For specific requirements on reporting, please go to www.ed.gov/fund/grant/apply/appforms/appforms.html.

    5. Performance Measures: The Department has established the following Government Performance and Results Act of 1993 (GPRA) performance measures for the GSEM program:

    (a) The number of training events provided by the GSEM program to assist LEAs in the development and implementation of high-quality school EOPs.

    (b) The extent to which the GSEM program expands the capacity of the SEAs to provide training and technical assistance to LEAs for the development and implementation of high-quality school EOPs.

    6. Continuation Awards: In making a continuation award under 34 CFR 75.253, the Secretary considers, among other things: whether a grantee has made substantial progress in achieving the goals and objectives of the project; whether the grantee has expended funds in a manner that is consistent with its approved application and budget; and, if the Secretary has established performance measurement requirements, the performance targets in the grantee's approved application.

    In making a continuation award, the Secretary also considers whether the grantee is operating in compliance with the assurances in its approved application, including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).

    VII. Other Information

    Accessible Format: Individuals with disabilities can obtain this document and a copy of the application package in an accessible format (e.g., braille, large print, audiotape, or compact disc) on request to the program contact person listed under FOR FURTHER INFORMATION CONTACT.

    Electronic Access to This Document: The official version of this document is the document published in the Federal Register. You may access the official edition of the Federal Register and the Code of Federal Regulations via the Federal Digital System at: www.thefederalregister.org/fdsys. At this site you can view this document, as well as all other documents of this Department published in the Federal Register, in text or Adobe Portable Document Format (PDF). To use PDF you must have Adobe Acrobat Reader, which is available free at this site.

    You may also access documents of the Department published in the Federal Register by using the article search feature at: www.federalregister.gov. Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department.

    Dated: July 27, 2018. Frank Brogan, Assistant Secretary of Elementary and Secondary Education.
    [FR Doc. 2018-16540 Filed 8-1-18; 8:45 am] BILLING CODE 4000-01-P
    DEPARTMENT OF EDUCATION Annual Updates to the Income Contingent Repayment (ICR) Plan Formula for 2018—William D. Ford Federal Direct Loan Program AGENCY:

    Federal Student Aid, Department of Education.

    ACTION:

    Notice.

    SUMMARY:

    The Secretary announces the annual updates to the ICR plan formula for 2018 to give notice to borrowers and the public regarding how monthly ICR payment amounts will be calculated for the 2018-2019 year under the William D. Ford Federal Direct Loan (Direct Loan) Program, Catalog of Federal Domestic Assistance number 84.063.

    DATES:

    The adjustments to the income percentage factors for the ICR plan formula contained in this notice are applicable from July 1, 2018, to June 30, 2019, for any borrower who enters the ICR plan or has his or her monthly payment amount recalculated under the ICR plan during that period.

    FOR FURTHER INFORMATION CONTACT:

    Ian Foss, U.S. Department of Education, 830 First Street NE, Room 113H2, Washington, DC 20202. Telephone: (202) 377-3681. Email: [email protected]

    If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service, toll free, at 1-800-877-8339.

    SUPPLEMENTARY INFORMATION:

    Under the Direct Loan Program, borrowers may choose to repay their non-defaulted loans (Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans made to graduate or professional students, and Direct Consolidation Loans) under the ICR plan. The ICR plan bases the borrower's repayment amount on the borrower's income, family size, loan amount, and the interest rate applicable to each of the borrower's loans.

    ICR is one of several income-driven repayment plans. Other income-driven repayment plans include the Income-Based Repayment (IBR) plan, the Pay As You Earn Repayment (PAYE) plan, and the Revised Pay As You Earn Repayment (REPAYE) plan. The IBR, PAYE, and REPAYE plans provide lower payment amounts than the ICR plan for most borrowers.

    A Direct Loan borrower who repays his or her loans under the ICR plan pays the lesser of: (1) The amount that he or she would pay over 12 years with fixed payments multiplied by an income percentage factor; or (2) 20 percent of discretionary income.

    Each year, to reflect changes in inflation, we adjust the income percentage factor used to calculate a borrower's ICR payment, as required by 34 CFR 685.209(b)(1)(ii)(A). We use the adjusted income percentage factors to calculate a borrower's monthly ICR payment amount when the borrower initially applies for the ICR plan or when the borrower submits his or her annual income documentation, as required under the ICR plan. This notice contains the adjusted income percentage factors for 2018, examples of how the monthly payment amount in ICR is calculated, and charts showing sample repayment amounts based on the adjusted ICR plan formula. This information is included in the following three attachments:

    Attachment 1—Income Percentage Factors for 2018 Attachment 2—Examples of the Calculations of Monthly Repayment Amounts Attachment 3—Charts Showing Sample Repayment Amounts for Single and Married Borrowers

    In Attachment 1, to reflect changes in inflation, we updated the income percentage factors that were published in the Federal Register on July 18, 2017 (82 FR 32803). Specifically, we have revised the table of income percentage factors by changing the dollar amounts of the incomes shown by a percentage equal to the estimated percentage change between the not-seasonally-adjusted Consumer Price Index for all urban consumers for December 2017 and December 2018.

    The income percentage factors reflected in Attachment 1 may cause a borrower's payments to be lower than they were in prior years, even if the borrower's income is the same as in the prior year. The revised repayment amount more accurately reflects the impact of inflation on the borrower's current ability to repay.

    Accessible Format: Individuals with disabilities can obtain this document in an accessible format (e.g., braille, large print, audiotape, or compact disc) on request to the contact person listed under FOR FURTHER INFORMATION CONTACT.

    Electronic Access to This Document: The official version of this document is the document published in the Federal Register. You may access the official edition of the Federal Register and the Code of Federal Regulations via the Federal Digital System at: www.thefederalregister.org/fdsys. At this site, you can view this document, as well as all other documents of this Department published in the Federal Register, in text or Portable Document Format (PDF). To use PDF, you must have Adobe Acrobat Reader, which is available free at this site.

    You may also access documents of the Department published in the Federal Register by using the article search feature at: www.federalregister.gov. Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department.

    Program Authority:

    20 U.S.C. 1087 et seq.

    Dated: July 30, 2018. James F. Manning, Acting Chief Operating Officer, Federal Student Aid. Attachment 1—Income Percentage Factors for 2018 Income Percentage Factors for 2018 Single Income % Factor Married/head of household Income % Factor $11,860 55.00 $11,860 50.52 16,318 57.79 18,712 56.68 20,997 60.57 22,299 59.56 25,782 66.23 29,152 67.79 30,352 71.89 36,114 75.22 36,114 80.33 45,361 87.61 45,361 88.77 56,890 100.00 56,891 100.00 68,424 100.00 68,424 100.00 85,724 109.40 82,238 111.80 114,547 125.00 105,302 123.50 154,905 140.60 149,143 141.20 216,641 150.00 171,006 150.00 354,009 200.00 304,590 200.00 Attachment 2—Examples of the Calculations of Monthly Repayment Amounts

    General notes about the examples in this attachment:

    • We have a calculator that borrowers can use to estimate what their payment amounts would be under the ICR plan. The calculator is called the “Repayment Estimator” and is available at StudentAid.gov/repayment-estimator. Based on information inputted into the calculator by the borrower (for example, income, family size, and tax filing status), this calculator provides a detailed, individualized assessment of a borrower's loans and repayment plan options, including the ICR plan.

    • The interest rates used in the examples are for illustration only. The actual interest rates on an individual borrower's Direct Loans depend on the loan type and when the postsecondary institution first disbursed the Direct Loan to the borrower.

    • The Poverty Guideline amounts used in the examples are from the 2018 U.S. Department of Health and Human Services (HHS) Poverty Guidelines for the 48 contiguous States and the District of Columbia. Different Poverty Guidelines apply to residents of Alaska and Hawaii. The Poverty Guidelines for 2018 were published in the Federal Register on January 18, 2018 (83 FR 2642).

    • All of the examples use an income percentage factor corresponding to an adjusted gross income (AGI) in the table in Attachment 1. If an AGI is not listed in the income percentage factors table in Attachment 1, the applicable income percentage can be calculated by following the instructions under the “Interpolation” heading later in this attachment.

    • Married borrowers may repay their Direct Loans jointly under the ICR plan. If a married couple elects this option, we add the outstanding balance on the Direct Loans of each borrower and we add together both borrowers' AGIs to determine a joint ICR payment amount. We then prorate the joint payment amount for each borrower based on the proportion of that borrower's debt to the total outstanding balance. We bill each borrower separately.

    • For example, if a married couple, John and Sally, has a total outstanding Direct Loan debt of $60,000, of which $40,000 belongs to John and $20,000 to Sally, we would apportion 67 percent of the monthly ICR payment to John and the remaining 33 percent to Sally. To take advantage of a joint ICR payment, married couples need not file taxes jointly; they may file separately and subsequently provide the other spouse's tax information to the borrower's Federal loan servicer.

    Calculating the monthly payment amount using a standard amortization and a 12-year repayment period.

    The formula to amortize a loan with a standard schedule (in which each payment is the same over the course of the repayment period) is as follows:

    M = P × <(I ÷ 12) ÷ [1 − {1 + (I ÷ 12)}⁁−N]>

    In the formula—

    • M is the monthly payment amount;

    • P is the outstanding principal balance of the loan at the time the calculation is performed;

    • I is the annual interest rate on the loan, expressed as a decimal (for example, for a loan with an interest rate of 6 percent, 0.06); and

    • N is the total number of months in the repayment period (for example, for a loan with a 12-year repayment period, 144 months).

    For example, assume that Billy has a $10,000 Direct Unsubsidized Loan with an interest rate of 6 percent.

    Step 1: To solve for M, first simplify the numerator of the fraction by which we multiply P, the outstanding principal balance. To do this divide I, the interest rate, as a decimal, by 12. In this example, Billy's interest rate is 6 percent. As a decimal, 6 percent is 0.06.

    • 0.06 ÷ 12 = 0.005

    Step 2: Next, simplify the denominator of the fraction by which we multiply P. To do this divide I, the interest rate, as a decimal, by 12. Then, add one. Next, raise the sum of the two figures to the negative power that corresponds to the length of the repayment period in months. In this example, because we are amortizing a loan to calculate the monthly payment amount under the ICR plan, the applicable figure is 12 years, which is 144 months. Finally, subtract the result from one.

    • 0.06 ÷ 12 = 0.005 • 1 + 0.005 = 1.005 • 1.005 ⁁ − 144 = 0.48762628 • 1 − 0.48762628 = 0.51237372

    Step 3: Next, resolve the fraction by dividing the result from Step 1 by the result from Step 2.

    • 0.005 ÷ 0.51237372 = 0.0097585

    Step 4: Finally, solve for M, the monthly payment amount, by multiplying the outstanding principal balance of the loan by the result of Step 3.

    • $10,000 × 0.0097585 = $97.59

    The remainder of the examples in this attachment will only show the results of the formula.

    Example 1. Brenda is single with no dependents and has $15,000 in Direct Subsidized and Unsubsidized Loans. The interest rate on Brenda's loans is 6 percent, and she has an AGI of $30,352.

    Step 1: Determine the total monthly payment amount based on what Brenda would pay over 12 years using standard amortization. To do this, use the formula that precedes Example 1. In this example, the monthly payment amount would be $146.38.

    Step 2: Multiply the result of Step 1 by the income percentage factor shown in the income percentage factors table (see Attachment 1 to this notice) that corresponds to Brenda's AGI. In this example, an AGI of $30,352 corresponds to an income percentage factor of 71.89 percent.

    • 0.7189 × $146.38 = $105.23

    Step 3: Determine 20 percent of Brenda's discretionary income and divide by 12 (discretionary income is AGI minus the HHS Poverty Guideline amount for a borrower's family size and State of residence). For Brenda, subtract the Poverty Guideline amount for a family of one from her AGI, multiply the result by 20 percent, and then divide by 12:

    • $30,352−$12,140 = $18,212 • $18,212 × 0.20 = $3,642.40 • $3,642.40 ÷ 12 = $303.53

    Step 4: Compare the amount from Step 2 with the amount from Step 3. The lower of the two will be the monthly ICR payment amount. In this example, Brenda will be paying the amount calculated under Step 2 ($105.23).

    Note: Brenda would have a lower payment under other income-driven repayment plans. Specifically, Brenda's payment would be $101.18 under the PAYE and REPAYE plans. However, Brenda's payment would be $151.76 under the IBR plan, which is higher than the payment she would have under the ICR plan.

    Example 2. Joseph is married to Susan and has no dependents. They file their Federal income tax return jointly. Joseph has a Direct Loan balance of $10,000, and Susan has a Direct Loan balance of $15,000. The interest rate on all of the loans is 6 percent.

    Joseph and Susan have a combined AGI of $85,724 and are repaying their loans jointly under the ICR plan (for general information regarding joint ICR payments for married couples, see the fifth and sixth bullets under the heading “General notes about the examples in this attachment”).

    Step 1: Add Joseph's and Susan's Direct Loan balances to determine their combined aggregate loan balance:

    • $10,000 + $15,000 = $25,000

    Step 2: Determine the combined monthly payment amount for Joseph and Susan based on what both borrowers would pay over 12 years using standard amortization. To do this, use the formula that precedes Example 1. In this example, the combined monthly payment amount would be $243.96.

    Step 3: Multiply the result of Step 2 by the income percentage factor shown in the income percentage factors table (see Attachment 1 to this notice) that corresponds to Joseph and Susan's combined AGI. In this example, the combined AGI of $85,724 corresponds to an income percentage factor of 109.40 percent.

    • 1.094 × $243.96 = $266.90

    Step 4: Determine 20 percent of Joseph and Susan's combined discretionary income (discretionary income is AGI minus the HHS Poverty Guideline amount for a borrower's family size and State of residence). To do this, subtract the Poverty Guideline amount for a family of two from the combined AGI, multiply the result by 20 percent, and then divide by 12:

    • $85,724−$16,460 = $69,264 • $69,264 × 0.20 = $13,852.80 • $13,852.80 ÷ 12 = $1,154.40

    Step 5: Compare the amount from Step 3 with the amount from Step 4. The lower of the two will be Joseph and Susan's joint monthly payment amount. Joseph and Susan will jointly pay the amount calculated under Step 3 ($266.90).

    Note: For Joseph and Susan, the ICR plan provides the lowest monthly payment of all of the income-driven repayment plans. Joseph and Susan would not be eligible for the IBR or PAYE plans, and would have a combined monthly payment under the REPAYE plan of $508.62.

    Step 6: Because Joseph and Susan are jointly repaying their Direct Loans under the ICR plan, the monthly payment amount calculated under Step 5 applies to both Joseph's and Susan's loans. To determine the amount for which each borrower will be responsible, prorate the amount calculated under Step 4 by each spouse's share of the combined Direct Loan debt. Joseph has a Direct Loan debt of $10,000 and Susan has a Direct Loan debt of $15,000. For Joseph, the monthly payment amount will be:

    • $10,000 ÷ ($10,000 + $15,000) = 40 percent • 0.40 × $266.90 = $106.76 For Susan, the monthly payment amount will be: • $15,000 ÷ ($10,000 + $15,000) = 60 percent • 0.60 × $266.90 = $160.14

    Example 3. David is single with no dependents and has $60,000 in Direct Subsidized and Unsubsidized Loans. The interest rate on all of the loans is 6 percent, and David's AGI is $36,114.

    Step 1: Determine the total monthly payment amount based on what David would pay over 12 years using standard amortization. To do this, use the formula that precedes Example 1. In this example, the monthly payment amount would be $585.51.

    Step 2: Multiply the result of Step 1 by the income percentage factor shown in the income percentage factors table (see Attachment 1 to this notice) that corresponds to David's AGI. In this example, an AGI of $36,114 corresponds to an income percentage factor of 80.33 percent.

    • 0.8033 × $585.51 = $470.34

    Step 3: Determine 20 percent of David's discretionary income and divide by 12 (discretionary income is AGI minus the HHS Poverty Guideline amount for a borrower's family size and State of residence). To do this, subtract the Poverty Guideline amount for a family of one from David's AGI, multiply the result by 20 percent, and then divide by 12:

    • $36,114−$12,140 = $23,974 • $23,974 × 0.20 = $4,794.80 • $4,794.80 ÷ 12 = $399.57

    Step 4: Compare the amount from Step 2 with the amount from Step 3. The lower of the two will be David's monthly payment amount. In this example, David will be paying the amount calculated under Step 3 ($399.57).

    Note: David would have a lower payment under each of the other income-driven plans. Specifically, David's payment would be $149.20 under the PAYE and REPAYE plans and $223.80 under the IBR plan.

    Interpolation. If an income is not included on the income percentage factor table, calculate the income percentage factor through linear interpolation. For example, assume that Joan is single with an income of $50,000.

    Step 1: Find the closest income listed that is less than Joan's income of $50,000 ($45,361) and the closest income listed that is greater than Joan's income of $50,000 ($56,891).

    Step 2: Subtract the lower amount from the higher amount (for this discussion we will call the result the “income interval”):

    • $56,891−$45,361 = $11,530

    Step 3: Determine the difference between the two income percentage factors that correspond to the incomes used in Step 2 (for this discussion, we will call the result the “income percentage factor interval”):

    • 100.00 percent−88.77 percent = 11.23 percent

    Step 4: Subtract from Joan's income the closest income shown on the chart that is less than Joan's income of $50,000:

    • $50,000−$45,361 = $4,639

    Step 5: Divide the result of Step 4 by the income interval determined in Step 2:

    • $4,639 ÷ $11,530 = 40.23 percent

    Step 6: Multiply the result of Step 5 by the income percentage factor interval:

    • 11.23 percent × 40.23 percent = 4.52 percent

    Step 7: Add the result of Step 6 to the lower of the two income percentage factors used in Step 3 to calculate the income percentage factor interval for $50,000 in income:

    • 4.52 percent + 88.77 percent = 93.29 percent (rounded to the nearest hundredth)

    The result is the income percentage factor that we will use to calculate Joan's monthly repayment amount under the ICR plan.

    Attachment 3—Charts Showing Sample Income-Driven Repayment Amounts for Single and Married Borrowers

    Below are two charts that provide first-year payment amount estimates for a variety of loan debt sizes and incomes under all of the income-driven repayment plans and the 10-Year Standard Repayment Plan. The first chart is for single borrowers who have a family size of one. The second chart is for a borrower who is married or a head of household and who has a family size of three. The calculations in Attachment 3 assume that the loan debt has an interest rate of 6 percent. For married borrowers, the calculations assume that the borrower files a joint Federal income tax return with his or her spouse and that the borrower's spouse does not have Federal student loans. A field with a “-” character indicates that the borrower in the example would not be eligible to enter the applicable income-driven repayment plan based on the borrower's income, loan debt, and family size.

    Sample First-Year Monthly Repayment Amounts for a Single Borrower Family Size = 1 Income Plan $20,000 $40,000 $60,000 $80,000 $100,000 Initial Debt $20,000 ICR $117 $165 $195 $214 $236 IBR 22 - - - - PAYE 15 182 - - - REPAYE 15 182 348 515 682 10-Year Standard 222 222 222 222 222 40,000 ICR 131 327 390 429 472 BR 22 272 - - - PAYE 15 182 348 - - REPAYE 15 182 348 515 682 10-Year Standard 444 444 444 444 444 60,000 ICR 131 464 586 643 707 IBR 22 272 522 - - PAYE 15 182 348 515 - REPAYE 15 182 348 515 682 10-Year Standard 666 666 666 666 666 80,000 ICR 131 464 781 858 943 IBR 22 272 522 772 - PAYE 15 182 348 515 682 REPAYE 15 182 348 515 692 10-Year Standard 888 888 888 888 888 100,000 ICR 131 464 798 1,072 1,179 IBR 22 272 522 772 1,022 PAYE 15 182 348 515 682 REPAYE 15 182 348 515 692 10-Year Standard 1,110 1,110 1,110 1,110 1,110 Sample First-Year Monthly Repayment Amounts for a Married or Head-of-Household Borrower Family Size = 3 Income Plan $20,000 $40,000 $60,000 $80,000 $100,000 Initial Debt Income Plan $20,000 $40,000 $60,000 $80,000 $100,000 $20,000 ICR $0 $166 $195 $207 $229 IBR 0 110 - - - PAYE 0 74 - - - REPAYE 0 74 240 407 574 10-Year Standard 222 222 222 222 222 40,000 ICR 0 314 390 415 457 IBR 0 110 360 - - PAYE 0 74 240 407 - REPAYE 0 74 240 407 574 10-Year Standard 444 444 444 444 444 60,000 ICR 0 320 586 622 686 IBR 0 110 360 610 - PAYE 0 74 240 407 574 REPAYE 0 74 240 407 574 10-Year Standard 666 666 666 666 666 80,000 ICR 0 320 654 830 914 IBR 0 110 360 610 860 PAYE 0 74 240 407 574 REPAYE 0 74 240 407 574 10-Year Standard 888 888 888 888 888 100,000 ICR 0 320 654 987 1,143 IBR 0 110 360 610 860 PAYE 0 74 240 407 574 REPAYE 0 74 240 407 574 10-Year Standard 1,110 1,110 1,110 1,110 1,110
    [FR Doc. 2018-16582 Filed 8-1-18; 8:45 am] BILLING CODE 4000-01-P
    DEPARTMENT OF ENERGY Notice of Request for Information (RFI) on Understanding Catalyst Production and Development Needs at National Laboratories AGENCY:

    Bioenergy Technologies Office, Office of Energy Efficiency and Renewable Energy, Department of Energy.

    ACTION:

    Request for information.

    SUMMARY:

    The U.S. Department of Energy (DOE) invites public comment on its Request for Information (RFI) to understand research, capabilities and yet-to-be addressed challenges pertinent to production scale-up of catalysts for the conversion of biomass and waste streams. Additionally, through this RFI, the Bioenergy Technologies Office (BETO) seeks to understand enhancement capabilities of process development units at the National Laboratories in order to increase their impact.

    DATES:

    Responses to the RFI must be received no later than September 14, 2018.

    ADDRESSES:

    Interested parties are to submit comments electronically to [email protected] Responses must be provided as attachments to an email. Include “Understanding Catalyst Production and Development RFI” as the subject of the email. It is recommended that attachments with file sizes exceeding 25MB be compressed (i.e., zipped) to ensure message delivery. Responses must be provided as a Microsoft Word (.docx) attachment to the email, and 12 point font, 1 inch margins. Only electronic responses will be accepted. The complete RFI document is located at https://eere-exchange.energy.gov/.

    FOR FURTHER INFORMATION CONTACT:

    Questions may be addressed to Jim Spaeth, (720) 356-1784, or [email protected] Further instructions can be found in the RFI document posted on EERE Exchange.

    SUPPLEMENTARY INFORMATION:

    DOE posted on its website a RFI to solicit feedback from industry (including but not limited to research organizations, manufacturing organizations, catalyst manufacturers, and catalyst research consortia), academia, research laboratories, government agencies, and other biofuels and bioproducts stakeholders on “catalyst productions capability for biochemical and thermochemical processes.” Specifically, BETO seeks information to help identify and understand additional areas of research, capabilities, and yet-to be-addressed challenges pertinent to production scale-up challenges (typically in multi-kilogram quantities of novel catalysts used in technology development and engineering solutions for the efficient conversion of lignocellulosic, waste, and algal feedstocks to produce biofuels and bioproducts). The RFI [DE-FOA-00001951] is available at: https://eere-exchange.energy.gov/.

    Confidential Business Information

    Because information received in response to this RFI may be used to structure future programs, funding and/or otherwise be made available to the public, respondents are strongly advised to not include any information in their responses that might be considered business sensitive, proprietary, or otherwise confidential. If, however, a respondent chooses to submit business sensitive, proprietary, or otherwise confidential information, it must be clearly and conspicuously marked as such in the response as detailed in the RFI [DE-FOA-00001951] at: https://eere-exchange.energy.gov/.

    Factors of interest to DOE when evaluating requests to treat submitted information as confidential include: (1) A description of the items; (2) whether and why such items are customarily treated as confidential within the industry; (3) whether the information is generally known by or available from other sources; (4) whether the information has previously been made available to others without obligation concerning its confidentiality; (5) an explanation of the competitive injury to the submitting person that would result from public disclosure; (6) when such information might lose its confidential character due to the passage of time; and (7) why disclosure of the information would be contrary to the public interest.

    Signed in Washington, DC, on July 27, 2018. Jonathan Male, Director, Bioenergy Technologies Office.
    [FR Doc. 2018-16577 Filed 8-1-18; 8:45 am] BILLING CODE 6450-01-P
    DEPARTMENT OF ENERGY [OE Docket No. EA-457] Application to Export Electric Energy; ADG Group Inc. AGENCY:

    Office of Electricity, Department of Energy.

    ACTION:

    Notice of application.

    SUMMARY:

    ADG Group Inc. (ADG or Applicant) has applied for authorization to transmit electric energy from the United States to Canada pursuant to the Federal Power Act.

    DATES:

    Comments, protests, or motions to intervene must be submitted on or before September 4, 2018.

    ADDRESSES:

    Comments, protests, motions to intervene, or requests for more information should be addressed to: Office of Electricity, Mail Code: OE-20, U.S. Department of Energy, 1000 Independence Avenue SW, Washington, DC 20585-0350. Because of delays in handling conventional mail, it is recommended that documents be transmitted by overnight mail, by electronic mail to [email protected], or by facsimile to 202-586-8008.

    SUPPLEMENTARY INFORMATION:

    Exports of electricity from the United States to a foreign country are regulated by the Department of Energy (DOE) pursuant to sections 301(b) and 402(f) of the Department of Energy Organization Act (42 U.S.C. 7151(b) and 7172(f)) and require authorization under section 202(e) of the Federal Power Act (16 U.S.C. 824a(e)).

    On July 17, 2018, DOE received an application from ADG for authorization to transmit electric energy from the United States to Canada as a power marketer for a five-year term using existing international transmission facilities.

    In its application, ADG states that it does not own, operate, or control any electric power generation, transmission, or distribution facilities, and that it has no franchised electric power service area. The electric energy that the Applicant proposes to export to Canada would be surplus energy purchased from third parties such as electric utilities and other suppliers within the United States pursuant to voluntary agreements. The existing international transmission facilities to be utilized by the Applicant have previously been authorized by Presidential Permits issued pursuant to Executive Order 10485, as amended, and are appropriate for open access transmission by third parties.

    Procedural Matters: Any person desiring to be heard in this proceeding should file a comment or protest to the application at the address provided above. Protests should be filed in accordance with Rule 211 of the Federal Energy Regulatory Commission's Rules of Practice and Procedure (18 CFR 385.211). Any person desiring to become a party to these proceedings should file a motion to intervene at the above address in accordance with FERC Rule 214 (18 CFR 385.214). Five (5) copies of such comments, protests, or motions to intervene should be sent to the address provided above on or before the date listed above.

    Comments and other filings concerning ADG's application to export electric energy to Canada should be clearly marked with OE Docket No. EA-457. An additional copy is to be provided to both Xue Chao (David) Cai, ADG Group Inc., 77 King Street West, Suite 400, Toronto, Ontario, Canada M5K 0A1, and Peter P. Thieman, Dentons US LLP, 1900 K Street NW, Washington, DC 20006.

    A final decision will be made on this application after the environmental impacts have been evaluated pursuant to DOE's National Environmental Policy Act Implementing Procedures (10 CFR part 1021) and after a determination is made by DOE that the proposed action will not have an adverse impact on the sufficiency of supply or reliability of the U.S. electric power supply system.

    Copies of this application will be made available, upon request, for public inspection and copying at the address provided above, by accessing the program website at http://energy.gov/node/11845, or by emailing Angela Troy at [email protected]

    Signed in Washington, DC, on July 24, 2018. Christopher Lawrence, Electricity Policy Analyst, Office of Electricity.
    [FR Doc. 2018-16579 Filed 8-1-18; 8:45 am] BILLING CODE 6450-01-P
    DEPARTMENT OF ENERGY Notice of Request for Information (RFI) on [email protected] (Hydrogen at Scale): Determining Opportunities To Facilitate Wide-Scale Hydrogen Adoption for Energy Security and Economic Growth AGENCY:

    Office of Energy Efficiency and Renewable Energy, Department of Energy (DOE).

    ACTION:

    Request for information (RFI).

    SUMMARY:

    The U.S. Department of Energy (DOE) invites public comment on its Request for Information (RFI) on [email protected] (Hydrogen at Scale): Determining Opportunities to Facilitate Wide-Scale Hydrogen Adoption for Energy Security and Economic Growth. The Office of Energy Efficiency and Renewable Energy (EERE) is specifically interested in information to quantify the increasing industrial demand for hydrogen, to identify and quantify the available domestic resources capable of generating sufficient hydrogen to sustainably meet the demand in the near- to long-terms across multiple sectors, and to identify opportunities to leverage current industrial infrastructure to better meet the growing demands for hydrogen across sectors.

    DATES:

    Responses to the RFI must be received no later than 5:00 p.m. (ET) on October 31, 2018.

    ADDRESSES:

    Interested parties are invited to submit comments using the Online Response Collector found at the specified web link included in the RFI document. Alternatively, responses can be submitted as an attachment to an email addressed to [email protected] with “[email protected] RFI” in the subject line. Email attachments can be provided as a Microsoft Word (.docx) file or an Adobe PDF (.pdf) file, prepared in accordance with the detailed instructions in the RFI. Documents submitted electronically should clearly indicate which topic areas and specific questions are being addressed, and should be limited to no more than 10MB in size. The complete RFI [DE-FOA-0001965] document is located at https://eere-exchange.energy.gov/.

    FOR FURTHER INFORMATION CONTACT:

    Questions may be addressed to [email protected] or to Eric Miller at (202) 287-5829. Further instruction can be found in the RFI document posted on EERE Exchange at https://eere-exchange.energy.gov/.

    SUPPLEMENTARY INFORMATION:

    The [email protected] initiative aims to develop and enable transformational technologies that can sustainably produce and efficiently utilize large quantities of affordable hydrogen to collectively enable energy storage, energy security, grid resiliency, domestic employment, and American dominance in energy innovation. The purpose of this RFI is to solicit feedback from industry, academia, research laboratories, government agencies, and other stakeholders on opportunities and strategies for expanding and diversifying current hydrogen supply options, and for leveraging and multi-purposing current industrial infrastructure to accommodate widespread hydrogen usage. The RFI seeks input in five topic areas: Hydrogen supply expansion and diversification; expansion of markets requiring significant hydrogen demand; leveraging and/or multi-purposing industries and infrastructure to facilitate widespread adoption of hydrogen; potential sponsored competitions to incentivize widespread adoption of hydrogen across multiple sectors; and other innovative approaches to help enable [email protected]

    Confidential Business Information: Because information received in response to this RFI may be used to structure future programs, funding and/or otherwise be made available to the public, respondents are strongly advised to not include any information in their responses that might be considered business sensitive, proprietary, or otherwise confidential. If, however, a respondent chooses to submit business sensitive, proprietary, or otherwise confidential information, it must be clearly and conspicuously marked as such in the response as detailed in the RFI [DE-FOA-0001965] at: https://eere-exchange.energy.gov/.

    Issued in Washington, DC, on July 23, 2018. Sunita Satyapal, Director, Fuel Cell Technologies Office.
    [FR Doc. 2018-16578 Filed 8-1-18; 8:45 am] BILLING CODE 6450-01-P
    FARM CREDIT ADMINISTRATION Sunshine Act Meeting; Farm Credit Administration Board AGENCY:

    Farm Credit Administration.

    ACTION:

    Notice, regular meeting.

    SUMMARY:

    Notice is hereby given, pursuant to the Government in the Sunshine Act, of the regular meeting of the Farm Credit Administration Board (Board).

    DATES:

    The regular meeting of the Board will be held at the offices of the Farm Credit Administration in McLean, Virginia, on August 9, 2018, from 9:00 a.m. until such time as the Board concludes its business.

    ADDRESSES:

    Farm Credit Administration, 1501 Farm Credit Drive, McLean, Virginia 22102-5090. Submit attendance requests via email to [email protected]. See SUPPLEMENTARY INFORMATION for further information about attendance requests.

    FOR FURTHER INFORMATION CONTACT:

    Dale L. Aultman, Secretary to the Farm Credit Administration Board, (703) 883-4009, TTY (703) 883-4056, [email protected].

    SUPPLEMENTARY INFORMATION:

    This meeting of the Board will be open to the public (limited space available). Please send an email to [email protected] at least 24 hours before the meeting. In your email include: name, postal address, entity you are representing (if applicable), and telephone number. You will receive an email confirmation from us. Please be prepared to show a photo identification when you arrive. If you need assistance for accessibility reasons, or if you have any questions, contact Dale L. Aultman, Secretary to the Farm Credit Administration Board, at (703) 883-4009. The matters to be considered at the meeting are:

    Open Session A. Approval of Minutes

    • July 12, 2018

    B. Report

    • Annual Report on the Farm Credit System's Young, Beginning, and Small Farmer Mission Performance: 2017 Results

    Dated: July 30, 2018. Dale L. Aultman, Secretary, Farm Credit Administration Board.
    [FR Doc. 2018-16629 Filed 7-31-18; 11:15 am] BILLING CODE 6705-01-P
    FEDERAL COMMUNICATIONS COMMISSION [OMB 3060-1162] Information Collection Being Submitted for Review and Approval to the Office of Management and Budget AGENCY:

    Federal Communications Commission.

    ACTION:

    Notice and request for comments.

    SUMMARY:

    As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995, the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees.

    The Commission may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.

    DATES:

    Written comments should be submitted on or before September 4, 2018. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contacts listed below as soon as possible.

    ADDRESSES:

    Direct all PRA comments to Nicholas A. Fraser, OMB, via email [email protected]; and to Cathy Williams, FCC, via email [email protected] and to [email protected] Include in the comments the OMB control number as shown in the SUPPLEMENTARY INFORMATION below.

    FOR FURTHER INFORMATION CONTACT:

    For additional information or copies of the information collection, contact Cathy Williams at (202) 418-2918. To view a copy of this information collection request (ICR) submitted to OMB: (1) Go to the webpage http://www.reginfo.gov/public/do/PRAMain, (2) look for the section of the webpage called “Currently Under Review,” (3) click on the downward-pointing arrow in the “Select Agency” box below the “Currently Under Review” heading, (4) select “Federal Communications Commission” from the list of agencies presented in the “Select Agency” box, (5) click the “Submit” button to the right of the “Select Agency” box, (6) when the list of FCC ICRs currently under review appears, look for the OMB control number of this ICR and then click on the ICR Reference Number. A copy of the FCC submission to OMB will be displayed.

    SUPPLEMENTARY INFORMATION:

    As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees.

    OMB Control Number: 3060-1162.

    Title: Closed Captioning of Video Programming Delivered Using internet Protocol, and Apparatus Closed Caption Requirements.

    Form Number: N/A.

    Type of Review: Revision of a currently approved collection.

    Respondents: Individuals or Household, Businesses or other for-profit, Not-for-profit institutions.

    Number of Respondents and Responses: 1,172 respondents; 3,341 responses.

    Estimated Time per Response: 0.084-10 hours.

    Frequency of Response: One time and on occasion reporting requirements; Recordkeeping requirement; Third party disclosure requirement.

    Obligation to Respond: Mandatory; Required to obtain or retain benefits. The statutory authority for this collection is contained in the Twenty-First Century Communications and Video Accessibility Act of 2010, Public Law 111-260, 124 Stat. 2751, and Sections 4(i), 4(j), 303, 330(b), 713, and 716 of the Communications Act of 1934, as amended (the Act), 47 U.S.C. 154(i), 154(j), 303, 330(b), 613, and 617.

    Total Annual Burden: 9,197 hours.

    Total Annual Cost: $95,700.

    Privacy Act Impact Assessment: Yes. As required by OMB Memorandum M-03-22 (September 26, 2003), the FC completed a Privacy Impact Assessment (PIA) on June 28, 2007, that gives a full and complete explanation of how the FCC collects, stores, maintains, safeguards, and destroys the PII covered by these information collection requirements. The PIA may be reviewed at: http://www.fcc.gov/omd/privacyact/Privacy_Impact_Assessment.html.

    Nature and Extent of Confidentiality: Some assurances of confidentiality are being provided to the respondents. Parties filing petitions for exemption based on economic burden, requests for Commission determinations of technical feasibility and achievability, requests for purpose-based waivers, or responses to complaints alleging violations of the Commission's rules may seek confidential treatment of information they provide pursuant to the Commission's existing confidentiality rules.

    The Commission is not requesting that individuals who file complaints alleging violations of our rules (complainants) submit confidential information (e.g., credit card numbers, social security numbers, or personal financial information) to us. We request that complainants submit their names, addresses, and other contact information, which enables us to process complaints. Any use of this information is covered under the routine uses listed in the Commission's SORN, FCC/CGB-1, “Informal Complaints, Inquiries, and Requests for Dispute Assistance.” The PIA that the FCC completed on June 28, 2007 gives a full and complete explanation of how the FCC collects, stores, maintains, safeguards, and destroys PII, as required by OMB regulations and the Privacy Act, 5 U.S.C. 552a. The PIA may be viewed at: http://www.fcc.gov/omd/privacyact/Privacy_Impact_Assessment.html.The Commission will update the PIA to cover the PII collected related to this information collection to incorporate various revisions to it as a result of revisions to the SORN and as required by OMB's Memorandum M-03-22 (September 26, 2003) and by the Privacy Act, 5 U.S.C. 552a.

    Needs and Uses: The Commission is submitting this revised information collection to transfer certain information collection burdens associated with this OMB control number to another OMB control number. This change is being made to reflect the development of an online form for use by consumers in filing complaints with the Commission that allege violations of the FCC's disability accessibility requirements. The online form is part of an information collection reflected in OMB control number 3060-0874.

    The Twenty-First Century Communications and Video Accessibility Act of 2010 (CVAA) directed the Commission to revise its regulations to mandate closed captioning on IP-delivered video programming that was published or exhibited on television with captions after the effective date of the regulations. Accordingly, the Commission requires video programming owners (VPOs) to send program files to video programming distributors and providers (hereinafter VPDs) with required captions, and it requires VPDs to enable the rendering or pass through of all required captions to the end user. The CVAA also directed the Commission to revise its regulations to mandate that all apparatus designed to receive, play back, or record video programming be equipped with built-in closed caption decoder circuitry or capability designed to display closed-captioned video programming, except that apparatus that use a picture screen that is 13 inches or smaller and recording devices must comply only if doing so is achievable. These rules are codified at 47 CFR 79.4 and 79.100-79.104.

    Federal Communications Commission. Marlene Dortch, Secretary, Office of the Secretary.
    [FR Doc. 2018-16511 Filed 8-1-18; 8:45 am] BILLING CODE 6712-01-P
    FEDERAL COMMUNICATIONS COMMISSION [OMB 3060-1103] Information Collection Being Reviewed by the Federal Communications Commission Under Delegated Authority AGENCY:

    Federal Communications Commission.

    ACTION:

    Notice and request for comments.

    SUMMARY:

    As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act of 1995 (PRA), the Federal Communications Commission (FCC or Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collections. Comments are requested concerning: whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees.

    The FCC may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.

    DATES:

    Written PRA comments should be submitted on or before October 1, 2018. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.

    ADDRESSES:

    Direct all PRA comments to Cathy Williams, FCC, via email to [email protected] and to [email protected].

    FOR FURTHER INFORMATION CONTACT:

    For additional information about the information collection, contact Cathy Williams at (202) 418-2918.

    SUPPLEMENTARY INFORMATION:

    OMB Control Number: 3060-1103.

    Title: Section 76.41 Franchise Application Process.

    Type of Review: Extension of a currently approved collection.

    Form Number: N/A.

    Respondents: State, local or tribal government, Business or other for profit entities.

    Number of Respondents and Responses: 22 respondents and 40 responses.

    Estimated Hours per Response: 0.5 to 4 hours.

    Frequency of Response: On occasion reporting requirements; Third party disclosure requirement.

    Total Annual Burden: 90 hours.

    Total Annual Cost: No cost.

    Privacy Impact Assessment: No impact(s).

    Nature of Response: Required to obtain or retain benefits. The statutory authority for this collection is contained in 47 U.S.C. 151, 152, 154(i), 157nt, 201, 531, 541 and 542.

    Confidentiality: There is no need for confidentiality required with this collection of information.

    Needs and Uses: The information collection requirements are as follows:

    47 CFR 76.41(b) requires a competitive franchise applicant to include the following information in writing in its franchise application, in addition to any information required by applicable state and local laws:

    (1) The applicant's name;

    (2) The names of the applicant's officers and directors;

    (3) The business address of the applicant;

    (4) The name and contact information of a designated contact for the applicant;

    (5) A description of the geographic area that the applicant proposes to serve;

    (6) The PEG channel capacity and capital support proposed by the applicant;

    (7) The term of the agreement proposed by the applicant;

    (8) Whether the applicant holds an existing authorization to access the public rights-of-way in the subject franchise service area;

    (9) The amount of the franchise fee the applicant offers to pay; and

    (10) Any additional information required by applicable state or local laws.

    The information collection requirements contained in 47 CFR 76.41(d) states when a competitive franchise applicant files a franchise application with a franchising authority and the applicant has existing authority to access public rights-of-way in the geographic area that the applicant proposes to serve, the franchising authority grant or deny the application within 90 days of the date the application is received by the franchising authority. If a competitive franchise applicant does not have existing authority to access public rights-of-way in the geographic area that the applicant proposes to serve, the franchising authority must perform grant or deny the application within 180 days of the date the application is received by the franchising authority. A franchising authority and a competitive franchise applicant may agree in writing to extend the 90-day or 180-day deadline, whichever is applicable.

    Federal Communications Commission. Marlene Dortch, Secretary, Office of the Secretary.
    [FR Doc. 2018-16514 Filed 8-1-18; 8:45 am] BILLING CODE 6712-01-P
    FEDERAL COMMUNICATIONS COMMISSION [OMB 3060-0149] Information Collection Being Reviewed by the Federal Communications Commission AGENCY:

    Federal Communications Commission.

    ACTION:

    Notice and request for comments.

    SUMMARY:

    As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995, the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees. The FCC may not conduct or sponsor a collection of information unless it displays a currently valid control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid Office of Management and Budget (OMB) control number.

    DATES:

    Written PRA comments should be submitted on or before October 1, 2018. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.

    ADDRESSES:

    Direct all PRA comments to Nicole Ongele, FCC, via email [email protected] and to [email protected].

    FOR FURTHER INFORMATION CONTACT:

    For additional information about the information collection, contact Nicole Ongele at (202) 418-2991.

    SUPPLEMENTARY INFORMATION:

    As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the Federal Communications Commission (FCC or Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collections. Comments are requested concerning: whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees.

    OMB Control Number: 3060-0149.

    Title: Part 63, Accelerating Wireline Broadband Deployment by Removing Barriers to Infrastructure Investment, WC Docket No. 17-84, FCC 18-74.

    Form Number(s): N/A.

    Type of Review: Revision of a currently approved collection.

    Respondents: Business or other for-profit.

    Number of Respondents and Responses: 80 respondents; 88 responses.

    Estimated Time per Response: 6-62 hours per response.

    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: 1,086 hours.

    Total Annual Cost: $27,900.

    Privacy Act Impact Assessment: No impact(s).

    Nature and Extent of Confidentiality: Information filed in section 214 applications has generally been non-confidential. Requests from parties seeking confidential treatment are considered by Commission staff pursuant to 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 to OMB. The Commission will submit this information collection to OMB 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. 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 (the “adequate replacement test”).

    In June 2018, the Commission further modified the rules applicable to section 214(a) discontinuance applications. First, all carriers, whether dominant or non-dominant, that seek approval to grandfather data services below speeds of 25 Mbps download speed and 3 Mbps upload speed are now subject to a uniform reduced public comment period of 10 days and an automatic grant period of 25 days. Second, all carriers, whether dominant or non-dominant, seeking authorization to discontinue data services below speeds of 25 Mbps download speed and 3 Mbps upload speed that have previously been grandfathered for a period of at least 180 days are subject to a uniform reduced public comment period of 10 days and an automatic grant period of 31 days, provided they submit a statement as part of their discontinuance application that they have received Commission authority to grandfather the services at issue at least 180 days prior to the filing of the discontinuance application. This statement must reference the file number of the prior Commission authorization to grandfather the services the carrier now seeks to permanently discontinue. Third, carriers are no longer required to file an application to discontinue, reduce, or impair any service for which it has had no customers and no request for service for at least a 30-day period immediately preceding the discontinuance. Fourth, all carriers, whether dominant or non-dominant, that seek approval to discontinue legacy voice service can obtain further streamlined processing with a public comment period of 15 days and an automatic grant period of 31 days, provided (1) they offer a stand-alone interconnected VoIP service throughout the service area, and (2) at least one alternative stand-alone, facilities-based voice service is available from an unaffiliated provider throughout the affected service area (the “alternative options test”). Finally, all carriers, whether dominant or non-dominant, that seek approval to grandfather legacy voice service are now subject to a uniform reduced public comment period of 10 days and an automatic grant period of 25 days. The Commission estimates that it will receive three fewer section 214(a) discontinuance applications annually in light of the Commission's forbearance from applying its section 214(a) discontinuance requirements to services for which the carrier has had no customers and no reasonable requests for service during the preceding 30-day period. The Commission also anticipates that the number of respondents and responses under the adequate replacement test will likely decrease from 5 and 25, respectively, to 2 and 10, respectively. The remaining 15 responses previously attributable to the adequate replacement test will likely proceed pursuant to the less rigorous alternative options test. The Commission estimates that the total annual burden of the entire collection, as revised, is reduced from 1,923 hours to 1,086 hours.

    Federal Communications Commission. Marlene Dortch, Secretary. Office of the Secretary.
    [FR Doc. 2018-16513 Filed 8-1-18; 8:45 am] BILLING CODE 6712-01-P
    FEDERAL ELECTION COMMISSION Sunshine Act Meeting Time and Date:

    Tuesday, August 7, 2018 at 10:00 a.m.

    Place:

    1050 First Street NE, Washington, DC

    Status:

    This meeting will be closed to the public.

    Matters to be Considered:

    Compliance matters pursuant to 52 U.S.C. 30109.

    Matters relating to internal personnel decisions, or internal rules and practices.

    Information the premature disclosure of which would be likely to have a considerable adverse effect on the implementation of a proposed Commission action.

    Matters concerning participation in civil actions or proceedings or arbitration.

    CONTACT PERSON FOR MORE INFORMATION:

    Judith Ingram, Press Officer, Telephone: (202) 694-1220.

    Dayna C. Brown, Secretary and Clerk of the Commission.
    [FR Doc. 2018-16700 Filed 7-31-18; 4:15 pm] BILLING CODE 6715-01-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Agency for Toxic Substances and Disease Registry [Docket No. ATSDR-2015-0001] Availability of Set 29 Draft Toxicological Profiles AGENCY:

    Agency for Toxic Substances and Disease Registry (ATSDR), Department of Health and Human Services (HHS).

    ACTION:

    Notice of availability; request for comment.

    SUMMARY:

    The Agency for Toxic Substances and Disease Registry (ATSDR), within the Department of Health and Human Services (HHS) announces the availability of Set 29 Draft Toxicological Profiles for review and comment. All toxicological profiles issued as “Drafts for Public Comment” represent ATSDR's best efforts to provide important toxicological information on priority hazardous substances. ATSDR is seeking public comments and additional information or reports on studies about the health effects of Tribufos, Bromodichloromethane, Bromomethane, and 2-Hexanone for review and potential inclusion in the profiles. Although ATSDR considers key studies for these substances during the profile development process, this document solicits any relevant, additional information. ATSDR will evaluate the quality and relevance of such data or studies for possible inclusion into the profile.

    ATSDR also seeks comments on the organization and format of the Toxicological Profile for Bromodichloromethane. In an effort to improve the usability of the profiles, ATSDR recently made content and organizational changes based on user feedback, as well as data identifying the most used profile content. Changes include: Removing redundant content; adding summary figures and tables to Chapters 1, 2, 5, and 6 that did not exist in previous Toxicological Profiles; and reformatting the Levels of Significant Exposure (LSE) tables in Chapter 2. ATSDR has only applied the changes to the Draft Toxicological Profile for Bromodichloromethane, but intends to use the new format for future profiles. Specifically, ATSDR would like to know:

    (1) Does the chapter organization make it easier for you to find the information you need? For example, are you satisfied with the organization of the health effects chapter by organ system rather than exposure route?

    (2) Are the new tables and figures clear and useful? Do they make the Toxicological Profile easier to read?

    (3) If you have previously used any Toxicological Profile(s) for your work, which parts or content are the most useful to you, and what do you use it for?

    (4) Does the profile contain all of the information you need? If no, please elaborate on what additional information would be helpful.

    (5) Is there information you would like to see in the profile that is not currently included? If yes, please elaborate on the additional information you would like to see in the profile.

    ATSDR remains committed to providing a public comment period for these documents as a means to provide the best service to the public regarding public health.

    DATES:

    Comments must be submitted by October 31, 2018.

    ADDRESSES:

    You may submit comments, identified by docket number ATSDR-2015-0001, by either of the following methods:

    Internet: Access the Federal eRulemaking Portal at www.regulations.gov. Follow the instructions for submitting comments.

    Mail: Division of Toxicology and Human Health Sciences, Agency for Toxic Substances and Disease Registry, 1600 Clifton Rd. NE, MS F-57, Atlanta, GA, 30329. Attn: Docket No. ATSDR-2015-0001.

    Instructions: All submissions must include the agency name and docket number for this notice. All relevant comments will be posted without change. This means that no confidential business information or other confidential information should be submitted in response to this notice. The public comments, responses, and other data submitted in response to the Federal Register notices are available by request from ATSDR. Contact CDC Info at 1-800-232-4636 or [email protected] to request this information.

    FOR FURTHER INFORMATION CONTACT:

    Susan Ingber, Agency for Toxic Substances and Disease Registry, Division of Toxicology and Human Health Sciences, 1600 Clifton Rd. NE, MS F-57, Atlanta, GA, 30329, Email: [email protected]; Phone: 1-800-232-4636.

    SUPPLEMENTARY INFORMATION:

    The Superfund Amendments and Reauthorization Act of 1986 (SARA) [42 U.S.C. 9601 et seq.] amended the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA or Superfund) [42 U.S.C. 9601 et seq.] by establishing certain requirements for ATSDR and the U.S. Environmental Protection Agency (EPA) regarding hazardous substances that are most commonly found at facilities on the CERCLA National Priorities List (NPL). Among these statutory requirements is a mandate for the Administrator of ATSDR to prepare toxicological profiles for each substance included on the priority list of hazardous substances [also called the Substance Priority List (SPL)]. This list identifies 275 hazardous substances that ATSDR and EPA have determined pose the most significant potential threat to human health. The SPL is available online at www.atsdr.cdc.gov/spl.

    In addition, CERCLA provides ATSDR with the authority to prepare toxicological profiles for substances not found on the SPL. CERCLA authorizes ATSDR to establish and maintain inventory of literature, research, and studies on the health effects of toxic substances (CERCLA Section 104(i)(1)(B)); to respond to requests for health consultations (CERCLA Section 104(i)(4)); and to support the site-specific response actions conducted by the agency.

    Availability

    The Draft Toxicological Profiles are available online at http://www.atsdr.cdc.gov/ToxProfiles and at www.regulations.gov, Docket No. ATSDR-2015-0001.

    Pamela I. Protzel Berman, Director, Office of Policy, Partnerships and Planning, Agency for Toxic Substances and Disease Registry.
    [FR Doc. 2018-16557 Filed 8-1-18; 8:45 am] BILLING CODE 4163-70-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Administration for Community Living Announce the Intent To Award an Administrative Supplement ACTION:

    Announcing the Intent to Award an Administrative Supplement for two (2) Help America Vote Act (HAVA) Training and Technical Assistance (T/TA) grantees, the National Disability Rights Network (NDRN) 90HAVA0001 and the National Federation of the Blind (NFB) 90HAVA0002.

    SUMMARY:

    The Administration for Community Living (ACL) announces the intent to award an administrative supplement to the current Help America Vote Act (HAVA) Training and Technical Assistance (T/TA) grantees held by the National Disability Rights Network (NDRN) and the National Federation of the Blind (NFB). The purpose of the HAVA programs are designed to establish and improve participation in the election process for individuals with a full range of disabilities. In each eligible state and territory, seven percent of HAVA funds are set aside for the Protection and Advocacy Systems (P&As) to ensure that individuals with disabilities have the opportunity to participate in every step of the voting process. After receiving training and technical assistance, P&As may inform others on the availability of accessible voting equipment and its use. The administrative supplement for FY 2018 will be in the amount of $122,721 bringing the total award for FY 2018 to $462,590.

    Program Name: Help America Vote Act Training and Technical Assistance.

    Recipients: National Disability Rights Network (NDRN) and National Federation of the Blind (NFB).

    Period of Performance: The supplement award will be issued for the second year of the two-year project period of September 1, 2018, through August 30, 2019.

    Total Award Amount: NDRN $326,274 in FY 2018 NFB $136,316 in FY2018.

    Award Type: Administrative Supplement.

    Statutory Authority: This program is authorized under Title II, Subtitle D, Part 5 of HAVA 42 U.S.C. 15461-62, Section 102 of the Developmental Disabilities Assistance and Bill of Rights Act of 2000 (DD Act) (42 U.S.C. 15002).

    Basis for Award: The additional funding will not be used to begin new projects. The funding will be used to increase NDRN's capacity building efforts to provide training and technical assistance to the Protection and Advocacy Systems in the electoral process and NFB will be able to attend voting related conferences, conduct voting outreach campaigns and translate materials into Spanish.

    FOR FURTHER INFORMATION CONTACT:

    For further information or comments regarding this program supplement, contact Melvenia Wright, U.S. Department of Health and Human Services, Administration for Community Living, Administration on Disabilities, Administration on Intellectual and Developmental Disabilities: telephone (202) 795-7472; email [email protected]

    Dated: July 26, 2018. Lance Robertson, Administrator and Assistant Secretary for Aging.
    [FR Doc. 2018-16561 Filed 8-1-18; 8:45 am] BILLING CODE 4154-01-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration [Docket No. FDA-2015-N-0126] Revocation of Authorization of Emergency Use of an In Vitro Diagnostic Device for Detection of Ebola Virus AGENCY:

    Food and Drug Administration, HHS.

    ACTION:

    Notice.

    SUMMARY:

    The Food and Drug Administration (FDA) is announcing the revocation of the Emergency Use Authorization (EUA) (the Authorization) issued to Zalgen Labs, LLC for the ReEBOV Antigen Rapid Test. FDA revoked this Authorization on May 18, 2018, under the Federal Food, Drug, and Cosmetic Act (FD&C Act), as requested by Zalgen Labs, LLC by letter dated March 1, 2018. The revocation, which includes an explanation of the reasons for revocation, is reprinted in this document.

    DATES:

    The Authorization is revoked as of May 18, 2018.

    ADDRESSES:

    Submit written requests for single copies of the revocation to the Office of Counterterrorism and Emerging Threats, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 1, Rm. 4338, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your request or include a Fax number to which the revocation may be sent. See the SUPPLEMENTARY INFORMATION section for electronic access to the revocation.

    FOR FURTHER INFORMATION CONTACT:

    Michael Mair, Office of Counterterrorism and Emerging Threats, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 1, Rm. 4336, Silver Spring, MD 20993-0002, 301-796-8510 (this is not a toll-free number).

    SUPPLEMENTARY INFORMATION: I. Background

    Section 564 of the FD&C Act (21 U.S.C. 360bbb-3) as amended by the Project BioShield Act of 2004 (Pub. L. 108-276) and the Pandemic and All-Hazards Preparedness Reauthorization Act of 2013 (Pub. L. 113-5) allows FDA to strengthen the public health protections against biological, chemical, nuclear, and radiological agents. Among other things, section 564 of the FD&C Act allows FDA to authorize the use of an unapproved medical product or an unapproved use of an approved medical product in certain situations. On February 24, 2015, FDA issued an EUA to Corgenix, Inc. for the ReEBOV Antigen Rapid Test, subject to the terms of the Authorization. Notice of the issuance of the Authorization was published in the Federal Register on June 5, 2015 (80 FR 32140), as required by section 564(h)(1) of the FD&C Act. In response to requests from Zalgen Labs, LLC and Corgenix, Inc. to transfer ownership of the EUA for the ReEBOV Antigen Rapid Test from Corgenix, Inc. to Zalgen Labs, LLC, FDA amended and reissued the EUA to Zalgen Labs, LLC in its entirety on November 3, 2016. Under section 564(g)(2), the Secretary of Health and Human Services may revoke an EUA if, among other things, the criteria for issuance are no longer met or other circumstances make such revocation appropriate to protect the public health or safety.

    II. EUA Revocation Request for an In Vitro Diagnostic Device for Detection of the Ebola Virus

    Pursuant to a request from Zalgen Labs, LLC on March 1, 2018, FDA revoked the EUA for the ReEBOV Antigen Rapid Test on May 18, 2018, because the criteria for issuance were no longer met and these circumstances made such revocation appropriate to protect the public health or safety.

    III. Electronic Access

    An electronic version of this document and the full text of the revocation are available on the internet at https://www.regulations.gov.

    IV. The Revocation

    Having concluded that the criteria for revocation of the Authorization under section 564(g) of the FD&C Act are met, FDA has revoked the EUA for Zalgen Labs, LLC's ReEBOV Antigen Rapid Test. The revocation in its entirety follows and provides an explanation of the reasons for revocation, as required by section 564(h)(1) of the FD&C Act.

    BILLING CODE 4164-01-P EN02AU18.006 EN02AU18.007 Dated: July 27, 2018. Leslie Kux, Associate Commissioner for Policy.
    [FR Doc. 2018-16537 Filed 8-1-18; 8:45 am] BILLING CODE 4164-01-C
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration [Docket No. FDA-2018-N-2657] Advancing the Development of Pediatric Therapeutics 5: Advancing Pediatric Pharmacovigilance; Public Workshop AGENCY:

    Food and Drug Administration, HHS.

    ACTION:

    Notice of public workshop.

    SUMMARY:

    The Division of Pediatric and Maternal Health, Office of Surveillance and Epidemiology, and Office of Pediatric Therapeutics, Food and Drug Administration (FDA or the Agency) are announcing a public workshop entitled “Advancing the Development of Pediatric Therapeutics 5: Advancing Pediatric Pharmacovigilance.” The purpose of this 1-day workshop is to provide a forum to gather information on the latest developments in pediatric pharmacovigilance from the perspective of various stakeholders and to expand the conversation to include the utility and challenges of emerging pharmacovigilance tools, including specific challenges associated with pediatric data tools.

    DATES:

    The public workshop will be held on Friday, September 14, 2018, from 8 a.m. to 5 p.m. See the SUPPLEMENTARY INFORMATION section for registration date and information.

    ADDRESSES:

    The public workshop will be held at FDAWhite Oak Campus, 10903 New Hampshire Ave. Bldg. 31 Conference Center, the Great Room (Rm. 1503A), Silver Spring, MD 20993. Entrance for the public workshop participants (non-FDA employees) is through Building 1 where routine security check procedures will be performed. For parking and security information, please refer to https://www.fda.gov/AboutFDA/WorkingatFDA/BuildingsandFacilities/WhiteOakCampusInformation/ucm241740.htm.

    FOR FURTHER INFORMATION CONTACT:

    For questions regarding the workshop, contact Denise Pica-Branco, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Silver Spring, MD 20993-0002, 301-796-1732, [email protected]; or Meshaun Payne, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Silver Spring, MD 20993-0002, 301-796-6668, [email protected]

    SUPPLEMENTARY INFORMATION:

    I. Background

    Drugs and biologics (products) receive marketing approval only after undergoing premarket review and upon establishment of safety and efficacy through adequate and well-controlled clinical trials. Because all safety issues related to a product may not be detected in the premarket phase, FDA receives and analyzes postmarket safety information to determine if events reported in the postmarketing period are likely to be related to exposure to a product. When FDA determines that reported postmarketing events are likely related to a product, FDA can introduce labeling changes and other activities to inform the professional and lay public.

    FDA receives reports through the MedWatch website (https://www.fda.gov/Safety/MedWatch/HowToReport/default.htm), which are then entered into the FDA Adverse Event Reporting System for subsequent analysis. Because the volume of reports is large and because reporting entities (product manufacturers and the professional or lay public) need only suspect a possible link between product exposure and an adverse event, FDA employs specific tools and strategies to assess postmarket safety reports and potential signals that arise from review of these reports. The process for receipt and assessment of such postmarket safety information is referred to as pharmacovigilance.

    FDA has a specific regulatory mandate to perform pediatric pharmacovigilance and to present or make available the results of such pediatric pharmacovigilance to the Pediatric Advisory Committee.

    II. Topics for Discussion at the Public Workshop

    In this workshop, FDA will gather information on the latest developments in pediatric pharmacovigilance from the perspective of various stakeholders and expand the conversation to include the utility and challenges of emerging pharmacovigilance tools, including specific challenges associated with pediatric data tools.

    III. Participation in the Public Workshop

    Registration: Persons interested in attending this public workshop must register online at https://www.eventbrite.com/e/advancing-the-development-of-pediatric-therapeutics-5-adept5-tickets-46654530958 by Thursday, September 6, 2018, midnight Eastern Time. Please provide complete contact information for each attendee, including name, title, affiliation, address, email, and telephone. Onsite registration will not be available.

    Registration for onsite participation or via webcast is free and based on space availability, with priority given to early registrants. Early registration is recommended because seating is limited; therefore, FDA may limit the number of participants from each organization. Registrants will receive confirmation when they have been accepted.

    If you need special accommodations due to a disability, please contact Denise Pica-Branco ([email protected]) or Meshaun Payne ([email protected]) no later than Thursday, September 6, 2018.

    Streaming Webcast of the Public Workshop: Webcast information will be provided after participants have registered for the workshop. If you have never attended a Connect Pro event before, test your connection at https://collaboration.fda.gov/common/help/en/support/meeting_test.htm. To get a quick overview of the Connect Pro program, visit https://www.adobe.com/go/connectpro_overview.

    FDA has verified the website addresses in this document, as of the date this document publishes in the Federal Register, but websites are subject to change over time.

    Dated: July 27, 2018. Leslie Kux, Associate Commissioner for Policy.
    [FR Doc. 2018-16524 Filed 8-1-18; 8:45 am] BILLING CODE 4164-01-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration [Docket No. FDA-2015-N-2126] Agency Information Collection Activities; Proposed Collection; Comment Request; Food and Drug Administration's Research and Evaluation Survey for the Public Education Campaign on Tobacco Among the Lesbian Gay Bisexual Transgender Community AGENCY:

    Food and Drug Administration, HHS.

    ACTION:

    Notice.

    SUMMARY:

    The Food and Drug Administration (FDA or Agency) is announcing an opportunity for public comment on the proposed collection of certain information by the Agency. Under the Paperwork Reduction Act of 1995 (PRA), Federal Agencies are required to publish notice in the Federal Register concerning each proposed collection of information, including each proposed extension of an existing collection of information, and to allow 60 days for public comment in response to the notice. This notice solicits comments on FDA's Research and Evaluation Survey for the Public Education Campaign on Tobacco (RESPECT) among the Lesbian Gay Bisexual Transgender (LGBT).

    DATES:

    Submit either electronic or written comments on the collection of information by October 1, 2018.

    ADDRESSES:

    You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before October 1, 2018. The https://www.regulations.gov electronic filing system will accept comments until midnight Eastern Time at the end of October 1, 2018. Comments received by mail/hand delivery/courier (for written/paper submissions) will be considered timely if they are postmarked or the delivery service acceptance receipt is on or before that date.

    Electronic Submissions

    Submit electronic comments in the following way:

    Federal eRulemaking Portal: https://www.regulations.gov. Follow the instructions for submitting comments. Comments submitted electronically, including attachments, to https://www.regulations.gov will be posted to the docket unchanged. Because your comment will be made public, you are solely responsible for ensuring that your comment does not include any confidential information that you or a third party may not wish to be posted, such as medical information, your or anyone else's Social Security number, or confidential business information, such as a manufacturing process. Please note that if you include your name, contact information, or other information that identifies you in the body of your comments, that information will be posted on https://www.regulations.gov.

    • If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).

    Written/Paper Submissions

    Submit written/paper submissions as follows:

    Mail/Hand Delivery/Courier (for written/paper submissions): Dockets Management Staff (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    • For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”

    Instructions: All submissions received must include the Docket No. FDA-2015-N-2126 for “Food and Drug Administration's (FDA's) Research and Evaluation Survey for the Public Education Campaign on Tobacco (RESPECT) among LGBT.” Received comments, those filed in a timely manner (see ADDRESSES), will be placed in the docket and, except for those submitted as “Confidential Submissions,” publicly viewable at https://www.regulations.gov or at the Dockets Management Staff between 9 a.m. and 4 p.m., Monday through Friday.

    • Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on https://www.regulations.gov. Submit both copies to the Dockets Management Staff. If you do not wish your name and contact information to be made publicly available, you can provide this information on the cover sheet and not in the body of your comments and you must identify this information as “confidential.” Any information marked as “confidential” will not be disclosed except in accordance with 21 CFR 10.20 and other applicable disclosure law. For more information about FDA's posting of comments to public dockets, see 80 FR 56469, September 18, 2015, or access the information at: https://www.thefederalregister.org/fdsys/pkg/FR-2015-09-18/pdf/2015-23389.pdf.

    Docket: For access to the docket to read background documents or the electronic and written/paper comments received, go to https://www.regulations.gov and insert the docket number, found in brackets in the heading of this document, into the “Search” box and follow the prompts and/or go to the Dockets Management Staff, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    FOR FURTHER INFORMATION CONTACT:

    Amber Sanford, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-8867, [email protected]

    SUPPLEMENTARY INFORMATION:

    Under the PRA (44 U.S.C. 3501-3520), Federal Agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires Federal Agencies to provide a 60-day notice in the Federal Register concerning each proposed collection of information, including each proposed extension of an existing collection of information, before submitting the collection to OMB for approval. To comply with this requirement, FDA is publishing notice of the proposed collection of information set forth in this document.

    With respect to the following collection of information, FDA invites comments on these topics: (1) Whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques, when appropriate, and other forms of information technology.

    Food and Drug Administration's (FDA's) Research and Evaluation Survey for the Public Education Campaign on Tobacco (RESPECT) Among LGBT OMB Control Number 0910-0808-Extension

    The 2009 Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act) (Pub. L. 111-31) amended the Federal Food, Drug, and Cosmetic Act (FD&C Act) to grant FDA authority to regulate the manufacture, marketing, and distribution of tobacco products to protect public health and to reduce tobacco use by minors. Section 1003(d)(2)(D) of the FD&C Act (21 U.S.C. 393(d)(2)(D)) supports the development and implementation of FDA public education campaigns related to tobacco use. In May 2016, FDA began implementing a public education campaign to help prevent and reduce tobacco use among LGBT young adults and thereby reduce the public health burden of tobacco. The campaign continues to be implemented in 12 U.S. cities and features events, television and radio and print advertisements, digital communications, including videos, social media, and other forms of media. For the purpose of this notice, these campaign elements will be referred to as “advertisements” or “ads.”

    In support of the provisions of the Tobacco Control Act that require FDA to protect the public health and to reduce tobacco use, FDA requests OMB approval to collect information needed to evaluate FDA's campaign to reduce tobacco use among LGBT young adults. Comprehensive evaluation of FDA's public education campaigns is needed to ensure campaign messages are effectively received, understood, and accepted by those for whom they are intended. Evaluation is an essential organizational practice in public health and a systematic way to account for and improve public health actions.

    To evaluate the effectiveness of FDA's RESPECT at reducing tobacco use among LGBT young adults aged 18 to 24, FDA contracted with RTI International (RTI) to conduct Web-based surveys with the target population in the 12 campaign cities and 12 comparison cities. The surveys include measures of tobacco-related knowledge, attitudes, beliefs, intentions, and use as well as measures of audience awareness of and exposure to campaign events and advertisements. The voluntary surveys also collect information on demographic variables, including sexual orientation, age, sex, race/ethnicity, education, and primary language. Baseline data collection for RESPECT was conducted between February and May 2016. Four subsequent waves of data collection were conducted with new (cross-sectional) and returning (longitudinal) respondents. This design facilitated analysis of relationships between individuals' exposure to campaign activities and baseline to follow-up changes in outcomes of interest between campaign and comparison cities. Information collection for baseline and the first four follow-ups was reviewed and approved by OMB.

    FDA will continue to implement RESPECT in 12 U.S. cities through April 2019. To complete the evaluation of RESPECT, FDA is requesting an extension of the previously approved information collection in order to conduct two additional waves of data collection with the target population. The proposed sixth and seventh waves of data collection (i.e., fifth and sixth follow-ups after baseline) will coincide with the official end of the campaign, and will serve as an assessment of the campaign at completion. Continued evaluation is necessary in order to determine the campaign's impact on outcomes of interest.

    As in previous waves, new and returning survey respondents will be invited to complete the online questionnaire. New (or cross-sectional) respondents will be recruited at LGBT social venues and via social media (i.e., Facebook and Twitter). In-person recruitment will take place in a variety of LGBT venues. The owners or managers of potential recruitment sites will be asked a series of questions to determine the appropriateness of its clientele for participation in the study. For the fifth and sixth follow-ups, an estimated 60 new venues (20 annualized) will be assessed at 5 minutes per assessment, for an additional 5 hours (1.67 annualized). A total of 1,980 venues (660 annualized) will be assessed during the evaluation study, for a total of 165 hours (55 annualized).

    Our goal is to recruit 75 percent of the sample via intercept interviews and 25 percent via social media. To obtain the target number of completed fifth and sixth follow-up questionnaires, an additional 11,904 adults (3,968 annualized) recruited in person and 2,736 adults (912 annualized) recruited via social media will complete screening questionnaires. For the entire evaluation study, a total of 33,717 adults (11,239 annualized) recruited in person will complete screening questionnaires along with 10,617 adults (3,539 annualized) recruited via social media. The estimated burden to complete the screening questionnaire is 5 minutes (0.083 hour), for a total of 2,799 hours (933 annualized) for in-person recruits and 881 hours (294 annualized) for social media recruits.

    Based on analysis of response rates from prior waves of data collection, we expect 65 percent of intercept respondents will be deemed eligible and 50 percent of those will complete the fifth follow-up questionnaire. We expect 30 percent of those recruited via social media will be deemed eligible and complete the fifth follow-up questionnaire. Lastly, we expect 50 percent of returning (or longitudinal) respondents to complete the fifth and sixth follow-up questionnaires. We estimate that approximately 2,100 new respondents (700 annualized) and 6,678 returning (2,226 annualized) respondents will complete the fifth and sixth follow-up questionnaires, for a total of 8,778 responses (2,926 annualized).

    OMB previously approved 3,156 (1,052 annualized) respondents recruited via social media and 9,456 (3,152 annualized) respondents recruited in person to complete the first four follow-up questionnaires. Adding the fifth and sixth follow-ups brings the total estimated number of follow up questionnaires completed by social media recruits to 5,256 (1,752 annualized) and by in-person recruits to 16,134 (5,378 annualized). At 40 minutes per completed questionnaire, the total burden is 3,507 hours (1,169 annualized) for social media respondents and 10,761 hours (3,587 annualized) for in-person respondents.

    OMB also previously approved 393 hours (approximately 132 annualized) for social media respondents and 1,182 hours (394 annualized) for in-person respondents to complete baseline questionnaires. OMB also approved the pilot test of procedures in bars (6 hours [2 annualized]). As these study components are complete, the corresponding burden will not change. Lastly, the original study design included a media tracking component, which included a burden of 414 hours (138 annualized) for completing a 5-minute screening questionnaire and 999 hours (333 annualized) for completing the media tracking questionnaire. However, this component was dropped from the study; hence, the related burden has been deducted from the total study burden.

    FDA estimates the burden of this collection of information as follows:

    Table 1—Estimated Annual Reporting Burden 1 Respondent type and activity Number of
  • respondents
  • Number of
  • responses per
  • respondent
  • Total
  • annual
  • responses
  • Average
  • burden per
  • response
  • Total
  • hours
  • Venue Owners and Managers 660 1 660 0.083 (5 minutes) 55 General Population: Pilot test of Procedures in Bars 27 1 27 0.083 (5 minutes) 2 General population—outcome screener (in person) 11,239 1 11,239 0.083 (5 minutes) 933 General population—outcome screener (social media) 3,539 1 3,539 0.083 (5 minutes) 294 LGBT young adults outcome baseline (social media) 263 1 263 0.500 (30 minutes) 132 LGBT young adults outcome baseline (in person) 788 1 788 0.500 (30 minutes) 394 LGBT young adults outcome follow-up questionnaire (social media) 1,752 1 1,752 0.667 (40 minutes) 1,169 LGBT young adults outcome follow-up questionnaire (in person) 5,378 1 5,378 0.667 (40 minutes) 3,587 Totals 6,566 1 There are no capital costs or operating and maintenance costs associated with this collection of information.

    To accommodate the additional waves of data collection, FDA requests approval to increase the number of burden hours under the existing control number. The previous number of approved responses was 53,967 (17,989 annualized), and the previous burden was 14,031 hours (4,677 annualized). The fifth and sixth follow-ups add 23,478 responses (7,826 annualized), which include responses to new venues assessments, screening questionnaires, and the follow-up questionnaires, for a total of 7,074 additional burden hours (2,357 annualized). Removing the media tracking component deducts 6,507 responses (2,169 annualized) and 1,413 burden hours (471 annualized). The totals for the entire evaluation study are increasing by 16,971 responses (5,657 annualized) and 5,661 hours (1,887 annualized) for a new total of 70,938 responses (23,646 annualized) and 19,692 burden hours (approximately 6,566 annualized).

    Dated: July 25, 2018. Leslie Kux, Associate Commissioner for Policy.
    [FR Doc. 2018-16538 Filed 8-1-18; 8:45 am] BILLING CODE 4164-01-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES National Institutes of Health National Cancer Institute; Notice of Meeting

    Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the National Cancer Advisory Board.

    The meeting will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting. The open session will be videocast and can be accessed from the NIH Videocasting and Podcasting website (http://videocast.nih.gov).

    The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.

    Name of Committee: National Cancer Advisory Board.

    Date: August 14, 2018.

    Open: 1:00 p.m. to 2:45 p.m.

    Agenda: Director's and Program reports and presentations; business of the Board.

    Closed: 2:55 p.m. to 4:00 p.m.

    Agenda: To review and evaluate grant applications.

    Place: National Cancer Institute—Shady Grove, 9609 Medical Center Drive, Room TE406, Rockville, MD 20850 (Virtual Meeting).

    Contact Person: Paulette S. Gray, Ph.D., Executive Secretary, Division of Extramural Activities, National Cancer Institute—Shady Grove, National Institutes of Health, 9609 Medical Center Drive, Room 7W444, Bethesda, MD 20892, 240-276-6340, [email protected]

    This notice is being published less than 15 days prior to the meeting due to scheduling difficulties.

    Any interested person may file written comments with the committee by forwarding the statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.

    In the interest of security, NIH has instituted stringent procedures for entrance onto the NCI-Shady Grove campus. Visitors will be asked to show one form of identification (for example, a government-issued photo ID, driver's license, or passport) and to state the purpose of their visit.

    Information is also available on the Institute's/Center's home page: http://deainfo.nci.nih.gov/advisory/ncab/ncab.htm, where an agenda and any additional information for the meeting will be posted when available.

    (Catalogue of Federal Domestic Assistance Program Nos. 93.392, Cancer Construction; 93.393, Cancer Cause and Prevention Research; 93.394, Cancer Detection and Diagnosis Research; 93.395, Cancer Treatment Research; 93.396, Cancer Biology Research; 93.397, Cancer Centers Support; 93.398, Cancer Research Manpower; 93.399, Cancer Control, National Institutes of Health, HHS)
    Dated: July 26, 2018. Melanie J. Pantoja, Program Analyst, Office of Federal Advisory Committee Policy.
    [FR Doc. 2018-16492 Filed 8-1-18; 8:45 am] BILLING CODE 4140-01-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES National Institutes of Health Center for Scientific Review; Notice of Closed Meeting

    Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.

    The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.

    Name of Committee: Center for Scientific Review Special Emphasis Panel; Member Conflict: Chemosensory Systems.

    Date: August 1, 2018.

    Time: 2:00 p.m. to 6:00 p.m.

    Agenda: To review and evaluate grant applications.

    Place: National Institutes of Health, 6701 Rockledge Drive, Bethesda, MD 20892, (Telephone Conference Call).

    Contact Person: M. Catherine Bennett, Ph.D., Scientific Review Officer, Center for Scientific Review, National Institutes of Health, 6701 Rockledge Drive, Room 5182, MSC 7846, Bethesda, MD 20892, 301-435-1766, [email protected]

    This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.

    (Catalogue of Federal Domestic Assistance Program Nos. 93.306, Comparative Medicine; 93.333, Clinical Research, 93.306, 93.333, 93.337, 93.393-93.396, 93.837-93.844, 93.846-93.878, 93.892, 93.893, National Institutes of Health, HHS)
    Dated: July 27, 2018. Sylvia L. Neal, Program Analyst, Office of Federal Advisory Committee Policy.
    [FR Doc. 2018-16506 Filed 8-1-18; 8:45 am] BILLING CODE 4140-01-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES National Institutes of Health Office of the Secretary; Notice of Meeting

    Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the Muscular Dystrophy Coordinating Committee (MDCC).

    The meeting will be open to the public and accessible by teleconference. Participation is limited to space available. Individuals who plan to participate and need special assistance, such as reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.

    Name of Committee: Muscular Dystrophy Coordinating Committee.

    Type of meeting: Open Meeting.

    Date: September 17, 2018.

    Time: 2:00 p.m. to 5:00 p.m. *Eastern Time*—Approximate end time.

    Agenda: The purpose of this meeting is to bring together committee members, representing government agencies, patient advocacy groups, other voluntary health organizations, and patients and their families to update one another on progress relevant to the Action Plan for the Muscular Dystrophies and to coordinate activities and discuss gaps and opportunities leading to better understanding of the muscular dystrophies, advances in treatments, and improvements in patients' and their families' lives. Prior to the meeting, an agenda will be posted to the MDCC website: https://mdcc.nih.gov/.

    Registration: To register, please contact Emily Carifi: [email protected]

    WebEx/Phone Access:

    Join WebEx Meeting: https://nih.webex.com/nih/j.php?MTID=m1c5fd34513186c7c87ebeeee5af47f05;

    Meeting number (access code): 628 888 923, Meeting password: fEN63PND

    Join by Phone: 1-650-479-3208 Call-in toll number (US/Canada) Global call-in numbers: https://nih.webex.com/nih/globalcallin.php?serviceType=MC&ED=701170342&tollFree=0.

    Place: National Institutes of Health, Neuroscience Center, 6001 Executive Boulevard, Rockville, MD 20852, (Telephone Conference Call).

    Contact Person: Glen H. Nuckolls, Ph.D., Executive Secretary, Muscular Dystrophy Coordinating Committee, National Institute of Neurological Disorders and Stroke, NIH, 6001 Executive Boulevard, NSC 2203, Bethesda, MD 20892, (301) 496-5745, [email protected]

    Any member of the public interested in presenting oral comments to the committee may notify the Contact Person listed on this notice at least 10 days in advance of the meeting. Interested individuals and representatives of organizations may submit a letter of intent, a brief description of the organization represented, and a short description of the oral presentation. Only one representative of an organization may be allowed to present oral comments and if accepted by the committee, presentations may be limited to five minutes. Both printed and electronic copies are requested for the record. In addition, any interested person may file written comments with the committee by forwarding their statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.

    More information can be found on the Muscular Dystrophy Coordinating Committee home page: https://mdcc.nih.gov/.

    (Catalogue of Federal Domestic Assistance Program Nos. 93.853, Clinical Research Related to Neurological Disorders; 93.854, Biological Basis Research in the Neurosciences, National Institutes of Health, HHS)
    Dated: July 27, 2018. Sylvia L. Neal, Program Analyst, Office of Federal Advisory Committee Policy.
    [FR Doc. 2018-16505 Filed 8-1-18; 8:45 am] BILLING CODE 4140-01-P
    DEPARTMENT OF HOMELAND SECURITY U.S. Customs and Border Protection Accreditation and Approval of Laboratory Service, Inc., as a Commercial Gauger and Laboratory AGENCY:

    U.S. Customs and Border Protection, Department of Homeland Security.

    ACTION:

    Notice of accreditation and approval of Laboratory Service, Inc., as a commercial gauger and laboratory.

    SUMMARY:

    Notice is hereby given, pursuant to CBP regulations, that Laboratory Service, Inc., has been approved to gauge petroleum and certain petroleum products and accredited to test petroleum and certain petroleum products for customs purposes for the next three years as of June 12, 2017.

    DATES:

    The accreditation and approval of Laboratory Service, Inc., as commercial gauger and laboratory became effective on June 12, 2017. The next triennial inspection date will be scheduled for June 2020.

    FOR FURTHER INFORMATION CONTACT:

    Melanie Glass, Laboratories and Scientific Services Directorate, U.S. Customs and Border Protection, 1300 Pennsylvania Avenue NW, Suite 1500N, Washington, DC 20229, tel. 202-344-2029.

    SUPPLEMENTARY INFORMATION:

    Notice is hereby given pursuant to 19 CFR 151.12 and 19 CFR 151.13, that Laboratory Service, Inc., 11731 Port Rd., Seabrook, TX 77586, has been approved to gauge petroleum and certain petroleum products and accredited to test petroleum and certain petroleum products for customs purposes, in accordance with the provisions of 19 CFR 151.12 and 19 CFR 151.13. Laboratory Service, Inc., is approved for the following gauging procedures for petroleum and certain petroleum products from the American Petroleum Institute (API):

    API Chapters Title 3 Tank gauging. 7 Temperature determination. 8 Sampling. 12 Calculations. 17 Maritime measurement.

    Laboratory Service, Inc. is accredited for the following laboratory analysis procedures and methods for petroleum and certain petroleum products set forth by the U.S. Customs and Border Protection Laboratory Methods (CBPL) and American Society for Testing and Materials (ASTM):

    CBPL No. ASTM Title 27-08 D86 Standard Test Method for Distillation of Petroleum Products. 27-48 D4052 Standard Test Method for Density and Relative Density of Liquids by Digital Density Meter. N/A D1364 Standard Test Method for Water in Volatile Solvents (Karl Fischer Reagent Titration Method).

    Anyone wishing to employ this entity to conduct laboratory analyses and gauger services should request and receive written assurances from the entity that it is accredited or approved by the U.S. Customs and Border Protection to conduct the specific test or gauger service requested. Alternatively, inquiries regarding the specific test or gauger service this entity is accredited or approved to perform may be directed to the U.S. Customs and Border Protection by calling (202) 344-1060. The inquiry may also be sent to [email protected] Please reference the website listed below for a complete listing of CBP approved gaugers and accredited laboratories. http://www.cbp.gov/about/labs-scientific/commercial-gaugers-and-laboratories.

    Dated: July 2, 2018. Dave Fluty, Executive Director, Laboratories and Scientific Services Directorate.
    [FR Doc. 2018-16516 Filed 8-1-18; 8:45 am] BILLING CODE 9111-14-P
    DEPARTMENT OF HOMELAND SECURITY [Docket No. DHS-2018-0035] First Responders Community of Practice AGENCY:

    Science and Technology Directorate, Department of Homeland Security.

    ACTION:

    60-Day Notice of Information Collection; request for comment. (Extension of a Currently Approved Collection, 1640-0016).

    SUMMARY:

    The Department of Homeland Security (DHS), Science and Technology (S&T) First Responders Group (FRG) is proposing to extend currently approved OMB 1640-0016, an information collection, by inviting the public to comment on the collection: First Responders Community of Practice (FRCoP) User Registration Page (DHS Form 10059 (9/09)). The FRCoP web based tool collects profile information from first responders and select authorized non-first responder users to facilitate networking and formation of online communities. All users are required to authenticate prior to entering the site. In addition, the tool provides members the capability to create wikis, discussion threads, blogs, documents, etc., allowing them to enter and upload content in accordance with the site's Rules of Behavior. Members are able to participate in threaded discussions and comment on other members' content. The FRCoP program is responsible for providing a collaborative environment for the first responder community to share information, best practices, and lessons learned. The Homeland Security Act of 2002 established this requirement. Interested persons may receive a copy of the collection by contacting the DHS S&T Paperwork Reduction Act (PRA) Coordinator.

    DATES:

    Comments are encouraged and accepted until October 1, 2018.

    ADDRESSES:

    You may submit comments, identified by docket number DHS-2018-0035, at:

    Federal eRulemaking Portal: http://www.regulations.gov. Please follow the instructions for submitting comments.

    Mail and hand delivery or commercial delivery: Science and Technology Directorate, ATTN: Chief Information Office—Mary Cantey, 245 Murray Drive, Mail Stop 0202, Washington, DC 20528.

    Instructions: All submissions received must include the agency name and docket number DHS-2018-0035. All comments received will be posted without change to http://www.regulations.gov, including any personal information provided. Please note that comments submitted by fax or email and those submitted after the comment period will not be accepted.

    Docket: For access to the docket to read background documents or comments received, go to http://www.regulations.gov.

    FOR FURTHER INFORMATION CONTACT:

    DHS/S&T/FRG System Owner: Rochele Smith, [email protected], (202) 254-8634 (Not a toll free number).

    SUPPLEMENTARY INFORMATION:

    DHS, in accordance with the PRA (6 U.S.C. 193), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collection of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provides the requested data in the desired format. DHS is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Homeland Security is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.

    Title of Collection: First Responders Community of Practice User Registration Page (DHS Form 10059 (9/09)).

    Prior OMB Control Number: 1640-0016.

    Prior Federal Register Document: 78 FR 53464, August 29, 2013.

    Type of Review: An extension of an information collection.

    Respondents/Affected Public: Federal, State, Local, and Tribal Governments.

    Frequency of Collection: Once per respondent.

    Average Burden per Response: 30 minutes.

    Total Estimated Number of Annual Responses: 2000.

    Total Estimated Number of Annual Burden Hours: 1000.

    Rick Stevens, Chief Information Officer, Science and Technology Directorate.
    [FR Doc. 2018-16452 Filed 8-1-18; 8:45 am] BILLING CODE 9110-9F-P
    DEPARTMENT OF THE INTERIOR Bureau of Indian Affairs [189A2100DD/AAKC001030/A0A501010.999900 253G] Notice of Establishment of the Bureau of Indian Education Standards, Assessments, and Accountability System Negotiated Rulemaking Committee; Notice of Meetings AGENCY:

    Bureau of Indian Affairs, Interior.

    ACTION:

    Notice of Establishment and notice of public meetings.

    SUMMARY:

    The Department of the Interior is establishing the Bureau of Indian Education (BIE) Standards, Assessments, and Accountability System Negotiated Rulemaking Committee (Committee). The Committee will advise the Secretary of the Interior (Secretary) through the BIE and the Assistant Secretary—Indian Affairs on the development of regulations to fulfill the Secretary's responsibility to define standards, assessments, and accountability system consistent with ESEA section 1111, as amended, for schools funded by BIE on a national, regional, or Tribal basis, as appropriate, taking into account the unique circumstances and needs of such schools and the students served by such schools and the process for requesting a waiver for these definitions. This notice also announces the dates and locations of each of the public meetings of the Committee.

    DATES:

    For a listing of the dates of each Committee meeting, refer to “Committee Meetings” under SUPPLEMENTARY INFORMATION section of this notice.

    ADDRESSES:

    For a listing of the locations of each Committee meeting, refer to “Committee Meetings” under SUPPLEMENTARY INFORMATION section of this notice.

    FOR FURTHER INFORMATION CONTACT:

    The Designated Federal Officer, Sue Bement, Education Program Specialist, Bureau of Indian Education, by any of the following methods:

    • (Preferred method) Email to: [email protected];

    • Mail, hand-carry or use an overnight courier service to the Designated Federal Officer, Ms. Sue Bement, C/O The Office of Regulatory Affairs and Collaborative Action, 1001 Indian School Road NW, Suite 312, Albuquerque, NM 87104.

    • Telephone: (952) 851-5427.

    SUPPLEMENTARY INFORMATION:

    Background

    On September 14, 2017, a notice in the Federal Register (82 FR 43199) announced the U.S. Department of the Interior's intent to form a negotiated rulemaking committee under the Every Student Succeeds Act (ESSA), the Negotiated Rulemaking Act, and the Federal Advisory Committee Act (5 U.S.C. Appendix 2). On April 17, 2018, a notice in the Federal Register (83 FR 16806) announced the proposed membership. The Committee will advise the Secretary through the BIE and the Assistant Secretary—Indian Affairs on the development of regulations to fulfill the Secretary's responsibility to define standards, assessments, and accountability system consistent with ESEA section 1111 (20 U.S.C. 6311), as amended, for schools funded by BIE on a national, regional, or Tribal basis, as appropriate, taking into account the unique circumstances and needs of such schools and the students served by such schools and the process for requesting a waiver for these definitions.

    The April 17, 2018, notice discussed the issues to be negotiated and the interest group representatives proposed as members of the Committee.

    The Secretary received additional proposed nominations in response to the April 17, 2018, notice and considered the nominations based on the qualifications outlined in the notice for approval. The nominees were approved to join the Committee and are included in this Federal Register Notice.

    Committee Membership

    The two nominees were received for consideration following the April 17, 2018, Federal Register notice and will now be appointed to the Committee.

    Tribe(s) represented Proposed committee members Nominated by Navajo Nation Genevieve Jackson Diné Bi Olta School Board Association, Inc. Northwest Tribes Dr. Amy McFarland Chief Leschi Schools. Committee Meetings

    Revised regulations must be put in place as soon as possible, thus the Committee will be expected to meet frequently within a short time frame. The BIE expects to have three in-person meetings and one teleconference, with each in-person meeting lasting three days in length. The BIE has dedicated resources required to: Ensure the Committee is able to conduct meetings; provide technical assistance; and provide any additional support required to fulfill the Committee's responsibilities. The meeting dates and locations are as follows:

    Date Time Location Tuesday, September 25, 2018 Through Thursday, September 27, 2018 Begin at 8:30 a.m. on September 25, and end at 4:30 p.m. on September 27, 2018, local time Bureau of Indian Affairs, Rocky Mountain Regional Office, Medicine Wheel Room—3rd floor, 2021 Fourth Avenue North Billings, MT 59101. Tuesday, October 30, 2018 Through Thursday, November 1, 2018 Begin at 8:30 a.m. on October 30, and end at 4:30 p.m. on November 1, 2018, local time Bureau of Indian Affairs, Southwest Regional Office, Pojoaque Classroom #271, 2nd floor, 1011 Indian School Road NW, Albuquerque, NM 87104. Tuesday, December 4, 2018 Through Thursday, December 6, 2018 Begin at 8:30 a.m. on December 4, and end at 4:30 p.m. on December 6, 2018, local time Office of Hearings & Appeals, 2nd Floor Conference Room, 801 N Quincy Street, Arlington, VA 22203. 1/2-day Webinar, Spring 2019 Begin at 11:30 a.m. and end at 2:30 p.m., Eastern Time Via Teleconference, 1 (866) 818-9861, Participant code: 70319382, Refer to BIE Negotiated Rulemaking Committee website for additional information.

    Detailed information about Committee meetings, including detailed agendas, can be accessed at https://www.bie.edu/Resources/NRMC/index.htm.

    Agenda for BIE Standards, Assessments, and Accountability System Negotiated Rulemaking Committee

    At the first meeting, the Committee will conduct introductions of members at the start of the meeting and will continue with the following items on the agenda:

    • Review and discussion of Committee Operations including operating protocols and decision-making criteria;

    • Overview and discussion of existing regulations (25 CFR part 30) implemented at BIE schools and an overview topic paper;

    • Overview and discussion of ESSA Section 8007(2) and ESEA Section 1111 and standards, assessments, and accountability topic papers;

    • Discussion of the Committee's tasks and approach to draft regulations including discussion of draft regulations, outline work; formation of subcommittees and tasks between the first and second meeting; and

    • Public comments.

    The second meeting will focus on edits to the draft preamble and the proposed rule, public comments, and reaffirm Committee tasks in preparation for the third meeting.

    The third meeting will focus on the draft proposed rule for publication, seek consensus on the draft, schedule government-to-government consultations including what key information will be shared during consultation, and public comment.

    The final meeting, via WebEx, will review public comments received, discuss any substantive comments that will affect the proposed rule, and seek consensus on a recommended approach to addressing the comments. The final meeting will include a close-out discussion about the process.

    Written comments may be sent to the Designated Federal Officer listed in the FOR FURTHER INFORMATION CONTACT section above. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask in your comment that the BIA withhold your personal identifying information from public review, the BIA cannot guarantee that it will be able to do so.

    All meetings are open to the public; however, transportation, lodging, and means are the responsibility of the participating public.

    Authority:

    The Elementary and Secondary Education Act of 1965, as amended, 20 U.S.C. 6301 et seq.

    Dated: July 27, 2018. John Tahsuda, Principal Deputy Assistant Secretary—Indian Affairs, Exercising the Authority of the Assistant Secretary—Indian Affairs.
    [FR Doc. 2018-16588 Filed 8-1-18; 8:45 am] BILLING CODE 4337-15-P
    DEPARTMENT OF THE INTERIOR Bureau of Indian Affairs [189A2100DD/AAKC001030/A0A51010.999900] Proclaiming Certain Lands as Reservation for the Bois Forte Band of the Minnesota Chippewa Tribe of Minnesota AGENCY:

    Bureau of Indian Affairs, Interior.

    ACTION:

    Notice of Reservation Proclamation.

    SUMMARY:

    This notice informs the public that the Acting Assistant Secretary—Indian Affairs proclaimed approximately 1,146.17 acres, more or less, an addition to the reservation of the Bois Forte Band of the Minnesota Chippewa Tribe of Minnesota on July 9, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Ms. Sharlene M. Round Face, Bureau of Indian Affairs, Division of Real Estate Services, 1849 C Street NW, MS-4642-MIB, Washington, DC 20240, telephone (202) 208-3615.

    SUPPLEMENTARY INFORMATION:

    This notice is published in the exercise of authority delegated by the Secretary of the Interior to the Assistant Secretary—Indian Affairs by part 209 of the Departmental Manual.

    A proclamation was issued according to the Act of June 18, 1934 (48 Stat. 984; 25 U.S.C. 5110), for the land described below. The land was proclaimed to be an addition to the reservation of the Bois Forte Band of the Minnesota Chippewa Tribe, Saint Louis County, State of Minnesota.

    Reservation for the Bois Forte Band of the Minnesota Chippewa Tribe 23 Contiguous Parcels Principal Meridian Saint Louis County, State of Minnesota Legal Description Containing 1,146.17 Acres, More or Less Parcel 1: NW1/4 NW1/4, Section 34, Township 62N, Range 16W, 4th Principal Meridian (40 acres) Parcel 2: That portion of the Westerly 100 ft. of the Easterly 600 ft. of Government Lot 2, Section 22, Township 62N, Range 16W, 4th Principal Meridian, lying South of County Highway 414 (0.92 acres) Parcel 3: SE1/4 NE1/4, Section 33, Township 62N, Range 16W, 4th Principal Meridian (40 acres) Parcel 4: N1/2 SE1/4, Section 27, Township 62N, Range 16W, 4th Principal Meridian (80 acres) Parcel 5: N1/2 SW1/4, Section 27, Township 62N, Range 16W, 4th Principal Meridian (80 acres) Parcel 6: NE1/4 NE1/4, Section 28, Township 62N, Range 16W, 4th Principal Meridian (40 acres) Parcel 7: SE1/4 NE1/4, Section 28, Township 62N, Range 16W, 4th Principal Meridian (40 acres) Parcel 8: S1/2 SW1/4, Section 27, Township 62N, Range 16W, 4th Principal Meridian (80 acres) Parcel 9: Government Lot 1, Section 27, Township 62N, Range 16W, 4th Principal Meridian (25.25 acres) Parcel 10: S1/2 SE1/4, Section 27, Township 62N, Range 16W, 4th Principal Meridian (80 acres) Parcel 11: W1/2 SE1/4, Section 22, Township 62N, Range 16W, 4th Principal Meridian (80 acres) Parcel 12: SW1/4 NW1/4, Section 27, Township 62N, Range 16W, 4th Principal Meridian (40 acres) Parcel 13: NE1/4 NW1/4, Section 27, Township 62N, Range 16W, 4th Principal Meridian (40 acres) Parcel 14: W1/2 NE1/4, Section 27, Township 62N, Range 16W, 4th Principal Meridian (80 acres) Parcel 15: SE1/4 NW1/4, Section 27, Township 62N, Range 16W, 4th Principal Meridian (40 acres) Parcel 16: S1/2 SW1/4, Section 22, Township 62N, Range 16W, 4th Principal Meridian (80 acres) Parcel 17: NW1/4 NE1/4, Section 34, Township 62N, Range 16W, 4th Principal Meridian (40 acres) Parcel 18: SE1/4 NE1/4, Section 34, Township 62N, Range 16W, 4th Principal Meridian (40 acres) Parcel 19: NE1/4 NW1/4, Section 34, Township 62N, Range 16W, 4th Principal Meridian (40 acres) Parcel 20: NE1/4 NE1/4, Section 34, Township 62N, Range 16W, 4th Principal Meridian (40 acres) Parcel 21: SW1/4 NW1/4, Section 34, Township 62N, Range 16W, 4th Principal Meridian (40 acres) Parcel 22: SE1/4 NW1/4, Section 34, Township 62N, Range 16W, 4th Principal Meridian (40 acres) Parcel 23: SW1/4, NE1/4, Section 34, Township 62N, Range 16W, 4th Principal Meridian (40 acres)

    The above described lands contain a total of 1,146.17 acres, more or less, which are subject to all valid rights, reservations, rights-of-way, and easements of record.

    This proclamation does not affect title to the land described above, nor does it affect any valid existing easements for public roads, highways, public utilities, railroads, and pipelines or any other valid easements or rights-of-way or reservations of record.

    Dated: July 9, 2018. John Tahsuda, Principal Deputy Assistant Secretary—Indian Affairs, Exercising the Authority of the Assistant Secretary—Indian Affairs.
    [FR Doc. 2018-16583 Filed 8-1-18; 8:45 am] BILLING CODE 4337-15-P
    DEPARTMENT OF THE INTERIOR Bureau of Indian Affairs [189A2100DD/AAKC001030/A0A51010.999900] Proclaiming Certain Lands as Reservation for the Rincon Band of Luiseno Mission Indians of the Rincon Reservation, California AGENCY:

    Bureau of Indian Affairs, Interior.

    ACTION:

    Notice of Reservation Proclamation.

    SUMMARY:

    This notice informs the public that the Principal Deputy Assistant Secretary—Indian Affairs proclaimed approximately 520 acres, more or less, an addition to the reservation of the Rincon Band of Luiseno Mission Indians of the Rincon Reservation, California on July 9, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Ms. Sharlene M. Round Face, Bureau of Indian Affairs, Division of Real Estate Services, 1849 C Street NW, MS-4642-MIB, Washington, DC 20240, telephone (202) 208-3615.

    SUPPLEMENTARY INFORMATION:

    This notice is published in the exercise of authority delegated by the Secretary of the Interior to the Assistant Secretary—Indian Affairs by part 209 of the Departmental Manual.

    A proclamation was issued according to the Act of June 18, 1934 (48 Stat. 986; 25 U.S.C. 5110) for the lands described below. The land was proclaimed to be part of the reservation for the Rincon Band of Luiseno Mission Indians of the Rincon Reservation, California, County of San Diego, and State of California.

    Reservation for the Rincon Band of Luiseno Mission Indians of the Rincon Reservation, California One Tribal Trust Tract Encompasses Two Parcels San Bernardino Base and Meridian San Diego County, California Legal Descriptions Containing 520 Acres, More or Less The Mowry Property (Tract 587-T-5532) Parcel 1: APN 133-190-04

    The South half, the West half of the Northeast quarter, the Northeast quarter of the Northeast quarter and the Northeast quarter of the Northwest quarter of Section 36, Township 10 South, Range 1 West, San Bernardino Base and Meridian in the County of San Diego, State of California, according to official plat thereof.

    Parcel 2: APN 133-190-07

    The Southeast quarter of the Northeast quarter of Section 36, Township 10 South, Range 1 West, San Bernardino Base and Meridian, in the County of San Diego, State of California, according to official plat thereof.

    The above described lands contain a total of 520 acres, more or less, which are subject to all valid rights, reservations, rights-of-way, and easements of record.

    This proclamation does not affect title to the lands described above, nor does it affect any valid existing easement for public roads and highways, public utilities, railroads, pipelines, or any other valid easement or rights-of-way or reservation of record.

    Dated: July 9, 2018. John Tahsuda, Principal Deputy Assistant Secretary—Indian Affairs Exercising the Authority of the Assistant Secretary—Indian Affairs.
    [FR Doc. 2018-16584 Filed 8-1-18; 8:45 am] BILLING CODE 4337-15-P
    DEPARTMENT OF THE INTERIOR Bureau of Land Management [LLNM006200 L99110000.EK0000 XXX L4053RV] Notice of Crude Helium Auction and Sale for Fiscal Year 2019 Delivery AGENCY:

    Bureau of Land Management, Interior.

    ACTION:

    Notice of auction and sale.

    SUMMARY:

    The Secretary of the Interior (Secretary), through the Bureau of Land Management (BLM) New Mexico State Office, is issuing this Notice to conduct an auction and sale from the Federal Helium Program, administered by the BLM New Mexico, Amarillo Field Office. The Helium Stewardship Act of 2013 (HSA) requires the BLM to conduct an annual auction and sale of crude helium. Accordingly, the BLM will once again use the auction and sale process established in the Federal Register dated June 20, 2017, for a previous sale.

    DATES:

    The schedule for the auction and sale process is:

    Helium Auction August 31, 2018—FY 2019 helium auction held in Amarillo, Texas September 4, 2018—FY 2019 helium auction results published on the BLM website September 5, 2018—Invoices for auction sent on or before this date; payments due 15 days from invoice Helium Sale August 31, 2018—Invitation for offers (IFO) posted for helium sale September 4, 2018—Bids due from IFO September 4, 2018—Award announcements published on the BLM website September 5, 2018—Invoices for sale sent on or before; payments due 15 days from invoice Helium Delivery September 30, 2018—Helium transferred to buyers' storage accounts

    If payment is not received by September 20, 2018, volumes will be re-offered for sale to all over bidders, proportionally, on September 21, 2018. Subsequently, for these re-offered volumes to count toward October 1, 2018 allocation percentages, payment must be received by September 28, 2018.

    ADDRESSES:

    The August 31, 2018, helium auction will be held in the main conference room of the Amarillo Field Office, 801 South Fillmore, Suite 500, Amarillo, TX 79101. The BLM's Federal Helium Program HSA Implementation page website is located at https://www.blm.gov/programs/energy-and-minerals/helium/federal-helium-operations. Questions related to the auction can be submitted by phone to the BLM at 806-356-1000.

    FOR FURTHER INFORMATION CONTACT:

    Samuel R.M. Burton, Amarillo Field Manager, at telephone: 806-356-1000, email: [email protected] Persons who use a telecommunications device for the deaf (TDD) may call the Federal Relay Service (FRS) at 1-800-877-8339. The FRS is available 24 hours a day, 7 days a week, to leave a message. You will receive a reply during normal business hours.

    SUPPLEMENTARY INFORMATION:

    A. Purpose and Background

    In October 2013, Congress passed the HSA, which requires the Department of the Interior, through the BLM Director, to offer for auction and sale annually a portion of the helium reserves owned by the United States and stored underground at the Cliffside Gas Field near Amarillo, Texas.

    On July 23, 2014, the BLM published a “Final Notice for Implementation of Helium Stewardship Act Sales and Auctions” in the Federal Register (79 FR 42808) (2014 Final Notice). The 2014 Final Notice contained information about the HSA, definitions of terms used in the Notice, the reasons for the action, and a process for conducting the auctions and sales in FY 2014.

    On August 24, 2015, the BLM published a “Notice of Final Action: Crude Helium Sale and Auction for Fiscal Year 2016 Delivery” in the Federal Register (80 FR 51304) (2015 Final Notice). The 2015 Final Notice refined the process the BLM used in 2014 for conducting the auction and sale of crude helium. The BLM will use the process set forth in the 2015 Final Notice for the auction and sale of crude helium to occur in FY 2018 for FY 2019 delivery.

    Both the 2014 and 2015 Final Notices are available from the BLM's HSA Implementation Page website (see ADDRESSES). Search under the “Documents and Reports” link.

    B. Volumes Offered in the FY 2019 Helium Auction and Sale:

    Table 1 identifies the volumes to be offered for auction and sale in FY 2018 for FY 2019 delivery.

    Table 1—Projected Volumes for Auction and Sales for FY 2019 Delivery Fiscal year (FY) Forecasted
  • production
  • capability
  • (NITEC
  • study)
  • MMcf * In-kind
  • sales
  • (sales to
  • federal
  • users)
  • MMcf Total
  • remaining
  • production
  • available
  • for sale/
  • auction or
  • delivery
  • MMcf Volume
  • available
  • for auction
  • MMcf Volume
  • available
  • for non-
  • allocated
  • sale
  • MMcf Volume
  • available
  • for sale
  • MMcf
    FY 2019 825 155 300 *** 210 ** 9 81 * MMcf means one million cubic feet of gas measured at standard conditions of 14.65 per square inch atmosphere (psia) and 60 degrees Fahrenheit. ** 70 percent of total production capacity after deducting in-kind (rounded). *** Volumes offered fulfill the requirement of the HSA to reach Phase C.
    C. FY 2019 Helium Auction

    1.01 What is the minimum FY 2019 auction price and the FY 2019 sales price? The minimum FY 2019 auction price is $110 per Mcf (one thousand cubic feet of gas measured at standard conditions of 14.65 psia and 60 degrees Fahrenheit). The BLM will announce the FY 2019 sale price after the auction has concluded, and the BLM completes its analysis of the auction information. The BLM will use this information to publish the crude helium price for FY 2019.

    1.02 What will happen to the helium offered but not sold in the helium auction? Any volume of helium offered, but not sold in the FY 2019 auction, will be added to the helium available for sale and will be offered in the FY 2019 sale.

    1.03 When will the auction and sale take place? The BLM will offer helium for FY 2019 according to the following schedule:

    Helium Auction August 31, 2018—FY 2019 helium auction held in Amarillo, Texas September 4, 2018—FY 2019 helium auction results published on the BLM website September 5, 2018—Invoices for auction sent on or before this date; payments due 15 days from invoice Helium Sale August 31, 2018—Invitation for offers (IFO) posted for helium sale September 4, 2018—Bids due from IFO September 4, 2018—Award announcements published on the BLM website September 5, 2018—Invoices for sale sent on or before; payments due 15 days from invoice Helium Transfer September 30, 2018—Helium transferred to buyers' storage accounts (in accordance with Section 1.08)

    If payment is not received by September 20, 2018, volumes will be re-offered for sale to all over-bidders, proportionally, on September 21, 2018. Subsequently, for these re-offered volumes to count toward October 1, 2018 allocation percentages, payment must be received by September 28, 2018.

    1.04 What is the auction format? The auction will be a live auction, held in the main conference room of the Amarillo Field Office at 1:00 p.m. Central Time, on August 31, 2018. The address is 801 South Fillmore, Suite 500, Amarillo, TX 79101. Anyone meeting the HSA definition of a qualified bidder may participate in the auction. The logistics for the auction and the pre-bid qualification form is included in a document entitled, “FY 2019 Helium Auction Notice and Guide” on the BLM's HSA Implementation Page website (see ADDRESSES). Click on the “Federal Register Notices” link.

    1.05 Who is qualified to purchase helium at the auction? Only qualified bidders, as defined in 50 U.S.C. 167(9), may participate in and purchase helium at the auction. The BLM will make the final determination of who is a qualified bidder using the HSA's definition of a qualified bidder, regardless of whether or not that person was previously determined to be a qualified bidder. Payment must be received not later than the close of business September 20, 2018.

    1.06 How many helium lots does the BLM anticipate offering at the FY 2019 auction? The BLM anticipates auctioning 210 MMcf in a total of 12 lots for delivery in FY 2019. The lots would be divided as follows:

    5 lots of 25 MMcf each; and

    5 lots of 15 MMcf each; and

    2 lots of 5 MMcf each.

    1.07 What must I do to bid at auction? The BLM has described the live auction procedures, including detailed bidding instructions and pre-bid registration requirements, in a document entitled, “FY 2019 Auction Notice and Guide,” which is available on the BLM's HSA Implementation Page website (see ADDRESSES). Click on the “Federal Register Notices” link.

    1.08 When will helium that is purchased at sale or won at auction be available in the purchaser's storage account? The BLM will transfer the volumes purchased in the FY 2019 auction and sale to the buyer's storage accounts on September 30, 2018.

    D. FY 2019 Helium Sale

    2.01 Who will be allowed to purchase helium in the FY 2019 sale? The crude helium sale will be separated into two distinct portions, a non-allocated portion and an allocated portion. The non-allocated portion will be ten percent of the total amount offered for sale for FY 2019, and will be available to those storage contract holders who do not have ability to accept delivery of crude helium from the Federal Helium Pipeline (as defined in 50 U.S.C. 167(2)) as of May 30, 2018. The allocated portion will be 90 percent of the total amount offered for sale for FY 2019, and will be available to any person (including individuals, corporations, partnerships, or other entities) with the ability to accept delivery of crude helium from the Federal Helium Pipeline (as defined in 50 U.S.C. 167(2)).

    2.02 How will helium sold in the FY 2019 sale be allocated among those participating in the non-allocated sale? The non-allocated sale will be made available to all qualified offerors not eligible to participate in the allocated sales. The minimum volume that can be requested is 1 MMcf. The total volume available for the non-allocated portion of the sale is 9 MMcf. Any volumes not sold at auction will be distributed between the non-allocated (10 percent) and the allocated sale (90 percent). Any volumes not purchased at the non-allocated sale will be sold in the allocated portion.

    2.03 How will the helium sold in the FY 2019 sale be allocated among the persons to accept delivery of crude helium from the Federal Helium Pipeline? Any person wishing to participate in the allocated portion of the FY 2019 sale needs to report its excess refining capacity and operational capacity a minimum of 14 calendar days prior to the sale, using the Excess Refining Capacity form. The form can be downloaded from the BLM's HSA Implementation Page website (see ADDRESSES). Click on the links for “Crude Helium Auctions & Sales” and then “FY 2019 Refiner Estimated Excess Capacity.” Each person participating in the sale will then be allocated a proportional share based upon that person's operational capacity.

    2.04 How does a person apply for access to the Federal Helium Pipeline for the purpose of taking crude helium? The steps for taking crude helium are provided in the BLM's HSA Implementation Page website (see ADDRESSES). The steps are contained in a document entitled, “How to Establish a Storage Contract and Pipeline Connection Point.” Click on the link for “Helium Storage.” Reporting forms can be downloaded from the same website address, click on the link for “Documents and Reports.” The forms show the requirements and due dates for each report. The length of time required to apply for and obtain access to the Federal Helium Pipeline can vary based on the person's plans for plant construction, pipeline metering installation, and other variables. The BLM is available to provide technical assistance, including contact information for applying for access and meeting any applicable National Environmental Policy Act requirements.

    E. Delivery of Helium in FY 2019

    3.01 When will I receive the helium that I purchase in a sale or win based on a successful auction bid? Helium purchased at the FY 2019 sale or won at the FY 2019 auction will be delivered starting September 30, 2018, in accordance with the crude helium storage contract. The intent is to ensure delivery of all helium purchased at sale or auction up to the BLM's production capability for the year.

    3.02 How will the BLM prioritize delivery? The HSA gives priority to Federal in-kind helium (i.e., helium sold to Federal users) (50 U.S.C. 167d(b)(1)(D)) and (b)(3)). After meeting that priority, the BLM will make delivery on a reasonable basis, as described in the crude helium storage contract, to ensure storage contract holders who have purchased or won helium at auction have the opportunity during the year to have that helium produced or refined in monthly increments.

    F. Background documents

    Supplementary documents referenced in this Notice are available at the BLM's HSA Implementation Page website (see ADDRESSES) and include the following documents:

    a. This Federal Register Notice for Fiscal year 2019 Delivery;

    b. The HSA (50 U.S.C. 167);

    c. FY 2019 Helium Auction Notice and Guide;

    d. 2016 Storage Contract (template for information only);

    e. Determination of Fair Market Value Pricing of Crude Helium;

    f. Storage Fees;

    g. Required Forms for Helium Reporting; and

    h. FY 2014 through FY 2018 Federal Register Notices for Helium Auctions and Sales.

    Authority:

    The HSA of 2013 (Pub. L. 113-40) codified to various sections in 50 U.S.C. 167-167q.

    Richard T. Cardinale, Acting Deputy Director, Operations.
    [FR Doc. 2018-16685 Filed 8-1-18; 8:45 am] BILLING CODE 4310-FB-P
    DEPARTMENT OF LABOR Employee Benefits Security Administration Advisory Council on Employee Welfare and Pension Benefit Plans; Nominations for Vacancies

    Section 512 of the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 895, 29 U.S.C. 1142, provides for the establishment of an Advisory Council on Employee Welfare and Pension Benefit Plans (the Council), consisting of 15 members appointed by the Secretary of Labor (the Secretary) as follows:

    • Three representatives of employee organizations (at least one of whom shall be a representative of an organization whose members are participants in a multiemployer plan);

    • three representatives of employers (at least one of whom shall be a representative of employers maintaining or contributing to multiemployer plans);

    • one representative each from the fields of insurance, corporate trust, actuarial counseling, investment counseling, investment management, and accounting; and

    • three representatives from the general public (one of whom shall be a person representing those receiving benefits from a pension plan).

    No more than eight members of the Council shall be members of the same political party.

    Council members must be qualified to appraise the programs instituted under ERISA. Appointments are for three-year terms. The Council's prescribed duties are to advise the Secretary with respect to carrying out his functions under ERISA, and to submit to the Secretary, or his designee, related recommendations. The Council will meet at least four times each year.

    The terms of five Council members expire at the end of this year. The groups or fields they represent are as follows:

    (1) Employee organizations;

    (2) employers;

    (3) actuarial counseling;

    (4) investment counseling; and

    (5) the general public.

    The Department of Labor is committed to equal opportunity in the workplace and seeks a broad-based and diverse Council.

    If you or your organization wants to nominate one or more people for appointment to the Council to represent one of the groups or fields specified above, submit nominations to Larry Good, Council Executive Secretary, Frances Perkins Building, U.S. Department of Labor, 200 Constitution Ave. NW, Suite N-5623, Washington, DC 20210, or as email attachments to [email protected] Nominations must be received on or before September 17, 2018. Please allow three weeks for regular mail delivery to the Department of Labor. If sending electronically, please use an attachment in rich text, Word, or pdf format. Nominations may be in the form of a letter, resolution or petition, signed by the person making the nomination or, in the case of a nomination by an organization, by an authorized representative of the organization. The Department encourages you to include additional supporting letters of nomination. It will not consider self-nominees who have no supporting letters.

    Nominations, including supporting letters, should:

    • State the person's qualifications to serve on the Council (including any particular specialized knowledge or experience relevant to the nominee's proposed Council position);

    • state that the candidate will accept appointment to the Council if offered;

    • include which of the five positions (representing groups or fields) you are nominating the candidate to fill;

    • include the nominee's full name, work affiliation, mailing address, phone number, and email address;

    • include the nominator's full name, mailing address, phone number, and email address;

    • include the nominator's signature, whether sent by email or otherwise.

    Please do not include any information that you do not want publicly disclosed.

    The Department will contact nominees for information on their political affiliation and their status as registered lobbyists. Anyone currently subject to federal registration requirements as a lobbyist is not eligible for appointment. Nominees should be aware of the time commitment for attending meetings and actively participating in the work of the Council. Historically, this has meant a commitment of at least 20 days per year. The Department of Labor has a process for vetting nominees under consideration for appointment.

    Signed at Washington, DC, on July 30, 2018. Preston Rutledge, Assistant Secretary, Employee Benefits Security Administration.
    [FR Doc. 2018-16571 Filed 8-1-18; 8:45 am] BILLING CODE 4510-29-P
    NATIONAL SCIENCE FOUNDATION Advisory Committee for Mathematical and Physical Sciences; Notice of Meeting

    In accordance with the Federal Advisory Committee Act (Pub. L. 92-463, as amended), the National Science Foundation (NSF) announces the following meeting:

    Name and Committee Code:

    Advisory Committee for Mathematical and Physical Sciences (#66).

    Date and Time:

    August 14, 2018; 12:30 p.m.-5:00 p.m.

    August 15, 2018; 8:30 a.m.-4:00 p.m.

    Place:

    National Science Foundation, 2415 Eisenhower Ave. Alexandria, VA 22314.

    Meeting Information:

    https://www.nsf.gov/mps/advisory.jsp.

    Type of Meeting:

    Open.

    Contact Person:

    Christopher Coox, National Science Foundation, 2415 Eisenhower Ave., Alexandria, VA 22314; Telephone: 703.292.5137; Email: [email protected]

    Purpose of Meeting:

    To provide advice, recommendations, and counsel on major goals and policies pertaining to mathematical and physical sciences programs and activities.

    Agenda Tuesday, August 14, 2018 • Meeting opening, FACA briefing, introductions, and approval of previous meeting minutes • MPS update • Big Ideas: Quantum Leap: Leading the Next Quantum Revolution • Big Ideas: Windows on the Universe: The Era of Multi-Messenger Astrophysics • Preparation for meeting with the NSF Director and Chief Operating Officer (COO) Wednesday, August 15, 2018 • Meeting opening and FACA briefing • Update: Sexual Harassment • Big Ideas: Harnessing the Data Revolution • Big Ideas: Understanding the Rules of Life: Predicting Phenotype • Discussion: Synthetic Biology • Update from MPSAC sub-committee on the Physics Frontiers Centers Program • Discussion with NSF Director and COO • Wrap up and opportunity for public Q&A/comments Dated: July 30, 2018. Crystal Robinson, Committee Management Officer.
    [FR Doc. 2018-16551 Filed 8-1-18; 8:45 am] BILLING CODE 7555-01-P
    NUCLEAR REGULATORY COMMISSION [Docket No. 40-8943-MLA-2; ASLBP No. 13-926-01-MLA-BD01] Notice (Regarding Weapons at Atomic Safety and Licensing Board Proceeding); In the Matter of Crow Butte Resources, Inc. (Marsland Expansion Area) July 27, 2018. Atomic Safety and Licensing Board Panel Before the Licensing Board: G. Paul Bollwerk, III, Chairman, Dr. Richard E. Wardwell, Dr. Thomas J. Hirons

    Notice is hereby given that the rules and policies regarding the possession of weapons in United States Courthouses and United States Federal Buildings in the State of Nebraska shall apply to all proceedings conducted in governmental or private facilities in Nebraska by the Atomic Safety and Licensing Board of the U.S. Nuclear Regulatory Commission.

    Accordingly, no person other than federal law enforcement personnel or law enforcement personnel from the Dawes County Sheriff's Department, or any other authorized Nebraska state or local law enforcement organization, while performing official duties, shall wear or otherwise carry a firearm, edged weapon, impact weapon, electronic control device, chemical weapon, ammunition, or other dangerous weapon into the limited appearance session scheduled at the Chadron State College Student Center in Chadron, Nebraska, on Sunday, October 28, 2018, or the evidentiary hearing scheduled to begin on Tuesday, October 30, 2018, at the Crawford Community Building in Crawford, Nebraska.

    This notice does not apply to state or local law enforcement officers responding to a call for assistance from within the Chadron State College Student Center or the Crawford Community Building.

    For the Atomic Safety and Licensing Board.

    Dated: Rockville, Maryland, July 27, 2018. George P. Bollwerk III, Chairman, Administrative Judge.
    [FR Doc. 2018-16545 Filed 8-1-18; 8:45 am] BILLING CODE 7590-01-P
    NUCLEAR REGULATORY COMMISSION [Docket No. 40-8943-MLA-2; ASLBP No. 13-926-01-MLA-BD01] Notice of Hearing (Notice of Evidentiary Hearing and Opportunity To Provide Oral, Written, and Audio-Recorded Limited Appearance Statements); In the Matter of Crow Butte Resources, Inc. (Marsland Expansion Area) July 27, 2018. Atomic Safety and Licensing Board Panel Before the Licensing Board: G. Paul Bollwerk, III, Chairman, Dr. Richard E. Wardwell, Dr. Thomas J. Hirons

    The Atomic Safety and Licensing Board hereby gives notice that it will convene an evidentiary hearing to receive testimony and exhibits in this proceeding regarding intervenor Oglala Sioux Tribe's (OST) challenge to the May 2012 application of Crow Butte Resources, Inc., (CBR) seeking to amend the existing 10 CFR part 40 source materials license for its Crow Butte in situ uranium recovery (ISR) site to authorize CBR to operate a satellite ISR facility within the Marsland Expansion Area (MEA) in Dawes County, Nebraska. The evidentiary hearing will concern OST's admitted Contention 2, which raises hydrogeological-related environmental and safety matters regarding the proposed license amendment. In addition, the Board gives notice that, in accordance with 10 CFR 2.315(a) and the procedures specified below, it will entertain oral, written, and audio-recorded limited appearance statements from members of the public in connection with the issues raised by Contention 2.

    A. Matters To Be Considered

    As set forth by the Licensing Board in a July 20, 2018 issuance, OST Contention 2 provides as follows:

    OST Contention 2: Failure to Include Adequate Hydrogeological Information to Demonstrate Ability to Contain Fluid Migration

    The application and final environmental assessment fail to provide sufficient information regarding the geological setting of the area to meet the requirements of 10 CFR part 40, Appendix A, Criteria 4(e) and 5G(2); the National Environmental Policy Act; and NUREG-1569 section 2.6. The application and final environmental assessment similarly fail to provide sufficient information to establish potential effects of the project on the adjacent surface and ground-water resources, as required by NUREG-1569 section 2.7, and the National Environmental Policy Act.

    LBP-18-3, 88 NRC __, __(slip op. at 43) (July 20, 2018). This issue will be the subject matter of the evidentiary hearing and should be the focus of any limited appearance statements.1

    1 As the Board also indicated in its July 2018 issuance, LBP-18-3, 88 NRC at __(slip op. at 43), the scope of the safety and environmental concerns encompassed by this contention include the following: (1) The adequacy of the descriptions of the affected environment for establishing the potential effects of the proposed MEA operation on the adjacent surface water and groundwater resources; (2) exclusively as a safety concern, the absence in the applicant's technical report, in accord with NUREG-1569 section 2.7, of a description of the effective porosity, hydraulic porosity, hydraulic conductivity, and hydraulic gradient of site hydrogeology, along with other information relative to the control and prevention of excursions such as transmissivity and storativity; (3) the failure to develop, in accord with NUREG-1569 section 2.7, an acceptable conceptual model of site hydrology that is adequately supported by site characterization data so as to demonstrate with scientific confidence that the area hydrogeology, including horizontal and vertical hydraulic conductivity, will result in the confinement of extraction fluids and expected operational and restoration performance; and (4) whether the final EA contains unsubstantiated assumptions as to the isolation of the aquifers in the ore-bearing zones.

    B. Date, Time, and Location of Evidentiary Hearing

    The Board will convene an evidentiary hearing conducted in accord with the procedures set forth in 10 CFR part 2, subpart L, regarding the environmental and safety matters specified in section A above on the following date at the specified location and time:

    Date: Tuesday, October 30, 2018.

    Time: 8:30 a.m. Mountain Time (MT).

    Location: Crawford Community Building, 1005 1st Street, Crawford, Nebraska.

    The hearing will continue from day-to-day until concluded. CBR, the NRC staff, and OST will be parties to the hearing and will sponsor witnesses and evidentiary material.

    Any member of the public who plans to attend the hearing is advised that security measures may be employed at the entrance to the room where the hearing will take place, including searches of hand-carried items such as briefcases or backpacks, and is reminded to arrive in sufficient time to allow for security screening. Items that could readily be used as weapons will not be permitted in the room where the evidentiary hearing sessions will be held. Also, during the evidentiary hearing session no signs will be permitted in the hearing room.

    C. Date, Time, and Location of Oral Limited Appearance Statement Session

    A 10 CFR 2.315(a) oral limited appearance session regarding the MEA ISR proceeding will be held on the following date at the specified location and time:

    Date: Sunday, October 28, 2018 (if there is sufficient interest).

    Time: 2:00 p.m. to 4:00 p.m. MT.

    Location: Scottsbluff Room, Chadron State College Student Center, 1000 Main Street, Chadron, Nebraska.

    D. Participation Guidelines for Oral Limited Appearance Statements

    Any person not a party, or the representative of a party, to this proceeding will be permitted to make an oral statement setting forth his or her position on matters of concern relating to the proceeding. Although these statements do not constitute testimony or evidence, they nonetheless may help the Licensing Board and/or the parties in their consideration of the matters of concern in this proceeding relating to OST Contention 2.

    Oral limited appearance statements will be entertained during the hours specified in section C above, or such lesser period as may be necessary to accommodate the speakers who are present. In this regard, if all scheduled and unscheduled speakers present at the session have made a presentation, the Licensing Board reserves the right to terminate the session before the ending time listed in section C above. The Board also reserves the right to cancel the Sunday afternoon session scheduled above if there has not been a sufficient showing of public interest as reflected by the number of preregistered speakers.

    Any member of the public who plans to attend the limited appearance session is strongly advised to arrive early to allow time to pass through any security measures that may be employed. Attendees are also requested not to bring any unnecessary hand-carried items, such as packages, briefcases, backpacks, or other items that might need to be examined individually. Items that could readily be used as weapons will not be permitted in the room where this session will be held. During the oral limited appearance session, signs no larger than 18 inches by 18 inches will be permitted, but may not be attached to sticks, held over one's head, or moved about in the room.

    The time allotted for each limited appearance statement normally will be no more than five minutes, but to ensure everyone will have an opportunity to speak, may be further limited depending on the number of written requests to make an oral statement that are submitted in accordance with section E below and/or the number of persons present at the designated times.

    E. Submitting a Request To Make an Oral Limited Appearance Statement

    A person wishing to make an oral statement who has submitted a timely written request to do so will be given priority over those who have not filed such a request. To be considered timely, a written request to make an oral statement must either be mailed, faxed, or sent by email so as to be received by 5:00 p.m. Eastern Time (ET) on Monday, October 12, 2018. Based on its review of the requests received by October 12, 2018, the Licensing Board may decide that the Sunday afternoon session will not be held due to lack of adequate interest in that session. Written requests to make an oral limited appearance received after Monday, October 12, 2018, will be honored to the extent practicable.

    Written requests to make an oral statement should be submitted to:

    Mail: Administrative Judge G. Paul Bollwerk, III, Atomic Safety and Licensing Board Panel, Mail Stop T-3A02, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. Fax: (301) 415-5205 (verification (301) 415-5277). Email: [email protected] and [email protected]. F. Submitting Written Limited Appearance Statements

    As provided in 10 CFR 2.315(a), any person not a party, or the representative of a party, to the proceeding may submit a written statement setting forth his or her position on matters of concern relating to this proceeding. Although these statements do not constitute testimony or evidence, they nonetheless may help the Board or the parties in their consideration of the matters of concern in this proceeding relating to OST Contention 2.

    A written limited appearance statement may be submitted at any time, however, for the statement to be the most helpful to the Board and parties relative to the evidentiary hearing on Contention 2, it should be submitted so as to be received by Wednesday, October 24, 2018. The written limited statement should be sent to the Office of the Secretary using one of the methods prescribed below:

    Mail: Office of the Secretary, Rulemakings and Adjudications Staff, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. Fax: (301) 415-1101 (verification (301) 415-1677). Email: [email protected]. In addition, using the same method of service, a copy of the written limited appearance statement should be sent to the Licensing Board Chairman as follows: Mail: Administrative Judge G. Paul Bollwerk, III, Atomic Safety and Licensing Board Panel, Mail Stop T-3A02, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. Fax: (301) 415-5599 (verification (301) 415-6094). Email: [email protected] and [email protected]. G. Submitting Audio-Recorded Limited Appearance Statements

    As provided in 10 CFR 2.315(a), any person not a party, or the representative of a party, to the proceeding may submit an audio-recorded statement setting forth his or her position on matters of concern relating to this proceeding. Although these statements do not constitute testimony or evidence, they nonetheless may help the Board or the parties in their consideration of the matters of concern in this proceeding relating to OST Contention 2.

    To ensure that the Licensing Board members will have the opportunity to review an audio-recorded limited appearance statements prior to the beginning of the evidentiary hearing, an audio-recorded limited appearance statement must be submitted so that it is received by Friday, October 12, 2018. All recordings must conform to the directions below in order for the Board and parties to consider the information and concerns contained therein. All audio-recorded limited appearance statements will be transcribed by a court reporter and included in the docket of this proceeding.

    1. Size

    Due to technical constraints, all audio-recorded limited appearance statements submitted must be no more than 15 minutes in length.

    2. Format and Submission

    Audio-recorded limited appearance statements may be sent to the Board one of two ways. An audio-recorded limited appearance statement may be sent by email to [email protected] as an attachment. The total size of the email cannot exceed 17 megabytes (MB). The attached file must be sent as an .mp3, .mp4, or .dss file.

    An audio-recorded limited appearance statement may also be sent by mail on either a compact disc (CD) or digital versatile disc (DVD) to:

    Mail: Administrative Judge G. Paul Bollwerk, III, Atomic Safety and Licensing Board Panel, Mail Stop T-3A02, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. H. Availability of Documentary Information Regarding the Proceeding

    The CBR application and license and various staff documents relating to the application are available on the NRC website at https://www.nrc.gov/info-finder/materials/uranium/licensed-facilities/crow-butte.html. 2 These and other documents relating to this proceeding also are available for public inspection at the Commission's Public Document Room (PDR), located at One White Flint North, 11555 Rockville Pike (first floor), Rockville, Maryland, or electronically from the publicly-available records component of NRC's document system (ADAMS) at www.nrc.gov/reading-rm/adams.html (the Public Electronic Reading Room), including the agency's Electronic Hearing Docket, https://adams.nrc.gov/ehd/ (under Docket No. 40-8943-MLA-2). Persons who do not have access to ADAMS or who encounter problems in accessing the documents located in ADAMS should contact the NRC PDR reference staff by telephone at (800) 397-4209 or (301) 415-4737 (available between 8:00 a.m. and 4:00 p.m. ET, Monday through Friday, except federal holidays), or by email to [email protected]

    2 On May 24, 2018, the staff notified the Board that, in accordance with 10 CFR 2.1202(a), the CBR license amendment license had been issued, effective immediately. See Letter from Emily Monteith, NRC Staff Counsel, to Licensing Board at 1 (May 24, 2018). Although section 2.1213(a) afforded OST the opportunity to seek a stay of this staff action, no such request was filed. Nonetheless, the CBR license amendment is subject to any merits determinations the Board might make relative to OST's pending contention.

    I. Information Updates to Schedule

    Any updates or revisions to the evidentiary hearing schedule or the schedule for the limited appearance session can be found on the NRC website at www.nrc.gov/public-involve/public-meetings/index.cfm, or by calling (800) 368-5642, extension 5036 (available between 7:00 a.m. and 9:00 p.m. ET, Monday through Friday, except federal holidays), or by calling (301) 415-5036 (available seven days a week, twenty-four hours a day).

    It is so ordered.

    For the Atomic Safety and Licensing Board.

    Rockville, Maryland, July 27, 2018. George P. Bollwerk III, Chairman, Administrative Judge.
    [FR Doc. 2018-16546 Filed 8-1-18; 8:45 am] BILLING CODE 7590-01-P
    POSTAL SERVICE Product Change—Priority Mail Negotiated Service Agreement AGENCY:

    Postal ServiceTM.

    ACTION:

    Notice.

    SUMMARY:

    The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.

    DATES:

    Date of required notice: August 2, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Elizabeth Reed, 202-268-3179.

    SUPPLEMENTARY INFORMATION:

    The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on July 27, 2018, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail Contract 455 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2018-199, CP2018-277.

    Elizabeth Reed, Attorney, Corporate and Postal Business Law.
    [FR Doc. 2018-16523 Filed 8-1-18; 8:45 am] BILLING CODE 7710-12-P
    POSTAL SERVICE Product Change—Priority Mail and First-Class Package Service Negotiated Service Agreement AGENCY:

    Postal ServiceTM.

    ACTION:

    Notice.

    SUMMARY:

    The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.

    DATES:

    Date of required notice: August 2, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Elizabeth Reed, 202-268-3179.

    SUPPLEMENTARY INFORMATION:

    The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on July 27, 2018, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail & First-Class Package Service Contract 85 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2018-196, CP2018-274.

    Elizabeth Reed, Attorney, Corporate and Postal Business Law.
    [FR Doc. 2018-16525 Filed 8-1-18; 8:45 am] BILLING CODE 7710-12-P
    POSTAL SERVICE Product Change—Parcel Select Negotiated Service Agreement AGENCY:

    Postal ServiceTM.

    ACTION:

    Notice.

    SUMMARY:

    The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.

    DATES:

    Date of notice required under 39 U.S.C. 3642(d)(1): August 2, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Elizabeth Reed, 202-268-3179.

    SUPPLEMENTARY INFORMATION:

    The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on July 27, 2018, it filed with the Postal Regulatory Commission a Request of the United States Postal Service to Add Parcel Select Contract 32 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2018-197, CP2018-275.

    Elizabeth Reed, Attorney, Corporate and Postal Business Law.
    [FR Doc. 2018-16520 Filed 8-1-18; 8:45 am] BILLING CODE 7710-12-P
    POSTAL SERVICE Product Change—Priority Mail Negotiated Service Agreement AGENCY:

    Postal ServiceTM.

    ACTION:

    Notice.

    SUMMARY:

    The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.

    DATES:

    Date of required notice: August 2, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Elizabeth Reed, 202-268-3179.

    SUPPLEMENTARY INFORMATION:

    The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on July 27, 2018, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail Contract 456 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2018-200, CP2018-278.

    Elizabeth Reed, Attorney, Corporate and Postal Business Law.
    [FR Doc. 2018-16519 Filed 8-1-18; 8:45 am] BILLING CODE 7710-12-P
    POSTAL SERVICE Product Change—Priority Mail Negotiated Service Agreement AGENCY:

    Postal ServiceTM.

    ACTION:

    Notice.

    SUMMARY:

    The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.

    DATES:

    Date of required notice: August 2, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Elizabeth Reed, 202-268-3179.

    SUPPLEMENTARY INFORMATION:

    The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on July 27, 2018, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail Contract 457 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2018-201, CP2018-279.

    Elizabeth Reed, Attorney, Corporate and Postal Business Law.
    [FR Doc. 2018-16521 Filed 8-1-18; 8:45 am] BILLING CODE 7710-12-P
    POSTAL SERVICE Product Change—Priority Mail Express, Priority Mail, & First-Class Package Service Negotiated Service Agreement AGENCY:

    Postal ServiceTM.

    ACTION:

    Notice.

    SUMMARY:

    The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.

    DATES:

    Date of required notice: August 2, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Elizabeth Reed, 202-268-3179.

    SUPPLEMENTARY INFORMATION:

    The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on July 27, 2018, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail Express, Priority Mail, & First-Class Package Service Contract 43 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2018-198, CP2018-276.

    Elizabeth Reed, Attorney, Corporate and Postal Business Law.
    [FR Doc. 2018-16522 Filed 8-1-18; 8:45 am] BILLING CODE 7710-12-P
    SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83733; File No. SR-NYSEArca-2018-25] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Amendment No. 1 and Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change as Modified by Amendment No. 1 Thereto Regarding the Continued Listing and Trading of Shares of the Natixis Loomis Sayles Short Duration Income ETF July 27, 2018. I. Introduction

    On April 16, 2018, NYSE Arca, Inc. (“Exchange” or “NYSE Arca”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (“Exchange Act”) 2 and Rule 19b-4 thereunder,3 a proposed rule change to continue listing and trading shares of the Natixis Loomis Sayles Short Duration Income ETF under NYSE Arca Rule 8.600-E, Managed Fund Shares.4 The proposed rule change was published for comment in the Federal Register on May 3, 2018.5 On June 5, 2018, the Commission extended the time period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to approve or disapprove the proposed rule change to August 1, 2018.6 On June 6, 2018, the Exchange filed Amendment No. 1 to the proposed rule change, which replaced and superseded the proposed rule change as originally filed. The Commission received no comments on the proposed rule change. The Commission is publishing this notice and order to solicit comments on the proposed rule change, as modified by Amendment No. 1, from interested persons and to institute proceedings under Section 19(b)(2)(B) of the Exchange Act to determine whether to approve or disapprove the proposed rule change as modified by Amendment No. 1.

    1 15 U.S.C. 78s(b)(1).

    2 15 U.S.C. 78a.

    3 17 CFR 240.19b-4.

    4 Currently, the Exchange lists and trades the shares pursuant to NYSE Arca Rule 8.600-E. As discussed further below, the Exchange submitted this proposed rule change to permit the fund's portfolio to deviate from two of the “generic” listing requirements applicable to Managed Fund Shares.

    5See Securities Exchange Act Release No. 83122 (April 27, 2018), 83 FR 19578. (“Notice”).

    6See Securities Exchange Act Release No. 83385, 83 FR 27034 (June 11, 2018).

    II. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.

    A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose

    The Exchange proposes to list and trade shares (“Shares”) of the following under NYSE Arca Rule 8.600-E, which governs the listing and trading of Managed Fund Shares: 7 Natixis Loomis Sayles Short Duration Income ETF (“Fund”). The Shares are offered by Natixis ETF Trust (the “Trust”), which is registered with the Commission as an open-end management investment company.8 Natixis Advisors, L.P. (the “Adviser”) is the investment adviser for the Fund. Loomis, Sayles & Company, L.P. is the Fund's sub-adviser (“Sub-Adviser”). ALPS Distributors, Inc. (the “Distributor”) is the principal underwriter and distributor of the Fund's Shares. The Adviser is the Fund's administrator. State Street Bank and Trust Company (“State Street”) serves as the custodian, and transfer agent (“Transfer Agent” or “Custodian”) for the Fund.9

    7 A Managed Fund Share is a security that represents an interest in an investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1) (“1940 Act”) organized as an open-end investment company or similar entity that invests in a portfolio of securities selected by its investment adviser consistent with its investment objectives and policies. In contrast, an open-end investment company that issues Investment Company Units, listed and traded on the Exchange under NYSE Arca Rule 5.2-E(j)(3), seeks to provide investment results that correspond generally to the price and yield performance of a specific foreign or domestic stock index, fixed income securities index or combination thereof.

    8 Shares of the Fund commenced trading on the Exchange on December 28, 2017 pursuant to Commentary .01 to NYSE Arca Rule 8.600-E.

    9 The Trust is registered under the 1940 Act. On December 26, 2017, the Trust filed with the Commission its registration statement on Form N-1A under the Securities Act of 1933 (15 U.S.C. 77a), and under the 1940 Act relating to the Fund (File Nos. 333-210156 and 811-23146) (“Registration Statement”). The description of the operation of the Trust and the Fund herein is based, in part, on the Registration Statement. In addition, the Commission has issued an order granting certain exemptive relief to the Trust under the 1940 Act. See Investment Company Act Release No. 30654 (August 20, 2013) (File No. 812-13942-02) (“Exemptive Order”).

    Commentary .06 to Rule 8.600-E provides that, if the investment adviser to the investment company issuing Managed Fund Shares is affiliated with a broker-dealer, such investment adviser shall erect a “fire wall” between the investment adviser and the broker-dealer with respect to access to information concerning the composition and/or changes to such investment company portfolio. In addition, Commentary .06 further requires that personnel who make decisions on the open-end fund's portfolio composition must be subject to procedures designed to prevent the use and dissemination of material nonpublic information regarding the open-end fund's portfolio.10 Commentary .06 to Rule 8.600-E is similar to Commentary .03(a)(i) and (iii) to NYSE Arca Rule 5.2-E(j)(3); however, Commentary .06 in connection with the establishment of a “fire wall” between the investment adviser and the broker-dealer reflects the applicable open-end fund's portfolio, not an underlying benchmark index, as is the case with index-based funds. The Adviser and Sub-Adviser are not registered as broker-dealers but each is affiliated with a broker-dealer and has implemented and will maintain a “fire wall” with respect to such broker-dealer regarding access to information concerning the composition and/or changes to the Fund's portfolio. In the event (a) the Adviser or Sub-Adviser becomes registered as a broker-dealer or newly affiliated with a broker-dealer, or (b) any new adviser or sub-adviser is a registered broker-dealer or becomes affiliated with a broker-dealer, it will implement and maintain a fire wall with respect to its relevant personnel or broker-dealer affiliate regarding access to information concerning the composition and/or changes to the portfolio, and will be subject to procedures designed to prevent the use and dissemination of material non-public information regarding such portfolio.

    10 An investment adviser to an open-end fund is required to be registered under the Investment Advisers Act of 1940 (the “Advisers Act”). As a result, the Adviser and Sub-Adviser and their related personnel are subject to the provisions of Rule 204A-1 under the Advisers Act relating to codes of ethics. This Rule requires investment advisers to adopt a code of ethics that reflects the fiduciary nature of the relationship to clients as well as compliance with other applicable securities laws. Accordingly, procedures designed to prevent the communication and misuse of non-public information by an investment adviser must be consistent with Rule 204A-1 under the Advisers Act. In addition, Rule 206(4)-7 under the Advisers Act makes it unlawful for an investment adviser to provide investment advice to clients unless such investment adviser has (i) adopted and implemented written policies and procedures reasonably designed to prevent violation, by the investment adviser and its supervised persons, of the Advisers Act and the Commission rules adopted thereunder; (ii) implemented, at a minimum, an annual review regarding the adequacy of the policies and procedures established pursuant to subparagraph (i) above and the effectiveness of their implementation; and (iii) designated an individual (who is a supervised person) responsible for administering the policies and procedures adopted under subparagraph (i) above.

    Natixis Loomis Sayles Short Duration Income ETF Principal Investments

    According to the Registration Statement, the Fund's investment objective is current income consistent with preservation of capital. Under normal market conditions,11 the Fund will invest at least 80% of its net assets in “Fixed-Income Securities” (as described below).

    11 The term “normal market conditions” is defined in NYSE Arca Rule 8.600-E(c)(5).

    The Fixed Income Securities in which the Fund may invest are the following:

    • U.S. Government Securities, including U.S. Treasury Bills, U.S. Treasury Notes and Bonds, U.S. Treasury Floating Rate Notes, Treasury Inflation-Protected Securities (“TIPS”), and obligations of U.S. agencies or instrumentalities (e.g., “Ginnie Maes”, “Fannie Maes” and “Freddie Macs”);

    • agency and non-agency asset-backed securities (“ABS”);

    • U.S. dollar-denominated foreign securities, including emerging market securities;

    • Adjustable-Rate Mortgage Securities (“ARMs”);

    • junior and senior loans;

    • bank loans, loan participations and assignments;

    • agency and non-agency mortgage-backed securities (“MBS”);

    • collateralized mortgage obligations (“CMOs”);

    • zero coupon and pay-in-kind securities;

    • corporate bonds;

    • Non-US government securities, supranational entities obligations issued by foreign governments, or international agencies and instrumentalities;

    • inflation-linked and inflation-indexed securities;

    • money market instruments; 12

    12 Money market instruments are short-term instruments referenced in Commentary .01 (c) to NYSE Arca Rule 8.600-E.

    • mortgage-related securities (such as Government National Mortgage Association or Federal National Mortgage Association certificates);

    • mortgage dollar rolls;

    • variable and floating rate securities;

    • Rule 144A securities;

    • taxable municipal securities;

    • step-coupon securities; and

    • stripped securities.

    The Fund may hold any portion of its assets in cash (U.S. dollars, foreign currencies or multinational currency units) and/or cash equivalents.13

    13 For purposes of this filing, cash equivalents shall mean the short-term instruments enumerated in Commentary .01(c) to NYSE Arca Rule 8.600-E.

    Other Investments

    While the Fund, under normal market conditions, will invest at least 80% of its net assets in the securities and financial instruments described above, the Fund may invest its remaining assets in the securities and financial instruments referenced below.

    The Fund may enter into short sales of Fixed Income Securities.

    The Fund may invest in exchange-traded funds (“ETFs”) 14 and exchange-traded notes (“ETNs”). 15

    14 For purposes of this filing, the term “ETFs” includes Investment Company Units (as described in NYSE Arca Rule 5.2-E(j)(3)); Portfolio Depositary Receipts (as described in NYSE Arca Rule 8.100-E); and Managed Fund Shares (as described in NYSE Arca Rule 8.600-E). All ETFs will be listed and traded in the U.S. on a national securities exchange. While the Fund may invest in inverse ETFs, the Fund will not invest in leveraged (e.g., 2X, -2X, 3X or -3X) ETFs.

    15 ETNs are Index-Linked Securities as described in NYSE Arca Rule 5.2-E(j)(6).

    The Fund may invest in bilateral credit default swaps, bilateral interest rate swaps and bilateral standardized commodity and equity index total return swaps. The Fund may invest in the following swaps: Interest rate, credit default, credit default swaps index (“CDX”), commodity, equity-linked, fixed income, credit default, credit-linked and currency exchange swaps or an index or indexes of the foregoing. The Fund may invest in swaptions.

    The Fund may invest in the following options: U.S. exchange-traded and over-the-counter (“OTC”) options on Fixed Income Securities, domestic and foreign equity and fixed income indices, CDX, U.S. Treasury futures contracts, interest rates and currencies.

    The Fund may invest in futures on Fixed Income Securities, domestic and foreign equity and fixed income indices, interest rates and CDX.

    The Fund may invest in publicly or privately issued interests in investment pools whose underlying assets are credit default, credit-linked, interest rate, currency exchange, equity-linked or other types of swap contracts and related underlying securities or securities loan agreements.

    The Fund may invest in non-exchange-traded open-end investment company securities.

    With respect to any of the Fund's investments identified above, the Fund may purchase securities on a forward commitment or when-issued or delayed delivery basis.

    Use of Derivatives by the Fund

    Investments in derivative instruments will be consistent with the Fund's investment objective and policies. The Fund will typically use derivative instruments as a substitute for taking a position in the underlying asset where advantageous and/or as part of a strategy designed to reduce exposure to other risks, such as interest rate risk. The Fund may also use derivative instruments to enhance returns, manage portfolio duration, or manage the risk of securities price fluctuations. To limit the potential risk associated with such transactions, the Fund segregates or “earmarks” assets determined to be liquid by the Adviser in accordance with procedures established by the Trust's Board of Trustees (the “Board”) to cover its obligations under derivative instruments. In addition, the Fund has included appropriate risk disclosure in its offering documents, including leveraging risk. Leveraging risk is the risk that certain transactions of the Fund, including the Fund's use of derivatives, may give rise to leverage, causing the Fund to be more volatile than if it had not been leveraged. Because the markets for certain securities, or the securities themselves, may be unavailable or cost prohibitive as compared to derivative instruments, suitable derivative transactions may be an efficient alternative for the Fund to obtain the desired asset exposure.

    Creation and Redemption of Shares

    According to the Registration Statement, the Fund issues and sells Shares of the Fund only in Creation Units of 100,000 Shares on a continuous basis through the Distributor at the net asset value (“NAV”) next determined after receipt of an order in proper form on any business day. The size of a Creation Unit is subject to change.

    The consideration for purchase of Creation Units generally consists of “Deposit Securities” and the “Cash Component”, which generally correspond pro rata, to the extent practicable, to the Fund securities, or, as permitted by the Fund, the “Cash Deposit.” Together, the Deposit Securities and the Cash Component or, alternatively, the Cash Deposit, constitute the “Fund Deposit,” which represents the minimum initial and subsequent investment amount for a Creation Unit of the Fund.

    The Transfer Agent and Custodian, through the National Securities Clearing Corporation (“NSCC”), makes available on each business day, prior to the opening of the Core Trading Session on NYSE Arca (currently 9:30 a.m., Eastern Time (“E.T.”)), the identity and the required number of each Deposit Security and the amount of the Cash Component to be included in the current Fund Deposit (based on information at the end of the previous business day).

    The Fund may also permit the substitution of an amount of cash (a “cash-in-lieu” amount) to replace any Deposit Security of the Fund that is a non-deliverable instrument. The amount of cash contributed will be equivalent to the price of the instrument listed as a Deposit Security. The Fund reserves the right to permit the substitution of a “cash in-lieu” amount to be added to replace any Deposit Security under specified circumstances.

    Procedures for Creating Creation Units

    To be eligible to place orders with the Distributor and to create a Creation Unit of the Fund, an entity must be: (i) A “Participating Party” (i.e., a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the NSCC; or (ii) a participant of the Depository Trust Company (“DTC”) (“DTC Participant”) and must have executed an Authorized Participant agreement with the Distributor, and accepted by the Transfer Agent, with respect to creations and redemptions of Creation Units. A Participating Party or DTC Participant who has executed an “Authorized Participant Agreement” is referred to as an “Authorized Participant.”

    To initiate a creation order for a Creation Unit, an Authorized Participant must submit an irrevocable order to purchase Shares in proper form to the Transfer Agent no later than 2:00 p.m., E.T. on any business day for creation of Creation Units to be effected based on the NAV of Shares of the Fund on the following business day.

    Redemption of Creation Units

    Shares may be redeemed only in Creation Units at their NAV next determined after receipt of a redemption request in proper form on a business day and only through a Participating Party or DTC Participant who has executed an Authorized Participant Agreement.

    With respect to the Fund, State Street, through the NSCC, makes available immediately prior to the opening of the Core Trading Session on the NYSE Arca on each business day, the identity of the Fund's securities and/or an amount of cash that will be applicable to redemption requests received in proper form on that day. The Fund's securities received on redemption generally correspond pro rata, to the positions in the Fund's portfolio. The Fund's securities received on redemption (“Fund Securities”) will generally be identical to Deposit Securities that are applicable to creations of Creation Units.

    Subject to the terms of the applicable Authorized Participant Agreement and any creation and redemption procedures adopted by the Fund and provided to all Authorized Participants, to initiate a redemption order for a Creation Unit, an Authorized Participant must submit an irrevocable order to redeem Shares in proper form to the Transfer Agent no later than 2:00 p.m., E.T. on any business day for redemption of Creation Units to be effected based on the NAV of shares of the Fund on that business day.

    Unless cash only redemptions are available or specified for the Fund, the redemption proceeds for a Creation Unit generally consists of Fund Securities—as announced on the business day of the request for a redemption order received in proper form—plus cash in an amount equal to the difference between the NAV of the Shares being redeemed, as next determined after a receipt of a request in proper form, and the value of the Fund Securities, less the redemption transaction fee and variable fees.16 The Fund may substitute a “cash-in-lieu” amount to replace any Fund Security in certain limited circumstances. The amount of cash paid out in such cases will be equivalent to the value of the instrument listed as the Fund Security. In the event that the Fund Securities have a value greater than the NAV of the Shares, a compensating cash payment equal to the difference will be included in the Cash Component required to be delivered by an Authorized Participant.

    16 The Adviser represents that, to the extent the Trust effects the redemption of Shares in cash, such transactions will be effected in the same manner for all Authorized Participants.

    Derivatives Valuation Methodology for Purposes of Determining Portfolio Indicative Value

    On each business day, before commencement of trading in Fund Shares on NYSE Arca, the Fund discloses on its website the identities and quantities of the portfolio instruments and other assets held by the Fund that form the basis for the Fund's calculation of NAV at the end of the business day. The NAV of the Shares of the Fund is determined once each day the New York Stock Exchange (the “NYSE”) is open, as of the close of its regular trading session (normally 4:00 p.m., E.T.) (“NYSE Close”).

    In order to provide additional information regarding the intra-day value of Shares of the Fund, one or more major market data vendors disseminates every 15 seconds an updated Intraday Indicative Value (“IIV”) for the Fund as calculated by an information provider or market data vendor. A third party market data provider calculates the IIV for the Fund.

    With respect to specific derivatives:

    • Foreign currency derivatives may be valued intraday using market quotes, or another proxy as determined to be appropriate by the third party market data provider.

    • Futures may be valued intraday using the relevant futures exchange data, or another proxy as determined to be appropriate by the third party market data provider.

    • Swaps may be valued using intraday data from market vendors, or based on underlying asset price, or another proxy as determined to be appropriate by the third party market data provider.

    • Exchange listed options may be valued intraday using the relevant exchange data, or another proxy as determined to be appropriate by the third party market data provider.

    • OTC options and swaptions may be valued intraday through option valuation models (e.g., Black-Scholes) or using exchange-traded options as a proxy, or another proxy as determined to be appropriate by the third party market data provider.

    Disclosed Portfolio

    The Fund's disclosure of derivative positions in the applicable Disclosed Portfolio includes information that market participants can use to value these positions intraday. On a daily basis, the Fund discloses the information regarding the Disclosed Portfolio required under NYSE Arca Rule 8.600-E (c)(2) to the extent applicable.

    Impact on Arbitrage Mechanism

    The Adviser believes there will be minimal, if any, impact to the arbitrage mechanism as a result of the use of derivatives. Market makers and participants should be able to value derivatives as long as the positions are disclosed with relevant information. The Adviser believes that the price at which Shares of the Fund trade will continue to be disciplined by arbitrage opportunities created by the ability to purchase or redeem Shares of the Fund at their NAV, which should ensure that Shares of the Fund will not trade at a material discount or premium in relation to their NAV.

    The Adviser does not believe there is any significant impact to the settlement or operational aspects of the Fund's arbitrage mechanism due to the use of derivatives. Because derivatives generally are not eligible for in-kind transfer, they will be substituted with a “cash in lieu” amount when the Fund processes purchases or redemptions of block-size “Creation Units” (as described above) in-kind.

    Application of Generic Listing Requirements

    The Exchange is submitting this proposed rule change because the portfolio for the Fund would not meet all of the “generic” listing requirements of Commentary .01 to NYSE Arca Rule 8.600-E applicable to the listing of Managed Fund Shares. The Fund's portfolio would meet all such requirements except for those set forth in Commentary .01(b)(5) and Commentary .01(a)(1).

    The Fund will not comply with the requirement of Commentary .01(b)(5) to NYSE Arca Rule 8.600-E that non-agency, non-government-sponsored entity (“GSE”) and privately-issued mortgage-related and other asset-backed securities components of a portfolio shall not account, in the aggregate, for more than 20% of the weight of the fixed income portion of the portfolio.17 Instead, up to 30% of the weight of the Fixed Income Securities portion of the Fund's portfolio may consist of non-agency, non-GSE and privately-issued mortgage-related and other asset-backed securities. The Adviser represents that permitting limited investments in non-agency, non-GSE and privately-issued mortgage-related and other asset-backed securities, as described above, would be in the best interest of the Fund's shareholders because such investments have the potential to reduce the overall risk profile of the Fund's portfolio through diversification. In the Adviser's view, such investments would reduce the Fund's risk with respect to non-agency, non-GSE and privately-issued mortgage-related and other asset-backed securities by diversifying the Fund's exposure among borrowers of such debt issues. The Adviser represents that the Fund will only purchase U.S. dollar denominated non-agency ABS and MBS that are settled through DTC. In addition, by allowing the Fund to allocate up to 30% of the weight of its Fixed Income Securities investments in such issues would afford the Fund greater flexibility to invest in the most liquid available Fixed Income Securities issues, in that such issues are expected to be as liquid, or more liquid, than other possible Fund investments.

    17 Commentary .01(b)(5) to NYSE Arca Rule 8.600-E provides that the components of the fixed income portion of a portfolio shall meet the following criteria initially and on a continuing basis: non-agency, non-government-sponsored entity (“GSE”) and privately-issued mortgage-related and other asset-backed securities components of a portfolio shall not account, in the aggregate, for more than 20% of the weight of the fixed income portion of the portfolio.

    As noted above, the Fund may invest in equity securities that are non-exchange-traded securities of other open-end investment company securities (e.g., mutual funds). The Exchange believes that it is appropriate and in the public interest to approve listing and trading of Shares of the Fund on the Exchange notwithstanding that the Fund would not meet the requirements of Commentary .01(a)(1)(A) through (E) to Rule 8.600-E with respect to the Fund's investments in such securities.18 Investments in such equity securities will not be principal investments of the Fund.19 Such investments, which may include mutual funds that invest, for example, principally in fixed income securities, would be utilized to help the Fund meet its investment objective and to equitize cash in the short term.20 Because such securities must have a net asset value based on the value of securities and financial assets the investment company holds, the Exchange believes it is both unnecessary and inappropriate to apply to such investment company securities the criteria in Commentary .01(a)(1).

    18 Commentary .01 (a) to Rule 8.600-E specifies the equity securities accommodated by the generic criteria in Commentary .01(a), namely, U.S. Component Stocks (as described in Rule 5.2-E(j)(3)); Non-U.S. Component Stocks (as described in Rule 5.2-E(j)(3)); Derivative Securities Products (i.e., Investment Company Units and securities described in Section 2 of Rule 8-E); and Index-Linked Securities that qualify for Exchange listing and trading under Rule 5.2-E(j)(6). Commentary .01(a)(1) to Rule 8.600-E (U.S. Component Stocks) provides that the component stocks of the equity portion of a portfolio that are U.S. Component Stocks shall meet the following criteria initially and on a continuing basis:

    (A) Component stocks (excluding Derivative Securities Products and Index-Linked Securities) that in the aggregate account for at least 90% of the equity weight of the portfolio (excluding such Derivative Securities Products and Index-Linked Securities) each shall have a minimum market value of at least $75 million;

    (B) Component stocks (excluding Derivative Securities Products and Index-Linked Securities) that in the aggregate account for at least 70% of the equity weight of the portfolio (excluding such Derivative Securities Products and Index-Linked Securities) each shall have a minimum monthly trading volume of 250,000 shares, or minimum notional volume traded per month of $25,000,000, averaged over the last six months;

    (C) The most heavily weighted component stock (excluding Derivative Securities Products and Index-Linked Securities) shall not exceed 30% of the equity weight of the portfolio, and, to the extent applicable, the five most heavily weighted component stocks (excluding Derivative Securities Products and Index-Linked Securities) shall not exceed 65% of the equity weight of the portfolio;

    (D) Where the equity portion of the portfolio does not include Non-U.S. Component Stocks, the equity portion of the portfolio shall include a minimum of 13 component stocks; provided, however, that there shall be no minimum number of component stocks if (i) one or more series of Derivative Securities Products or Index-Linked Securities constitute, at least in part, components underlying a series of Managed Fund Shares, or (ii) one or more series of Derivative Securities Products or Index-Linked Securities account for 100% of the equity weight of the portfolio of a series of Managed Fund Shares;

    (E) Except as provided herein, equity securities in the portfolio shall be U.S. Component Stocks listed on a national securities exchange and shall be NMS Stocks as defined in Rule 600 of Regulation NMS under the Securities Exchange Act of 1934.

    19 For purposes of this section of the filing, non-exchange-traded securities of other registered investment companies do not include money market funds, which are cash equivalents under Commentary .01(c) to Rule 8.600-E and for which there is no limitation in the percentage of the portfolio invested in such securities.

    20 The Commission has previously approved proposed rule changes under Section 19(b) of the Act for series of Managed Fund Shares that may invest in non-exchange traded investment company securities to the extent permitted by Section 12(d)(1) of the 1940 Act and the rules thereunder. See, e.g., Securities Exchange Act Release No. 78414 (July 26, 2016), 81 FR 50576 (August 1, 2016) (SR-NYSEArca-2016-79) (order approving listing and trading of shares of the Virtus Japan Alpha ETF under NYSE Arca Equities Rule 8.600).

    The Exchange notes that Commentary .01(A) through (D) to Rule 8.600-E exclude application of those provisions to certain “Derivative Securities Products” that are exchange-traded investment company securities, including Investment Company Units (as described in NYSE Arca Rule 5.2-E(j)(3)), Portfolio Depositary Receipts (as described in NYSE Arca Rule 8.100-E)) and Managed Fund Shares (as described in NYSE Arca Rule 8.600-E).21 In its 2008 Approval Order approving amendments to Commentary .01(a) to Rule 5.2(j)(3) that exclude Derivative Securities Products from certain provisions of Commentary .01(a) (which exclusions are similar to those in Commentary .01(a)(1) to Rule 8.600-E), the Commission stated that “based on the trading characteristics of Derivative Securities Products, it may be difficult for component Derivative Securities Products to satisfy certain quantitative index criteria, such as the minimum market value and trading volume limitations.” The Exchange notes that it would be difficult or impossible to apply to non-exchange-traded investment company securities the generic quantitative criteria (e.g., market capitalization, trading volume, or portfolio criteria) in Commentary .01 (A) through (D) applicable to U.S. Component Stocks. For example, the requirement for U.S. Component Stocks in Commentary .01(a)(1)(B) that there be minimum monthly trading volume of 250,000 shares, or minimum notional volume traded per month of $25,000,000, averaged over the last six months is tailored to exchange-traded securities (e.g., U.S. Component Stocks) and not to mutual fund shares, which do not trade in the secondary market. Moreover, application of such criteria would not serve the purpose served with respect to U.S. Component Stocks, namely, to establish minimum liquidity and diversification criteria for U.S. Component Stocks held by series of Managed Fund Shares.

    21 The Commission initially approved the Exchange's proposed rule change to exclude “Derivative Securities Products” (i.e., Investment Company Units and securities described in Section 2 of Rule 8) and “Index-Linked Securities (as described in Rule 5.2-E (j)(6)) from Commentary .01(a)(A) (1) through (4) to Rule 5.2-E(j)(3 in Securities Exchange Act Release No. 57751 (May 1, 2008), 73 FR 25818 (May 7, 2008) (SR-NYSEArca-2008-29) (Order Granting Approval of a Proposed Rule Change, as Modified by Amendment No. 1 Thereto, to Amend the Eligibility Criteria for Components of an Index Underlying Investment Company Units)(“2008 Approval Order”). See also, Securities Exchange Act Release No. 57561 (March 26, 2008), 73 FR 17390 (April 1, 2008) (Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto to Amend the Eligibility Criteria for Components of an Index Underlying Investment Company Units). The Commission subsequently approved generic criteria applicable to listing and trading of Managed Fund Shares, including exclusions for Derivative Securities Products and Index-Linked Securities in Commentary .01(a)(1)(A) through (D), in Securities Exchange Act Release No. 78397 (July 22, 2016), 81 FR 49320 (July 27, 2016) (Order Granting Approval of Proposed Rule Change, as Modified by Amendment No. 7 Thereto, Amending NYSE Arca Equities Rule 8.600 To Adopt Generic Listing Standards for Managed Fund Shares). See also, Amendment No. 7 to SR-NYSEArca-2015-110, available at https://www.sec.gov/comments/sr-nysearca-2015-110/nysearca2015110-9.pdf.

    The Exchange notes that the Commission has previously approved listing and trading of an issue of Managed Fund Shares that may invest in equity securities that are non-exchange-traded securities of other open-end investment company securities notwithstanding that the fund would not meet the requirements of Commentary .01(a)(1)(A) through (E) to Rule 8.600-E with respect to such fund's investments in such securities.22 Thus, the Exchange believes that it is appropriate to permit the Fund to invest in non-exchange-traded open-end management investment company securities, as described above.

    22See Securities Exchange Act Release No. 83319 (May 24, 2018) (SR-NYSEArca-2018-15) (Order Approving a Proposed Rule Change, as Modified by Amendment No. 1 Thereto, to Continue Listing and Trading Shares of the PGIM Ultra Short Bond ETF Under NYSE Arca Rule 8.600-E).

    The Exchange notes that, other than Commentary .01(a)(1)(A) through (E) and Commentary.01(b)(5) to Rule 8.600-E, the Fund's portfolio will meet all other requirements of Rule 8.600-E.

    Availability of Information

    The Fund's website (www.im.natixis.com/us/active-short-duration-income-etf) includes a form of the prospectus for the Fund that may be downloaded. The Fund's website includes additional quantitative information updated on a daily basis including, for the Fund, (1) daily trading volume, the prior business day's reported closing price, NAV and midpoint of the bid/ask spread at the time of calculation of such NAV (the “Bid/Ask Price”),23 and a calculation of the premium and discount of the Bid/Ask Price against the NAV, and (2) data in chart format displaying the frequency distribution of discounts and premiums of the daily Bid/Ask Price against the NAV, within appropriate ranges, for each of the four previous calendar quarters. On each business day, before commencement of trading in Shares in the Core Trading Session on the Exchange, the Fund discloses on its website the Disclosed Portfolio as defined in NYSE Arca Rule 8.600-E (c)(2) that forms the basis for the Fund's calculation of NAV at the end of the business day.24

    23 The Bid/Ask Price of the Fund's Shares will be determined using the mid-point of the highest bid and the lowest offer on the Exchange as of the time of calculation of the Fund's NAV. The records relating to Bid/Ask Prices will be retained by the Fund and its service providers.

    24 Under accounting procedures followed by the Fund, trades made on the prior business day (“T”) will be booked and reflected in NAV on the current business day (“T+1”). Accordingly, the Fund will be able to disclose at the beginning of the business day the portfolio that will form the basis for the NAV calculation at the end of the business day.

    On a daily basis, the Fund discloses the information required under NYSE Arca Rule 8.600-E (c)(2) to the extent applicable. The website information will be publicly available at no charge.

    In addition, a basket composition file, which includes the security names and share quantities, if applicable, required to be delivered in exchange for the Fund's Shares, together with estimates and actual cash components, is publicly disseminated daily prior to the opening of the Exchange via the NSCC. The basket represents one Creation Unit of the Fund. Authorized Participants may refer to the basket composition file for information regarding Fixed Income Securities, and any other instrument that may comprise the Fund's basket on a given day.

    Investors can also obtain the Trust's Statement of Additional Information (“SAI”), the Fund's Shareholder Reports, and the Fund's Forms N-CSR and Forms N-SAR, filed twice a year. The Fund's SAI and Shareholder Reports will be available free upon request from the Trust, and those documents and the Form N-CSR, Form N-PX and Form N-SAR may be viewed on-screen or downloaded from the Commission's website at www.sec.gov. Intra-day and closing price information regarding exchange-traded options (including options on futures) and futures will be available from the exchange on which such instruments are traded. Intra-day and closing price information regarding Fixed Income Securities also will be available from major market data vendors. Price information relating to Rule 144A securities, interests in investment pools, OTC options, swaps and swaptions will be available from major market data vendors. Intra-day price information for exchange-traded derivative instruments will be available from the applicable exchange and from major market data vendors. Price information regarding non-exchange-traded investment company securities will be available from the applicable investment company. Information regarding market price and trading volume of the Shares will be continually available on a real-time basis throughout the day on brokers' computer screens and other electronic services. Information regarding the previous day's closing price and trading volume information for the Shares will be published daily in the financial section of newspapers. Quotation and last sale information for the Shares, ETFs and ETNs will be available via the Consolidated Tape Association (“CTA”) high-speed line. Exchange-traded options quotation and last sale information for options cleared via the Options Clearing Corporation (“OCC”) is available via the Options Price Reporting Authority. In addition, the IIV, as defined in NYSE Arca Rule 8.600-E (c)(3), will be widely disseminated by one or more major market data vendors at least every 15 seconds during the Core Trading Session. The dissemination of the IIV, together with the Disclosed Portfolio, may allow investors to determine an approximate value of the underlying portfolio of the Fund on a daily basis and to provide an estimate of that value throughout the trading day.

    Trading Halts

    With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Shares of the Fund. Trading in Shares of the Fund will be halted if the circuit breaker parameters in NYSE Arca Rule 7.12-E have been reached. Trading also may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. These may include: (1) The extent to which trading is not occurring in the securities and/or the financial instruments comprising the Disclosed Portfolio of the Fund; or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. Trading in the Shares will be subject to NYSE Arca Rule 8.600-E (d)(2)(D), which sets forth circumstances under which Shares of the Fund may be halted.

    Trading Rules

    The Exchange deems the Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities. Shares will trade on the NYSE Arca Marketplace from 4:00 a.m. to 8:00 p.m. E.T. in accordance with NYSE Arca Rule 7.34-E (Early, Core, and Late Trading Sessions). The Exchange has appropriate rules to facilitate transactions in the Shares during all trading sessions. As provided in NYSE Arca Rule 7.6-E, the minimum price variation (“MPV”) for quoting and entry of orders in equity securities traded on the NYSE Arca Marketplace is $0.01, with the exception of securities that are priced less than $1.00 for which the MPV for order entry is $0.0001.

    The Shares will conform to the initial and continued listing criteria under NYSE Arca Rule 8.600-E. The Exchange represents that, for initial and continued listing, the Fund will be in compliance with Rule 10A-3 under the Act, as provided by NYSE Arca Rule 5.3-E. The Exchange has obtained a representation from the issuer of the Shares that the NAV per Share will be calculated daily and that the NAV and the Disclosed Portfolio will be made available to all market participants at the same time.

    Surveillance

    The Exchange represents that trading in the Shares will be subject to the existing trading surveillances administered by the Exchange, as well as cross-market surveillances administered by the Financial Industry Regulatory Authority (“FINRA”) on behalf of the Exchange, which are designed to detect violations of Exchange rules and applicable federal securities laws. The Exchange represents that these procedures are adequate to properly monitor Exchange trading of the Shares in all trading sessions and to deter and detect violations of Exchange rules and federal securities laws applicable to trading on the Exchange.

    The surveillances referred to above generally focus on detecting securities trading outside their normal patterns, which could be indicative of manipulative or other violative activity. When such situations are detected, surveillance analysis follows and investigations are opened, where appropriate, to review the behavior of all relevant parties for all relevant trading violations.

    The Exchange or FINRA, on behalf of the Exchange, or both, will communicate as needed regarding trading in the Shares, ETFs, ETNs, certain exchange-traded options and certain futures with other markets and other entities that are members of the ISG, and the Exchange or FINRA, on behalf of the Exchange, or both, may obtain trading information regarding trading in the Shares, ETFs, ETNs, certain exchange-traded options and certain futures from such markets and other entities. In addition, the Exchange may obtain information regarding trading in the Shares, ETFs, ETNs, certain exchange-traded options and certain futures from markets and other entities that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement (“CSSA”). The Exchange is able to access from FINRA, as needed, trade information for certain Fixed Income Securities held by the Fund reported to FINRA's Trade Reporting and Compliance Engine (“TRACE”). FINRA also can access data obtained from the Municipal Securities Rulemaking Board (“MSRB”) relating to certain municipal bond trading activity for surveillance purposes in connection with trading in the Shares.

    In addition, the Exchange also has a general policy prohibiting the distribution of material, non-public information by its employees.

    All statements and representations made in this filing regarding (a) the description of the portfolio or reference assets, (b) limitations on portfolio holdings or reference assets, or (c) the applicability of Exchange rules and surveillance procedures shall constitute continued listing requirements for listing the Shares on the Exchange.

    The issuer has represented to the Exchange that it will advise the Exchange of any failure by the Fund to comply with the continued listing requirements, and, pursuant to its obligations under Section 19(g)(1) of the Act, the Exchange will monitor for compliance with the continued listing requirements. If the Fund is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under NYSE Arca Rule 5.5-E(m).

    Information Bulletin

    Prior to the commencement of trading, the Exchange will inform its Equity Trading Permit (“ETP”) Holders in an Information Bulletin (“Bulletin”) of the special characteristics and risks associated with trading the Shares of the Fund. Specifically, the Bulletin will discuss the following: (1) The procedures for purchases and redemptions of Shares in Creation Units (and that Shares are not individually redeemable); (2) NYSE Arca 9.2-E(a), which imposes a duty of due diligence on its ETP Holders to learn the essential facts relating to every customer prior to trading the Shares; (3) the risks involved in trading the Shares during the Early and Late Trading Sessions when an updated IIV will not be calculated or publicly disseminated; (4) how information regarding the IIV and the Disclosed Portfolio is disseminated; (5) the requirement that ETP Holders deliver a prospectus to investors purchasing newly issued Shares prior to or concurrently with the confirmation of a transaction; and (6) trading information.

    In addition, the Bulletin will reference that the Fund is subject to various fees and expenses described in the Registration Statement. The Bulletin will discuss any exemptive, no-action, and interpretive relief granted by the Commission from any rules under the Act. The Bulletin will also disclose that the NAV for the Shares of the Fund is calculated after 4:00 p.m. E.T. each trading day.

    2. Statutory Basis

    The basis under the Act for this proposed rule change is the requirement under Section 6(b)(5) that an exchange have rules that are designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to, and perfect the mechanism of a free and open market and, in general, to protect investors and the public interest.

    The Exchange believes that the proposed rule change is designed to prevent fraudulent and manipulative acts and practices in that the Shares will be listed and traded on the Exchange pursuant to the initial and continued listing criteria in NYSE Arca Rule 8.600-E. The Exchange has in place surveillance procedures that are adequate to properly monitor trading in the Shares in all trading sessions and to deter and detect violations of Exchange rules and federal securities laws applicable to trading on the Exchange. The Adviser is not registered as a broker-dealer but the Adviser is affiliated with a broker-dealer and has implemented and will maintain a “fire wall” with respect to such broker-dealer regarding access to information concerning the composition and/or changes to the Fund's portfolio. The Exchange or FINRA, on behalf of the Exchange, or both, will communicate as needed regarding trading in the Shares, ETFs, ETNs, certain exchange-traded options and certain futures with other markets and other entities that are members of the ISG, and the Exchange or FINRA, on behalf of the Exchange, or both, may obtain trading information regarding trading in the Shares, ETFs, ETNs, certain exchange-traded options and certain futures from such markets and other entities. In addition, the Exchange may obtain information regarding trading in the Shares, ETFs, ETNs, certain exchange-traded options and certain futures from markets and other entities that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. The Exchange is able to access from FINRA, as needed, trade information for certain fixed income securities held by the Fund reported to FINRA's TRACE. FINRA also can access data obtained from the MSRB relating to certain municipal bond trading activity for surveillance purposes in connection with trading in the Shares.

    The proposed rule change is designed to promote just and equitable principles of trade and to protect investors and the public interest in that the Exchange will obtain a representation from the issuer of the Shares that the NAV per Share will be calculated daily and that the NAV and the Disclosed Portfolio will be made available to all market participants at the same time. In addition, a large amount of information is publicly available regarding the Fund and the Shares, thereby promoting market transparency. The website for the Fund includes a form of the prospectus for the Fund and additional data relating to NAV and other applicable quantitative information. Trading in Shares of the Fund will be halted if the circuit breaker parameters in NYSE Arca Rule 7.12-E have been reached or because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable, and trading in the Shares will be subject to NYSE Arca 8.600-E (d)(2)(D), which sets forth circumstances under which trading in the Shares of the Fund may be halted. In addition, as noted above, investors have ready access to information regarding the Fund's holdings, the IIV, the Disclosed Portfolio, and quotation and last sale information for the Shares. In the aggregate, at least 90% of the weight of the Fund's holdings invested in futures, exchange-traded options, and listed swaps shall, on both an initial and continuing basis, consist of futures, options, and swaps for which the Exchange may obtain information from other members or affiliates of the ISG or for which the principal market is a market with which the Exchange has a CSSA.

    As described above, deviations from the generic requirements of Commentary .01(a) are necessary for the Fund to achieve its investment objective in a manner that is cost-effective and that maximizes investors' returns. Further, the proposed alternative requirements are narrowly tailored to allow the Fund to achieve its investment objective in manner that is consistent with the principles of Section 6(b)(5) of the Act. As a result, it is in the public interest to approve listing and trading of Shares of the Fund on the Exchange pursuant to the requirements set forth herein.

    The Adviser represents that permitting limited investments in non-agency, non-GSE and privately-issued mortgage-related and other asset-backed securities, as described above, would be in the best interest of the Fund's shareholders because such investments have the potential to reduce the overall risk profile of the Fund's portfolio. In the Adviser's view, such investments would reduce the Fund's risk with respect to non-agency, non-GSE and privately-issued mortgage-related and other asset-backed securities by diversifying the Fund's exposure among borrowers of such debt issues. In addition, by allowing the Fund to allocate up to 30% of the weight of its Fixed Income Securities investments in such issues would afford the Fund greater flexibility to invest in the most liquid available Fixed Income Securities issues, in that such issues are expected to be as liquid, or more liquid, than other possible Fund investments.

    The Exchange also believes that it is appropriate and in the public interest to approve listing and trading of Shares of the Fund on the Exchange notwithstanding that the Fund would not meet the requirements of Commentary .01(a)(1)(A) through (E) to Rule 8.600-E with respect to the Fund's investments in non-exchange-traded open-end investment company securities. Investments in such equity securities will not be principal investments of the Fund. Such investments, which may include mutual funds that invest, for example, principally in fixed income securities, would be utilized to help the Fund meet its investment objective and to equitize cash in the short term. Because such securities have a net asset value based on the value of securities and financial assets the investment company holds, the Exchange believes it is both unnecessary and inappropriate to apply to such investment company securities the criteria in Commentary .01(a)(1).

    The Exchange notes that it would be difficult or impossible to apply to non-exchange-traded investment company securities the generic quantitative criteria (e.g., market capitalization, trading volume, or portfolio criteria) in Commentary .01 (A) through (D) applicable to U.S. Component Stocks. For example, the requirement for U.S. Component Stocks in Commentary .01(a)(1)(B) that there be minimum monthly trading volume of 250,000 shares, or minimum notional volume traded per month of $25,000,000, averaged over the last six months is tailored to exchange-traded securities (e.g., U.S. Component Stocks) and not to mutual fund shares, which do not trade in the secondary market. Moreover, application of such criteria would not serve the purpose served with respect to U.S. Component Stocks, namely, to establish minimum liquidity and diversification criteria for U.S. Component Stocks held by series of Managed Fund Shares. Other than Commentary .01(a)(1)(A) through (E) and Commentary.01(b)(5) to Rule 8.600-E, the Fund's portfolio will meet all other requirements of Rule 8.600-E.

    The proposed rule change is designed to perfect the mechanism of a free and open market and, in general, to protect investors and the public interest in that it will facilitate the listing and trading of an additional type of actively managed ETF that will enhance competition among market participants, to the benefit of investors and the marketplace. As noted above, the Exchange has in place surveillance procedures relating to trading in the Shares and may obtain information via ISG from other exchanges that are members of ISG or with which the Exchange has entered into a CSSA. In addition, as noted above, investors have ready access to information regarding the Fund's holdings, the IIV, the Disclosed Portfolio, and quotation and last sale information for the Shares.

    B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purpose of the Act. The Exchange notes that the proposed rule change will facilitate the listing and trading of an issue of Managed Fund Shares that, through permitted use of an increased level of non-agency ABS and MBS above that currently permitted by the generic listing requirements of Commentary .01 to NYSE Arca Rule 8.600-E, will enhance competition among market participants, to the benefit of investors and the marketplace.

    C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the proposed rule change.

    III. Proceedings to Determine Whether to Approve or Disapprove SR-NYSEArca-2018-25 and Grounds for Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Exchange Act 25 to determine whether the proposed rule change, as modified by Amendment No. 1, should be approved or disapproved. Institution of such proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, as described below, the Commission seeks and encourages interested persons to provide comments on the proposed rule change.

    25 15 U.S.C. 78s(b)(2)(B).

    Pursuant to Section 19(b)(2)(B) of the Exchange Act,26 the Commission is providing notice of the grounds for disapproval under consideration. The Commission is instituting proceedings to allow for additional analysis of the proposal's consistency with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and to protect investors and the public interest.27 In light of the portfolio's potential exposure to the permitted investments identified above (including junior loans, ABS, MBS, and interests in investment pools in particular), the Commission seeks commenters' views on the sufficiency of the information provided in the proposed rule change to support a determination that the listing and trading of the Shares would be consistent with Section 6(b)(5) of the Exchange Act as modified by Amendment No. 1. The Commission notes that the Exchange proposes to exempt equity interests in investment pools from all of the requirements of Commentary .01(a)(1) to NYSE Arca Rule 8.600-E.In light of the portfolio's potential exposure to the permitted investments identified above, the Commission seeks commenters' views on the sufficiency of the information provided in the proposed rule change to support a determination that the listing and trading of the Shares would be consistent with Section 6(b)(5) of the Exchange Act as modified by Amendment No. 1.

    26Id.

    27 15 U.S.C. 78f(b)(5).

    IV. Procedure: Request for Written Comments

    Interested persons are invited to submit written views, data, and arguments concerning the foregoing, including whether the proposed rule change as modified by Amendment No. 1 is consistent with Section 6(b)(5) or any other provision of the Exchange Act, or the rules and regulations thereunder. Although there do not appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b-4 under the Exchange Act,28 any request for an opportunity to make an oral presentation.29

    28 17 CFR 240.19b-4.

    29 Section 19(b)(2) of the Exchange Act, as amended by the Securities Acts Amendments of 1975, Pub. L. 94-29 (June 4, 1975), grants the Commission flexibility to determine what type of proceeding—either oral or notice and opportunity for written comments—is appropriate for consideration of a particular proposal by a self-regulatory organization. See Securities Acts Amendments of 1975, Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975).

    Interested persons are invited to submit written data, views, and arguments regarding whether the proposal should be approved or disapproved by August 23, 2018. Any person who wishes to file a rebuttal to any other person's submission must file that rebuttal by September 6, 2018.

    Comments may be submitted by any of the following methods:

    Electronic Comments

    • Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or

    • Send an email to [email protected] Please include File Number SR-NYSEArca-2018-25 on the subject line.

    Paper Comments

    • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

    All submissions should refer to File Number SR-NYSEArca-2018-25. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's internet website (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission's Public Reference Room, 100 F Street NE, Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSEArca-2018-25 and should be submitted on or before August 23, 2018. Rebuttal comments should be submitted by September 6, 2018.

    For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.30

    30 17 CFR 200.30-3(a)(57).

    Robert W. Errett, Deputy Secretary.
    [FR Doc. 2018-16536 Filed 8-1-18; 8:45 am] BILLING CODE 8011-01-P
    SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83725; File No. SR-OCC-2017-020] Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing of Amendments No. 1 and 2 to Proposed Rule Change Concerning Enhanced and New Tools for Recovery Scenarios July 27, 2018.

    On December 18, 2017, The Options Clearing Corporation (“OCC”) filed with the Securities and Exchange Commission (“Commission”) proposed rule change SR-OCC-2017-020 (“Proposed Rule Change”) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),1 and Rule 19b-4 thereunder,2 concerning enhanced and new tools for recovery scenarios.3 The Proposed Rule Change was published for comment in the Federal Register on December 26, 2017.4 On March 22, 2018, the Commission instituted proceedings under Section 19(b)(2)(B)(i) of the Act 5 to determine whether to approve or disapprove the Proposed Rule Change.6 On June 20, 2018 the Commission designated a longer period for Commission action on proceedings to determine whether to approve or disapprove the Proposed Rule Change.7 On July 11, 2018, OCC filed Amendment No. 1 to the Proposed Rule Change. On July 12, 2018, OCC filed Amendment No. 2 to the Proposed Rule Change to supersede and replace Amendment No. 1 in its entirety, due to technical defects in Amendment No. 1. Therefore, the Initial Filing, as modified by Amendment No. 2, reflects the changes proposed.

    1 15 U.S.C. 78s(b)(1).

    2 17 CFR 240.19b-4.

    3 On December 8, 2017, OCC also filed this proposal as an advance notice SR-OCC-2017-809 (“Advance Notice”) with the Commission pursuant to Section 806(e)(1) of Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, entitled the Payment, Clearing, and Settlement Supervision Act of 2010 (12 U.S.C. 5465(e)(1)) and Rule 19b-4(n)(1)(i) of the Act (17 CFR 240.19b-4(n)(1)(i)). Notice of filing of the Advance Notice was published for comment in the Federal Register on January 23, 2018. Securities Exchange Act Release No. 82513 (Jan. 17, 2018), 83 FR 3244 (Jan. 23, 2018) (SR-OCC-2017-809).

    4 Securities Exchange Act Release No. 82531 (Dec. 19, 2017), 82 FR 61107 (Dec. 26, 2017) (SR-OCC-2017-020) (“Initial Filing”).

    5 15 U.S.C. 78s(b)(2)(B)(i).

    6See Securities Exchange Act Release No. 82926 (Mar. 22, 2018), 83 FR 13171 (Mar. 27, 2018) (SR-OCC-2018-020).

    7See Securities Exchange Act Release No. 83484 (Jun. 20, 2018), 83 FR 29846 (Jun. 26, 2018) (SR-OCC-2017-020).

    Pursuant to Section 19(b)(1) of the Act 8 and Rule 19b-4 thereunder 9 the Commission is publishing notice of these Amendments No. 1 and 2 to the Proposed Rule Change as described in Items I, II and III below, which Items have been prepared by OCC. The Commission is publishing this notice to solicit comments on the Proposed Rule Change, as modified by Amendments No. 1 and 2, from interested persons.

    8 15 U.S.C. 78s(b)(1).

    9 17 CFR 240.19b-4.

    I. Clearing Agency's Statement of the Terms of Substance of the Proposed Rule Change

    This proposed rule change by the OCC would make certain revisions to OCC's Rules and By-Laws to enhance OCC's existing tools to address the risks of liquidity shortfalls and credit losses and to establish new tools by which OCC could re-establish a matched book following a default. Each of the tools proposed herein is contemplated to be deployed by OCC in an extreme stress event that has placed OCC into a recovery or orderly wind-down scenario.

    II. Clearing Agency's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, OCC included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. OCC has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of these statements.

    Clearing Agency's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Background

    The purpose of this proposed rule change is to make certain revisions to OCC's Rules and By-Laws Laws that are designed to enhance OCC's existing tools to address the risks of liquidity shortfalls and credit losses and to establish tools by which OCC could re-establish a matched book following a default. Each of the tools proposed herein is contemplated to be deployed by OCC in an extreme stress event that has placed OCC into a recovery or orderly wind-down scenario. Each of the proposed revisions also is designed to further OCC's compliance, in whole or in part, with the provisions of the Commission's rules identified immediately below.

    On September 28, 2016, the Commission adopted amendments to Rule 17Ad-2210 and added new Rules 17Ad-22(e)(3)(ii), (e)(4)(viii), (e)(4)(ix), (e)(7)(ix), (e)(13), (e)(23)(i) and (e)(23)(ii) 11 pursuant to Section 17A of the Securities Exchange Act of 1934 12 and the Payment, Clearing, and Settlement Supervision Act of 2010 (“Payment, Clearing and Settlement Supervision Act”).13 In relevant part, these new rules collectively require a covered clearing agency (“CCA”), as defined by Rule 17Ad-22(a)(5),14 to establish, implement, maintain and enforce written policies and procedures reasonably designed to: (1) Maintain a risk management framework including plans for recovery and orderly wind-down necessitated by credit losses, liquidity shortfalls, general business risk losses or any other losses, (2) effectively identify, measure, monitor and manage its credit exposures to participants and those arising from its payment, clearing and settlement processes, including by addressing the allocation of credit losses a CCA might face if its collateral and other resources are insufficient to fully cover its credit exposures, (3) effectively identify, measure, monitor and manage credit exposures, including by describing the process to replenish any financial resource that a CCA may use following a default event or other event in which use of such resource is contemplated, (4) effectively identify, measure, monitor and manage liquidity risks that arises or is borne by the CCA by, at a minimum, describing the process for replenishing any liquid resource that a CCA may employ during a stress event, (5) ensure it has the authority and operational capacity to take timely action to contain losses and liquidity demands and continue to meet its obligations, (6) publicly disclose relevant rules and material procedures, including key aspects of its default rules and procedures, and (7) provide sufficient information to enable participants to identify and evaluate the risks, fees, and other material costs they incur by participating in the CCA. The relevant portions of each of these new requirements is restated below:

    10 17 CFR 240.17Ad-22.

    11 17 CFR 240.17Ad-22(e)(3)(ii), (e)(4)(viii), (e)(4)(ix), (e)(7)(ix), (e)(13), (e)(23)(i) and (e)(23)(ii).

    12 15 U.S.C. 78q-1.

    13 12 U.S.C. 5461 et seq.

    14 17 CFR 240.17Ad-22(a)(5).

    • Rule 17Ad-22(e)(3)(ii) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [m]aintain a sound risk management framework for comprehensively managing legal, credit, liquidity, operational, general business, investment, custody, and other risks that arise in or are borne by the [CCA], which . . . [i]ncludes plans for the recovery and orderly wind-down of the [CCA] necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses.” 15

    15 17 CFR 240.17Ad-22(e)(3)(ii).

    • Rule 17Ad-22(e)(4)(viii) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [e]ffectively identify, measure, monitor, and manage its credit exposures to participants and those arising from its payment, clearing, and settlement processes, including by . . . [a]ddressing allocation of credit losses the [CCA] may face if its collateral and other resources are insufficient to fully cover its credit exposures, including the repayment of any funds the [CCA] may borrow from liquidity providers.” 16

    16 17 CFR 240.17Ad-22(e)(v)(viii).

    • Rule 17Ad-22(e)(4)(ix) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [e]ffectively identify, measure, monitor, and manage its credit exposures to participants and those arising from its payment, clearing, and settlement processes, including by . . . [d]escribing the [CCA's] process to replenish any financial resources it may use following a default or other event in which use of such resources is contemplated.” 17

    17 17 CFR 240.17Ad-22(e)(4)(ix).

    • Rule 17Ad-22(e)(7)(ix) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to. . . [e]ffectively measure, monitor, and manage the liquidity risk that arises in or is borne by the [CCA], including measuring, monitoring, and managing its settlement and funding flows on an ongoing and timely basis, and its use of intraday liquidity by, at a minimum, doing the following . . . [d]escribing the [CCA's] process to replenish any liquid resources that the clearing agency may employ during a stress event.” 18

    18 17 CFR 240.17Ad-22(e)(7)(ix).

    • Rule 17Ad-22(e)(13) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [e]nsure the covered clearing agency has the authority and operational capacity to take timely action to contain losses and liquidity demands and continue to meet its obligations. . .” 19

    19 17 CFR 240.17Ad-22(e)(13).

    • Rule 17Ad-22(e)(23)(i) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [p]ublicly disclos[e] all relevant rules and material procedures, including key aspects of its default rules and procedures.” 20

    20 17 CFR 240.17Ad-22(e)(23)(i).

    • Rule 17Ad-22(e)(23)(ii) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to. . . [p]rovid[e] sufficient information to enable participants to identify and evaluate the risks, fees, and other material costs they incur by participating in the covered clearing agency.” 21

    21 17 CFR 240.17Ad-22(e)(23)(ii).

    OCC meets the definition of a CCA and is therefore subject to the requirements of the CCA rules, including new Rules 17Ad-22(e)(3)(ii), (e)(4)(viii), (e)(4)(ix), (e)(7)(ix), (e)(13), (e)(23)(i) and (e)(23)(ii).22

    22 17 CFR 240.17Ad-22(e)(3)(ii), (e)(4)(viii), (e)(4)(ix) and (e)(7)(ix).

    Proposed Changes Summary of Proposed Changes

    In order to enhance OCC's existing tools to address the risks of liquidity shortfalls and credit losses and to establish new tools by which OCC could re-establish a matched book following a default, OCC is proposing to make the following revisions to its Rules and By-Laws:

    (1) Revise the existing assessment powers in Section 6 of Article VIII of OCC's By-Laws, specifically to:

    (a) Establish a rolling “cooling-off period” that would be triggered by the payment of a proportionate charge against the Clearing Fund (“triggering proportionate charge”), during which period the aggregate liability of a Clearing Member to replenish the Clearing Fund (inclusive of assessments) would be 200% of the Clearing Member's required contribution as of the time immediately preceding the triggering proportionate charge;

    (b) Clarify that a Clearing Member that chooses to terminate its membership status during a cooling-off period will not be liable for replenishment of the Clearing Fund immediately following the expiration of such cooling-off period, provided that the withdrawing Clearing Member satisfies enumerated criteria, including providing notice of such termination by no later than the end of the cooling-off period and by closing-out and/or transferring of all its open positions with OCC by no later than the last day of the cooling-off period; and

    (c) Delineate between the obligation of a Clearing Member to replenish its contributions to the Clearing Fund and its obligations to meet additional “assessments” that may be levied following a proportionate charge to the Clearing Fund.

    (2) Adopt a new Rule 1011 23 that would provide OCC with discretionary authority to call for voluntary payments from non-defaulting Clearing Members in a circumstance where one or more Clearing Members has already defaulted and OCC has determined that it may not have sufficient resources to satisfy its obligations and liabilities resulting from such default.24 Rule 1011 also would establish that OCC would prioritize compensation of Clearing Members that made voluntary payments from any amounts recovered from the defaulted Clearing Members.

    23 OCC is amending the Initial Filing to renumber proposed Rule 1009 to proposed Rule 1011 and updated related cross references in Rule 1111 to reflect this renumbering. OCC is also amending the Default Management Policy as submitted in the Initial Filing to update similar cross references.

    24 Under the Initial Filing, OCC's authority to conduct Partial Tear-Ups, as well as call for voluntary payments or to conduct Voluntary Tear-Ups, would be conditioned in part on OCC having determined that, notwithstanding the availability of any remaining resources, OCC may not have sufficient resources to satisfy its obligations and liabilities resulting from such default. Under the Initial Filing, the proposed text of Rules 1009(a), 1111(a) and 1111(b) incorrectly transcribed this condition to require that OCC determine that, notwithstanding the availability of any remaining resources, OCC does not have sufficient resources to satisfy its obligations and liabilities resulting from such default (emphasis added). In each such instance, OCC is amending the proposed text of Rules 1009(a) (which is being renumbered as Rule 1011(a)), 1111(a) and 1111(b) in Exhibit 5B of the Initial Filing to delete the word “does” and insert in its place the word “may.”

    (3) Adopt a new Rule 1111 that would provide authority to:

    (a) Allow OCC to call for voluntary tear-ups (“Voluntary Tear-Up,” as defined below) of non-defaulting Clearing Member and/or customer positions at any time following the suspension or default of a Clearing Member, with the scope of any such Voluntary Tear-Ups being determined by the Risk Committee of OCC's Board (“Risk Committee”);

    (b) Allow OCC's Board to vote to tear-up the “Remaining Open Positions” (defined below) of a defaulted Clearing Member, as well as any “Related Open Positions” (defined below) in a circumstance where OCC has attempted one or more auctions of such defaulted Clearing Member's remaining open positions and OCC has determined that it may not have sufficient resources to satisfy its obligations and liabilities resulting from such default with the scope of any such tear-up (“Partial Tear-Up”) being determined by the Risk Committee; and

    (c) Allow OCC's Board to vote to re-allocate losses, costs and fees imposed upon holders of positions extinguished in a Partial Tear-Up through a special charge levied against remaining non-defaulting Clearing Members.

    (4) Revise the descriptions and authorizations in Article VIII of OCC's By-Laws concerning the use of the Clearing Fund to reflect the discretion of OCC to use remaining Clearing Fund contributions to re-allocate losses imposed on non-defaulting Clearing Members and customers from a Voluntary Tear-Up or a mandatory tear-up (“Partial Tear-Up,” as defined below).

    Discussion of Proposed Changes

    Each of the proposed revisions to OCC's Rules and By-Laws is described in more detail in the following sub-sections:

    1. Proposed Changes to OCC's Assessment Powers a. Current Assessment Powers

    OCC's current assessment powers are described in Section 6 of Article VIII of OCC's By-Laws. Section 6 establishes a general requirement for each Clearing Member to promptly make good any deficiency in its required contribution to the Clearing Fund whenever an amount is paid out of its Clearing Fund contribution (whether by proportionate charge or otherwise).25 In this regard, a Clearing Member's obligation to replenish the Clearing Fund is not currently subject to any pre-determined limit. Notwithstanding the foregoing, a Clearing Member can limit the amount of its liability for replenishing the Clearing Fund (at an additional 100% of the amount of its then-required Clearing Fund contribution) by winding-down its clearing activities and terminating its status as a Clearing Member. Any Clearing Member seeking to so limit its liability for replenishing the Clearing Fund must: (i) notify OCC in writing not later than the fifth business day after the proportionate charge that it is terminating its status as a Clearing Member, (ii) not initiate any opening purchase or opening writing transaction, and, if the Clearing Member is a Market Loan Clearing Member or a Hedge Clearing Member, not initiate any Stock Loan transaction, through any of its accounts, and (iii) close out or transfer all of its open positions as promptly as practicable after giving notice to OCC. Thus, withdrawal from clearing membership is the only means by which a Clearing Member currently can limit its liability for replenishing the Clearing Fund.

    25 Under Article VIII, Section 6 of OCC's By-Laws, OCC currently has authority to assess proportionate charges against Clearing Members' contributions to the Clearing Fund in certain enumerated situations. For example, Section 6 generally provides that if the conditions regarding a Clearing Member default specified in subparagraphs (a)(i) through (vi) of Article VIII, Section 5 of OCC's By-Laws are satisfied, OCC will make good resulting losses or expenses that are suffered by OCC by applying the defaulting Clearing Member's Clearing Fund contribution after first applying other funds available to OCC in the accounts of the Clearing Member. If the sum of the obligations, however, exceeds the total Clearing Fund contribution and other funds of the defaulting Clearing Member available to OCC, then OCC will charge the amount of the remaining deficiency on a proportionate basis against all non-defaulting Clearing Members' required contributions to the Clearing Fund at the time. Section 5(b) of Article VIII of OCC's By-Laws similarly provides for proportionate charges against Clearing Members' contributions to the Clearing Fund when certain conditions are met that involve a failure by a bank or a securities or commodities clearing organization to perform obligations to OCC when they are due.

    b. Proposed Changes to Assessment Powers

    OCC proposes to revise Section 6 of Article VIII of OCC's By-Laws to make three primary modifications regarding its existing authority to assess proportionate charges against Clearing Members' contributions to the Clearing Fund. First, the proposal introduces an automatic minimum fifteen calendar day “cooling-off” period that begins when a proportionate charge is assessed by OCC against Clearing Members' Clearing Fund contributions. While the cooling-off period will continue for a minimum of fifteen consecutive calendar days, if one or more of the events described in clauses (i) through (iv) of Article VIII, Section 5(a) of OCC's By-Laws occur(s) during that fifteen calendar day period and result in one or more proportionate charges against the Clearing Fund, the cooling-off period shall be extended through either (i) the fifteenth calendar day from the date of the most recent proportionate charge resulting from the subsequent event, or (ii) the twentieth day from the date of the proportionate charge that initiated the cooling-off period, whichever is sooner.

    During a cooling-off period, each Clearing Member would have its aggregate liability to replenish the Clearing Fund capped at 200% of the Clearing Member's then-required contribution to the Clearing Fund. Once the cooling-off period ends each remaining Clearing Member would be required to replenish the Clearing Fund in the amount necessary to meet its then-required contribution. Once the cooling-off period ends, any remaining losses or expenses suffered by OCC as a result of any event described in clauses (i) through (iv) of Article VIII, Section 5(a) of OCC's By-Laws that occurred during such cooling-off period could not be charged against the amounts Clearing Members have contributed to replenish the Clearing Fund upon the expiration of the cooling-off period.26

    26 After a cooling-off period has ended, the occurrence of any event described in clauses (i) through (iv) of Article VIII, Section 5(a) of OCC's By-Laws that results in a proportionate charge against the Clearing Fund would trigger a new cooling off period, and thusly, a cap of 200% of each Clearing Member's then-required contribution would again apply.

    Second, in connection with the cooling-off period, the proposal would extend the time frame within which a Clearing Member may provide a termination notice to OCC to avoid liability for replenishment of the Clearing Fund after the cooling-off period and would modify the obligations of such a terminating Clearing Member for closing-out and transferring its remaining open positions. Specifically, to effectively terminate its status as a Clearing Member and not be liable for replenishing the Clearing Fund after the cooling-off period, a Clearing Member would be required to: (i) notify OCC in writing of its intent to terminate not later than the last day of the cooling-off period, (ii) not initiate any opening purchase or opening writing transaction, and, if the Clearing Member is a Market Loan Clearing Member or a Hedge Clearing Member, not initiate any Stock Loan transaction, through any of its accounts, and (iii) close-out or transfer all of its open positions by no later than the last day of the cooling-off period. If a Clearing Member fails to satisfy all of these conditions by the end of a given cooling-off period, it would not have completed all of the requirements necessary to terminate its status as a Clearing Member under Article VIII, Section 6 of OCC's By-Laws and therefore it would remain subject to the obligation to replenish the Clearing Fund after the end of the cooling-off period.

    Third, the proposal would clarify the distinction between “replenishment” of the Clearing Fund and a Clearing Member's obligation to answer “assessments.” In this context, the term “replenish” (and its variations) shall to refer to a Clearing Member's standing duty, following any proportionate charge against the Clearing Fund, to return its Clearing Fund contribution to the amount required from such Clearing Member for the month in question.27 The term “assessment” (and its variations) shall refer to the amount, during any cooling-off period, that a Clearing Member would be required to contribute to the Clearing Fund in excess of the amount of the Clearing Member's pre-funded required Clearing Fund contribution.

    27 This assumes that the proportionate charge resulted in the Clearing Member's actual Clearing Fund contribution dropping below the amount of its required contribution (i.e., that the Clearing Member did not have excess above its required contribution that was sufficient to cover the amount of the proportionate charge allocated to such Clearing Member).

    Proposed Addition of Ability To Request Voluntary Payments

    OCC proposes to add new Rule 1011, which will provide a framework by which OCC could receive voluntary payments in a circumstance where a Clearing Member has defaulted and OCC has determined that, notwithstanding the availability of any remaining resources under OCC Rules 707, 1001, 1104 through 1107, 2210 and 2211,28 OCC may not have sufficient resources to satisfy its obligations and liabilities resulting from such default. Under new Rule 1011, OCC will initiate a call for voluntary payments by issuing a “Voluntary Payment Notice” inviting all non-defaulting Clearing Members to make payments to the Clearing Fund in addition to any amounts they are otherwise required to contribute pursuant to Rule 1001. The Voluntary Payment Notice would specify the terms applicable to any voluntary payment, including but not limited to, that any voluntary payment may not be withdrawn once made, that no Clearing Member shall be obligated to make a voluntary payment and that OCC shall retain full discretion to accept or reject any voluntary payment. Rule 1011 specifies that if OCC subsequently recovers from the defaulted Clearing Member or the estate(s) of the defaulted Clearing Member(s), OCC would seek to compensate first from such recovery all non-defaulting Clearing Members that made voluntary payments (and if the amount recovered from the defaulted Clearing Member(s) is less than the aggregate amount of voluntary payments, non-defaulting Clearing Members that made voluntary payments each would receive a percentage of the recovery that corresponds to that Clearing Member's percentage of the total amount of voluntary payments received).

    28 Rule 707 addresses the treatment of funds in a Clearing Member's X-M accounts. Rule 1001 addresses the size of OCC's Clearing Fund and the amount of a Clearing Member's contribution. Rules 1104 through 1107 concern the treatment of the portfolio of a defaulted Clearing Member. Rules 2210 and 2211 concern the treatment of Stock Loan positions of a defaulted Clearing Member.

    Proposed Addition of Ability To Conduct Voluntary Tear-Ups

    OCC proposes to add new Rule 1111, which, in relevant part, will establish a framework by which non-defaulting Clearing Members and non-defaulting customers of Clearing Members could be given an opportunity to voluntarily extinguish (i.e., voluntarily tear-up) their open positions at OCC in a circumstance where a Clearing Member has defaulted and OCC has determined that, notwithstanding the availability of any remaining resources under OCC Rules 707, 1001, 1104 through 1107, 2210 and 2211, OCC may not have sufficient resources to satisfy its obligations and liabilities resulting from such default.

    While Risk Committee approval is not needed to commence a voluntary tear-up, the Risk Committee would be responsible for determining the appropriate scope of each voluntary tear-up. To ensure OCC retains sufficient flexibility to effectively deploy this tool in an extreme stress event, proposed Rule 1111(c) is drafted to provide the Risk Committee with discretion to determine the appropriate scope of each voluntary tear-up.29 New Rule 1111(c) also would impose standards designed to circumscribe the Risk Committee's discretion, requiring that any determination regarding the scope of a voluntary tear-up shall (i) be based on then-existing facts and circumstances, (ii) be in furtherance of the integrity of OCC and the stability of the financial system, and (iii) take into consideration the legitimate interests of Clearing Members and market participants.

    29 Notwithstanding the discretion that would be afforded by the text of proposed Rule 1111(c), OCC anticipates that the scope of voluntary tear-ups likely would be dictated by the cleared contracts remaining in the portfolio(s) of the defaulted Clearing Member(s).

    Once the Risk Committee has determined the scope of the Voluntary Tear-Up, OCC will initiate the call for voluntary tear-ups by issuing a “Voluntary Tear-Up Notice.” The Voluntary Tear-Up Notice shall inform all non-defaulting Clearing Members of the opportunity to participate in a Voluntary Tear-Up.30 The Voluntary Tear-Up Notice would specify the terms applicable to any voluntary tear-up, including but not limited to, that no Clearing Member or customers of a Clearing Member shall be obligated to participate in a voluntary tear-up and that OCC shall retain full discretion to accept or reject any voluntary tear-up.

    30 Since OCC does not know the identities of Clearing Members' customers, OCC would depend on each Clearing Member to notify its customers with positions in scope of the Voluntary Tear-Up of the opportunity to participate in such tear-up.

    OCC is not proposing a tear-up process that would require the imposition of “gains haircutting” (i.e., the reduction of unpaid gains) on a portion of OCC's cleared contracts.31 Instead, OCC has determined that its tear-up process—for both Voluntary Tear-Ups as well as Partial Tear-Ups—should be initiated on a date sufficiently in advance of the exhaustion of OCC's financial resources such that OCC would be expected to have adequate remaining resources to cover the amount it must pay to extinguish the positions of Clearing Members and customers without haircutting gains.32

    31 In general, forced gains haircutting is a tool that can be more easily applied to products whose gains are settled at least daily, like futures through an exchange of variation margin, and by central counterparties with comparatively large daily settlement flows. Listed options, which constitute the vast majority of the contracts cleared by OCC, do not have daily settlement flows and any attempt to reduce the “unrealized gains” of a listed options contract would require the reduction of the option premium that is embedded within the required margin (such a process would effectively require haircutting the listed option's initial margin).

    32 OCC anticipates that it would determine the date on which to initiate Partial Tear-Ups by monitoring its remaining financial resources against the potential exposure of the remaining unauctioned positions from the portfolio(s) of the defaulted Clearing Member(s).

    In OCC's proposed tear-up process, the holders of torn-up positions would be assigned a Tear-Up Price and OCC would draw on its remaining financial resources in order to extinguish the torn-up positions at the assigned Tear-Up Price without forcing a reduction in the amount of unpaid value of such positions. OCC is amending the Initial Filing to clarify that while OCC does not intend, in the first instance, for its tear-up process to serve as a means of loss allocation, circumstances may arise such that, despite best efforts, OCC has inadequate remaining financial resources to extinguish torn-up positions at their assigned Tear-Up Price without forcing a reduction in the amount of unpaid value of such positions (e.g., despite best efforts, market movements not accounted for by monitoring, additional Clearing Member defaults occur immediately preceding a tear-up). In such circumstances, despite best efforts, OCC would use its partial tear-up process as a means of loss allocation.33

    33 This change does not impact the statutory basis for the proposed rule change.

    The proposed changes would provide OCC with two separate and non-exclusive means of equitably re-allocating the losses, costs or expenses imposed upon the holders of torn-up positions as a result of the tear-up(s). First, the proposed changes to Article VIII would provide OCC discretion to use remaining Clearing Fund contributions to re-allocate losses imposed on non-defaulting Clearing Members and customers from such tear-up(s). Second, Rule 1111(a) would provide that if OCC subsequently recovers from the defaulted Clearing Member or the estate(s) of the defaulted Clearing Member(s) and the amount of such recovery exceeds the amount OCC received in voluntary payments, then non-defaulting Clearing Members and non-defaulting customers that voluntarily tore-up open positions and incurred losses from such tear-ups would be repaid from the amount of the recovery in excess of the amount OCC received in voluntary payments.34 If the amount recovered is less than the aggregate amount of Voluntary Tear-Up, each non-defaulting Clearing Member and non-defaulting customer that incurred losses from voluntarily torn-up positions would be repaid in an amount proportionate to the percentage of its total amount of losses, costs and fees imposed on Clearing Members or customers as a result of the Voluntary Tear-Ups.

    34 In order to effect re-allocation of the losses, costs or expenses imposed upon the holders of torn-up positions, OCC expects that after it has completed its tear-up process and re-established a matched book, holders of both voluntarily torn-up and mandatorily torn-up positions would be provided with a limited opportunity to re-establish positions in the contracts that were voluntarily or mandatorily extinguished. After the expiration of such period, OCC would seek to collect the information on the losses, costs or expenses that had been imposed on the holders of torn-up positions. Based on the information collected, OCC would determine whether it can reasonably determine the losses, costs and expenses sufficiently to re-allocate such amounts.

    With respect to Voluntary Tear-Ups, new Rule 1111(h) would clarify that no action or omission by OCC pursuant to and in accordance Rule 1111 shall constitute a default by OCC.

    Proposed Addition of Ability To Conduct Partial Tear-Ups

    OCC proposes to add new Rule 1111, which, in relevant part, will provide the Board with discretion to extinguish the remaining open positions of any defaulted Clearing Member or customer of such defaulted Clearing Member(s) (such positions, “Remaining Open Positions”), as well as any related open positions as necessary to mitigate further disruptions to the markets affected by the Remaining Open Positions (such positions, “Related Open Positions”), in a circumstance where a Clearing Member has defaulted and OCC has determined that, notwithstanding the availability of any remaining resources under OCC Rules 707, 1001, 1104 through 1107, 2210 and 2211, OCC may not have sufficient resources to satisfy its obligations and liabilities resulting from such default (such tear-ups hereinafter collectively referred to as “Partial Tear-Ups”). Like the determination for Voluntary Tear-Ups, the Risk Committee shall determine the appropriate scope of each Partial Tear-Up and such determination shall (i) be based on then-existing facts and circumstances, (ii) be in furtherance of the integrity of OCC and the stability of the financial system, and (iii) take into consideration the legitimate interests of Clearing Members and market participants. Once the Risk Committee has determined the scope of the Partial Tear-Up, OCC will initiate the Partial Tear-Up process by issuing a “Partial Tear-Up Notice.” The Partial Tear-Up Notice shall (i) identify the Remaining Open Positions and Related Open Positions designated for tear-up, (ii) identify the open positions of non-defaulting Clearing Members and non-defaulting customers that will be subject to Partial Tear-Up (such positions, “Tear-Up Positions”), (iii) specify the termination price (“Partial Tear-Up Price”) for each position to be torn-up, and (iv) list the date and time as of which the Partial Tear-Up will occur.35 With regard to the date and time of a Partial Tear-Up, Rule 1111(d) specifies that the Risk Committee shall set the date and time. With regard to the Partial Tear-Up Price, OCC anticipates that it is likely to use the last established end-of-day settlement price, in accordance with its existing practices concerning pricing and valuation. However, given that it is not possible to know in advance the precise circumstances that would cause OCC to conduct a tear-up, Rule 1111(f) has been drafted to allow OCC to exercise reasonable discretion, if necessary, in establishing the Partial Tear-Up Price by some means other than its existing practices concerning pricing and valuation.36 Specifically, Rule 1111(f) would require that OCC, in exercising any such discretion, would act in good faith and in a commercially reasonable manner to adopt methods of valuation expected to produce reasonably accurate substitutes for the values that would have been obtained from the relevant market if it were operating normally, including but not limited to the use of pricing models that use the market price of the underlying interest or the market prices of its components. Rule 1111(f) further specifies that OCC may consider the same information set forth in subpart (c) of Section 27, Article VI of OCC's By-Laws.37

    35 Since OCC does not know the identities of Clearing Members' customers, OCC would depend on each Clearing Member to notify its customers with positions in scope of the Partial Tear-Up of the possibility of tear-up.

    36 For example, OCC has observed certain rare circumstances in which a closing price for an underlying security of an option may be stale or unavailable. A stale or unavailable closing price could be the result of a halt on trading in the underlying security, or a corporate action resulting in a cash-out or conversion of the underlying security (but that has not yet been finalized), or the result of an ADR whose underlying security is being impacted by certain provisions under foreign laws. OCC would consider the presence of these factors on its end-of-day prices in determining whether use of the discretion that would be afforded under proposed Rule 1111(f) might be warranted.

    37 In relevant part, subpart (c) reads as follows: “In determining a close-out amount, the Corporation may consider any information that it deems relevant, including, but not limited to, any of the following: (1) Prices for underlying interests in recent transactions, as reported by the market or markets for such interests; (2) quotations from leading dealers in the underlying interest, setting forth the price (which may be a dealing price or an indicative price) that the quoting dealer would charge or pay for a specified quantity of the underlying interest; (3) relevant historical and current market data for the relevant market, provided by reputable outside sources or generated internally; and (4) values derived from theoretical pricing models using available prices for the underlying interest or a related interest and other relevant data. Amounts stated in a currency other than U.S. Dollars shall be converted to U.S. Dollars at the current rate of exchange, as determined by the Corporation. A position having a positive close-out value shall be an `asset position' and a position having a negative close-out value shall be a `liability position.' ”

    The scope of any Partial Tear-Up will be determined in accordance with Rule 1111(e).38 With respect to the extinguishment of Remaining Open Positions, OCC will designate Tear-Up Positions in identical Cleared Contracts and Cleared Securities on the opposite side of the market and in an aggregate amount equal to that of the Remaining Open Positions. OCC will only designate Tear-Up Positions in the accounts of non-defaulting Clearing Members (inclusive of such Clearing Members' customer accounts) with an open position in the applicable Cleared Contract or Cleared Security.39 Tear-Up Positions shall be designated and applied by OCC on a pro rata basis across all the identical positions in Cleared Contracts and Cleared Securities on the opposite side of the market in the accounts of non-defaulted Clearing Members and their customers.40

    38 OCC is amending the Initial Filing to reflect that after further evaluation of its proposed recovery tools and the proposed tear-up process, OCC does not believe there would be a need to assign or transfer any hedging transactions established with relation to tear-up positions. OCC is therefore amending the Initial Filing to remove text in proposed Rule 1111(e) concerning proposed authority for OCC to offer to assign or transfer any hedging transactions related to Remaining Open Positions with related Tear-Up Positions. This change does not impact the statutory basis for the proposed rule change.

    39 Since, as stated in the Initial Filing, the objective of Partial Tear-Ups is to extinguish the Remaining Open Positions cleared by the defaulted Clearing Member(s) or customer of such defaulted Clearing Member(s) (emphasis added), OCC does not believe there would be a need to designate Tear-Up Positions to the non-defaulted customers of a defaulted Clearing Member. OCC is therefore amending the Initial Filing to remove references to non-defaulted customers of defaulted Clearing Members.

    40 OCC is amending the Initial Filing to clarify that a non-defaulted Clearing Member would be required to allocate the assigned Tear-Up Positions on a pro rata basis across those customers that have open positions in such Cleared Contract or Cleared Security in such account, and for any listed option positions being extinguished, allocation across customer accounts should occur in accordance with such Clearing Member's procedures for allocating exercises and assignments. This change does not impact the statutory basis for the proposed rule change.

    Rule 1111(e)(iii) provides that every Partial Tear-Up position is automatically terminated upon and with effect from the Partial Tear-Up Time, without the need for any further step by any party to such Cleared Contract or Cleared Security, and that upon termination, either OCC or the relevant Clearing Member (as the case may be) shall be obligated to pay the other the applicable Partial Tear-Up Price. Rule 1111(e)(iii) further provides that the corresponding open position shall be deemed terminated at the Partial Tear-Up Price.41

    41 OCC is amending the Initial Filing and the proposed text of Rule 1111(e)(iii) to clarify that if, in certain circumstances discussed above (see fn. 27 and associated text), OCC, in its discretion, determines that its remaining resources are inadequate to pay the applicable Partial Tear-Up Price for each position being extinguished in the Partial Tear-Up, OCC shall be obligated to pay each relevant Clearing Member a pro rata amount of the applicable Partial Tear-Up Price based on OCC's remaining resources, and the relevant Clearing Member shall have a claim against the Corporation for the value of the difference between the pro rata amount received and the Partial Tear-Up Price. This change does not impact the statutory basis for the proposed rule change.

    Rule 1111(g) provides that to the extent losses imposed upon non-defaulting Clearing Members and non-defaulting customers resulting from a Partial Tear-Up can reasonably be determined, the Board may elect to re-allocate such losses among all non-defaulting Clearing Members through a special charge to all non-defaulting Clearing Members in an amount corresponding to each such non-defaulting Clearing Member's proportionate share of the variable amount of the Clearing Fund at the time such Partial Tear-Up is conducted.42

    42 For the avoidance of doubt, the special charge would be distinct and separate from a Clearing Member's obligation to satisfy Clearing Fund assessments, and therefore, would not be subject to the aforementioned assessment cap in the amount of 200% of a Clearing Member's then-required contribution to the Clearing Fund.

    With respect to Partial Tear-Ups, new Rule 1111(h) would clarify that no action or omission by OCC pursuant to and in accordance Rule 1111 shall constitute a default by OCC.

    2. Statutory Basis

    Section 17A(b)(3)(F) of the Securities Exchange Act of 1934 (“Act”),43 requires, among other things, that the rules of a clearing agency be designed to foster cooperation and coordination with persons engaged in the clearance and settlement of securities transactions, to remove impediments to and perfect the mechanism of a national system for the prompt and accurate clearance and settlement of securities transactions, and, in general, to protect investors and the public interest. OCC believes that the proposed rule change is consistent with the requirements of Section 17A(b)(3)(F) of the Act 44 and the rules thereunder applicable to OCC for the reasons set forth below.

    43 15 U.S.C. 78q-1(b)(3)(F).

    44Id.

    As stated above, each of the changes is designed to provide OCC with tools to address the risks OCC might confront in a recovery and orderly wind-down scenario. In this regard, the proposed changes are designed to further address the risks of liquidity shortfalls and credit losses resulting from a Clearing Member default or certain other loss events and to establish tools to enable OCC to re-establish a matched book and limit OCC's potential exposure to losses from a Clearing Member default, in each case as might result from an unprecedented loss scenario that exceeds OCC's standard risk management and default management procedures. OCC's process in crafting the proposed changes was informed by published guidance from OCC's primary regulators (the Commission and the Commodity Futures Trading Commission), the publications of key international organizations (including the Bank for International Settlements, the International Organization of Securities Commissions and the Financial Stability Board) and the publications of key industry trade organizations. OCC's proposal was further informed by conversations with, among others, OCC's Board, OCC's Risk Committee, Clearing Members and market participants.

    Informed by these perspectives, OCC has crafted the proposed changes with the aim of enhancing its ability to address an unprecedented loss event but also, to the extent possible, providing a reasonable amount of certainty to Clearing Members, customers and other stakeholders about the potential consequences of such an event and the resources and tools that would be expected to be available to OCC in support of its clearing operations.45 Accordingly, the proposed changes should leave Clearing Members, customers and other stakeholders in a position to better evaluate the risks and benefits of clearing in order to facilitate their own risk management, and to the extent applicable, their own regulatory and capital considerations. The proposed changes also seek to avoid a result that would force only particular clearing participants to shoulder certain losses in an extreme stress scenario (i.e., holders of positions extinguished in Partial Tear-Ups),46 and instead leaves OCC and its Board with discretionary tools that could provide a more equitable method of allocating the losses from such an event more broadly, consistent with the general principle of mutualized loss that upon which central clearing rests. In this regard, OCC believes the proposed changes foster cooperation and coordination with participants in the clearing system, consistent with Section 17A(b)(3)(F) of the Act.47

    45 OCC notes that the very nature of an extreme stress and unprecedented loss event means that its impact is difficult to predict and quantify in advance.

    46 Absent a means of re-allocating the potential losses, costs and fees imposed upon holders of positions extinguished during tear-ups, the holders of such positions would be left to individually address such losses, costs and fees.

    47 15 U.S.C. 78q-1(b)(3)(F).

    As stated above, the proposed changes are designed to enable OCC to further address the risks of liquidity shortfalls and credit losses resulting from a Clearing Member default or certain other loss events and to re-establish a matched book and limit OCC's potential exposure to losses from a Clearing Member default, in each case as might result from an unprecedented loss scenario that exceeds OCC's standard risk management and default management procedures. OCC believes that the proposed changes will facilitate its ability to fully allocate, and ultimately extinguish, the loss so that it has a better opportunity of withstanding an extreme stress scenario without sacrificing its viability as a going concern or its ability to continue to provide its critical clearing services. In this regard, OCC believes that the proposed changes remove impediments to and perfect the mechanism of a national system for the prompt and accurate clearance and settlement of securities transactions, consistent with Section 17A(b)(3)(F) of the Act.48

    48Id.

    The proposed changes are designed to enhance the stability of the clearing system generally and are aimed at ensuring that OCC has adequate tools and resources to better protect market participants from the risks of extreme stress scenarios and unprecedented loss events. In this regard, OCC believes that the proposed changes are reasonably designed to protect investors and the public interest, consistent with Section 17A(b)(3)(F) of the Act.49

    49Id.

    The proposed changes also are designed to further OCC's compliance, in whole or in part, with the provisions of the Commission's rules discussed immediately below:

    Recovery and Orderly Wind-Down

    In relevant part, Rule 17Ad-22(e)(3)(ii) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . plan[] for the recovery and orderly wind-down of the [CCA] necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses.” 50 As stated above, each of the proposed changes is designed to provide OCC with tools to address the risks OCC might confront in a recovery and orderly wind-down scenario.51 Consistent with the requirements of Rule 17Ad-22(e)(3)(ii), the proposed tools would enable OCC to better address the risks of liquidity shortfalls and credit losses resulting from a Clearing Member default or certain other loss events and, if necessary, to ultimately re-establish a matched book in a recovery or orderly wind-down scenario.52 In this context, the proposed changes serve as a critical component of OCC's recovery and orderly wind-down plan. As a result, in OCC's view, the proposed changes are consistent with the requirements of Rule 17Ad-22(e)(3)(ii) as to the recovery and orderly wind-down plan.53

    50 17 CFR 240.17Ad-22(e)(3)(ii).

    51 Indeed, the OCC's separately filed recovery and orderly wind-down plan identifies OCC's assessment powers, ability to call for voluntary payments, ability to call for Voluntary Tear-Ups and ability to impose Partial Tear-Ups among its “Recovery Tools.” OCC has filed a proposed rule change with the Commission in connection with this proposal. See Securities Exchange Act Release No. 82352 (December 19, 2017), 82 FR 61072 (December 26, 2017) (SR-OCC-2017-021). On March 22, 2018, the Commission instituted proceedings to determine whether to approve or disapprove the proposed rule change. See Securities Exchange Act Release No. 82927 (March 22, 2018), 83 FR 13176 (March 27, 2018) (SR-OCC-2017-021).

    52 17 CFR 240.17Ad-22(e)(3)(ii).

    53 17 CFR 240.17Ad-22(e)(3)(ii).

    Allocation of Credit Losses Above Available Resources

    In relevant part, Rule 17Ad-22(e)(4)(viii) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [a]ddress[ ] allocation of credit losses the [CCA] may face if its collateral and other resources are insufficient to fully cover its credit exposures . . .” 54 The proposed changes would provide OCC with three distinct tools that could be used to allocate any credit losses OCC may face in excess of collateral and other resources available to OCC. First, new Rule 1011 would provide a framework by which OCC could receive voluntary payments in a circumstance where a Clearing Member has defaulted and OCC has determined that, notwithstanding the availability of any remaining resources under OCC Rules 707, 1001, 1104 through 1107, 2210 and 2211,55 OCC may not have sufficient resources to satisfy its obligations and liabilities resulting from such default. Second, new Rule 1111 would establish a framework by which non-defaulting Clearing Members and non-defaulting customers of Clearing Members could be given an opportunity to participate in Voluntarily Tear-Ups in a circumstance where a Clearing Member has defaulted and OCC has determined that, notwithstanding the availability of any remaining resources under OCC Rules 707, 1001, 1104 through 1107, 2210 and 2211, OCC may not have sufficient resources to satisfy its obligations and liabilities resulting from such default. Finally, new Rule 1111 also would provide the Board with discretion to mandatorily tear-up Remaining Open Positions and Related Open Positions, in a circumstance where a Clearing Member has defaulted and OCC has determined that, notwithstanding the availability of any remaining resources under OCC Rules 707, 1001, 1104 through 1107, 2210 and 2211, OCC may not have sufficient resources to satisfy its obligations and liabilities resulting from such default.56 In OCC's view, each of these tools could be deployed by OCC, if necessary, to allocate credit losses in excess of the collateral and other resources available to OCC, in accordance with Rule 17Ad-22(e)(4)(viii).57

    54 17 CFR 240.17Ad-22(e)(v)(viii).

    55 Rule 707 addresses the treatment of funds in a Clearing Member's X-M accounts. Rule 1001 addresses the size of OCC's Clearing Fund and the amount of a Clearing Member's contribution. Rules 1104 through 1107 concern the treatment of the portfolio of a defaulted Clearing Member. Rules 2210 and 2211 concern the treatment of Stock Loan positions of a defaulted Clearing Member.

    56 Rule 1111(g), which would provide the Board authority to equitably re-allocate losses, costs and fees directly imposed as a result of a Partial Tear-Up among all non-defaulting Clearing Members through a special charge, would serve as a discretionary tool to redistribute the credit losses allocated through Partial Tear-Up.

    57 17 CFR 240.17Ad-22(e)(v)(viii).

    Replenishment of Financial Resources Following a Default

    In relevant part, Rule 17Ad-22(e)(4)(ix) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [d]escrib[e] the [CCA's] process to replenish any financial resources it may use following a default or other event in which use of such resources is contemplated.” 58 OCC's Clearing Members have a standing obligation to replenish the Clearing Fund following any proportionate charge. The proposed changes would establish a rolling cooling-off period, triggered by the payment of a proportionate charge against the Clearing Fund, during which period the aggregate liability of a Clearing Member to replenish the Clearing Fund (inclusive of assessments) would be 200% of the Clearing Member's required contribution as of the time immediately preceding the triggering proportionate charge. Compared to the current requirement under which a Clearing Member may cap its liability to proportionate charges at an additional 100% of its then-required contribution, a Clearing Member would instead be permitted to cap its liability for proportionate charges at an additional 200% of its then-required Clearing Fund contribution.

    58 17 CFR 240.17Ad-22(e)(4)(ix).

    OCC believes that the proposed approach improves predictability for OCC and for Clearing Members regarding the size of Clearing Fund contributions that are likely to be subject to assessments for proportionate charges. Additionally, replacing the five business day withdrawal period with the withdrawal period commensurate with the cooling-off period (which, as proposed would be a minimum of fifteen calendar days) would give Clearing Members a more reasonable period in which to meet the wind-down and termination requirements necessary to cap their liability. OCC believes that this would afford them greater certainty regarding their maximum liability with respect to the Clearing Fund during extreme stress events, which in turn, facilitates Clearing Members' management of their own risk management, and to the extent applicable, regulatory capital considerations. And OCC believes this increased predictability would also be beneficial to OCC by helping it to more reliably understand the amount of Clearing Fund contributions that will likely be available to it after a proportionate charge is assessed.59

    59 Under the existing approach, it is less certain from OCC's standpoint regarding whether Clearing Members would reasonably be able to cap their liability to proportionate charges within five business days.

    OCC believes that the relative certainty provided by the proposed cooling-off period and 200% cap on assessments ultimately could reduce the risks of successive or “cascading” defaults, in which the financial demands on remaining non-defaulting Clearing Members to continually replenish OCC's Clearing Fund (and similar guaranty funds at other CCPs to which such Clearing Members might belong) have the effect of further weakening such Clearing Members to the point of default. In this regard, the proposed changes are designed to provide OCC, Clearing Members and other stakeholders with sufficient time to manage the ongoing default(s) without further aggravating the extreme stresses facing market participants.

    OCC recognizes that the proposed changes would limit the maximum amount of Clearing Fund resources that could be available to OCC in an extreme stress scenario, which introduces the possibility, however remote, that the proposed 200% cap ultimately could be reached. If during any cooling-off period the amount of aggregate proportionate charges against the Clearing Fund approaches the 200% cap, the amount remaining in the Clearing Fund may no longer be sufficient to comply with the applicable minimum regulatory financial resources requirements in the CCAs. In any such event, OCC's existing authority under Rule 603 would permit OCC to call on participants for additional initial margin, which could ensure that OCC's minimum financial resources remain in excess of applicable CCA requirements.60 OCC recognizes that the imposition of increased margin requirements could have an immediate pro-cyclical impact on participants (and consequential impacts on the broader financial system) that is potentially greater than the impact of replenishing the Clearing Fund. These risks would be limited to a specific extreme stress event and could be mitigated by certain factors. First, OCC, in coordination with its regulators, would carefully evaluate any potential increase in the context of then-existing facts and circumstances. Second, during the cooling-off period, Clearing Members and their customers will have the opportunity to reduce or rebalance their respective portfolios in order to mitigate their exposures to stress losses and initial margin increases. Finally, since initial margin is not designed to be subject to mutualized loss, the risk of loss faced by Clearing Members for amounts posted as additional margin would be substantially less than for replenishments of the Clearing Fund.

    60 Rule 603 provides that “[t]he Risk Committee may, from time to time, increase the amount of margin which may be required in respect of a cleared contract, open short position or exercised contract if, in its discretion, it determines that such increase is advisable for the protection of [OCC], the Clearing Members or the general public.”

    Given the products cleared by OCC and the composition of its clearing membership, OCC has determined that a minimum 15-calendar day cooling-off period, rolling up to a maximum of 20 calendar days, is likely to be a sufficient amount of time for OCC to manage the ongoing default(s) and take necessary steps in furtherance of stabilizing the clearing system. Further, through conversations with Clearing Members, OCC believes that the proposed cooling-off period is likely to be a sufficient amount for Clearing Members (and their customers) to orderly reduce or rebalance their positions, in an attempt to mitigate stress losses and exposure to potential initial margin increases as they navigate the stress event. Through conversations with Clearing Members, OCC also believes that the proposed cooling-off period is likely to be a sufficient amount for certain Clearing Members to orderly close-out their positions and transfer customer positions as they withdraw from clearing membership. OCC believes the proposed cooling-off period, coupled with the other proposed changes to OCC's assessment powers, is likely to provide Clearing Members with an adequate measure of stability and predictability as to the potential use of Clearing Fund resources, which OCC believes removes the existing incentive for Clearing Members to withdraw following a proportionate charge.61

    61 OCC initially considered a fixed 15-calendar day cooling-off period; however, OCC concluded that a fixed 15-calendar day cooling-off period may increase the risks of successive or cascading Clearing Member defaults and may perversely incentivize Clearing Members to seek to withdraw from clearing membership. Through conversations with Clearing Members, OCC believes that these potentially disruptive consequences are mitigated by the proposed rolling cooling-off period.

    In light of the foregoing, OCC believes that the proposed changes would enhance and strengthen its process to replenish the Clearing Fund following a default or other event in which use of the Clearing Fund is contemplated, in accordance with Rule 17Ad-22(e)(4)(ix).62

    62 17 CFR 240.17Ad-22(e)(4)(ix).

    Replenishment of Liquid Resources

    In relevant part, Rule 17Ad-22(e)(7)(ix) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [d]escrib[e] the [CCA's] process to replenish any liquid resources that the clearing agency may employ during a stress event.” 63 Since the use any part of the cash portion of OCC's Clearing Fund would constitute a depletion of one of OCC's liquid resources, OCC's assessment power, discussed above, is the primary means of replenishing the Clearing Fund cash that OCC used to address the stress event. For the same reasons stated above, OCC believes that the proposed changes enhance and strengthen its process to replenish the Clearing Fund, as necessary, following a default or other stress event in which the Clearing Fund is used, and therefore, OCC views the proposed changes as consistent with Rule 17Ad-22(e)(7)(ix).64

    63 17 CFR 240.17Ad-22(e)(7)(ix).

    64 17 CFR 240.17Ad-22(e)(7)(ix).

    Timely Action to Contain Losses

    In relevant part, Rule 17Ad-22(e)(13) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [e]nsure the [CCA] has the authority and operational capacity to take timely action to contain losses and liquidity demands and continue to meet its obligations . . .” 65 The proposed changes would provide OCC with the authority to call for Voluntary Tear-Ups and OCC's Board with the discretion to impose Partial Tear-Ups, which would provide OCC with authority necessary to extinguish certain losses (and attendant liquidity demands) thereby potentially enabling OCC to continue to meet its remaining obligations to participants. As designed, Voluntary Tear-Ups and Partial Tear-Ups would be initiated on a date sufficiently in advance of the exhaustion of OCC's financial resources such that OCC is expected to have adequate resources remaining to cover the amount it must pay to extinguish the positions of Clearing Members and customers without haircutting gains. Accordingly, OCC believes that its authority and capacity to conduct a Partial Tear-Up should be timely, relative to the adequacy of OCC's remaining financial resources. Finally, OCC believes it has the operational and systems capacity sufficient to support the proposed changes, and OCC's policies and procedures will be updated accordingly to reflect the existence of these new tools. As a result, OCC believes that the proposed changes conform to the relevant requirements in Rule 17Ad-22(e)(13).66

    65 17 CFR 240.17Ad-22(e)(13).

    66 17 CFR 240.17Ad-22(e)(13).

    Public Disclosure of Key Aspects of Default Rules

    In relevant part, Rule 17Ad-22(e)(23)(i) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [p]ublicly disclos[e] all relevant rules and material procedures, including key aspects of its default rules and procedures.” 67 As stated above, each of the tools discussed herein are contemplated to be deployed by OCC if an extreme stress event has placed OCC into a recovery or orderly wind-down scenario, and therefore, the tools discussed herein constitute key aspects of OCC's default rules. By incorporating the proposed changes into OCC's Rules and By-Laws, as further supplemented by the discussion in OCC's public rule filing, OCC believes that proposed changes would conform to the relevant requirements in Rule 17Ad-22(e)(23)(i).68

    67 17 CFR 240.17Ad-22(e)(23)(i).

    68 17 CFR 240.17Ad-22(e)(13).

    Sufficient Information Regarding the Risks, Fees and Costs of Clearing

    In relevant part, Rule 17Ad-22(e)(23)(ii) requires that each CCA “establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [p]rovid[e] sufficient information to enable participants to identify and evaluate the risks, fees, and other material costs they incur by participating in the covered clearing agency.” 69 The proposed changes would clearly explain to Clearing Members and market participants that an extreme stress scenario could result in the use—and theoretically the exhaustion—of OCC's financial resources, inclusive of OCC's proposed assessment powers. Proposed changes to Section 6, Article VIII of OCC's By-Laws would explain Clearing Members' replenishment obligation and liability for assessments. The proposed changes also would clearly explain, through proposed Rules 1011 and 1111, that as OCC nears the exhaustion of its assessment powers, Clearing Members may be asked for voluntary payments and, if necessary, Clearing Members and customers may be asked to participate in a Voluntary Tear-Up and/or subject to a Partial Tear-Up. Proposed Rules 1011(b) and 1111(a)(ii) also would make clear that Clearing Members that made voluntary payments and Clearing Members and customers whose tendered positions were extinguished in the Voluntary Tear-Up would be prioritized in the distribution of any recovery from the defaulted Clearing Member(s). Proposed changes to Article VIII would clarify that the Clearing Fund contributions remaining after OCC has conducted a Voluntary Tear-Up or Partial Tear-Up could be used to compensate the non-defaulting Clearing Members and non-defaulting customers for the losses, costs or fees imposed upon them as a result of such Voluntary Tear-Up or Partial Tear-Up. Proposed Rule 1111(g) would make clear that, following a Partial Tear-Up, OCC's Board may seek to equitably re-allocate losses, costs and fees directly imposed as a result of a Partial Tear-Up among all non-defaulting Clearing Members through a special charge. By incorporating the proposed changes into OCC's Rules and By-Laws, as further supplemented by the discussion in OCC's public rule filing, OCC believes that is has provided sufficient information to enable participants to identify and evaluate the risks, fees, and other material costs they could incur by participating OCC, consistent with the requirements in Rule 17Ad-22(e)(23)(ii).70

    69 17 CFR 240.17Ad-22(e)(23)(ii).

    70 17 CFR 240.17Ad-22(e)(23)(ii).

    (B) Clearing Agency's Statement on Burden on Competition

    Section 17A(b)(3)(I) of the Act 71 requires that the rules of a clearing agency not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. OCC does not believe the proposed rule change would have any impact or impose any burden on competition. The primary purpose of the proposed changes is to make certain revisions to OCC's Rules and By-Laws Laws that are designed to enhance OCC's existing tools to address the risks of liquidity shortfalls and credit losses and to establish tools by which OCC could re-establish a matched book following a default. As explained above, each of the tools proposed herein is contemplated to be deployed by OCC in an extreme stress event that has placed OCC into a recovery or orderly wind-down scenario. The proposed rule change is intended to provide Clearing Members, market participants and other stakeholders with greater certainty as to their liabilities and potential exposure to OCC in the event of an unprecedented loss scenario. OCC does not believe that the proposed changes would discriminatorily impact any Clearing Member's access to OCC's services or unnecessarily disadvantage or favor any particular user in relationship to another user. OCC recognizes that the nature of a Partial Tear-Up means that only particular Clearing Members and market participants holding certain positions may be impacted; however, the risk of Partial Tear-Ups is extremely remote, and even then, the proposed changes seek to provide means of equitably re-allocating the losses, costs and fees imposed by Voluntary Tear-Up or Partial Tear-Up. Therefore, OCC believes that the proposed changes would not have any impact or impose any burden on competition.

    71 15 U.S.C. 78q-1(b)(3)(I).

    (C) Clearing Agency's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others

    Written comments were not and are not intended to be solicited with respect to the proposed rule change, and none have been received.

    III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action

    Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will:

    (A) By order approve or disapprove the proposed rule change, or

    (B) institute proceedings to determine whether the proposed rule change should be disapproved.

    IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:

    Electronic Comments

    • Use the Commissions internet comment form (http://www.sec.gov/rules/sro.shtml); or

    • Send an email to [email protected] Please include File Number SR-OCC-2017-020 on the subject line.

    Paper Comments

    • Send paper comments in triplicate to Brent Fields, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

    All submissions should refer to File Number SR-OCC-2017-020. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's internet website (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission's Public Reference Section, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of OCC and on OCC's website at https://www.theocc.com/about/publications/bylaws.jsp.

    All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal or identifying information from comment submissions. You should submit only information that you wish to make available publicly.

    All submissions should refer to File Number SR-OCC-2017-020 and should be submitted on or before August 17, 2018.

    For the Commission by the Division of Trading and Markets, pursuant to delegated authority.72

    72 17 CFR 200.30-3(a)(12).

    Robert W. Errett, Deputy Secretary.
    [FR Doc. 2018-16535 Filed 8-1-18; 8:45 am] BILLING CODE 8011-01-P
    SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83726; File No. SR-MIAX-2018-16] Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 518, Complex Orders July 27, 2018.

    Pursuant to the provisions of Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder,2 notice is hereby given that on July 16, 2018, Miami International Securities Exchange, LLC (“MIAX Options” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) a proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

    1 15 U.S.C. 78s(b)(1).

    2 17 CFR 240.19b-4.

    I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

    The Exchange is filing a proposal to amend Exchange Rule 518, Complex Orders, to update its rule text regarding stock-option orders, in connection with the upcoming launch of such orders on the Exchange.

    The text of the proposed rule change is available on the Exchange's website at http://www.miaxoptions.com/rule-filings/ at MIAX Options' principal office, and at the Commission's Public Reference Room.

    II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.

    A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose

    The Exchange proposes to amend Exchange Rule 518, Complex Orders, to update its rule text regarding stock-option orders, in connection with the upcoming launch of such orders on the Exchange. In particular, the Exchange is proposing to (i) adopt new rule text to introduce a new price protection feature for certain stock-option strategies, (ii) delete certain existing rule text to eliminate an unnecessary execution price restriction for the stock component of a stock-option strategy, and (iii) make certain minor clarifying edits to existing rule text.

    Complex orders began trading on the Exchange on October 24, 2016.3 In its rule filing to establish the trading of complex orders, the Exchange adopted rules for handling stock-option orders.4 The Exchange also indicated that it would determine when stock-option orders would be made available for trading in the System 5 and would communicate such determination to Members 6 via Regulatory Circular.7 The Exchange is now proposing to make certain changes to its rule text, in connection with the upcoming launch of such orders on the Exchange, which is scheduled for the third quarter of 2018.

    3See MIAX Regulatory Circular 2016-43, October 20, 2016.

    4See Securities Exchange Act Release No. 79072 (October 7, 2016), 81 FR 71131 (October 14, 2016) (SR-MIAX-2016-26).

    5 The term “System” means the automated trading system used by the Exchange for the trading of securities. See Exchange Rule 100.

    6 The term “Member” means an individual or organization approved to exercise the trading rights associated with a Trading Permit. Members are deemed “members” under the Exchange Act. See Exchange Rule 100.

    7See supra note 4.

    Currently, the Exchange provides price protection for certain complex option trading strategies such as Vertical Spreads 8 and Calendar Spreads 9 to prevent executions at potentially erroneous prices. Specifically, the Exchange provides a Vertical Spread Variance (“VSV”) price protection and a Calendar Spread Variance (“CSV”) price protection. The VSV establishes minimum and maximum trading price limits for Vertical Spreads.10 The CSV establishes a minimum trading price limit for Calendar Spreads.11 If the execution price of a complex order would be outside of the limits established for Vertical Spreads and Calendar Spreads, such complex order will be placed on the Strategy Book and will be managed to the appropriate trading price limit as described in Rule 518(c)(4), Managed Interest Process for Complex Orders. Orders to buy below the minimum trading price limit and orders to sell above the maximum trading price limit (in the case of Vertical Spreads) will be rejected by the System.12

    8 A “Vertical Spread” is a complex strategy consisting of the purchase of one call (put) option and the sale of another call (put) option overlying the same security that have the same expiration but different strike prices. See Exchange Rule 518.05(a).

    9 A “Calendar Spread” is a complex strategy consisting of the purchase of one call (put) option and the sale of another call (put) option overlying the same security that have different expirations but the same strike price. See Exchange Rule 518.05(b).

    10See Exchange Rule 518.05(a).

    11See Exchange Rule 518.05(b).

    12See Exchange Rule 518.05(c).

    The Exchange now proposes to adopt new subsection (g) in Rule 518, Interpretations and Policies .01, to provide a price protection feature for certain stock-option strategies that have a single option component tied to a stock component with a standard deliverable.13 The proposed price protection feature, named “Parity Price Protection,” will provide price protection for strategies that consist of a sale of one call 14 and the purchase of one hundred shares of the underlying stock (“Buy-Write”) and the contra side of the strategy, or that consist of the purchase of one put 15 and the purchase of one hundred shares of the underlying stock (“Married-Put”) and the contra side of the strategy. The Exchange will establish a Parity Spread Variance (“PSV”) value between $0.00 and $0.50. The PSV value will be uniform for all option classes traded on the Exchange as determined by the Exchange and communicated to Members via Regulatory Circular prior to accepting such orders on the Exchange. The PSV will be used to calculate a minimum option trading price limit that the System will prevent the option leg from trading below by applying the PSV value to the strike price of the option to establish a parity protected price for the strategy. For call option legs, the PSV value is added to the strike price of the option; for put option legs, the PSV value is subtracted from the strike price of the option. The System will then prevent the strategy from trading below its parity protected price limit to ensure that the strategy does not execute at a potentially erroneous price.

    13 The standard stock deliverable is 100 shares.

    14 The term “call” means an option contract under which the holder of the option has the right, in accordance with the terms of the option, to purchase from the Clearing Corporation the number of units of the underlying security covered by the option contract. See Exchange Rule 100.

    15 The term “put” means an option contract under which the holder of the option has the right, in accordance with the terms and provisions of the option, to sell to the Clearing Corporation the number of units of the underlying security covered by the option contract. See Exchange Rule 100.

    The examples below provide an illustration of how the protection is calculated for Buy-Write and Married-Put strategies. For the purposes of the following examples the PSV used in the calculations is $.10.

    Following is an example of the operation of the price protection feature for a Married-Put Strategy:

    Example 1 (Married-Put)

    In its simplest terms the parity price of a put option can be expressed as (Strike Price − Stock Price = Put Option Parity Price). If, for example, the stock is trading at $45.00 and the Strike Price of the put option is $50.00, the parity price of the put option would then be $5.00 ($50.00 − $45.00 = $5.00). The Exchange is able to leverage the parity relationship between the components to establish a minimum option trading price limit for Married-Put Strategies by simply subtracting the PSV from the strike price of the option. The effect on the option price can be seen in the following calculation (($50.00 − $0.10) − $45.00 = $49.90 − $45.00 = $4.90). The Exchange will calculate the parity protected price for a Married-Put Strategy by leveraging the put option parity formula by simply subtracting the PSV from the strike price of the option. This would result in a parity protected price for the strategy of $49.90 using the figures above.

    This allows for the stock component and the option component prices to fluctuate to achieve the strategy's net price, but ensures that the strategy will not trade below its parity protected price. Married Put Strategy interest received to sell a price protected Married-Put Strategy below $49.90 will be placed on the Strategy Book 16 at $49.90. Married Put Strategy interest received to buy a price protected Married-Put Strategy below $49.90 will be rejected.

    16 The “Strategy Book” is the Exchange's electronic book of complex orders and complex quotes. See Exchange Rule 518(a)(17).

    Example 2 (Buy-Write)

    In its simplest terms the parity price of a call option can be expressed as (Stock Price − Strike Price = Call Option Parity Price). If, for example, the stock is trading at $45.00 and the Strike Price of the call option is $40.00, the parity price of the call option would then be $5.00 ($45.00 − $40.00 = $5.00). The Exchange is able to leverage the parity relationship between the components to establish a minimum option trading price limit for Buy-Write Strategies by adding the PSV to the strike price of the option. The effect on the option price can be seen in the following calculation ($45.00 − ($40.00 + $.10) = $45.00 − $40.10 = $4.90). The Exchange will calculate the parity protected price for a Buy-Write Strategy by leveraging the call option parity formula by simply adding the PSV to the strike price of the option. This would result in a parity protected price for the strategy of $40.10 net debit using the figures above.

    This allows for the stock component and the option component prices to fluctuate to achieve the strategy's net price, but ensures that the strategy will not trade below its parity protected price. Buy-Write strategy interest received to sell a price protected Buy-Write Strategy below $40.10 net debit will be placed on the Strategy Book at $40.10 net debit.17 Buy-Write strategy interest received to buy a price protected Buy-Write Strategy below $40.10 net debit will be rejected.

    17 A seller of the strategy would receive a $40.10 net credit.

    Second, the Exchange proposes to delete certain existing rule text from Exchange Rule 518, Interpretations and Policies .01, subsection (b), to eliminate an unnecessary execution price restriction for the stock component of a stock-option strategy. Exchange Rule 518, Interpretations and Policies .01 subsection (b), contains a paragraph that provides that, “[t]he execution price of the underlying security component must be also within the high-low range for the day in the underlying security at the time the stock-option order is processed and within a certain price from the current market, which the Exchange will establish and communicate to Members via Regulatory Circular. If the underlying security component price is not within these parameters, the stock-option order is not executable.” 18 The Exchange does not believe that this execution price restriction for the stock component is necessary given the existing price protections already in place on the Exchange.

    18See Exchange Rule 518, Interpretations and Policies .01(b).

    The Exchange believes that the execution price restriction for the stock component of a stock-option strategy is unnecessary because all complex orders on the Exchange, including stock-option orders, receive Implied Complex MIAX Best Bid or Offer (“icMBBO”) protection.19 The icMBBO is a calculation that uses the best price from the Simple Order Book for each component of a complex strategy including displayed and non-displayed trading interest. For stock-option orders, the icMBBO for a complex strategy is calculated using the best price (whether displayed or non-displayed) on the Simple Order Book 20 in the individual option component(s), and the NBBO 21 in the stock component.22 Exchange Rule 518(c)(2)(ii) provides, in relevant part, that incoming complex orders and quotes will not be executed at prices inferior to the icMBBO or at a price that is equal to the icMBBO when there is a Priority Customer Order (as defined in Rule 100) at the best icMBBO price. Further, the rule provides that complex orders will never be executed at a price that is outside of the individual component prices on the Simple Order Book, and the net price of a complex order executed against another complex order on the Strategy Book will never be inferior to the price that would be available if the complex order legged into the Simple Order Book. Accordingly, as a result of the icMBBO price protection feature, the execution price for the stock component of a stock-option order will always be inside the NBBO of the stock. Therefore, rule text stating that the execution price of the underlying security component must be within the high-low range for the day is unnecessary, as the icMBBO protection ensures that executions are always within the NBBO.

    19See Exchange Rule 518(a)(11).

    20 The “Simple Order Book” is the Exchange's regular electronic book of orders and quotes. See Exchange Rule 518(a)(15).

    21 The term “NBBO” means the national best bid or offer as calculated by the Exchange based on market information received by the Exchange from the appropriate Securities Information Processor (“SIP”). See Exchange Rule 518(a)(14).

    22See Exchange Rule 518(a)(11).

    Finally, the Exchange proposes to make a number of minor, non-substantive edits to Rule 518, Interpretations and Policies .05(e), to add clarity and precision to the Exchange's rule text. Since the Exchange will be introducing the trading of complex strategies which include a “stock” component, the Exchange seeks to clarify certain aspects of the rule that are intended to apply only to the “option” component of a complex strategy. Specifically, the Exchange proposes to clarify the definition of a Wide Market Condition, as described in Interpretations and Policies .05, subsection (e)(1), so that it is clear that it is only applying to the “option” component of a complex strategy. The new proposed rule text will provide that, “[a] `wide market condition' is defined as any individual option component of a complex strategy having, at the time of evaluation, an MBBO 23 quote width that is wider than the permissible valid quote width as defined in Rule 603(b)(4).” By definition, the MBBO is comprised of option interest only, therefore providing additional detail to the existing rule adds clarity to the Exchange's rules.

    23 The term “MBBO” means the best bid or offer on the Simple Order Book on the Exchange. See Exchange Rule 518(a)(13).

    Similarly, the Exchange proposes to clarify that Simple Market Auction or Timer Events (“SMAT Events”) pertain only to “option” components of a complex strategy, by amending Interpretations and Policies .05, subsection (e)(2)(i) and (e)(2)(ii), to include the term “option component” in the first sentence of each section. By definition, the Exchange's Simple Market is comprised of option interest only, on the Simple Order Book, therefore providing additional detail to the existing rule adds clarity to the Exchange's rules.

    2. Statutory Basis

    The Exchange believes that its proposed rule change is consistent with Section 6(b) of the Act 24 in general, and furthers the objectives of Section 6(b)(5) of the Act 25 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, to remove impediments to and perfect the mechanisms of a free and open market and a national market system and, in general, to protect investors and the public interest.

    24 15 U.S.C. 78f(b).

    25 15 U.S.C. 78f(b)(5).

    The Exchange believes establishing a parity price protection for certain Buy-Write and Married-Put strategies promotes just and equitable principles of trade and removes impediments to and perfects the mechanisms of a free and open market and a national market system and, in general, protects investors and the public interest by ensuring that strategies are not executed at potentially erroneous prices.

    Given the relationship that the stock price, strike price, and option price have to each other, the Exchange is able to calculate a minimum option trading price limit for the option leg of certain stock-option strategies with a call or a put component. Specifically, the parity price of a call option can be derived by subtracting the strike price from the stock price (Stock Price − Strike Price = Call Option Parity Price); and the parity price of a put option can be derived by subtracting the stock price from the strike price (Strike Price − Stock Price = Put Option Parity Price). Using these relationships the PSV may be applied to establish a minimum option trading price limit that the System will prevent the option leg from trading below to establish a parity protected price for the strategy to ensure the strategy does not trade below its parity protected price at a potentially erroneous price.

    The Exchange believes that Members will benefit from the proposed risk protection measure as the protection ensures that these stock-option strategies are not executed below their parity protected price as calculated by the Exchange. Consequently, the proposed risk protection is designed to encourage Members to submit additional order flow and liquidity to the Exchange in these strategies, thereby removing impediments to and perfecting the mechanisms of a free and open market and a national market system and, in general, protecting investors and the public interest. This protection should provide Members with confidence that protections are in place on the Exchange to reduce the risk of these strategies being executed at potentially erroneous prices. As a result, the Exchange believes that the proposed price protection feature will promote just and equitable principles of trade.

    Additionally the Exchange's proposal to remove unnecessary rule text from its current rule which requires that the execution price of the underlying security component be within the high-low range for the day in the underlying security at the time the stock-option order is processed is consistent with Section 6(b) of the Act 26 in general, and furthers the objectives of Section 6(b)(5) of the Act 27 in particular. The Exchange believes that its existing icMBBO price protection feature will sufficiently guard against potentially erroneous transaction prices for complex strategies which include an underlying stock component. The icMBBO for a complex strategy involving a stock component is calculated using the best price on the Simple Order Book in the individual option component(s) and the NBBO in the stock component.28 Every complex order entered on the Exchange receives the icMBBO price protection 29 and as a result, the execution price for the stock component of a stock-option order will always be inside the NBBO of the stock. Removal of the unnecessary rule text will protect investors and the public interest by providing clarity and precision in the Exchange's rules. Further, the Exchange notes that other exchanges that offer stock-option orders do not have this provision in their rules.30

    26 15 U.S.C. 78f(b).

    27 15 U.S.C. 78f(b)(5).

    28See supra note 21.

    29See supra note 19.

    30See CBOE Rule 6.53C.06 and NASDAQ ISE Rule 722.

    Finally, the Exchange proposes to make minor non-substantive changes to its rule to clarify that Wide Market Conditions and Simple Market Auction or Timer Events on the Exchange are related to the “option” components only for complex strategies. The Exchange believes the proposed changes promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a free and open market and a national market system because they seek to add clarity and precision to the Exchange's rules. The Exchange believes that the proposed rule changes will provide greater clarity to Members and the public regarding the Exchange's Rules, and it is in the public interest for rules to be accurate and concise so as to eliminate the potential for confusion.

    B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes the proposed rule change will foster competition as it provides a risk protection mechanism for certain complex strategies entered on the Exchange and may promote competition by enabling Members to trade more aggressively on the Exchange knowing that these strategies will not be executed below [sic] parity protected price at potentially erroneous prices. Accordingly, the price protection feature should instill additional confidence in Members that submit certain stock-option orders to the Exchange that their orders receive price protection, and thus should encourage Members to submit additional order flow and liquidity to the Exchange, thereby removing impediments to and perfecting the mechanisms of a free and open market and a national market system and, in general, protecting investors and the public interest.

    The removal of unnecessary rule text pertaining to the execution price of the stock component of a stock-option order does not impose any burden on competition as the proposed change will align the Exchange's rule with that of other exchanges.31 Further, the additional proposed changes remedy minor non-substantive issues in the text of various rules identified in this proposal.

    31Id.

    The Exchange does not believe the proposed rule change will impose any burden on intra-market competition as price protection is available to all market participants that submit orders in certain stock-option strategies. The Exchange further believes that the proposed price protection should promote inter-market competition, and result in more competitive order flow to the Exchange by protecting market participants from potentially erroneous executions occurring at prices below the parity protected price of the strategy, as calculated by the Exchange.

    The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act, and believes the proposed change will enhance competition.

    C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

    III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action

    Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate, it has become effective pursuant to 19(b)(3)(A) of the Act 32 and Rule 19b-4(f)(6) 33 thereunder.

    32 15 U.S.C. 78s(b)(3)(A).

    33 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement.

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act 34 normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii) 35 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay. The Exchange states that waiver of the operative delay is consistent with the protection of investors and the public interest because it will enable market participants to benefit from the proposed parity price protection feature, which is designed to safeguard against the possibility of executions occurring at potentially erroneous prices. MIAX also states that the proposal protects investors and the public interest by deleting a provision requiring the execution price of the underlying security component of a stock-option order to be within the underlying component's high-low range for the day. MIAX notes that this provision is unnecessary because all complex orders on MIAX are protected by the icMBBO price protection feature, which assures that the stock leg of a stock-option order will not be executed at a price that is inferior to the NBBO for the stock. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because the proposed parity price protection feature is designed to prevent Buy-Write and Married Put strategies from executing at potentially erroneous prices. As noted above, Buy-Write and Married Put interest to buy that is priced below the parity protected price for the strategy will be rejected, and Buy-Write and Married Put interest to sell that is priced below the parity protected price will be placed on the Strategy Book at the parity protected price for the strategy. Therefore, the Commission hereby waives the operative delay and designates the proposed rule change as operative upon filing.36

    34 17 CFR 240.19b-4(f)(6).

    35 17 CFR 240.19b-4(f)(6)(iii).

    36 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f).

    At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.

    IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:

    Electronic Comments

    • Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or

    • Send an email to [email protected]. Please include File Number SR-MIAX-2018-16 on the subject line.

    Paper Comments

    • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

    All submissions should refer to File Number SR-MIAX-2018-16. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's internet website (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission's Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-MIAX-2018-16 and should be submitted on or before August 23, 2018.

    37 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.37

    Robert W. Errett, Deputy Secretary.
    [FR Doc. 2018-16528 Filed 8-1-18; 8:45 am] BILLING CODE 8011-01-P
    SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83728; File No. SR-BOX-2018-24] Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule on the BOX Market LLC (“BOX”) Options Facility To Establish BOX Connectivity Fees for Participants and Non-Participants Who Connect to the BOX Network July 27, 2018.

    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),1 and Rule 19b-4 thereunder,2 notice is hereby given that on July 19, 2018, BOX Options Exchange LLC (the “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Exchange filed the proposed rule change pursuant to Section 19(b)(3)(A)(ii) of the Act,3 and Rule 19b-4(f)(2) thereunder,4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

    1 15 U.S.C. 78s(b)(1).

    2 17 CFR 240.19b-4.

    3 15 U.S.C. 78s(b)(3)(A)(ii).

    4 17 CFR 240.19b-4(f)(2).

    I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change

    The Exchange is filing with the Securities and Exchange Commission (“Commission”) a proposed rule change to amend the Fee Schedule on the BOX Market LLC (“BOX”) options facility. The text of the proposed rule change is available from the principal office of the Exchange, at the Commission's Public Reference Room and also on the Exchange's internet website at http://boxexchange.com.

    II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.

    A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose

    The Exchange proposes to amend Section VI. (Technology Fees) of the BOX Fee Schedule to establish BOX Connectivity Fees for Participants and non-Participants who connect to the BOX network. Connectivity fees will be based upon the amount of bandwidth that will be used by the Participant or non-Participant. Further, BOX Participants or non-Participants connected as of the last trading day of each calendar month will be charged the applicable Connectivity Fee for that month. The Connectivity Fees will be as follows:

    Connection type Monthly fees Non-10 Gb Connection $1,000 per connection. 10 Gb Connection 5,000 per connection.

    The Exchange also proposes to amend certain language and numbering in Section VI.A to reflect the changes discussed above. Specifically, BOX proposes to add the title “Third Party Connectivity Fees” under Section VI.A. Further, the Exchange proposes to add Section VI.A.2 which details the proposed BOX Connectivity Fees discussed above.

    Participants and non-Participants with ten (10) Gigabit Connections will be charged a monthly fee of $5,000 per connection. Participants and non-Participants with non-10 Gigabits Connections will be charged a monthly fee of $1,000 per connection. The Exchange notes that another exchange in the industry has similar connectivity fees.5 The Exchange also notes that certain fees will continue to be assessed by the datacenters and will be billed directly to the market participant.

    5See Miami International Securities Exchange LLC (“MIAX”) Fee Schedule. MIAX charges its Members and non-Members a monthly fee of $1,100 for each 1 Gigabit connection and $5,500 for each 10 Gigabit connection to MIAX's Primary/Secondary Facility. The Exchange notes a minor difference between MIAX's connectivity fees and BOX's proposal. MIAX prorates their connectivity fees when a Member makes a change to their connectivity (by adding or deleting connections). BOX notes that, like the Exchange's Port Fees and HSVF Fees, Participants or non-Participants connected as of the last trading day of each calendar month will be charged the applicable Connectivity Fee for that month.

    Next, the Exchange is amending Section VI.C. High Speed Vendor Feed (“HSVF”) of the Fee Schedule. Specifically, BOX is proposing to delete Section VI.C. and reclassify the HSVF Connection as a Port Fee. The Exchange believes this reclassification is more accurate, as HSVF subscription is not dependent on a physical connection to the Exchange. Instead, subscribers must be credentialed by BOX to receive the HSVF. The HSVF Fee will remain unchanged, BOX will assess a HSVF Port Fee of $1,500 per month 6 for each month a Participant or non-Participant is credentialed to use the HSVF Port. The Exchange notes that another exchange in the industry charges similar fees.7

    6 The Exchange notes that with the proposed change discussed herein, Participants and non-Participants credentialed to use the HSVF Port who also have physical connections to the BOX system will be charged for both the HSVF monthly fee and the applicable amount for their physical connections to BOX. For example, if non-Participant X is credentialed to use the HSVF Port and has three (3) physical non-10Gb connections to BOX, non-Participant X will be charged $1,500 for the monthly HSVF Port Fee and $3,000 for the three non-10Gb physical connections to BOX.

    7See Cboe Data Services, LLC. (“Cboe CDS”) Fee Schedule. Cboe CDS charges its Customers that receive data through a direct connection to CDS or through a connection to CDS provided by an extranet provider $500 per port per month. Cboe CDS's port fee applies to receipt of any Cboe Options data feed but is only assessed once per data port. In addition to the data port fee, Cboe Exchange Inc. (“Cboe”) charges connectivity fees based on the bandwidth used to connect to the Exchange to receive such data. See Cboe Fee Schedule.

    2. Statutory Basis

    The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Act, in general, and Section 6(b)(4) and 6(b)(5)of the Act,8 in particular, in that it provides for the equitable allocation of reasonable dues, fees, and other charges among BOX Participants and other persons using its facilities and does not unfairly discriminate between customers, issuers, brokers or dealers.

    8 15 U.S.C. 78f(b)(4) and (5).

    The Exchange believes that the proposed Connectivity Fees in general constitute an equitable allocation of fees, and are not unfairly discriminatory, because they allow the Exchange to recover costs associated with offering access through the network connections. The proposed Connectivity Fees are also expected to offset the costs BOX incurs in maintaining, and implementing ongoing improvements to the trading systems, including connectivity costs, costs incurred on software and hardware enhancements and resources dedicated to software development, quality assurance, and technology support. The Exchange believes that its proposed fees are reasonable in that they are competitive with those charged by another exchange. Further, the Exchange believes that the proposed Connectivity Fees are not unfairly discriminatory as they are assessed to all market participants who wish to connect to the BOX network.

    The Exchange believes that the proposed HSVF Port Fee is reasonable as it is similar to fees assessed at another exchange in the industry.9 Further, the Exchange believes that charging Participants and non-Participants for both the HSVF monthly fee and applicable physical connection fees as outlined in the example above is reasonable as it is in line with another exchange in the industry.10 Further, the Exchange believes that the proposed change is equitable and not unfairly discriminatory because it allows the Exchange to recoup ongoing expenditures made by the Exchange in order to offer such services to Participants and non-Participants.

    9See supra note 7.

    10Id.

    B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. Unilateral action by BOX in establishing fees for services provided to its Participants and others using its facilities will not have an impact on competition. As a small Exchange in the already highly competitive environment for options trading, BOX does not have the market power necessary to set prices for services that are unreasonable or unfairly discriminatory in violation of the Exchange Act. BOX's proposed fees, as described herein, are comparable to and generally lower than fees charged by other options exchanges for the same or similar services. Lastly, the Exchange believes the proposed change will not impose a burden on intramarket competition as the proposed fees are applicable to all Participants and others using its facilities that connect to BOX.

    C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

    III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action

    The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Exchange Act 11 and Rule 19b-4(f)(2) thereunder,12 because it establishes or changes a due, or fee.

    11 15 U.S.C. 78s(b)(3)(A)(ii).

    12 17 CFR 240.19b-4(f)(2).

    At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend the rule change if it appears to the Commission that the action is necessary or appropriate in the public interest, for the protection of investors, or would otherwise further the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.

    IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:

    Electronic Comments

    • Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or

    • Send an email to [email protected] Please include File Number SR-BOX-2018-24 on the subject line.

    Paper Comments

    • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

    All submissions should refer to File Number SR-BOX-2018-24. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's internet website (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission's Public Reference Room, 100 F Street NE, Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-BOX-2018-24, and should be submitted on or before August 23, 2018.

    13 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13

    Robert W. Errett, Deputy Secretary.
    [FR Doc. 2018-16531 Filed 8-1-18; 8:45 am] BILLING CODE 8011-01-P
    SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 33184] Notice of Applications for Deregistration Under Section 8(f) of the Investment Company Act of 1940 July 27, 2018.

    The following is a notice of applications for deregistration under section 8(f) of the Investment Company Act of 1940 for the month of July 2018. A copy of each application may be obtained via the Commission's website by searching for the file number, or for an applicant using the Company name box, at http://www.sec.gov/search/search.htm or by calling (202) 551-8090. An order granting each application will be issued unless the SEC orders a hearing. Interested persons may request a hearing on any application by writing to the SEC's Secretary at the address below and serving the relevant applicant with a copy of the request, personally or by mail. Hearing requests should be received by the SEC by 5:30 p.m. on August 21, 2018, and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Pursuant to Rule 0-5 under the Act, hearing requests should state the nature of the writer's interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary.

    ADDRESSES:

    The Commission: Secretary, U.S. Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

    FOR FURTHER INFORMATION CONTACT:

    Shawn Davis, Branch Chief, at (202) 551-6413 or Chief Counsel's Office at (202) 551-6821; SEC, Division of Investment Management, Chief Counsel's Office, 100 F Street NE, Washington, DC 20549-8010.

    Broadstone Real Estate Access Fund, Inc. [File No. 811-23303]

    Summary: Applicant, a closed-end investment company, seeks an order declaring that it has ceased to be an investment company. Applicant has never made a public offering of its securities and does not propose to make a public offering or engage in business of any kind.

    Filing Dates: The application was filed on July 11, 2018, and amended on July 19, 2018.

    Applicant's Address: 800 Clinton Square, Rochester, New York 14604.

    Cohen & Steers Active Commodities Strategy Fund, Inc. [File No. 811-22938]

    Summary: Applicant seeks an order declaring that it has ceased to be an investment company. On April 13, 2018, applicant made a liquidating distribution to its shareholders, based on net asset value. Expenses of $50,599 incurred in connection with the liquidation were paid by the applicant.

    Filing Date: The application was filed on July 11, 2018.

    Applicant's Address: 280 Park Avenue, 10th Floor New York, New York 10017.

    For the Commission, by the Division of Investment Management, pursuant to delegated authority.

    Robert W. Errett, Deputy Secretary.
    [FR Doc. 2018-16527 Filed 8-1-18; 8:45 am] BILLING CODE 8011-01-P
    SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83735; File No. SR-OCC-2018-008] Self-Regulatory Organizations; The Options Clearing Corporation; Order Approving Proposed Rule Change, as Modified by Amendments No. 1 and 2, Related to The Options Clearing Corporation's Stress Testing and Clearing Fund Methodology July 27, 2018. I. Introduction

    On May 30, 2018, The Options Clearing Corporation (“OCC”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change SR-OCC-2018-008 (“Proposed Rule Change”) pursuant to Section 19(b) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 2 thereunder to propose changes to OCC's By-Laws and Rules, the formalization of a substantially new Clearing Fund Methodology Policy (“Policy”), and the adoption of a document describing OCC's new Clearing Fund and stress testing methodology (“Methodology Description”).3 The proposed changes are primarily designed to enhance OCC's overall resiliency, particularly with respect to the level of OCC's pre-funded financial resources. Specifically, the proposed changes would:

    1 15 U.S.C. 78s(b)(1).

    2 17 CFR 240.19b-4.

    3See Notice of Filing infra note 5, at 83 FR 28018.

    (1) Reorganize, restate, and consolidate the provisions of OCC's By-Laws and Rules relating to the Clearing Fund into a newly revised Chapter X of OCC's Rules;

    (2) modify the coverage level of OCC's Clearing Fund sizing requirement to protect OCC against losses stemming from the default of the two Clearing Member Groups that would potentially cause the largest aggregate credit exposure for OCC in extreme but plausible market conditions (i.e., adopt a “Cover 2 Standard” for sizing the Clearing Fund);

    (3) adopt a new risk tolerance for OCC to cover a 1-in-50 year hypothetical market event at a 99.5% confidence level over a two-year look-back period;

    (4) adopt a new Clearing Fund and stress testing methodology, which would be underpinned by a new scenario-based one-factor risk model stress testing approach, as detailed in the newly proposed Policy and Methodology Description;

    (5) document governance, monitoring, and review processes related to Clearing Fund and stress testing;

    (6) provide for certain anti-procyclical limitations on the reduction in Clearing Fund size from month to month;

    (7) increase the minimum Clearing Fund contribution requirement for Clearing Members to $500,000;

    (8) modify OCC's allocation weighting methodology for Clearing Fund contributions;

    (9) reduce from five to two business days the timeframe within which Clearing Members are required to fund Clearing Fund deficits due to monthly or intra-month resizing or due to Rule amendments;

    (10) provide additional clarity in OCC's Rules regarding certain anti-procyclicality measures in OCC's margin model; and

    (11) make a number of other non-substantive clarifying, conforming, and organizational changes to OCC's By-Laws, Rules, Collateral Risk Management Policy, Default Management Policy, and filed procedures, including retiring OCC's existing Clearing Fund Intra-Month Re-sizing Procedure, Financial Resources Monitoring and Call Procedure (“FRMC Procedure”), and Monthly Clearing Fund Sizing Procedure, as these procedures would no longer be relevant to OCC's proposed Clearing Fund and stress testing methodology and would be replaced by the proposed Rules, Policy, and Methodology Description described herein.

    On June 7, 2018, OCC filed Amendment No. 1 to the Proposed Rule Change.4 The Proposed Rule Change, as amended, was published for public comment in the Federal Register on June 15, 2018.5 On July 11, 2018, OCC filed Amendment No. 2 to the Proposed Rule Change.6 The Commission received five comment letters in support of the proposal.7 This order approves the Proposed Rule Change as modified by Amendments No. 1 and 2.

    4 In Amendment No. 1, OCC corrected formatting errors in Exhibits 5A and 5B without changing the substance of the Proposed Rule Change.

    5 Securities Exchange Act Release No. 83406 (Jun. 11, 2018), 83 FR 28018 (Jun. 15, 2018) (SR-OCC-2018-008) (“Notice of Filing”). On May 30, 2018, OCC also filed a related advance notice (SR-OCC-2018-803) (“Advance Notice”) with the Commission pursuant to Section 806(e)(1) of Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, entitled the Payment, Clearing, and Settlement Supervision Act of 2010 and Rule 19b-4(n)(1)(i) under the Act. 12 U.S.C. 5465(e)(1). 15 U.S.C. 78s(b)(1) and 17 CFR 240.19b-4, respectively. The Advance Notice was published in the Federal Register on July 6, 2018. Securities Exchange Act Release No. 83561 (Jun. 29, 2018), 83 FR 31594 (Jul. 6, 2018) (SR-OCC-2018-803).

    6 In Amendment No. 2, OCC made three non-substantive changes to the proposal. Specifically, OCC (1) updated a cross-reference in Article VI, Section 27 of the OCC By-Laws to reflect the relocation of OCC's clearing fund-related rules, (2) added an Interpretation and Policy to proposed Rule 1001 to clarify the applicability of the 5 percent month-over-month limitation in the reduction of clearing fund size is not intended to apply to the initial changes in to OCC's clearing fund sizing resulting from implementation of the proposed methodology, and (3) clarified an implementation date of September 1, 2018 for the proposed changes in the filing.

    7See letter from Andrej Bolkovic, CEO, ABN AMRO Clearing Corporation LLC (“AACC”), dated June 26, 2018, to Brent Fields, Secretary, Commission (AACC Letter I); letter from Chris Concannon, President and COO, Cboe Global Markets (“CBOE”), dated July 6, 2018, to Brent Fields, Secretary, Commission (CBOE Letter I); letter from Matthew R. Scott, President, Merrill Lynch Professional Clearing Corp. (“MLPRO”), dated July 6, 2018, to Brent J. Fields, Secretary, Commission (MLPRO Letter I); letter from Kurt Eckert, Partner, Wolverine Execution Services (“WEX”), dated July 12, 2018, to Brent Fields, Secretary, Commission (WEX Letter I); and letter from Mark Dehnert, Managing Director, Goldman Sachs & Co. LLC (“GS”), dated July 17, 2018, to Brent J. Fields, Secretary, Commission (GS Letter I), available at https://www.sec.gov/comments/sr-occ-2018-008/occ2018008.htm.

    II. Background

    The Proposed Rule Change concerns proposed changes to OCC's By-Laws 8 and Rules,9 the formalization of the substantially new Policy, and the adoption of OCC's new Methodology Description.10 According to OCC, the changes comprising the Proposed Rule Change are primarily designed to enhance OCC's overall resiliency, particularly with respect to the level of OCC's pre-funded financial resources.11

    8 OCC's By-Laws are available at https://www.theocc.com/components/docs/legal/rules_and_bylaws/occ_bylaws.pdf.

    9 OCC's Rules are available at https://www.theocc.com/components/docs/legal/rules_and_bylaws/occ_rules.pdf.

    10See Notice of Filing, 83 FR at 28018.

    11See id.

    As enumerated in the Notice of Filing, the specific modifications that OCC proposes are as follows: (1) Reorganize, restate, and consolidate the provisions of OCC's By-Laws and Rules relating to the clearing fund into a revised Chapter X of OCC's Rules; (2) modify the coverage level of OCC's clearing fund sizing requirement to protect OCC against losses stemming from the default of the two clearing member groups that would potentially cause the largest aggregate credit exposure for OCC in extreme but plausible market conditions (i.e., adopt a “Cover 2 Standard” for sizing the clearing fund); (3) adopt a new risk tolerance for OCC to cover a 1-in-50 year hypothetical market event at a 99.5% confidence level over a two-year look-back period; (4) adopt a new clearing fund and stress testing methodology, which would be underpinned by a new scenario-based one-factor risk model stress testing approach, as detailed in the proposed Policy and Methodology Description; (5) document governance, monitoring, and review processes related to the clearing fund and stress testing; (6) provide for certain anti-procyclical limitations on the reduction in clearing fund size from month to month; (7) increase the minimum clearing fund contribution requirement for clearing members from $150,000 to $500,000; (8) modify OCC's allocation weighting methodology for clearing fund contributions; (9) reduce from five to two business days the timeframe within which clearing members are required to fund clearing fund deficits due to monthly or intra-month resizing; (10) provide additional clarity in OCC's Rules regarding certain anti-procyclicality measures in OCC's margin model; and (11) make a number of other non-substantive clarifying, conforming, and organizational changes to OCC's By-Laws, Rules and filed procedures, including retiring OCC's existing Clearing Fund Intra-Month Re-sizing Procedure, Financial Resources Monitoring and Call Procedure, and Monthly Clearing Fund Sizing Procedure, as these procedures would be replaced by the proposed Rules, Policy, and Methodology Description.12

    12See id. at 28018-19.

    The remainder of this section will first provide an overview of OCC's current process for sizing the clearing fund, followed by a more detailed discussion of the specific changes proposed by OCC, with particular focus on the following categories: (a) Stress testing; (b) total financial resources; (c) financial resource sufficiency; (d) allocation of clearing fund contributions; and (e) textual clarification and consolidation.

    A. OCC's Current Process for Sizing the Clearing Fund

    OCC's process for determining the size of its clearing fund was initially approved in 2011,13 and enhanced in 2015,14 resulting in OCC's current process. Currently, OCC resizes its clearing fund at the beginning of each month to maintain financial resources, in excess of margin, to cover its credit exposures to its clearing members. The current process is effectively an extension of OCC's daily margin process, in which OCC calculates what it refers to as the “daily draw” based on observations from its margin model at specific confidence levels each day.15 OCC tracks the rolling five-day average of these daily draws and, at the beginning of each month, sets the clearing fund size to the sum of (1) the largest five-day rolling average observed over the last three months and (2) a $1.8 billion buffer.16

    13See Securities Exchange Act Release No. 65386 (Sep. 23, 2011), 76 FR 60572 (Sep. 29, 2011) (Order Approving Clearing Fund I).

    14See Securities Exchange Act Release No. 75528 (Jul. 27, 2015), 80 FR 45690 (Jul. 31, 2015) (Order Approving Clearing Fund II).

    15See Order Approving Clearing Fund I, 76 FR at 60572-60573. Each day, OCC estimates credit exposures under the stressed margin model for two scenarios: The greater of the two estimates is the daily draw. The two scenarios are of (1) the single largest credit exposure that would arise out of the default of a single clearing member group (“idiosyncratic default”) and (2) the credit exposure that would arise out of the default of two-randomly selected clearing member groups (“minor systemic default”). See Notice of Filing, 83 FR at 28019.

    16See Order Approving Clearing Fund II, 80 FR at 45691.

    As described in detail below, OCC is proposing three primary changes to the existing approach. First, instead of simply relying on its margin model, OCC would rely on the proposed stress testing framework, including both sizing and sufficiency stress tests. Second, OCC would set the size of its clearing fund based on a Cover 2 Standard. Third, OCC would eliminate the current $1.8 billion static buffer because it would be obsolete in light of the new sizing stress tests and increased coverage afforded by the move to a Cover 2 Standard that, together, would function as a dynamic buffer.

    B. Stress Testing

    OCC proposes to adopt a new stress testing methodology, as detailed in both the proposed Policy and the proposed Methodology Description.17 OCC believes that its proposed methodology would enable it to measure its credit exposure at a level sufficient to cover potential losses under extreme but plausible market conditions.18 To do so, OCC proposes to conduct daily stress tests that consider a range of relevant stress scenarios and related price changes, including but not limited to: (1) Relevant peak historic price volatilities; (2) shifts in other market factors including, as appropriate, price determinants and yield curves; and (3) the default of one or multiple clearing members.19

    17See Notice of Filing, 83 FR at 28021.

    18See id.

    19See id.

    The stress scenarios used in OCC's proposed methodology would consist of two types of scenarios: Historical scenarios and hypothetical scenarios.20 Historical Scenarios would replicate historical events in current market conditions, which include the set of currently existing securities and their prices and volatility levels.21 Hypothetical scenarios, rather than replicating past events, would simulate events in which market conditions change in ways that may have not yet been observed.22 Hypothetical Scenarios, constructed using statistical methods, would generally include price shocks specific to various instruments, such as equity products, volatility products, and fixed income products. Each scenario would represent a draw from a multivariate distribution fitted to historical data regarding the relevant instrument (e.g., returns of the S&P 500).23 In a hypothetical scenario, the shock to a risk driver would be used to determine the relative shock to each associated risk factor (i.e., related underlying security).24 For example, OCC would establish the size of its clearing fund according to a scenario that is based on statistically generated up or down price shocks for the SPX assuming a 1-in-80 year market event.25

    20See id. Because not all of the underlying securities in current portfolios existed during the events on which historical scenarios are based, OCC has developed methodologies to approximate the past price and volatility movements as appropriate. See id. at 28023.

    21See id. at 28021.

    22See id. at 28022.

    23See id. at 28023. Risk drivers are a selected set of securities or market indices (e.g., the Cboe S&P 500 Index (“SPX”) or the Cboe Volatility Index (“VIX”)) that are used to represent the main sources or drivers for the price changes of the risk factors. See id. at 28021, n. 25. The term risk factor refers broadly to all of the individual underlying securities (such as Google, IBM and Standard & Poor's Depositary Receipts (“SPDR”), S&P 500 Exchange Traded Funds (“SPY”), etc.) listed on a market. See id.

    24See id. at 28022.

    25See id. at 28023.

    OCC's proposed stress testing framework would categorize OCC's inventory of stress tests by each stress test's intended purpose: Adequacy, sizing, sufficiency, and informational.26 Specifically, OCC would use the (1) “Adequacy Stress Tests” to determine whether the financial resources collected from all clearing members collectively are adequate to cover OCC's risk tolerance; (2) “Sizing Stress Tests” to establish the monthly size of the clearing fund; (3) “Sufficiency Stress Tests” to monitor whether OCC's credit exposure to the portfolios of individual clearing member groups is at a level sufficiently large enough to necessitate OCC calling for additional resources so that OCC continues to maintain sufficient financial resources to guard against potential losses under a wide range of stress scenarios, including extreme but plausible market conditions; and (4) “Informational Stress Tests” to monitor and assess the size of OCC's pre-funded financial resources against a wide range of stress scenarios that may include extreme but implausible and reverse stress testing scenarios.27

    26See id. at 28024.

    27See id. at 28024-26.

    C. Total Financial Resources

    As noted above, OCC proposes to (i) to adopt a new clearing fund methodology, which would be underpinned by a new scenario-based one-factor risk model stress testing approach,28 modify the coverage level of OCC's clearing fund sizing requirement to a Cover 2 Standard; (iii) provide for certain anti-procyclical limitations on the reduction in clearing fund size from month to month; and (iv) reduce from five business days to two business days the timeframe within which clearing members are required to satisfy clearing fund deficits due to monthly or intra-month resizing.29

    28 OCC detailed the new methodology in the proposed Policy and Methodology Description.

    29See Notice of Filing, 83 FR at 28020.

    1. Proposal To Change the Monthly Clearing Fund Size Calculation

    As discussed above, OCC proposes to replace the methodology by which it determines the monthly clearing fund size with an approach based on hypothetical stress scenarios that assume SPX shocks (up and down) associated with a 1-in-80-year market event.30 Under the proposal, OCC would continue determining the size of its clearing fund each month based on the peak-five daily rolling average of estimated stress exposures; however, such exposures would be based on the output from OCC's stress testing framework going forward as opposed to the margin-derived approach described above.31

    30See id. at 28023.

    31See id. at 28024. Specifically, OCC would identify its exposures under a 1-in-80-year hypothetical event. See id.

    As its benchmark for identifying extreme but plausible market conditions, OCC proposes to adopt a credit risk tolerance defined by OCC's largest potential aggregate credit exposure to two clearing member groups under a 1-in-50-year hypothetical market event as opposed to the greater of exposures arising under an idiosyncratic default or a minor systemic default.32 OCC further proposes to base its daily draw on the aggregate credit exposures estimated under a 1-in-80-year hypothetical market event.33 Additionally, OCC proposes to size the clearing fund to a Cover 2 Standard.34

    32See id. at 28021. As discussed above, OCC's hypothetical stress scenarios represent draws from a fitted distribution of 2-day log returns for a given risk driver. OCC noted in its proposal that a 1-in-50-year hypothetical market event corresponds to a 99.9921 percent confidence interval under OCC's chosen distribution of 2-day logarithmic S&P 500 index returns. See id., n. 24.

    33See id. at 28024.

    34See id. at 28021.

    OCC believes that sizing the clearing fund to cover a 1-in-80-year event would provide sufficient coverage in excess of the exposures estimated under a 1-in-50-year event to justify no longer collecting the $1.8 prudential margin of safety.35

    35See id., n. 23.

    2. Proposal To Limit Reductions in Clearing Fund Size From Month to Month

    Currently, OCC does not constrain month-over-month changes in the size of the clearing fund. OCC proposes to adopt two limitations on month-over-month decreases in the size of the clearing fund. First, OCC proposes to prohibit a clearing fund decrease of more than 5 percent month-over-month.36 Second, OCC proposes to limit the clearing fund decreases based on its daily monitoring of OCC's financial resources. When determining the size of the clearing fund at the beginning of a given month, OCC would not allow that size to be less than 90 percent of the peak credit exposures estimated under the stress tests used for daily monitoring during the last five business days of the preceding month.37 These limitations are designed to reduce the potential for cyclical movements in the size of the clearing fund, as well as reduce the need for OCC to call for additional financial resources intra-month.38

    36See id. at 28027.

    37See id. As discussed below, OCC proposes to monitor the sufficiency of its financial resources daily by comparing the size of the clearing fund to the output of several historical stress tests.

    38See id.

    3. Timing of Clearing Fund Contributions

    In addition to revising the methodology for sizing OCC's total financial resources, OCC proposes generally to reduce the time in which each clearing member must make its clearing fund contribution.39 Clearing members currently have five business days to satisfy a clearing fund deficiency arising out of the monthly sizing or intra-month resizing processes. OCC proposes to reduce that time to two business days.40 OCC also proposes to require clearing members to satisfy any clearing fund deficit resulting from a decrease in the value of the clearing member's existing contribution within one hour of notification by OCC.41

    39See id. at 28028-29.

    40See id. at 28029.

    41See id. at 28028.

    D. Financial Resource Sufficiency

    As noted above, OCC proposes to (i) adopt a new clearing fund methodology, as detailed in the newly-proposed Policy and Methodology Description and (ii) document governance, monitoring, and review processes related to the clearing fund and stress testing.42 Proposed changes to OCC's clearing fund methodology include the assessment of OCC's clearing fund against a wide range of historical scenarios.43

    42See id. at 28020.

    43See id.

    1. Proposal To Monitor the Sufficiency of OCC's Financial Resources

    Currently, OCC monitors the sufficiency of its financial resources daily by estimating whether the size of the clearing fund is sufficient to cover a maximum potential loss from a simulated idiosyncratic default.44 Under its current procedures, when OCC observes credit exposures estimated under the idiosyncratic default in excess of 75 percent of the clearing fund size, OCC issues a margin call against the clearing member group generating the credit exposures.45 The size of such a margin call is the difference between the idiosyncratic default exposure and the base clearing fund amount.46 The margin call is allocated among the individual clearing members in the clearing member group based on each clearing member's proportionate share of the risk to OCC.47 OCC may limit the size of the margin call to each clearing member to the lesser of $500 million or 100 percent of such clearing member's net capital.48

    44See id. at 28019. As noted above, an idiosyncratic default is one of the two scenarios that OCC currently uses to determine the size of the clearing fund each month. See supra note 15. Specifically, the single largest credit exposure that would arise out of the default of a single clearing member group.

    45See id.

    46See id. As noted above in section II.A., the base clearing fund amount is the size of the clearing fund less the $1.8 billion prudential margin of safety.

    47See id., n. 13.

    48See id. at 28019.

    OCC's current procedures also call for increases to the total size of the clearing fund in more extreme scenarios. When OCC observes credit exposures estimated under the idiosyncratic default 49 exceeding 90 percent of the clearing fund size OCC must, under its procedures, increase the size of the clearing fund.50 The size of the increase to the clearing fund is the greater of $1 billion or 125 percent of the difference between the idiosyncratic default exposure and the clearing fund.51

    49 OCC would reduce the size of the idiosyncratic default exposure by factoring in margin calls issued due to a breach of the 75 percent threshold described above. See id.

    50See id.

    51See id.

    OCC proposes to revise this process by replacing the above-described idiosyncratic default approach with an approach that compares the size of the clearing fund to the exposures estimated under a set of historical scenario stress tests (“Sufficiency Stress Tests”).52 The Sufficiency Stress Tests proposed by OCC include the largest market moves up and down during 2008 on a cover 2 basis and the market moves associated with the 1987 market crash on a cover 1 basis.53

    52See id. at 28024.

    53See id. OCC proposes to measure the clearing fund against the two largest exposures under the 2008-like events and the one largest exposure under a 1987-like event. See id.

    OCC proposes to call for additional margin when it observes that one or more clearing member groups' exposure under a Sufficiency Stress Test exceeds 75 percent of the clearing fund.54 Under the proposal, the size of the margin call would be the amount by which the Sufficiency Stress Test exposure exceeds the 75 percent threshold.55 Similar to the current process, OCC proposes to retain authority to limit such margin calls to each clearing member to $500 million or 100 percent of the clearing member's net capital.56

    54See id. at 28025.

    55See id.

    56See id.

    OCC also proposes to revise the process for increasing the size of the clearing fund under more extreme scenarios. OCC proposes to increase the size of the clearing fund when it observes a Sufficiency Stress Test exposure in excess of 90 percent of the clearing fund.57 Similar to the current process, the size of the clearing fund increase would be the greater of $1 billion or 125 percent of the difference between the Sufficiency Stress Test exposure and the clearing fund.58 OCC also proposes to provide new authority to its Chief Executive Officer, Chief Administrative Officer, and Chief Operating Officer to temporarily increase the size of the clearing fund, subject to notice and later review by OCC's Board Risk Committee (“RC”).59

    57See id. at 28025-26.

    58See id. at 28026.

    59See id.

    Additionally, OCC proposes to add a new threshold at which it would commence enhanced monitoring of a clearing member group.60 Where OCC observes that a clearing member group's Sufficiency Stress Test exposure exceeds 65 percent of the clearing fund, OCC would commence enhanced monitoring of, and provide notice to the clearing member group.61

    60See id. at 28025. Based on OCC's procedures, staff understands that such monitoring would entail escalation within OCC's Financial Risk Management group noting the relevant clearing member, the future potential for breach of the 75 percent margin call threshold, and a summary of the apparent risk drivers resulting in the stress exposures.

    61See id.

    2. Proposal To Document Governance Processes Related to the Clearing Fund and Stress Testing

    OCC proposes to establish, as part of its rules, processes for the governance, monitoring, and review of the stress testing framework and clearing fund methodology described above.62 Such processes would cover daily, monthly, and annual review of OCC's stress testing framework and clearing fund methodology.

    62See id. at 28026.

    On a daily basis, OCC's staff would monitor the size of the clearing fund against OCC's risk tolerance and sufficiency stress tests.63 OCC staff would be required to report material issues to the Executive Vice President of OCC's Financial Risk Management group (“EVP-FRM”). The EVP-FRM would further escalate issues with OCC management as applicable.

    63See id.

    On a monthly basis, OCC's staff would provide reports and analyses of the daily stress tests to OCC's Management Committee and RC.64 OCC's staff would also be responsible for conducting a comprehensive analysis of stress test results, scenarios, models, parameters, and assumptions monthly or more frequently when the products cleared or markets served by OCC display high volatility or become less liquid or when the size or concentration of positions held by OCC's participants increases significantly.65

    64See id. at 28026-27.

    65See id. at 28026.

    On an annual basis, OCC's Model Validation Group would be required to perform a model validation of OCC's clearing fund methodology.66 The RC would review such validations.67 The RC would also be responsible for annual review and approval of the Policy.68

    66See id. at 28027.

    67See id.

    68See id.

    E. Allocation of Clearing Fund Contributions

    As noted above, OCC proposes to (i) increase the minimum clearing fund contribution requirement for clearing members to $500,000 and (ii) modify OCC's allocation weighting methodology for clearing fund contributions.69

    69See id. at 28020.

    1. Proposal To Increase the Minimum Clearing Fund Contribution

    Currently, the minimum amount a clearing member must contribute to OCC's clearing fund (the “fixed amount”) is $150,000.70 OCC proposes to increase the fixed amount to $500,000.71 The minimum contribution requirement has been in place since June 5, 2000,72 and has remained static while the average size of OCC's clearing fund has increased significantly.73 OCC also noted that other CCPs' minimum requirements are well in excess of OCC's minimum contribution requirement.74 OCC analyzed the impact of the proposed change on its clearing members and discussed such impacts with the potentially affected clearing members, the majority of which did not express concerns over the proposed increase.75

    70See id. at 28028. The initial amount that a new clearing member must contribute to OCC's clearing fund is also $150,000. See id. at 28027.

    71See id. at 28028. OCC similarly proposes to increase the initial contribution. See id. at 28027.

    72See id. (citing Securities Exchange Act Release No. 42897 (June 5, 2000), 65 FR 36750 (June 9, 2000) (SR-OCC-99-9)).

    73See id. at 28027.

    74See id.

    75See id.

    2. Proposal To Modify the Clearing Fund Allocation Weighting

    In addition to the fixed amount described above, most clearing members are required to contribute an additional amount to OCC's clearing fund (the “variable amount”). The variable amount is based on the weighted average of each clearing member's proportionate share of total risk, open interest, and volume.76 Currently, OCC uses the following weighting in its allocation of clearing fund requirements: 35 percent total risk; 50 percent open interest; and 15 percent volume.77 OCC proposes to modify the allocation weighting as follows: 70 percent total risk; 15 percent open interest; and 15 percent volume.78

    76See id. at 28028. Total risk refers to a clearing member's margin requirement. See id., n. 43. Additionally, the current methodology calculates volume based on executed volume. See id. at 28028.

    77See id.

    78See id. The definition of total risk would remain the same, but OCC would calculate volume based on cleared volume as opposed to executed volume. See id.

    F. Textual Clarification and Consolidation

    Finally, as noted above, OCC proposes to (i) reorganize, restate, and consolidate the provisions of OCC's By-Laws and Rules relating to the Clearing Fund into a newly-revised Chapter X of OCC's Rules; (ii) provide additional clarity in OCC's Rules regarding certain anti-procyclicality measures in OCC's margin model; and (iii) make a number of other non-substantive clarifying, conforming, and organizational changes to OCC's By-Laws, Rules, and filed procedures, including retiring OCC's existing Clearing Fund Intra-Month Re-sizing Procedure, Financial Resources Monitoring and Call Procedure, and Monthly Clearing Fund Sizing Procedure, as these procedures would be replaced by the proposed Rules, Policy, and Methodology Description.79

    79See id. at 28020.

    1. Proposal To Reorganize, Restate, and Consolidate Certain Rule Text

    The primary provisions that address OCC's Clearing Fund are currently located in Article VIII of the By-Laws and Chapter X of the Rules.80 OCC believes that consolidating all of the Clearing Fund-related provisions of its By-Laws and Rules into one place would provide more clarity around, and enhance the readability of, OCC's Clearing Fund requirements.81 Given the scope of changes described above, OCC believes that it is appropriate to make such revisions at this time.82

    80See id.

    81See id.

    82See id.

    The changes to the provisions currently residing in OCC's By-Laws require an affirmative vote of two-thirds of the directors then in office, but not less than a majority of the number of directors fixed by the By-Laws; however, changes to OCC's rules generally require only a majority vote of OCC's Board of Directors.83 OCC proposes to amend its By-Laws to maintain the existing requirements for modifying those rules that would be moved from Article VIII of OCC's By-Laws to Chapter X of its Rules.84

    83See id.

    84See id.

    2. Proposal To Add Rule Text Clarifying Anti-Procyclicality Measures in OCC's Margin Model

    OCC's existing methodology for calculating margin requirements incorporates measures designed to ensure that margin requirements are not lower than those that would be calculated using volatility estimated over a historical look-back period of at least ten years.85 OCC now proposes to amend its Rule 601(c) to reflect this practice.86 OCC believes that the proposed change would provide more clarity and transparency in its rules.87

    85See id. at 28029.

    86See id.

    87See id.

    3. Proposal To Make Other Non-Substantive Changes to OCC's Rules

    OCC proposes a number of clarifying, conforming, and organizational changes to its By-Laws, Rules, Collateral Risk Management Policy, Default Management Policy, and Clearing Fund-related procedures in connection with the proposed enhancements to its Pre-Funded Financial Resources and the relocation of OCC's Clearing Fund-related By-Laws into Chapter X of the Rules.88

    88See id. at 28029-30.

    In addition to the relocation of rules described above, OCC would also make minor, non-substantive revisions. For example, OCC would replace text referencing “computed contributions to the Clearing Fund” and “as fixed at the time” with text stating “required contributions to the Clearing Fund” and “as calculated at the time” to more accurately reflect that these rules are intended to refer to a Clearing Member's required Clearing Fund contribution amount as calculated under the proposed rules.89

    89See id. at 28031, n. 52.

    Further, OCC proposes to update references to Article VIII of the By-Laws in its Collateral Risk Management Policy and Default Management Policy to reflect the relocation of OCC's Clearing Fund-related By-Laws into Chapter X of the Rules.90

    90See id. at 28031.

    Finally, OCC proposes to replace procedures regarding its processes for (i) the monthly resizing of its Clearing Fund, (ii) the addition of financial resources, and (iii) the execution of any intra-month resizing of the Clearing Fund.91 OCC proposes to retire its existing procedures because the relevant rule requirements would be maintained in the proposed rules as well as the Clearing Fund Methodology Policy and Clearing Fund Methodology Description included as part of the Proposed Rule Change.92

    91See id.

    92See id.

    III. Summary of Comments

    As noted above, the Commission received five comment letters—AACC Letter I, CBOE Letter I, MLPRO Letter I, WEX Letter I, and GS Letter I—supporting the changes in the Proposed Rule Change.93 Two of the commenters urge the Commission to approve the proposal as expeditiously as possible.94 AACC believes that the proposal would remediate two problems with the current clearing fund methodology: (1) OCC's current clearing fund sizing methodology failing to contain sufficient anti-procyclicality measures, and (2) OCC's current clearing fund contribution allocation methodology failing to appropriately incentivize clearing member risk management.95

    93See supra note 7.

    94 AACC Letter I at 1; MLPRO Letter I at I.

    95 AACC Letter I at 1.

    Regarding the clearing fund sizing methodology, AACC believes that the proposal would implement a number of measures intended to provide stability and consistency to the size of OCC's clearing fund.96 Specifically, AACC supports (1) sizing the clearing fund based on a variety of risk factors, and (2) testing the size of the clearing fund on a daily basis against extreme but plausible market events, thereby lowering the likelihood that OCC's clearing fund would be insufficient to protect OCC and market participants in the event of a clearing member default.97 MLPRO believes that the proposed changes would create a more transparent and predictable model.98 Similarly, GS supports OCC's proposal to include more comprehensive testing scenarios by including observed market events over a longer historical period, which would improve the overall quality of OCC's stress testing and strengthen OCC's ability to model risk scenarios.99 Additionally, WEX believes that the proposed changes, specifically changes regarding how the monthly clearing fund sizing process will address anti-procyclicality, should help reduce operational issues related to a clearing member's obligations increasing and decreasing.100

    96Id. at 2.

    97Id. at 2-3.

    98 MLPRO Letter I at 2.

    99 GS Letter I at 2. In its letter, GS refers to OCC's movement to a 1-in-80-year period from a 1-in-50-year model. The Commission notes that OCC's current process is not based on a 1-in-50-year model, and that OCC is now proposing to adopt a new risk tolerance based on a 1-in-50-year hypothetical event. See Notice of Filing, 83 FR at 31596. Further, OCC proposes to base the size of the clearing fund on the aggregate credit exposures estimated under a 1-in-80-year hypothetical market event (as opposed to an historical market event). See id. at 31600.

    100 WEX Letter I at 1.

    AACC states that, from a theoretical perspective, OCC's proposed sizing methodology constitutes a significant improvement over the current sizing methodology in that the size of the clearing fund would be less influenced by changes in volatility because OCC is introducing other risk drivers into the sizing methodology as well as monitoring and augmenting such risk drivers on a daily basis based on market conditions.101 AACC also comments that the proposal would cause the size of OCC's clearing fund to become more stable because OCC would test for adequacy and sufficiency on a daily basis using a series of historical and hypothetical stress tests that are rooted in extreme but plausible market events.102

    101 AACC Letter I at 3.

    102Id.

    Commenters also believe that the proposal would improve OCC's risk models by correcting existing shortcomings.103 CBOE comments that the adoption of a Cover 2 standard would ensure that the size of the clearing fund is sufficient to protect OCC against losses from the simultaneous default of its two largest Clearing Members under extreme, but plausible market conditions.104 GS also agrees with OCC's proposal to adopt a Cover 2 Standard.105 MLPRO comments that the adoption of a Cover 2 standard in establishing a new model to measure the adequacy of the clearing fun and address potential default scenarios would address issues that MLPRO identifies with OCC's current model.106 MLPRO also supports OCC's (1) adopting risk tolerance and stress testing assumptions that are developed from extreme, but plausible scenarios, and (2) calibrating individual equity price movements to the price shock for the applicable equity index to address issues with the current model.107

    103 CBOE Letter I at 1; MLPRO Letter I at 1-2.

    104 CBOE Letter I at 1.

    105 GS Letter I at 2.

    106 MLPRO Letter I at 1-2.

    107Id.

    Regarding the changes to the clearing fund allocation methodology, commenters believe that the proposal would better align clearing members' required clearing fund contribution to the risk they present to OCC and other market participants.108 AACC states that the proposed changes would place more emphasis on the economic risk presented by a clearing member's cleared contracts than the operational risk presented by a high volume clearing member, thereby better recognizing that certain types of clearing members present a relatively lower risk to OCC even though they may represent a higher percentage of overall activity (i.e., clearing members with market-maker and other risk-neutral customers).109 Similarly, WEX supports allocation based on cleared volumes as opposed to executed volumes in consideration of where a positon is cleared as opposed to where it is executed.110 MLPRO also supports increases the weighting of total risk in the allocation process.111 Commenters also believe that the proposed changes make sense from a default and liquidation perspective.112

    108 AACC Letter I at 4; WEX Letter I at 1; GS Letter I at 1.

    109 AACC Letter I at 4.

    110 WEX Letter I at 2.

    111 MLPRO Letter I at 2.

    112 AACC Letter I at 4; GS Letter I at 1.

    Commenters AACC and WEX believe that the proposed changes would have positive effects on the listed options market.113 Similarly, MLPRO believes that the proposed changes would increase liquidity in the listed options market.114 Additionally, GS believes that the proposed changes will greatly enhance OCC's resiliency and risk management.115

    113 AACC Letter I at 5; WEX Letter I at 2.

    114 MLPRO Letter I at 1.

    115 GS Letter I at 2.

    IV. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Act directs the Commission to approve a proposed rule change of a self-regulatory organization if it finds that such proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to such organization.116 After carefully considering the Proposed Rule Change, the Commission finds the proposal is consistent with the requirements of the Act and the rules and regulations thereunder applicable to OCC. More specifically, the Commission finds that the proposal is consistent with Section 17A(b)(3)(F) of the Act 117 and Rules 17Ad-22(e)(1) and 17Ad-22(e)(4) thereunder.118

    116 15 U.S.C. 78s(b)(2)(C).

    117 15 U.S.C. 78q-1(b)(3)(F).

    118 17 CFR 240.17Ad-22(e)(1); 17 CFR 240.17Ad-22(e)(4).

    A. Consistency With Section 17A(b)(3)(F) of the Act

    Section 17A(b)(3)(F) of the Act requires that the rules of a clearing agency be designed to, among other things, promote the prompt and accurate clearance and settlement of securities transactions, assure the safeguarding of securities and funds which are in the custody or control of the clearing agency or for which it is responsible, and, in general, to protect investors and the public interest.119 Based on its review of the record, the Commission believes that the proposed changes are designed to promote the prompt and accurate clearance and settlement of securities transactions, assure the safeguarding of securities and funds which are in OCC's custody or control, and, in general, protect investors and the public interest by enhancing OCC's overall risk management for the reasons set forth below.

    119 15 U.S.C. 78q-1(b)(3)(F).

    First, as described above, OCC's current process for sizing the clearing fund was established in 2011 and strengthened under a 2015 interim approach. The current process is essentially an extension of OCC's margin model. In general, margin requirements for clearing members are very reactive to market movements and changes in clearing member portfolios. Because OCC's current process for sizing the clearing fund is based on a relatively dynamic daily margin process, the size of the clearing fund can at times be volatile and cyclical in nature. The Proposed Rule Change would base the sizing and monitoring of OCC's clearing fund on a stable inventory of stress tests rather than continuing to rely on a dynamic margin model. The Commission believes this new approach would provide OCC with a more precise, rigorous, and stable assessment of the financial resources it would need to hold in its clearing fund to cover its credit risk exposure to its members in extreme but plausible market conditions.

    Second, with respect to the robustness of the new stress testing framework itself, the Commission believes that the stress tests proposed in OCC's framework are an improvement over OCC's current approach in this area, as the stress tests comprise a wide range of foreseeable stress scenarios. The scenarios cover historical events as extreme as the 2008 financial crisis and 1987 market crash as well as hypothetical events derived from a dataset of historical S&P returns. OCC's proposed stress testing framework would also include a category of stress tests designed specifically for review of OCC's financial resources against implausible scenarios and reverse stress tests. Such stress tests would not directly affect the total amount of OCC's financial resources, but would facilitate a more forward looking risk management process. Accordingly, while as an ongoing supervisory matter the Commission expects OCC to consider and, as necessary, implement future enhancements to its suite of stress tests, the Commission believes that the suite of stress tests that OCC proposes to establish in its risk management framework pursuant to the Proposed Rule Change represents a material improvement to OCC's current risk management practices for estimating potential future losses in extreme but plausible market conditions.

    Third, as described above, OCC proposes to adopt several enhancements to its methodology for determining the size of its clearing fund. OCC proposes to adopt an internal credit risk tolerance based on hypothetical stress scenarios, which would provide OCC with a benchmark that it believes represents extreme but plausible market conditions. The Commission believes that establishing such a tolerance is a valuable step in accurately estimating the total financial resources necessary to cover OCC's exposures in extreme but plausible market conditions. Next, OCC proposes to set the size of its clearing fund to cover a scenario that is more extreme than its internal tolerance to ensure consistent coverage, which the Commission believes would be another valuable step in accurately estimating OCC's necessary total financial resources. Further, OCC proposes to cover its two largest credit exposures when setting the size of the clearing fund, which goes further than OCC's current practice of covering the greater of OCC's single largest exposure or two random exposures. For the same reasons, the Commission believes this, too, would improve OCC's risk management practices. Finally, OCC proposes to limit the potential reductions in the size of the clearing fund month-over-month. Such limitations would avoid large drops in the clearing fund size over a short period of time and unnecessary reductions followed by immediate calls for additional resources at the beginning of each month.

    Fourth, the proposal discussed above would expand and improve upon the scope of stress scenarios against which OCC monitors is financial resources. Under the proposal, OCC would continue to review the size of its clearing fund against exposures under a stress scenario designed to replicate the 1987 market crash, and would also introduce monitoring against other historical scenarios such as the largest market moves up and down observed during the 2008 financial crisis. In addition, OCC would continue its practice of collecting additional resources in margin collateral and clearing fund requirements where stress exposures exceed 75 percent and 90 percent, respectively, of the size of the clearing fund. Based on a review of the parameters of the scenario replicating the 1987 market crash, the Commission believes that the scenario presents potential losses that are extreme while also plausible in light of their historical basis. Additionally, the Commission believes that the scenario would provide stress exposure estimates that would be meaningful for the monitoring of OCC's total financial resources. The Commission also believes that the introduction of new historical scenarios, such as those replicating the financial crisis, would provide additional depth to the monitoring of OCC's financial resources. The Commission believes, therefore, that the changes proposed in the Proposed Rule Change include the adoption of a wide range of stress scenarios for the testing of OCC's financial resources.

    Fifth, OCC would document its periodic review and analysis of its stress testing framework and clearing fund methodology, which would include (1) daily review of stress test outputs, (2) monthly (or more frequently as needed) analysis of the stress test results, scenarios, models, parameters, and assumptions, and (3) annual validation of the clearing fund methodology. OCC also would clearly define the process for escalating the results of its daily and monthly analyses and require on an annual basis Board level review and approval of the Clearing Fund Methodology Policy. The Commission believes that these governance processes would help ensure that OCC is in a position to continuously monitor, analyze, and adjust as necessary both the stress testing framework and the clearing fund methodology, thereby helping to ensure the accuracy and reliability of the methodology by which OCC tests the sufficiency of its financial resources.

    Taken together, and for the reasons discussed above, the Commission believes that the proposed changes will increase the likelihood that OCC will have sufficient financial resources in excess of margin to address credit losses that could arise from a wide range of stress scenarios including, but not limited to, the default of the participant family that would potentially cause the largest aggregate credit exposure for OCC in extreme but plausible market conditions. Having an improved capacity to access and apply sufficient financial resources to credit losses in a wide range of stress scenarios should, in turn, enhance OCC's ability to continue to promptly and accurately clear and settle securities transactions for participants in the options markets during periods of market stress. Therefore, the Commission believes that the proposal is consistent with promoting the prompt and accurate clearance and settlement of securities transactions.

    The Commission further believes that the proposed changes are consistent with assuring the safeguarding of securities and funds which are in OCC's custody or control, or for which it is responsible. By establishing a clearing fund that is sized to address credit losses that could arise from a wide range of stress scenarios including, but not limited to, the default of the participant family that would potentially cause the largest aggregate credit exposure for OCC in extreme but plausible market conditions, the proposal will enhance OCC's ability to use the clearing fund as a means to safeguard the securities and funds it holds for its Clearing Members during periods of market stress. In addition, the Commission believes that the proposed changes to OCC's allocation weighting will allow OCC to better manage its credit exposures to its clearing members by better aligning each clearing member's contributions to the credit risk it poses to OCC. This improved ability to manage credit exposure in the form of clearing fund amounts more closely calibrated to credit exposure should, in turn, improve OCC's ability to rely upon the clearing fund as a resource to safeguard the securities and funds it holds during periods of market stress.

    Finally, the Commission believes that OCC's proposed measures addressing the potential procyclical nature of clearing fund obligations, as well as the textual clarifications and reorganization set forth in the proposal, are consistent with the protection of investors and the public interest. The enhanced certainty for Clearing Members that should be achieved in the form of clearly established and understood limitations on the reduction in Clearing Fund size from month to month should make it easier for Clearing Members, and their customers and investors more broadly, to more easily anticipate and manage financial resource demands that can arise from OCC's risk management processes in respect of the clearing fund. In addition, the reorganization and consolidation of rule provisions related to OCC's clearing fund would enhance the readability of OCC's public-facing rules, and additional clarification of OCC's margin rules would promote transparency by providing the public with information about OCC's risk management processes. The Commission believes that the additional clarity, predictability and transparency provided by these proposed changes would generally be consistent with the protection of investors and the public interest by removing potential sources of confusion, surprise or misunderstanding regarding the operations and potential consequences of OCC's risk management processes in respect of the clearing fund.

    Accordingly, and for the reasons stated above, the Commission finds that the Proposed Rule Change is consistent with Section 17A(b)(3)(F) of the Act.120

    120 15 U.S.C. 78q-1(b)(3)(F).

    B. Consistency With Rule 17Ad-22(e)(4) Under the Act 1. Total Financial Resources

    Rules 17Ad-22(e)(4)(i) and (iii) under the Act requires, among other things, that OCC establish, implement, maintain, and enforce written policies and procedures reasonably designed to effectively identify, measure, monitor, and manage its credit exposures to participants and those arising from its payment, clearing, and settlement processes by, among other things, maintaining financial resources at the minimum to enable OCC to cover a wide range of foreseeable stress scenarios that include, but are not limited to, the default of the participant family that would potentially cause the largest aggregate credit exposure for OCC in extreme but plausible market conditions.121

    121 17 CFR 240.17Ad-22(e)(4)(i) and (iii).

    As described above, the proposal includes enhancements to OCC's methodology for sizing its clearing fund to ensure that it maintains sufficient financial resources, including: (i) Adoption of an internal credit risk tolerance that OCC believes represents extreme but plausible market conditions; (ii) sizing the clearing fund to cover credit exposures under scenarios that are more extreme than OCC's risk tolerance, (iii) sizing the clearing fund to cover the default of the two clearing member groups that that would potentially cause the largest aggregate credit exposure for OCC; (iv) limiting the potential reduction in clearing fund size month-over-month; and (v) shortening the time by which each clearing member must fund its clearing fund contribution.

    Taken together, the Commission believes that proposed changes described above are designed to improve the process by which OCC sizes its total financial resources and are consistent with the requirements of Rules 17Ad-22(e)(4)(i) and (iii) under the Act. First, the proposal is designed to cover credit exposures in excess of those posed by any one clearing member group because OCC is proposing to cover the largest aggregate exposure to two clearing member groups. Second, the proposal is designed to cover credit exposures in extreme but plausible market conditions because OCC proposes to size its clearing fund based on scenarios that are more extreme than those that OCC believes to represent extreme but plausible market conditions. Further, based on the Commission's detailed analysis of the relevant scenarios through the supervisory process, the Commission believes that OCC has defined extreme but plausible scenarios in an acceptable manner for the markets served. Finally, the Commission believes that proposal would support the consistent and stable maintenance of an appropriate level of total financial resources by limiting month-over-month reductions in the size of clearing fund and requiring clearing members to make clearing fund contributions within two business days. Accordingly, the Commission believes that the proposed modifications to OCC's clearing fund sizing methodology are consistent with Rule 17Ad-22(e)(4)(i) and (iii).122

    122Id.

    2. Financial resource sufficiency

    Rule 17Ad-22(e)(4)(vi) under the Act requires OCC to establish, implement, maintain, and enforce written policies and procedures reasonably designed to effectively identify, measure, monitor, and manage its credit exposures to participants and those arising from its payment, clearing, and settlement processes by testing the sufficiency of its total financial resources available to meet the minimum financial resource requirements under paragraphs Rules 17Ad-22(e)(4)(i) through (iii).123 Such testing must include (A) Conducting stress testing of OCC's total financial resources once each day using standard predetermined parameters and assumptions; (B) conducting a comprehensive analysis on at least a monthly basis of the existing stress testing scenarios, models, and underlying parameters and assumptions, and considering modifications to ensure they are appropriate for determining the covered clearing agency's required level of default protection in light of current and evolving market conditions; (C) conducting a comprehensive analysis of stress testing scenarios, models, and underlying parameters and assumptions more frequently than monthly when the products cleared or markets served display high volatility or become less liquid, or when the size or concentration of positions held by the covered clearing agency's participants increases significantly; and (D) reporting the results of such analyses to appropriate decision makers at OCC, including but not limited to, its risk management com