Federal Register Vol. 83, No.151,

Federal Register Volume 83, Issue 151 (August 6, 2018)

Page Range38245-38655
FR Document

83_FR_151
Current View
Page and SubjectPDF
83 FR 38311 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; ExtensionPDF
83 FR 38302 - Announcement of the Per- and Polyfluoroalkyl Substances (PFAS) North Carolina Community EngagementPDF
83 FR 38450 - Delegation of Authority To Concur With Department of Defense Humanitarian and Civic Assistance ActivitiesPDF
83 FR 38450 - E.O. 13224 Designation of Abdul Rehman al-Dakhil, aka Dilshad Ahmad, aka Danish Dilshad, aka Amantullah Ali, aka Amanatullah Ali, aka Amanat Ali, aka Imanat Ullah Iqbal, aka `Abd al-Rahman al-Dakhil as a Specially Designated Global TerroristPDF
83 FR 38326 - Distribution of Cable Royalty Funds; Distribution of Satellite Royalty FundsPDF
83 FR 38301 - Adequacy Status of Motor Vehicle Emission Budgets in Submitted State Implementation Plan for Transportation Conformity Purposes; District of Columbia, Maryland, and Virginia; Washington, DC-MD-VA 2008 8-Hour Ozone National Ambient Air Quality Standard Nonattainment Area Maintenance Plan 2014, 2025, and 2030 Motor Vehicle Emissions Budgets for Nitrogen Oxides and Volatile Organic CompoundsPDF
83 FR 38263 - National Oil and Hazardous Substances Pollution Contingency Plan; National Priorities List: Deletion of the Frontier Hard Chrome, Inc. Superfund SitePDF
83 FR 38262 - Address Change for Waste Import-Export Submittals From the Office of Federal Activities to the Office of Resource Conservation and RecoveryPDF
83 FR 38294 - Magnuson-Stevens Act Provisions; General Provisions for Domestic Fisheries; Application for Exempted Fishing PermitsPDF
83 FR 38286 - Magnuson-Stevens Act Provisions; General Provisions for Domestic Fisheries; Application for Exempted Fishing PermitsPDF
83 FR 38282 - Submission for OMB Review; Comment RequestPDF
83 FR 38300 - Pesticide Product Registration; Receipt of Applications for New UsesPDF
83 FR 38289 - Takes of Marine Mammals Incidental to Specified Activities; Taking Marine Mammals Incidental to the Sand Point City Dock Replacement Project in Sand Point, AlaskaPDF
83 FR 38270 - Governing BodiesPDF
83 FR 38292 - Determination of Overfishing or an Overfished ConditionPDF
83 FR 38313 - Submission for OMB Review; Construction Wage Rate Requirements-Price Adjustment (Actual Method)PDF
83 FR 38450 - Hours of Service of Drivers: Allied Beverage Group L.L.C. (Allied); Application for ExemptionPDF
83 FR 38314 - Decision To Evaluate a Petition To Designate a Class of Employees From the Superior Steel Company in Carnegie, Pennsylvania, To Be Included in the Special Exposure CohortPDF
83 FR 38317 - Polar Icebreaker Program; Preparation of Environmental Impact StatementPDF
83 FR 38457 - Disciplinary Appeals Board PanelPDF
83 FR 38259 - Safety Zone; Philippine Sea, RotaPDF
83 FR 38257 - Safety Zones; Annual Events Requiring Safety Zones in the Captain of the Port Lake Michigan Zone-Menominee Waterfront Festival FireworksPDF
83 FR 38451 - Petition for Waiver of CompliancePDF
83 FR 38257 - Safety Zone; Philippine Sea, TinianPDF
83 FR 38306 - Formations of, Acquisitions by, and Mergers of Bank Holding CompaniesPDF
83 FR 38296 - Alabama Power Company; Notice of Intent To File License Application, Filing of Pre-Application Document (PAD), Commencement of Pre-Filing Process, and Scoping; Request for Comments on the Pad and Scoping Document, and Identification of Issues and Associated Study RequestsPDF
83 FR 38299 - Targa NGL Pipeline Company LLC; Notice of Petition for Declaratory OrderPDF
83 FR 38299 - Titan Solar, LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 AuthorizationPDF
83 FR 38298 - Casa Mesa Wind, LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 AuthorizationPDF
83 FR 38300 - Combined Notice of FilingsPDF
83 FR 38298 - Combined Notice of Filings #2PDF
83 FR 38296 - Combined Notice of Filings #1PDF
83 FR 38312 - Information Collection; Travel CostsPDF
83 FR 38311 - Information Collection; Subcontracting PlansPDF
83 FR 38273 - Announcement of Loan Application Procedures, and Deadlines for the Rural Energy Savings Program (RESP)PDF
83 FR 38266 - Regulations Governing Fees for Services Performed in Connection With Licensing and Related Services-2018 UpdatePDF
83 FR 38282 - District Export Council Nomination OpportunityPDF
83 FR 38324 - Agency Information Collection Activities; Proposed eCollection, eComments Requested; Revision of a Currently Approved Collection; the National Forensic Laboratory Information System Collection of Drug Analysis DataPDF
83 FR 38295 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; Graduate Assistance in Areas of National Need (GAANN) Performance ReportPDF
83 FR 38320 - Endangered and Threatened Wildlife and Plants; 5-Year Status Reviews for 42 Southeastern SpeciesPDF
83 FR 38292 - Meeting of the Columbia Basin Partnership Task Force of the Marine Fisheries Advisory CommitteePDF
83 FR 38327 - Proposal Review; Notice of MeetingsPDF
83 FR 38441 - Agency Information Collection Activities: Proposed Request and Comment RequestPDF
83 FR 38315 - Nonclinical Testing of Orally Inhaled Nicotine-Containing Drug Products; Draft Guidance for Industry; AvailabilityPDF
83 FR 38434 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Granting Approval of a Proposed Rule Change To Amend FINRA Rule 6433 To Adopt the OTC Quotation Tier Pilot as PermanentPDF
83 FR 38393 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Designation of a Longer Period on Commission Action of Proposed Rule Change To Make Permanent the Retail Liquidity Program Pilot, NYSE Rule 107C, Which Is Set To Expire on December 31, 2018PDF
83 FR 38327 - Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Withdrawal of a Proposed Rule Change To Adopt BZX Rule 14.11(k) To Permit the Listing and Trading of Managed Portfolio Shares and To List and Trade Shares of the ClearBridge Appreciation ETF, ClearBridge Large Cap ETF, ClearBridge Mid Cap Growth ETF, ClearBridge Select ETF, and ClearBridge All Cap Value ETFPDF
83 FR 38327 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Approving a Proposed Rule Change Creating Fee and Honorarium for Late Cancellation of a Prehearing ConferencePDF
83 FR 38428 - Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Lower Fees and Administrative Costs for Distributors of Nasdaq Basic, Nasdaq Last Sale, NLS Plus and the Nasdaq Depth-of-Book Products Through a Consolidated Enterprise LicensePDF
83 FR 38287 - Marine Mammals; File No. 21217PDF
83 FR 38357 - Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing of Amendment No. 1 to an Advance Notice To Amend the Loss Allocation Rules and Make Other ChangesPDF
83 FR 38324 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-Cooperative Research Group on ROS-Industrial Consortium AmericasPDF
83 FR 38375 - Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing of Amendment No. 1 to an Advance Notice To Amend the Loss Allocation Rules and Make Other ChangesPDF
83 FR 38329 - Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing of Amendment No. 1 to an Advance Notice To Adopt a Recovery & Wind-Down Plan and Related RulesPDF
83 FR 38288 - Caribbean Fishery Management Council; Public MeetingPDF
83 FR 38393 - Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of Amendment No. 1 to an Advance Notice To Amend the Loss Allocation Rules and Make Other ChangesPDF
83 FR 38344 - Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing of Amendment No. 1 to an Advance Notice To Adopt a Recovery & Wind-Down Plan and Related RulesPDF
83 FR 38413 - Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of Amendment No. 1 to an Advance Notice To Adopt a Recovery & Wind-Down Plan and Related RulesPDF
83 FR 38324 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-Integrated Photonics Institute for Manufacturing Innovation Operating Under the Name of The American Institute for Manufacturing Integrated PhotonicsPDF
83 FR 38323 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-National Armaments ConsortiumPDF
83 FR 38293 - New England Fishery Management Council; Public MeetingPDF
83 FR 38294 - North Pacific Fishery Management Council; Public MeetingPDF
83 FR 38306 - Formations of, Acquisitions by, and Mergers of Savings and Loan Holding CompaniesPDF
83 FR 38306 - Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding CompanyPDF
83 FR 38285 - Fisheries of the South Atlantic; Southeast Data, Assessment, and Review (SEDAR); Public MeetingPDF
83 FR 38288 - Pacific Fishery Management Council; Public MeetingPDF
83 FR 38318 - Board of Visitors for the National Fire AcademyPDF
83 FR 38264 - Suspension of Community EligibilityPDF
83 FR 38283 - Stainless Steel Sheet and Strip From the People's Republic of China: Rescission of Antidumping Duty Administrative Review; 2016-2018PDF
83 FR 38255 - Safety Zone; Fireworks Display, Little Egg Harbor, Long Beach, NJPDF
83 FR 38316 - Findings of Research MisconductPDF
83 FR 38447 - Privacy Act of 1974; System of RecordsPDF
83 FR 38452 - Notice of Funding Opportunity (NOFO): Solicitation of Project Proposals for the National Center for Mobility ManagementPDF
83 FR 38285 - North American Free Trade Agreement (NAFTA), Article 1904, Binational Panel Reviews: Notice of Completion of Panel ReviewPDF
83 FR 38253 - Amendment and Establishment of Class E Airspace; Columbus, NEPDF
83 FR 38455 - Deepwater Port License Application: Texas Gulf Terminals, Inc.PDF
83 FR 38307 - Hearings on Competition and Consumer Protection in the 21st CenturyPDF
83 FR 38261 - Approval and Promulgation of Air Quality Implementation Plans; Pennsylvania; Removal of Department of Environmental Protection Gasoline Volatility Requirements for the Pittsburgh-Beaver Valley Area; Withdrawal of Direct Final RulePDF
83 FR 38325 - Agency Information Collection Activities; Proposed eCollection eComments Requested; New Collection: Survey of State Attorneys General Offices (SSAGO): Human TraffickingPDF
83 FR 38622 - Medicare Program; FY 2019 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting RequirementsPDF
83 FR 38576 - Medicare Program; FY 2019 Inpatient Psychiatric Facilities Prospective Payment System and Quality Reporting Updates for Fiscal Year Beginning October 1, 2018 (FY 2019)PDF
83 FR 38514 - Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2019PDF
83 FR 38250 - Airworthiness Directives; The Boeing Company AirplanesPDF
83 FR 38245 - Airworthiness Directives; The Boeing Company AirplanesPDF
83 FR 38247 - Airworthiness Directives; the Boeing Company AirplanesPDF
83 FR 38273 - United States Classes, Standards, and Grades for PoultryPDF
83 FR 38460 - Single-Counterparty Credit Limits for Bank Holding Companies and Foreign Banking OrganizationsPDF
83 FR 38303 - Proposed Agency Information Collection Activities; Comment RequestPDF

Issue

83 151 Monday, August 6, 2018 Contents Agricultural Marketing Agricultural Marketing Service NOTICES United States Classes, Standards, and Grades for Poultry, 38273 2018-16249 Agriculture Agriculture Department See

Agricultural Marketing Service

See

Rural Utilities Service

Antitrust Division Antitrust Division NOTICES Changes under the National Cooperative Research And Production Act: Integrated Photonics Institute for Manufacturing Innovation Operating under Name of American Institute for Manufacturing Integrated Photonics, 38324 2018-16706 National Armaments Consortium, 38323 2018-16705 Changes under the National Cooperative Research and Production Act: Southwest Research Institute—Cooperative Research Group on ROS-Industrial Consortium-Americas, 38324 2018-16713 Centers Disease Centers for Disease Control and Prevention NOTICES Petitions to Designate Classes of Employees to be Included in Special Exposure Cohort: Superior Steel Co. in Carnegie, PA, 38314 2018-16761 Centers Medicare Centers for Medicare & Medicaid Services RULES Medicare Program: FY 2019 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements, 38622-38655 2018-16539 FY 2019 Inpatient Psychiatric Facilities Prospective Payment System and Quality Reporting Updates for Fiscal Year Beginning October 1, 2018, 38576-38620 2018-16518 Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2019, 38514-38573 2018-16517 Coast Guard Coast Guard RULES Safety Zones: Annual Events in Captain of the Port Lake Michigan Zone: Menominee Waterfront Festival Fireworks, 38257 2018-16756 Fireworks Display, Little Egg Harbor, Long Beach, NJ, 38255-38257 2018-16694 Philippine Sea, Rota, 38259-38261 2018-16757 Philippine Sea, Tinian, 38257-38259 2018-16754 NOTICES Environmental Impact Statements; Availability, etc.: Polar Icebreaker Program, 38317-38318 2018-16760 Commerce Commerce Department See

International Trade Administration

See

National Oceanic and Atmospheric Administration

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 38282 2018-16769
Copyright Royalty Board Copyright Royalty Board NOTICES Distribution of Cable and Satellite Royalty Funds, 38326-38327 2018-16780 Defense Department Defense Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Construction Wage Rate Requirements-Price Adjustment, 38313-38314 2018-16763 Subcontracting Plans, 38311-38312 2018-16744 Travel Costs, 38312-38313 2018-16745 Education Department Education Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Graduate Assistance in Areas of National Need Performance Report, 38295 2018-16737 Energy Department Energy Department See

Federal Energy Regulatory Commission

Environmental Protection Environmental Protection Agency RULES Address Change for Waste Import-Export Submittals from Office of Federal Activities to Office of Resource Conservation and Recovery, 38262-38263 2018-16774 Air Quality State Implementation Plans; Approvals and Promulgations: Pennsylvania; Removal of Gasoline Volatility Requirements for Pittsburgh-Beaver Valley Area; Withdrawal, 38261 2018-16604 National Oil and Hazardous Substances Pollution Contingency Plan; National Priorities List: Deletion of Frontier Hard Chrome, Inc. Superfund Site, 38263-38264 2018-16775 NOTICES Events: Per- and Polyfluoroalkyl Substances North Carolina Community Engagement, 38302-38303 2018-16805 Motor Vehicle Emissions Budgets: Adequacy Status for Transportation Conformity Purposes for Nitrogen Oxides and Volatile Organic Compounds: District of Columbia, Maryland, and Virginia, 38301-38302 2018-16777 Pesticide Product Registrations: Applications for New Uses, 38300-38301 2018-16768 Federal Aviation Federal Aviation Administration RULES Airworthiness Directives: The Boeing Company Airplanes, 38245-38253 2018-16320 2018-16479 2018-16499 Amendment and Establishment of Class E Airspace: Columbus, NE, 38253-38255 2018-16679 Federal Emergency Federal Emergency Management Agency RULES Suspensions of Community Eligibility, 38264-38266 2018-16696 NOTICES Meetings: Board of Visitors for National Fire Academy, 38318-38319 2018-16697 Federal Energy Federal Energy Regulatory Commission NOTICES Combined Filings, 38296, 38298-38300 2018-16746 2018-16747 2018-16748 Declaratory Orders; Petitions: Targa NGL Pipeline Co. LLC, 38299 2018-16751 Initial Market-Based Rate Filings Including Requests for Blanket Section 204 Authorizations: Casa Mesa Wind, LLC, 38298 2018-16749 Titan Solar, LLC, 38299-38300 2018-16750 License Applications: Alabama Power Co., 38296-38298 2018-16752 Federal Motor Federal Motor Carrier Safety Administration NOTICES Hours of Service of Drivers; Exemption Applications: Allied Beverage Group, LLC, 38450-38451 2018-16762 Federal Railroad Federal Railroad Administration NOTICES Compliance Waivers; Petitions, 38451-38452 2018-16755 Federal Reserve Federal Reserve System RULES Single-Counterparty Credit Limits for Bank Holding Companies and Foreign Banking Organizations, 38460-38511 2018-16133 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 38303-38306 2018-16132 Changes in Bank Control: Acquisitions of Shares of a Bank or Bank Holding Company, 38306 2018-16701 Formations of, Acquisitions by, and Mergers of Bank Holding Companies, 38306 2018-16753 Formations of, Acquisitions by, and Mergers of Savings and Loan Holding Companies, 38306-38307 2018-16702 Federal Trade Federal Trade Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 38311 C1--2018--15979 Meetings: Hearings on Competition and Consumer Protection in 21st Century, 38307-38310 2018-16608 Federal Transit Federal Transit Administration NOTICES Funding Opportunities: National Center for Mobility Management, Solicitation of Project Proposals, 38452-38455 2018-16689 Fish Fish and Wildlife Service NOTICES Endangered and Threatened Wildlife and Plants; 5-Year Status Reviews for 42 Southeastern Species, 38320-38323 2018-16734 Food and Drug Food and Drug Administration NOTICES Guidance: Nonclinical Testing of Orally Inhaled Nicotine-Containing Drug Products, 38315-38316 2018-16726 General Services General Services Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Construction Wage Rate Requirements-Price Adjustment, 38313-38314 2018-16763 Subcontracting Plans, 38311-38312 2018-16744 Travel Costs, 38312-38313 2018-16745 Health and Human Health and Human Services Department See

Centers for Disease Control and Prevention

See

Centers for Medicare & Medicaid Services

See

Food and Drug Administration

NOTICES Findings of Research Misconduct, 38316-38317 2018-16693
Homeland Homeland Security Department See

Coast Guard

See

Federal Emergency Management Agency

Interior Interior Department See

Fish and Wildlife Service

International Trade Adm International Trade Administration NOTICES Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Stainless Steel Sheet and Strip from the People's Republic of China, 38283-38285 2018-16695 Panel Reviews: North American Free Trade Agreement, 38285 2018-16688 Requests for Nominations: District Export Council, 38282-38283 2018-16741 Justice Department Justice Department See

Antitrust Division

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: National Forensic Laboratory Information System Collection of Drug Analysis Data, 38324-38325 2018-16740 Survey of State Attorneys General Offices: Human Trafficking, 38325-38326 2018-16581
Legal Legal Services Corporation PROPOSED RULES Governing Bodies, 38270-38272 2018-16765 Library Library of Congress See

Copyright Royalty Board

Maritime Maritime Administration NOTICES Deepwater Port License Applications: Texas Gulf Terminals, Inc., 38455-38457 2018-16673 NASA National Aeronautics and Space Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Construction Wage Rate Requirements-Price Adjustment, 38313-38314 2018-16763 Subcontracting Plans, 38311-38312 2018-16744 Travel Costs, 38312-38313 2018-16745 National Oceanic National Oceanic and Atmospheric Administration NOTICES Determinations: Overfishing or Overfished Condition, 38292-38293 2018-16764 Meetings: Caribbean Fishery Management Council, 38288-38289 2018-16710 Columbia Basin Partnership Task Force of Marine Fisheries Advisory Committee, 38292 2018-16731 Fisheries of South Atlantic; Southeast Data, Assessment, and Review, 38285-38286 2018-16699 New England Fishery Management Council, 38293-38294 2018-16704 North Pacific Fishery Management Council, 38294 2018-16703 Pacific Fishery Management Council, 38288 2018-16698 Permit Applications: Magnuson-Stevens Act Provisions; General Provisions for Domestic Fisheries; Exempted Fishing, 38286-38287, 38294-38295 2018-16770 2018-16771 Permits: Marine Mammals; File No. 21217, 38287-38288 2018-16719 Takes of Marine Mammals Incidental to Specified Activities: Sand Point City Dock Replacement Project in Sand Point, AK, 38289-38292 2018-16767 National Science National Science Foundation NOTICES Meetings: Proposal Review, 38327 2018-16729 Rural Utilities Rural Utilities Service NOTICES Funding Availability: Loan Application Procedures, and Deadlines; Rural Energy Savings Program, 38273-38282 2018-16743 Securities Securities and Exchange Commission NOTICES Self-Regulatory Organizations; Proposed Rule Changes: Cboe BZX Exchange, Inc., 38327 2018-16722 Depository Trust Co., 38344-38375 2018-16708 2018-16714 Financial Industry Regulatory Authority, Inc., 38327-38329, 38434-38441 2018-16721 2018-16724 Fixed Income Clearing Corp., 38393-38428 2018-16707 2018-16709 Nasdaq Stock Market, LLC, 38428-38434 2018-16720 National Securities Clearing Corp., 38329-38343, 38375-38393 2018-16711 2018-16712 New York Stock Exchange, LLC, 38393 2018-16723 Social Social Security Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 38441-38447 2018-16727 Privacy Act; Systems of Records, 38447-38450 2018-16692 State Department State Department NOTICES Delegations of Authority, 38450 2018-16782 Specially Designated Global Terrorists: Abdul Rehman al-Dakhil, aka Dilshad Ahmad, aka Danish Dilshad, aka Amantullah Ali, etc., 38450 2018-16781 Surface Transportation Surface Transportation Board RULES Fees for Services Performed in Connection with Licensing and Related Services: 2018 Update, 38266-38269 2018-16742 Transportation Department Transportation Department See

Federal Aviation Administration

See

Federal Motor Carrier Safety Administration

See

Federal Railroad Administration

See

Federal Transit Administration

See

Maritime Administration

Veteran Affairs Veterans Affairs Department NOTICES Requests for Comments: Disciplinary Appeals Board Panel, 38457-38458 2018-16759 Separate Parts In This Issue Part II Federal Reserve System, 38460-38511 2018-16133 Part III Health and Human Services Department, Centers for Medicare & Medicaid Services, 38514-38573 2018-16517 Part IV Health and Human Services Department, Centers for Medicare & Medicaid Services, 38576-38620 2018-16518 Part V Health and Human Services Department, Centers for Medicare & Medicaid Services, 38622-38655 2018-16539 Reader Aids

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83 151 Monday, August 6, 2018 Rules and Regulations DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0392; Product Identifier 2018-NM-044-AD; Amendment 39-19349; AD 2018-16-09] RIN 2120-AA64 Airworthiness Directives; The Boeing Company Airplanes AGENCY:

Federal Aviation Administration (FAA), DOT.

ACTION:

Final rule.

SUMMARY:

We are adopting a new airworthiness directive (AD) for all The Boeing Company Model 737-100, -200, -200C, -300, -400, and -500 series airplanes. This AD was prompted by report indicating that cracks were found on the fuselage frame webs at stations forward and aft of the overwing emergency exits between stringer-7 (S-7) and S-8. This AD requires repetitive high frequency eddy current (HFEC) inspections for cracking of the fuselage frame webs at certain stations between S-7 and S-8 and applicable on-condition actions. We are issuing this AD to address the unsafe condition on these products.

DATES:

This AD is effective September 10, 2018.

The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of September 10, 2018.

ADDRESSES:

For service information identified in this final rule, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; internet https://www.myboeingfleet.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. It is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0392.

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-2018-0392; 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 final rule, the regulatory evaluation, any comments received, and other information. The address for Docket Operations (phone: 800-647-5527) is Docket Operations, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT:

David Truong, Aerospace Engineer, Airframe Section, FAA, Los Angeles ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-5224; fax: 562-627-5210; email: [email protected]

SUPPLEMENTARY INFORMATION:

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all The Boeing Company Model 737-100, -200, -200C, -300, -400, and -500 series airplanes. The NPRM published in the Federal Register on May 11, 2018 (83 FR 21946). The NPRM was prompted by a report indicating that cracks were found on the fuselage frame webs at stations forward and aft of the overwing emergency exits between stringers S-7 and S-8. The NPRM proposed to require repetitive HFEC inspections for cracking of the fuselage frame webs at certain stations between S-7 and S-8 and applicable on-condition actions.

We are issuing this AD to address fuselage frame web cracking, which may lead to subsequent failure of the surrounding structure, and ultimately result in rapid decompression and loss of structural integrity of the airplane.

Comments

We gave the public the opportunity to participate in developing this final rule. We have considered the comments received. The Boeing Company Airplanes indicated their support for the NPRM.

Effect of Winglets on Accomplishment of the Proposed Actions

Aviation Partners Boeing stated that accomplishing the supplemental type certificate (STC) ST01219SE does not affect the actions specified in the NPRM.

We concur with the commenter. We have redesignated paragraph (c) of the proposed AD as paragraph (c)(1) of this AD and added paragraph (c)(2) to this AD to state that installation of STC ST01219SE does not affect the ability to accomplish the actions required by this AD. Therefore, for airplanes on which STC ST01219SE is installed, a “change in product” alternative method of compliance (AMOC) approval request is not necessary to comply with the requirements of 14 CFR 39.17.

Conclusion

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this final rule with the changes described previously and except for minor editorial changes. We have determined that these minor changes:

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

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

We also determined that these changes will not increase the economic burden on any operator or increase the scope of this final rule.

Related Service Information Under 1 CFR Part 51

We reviewed Boeing Alert Requirements Bulletin 737-53A1371 RB, dated January 19, 2018. This service information describes procedures for repetitive HFEC inspections for cracking of the fuselage frame webs at certain stations between S-7 and S-8 and applicable on-condition actions. The on-condition action is repair. 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.

Costs of Compliance

We estimate that this AD affects 63 airplanes of U.S. registry. We estimate the following costs to comply with this AD:

Estimated Costs for Required Actions Action Labor cost Parts cost Cost per product Cost on U.S. operators Repetitive inspections Up to 14 work-hours × $85 per hour = $1,190 per inspection cycle $0 Up to $1,190 per inspection cycle Up to $74,970 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 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 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 and associated appliances to the Director of the System Oversight Division.

Regulatory Findings

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

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

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

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

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

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

List of Subjects in 14 CFR Part 39

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

Adoption of the Amendment

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

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

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

§ 39.13 [Amended]
2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): 2018-16-09 The Boeing Company Airplanes Amendment 39-19349; Docket No. FAA-2018-0392; Product Identifier 2018-NM-044-AD. (a) Effective Date

This AD is effective September 10, 2018.

(b) Affected ADs

None.

(c) Applicability

(1) This AD applies to all The Boeing Company Model 737-100, -200, -200C, -300, -400, and -500 series airplanes, certificated in any category.

(2) Installation of Supplemental Type Certificate (STC) ST01219SE (http://rgl.faa.gov/Regulatory_and_Guidance_Library/rgstc.nsf/0/EBD1CEC7B301293E86257CB30045557A?OpenDocument&Highlight=st01219se) does not affect the ability to accomplish the actions required by this AD. Therefore, for airplanes on which STC ST01219SE is installed, a “change in product” alternative method of compliance (AMOC) approval request is not necessary to comply with the requirements of 14 CFR 39.17

(d) Subject

Air Transport Association (ATA) of America Code 53, Fuselage.

(e) Unsafe Condition

This AD was prompted by a report indicating that cracks were found on the fuselage frame webs at stations forward and aft of the overwing emergency exits between stringer-7 (S-7) and S-8. We are issuing this AD to address fuselage frame web cracking, which may lead to subsequent failure of the surrounding structure, and ultimately result in rapid decompression and loss of structural integrity of the airplane.

(f) Compliance

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

(g) Required Actions for Group 1 Airplanes

For airplanes identified as Group 1 in Boeing Alert Requirements Bulletin 737-53A1371 RB, dated January 19, 2018: Within 120 days after the effective date of this AD, inspect the fuselage frame webs at station (STA) 616 and STA 639 between S-7 and S-8 and do all applicable repairs, using a method approved in accordance with the procedures specified in paragraph (j) of this AD.

(h) Required Actions for Groups 2 Through 4 Airplanes

Except for airplanes identified in paragraph (g) of this AD and except as required by paragraph (i) of this AD: At the applicable times specified in the “Compliance” paragraph of Boeing Alert Requirements Bulletin 737-53A1371 RB, dated January 19, 2018, do all applicable actions identified in, and in accordance with, the Accomplishment Instructions of Boeing Alert Requirements Bulletin 737-53A1371 RB, dated January 19, 2018.

Note 1 to paragraph (h) of this AD:

Guidance for accomplishing the actions required by this AD can be found in Boeing Alert Service Bulletin 737-53A1371, dated January 19, 2018, which is referred to in Boeing Alert Requirements Bulletin 737-53A1371 RB, dated January 19, 2018.

(i) Exceptions to Service Information Specifications

(1) For purposes of determining compliance with the requirements of this AD: Where Boeing Alert Requirements Service Bulletin 737-53A1371 RB, dated January 19, 2018, uses the phrase “the original issue date of Requirements Bulletin 737-53A1371 RB,” this AD requires using “the effective date of this AD.”

(2) Where Boeing Alert Requirements Bulletin 737-53A1371 RB, dated January 19, 2018, specifies contacting Boeing, this AD requires repair using a method approved in accordance with the procedures specified in paragraph (j) of this AD.

(j) Alternative Methods of Compliance (AMOCs)

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

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

(3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Los Angeles ACO Branch, to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.

(k) Related Information

For more information about this AD, contact David Truong, Aerospace Engineer, Airframe Section, FAA, Los Angeles ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-5224; fax: 562-627-5210; email: [email protected]

(l) Material Incorporated by Reference

(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.

(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.

(i) Boeing Alert Requirements Bulletin 737-53A1371 RB, dated January 19, 2018.

(ii) Reserved.

(3) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; internet https://www.myboeingfleet.com.

(4) 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.

(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

Issued in Des Moines, Washington, on July 25, 2018. James Cashdollar, Acting Director, System Oversight Division, Aircraft Certification Service.
[FR Doc. 2018-16479 Filed 8-3-18; 8:45 am] BILLING CODE 4910-13-P
DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2017-0805; Product Identifier 2017-NM-051-AD; Amendment 39-19235; AD 2018-07-04] RIN 2120-AA64 Airworthiness Directives; the Boeing Company Airplanes AGENCY:

Federal Aviation Administration (FAA), DOT.

ACTION:

Final rule.

SUMMARY:

We are adopting a new airworthiness directive (AD) for all The Boeing Company Model DC-9-81 (MD-81), DC-9-82 (MD-82), DC-9-83 (MD-83), and DC-9-87 (MD-87) airplanes, Model MD-88 airplanes, and Model MD-90-30 airplanes. This AD was prompted by a report of loss of airspeed indication due to icing. This AD requires modifying the air data heat (ADH) system. We are issuing this AD to address the unsafe condition on these products.

DATES:

This AD is effective September 10, 2018.

The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of September 10, 2018.

ADDRESSES:

For service information identified in this final rule, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; internet https://www.myboeingfleet.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. It is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2017-0805.

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-2017-0805; 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 final rule, the regulatory evaluation, any comments received, and other information. The address for the Docket Office (phone: 800-647-5527) is Docket Management Facility, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT:

Eric Igama, Aerospace Engineer, Systems and Equipment Section, FAA, Los Angeles ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-5388; fax: 562-627-5210; email: [email protected]

SUPPLEMENTARY INFORMATION: Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all The Boeing Company Model DC-9-81 (MD-81), DC-9-82 (MD-82), DC-9-83 (MD-83), and DC-9-87 (MD-87) airplanes, Model MD-88 airplanes, and Model MD-90-30 airplanes. The NPRM published in the Federal Register on August 25, 2017 (82 FR 40505). The NPRM was prompted by a report of loss of airspeed indication due to icing. The NPRM proposed to require modifying the ADH system. We are issuing this AD to prevent operation of unheated air data sensors in icing conditions. Failure to activate the ADH system in icing conditions could result in irregular airspeed or altitude indications, which could possibly result in a runway overrun during a high speed rejected takeoff (RTO) due to failure to rotate before the end of the runway, or a stall/overspeed during flight.

Comments

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

Support for the NPRM

Boeing and the Air Line Pilots Association, International (ALPA) expressed support for the NPRM.

Request To Allow the Use of Alternative Ground Terminal Locations

Delta Airlines (DAL) requested that we revise the proposed AD to allow alternative ground terminal locations for certain wires. DAL noted that, during prototype testing, it was unable to relocate ground wire 2EB292B20N or ground wire 1EB292B20N to certain ground termination points because those points were already full of existing wires. DAL noted that Boeing Alert Service Bulletin MD90-30A031, dated June 2, 2017, specifies locating ground wires in specific ground termination points, and that action is required for compliance (RC). DAL suggested that varied wiring configurations on Model MD-90 airplanes would lead it to make multiple requests for alternative methods of compliance (AMOCs), which could require additional out-of-service time for the affected airplanes. For this reason, DAL requested that we add language allowing the use of alternative ground terminal locations as specified in standard wiring practices manual (SWPM) chapter 20 and Boeing Service Request (SR) concurrence that provide an equivalent level of safety.

We disagree with the commenter's request. If an airplane has a different wiring or ground termination configuration than that identified in Boeing Alert Service Bulletin MD90-30A031, dated June 2, 2017, an operator must request an AMOC in accordance with the procedures specified in paragraph (j) of this AD. We have not changed this AD in this regard.

Request To Extend the Compliance Times

DAL requested that the compliance times specified in paragraphs (g)(1) and (g)(2) of the proposed AD (within 28 months after the effective date of this AD and within 27 months after the effective date of this AD, respectively) be extended by 6 months. DAL noted that the actions required by this AD would have to be done outside of regularly scheduled heavy maintenance checks. DAL stated that Boeing is providing a lead time of 174 days to procure the needed kits. For these reasons, DAL requested that the compliance time be extended by 6 months for both Model MD-88 and MD-90 airplanes.

We disagree with the commenter's request. We confirmed with Boeing that the lead time for kit procurement will be 75-90 days, with some components already available, not 174 days as suggested by DAL. If an operator needs additional time to comply with this AD, they may request an AMOC in accordance with the procedures specified in paragraph (j) of this AD. We have not changed this AD in this regard.

Changes to Paragraph (i) of This AD

We have clarified the language of paragraph (i) of this AD. Paragraph (i) of the proposed AD would have allowed for the operation of the airplane even if the modified ADH system is inoperable, so long as the Master Minimum Equipment List (MMEL) and the operator's Minimum Equipment List (MEL) have a provision to allow for this inoperability. The FAA has revised paragraph (i) of this AD to make it clear that, if there is a provision in the operator's MEL that allows for the modified ADH system to be inoperable then the operator can operate the airplane with an inoperable modified ADH system. We have removed the references to the MMEL because it is unnecessary to reference the MMEL, as operators are required in 14 CFR part 91 to have an MEL to operate with inoperable equipment and a provision cannot be in an MEL without first being part of the MMEL. The intent of the provision has not changed.

Conclusion

We reviewed the relevant data, considered the comment received, and determined that air safety and the public interest require adopting this final rule with the change described previously and minor editorial changes. We have determined that these minor changes:

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

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

We also determined that the change will not increase the economic burden on any operator or increase the scope of this final rule.

Related Service Information Under 1 CFR Part 51

We reviewed Boeing Alert Service Bulletin MD80-30A132, dated April 28, 2017; and Boeing Alert Service Bulletin MD90-30A031, dated June 2, 2017. This service information describes procedures for modifying the ADH system so that it activates when the left and right fuel switches are in the ON position. These documents are distinct since they apply to different airplane models. 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.

Costs of Compliance

We estimate that this AD affects 553 airplanes of U.S. registry. We estimate the following costs to comply with this AD:

Estimated Costs Action Labor cost Parts cost Cost per
  • product
  • Cost on U.S.
  • operators
  • Modification, MD-80 Group 1, 84 airplanes 56 work-hours × $85 per hour = $4,760 $4,459 $9,219 $774,396 Modification, MD-80 Group 2, 11 airplanes 57 work-hours × $85 per hour = $4,845 11,014 15,859 174,449 Modification, MD-80 Group 3, 336 airplanes 57 work-hours × $85 per hour = $4,845 8,589 13,434 4,513,824 Modification, MD-80 Group 4, 1 airplane 56 work-hours × $85 per hour = $4,760 4,479 9,239 9,239 Modification, MD-80 Group 5, 37 airplanes 57 work-hours × $85 per hour = $4,845 11,034 15,879 587,523 Modification, MD-90 Group 1, 84 airplanes 37 work-hours × $85 per hour = $3,145 4,395 7,540 633,360

    We have received no definitive data that would enable us to provide cost estimates for doing the modification on Model MD-80 Group 6 airplanes.

    Authority for This Rulemaking

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

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

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

    Regulatory Findings

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

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

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

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

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

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

    List of Subjects in 14 CFR Part 39

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

    Adoption of the Amendment

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

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

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

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): 2018-07-04 The Boeing Company: Amendment 39-19235; Docket No. FAA-2017-0805; Product Identifier 2017-NM-051-AD. (a) Effective Date

    This AD is effective September 10, 2018.

    (b) Affected ADs

    None.

    (c) Applicability

    This AD applies to all The Boeing Company Model DC-9-81 (MD-81), DC-9-82 (MD-82), DC-9-83 (MD-83), and DC-9-87 (MD-87) airplanes, Model MD-88 airplanes, and Model MD-90-30 airplanes, certificated in any category.

    (d) Subject

    Air Transport Association (ATA) of America Code 30, Ice and rain protection.

    (e) Unsafe Condition

    This AD was prompted by a report of loss of airspeed indication due to icing. We are issuing this AD to prevent operation of unheated air data sensors in icing conditions. Failure to activate the air data heat (ADH) system in icing conditions could result in irregular airspeed or altitude indications, which could possibly result in a runway overrun during a high speed rejected takeoff (RTO) due to failure to rotate before the end of the runway, or a stall/overspeed during flight.

    (f) Compliance

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

    (g) Required Actions

    At the applicable time specified in paragraph (g)(1) or (g)(2) of this AD: Do all applicable actions identified as “RC” (required for compliance) in, and in accordance with, the Accomplishment Instructions of Boeing Alert Service Bulletin MD80-30A132, dated April 28, 2017; or Boeing Alert Service Bulletin MD90-30A031, dated June 2, 2017; as applicable; except as required by paragraph (h) of this AD.

    (1) For Model DC-9-81 (MD-81), DC-9-82 (MD-82), DC-9-83 (MD-83), DC-9-87 (MD-87), and Model MD-88 airplanes: Within 28 months after the effective date of this AD.

    (2) For Model MD-90-30 airplanes: Within 27 months after the effective date of this AD.

    (h) Exception to Certain Service Information Specifications

    Where Boeing Alert Service Bulletin MD80-30A132, dated April 28, 2017, specifies contacting Boeing, and specifies that action as “RC” (Required for Compliance): This AD requires using a method approved in accordance with the procedures specified in paragraph (j) of this AD.

    (i) Minimum Equipment List (MEL)

    In the event that the ADH system as modified by this AD is inoperable, an airplane may be operated as specified in the operator's MEL, provided provisions that address the modified ADH system are included in the MEL.

    (j) Alternative Methods of Compliance (AMOCs)

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

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

    (3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Los Angeles ACO Branch, to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.

    (4) Except as required by paragraph (h) of this AD: For service information that contains steps that are labeled as Required for Compliance (RC), the provisions of paragraphs (j)(4)(i) and (j)(4)(ii) of this AD apply.

    (i) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD. If a step or substep is labeled “RC Exempt,” then the RC requirement is removed from that step or substep. An AMOC is required for any deviations to RC steps, including substeps and identified figures.

    (ii) Steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.

    (k) Related Information

    For more information about this AD, contact Eric Igama, Aerospace Engineer, Systems and Equipment Section, FAA, Los Angeles ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-5388; fax: 562-627-5210; email: [email protected]

    (l) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.

    (2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.

    (i) Boeing Alert Service Bulletin MD80-30A132, dated April 28, 2017.

    (ii) Boeing Alert Service Bulletin MD90-30A031, dated June 2, 2017.

    (3) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; internet https://www.myboeingfleet.com.

    (4) 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.

    (5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Des Moines, Washington, on March 20, 2018. Michael Kaszycki, Acting Director, System Oversight Division, Aircraft Certification Service.
    [FR Doc. 2018-16320 Filed 8-3-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0110; Product Identifier 2017-NM-125-AD; Amendment 39-19345; AD 2018-16-05] RIN 2120-AA64 Airworthiness Directives; The Boeing Company Airplanes AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Final rule.

    SUMMARY:

    We are adopting a new airworthiness directive (AD) for certain The Boeing Company Model 757 airplanes. This AD was prompted by reports of bolt rotation in the engine drag fitting joint and fasteners heads; an inspection of the fastener holes revealed that cracks were found in the skin on two airplanes. This AD requires repetitive inspections for skin cracking and shim migration at the upper link drag fittings, diagonal brace cracking, and fastener looseness; and applicable on-condition actions. We are issuing this AD to address the unsafe condition on these products.

    DATES:

    This AD is effective September 10, 2018.

    The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of September 10, 2018.

    ADDRESSES:

    For service information identified in this final rule, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; internet https://www.myboeingfleet.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. It is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0110.

    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-2018-0110; 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 final rule, the regulatory evaluation, any comments received, and other information. The address for Docket Operations (phone: 800-647-5527) is Docket Operations, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590.

    FOR FURTHER INFORMATION CONTACT:

    Chandra Ramdoss, Aerospace Engineer, Airframe Section, FAA, Los Angeles ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-5239; fax: 562-627-5210; email: [email protected]

    SUPPLEMENTARY INFORMATION: Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain The Boeing Company Model 757 airplanes. The NPRM published in the Federal Register on February 16, 2018 (83 FR 6984). The NPRM was prompted by reports of bolt rotation in the engine drag fitting joint and fasteners heads; an inspection of the fastener holes revealed that cracks were found in the skin on two airplanes. The NPRM proposed to require repetitive inspections for skin cracking and shim migration at the upper link drag fittings, diagonal brace cracking, and fastener looseness; and applicable on-condition actions.

    We are issuing this AD to address cracking in the wing upper skin and forward drag fittings, which could lead to a compromised upper link and reduced structural integrity of the engine strut.

    Comments

    We gave the public the opportunity to participate in developing this final rule. The following presents the comments received on the NPRM and the FAA's response to each comment. Micaela Murrugarra and United Airlines stated that they supported the NPRM.

    Effect of Winglets on Accomplishment of the Proposed Actions

    Aviation Partners Boeing stated that accomplishing the supplemental type certificate (STC) ST01518SE does not affect the actions specified in the NPRM.

    We concur with the commenter. We have redesignated paragraph (c) of the proposed AD as paragraph (c)(1) of this AD and added paragraph (c)(2) to this AD to state that installation of STC ST01518SE does not affect the ability to accomplish the actions required by this AD. Therefore, for airplanes on which STC ST01518SE is installed, a “change in product” alternative method of compliance (AMOC) approval request is not necessary to comply with the requirements of 14 CFR 39.17.

    Request To Include Additional Inspections

    American Airlines (AAL) and FedEx requested that we revise the proposed AD to include additional inspections. FedEx stated that releasing the proposed AD using Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017, would have potential safety and economic implications on the operator. FedEx stated that the safety concern in its entirety is not addressed in Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017, and any additional mandated inspections issued later would require a duplication of effort to address the remaining fastener locations. FedEx requested that the proposed AD include additional inspections.

    AAL stated that due to the ongoing efforts at Boeing to conduct a safety analysis on cracking found in the upper link drag fitting layer on multiple airplanes, it encourages the FAA to work together with Boeing to include any new inspection requirements beyond those in Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017, into the proposed AD. AAL commented that publication of the final rule without incorporating any new inspection requirements could drive additional unnecessary burden to operators by requiring multiple maintenance visits to conduct work that could have been consolidated.

    We disagree with the commenters' request. We do not consider that delaying this action until release of new service information is warranted since sufficient data and technology currently exist to justify the requirements in this AD within the required compliance time. We may consider further rulemaking in the future to require additional inspections based on revised service information, and if so, would determine an appropriate compliance time that would provide operators sufficient time to coordinate the inspection intervals. We have not changed this AD in this regard.

    Request To Revise the Costs of Compliance

    AAL requested that we revise the costs of compliance in the NPRM. AAL stated that based on the inspections and repairs previously accomplished on 5 of its airplanes, it estimated 100 work-hours to complete the inspection requirements, 20 work-hours to complete a minor hole oversize repair, and 800 work-hours to accomplish a more complex hole repair or shim replacement. AAL also stated that the current fastener pricing procured from Boeing averages $445 per fastener.

    While we acknowledge AAL's varied work-hour estimates based on its repair experience for the requirements of this AD, we disagree with the commenter's request. The cost estimates and required man-hours are only approximate values and are not necessarily the same for different maintenance organizations and part suppliers. Because operators' schedules vary substantially, we cannot accommodate every operator's optimal scheduling in each AD. We have not changed this AD in this regard.

    Request To Revise the Compliance Time

    AAL requested that we revise the grace period for the high frequency eddy current (HFEC) hole probe inspection from 3,000 flight cycles to 6,500 flight cycles after the effective date of this AD due to the extent of access that may be required to correct discrepancies. AAL stated that this proposed grace period would allow operators with a 72-month heavy check interval, flying 3 flight cycles per day, to perform the required HFEC hole probe inspections at a visit with adequate span time and structures personnel to correct any possible findings. AAL also proposed adding interim inspections to justify this compliance-time extension.

    We disagree with the commenter's request. We have determined that the compliance time, as proposed, represents the maximum interval of time allowable for the affected airplanes to safely operate before the inspection and bolt replacement is done. Since maintenance schedules vary among operators, there would be no assurance that the airplane would be inspected and the bolt replaced during that maximum interval. In terms of adding interim inspections to justify the compliance-time extension, we have not received enough technical data to make this determination. However, under the provisions of paragraph (i) of this AD, we will consider requests for approval of interim inspections if sufficient data are submitted to substantiate that the change would provide an acceptable level of safety. We have not changed this AD in this regard.

    Request To Replace the Inspection Type From the Proposed Action

    The Boeing Company and FedEx requested that we revise the proposed AD to remove the requirement of the dye-penetrant inspection of the bolts and to include a requirement to perform a detailed inspection of the bolts. Boeing stated that the dye-penetrant inspection of the bolts to look for cracking in the fillet between head and shank is problematic due to the coating on the bolt, creating an unacceptably high chance for false indication. Boeing commented that it has determined that replacing the dye-penetrant inspection with a detailed inspection is as an acceptable means to detect cracking in the fillet between head and shank. Boeing commented that it should be noted that the bolt head cracking is not the unsafe condition specified in Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017. Boeing also commented that the bolt head cracking correlates with clamp loss, which can be a predecessor to early fatigue cracking of the wing skin; the condition duly mitigated by Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017.

    FedEx stated that the bolt dye-penetrant inspection is not an effective method due to the coating on the bolts. FedEx stated that Boeing indicates that it plans to revise the service information to provide an alternative detailed inspection that will be more effective. FedEx requests that the proposed AD include the revised inspection to allow operators a way to determine if the existing bolts are in a serviceable condition.

    We agree with the commenters' request. We have added paragraph (h)(3) to this AD accordingly to allow a detailed inspection for cracks in the fillet between head and shank on the removed fasteners in lieu of the dye-penetrant inspection. Either inspection will provide an adequate level of safety.

    Request To Increase Shim Migration Limits

    AAL requested that we increase the shim migration limits. AAL stated that according to Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017, any shim migration of the horizontal shims greater than 0.200 inch and any shim migration where the migrated shim is greater than 0.020 inch thick are considered “Major” shim migration, which, according to paragraph (h) of the proposed AD, would require an approval for an alternative method of compliance for the corrective action.

    AAL commented that the shim migration limits noted above are far more conservative than the two-shim migration allowable limits currently contained in Boeing Model 757 Structural Repair Manual (SRM) 54-50-90 for shim locations in the pylon. AAL stated that both SRM allowable limits have no restriction on shim thickness and allow migration of at least 25 percent of the total shim area.

    AAL recommended applying these same general principles from these SRM sections to the shims specified in the Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017, and increasing the limits for minor shim migration to include full shim thickness, and migration up to 0.5 inch. AAL stated that the inspections contained in Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017, and proposed in the proposed AD, are already adding additional surveillance of the upper link drag fitting to the upper wing skin joint, which would mitigate any risk associated with the increase in shim migration limits.

    We disagree with the commenter's request. Shim inspection procedures do not currently exist for the wing skin joint described in Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017. However, under the provisions of paragraph (i) of this AD, we will consider requests for approval of an AMOC if sufficient data are submitted to substantiate that the change would provide an acceptable level of safety. We have not changed this AD in this regard.

    Conclusion

    We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this final rule with the changes described previously and minor editorial changes. We have determined that these minor changes:

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

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

    We also determined that these changes will not increase the economic burden on any operator or increase the scope of this final rule.

    Related Service Information Under 1 CFR Part 51

    We reviewed Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017. This service information describes procedures for repetitive detailed inspections for skin cracking and shim migration at the upper link drag fittings, repetitive general visual inspections for diagonal brace cracking and fastener looseness, and applicable on-condition actions. 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.

    Costs of Compliance

    We estimate that this AD affects 606 airplanes of U.S. registry. We estimate the following costs to comply with this AD:

    Estimated Costs for Required Actions Action Labor cost Parts cost Cost per
  • product
  • Cost on
  • U.S. operators
  • Inspections 83 work-hours × $85 per hour = $7,055 per inspection cycle $0 $7,055 per inspection cycle $4,275,330 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 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 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 and associated appliances to the Director of the System Oversight Division.

    Regulatory Findings

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

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

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

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

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

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

    List of Subjects in 14 CFR Part 39

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

    Adoption of the Amendment

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

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

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

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): 2018-16-05 The Boeing Company: Amendment 39-19345; Docket No. FAA-2018-0110; Product Identifier 2017-NM-125-AD. (a) Effective Date

    This AD is effective September 10, 2018.

    (b) Affected ADs

    None.

    (c) Applicability

    (1) This AD applies to The Boeing Company Model 757-200, -200PF, -200CB, and -300 series airplanes, certificated in any category, as identified in Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017.

    (2) Installation of Supplemental Type Certificate (STC) ST01518SE does not affect the ability to accomplish the actions required by this AD. Therefore, for airplanes on which STC ST01518SE is installed, a “change in product” alternative method of compliance (AMOC) approval request is not necessary to comply with the requirements of 14 CFR 39.17.

    (d) Subject

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

    (e) Unsafe Condition

    This AD was prompted by bolt rotation in the engine drag fitting joint and fasteners heads; an inspection of the fastener holes revealed that cracks were found in the skin on two airplanes. We are issuing this AD to detect and correct cracking in the wing upper skin and forward drag fittings, which could lead to a compromised upper link and reduced structural integrity of the engine strut.

    (f) Compliance

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

    (g) Required Actions

    Except as required by paragraph (h) of this AD: At the applicable times specified in the “Compliance” paragraph of Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017, do all applicable actions identified in, and in accordance with, the Accomplishment Instructions of Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017.

    Note 1 to paragraph (g) of this AD:

    Guidance for accomplishing the actions required by this AD can be found in Boeing Alert Service Bulletin 757-57A0073, dated July 14, 2017, which is referred to in Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017.

    (h) Exceptions to Service Information Specifications

    (1) For purposes of determining compliance with the requirements of this AD: Where Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017, uses the phrase “the original issue date of the requirements bulletin,” this AD requires using “the effective date of this AD.”

    (2) Where Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017, specifies contacting Boeing, this AD requires repair using a method approved in accordance with the procedures specified in paragraph (i) of this AD.

    (3) Where Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017, specifies a dye-penetrant inspection for cracks in the fillet between head and shank on the removed fasteners,” this AD allows a detailed inspection for cracks in the fillet between head and shank on the removed fasteners, as an optional method of compliance with the dye-penetrant inspection.

    (i) Alternative Methods of Compliance (AMOCs)

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

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

    (3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Los Angeles ACO Branch, FAA, to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.

    (j) Related Information

    (1) For more information about this AD, contact Chandra Ramdoss, Aerospace Engineer, Airframe Section, FAA, Los Angeles ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-5239; fax: 562-627-5210; email: [email protected]

    (2) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; internet https://www.myboeingfleet.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.

    (k) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.

    (2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.

    (i) Boeing Alert Requirements Bulletin 757-57A0073 RB, dated July 14, 2017.

    (ii) Reserved.

    (3) For Boeing service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; internet https://www.myboeingfleet.com.

    (4) 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.

    (5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Des Moines, Washington, on July 24, 2018. James Cashdollar, Acting Director, System Oversight Division, Aircraft Certification Service.
    [FR Doc. 2018-16499 Filed 8-3-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2018-0137; Airspace Docket No. 18-ACE-2] RIN-2120-AA66 Amendment and Establishment of Class E Airspace; Columbus, NE AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Final rule.

    SUMMARY:

    This action modifies Class E airspace designated as a surface area and makes the airspace full-time and removes the airspace part-time status and language from the airspace legal description, amends Class E airspace extending upward from 700 feet above the surface, and establishes Class E airspace designated as an extension to the Class E surface area at Columbus Municipal Airport, Columbus, NE. This action is at the request of Minneapolis Air Route Traffic Control Center (ARTCC) and the result of an FAA airspace review. Additionally, the geographic coordinates of the airport are updated to coincide with the FAA's aeronautical database. This action is necessary for the safety and management of instrument flight rules (IFR) operations at this airport.

    DATES:

    Effective 0901 UTC, November 8, 2018. The Director of the Federal Register approves this incorporation by reference action under Title 1, Code of Federal Regulations, part 51, subject to the annual revision of FAA Order 7400.11 and publication of conforming amendments.

    ADDRESSES:

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

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

    FOR FURTHER INFORMATION CONTACT:

    Jeffrey Claypool, Federal Aviation Administration, Operations Support Group, Central Service Center, 10101 Hillwood Parkway, Fort Worth, TX 76177; telephone (817) 222-5711.

    SUPPLEMENTARY INFORMATION: Authority for This Rulemaking

    The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends Class E airspace designated as a surface area, amends Class E airspace extending upward from 700 feet above the surface, and establishes Class E airspace designated as an extension to the Class E surface area at Columbus Municipal Airport, Columbus, NE to support IFR operations at the airport.

    History

    The FAA published a notice of proposed rulemaking (NPRM) in the Federal Register (83 FR 13438; March 29, 2018) for Docket No. FAA-2018-0137 to amend Class E airspace designated as a surface area and make the airspace full-time and remove the airspace part-time status and language from the airspace legal description, amend Class E airspace extending upward from 700 feet above the surface, and establish Class E airspace designated as an extension to the Class E surface area at Columbus Municipal Airport, Columbus, NE. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

    Subsequent to publication, the FAA discovered the following typographical errors: In the Class E airspace designated as a surface area airspace legal description, the airspace radius should be 4.2 vice 4.7; and the geographic coordinates for Columbus Municipal Airport in the classes of airspace shown should be (lat. 41°26′55″ N, long. 97°20′27″ W) vice (lat. 41°26′55″ N, long. 97°20′34″ W). These errors are corrected with this action.

    Class E airspace designations are published in paragraph 6002, 6004, and 6005, respectively, of FAA Order 7400.11B, dated August 3, 2017, and effective September 15, 2017, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

    Availability and Summary of Documents for Incorporation by Reference

    This document amends FAA Order 7400.11B, Airspace Designations and Reporting Points, dated August 3, 2017, and effective September 15, 2017. FAA Order 7400.11B is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11B lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

    The Rule

    The FAA amends Title 14, Code of Federal Regulations (14 CFR) part 71 by: Amending the Class E airspace designated as a surface area to within a 4.2-mile radius (reduced from a 4.7-mile radius) at Columbus Municipal Airport, Columbus, NE; removing the Columbus VOR/DME and the extensions to the southeast and northwest of the airport as they are no longer needed to define this boundary; making the airspace full-time and removing the part-time status and language from the airspace legal description; and updating the geographic coordinates of the airport to coincide with the FAA's aeronautical database;

    Establishing Class E airspace designated as an extension to the Class E surface area at Columbus Municipal Airport within 2.4 miles each side of the Columbus VOR/DME 150° radial from the 4.2-mile radius of the airport to 7.0 miles southeast of the airport, and within 2.4 miles each side of the Columbus VOR/DME 309° radial from the 4.2-mile radius of the airport to 7.7 miles northwest of the airport; and

    Amending Class E airspace extending upward from 700 feet above the surface to within a 6.7-mile radius (reduced from a 7.7-mile radius) of Columbus Municipal Airport; removing the Columbus Municipal ILS Localizer, Platte Center NDB, and the associated northwest extension; amending the extension to the southeast to within 2.4 miles (increased from 1.6 miles) each side of the Columbus VOR/DME 150° (previously 157°) radial from the 6.7-mile radius to 7.0 miles (decreased from 11 miles) southeast of the airport; adding an extension 2.4 miles each side of the Columbus VOR/DME 309° radial extending from the 6.7-mile radius to 7.7 miles northeast of the airport; and updating the geographic coordinates of the airport to coincide with the FAA's aeronautical database.

    The NPRM incorrectly stated the geographic coordinates of the airport noted in the classes of airspace and are corrected in this rule to (lat. 41°26′55″ N, long. 97°20′27″ W).

    Airspace reconfiguration is necessary due to a request from Minneapolis ARTCC, to bring the airspace into compliance with FAA Order 7400.2L, Procedures for Handling Airspace, and to support the safety and management of IFR operations at the airport.

    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, 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 only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

    Environmental Review

    The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5.a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

    Lists of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (air).

    Adoption of the Amendment

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

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

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

    § 71.1 [Amended]
    2. The incorporation by reference in 14 CFR 71.1 of FAA Order 7400.11B, Airspace Designations and Reporting Points, dated August 3, 2017, and effective September 15, 2017, is amended as follows: Paragraph 6002 Class E Airspace Areas Designated as Surface Areas. ACE NE E2 Columbus, NE [Amended] Columbus Municipal Airport, NE (Lat. 41°26′55″ N, long. 97°20′27″ W)

    Within a 4.2 mile radius of Columbus Municipal Airport.

    Paragraph 6004 Class E Airspace Areas Designated as an Extension to a Class D or Class E Surface Area. ACE MO E4 Columbus, NE [New] Columbus Municipal Airport, NE (Lat. 41°26′55″ N, long. 97°20′27″ W) Columbus VOR/DME (Lat. 41°27′00″ N, long. 97°20′27″ W)

    That airspace extending upward from the surface within 2.4 miles each side of the Columbus VOR/DME 150° radial extending from the 4.2-mile radius of Columbus Municipal Airport to 7.0 miles southeast of the airport, and within 2.4 miles each side of the Columbus VOR/DME 309° radial extending from the 4.2-mile radius of Columbus Municipal Airport to 7.7 miles northwest of the airport.

    Paragraph 6005 Class E Airspace Areas Extending Upward From 700 Feet or More Above the Surface of the Earth. ACE NE E5 Columbus, NE [Amended] Columbus Municipal Airport, NE (Lat. 41°26′55″ N, long. 97°20′27″ W) Columbus VOR/DME (Lat. 41°27′00″ N, long. 97°20′27″ W)

    That airspace extending upward from 700 feet above the surface within a 6.7-mile radius of Columbus Municipal Airport and within 2.4 miles each side of the Columbus VOR/DME 150° radial extending from the 6.7-mile radius to 7.0 miles southeast of the airport and within 2.4 miles each side of the Columbus VOR/DME 309° radial extending from the 6.7-mile radius to 7.7 miles northwest of the airport.

    Issued in Fort Worth, Texas, on July 17, 2018. Walter Tweedy, Acting Manager, Operations Support Group, ATO Central Service Center.
    [FR Doc. 2018-16679 Filed 8-3-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket Number USCG-2018-0615] RIN 1625-AA00 Safety Zone; Fireworks Display, Little Egg Harbor, Long Beach, NJ AGENCY:

    Coast Guard, DHS.

    ACTION:

    Temporary final rule.

    SUMMARY:

    The Coast Guard is establishing a temporary safety zone on the waters of Little Egg Harbor off Long Beach, NJ, from 8:30 p.m. through 9:30 p.m. on August 7, 2018, during the Long Beach National Night Out Fireworks Display. The safety zone is necessary to ensure the safety of participant vessels, spectators, and the boating public during the event. This regulation prohibits persons and non-participant vessels from entering, transiting through, anchoring in, or remaining within the safety zone unless authorized by the Captain of the Port (COTP) Delaware Bay or a designated representative.

    DATES:

    This rule is effective from 8:30 p.m. through 9:30 p.m. on August 7, 2018.

    ADDRESSES:

    To view documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov, type USCG-2018-0615 in the “SEARCH” box and click “SEARCH.” Click on Open Docket Folder on the line associated with this rule.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions on this rule, call or email MST1 Edmund Ofalt, U.S. Coast Guard, Sector Delaware Bay, Waterways Management Division; telephone (215) 271-4814, email [email protected].

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

    The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable and contrary to the public interest to do so. There is insufficient time to allow for a reasonable comment period prior to the date of the event. The rule must be in force by August 7, 2018, to serve its purpose of ensuring the safety of spectators and the general public from hazards associated with the fireworks display. Hazards include accidental discharge of fireworks, dangerous projectiles, and falling hot embers or other debris.

    Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register. Delaying the effective date of this rule would be impracticable and contrary to the public interest because immediate action is needed to mitigate the potential safety hazards associated with a fireworks display in this location.

    III. Legal Authority and Need for Rule

    The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port Delaware Bay (COTP) has determined that potential hazards associated with the fireworks display on August 7, 2018, will be a safety concern for anyone within a 200-yard radius of the fireworks barge, which will be anchored in approximate position 39°37′08.34″ N, 074°12′25.60″ W. This rule is needed to protect persons, vessels and the public within the safety zone during the fireworks display.

    IV. Discussion of the Rule

    This rule establishes a temporary safety zone from 8:30 p.m. to 9:30 p.m. on August 7, 2018, on the waters of Little Egg Harbor off Long Beach, NJ, during a fireworks display from a barge. The event is scheduled to take place at 8:45 p.m. on August 7, 2018. The safety zone will extend 200 yards around the barge, which will be anchored at approximate position 39°37′08.34″ N, 074°12′25.60″ W. No person or vessel will be permitted to enter, transit through, anchor in, or remain within the safety zone without obtaining permission from the COTP Delaware Bay or a designated representative. If authorization to enter, transit through, anchor in, or remain within the safety zone is granted by the COTP Delaware Bay or a designated representative, all persons and vessels receiving such authorization must comply with the instructions of the COTP Delaware Bay or a designated representative. The Coast Guard will provide public notice of the safety zone by Broadcast Notice to Mariners and by on-scene actual notice from designated representatives.

    V. Regulatory Analyses

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

    A. Regulatory Planning and Review

    Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.

    The rule is not a significant regulatory action for the following reasons: (1) Although persons and vessels may not enter, transit through, anchor in, or remain within the safety zone without authorization from the COTP Delaware Bay or a designated representative, they may operate in the surrounding area during the enforcement period; (2) persons and vessels will still be able to enter, transit through, anchor in, or remain within the regulated area if authorized by the COTP Delaware Bay or a designated representative; and (3) the Coast Guard will provide advance notification of the safety zone to the local maritime community by Broadcast Notice to Mariners, or by on-scene actual notice from designated representatives.

    B. Impact on Small Entities

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

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

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

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

    C. Collection of Information

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

    D. Federalism and Indian Tribal Governments

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

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

    E. Unfunded Mandates Reform Act

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

    F. Environment

    We have analyzed this rule under Department of Homeland Security Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone that will prohibit persons and vessels from entering, transiting through, anchoring in, or remaining within a limited area on the navigable water in the Delaware Bay, during a fireworks display lasting less than an hour. This rule is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A Record of Environmental Consideration (REC) supporting this determination is available in the docket where indicated under ADDRESSES.

    G. Protest Activities

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

    List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.

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

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

    33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.

    2. Add § 165.T05-0615 to read as follows:
    § 165.T05-0615 Safety Zone; Fireworks, Little Egg Harbor, Long Beach, NJ.

    (a) Location. The following area is a safety zone: all waters of Little Egg Harbor off Long Beach, NJ, within 200 yards of the barge anchored in position 39°37′08.34″ N, 074°12′25.60″ W. All coordinates are based on Datum NAD 1983.

    (b) Definitions. As used in this section, designated representative means a Coast Guard Patrol Commander, including a Coast Guard petty officer, warrant or commissioned officer on board a Coast Guard vessel or on board a federal, state, or local law enforcement vessel assisting the Captain of the Port (COTP), Delaware Bay in the enforcement of the safety zone.

    (c) Regulations. (1) Under the general safety zone regulations in subpart C of this part, you may not enter the safety zone described in paragraph (a) of this section unless authorized by the COTP or the COTP's designated representative.

    (2) To seek permission to enter or remain in the zone, contact the COTP or the COTP's representative via VHF-FM channel 16 or 215-271-4807. Those in the safety zone must comply with all lawful orders or directions given to them by the COTP or the COTP's designated representative.

    (3) This section applies to all vessels except those engaged in law enforcement, aids to navigation servicing, and emergency response operations.

    (d) Enforcement. The U.S. Coast Guard may be assisted in the patrol and enforcement of the safety zone by Federal, State, and local agencies.

    (e) Enforcement period. This zone will be enforced from approximately 8:30 p.m. through 9:30 p.m. on August 7, 2018.

    Dated: July 31, 2018. S.E. Anderson, Captain, U.S. Coast Guard, Captain of the Port Delaware Bay.
    [FR Doc. 2018-16694 Filed 8-3-18; 8:45 am] BILLING CODE 9110-04-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket No. USCG-2018-0692] Safety Zones; Annual Events Requiring Safety Zones in the Captain of the Port Lake Michigan Zone—Menominee Waterfront Festival Fireworks AGENCY:

    Coast Guard, DHS.

    ACTION:

    Notice of enforcement of regulation.

    SUMMARY:

    The Coast Guard will enforce a safety zone on Green Bay in Menominee, MI. This action is necessary and intended to protect the safety of life and property on navigable waters before, during, and immediately after a shore based firework display. During the enforcement period listed below, vessels and persons are prohibited from transiting through, mooring, or anchoring within this safety zone without approval from the Captain of the Port Lake Michigan or his or her designated representative.

    DATES:

    The regulations in 33 CFR 165.929(f)(7) will be enforced from 9:30 p.m. through 10 p.m. on August 4, 2018.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions about this notice of enforcement, call or email MSTC Kaleena Carpino, Marine Event Coordinator, U.S. Coast Guard Sector Lake Michigan; telephone 414-747-7148, email [email protected]

    SUPPLEMENTARY INFORMATION:

    The Coast Guard will enforce the Safety Zone; Waterfront Festival Fireworks listed as item (f)(7) in Table 165.929 of 33 CFR 165.929. Section 165.929 lists annual events requiring safety zones in the Captain of the Port Lake Michigan zone. This safety zone will encompass all waters of Green Bay within an 1,000 foot radius from approximate launch position at 45°06.040 N 087°36.054 W (NAD, 83). This safety zone will be enforced from 9:30 p.m. through 10 p.m. on August 4, 2018.

    Pursuant to 33 CFR 165.929, entry into, transiting, or anchoring within the safety zone during an enforcement period is prohibited unless authorized by the Captain of the Port Lake Michigan, or his or her designated on-scene representative. Those seeking permission to enter the safety zone may request permission from the Captain of Port Lake Michigan via Channel 16, VHF-FM. Vessels and persons granted permission to enter the safety zone shall obey the directions of the Captain of the Port Lake Michigan or his or her designated representative. While within a safety zone, all vessels shall operate at the minimum speed necessary to maintain a safe course.

    This notice of enforcement is issued under authority of 33 CFR 165.929, Safety Zones; Annual events requiring safety zones in the Captain of the Port Lake Michigan zone, and 5 U.S.C. 552(a). In addition to this notice in the Federal Register, the Coast Guard will provide the maritime community with advance notification of this enforcement period via Broadcast Notice to Mariners and Local Notice to Mariners. The Captain of the Port Lake Michigan or his or her designated on-scene representative may be contacted via VHF Channel 16 or at (414) 747-7182.

    Dated: July 24, 2018. Thomas J. Stuhlreyer, Captain, U.S. Coast Guard, Captain of the Port Lake Michigan.
    [FR Doc. 2018-16756 Filed 8-3-18; 8:45 am] BILLING CODE 9110-04-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket Number USCG-2018-0194] RIN 1625-AA00 Safety Zone; Philippine Sea, Tinian AGENCY:

    Coast Guard, DHS.

    ACTION:

    Temporary final rule.

    SUMMARY:

    The Coast Guard is establishing a temporary safety zone for certain waters off of Chulu and Babui beaches in Tinian. The Coast Guard believes this safety zone is necessary to protect all divers participating in this underwater military exercise from potential safety hazards associated with vessel traffic in the area. This safety zone will prohibit persons and vessels not involved in the exercise from being in the safety zone unless authorized by the Captain of the Port Guam (COTP) or a designated representative.

    DATES:

    This rule is effective from 5 p.m. on September 10, 2018, to 5 a.m. on September 11, 2018.

    ADDRESSES:

    To view documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov, type USCG-2018-0194 in the “SEARCH” box and click “SEARCH.” Click on Open Docket Folder on the line associated with this rule.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions on this rule, call or email Chief Todd Wheeler, Sector Guam Waterways Management Division, U.S. Coast Guard; telephone 671-355-4866, email [email protected]

    SUPPLEMENTARY INFORMATION:

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

    The purpose of this rulemaking is to ensure the safety of divers in the water during an underwater military exercise in support of the biennial Exercise Valiant Shield from 5 p.m. on September 10, 2018 to 5 a.m. on September 11, 2018.

    In response, on May 1, 2018, the Coast Guard published a notice of proposed rulemaking (NPRM) titled Safety Zone; Philippine Sea, Tinian (83 FR 19025-19026). There, we stated why we issued the NPRM and requested comments on our proposed regulatory action related to this safety zone. During the comment period that ended May 31, 2018, we received no comments.

    III. Legal Authority and Need for Rule

    The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port Guam (COTP) has determined that potential hazards associated with the exercise will be a safety concern. The purpose of this rule is to protect all divers participating in this underwater military exercise from potential safety hazards associated with vessel traffic in the area.

    IV. Discussion of Comments, Changes, and the Rule

    As noted above, we received no comments on our NPRM published May 1, 2018. The Exercise Valiant Shield coordinator did send an updated time and coordinates for where and when the divers will enter the water. The safety zone has moved approximately one mile northeast of the previous safety zone that was proposed in the NPRM. Also the time has moved up by one hour. The changes are reflected in the regulatory text of this rule.

    This rule establishes a safety zone from 5 p.m. on September 10, 2018 to 5 a.m. on September 11, 2018. The safety zone will cover all navigable waters two miles off Chulu and Babui beaches in Tinian. This safety zone is necessary to protect all divers participating in this underwater military exercise from potential safety hazards associated with vessel traffic in the area. This proposed rulemaking would prohibit persons and vessels not involved in the exercise from being in the safety zone unless authorized by the COTP or a designated representative.

    V. Regulatory Analyses

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

    A. Regulatory Planning and Review

    Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.

    This regulatory action determination is based on the size, location, duration, and time of day of the safety zone. Vessel traffic would be able to safely transit around this safety zone. Moreover, the Coast Guard would issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone, and the rule would allow vessels to seek permission to enter the zone.

    B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard received no comments from the Small Business Administration on this rulemaking. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

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

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

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

    C. Collection of Information

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

    D. Federalism and Indian Tribal Governments

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

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

    E. Unfunded Mandates Reform Act

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

    F. Environment

    We have analyzed this rule under Department of Homeland Security Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone vessel traffic would be able to safely transit around. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES.

    G. Protest Activities

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

    List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.

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

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

    33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.

    2. Add § 165.T14-0194 to read as follows:
    § 165.T14-0194 Safety Zone; Philippine Sea, Tinian.

    (a) Location. The following area is a safety zone: All waters off of Chulu and Babui Beach, Tinian, from surface to bottom, encompassed by a line connecting the following points beginning at 15°04′34″ N, 145°37′03″ E, thence to 15°05′17″ N, 145°36′30″ E, thence to 15°05′42″ N, 145°36′54″ E, thence to 15°05′03″ N, 145°37′36″ E, and along the shore line back to the beginning point. These coordinates are based on NAD 1983.

    (b) Regulations. (1) The general regulations governing safety zones contained in § 165.23 apply. This proposed rulemaking would prohibit persons and vessels not involved in the exercise from being in the safety zone unless authorized by the Captain of the Port (COTP) Guam or a designated representative.

    (2) To seek permission to enter, contact the COTP Guam or the COTP's representative by VHF channel 16 or by telephone at 671-355-4821. Those in the safety zone must comply with all lawful orders or directions given to them by the COTP or the COTP's designated representative.

    (c) Enforcement period. This section will be enforced from 5 p.m. on September 10, 2018, to 5 a.m. on September 11, 2018.

    Dated: July 13, 2018. Christopher M. Chase, Captain, U.S. Coast Guard, Captain of the Port Guam.
    [FR Doc. 2018-16754 Filed 8-3-18; 8:45 am] BILLING CODE 9110-04-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket Number USCG-2018-0183] RIN 1625-AA00 Safety Zone; Philippine Sea, Rota AGENCY:

    Coast Guard, DHS.

    ACTION:

    Temporary final rule.

    SUMMARY:

    The Coast Guard is establishing a temporary safety zone for certain waters off the Port of Rota. The Coast Guard believes this safety zone is necessary to protect all divers participating in this underwater military exercise from potential safety hazards associated with vessel traffic in the area. This safety zone will prohibit persons and vessels not involved in the exercise from being in the safety zone unless authorized by the Captain of the Port Guam (COTP) or a designated representative.

    DATES:

    This rule is effective from 11 a.m. to 11 p.m. on September 16, 2018.

    ADDRESSES:

    To view documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov, type USCG-2018-0183 in the “SEARCH” box and click “SEARCH.” Click on Open Docket Folder on the line associated with this rule.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions on this rule, call or email call or email Chief Todd Wheeler, Sector Guam Waterways Management Division, U.S. Coast Guard; telephone 671-355-4866, email [email protected]

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

    The purpose of this rulemaking is to ensure the safety of divers in the water during an underwater military exercise in support of the biennial Exercise Valiant Shield from 11 a.m. to 11 p.m. on September 16, 2018.

    In response, on May 21, 2018, the Coast Guard published a notice of proposed rulemaking (NPRM) titled Safety Zone; Philippine Sea, Rota (83 FR 23400-23402). There, we stated the background and proposed regulatory action, and requested comments on our proposed regulatory action related to this safety zone. During the comment period that ended June 20, 2018, we received no comments.

    III. Legal Authority and Need for Rule

    The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port Guam (COTP) has determined that potential hazards associated with the exercise will be a safety concern. The purpose of this rule is to protect all divers participating in this underwater military exercise from potential safety hazards associated with vessel traffic in the area.

    IV. Discussion of Comments, Changes, and the Rule

    As noted above, we received no comments on our NPRM published May 21, 2018. The Exercise Valiant Shield coordinator did send an updated time for when the divers will enter the water. The safety zone has moved up seven hours from the previous safety zone that was proposed in the NPRM. The changes are reflected in the regulatory text of this rule.

    This rule establishes a safety zone from 11 a.m. to 11 p.m. on September 16, 2018. The safety zone will cover all navigable waters two miles off of the Port of Rota. This safety zone is necessary to protect all divers participating in this underwater military exercise from potential safety hazards associated with vessel traffic in the area. This proposed rulemaking would prohibit persons and vessels not involved in the exercise from being in the safety zone unless authorized by the COTP or a designated representative.

    V. Regulatory Analyses

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

    A. Regulatory Planning and Review

    Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.

    This regulatory action determination is based on the size, location, duration, and time of day of the safety zone. Vessel traffic would be able to safely transit around this safety zone. Moreover, the Coast Guard would issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone, and the rule would allow vessels to seek permission to enter the zone.

    B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard received no comments from the Small Business Administration on this rulemaking. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

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

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

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

    C. Collection of Information

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

    D. Federalism and Indian Tribal Governments

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

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

    E. Unfunded Mandates Reform Act

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

    F. Environment

    We have analyzed this rule under Department of Homeland Security Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone lasting for 12 hours that will prohibit entry into navigable waters 2 miles off the coast of the Port of Rota; however, vessel traffic would be able to safely transit around the safety zone. It is categorically excluded from further review under paragraph L60(c) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES.

    G. Protest Activities

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

    List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.

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

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

    33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.

    2. Add § 165.T14-0183 to read as follows:
    § 165.T14-0183 Safety Zone; Philippine Sea, Rota.

    (a) Location. The following area is a safety zone: All waters off of the Port of Rota, from surface to bottom, encompassed by a line connecting the following points beginning at 14°08′07″ N, 145°08′00″ E, thence to 14°08′53″ N, 145°06′51″ E, thence to 14°09′12″ N, 145°07′13″ E, thence to 14°08′16″ N, 145°08′08″ E, and along the shore line back to the beginning point. These coordinates are based on NAD 1983.

    (b) Regulations. (1) The general regulations governing safety zones contained in § 165.23 apply. This proposed rulemaking would prohibit persons and vessels not involved in the exercise from being in the safety zone unless authorized by the Captain of the Port (COTP) Guam or a designated representative.

    (2) To seek permission to enter, contact the COTP Guam or the COTP's representative by VHF channel 16 or by telephone at 671-355-4821. Those in the safety zone must comply with all lawful orders or directions given to them by the COTP or the COTP's designated representative.

    (c) Enforcement period. This section will be enforced from 11 a.m. to 11 p.m. on September 16, 2018.

    Dated: July 13, 2018. Christopher M. Chase, Captain, U.S. Coast Guard, Captain of the Port Guam.
    [FR Doc. 2018-16757 Filed 8-3-18; 8:45 am] BILLING CODE 9110-04-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R03-OAR-2018-0277; FRL-9981-70—Region 3] Approval and Promulgation of Air Quality Implementation Plans; Pennsylvania; Removal of Department of Environmental Protection Gasoline Volatility Requirements for the Pittsburgh-Beaver Valley Area; Withdrawal of Direct Final Rule AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Withdrawal of direct final rule.

    SUMMARY:

    Due to receipt of adverse comment, the Environmental Protection Agency (EPA) is withdrawing the direct final rule published on June 15, 2018, to approve a revision to the Commonwealth of Pennsylvania state implementation plan (SIP) requesting removal of Pennsylvania requirements limiting summertime gasoline volatility to 7.8 pounds per square inch (psi) Reid Vapor Pressure (RVP) to address nonattainment under the 1-hour ozone national ambient air quality standard (NAAQS) in the Pittsburgh-Beaver Valley ozone nonattainment area (hereafter Pittsburgh-Beaver Valley Area).

    DATES:

    The direct final rule published at 83 FR 27901 on June 15, 2018, is withdrawn effective August 6, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Brian Rehn, Office of Air Program Planning, Air Protection Division, U.S. Environmental Protection Agency, Region 3, 1650 Arch Street, Philadelphia, PA 19103. Brian Rehn can be reached via telephone at (215) 814-2176 or via electronic mail at [email protected]

    SUPPLEMENTARY INFORMATION:

    Please see the information provided in the direct final action published in the Federal Register on June 15, 2018 (83 FR 27901) and in the companion proposed rule which was also published on June 15, 2018 (83 FR 27910).

    In those actions, EPA proposed to approve a May 2, 2018 SIP revision from Pennsylvania to remove Pennsylvania Department of Environmental Protection (PADEP) requirements for summertime low volatility gasoline (as codified at 25 Pa. Code Chapter 126, Subchapter C) from the Pennsylvania SIP. EPA's June 15, 2018 direct final action served to approve the Commonwealth's supporting analysis, submitted to EPA on May 2, 2018, which demonstrates that removal of the Pittsburgh-Beaver Valley Area low RVP gasoline program does not interfere with the Commonwealth's ability to attain or maintain any NAAQS in the Pittsburgh-Beaver Valley Area. Removal of PADEP volatility requirements would leave in place federal gasoline volatility requirements, as well as separate Allegheny County low-RVP requirements adopted by the Allegheny County Health Department (ACHD) and approved by EPA as a separate part of the Pennsylvania SIP.

    In the direct final rule published on June 15, 2018 (83 FR 27901), EPA stated that if we received adverse comments on our action the rule would be withdrawn and would not take effect. EPA subsequently received adverse comments. EPA will address the comments received on our proposed action to remove the PADEP low RVP gasoline requirements from the Pennsylvania SIP in a subsequent final action based upon the proposed action also published on June 15, 2018 (83 FR 27910). EPA will not institute a second comment period on this action.

    List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Volatile organic compounds.

    Dated: July 24, 2018. Cecil Rodrigues, Acting Regional Administrator, Region III. Accordingly, the amendment to 40 CFR 52.2020(c)(1), published on June 15, 2018 (83 FR 27901), is withdrawn effective August 6, 2018.
    [FR Doc. 2018-16604 Filed 8-3-18; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 261 and 262 [FRL-9981-90-OLEM] Address Change for Waste Import-Export Submittals From the Office of Federal Activities to the Office of Resource Conservation and Recovery AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Final rule.

    SUMMARY:

    The Environmental Protection Agency (EPA or the Agency) is making conforming changes to the EPA office and address to which paper documents concerning imports and exports of hazardous waste and conditionally excluded cathode ray tubes must be sent. The change in address is needed to reflect the reorganization of hazardous waste import-export functions on April 29, 2018, from the Office of Federal Activities' International Compliance Assurance Division, in EPA's Office of Enforcement and Compliance Assurance, to the International Branch within the Office of Resource Conservation and Recovery's Materials Recovery and Waste Management Division, in EPA's Office of Land and Emergency Management. The change in address will ensure that such paper documents will continue to be received by the appropriate personnel in a timely manner.

    DATES:

    This rule is effective on August 6, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Laura Coughlan, Materials Recovery and Waste Management Division, Office of Resource Conservation and Recovery (5304P), Environmental Protection Agency, 1200 Pennsylvania Avenue NW, Washington, DC 20460; telephone number: (703) 308-0005; email address: [email protected]

    SUPPLEMENTARY INFORMATION: I. General Information A. Does this action apply to me?

    This action relates to the internal reorganization of the EPA. It provides notice directed to the public in general and has particular applicability to anyone who wants to communicate with the EPA office responsible for hazardous waste import-export functions, or to submit information concerning imports and exports of hazardous waste or export of conditionally excluded cathode ray tubes to the Agency. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT.

    B. How can I get additional information, including copies of this document or other related information?

    To obtain electronic copies of this document and other related information that is available electronically, please visit www.epa.gov/hwgenerators.

    II. Background A. What action is the Agency taking?

    This action makes conforming changes to the EPA office and address to which paper documents concerning imports and exports of hazardous waste and conditionally excluded cathode ray tubes must be sent. The notice changes the addresses for U.S. postal service delivery and courier hand delivery of submittals listed in 40 CFR 261.39(a)(5)(xi), 40 CFR 261.41(a)(2), and 40 CFR 262.82(e) from those of the Office of Federal Activities' International Compliance Assurance Division, in EPA's Office of Enforcement and Compliance Assurance, to those of the International Branch within the Office of Resource Conservation and Recovery's Materials Recovery and Waste Management Division, in EPA's Office of Land and Emergency Management. The change in listed addresses is needed to reflect the reorganization of hazardous waste import-export functions on April 29, 2018, from the Office of Federal Activities' International Compliance Assurance Division, in EPA's Office of Enforcement and Compliance Assurance, to the International Branch within the Office of Resource Conservation and Recovery's Materials Recovery and Waste Management Division, in EPA's Office of Land and Emergency Management. The change in address will ensure that such paper documents will continue to be received by the appropriate personnel in a timely manner.

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

    The EPA is issuing this document under its general rulemaking authority, Reorganization Plan No. 3 of 1970 (5 U.S.C. app.). Section 553 of the Administrative Procedure Act (APA), 5 U.S.C. 553(b)(3)(A), provides that “rules of agency organization, procedure, or practice” are exempt from notice and comment requirements. This exemption applies to this action. Accordingly, EPA is not taking comment on this action.

    In addition, under the good cause exemption in Section 553(d)(3), the EPA is publishing and making this rule immediately effective. A 30-day delay in the rule's effectiveness is unnecessary for updating an EPA office and mailing address; a delay would be contrary to public interest because it could create a short period of public confusion.

    III. Do any of the Statutory and Executive Order Reviews apply to this action?

    This final rule revises the EPA office and address listed in the regulations to reflect the reorganization of hazardous waste import-export functions from one of the EPA's offices to another of the EPA's offices, and does not otherwise impose or change any requirements. This action is not a “significant regulatory action” and is therefore not subject to OMB review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). In addition, this action is not considered an Executive Order 13771 (82 FR 9339, February 3, 2017) regulatory action, because this action is not significant under Executive Order 12866. Because this action is not subject to notice and comment requirements under the Administrative Procedure Act or any other statute, it is not subject to the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) or Sections 202 and 205 of the Unfunded Mandates Reform Act of 1999 (UMRA) (Pub. L. 104-4). In addition, this action does not significantly or uniquely affect small governments. This action does not create new binding legal requirements that substantially and directly affect tribes under Executive Order 13175 (65 FR 67249, November 9, 2000). This action does not have significant federalism implications under Executive Order 13132 (64 FR 43255, August 10, 1999). Because this final rule has been exempted from review under Executive Order 12866, this final rule is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq., nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994). This action does not involve technical standards; thus, the requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply.

    The Congressional Review Act (CRA), 5 U.S.C. 801 et seq., generally provides that before certain actions may take effect, the agency promulgating the action must submit a report, which includes a copy of the action, to each House of the Congress and to the Comptroller General of the United States. This final action is exempt from the CRA because it is a rule relating to agency management or personnel and a rule of agency organization, procedure or practice that does not substantially affect the rights or obligations of non-agency parties.

    List of Subjects 40 CFR Part 261

    Environmental protection, Hazardous waste, Recycling, Reporting and recordkeeping requirements.

    40 CFR Part 262

    Environmental protection, Exports, Hazardous materials transportation, Hazardous waste, Imports, Labeling, Packaging and containers, Reporting and recordkeeping requirements.

    Dated: July 26, 2018. Barry N. Breen, Acting Assistant Administrator, Office of Land and Emergency Management.

    For the reasons stated in the preamble, EPA amends title 40, chapter 1 of the Code of Federal Regulations as follows:

    PART 261—IDENTIFICATION AND LISTING OF HAZARDOUS WASTE 1. The authority citation for part 261 continues to read as follows: Authority:

    42 U.S.C. 6905, 6912(a), 6921, 6922, 6924(y) and 6938.

    2. In § 261.39, revise paragraph (a)(5)(xi) to read as follows:
    § 261.39 Conditional Exclusion for Used, Broken Cathode Ray Tubes (CRTs) and Processed CRT Glass Undergoing Recycling.

    (a) * * *

    (5) * * *

    (xi) Prior to one year after the AES filing compliance date, annual reports must be sent to the following mailing address: Office of Land and Emergency Management, Office of Resource Conservation and Recovery, Materials Recovery and Waste Management Division, International Branch (Mail Code 2255A), Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460. Hand-delivered annual reports on used CRTs exported during 2016 should be sent to: Office of Land and Emergency Management, Office of Resource Conservation and Recovery, Materials Recovery and Waste Management Division, International Branch (Mail Code 2255A), Environmental Protection Agency, William Jefferson Clinton South Building, Room 6144, 1200 Pennsylvania Ave. NW, Washington, DC 20004. Subsequently, annual reports must be submitted to the office listed using the allowable methods specified in paragraph (a)(5)(ii) of this section. Exporters must keep copies of each annual report for a period of at least three years from the due date of the report. Exporters may satisfy this recordkeeping requirement by retaining electronically submitted annual reports in the CRT exporter's account on EPA's Waste Import Export Tracking System (WIETS), or its successor system, provided that a copy is readily available for viewing and production if requested by any EPA or authorized state inspector. No CRT exporter may be held liable for the inability to produce an annual report for inspection under this section if the CRT exporter can demonstrate that the inability to produce the annual report is due exclusively to technical difficulty with EPA's Waste Import Export Tracking System (WIETS), or its successor system for which the CRT exporter bears no responsibility.

    3. In § 261.41, revise paragraph (a)(2) to read as follows:
    § 261.41 Notification and Recordkeeping for Used, Intact Cathode Ray Tubes (CRTs) Exported for Reuse.

    (a) * * *

    (2) Notifications submitted by mail should be sent to the following mailing address: Office of Land and Emergency Management, Office of Resource Conservation and Recovery, Materials Recovery and Waste Management Division, International Branch (Mail Code 2255A), Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460. Hand-delivered notifications should be sent to: Office of Land and Emergency Management, Office of Resource Conservation and Recovery, Materials Recovery and Waste Management Division, International Branch (Mail Code 2255A), Environmental Protection Agency, William Jefferson Clinton South Building, Room 6144, 1200 Pennsylvania Ave. NW, Washington, DC 20004. In both cases, the following shall be prominently displayed on the front of the envelope: “Attention: Notification of Intent to Export CRTs.”

    PART 262—STANDARDS APPLICABLE TO GENERATORS OF HAZARDOUS WASTE 4. The authority citation for part 262 continues to read as follows: Authority:

    42 U.S.C 6906, 6912, 6922-6925, 6937, 6938 and 6939g.

    5. In § 262.82, revise paragraphs (e)(1) and (2) to read as follows:
    § 262.82 General conditions.

    (e) * * *

    (1) For postal mail delivery, the Office of Land and Emergency Management, Office of Resource Conservation and Recovery, Materials Recovery and Waste Management Division, International Branch (Mail Code 2255A), Environmental Protection Agency, 1200 Pennsylvania Avenue NW, Washington, DC 20460.

    (2) For hand-delivery, the Office of Land and Emergency Management, Office of Resource Conservation and Recovery, Materials Recovery and Waste Management Division, International Branch (Mail Code 2255A), Environmental Protection Agency, William Jefferson Clinton South Building, Room 6144, 1200 Pennsylvania Ave. NW, Washington, DC 20004.

    [FR Doc. 2018-16774 Filed 8-3-18; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 300 [EPA-HQ-SFUND-1983-0002; FRL-9980-82—Region 10] National Oil and Hazardous Substances Pollution Contingency Plan; National Priorities List: Deletion of the Frontier Hard Chrome, Inc. Superfund Site AGENCY:

    Environmental Protection Agency.

    ACTION:

    Final rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) Region 10 announces the deletion of the Frontier Hard Chrome, Inc. (FHC) Superfund Site (Site) located in Vancouver, Washington, from the National Priorities List (NPL). The NPL, promulgated pursuant to section 105 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980, as amended, is an appendix of the National Oil and Hazardous Substances Pollution Contingency Plan (NCP). The EPA and the State of Washington, through the Department of Ecology, have determined that all appropriate response actions under CERCLA have been completed. However, this deletion does not preclude future actions under Superfund.

    DATES:

    This action is effective August 6, 2018.

    ADDRESSES:

    Docket: EPA has established a docket for this action under Docket Identification No. EPA-HQ-SFUND-1983-0002. All documents in the docket are listed on the http://www.regulations.gov website. Although listed in the index, some information is not publicly available, i.e., Confidential Business Information 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 either electronically through http://www.regulations.gov or in hard copy at the site information repositories. Locations, contacts, phone numbers and viewing hours are:

    Records Center, U.S. EPA Region 10, 1200 Sixth Avenue, Suite 155, Seattle, Washington, 206-553-4494, Monday through Friday, except Federal holidays, between 9:00 a.m. and 5:00 p.m.

    Vancouver Community Library, 901 C Street, Vancouver, Washington, 360-906-5000, between 9:00 a.m. and 8:00 p.m. Monday to Thursday, or 10:00 a.m. and 6:00 p.m. Friday to Sunday.

    FOR FURTHER INFORMATION CONTACT:

    Jeremy Jennings, Remedial Project Manager, U.S. Environmental Protection Agency, Region 10, 1200 Sixth Avenue, Suite 155, ECL-122, Seattle, Washington 98101-3123, telephone: 206-553-2724, email: [email protected]

    SUPPLEMENTARY INFORMATION:

    The site to be deleted from the NPL is: Frontier Hard Chrome, Inc., Vancouver, Washington. A Notice of Intent to Delete for this Site was published in the Federal Register (83 FR 23409-23412) on May 21, 2018.

    The closing date for comments on the Notice of Intent to Delete was June 20, 2018. One anonymous comment was received. The comment did not oppose deletion of the Site from the NPL, and included a non-Site specific gratuitous statement about the EPA Administrator. Since the comment was not adverse to the intended EPA action, there is no need to evaluate or respond. EPA continues to believe that the Site meets the National Contingency Plan deletion criteria, and is proceeding with deletion of the Site from the NPL. A Responsiveness Summary was prepared and placed in both the docket, EPA-HQ-SFUND-1983-0002, www.regulations.gov and in the site information repositories listed above.

    EPA maintains the NPL as the list of sites that appear to present a significant risk to public health, welfare, or the environment. Deletion from the NPL does not preclude further remedial action. Whenever there is a significant release from a site deleted from the NPL, the deleted site may be restored to the NPL without application of the hazard ranking system. Deletion of a site from the NPL does not affect responsible party liability in the unlikely event that future conditions warrant further actions.

    List of Subjects in 40 CFR Part 300

    Environmental protection, Air pollution control, Chemicals, Hazardous substances, Hazardous waste, Intergovernmental relations, Penalties, Reporting and recordkeeping requirements, Superfund, Water pollution control, Water supply.

    Chris Hladick, Regional Administrator, Region 10.

    For reasons set out in the preamble, 40 CFR part 300 is amended as follows:

    PART 300—NATIONAL OIL AND HAZARDOUS SUBSTANCES POLLUTION CONTINGENCY PLAN 1. The authority citation for part 300 continues to read as follows: Authority:

    33 U.S.C. 1321(d); 42 U.S.C. 9601-9657; E.O. 13626, 77 FR 56749, 3 CFR, 2013 Comp., p. 306; E.O. 12777, 56 FR 54757, 3 CFR, 1991 Comp., p. 351; E.O. 12580, 52 FR 2923, 3 CFR, 1987 Comp., p. 193.

    Appendix B to Part 300—[Amended] 2. Table 1 of appendix B to part 300 is amended by removing the listing under Washington for “Frontier Hard Chrome, Inc”.
    [FR Doc. 2018-16775 Filed 8-3-18; 8:45 am] BILLING CODE 6560-50-P
    DEPARTMENT OF HOMELAND SECURITY Federal Emergency Management Agency 44 CFR Part 64 [Docket ID FEMA-2018-0002; Internal Agency Docket No. FEMA-8541] Suspension of Community Eligibility AGENCY:

    Federal Emergency Management Agency, DHS.

    ACTION:

    Final rule.

    SUMMARY:

    This rule identifies communities where the sale of flood insurance has been authorized under the National Flood Insurance Program (NFIP) that are scheduled for suspension on the effective dates listed within this rule because of noncompliance with the floodplain management requirements of the program. If the Federal Emergency Management Agency (FEMA) receives documentation that the community has adopted the required floodplain management measures prior to the effective suspension date given in this rule, the suspension will not occur and a notice of this will be provided by publication in the Federal Register on a subsequent date. Also, information identifying the current participation status of a community can be obtained from FEMA's Community Status Book (CSB). The CSB is available at https://www.fema.gov/national-flood-insurance-program-community-status-book.

    DATES:

    The effective date of each community's scheduled suspension is the third date (“Susp.”) listed in the third column of the following tables.

    FOR FURTHER INFORMATION CONTACT:

    If you want to determine whether a particular community was suspended on the suspension date or for further information, contact Adrienne L. Sheldon, PE, CFM, Federal Insurance and Mitigation Administration, Federal Emergency Management Agency, 400 C Street SW, Washington, DC 20472, (202) 212-3966.

    SUPPLEMENTARY INFORMATION:

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

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

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

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

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

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

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

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

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

    List of Subjects in 44 CFR Part 64

    Flood insurance, Floodplains.

    Accordingly, 44 CFR part 64 is amended as follows:

    PART 64—[AMENDED] 1. The authority citation for Part 64 continues to read as follows: Authority:

    42 U.S.C. 4001 et seq.; Reorganization Plan No. 3 of 1978, 3 CFR, 1978 Comp.; p. 329; E.O. 12127, 44 FR 19367, 3 CFR, 1979 Comp.; p. 376.

    § 64.6 [Amended]
    2. The tables published under the authority of § 64.6 are amended as follows: Table 33—Episode-Based Measures Proposed for the 2019 MIPS Performance Period and Future Performance Periods State and location Community No. Effective date authorization/cancellation of sale of flood insurance in community Current effective map date Date certain Federal
  • assistance no
  • longer available in SFHAs
  • Region IV Alabama: Ardmore, Town of, Limestone County. 010306 July 9, 1979, Emerg; April 15, 1986, Reg; August 16, 2018, Susp. Aug. 16, 2018 Aug. 16, 2018. Athens, City of, Limestone County. 010146 April 11, 1974, Emerg; September 28, 1979, Reg; August 16, 2018, Susp. ......do   Do. Decatur, City of, Limestone and Morgan Counties. 010176 November 5, 1973, Emerg; September 5, 1979, Reg; August 16, 2018, Susp. ......do   Do. Falkville, Town of, Morgan County. 010177 May 7, 1974, Emerg; January 3, 1979, Reg; August 16, 2018, Susp. ......do   Do. Hartselle, City of, Morgan County. 010178 February 11, 1971, Emerg; July 17, 1978, Reg; August 16, 2018, Susp. ......do   Do. Huntsville, City of, Limestone and Madison Counties. 010153 March 8, 1974, Emerg; November 1, 1979, Reg; August 16, 2018, Susp. ......do   Do. Limestone County, Unincorporated Areas. 010307 September 2, 1975, Emerg; July 16, 1981, Reg; August 16, 2018, Susp. ......do   Do. Madison, City of, Limestone and Madison Counties. 010308 July 23, 1975, Emerg; December 15, 1978, Reg; August 16, 2018, Susp. ......do   Do. Madison County, Unincorporated Areas. 010151 August 26, 1974, Emerg; July 2, 1981, Reg; August 16, 2018, Susp. ......do   Do. Mooresville, Town of, Limestone County. 010455 December 23, 2008, Emerg; September 21, 2010, Reg; August 16, 2018, Susp. ......do   Do. Morgan County, Unincorporated Areas. 010175 N/A, Emerg; March 1, 1991, Reg; August 16, 2018, Susp. ......do   Do. New Hope, City of, Madison County. 010154 August 7, 1975, Emerg; November 24, 1978, Reg; August 16, 2018, Susp. ......do   Do. Owens Cross Roads, Town of, Madison County. 010218 August 6, 1974, Emerg; March 2, 1981, Reg; August 16, 2018, Susp. ......do   Do. Priceville, Town of, Morgan County. 010448 N/A, Emerg; November 2, 2010, Reg; August 16, 2018, Susp. ......do   Do. Somerville, Town of, Morgan County. 010363 N/A, Emerg; June 26, 2006, Reg; August 16, 2018, Susp. ......do   Do. Triana, Town of, Madison County. 010155 July 21, 1980, Emerg; September 29, 1986, Reg; August 16, 2018, Susp. ......do   Do. Trinity, Town of, Morgan County. 010309 July 7, 1977, Emerg; November 24, 1978, Reg; August 16, 2018, Susp. Aug. 16, 2018 Aug. 16, 2018. South Carolina: Aiken County, Unincorporated Areas. 450002 July 31, 1975, Emerg; March 4, 1980, Reg; August 16, 2018, Susp. ......do   Do. Jackson, Town of, Aiken County. 450005 April 12, 1976, Emerg; May 15, 1986, Reg; August 16, 2018, Susp. ......do   Do. North Augusta, City of, Aiken and Edgefield County. 450007 March 12, 1975, Emerg; February 1, 1980, Reg; August 16, 2018, Susp. ......do   Do. *......do and Do = Ditto. Code for reading third column: Emerg.—Emergency; Reg.—Regular; Susp.—Suspension.
    Dated: July 25, 2018. Michael M. Grimm, Assistant Administrator for Mitigation, Federal Insurance and Mitigation Administration, Department of Homeland Security, Federal Emergency Management Agency.
    [FR Doc. 2018-16696 Filed 8-3-18; 8:45 am] BILLING CODE 9110-12-P
    SURFACE TRANSPORTATION BOARD 49 CFR Part 1002 [Docket No. EP 542 (Sub-No. 26)] Regulations Governing Fees for Services Performed in Connection With Licensing and Related Services—2018 Update AGENCY:

    Surface Transportation Board.

    ACTION:

    Final rule.

    SUMMARY:

    The Board updates for 2018 the fees that the public must pay to file certain cases and pleadings with the Board.

    DATES:

    This rule is effective September 5, 2018.

    FOR FURTHER INFORMATION CONTACT:

    David T. Groves, (202) 245-0327, or Andrea Pope-Matheson (202) 245-0363. [TDD for the hearing impaired: 1-800-877-8339.]

    SUPPLEMENTARY INFORMATION:

    The Board's regulations at 49 CFR 1002.3 provide for an annual update of the Board's entire user-fee schedule. Fees are generally revised based on the cost study formula set forth at 49 CFR 1002.3(d), which looks to changes in salary costs, publication costs, and Board overhead cost factors. Applying that formula, 72 of the Board's 133 fees will be increased, two will be decreased, and 59 will remain unchanged.

    Additional information is contained in the Board's decision. To obtain a free copy of the full decision, visit the Board's website at http://www.stb.gov or call (202) 245-0245. [Assistance for the hearing impaired is available through Federal Information Relay Services (FIRS): (800) 877-8339.]

    List of Subjects in 49 CFR Part 1002

    Administrative practice and procedure, Common carriers, and Freedom of information.

    Decided: July 31, 2018.

    By the Board, Board Members Begeman and Miller.

    Marline Simeon, Clearance Clerk.

    For the reasons set forth in the preamble, title 49, chapter X, part 1002, of the Code of Federal Regulations is amended as follows:

    PART 1002—FEES 1. The authority citation for part 1002 continues to read as follows: Authority:

    5 U.S.C. 552(a)(4)(A), (a)(6)(B), and 553; 31 U.S.C. 9701; and 49 U.S.C. 1321(a). Section 1002.1(g)(11) is also issued under 5 U.S.C. 5514 and 31 U.S.C. 3717.

    2. Section 1002.1 is amended by revising paragraphs (a) through (c), (f)(1), and (g)(6) to read as follows:
    § 1002.1 Fees for records search, review, copying, certification, and related services.

    (a) Certificate of the Records Officer, $20.00.

    (b) Services involved in examination of tariffs or schedules for preparation of certified copies of tariffs or schedules or extracts therefrom at the rate of $45.00 per hour.

    (c) Services involved in checking records to be certified to determine authenticity, including clerical work, etc. identical thereto, at the rate of $31.00 per hour.

    (f) * * *

    (1) A fee of $78.00 per hour for professional staff time will be charged when it is required to fulfill a request for ADP data.

    (g) * * *

    (6) The search and review hourly fees will be based upon employee grade levels in order to recoup the full, allowable direct costs attributable to their performance of these functions. A listing of the hourly fees by employee grade level is available on the Board's website, http://www.stb.gov.

    3. In 1002.2, paragraph (f) is revised to read as follows:
    § 1002.2 Filing fees.

    (f) Schedule of filing fees.

    Type of proceeding Fee PART I: Non-Rail Applications or Proceedings to Enter Into a Particular Financial Transaction or Joint Arrangement: (1) An application for the pooling or division of traffic $5,200. (2) (i) An application involving the purchase, lease, consolidation, merger, or acquisition of control of a motor carrier of passengers under 49 U.S.C. 14303 $2,400. (ii) A petition for exemption under 49 U.S.C. 13541 (other than a rulemaking) filed by a non-rail carrier not otherwise covered $3,700. (iii) A petition to revoke an exemption filed under 49 U.S.C. 13541(d) $3,100. (3) An application for approval of a non-rail rate association agreement. 49 U.S.C. 13703 $32,800. (4) An application for approval of an amendment to a non-rail rate association agreement: (i) Significant amendment $5,400. (ii) Minor amendment $100. (5) An application for temporary authority to operate a motor carrier of passengers. 49 U.S.C. 14303(i) $550. (6) A notice of exemption for transaction within a motor passenger corporate family that does not result in adverse changes in service levels, significant operational changes, or a change in the competitive balance with motor passenger carriers outside the corporate family $1,900. (7)-(10) [Reserved] PART II: Rail Licensing Proceedings other than Abandonment or Discontinuance Proceedings: (11) (i) An application for a certificate authorizing the extension, acquisition, or operation of lines of railroad. 49 U.S.C. 10901 $8,600. (ii) Notice of exemption under 49 CFR 1150.31-1150.35 $2,000. (iii) Petition for exemption under 49 U.S.C. 10502 $14,900. (12) (i) An application involving the construction of a rail line $88,700. (ii) A notice of exemption involving construction of a rail line under 49 CFR 1150.36 $2,000. (iii) A petition for exemption under 49 U.S.C. 10502 involving construction of a rail line $88,700. (iv) A request for determination of a dispute involving a rail construction that crosses the line of another carrier under 49 U.S.C. 10902(d) $300. (13) A Feeder Line Development Program application filed under 49 U.S.C. 10907(b)(1)(A)(i) or 10907(b)(1)(A)(ii) $2,600. (14) (i) An application of a class II or class III carrier to acquire an extended or additional rail line under 49 U.S.C. 10902 $7,300. (ii) Notice of exemption under 49 CFR 1150.41-1150.45 $2,000. (iii) Petition for exemption under 49 U.S.C. 10502 relating to an exemption from the provisions of 49 U.S.C. 10902 $7,800. (15) A notice of a modified certificate of public convenience and necessity under 49 CFR 1150.21-1150.24 $1,900. (16) An application for a land-use-exemption permit for a facility existing as of October 16, 2008 under 49 U.S.C. 10909 $7,100. (17) An application for a land-use-exemption permit for a facility not existing as of October 16, 2008 under 49 U.S.C. 10909 $25,100. (18)-(20) [Reserved] PART III: Rail Abandonment or Discontinuance of Transportation Services Proceedings: (21) (i) An application for authority to abandon all or a portion of a line of railroad or discontinue operation thereof filed by a railroad (except applications filed by Consolidated Rail Corporation pursuant to the Northeast Rail Service Act [Subtitle E of Title XI of Pub. L. 97-35], bankrupt railroads, or exempt abandonments) $26,300. (ii) Notice of an exempt abandonment or discontinuance under 49 CFR 1152.50 $4,200. (iii) A petition for exemption under 49 U.S.C. 10502 $7,400. (22) An application for authority to abandon all or a portion of a line of a railroad or operation thereof filed by Consolidated Rail Corporation pursuant to Northeast Rail Service Act $550. (23) Abandonments filed by bankrupt railroads $2,200. (24) A request for waiver of filing requirements for abandonment application proceedings $2,100. (25) An offer of financial assistance under 49 U.S.C. 10904 relating to the purchase of or subsidy for a rail line proposed for abandonment $1,800. (26) A request to set terms and conditions for the sale of or subsidy for a rail line proposed to be abandoned $26,900. (27) (i) A request for a trail use condition in an abandonment proceeding under 16 U.S.C. 1247(d) $300. (ii) A request to extend the period to negotiate a trail use agreement $500. (28)-(35) [Reserved] PART IV: Rail Applications to Enter Into a Particular Financial Transaction or Joint Arrangement: (36) An application for use of terminal facilities or other applications under 49 U.S.C. 11102 $22,500. (37) An application for the pooling or division of traffic. 49 U.S.C. 11322 $12,100. (38) An application for two or more carriers to consolidate or merge their properties or franchises (or a part thereof) into one corporation for ownership, management, and operation of the properties previously in separate ownership. 49 U.S.C. 11324: (i) Major transaction $1,773,200. (ii) Significant transaction $354,600. (iii) Minor transaction $8,500. (iv) Notice of an exempt transaction under 49 CFR 1180.2(d) $1,900. (v) Responsive application $8,500. (vi) Petition for exemption under 49 U.S.C. 10502 $11,100. (vii) A request for waiver or clarification of regulations filed in a major financial proceeding as defined at 49 CFR 1180.2(a) $6,500. (39) An application of a non-carrier to acquire control of two or more carriers through ownership of stock or otherwise. 49 U.S.C. 11324: (i) Major transaction $1,773,200. (ii) Significant transaction $354,600. (iii) Minor transaction $8,500. (iv) A notice of an exempt transaction under 49 CFR 1180.2(d) $1,500. (v) Responsive application $8,500. (vi) Petition for exemption under 49 U.S.C. 10502 $11,100. (vii) A request for waiver or clarification of regulations filed in a major financial proceeding as defined at 49 CFR 1180.2(a) $6,500. (40) An application to acquire trackage rights over, joint ownership in, or joint use of any railroad lines owned and operated by any other carrier and terminals incidental thereto. 49 U.S.C. 11324: (i) Major transaction $1,773,200. (ii) Significant transaction $354,600. (iii) Minor transaction $8,500. (iv) Notice of an exempt transaction under 49 CFR 1180.2(d) $1,300. (v) Responsive application $8,500. (vi) Petition for exemption under 49 U.S.C. 10502 $11,100. (vii) A request for waiver or clarification of regulations filed in a major financial proceeding as defined at 49 CFR 1180.2(a) $6,500. (41) An application of a carrier or carriers to purchase, lease, or contract to operate the properties of another, or to acquire control of another by purchase of stock or otherwise. 49 U.S.C. 11324: (i) Major transaction $1,773,200. (ii) Significant transaction $354,600. (iii) Minor transaction $8,500. (iv) Notice of an exempt transaction under 49 CFR 1180.2(d) $1,600. (v) Responsive application $8,500. (vi) Petition for exemption under 49 U.S.C. 10502 $7,800. (vii) A request for waiver or clarification of regulations filed in a major financial proceeding as defined at 49 CFR 1180.2(a) $6,500. (42) Notice of a joint project involving relocation of a rail line under 49 CFR 1180.2(d)(5) $2,700. (43) An application for approval of a rail rate association agreement. 49 U.S.C. 10706 $83,000. (44) An application for approval of an amendment to a rail rate association agreement. 49 U.S.C. 10706: (i) Significant amendment $15,300. (ii) Minor amendment $100. (45) An application for authority to hold a position as officer or director under 49 U.S.C. 11328 $900. (46) A petition for exemption under 49 U.S.C. 10502 (other than a rulemaking) filed by rail carrier not otherwise covered $9,500. (47) National Railroad Passenger Corporation (Amtrak) conveyance proceeding under 45 U.S.C. 562 $300. (48) National Railroad Passenger Corporation (Amtrak) compensation proceeding under Section 402(a) of the Rail Passenger Service Act $300. (49)-(55) [Reserved] PART V: Formal Proceedings: (56) A formal complaint alleging unlawful rates or practices of carriers: (i) A formal complaint filed under the coal rate guidelines (Stand-Alone Cost Methodology) alleging unlawful rates and/or practices of rail carriers under 49 U.S.C. 10704(c)(1) $350. (ii) A formal complaint involving rail maximum rates filed under the Simplified-SAC methodology $350. (iii) A formal complaint involving rail maximum rates filed under the Three Benchmark methodology $150. (iv) All other formal complaints (except competitive access complaints) $350. (v) Competitive access complaints $150. (vi) A request for an order compelling a rail carrier to establish a common carrier rate $300. (57) A complaint seeking or a petition requesting institution of an investigation seeking the prescription or division of joint rates or charges. 49 U.S.C. 10705 $10,500. (58) A petition for declaratory order: (i) A petition for declaratory order involving a dispute over an existing rate or practice which is comparable to a complaint proceeding $1,000. (ii) All other petitions for declaratory order $1,400. (59) An application for shipper antitrust immunity. 49 U.S.C. 10706(a)(5)(A) $8,300. (60) Labor arbitration proceedings $300. (61) (i) An appeal of a Surface Transportation Board decision on the merits or petition to revoke an exemption pursuant to 49 U.S.C. 10502(d) $300. (ii) An appeal of a Surface Transportation Board decision on procedural matters except discovery rulings $450. (62) Motor carrier undercharge proceedings $300. (63) (i) Expedited relief for service inadequacies: A request for expedited relief under 49 U.S.C. 11123 and 49 CFR part 1146 for service emergency $300. (ii) Expedited relief for service inadequacies: A request for temporary relief under 49 U.S.C. 10705 and 11102, and 49 CFR part 1147 for service inadequacy $300. (64) A request for waiver or clarification of regulations except one filed in an abandonment or discontinuance proceeding, or in a major financial proceeding as defined at 49 CFR 1180.2(a) $700. (65)-(75) [Reserved] PART VI: Informal Proceedings: (76) An application for authority to establish released value rates or ratings for motor carriers and freight forwarders of household goods under 49 U.S.C. 14706 $1,400. (77) An application for special permission for short notice or the waiver of other tariff publishing requirements $150. (78) The filing of tariffs, including supplements, or contract summaries $1 per page ($29 min. charge.) (79) Special docket applications from rail and water carriers: (i) Applications involving $25,000 or less $75. (ii) Applications involving over $25,000 $150. (80) Informal complaint about rail rate applications $700. (81) Tariff reconciliation petitions from motor common carriers: (i) Petitions involving $25,000 or less $75. (ii) Petitions involving over $25,000 $150. (82) Request for a determination of the applicability or reasonableness of motor carrier rates under 49 U.S.C. 13710(a)(2) and (3) $250. (83) Filing of documents for recordation 49 U.S.C. 11301 and 49 CFR 1177.3(c) $48 per document. (84) Informal opinions about rate applications (all modes) $300. (85) A railroad accounting interpretation $1,300. (86) (i) A request for an informal opinion not otherwise covered $1,700. (ii) A proposal to use on a voting trust agreement pursuant to 49 CFR 1013 and 49 CFR 1180.4(b)(4)(iv) in connection with a major control proceeding as defined at 49 CFR 1180.2(a) $6,100. (iii) A request for an informal opinion on a voting trust agreement pursuant to 49 CFR 1013.3(a) not otherwise covered $600. (87) Arbitration of Certain Disputes Subject to the Statutory Jurisdiction of the Surface Transportation Board under 49 CFR 1108: (i) Complaint $75. (ii) Answer (per defendant), Unless Declining to Submit to Any Arbitration $75. (iii) Third Party Complaint $75. (iv) Third Party Answer (per defendant), Unless Declining to Submit to Any Arbitration $75. (v) Appeals of Arbitration Decisions or Petitions to Modify or Vacate an Arbitration Award $150. (88) Basic fee for STB adjudicatory services not otherwise covered $300. (89)-(95) [Reserved] PART VII: Services: (96) Messenger delivery of decision to a railroad carrier's Washington, DC, agent $38 per delivery. (97) Request for service or pleading list for proceedings $29 per list. (98) Processing the paperwork related to a request for the Carload Waybill Sample to be used in an STB or State proceeding that: (i) Annual request does not require a Federal Register notice: (A) Set cost portion $150. (B) Sliding cost portion $56 per party. (ii) Annual request does require a FR notice: (A) Set cost portion $450. (B) Sliding cost portion $56 per party. (iii) Quarterly request does not require a FR notice: (A) Set cost portion $48. (B) Sliding cost portion $14 per party. (iv) Quarterly request does require a FR notice: (A) Set cost portion $227. (B) Sliding cost portion $14 per party. (v) Monthly request does not require a FR notice: (A) Set cost portion $16. (B) Sliding cost portion $4 per party. (vi) Monthly request does require a FR notice: (A) Set cost portion $176. (B) Sliding cost portion $4 per party. (99) (i) Application fee for the STB's Practitioners' Exam $200. (ii) Practitioners' Exam Information Package $25. (100) Carload Waybill Sample data: (i) Requests for Public Use File for all years prior to the most current year Carload Waybill Sample data available, provided on CD-R $250 per year. (ii) Specialized programming for Waybill requests to the Board $122 per hour.
    [FR Doc. 2018-16742 Filed 8-3-18; 8:45 am] BILLING CODE 4915-01-P
    83 151 Monday, August 6, 2018 Proposed Rules LEGAL SERVICES CORPORATION 45 CFR Part 1607 Governing Bodies AGENCY:

    Legal Services Corporation.

    ACTION:

    Notice of proposed rulemaking.

    SUMMARY:

    This proposed rule revises the Legal Services Corporation (LSC or Corporation) regulation regarding recipient governing bodies. LSC is proposing two revisions to give recipient governing bodies flexibility in how they recruit, appoint, and retain client eligible members while remaining faithful to the LSC Act's requirement to appoint client-eligible board members who may also represent associations or organizations of eligible clients. First, LSC proposes to revise the definition of the term eligible client to remove the requirement that a client-eligible board member must be financially eligible “at the time of appointment to each term of office” (emphasis added). Second, LSC proposes to eliminate the requirement that client-eligible members be appointed by outside groups.

    DATES:

    Comments must be submitted by October 5, 2018.

    ADDRESSES:

    You may submit comments by any of the following methods:

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

    Email: [email protected] Include “Comments on Revisions to Part 1607” in the subject line of the message.

    Fax: (202) 337-6519.

    Mail: Stefanie K. Davis, Assistant General Counsel, Legal Services Corporation, 3333 K Street NW, Washington, DC 20007, ATTN: Part 1607 Rulemaking.

    Hand Delivery/Courier: Stefanie K. Davis, Assistant General Counsel, Legal Services Corporation, 3333 K Street NW, Washington, DC 20007, ATTN: Part 1607 Rulemaking.

    Instructions: Electronic submissions are preferred via email with attachments in Acrobat PDF format. LSC will not consider written comments sent to any other address or received after the end of the comment period.

    FOR FURTHER INFORMATION CONTACT:

    Stefanie K. Davis, Assistant General Counsel, Legal Services Corporation, 3333 K Street NW, Washington, DC 20007; (202) 295-1563 (phone), (202) 337-6519 (fax), or [email protected]

    SUPPLEMENTARY INFORMATION: I. Background

    In December 1977, Congress amended § 1007(c) of the LSC Act. Public Law 95-222, 11, 91 Stat. 1619. Through the amendment, Congress directed LSC to fund only those organizations whose governing bodies consisted of “one-third . . . persons who are, when selected, eligible clients who may also be representatives of associations or organizations of eligible clients.” Id. at 1622. LSC published a notice of proposed rulemaking (NPRM) to implement the new requirement in May 1978. In that NPRM, LSC proposed to define “eligible client” as an “individual eligible to receive legal assistance under the LSC Act.” 43 FR 21902, May 22, 1978. The proposed definition was narrower than the LSC Act's definition of the term “[e]ligible client,” which the Act defines as “any person financially unable to afford legal assistance.” Sec. 1002(3), Public Law 88-452, title X; 42 U.S.C. 2996a(3). LSC also proposed to adopt a requirement that eligible client members “be selected from, or designated by, a variety of appropriate groups including, but not limited to, client and neighborhood associations and organizations.” Id. This language reflected LSC's “attempt to insure that programs will be accountable to the communities that they serve.” On July 28, 1978, LSC adopted the proposed rule without change. 43 FR 32772, July 28, 1978.

    The provisions governing the appointment of client-eligible members to recipient governing bodies remained unchanged for 16 years. In 1994, LSC proposed to revise Part 1607 in two relevant ways. First, LSC proposed to amend the regulation to reflect its interpretation of the statutory language requiring one-third of a recipient governing body's members to be “persons who are, when selected, eligible clients”:

    [T]he language has been revised to make it clear that client board members must be eligible at the time of their appointment to each term of office. Thus, a client member who is financially eligible for services when first appointed to a recipient's board may not be reappointed to a second or subsequent term if, at the time of reappointment, the client board member is no longer financially eligible for LSC-funded services.

    59 FR 30885, 30886, June 16, 1994. The second proposed revision “would codify the current LSC interpretation of the language to require that client board members be selected by client groups that have been designated by the recipient.” Id. at 30886-87.

    In a final rule published on December 19, 1994, LSC adopted both proposed changes. LSC revised the proposed definition of “eligible client” to make clear that the member had to be financially eligible “to receive legal assistance under the Act and part 1611” of LSC's regulations. 59 FR 65249-50, Dec. 19, 1994. In so doing, LSC rejected comments recommending that LSC expand the definition to include individuals whose income exceeds LSC's financial eligibility limit, but who are eligible to receive non-LSC-funded legal assistance from a recipient. LSC limited the definition to individuals who were financially eligible for LSC-funded legal assistance because it “wished to insure that the focus of the legal services program remains on the indigent population.” Id. at 65250. As it did in 1978, LSC adopted a narrower definition of the term “eligible client” than the one provided in § 1002 of the LSC Act.

    With respect to LSC's proposal to require that client-eligible members be appointed by organizations or associations, LSC received comments both in support of and opposing the requirement. In the preamble to the final rule, LSC explained that favorable comments “supported the clarification and the policy choice that it represented.” Id. at 65251. LSC provided more detailed explanations of the comments in opposition. One basis for opposition was that it would be difficult or impossible for some recipients to comply with the requirement because “often there are no organized client groups within the service area and, even when there are, it is not necessarily true that client groups speak for the client community.” Id. at 65251. The other was that “recipients often come into contact with program clients or other financially eligible individuals who would make good client board members but who, for one reason or another, are not involved with any client group.” Id. LSC adopted the language from the NPRM without change.

    In 2015, LSC Board Member Julie Reiskin provided Management with a memorandum detailing concerns clients had expressed to her. The primary concerns expressed in the memorandum were that some client governing body members were not truly representative of the population eligible for LSC-funded legal services and that the rule was more prescriptive than § 1007(c) of the LSC Act, which states that client-eligible members (1) must be eligible when selected; and (2) may be representatives of associations or organizations of eligible clients. 42 U.S.C. 2996f(c). Following up on this memorandum, in 2017, the Office of Legal Affairs (OLA) participated in Board Member Reiskin's and President Sandman's client-listening session at the National Legal Aid and Defender Association's annual conference. Recipients and their clients communicated that two provisions in Part 1607 present obstacles to recruiting and retaining qualified client-eligible members: the definition of “eligible client” and the requirement that outside organizations appoint client-eligible members.

    LSC takes seriously the client community's concerns and believes regulatory action is justified for two reasons. First, LSC believes that the current rule interprets § 1007(c) too restrictively. Second, LSC believes that recipients should have discretion to establish board member appointment procedures that maximize their ability to recruit qualified client-eligible board members.

    On April 23, 2017, the Committee approved Management's proposed 2017-2018 rulemaking, which included revising part 1607 as a Tier 2 rulemaking item. On April 8, 2018, the Committee voted to recommend that the Board authorize rulemaking on part 1607. On April 10, 2018, the Board authorized LSC to begin rulemaking. On July 25, 2018, the Committee voted to recommend that the Board authorize publication of this NPRM in the Federal Register for notice and comment. On July 26, 2018, the Board accepted the Committee's recommendation and voted to approve publication of this NPRM.

    II. Proposed Changes § 1607.1 Purpose

    LSC proposes to make no changes to this section.

    § 1607.2 Definitions

    LSC proposes to remove the requirement that a board member be financially eligible “at the time of appointment to each term of office to the recipient's governing body” to allow client-eligible members who improve their financial position to serve consecutive terms on a recipient's governing body (emphasis added). Under this interpretation, the member's eligibility status would be evaluated upon first appointment and at any subsequent appointment following a gap in service on the recipient's governing body, but not upon reappointment to consecutive terms of service. This is not intended to require the recipient to reappoint the client-eligible member to another term; it merely permits the recipient to do so. Thus, for example, if a client-eligible board member's income increases negligibly, but nonetheless sufficiently to exceed the applicable financial eligibility income ceiling, the recipient would have the discretion and flexibility to reappoint that client-eligible board member to a successive term. This is consistent with the statutory language of Section 1007(c) of the LSC Act that “at least one-third of [the recipient's governing body] consists of persons who are, when selected, eligible clients . . .” (emphasis added).

    § 1607.3 Composition

    LSC proposes to eliminate the § 1607.3(c) requirement that client-eligible members be appointed by groups. Unlike the requirement that the majority of attorney members of recipient governing bodies be appointed by state, county, or local bar associations, LSC's governing statutes do not require client-eligible members to be appointed by groups. LSC believes that each recipient governing body should have the authority and flexibility to implement an appointment procedure that takes into account its unique client population, including associations and organizations of client-eligible people. Under LSC's proposal, recipients may choose to continue using the procedure required by existing § 1607.3(c), but will no longer be required to have outside organizations appoint client-eligible members to the recipients' governing bodies.

    § 1607.4 Functions of a Governing Body

    LSC proposes to make no changes to this section.

    § 1607.5 Compensation

    LSC proposes to make no changes to this section.

    § 1607.6 Waiver

    LSC proposes to make no changes to this section.

    List of Subjects in 45 CFR Part 1607

    Grant programs—law, Legal services.

    For the reasons set forth in the preamble, the Legal Services Corporation proposes to amend 45 CFR part 1607 as follows:

    PART 1607—GOVERNING BODIES 1. Revise the authority citation for part 1607 to read as follows: Authority:

    42 U.S.C. 2996g(e).

    2. Revise paragraph (c) of § 1607.2 to read as follows:
    § 1607.2 Definitions.

    (c) Eligible client member means a board member who is financially eligible to receive legal assistance under the Act and part 1611 of this chapter, without regard to whether the person actually has received or is receiving legal assistance at that time. Eligibility of client members must be determined by the recipient or, if the recipient so chooses, by the nominating organization(s) or group(s) in accordance with written policies adopted by the recipient.

    3. Revise paragraph (c) of § 1607.3 to read as follows:
    § 1607.3 Composition.

    (c) At least one-third of the members of a recipient's governing body must be eligible client members when initially appointed by the recipient. The recipient must solicit recommendations for eligible client members from a variety of appropriate groups designated by the recipient that may include, but are not limited to, client and neighborhood associations and community-based organizations that advocate for or deliver services or resources to the client community served by the recipient. Recipients should solicit recommendations from groups in a manner that reflects, to the extent possible, the variety of interests

    within the client community, and eligible client members should be selected so that they reasonably reflect the diversity of the eligible client population served by the recipient, including race, gender, ethnicity and other similar factors.
    Dated: August 1, 2018. Stefanie Davis, Assistant General Counsel.
    [FR Doc. 2018-16765 Filed 8-3-18; 8:45 am] BILLING CODE 7050-01-P
    83 151 Monday, August 6, 2018 Notices DEPARTMENT OF AGRICULTURE Agricultural Marketing Service [Docket No. AMS-LP-18-0050] United States Classes, Standards, and Grades for Poultry AGENCY:

    Agricultural Marketing Service, USDA.

    ACTION:

    Notice.

    SUMMARY:

    The U.S. Department of Agriculture's (USDA) Agricultural Marketing Service (AMS) is revising the United States Classes, Standards, and Grades for Poultry, (the poultry standards) to lower the age requirement for the “roaster and roasting chickens” class of poultry and identify a ready-to-cook weight of 5.5 pounds or more. This change is consistent with how the USDA Food Safety and Inspection Service (FSIS) defines “roaster or roasting chickens” for labeling compliance.

    DATES:

    The revised poultry standards are effective August 6, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Richard Lawson, National Poultry Supervisor, Livestock and Poultry Program, AMS, USDA; 1400 Independence Ave. SW; Room 3932-S, STOP 0258; Washington, DC 20250-0258; phone (202) 690-3166; [email protected]

    SUPPLEMENTARY INFORMATION:

    Section 203(c) of the Agricultural Marketing Act of 1946, as amended (7 U.S.C. 1621 et seq.), directs and authorizes the Secretary of Agriculture “to develop and improve standards of quality, condition, quantity, grade, and packaging and recommend and demonstrate such standards in order to encourage uniformity and consistency in commercial practices.” AMS is committed to carrying out this authority in a manner that facilitates the marketing of agricultural commodities. While the poultry standards do not appear in the Code of Federal Regulations, they—along with other official standards—are maintained by USDA and can be found at https://www.ams.usda.gov/grades-standards. Copies of official standards are also available upon request. To revise the poultry standards, AMS utilizes the procedures it published in the August 13, 1997, Federal Register (62 FR 43439) and in 7 CFR part 36. Because this change to the poultry standards is to ensure consistency with FSIS's definition, public comments are not being sought.

    Background

    FSIS maintains regulatory authority over the labeling of poultry products under the Poultry Products Inspection Act (PPIA) which prohibits the distribution of poultry products that are adulterated or misbranded (12 U.S.C. 458). In November 2013, the National Chicken Council petitioned FSIS to amend the “roaster chicken class to remove the 8-week minimum age criteria and increase the Ready-to-Cook (RTC) carcass weight to 5.5 pounds.” According to the petition, the existing “roaster” standard—defined at 9 CFR 381.170(a)(1)(iii) as a “young chicken (between 8 and 12 weeks of age), of either sex, with a ready-to-cook carcass weight of 5 pounds or more, that is tender-meated with soft, pliable, smooth-textured skin and breastbone cartilage that is somewhat less flexible than that of a broiler or fryer”—detracted from the orderly and efficient marketing of classes. Specifically, companies were unable to label and market chickens as “roasters” that met all the physical attributes apart from the minimum age requirement. FSIS and AMS completed a review of the petition in July 2014 and concluded that continuous improvements in breeding and poultry management techniques had enabled producers to raise chickens with the characteristics of roasters in under 8 weeks.

    On April 13, 2016, FSIS published a final rule in the Federal Register (81 FR 21706) amending the definition and standard of identity for the “roaster or roasting chicken” poultry class, with an effective date of January 1, 2018. AMS is revising its poultry standards definition of roaster from usually 3 to 5 months of age to 5.5 pounds or more and less than 12 weeks of age to maintain consistency with the FSIS regulation.

    Dated: July 23, 2018. Bruce Summers, Administrator, Agricultural Marketing Service.
    [FR Doc. 2018-16249 Filed 8-3-18; 8:45 am] BILLING CODE 3410-02-P
    DEPARTMENT OF AGRICULTURE Rural Utilities Service Announcement of Loan Application Procedures, and Deadlines for the Rural Energy Savings Program (RESP) AGENCY:

    Rural Utilities Service, USDA.

    ACTION:

    Notice of Funding Availability (NOFA); the RESP application process and deadlines.

    SUMMARY:

    The Rural Utilities Service (RUS), an agency of the United States Department of Agriculture (USDA), is announcing funding availability and is soliciting letters of intent for loan applications under the Rural Energy Savings Program (RESP), announcing the application process for those loans and deadlines for applications from eligible entities. These loans are made available under the authority of Section 6407 of the Farm Security and Rural Investment Act of 2002, as amended, (Section 6407) and Title VII, Section 741 of the Consolidated Appropriations Act, 2018. This notice describes the eligibility requirements, the application process and deadlines, the criteria that will be used by RUS to assess Applicants' creditworthiness, and how to obtain application materials. The Consolidated Appropriations Act of 2018 appropriated a budget authority of $8,000,000 and authorized that the Secretary may use this funding to allow eligible entities to offer energy efficiency loans to customers in any part of their service territory and may also use this funding for projects replacing manufactured housing units with another manufactured housing unit if the replacement would be more cost effective in saving energy. The Administrator may approve loans proposing to include these new eligible activities for entities currently in the queue provided they still meet the all application requirements, pursuant to this NOFA.

    The Agency encourages applications that will support recommendations made in the Rural Prosperity Task Force report to help improve life in rural America, See, www.usda.gov/ruralprosperity. Applicants are encouraged to consider projects that provide measurable results in helping rural communities build robust and sustainable economies through strategic investments in infrastructure, partnerships and innovation. Key strategies include: Achieving e-Connectivity for rural America, developing the rural economy, harnessing technological innovation, supporting a rural workforce, and improving quality of life.

    DATES:

    The application process consists of two steps. To be considered for this funding, Applicants must submit their documentation no later than the mandatory dates set forth herein.

    Step 1: To be considered for financing pursuant to this notice, an Applicant seeking financing must submit a Letter of intent to apply, as provided herein, in an electronic Portable Document Format (PDF), not to exceed 10 MB in size, by electronic mail (email) to [email protected] This Notice will remain open until September 30, 2019; or until all funds available for this year have been obligated; or changed by a subsequent notice. If funds are exhausted prior to the end of the open period, applicants that qualify based on their Letter of Intent will be placed in a queue, and will be notified when funds become available. Late or incomplete Letters of Intent will not be considered by RUS.

    Step 2: An RESP Applicant that has been invited in writing by RUS to proceed with the loan application, as provided in this NOFA, will have up to sixty (60) days to complete the documentation for a complete application. The sixty (60) day timeframe will begin from the date the RESP Applicant receives an email with RUS' Invitation to proceed. If the deadline to submit the completed application falls on Saturday, Sunday, or a Federal holiday, the application is due the next business day. Instructions on how to submit the loan application package will be included in the RUS Invitation to proceed to the RESP Applicant.

    ADDRESSES:

    Copies of this NOFA and other information on the Rural Energy Savings Program may be obtained by:

    (1) Contacting Robert Coates at (202) 260-5415 to request a copy of this Notice.

    (2) Sending an electronic mail (Email) to [email protected] The email must be identified as RESP Notice of Funding Availability in the subject field.

    (3) The Letter of intent must be submitted by the Applicant in an electronic PDF (PDF) format not to exceed 10 Megabytes (10 MB) by electronic mail (email) to [email protected] on or before the deadline set forth herein. No paper letters of intent will be accepted.

    (4) The completed loan application package must be submitted following the instructions that will be outlined in the RUS Invitation to proceed to the RESP Applicant. The loan application package must be marked with the subject line “Attention: Christopher McLean, Assistant Administrator for the Electric Program; RESP Loan Application.”

    FOR FURTHER INFORMATION CONTACT:

    Robert Coates, Rural Utilities Service-Electric Program, Rural Development, United States Department of Agriculture, 1400 Independence Avenue SW, STOP 1568, Room 0257-S, Washington DC 20250-1560; Telephone: (202) 260-5415; Email [email protected]

    SUPPLEMENTARY INFORMATION:

    Overview

    Federal Agency: Rural Utilities Service (RUS), USDA.

    Funding Opportunity Title: Rural Energy Savings Program (RESP).

    Announcement Type: Requests for Letter of intent and Applications.

    Catalog of Federal Domestic Assistance (CFDA) Number: 10.751.

    Dates: Submit the Letter of intent before September 30, 2019, and the completed loan application package on or before sixty (60) days from the receipt date of a written RUS Invitation to proceed.

    Information Collection and Recordkeeping Requirements

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), OMB approved this information collection under OMB Control Number 0572-0151. The current expiration date for the information collection is December 31, 2019.

    Definitions and Rules of Grammatical Construction

    For the purpose of RESP, the following terms must have the following meanings:

    Administrator means the Administrator of the Rural Utilities Service, an agency under the Rural Development mission area of the United States Department of Agriculture.

    Applicant means an Eligible entity interested in applying for a RESP that is planning to submit a Letter of intent.

    Commercially available technology means equipment, devices, applications, or systems that have a proven, reliable performance and replicable operating history specific to the proposed application. The equipment, device, application or system is based on established patented design or has been certified by an industry-recognized organization and subject to installation, operating, and maintenance procedures generally accepted by industry practices and standards. Service and replacement parts for the equipment, device, application or system must be readily available in the marketplace with established warranty applicable to parts, labor and performance.

    Completed loan application means an application containing all information required by RUS to approve a loan and that is materially complete in form and substance satisfactory to RUS within the specified time.

    Conditional commitment letter means the notification issued by the Administrator to a RESP Applicant advising it of the total loan amount approved for it as a RESP borrower, the acceptable security arrangement, and such controls and conditions on the RESP borrower's financial, investment, operational and managerial activities deemed necessary by the Administrator to adequately secure the Government's interest. This notification will also describe the accounting standards and audit requirements applicable to the transaction.

    Conflict of interest means a situation or situations, event or series of events, that jointly or severely undermines an individual's judgement, ability, or commitment to providing an accurate, unbiased, fair and reliable assessment or determination about the cost-effectiveness of the Energy efficiency measures due to self-interest or cannot be justified by the prevailing and sound application of the generally accepted standards and principles of the industry.

    Eligible entity means an entity described in section C.1. of this NOFA.

    Energy audit means an analysis or inspection of the energy flows in a building, process, or system with the goal of identifying opportunities to enhance energy efficiency. The activity should result in an objective standard-based technical report containing recommendations on the Energy efficiency measures to reduce energy costs or consumption of the Qualified consumer and an analysis of the estimated benefits and costs of pursuing each recommendation in a payback period not to exceed 10 years. The report will include a payback analysis of the aggregated energy efficiency measures.

    Energy efficiency measures means for or at a property served by an Eligible entity, structural improvements or investments in cost-effective, commercially available technologies that result in a decrease in a Qualified consumer's energy usage or costs.

    Energy efficiency program (EE Program) means a program set up by an Eligible entity to provide financing to Qualified consumers so that they can reduce their energy use or costs by implementing energy efficiency measures.

    Financial feasibility means an Eligible entity's ability to generate sufficient revenues to cover its expenses, sufficient cash flow to service its debts and obligations as they come due, and meet the financial ratios set forth in the applicable loan documents.

    Invitation to proceed means the written notification issued by RUS to the Eligible entity acknowledging that the Letter of intent was received and reviewed, describing the next steps in the application process and inviting the Eligible entity to submit a complete application.

    Key performance indicators means the set of measures that help an entity to determine if it is reaching its performance and operational goals. These indicators can be both financial and non-financial.

    Letter of intent means a signed letter issued by an Applicant notifying RUS of its intent to apply for a RESP loan and addressing all the elements identified in section D.1.a. of this NOFA.

    Qualified consumer means a consumer served by an Eligible entity that has the ability to repay a loan made by an RESP borrower under the RESP program, as determined by the Eligible entity.

    RESP applicant means an Eligible entity that has received a written Invitation to proceed from RUS to apply for a RESP loan.

    RESP borrower means an Eligible entity with an approved RESP loan.

    Small business means an entity that is in accordance with the Small Business Administration's (SBA) small business size standards found in 13 CFR part 121.

    Special advance means an advance, not to exceed 4 percent of the total approved loan amount, that a RESP borrower may request to defray the start-up costs of establishing a new EE Program.

    Start-up costs mean amounts paid or incurred for: (a) Creating or implementing an active Energy efficiency (EE) program; or (b) investing in the integration of an active Energy efficiency program. Start-up costs may include, but are not limited to, amounts paid or incurred in the analysis or survey of potential markets, products such as software and hardware, labor supply, consultants, salaries and other working capital directly related to creation or enhancement of an Energy efficiency program consistent with RESP.

    With regard to the rules of grammatical construction, unless the context otherwise indicates, “includes” and “including” are not limiting, and “or” is not exclusive.

    Additional Items in Supplementary Information A. Program Description B. Federal Award Information C. Eligibility Information D. Application and Submission Information E. Agency Review of Letter of Intent and Loan Application F. Federal Award Administration Information G. Federal Awarding Agency Contact H. Other Information A. Program Description

    The USDA through the Rural Utilities Service (RUS) provides RESP loans to Eligible entities that agree to, in turn, make loans to Qualified consumers for the purpose of implementing Energy efficiency measures. These loans are made available under the authority of Section 6407. Eligible Energy efficiency measures funded under this NOFA must be for or at a property or properties served by a RESP borrower, using commercially available technologies that would allow Qualified consumers to decrease their energy use or costs through cost-effective measures including structural improvements to the structure. Loans made by RESP borrowers under this program may be repaid through charges added to the Qualified consumer's bill for the property or properties for, or at which, energy efficiencies are or will be implemented. The purpose of the program is to help rural families and small businesses achieve cost savings by providing loans to Qualified consumers to implement durable cost-effective Energy efficiency measures.

    B. Federal Award Information

    Type of Award: Loan.

    Fiscal Year 2018 Funds: $8,000,000 in budget authority to remain available until expended, plus any available prior year funding, to remain available until September 30, 2019. Based on projected subsidy rates and estimated carry over funds, RUS expects to have approximately $100 Million available to lend this fiscal year.

    Authority: RESP is a program to be carried out by the Rural Utilities Service pursuant to Section 6407 of the Farm Security and Rural Investment Act of 2002, 7 U.S.C. 8107a, as amended; and Section 769, Title VII, Division A of the Consolidated Appropriations Act, 2017, Public Law 115-31, May 5, 2017.

    C. Eligibility Information 1. Eligible Entities Include

    a. Any public power district, public utility district, or similar entity, or any electric cooperative described in section 501(c)(12) or 1381(a)(2) of the Internal Revenue Code of 1986, that borrowed and repaid, prepaid, or is paying an electric loan made or guaranteed by the Rural Utilities Service (or any predecessor agency);

    b. Any entity primarily owned or controlled by one (1) or more entities described in section C.1.a. of this NOFA; and

    c. Any other entity that is an eligible borrower of the Rural Utilities Service, as determined under 7 CFR 1710.101.

    2. Equity Contributions

    a. To be eligible for a RESP loan, a newly created Eligible entity or an entity primarily owned or controlled by one (1) or more entities described in section C.1.a. of this NOFA must have a minimum equity position in the Energy efficiency program proposed to be funded with RESP at the time of the loan closing and the Eligible entity will be required to continue to maintain the minimum equity position for the period of time determined by the Administrator and as set forth in the loan documents. The required equity position and terms will be determined by the Administrator on a case-by-case basis based upon review of the risk profile of the Eligible entity and other security arrangements.

    b. If the Administrator determines that the RESP Applicant under this section does not have acceptable equity, in the Energy efficiency (EE) Program at the time of application, the Administrator may consider the following to meet such shortfall regarding equity:

    i. The infusion of additional capital into the EE program by an Investor to meet any shortfall. RUS may require that the additional capital be deposited into a RESP Applicant's special account subject to a deposit account control agreement with RUS prior to loan closing.

    ii. An unconditional, irrevocable letter of credit satisfactory to the Administrator in the amount of the shortfall. RUS must be an unconditional payee under the letter of credit and the letter of credit must be in place prior to loan closing and remain in place until the loan is repaid.

    iii. General obligation bonds issued by tribal, state or local governments in the amount of the shortfall. If the equity requirement is satisfied with general obligation bonds, any lien securing the bonds must be subordinate to the lien of the government securing the RESP loan.

    iv. Any other equity requirements determined necessary by the Administrator to meet the shortfall.

    D. Application and Submission Information

    Complete applications for loans to Eligible entities under this NOFA will be processed on a first-come-first served basis (queue) until funds appropriated to carry out RESP are available pursuant to Public Law 115-31, as amended by Public Law 115-141, and pursuant to Public Law 115-141. An Eligible entity that applied pursuant to the Notice of Solicitation of Application issued on June 21, 2016, or pursuant to the NOFA issued on November 20, 2017, and that is in the queue but has not yet been invited to proceed to closing, may notify the Administrator of its intent to participate in RESP pursuant to the new authorities granted by Public Law 115-141 regarding manufactured housing replacement and service territory. The Administrator may approve loans for the queued entities provided they still meet the all application requirements, pursuant to this NOFA. To be considered for this funding, Applicants must submit documentation no later than the dates set forth in this NOFA. The application process consists of two steps:

    1. Step 1: Letter of Intent—To be considered for financing pursuant to this notice, an Applicant seeking financing must submit a mandatory Letter of intent with the following information. Applicants must submit all the information identified in the Letter of intent “Evaluation Criteria Checklist” available online at the following web address: http://www.rd.usda.gov/resp/. A sample Letter of intent is available online at the following web address: www.rd.usda.gov/files/RD-RUS-SampleLetterofIntent.pdf.

    By submitting the Letter of intent, the Applicant certifies to RUS that it has the intent of submitting a complete RESP loan application on or before the date set forth as the application deadline in the event that RUS provides an Invitation to proceed. RUS will not consider Letters of intent where the project description exceeds five (5) pages. An Invitation to proceed with the loan application sent by the RUS is not to be deemed as an offer by the Agency. The Letter of intent must contain the following:

    a. Applicant's Profile and Point of Contact—

    i. Name and legal status of the Eligible entity and its address and principal place of business.

    ii. The Eligible entity's tax identification number, DUNS and Bradstreet (D&B) number.

    iii. Specify if the Eligible entity is a current or a former RUS borrower.

    iv. Identify the service territory.

    v. Identify the net assets value and specify if the Eligible entity has been placed in receivership liquidation, or under a workout agreement or declared bankruptcy or has had a decree or order issued for relief in any bankruptcy, insolvency or other similar action over the last 10 years. The Applicant must submit a copy of its balance sheet and income statements for the last 3 years. If applicable, the Applicant must provide the balance sheet and income statements for the last 3 years of the entity or entities providing equity or security for the RESP loan together with an explanation of the legal relationship among the legal entities.

    vi. Identify a point of contact and provide contact information.

    b. The description of the project must not exceed five (5) pages (size 8.5 X 11) and must include the following:

    i. A description of the service to be provided to Qualified consumers.

    ii. Identity of the staff or contractors that will be implementing the EE Program and their credentials.

    iii. Implementation plan that briefly addresses:

    A. The marketing strategy.

    B. How the Applicant will operate the relending process.

    C. A schedule showing sources and uses of funds to implement the EE Program.

    D. A brief description of the processes, procedures, and capabilities to quantify and verify the reduction in energy consumption or decrease in the energy costs of the Qualified consumers.

    iv. A list of eligible Energy efficiency measures that will be implemented. An Applicant with an existing Energy efficiency Program in place by April 8, 2014, may describe the Energy efficiency measures, its implementation plan, and its measurement and verification system for the existing program in its Letter of intent to expedite the application process.

    c. The Applicant must provide evidence of its key performance indicators for the 5 complete years prior to the submission of the loan application if the total loan amount exceeds 5 million dollars.

    2. Step 2: Loan Application—A RESP Applicant that has been invited in writing by RUS to proceed with the loan application, as provided in this NOFA, will have up to sixty (60) days to complete the documentation for a complete application. The sixty (60) day timeframe will begin from the date the RESP Applicant receives an email with RUS' Invitation to proceed. If the deadline to submit the completed application falls on Saturday, Sunday, or a Federal holiday, the application is due the next business day. The Administrator may grant an extension of time to complete the documentation required for an application if, in the Administrator's sole judgment, extraordinary circumstances prevented the RESP Applicant from completing the application within the timeframe herein stipulated (60 days). An Applicant may not submit more than one application in this funding cycle for the same EE Program. However, one or more Eligible entities may submit their applications using the same EE Program model. In extending an Invitation to proceed to an Applicant in the queue, RUS reserves the right to meet overall RUS Program objectives and therefore, may notify the Applicant that the amount of financing to be awarded is below the level sought by the Applicant.

    Instructions on how to submit the loan application package will be included in the RUS Invitation to proceed to the RESP Applicant. An initial conference call will be scheduled within 10 days from the date of the written invitation to proceed with the RESP loan application and a General Field Representative (GFR) will be assigned to assist the RESP Applicant during this part of the application process.

    a. Loan Application Package—The RESP Applicant's application package must include the following documents:

    i. Cover Letter. A signed cover letter from the RESP Applicant's General Manager or highest-ranking officer requesting a RESP loan under this NOFA.

    ii. Board Resolution. A signed copy of the board resolution or applicable authorizing document approving and establishing the EE Program.

    iii. Environmental Compliance Agreement. A copy of the duly executed Multi-tier Action Environmental Compliance Agreement (Multi-tier Agreement). A template of a Multi-tier Agreement can be found in Exhibit H of RD Instruction 1970-A, Environmental Policies and Procedures (http://www.rd.usda.gov/files/1970a.pdf). A copy of the Multi-tier Agreement will be provided to the RESP Applicant with the Invitation to proceed and discussed with the RESP Applicant in the initial conference call.

    iv. Financial Forecast. A financial forecast approved by the applicable governing body of the RESP Applicant in support of its loan application. RUS encourages RESP Applicants to follow the format set forth in RUS Form 325, which may be obtained from a GFR. The financial forecast must cover a period of at least 10 years and must demonstrate that the RESP Applicant's operation is economically viable and that the proposed loan is financially feasible. RUS may request projections for a longer period of time, or additional information, if RUS deems it necessary based on the financial structure of the RESP Applicant and necessary to make a determination regarding loan feasibility. The financial forecast and related projections submitted in support of a loan application must include:

    A. Current and projected cash flows.

    B. A pro forma balance sheet, statement of operations, and general funds summary projected for each year during the forecast period. The requested RESP loan must be included in the financial forecast.

    C. The financial goals established for margins, debt service coverage, equity, and levels of general funds to be invested in the EE Program. The financial forecast must use the accrual method of accounting for analyzing costs and revenues and, as applicable, compare the economic results of the various alternatives on a present value basis.

    D. A full explanation of the assumptions, supporting data, and analysis used in the forecast, including the methodology used to project revenues, operating expenses, power costs, and any other factors having a material effect on the balance sheet and the financial ratios such as equity and debt service coverage. RUS may require additional data and analysis on a case-by-case basis to assess the probable future competitiveness of the RESP Applicant.

    E. Current and projected non-operating income and expense.

    F. An itemized budget and schedule for the activities to be implemented with the RESP funds and a discussion on how the loan loss reserve will be set up, the expected delinquency and default rates. The RESP applicant is expected to forecast the amount of loans to be made to Qualified consumers over a 10-year timeframe. If the RESP Applicant determines to charge interest, the RESP Applicant must describe how it is going to use the funds generated from the interest to be received from the loans to the Qualified consumers.

    G. A sensitivity analysis may be required by RUS on a case-by-case basis.

    v. EE Program Implementation Work Plan (IWP). The RESP Applicant must produce, to the satisfaction of the Administrator, an IWP, duly approved by the applicable governing body of the Eligible entity. The IWP must address all the following core elements:

    A. Marketing. In this section the RESP Applicant will identify the qualified customers by market segment that will benefit from the funding available under this NOFA and explains the marketing and outreach efforts to be executed in implementing the relending program. In the identification of the marketing effort to the qualified customers, the RESP Applicant should provide racial and ethnic demographics for the service area or individuals.

    B. Operations. In this section the RESP Applicant will describe its Energy efficiency program and how it will operate the relending process. The RESP Applicant must also identify the staff that will be implementing the program, including the tasks that each one will be carrying out, and whether or not it will be outsourcing some or all of the execution of the program.

    The RESP Applicant must describe its expertise and the credentials of any third party implementing outsourced tasks to effectively implement the Energy efficiency measures at the scale contemplated by the EE Program for which RESP funding is requested. The statement of qualifications must show the party's experience carrying out the financial and technical expertise components of an EE program at the desired scale. The RESP Applicant will be held accountable to RUS for actions or omissions departing from the required standards by those partners or contractors, arising from or in connection with an EE Program funded under this NOFA.

    In this section the RESP Applicant will identify the anticipated amount of special advance for start-up costs and purposes over the expected schedule to draw down the funds attributable to such purposes. In addition, the RESP Applicant will describe the expected schedule to implement the EE Program with an itemized allocation of expected resources including anticipated costs assigned to each task. The IWP must only include those activities and investments identified in the Multi-tier Agreement executed between RUS and the RESP Applicant. If any additional activities or investments are to be pursued, additional environmental review would be required.

    The RESP Applicant must describe the processes and procedures that will be put in place to avoid a Conflict of interest in the implementation of the energy efficiency loan program for Qualified consumers.

    C. Financials. The RESP Applicant must address the items identified in the Financial Forecast section of this NOFA, Section D.2.a.iv.

    D. Measurement and Verification. The RESP Applicant must describe the processes, procedures, and capabilities to quantify and verify the reduction in energy consumption or decrease in energy costs of the Qualified consumers. An RESP Applicant may provide a measurement and verification plan approved by a state or local regulatory body or sponsored by a governmental entity. A measurement and verification plan developed and certified by an industry recognized professional or entity will also be acceptable. Other measurement and verification plans may be acceptable if the Eligible entity can support, to the satisfaction of the Administrator, that the protocols and methodology used to verify the Energy efficiency measures are cost-effective and follow generally accepted industry principles and standards. An RESP Applicant with an existing EE Program as of April 8, 2014, may submit the measurement and verification plan previously established to fulfill this requirement.

    vi. Articles of incorporation and bylaws or other applicable governing and organizational documents. The RESP Applicant must provide the Applicant's articles of incorporation or other applicable organizational documents currently in effect, as filed with the appropriate state office, setting forth the RESP applicant's corporate purpose; and the bylaws or other applicable governing documents currently in effect, as adopted by the RESP Applicant's applicable governing body. RESP Applicants that are active RUS borrowers may comply with this requirement by notifying in writing to RUS that there are no material changes to the documents already on file with RUS.

    vii. Statement of Compliance with other federal statutes. The RESP Applicant must provide statement of compliance with other federal statutes, including but not limited to the following:

    A. Nondiscrimination in Federally Assisted Programs. 7 CFR part 15, subpart A, Nondiscrimination in Federally-Assisted Programs of the Department of Agriculture-Effectuation on Title VI of the Civil Rights Act of 1964, RUS Bulletin 1790-1, “Nondiscrimination Among Beneficiaries of RUS Program.” Eligible entities must complete and submit RUS Form 266, Assurance Agreement.

    • Signing Form RD 400-4 (Assurance Agreement). Each prospective recipient must sign Form 400-4, Assurance Agreement, which assures USDA that the recipient is in compliance with Title VI of the Civil Rights Act of 1964, 7 CFR part 15 and other Agency regulations. That no person will be discriminated against based on race, color or national origin, in regard to any program or activity for which the recipient receives Federal financial assistance. That nondiscrimination statements are in advertisements and brochures.

    • Collect and maintain data provided by ultimate beneficiaries on race, sex, and national origin. Race and ethnicity data will be collected in accordance with OMB Federal Register notice, “Revisions to the Standards for the Classification of Federal Data on Race and Ethnicity, “(62 FR 58782), October 30, 1997. These items should not be submitted with the application but should be available upon request by the Agency.

    • The applicant and the ultimate recipient must comply with Title VI of the Civil Rights Act of 1964, Title IX of the Education Amendments of 1972, Americans with Disabilities Act (ADA), Section 504 of the Rehabilitation Act of 1973, Age Discrimination Act of 1975, Equal Credit Opportunity Act, Executive Order 12250, Executive Order 13166 Limited English Proficiency (LEP), and 7 CFR part 1901, subpart E.

    • Civil rights compliance reviews will be conducted by the Agency at pre-award and post award. The results of the review should be documented on Form 9, Compliance Review, and appropriate documentation attached to substantiate findings of compliance or noncompliance. The original Form 9 should be maintained in the case file with copies forwarded to the Rural Development Program Compliance Branch. If the recipient is not in compliance, copies must be immediately forwarded to the Director, Civil Rights Staff, with a recommendation for action to be taken.

    • RD Instruction 2006-P requires that a Civil Rights Impact Analysis be conducted prior to approving or implementing a wide range of Agency activities. The Agency will prepare Form RD 2006-38, Civil Rights Impact Analysis, on the recipient.

    • Signing Form 400-1 Equal Opportunity Agreement in accordance with Executive Order 11246. The requirement of the Equal Opportunity Clause within a construction contract where federal financial assistance exceeds $10,000.

    B. Standard Form 100—Equal Employment Opportunity Employer Report EEO-1. This form, required by the Department of Labor, sets forth employment data for Eligible entities with 100 or more employees. A copy of this form, as submitted to the Department of Labor, is to be included in the application for an insured loan if the Eligible entity has more than 100 employees.

    C. Form AD-1049—Certificate Regarding Drug Free Workplace Requirements. This form is required as prescribed in 2 CFR parts 182 and 421, Requirements for Drug Free Workplace (Financial Assistance). Information on all of your organization's known workplaces by including the actual address of buildings (or parts of buildings) or other sites where work under the award takes place. Workplace identification is required under the drug-free workplace requirements in Subpart B of 2 CFR part 421, which adopts the Government-wide implementation (2 CFR part 182) of the Drug-Free Workplace Act.

    D. Form AD-1047—Certification Regarding Debarment, Suspension, and Other Responsibility Matters. This form is required in accordance with 2 CFR part 417 (Nonprocurement Debarment and Suspension) supplemented by 2 CFR part 180, if it applies. See the section heading is “What information must I provide before entering into a covered transaction with the Federal Government?” located at 2 CFR 180.335.

    E. Executive Order 13166, “Improving Access to Services for Persons with Limited English Proficiency.” For information on limited English proficiency and agency-specific guidance, go to http://www.LEP.gov.

    F. Lobbying for Grants, Loans, Contracts and Cooperative Agreements. The information on lobbying is required pursuant to 2 CFR part 418. The RESP Applicant should consult RUS before submitting this information.

    G. Report on Federal debt delinquency. This report indicates whether or not the RESP Applicant is delinquent on any Federal debt.

    H. Certify Accounting, Auditing, and Reporting Requirements. The RESP Applicant must certify to RUS that it is aware of and will abide by the accounting, auditing, and reporting requirements as described within the Federal Award Administration Information section of this NOFA.

    I. Dun and Bradstreet Universal Numbering System (DUNS). The Dun and Bradstreet Universal Numbering System (DUNS Unique entity identifier and System for Award Management (SAM). Applicants must supply a Dun and Bradstreet Data Universal Numbering System (DUNS) number with their Letters of Intent and RESP Applicants with their loan application. Please see http://fedgov.dnb.com/webform. RESP Applicants are required to be registered in SAM before submitting an application, provide a valid unique entity identifier in the application, and continue to maintain an active SAM registration with current information at all times during which the entity has an active Federal award or an application or plan under consideration by a Federal awarding agency. The agency may not make a Federal award to a RESP Applicant until the RESP Applicant has complied with all applicable unique entity identifier and SAM requirements. If a RESP Applicant has not fully complied with the requirements by the time the Federal awarding agency is ready to make a Federal award, the Federal awarding agency may determine that the RESP Applicant is not qualified to receive a Federal award and use that determination as a basis for making a Federal award to another RESP Applicant. Applicants may register for the SAM at http://www.sam.gov/portal/public/SAM. To remain registered in SAM, the Applicant must review and update the information in the SAM database annually from the date of initial registration or last update. Applicants must ensure that the information in the database is current, accurate, and complete.

    E. Agency Review: Letter of Intent and Loan Application

    1. General—Loans made to RESP Applicants for eligible purposes under this program will be made only when the Administrator, in his judgment, finds that there is reasonably adequate security and the loan will be repaid within the time agreed.

    The Administrator, on case-by-case basis, may set financial coverage ratios based on the risk profile of the RESP Applicant and specific loan terms. Those financial ratios will be included in the RESP borrower's loan documents with RUS. Existing RUS borrowers will be subject to their current debt service coverage ratios in their current loan documents, unless notified otherwise. A RESP Applicant must, after submitting a loan application, promptly notify RUS of any changes in its circumstances that materially affect the information contained in the loan application.

    2. Letter of Intent Review—RUS will consider complete Letters of intent as they are received. Upon review of the Letters of Intent, RUS will issue a notification to the Applicant indicating the result of the initial screening. Letters of intent will be reviewed by RUS for the following:

    a. Eligibility to participate in RESP in accordance with section C. of this NOFA.

    b. Eligibility and feasibility of the project. Compliance with the purpose of Section 6407 to help rural families and small businesses achieve cost savings by providing loans to Qualified consumers to implement durable cost-effective Energy efficiency measures, provided that the Administrator may allow eligible entities to offer loans to customers in any part of their service territory.

    c. The financial status of the Applicant to determine the Applicant's likelihood to complete the full application.

    3. Loan Application Review

    a. Loan Feasibility. Based on the complete application, RUS must have reasonable assurance that the loan, together with all other outstanding loans and other obligations of the RESP Applicant, will be repaid in full as scheduled, in accordance with the loan documents. In making a finding of loan feasibility, RUS will consider, among others: (i) That expected amount of loans and loan amounts are based on reasonable assumptions and adequate supporting data and analysis; (ii) the interest rate, application fees, servicing fees and any other fees expected to be charged to the Qualified consumer per customer class; (iii) the projected revenues, expenses, and any other reliable financial information that could enable RUS to assess its ability to repay the loan within a term not to exceed 20 years; (iv) the ability of the RESP Applicant to meet the required coverage ratios; (v) such risk factors that may substantially impair the RESP Applicant's ability to operate a sustainable business; (vi) supplemental sources of funding to carry out the EE Program; (vii) management's experience implementing EE Programs at the expected scale; and (viii) the financial and management controls in place.

    b. Loan Security. Loans will ordinarily be secured by a first and prior lien on substantially all the RESP borrower's property, and in any event will be secured by the best security position practicable in a manner which will adequately protect the interest of the Government during the repayment period of the loan. Collateral that is used to secure a loan must ordinarily be free from liens or security interests other than those permitted by RUS or existing security documents. RUS may in certain circumstances agree to share its first lien position with another lender provided the RESP loan is adequately secured and the security arrangements are acceptable to RUS. In such circumstances, RUS will consider entering into joint security arrangements with other lenders on a pari passu basis.

    c. Loan Term. Amortization schedule must be based on a loan term that does not exceed 20 years from the date on which the loan is closed.

    d. EE Program Compliance. Proceeds from a RESP loan may only be used for loans to Qualified consumers for the purpose of implementing Energy efficiency measures that decrease energy (not just electricity) usage or costs of the Qualified consumer by an amount that ensures, to the maximum extent practicable, that a loan term of not more than 10 years will not pose an undue financial burden on the Qualified consumer.

    Proceeds from the interest charged to the Qualified consumers may be used to establish a loan loss reserve, and to offset personnel and program costs necessary to carry out the program. Nonetheless, under no circumstances will the RESP borrower be able to charge more than 3 percent interest rate to its customers. Loans made by the RESP borrower to Qualified consumers may not exceed 10 years.

    Qualified consumers must ordinarily repay their loans to the RESP borrower through charges added by the RESP borrower to the electric bill associated with the property where the Energy efficiency measures are or will be implemented. The repayment mechanism adopted to implement an EE Program under RESP must not prevent the voluntary prepayment of the loan by the owner of the property. A RESP borrower may adopt any other repayment mechanism to carry out its EE Program with RESP proceeds as long as it can demonstrate that the proposed repayment mechanism has appropriate risk mitigation features and ensures repayment to the RESP borrower if the Qualified consumer will no longer be a customer of the RESP borrower.

    Loans made by a RESP borrower to a Qualified consumer using RESP loan funds must require an Energy audit by the RESP borrower to determine the impact of the proposed Energy efficiency measures on the energy costs and consumption of the Qualified consumer. The RESP borrower may engage contractors to carry out the Energy audits necessary to fulfill this requirement. In so doing, the RESP borrower must engage contractors with adequate expertise to perform the Energy audits according to the applicable standards of the industry. The credentials of the energy auditors used or proposed to be used by the RESP Applicant will be subject to RUS review. RUS may reject a loan application or refuse to disburse loan proceeds to the RESP borrower that fails to demonstrate that the Energy audits will be or have been performed by qualified individuals.

    4. Ancillary Provisions

    a. Contractor's Expertise—Contractor's adequate expertise may be determined by using the following criteria:

    i. Contractor's staff possesses a current residential or commercial Energy auditor or building analyst certification from a national, industry-recognized organization.

    ii. Contractor's staff possesses proficiency in the knowledge, skills and abilities needed to conduct whole house assessments, building performance diagnostics and reasoning, and estimates of energy savings from improvement installations (via calculations or a modeling software tool) accredited by training and credentialing. The credentialing process must be at least as robust as those employed by nationally recognized certification bodies or suitable to meet or exceed the rigor of the standards of federal, state or local government entities.

    iii. The contractor must demonstrate adequate capacity and resources to engage customers, conduct whole house assessments, building performance testing and diagnostic reasoning, and fulfillment of all program data collection and reporting requirements. This includes having access to satisfactory diagnostic equipment, tools, qualified staff, data systems and software, and administrative support.

    iv. The contractor must be current and in good standing with all local registration and licensing requirements for their specific region and trade.

    v. The contractor must employ or sub-contract to companies with workers who are qualified to install or physically oversee the installation of home performance improvements in compliance with local building codes and industry-accepted protocols.

    vi. In the absence of fulfilling the first criterion under this subsection, the contractor for commercial Energy audits, must meet one of the following criteria:

    A. Be a licensed professional engineer in the state in which the audit is conducted with at least one (1) year experience and who has completed at least two similar type Energy audits;

    B. Be an individual with a four-year engineering or architectural degree with at least three years of experience and who has completed at least five similar type Energy audits; or

    C. Be an individual with an energy auditor certification recognized by the U.S. Department of Energy through its Better Buildings Workforce Guidelines project. For related information please visit: http://betterbuildingssolutioncenter.energy.gov/workforce/better-buildings-workforce-guidelines.

    b. Collateral. RUS generally requires that borrowers provide it with a first priority lien on all of the borrower's real and personal property, including intangible personal property and any property acquired after the date of the loan. For existing RUS borrowers, the agency may, at its sole discretion, rely on existing security arrangements with RUS. When a RESP borrower is unable by reason of preexisting encumbrances, or otherwise, to furnish a first priority lien on its entire system, the Administrator may accept other forms of security, such as a parent guarantee, state guarantee, an irrevocable letter of credit, or a pledge of revenues if the Administrator determines such credit support is reasonably adequate and otherwise acceptable in form and substance.

    c. Appeal Rights. Applicants and RESP Applicants have appeal or review rights for Agency decisions made under this NOFA. Programmatic decisions based on clear and objective statutory or regulatory requirements are not appealable; however, such decisions are reviewable for appealability by the National Appeals Division (NAD). An Applicant and a RESP Applicant can appeal any Agency decision that directly and adversely impacts it. Appeals will be conducted by USDA NAD and will be handled in accordance with 7 CFR part 11.

    d. Eligible Activities and Investments. A RESP borrower may provide financing to Qualified consumers to implement or invest in one or more set of Energy efficiency measures listed in this section. However, a RESP borrower may be able to fund other Energy efficiency measures if it can justify, to the satisfaction of the Administrator that the proposed Energy efficiency measure is cost effective and the technology is commercially available. Eligible activities and investments include, but are not limited, to:

    i. Lighting:

    A. Lighting fixture upgrades to improve efficiency.

    B. Re-lamping to more energy efficient bulbs.

    C. Lighting controls.

    ii. Heating, Ventilation, and Air Conditioning (HVAC):

    A. Central Air Systems—Energy Star qualified equipment.

    B. Economizers.

    C. Heat pumps.

    D. Furnaces—Energy Star qualified equipment.

    E. Air Handlers.

    F. Programmable controls.

    G. Duct sealing.

    iii. Building Envelope Improvements:

    A. Improved insulation—added insulation beyond existing levels, or above existing building codes.

    B. Caulking and weather stripping of doors and windows.

    C. Window upgrades—Energy Star qualifying windows.

    D. Door upgrades—door upgrades could include man-doors, and overhead doors with integrated insulation and energy efficient windows.

    E. Materials listed in Appendix A to Part 440 of the U.S. Department of Energy's Weatherization Assistance Program, 10 CFR part 440, Appendix A—Standards for Weatherization Materials.

    iv. Water Heaters.

    v. Compressed Air Systems.

    vi. Motors:

    A. High efficiency motors—motors with a rated efficiency beyond the Energy Policy Act standards.

    B. Variable frequency drive.

    vii. Boilers, dryers, heaters and process-related equipment or equipment not otherwise specified, e.g. commercial coolers and freezers.

    viii. Energy audits.

    ix. On or Off Grid Renewable energy systems if consistent with the statutory purpose of RESP.

    x. Energy storage devices if permanently installed to reduce the energy cost or usage of small businesses and families within a rural area.

    xi. Energy efficient appliance upgrades if attached to real property as fixtures.

    xii. Irrigation or water and waste disposal system efficiency improvements.

    xiii. Replacement of a manufactured housing unit with another manufactured housing unit, if replacement would be more cost effective in saving energy.

    xiv. Necessary and incidental activities and investments directly related to implementation of an Energy efficiency measure.

    e. Funding Disbursements and Restriction

    i. General. RUS will disburse RESP funds to the RESP borrower in accordance with the terms of the executed loan documents. Excluding the special advance for start-up activities, all loan funds will be disbursed either as an advance in anticipation of consumer loans to be made by the RESP borrower; or as a reimbursement for eligible program costs, including consumer loans already made, upon the RESP borrower having complied with the loan conditions set forth in the loan documents. Within a 12-month consecutive period, any disbursements of loan funds to an RESP borrower must not exceed 50 percent of the approved loan amount.

    ii. Loan Advances. The RESP borrower must provide to the Qualified consumers all RESP loan funds that the RESP borrower receives within one year of receiving them from RUS. If the RESP borrower does not re-lend the RESP loan funds within one year, the unused RESP loan funds, and any interest earned on those RESP loan funds, must be returned to the Federal Government and will be applied to the RESP borrower's debt. The RESP borrower will not be eligible to receive additional RESP loan funds from RUS until providing evidence, satisfactory to RUS, that RESP loan funds from a previous advance have been fully relent to Qualified consumers or returned to the Federal Government. RUS will disburse the RESP loan funds in advance only if the RESP borrower has established written procedures that will minimize the time elapsing between the transfer of RESP loan funds from RUS and their disbursement to the Qualified consumer, and the requests for advances made by the RESP borrower are limited to the minimum amounts needed and timed to be in accordance with the actual immediate cash needs to carry out the Energy efficiency program.

    iii. Loan term for loans to Qualified consumers. Each loan made by the RESP borrower to a Qualified consumer may not exceed a term of 10 years.

    iv. Unauthorized uses of funds. The RESP borrower must not finance the purchase or modification of personal property with proceeds from the RESP loan unless the personal property is or becomes attached to real property (including a manufactured home) as a fixture. The RESP borrower must keep adequate processes, procedures and records and must not commingle RESP funds with other sources of funding in the implementation of an EE Program.

    F. Federal Award Administration Information

    1. General. A successful loan RESP Applicant will receive a Conditional commitment letter from the Administrator notifying the Applicant of the total loan amount approved by RUS; any additional controls on the its financial, investment, operational and managerial activities; acceptable security arrangements; and such other conditions deemed necessary by the Administrator to adequately secure the Government's interest and ensure repayment. Upon receipt of the acceptance of the loan offer from the RUS Borrower, RUS will begin to prepare the loan documents with the assistance of the Eligible entity. Upon completion of the loan documents, RUS will forward the loan documents to the RESP borrower.

    Receipt of a Conditional commitment letter from the Administrator does not authorize the RESP borrower to commence performance under the award. All RUS requirements and loan conditions specified in the Conditional commitment letter must be met before the loan will be advanced. RUS will notify the RESP borrower when it is authorized to commence performance using RESP funds.

    2. Loan Term. RUS will make loans to RESP Applicant under RESP for a term not to exceed 20 years from the date on which the loan is closed.

    3. Interest rate. Loans made under RESP will not bear interest (0 percent) although indebtedness not paid when due will be subject to interest, penalties, administrative costs and late fees as provided in the loan documents.

    4. Repayment. The repayment of each advance to the RESP borrower must be amortized for a period not to exceed 10 years. However, any special advances under a loan must be made during the first 10-year period of the term of the underlying loan and repayment of such special advance shall be required during the 10-year period with such period beginning on the date on which such special advance is made. A RESP borrower may elect to defer the repayment of the special advance to the end of the 10-year period. However, all amounts advanced on the loan by RUS to the RESP borrower must be paid prior to the final maturity which must not exceed 20 years. The RESP borrower is responsible for fully repaying the RESP loan to RUS according to the loan documents regardless of repayment by its Qualified consumers.

    5. Financial Ratios. The requirements for coverage ratios will be set forth in the Conditional commitment letter and RESP borrower's loan documents with RUS. The minimum coverage ratios required of RESP borrowers, whether applied on an annual or average basis will be determined by the Administrator on case-by-case basis based on the risk profile of the RESP Applicant and specific loan features. Existing RUS borrowers will be subject to their current debt service coverage ratios. When new loan documents are executed, the Administrator may, on a case-by-case basis, increase the coverage ratio of the RESP borrower if the Administrator determines that higher ratios are required to ensure the repayment made by RUS. Also, the Administrator may, on a case-by-case basis, reduce the coverage ratios if the Administrator determines that the lower ratios are required to ensure the repayment of the loan made by RUS.

    6. Equity Requirements. The required equity position would be determined by the Administrator on a case-by-case basis and will be set forth in the Conditional commitment letter and the loan documents as a condition to the RESP loan.

    7. Opinion of counsel. An opinion of counsel is required at closing and must be acceptable to the Administrator, opining that the RESP Applicant is properly organized and has the required corporate authority to enter into the proposed transaction. It must also identify the proposed collateral to secure the RESP loan and certify that such collateral is free of liens or identify any issues that may arise for the Government regarding the securing and perfecting of a first and prior lien on such property comprising the collateral.

    8. Loan Term and Conditions. The Administrator reserves the right to modify or waive certain requirements if the Administrator believes such modifications or waiver are in the best interest of the government and the Administrator has determined that the loan will be repaid in the designated time period and the security is adequate. Also, the Administrator, at his sole discretion, may add such terms and conditions in a loan under this NOFA to ensure the RESP loan is timely repaid and is adequately secured.

    9. Administrative and National Policy Requirements. The items listed in this notice implement the appropriate administrative and national policy requirements, which include but are not limited to:

    a. Execution of a RESP loan agreement and related loan documents;

    b. Compliance with policies, guidance, and requirements as described in Section D.2.a.vii. (Statement of Compliance with other federal statutes) of this notice, and any successor regulations.

    10. Reporting.

    a. Performance Reporting. RUS will establish periodic reporting requirements. These will be enumerated in the loan documents.

    b. Accounting Requirements. RESP borrowers must follow RUS' accounting requirements. These requirements, which will be specified in the loan agreement, include, but are not limited to, the following:

    i. RUS accounting requirements include compliance with Generally Accepted Accounting Principles, as well as compliance with the requirements of the applicable regulations: 7 CFR part 200 (for RESP borrowers, under this CFR Part, the term “grant recipient” will also mean loan recipient) or the system of accounting prescribed by RUS Bulletin 1767. The Administrator may modify the accounting requirements if, in his judgement, it is necessary to satisfy the purpose of Section 6407.

    ii. RESP borrowers must comply with all reasonable RUS requests to support ongoing monitoring efforts. The RESP borrowers must afford RUS, through their representatives, a reasonable opportunity, at all times during business hours and upon prior notice, to have access to and the right to inspect any or all books, records, accounts, invoices, contracts, leases, payrolls, timesheets, cancelled checks, statements, and other documents, electronic or paper of every kind belonging to or in possession of the RESP borrowers or in any way pertaining to its property or business, including its parents, affiliates, and subsidiaries, if any, and to make copies or extracts therefrom.

    c. Audit Requirements. RESP borrowers will be required to prepare and furnish to RUS, at least once during each 12-month period, a full and complete report of its financial condition, operations, and cash flows, in form and substance satisfactory to RUS, audited and certified by an independent certified public accountant, satisfactory to RUS, and accompanied by a report of such audit, in form and substance satisfactory to RUS. RESP borrowers must follow the 7 CRF 1773, Policy on Audits for RUS borrowers or 2 CFR part 200, subpart F audit requirements. The Administrator may modify the audit requirements if, in his judgement, it is necessary to satisfy the purpose of Section 6407.

    G. Federal Awarding Agency Contact

    Robert Coates, Electric Program, Rural Utilities Service, Rural Development, United States Department of Agriculture, 1400 Independence Avenue SW, STOP 1568, Room 0257-S, Washington, DC 20250-1510; Telephone: (202) 260-5415; Email: [email protected]

    H. Other Information 1. Other Funding Opportunities

    Applicants may also consider the funding opportunities under the Energy Efficiency and Conservation Loan Program, 7 CFR 1710, Subpart H.

    2. USDA Non-Discrimination Statement

    In accordance with Federal civil rights law and USDA civil rights regulations and policies, the USDA, its Agencies, offices, and employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, religion, sex, age, national origin, marital status, gender identity (including gender expression), sexual orientation, familial status, disability, limited English proficiency, or because all or a part of an individual's income is derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident.

    Persons with disabilities who require alternative means of communication for program information (e.g., Braille, large print, audiotape, American Sign Language, etc.) should contact the responsible Agency or USDA's TARGET Center at (202) 720-2600 (voice and TTY) or contact USDA through the Federal Relay Service at (800) 877-8339. Additionally, program information may be made available in languages other than English. To file a program discrimination complaint, complete the USDA Program Discrimination Complaint Form, AD-3027, found online at https://www.ascr.usda.gov/ad-3027-usda-program-discrimination-complaint-form and at any USDA office or write a letter addressed to USDA and provide in the letter all of the information requested in the form.

    To request a copy of the complaint form, call (866) 632-9992. Submit your completed form or letter to USDA by:

    a. Mail: U.S. Department of Agriculture, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC 20250-9410;

    b. Facsimile: (202) 690-7442; or

    c. Email: [email protected]

    d. USDA is an equal opportunity provider, employer, and lender.

    Kenneth L. Johnson, Administrator, Rural Utilities Service.
    [FR Doc. 2018-16743 Filed 8-3-18; 8:45 am] BILLING CODE P
    DEPARTMENT OF COMMERCE Submission for OMB Review; Comment Request

    The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.

    Agency: U.S. Census Bureau.

    Title: Public Employment & Payroll Forms.

    OMB Control Number: 0607-0452.

    Form Number(s): E-1, E-2, E-3, E-4, E-5, E-6, E-7, E-8, E-9, E-10.

    Type of Request: Extension of a currently approved collection.

    Number of Respondents: 16,357.

    Average Hours per Response: 50 minutes.

    Burden Hours: 13,614.

    Needs and Uses: The Census Bureau's Public Employment & Payroll Program, consisting of a Census of Governments: Employment Phase (conducted every 5 years in years ending in 2 and 7) and the related Annual Survey of Public Employment & Payroll (conducted in the intervening years), provides a rich source of data on state and local government employment and payroll in the United States. The survey provides state and local government data on full-time and part-time employment, part-time hours worked, full-time equivalent employment, and payroll statistics by governmental function (e.g., elementary and secondary education, higher education, police protection, fire protection, financial administration, central staff services, judicial and legal, highways, public welfare, etc.).

    This request is for clearance of the forms and procedures to be used in conducting the 2019, 2020 and 2021 Annual Survey of Public Employment & Payroll.

    The users of the Public Employment and Payroll Program data include Federal agencies, state and local governments and related organizations, public interest groups, and many business, market, and private research organizations. The Census Bureau provides these employment data to the Bureau of Economic Analysis for constructing the functional payrolls in the public sector of the Gross Domestic Product; payroll being the single largest component of current operations. The public employment and payroll data are also used in reimbursable programs conducted by the Census Bureau for other Federal agencies such as: (1) The government portion of the Medical Expenditure Panel Survey commissioned by the Agency for Healthcare Research and Quality to provide timely, comprehensive information about health care use and costs in the United States, and (2) the Criminal Justice Expenditure and Employment Survey, sponsored by the Bureau of Justice Statistics (BJS), which provides criminal justice expenditure and employment data on spending and personnel levels.

    Affected Public: State, local or tribal governments.

    Frequency: Annually.

    Respondent's Obligation: Voluntary.

    Legal Authority: Title 13, U.S.C., Sections 161 and 182.

    This information collection request may be viewed at www.reginfo.gov. Follow the instructions to view Department of Commerce collections currently under review by OMB.

    Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to [email protected] or fax to (202)395-5806.

    Sheleen Dumas, Departmental PRA Lead Officer, Office of the Chief Information Officer.
    [FR Doc. 2018-16769 Filed 8-3-18; 8:45 am] BILLING CODE 3510-07-P
    DEPARTMENT OF COMMERCE International Trade Administration District Export Council Nomination Opportunity AGENCY:

    International Trade Administration, Department of Commerce.

    ACTION:

    Notice of Opportunity for Appointment to serve as a District Export Council Member on the Central California District Export Council.

    SUMMARY:

    The Department of Commerce is currently seeking nominations of individuals for consideration for up to 35 appointments by the Secretary of Commerce to serve as members of a new Central California District Export Council (CenCal DEC). The CenCal DEC is closely affiliated with the Fresno and Bakersfield U.S. Export Assistance Centers (USEACs) of the U.S. and Foreign Commercial Service (US&FCS), and will play a key role in the planning and coordination of export activities in Central California communities. As representatives of the local exporting community, DEC Members must reside in, or conduct the majority of their work in, the territory that the DEC covers which includes the counties of Fresno, Inyo, Kern, Kings, Madera, Mariposa, Merced, Mono, San Luis Obispo, Stanislaus, Tulare, Tuolumne, and surrounding areas.

    DATES:

    Nominations must be submitted by 5:00 p.m. PDT on August 17, 2018.

    ADDRESSES:

    Contact Glen Roberts, the Director of the Fresno USEAC at (559) 348-9859 or [email protected] for information on how to submit your nomination on-line.

    FOR FURTHER INFORMATION CONTACT:

    Please contact Glen Roberts, the Director of the Fresno USEAC at (559) 348-9859 or [email protected] for more information on the CenCal DEC and the nomination process. For general program information, contact Laura Barmby, National DEC Liaison, U.S. & Foreign Commercial Service, at (202) 482-2675.

    SUPPLEMENTARY INFORMATION:

    District Export Councils support the mission of US&FCS by facilitating the development of an effective local export assistance network, supporting the expansion of export opportunities for local U.S. companies, serving as a communication link between the business community and US&FCS, and assisting in coordinating the activities of trade assistance partners to leverage available resources. Individuals appointed to a DEC become part of a select corps of trade experts dedicated to providing international trade leadership and guidance to the local business community and assistance to the Department of Commerce on export development issues.

    Nomination Process: Each DEC has a maximum membership of 35 appointed to staggered four-year terms. Because the CenCal DEC will be a new DEC, up to 17 members will be appointed from the date of appointment until December 31, 2019, and up to 18 individuals will be appointed from the date of appointment until December 31, 2021. All potential nominees must complete an online nomination form and consent, if appointed, to sharing of their contact information with the National Association of District Export Councils; trade and industry associations; and with Federal, State, and local government agencies with an interest in trade.

    Eligibility and Appointment Criteria: Appointment is based upon an individual's international trade leadership in the local community, ability to influence the local environment for exporting, knowledge of day-to-day international operations, interest in export development, and willingness and ability to devote time to DEC activities. Members must be employed as exporters or export service providers or in a profession which supports U.S. export promotion efforts. Members include exporters, export service providers and others whose profession supports U.S. export promotion efforts. DEC member appointments are made without regard to political affiliation. DEC membership is open to U.S. citizens and permanent residents of the United States. As representatives of the local exporting community, DEC Members must reside in, or conduct the majority of their work in, the territory that the DEC covers. DEC membership is not open to federal government employees, or individuals representing foreign governments, including individuals registered with the Department of Justice under the Foreign Agents Registration Act.

    Selection Process: Nominations of individuals who have applied for DEC membership will be forwarded to the Fresno USEAC Director for consideration. The Fresno USEAC Director ensures that all nominees meet the membership criteria outlined below. The Fresno USEAC Director then evaluates all nominations to determine their interest, commitment, and qualifications. In reviewing nominations, the Fresno USEAC Director strives to ensure a balance among exporters from a manufacturing or service industry and export service providers. A fair representation should be considered from companies and organizations that support exporters, representatives of local and state government, and trade organizations and associations. Membership should reflect the diversity of the local business community, encompass a broad range of businesses and industry sectors, and be distributed geographically across the DEC service area.

    The Executive Secretary determines which nominees to forward to the US&FCS Office of U.S. Operations for further consideration for recommendation to the Secretary of Commerce. A candidate's background and character are pertinent to determining suitability and eligibility for DEC membership. Since DEC appointments are made by the Secretary, the Department must make a suitability determination for all DEC nominees. After completion of a vetting process, the Secretary selects nominees for appointment to local DECs. DEC members are appointed by and serve at the pleasure of the Secretary of Commerce.

    Authority:

    15 U.S.C. 1512, 15 U.S.C. 4721.

    Anthony Diaz, Program Analyst, Global Markets, International Trade Administration.
    [FR Doc. 2018-16741 Filed 8-3-18; 8:45 am] BILLING CODE 3510-FP-P
    DEPARTMENT OF COMMERCE International Trade Administration [A-570-042] Stainless Steel Sheet and Strip From the People's Republic of China: Rescission of Antidumping Duty Administrative Review; 2016-2018 AGENCY:

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

    SUMMARY:

    The Department of Commerce (Commerce) is rescinding the administrative review of the antidumping duty (AD) order on stainless steel sheet and strip (SSSS) from the People's Republic of China (China) for the period September 19, 2016, through March 31, 2018.

    DATES:

    Applicable Date: August 6, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Chloee Sagmoe and Kathryn Wallace, Enforcement and Compliance, AD/CVD Operations, Office VII, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2273 and (202) 482-6251.

    Background

    On April 2, 2018, Commerce published a notice of opportunity to request an administrative review of the antidumping order on SSSS from China for the period September 19, 2016 through March 31, 2018.1 On April 30, 2018, Hans-Mill Corporation and C.Y. Housewares (Dongguan) Co., Ltd. (C.Y. Housewares), requested an administrative review of its exports of subject merchandise to the United States.2 Additionally, on April 30, 2018, the petitioners 3 requested an administrative review with respect to the U.S. entries of subject merchandise that were produced in or exported from China by the companies listed in the Appendix.4 On June 6, 2018, in accordance with section 751(a) the Act and 19 CFR 351.221(c)(1)(i), we initiated an administrative review of the order on SSSS from China with respect to the requested companies.5 On June 20, 2018, the petitioners timely withdrew their requests for an administrative review of all 152 companies listed in Appendix I.6 On July 3, 2018, C.Y. Housewares also timely withdrew its request for an administrative review.7

    1See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 83 FR 13949 (April 2, 2018).

    2See C.Y. Houseware's letter, “Stainless Steel Sheet and Strip from the People's Republic of China: Request for Administrative Review,” dated April 30, 2018.

    3 The petitioners are AK Steel Corporation; Allegheny Ludlum, LLC d/b/a ATI Flat Rolled Products; North American Stainless; and Outokumpu Stainless USA, LLC.

    4See Petitioners' Letter, “Stainless Steel Sheet and Strip from the People's Republic of China-Petitioner's Request for Initiation of First Administrative Review” (April 30, 2018); see also Appendix for the list of companies.

    5See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 83, FR 26258 (June 6, 2018) (Initiation Notice).

    6See Petitioners' letter, “Stainless Steel Sheet and Strip from the People's Republic of China- Petitioner's Withdrawal of Requests for First Administrative Review,” dated June 20, 2018.

    7See C.Y. Houseware's letter, “Stainless Steel Sheet and Strip from the People's Republic of China: Withdrawal of Request for Administrative Review,” dated July 3, 2018.

    Rescission of Review

    Pursuant to 19 CFR 351.213(d)(1), Commerce will rescind an administrative review, “in whole or in part, if a party that requested the review withdraws the request within 90 days of the date of publication of the notice of initiation of the requested review.” The petitioners and C.Y. Housewares both withdrew their requests within the 90-day time limit. Because we received no other requests for review of the order on SSSS from China, we are rescinding the administrative review of the order in full, in accordance with 19 CFR 351.213(d)(1).

    Assessment

    Commerce will instruct U.S. Customs and Border Protection (CBP) to assess antidumping on all appropriate entries of SSSS from China during the POR at rates equal to the cash deposit rate of estimated antidumping duties required at the time of entry, or withdrawal from warehouse, for consumption, in accordance with 19 CFR 351.212(c)(1)(i). Commerce intends to issue appropriate instructions to CBP 15 days after publication of this notice in the Federal Register.

    Notification to Importers

    This notice also serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of doubled antidumping duties.

    Notification Regarding Administrative Protective Orders

    This notice also serves as a reminder to parties subject to the administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under an APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.

    This notice is issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Tariff Act of 1930, as amended, and 19 CFR 351.213(d)(4).

    Dated: July 31, 2018. James Maeder, Associate Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations performing the duties of Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations. Appendix 1. Ahonest Changjiang Stainless Co., Ltd. 2. Angang Guangzhou Stainless Steel Corporation (LISCO). 3. Angang Hanyang Stainless Steel Corp. (LISCO). 4. Anping Yuanjing Metal Products Co., Ltd. 5. Apex Industries Corporation. 6. Baofeng Xianglong Stainless Steel (Baofeng Steel Group Co.) 7. Baojing Steel Ltd. 8. Baosteel Desheng Stainless Steel Co., Ltd. 9. Baosteel Huayong Stainless Steel Co., Ltd. 10. Baosteel Stainless Steel Co., Ltd. 11. Beihai Chengde Ferronickel Stainless Steel. 12. Beijing Dayang Metal Industry Co. 13. Beijing Hengsheng Tongda Stainless Steel. 14. Beijing Jingnanfang Decoration Engineering Co., Ltd. 15. Benxi Iron and Steel. 16. Chain Chon Metal (Foshan). 17. Chain Chon Metal (Kunshan). 18. Changhai Stainless Steel. 19. Changzhou General Import and Export. 20. Changzhou Taiye Sensing Technology Co., Ltd. 21. Compart Precision Co. 22. Dalian Yirui Import and Export Agent Co., Ltd. 23. Daming International Import and Export Co., Ltd. 24. Dongbei Special Steel Group Co., Ltd 25. Double Stone Steel. 26. Etco (China) International Trading Co., Ltd. 27. FHY Corporation. 28. Foshan Foreign Economic Enterprise. 29. Foshan Hermes Steel Co., Ltd. 30. Foshan Jinfeifan Stainless Steel Co. 31. Foshan Topson Stainless Steel Co. 32. Fugang Group. 33. Fujian Fuxin Special Steel Co., Ltd. 34. Fujian Kaixi Stainless Steel. 35. Fujian Wuhang STS Products Co., Ltd. 36. Gangzhan Steel Developing Co., Ltd. 37. Globe Express Services Co., Ltd. 38. Golden Fund International Trading Co. 39. Guangdong Forward Metal Supply Chain Co., Ltd. 40. Guangdong Guangxin Suntec Metal Holdings Co., Ltd. 41. Guanghan Tiancheng Stainless Steel Products Co. Ltd. 42. Guangxi Beihai Chengde Group 43. Guangxi Wuzhou Jinhai Stainless Steel Co. 44. Guangzhou Eversunny Trading Co., Ltd. 45. Haimen Senda Decoration Material Co. 46. Hanyang Stainless Steel Co. (LISCO) 47. Hebei Iron & Steel. 48. Henan Tianhong Metal. 49. Henan Xinjinhui Stainless Steel Co., Ltd. 50. Henan Xuyuan Stainless Steel Co. Ltd. 51. Huadi Steel Group Co., Ltd. 52. Ideal Products of Dongguan Ltd. 53. Irestal Shanghai Stainless Pipe (ISSP). 54. Jaway Metal Co., Ltd. 55. Jiangdu Ao Jian Sports Apparatus Factory. 56. Jiangsu Daming Metal Products Co., Ltd. 57. Jiangsu Jihongxin Stainless Steel Co., Ltd. 58. Jiaxing Winner Import and Export Co., Ltd. 59. Jiaxing Zhongda Import and Export Co., Ltd. 60. Jieyang Baowei Stainless Steel Co., Ltd. 61. Jinyun Xinyongmao. 62. Jiuquan Iron & Steel (JISCO). 63. Kuehne & Nagel, Ltd. (Ningbo). 64. Lianzhoung Stainless Steel Corp. (LISCO). 65. Lu Qin (Hong Kong) Co., Ltd. 66. Maanshan Sungood Machinery Equipment Co., Ltd. 67. Minmetals Steel Co., Ltd. 68. Nanhi Tengshao Metal Manufacturing Co. 69. NB (Ningbo) Rilson Export & Import Corp. 70. Ningbo Baoxin Stainless Steel Co., Ltd. 71. Ningbo Bestco Import & Export Co., Ltd. 72. Ningbo Bingcheng Import & Export Co., Ltd. 73. Ningbo Chinaworld Grand Import & Export Co., Ltd. 74. Ningbo Dawon Resources Co., Ltd. 75. Ningbo Economic and Technological Development Zone (Beilun Xiapu). 76. Ningbo Hog Slat Trading Co., Ltd. 77. Ningbo New Hailong Import & Export Co. 78. Ningbo Polaris Metal Products Co. 79. Ningbo Portec Sealing Component. 80. Ningbo Qiyi Precision Metals Co., Ltd. 81. Ningbo Seduno Import & Export Co., Ltd. 82. Ningbo Sunico International Ltd. 83. Ningbo Swoop Import & Export. 84. Ningbo Yaoyi International Trading Co., Ltd. 85. Onetouch Business Service, Ltd. 86. Qianyuan Stainless Steel. 87. Qingdao-Pohang Stainless Steel (QPSS). 88. Qingdao Rising Sun International Trading Co., Ltd. 89. Qingdao Sincerely Steel. 90. Rihong Stainless Co., Ltd. 91. Ruitian Steel. 92. Samsung Precision Stainless Steel (Pinghu) Co., Ltd. 93. Sejung Sea & Air Co., Ltd. 94. Shandong Huaye Stainless Steel Group Co., Ltd. 95. Shandong Mengyin Huarun Imp and Exp Co., Ltd. 96. Shandong Mingwei Stainless Steel Products Co., Ltd. 97. Shanghai Dongjing Import & Export Co. 98. Shanghai Fengye Industry Co., Ltd. 99. Shanghai Ganglian E-commerce Holdings Co. Ltd. 100. Shanghai Krupp Stainless (SKS). 101. Shanghai Metal Corporation. 102. Shanghai Tankii Alloy Material Co, Ltd. 103. Shanxi Taigang Stainless Steel Co., Ltd. (TISCO). 104. Shaoxing Andrew Metal Manufactured Co., Ltd. 105. Shaoxing Yuzhihang Import & Export Trade Co, Ltd. 106. Shenzhen Brilliant Sign Co., Ltd. 107. Shenzhen Wide International Trade Co., Ltd. 108. Sichuan Southwest Stainless Steel. 109. Sichuan Tianhong Stainless Steel. 110. Sino Base Metal Co., Ltd. 111. Suzhou Xinchen Precision Industrial Materials Co., Ltd. 112. Taishan Steel. 113. Taiyuan Accu Point Technology, Co. Ltd. 114. Taiyuan Iron & Steel (TISCO). 115. Taiyuan Ridetaixing Precision Stainless Steel Incorporated Co., Ltd. 116. Taizhou Durable Hardware Co., Ltd. 117. Tiancheng Stainless Steel Products. 118. Tianjin Fulida Supply Co., Ltd. 119. Tianjin Hongji Stainless Steel Products Co. Ltd. 120. Tianjin Jiuyu Trade Co., Ltd. 121. Tianjin Taigang Daming Metal Product Co., Ltd. 122. Tianjin Teda Ganghua Trade Co., Ltd. 123. Tianjin Tianchengjida Import & Export Trade Co., Ltd. 124. Tianjin Tianguan Yuantong Stainless Steel. 125. TISCO Stainless Steel (HK), Ltd. 126. Top Honest Stainless Steel Co., Ltd. 127. TPCO Yuantong Stainless Steel Ware. 128. Tsingshan Qingyuan. 129. World Express Freight Co., Ltd. 130. Wuxi Baochang Metal Products Co., Ltd. 131. Wuxi Fangzhu Precision Materials Co. 132. Wuxi Grand Tang Metal Co., Ltd. 133. Wuxi Jinyate Steel Co., Ltd. 134. Wuxi Joyray International Corp. 135. Wuxi Shuoyang Stainless Steel Co., Ltd. 136. Xiamen Lizhou Hardware Spring Co., Ltd. 137. Xinwen Mining 138. Yieh Corp. Ltd. 139. Yongjin Metal Technology. 140. Yuyao Purenovo Stainless Steel Co., Ltd. 141. Zhangjiagang Pohang Stainless Steel Co., Ltd. (ZPSS) 142. Zhejiang Baohong Stainless Steel Co., Ltd. 143. Zhejiang Huashun Metals Co., Ltd. 144. Zhejiang Jaguar Import & Export Co., Ltd. 145. Zhejiang New Vision Import & Export 146. Zhejiang Yongjin Metal Technology Co., Ltd. 147. Zhengzhou Mingtai Industry Co., Ltd. 148. Zhenjiang Huaxin Import & Export 149. Zhenjiang Yongyin Metal Tech Co. 150. Zhenshi Group Eastern Special Steel Co., Ltd. 151. Zun Hua City Transcend Ti-Gold
    [FR Doc. 2018-16695 Filed 8-3-18; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE International Trade Administration North American Free Trade Agreement (NAFTA), Article 1904, Binational Panel Reviews: Notice of Completion of Panel Review AGENCY:

    United States Section, NAFTA Secretariat, International Trade Administration, Department of Commerce.

    ACTION:

    Notice of completion of panel review in the matter of Supercalendered Paper from Canada: Final Affirmative Countervailing Duty Determination (Secretariat File Number: USA-CDA-2015-1904-01).

    SUMMARY:

    The NAFTA Secretariat has received motions filed on behalf of the U.S. Department of Commerce; the government of Canada; the governments of British Columbia, Ontario, Nova Scotia, New Brunswick, and Quebec; Resolute FP Canada Inc. and Resolute FP US Inc.; Catalyst Paper Corporation, Catalyst Pulp and Paper Sales Inc. and Catalyst Paper (USA) Inc.; Port Hawkesbury Paper LP; Irving Paper Limited; and Verso Corporation requesting the termination of panel review in the Supercalendered Paper from Canada: Final Affirmative Countervailing Duty Determination (Supercalendered Paper CVD) dispute.

    Given all the participants have filed motions requesting termination and pursuant to Rule 71(2) of the NAFTA Rules of Procedure for Article 1904 Binational Panel Reviews (Rules), the NAFTA Supercalendered Paper CVD dispute has been terminated.

    As a result, and in accordance with Rule 78(a), notice is hereby given that the panel review of the NAFTA Supercalendered Paper CVD dispute has been completed and the panelists were discharged from their duties effective July 24, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Paul E. Morris, United States Secretary, NAFTA Secretariat, Room 2061, 1401 Constitution Avenue NW, Washington, DC 20230, (202) 482-5438.

    SUPPLEMENTARY INFORMATION:

    Chapter 19 of Article 1904 of NAFTA provides a dispute settlement mechanism involving trade remedy determinations issued by the government of the United States, the government of Canada, and the government of Mexico. There are established Rules, which were adopted by the three governments and require Notices of Completion of Panel Review to be published in accordance with Rule 78. For the complete Rules, please see https://www.nafta-sec-alena.org/Home/Texts-of-the-Agreement/Rules-of-Procedure/Article-1904.

    Dated: July 31, 2018. Paul E. Morris, U.S. Secretary, NAFTA Secretariat.
    [FR Doc. 2018-16688 Filed 8-3-18; 8:45 am] BILLING CODE 3510-GT-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration RIN 0648-XG387 Fisheries of the South Atlantic; Southeast Data, Assessment, and Review (SEDAR); Public Meeting AGENCY:

    National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Notice of SEDAR 58 Data Scoping Webinar.

    SUMMARY:

    The SEDAR 58 assessment of the Atlantic stock of Cobia will consist of a series of workshops and webinars: Data Workshop; Assessment Webinars; and a Review Workshop. See SUPPLEMENTARY INFORMATION.

    DATES:

    The SEDAR 58 Data Scoping Webinar will be held on Wednesday, August 29, 2018, from 9 a.m. to 1 p.m.

    ADDRESSES:

    The meetings will be held via webinar. The webinar is open to members of the public. Those interested in participating should contact Julia Byrd at SEDAR (see FOR FURTHER INFORMATION CONTACT) to request an invitation providing webinar access information. Please request webinar invitations at least 24 hours in advance of each webinar.

    SEDAR address: South Atlantic Fishery Management Council, 4055 Faber Place Drive, Suite 201, N Charleston, SC 29405; www.sedarweb.org.

    FOR FURTHER INFORMATION CONTACT:

    Julia Byrd, SEDAR Coordinator, 4055 Faber Place Drive, Suite 201, North Charleston, SC 29405; phone: (843) 571-4366; email: [email protected]

    SUPPLEMENTARY INFORMATION:

    The Gulf of Mexico, South Atlantic, and Caribbean Fishery Management Councils, in conjunction with NOAA Fisheries and the Atlantic and Gulf States Marine Fisheries Commissions, have implemented the Southeast Data, Assessment and Review (SEDAR) process, a multi-step method for determining the status of fish stocks in the Southeast Region. SEDAR is a three-step process including: (1) Data Workshop; (2) Assessment Process utilizing webinars; and (3) Review Workshop. The product of the Data Workshop is a data report which compiles and evaluates potential datasets and recommends which datasets are appropriate for assessment analyses. The product of the Assessment Process is a stock assessment report which describes the fisheries, evaluates the status of the stock, estimates biological benchmarks, projects future population conditions, and recommends research and monitoring needs. The assessment is independently peer reviewed at the Review Workshop. The product of the Review Workshop is a Summary documenting panel opinions regarding the strengths and weaknesses of the stock assessment and input data. Participants for SEDAR Workshops are appointed by the Gulf of Mexico, South Atlantic, and Caribbean Fishery Management Councils and NOAA Fisheries Southeast Regional Office, Highly Migratory Species Management Division, and Southeast Fisheries Science Center. Participants include: Data collectors and database managers; stock assessment scientists, biologists, and researchers; constituency representatives including fishermen, environmentalists, and non-governmental organizations (NGOs); international experts; and staff of Councils, Commissions, and state and federal agencies.

    The items of discussion at the Data Scoping webinar are as follows:

    1. Participants will review SEDAR 58 stock identification recommendations.

    2. Participants will identify potential data sources and discuss data needs and treatments in order to prepare for the Data Workshop.

    Although non-emergency issues not contained in this agenda may come before this group for discussion, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically identified in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency.

    Special Accommodations

    This meeting is accessible to people with disabilities. Requests for auxiliary aids should be directed to the SAFMC office (see ADDRESSES) at least 5 business days prior to the meeting.

    Note: The times and sequence specified in this agenda are subject to change.

    Authority:

    16 U.S.C. 1801 et seq.

    Dated: July 31, 2018. Tracey L. Thompson, Acting Deputy Director, Office of Sustainable Fisheries, National Marine Fisheries Service.
    [FR Doc. 2018-16699 Filed 8-3-18; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration RIN 0648-XG385 Magnuson-Stevens Act Provisions; General Provisions for Domestic Fisheries; Application for Exempted Fishing Permits AGENCY:

    National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Notice; request for comments.

    SUMMARY:

    The Acting Assistant Regional Administrator for Sustainable Fisheries, Greater Atlantic Region, NMFS, has made a preliminary determination that an Exempted Fishing Permit application contains all of the required information and warrants further consideration. This Exempted Fishing Permit would allow four commercial fishing vessels, directed by Coonamessett Farm Foundation, to be exempt from Atlantic sea scallop regulations for the purpose of bycatch reduction research.

    Regulations under the Magnuson-Stevens Fishery Conservation and Management Act require publication of this notification to provide interested parties the opportunity to comment on applications for proposed Exempted Fishing Permits.

    DATES:

    Comments must be received on or before August 21, 2018.

    ADDRESSES:

    You may submit written comments by any of the following methods:

    Email: [email protected] Include in the subject line “Comments on CFF Extended Link Apron EFP.”

    Mail: Michael Pentony, Regional Administrator, NMFS, NE Regional Office, 55 Great Republic Drive, Gloucester, MA 01930. Mark the outside of the envelope “Comments on CFF Extended Link Apron EFP.”

    FOR FURTHER INFORMATION CONTACT:

    Shannah Jaburek, Fishery Management Specialist, 978-282-8456.

    SUPPLEMENTARY INFORMATION:

    Coonamessett Farm Foundation (CFF) submitted a complete application for an Exempted Fishing Permit (EFP) on July 10, 2018, to conduct commercial fishing activities that the regulations would otherwise restrict. The EFP would authorize vessels to test the efficacy of an extended link scallop dredge apron at reducing the capture of yellowtail and windowpane flounder and small scallops over the duration of four directed research cruises. The EFP would support research associated with a project titled “Development of an Extended Link Apron: A Broad Range Tool for Bycatch Reduction,” that has been funded under the 2017 Atlantic Sea Scallop Research Set-Aside (RSA) Program.

    CFF is requesting exemptions that would exempt four commercial fishing vessels from the following regulations:

    • Atlantic sea scallop days-at-sea (DAS) allocations at 50 CFR 648.53(b);

    • Crew size restrictions at § 648.51(c);

    • Dredge gear restrictions for minimum mesh size at § 648.51(b)(2) and gear obstructions at § 648.51(b)(4)(iii);

    • Atlantic sea scallop observer program requirements at § 648.11(g);

    • Access area program requirements at § 648.59(a)(1)-(3), (b)(2), (b)(4);

    • Rotational closed area exemptions for Closed Area I Access Area at § 648.60(c), Closed Area II Access Area at § 648.60(d), and all four of the Nantucket Lightship areas at § 648.60(e)-(h); and

    • Possession limits and minimum size requirements specified in 50 CFR part 648, subpart B and subparts D through O, to allow temporary possession for biological sampling.

    Any fishing activity conducted outside the scope of the exempted fishing activity would be prohibited.

    The project would consist of conduct four, 7-day research trips for a total of 28 days-at-sea on limited access (LA) vessels fishing on Georges Bank. All trips will take place from September 2018 through June 2019. Vessels would complete approximately 55 paired, 30-minute tows per trip at a standard vessel speed of 4.8 knots. In addition to open areas, tows could occur in Closed Area I, Closed Area II, or the four Nantucket Lightship Scallop Rotational Areas. The four research trips would be centralized around areas with high yellowtail and winter flounder bycatch and in areas with a high abundance of harvestable size scallops mixed with pre-recruit scallops.

    Vessels would fish two, 15-foot (4.57-m) Turtle Deflector Dredges; one dredge would be rigged with a standard apron while the other would be rigged with an extended vertical link apron. The project will alternate tows with and without the dredge over net over both dredges. Standard linking is defined as a single link between ring spaces, and the extended link is defined as two links linked together between rings. Both dredges would use 4-inch (10.16-cm) rings and a 10-inch (25.40-cm) twine top.

    For all tows, the sea scallop catch would be counted into baskets and weighed. One basket from each dredge would be randomly selected and the scallops would be measured in 5 mm increments to determine size selectivity. Finfish catch would be sorted by species and then counted, weighed, and measured in 1 mm increments. Depending on the volume of scallops and finfish captured, the catch would be subsampled as necessary. No catch would be retained for longer than needed to conduct sampling and no finfish or scallop catch would be landed for sale. Table 1 contains an estimate of the finfish catch anticipated for the project.

    Table 1—CFF Extended Link Apron Project Catch Estimates Species Weight
  • (lbs)
  • Weight
  • (kg)
  • Sea Scallop 16,552 7,508 Yellowtail Flounder 549 249 Winter Flounder 803 364 Windowpane Flounder 2,828 1,283 Summer Flounder 943 428 Fourspot Flounder 74 34 American Plaice Flounder 90 41 Witch Flounder 12 5 Haddock 58 26 Atlantic Cod 100 45 Monkfish 8,420 3,819 Spiny Dogfish 87 39 Barndoor Skate 1,109 503 NE Skate Complex (excluding barndoor skate) 63,528 28,816

    CFF needs these exemptions to allow them to conduct experimental dredge towing without being charged DAS, and to deploy gear in closed access areas where concentrations of primary bycatch species are sufficiently high to provide statistically robust results. Researchers also need mesh size and gear obstruction exemptions in order to use the dredge net cover. Utilizing the dredge net cover will allow researchers to quantify fish that would normally escape through the gear during normal fishing operations. Participating vessels need crew size waivers to accommodate science personnel, and possession waivers will enable researchers to conduct finfish sampling activities. The project would be exempt from the sea scallop observer program requirements because activities conducted on the trip are not consistent with normal fishing operations.

    If approved, the applicant may request minor modifications and extensions to the EFP throughout the year. EFP modifications and extensions may be granted without further notice if they are deemed essential to facilitate completion of the proposed research and have minimal impacts that do not change the scope or impact of the initially approved EFP request. Any fishing activity conducted outside the scope of the exempted fishing activity would be prohibited.

    Authority:

    16 U.S.C. 1801 et seq.

    Dated: August 1, 2018. Margo B. Schulze-Haugen, Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service.
    [FR Doc. 2018-16770 Filed 8-3-18; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration RIN 0648-XF696 Marine Mammals; File No. 21217 AGENCY:

    National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Notice; receipt of application for permit amendment.

    SUMMARY:

    Notice is hereby given that Aaron Roberts, Ph.D., University of North Texas, Biological Sciences, 1155 Union Circle, #310559, Denton, TX 76203, has applied for an amendment to Scientific Research Permit No. 21217.

    DATES:

    Written, telefaxed, or email comments must be received on or before September 5, 2018.

    ADDRESSES:

    The application and related documents are available for review by selecting “Records Open for Public Comment” from the “Features” box on the Applications and Permits for Protected Species (APPS) home page, https://apps.nmfs.noaa.gov, and then selecting File No. 21217 from the list of available applications.

    These documents are also available upon written request or by appointment in the Permits and Conservation Division, Office of Protected Resources, NMFS, 1315 East-West Highway, Room 13705, Silver Spring, MD 20910; phone (301) 427-8401; fax (301) 713-0376.

    Written comments on this application should be submitted to the Chief, Permits and Conservation Division, at the address listed above. Comments may also be submitted by facsimile to (301) 713-0376, or by email to [email protected] Please include the File No. 21217 in the subject line of the email comment.

    Those individuals requesting a public hearing should submit a written request to the Chief, Permits and Conservation Division at the address listed above. The request should set forth the specific reasons why a hearing on the application would be appropriate.

    FOR FURTHER INFORMATION CONTACT:

    Jennifer Skidmore or Sara Young (301) 427-8401.

    SUPPLEMENTARY INFORMATION:

    The subject amendment to Permit No. 21217 is requested under the authority of the Marine Mammal Protection Act of 1972, as amended (MMPA; 16 U.S.C. 1361 et seq.) and the regulations governing the taking and importing of marine mammals (50 CFR part 216).

    Permit No. 21217, issued on November 6, 2017 (82 FR 60968; December 26, 2017), authorizes the permit holder to import biological samples from up to 30 harp seals (Pagophilus groenlandicus) and 30 hooded seals (Cystophora cristata) from Canada to study the effects of polybrominated diphenyl ethers (PBDEs) on the fitness and immune function in two species of phocid seals. The permit holder is requesting the permit be amended to increase the number of samples imported from each species from 30 to 60 individuals and to include the import of samples collected during the 2019 field season in Canada. All other aspects of the permitted activities would not change.

    In compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), an initial determination has been made that the proposed activities are categorically excluded from the requirement to prepare an environmental assessment or environmental impact statement.

    Concurrent with the publication of this notice in the Federal Register, NMFS is forwarding copies of these applications to the Marine Mammal Commission and its Committee of Scientific Advisors.

    Dated: July 31, 2018. Julia Marie Harrison, Chief, Permits and Conservation Division, Office of Protected Resources, National Marine Fisheries Service.
    [FR Doc. 2018-16719 Filed 8-3-18; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration RIN 0648-XG365 Pacific Fishery Management Council; Public Meeting AGENCY:

    National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Notice of public meeting (webinar).

    SUMMARY:

    The Pacific Fishery Management Council's (Pacific Council) Salmon Technical Team (STT), Salmon Advisory Subpanel (SAS), and Model Evaluation Workgroup (MEW) will hold a joint meeting to discuss and make recommendations on issues on the Pacific Council's September 2018 agenda. This meeting will be held via webinar and is open to the public.

    DATES:

    The webinar will be held Wednesday, August 22, 2018, at 2 p.m. and will end when business for the day has been completed.

    ADDRESSES:

    The meeting will be held via webinar. A public listening station is available at the Pacific Council office (address below). To attend the webinar, use this link: https://www.gotomeeting.com/webinar (click “Join a Webinar” in top right corner of page). (1) Enter the Webinar ID: 493-298-571. (2) Enter your name and email address (required). You must use your telephone for the audio portion of the meeting by dialing this TOLL number 1-415-930-5321. (3) Enter the Attendee phone audio access code 706-308-295. (4) Enter your audio phone pin (shown after joining the webinar). Note: We have disabled Mic/Speakers as an option and require all participants to use a telephone or cell phone to participate. Technical Information and System Requirements: PC-based attendees are required to use Windows® 7, Vista, or XP; Mac®-based attendees are required to use Mac OS® X 10.5 or newer; Mobile attendees are required to use iPhone®, iPad®, AndroidTM phone or Android tablet (see https://www.gotomeeting.com/webinar/ipad-iphone-android-webinar-apps). You may send an email to Mr. Kris Kleinschmidt at [email protected] or contact him at 503-820-2280, extension 411 for technical assistance.

    Council address: Pacific Fishery Management Council, 7700 NE Ambassador Place, Suite 101, Portland, OR 97220-1384.

    FOR FURTHER INFORMATION CONTACT:

    Robin Ehlke, Pacific Council; telephone: (503) 820-2410.

    SUPPLEMENTARY INFORMATION:

    Major topics include, but are not limited to, Salmon Methodology Review, Salmon Rebuilding Plan update, and preliminary Pacific halibut management for 2019. The groups may also address one or more of the Council's scheduled Administrative Matters and Ecosystem topics. Public comments during the webinar will be received from attendees at the discretion of the STT, SAS, and MEW Chairs.

    Although non-emergency issues not contained in the meeting agenda may be discussed, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically listed in this document and any issues arising after publication of this document that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency.

    Special Accommodations

    The public listening station is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Mr. Kris Kleinschmidt ([email protected]; (503) 820-2411) at least 10 days prior to the meeting date.

    Dated: July 31, 2018. Tracey L. Thompson, Acting Deputy Director, Office of Sustainable Fisheries, National Marine Fisheries Service.
    [FR Doc. 2018-16698 Filed 8-3-18; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration RIN 0648-XG374 Caribbean Fishery Management Council; Public Meeting AGENCY:

    National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Notice of a public meeting.

    SUMMARY:

    The Caribbean Fishery Management Council will hold its 163rd meeting in August to discuss the items contained in the agenda in the SUPPLEMENTARY INFORMATION.

    DATES:

    The meetings will be held on August 28-30, 2018, from 8:30 a.m. to 5 p.m.

    ADDRESSES:

    The meetings will be held at The Buccaneer Hotel located at 5007 Estate Shoys, Christiansted, St. Croix, USVI.

    FOR FURTHER INFORMATION CONTACT:

    Caribbean Fishery Management Council, 270 Muñoz Rivera Avenue, Suite 401, San Juan, Puerto Rico 00918-1903, telephone: (787) 766-5926.

    SUPPLEMENTARY INFORMATION: August 28, 2018, 8:30 a.m.-5 p.m. ○ New Council Members Oath ○ Election of New Officers ○ Call to Order ○ Adoption of Agenda ○ Consideration of 162nd Council Meeting Verbatim Transcriptions ○ Executive Director's Report ○ Scientific and Statistical Committee (SSC)) Meeting Report—Richard Appeldoorn ○ Island-based Fishery Management Plans —Review of Draft Environmental Impact Statements: —Puerto Rico —St. Thomas/St. John —St. Croix —Council selection of preferred alternatives —Council decision as to whether to take DEIS to public hearings ○ Spiny Lobster Control Rule Public Comment Period (5-minute presentations) August 28, 2018, 5:30 p.m.-6:30 p.m. ○ Administrative Issues ○ Closed Session August 29, 2018, 8:30 a.m.-12 p.m. ○ Outreach and Education Report—Alida Ortiz ○ Lionfish Project Report—Dr. J. Tookes ○ Puerto Rico Fisheries Socio-Economic Project Update—Dr. T. Seara ○ Western Central Atlantic Fishery Commission (WECAFC) —Overview and Status of Working Groups —Proposal for a Regional Fishery Management (RFMO)—DOS ○ 2018 Okeanos Expedition to PR and the USVI—Daniel Wagner August 29, 2018, 1 p.m.-6 p.m. ○ Field Trip to Visit St. Croix Fishing Communities August 30, 2018, 8:30 a.m.-12 p.m. ○ Exempted Fishing Permits (EFPs) Summary of Applications and Status ○ Emergency Location and Removal of Lost Fishing Gear in Puerto Rico: Avoiding Long Term Impacts of Ghost Gear—Raimundo Espinoza. ○ Enforcement Issues: —Puerto Rico-DNER —U.S. Virgin Islands-DPNR —U.S. Coast Guard —NMFS/NOAA ○ Meetings Attended by Council Members and Staff ○ Other Business Public Comment Period (5-minute presentations) ○ Next Meeting

    The order of business may be adjusted as necessary to accommodate the completion of agenda items. The meeting will begin on August 28, 2018 at 8:30 a.m. Other than the start time, interested parties should be aware that discussions may start earlier or later than indicated. In addition, the meeting may be extended from, or completed prior to the date established in this notice.

    Special Accommodations

    These meetings are physically accessible to people with disabilities. For more information or request for sign language interpretation and other auxiliary aids, please contact Mr. Miguel A. Rolón, Executive Director, Caribbean Fishery Management Council, 270 Muñoz Rivera Avenue, Suite 401, San Juan, Puerto Rico, 00918-1903, telephone: (787) 766-5926, at least 5 days prior to the meeting date.

    Dated: July 31, 2018. Tracey L. Thompson, Acting Deputy Director, Office of Sustainable Fisheries, National Marine Fisheries Service.
    [FR Doc. 2018-16710 Filed 8-3-18; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration RIN 0648-XF370 Takes of Marine Mammals Incidental to Specified Activities; Taking Marine Mammals Incidental to the Sand Point City Dock Replacement Project in Sand Point, Alaska AGENCY:

    National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Notice; issuance of an incidental harassment authorization.

    SUMMARY:

    NMFS has received a request from the Alaska Department of Transportation and Public Facilities (ADOT&PF) to issue an incidental harassment authorization (IHA) previously issued to ADOT&PF to incidentally take nine species of marine mammal, by Level A and Level B harassment, during construction activities associated with the Sand Point City Dock Replacement Project in Sand Point, Alaska. ADOT&PF reported that the project has been delayed. The IHA issued on October 13, 2017 has effective dates of August 1, 2018 through July 31, 2019. ADOT&PF requested that a new IHA be issued to conduct their work between May 31, 2019 and May 30, 2020. NMFS is, therefore, issuing a second IHA to cover the incidental take analyzed and authorized in the first IHA. The authorized take numbers would be the same as authorized previously, and the required mitigation, monitoring, and reporting would remain the same as authorized for the 2018 IHA referenced above. Pursuant to the Marine Mammal Protection Act (MMPA), NMFS is notifying the public about the issuance of an IHA to ADOT&PF to incidentally take marine mammals, by Level A and Level B harassment only, during the specified activity.

    DATES:

    The IHA is valid May 31, 2019, through May 30, 2020.

    ADDRESSES:

    An electronic copy of the final Authorization previously issued for 2018-2019, ADOT&PF's application, and related documents may be obtained by visiting https://www.fisheries.noaa.gov/national/marine-mammal-protection/incidental-take-authorizations-construction-activities. In case of problems accessing these documents, please call the contact listed below (see FOR FURTHER INFORMATION CONTACT).

    FOR FURTHER INFORMATION CONTACT:

    Rob Pauline, Office of Protected Resources, NMFS, (301) 427-8401.

    SUPPLEMENTARY INFORMATION: Background

    Sections 101(a)(5)(A) and (D) of the MMPA (16 U.S.C. 1361 et seq.) direct the Secretary of Commerce (as delegated to NMFS) to allow, upon request, the incidental, but not intentional, taking of small numbers of marine mammals by U.S. citizens who engage in a specified activity (other than commercial fishing) within a specified geographical region if certain findings are made and either regulations are issued or, if the taking is limited to harassment, a notice of a proposed authorization is provided to the public for review.

    An authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s), will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant), and if the permissible methods of taking and requirements pertaining to the mitigation, monitoring and reporting of such takings are set forth.

    NMFS has defined “negligible impact” in 50 CFR 216.103 as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.

    The MMPA states that the term “take” means to harass, hunt, capture, kill or attempt to harass, hunt, capture, or kill any marine mammal.

    Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).

    National Environmental Policy Act

    To comply with the National Environmental Policy Act of 1969 (NEPA; 42 U.S.C. 4321 et seq.) and NOAA Administrative Order (NAO) 216-6A, NMFS must review our proposed action (i.e., the issuance of an incidental harassment authorization) with respect to potential impacts on the human environment.

    This action is consistent with categories of activities identified in CE B4 of the Companion Manual for NOAA Administrative Order 216-6A, which do not individually or cumulatively have the potential for significant impacts on the quality of the human environment and for which we have not identified any extraordinary circumstances that would preclude this categorical exclusion. Accordingly, NMFS had determined that the issuance of the 2018-2019 IHA qualified to be categorically excluded from further NEPA review and signed a Categorical Exclusion memo in October 2017. Since the new 2019-2020 IHA covers the same work covered in the former 2018-2019 IHA, NMFS is relying on this same Categorical Exclusion memo for the issuance of this IHA.

    History of Request

    On September 16, 2016, NMFS received an application from ADOT&PF for the taking of marine mammals incidental to replacing the city dock in Sand Point, Alaska. On April 11, 2017, ADOT&PF submitted a revised application that NMFS determined was adequate and complete. ADOT&PF proposed to conduct in-water activities that may incidentally take, by Level A and Level B harassment, nine species of marine mammals. Proposed activities included as part of the Sand Point City Dock Replacement Project with potential to affect marine mammals include impact hammer pile driving and vibratory pile driving and removal. We published a notice of a proposed IHA and request for comments on July 6, 2017 (82 FR 31400). We subsequently published the final notice of our issuance of the IHA on October 23, 2017 (82 FR 48987), making the IHA valid for August 1, 2018-July 31, 2019. The specified activities are expected to result in the take of nine species of marine mammals including harbor seal (Phoca vitulina), Steller sea lion (Eumetopias jubatus), harbor porpoise (Phocoena phocoena), Dall's porpoise (Phocoenoides dalli), killer whale (Orcinus orca), humpback whale (Megaptera novaeangliae), Fin whale (Balaenoptera physalus), gray whale (Eschrichtius robustus), and minke whale (Balaenoptera acutorostrata).

    On April 24, 2018, ADOT&PF informed NMFS that work would be postponed relevant to the specified activity considered in the MMPA analysis and construction will not start until spring of 2019. Therefore, ADOT&PF requested the IHA be re-issued to be valid from May 31, 2019 through May 30, 2020.

    Description of the Proposed Activity and Anticipated Impacts

    The 2018-2019 IHA covered the construction of a new dock in Sand Point, Alaska. Impact and vibratory driving of piles and vibratory pile removal were expected to take place over a total of approximately 32 working days within a 5-month window from August 1, 2019 through December 31, 2019. However, due to the potential for unexpected delays, up to 40 working days may be required. The new dock would be supported by approximately 52 round, 30-inch-diameter, 100-foot-long permanent steel pipe piles. Fender piles installed at the dock face would consist of 8 round, 24-inch-diameter, 80-foot-long permanent steel pipe piles. The single mooring dolphin would consist of 3 round, 24-inch-diameter, 120-foot-long permanent battered steel pipe piles. This equates to a total of 63 permanent piles. Up to 90 temporary piles would be installed and removed during construction of the dock and would be either H-piles or pipe piles with a diameter of less than 24 inches.

    NMFS refers the reader to the documents related to the previously issued IHA for more detailed description of the project activities. These previous documents include the Federal Register notice of the issuance of the 2018-2019 IHA for ADOT&PF's Sand Point City Dock Replacement Project (82 FR 48987; October 23, 2017), ADOT&PF's application, the Federal Register notice of the proposed IHA (82 FR 31400; July 6, 2017) and all associated references and documents.

    Detailed Description of the Action—A detailed description of the proposed vibratory and impact pile driving activities at Sand Point City Dock is found in these previous documents. The location, timing (including the August 1, 2019—December 31 2019 work window), and nature of the pile driving operations, including the type and size of piles and the methods of pile driving, are identical to those described in the previous notices.

    Description of Marine Mammals—A description of the marine mammals in the area of the activities is found in these previous documents, which remains applicable to this IHA as well. In addition, NMFS has reviewed recent draft Stock Assessment Reports, information on relevant Unusual Mortality Events, and recent scientific literature, and determined that no new information affects our original analysis of impacts under the current IHA.

    Potential Effects on Marine Mammals—A description of the potential effects of the specified activities on marine mammals and their habitat is found in these previous documents, which remains applicable to this IHA. There is no new information on potential effects.

    Estimated Take—A description of the methods and inputs used to estimate take anticipated to occur and, ultimately, the take that was authorized is found in these previous documents. The methods of estimating take are identical to those used in the previous IHA, as is the density of marine mammals. The source levels, were also unchanged from the previously issued IHA, and NMFS' 2016 acoustic technical guidance was used to address new acoustic thresholds in the notice of issuance of the 2018 IHA.

    Description of Proposed Mitigation, Monitoring and Reporting Measures—A description of proposed mitigation, monitoring, and reporting measures is found in the previous documents, which are identical in this issued IHA. The following measures would apply to ADOT&PFs mitigation requirements:

    Establishment of Shutdown Zone—For all pile driving activities, ADOT&PF will establish a shutdown zone. The purpose of a shutdown zone is generally to define an area within which shutdown of activity would occur upon sighting of a marine mammal (or in anticipation of an animal entering the defined area). In this case, shutdown zones are intended to contain areas in which SPLs equal or exceed acoustic injury criteria for some authorized species, based on NMFS' acoustic technical guidance published in the Federal Register on August 4, 2016 (81 FR 51693).

    Establishment of Monitoring Zones—ADOT&PF will identify Level A take zones which are areas beyond the shutdown zones where animals may be exposed to sound levels that could result in permanent threshold shift (PTS). During impact installation of 30-inch and 24-inch piles, a 100-meter shutdown zone would not be sufficient to prevent Level A take of low-frequency cetaceans (i.e., humpback whales), high-frequency cetaceans (i.e., harbor porpoises), or phocid pinnipeds (i.e., harbor seals). For this reason, Level A take for small numbers of humpback whales, harbor porpoises, and harbor seals is authorized. To account for potential variations in daily productivity during impact installation, isopleths were calculated for different numbers of piles that could be installed each day. ADOT&PF will identify Level B disturbance zones which are areas where SPLs equal or exceed 160 dB rms for impact driving and 120 dB rms during vibratory driving. Observation of monitoring zones enables observers to be aware of and communicate the presence of marine mammals in the project area and outside the shutdown zone and thus prepare for potential shutdowns of activity. NMFS has established monitoring protocols described in the Federal Register notice of the issuance (82 FR 48987; October 23, 2017) which are based on the distance and size of the monitoring and shutdown zones. The same protocols are contained in this 2019-2020 IHA.

    Soft Start—The use of a soft-start procedure is believed to provide additional protection to marine mammals by providing warning and/or giving marine mammals a chance to leave the area prior to the hammer operating at full capacity. For impact pile driving, contractors will be required to implement soft start procedures. Soft Start is not required during vibratory pile driving and removal activities.

    Pre-Activity Monitoring—Prior to the start of daily in-water construction activity, or whenever a break in pile driving of 30 minutes or longer occurs, the observer will observe the shutdown and monitoring zones for a period of 30 minutes. The shutdown zone will be cleared when a marine mammal has not been observed within zone for that 30-minute period. If a marine mammal is observed within the shutdown zone, a soft-start cannot proceed until the animal has left the zone or has not been observed for 30 minutes for medium and large-sized odontocetes and mysticetes and 15 minutes for small cetaceans and pinnipeds.

    Visual Marine Mammal Observation—Monitoring will be conducted by qualified marine mammal observers (MMOs), who are trained biologists, with minimum qualifications described in the Federal Register notice of the issuance of the 2018-2019 IHA (82 FR 48987; October 23, 2017). In order to effectively monitor the pile driving monitoring zones, two MMOs will be positioned at the best practical vantage point(s). If waters exceed a sea-state which restricts the observers' ability to make observations within 100 m of the pile driving activity (e.g., excessive wind or fog), pile installation and removal will cease. Pile driving will not be initiated until the entire shutdown zone is visible. MMOs shall record specific information on the sighting forms as described in the Federal Register notice of the issuance of the 2018-2019 IHA (82 FR 48987; October 23, 2017). At the conclusion of the in-water construction work, ADOT&PF will provide NMSF with a monitoring report which includes summaries of recorded takes and estimates of the number of marine mammals that may have been harassed.

    Determinations

    ADOT&PF proposes to conduct activities identical to those covered in the previous 2018 IHA. As described above, the number of estimated takes of the same stocks of marine mammals is the same as those authorized in the 2018 IHA that were found to meet the negligible impact and small numbers standards. The authorized take of marine mammal species is shown in Table 1. Our analysis shows that between <0.01 percent and 2.89 percent of the populations of affected stocks could be taken by harassment. Therefore, the numbers of animals authorized to be taken for all species would be considered small relative to the relevant stocks or populations.

    Table 11—Summary of the Estimated Numbers of Marine Mammals Potentially Exposed to Level A and Level B Harassment Noise Levels Species (DPS/stock) Estimated
  • number of
  • individuals
  • potentially
  • exposed to
  • the level A
  • harassment
  • threshold
  • Estimated
  • number of
  • individuals
  • potentially
  • exposed to
  • the level B
  • harassment
  • threshold
  • DPS/stock bundance
  • (DPS/stock)
  • Percent of population
  • exposed to level A
  • or level B thresholds
  • Steller sea lion (wDPS) 0 960 50,983 1.88 Harbor seal (Cook Inlet/Shelikof Strait) 27 53 27,386 0.29 Harbor porpoise (Gulf of Alaska) 16 33 31,046 0.16 Dall's porpoise (Alaska) 0 4 83,400 <0.01 Killer whale (Gulf of Alaska, Aleutian Islands, and Bering Sea transient or Alaska resident) 0 14 587 (transient)
  • 2,347 (resident)
  • 2.38 (transient)
  • 0.6 (resident)
  • Humpback whale 1 (Central North Pacific/Western North Pacific) 2 30 10,103 (Central NP)
  • 1,107 (Western NP)
  • 0.32
  • 2.89
  • Fin whale (Northeast Pacific) 0 6 2 1,368 0.44 Gray whale (Eastern North Pacific) 0 2 20,990 <0.01 Minke whale (Alaska) 0 3 3 2,020 <0.01 Total 45 1,105 N/A N/A. 1 The Hawaii DPS is estimated to account for approximately 89 percent of all humpback whales in the Gulf of Alaska, whereas the Mexico and Western North Pacific DPSs account for approximately 10.5% and 0.5%, respectively (Wade et al., 2016; NMFS 2016). Therefore, an estimated 28 animals from Hawaii DPS; 3 from Mexico DPS; and 1 from Western North Pacific DPS. 2 Based on 2010 survey of animals north and west of Kenai Peninsula in U.S. waters and is likely an underestimate (Muto et al., 2016b). 3 Based on 2010 survey on Eastern Bering Sea shelf. Considered provisional and not representative of abundance of entire stock (Muto et al., 2016a). N/A: Not Applicable.

    This final IHA includes identical required mitigation, monitoring, and reporting measures as the 2018 IHA, and there is no new information suggesting that our analysis or findings should change.

    Based on the information contained here and in the referenced documents, NMFS has determined the following: (1) The required mitigation measures will effect the least practicable impact on marine mammal species or stocks and their habitat; (2) the authorized takes will have a negligible impact on the affected marine mammal species or stocks; (3) the authorized takes represent small numbers of marine mammals relative to the affected stock abundances; and (4) ADOT&PF's activities will not have an unmitigable adverse impact on taking for subsistence purposes as no relevant subsistence uses of marine mammals are implicated by this action.

    Endangered Species Act (ESA)

    Section 7(a)(2) of the Endangered Species Act of 1973 (ESA: 16 U.S.C. 1531 et seq.) requires that each Federal agency insure that any action it authorizes, funds, or carries out is not likely to jeopardize the continued existence of any endangered or threatened species or result in the destruction or adverse modification of designated critical habitat. To ensure ESA compliance for the issuance of IHAs, NMFS consults internally whenever we propose to authorize take for endangered or threatened species.

    In order to comply with the ESA, NMFS Alaska Regional Office (AKR) Protected Resources Division issued a Biological Opinion in September 2017 under section 7 of the ESA, on the issuance of an IHA to ADOT&PF under section 101(a)(5)(D) of the MMPA. There are four distinct population segments (DPSs) of three marine mammal species that are listed under the ESA with confirmed or possible occurrence in the study area: The Western North Pacific DPS and Mexico DPS of humpback whale; the Western DPS of Steller sea lion; and fin whale. The Biological Opinion concluded that while the issuance of the authorization may adversely affect members of some listed species it is not likely to jeopardize the continued existence of any listed marine mammal species or destroy or modify any critical habitat. Note that the only modification to the IHA is a change in effective dates. No additional take has been requested or is being authorized and all mitigation measures described in the Biological Opinion will continue to be implemented to limit Level A and Level B exposures. For these reasons, we anticipate no new or changed effects of the action beyond what was considered in the 2017 Biological Opinion.

    Authorization

    NMFS has issued an IHA to ADOT&PF for the Sand Point City Dock Replacement Project for 2019-2020, provided the previously described mitigation, monitoring, and reporting requirements from the 2018-2019 IHA are incorporated.

    Dated: August 1, 2018. Elaine T. Saiz, Acting Deputy Director, Office of Protected Resources, National Marine Fisheries Service.
    [FR Doc. 2018-16767 Filed 8-3-18; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration RIN 0648-XG358 Meeting of the Columbia Basin Partnership Task Force of the Marine Fisheries Advisory Committee AGENCY:

    National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Notice of open public meeting.

    SUMMARY:

    This notice sets forth the proposed schedule and agenda of a forthcoming meeting of the Marine Fisheries Advisory Committee's (MAFAC's) Columbia Basin Partnership Task Force (CBP Task Force). The CBP Task Force will discuss the issues outlined in the SUPPLEMENTARY INFORMATION below.

    DATES:

    The meeting will be held August 22, 2018, 1-4 p.m., Pacific Time.

    ADDRESSES:

    There is no public access. Meeting is by conference call.

    FOR FURTHER INFORMATION CONTACT:

    Katherine Cheney; NFMS West Coast Region; 503-231-6730; email: [email protected]

    SUPPLEMENTARY INFORMATION:

    Notice is hereby given of a meeting of MAFAC's CBP Task Force. The MAFAC was established by the Secretary of Commerce (Secretary), and, since 1971, advises the Secretary on all living marine resource matters that are the responsibility of the Department of Commerce. The MAFAC charter and summaries of prior MAFAC meetings are located online at https://www.fisheries.noaa.gov/topic/partners#marine-fisheries-advisory-committee. The CBP Task Force reports to MAFAC and is being convened to develop recommendations for long-term goals to meet Columbia Basin salmon recovery, conservation needs, and harvest opportunities, in the context of habitat capacity and other factors that affect salmon mortality. More information is available at the CBP Task Force web page: http://www.westcoast.fisheries.noaa.gov/columbia_river/index.html.

    Matters To Be Considered

    The Committee is convening to discuss feedback from CBP Task Force members as they shared provisional goals with their constituents and communities; drafting of their recommendations and report; and next steps for the CBP Task Force.

    Time and Date

    The meeting is scheduled for August 22, 2018, 1-4 p.m., Pacific Time by conference call and webinar. Access information for the public will be posted at http://www.westcoast.fisheries.noaa.gov/columbia_river/index.html by August 8, 2018.

    Special Accommodations

    These meetings are physically accessible to people with disabilities. Requests for auxiliary aids should be directed to Katherine Cheney, 503-231-6730 by August 8, 2018.

    Dated: August 1, 2018. Jennifer L. Lukens, Federal Program Officer, Marine Fisheries Advisory Committee, National Marine Fisheries Service.
    [FR Doc. 2018-16731 Filed 8-3-18; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration RIN 0648-XG311 Determination of Overfishing or an Overfished Condition AGENCY:

    National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Notice.

    SUMMARY:

    This action serves as a notice that NMFS, on behalf of the Secretary of Commerce (Secretary), has found that the following stocks are overfished or subject to overfishing. Klamath River fall-run Chinook salmon, Queets coho salmon, Juan de Fuca coho salmon, Snohomish coho salmon, and Sacramento River fall-run Chinook salmon are now overfished. Upper Columbia River summer-run Chinook salmon is now subject to overfishing. Thorny skate and the Atlantic and Gulf of Mexico stock of sandbar shark are still overfished. The Gulf of Maine/Cape Hatteras Atlantic mackerel stock is now both overfished and subject to overfishing. NMFS, on behalf of the Secretary, notifies the appropriate fishery management council (Council) whenever it determines that overfishing is occurring, a stock is in an overfished condition or a stock is approaching an overfished condition.

    FOR FURTHER INFORMATION CONTACT:

    Regina Spallone, (301) 427-8568.

    SUPPLEMENTARY INFORMATION:

    Pursuant to section 304(e)(2) of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), 16 U.S.C. 1854(e)(2), NMFS, on behalf of the Secretary, must notify Councils, and publish in the Federal Register, whenever it determines that a stock or stock complex is subject to overfishing, overfished, or approaching an overfished condition.

    NMFS has determined that Klamath River fall-run Chinook salmon, Queets coho salmon, Juan de Fuca coho salmon, Snohomish coho salmon, and Sacramento River fall-run Chinook salmon are now overfished. Pacific salmon stocks are overfished when the 3-year geometric mean of annual spawning escapement falls below the stock's minimum stock size threshold (MSST). MSST for Pacific salmon is generally defined as 0.5*SMSY or 0.75*SMSY, although there are some exceptions including Juan de Fuca and Snohomish coho, where MSST is 0.636*SMSY and 0.62 SMSY, respectively. SMSY is the number of spawners corresponding to maximum sustainable yield (MSY). The determinations for the two Chinook stocks are based on 2018 assessments—using data from 2017—produced by the Pacific Fishery Management Council's (Pacific Council) Salmon Technical Team (STT) using methodologies that have been reviewed by the Pacific Council's Science and Statistical Committee (SSC). The determinations for the three coho stocks are based on 2018 assessments—using data from 2016—produced by the Pacific Council's STT, using methodologies that have been reviewed by the Pacific Council's SSC.

    NMFS has further determined that Upper Columbia River summer-run Chinook salmon is now subject to overfishing. This stock is subject to overfishing when the Fyear exceeds the maximum fishing mortality threshold (MFMT), where the MFMT is generally defined as less than or equal to FMSY. This determination is based on a 2018 assessment—using data from 2015—produced by the Pacific Salmon Commission's Chinook Technical Committee. Consistent with the requirements in the Salmon FMP, the Pacific Council has directed the STT to develop rebuilding plans for each overfished stock for the Council's consideration. Of the six salmon stocks, only the two Chinook stocks are not internationally managed stocks. For all other stocks, the Council has limited ability to control ocean fisheries in waters outside its jurisdiction.

    Thorny skate and the Atlantic and Gulf of Mexico stock of sandbar shark are still overfished. Thorny skate is overfished if the three-year moving average of the autumn survey mean weight per tow (B) is less than BTHRESHOLD, which is one-half of the 75th percentile of the mean weight per tow observed in the autumn trawl survey from the selected reference time series. A stock assessment was completed in 2017—using data through 2016—which supported the determination that thorny skate remains overfished. NMFS is working with the New England Fishery Management Council (New England Council) to implement conservation and management measures to rebuild thorny skate. The sandbar shark stock is overfished when current biomass (B) proxy is less than the minimum stock size threshold (MSST) (B < BMSST). The B proxy for sandbar shark is spawning stock fecundity. The sandbar shark determination is based on a stock assessment completed in 2018—using data through 2015—following the Southeast Data Assessment and Review process. NMFS manages sandbar shark under the 2006 Consolidated Atlantic Highly Migratory Species Fishery Management Plan and its amendments.

    The Gulf of Maine/Cape Hatteras Atlantic mackerel stock is now both overfished and subject to overfishing. Atlantic mackerel is subject to overfishing if the fishing mortality rate (F) exceeds F40%. The stock is overfished if spawning stock biomass (SSB) is less than 1/2 SSBMSY, the SSB associated with fishing at FMSY. This determination is based on a benchmark assessment, finalized in 2018 and using data through 2016. The Mid-Atlantic Fishery Management Council has been notified of its requirement to adopt measures to end overfishing and approve a rebuilding plan for Atlantic mackerel.

    Dated: August 1, 2018. Margo Schulze-Haugen, Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service.
    [FR Doc. 2018-16764 Filed 8-3-18; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration RIN 0648-XG368 New England Fishery Management Council; Public Meeting AGENCY:

    National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Notice; public meeting.

    SUMMARY:

    The New England Fishery Management Council (Council) is scheduling a public meeting of its Whiting Advisory Panel and Committee on Wednesday, August 29, 2018 to consider actions affecting New England fisheries in the exclusive economic zone (EEZ). Recommendations from this group will be brought to the full Council for formal consideration and action, if appropriate.

    DATES:

    The meeting will be held on Wednesday, August 29, 2018 at 9:30 a.m.

    ADDRESSES:

    Meeting address: The meeting will be held at the Hotel Providence, 139 Mathewson Street, Providence, RI 02903; telephone: (401) 861-8000.

    Council address: New England Fishery Management Council, 50 Water Street, Mill 2, Newburyport, MA 01950.

    FOR FURTHER INFORMATION CONTACT:

    Thomas A. Nies, Executive Director, New England Fishery Management Council; telephone: (978) 465-0492.

    SUPPLEMENTARY INFORMATION:

    Agenda

    The Whiting Advisory Panel and Committee will evaluate Amendment 22 (limited access alternatives) public hearing comments and impact analyses to recommend final action to the Council at its September meeting. The will also receive the Annual Monitoring Report for Fishing Year 2017 from the Whiting Plan Development Team. The Advisory Panel and Committee will review recommendations to streamline small-mesh multispecies fishery regulations and make final recommendations to the Council. Other business will be discussed as necessary.

    Although non-emergency issues not contained in this agenda may come before this group for discussion, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Act, provided the public has been notified of the Council's intent to take final action to address the emergency.

    Special Accommodations

    The meeting is physically accessible to people with disabilities. This meeting will be recorded. Consistent with 16 U.S.C. 1852, a copy of the recording is available upon request. Requests for sign language interpretation or other auxiliary aids should be directed to Thomas A. Nies, Executive Director, at (978) 465-0492, at least 5 days prior to the meeting date.

    Authority:

    16 U.S.C. 1801 et seq.

    Dated: July 31, 2018. Tracey L. Thompson, Acting Deputy Director, Office of Sustainable Fisheries, National Marine Fisheries Service.
    [FR Doc. 2018-16704 Filed 8-3-18; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration RIN 0648-XG389 North Pacific Fishery Management Council; Public Meeting AGENCY:

    National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Notice of public meeting.

    SUMMARY:

    The North Pacific Fishery Management Council (Council) Trawl Electronic Monitoring Committee will hold a public meeting on August 23, 2018 through August 24, 2018.

    DATES:

    The meeting will be held on Thursday, August 23, 2018, from 9 a.m. to 5:30 p.m. and on Friday, August 24, 2018, from 9 a.m. to 5:30 p.m. (or as necessary).

    ADDRESSES:

    The meeting will be held in the Husky Room, Purple and Gold at the Silver Cloud Hotel, 5036 25th Ave. NE, Seattle, WA 98105. Teleconference number: (907) 271-2896.

    Council address: North Pacific Fishery Management Council, 605 W 4th Ave., Suite 306, Anchorage, AK 99501-2252; telephone: (907) 271-2809.

    FOR FURTHER INFORMATION CONTACT:

    Elizabeth Figus, Council staff; telephone: (907) 271-2801.

    SUPPLEMENTARY INFORMATION:

    Thursday, August 23, 2018 through Friday, August 24, 2018

    This two-day meeting is expected to focus on: (a) A presentation on uses of EM for recording interactions with seabirds; (b) an update about the Alaska Region Electronic Technologies Implementation Plan; (c) updates for ongoing research, funding, and regulatory comparisons relevant to trawl EM; (d) a review of the EM Workgroup cooperative approach; (e) drafting of a cooperative workplan for trawl EM; and, (f) a discussion of scheduling and other issues. The Agenda is subject to change, and the latest version will be posted at http://www.npfmc.org/observer-program/.

    Public Comment

    Public comment letters will be accepted and should be submitted either electronically to Elizabeth Figus, Council staff: [email protected] or through the mail: North Pacific Fishery Management Council, 605 W 4th Ave., Suite 306, Anchorage, AK 99501-2252. In-person oral public testimony will be accepted at the discretion of the chair.

    Special Accommodations

    These meetings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Shannon Gleason at (907) 271-2809 at least 7 working days prior to the meeting date.

    Dated: July 31, 2018. Tracey L. Thompson, Acting Deputy Director, Office of Sustainable Fisheries, National Marine Fisheries Service.
    [FR Doc. 2018-16703 Filed 8-3-18; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration RIN 0648-XG384 Magnuson-Stevens Act Provisions; General Provisions for Domestic Fisheries; Application for Exempted Fishing Permits AGENCY:

    National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Notice; request for comments.

    SUMMARY:

    The Acting Assistant Regional Administrator for Sustainable Fisheries, Greater Atlantic Region, NMFS, has made a preliminary determination that an Exempted Fishing Permit application contains all of the required information and warrants further consideration. The Exempted Fishing Permit would allow commercial fishing vessels to fish outside of scallop regulations in support of research conducted by the Coonamessett Farm Foundation. These exemptions would support research conducted on trips to test gear modifications for bycatch reduction in the scallop dredge fishery.

    Regulations under the Magnuson-Stevens Fishery Conservation and Management Act require publication of this notification to provide interested parties the opportunity to comment on applications for proposed Exempted Fishing Permits.

    DATES:

    Comments must be received on or before August 21, 2018.

    ADDRESSES:

    You may submit written comments by any of the following methods:

    Email: [email protected] Include in the subject line “CFF Compensation Fishing Gear Research EFP.”

    Mail: Michael Pentony, Regional Administrator, NMFS, Greater Atlantic Regional Fisheries Office, 55 Great Republic Drive, Gloucester, MA 01930. Mark the outside of the envelope “Comments on CFF Compensation Fishing Gear Research EFP.”

    FOR FURTHER INFORMATION CONTACT:

    Shannah Jaburek, Fisheries Management Specialist, 978-282-8456.

    SUPPLEMENTARY INFORMATION:

    Coonamessett Farm Foundation (CFF) submitted a complete application for an Exempted Fishing Permit (EFP) on July 6, 2018, that would allow gear research to be conducted by vessels on compensation fishing trips associated with projects funded by the 2018 Scallop Research Set-Aside (RSA) program. The exemptions would allow commercial fishing vessels to exceed the crew size regulations at 50 CFR 648.51(c) to place a researcher on the vessel and temporarily exempt the participating vessels from possession limits and minimum size requirements specified in 50 CFR part 648, subpart B and subparts D through O, for biological sampling purposes. Any fishing activity conducted outside the scope of the exempted fishing activity would be prohibited, including landing fish in excess of a possession limit or below the minimum size.

    Experimental fishing activity would test a one-way extended link gear modification in an attempt to reduce finfish bycatch and habitat impact in the scallop dredge fishery. Any modification would comply with existing scallop gear regulations. All trips would take place in scallop fishing areas open to scallop RSA compensation fishing.

    Exemption from crew size limits is needed because a research technician would accompany vessels on the compensation fishing trips to collect catch data associated with the dredge modifications. The crew size exemption would be for approximately 120 days-at-sea and would be used in conjunction with a valid compensation fishing letter of authorization. The technician would only engage in data collection activities, and would not process catch to be landed for sale. Exemption from possession limit and minimum sizes would support catch sampling activities, and ensure the vessel is not in conflict with possession regulations while collecting catch data. All catch above a possession limit or below a minimum size would be discarded as soon as possible following data collection. Estimated catch totals for the experimental permit activities are listed below in Table 1. The proposed gear modifications are not expected to increase catch above typical commercial fishing practices and gears. All research trips would otherwise be consistent with normal commercial fishing activity and catch would be retained for sale.

    Table 1—Estimated Bycatch for CFF EFP Compensation Trips Species Number Weight
  • (lb)
  • Weight
  • (kg)
  • NE Skate Complex 19,326 10,051 4,559 Barndoor Skate 1,231 14 6 Summer Flounder 747 2,951 1,339 Winter Flounder 14 2 1 Yellowtail Flounder 36 10 5 Windowpane Flounder 106 39 18 Monkfish 2,973 4,689 2,127

    If approved, the applicant may request minor modifications and extensions to the EFP throughout the year. EFP modifications and extensions may be granted without further notice if they are deemed essential to facilitate completion of the proposed research and have minimal impacts that do not change the scope or impact of the initially approved EFP request. Any fishing activity conducted outside the scope of the exempted fishing activity would be prohibited.

    Authority:

    16 U.S.C. 1801 et seq.

    Dated: August 1, 2018. Margo B. Schulze-Haugen, Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service.
    [FR Doc. 2018-16771 Filed 8-3-18; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF EDUCATION [Docket No.: ED-2018-ICCD-0059] Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; Graduate Assistance in Areas of National Need (GAANN) Performance Report AGENCY:

    Office of Postsecondary Education (OPE), Department of Education (ED).

    ACTION:

    Notice.

    SUMMARY:

    In accordance with the Paperwork Reduction Act of 1995, ED is proposing a revision of an existing information collection.

    DATES:

    Interested persons are invited to submit comments on or before September 5, 2018.

    ADDRESSES:

    To access and review all the documents related to the information collection listed in this notice, please use http://www.regulations.gov by searching the Docket ID number ED-2018-ICCD-0059. Comments submitted in response to this notice should be submitted electronically through the Federal eRulemaking Portal at http://www.regulations.gov by selecting the Docket ID number or via postal mail, commercial delivery, or hand delivery. Please note that comments submitted by fax or email and those submitted after the comment period will not be accepted. Written requests for information or comments submitted by postal mail or delivery should be addressed to the Director of the Information Collection Clearance Division, U.S. Department of Education, 550 12th Street SW, PCP, Room 9086, Washington, DC 20202-0023.

    FOR FURTHER INFORMATION CONTACT:

    For specific questions related to collection activities, please contact Rebecca Ell, 202-453-6348.

    SUPPLEMENTARY INFORMATION:

    The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.

    Title of Collection: Graduate Assistance in Areas of National Need (GAANN) Performance Report.

    OMB Control Number: 1840-0748.

    Type of Review: A revision of an existing information collection.

    Respondents/Affected Public: Private Sector; State, Local, and Tribal Governments.

    Total Estimated Number of Annual Responses: 291.

    Total Estimated Number of Annual Burden Hours: 3,274.

    Abstract: GAANN grantees must submit a performance report annually. In addition, grantees are required to submit a supplement to the final performance report two years after submission of their final report. The reports are used to evaluate grantee performance. Further, the data from the reports will be aggregated to evaluate the accomplishments and impact of the GAANN Program as a whole. Results will be reported to the Secretary in order to respond to GPRA requirements.

    Minor changes have been made to the collection to clarify the intent of the questions and update the areas of national need. These changes did not alter the anticipated burden hours associated with this collection. There was a small increase in total burden hours based on the recalculation of the burden on public respondents.

    Dated: August 1, 2018. Kate Mullan, Acting Director, Information Collection Clearance Division, Office of the Chief Privacy Officer, Office of Management.
    [FR Doc. 2018-16737 Filed 8-3-18; 8:45 am] BILLING CODE 4000-01-P
    DEPARTMENT OF ENERGY Federal Energy Regulatory Commission Combined Notice of Filings #1

    Take notice that the Commission received the following electric corporate filings:

    Docket Numbers: EC18-76-000.

    Applicants: Entergy Arkansas, Inc., Entergy Mississippi, Inc.

    Description: Supplement to March 27, 2018 Joint Application of Entergy Arkansas, Inc., et al. for Approval under Section 203 of the Federal Power Act.

    Filed Date: 7/27/18.

    Accession Number: 20180727-5212.

    Comments Due: 5 p.m. ET 8/10/18.

    Take notice that the Commission received the following exempt wholesale generator filings:

    Docket Numbers: EG18-116-000.

    Applicants: Live Oak Wind Project, LLC.

    Description: Notice of Self-Certification of Exempt Wholesale Generator Status of Live Oak Wind Project, LLC.

    Filed Date: 7/31/18.

    Accession Number: 20180731-5034.

    Comments Due: 5 p.m. ET 8/21/18.

    Take notice that the Commission received the following electric rate filings:

    Docket Numbers: ER10-3279-002; ER10-3275-002; ER10-3274-002; ER18-213-001; ER10-3278-002.

    Applicants: Basin Creek Equity Partners L.L.C., Capitol District Energy Center Cogeneration Associates, Pawtucket Power Associates Limited Partnership, Pittsfield Generating Company, L.P., Forked River Power LLC.

    Description: Notice of Non-Material Change in Status of Basin Creek Equity Partners L.L.C., et. al.

    Filed Date: 7/30/18.

    Accession Number: 20180730-5275.

    Comments Due: 5 p.m. ET 8/20/18.

    Docket Numbers: ER15-794-008.

    Applicants: Catalyst Paper Operations, Inc.

    Description: Notification of Change in Status of Catalyst Paper Operations, Inc.

    Filed Date: 7/30/18.

    Accession Number: 20180730-5250.

    Comments Due: 5 p.m. ET 8/20/18.

    Docket Numbers: ER18-2049-001.

    Applicants: Midcontinent Independent System Operator, Inc.

    Description: Tariff Amendment: 2018-07-30_Amendment to Attachment X Revisions to Expedite Phase I of the DPP to be effective 9/19/2018.

    Filed Date: 7/30/18.

    Accession Number: 20180730-5233.

    Comments Due: 5 p.m. ET 8/20/18.

    Docket Numbers: ER18-2104-000.

    Applicants: Arizona Public Service Company.

    Description: § 205(d) Rate Filing: Rate Schedule No. 217, Exhibit A and Exhibit B Revisions to be effective 10/1/2018.

    Filed Date: 7/30/18.

    Accession Number: 20180730-5227.

    Comments Due: 5 p.m. ET 8/20/18.

    Docket Numbers: ER18-2105-000.

    Applicants: Arizona Public Service Company.

    Description: § 205(d) Rate Filing: Revisions to Service Agreement Nos. 218 and 335 to be effective 7/1/2018.

    Filed Date: 7/30/18.

    Accession Number: 20180730-5229.

    Comments Due: 5 p.m. ET 8/20/18.

    Docket Numbers: ER18-2106-000.

    Applicants: Duke Energy Ohio, Inc.

    Description: § 205(d) Rate Filing: Duke-DP&L IA 205 Filing (PJM SA No. TBD) to be effective 6/30/2018.

    Filed Date: 7/30/18.

    Accession Number: 20180730-5238.

    Comments Due: 5 p.m. ET 8/20/18.

    Docket Numbers: ER18-2107-000.

    Applicants: Duke Energy Ohio, Inc.

    Description: § 205(d) Rate Filing: Duke-AEP IA 205 Filing (PJM SA No. 1491) to be effective 6/30/2018.

    Filed Date: 7/30/18.

    Accession Number: 20180730-5239.

    Comments Due: 5 p.m. ET 8/20/18.

    Docket Numbers: ER18-2108-000.

    Applicants: Duke Energy Ohio, Inc.

    Description: § 205(d) Rate Filing: Duke-EKPC IA 205 Filing (PJM SA No. 3141) to be effective 6/30/2018.

    Filed Date: 7/30/18.

    Accession Number: 20180730-5240.

    Comments Due: 5 p.m. ET 8/20/18.

    Docket Numbers: ER18-2109-000.

    Applicants: PJM Interconnection, L.L.C.

    Description: § 205(d) Rate Filing: 2nd Quarter 2018 Revisions to OA, Sch. 12 and RAA, Sch. 17 Member Lists to be effective 6/30/2018.

    Filed Date: 7/31/18.

    Accession Number: 20180731-5059.

    Comments Due: 5 p.m. ET 8/21/18.

    The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.

    Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.

    eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call (866) 208-3676 (toll free). For TTY, call (202) 502-8659.

    Dated: July 31, 2018. Nathaniel J. Davis, Sr., Deputy Secretary.
    [FR Doc. 2018-16746 Filed 8-3-18; 8:45 am] BILLING CODE 6717-01-P
    DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Project No. 2628-065] Alabama Power Company; Notice of Intent To File License Application, Filing of Pre-Application Document (PAD), Commencement of Pre-Filing Process, and Scoping; Request for Comments on the Pad and Scoping Document, and Identification of Issues and Associated Study Requests

    a. Type of Filing: Notice of Intent to File License Application for a New License and Commencing Pre-filing Process.

    b. Project No.: 2628-065.

    c. Dated Filed: June 1, 2018.

    d. Submitted By: Alabama Power Company (Alabama Power).

    e. Name of Project: R.L. Harris Hydroelectric Project (Harris Project).

    f. Location: The project is located on the Tallapoosa River the City of Lineville in Randolph, Clay, and Cleburne Counties, Alabama. The project occupies 4.90 acres of federal land administered by the Bureau of Land Management.

    g. Filed Pursuant to: 18 CFR part 5 of the Commission's Regulations.

    h. Potential Applicant Contact: Angie Anderegg, Harris Relicensing Project Manager, Alabama Power Company, 600 18th Street, Birmingham, AL 35203; (205) 257-2251 or [email protected].

    i. FERC Contact: Sarah Salazar at (202) 502-6863 or email at [email protected].

    j. Cooperating agencies: Federal, state, local, and tribal agencies with jurisdiction and/or special expertise with respect to environmental issues that wish to cooperate in the preparation of the environmental document should follow the instructions for filing such requests described in item o below. Cooperating agencies should note the Commission's policy that agencies that cooperate in the preparation of the environmental document cannot also intervene. See 94 FERC ¶ 61,076 (2001).

    k. With this notice, we are initiating informal consultation with: (a) The U.S. Fish and Wildlife Service and/or NOAA Fisheries under section 7 of the Endangered Species Act and the joint agency regulations thereunder at 50 CFR, part 402 and (b) the State Historic Preservation Officer, as required by section 106, National Historic Preservation Act, and the implementing regulations of the Advisory Council on Historic Preservation at 36 CFR 800.2.

    l. With this notice, we are designating Alabama Power as the Commission's non-federal representative for carrying out informal consultation, pursuant to section 7 of the Endangered Species Act and section 106 of the National Historic Preservation Act.

    m. Alabama Power filed with the Commission a Pre-Application Document (PAD; including a proposed process plan and schedule), pursuant to 18 CFR 5.6 of the Commission's regulations.

    n. A copy of the PAD is available for review at the Commission in the Public Reference Room or may be viewed on the Commission's website (http://www.ferc.gov), using the “eLibrary” link. Enter the docket number, excluding the last three digits in the docket number field to access the document. For assistance, contact FERC Online Support at [email protected], (866) 208-3676 (toll free), or (202) 502-8659 (TTY). A copy is also available for inspection and reproduction at the address in paragraph h.

    Register online at http://www.ferc.gov/docs-filing/esubscription.asp to be notified via email of new filing and issuances related to this or other pending projects. For assistance, contact FERC Online Support.

    o. With this notice, we are soliciting comments on the PAD and Commission staff's Scoping Document 1 (SD1), as well as study requests. All comments on the PAD and SD1, and study requests should be sent to the address above in paragraph h. In addition, all comments on the PAD and SD1, study requests, requests for cooperating agency status, and all communications to and from Commission staff related to the merits of the potential application must be filed with the Commission.

    The Commission strongly encourages electronic filing. Please file all documents using the Commission's eFiling system at http://www.ferc.gov/docs-filing/efiling.asp. Commenters can submit brief comments up to 6,000 characters, without prior registration, using the eComment system at http://www.ferc.gov/docs-filing/ecomment.asp. You must include your name and contact information at the end of your comments. For assistance, please contact FERC Online Support at [email protected] In lieu of electronic filing, please send a paper copy to: Secretary, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426. The first page of any filing should include docket number P-2628-065.

    All filings with the Commission must bear the appropriate heading: “Comments on Pre-Application Document,” “Study Requests,” “Comments on Scoping Document 1,” “Request for Cooperating Agency Status,” or “Communications to and from Commission Staff.” Any individual or entity interested in submitting study requests, commenting on the PAD or SD1, and any agency requesting cooperating status must do so by September 29, 2018.

    p. We intend to prepare either an environmental assessment (EA) or Environmental Impact Statement (EIS). The meetings listed below will satisfy the NEPA scoping requirements, irrespective of whether an EA or EIS is issued by the Commission.

    Scoping Meetings

    Commission staff will hold two scoping meetings in the vicinity of the project at the times and places noted below. The daytime meeting will focus on resource agency, Indian tribes, and non-governmental organization concerns, while the evening meeting is primarily for receiving input from the public. We invite all interested individuals, organizations, and agencies to attend one or both of the meetings, and to assist staff in identifying particular study needs, as well as the scope of environmental issues to be addressed in the environmental document. The times and locations of these meetings are as follows:

    Evening Scoping Meeting—Lineville, Alabama

    Date & Time: Tuesday, August 28, 2018 at 6:30 p.m.

    Location: Wedowee Marine South, 9681 Highway 48, Lineville, Alabama 36266, (770) 843-3054.

    Daytime Scoping Meeting—Lineville, Alabama

    Date & Time: Wednesday, August 29, 2018 at 9 a.m.

    Location: Wedowee Marine South, 9681 Highway 48, Lineville, Alabama 36266, (770) 843-3054.

    Please RSVP to [email protected], or call Cecile Jones at 205-257-1701, on or before August 15, 2018, if you plan to attend one of the scoping meetings in Lineville. Directions to Wedowee Marine South are available at www.harrisrelicensing.com and in Appendix C of the Commission's Scoping Document 1, described below.

    Scoping Document 1 (SD1), which outlines the subject areas to be addressed in the environmental document, was mailed to the individuals and entities on the Commission's mailing list. Copies of SD1 will be available at the scoping meetings, or may be viewed on the web at http://www.ferc.gov, using the “eLibrary” link. Follow the directions for accessing information in paragraph n. Based on all oral and written comments, a Scoping Document 2 (SD2) may be issued. SD2 may include a revised process plan and schedule, as well as a list of issues, identified through the scoping process.

    Environmental Site Review

    The potential applicant and Commission staff will conduct an Environmental Site Review (site visit) of the project on Tuesday, August 28, 2018, starting at 9:00 a.m., and ending at or about 4:30 p.m. All participants should meet at the R.L. Harris Dam located at 2761 County Road 100, Lineville, AL 36266. Directions to the R.L. Harris Dam are available at www.harrisrelicensing.com and in Appendix C of the Commission's SD1. Participants must notify Cecile Jones at (205) 257-1701 or www.harrisrelicensing.com, on or before August 15, 2018, if they plan to attend the environmental site review.

    Meeting Objectives

    At the scoping meetings, staff will: (1) Initiate scoping of the issues; (2) review and discuss existing conditions and resource management objectives; (3) review and discuss existing information and identify preliminary information and study needs; (4) review and discuss the process plan and schedule for pre-filing activity that incorporates the time frames provided for in Part 5 of the Commission's regulations and, to the extent possible, maximizes coordination of federal, state, and tribal permitting and certification processes; and (5) discuss the appropriateness of any federal or state agency or Indian tribe acting as a cooperating agency for development of an environmental document.

    Meeting participants should come prepared to discuss their issues and/or concerns. Please review the PAD in preparation for the scoping meetings. Directions on how to obtain a copy of the PAD and SD1 are included in item n. of this document.

    Meeting Procedures

    The meetings will be recorded by a stenographer and will be placed in the public records of the project.

    Dated: July 31, 2018. Nathaniel J. Davis, Sr., Deputy Secretary.
    [FR Doc. 2018-16752 Filed 8-3-18; 8:45 am] BILLING CODE 6717-01-P
    DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket No. ER18-1978-000] Casa Mesa Wind, LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization

    This is a supplemental notice in the above-referenced proceeding of Casa Mesa Wind, LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.

    Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.

    Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is August 20, 2018.

    The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at http://www.ferc.gov. To facilitate electronic service, persons with internet access who will eFile a document and/or be listed as a contact for an intervenor must create and validate an eRegistration account using the eRegistration link. Select the eFiling link to log on and submit the intervention or protests.

    Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426.

    The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the website that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email [email protected] or call (866) 208-3676 (toll free). For TTY, call (202) 502-8659.

    Dated: July 31, 2018. Nathaniel J. Davis, Sr., Deputy Secretary.
    [FR Doc. 2018-16749 Filed 8-3-18; 8:45 am] BILLING CODE 6717-01-P
    DEPARTMENT OF ENERGY Federal Energy Regulatory Commission Combined Notice of Filings #2

    Take notice that the Commission received the following electric rate filings:

    Docket Numbers: ER10-2042-028; ER10-1945-008; ER10-1944-006; ER10-2051-008; ER10-1942-020; ER17-696-008; ER14-2931-006; ER10-1941-010; ER10-2043-008; ER10-2029-010; ER10-2041-008; ER18-1321-001; ER10-2040-008; ER10-1938-023; ER10-2036-009; ER13-1407-007; ER10-1934-022; ER10-1893-022; ER10-3051-027; ER10-2985-026; ER10-3049-027; ER10-1889-006; ER10-1888-010; ER10-1885-010; ER15-748-004; ER10-1884-010; ER10-1883-010; ER10-1878-010; ER10-3260-008; ER10-1877-005; ER10-1895-006; ER10-1876-010; ER10-1875-010; ER10-1873-010; ER10-1871-007; ER10-1870-006; ER11-4369-007; ER16-2218-007; ER12-1987-008; ER10-1947-010; ER12-2645-003; ER10-1863-006; ER10-1862-022; ER10-1933-005; ER12-2261-009; ER10-1865-009; ER10-1858-006; ER13-1401-006; ER10-2044-008.

    Applicants: Calpine Energy Services, L.P., Auburndale Peaker Energy Center, LLC, Bethpage Energy Center 3, LLC, Calpine Bethlehem, LLC, Calpine Construction Finance Company, L.P., Calpine Energy Solutions, LLC, Calpine Fore River Energy Center, LLC, Calpine Gilroy Cogen, L.P., Calpine Mid-Atlantic Generation, LLC, Calpine Mid-Atlantic Marketing, LLC, Calpine Mid Merit, LLC, Calpine Mid-Merit II, LLC, Calpine New Jersey Generation, LLC, Calpine Power America—CA, LLC, Calpine Vineland Solar, LLC, CCFC Sutter Energy, LLC, CES Marketing IX, LLC, CES Marketing X, LLC, Champion Energy, LLC, Champion Energy Marketing LLC, Champion Energy Services, LLC, CPN Bethpage 3rd Turbine, Inc., Creed Energy Center, LLC, Delta Energy Center, LLC, Geysers Power Company, LLC, Gilroy Energy Center, LLC, Goose Haven Energy Center, LLC, Granite Ridge Energy, LLC, Hermiston Power, LLC, KIAC Partners, Los Esteros Critical Energy Facility LLC, Los Medanos Energy Center, LLC, Metcalf Energy Center, LLC, Morgan Energy Center, LLC, Nissequogue Cogen Partners, North American Power and Gas, LLC, North American Power Business, LLC, O.L.S. Energy-Agnews, Inc., Otay Mesa Energy Center, LLC, Pastoria Energy Facility L.L.C., Pine Bluff Energy, LLC, RockGen Energy, LLC, Power Contract Financing, L.L.C., Russell City Energy Company, LLC, South Point Energy Center, LLC, Westbrook Energy Center, LLC, Zion Energy LLC, TBG Cogen Partners, Garrison Energy Center LLC.

    Description: Notification of Change in Status of the Calpine MBR Sellers.

    Filed Date: 7/31/18.

    Accession Number: 20180731-5112.

    Comments Due: 5 p.m. ET 8/21/18.

    Docket Numbers: ER18-614-003.

    Applicants: PJM Interconnection, L.L.C.

    Description: Compliance filing: Compliance Filing—OATT, Sch. 12—Appendix A re: RTEP to be effective 4/5/2018.

    Filed Date: 7/31/18.

    Accession Number: 20180731-5110.

    Comments Due: 5 p.m. ET 8/21/18.

    Docket Numbers: ER18-1737-001.

    Applicants: Northern Indiana Public Service Company.

    Description: Tariff Amendment: Amendment to Reactive Power Rate Filing of NIPSCO to be effective 10/1/2018.

    Filed Date: 7/31/18.

    Accession Number: 20180731-5107.

    Comments Due: 5 p.m. ET 8/21/18.

    Docket Numbers: ER18-2110-000.

    Applicants: Buckeye Power, Inc., PJM Interconnection, L.L.C.

    Description: § 205(d) Rate Filing: Revised SA No. 4753—NITSA among PJM and Buckeye Power, Inc. to be effective 10/1/2018.

    Filed Date: 7/31/18.

    Accession Number: 20180731-5088.

    Comments Due: 5 p.m. ET 8/21/18.

    Docket Numbers: ER18-2111-000.

    Applicants: Midcontinent Independent System Operator, Inc., ITC Midwest LLC.

    Description: § 205(d) Rate Filing: 2018-07-31_SA 3142 ITC Midwest-EDF Renewables E&P Agreement (J495) to be effective 9/30/2018.

    Filed Date: 7/31/18.

    Accession Number: 20180731-5111.

    Comments Due: 5 p.m. ET 8/21/18.

    Docket Numbers: ER18-2112-000.

    Applicants: Midcontinent Independent System Operator, Inc.

    Description: § 205(d) Rate Filing: 2018-07-31_SA 3137 Entergy Arkansas-Cooperative Energy TSR CPA (F116) to be effective 6/28/2018.

    Filed Date: 7/31/18.

    Accession Number: 20180731-5141.

    Comments Due: 5 p.m. ET 8/21/18.

    Docket Numbers: ER18-2113-000.

    Applicants: Midcontinent Independent System Operator, Inc.

    Description: § 205(d) Rate Filing: 2018-07-31_Revisions to Attachment O-MRES interest rate calculation language to be effective 8/1/2018.

    Filed Date: 7/31/18.

    Accession Number: 20180731-5153.

    Comments Due: 5 p.m. ET 8/21/18.

    Docket Numbers: ER18-2114-000.

    Applicants: Southwest Power Pool, Inc.

    Description: § 205(d) Rate Filing: 3215R4 People's Electric Cooperative NITSA NOA to be effective 7/1/2018.

    Filed Date: 7/31/18.

    Accession Number: 20180731-5176.

    Comments Due: 5 p.m. ET 8/21/18.

    The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.

    Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.

    eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call (866) 208-3676 (toll free). For TTY, call (202) 502-8659.

    Dated: July 31, 2018. Nathaniel J. Davis, Sr., Deputy Secretary.
    [FR Doc. 2018-16747 Filed 8-3-18; 8:45 am] BILLING CODE 6717-01-P
    DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket No. OR18-30-000] Targa NGL Pipeline Company LLC; Notice of Petition for Declaratory Order

    Take notice that on July 27, 2018, pursuant to Rule 207(a)(2) of the Federal Energy Regulatory Commission's (Commission) Rules of Practice and Procedure, 18 CFR 385.207(a)(2) (2017), Targa NGL Pipeline Company LLC (Targa or Petitioner) filed a declaratory order petition seeking approval of the overall tariff rate structure and terms and conditions of service, including the proposed prorationing methodology for a new pipeline system that Targa is developing through a combination of newly constructed and leased capacity to transport mixed natural gas liquids from processing facilities in Coal and Hughes Counties, Oklahoma to Targa's affiliate's storage facilities in Mont Belvieu, Texas, all as more fully explained in the petition.

    Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211, 385.214). Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. Such notices, motions, or protests must be filed on or before the comment date. Anyone filing a motion to intervene or protest must serve a copy of that document on the Petitioner.

    The Commission encourages electronic submission of protests and interventions in lieu of paper using the “eFiling” link at http://www.ferc.gov. Persons unable to file electronically should submit an original and 5 copies of the protest or intervention to the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426

    This filing is accessible on-line at http://www.ferc.gov, using the “eLibrary” link and is available for review in the Commission's Public Reference Room in Washington, DC. There is an “eSubscription” link on the website that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email [email protected], or call (866) 208-3676 (toll free). For TTY, call (202) 502-8659.

    Comment Date: 5:00 p.m. Eastern time on August 27, 2018.

    Dated: July 31, 2018. Nathaniel J. Davis, Sr., Deputy Secretary.
    [FR Doc. 2018-16751 Filed 8-3-18; 8:45 am] BILLING CODE 6717-01-P
    DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket No. ER18-2091-000] Titan Solar, LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization

    This is a supplemental notice in the above-referenced proceeding of Titan Solar, LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.

    Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.

    Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is August 20, 2018.

    The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at http://www.ferc.gov. To facilitate electronic service, persons with internet access who will eFile a document and/or be listed as a contact for an intervenor must create and validate an eRegistration account using the eRegistration link. Select the eFiling link to log on and submit the intervention or protests.

    Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426.

    The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the website that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email [email protected] or call (866) 208-3676 (toll free). For TTY, call (202) 502-8659.

    Dated: July 31, 2018. Nathaniel J. Davis, Sr., Deputy Secretary.
    [FR Doc. 2018-16750 Filed 8-3-18; 8:45 am] BILLING CODE 6717-01-P
    DEPARTMENT OF ENERGY Federal Energy Regulatory Commission Combined Notice of Filings

    Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:

    Filings Instituting Proceedings

    Docket Numbers: RP18-1000-000.

    Applicants: Transcontinental Gas Pipe Line Company, LLC.

    Description: Compliance filing Refund Report—Texas Eastern OFO Penalty Sharing (Rate Schedule S-2).

    Filed Date: 7/30/18.

    Accession Number: 20180730-5065.

    Comments Due: 5 p.m. ET 8/13/18.

    Docket Numbers: RP18-1001-000.

    Applicants: Transcontinental Gas Pipe Line Company, LLC.

    Description: § 4(d) Rate Filing: Rate Schedule S-2 Tracker Filing—EPC eff 8/1/2018 to be effective 8/1/2018.

    Filed Date: 7/30/18.

    Accession Number: 20180730-5068.

    Comments Due: 5 p.m. ET 8/13/18.

    Docket Numbers: RP18-1002-000.

    Applicants: Transcontinental Gas Pipe Line Company, LLC.

    Description: § 4(d) Rate Filing: Non-Conforming—Philadelphia Gas Works—FT, PSFT to be effective 9/1/2018.

    Filed Date: 7/30/18.

    Accession Number: 20180730-5088.

    Comments Due: 5 p.m. ET 8/13/18.

    Docket Numbers: RP18-1003-000.

    Applicants: Dominion Energy Transmission, Inc.

    Description: § 4(d) Rate Filing: DETI—July 30, 2018 Nonconforming Service Agreement to be effective 8/30/2018.

    Filed Date: 7/30/18.

    Accession Number: 20180730-5131.

    Comments Due: 5 p.m. ET 8/13/18.

    Docket Numbers: RP18-1004-000.

    Applicants: Transcontinental Gas Pipe Line Company, LLC.

    Description: § 4(d) Rate Filing: Non-Conforming—Rivervale—Tennessee, PSEG to be effective 9/1/2018.

    Filed Date: 7/30/18.

    Accession Number: 20180730-5196.

    Comments Due: 5 p.m. ET 8/13/18.

    The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.

    Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.

    eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call (866) 208-3676 (toll free). For TTY, call (202) 502-8659.

    Dated: July 31, 2018. Nathaniel J. Davis, Sr., Deputy Secretary.
    [FR Doc. 2018-16748 Filed 8-3-18; 8:45 am] BILLING CODE 6717-01-P
    ENVIRONMENTAL PROTECTION AGENCY [EPA-HQ-OPP-2017-0273; FRL-9980-85] Pesticide Product Registration; Receipt of Applications for New Uses AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Notice.

    SUMMARY:

    EPA has received an application to register a new use for a pesticide product containing a currently registered active ingredient. Pursuant to the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), EPA is hereby providing notice of receipt and opportunity to comment on this application.

    DATES:

    Comments must be received on or before September 5, 2018.

    ADDRESSES:

    Submit your comments, by one of the following methods:

    Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute.

    Mail: OPP Docket, Environmental Protection Agency Docket Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001.

    Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at http://www.epa.gov/dockets/contacts.html.

    Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at http://www.epa.gov/dockets.

    FOR FURTHER INFORMATION CONTACT:

    Michael Goodis, Registration Division (RD) (7505P), main telephone number: (703) 305-7090; email address: [email protected] The mailing address is: Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001.

    SUPPLEMENTARY INFORMATION: I. General Information A. Does this action apply to me?

    You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

    • Crop production (NAICS code 111).

    • Animal production (NAICS code 112).

    • Food manufacturing (NAICS code 311).

    • Pesticide manufacturing (NAICS code 32532).

    B. What should I consider as I prepare my comments for EPA?

    1. Submitting CBI. Do not submit this information to EPA through regulations.gov or email. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD-ROM that you mail to EPA, mark the outside of the disk or CD-ROM as CBI and then identify electronically within the disk or CD-ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.

    2. Tips for preparing your comments. When preparing and submitting your comments, see the commenting tips at http://www.epa.gov/dockets/comments.html.

    II. Registration Applications

    EPA has received an application to register a new use for a pesticide product containing a currently registered active ingredient. Pursuant to the provisions of FIFRA section 3(c)(4) (7 U.S.C. 136a(c)(4)), EPA is hereby providing notice of receipt and opportunity to comment on this application. Notice of receipt does not imply a decision by the Agency on this application.

    New Uses

    EPA registration numbers: 59639-107, 59639-138, 59639-202. Docket ID number: EPA-HQ-OPP-2017-0273. Applicant: The Interregional Research Project No. 4 (IR-4), Rutgers, The State University of New Jersey, 500 College Road East, Suite 201 W, Princeton, NJ 08540. Active ingredient: etoxazole. Product type: insecticide. Proposed use: sweet corn. Contact: RD.

    Authority:

    7 U.S.C. 136 et seq.

    Dated: July 24, 2018. Michael Goodis, Director, Registration Division, Office of Pesticide Programs.
    [FR Doc. 2018-16768 Filed 8-3-18; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY [EPA-R03-OAR-2018-0215; FRL-9981-71—Region 3] Adequacy Status of Motor Vehicle Emission Budgets in Submitted State Implementation Plan for Transportation Conformity Purposes; District of Columbia, Maryland, and Virginia; Washington, DC-MD-VA 2008 8-Hour Ozone National Ambient Air Quality Standard Nonattainment Area Maintenance Plan 2014, 2025, and 2030 Motor Vehicle Emissions Budgets for Nitrogen Oxides and Volatile Organic Compounds AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Notice of adequacy.

    SUMMARY:

    In this document, the Environmental Protection Agency (EPA or Agency) is notifying the public that the Agency has found that the 2014, 2025, and 2030 motor vehicle emissions budgets (MVEBs) for the ozone precursors nitrogen oxides (NOX) and volatile organic compounds (VOC) contained in the maintenance plan for the Washington, DC-MD-VA 2008 ozone national ambient air quality standards (NAAQS) nonattainment area (hereafter “the Washington Area” or “the Area”) are adequate for conformity purposes. As a result of EPA's finding, the Washington Area must use the NOX and VOC MVEBs from the submitted maintenance plan for the Washington Area in future conformity determinations.

    DATES:

    This finding is effective August 21, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Sara Calcinore, (215) 814-2043, or by email at [email protected]

    SUPPLEMENTARY INFORMATION:

    On March 12, 2018, January 29, 2018, and January 3, 2018, the District of Columbia (the District), State of Maryland (Maryland), and Commonwealth of Virginia (Virginia), respectively, formally submitted, as revisions to their SIPs, a maintenance plan for the Washington Area. The maintenance plan includes NOX and VOC MVEBs for the Washington Area for the years 2014 (the attainment year), 2025, and 2030. Under 40 CFR part 93, a MVEB for an area seeking redesignation to attainment must be established, at minimum, for the last year of the maintenance plan. A state may adopt MVEBs for other years as well. The MVEBs are the amount of emissions allowed in the SIP for on-road motor vehicles and establishes an emissions ceiling for the regional transportation network. The most recently approved MVEBs for the Washington Area originate from the attainment plan for the 1997 ozone NAAQS, which EPA found adequate on February 7, 2013 (78 FR 9044). The maintenance plan includes two sets of NOX and VOC MVEBs, shown in Table 1 and Table 2. The MVEBs shown in Table 1 will be the applicable motor vehicle emissions budgets after the adequacy findings are effective. The MVEBs shown in Table 2 add a twenty percent (20%) transportation buffer to the mobile emissions inventory projections for NOX and VOC in 2025 and 2030. The MVEBs shown in Table 2 that include a transportation buffer will be used only as needed in situations where the conformity analysis must be based on different data, models, or planning assumptions, including, but not limited to, updates to demographic, land use, or project-related assumptions, than were used to create the first set of MVEBs in the maintenance plan (Table 1). The technical analyses used to demonstrate compliance with the MVEBs and the need, if any, to use transportation buffers will be fully documented in the conformity analysis and follow the Transportation Planning Board's (TPB) interagency consultation procedures.

    Table 1—Washington, DC-MD-VA Maintenance Plan On-Road MVEBs Year MVEBs for NOX
  • on-road emissions
  • (tons per day)
  • MVEBs for VOC
  • on-road emissions
  • (tons per day)
  • 2014 (Attainment Year) 136.8 61.3 2025 40.7 33.2 2030 27.4 24.1
    Table 2—Washington, DC-MD-VA Maintenance Plan On-Road MVEBs With Transportation Buffers Year MVEBs for NOX
  • on-road emissions
  • (tons per day)
  • MVEBs for VOC
  • on-road emissions
  • (tons per day)
  • 2014 (Attainment Year) 136.8 61.3 2025 48.8 39.8 2030 32.9 28.9

    On May 21, 2018, EPA posted the availability of the 2014, 2025, and 2030 NOX and VOC MVEBs for the Washington Area on EPA's website for the purpose of soliciting public comments as part of the adequacy process. The comment period closed on June 20, 2018 and EPA received no comments.

    This document is simply an announcement of a finding that we have already made. EPA Region III sent letters to the District of Columbia Department of Energy and Environment (DOEE), Maryland Department of the Environment (DOE), and the Virginia Department of Environmental Quality (DEQ) on July 24, 2018 finding that the 2014, 2025, and 2030 NOX and VOC MVEBs in the maintenance plan for the Washington Area submitted by the District, Maryland, and Virginia on March 12, 2018, January 29, 2018, and January 3, 2018, respectively, are adequate and must be used for transportation conformity determinations in the Washington Area.1 The finding and associated letters are available at EPA's conformity website: https://www.epa.gov/state-and-local-transportation.

    1 EPA originally informed the District, Maryland, and Virginia that the 2014, 2025, and 2030 MVEBs were adequate for use in transportation conformity analyses in letters dated July 18, 2018. EPA revised language in these letters and sent the revised letters to the District, Maryland, and Virginia on July 24, 2018. The original and revised letters are available online at http://www.regulations.gov as well as EPA's conformity website: https://www.epa.gov/state-and-local-transportation.

    Transportation conformity is required by Clean Air Act (CAA) section 176(c). EPA's conformity rule requires that transportation plans, transportation improvement programs, and projects conform to state air quality implementation plans (SIPs) and establishes the criteria and procedures for determining whether or not they do. Conformity to a SIP means that transportation activities will not produce new air quality violations, worsen existing violations, or delay timely attainment of the NAAQS.

    The criteria by which we determine whether a SIP's MVEBs are adequate for conformity purposes are outlined in 40 CFR 93.118(e)(4). We've described our process for determining the adequacy of submitted SIP budgets in our July 1, 2004 preamble starting at 69 FR 40038, and we used the information in these resources in making our adequacy determination. Please note that an adequacy review is separate from EPA's completeness review and should not be used to prejudge EPA's ultimate approval action for the SIP. Even if we find a budget adequate, the SIP could later be disapproved.

    The finding for the 2014, 2025, and 2030 NOX and VOC MVEBs contained in the maintenance plan for the Washington Area and the response to comments are available at EPA's conformity website: https://www.epa.gov/state-and-local-transportation.

    Authority:

    42 U.S.C. 7401-7671q.

    Dated: July 24, 2018. Cosmo Servidio, Regional Administrator, Region III.
    [FR Doc. 2018-16777 Filed 8-3-18; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY [EPA-OW-2018-0270; FRL-9981-86-OW] Announcement of the Per- and Polyfluoroalkyl Substances (PFAS) North Carolina Community Engagement AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Notice of an event.

    SUMMARY:

    The Environmental Protection Agency (EPA) will host a Per- and Polyfluoroalkyl Substances (PFAS) community engagement in Fayetteville, North Carolina. The goal of the event is to allow the EPA to hear directly from North Carolina communities to understand ways the Agency can best support the work that is being done at the state, local, and tribal level. For more information on the event, visit the EPA's PFAS website: https://www.epa.gov/pfas/pfas-community-engagement. During the recent PFAS National Leadership Summit, the EPA announced plans to visit communities to hear directly from those impacted by PFAS. These engagements are the next step in the EPA's commitment to address challenges with PFAS. The EPA anticipates that the community engagements will provide valuable insight for the Agency's efforts moving forward. For more information, go to the SUPPLEMENTARY INFORMATION section of this notice.

    DATES:

    The event will be held on August 14, 2018, from 10 a.m. to 8 p.m., eastern time. The public listening session will begin at 3 p.m., eastern time.

    ADDRESSES:

    The event will be held at the Crown Ballroom, 1960 Coliseum Drive, Fayetteville, North Carolina 28306. If you are unable to attend the North Carolina Community Engagement event, you will be able to submit comments at http://www.regulations.gov: Enter Docket ID No. EPA-OW-2018-0270. Citizens, including those that attend and provide oral statements, are encouraged to send written statements to the public docket. Follow the online instructions for submitting comments. Once submitted, comments cannot be edited or withdrawn. The EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (i.e., on the web, cloud, or other file sharing system). For additional submission methods, the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

    FOR FURTHER INFORMATION CONTACT:

    Davina Marraccini, USEPA Region 4, 61 Forsyth Street SW (Mail Code 9T24), Atlanta, Georgia 30303-8960; telephone number: 404-562-8293; email address: [email protected]

    SUPPLEMENTARY INFORMATION:

    Details about Participating in the Event: The public is invited to speak during the August 14 listening session. Those interested in speaking can sign up for a 3-minute speaking slot on the EPA's website at https://www.epa.gov/pfas/pfas-community-engagement. Please check this website for event materials as they become available, including a full agenda, leading up to the event.

    The PFAS National Leadership Summit: On May 22-23, 2018, the EPA hosted the PFAS National Leadership Summit. During the summit, participants worked together to share information on ongoing efforts to characterize risks from PFAS, develop monitoring and treatment/cleanup techniques, identify specific near-term actions (beyond those already underway) that are needed to address challenges currently facing states and local communities, and develop risk communication strategies that will help communities to address public concerns regarding PFAS.

    The EPA wants to assure the public that their input is valuable and meaningful. Using information from the National Leadership Summit, public docket, and community engagements, the EPA plans to develop a PFAS Management Plan for release later this year. A summary of the North Carolina Community Engagement will be made available to the public following the event on the EPA's PFAS Community Engagement website at: https://www.epa.gov/pfas/pfas-community-engagement.

    Dated: July 27, 2018. Jennifer McLain, Acting Director, Office of Ground Water and Drinking Water.
    [FR Doc. 2018-16805 Filed 8-3-18; 8:45 am] BILLING CODE 6560-50-P
    FEDERAL RESERVE SYSTEM Proposed Agency Information Collection Activities; Comment Request AGENCY:

    Board of Governors of the Federal Reserve System.

    ACTION:

    Notice, request for comment.

    SUMMARY:

    The Board of Governors of the Federal Reserve System (Board) invites comment on a proposal to implement a new information collection, the Single-Counterparty Credit Limits (SCCL) (FR 2590; OMB No. 7100-NEW) and associated notice requirements in connection with the final SCCL rule published elsewhere in this issue of the Federal Register.

    DATES:

    Comments must be submitted on or before October 5, 2018.

    ADDRESSES:

    You may submit comments, identified by FR 2590, by any of the following methods:

    Agency website: http://www.federalreserve.gov. Follow the instructions for submitting comments at http://www.federalreserve.gov/apps/foia/proposedregs.aspx.

    Email: [email protected] Include OMB number in the subject line of the message.

    FAX: (202) 452-3819 or (202) 452-3102.

    Mail: Ann E. Misback, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue NW, Washington, DC 20551.

    All public comments are available from the Board's website at http://www.federalreserve.gov/apps/foia/proposedregs.aspx as submitted, unless modified for technical reasons or to remove personal identifying information at the commenter's request. Public comments may also be viewed electronically or in paper form in Room 3515, 1801 K Street NW (between 18th and 19th Streets NW), Washington, DC 20006 between 9:00 a.m. and 5:00 p.m. on weekdays. For security reasons, the Board requires that visitors make an appointment to inspect comments. You may do so by calling (202) 452-3684. Upon arrival, visitors will be required to present valid government-issued photo identification and to submit to security screening in order to inspect and photocopy comments. Additionally, commenters may send a copy of their comments to the OMB Desk Officer—Shagufta Ahmed—Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street NW, Washington, DC 20503 or by fax to (202) 395-6974.

    FOR FURTHER INFORMATION CONTACT:

    A copy of the PRA OMB submission, including the proposed reporting form and instructions, supporting statement, and other documentation will be placed into OMB's public docket files, once approved. These documents will also be made available on the Federal Reserve Board's public website at: http://www.federalreserve.gov/apps/reportforms/review.aspx or may be requested from the agency clearance officer, whose name appears below. Federal Reserve Board Clearance Officer—Nuha Elmaghrabi—Office of the Chief Data Officer, Board of Governors of the Federal Reserve System, Washington, DC 20551, (202) 452-3829. Telecommunications Device for the Deaf (TDD) users may contact (202) 263-4869, Board of Governors of the Federal Reserve System, Washington, DC 20551.

    SUPPLEMENTARY INFORMATION:

    On June 15, 1984, the Office of Management and Budget (OMB) delegated to the Board authority under the Paperwork Reduction Act (PRA) to approve of and assign OMB control numbers to collection of information requests and requirements conducted or sponsored by the Board. In exercising this delegated authority, the Board is directed to take every reasonable step to solicit comment. In determining whether to approve a collection of information, the Board will consider all comments received from the public and other agencies.

    Request for Comment on Information Collection Proposal

    The Board invites public comment on the following information collection, which is being reviewed under authority delegated by the OMB under the PRA. Comments are invited on the following:

    a. Whether the proposed collection of information is necessary for the proper performance of the Board's functions, including whether the information has practical utility;

    b. The accuracy of the Board's estimate of the burden of the proposed information collection, including the validity of the methodology and assumptions used;

    c. Ways to enhance the quality, utility, and clarity of the information to be collected;

    d. Ways to minimize the burden of information collection on respondents, including through the use of automated collection techniques or other forms of information technology; and

    e. Estimates of capital or startup costs and costs of operation, maintenance, and purchase of services to provide information.

    At the end of the comment period, the comments and recommendations received will be analyzed to determine the extent to which the Board should modify the proposal.

    Proposal To Approve Under OMB Delegated Authority the Implementation of a New Information Collection

    Report title: Single-Counterparty Credit Limits.

    Agency form number: FR 2590.

    OMB control number: 7100-NEW.

    Frequency: Quarterly; event-generated for requests for temporary relief.

    Respondents: U.S. bank holding companies (BHCs) with total consolidated assets that equal or exceed $250 billion, foreign banking organizations (FBOs) with U.S. banking operations and total consolidated assets that equal or exceed $250 billion, and the U.S. intermediate holding companies (IHCs) of such FBOs with total consolidated assets of at least $50 billion. Based on data as of December 31, 2017, this respondent panel would include 10 U.S. BHCs, 12 U.S. IHCs, and 82 FBOs.

    Estimated number of respondents: 104; 3 for requests for temporary relief.

    Estimated average hours per response: 254 for ongoing and 1,273 for one-time implementation and 10 for requests for temporary relief.

    Estimated annual burden hours: 237,982 (which includes 132,392 for one-time implementation and 30 for requests for temporary relief).

    General description of report: The proposed reporting form would provide the Federal Reserve with information to monitor a covered company's or a covered foreign entity's compliance with the SCCL set forth in the final SCCL rule published elsewhere in this issue of the Federal Register. The report would comprehensively capture the credit exposures of a respondent organization to its counterparties in accordance with the SCCL rule. A covered company is any U.S. BHC identified as a global systemically important BHC (GSIB) under the Board's Regulation Q and any other U.S. BHC with total consolidated assets that equal or exceed $250 billion. A covered foreign entity is any entity that is part of the combined U.S. operations of an FBO with total global consolidated assets that equal or exceed $250 billion, and any U.S. IHC of such an FBO with total consolidated assets that equal or exceed $50 billion.

    The reporting form first asks for general information about the respondent organization (e.g., the respondent organization's full legal name; the amount of its capital stock and surplus; whether the respondent would be considered a major covered company, major foreign banking organization, or major U.S. intermediate holding company under the final SCCL rule).1 The reporting form also permits any respondent that is an FBO to certify that it is subject to and complies with large exposure standards on a consolidated basis established by its home-country supervisor that are consistent with the large exposures framework published by the Basel Committee on Banking Supervision. The reporting form then requests data required to calculate the respondent organization's credit exposures and requires identification of counterparties by name and by entity type (e.g., sovereign entities, securitization funds). The form would require each respondent organization to report its top 50 counterparties.2

    1 “Major covered company,” “major foreign banking organization,” and “major U.S. intermediate holding company” are defined terms in the final SCCL rule. See § 252.71(y), 252.171(z), 252.171(aa).

    2 “Counterparty” is a defined term in the final SCCL rule. See § 252.71(e), 252.171(f).

    The FR 2590 includes nine schedules. Five of these schedules (Schedules G-1 through G-5) collect information related to the gross exposures of the respondent organization to various counterparties, as calculated pursuant to the methods in § 252.73 and 252.173, respectively, of the SCCL rule. A respondent organization must add the exposure amounts in the five G schedules to calculate its aggregate gross credit exposure.

    A respondent organization would then calculate its net credit exposure by adjusting its gross credit exposures using Schedules M-1 and M-2, which collect information related to eligible collateral and other eligible risk mitigants (e.g., eligible guarantees), respectively, pursuant to § 252.74 and 252.174 of the SCCL rule.

    The respondent organization must take into account special provisions in the SCCL rule that require aggregation of certain connected counterparties due to economic interdependence—meaning the underlying risk of one counterparty's financial distress or failure would cause the financial distress or failure of another counterparty, as indicated by the presence of certain enumerated factors in the SCCL rule—or due to the presence of certain control relationships described in the SCCL rule.3 Data relevant to understanding the presence of any relationships that require such aggregation are reported in Schedules A-1 and A-2.

    3 The requirement to aggregate counterparties based on these relationships can be found in § 252.76 and 252.176 of the SCCL rule.

    In filling out the schedules described above, the respondent organization must report exposures by counterparty, with a single counterparty in each row. The reporting form requires each respondent organization to report its top 50 counterparties.

    Detailed Discussion of Proposed Information Collection Activity Schedule G-1: General Exposures

    This schedule contains seven general gross credit exposure categories that are described in § 252.73, 252.75, 252.173, and 252.175 of the SCCL rule: (i) Deposits; (ii) loans and leases; (iii) debt securities or investments; (iv) equity securities or investments; (v) committed credit lines; (vi) guarantees and letters of credit; and (vii) securitization arising from the look-through approach.4 These gross exposures are summed together, by counterparty, in the final column of Schedule G-1.

    4 Calculation of gross credit exposure as a result of item (vii) (securitization arising from the look-through approach) is described in § 252.75 and 252.175 of the SCCL rule. Gross credit exposure to a securitization that does not require application of the look-through approach would be reported as either item (iii) (debt securities or investments) or item (iv) (equity securities or investments), as applicable.

    Schedule G-2: Repurchase Agreement Exposures

    This schedule collects gross credit exposures arising from repurchase agreements and reverse repurchase agreements as provided in § 252.73 and 252.173 of the SCCL rule. It requires the respondent organization to identify the assets transferred and received in the transaction. Examples include sovereign entity debt, non-sovereign entity debt, main index equities,5 and cash. The penultimate column asks for the total gross credit exposure under bilateral netting agreements. The final column tallies the total gross credit exposure resulting from these transactions by counterparty.

    5 “Main index” is defined in the Board's capital rules, 12 CFR part 217.

    Schedule G-3: Securities Lending Exposures

    This schedule collects similar information to that collected in Schedule G-2 with respect to securities lending and securities borrowing transactions. Again, the final column tallies the total gross credit exposure resulting from these transactions by counterparty.

    Schedule G-4: Derivatives Exposures

    Schedule G-4 requires the respondent organization to report the gross notional amount of its derivatives transactions—interest rate, foreign exchange rate, credit, equity, commodity, or other—by counterparty, consistent with § 252.73 and 252.173 of the SCCL rule. If the respondent organization has been authorized by the Board to use internal models to value such transactions, then it can report its exposures using the “Internal Model Method” columns.6 Another column in Schedule G-4 is available for a respondent organization to report gross credit exposures resulting from qualifying master netting agreements.7 All respondent organizations are required to complete the total gross credit exposure column.

    6 If the respondent organization has not been authorized by the Board to use internal models, these columns would remain blank.

    7 “Qualifying master netting agreement” is defined in § 252.71(cc) and 252.171(ee) of the SCCL rule.

    Schedule G-5: Risk-Shifting Exposures

    Schedule G-5 collects information related to gross credit exposures that have been impacted by the risk shifting requirements of § 252.74 and 252.174 of the SCCL rule. Risk-shifting is required when a respondent organization employs five types of credit risk mitigants: (i) Eligible collateral; (ii) eligible guarantees; (iii) eligible credit derivatives; (iv) other eligible hedges; or (v) unused portion of certain extensions of credit. Risk-shifting may also be required in connection with credit transactions involving exempt counterparties.8 The final column aggregates the total gross exposure, by counterparty, due to risk-shifting.

    8See § 252.74(g) and 252.174(g) of the SCCL rule. “Exempt counterparty” is defined in the SCCL rule to mean an entity that is expressly exempted from or otherwise excluded from the requirements of the SCCL rule. See §§ 252.71(q) and 252.171(r) of the SCCL rule.

    Schedule M-1: Eligible Collateral

    Sections 252.74 and 252.174 of the SCCL rule permit a respondent organization to subtract the value of any “eligible collateral” provided by a counterparty in connection with a particular transaction from its gross credit exposure for that transaction.9 The value of all such eligible collateral is reported in Schedule M-1. Eligible collateral include, but are not limited to, sovereign debt, non-sovereign debt, main index equities, other publicly traded equities, and cash. The final column sums the total credit risk mitigation impact due to eligible collateral, by counterparty.

    9 “Eligible collateral” is defined in sections 252.71(k) and 252.171(l).

    Schedule M-2: General Risk Mitigants

    Schedule M-2 collects information related to credit risk mitigation techniques other than the receipt of eligible collateral used by the firm to reduce its gross credit exposure in a given transaction. Permitted credit risk mitigation methods, described in § 252.74 and 252.174 of the SCCL rule, are (i) eligible guarantees; (ii) eligible credit derivatives; (iii) other eligible hedges; (iv) unused portion of certain extensions of credit; and (v) credit transactions involving exempt entities. The final column sums the total credit risk mitigation effected by use of these techniques, by counterparty.

    Summary Sheet

    The reporting form contains a summary sheet that sums the respondent organization's aggregate gross credit exposure (as reported in the final columns of each of the five G schedules); calculates the respondent organization's aggregate net credit exposures by reducing its aggregate gross credit exposure by its aggregate credit risk mitigants (calculated by taking the sum of the final columns of the two M schedules); and divides the respondent organization's aggregate net credit exposure by its eligible capital base.10 The resulting ratio shows whether the respondent organization's aggregate net credit exposures comply with the limits of the SCCL rule.

    10 As noted above, a respondent organization's aggregate net credit exposure limits under the SCCL rule are based on a percentage of either its capital stock and surplus or its tier 1 capital, depending on the size of the respondent organization. “Eligible capital base,” as reported on this form, refers to either the respondent organization's capital stock and surplus or its tier 1 capital, as applicable.

    Schedule A-1: Economic Interdependence

    Sections 252.76(b) and 252.176(b) of the SCCL rule require a covered company, a covered foreign entity, or U.S. IHC with total consolidated assets that equal or exceed $250 billion to aggregate its net credit exposures to counterparties that are economically interdependent—meaning that the underlying risk of one counterparty's financial distress or failure would cause the financial distress or failure of another counterparty.11 Those sections enumerate specific factors that those covered companies or covered foreign entities must consider in order to assess whether counterparties are economically interdependent. Such factors include whether 50 percent or more of one counterparty's gross revenue is derived from the other counterparty, or whether two or more counterparties rely on the same source for the majority of their funding.12 The SCCL rule requires that counterparties that must be aggregated be treated as a single counterparty (reported in Schedule A-1 as an “interconnected counterparty group”) for purposes of the aggregate net credit exposure limits of the SCCL rule. Schedule A-1 requires the respondent organization to provide its aggregate net credit exposure to each member of the interconnected counterparty group (one per column). The final column of Schedule A-1 sums the total net credit exposure of the respondent organization to each connected counterparty group.

    11 This requirement does not apply to U.S. IHCs with total consolidated assets of less than $250 billion, unless the Board determines in writing after notice and opportunity for hearing that the covered foreign entity must aggregate its exposures to two or more counterparties to prevent evasions of the purposes of subpart Q of Regulation YY (12 CFR part 252, subpart Q). See § 252.176 of the SCCL rule.

    12 A covered company, foreign banking organization that is a covered foreign entity, or U.S. IHC with total consolidated assets that equal or exceed $250 billion is required to conduct an assessment for economic interdependence only if its aggregate net credit exposure to a counterparty exceeds 5 percent of its tier 1 capital. See §§ 252.76(b) and 252.176(b) of the SCCL rule. If none of the enumerated factors are met, then the covered company or covered foreign entity need not aggregate exposures to those counterparties unless the Board determines that one or more other counterparties of the covered company or covered foreign entity are economically interdependent. Id.

    Schedule A-2: Control Relationships

    Sections 252.76(c) and 252.176(c) of the SCCL rule require a covered company, a covered foreign entity, or U.S. IHC with total consolidated assets that equal or exceed $250 billion to aggregate exposures to counterparties due to the presence of certain control relationships.13 These sections require that counterparties that are connected by certain specified control relationships must be treated as a single counterparty (reported in Schedule A-2 as a “control counterparty group”) for purposes of the aggregate net credit exposure limits of the SCCL rule. Schedule A-2 requires the respondent organization to provide its aggregate net credit exposure to each member of the control counterparty group (one per column). The final column of Schedule A-2 sums the total net credit exposure of the respondent organization to each control counterparty group.

    13 This requirement does not apply to U.S. IHCs with total consolidated assets of less than $250 billion, unless the Board determines in writing after notice and opportunity for hearing that a covered company must aggregate its exposures to two or more counterparties to prevent evasions of the purposes of subpart Q of Regulation YY (12 CFR part 252, subpart Q). See § 252.176 of the SCCL rule.

    In addition, certain provisions in the SCCL rule permit a covered company or covered foreign entity to request temporary relief from specific requirements of the rule. Specifically, the SCCL rule permits a covered company or covered foreign entity to request temporary relief from requirements to aggregate one or more counterparties even if one or more factors indicating economic interdependence or control relationships are met, subject to certain conditions, including that such relief be in the public interest and consistent with the purpose of the rule.14 The SCCL rule also permits a covered company or covered foreign entity that is not in compliance with the requirements of the rule to request a special temporary credit exposure limit exemption from the Board to permit continued credit transactions with that counterparty, based upon a finding that those transactions are necessary or appropriate to preserve the safety and soundness of the covered company or U.S. financial stability.15

    14See §§ 252.76(b)(3), 252.76(c)(2), 252.176(b)(3), and 252.176(c)(2) of the SCCL rule.

    15See § 252.78(c)(2) and 252.178(c)(2) of the SCCL rule.

    Legal authorization and confidentiality: Section 165(e) of the Dodd-Frank Act (12 U.S.C. 5365(e)) and section 5(c)(1) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)(1)) authorize the Board to require these BHCs, FBOs, and U.S. IHCs to file a reporting form such as the proposed FR 2590 with the Board. The proposed FR 2590 would be mandatory for U.S. BHCs with total consolidated assets that equal or exceed $250 billion, FBOs with U.S. banking operations and total consolidated assets that equal or exceed $250 billion, and U.S. IHCs of such FBOs with at least $50 billion in total consolidated assets.

    The data collected on this proposed form includes financial information that is not normally disclosed by the respondent organizations, the release of which would likely cause substantial harm to the competitive position of the respondent organization if made publicly available. Therefore, the data collected on this form would be kept confidential under exemption 4 of the Freedom of Information Act, which protects from disclosure trade secrets and commercial or financial information (5 U.S.C. 552(b)(4)).

    Regarding notices associated with requests for temporary relief from specific requirements of the SCCL rule, a firm that wishes information in these notices to be kept confidential in accordance with exemption 4 of the Freedom of Information Act (5 U.S.C. 552(b)(4)) may request confidential treatment under the Board's rules regarding confidential treatment of information at 12 CFR 261.15. The Board's Legal Division will be asked to review the confidentiality status of such notices.

    By order of the Board of Governors of the Federal Reserve System, July 24, 2018. Yao-Chin Chao, Assistant Secretary of the Board.
    [FR Doc. 2018-16132 Filed 8-3-18; 8:45 am] BILLING CODE 6210-01-P
    FEDERAL RESERVE SYSTEM Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding Company

    The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).

    The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than August 20, 2018.

    A. Federal Reserve Bank of Kansas City (Dennis Denney, Assistant Vice President) 1 Memorial Drive, Kansas City, Missouri 64198-0001:

    1. Ernest E. (Gene) Dillard, Sheila A. Dillard, and Aaron D. Dillard, all of Tulsa Oklahoma, and Sarah E. Dillard, Dallas, Texas; to acquire voting shares of First Pryor Bancorp, Inc., Pryor, Oklahoma, and thereby be approved as members of the Dillard family group, which owns voting shares of First Pryor Bancorp, Inc. and thereby indirectly owns First Pryority Bank, Pryor, Oklahoma, and Locust Grove Banshares, Inc., Locust Grove, Oklahoma, which owns Lakeside Bank of Salina, Salina, Oklahoma, and Bank of Locust Grove, Locust Grove, Oklahoma.

    Board of Governors of the Federal Reserve System, July 31, 2018. Yao-Chin Chao, Assistant Secretary of the Board.
    [FR Doc. 2018-16701 Filed 8-3-18; 8:45 am] BILLING CODE P
    FEDERAL RESERVE SYSTEM Formations of, Acquisitions by, and Mergers of Bank Holding Companies

    The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) (BHC Act), Regulation Y (12 CFR part 225), and all other applicable statutes and regulations to become a bank holding company and/or to acquire the assets or the ownership of, control of, or the power to vote shares of a bank or bank holding company and all of the banks and nonbanking companies owned by the bank holding company, including the companies listed below.

    The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 4 of the BHC Act (12 U.S.C. 1843). Unless otherwise noted, nonbanking activities will be conducted throughout the United States.

    Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than August 31, 2018.

    A. Federal Reserve Bank of Dallas (Robert L. Triplett III, Senior Vice President) 2200 North Pearl Street, Dallas, Texas 75201-2272:

    1. Steele Holdings, Inc., Tyler, Texas; to merge with Joaquin Bankshares, Inc., Huntington, Texas, and thereby indirectly acquire Texas State Bank, Joaquin, Texas.

    Board of Governors of the Federal Reserve System, August 1, 2018. Yao-Chin Chao, Assistant Secretary of the Board.
    [FR Doc. 2018-16753 Filed 8-3-18; 8:45 am] BILLING CODE P
    FEDERAL RESERVE SYSTEM Formations of, Acquisitions by, and Mergers of Savings and Loan Holding Companies

    The companies listed in this notice have applied to the Board for approval, pursuant to the Home Owners' Loan Act (12 U.S.C. 1461 et seq.) (HOLA), Regulation LL (12 CFR part 238), and Regulation MM (12 CFR part 239), and all other applicable statutes and regulations to become a savings and loan holding company and/or to acquire the assets or the ownership of, control of, or the power to vote shares of a savings association and nonbanking companies owned by the savings and loan holding company, including the companies listed below.

    The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The application also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the HOLA (12 U.S.C. 1467a(e)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 10(c)(4)(B) of the HOLA (12 U.S.C. 1467a(c)(4)(B)). Unless otherwise noted, nonbanking activities will be conducted throughout the United States.

    Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than August 28, 2018.

    A. Federal Reserve Bank of Minneapolis (Mark A. Rauzi, Vice President), 90 Hennepin Avenue, Minneapolis, Minnesota 55480-0291:

    1. MidCountry Acquisition Corp., Minneapolis, Minnesota; to become a savings and loan holding company by acquiring 100 percent of the voting shares of MidCountry Bank, Bloomington, Minnesota.

    Board of Governors of the Federal Reserve System, July 31, 2018. Yao-Chin Chao, Assistant Secretary of the Board.
    [FR Doc. 2018-16702 Filed 8-3-18; 8:45 am] BILLING CODE P
    FEDERAL TRADE COMMISSION Hearings on Competition and Consumer Protection in the 21st Century AGENCY:

    Federal Trade Commission.

    ACTION:

    Notice of hearings and request for comments.

    SUMMARY:

    The Federal Trade Commission seeks comment in connection with a forthcoming series of public hearings in the fall and winter 2018 to examine whether broad-based changes in the economy, evolving business practices, new technologies, or international developments might require adjustments to competition and consumer protection law, enforcement priorities, and policy. These hearings will cover a range of issues listed in the SUPPLEMENTARY INFORMATION section below. The Commission seeks the views of consumers, business representatives, economists, lawyers, academics, information technology professionals, and other interested parties. Commenters are invited to address one or more of the following topics generally, or with respect to a specific industry.

    DATES:

    The hearings will begin in September 2018 and are expected to continue through January 2019, and will consist of 15 to 20 public sessions. The sessions will be held in various locations throughout Washington, DC and in other parts of the country. For this stage of the public comment process, comments will be accepted on or before August 20, 2018.

    ADDRESSES:

    Interested parties may file a comment online or on paper, by following the instructions in the Public Comments portion of the SUPPLEMENTARY INFORMATION section below. Comments should refer to “Competition and Consumer Protection in the 21st Century Hearings, Project Number P181201.” If an interested party wishes to comment on multiple topics, we encourage filing a separate comment for each topic. If an interested party wishes to make general comments about the hearings, we encourage filing a comment in response to Topic 1, using this link: https://www.regulations.gov/docket?D=FTC-2018-0048. For this stage of the public comment process, comments will be accepted until August 20, 2018. If you prefer to file a comment in hard copy, write “Competition and Consumer Protection in the 21st Century Hearing, Project Number P181201,” on your comment and on the envelope and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex C), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex C), Washington, DC 20024.

    FOR FURTHER INFORMATION CONTACT:

    Derek Moore, Office of Policy Planning, 202-326-3367, or John Dubiansky, Office of Policy Planning, 202-326-2182 or email us at [email protected]

    SUPPLEMENTARY INFORMATION:

    The mission of the Federal Trade Commission (“FTC” or “Commission”) is to promote competition and to protect consumers from unfair and deceptive practices. In support of pursuing a vigorous law enforcement agenda, the FTC engages in substantial research to stay informed of market developments, shape its policy agenda, and identify opportunities to develop the law consistent with its enforcement authority. Beginning in September 2018, the FTC will hold a series of multi-day, multi-part public hearings (“hearings”) to consider whether broad-based changes in the economy, evolving business practices, new technologies, or international developments might require adjustments to competition and consumer protection law, enforcement priorities, and policy. The hearings pay tribute to, and are modeled after, the FTC's 1995 Global Competition and Innovation Hearings under the leadership of then-Chairman Robert Pitofsky. Chairman Pitofsky's hearings “were the first major step in establishing the FTC as a key modern center for . . . `competition policy research and development' ” and “sought to `articulate recommendations that would effectively ensure the competitiveness of U.S. markets without imposing unnecessary costs on private parties or governmental processes.' ” 1 They “re-energized one of the FTC's most valuable functions—to gather leaders in business, economics, law, and related disciplines to discuss tough, emerging problems and prepare public reports on the facts, issues, governing law, and the need, as appropriate, for change.” 2 Subsequent to the hearings, the Commission released two staff reports “Anticipating the 21st Century” on competition and consumer protection policy, respectively.3 This new series of hearings honors Chairman Pitofsky's legacy, and complements and enhances the agency's robust enforcement program.

    1 Timothy J. Muris, More Than Law Enforcement: The FTC's Many Tools—A Conversation with Tim Muris and Bob Pitofsky, 72 Antitrust L.J. 772, 773 (2005).

    2Id. at 774.

    3 Fed. Trade Comm'n Staff, Anticipating the 21st Century: Competition Policy in the New High-Tech, Global Marketplace (1996), https://www.ftc.gov/system/files/documents/reports/anticipating-21st-century-competition-policy-new-high-tech-global-marketplace/gc_v1.pdf; Fed. Trade Comm'n Staff, Anticipating the 21st Century: Consumer Protection Policy in the New High-Tech, Global Marketplace (1996), https://www.ftc.gov/system/files/documents/reports/anticipating-21st-century-competition-policy-new-high-tech-global-marketplace/gc_v2.pdf.

    “The progress of the Federal Trade Commission in its modern era has built heavily upon the willingness of its people to assess their work critically and explore possibilities for improvement.” 4 The hearings and associated public comment process will provide opportunities for FTC staff and leadership to obtain input from a broad and diverse range of interested stakeholders and experts, and will stimulate thoughtful internal and external evaluation of the FTC's near- and long-term law enforcement and policy agenda. The hearings may identify areas for additional study, enforcement, advocacy, and policy guidance, including improvements to the agency's investigation and law enforcement processes.

    4 The Federal Trade Commission at 100: Into Our 2nd Century: The Continuing Pursuit of Better Practices, A Report by Federal Trade Commission Chairman William E. Kovacic (2009), https://www.ftc.gov/sites/default/files/documents/public_statements/federal-trade-commission-100-our-second-century/ftc100rpt.pdf at (i).

    The Commission will invite public comment in stages throughout the term of the hearings.

    • Through August 20, 2018, the Commission will accept public comment on the topics identified in this announcement. Each topic description includes issues of particular interest to the Commission, but comments need not be restricted to these subjects.

    • Additionally, the Commission will invite comments on the topic of each hearing session. The FTC will issue a news release before each session to inform the public of the agenda, the date and location, and instructions on submitting comment.

    • The Commission will also invite public comment upon completion of the entire series of hearings.

    The Commission is especially interested in new empirical research that indicates (or contraindicates) a causal relationship with respect to any of the topics identified for comment. Upon review and consideration of a public comment highlighting such research, the Commission may request the voluntary sharing of the data and models underlying the comment, in accordance with general principles of peer review of social scientific inquiry, and consistent with confidentiality or other limitations on the sharing of such data.

    Commenters are invited to address one or more of the following topics generally, or with respect to a specific industry, such as the health care,5 high-tech,6 or energy 7 industries. (1) The state of antitrust and consumer protection law and enforcement, and their development, since the Pitofsky hearings. Of particular interest to the Commission: (a) The continued viability of the consumer welfare standard for antitrust law enforcement and policy; (b) economic analysis and evidence on market competitiveness, enforcement policy, and the effects of past FTC enforcement decisions; (c) the identification of new developments in markets and in business-to-business or business-to-consumer relationships; (d) the benefits and costs associated with the growth of international competition and consumer protection enforcement regimes; and (e) the advisory and advocacy role of the FTC regarding enforcement efforts by competition and consumer protection agencies outside the United States, when such efforts have a direct effect on important U.S. interests. Comments filed in electronic form should be submitted using this link: https://www.regulations.gov/docket?D=FTC-2018-0048.

    5See, e.g., Fed. Trade Comm'n, Emerging Health Care Issues: Follow-On Biologic Drug Competition (2009), https://www.ftc.gov/sites/default/files/documents/reports/emerging-health-care-issues-follow-biologic-drug-competition-federal-trade-commission-report/p083901biologicsreport.pdf; Fed Trade Comm'n & Dep't of Justice, Improving Health Care: A Dose of Competition (2004), https://www.ftc.gov/sites/default/files/documents/reports/improving-health-care-dose-competition-report-federal-trade-commission-and-department-justice/040723healthcarerpt.pdf.

    6See, e.g., Fed. Trade Comm'n Staff, Protecting Consumers in the Next Tech-Ade (2008), https://www.ftc.gov/sites/default/files/documents/reports/protecting-consumers-next-tech-ade-report-staff-federal-trade-commission/p064101tech.pdf; Fed. Trade Comm'n Staff, Mobile Privacy Disclosures: Building Trust Through Transparency (2013), https://www.ftc.gov/sites/default/files/documents/reports/mobile-privacy-disclosures-building-trust-through-transparency-federal-trade-commission-staff-report/130201mobileprivacyreport.pdf.

    7See, e.g., Fed. Trade Comm'n, The Federal Trade Commission Investigation of Gasoline Price Manipulation and Post-Katrina Gasoline Price Increases: A Commission Report to Congress (2006), https://www.ftc.gov/sites/default/files/documents/reports/federal-trade-commission-investigation-gasoline-price-manipulation-and-post-katrina-gasoline-price/060518publicgasolinepricesinvestigationreportfinal.pdf; Fed. Trade Comm'n, Gasoline Price Changes: The Dynamic of Supply, Demand, and Competition (2005), https://www.ftc.gov/sites/default/files/documents/reports/gasoline-price-changes-dynamic-supply-demand-and-competition-federal-trade-commission-report-2005/050705gaspricesrpt.pdf; Fed Trade Comm'n Staff, The Petroleum Industry: Mergers, Structural Change, And Antitrust Enforcement (2004), https://www.ftc.gov/sites/default/files/documents/reports/petroleum-industry-mergers-structural-change-and-antitrust-enforcement-report-staff-federal-trade/040813mergersinpetrolberpt.pdf; Fed. Trade Comm'n Staff, Competition and Consumer Protection Perspectives on Electric Power Regulatory Reform: Focus on Retail Competition (2001), https://www.ftc.gov/sites/default/files/documents/reports/competition-and-consumer-protection-perspectives-electric-power-regulatory-reform-focus-retail/electricityreport.pdf; Fed. Trade Comm'n Staff, Competition and Consumer Protection Perspectives on Electric Power Regulatory Reform (2000), https://www.ftc.gov/reports/competition-consumer-protection-perspectives-electric-power-regulatory-reform.

    (2) Competition and consumer protection issues in communication, information, and media technology networks. FTC staff's 1996 Competition Policy in the New High-Tech Global Marketplace report 8 discussed the competitive analysis of both unilateral and joint conduct in industries subject to network effects; and FTC staff's 2007 Broadband Connectivity and Competition Policy report 9 addressed similar issues in the broadband internet access service market. Of particular interest to the Commission: (a) Whether contemporary industry practices in networked industries continue to present competition and consumer protection concerns like those discussed in the prior reports; (b) the welfare effects of regulatory intervention to promote standardization and interoperability; (c) the application of the FTC's Section 5 authority to the broadband internet access service business; and (d) unique competition and consumer protection issues associated with internet and online commerce. Comments filed in electronic form should be submitted using this link: https://www.regulations.gov/docket?D=FTC-2018-0049.

    8 Fed. Trade Comm'n Staff, Anticipating the 21st Century: Competition Policy in the New High-Tech, Global Marketplace (1996), https://www.ftc.gov/system/files/documents/reports/anticipating-21st-century-;competition-policy-new-high-tech-global-marketplace/gc_v1.pdf at Ch. 9.

    9 Fed. Trade Comm'n Staff, Broadband Connectivity Competition Policy (2007), https://www.ftc.gov/sites/default/files/documents/reports/broadband-connectivity-competition-policy/v070000report.pdf.

    (3) The identification and measurement of market power and entry barriers, and the evaluation of collusive, exclusionary, or predatory conduct or conduct that violates the consumer protection statutes enforced by the FTC, in markets featuring “platform” businesses.10 Of particular interest to the Commission: (a) Whether the platform business model has unique implications for antitrust and consumer protection law enforcement and policy; and (b) whether and how the presence of “network effects” should affect the Commission's analysis of competition and consumer protection issues in these markets. Comments filed in electronic form should be submitted using this link: https://www.regulations.gov/docket?D=FTC-2018-0050.

    10 The Commission's workshop and report on the Sharing Economy addressed many issues related to “platform” businesses. Fed. Trade Comm'n Staff, The Sharing Economy: Issues Facing Platforms, Participants & Regulators (2016), https://www.ftc.gov/system/files/documents/reports/sharing-economy-issues-facing-platforms-participants-regulators-federal-trade-commission-staff/p151200_ftc_staff_report_on_the_sharing_economy.pdf.

    (4) The intersection between privacy, big data, and competition.11 Of particular interest to the Commission: (a) Data as a dimension of competition, and/or as an impediment to entry into or expansion within a relevant market; (b) competition on privacy and data security attributes (between, for example, social media companies or app developers), and the importance of this competition to consumers and users; (c) whether consumers prefer free/ad-supported products to products offering similar services or capabilities but that are neither free nor ad-supported; (d) the benefits and costs of privacy laws and regulations, including the effect of such regulations on innovation, product offerings, and other dimensions of competition and consumer protection; (e) the benefits and costs of varying state, federal and international privacy laws and regulations, including the conflicts associated with those standards; and (f) competition and consumer protection implications of use and location tracking mechanisms. Comments filed in electronic form should be submitted using this link: https://www.regulations.gov/docket?D=FTC-2018-0051.

    11 The Commission has previously issued reports related to this area of inquiry, including id.; Fed. Trade Comm'n Staff, Internet of Things: Privacy and Security in a Connected World (2015), https://www.ftc.gov/system/files/documents/reports/federal-trade-commission-staff-report-november-2013-workshop-entitled-internet-things-privacy/150127iotrpt.pdf; and Fed. Trade Comm'n, Big Data: A Tool for Inclusion or Exclusion? (2016), https://www.ftc.gov/system/files/;documents/reports/big-data-tool-inclusion-or-exclusion-understanding-issues/160106big-data-rpt.pdf.

    (5) The Commission's remedial authority to deter unfair and deceptive conduct in privacy and data security matters. Of particular interest to the Commission: (a) The efficacy of the Commission's use of its current remedial authority; and (b) the identification of any additional tools or authorities the Commission may need to adequately deter unfair and deceptive conduct related to privacy and data security. Comments filed in electronic form should be submitted using this link: https://www.regulations.gov/docket?D=FTC-2018-0052.

    (6) Evaluating the competitive effects of corporate acquisitions and mergers. Of particular interest to the Commission: (a) The economic and legal analysis of vertical and conglomerate mergers; (b) whether the doctrine of potential competition is sufficient to identify and analyze the competitive effects (if any) associated with the acquisition of a firm that may be a nascent competitive threat; (c) the analysis of acquisitions and holding of a non-controlling ownership interest in competing companies; (d) the identification and evaluation of the exercise of monopsony power and buyer-power as arising from consolidation; (e) the identification and evaluation of differentiated but potentially competing technologies, and of disruptive or generational changes in technology, and how such technologies affect competitive effects analysis; and (f) empirical validation of the analytical tools used to evaluate acquisitions and mergers (e.g., models of upward pricing pressure, gross upward pricing pressure, net innovation pressure, critical loss analysis, compensating marginal cost reduction, merger simulation, natural experiments, and empirical estimation of demand systems). Comments filed in electronic form should be submitted using this link: https://www.regulations.gov/docket?D=FTC-2018-0053.

    (7) The evidence and analysis of monopsony power, including but not limited to, in labor markets. Of particular interest to the Commission: (a) The analytic framework applied to conduct and transactions that negatively or positively affect competition between employers as buyers in labor markets; (b) evidence regarding the existence and exercise of buyer monopsony or market power in properly defined markets, including by employers in labor markets; (c) the exercise of monopsony power through collusion, including in labor markets through employer collusion; and (d) the use of non-competition agreements and the conditions under which their use may be inconsistent with the antitrust laws. Comments filed in electronic form should be submitted using this link: https://www.regulations.gov/docket?D=FTC-2018-0054.

    (8) The role of intellectual property and competition policy in promoting innovation. The Commission has taken a dual-pronged approach to issues arising at the intersection of intellectual property and antitrust law: (1) Antitrust enforcement against harmful business conduct involving intellectual property; and (2) competition advocacy regarding the development of intellectual property law. The Commission has articulated its enforcement positions in a number of public documents, including the joint Commission and Department of Justice 2017 Antitrust Guidelines for the Licensing of Intellectual Property12 and 2007 Antitrust Enforcement and Intellectual Property Rights report.13 The Commission has engaged in substantial competition advocacy with respect to the legal and policy regime related to intellectual property rights, including its three “IP” reports: The 2003 To Promote Innovation14 report, the 2011 Evolving IP Marketplace15 report, and the 2016 Patent Assertion Entity Activity16 report. Of particular interest to the Commission: (a) The adoption and utilization of novel business practices (beyond those addressed in the Commission's prior guidance and actions) 17 with respect to obtaining or enforcing intellectual property rights, where such practices may be inconsistent with the antitrust laws; (b) identification of contemporary patent doctrine that substantially affects innovation and raises the greatest challenges for competition policy; (c) evaluation of intellectual property litigation in competitive effects analysis; and (d) evaluation of efficiencies and entry considerations in technology markets in merger analysis. Comments filed in electronic form should be submitted using this link: https://www.regulations.gov/docket?D=FTC-2018-0055.

    12 Fed. Trade Comm'n & U.S. Dep. Justice, Guidelines for the Licensing of Intellectual Property (2017), https://www.justice.gov/atr/IPguidelines/download.

    13 Fed. Trade Comm'n & U.S. Dep. Justice, Antitrust Enforcement and Intellectual Property Rights: Promoting Innovation and Competition (2007), https://www.justice.gov/atr/public/hearings/ip/222655.pdf.

    14 Fed. Trade Comm'n, To Promote Innovation: The Proper Balance of Competition Law and Policy (2003), https://www.ftc.gov/sites/default/files/documents/reports/promote-innovation-proper-balance-competition-and-patent-law-and-policy/innovationrpt.pdf.

    15 Fed. Trade Comm'n, The Evolving IP Marketplace: Aligning Patent Notice and Remedies with Competition (2011), https://www.ftc.gov/sites/default/files/documents/reports/evolving-ip-marketplace-aligning-patent-notice-and-remedies-competition-report-federal-trade/110307patentreport.pdf.

    16 Fed. Trade Comm'n, Patent Assertion Entity Activity: An FTC Study (2016), https://www.ftc.gov/system/files/documents/reports/patent-assertion-entity-activity-ftc-study/p131203_patent_assertion_entity_activity_an_ftc_study_0.pdf.

    17 Enforcement and policy issues with respect to standard essential patents are discussed in Fed. Trade Comm'n & U.S. Dep. Justice, Antitrust Enforcement and Intellectual Property Rights: Promoting Innovation and Competition (2007), https://www.justice.gov/atr/public/hearings/ip/222655.pdf and have been the subject of seven FTC enforcement matters. Licensing conduct, such as tying and grantbacks, is discussed in the revised Fed. Trade Comm'n & U.S. Dep. Justice, Guidelines for the Licensing of Intellectual Property (2017), https://www.justice.gov/atr/IPguidelines/download. The behavior of Patent Assertion Entities is discussed in Fed. Trade Comm'n, Patent Assertion Entity Activity: An FTC Study (2016), https://www.ftc.gov/system/files/documents/reports/patent-assertion-entity-activity-ftc-study/p131203_patent_assertion_entity_activity_an_ftc_study_0.pdf.

    (9) The consumer welfare implications associated with the use of algorithmic decision tools, artificial intelligence, and predictive analytics. Of particular interest to the Commission: (a) The welfare effects and privacy implications associated with the application of these technologies to consumer advertising and marketing campaigns; (b) the welfare implications associated with use of these technologies in the determination of a firm's pricing and output decisions; and (c) whether restrictions on the use of computer and machine learning and data analytics affect innovation or consumer rights and opportunities in existing or future markets, or in the development of new business models. Comments filed in electronic form should be submitted using this link: https://www.regulations.gov/docket?D=FTC-2018-0056.

    (10) The interpretation and harmonization of state and federal statutes and regulations that prohibit unfair and deceptive acts and practices. Of particular interest to the Commission: (a) Whether and to what extent other enforcement entities authorized to prosecute unfair or deceptive acts and practices apply FTC precedent in their enforcement efforts; and (b) whether the Commission can, and to what extent it should, take steps to promote harmonization between the FTC Act and similar statutes. Comments filed in electronic form should be submitted using this link: https://www.regulations.gov/docket?D=FTC-2018-0057.

    (11) The agency's investigation, enforcement and remedial processes. Of particular interest to the Commission: (a) Whether the agency's investigative process can be improved without diminishing the ability of the Commission to identify and prosecute prohibited conduct; (b) the extent to which the Commission's Part 3 process facilitates timely and efficient administrative litigation; (c) the efficacy of the Commission's current use of its remedial authority; and (d) willingness of affected parties to cooperate with the Commission in conducting post-investigation and enforcement retrospectives. Comments filed in electronic form should be submitted using this link: https://www.regulations.gov/docket?D=FTC-2018-0058.

    Public Comments: Interested parties may submit written comments on the topics listed above to the FTC. Electronic submission is preferred; comments in paper form are also accepted. FTC staff may use these comments in any subsequent reports or policy papers. Comments should refer to “Competition and Consumer Protection in the 21st Century Hearings, Project Number P181201.” If an interested party wishes to comment on multiple topics, we encourage filing a separate comment for each topic. If an interested party wishes to make general comments about the hearings, we encourage filing a comment in response to Topic 1, using this link: https://www.regulations.gov/docket?D=FTC-2018-0048. For this stage of the public comment process, comments will be accepted until August 20, 2018.

    Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online. If you prefer to file your comment on paper, write “Competition and Consumer Protection in the 21st Century Hearings, Project Number P181201” on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex C), Washington, DC 20580; or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex C), Washington, DC 20024. If possible, submit your paper comment to the Commission by courier or overnight service.

    Because your comment may be placed on the publicly accessible FTC website at https://www.ftc.gov, you are solely responsible for making sure that your comment does not include any sensitive or confidential information. In particular, your comment should not include any sensitive personal information, such as your or anyone else's Social Security number; date of birth; driver's license number or other state identification number, or foreign country equivalent; passport number; financial account number; or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, such as medical records or other individually identifiable health information. In addition, your comment should not include any “trade secret or any commercial or financial information which . . . is privileged or confidential”—as provided in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)—including, in particular, competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names.

    Comments containing material for which confidential treatment is requested must be filed in paper form, must be clearly labeled “Confidential,” and must comply with FTC Rule 4.9(c). In particular, the written request for confidential treatment that accompanies the comment must include the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. See FTC Rule 4.9(c). Your comment will be kept confidential only if the General Counsel grants your request in accordance with the law and the public interest. Once your comment has been posted on the public FTC website—as legally required by FTC Rule 4.9(b)—we cannot redact or remove your comment from the FTC website, unless you submit a confidentiality request that meets the requirements for such treatment under FTC Rule 4.9(c), and the General Counsel grants that request.

    If any entity has provided funding for research, analysis, or commentary that is included in a submitted public comment, such funding and its source should be identified on the first page of any submitted comment.

    Visit the FTC website at http://www.ftc.gov to read this Notice and the news release describing it. The FTC Act and other laws that the Commission administers permit the collection of public comments to consider and use in this proceeding, as appropriate. For this stage of the comment process, the Commission will consider all timely and responsive public comments that it receives on or before August 20, 2018.

    The FTC Act and other laws that the Commission administers permit the collection of public comments. More information, including routine uses permitted by the Privacy Act, may be found in the FTC's privacy policy, available at https://www.ftc.gov/site-information/privacy-policy.

    By direction of the Commission.

    Donald S. Clark, Secretary.
    [FR Doc. 2018-16608 Filed 8-3-18; 8:45 am] BILLING CODE 6750-01-P
    FEDERAL TRADE COMMISSION Agency Information Collection Activities; Submission for OMB Review; Comment Request; Extension Correction

    In notice document 2018-15979, appearing on pages 35477 through 35485 in the issue of Thursday, July 26, 2018, make the following correction:

    On page 35481, the heading of the first table should read “Regulation E: Recordkeeping and Disclosures—Cost”.

    [FR Doc. C1-2018-15979 Filed 8-3-18; 8:45 am] BILLING CODE 1301-00-D
    DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION [OMB Control No. 9000-0007: Docket No. 2018-0003; Sequence No. 6] Information Collection; Subcontracting Plans AGENCIES:

    Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

    ACTION:

    Notice and request for comments.

    SUMMARY:

    In accordance with the Paperwork Reduction Act of 1995 and the Office of Management and Budget (OMB) regulations, the FAR Council invites the public to comment upon a renewal concerning small business subcontracting plans.

    DATES:

    Submit comments on or before October 5, 2018.

    ADDRESSES:

    The FAR Council invites interested persons to submit comments on this collection by either of the following methods:

    Federal eRulemaking Portal: This website provides the ability to type short comments directly into the comment field or attach a file for lengthier comments. Go to http://www.regulations.gov and follow the instructions on the site.

    Mail: General Services Administration, Regulatory Secretariat Division (MVCB), 1800 F Street NW, Washington, DC 20405. ATTN: Ms. Mandell/IC 9000-0007, Subcontracting Plans.

    Instructions: All items submitted must cite Information Collection 9000-0007, Subcontracting Plans. Comments received in response to this docket will be made available for public inspection and posted without change, including any personal information, at http://www.regulations.gov. Comments received generally will be posted without change to http://www.regulations.gov, including any personal and/or business confidential information provided. To confirm receipt of your comment(s), please check www.regulations.gov, approximately two to three days after submission to verify posting (except allow 30 days for posting of comments submitted by mail). This information collection is pending at the FAR Council. The Council will submit it to OMB within 60 days from the date of this notice.

    FOR FURTHER INFORMATION CONTACT:

    Ms. Zenaida Delgado, Procurement Analyst, at telephone 202-969-7207, or email [email protected]

    SUPPLEMENTARY INFORMATION: A. Overview of Information Collection Description of the Information Collection

    1. Type of Information Collection: Revision/Renewal of a currently approved collection.

    2. Title of the Collection—Subcontracting Plans.

    3. Agency form number, if any: —— SF 294.

    Solicitation of Public Comment

    Written comments and suggestions from the public should address one or more of the following four points:

    (1) Evaluate whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;

    (2) Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;

    (3) Enhance the quality, utility, and clarity of the information to be collected; and

    (4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses.

    B. Purpose

    This information collection requirement, OMB Control No. 9000-0007, currently titled “Summary Subcontract Report,” is proposed to be retitled “Subcontracting Plans,” due to consolidation with currently approved information collection requirement OMB Control No. 9000-0006, Subcontracting Plans/Individual Subcontract Report (SF 294) and ISRS, and 9000-0192, Utilization of Small Business Subcontractors.

    This clearance covers the information that offerors and contractors must submit to comply with the requirements in Federal Acquisition Regulation (FAR) 52.219-9, Small Business Subcontracting Plans, regarding subcontracting plans as follows:

    1. Subcontracting plan. In accordance with Section 8(d) of the Small Business Act (15 U.S.C. 637(d)), any contractor receiving a contract for more than the simplified acquisition threshold must agree in the contract that small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns will have the maximum practicable opportunity to participate in contract performance. Further, 15 U.S.C. 637(d) imposes the requirement that contractors receiving a contract that is expected to exceed, or a contract modification that causes a contract to exceed, $700,000 ($1.5 million for construction) and has subcontracting possibilities, shall submit an acceptable subcontracting plan that provides maximum practicable opportunities for small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns. Specific elements required to be included in the plan are specified in section 8(d) of the Small Business Act and implemented in FAR subpart 19.7 and the clause at 52.219-9.

    2. Summary Subcontract Report (SSR). In conjunction with the subcontracting plan requirements, contractors with subcontracting plans must submit an annual summary of subcontracts awarded as prime and subcontractors for each specific Federal Government agency. Contractors submit the information in a SSR through the Electronic Subcontracting Reporting System (eSRS). This is required for all contractors with subcontracting plans regardless of the type of plan (i.e., commercial or individual).

    3. Individual Subcontract Report (ISR). In conjunction with the subcontracting plan requirements, contractors with individual subcontracting plans must submit semi-annual reports of their small business subcontracting progress. Contractors submit the information through eSRS in an ISR, the electronic equivalent of the Standard Form (SF) 294, Subcontracting Report for Individual Contracts. Contracts that are not reported in the Federal Procurement Data System (FPDS) in accordance with FAR 4.606(c)(5) do not submit ISRs in eSRS; they will continue to use the SF 294 to submit the information to the agency.

    4. Written explanation for not using a small business subcontractor as specified in the proposal or subcontracting plan. Section 1322 of the Small Business Jobs Act of 2010 (Jobs Act), Public Law 111-240, amends the Small Business Act (15 U.S.C. 637(d)(6)) to require as part of a subcontracting plan that a prime contractor make good faith effort to utilize a small business subcontractor during performance of a contract to the same degree the prime contractor relied on the small business in preparing and submitting its bid or proposal. If a prime contractor does not utilize a small business subcontractor as described above, the prime contractor is required to explain, in writing, to the contracting officer the reasons why it is unable to do so.

    C. Annual Reporting Burden

    1. Subcontracting plan. Subcontracting plans are provided on a contract-by-contract basis for individual subcontracting plans. Individual subcontracting plans cover the entire contract period, including options. Commercial plans are provided on an entity basis and cover the fiscal year of the contractor. The time required for development of the plan (including commercial and individual plans) is estimated as follows:

    Respondents: 4,350.

    Responses per Respondent: 1.

    Total Annual Responses: 4,350.

    Hours per Response: 5.

    Total Burden Hours: 21,750.

    2. Summary Subcontract Report (SSR). SSRs are submitted annually for all types of subcontracting plans. One SSR is submitted for each commercial subcontracting plan. For individual subcontracting plans, an SSR is required for every agency that funds work under the contract that the plan covers. Time required for reading, preparing information, and data entry into eSRS is estimated as follows:

    Commercial plan Respondents: 1,653. Responses per Respondent: 1. Total Annual Responses: 1,653. Hours per Response: 2. Total Burden Hours: 3,306. Individual plan without order level reporting Respondents: 10,885. Responses per Respondent: 1. Total Annual Responses: 10,885. Hours per Response: 1.5. Total Burden Hours: 16,327.5. Individual plan with order level reporting Respondents: 197. Responses per Respondent: 3. Total Annual Responses: 591. Hours per Response: 1.5. Total Burden Hours: 886.5.

    3. Individual Subcontract Report (ISR). ISRs are submitted semi-annually for each contract with an individual subcontracting plan. The ISR consists of data for subcontracting under a given contract. ISRs are not required for commercial plans. Time required for reading, preparing information, and data entry into eSRS is estimated as follows:

    Individual plan without order-level reporting requirement Respondents: 10,855. Responses per Respondent: 2. Total Annual Responses: 21,710. Hours per Response: 2. Total Burden Hours: 43,420. Individual plan—with order-level reporting requirement Respondents: 197. Responses per Respondent: 2. Total Annual Responses: 394. Hours per Response: 5. Total Burden Hours: 1,970.

    4. Written explanation for not using a small business subcontractor as specified in the proposal or subcontracting plan. This explanation is submitted on a contract-by-contract basis. FPDS for FY 2017 identified 3,808 contracts with individual subcontracting plans and 542 entities awarded contracts with commercial plans, for a total of 4,350 plans for FY 2017. We estimate that at most 50%, or 2,175, of these contracts with subcontracting plans may have instances of the prime contractor not using a small business subcontractor to the same extent used in preparing the bid or proposal. We estimate two hours as the average time required to read and prepare information for this collection.

    Respondents: 2,175.

    Responses per Respondent: 1.

    Total Annual Responses: 2,175.

    Hours per Response: 2.

    Total Burden Hours: 4,350.

    5. Summary.

    Respondents: 30,312.

    Total Annual Responses: 41,758.

    Total Burden Hours: 92,010.

    Obtaining Copies of Proposals: Requesters may obtain a copy of the information collection documents from the General Services Administration, Regulatory Secretariat Division (MVCB), 1800 F Street NW, Washington, DC 20405, telephone 202-501-4755.

    Please cite OMB Control No. 9000-0007, Subcontracting Plans, in all correspondence.

    William Clark, Director, Office of Governmentwide Acquisition Policy, Office of Acquisition Policy, Office of Governmentwide Policy.
    [FR Doc. 2018-16744 Filed 8-3-18; 8:45 am] BILLING CODE 6820-EP-P
    DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION [OMB Control No. 9000-0079; Docket No. 2018-0003; Sequence No. 14] Information Collection; Travel Costs AGENCY:

    Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

    ACTION:

    Notice and request for comments.

    SUMMARY:

    In accordance with the Paperwork Reduction Act of 1995 and the Office of Management and Budget (OMB) regulations, the FAR Council invites the public to comment upon a renewal concerning travel costs.

    DATES:

    Submit comments on or before October 5, 2018.

    ADDRESSES:

    The FAR Council invites interested persons to submit comments on this collection by either of the following methods:

    Federal eRulemaking Portal: This website provides the ability to type short comments directly into the comment field or attach a file for lengthier comments. Go to http://www.regulations.gov and follow the instructions on the site.

    Mail: General Services Administration, Regulatory Secretariat Division (MVCB), 1800 F Street NW, Washington, DC 20405. ATTN: Ms. Mandell/IC 9000-0079, Travel Costs.

    Instructions: All items submitted must cite Information Collection 9000-0079, Travel Costs. Comments received in response to this docket will be made available for public inspection and posted without change, including any personal information, at http://www.regulations.gov.

    Comments received generally will be posted without change to http://www.regulations.gov, including any personal and/or business confidential information provided. To confirm receipt of your comment(s), please check www.regulations.gov, approximately two to three days after submission to verify posting (except allow 30 days for posting of comments submitted by mail). This information collection is pending at the FAR Council. The Council will submit it to OMB within 60 days from the date of this notice.

    FOR FURTHER INFORMATION CONTACT:

    Ms. Zenaida Delgado, Procurement Analyst, at telephone 202-969-7207, or email [email protected]

    SUPPLEMENTARY INFORMATION:

    A. Overview of Information Collection Description of the Information Collection

    1. Type of Information Collection: Revision/Renewal of a currently approved collection.

    2. Title of the Collection: Travel Costs.

    3. Agency form number, if any: N/A.

    Solicitation of Public Comment

    Written comments and suggestions from the public should address one or more of the following four points:

    (1) Evaluate whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;

    (2) Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;

    (3) Enhance the quality, utility, and clarity of the information to be collected; and

    (4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses.

    B. Purpose

    This information collection requirement, OMB Control No. 9000-0079, currently titled “Corporate Aircraft Costs,” is proposed to be retitled “Travel Costs,” due to consolidation with currently approved information collection requirement OMB Control No. 9000-0088, Travel Costs.

    This information collection requirement pertains to information that a contractor must submit in response to the requirements in FAR 31.205-46:

    1. FAR 31.205-46(a)(3)—In special or unusual situations, costs incurred by a contractor for lodging, meals, and incidental expenses, may exceed on a daily basis the per diem rates in effect as set forth in the Federal Travel Regulation (FTR) for travel in the conterminous 48 United States. The actual costs may be allowed only if the contractor provides the following:

    a. FAR 31.205-46(a)(3)(ii)—A written justification for use of the higher amounts approved by an officer of the contractor's organization or designee to ensure that the authority is properly administered and controlled to prevent abuse.

    b. FAR 31.205-46(a)(3)(iii)—Advance approval from the contracting officer if it becomes necessary to exercise the authority to use the higher actual expense method repetitively or on a continuing basis in a particular area.

    c. FAR 31.205-46(a)(3)(iv)—Documentation to support actual costs incurred including a receipt for each expenditure of $75.00 or more.

    2. FAR 31.205-46(c) requires firms to maintain and make available manifest/logs for all flights on company aircraft. As a minimum, the manifest/log must indicate:

    a. Date, time, and points of departure;

    b. Destination, date, and time of arrival;

    c. Name of each passenger and relationship to the contractor

    d. Authorization for trip; and

    e. Purpose of trip.

    The information required by (a) and (b) and the name of each passenger (required by (c)) are recordkeeping requirements already established by Federal Aviation Administration regulations. This information, plus the additional required information, is needed to ensure that costs of owned, chartered, or leased aircraft are properly charged against Government contracts and that directly associated costs of unallowable activities are not charged to Government contracts.

    C. Annual Reporting Burden

    DoD, GSA and NASA analyzed the FY 2017 data from the Federal Procurement Data System (FPDS) to develop the estimated burden hours for this information collection.

    1. FAR 31.205-46(a)(3)—Actual travel costs.

    Respondents: 3,247.

    Responses Per Respondent: 10.

    Total Annual Responses: 32,470.

    Hours Per Response: 0.25.

    Total Burden Hours: 8,118.

    2. FAR 31.205-46(c)—Manifest/logs for flights on company aircraft.

    Number of recordkeepers: 797.

    Records per recordkeeper per year: 3.

    Total annual records: 2,391.

    Estimated hours per record: 2.0.

    Total recordkeeping burden hours: 4,782.

    3. Total (counting recordkeepers with respondents).

    Recordkeepers and respondents: 4,044.

    Responses: 34,861.

    Hours (reporting and recordkeeping): 12,900.

    Affected Public: Businesses or other for-profit and not-for-profit institutions.

    Obtaining Copies of Proposals: Requesters may obtain a copy of the information collection documents from the General Services Administration, Regulatory Secretariat Division (MVCB), 1800 F Street NW, Washington, DC 20405, telephone 202-501-4755.

    Please cite OMB Control No. 9000-0079, Travel Costs, in all correspondence.

    William Clark, Director, Office of Governmentwide Acquisition Policy, Office of Acquisition Policy, Office of Governmentwide Policy.
    [FR Doc. 2018-16745 Filed 8-3-18; 8:45 am] BILLING CODE 6820-EP-P
    DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION [OMB Control No. 9000-0154; Docket No. 2018-0053; Sequence No. 2] Submission for OMB Review; Construction Wage Rate Requirements—Price Adjustment (Actual Method) AGENCY:

    Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

    ACTION:

    Notice.

    SUMMARY:

    Under the provisions of the Paperwork Reduction Act, the Regulatory Secretariat Division will be submitting to the Office of Management and Budget (OMB) a request to review and approve an extension of a previously approved information collection requirement regarding the price adjustment (Actual Method) for Construction Wage Rate Requirements.

    DATES:

    Submit comments on or before September 5, 2018.

    ADDRESSES:

    Submit comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to: Office of Information and Regulatory Affairs of OMB, Attention: Desk Officer for GSA, Room 10236, NEOB, Washington, DC 20503. Additionally submit a copy to GSA by any of the following methods:

    Federal eRulemaking Portal: This website provides the ability to type short comments directly into the comment field or attach a file for lengthier comments. Go to http://www.regulations.gov and follow the instructions on the site.

    Mail: General Services Administration, Regulatory Secretariat Division (MVCB), 1800 F Street NW, Washington, DC 20405. ATTN: Ms. Mandell/IC 9000-0154, Construction Wage Rate Requirements—Price Adjustment (Actual Method).

    Instructions: Please submit comments only and cite Information Collection 9000-0154, Construction Wage Rate Requirements—Price Adjustment (Actual Method), in all correspondence related to this collection. Comments received generally will be posted without change to http://www.regulations.gov, including any personal and/or business confidential information provided. To confirm receipt of your comment(s), please check www.regulations.gov, approximately two to three days after submission to verify posting (except allow 30 days for posting of comments submitted by mail).

    FOR FURTHER INFORMATION CONTACT:

    Ms. Zenaida Delgado, Procurement Analyst, at telephone 202-969-7207, or email [email protected]

    SUPPLEMENTARY INFORMATION: A. Purpose

    Government contracting officers may include Federal Acquisition Regulation (FAR) clause 52.222-32, Construction Wage Rate Requirements—Price Adjustment (Actual Method), in fixed-price solicitations and contracts subject to the Construction Wage Rate Requirements statute under certain conditions. The conditions are that the solicitation or contract contains option provisions to extend the term of the contract and the contracting officer determines that the most appropriate method to adjust the contract price at option exercise is to use a computation method based on the actual increase or decrease from a new or revised Department of Labor Construction Wage Rate Requirements statute wage determination.

    The clause requires that a contractor submit at the exercise of each option to extend the term of the contract, a statement of the amount claimed for incorporation of the most current wage determination by the Department of Labor, and any relevant supporting data, including payroll records, that the contracting officer may reasonably require. The information is used by Government contracting officers to establish the contract price adjustment for the construction requirements of a contract, generally if the contract requirements are predominantly services subject to the Service Contract Labor Standards statute.

    B. Public Comment

    A 60 day notice was published in the Federal Register at 83 FR 23278, on May 18, 2018. No comments were received.

    C. Annual Reporting Burden

    The Federal Procurement Data System (FPDS) indicates that 5,309 construction contractors in FY 2017 could potentially have had contracts with recurring options. However, we believe there are only approximately 10% of these that would contain the subject clause, since most would not have a price adjustment clause, and there are other FAR prescribed price adjustment clauses.

    The estimated total burden is as follows:

    Respondents: 531.

    Responses per Respondent: 1.

    Total Annual Responses: 531.

    Hours per Response: 40.

    Total Burden Hours: 21,240.

    Affected Public: Businesses or other for-profit and not-for-profit institutions.

    Frequency: Annually.

    Obtaining Copies: Requesters may obtain a copy of the information collection documents from the General Services Administration, Regulatory Secretariat Division (MVCB), 1800 F Street NW, Washington, DC 20405, telephone 202-501-4755. Please cite OMB Control No. 9000-0154, Construction Wage Rate Requirements—Price Adjustment (Actual Method), in all correspondence.

    William F. Clark, Director, Office of Governmentwide Acquisition Policy, Office of Acquisition Policy, Office of Governmentwide Policy.
    [FR Doc. 2018-16763 Filed 8-3-18; 8:45 am] BILLING CODE 6820-EP-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Disease Control and Prevention Decision To Evaluate a Petition To Designate a Class of Employees From the Superior Steel Company in Carnegie, Pennsylvania, To Be Included in the Special Exposure Cohort AGENCY:

    National Institute for Occupational Safety and Health (NIOSH), Centers for Disease Control and Prevention, Department of Health and Human Services.

    ACTION:

    Notice.

    SUMMARY:

    NIOSH gives notice of a decision to evaluate a petition to designate a class of employees from the Superior Steel Company in Carnegie, Pennsylvania, to be included in the Special Exposure Cohort under the Energy Employees Occupational Illness Compensation Program Act of 2000.

    FOR FURTHER INFORMATION CONTACT:

    Stuart L. Hinnefeld, Director, Division of Compensation Analysis and Support, National Institute for Occupational Safety and Health, 1090 Tusculum Avenue, MS C-46, Cincinnati, OH 45226-1938, Telephone 877-222-7570. Information requests can also be submitted by email to [email protected]

    SUPPLEMENTARY INFORMATION:

    Authority:

    42 CFR 83.9-83.12.

    Pursuant to 42 CFR 83.12, the initial proposed definition for the class being evaluated, subject to revision as warranted by the evaluation, is as follows:

    Facility: Superior Steel Company.

    Location: Carnegie, Pennsylvania.

    Job Titles and/or Job Duties: All workers who worked at all locations at the Superior Steel Co. in Carnegie, PA from January 1, 1952 through December 31, 1957.

    Period of Employment: January 1, 1952 through December 31, 1957.

    John J. Howard, Director, National Institute for Occupational Safety and Health.
    [FR Doc. 2018-16761 Filed 8-3-18; 8:45 am] BILLING CODE 4163-19-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration [Docket No. FDA-2018-D-2583] Nonclinical Testing of Orally Inhaled Nicotine-Containing Drug Products; Draft Guidance for Industry; Availability AGENCY:

    Food and Drug Administration, HHS.

    ACTION:

    Notice of availability.

    SUMMARY:

    The Food and Drug Administration (FDA or Agency) is announcing the availability of a draft guidance for industry entitled “Nonclinical Testing of Orally Inhaled Nicotine-Containing Drug Products.” The document provides guidance regarding the nonclinical information FDA recommends to support development and approval of orally inhaled nicotine-containing drug products, including electronic nicotine delivery systems intended for smoking cessation and other chronic uses.

    DATES:

    Submit either electronic or written comments on the draft guidance by October 5, 2018 to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance.

    ADDRESSES:

    You may submit comments on any guidance at any time as follows:

    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-2018-D-2583 for “Nonclinical Testing of Orally Inhaled Nicotine-Containing Drug Products; Draft Guidance for Industry; Availability.” Received comments 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.

    You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).

    Submit written requests for single copies of the draft guidance to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10001 New Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your requests. See the SUPPLEMENTARY INFORMATION section for electronic access to the draft guidance document.

    FOR FURTHER INFORMATION CONTACT:

    Alina Salvatore, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 22, Rm. 5418, Silver Spring, MD 20903-0002, 240-402-0379.

    SUPPLEMENTARY INFORMATION:

    I. Background

    FDA is announcing the availability of a draft guidance for industry entitled “Nonclinical Testing of Orally Inhaled Nicotine-Containing Drug Products.” This document provides guidance on the nonclinical information FDA recommends to support development and approval of orally inhaled nicotine-containing drug products for smoking cessation and other chronic uses.

    The recommended nonclinical assessment as outlined in the guidance addresses safety of novel components of the drug product formulation, novel chemicals generated from any component of the drug product formulation by the delivery system, and novel impurities. As used in the guidance, the phrase novel component of the formulation refers to active and inactive ingredients intentionally added to the drug product that have not been approved in drugs at an equal or greater dose, for an equal or greater duration of use, or by a relevant route of administration sufficient to characterize toxicity via local and systemic exposure. FDA expects that in many cases use of the delivery system will generate novel chemicals (e.g., heat-generated products).

    Orally inhaled nicotine-containing drug products developed for smoking cessation and other chronic uses are expected to involve continuous use or chronic intermittent use resulting in 6 months or more exposure over a lifetime. Because of the duration of use, the nonclinical assessment for marketing approval should include general toxicity studies, developmental and reproductive toxicity studies, an assessment of carcinogenic potential, and supporting toxicokinetic and pharmacokinetic studies.

    FDA is aware of the serious risk associated with smoking and is committed to facilitating the development of therapies to support smoking cessation efforts. This guidance focuses on novel components of the drug product formulation, heat-generated products, and impurities that are generally not well characterized. Orally inhaled nicotine-containing tobacco products, including electronic nicotine delivery systems currently marketed in the United States, have already been associated with toxicity concerns (Refs 1-4). An adequate nonclinical assessment, as described in this guidance, can address the potential toxicity of chemicals from orally inhaled nicotine-containing drug products. As noted in the guidance, sponsors can use an alternative approach if that approach provides adequate safety information.

    This draft guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent the current thinking of FDA on nonclinical testing of orally inhaled nicotine-containing drug products. It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations. This guidance is not subject to Executive Order 12866.

    II. Paperwork Reduction Act of 1995

    This guidance refers to previously approved collections of information that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in 21 CFR part 312 have been approved under OMB control number 0910-0014. The collections of information resulting from special protocol assessments have been approved under OMB control number 0910-0470.

    III. Electronic Access

    Persons with access to the internet may obtain the draft guidance at either https://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/default.htm or https://www.regulations.gov.

    IV. References

    The following reference marked with an asterisk (*) is on display at the Dockets Management Staff (see ADDRESSES) and is available for viewing by interested persons between 9 a.m. and 4 p.m., Monday through Friday; it also is available electronically at https://www.regulations.gov. References without asterisks are not on display because they have copyright restriction, or they are available as published articles and books. Please contact the person identified in the FOR FURTHER INFORMATION CONTACT section to schedule a date to inspect references without asterisks.

    1. Madsen, L.R., N.H. Vinther Krarup, T.K. Bergmann, et al., 2016, “A Cancer That Went Up in Smoke: Pulmonary Reaction to E-Cigarettes Imitating Metastatic Cancer,” Chest, 149(3):e65-67. 2. Ghosh, A., R.C. Coakley, T. Mascenik, et al., 2018, “Chronic E-Cigarette Exposure Alters the Human Bronchial Epithelial Proteome,” American Journal of Respiratory and Critical Care Medicine, epub ahead of print February 26, 2018, doi: 10.1164/rccm.201710-2033OC. * 3. Olmedo, P., W. Goessler, S. Tanda, et al., 2018, “Metal Concentrations in E-Cigarette Liquid and Aerosol Samples: The Contribution of Metallic Coils,” Environmental Health Perspectives, 126(2): doi: 10.1289/EHP2175. 4. Rubinstein, M.L., K. Delucchi, N.L. Benowitz, and D.E. Ramo, 2018, “Adolescent Exposure to Toxic Volatile Organic Chemicals From E-Cigarettes,” Pediatrics, epub ahead of print March 5, 2018, doi: 10.1542/peds.2017-3557. Dated: July 31, 2018. Leslie Kux, Associate Commissioner for Policy.
    [FR Doc. 2018-16726 Filed 8-3-18; 8:45 am] BILLING CODE 4164-01-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Office of the Secretary Findings of Research Misconduct AGENCY:

    Office of the Secretary, HHS.

    ACTION:

    Notice.

    SUMMARY:

    Notice is hereby given that on July 13, 2018, the U.S. Department of Health and Human Services (HHS) Debarring Official, on behalf of the Secretary of HHS, issued a final notice of debarment based on an Administrative Law Judge's findings of research misconduct against Christian Kreipke, Ph.D., former Research Associate Professor, Wayne State University. Dr. Kreipke engaged in research misconduct in research supported by National Institute of Neurological Disorders and Stroke (NINDS), National Institutes of Health (NIH), grants R01 NS039860 and R01 NS064976-01A2. The administrative actions, including five (5) years of debarment, were implemented beginning on July 13, 2018, and are detailed below.

    FOR FURTHER INFORMATION CONTACT:

    Wanda K. Jones, Dr.P.H., Interim Director, Office of Research Integrity, 1101 Wootton Parkway, Suite 750, Rockville, MD 20852, (240) 453-8200.

    SUPPLEMENTARY INFORMATION:

    Christian Kreipke, Ph.D., Wayne State University: ORI issued a charge letter enumerating findings of research misconduct and proposing HHS administrative actions. Dr. Kreipke (“Respondent”) subsequently requested a hearing before an Administrative Law Judge (ALJ) of the Departmental Appeals Board to dispute these findings. A hearing before the ALJ was held on July 10-12, 2017. On May 31, 2018, the ALJ issued his recommended decision, finding that Respondent recklessly caused or permitted twenty-three (23) instances of research misconduct in his three (3) grant applications, two (2) articles on which he was the first listed author, and two (2) posters on which he was the first listed author. The ALJ held that appropriate administrative actions included a five-year debarment from any contracting or subcontracting with any agency of the United States and from eligibility for or involvement in nonprocurement programs of the United States referred to as “covered transactions.” 2 CFR parts 180 and 376. The ALJ held it was an appropriate administrative action to also impose a five-year prohibition from serving in any capacity to the U.S. Public Health Service (PHS), including but not limited to, service on any PHS advisory committee, board, or peer review committee, or as a consultant. The ALJ noted that ORI also had proposed that the publisher of certain articles be notified of the need to retract those articles and that retraction had already occurred by the time of his recommended decision.

    Under the regulation, the ALJ's recommended decision went to the Assistant Secretary for Health, who did not modify it and forwarded it to the HHS Debarring Official, who is the deciding official for the debarment. The ALJ decision constituted the findings of fact to the HHS Debarring Official in accordance with 2 CFR 180.845(c). On July 13, 2018, the HHS Debarring Official issued a final notice of debarment to begin on July 13, 2018, and end on July 12, 2023.

    Respondent's grant applications, articles, and posters in question examined the differential effects of endothelin receptor antagonists on traumatic brain injury-induced hypoperfusion of cerebral blood flow, neuronal cell injury, and cognition in rat animal models.

    Respondent recklessly included falsely described images in the following grant applications:

    • R01 NS064976-01A1 submitted to NINDS, NIH (unfunded) • R01 NS064976-01A2 submitted to NINDS, NIH (funded) • R01 NS065824-01 submitted to NINDS, NIH (unfunded)

    Respondent recklessly included falsely described images in the following publications and posters:

    • “Differential effects of endothelin receptor A and B antagonism on cerebral hypoperfusion following traumatic brain injury.” Neurological Research 32(2):209-14, 2010 Mar (“NR2010”). Retracted in Neurological Research 39(5):472, 2017 May.

    • “Clazosentan, a novel endothelin A antagonist, improves cerebral blood flow and behavior after traumatic brain injury.” Neurological Research 33(2):208-13, 2011 Mar (“NR2011-1”). Retracted in Neurological Research 39(5):472, 2017 May.

    • 2009 poster for a Department of Veterans Affairs (VA) presentation: “Using endothelin-A antagonists to ameliorate hypoperfusion and cognitive deficits following brain trauma: towards a clinical trial” (“VA2009”).

    • 2010 poster for a VA presentation: “Endothelin-1 receptor A antagonists improve neurologic and cognitive outcome following TBI” (“VA2010”).

    The following findings of research misconduct were proven by a preponderance of the evidence. Respondent recklessly included:

    • falsely described Fluoro-Jade stained images of rat brain cells in: —Figure 8 (left panel) in R01 NS064976-01A1 —Figure 8B (left panel) in R01 NS064976-01A2 —Figures 4A-F in R01 NS065824-01 —Figure 3 (right and left panels) in NR2011-1 —Figure 5C in NR2010 —Figure 3 (panel 3) and Figure 6 (right and left panels) in VA2009 —Figure 3 (panel 3) and Figure 6 (right and left panels) in VA2010 • falsely described systolic blood pressure curves in Figures 4A and 4B in NR2010 • falsely described cerebral blood flow graphs in: —Figure 5 (left panel) in R01 NS064976-01A1 —Figure 5 (left panel) in R01 NS064976-01A2 —Figure 3A in NR2010 —Figure 5 in VA2009 —Figure 5 in VA2010 • falsely described Western blot images in one of the following three grant applications (because at least one of the three must be false): Figure 1 (me+TBI panel for VEGF) in R01 NS065824-01, Figure 2B in R01 NS064976-01A1, and Figure 2B in R01 NS064976-01A2 • falsely described Western blot images in: —Figure 2A in R01 NS064976-01A1 —Figure 2A in R01 NS064976-01A2 • a falsely described image of lectin labeled rat brain section in Figure 2C in R01 NS065824-01

    Thus, the research misconduct findings set forth above became effective, and the following administrative actions have been implemented for a period of five (5) years, beginning on July 13, 2018:

    (1) Dr. Kreipke is debarred from any contracting or subcontracting with any agency of the United States Government and from eligibility or involvement in nonprocurement programs of the United States Government referred to as “covered transactions” pursuant to HHS' Implementation (2 CFR part 376) of Office of Management and Budget (OMB) Guidelines to Agencies on Governmentwide Debarment and Suspension (2 CFR part 180); and

    (2) Dr. Kreipke is prohibited from serving in any advisory capacity to PHS including, but not limited to, service on any PHS advisory committee, board, and/or peer review committee, or as a consultant.

    Wanda K. Jones, Interim Director, Office of Research Integrity.
    [FR Doc. 2018-16693 Filed 8-3-18; 8:45 am] BILLING CODE 4150-31-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard [Docket Number USCG-2018-0193] Polar Icebreaker Program; Preparation of Environmental Impact Statement AGENCY:

    Coast Guard, DHS.

    ACTION:

    Notice of Availability and request for comments.

    SUMMARY:

    The U.S. Coast Guard, as lead agency, announces the availability of a draft Programmatic Environmental Impact Statement (EIS) in accordance with the National Environmental Policy Act (NEPA) for the Polar Icebreaker Program's design and build of up to six polar icebreakers. The U.S. Coast Guard requests public comments on the draft EIS.

    DATES:

    Comments must be submitted to the online docket via http://www.regulations.gov on or before September 20, 2018.

    ADDRESSES:

    You may submit comments identified by docket number USCG-2018-0193 using the Federal 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 notice of intent, email Mr. Ahmed Majumder, Deputy Program Manager, Polar Icebreaker Program, U.S. Coast Guard; email [email protected]

    SUPPLEMENTARY INFORMATION:

    I. Table of Abbreviations CFR Code of Federal Regulations CGC Coast Guard Cutter EIS Environmental Impact Statement FR Federal Register NEPA National Environmental Policy Act PIBs Polar Icebreakers U.S.C. United States Code II. Background and Purpose

    The U.S. Coast Guard's current fleet of polar icebreakers (PIBs) consists of two heavy icebreakers, Coast Guard Cutter (CGC) POLAR STAR and CGC POLAR SEA, and one medium icebreaker, CGC HEALY. The U.S. Coast Guard's heavy icebreakers have both exceeded their designed 30 year service life. CGC POLAR STAR was commissioned in 1976 and CGC POLAR SEA in 1978. CGC POLAR STAR began reactivation in 2010 and completed a service life extension in 2013 to allow CGC POLAR STAR to operate for an additional seven to ten years. CGC POLAR SEA has remained out of service since 2010 and is not expected to be reactivated. The current PIB program acquisition strategy is approved to construct up to three heavy PIBs and may (at a future date) potentially expand to include up to three medium icebreakers, with planned service design lives of 30 years each. The first of these new PIBs is expected to delivered in 2023. Because the first new PIB would not be operational in the Polar Regions until at least 2023, new information may become available after the completion of this EIS. In that case, supplemental NEPA documentation may, as appropriate, be prepared in support of individual proposed actions. Examples of new information may include, but are not limited to, changes to a species listing status or any other applicable laws and directives, and information regarding mission, training, homeporting, maintenance, and eventual decommissioning of the new PIBs.

    A new PIB would be designed to carry out the U.S. Coast Guard's primary missions supported by the current polar icebreaker fleet. Expected missions include Ice Operations, Defense Readiness, Aids to Navigation, Living Marine Resources, Marine Safety, Marine Environmental Protection, Other Law Enforcement, Ports, Waterways, and Coastal Security, and Search and Rescue.

    In executing its various missions, the U.S. Coast Guard protects the public, the environment, and U.S. economic and security interests in any maritime region, including international waters and the Nation's coasts, ports, and inland waterways, as required to support national security. Legislation and executive orders assign the U.S. Coast Guard a wide range of responsibilities applicable to Polar Regions. The U.S. Coast Guard derives its authority for the use of icebreaking from several statutes governing execution of its missions. These include 14 U.S.C. 81 (Coast Guard establishment, maintenance, and operation of aids to navigation), 14 U.S.C. 88 (Coast Guard saving of life and property), 14 U.S.C. 89 (Coast Guard law enforcement), 14 U.S.C. 90 (Arctic maritime transportation), 14 U.S.C. 91 (controlling anchorage and movement of vessels), 14 U.S.C. 94 (conduct oceanographic research), and 14 U.S.C. 141 (cooperation with agencies, States, territories, and others). In addition, Executive Order 7521 (Use of Vessels for Icebreaking in Channels and Harbors), 1 FR 2184, Dec. 24, 1936, directs the U.S. Coast Guard to assist in keeping channels and harbors open to navigation by means of icebreaking operations.

    The U.S. Coast Guard proposes to conduct polar icebreaker operations and training exercises to meet Coast Guard mission responsibilities in the U.S. Arctic and Antarctic Regions of operation, in addition to vessel performance testing post-dry dock in the Pacific Northwest near the current polar icebreaker homeport of Seattle, Washington. The exact location for future homeporting has not been determined, but the current fleet of polar icebreakers is homeported in Seattle, Washington.

    Polar Regions are becoming increasingly important to U.S. national interests. The changing environment in these regions could lead to a rise in human activity and increased commercial ship, cruise ship, and naval surface ship operations, as well as increased exploration for oil and other resources, particularly in the Arctic. One of the U.S. Coast Guard's highest priorities is safety of life at sea. This entails the Artic responsibilities described above as well as assisting with Antarctica logistics at McMurdo Station. Long-term projected increases in U.S. Coast Guard mission demand in the Polar Regions would require additional support from PIBs. A lack of infrastructure, polar environmental conditions, and long distances between operating areas and support bases all influence the U.S. Coast Guard's ability to provide comparable service and presence in Polar Regions as compared to that provided in other non-polar areas of operation with existing Coast Guard assets.

    This EIS will analyze the potential impacts of up to six new PIBs, as this is the maximum number anticipated to be operational in the Polar Regions under the current PIB program acquisition strategy; A lesser number of icebreakers is expected to result in a similar or reduced impact than what will be discussed and evaluated in this EIS. Potential environmental stressors include acoustic (underwater acoustic transmissions, vessel noise, icebreaking noise, aircraft noise, and gunnery noise), and physical (vessel movement, aircraft or in-air device movement, in-water device movement, icebreaking, and marine expended materials).

    III. Scoping Process

    The U.S. Coast Guard conducted scoping in accordance with Council on Environmental Quality (CEQ) regulations implementing the NEPA (40 CFR 1500 et seq.) through public comment and public meetings. A summary of the scoping process can be found in the draft EIS.

    IV. Public Participation and Request for Comments

    We encourage you to submit comments (or related material) on the draft Programmatic Environmental Impact Statement. We will consider all submissions and may adjust our final action based on your comments. If you submit a comment, please include the docket number for this notice, 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. Documents mentioned in this notice, and all public comments, are 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 EIS is published.

    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, you may review a Privacy Act notice regarding the Federal Docket Management System in the March 24, 2005, issue of the Federal Register (70 FR 15086).

    This notice is issued under authority of 5 U.S.C. 552(a).

    Dated: June 31, 2018. Ahmed Majumder, U.S. Coast Guard, Program Manager, Polar Icebreaker Program.
    [FR Doc. 2018-16760 Filed 8-3-18; 8:45 am] BILLING CODE 9110-04-P
    DEPARTMENT OF HOMELAND SECURITY Federal Emergency Management Agency [Docket ID FEMA-2008-0010] Board of Visitors for the National Fire Academy AGENCY:

    Federal Emergency Management Agency, DHS.

    ACTION:

    Committee management; notice of open federal advisory committee meeting.

    SUMMARY:

    The Board of Visitors for the National Fire Academy (Board) will meet on August 27-28, 2018, in Emmitsburg, Maryland. The meeting will be open to the public.

    DATES:

    The meeting will take place on Monday, August 27, 8:00 a.m. to 5:00 p.m. Eastern Daylight Time and on Tuesday, August 28, 8:00 a.m. to 5:00 p.m. Eastern Daylight Time. Please note that the meeting may close early if the Board has completed its business.

    ADDRESSES:

    The meeting will be held at the National Emergency Training Center, 16825 South Seton Avenue, Building H, Room 300, Emmitsburg, Maryland. Members of the public who wish to obtain details on how to gain access to the facility and directions may contact Deborah Gartrell-Kemp as listed in the FOR FURTHER INFORMATION CONTACT section by close of business August 17, 2018. Photo identification that meets REAL ID ACT standards (https://www.usfa.fema.gov/training/nfa/admissions/campus_access.html) is required for access. Members of the public may also participate by teleconference and may contact Deborah Gartrell-Kemp to obtain the call-in number and access code. For information on services for individuals with disabilities or to request special assistance, contact Deborah Gartrell-Kemp as soon as possible.

    To facilitate public participation, we are inviting public comment on the issues to be considered by the Board as listed in the SUPPLEMENTARY INFORMATION section. Comments must be submitted in writing no later than August 17, 2018, must be identified by Docket ID FEMA-2008-0010 and may be submitted by one of the following methods:

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

    Email: [email protected] Include the docket number in the subject line of the message.

    Mail/Hand Delivery: Deborah Gartrell-Kemp, 16825 South Seton Avenue, Emmitsburg, Maryland 21727, post-marked no later than August 17, 2018.

    Instructions: All submissions received must include the words “Federal Emergency Management Agency” and the Docket ID for this action. Comments received will be posted without alteration at http://www.regulations.gov, including any personal information provided.

    Docket: For access to the docket to read background documents or comments received by the National Fire Academy Board of Visitors, go to http://www.regulations.gov, click on “Advanced Search,” then enter “FEMA-2008-0010” in the “By Docket ID” box, then select “FEMA” under “By Agency,” and then click “Search.”

    FOR FURTHER INFORMATION CONTACT:

    Alternate Designated Federal Officer: Kirby E. Kiefer, telephone (301) 447-1117, email [email protected]

    Logistical Information: Deborah Gartrell-Kemp, telephone (301) 447-7230 and email [email protected]

    SUPPLEMENTARY INFORMATION:

    The Board will meet on Monday, August 27, and Tuesday, August 28, 2018. The meeting will be open to the public. Notice of this meeting is given under the Federal Advisory Committee Act, 5 U.S.C. App.

    Purpose of the Board

    The purpose of the Board is to review annually the programs of the National Fire Academy (Academy) and advise the Administrator of the Federal Emergency Management Agency (FEMA), through the United States Fire Administrator, on the operation of the Academy and any improvements therein that the Board deems appropriate. In carrying out its responsibilities, the Board examines Academy programs to determine whether these programs further the basic missions that are approved by the Administrator of FEMA, examines the physical plant of the Academy to determine the adequacy of the Academy's facilities, and examines the funding levels for Academy programs. The Board submits a written annual report through the United States Fire Administrator to the Administrator of FEMA. The report provides detailed comments and recommendations regarding the operation of the Academy.

    Agenda

    On Monday, August 27, 2018, there will be five sessions, with deliberations and voting at the end of each session as necessary:

    1. The Board will conduct a swearing in of new Board members and will then select a Chairperson and Vice Chairperson for Fiscal Year 2019.

    2. The Board will receive annual ethics training and will tour the campus facility.

    3. The Board will discuss deferred maintenance and capital improvements on the National Emergency Training Center campus and Fiscal Year 2018 Budget Request/Budget Planning.

    4. The Board will deliberate and vote on recommendations on Academy program activities, including:

    • Fire and Emergency Services Higher Education (FESHE) Recognition Program update, a certification program acknowledging that a collegiate emergency services degree meets the minimum standards of excellence established by FESHE development committees and the Academy;

    • The National Professional Development Summit Report held on June 13-16, 2018, which brought national training and education audiences together for their annual conference and support initiatives;

    • The Managing Officer Program progress report, a multiyear curriculum that introduces emerging emergency services leaders to personal and professional skills in change management, risk reduction, and adaptive leadership;

    • Program application selection results;

    • The Executive Fire Officer (EFO) Program Symposium held April 6-8, 2018, an annual event for alumni which recognizes outstanding applied research completed by present EFO Program participants, recognizes recent EFO Program graduates, provides high-quality presentations offered by private and public sector representatives, facilitates networking between EFO Program graduates, promotes further dialog between EFO Program graduates and U.S. Fire Administrator and National Fire Academy faculty and staff;

    • The EFO Program review initiative;

    • Curriculum development and revision updates for Academy courses;

    • Discussion on the approval process for state-specific courses;

    • Online mediated instruction program update;

    • Distance learning program update;

    • Staffing update.

    5. The Board will receive activity reports on the National Fire Incident Reporting System Subcommittee, the Professional Development Initiative Subcommittee, and four EFO Program Subcommittees: Admissions, Curriculum, Delivery and Design, and Evaluations and Outcomes.

    On Tuesday, August 28, 2018, the Board will receive updates on U.S. Fire Administration data, research, and response support initiatives and will conduct classroom visits. The Board will also engage in an annual report writing session. Deliberations or voting may occur as needed during the report writing session.

    There will be a 10-minute comment period after each agenda item and each speaker will be given no more than 2 minutes to speak. Please note that the public comment period may end before the time indicated, following the last call for comments. Contact Deborah Gartrell-Kemp to register as a speaker. Meeting materials will be posted at https://www.usfa.fema.gov/training/nfa/about/bov.html by August 17, 2018.

    Dated: July 27, 2018. Tonya L. Hoover, Superintendent, National Fire Academy, United States Fire Administration, Federal Emergency Management Agency.
    [FR Doc. 2018-16697 Filed 8-3-18; 8:45 am] BILLING CODE 9111-45-P
    DEPARTMENT OF THE INTERIOR Fish and Wildlife Service [FWS-R4-ES-2018-N057; FXES11130900000C2-189-FF09E32000] Endangered and Threatened Wildlife and Plants; 5-Year Status Reviews for 42 Southeastern Species AGENCY:

    Fish and Wildlife Service, Interior.

    ACTION:

    Notice of initiation of reviews; request for information.

    SUMMARY:

    We, the U.S. Fish and Wildlife Service (Service), are initiating 5-year status reviews of 42 species under the Endangered Species Act of 1973, as amended. A 5-year review is an assessment of the best scientific and commercial data available at the time of the review. We are requesting submission of information that has become available since the last reviews of these species.

    DATES:

    To allow us adequate time to conduct these reviews, we must receive your comments or information on or before October 5, 2018. However, we will continue to accept new information about any listed species at any time.

    ADDRESSES:

    For instructions on how to submit information and review information that we receive on these species, see Request for New Information under SUPPLEMENTARY INFORMATION.

    FOR FURTHER INFORMATION CONTACT:

    For species-specific information, see Request for New Information under SUPPLEMENTARY INFORMATION.

    SUPPLEMENTARY INFORMATION:

    Why do we conduct 5-year reviews?

    Under the Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531 et seq.), we maintain lists of endangered and threatened wildlife and plant species (referred to as the Lists) in title 50 of the Code of Federal Regulations (CFR) at 50 CFR 17.11 (for wildlife) and 17.12 (for plants). Section 4(c)(2)(A) of the ESA requires us to review each listed species' status at least once every 5 years. Our regulations at 50 CFR 424.21 require that we publish a notice in the Federal Register announcing those species under active review. For additional information about 5-year reviews, go to http://www.fws.gov/endangered/what-we-do/recovery-overview.html.

    Which species are under review?

    This notice announces our active 5-year reviews of the species in the following table.

    Common name/scientific name Contact person, email, phone Status
  • (endangered or
  • threatened)
  • States where the species is known to occur Final listing rule
  • (Federal Register citation and
  • publication date)
  • Contact's mailing address
    ANIMALS Mammals Bat, Florida bonneted (Eumops floridanus) Roxanna Hinzman, [email protected], 772-468-4341 Endangered Florida 78 FR 61003; 10/2/2013 USFWS, 1339 20th St., Vero Beach, FL 32960. Mouse, St. Andrew beach (Peromyscus polionotus peninsularis) Kristi Yanchis, [email protected], 850-769-0552 Endangered Florida 63 FR 70053; 12/18/1998 USFWS, 1601 Balboa Ave., Panama City, FL 32405. Rabbit, Lower Keys (Sylvilagus palustris hefneri) Roxanna Hinzman, [email protected], 772-469-4342 Endangered Florida 55 FR 25588; 6/21/1990 USFWS, 1339 20th St., Vero Beach, FL 32960. Rice rat, (=silver rice rat) (Oryzomys palustris natator) Roxanna Hinzman, [email protected], 772-469-4343 Endangered Florida 56 FR 19809; 4/30/1991 USFWS, 1339 20th St., Vero Beach, FL 32960. Birds Woodpecker, red-cockaded (Picoides borealis) Will McDearman, [email protected], 601-321-1124 Endangered Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina, Texas, Virginia 35 FR 16047: 10/13/1970 USFWS, 6578 Dogwood View Pkwy., Jackson, MS 39213. Reptiles Crocodile, American (Crocodylus acutus) Roxanna Hinzman, [email protected]., 772-469-4355 Threatened Florida 71 FR 13027; 3/20/2007 USFWS, 1339 20th St., Vero Beach, FL 32960 Lizard, St. Croix ground (Ameiva polops) Jan Zegarra, [email protected]., 787-851-7297 Endangered U.S. Virgin Islands 42 FR 28543; 6/3/1977 USFWS, Road 301, Km 5.1, P.O. Box 491, Boquerón, PR 00622 Fishes Darter, bayou (Etheostoma rubrum) Daniel Drennen, [email protected]., 601-321-1127 Threatened Mississippi 40 FR 44149; 9/25/1975 USFWS, 6578 Dogwood View Pkwy., Jackson, MS 39213 Darter, Okaloosa (Etheostoma okaloosae) Bill Tate, [email protected]., 850-769-0552 Threatened Florida 76 FR 18087; 4/1/2011 USFWS, 1601 Balboa Ave., Panama City, FL 32405 Darter, Relict (Etheostoma chienense) Mike Floyd, [email protected]., 502-695-0468 Endangered Kentucky 58 FR 68480; 12/27/1993 USFWS, 330 W. Broadway, Ste 265, Frankfort, KY 40601 Logperch, Conasauga (Percina jenkinsi) Robin Goodloe, [email protected]., 706-613-9493 Endangered Georgia/Tennessee 56 FR 31597; 8/5/1985 USFWS, 355 East Hancock Ave Room 320, Athens, GA 30601 Clams Bankclimber, purple (Elliptoideus sloatianus) Maureen Walsh, [email protected]., 850-769-0552 Threatened Florida 63 FR 12664; 3/16/1998 USFWS, 1601 Balboa Ave., Panama City, FL 32405 Moccasinshell, Gulf (Medionidus penicillatus) Maureen Walsh, [email protected]., 850-769-0552 Endangered Florida 63 FR 12664; 3/16/1998 USFWS, 1601 Balboa Ave., Panama City, FL 32405 Moccasinshell, Ochlockonee (Medionidus simpsonianus) Maureen Walsh., [email protected]., 850-769-0552 Endangered Florida 63 FR 12664; 3/16/1998 USFWS, 1601 Balboa Ave., Panama City, FL 32405 Pearlymussel, littlewing (Pegias fabula) Leroy Koch, [email protected]., 502-695-0468 Endangered Alabama, Kentucky, North Carolina, Tennessee, Virginia 53 FR 45861; 11/14/1988 USFWS, 330 West Broadway, Suite 265, Frankfort, KY 40601 Pigtoe, oval (Pleurobema pyriforme) Maureen Walsh, [email protected]., 850-769-0552 Threatened Florida 63 FR 12664; 3/16/1998 USFWS, 1601 Balboa Ave., Panama City, FL 32405 Pocketbook, shinyrayed (Lampsilis subangulata) Maureen Walsh, [email protected]., 850-769-0552 Endangered Florida 63 FR 12664; 3/16/1998 USFWS, 1601 Balboa Ave., Panama City, FL 32405 Slabshell, Chipola (Elliptio chipolaensis) Maureen Walsh, [email protected]., 850-769-0552 Threatened Florida 63 FR 12664; 3/16/1998 USFWS., 1601 Balboa Ave., Panama City, FL 32405 Spinymussel, Altamaha (Elliptio spinosa) Anthony Sowers, [email protected]., 706-613-9493 Endangered Georgia 76 FR 62928; 10/11/2011 USFWS, 355 East Hancock Ave Room 320, Athens, GA 30601 Threeridge, fat (Amblema neislerii) Maureen Walsh, [email protected]., 850-769-0552 Endangered Florida/Georgia 63 FR 12664; 3/16/1998 USFWS, 1601 Balboa Ave, Panama City, FL 32405 Snails Snail, Stock Island tree (Orthalicus reses) Roxanna Hinzman, [email protected]., 772-469-4347 Threatened Florida 43 FR 28932; 7/3/1978 USFWS, 1339 20th St., Vero Beach, FL 32960 Insects Swallowtail, Schaus (Heraclides aristodemus ponceanus) Roxanna Hinzman, [email protected]., 772-469-4345 Endangered Florida 49 FR 34501; 8/31/1984 USFWS, 1339 20th St., Vero Beach, FL 32960 Crustaceans Crayfish, Benton County Cave (Cambarus aculabrum) Tommy Inebnit, [email protected]., 501-513-4483 Endangered Florida 58 FR 25742; 4/27/1993 USFWS, 110 South Amity Rd., Suite 300, Conway, AR 72032 PLANTS Flowering Plants Buxus vahlii (Vahl's boxwood) Omar Monsegur, [email protected]., 787-851-7297 Endangered Puerto Rico 50 FR 32572; 8/13/1985 USFWS, Road 301, Km 5.1, P.O. Box 491, Boquerón, PR 00622 Calyptranthes thomasiana (Thomas lidflower) Jaime Yrigoyen, [email protected]., 787-851-7297 Endangered Puerto Rico; U.S. Virgin Islands 59 FR 8138; 2/18/1994 USFWS, Road 301, Km 5.1, P.O. Box 491, Boquerón, PR 00622 Cladonia perforata (Florida perforate cladonia) Roxanna Hinzman, [email protected]., 772-469-4349 Endangered Florida 58 FR 25746; 4/27/1993 USFWS, 1339 20th St., Vero Beach, FL 32960 Clitoria fragrans (Pigeon wings) Roxanna Hinzman, [email protected]., 772-469-4353 Threatened Florida 58 FR 25746; 4/27/1993 USFWS, 1339 20th St., Vero Beach, FL 32960 Crotalaria avonensis (Avon Park harebells) Roxanna Hinzman, [email protected]., 772-469-4350 Endangered Florida 58 FR 25746; 4/27/1993 USFWS, 1339 20th St., Vero Beach, FL 32960 Daphnopsis hellerana (no common name) Jennifer Valentin, [email protected]., 787-851-7297 Endangered Puerto Rico 53 FR 23740; 6/23/1988 USFWS, Road 301, Km 5.1, P.O. Box 491, Boquerón, PR 00622 Dicerandra immaculata (Lakela's mint) Roxanna Hinzman, [email protected]., 772-469-4350 Endangered Florida 50 FR 20212; 5/15/1985 USFWS., 1339 20th St., Vero Beach, FL 32960 Gesneria pauciflora (no common name) Omar Monsegur, [email protected]., 787-851-7297 Threatened Puerto Rico 60 FR 12483; 3/7/1995 USFWS, Road 301, Km 5.1, P.O. Box 491, Boquerón, PR 00622 Goetzea elegans (Beautiful goetzea) Martiza Vargas, [email protected]., 787-851-7297 Endangered Puerto Rico 50 FR 15564; 4/19/1985 USFWS, Road 301, Km 5.1, P.O. Box 491, Boquerón, PR 00622 Helianthus schweinitzii (Schweinitz's sunflower) Rebekkah Reid, [email protected]., 828-258-3939 Endangered North Carolina; South Carolina 56 FR 21087; 5/7/1991 USFWS, 160 Zillicoa St., Asheville, NC 28801 Hudsonia montana (Mountain golden heather) Rebekkah Reid, [email protected]., 828-258-3939 Threatened North Carolina 45 FR 69360; 10/20/1980 USFWS, 160 Zillicoa St., Asheville, NC 28801 Ilex cookii (Cook's holly) Angel Colon, [email protected]., 787-851-7297 Endangered Puerto Rico 52 FR 22936; 6/16/1987 USFWS, Road 301, Km 5.1, P.O. Box 491, Boquerón, PR 00622 Jacquemontia reclinata (Beach jacquemontia) Roxanna Hinzman, [email protected]., 772-469-4348 Endangered Florida 58 FR 62046; 11/24/1993 USFWS, 1339 20th St., Vero Beach, FL 32960 Juglans jamaicensis (West Indian walnut (nogal)) Angel Colon, [email protected]., 787-851-7297 Endangered Puerto Rico 62 FR 1691; 1/13/1997 USFWS, Road 301, Km 5.1, P.O. Box 491, Boquerón, PR 00622 Paronychia chartacea (Papery whitlow-wort) Roxanna Hinzman, [email protected]., 772-469-4352 Threatened Florida 52 FR 2227; 1/21/1987 USFWS, 1339 20th St., Vero Beach, FL 32960 Rhododendron chapmanii (Chapman's rhododendron) Vivian Negron-Ortiz, [email protected]., 850-769-0552 Endangered Florida 44 FR 24248; 4/24/1979 USFWS, 1601 Balboa Ave., Panama City, FL 32405 Sisyrinchium dichotomum (White irisette) Rebekkah Reid, [email protected]., 828-258-3939 Endangered North Carolina; South Carolina 56 FR 48752; 9/26/1991 USFWS., 160 Zillicoa St., Asheville, NC 28801 Solidago spithamaea, (Blue Ridge goldenrod) Rebekkah Reid, [email protected]., 828-258-3939 Threatened North Carolina, Tennessee 50 FR 12306; 3/28/1985 USFWS, 160 Zillicoa St., Asheville, NC 28801 Conifers Torreya taxifolia (Florida torreya) Vivian Negron-Ortiz, [email protected]., 850-769-0552 Endangered Florida, Georgia 49 FR 2783; 1/23/1984 USFWS, 1601 Balboa Ave., Panama City, FL 32405
    What information do we consider in our review?

    A 5-year review considers the best scientific and commercial data that have become available since the current listing determination or most recent status review of each species, such as:

    A. Species biology, including but not limited to population trends, distribution, abundance, demographics, and genetics;

    B. Habitat conditions, including but not limited to amount, distribution, and suitability;

    C. Conservation measures that have been implemented to benefit the species;

    D. Threat status and trends (see the five factors under How Do We Determine Whether A Species Is Endangered or Threatened?); and

    E. Other new information, data, or corrections, including but not limited to taxonomic or nomenclatural changes, identification of erroneous information contained in the List, and improved analytical methods.

    We request any new information concerning the status of any of these 42 species. Information submitted should be supported by documentation such as maps, bibliographic references, methods used to gather and analyze the data, and/or copies of any pertinent publications, reports, or letters by knowledgeable sources.

    We expect we could conduct a species status assessment (SSA) for some of these species under review. An SSA is a biological risk assessment to aid decision makers who must use the best available scientific information to make policy decisions under the ESA. The SSA provides decisionmakers with a scientifically rigorous characterization of a species' status, and of the likelihood that the species will sustain populations, along with key uncertainties in that characterization.

    It presents a compilation of the best available information on a species, as well as its ecological needs, based on environmental factors. An SSA also describes the current condition of the species' habitat and demographics, and probable explanations for past and ongoing changes in abundance and distribution within the species' range. Finally, it forecasts the species' response to probable future scenarios of environmental conditions and conservation efforts. Overall, an SSA uses the conservation biology principles of resiliency, redundancy, and representation (collectively known as the “3 Rs”) to evaluate the current and future condition of the species. As a result, the SSA characterizes a species' ability to sustain populations in the wild over time based on the best scientific understanding of current and future abundance and distribution within the species' ecological settings.

    Definitions

    A. Species means any species or subspecies of fish, wildlife, or plant, and any distinct population segment of any species of vertebrate which interbreeds when mature.

    B. Endangered means any species that is in danger of extinction throughout all or a significant portion of its range.

    C. Threatened means any species that is likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range.

    How do we determine whether a species is endangered or threatened?

    Section 4(a)(1) of the ESA requires that we determine whether a species is endangered or threatened based on one or more of the following five factors:

    A. The present or threatened destruction, modification, or curtailment of its habitat or range;

    B. Overutilization for commercial, recreational, scientific, or educational purposes;

    C. Disease or predation;

    D. The inadequacy of existing regulatory mechanisms; or

    E. Other natural or manmade factors affecting its continued existence.

    Request for New Information

    To do any of the following, contact the person associated with the species you are interested in under the table in SUPPLEMENTARY INFORMATION:

    A. To get more information on a species;

    B. To submit information on a species; or

    C. To review information we receive, which will be available for public inspection by appointment, during normal business hours, at the listed addresses.

    Public Availability of Comments

    Comments we receive become part of the administrative record associated with this action. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can request in your comment that we withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so. All submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses, will be made available for public disclosure in their entirety.

    Availability of Status Reviews

    All completed status reviews under the ESA are available via the Service website, at https://www.fws.gov/endangered/species/us-species.html.

    Authority

    We publish this document under the authority of the Endangered Species Act (16 U.S.C. 1531 et seq.).

    Dated: May 1, 2018. Mike Oetker, Acting Regional Director, Southeast Region.
    [FR Doc. 2018-16734 Filed 8-3-18; 8:45 am] BILLING CODE 4333-15-P
    DEPARTMENT OF JUSTICE Antitrust Division Notice Pursuant to the National Cooperative Research and Production Act of 1993—National Armaments Consortium

    Notice is hereby given that, on April 20, 2018, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301 et seq. (“the Act”), National Armaments Consortium (“NAC”) has filed written notifications simultaneously with the Attorney General and the Federal Trade Commission disclosing changes in its membership. The notifications were filed for the purpose of extending the Act's provisions limiting the recovery of antitrust plaintiffs to actual damages under specified circumstances. Specifically, Base Design LLC, Wake Forest, NC; Agile Defense, Inc., Reston, VA; Arizona State University Research Enterprise (ASURE), Scottsdale, AZ; ARRS Technologies, LLC, San Diego, CA; Ascent Vision Technologies, LLC, Belgrade, MT; Bachstein Consulting LLC, Raymond, NH; Barden Brook Solutions, Bloomfield Hills, MI; Binergy Scientific Inc., Atlanta, GA; BlankSafe LLC, San Juan Bautista, CA; Calculagraph Co DBA Control Products, Inc., East Hanover, NJ; Chemimage Biothreat, LLC d/b/a Chemimage Sensor Systems, Pittsburgh, PA; CMI Defence America, Sterling Heights, MI; CTC Enterprise Ventures Corporation (EVC), Johnstown, PA; Dynamic Matter LLC, Englewood, CO; Fiber Materials, Inc., Biddeford, ME; FLIR Systems, Inc., North Billerica, MA; Harbour Mechanical Corporation, Hoboken, NJ; Harris Corporation, Roanoke, VA; Hill Technical Solutions, Inc., Huntsville, AL; Intellisense Systems, Inc., Torrance, CA; Knobley Technical Associates LLC, Rocket Center, WV; Lithium Battery Engineering, LLC, Randolph, NJ; Lynntech, Inc., College Station, TX; Mainstream Engineering Corporation, Rockledge, FL; MAJR Mechatronics Corp, Sebring, FL; MegaWave Corporation, Devens, MA; Mustang Vacuum Systems, Inc., Sarasota, FL; NAVSYS Corporation, Colorado Springs, CO; NBS Enterprises, LLC, Leesburg, VA; North Star Systems, Inc., Birmingham, AL; Novateur Research Solutions LLC, Leesburg, VA; Novetta, Inc., McLean, VA; nP Technology LLC, Colorado Springs, CO; Nutronics, Inc., Longmont, CO; nVision Technology, Inc, Norton, OH; OASYS, INC., Huntsville, AL; Olin Corporation—Winchester Division, East Alton, IL; Optek Global Solutions, Inc., Los Angeles, CA; Ordnance Technology Service, Inc., Mentor, OH; Ormond, LLC, Auburn, WA; Peak Nano Optics, LLC, Coppel, TX; Piasecki Aircraft Corporation, Essington, PA; Polaris Contract Manufacturing, Inc., Marion, MA; PolyK Technologies, LLC, State College, PA; PPI-Time Zero, Inc., Fairfield, NJ; Princeton Infrared Technologies, Inc., Monmouth, NJ; Qynergy Corporation, Albuquerque, NM; RADA Technologies LLC, Silver Spring, MD; Redfish Trading, LLC, San Antonio, TX; Riptide Autonomous Solutions, Plymouth, MA; Robert Doto Associates, LLC, Sun City Center, FL; Senvol LLC, New York, NY; Sierra Nevada Corporation, Sparks, NV; SiliconScapes, LLC, State College, PA; Solid Innovations, LLC, East Stroudsburg, PA; Space Vector Corporation, Chatsworth, CA; SPIRE Manufacturing Solutions, LLC, Colorado Springs, CO; Stockdale & Associates, Indianapolis, IN; Strategic Marketing Innovations, Inc., Washington, DC; Technology and Communications Systems Inc., Clearwater, FL; Teledyne Brown Engineering, Inc., Huntsville, AL; Telephonies Corporation, Farmingdale, NY; TERMA North America Inc., Warner Robins, GA; Total Reliant Consulting, Boerne, TX; T-Worx Holdings, LLC, Ashburn, VA; UDC USA Inc., Tampa, FL; United Protective Technologies LLC, Locus, NC; University of Delaware, Newark, DE; VK Integrated Systems, Fullerton, CA; Volans-I, INC., San Francisco, CA; VT Miltope Corporation, Hope Hull, AL; WMD Guns, LLC, Stuart, FL; and ZedaSoft, Inc., Fort Worth, TX have been added as parties to this venture.

    Also, 3D Systems, Inc., Rock Hill, SC; Advanced Ceramics Manufacturing, Tucson, AZ; Alaire Technologies Inc., Lorton, VA; Arco Global Services Corp., Corpus Christi, TX; Aria Microwave Systems, Inc., Teaneck, NJ; KYNTEC Corporation, Cheektowaga, NY; Metamagnetics Inc., Westborough, MA; Mission Critical Solutions, LLC, Alum Bank, PA; Riptide Software, Inc., Oviedo, FL; and Vista Outdoor Sales LLC, Anoka, MN, have withdrawn as parties to this venture.

    No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and NAC intends to file additional written notifications disclosing all changes in membership.

    On May 2, 2000, NAC filed its original notification Pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the Federal Register pursuant to Section 6(b) of the Act on June 30, 2000 (65 FR 40693).

    The last notification was filed with the Department on April 19, 2018. A notice was published in the Federal Register pursuant to Section 6(b) of the Act on May 21, 2018 (83 FR 23486).

    Suzanne Morris Chief, Premerger and Division Statistics Unit, Antitrust Division.
    [FR Doc. 2018-16705 Filed 8-3-18; 8:45 am] BILLING CODE 4410-11-P
    DEPARTMENT OF JUSTICE Antitrust Division Notice Pursuant to the National Cooperative Research and Production Act of 1993—Cooperative Research Group on ROS-Industrial Consortium Americas

    Notice is hereby given that, on July 12, 2018, Pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301 et seq. (“the Act”), Southwest Research Institute—Cooperative Research Group on ROS-Industrial Consortium-Americas (“RIC-Americas”) has filed written notifications simultaneously with the Attorney General and the Federal Trade Commission disclosing changes in its membership. The notifications were filed for the purpose of extending the Act's provisions limiting the recovery of antitrust plaintiffs to actual damages under specified circumstances. Specifically, Microsoft Corp., Redmond, WA, has been added as a party to this venture.

    No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and RIC-Americas intends to file additional written notifications disclosing all changes in membership.

    On April 30, 2014, RIC-Americas filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the Federal Register pursuant to Section 6(b) of the Act on June 9, 2014 (79 FR 32999).

    The last notification was filed with the Department on June 11, 2018. A notice was published in the Federal Register pursuant to Section 6(b) of the Act on July 9, 2018 (83 FR 31775).

    Suzanne Morris, Chief, Premerger and Division Statistics Unit, Antitrust Division.
    [FR Doc. 2018-16713 Filed 8-3-18; 8:45 am] BILLING CODE 4410-11-P
    DEPARTMENT OF JUSTICE Antitrust Division Notice Pursuant to the National Cooperative Research and Production Act of 1993—Integrated Photonics Institute for Manufacturing Innovation Operating Under the Name of The American Institute for Manufacturing Integrated Photonics

    Notice is hereby given that, on July 23, 2018, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301 et seq. (“the Act”), Integrated Photonics Institute for Manufacturing Innovation operating under the name of the American Institute for Manufacturing Integrated Photonics (“AIM Photonics”) has filed written notifications simultaneously with the Attorney General and the Federal Trade Commission disclosing changes in its membership. The notifications were filed for the purpose of extending the Act's provisions limiting the recovery of antitrust plaintiffs to actual damages under specified circumstances. Specifically, Applied Materials, Inc., Santa Clara, CA; The Board of Governors of the Colorado State University System acting by and through Colorado State University, Fort Collins, CO; Stonehill College, Inc., Easton, MA; University of Chicago Argonne LLC, as operator of Argonne National Laboratory, Lemont, IL; The George Washington University, Washington, DC; Marktech International Corporation dba Marktech Optoelectronics, Latham, NY; and Israeli Hi-Tech Association at the Manufacturer's Association of Israel, TelAviv, ISRAEL, have been added as parties to this venture.

    No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and AIM Photonics intends to file additional written notifications disclosing all changes in membership.

    On June 16, 2016, AIM Photonics filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the Federal Register pursuant to Section 6(b) of the Act on July 25, 2016 (81 FR 48450).

    The last notification was filed with the Department on January 26, 2018. A notice was published in the Federal Register pursuant to Section 6(b) of the Act on March 12, 2018 (83 FR 10750).

    Suzanne Morris, Chief, Premerger and Division Statistics Unit, Antitrust Division.
    [FR Doc. 2018-16706 Filed 8-3-18; 8:45 am] BILLING CODE 4410-11-P
    DEPARTMENT OF JUSTICE [OMB Number 1117-0034] Agency Information Collection Activities; Proposed eCollection, eComments Requested; Revision of a Currently Approved Collection; the National Forensic Laboratory Information System Collection of Drug Analysis Data AGENCY:

    Drug Enforcement Administration, Department of Justice.

    ACTION:

    30-day Notice.

    SUMMARY:

    The Department of Justice (DOJ), Drug Enforcement Administration (DEA), will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection was previously published in the Federal Register, on June 11, 2018, allowing for a 60 day comment period.

    DATES:

    Comments are encouraged and will be accepted for 30 days until September 5, 2018.

    FOR FURTHER INFORMATION CONTACT:

    If you have comments on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Thomas D. Sonnen, Diversion Control Division, Drug Enforcement Administration; Mailing Address: 8701 Morrissette Drive, Springfield, Virginia 22152; Telephone: (202) 598-6812 or sent to [email protected]

    SUPPLEMENTARY INFORMATION:

    Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:

    —Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; —Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; —Evaluate whether and if so how the quality, utility, and clarity of the information proposed to be collected can be enhanced; and —Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other forms of information technology, e.g., permitting electronic submission of responses. Overview of This Information Collection

    1. Type of Information Collection: Revision of a currently approved collection.

    2. Title of the Form/Collection: The National Forensic Laboratory Information System Collection of Drug Analysis Data.

    3. The agency form number, if any, and the applicable component of the Department sponsoring the collection: Medical Examiner/Coroner Office Survey; National Forensic Laboratory Information System Drug Survey of Drug Laboratories; and Toxicology Laboratory Survey for the component within the Department of Justice is the Drug Enforcement Administration, Diversion Control Division.

    4. Affected public who will be asked or required to respond, as well as a brief abstract:

    Affected public (Primary): Forensic Science Laboratory Management.

    Abstract: The National Forensic Laboratory Information System (NFLIS) collections provide the DEA with national databases on analyzed drug samples from law enforcement activities, antemortem toxicology samples (toxiciology laboratories), and post-mortem toxicology samples (medical examiner/coroner offices (MECs) from federal, state, and local laboratories. Specifically, NFLIS-Drug data provide DEA current, precise, and representative estimates of drugs seized by law enforcement and analyzed by forensic laboratories. Since 2001, DEA has had case and drug report estimates for all drugs reported in NFLIS that are statistically representative of the nation and of census regions. The estimates, which are made possible by updating the laboratory profiles through the survey effort (see draft survey in Appendix), have given DEA the ability to track national and regional drug trends; a clearer national picture of illicit or diverted drug availability; additional information about the temporal changes in drug availability by geographic region; and the ability to detect new or emerging drugs. Information from NFLIS is combined with other existing databases to develop more accurate, up-to-date information on abused drugs. This database represents a voluntary, cooperative effort on the part of participating laboratories and MECs to provide a centralized source of analyzed drug data. Existing federal drug abuse databases do not provide the type, scope, timeliness, or quality of information necessary to effectively estimate the actual or relative abuse potential of drugs as required under the Controlled Substances Act (21 U.S.C. 811(b)) and international treaties in a timely and efficient manner. For example, much of the trafficking data for federal drug scheduling actions is presently obtained on a case-by-case basis from state and local laboratories. Occasionally scientific personnel from the DEA's Diversion Control Division, Drug and Chemical Evaluation Section, have contacted specific laboratories and requested files. In addition, some DEA field offices routinely subpoena MEC records for use in case work. The development of the National Forensic Laboratory Information System (NFLIS) greatly enhances the collection of such data. Submission of information for this collection is voluntary. DEA is not mandating this information collection.

    5. An estimate of the total number of respondents and the amount of time estimated for an average respondent to respond: The DEA estimates that 140 persons annually for this collection at 1.6 hour per respondent, for an annual burden of 218 hours.

    6. An estimate of the total public burden (in hours) associated with the proposed collection: The DEA estimates that this collection takes 218 annual burden hours.

    If additional information is required please contact: Melody Braswell, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE, Suite 3E.405B, Washington, DC 20530.

    Dated: August 1, 2018. Melody Braswell, Department Clearance Officer for PRA, U.S. Department of Justice.
    [FR Doc. 2018-16740 Filed 8-3-18; 8:45 am] BILLING CODE 4410-09-P
    DEPARTMENT OF JUSTICE [OMB Number 1121-NEW] Agency Information Collection Activities; Proposed eCollection eComments Requested; New Collection: Survey of State Attorneys General Offices (SSAGO): Human Trafficking AGENCY:

    Bureau of Justice Statistics, Department of Justice.

    ACTION:

    60-Day notice.

    SUMMARY:

    The Department of Justice (DOJ), Office of Justice Programs, Bureau of Justice Statistics (BJS), will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995.

    DATES:

    Comments are encouraged and will be accepted for 60 days until October 5, 2018.

    FOR FURTHER INFORMATION CONTACT:

    If you have additional comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Suzanne Strong, Statistician, Prosecution and Judicial Statistics Unit, Bureau of Justice Statistics, 810 Seventh Street NW, Washington, DC 20531 (email: [email protected]; telephone: 202-616-3666).

    SUPPLEMENTARY INFORMATION:

    Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:

    —Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the Bureau of Justice Statistics, including whether the information will have practical utility; —Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; —Evaluate whether and if so how the quality, utility, and clarity of the information to be collected can be enhanced; and —Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. Overview of This Information Collection

    (1) Type of Information Collection: New collection.

    (2) The Title of the Form/Collection: Survey of State Attorneys General Offices (SSAGO)—Human Trafficking.

    (3) The agency form number, if any, and the applicable component of the Department sponsoring the collection: SSAGO-2. The applicable component within the Department of Justice is the Bureau of Justice Statistics, in the Office of Justice Programs.

    (4) Affected public who will be asked or required to respond, as well as a brief abstract: Respondents will be state attorneys general or deputy attorneys within the state and territory attorneys general offices who work on human trafficking matters. Abstract: Among other responsibilities, the Bureau of Justice Statistics is charged with collecting data regarding the prosecution of crimes by state and federal offices. This survey will be directed towards state and territory attorneys general offices regarding their jurisdiction over civil and criminal human trafficking matters. This is BJS's second survey of state attorney general offices, but the first survey from the Survey of State Attorneys General Offices (SSAGO) program. The survey collects data on the staffing of state attorneys general offices, including the total number of deputy attorneys general and access to support staff. The survey also collects information on the types and numbers of human trafficking matters referred to the state attorneys general offices, the sources of the referrals of human trafficking matters, the estimates of labor and sex trafficking cases, the types of victims in labor and sex trafficking cases, the types of offenders of labor and sex trafficking cases, the manner in which criminal and civil human trafficking cases were closed in court, and state attorneys general offices' participation in state and federal human trafficking task forces.

    (5) An estimate of the total number of respondents and the amount of time estimated for an average respondent to respond: An agency-level survey will be sent to approximately 56 state and territory attorneys general offices. The expected burden placed on these respondents is about 25 minutes per respondent, with an additional 5 minutes to locate any additional persons within the office necessary to complete the survey.

    (6) An estimate of the total public burden (in hours) associated with the collection: The total respondent burden is approximately 28 burden hours for the 56 respondents.

    If additional information is required contact: Melody Braswell, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE, 3E.405A, Washington, DC 20530.

    Dated: July 30, 2018. Melody Braswell, Department Clearance Officer for PRA, U.S. Department of Justice.
    [FR Doc. 2018-16581 Filed 8-3-18; 8:45 am] BILLING CODE 4410-18-P
    LIBRARY OF CONGRESS Copyright Royalty Board [Docket 14-CRB-0010-CD/SD (2010-13)] Distribution of Cable Royalty Funds; Distribution of Satellite Royalty Funds AGENCY:

    Copyright Royalty Board, Library of Congress.

    ACTION:

    Final Distribution Determination.

    SUMMARY:

    The Copyright Royalty Judges (Judges) announce final distribution of a portion of cable and satellite royalty funds for the years 2010, 2011, 2012, and 2013. The determination results from agreement among the participants that claim shares of the funds to be allocated to the Devotional Claimant category. The Judges issued their initial determination to the participants on July 19, 2018.

    DATES:

    Applicable: August 6, 2018.

    ADDRESSES:

    The final distribution order is also published in eCRB at https://app.crb.gov/ and on the Federal eRulemaking Portal at www.regulations.gov.

    Docket: For access to the docket to read submitted background documents, go to eCRB, the Copyright Royalty Board's electronic filing and case management system, at https://app.crb.gov/ and search for docket number 14-CRB-0010-CD/SD (2010-13).

    FOR FURTHER INFORMATION CONTACT:

    Anita Blaine, CRB Program Specialist, by telephone at (202) 707-7658 or email at [email protected]

    SUPPLEMENTARY INFORMATION:

    This matter is before the Copyright Royalty Judges (Judges) on motion of Multigroup Claimants (MGC) for entry of a consent order adopting the distribution shares proposed by the Settling Devotional Claimants (SDC) and ordering a final distribution of cable and satellite television royalty funds to be allocated to the Devotional Claimants category in conformity with those agreed shares.1 The SDC do not oppose the final percentage distribution.

    1 Allocation of cable royalty funds to the Devotional Claimants category remains the subject of the allocation proceeding, Docket No. 14-CRB-0010 CD (2010-13). The schedule in the proceeding to determine allocation of satellite royalty funds among claimant categories, Docket No. 14-CRB-0011 SD (2010-13) is suspended pending completion of the cable allocation proceeding.

    The Judges find that the parties' agreement regarding the final percentage distribution ends any remaining controversy with regard to the subject funds over which the Judges have jurisdiction and that neither party retains a significant interest related to this proceeding. Accordingly, good cause exists for entry of a final distribution determination relating to the subject funds.

    The Judges therefore order that the royalty shares proposed in the SDC's Written Direct Statement (Dec. 29, 2017) are adopted, and that final distribution of the cable and satellite royalty funds allocated to the Devotional category shall be in accordance with the following relative shares.

    Cable Funds Allocated to Devotional Programming Cable royalty year SDC share
  • (percent)
  • MGC share
  • (percent)
  • 2010 77.1 22.9 2011 82.6 17.4 2012 84.8 15.2 2013 89.1 10.9
    Satellite Funds Allocated to Devotional Programming Satellite royalty year SDC share
  • (percent)
  • MGC share
  • (percent)
  • 2010 75.3 24.7 2011 88.3 11.7 2012 90.7 9.3 2013 97.7 2.3

    The Judges further order that, as the parties have presented this as an agreed determination, they have waived their rights to seek rehearing.

    The Judges further order that this final distribution determination is without prejudice to the parties' right to appeal the Judges' interlocutory ruling in this consolidated proceeding with regard to both cable and satellite claims issues.

    Upon issuance of this final determination, the Register of Copyrights (Register) shall have 60 days to conduct a statutory review. The Librarian of Congress shall review and cause this final determination, and any correction thereto by the Register, to be published in the Federal Register no later than the conclusion of the 60-day review period.

    July 18, 2018.

    So ordered.

    Suzanne M. Barnett, Chief United States Copyright Royalty Judge. David R. Strickler United States Copyright Royalty Judge. Jesse M. Feder United States Copyright Royalty Judge. Dated: July 27, 2018. Suzanne M. Barnett, Chief United States Copyright Royalty Judge. Dr. Carla D. Hayden, Librarian of Congress.
    [FR Doc. 2018-16780 Filed 8-3-18; 8:45 am] BILLING CODE 1410-72-P
    NATIONAL SCIENCE FOUNDATION Proposal Review; Notice of Meetings

    In accordance with the Federal Advisory Committee Act (Pub. L. 92-463, as amended), the National Science Foundation (NSF) announces its intent to hold proposal review meetings throughout the year. The purpose of these meetings is to provide advice and recommendations concerning proposals submitted to the NSF for financial support. The agenda for each of these meetings is to review and evaluate proposals as part of the selection process for awards. The review and evaluation may also include assessment of the progress of awarded proposals. These meetings will primarily take place at NSF's headquarters, 2415 Eisenhower Avenue, Alexandria, VA 22314.

    These meetings will be closed to the public. The proposals being reviewed include information of a proprietary or confidential nature, including technical information; financial data, such as salaries; and personal information concerning individuals associated with the proposals. These matters are exempt under 5 U.S.C. 552b(c), (4) and (6) of the Government in the Sunshine Act. NSF will continue to review the agenda and merits of each meeting for overall compliance of the Federal Advisory Committee Act.

    These closed proposal review meetings will not be announced on an individual basis in the Federal Register. NSF intends to publish a notice similar to this on a quarterly basis. For an advance listing of the closed proposal review meetings that include the names of the proposal review panel and the time, date, place, and any information on changes, corrections, or cancellations, please visit the NSF website: https://www.nsf.gov/events/advisory.jsp. This information may also be requested by telephoning, 703/292-8687.

    Dated: August 1, 2018. Crystal Robinson, Committee Management Officer.
    [FR Doc. 2018-16729 Filed 8-3-18; 8:45 am] BILLING CODE 7555-01-P
    SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83750; File No. SR-CboeBZX-2018-010] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Withdrawal of a Proposed Rule Change To Adopt BZX Rule 14.11(k) To Permit the Listing and Trading of Managed Portfolio Shares and To List and Trade Shares of the ClearBridge Appreciation ETF, ClearBridge Large Cap ETF, ClearBridge Mid Cap Growth ETF, ClearBridge Select ETF, and ClearBridge All Cap Value ETF July 31, 2018.

    On February 5, 2018, Cboe BZX Exchange, Inc. (“Exchange” or “BZX”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Exchange Act”) 1 and Rule 19b-4 thereunder,2 a proposed rule change to adopt BZX Rule 14.11(k) to permit the listing and trading of Managed Portfolio Shares, and to list and trade shares of the ClearBridge Appreciation ETF, ClearBridge Large Cap ETF, ClearBridge Mid Cap Growth ETF, ClearBridge Select ETF, and ClearBridge All Cap Value ETF under proposed BZX Rule 14.11(k). The proposed rule change was published for comment in the Federal Register on February 20, 2018.3 On April 3, 2018, pursuant to Section 19(b)(2) of the Exchange Act,4 the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.5 On May 21, 2018, the Commission instituted proceedings under Section 19(b)(2)(B) of the Exchange Act 6 to determine whether to approve or disapprove the proposed rule change.7 The Commission has received four comment letters on the proposed rule change.8

    1 15 U.S.C. 78s(b)(1).

    2 17 CFR 240.19b-4.

    3See Securities Exchange Act Release No. 82705 (February 13, 2018), 83 FR 7256.

    4 15 U.S.C. 78s(b)(2).

    5See Securities Exchange Act Release No. 82984, 83 FR 15181 (April 9, 2018).

    6 15 U.S.C. 78s(b)(2)(B).

    7See Securities Exchange Act Release No. 83293, 83 FR 24367 (May 25, 2018).

    8See letters to Brent J. Fields, Secretary, Commission, from: (1) Todd J. Broms, Chief Executive Officer, Broms & Company LLC, dated March 13, 2018; (2) Simon P. Goulet, Co-Founder, Blue Tractor Group, LLC, dated March 19, 2018; (3) Terence W. Norman, Founder, Blue Tractor Group, LLC, dated March 20, 2018; and (4) Terence W. Norman, Founder, Blue Tractor Group, LLC, dated May 8, 2018. The comment letters are available at https://www.sec.gov/comments/sr-cboebzx-2018-010/cboebzx2018010.htm.

    On July 27, 2018, the Exchange withdrew the proposed rule change (SR-CboeBZX-2018-010).

    For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9

    9 17 CFR 200.30-3(a)(12).

    Robert W. Errett, Deputy Secretary.
    [FR Doc. 2018-16722 Filed 8-3-18; 8:45 am] BILLING CODE 8011-01-P
    SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83752; File No. SR-FINRA-2018-019] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Approving a Proposed Rule Change Creating Fee and Honorarium for Late Cancellation of a Prehearing Conference July 31, 2018. I. Introduction

    On May 4, 2018, Financial Industry Regulatory Authority, Inc. (“FINRA”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Exchange Act”) 1 and Rule 19b-4 thereunder,2 a proposed rule change to amend FINRA Rules 12500 and 12501 of the Code of Arbitration Procedure for Customer Disputes (“Customer Code”) and FINRA Rules 13500 and 13501 of the Code of Arbitration Procedure for Industry Disputes (“Industry Code” and together, “Codes”), to charge a $100 per-arbitrator fee to parties who request cancellation of a prehearing conference within three business days before a scheduled prehearing conference. The proposed rule change would also amend FINRA Rules 12214(a) and 13214(a) of the Codes to create a $100 honorarium to pay each arbitrator scheduled to attend a prehearing conference that was cancelled within three business days of the prehearing conference.

    1 15 U.S.C. 78s(b)(1).

    2 17 CFR 240.19b-4.

    The proposed rule change was published for comment in the Federal Register on May 14, 2018.3 The public comment period closed on June 8, 2018. The Commission received one comment letter in response to the Notice, supporting the proposed rule change.4 This order approves the proposed rule change.

    3See Exchange Act Release No. 83227 (May 4, 2018), 83 FR 23306 (May 14, 2018) (File No. SR-FINRA-2018-019 (“Notice”).

    4See Letter from Steven B. Caruso, Maddox Hargett Caruso, P.C., dated May 15, 2018 (“Caruso Letter”), available at https://www.sec.gov.

    II. Description of the Proposed Rule Change 5

    5 The subsequent description of the proposed rule change is substantially excerpted from FINRA's description in the Notice. See Notice, 83 FR at 23306-23308.

    Cancellation Fee

    Parties to an arbitration typically schedule prehearing conferences with the arbitrator(s) before the hearing on the merits of the claim.6 During these conferences, the participants set discovery, briefing and motions deadlines, schedule subsequent hearing sessions, and address other preliminary matters.7 A prehearing conference may also address other outstanding matters, such as discovery disputes or substantive motions (e.g., motions to dismiss or motions to amend).8

    6See FINRA Rules 12100(w) and 13100(w).

    7See FINRA Rules 12500(c) and 13500(c).

    8See FINRA Rules 12501(b) and 13501(b).

    FINRA stated that its arbitrators devote considerable time preparing for prehearing conferences and forgo other opportunities by reserving time on their schedules.9 Currently, however, parties can cancel prehearing conferences up to, and including, the day of the conference without penalty.10 Consequently, FINRA has found that late cancellations (in particular, those that occur within three or fewer business days of a scheduled prehearing conference) have negatively impacted its roster of arbitrators by creating scheduling inconveniences for, and uncompensated work by, arbitrators.11

    9See Notice, 83 FR at 23309.

    10Id.

    11 In the past, arbitrators have resigned from the roster because FINRA's dispute resolution forum does not provide a payment to arbitrators for cancellations of prehearing conferences. FINRA notes that one reason former arbitrators have given for their resignation is the lack of compensation for prehearing conferences that are cancelled on short notice. FINRA has identified 17 separate complaints relating to 22 arbitrators with respect to the late cancellations of prehearing conferences. See Notice, 83 FR at 23307, note 12.

    To help alleviate these burdens, FINRA is proposing to amend FINRA Rules 12500 and 12501 of the Customer Code and FINRA Rules 13500 and 13501 of the Industry Code,12 which govern prehearing conferences, to provide that if a cancellation 13 request is agreed to by the parties or requested by one or more parties within three business days before a scheduled prehearing conference and granted, the party or parties shall be charged a fee of $100 per arbitrator scheduled to attend the prehearing conference (“late cancellation fee”).14 The date of the party's or parties' cancellation request would control whether the fee is assessed, not the date of the arbitrator or arbitrators' decision on such a request, if a decision is required.15 If the arbitrator(s) cancel a prehearing conference on their own, the parties would not be charged.16

    12 To simplify this explanation, FINRA's discussion of the proposed changes focuses on changes to the Customer Code. However, the proposed changes also apply to the Industry Code. See Notice, 83 FR at 23307, note 13.

    13 References to cancellations of prehearing conferences include postponements of such conferences. See Notice, 83 FR at 23309, note 29.

    14See Notice, 83 FR at 23307.

    15 A decision would be required if only one party requests that the prehearing conference be cancelled. See Notice, 83 FR at 23307, note 14.

    16See Notice, 83 FR at 23307.

    Under the proposal, if more than one party requests the cancellation of a prehearing conference, the arbitrator(s) would have the authority to allocate the fee in the award between or among the requesting parties.17 However, depending on the facts and circumstances of the request, the arbitrator(s) could assess the fee to one party or to a non-requesting party or parties if the arbitrator(s) determine that these parties caused or contributed to the need for the cancellation.18

    17See Notice, 83 FR at 23307.

    18See Notice, 83 FR at 23307. See also FINRA Rules 12904(e)(8) and 13904(e)(8); see generally FINRA Rules 12601(b) and 13601(b).

    Under the proposal, however, if an extraordinary circumstance prevents a party from making a timely cancellation request, the arbitrator(s) would have the discretion to waive the late cancellation fee, provided they receive a written explanation of the circumstance.19 FINRA would notify parties and arbitrator(s) that the prehearing conference was cancelled and remind parties to provide an explanation, if applicable, before the close of the arbitration case.20 If the fee is waived, the party's or parties' obligation to pay the fee would be eliminated. FINRA, however, would pay the $100 per-arbitrator honorarium (discussed below) to the arbitrator(s) scheduled to attend the prehearing conference.21

    19See Notice, 83 FR at 23307.

    20Id.

    21Id.

    Honorarium

    In addition, FINRA is proposing to amend FINRA Rules 12214(a) and 13214(a) to provide that FINRA would pay an honorarium of $100 to each arbitrator scheduled to attend a prehearing conference that was cancelled within three business days of the prehearing conference by agreement of the parties or was requested by one or more parties within three business days of the prehearing conference and granted. As discussed above, if the arbitrator(s) waive the fee, the obligation to pay the fee would be eliminated, but FINRA would still pay the $100 per-arbitrator honorarium to the arbitrator(s) scheduled to attend the prehearing conference.

    III. Comment Summary

    As noted above, the Commission received one comment letter on the proposed rule change, supporting the proposal.22 The commenter states that late cancellations often result in scheduling inconvenience for, and uncompensated work by, arbitrators. The commenter believes that the proposal represents a “fair, equitable and reasonable” solution to these concerns because the fee and honorarium recognize the “considerable preparation by arbitrators . . . that is required prior to a prehearing conference.” 23 Accordingly, the commenter believes that the proposal would “lead to an improved and expanded roster of arbitrators.” 24

    22See supra note 4.

    23 Caruso Letter.

    24Id.

    IV. Discussion and Commission Findings

    After careful review of the proposed rule change and the comment letter, the Commission finds that the proposal is consistent with the requirements of the Exchange Act and the rules and regulations thereunder that are applicable to a national securities association.25 Specifically, the Commission finds that the proposed rule change is consistent with Section 15A(b)(6) of the Exchange Act,26 which requires, among other things, that FINRA rules be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest, and Exchange Act Section 15A(b)(5) of the Exchange Act,27 which requires, among other things, that FINRA rules provide for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility or system that FINRA operates or controls.

    25 In approving this rule change, the Commission has considered the rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f).

    26 15 U.S.C. 78o-3(b)(6).

    27 15 U.S.C. 78o-3(b)(5).

    Public Interest

    The Commission agrees with FINRA and the commenter that the proposed rule change would protect investors and the public interest by improving FINRA's ability to recruit and retain qualified arbitrators willing to devote the time and effort necessary to consider prehearing issues, which FINRA asserts is an essential element for it to operate an effective arbitration forum.28 Currently, parties can cancel prehearing conferences up to, and including, the same day of the conference without penalty. Late cancellations of prehearing conferences do, however, penalize the arbitrators who would not receive compensation for the time and effort devoted to preparing for the conference, as well as the potential for lost personal or professional opportunities caused by reserving the scheduled meeting time. These burdens could negatively impact an arbitrator's decision to remain on the FINRA arbitrator roster or an individual's decision to join the roster. The proposed rule change would eliminate these disincentives by compensating arbitrators in the event of a late cancellation. For these reasons, the Commission believes the proposed rule change is consistent with the Section 15A(b)(6) requirement that FINRA rules be designed to protect the public interest.

    28See Notice, 83 FR at 23308.

    Equitable Allocation of Fees

    The Commission also agrees that the proposed rule change represents an equitable allocation of the fees associated with using the FINRA arbitration forum.29 In particular, the Commission notes the proposed late cancellation fee would be allocated among those parties responsible for canceling the meeting within three days of the prehearing conferences. Even if a party or parties did not request the cancellation, the proposed rule change would permit arbitrators to allocate all, or a portion of the fee, to those parties if the arbitrators determine that they caused or contributed to the late cancellation.30

    29Id. See also Caruso Letter.

    30See Notice, 83 FR at 23308.

    The Commission recognizes that the proposed rule change could increase the cost to parties of using the arbitration forum.31 However, the Commission also recognizes that the late cancellation fee would compensate arbitrators directly inconvenienced by the late cancellation of a prehearing conference and address a practice that negatively impacts the roster of arbitrators. In particular, the Commission notes that FINRA would compensate arbitrators for their preparation time and opportunity cost associated with reserving a meeting date when a prehearing conference is cancelled on short notice.32 The Commission believes that it is reasonable to compensate the inconvenienced arbitrators for the time and opportunity cost. Furthermore, the Commission notes that parties to an arbitration could avoid the proposed late termination fee by, among other ways, providing notice of cancellation more than three business days prior to a scheduled prehearing conference.33 Furthermore, the Commission notes that the arbitrator(s) could assess the fee to one party or to a non-requesting party or parties if the arbitrator(s) determine that these parties caused or contributed to the need for the cancellation. Finally, if an extraordinary circumstance prevents a party from making a timely cancellation request, the arbitrator(s) would have the discretion to waive the late cancellation fee, provided they receive a written explanation of the circumstance

    31Id.

    32Id.

    33See Notice, 83 FR at 23308.

    For these reasons, the Commission believes the proposed rule change is also consistent with the Section 15A(b)(5) requirement that FINRA rules provide for the equitable allocation of reasonable fees among persons using any facility or system that FINRA operates or controls.

    V. Conclusion

    It is therefore ordered pursuant to Section 19(b)(2) of the Exchange Act 34 that the proposal (SR-FINRA-2018-019), be and hereby is approved.

    34 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.35

    35 17 CFR 200.30-3(a)(12).

    Robert W. Errett, Deputy Secretary.
    [FR Doc. 2018-16721 Filed 8-3-18; 8:45 am] BILLING CODE 8011-01-P
    SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83745; File No. SR-NSCC-2017-805] Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing of Amendment No. 1 to an Advance Notice To Adopt a Recovery & Wind-Down Plan and Related Rules July 31, 2018.

    On December 18, 2017, National Securities Clearing Corporation (“NSCC”) filed with the Securities and Exchange Commission (“Commission”) advance notice SR-NSCC-2017-805 (“Advance Notice”) 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 (“Clearing Supervision Act”) and Rule 19b-4(n)(1)(i) under the Securities Exchange Act of 1934 (“Act”).1 The notice of filing and extension of the review period of the Advance Notice was published for comment in the Federal Register on January 30, 2018.2

    1 12 U.S.C. 5465(e)(1) and 17 CFR 240.19b-4(n)(1)(i), respectively. On December 18, 2017, NSCC filed the Advance Notice as a proposed rule change (SR-NSCC-2017-017) with the Commission pursuant to Section 19(b)(1) of the Act and Rule 19b-4 thereunder (“Proposed Rule Change”). (17 CFR 240.19b-4 and 17 CFR 240.19b-4, respectively.) The Proposed Rule Change was published in the Federal Register on January 8, 2018. See Securities Exchange Act Release No. 82430 (January 2, 2018), 83 FR 841 (January 8, 2018) (SR-NSCC-2017-017). On February 8, 2018, the Commission designated a longer period within which to approve, disapprove, or institute proceedings to determine whether to approve or disapprove the Proposed Rule Change. See Securities Exchange Act Release No. 82669 (February 8, 2018), 83 FR 6653 (February 14, 2018) (SR-DTC-2017-021; SR-FICC-2017-021; SR-NSCC-2017-017). On March 20, 2018, the Commission instituted proceedings to determine whether to approve or disapprove the Proposed Rule Change. See Securities Exchange Act Release No. 82908 (March 20, 2018), 83 FR 12986 (March 26, 2018) (SR-NSCC-2017-017). On June 25, 2018, the Commission designated a longer period for Commission action on the proceedings to determine whether to approve or disapprove the Proposed Rule Change. Therefore, September 5, 2018 is the date by which the Commission should either approve or disapprove the Proposed Rule Change. See Securities Exchange Act Release No. 83509 (June 25, 2018), 83 FR 30785 (June 29, 2018) (SR-DTC-2017-021; SR-FICC-2017-021; SR-NSCC-2017-017). On June 28, 2018, NSCC filed Amendment No. 1 to the Proposed Rule Change. See Securities Exchange Act Release No. 83632 (July 13, 2018), 83 FR 34166 (July 19, 2018) (SR-NSCC-2017-017). As of the date of this release, the Commission has not received any comments on the Proposed Rule Change.

    2 Securities Exchange Act Release No. 82581 (January 24, 2018), 83 FR 4327 (January 30, 2018) (SR-NSCC-2017-805). Pursuant to Section 806(e)(1)(H) of the Clearing Supervision Act, the Commission may extend the review period of an advance notice for an additional 60 days, if the changes proposed in the advance notice raise novel or complex issues, subject to the Commission providing the clearing agency with prompt written notice of the extension. 12 U.S.C. 5465(e)(1)(H). The Commission found that the Advance Notice raised novel and complex issues and, accordingly, extended the review period of the Advance Notice for an additional 60 days until April 17, 2018, pursuant to Section 806(e)(1)(H). Id.

    On April 10, 2018, the Commission required additional information from NSCC pursuant to Section 806(e)(1)(D) of the Clearing Supervision Act, which tolled the Commission's period of review of the Advance Notice.3 On June 28, 2018, NSCC filed Amendment No. 1 to the Advance Notice to amend and replace in its entirety the Advance Notice as originally submitted on December 18, 2017.4 On July 6, 2018, the Commission received a response to its request for additional information in consideration of the Advance Notice, which added a further 60-days to the review period pursuant to Section 806(e)(1)(E) and (G) of the Clearing Supervision Act.5

    3 12 U.S.C. 5465(e)(1)(D); see Memorandum from the Office of Clearance and Settlement Supervision, Division of Trading and Markets, titled “Commission's Request for Additional Information,” available at https://www.sec.gov/rules/sro/nscc-an.htm.

    4 To promote the public availability and transparency of its post-notice amendment, NSCC submitted a copy of Amendment No. 1 through the Commission's electronic public comment letter mechanism. Accordingly, Amendment No. 1 has been posted on the Commission's website at https://www.sec.gov/rules/sro/nscc-an.htm and thus been publicly available since June 29, 2018.

    5 12 U.S.C. 5465(e)(1)(E) and (G); see Memorandum from the Office of Clearance and Settlement Supervision, Division of Trading and Markets, titled “Response to the Commission's Request for Additional Information,” available at https://www.sec.gov/rules/sro/nscc-an.htm.

    The Advance Notice, as amended by Amendment No. 1, is described in Items I and II below, which Items have been prepared by NSCC. The Commission is publishing this notice to solicit comments on the Advance Notice, as amended by Amendment No. 1, from interested persons.

    I. Clearing Agency's Statement of the Terms of Substance of the Advance Notice

    The Advance Notice of NSCC proposes to (1) adopt the Recovery & Wind-down Plan of NSCC (“R&W Plan” or “Plan”); and (2) amend NSCC's Rules & Procedures (“Rules”) 6 in order to adopt Rule 41 (Corporation Default), Rule 42 (Wind-down of the Corporation), and Rule 60 (Market Disruption and Force Majeure) (each a “Proposed Rule” and, collectively, the “Proposed Rules”). The Advance Notice would also propose to re-number the current Rule 42 (Wind-down of a Member, Fund Member or Insurance Carrier/Retirement Services Member) to Rule 40, which is currently reserved for future use.

    6 Capitalized terms used herein and not otherwise defined herein are defined in the Rules, available at www.dtcc.com/~/media/Files/Downloads/legal/rules/nscc_rules.pdf.

    The R&W Plan would be maintained by NSCC in compliance with Rule 17Ad-22(e)(3)(ii) under the Act by providing plans for the recovery and orderly wind-down of NSCC necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses, as described below.7 The Proposed Rules are designed to (1) facilitate the implementation of the R&W Plan when necessary and, in particular, allow NSCC to effectuate its strategy for winding down and transferring its business; (2) provide Members and Limited Members with transparency around critical provisions of the R&W Plan that relate to their rights, responsibilities and obligations; and (3) provide NSCC with the legal basis to implement those provisions of the R&W Plan when necessary, as described below.

    7 17 CFR 240.17Ad-22(e)(3)(ii).

    II. Clearing Agency's Statement of the Purpose of, and Statutory Basis for, the Advance Notice

    In its filing with the Commission, the clearing agency included statements concerning the purpose of and basis for the Advance Notice and discussed any comments it received on the Advance Notice. The text of these statements may be examined at the places specified in Item IV below. The clearing agency has prepared summaries, set forth in sections A and B below, of the most significant aspects of such statements.

    (A) Clearing Agency's Statement on Comments on the Advance Notice Received From Members, Participants, or Others

    While NSCC has not solicited or received any written comments relating to this proposal, NSCC has conducted outreach to Members in order to provide them with notice of the proposal. NSCC will notify the Commission of any written comments received by NSCC.

    (B) Advance Notice Filed Pursuant to Section 806(e) of the Clearing Supervision Act Description of Amendment No. 1

    This filing constitutes Amendment No. 1 (“Amendment”) to the Advance Notice (also referred to below as the “Original Filing”) previously filed by NSCC.8 NSCC is amending the proposed R&W Plan and the Original Filing in order to clarify certain matters and make minor technical and conforming changes to the R&W Plan, as described below and as marked on Exhibit 4 hereto. To the extent such changes to the Plan require changes to the Original Filing, the information provided under “Description of Proposed Changes” in the Original Filing has been amended and is restated in its entirety below. Other sections of the Original Filing are unchanged and are restated in their entity for convenience.

    8See Securities Exchange Act Release No. 82581 (January 24, 2018), 83 FR 4327 (January 30, 2018) (SR-NSCC-2017-805).

    First, this Amendment would clarify the meaning of the terms “cease to act,” “Member default,” “Defaulting Member,” and “Member Default Losses” as such terms are used in the Plan. This Amendment would also make conforming changes as necessary to reflect the use of these terms.

    Second, this Amendment would clarify that actions and tools described in the Plan that are available in one phase of the Crisis Continuum may be used in subsequent phases of the Crisis Continuum when appropriate to address the applicable situation. This Amendment would also clarify that the allocation of losses resulting from a Member default would be applied when provided for, and in accordance with, Rule 4 of the Rules.

    Third, this Amendment would clarify that the Recovery Corridor (as defined therein) is not a “sub-phase” of the recovery phase. Rather, the Recovery Corridor is a period of time that would occur toward the end of the Member default phase, when indicators are that NSCC may transition into the recovery phase. Thus, the Recovery Corridor precedes the recovery phase within the Crisis Continuum.

    Fourth, this Amendment would make revisions to address the allocation of losses resulting from a Member default in order to more closely conform such statements to the changes proposed by the Loss Allocation Filing, as defined below.

    Fifth, this Amendment would clarify the notifications that NSCC would be required to make under the Proposed Rule 60 (Market Disruption and Force Majeure).

    Finally, this Amendment would make minor, technical and conforming revisions to correct typographical errors and to simplify descriptions. For example, such revisions would use lower case for terms that are not defined therein, and would use upper case for terms that are defined. The Amendment would also simplify certain descriptions by removing extraneous words and statements that are repetitive. These minor, technical revisions would not alter the substance of the proposal.

    Description of Proposed Changes

    NSCC is proposing to adopt the R&W Plan to be used by the Board and management of NSCC in the event NSCC encounters scenarios that could potentially prevent it from being able to provide its critical services as a going concern. The R&W Plan would identify (i) the recovery tools available to NSCC to address the risks of (a) uncovered losses or liquidity shortfalls resulting from the default of one or more Members, and (b) losses arising from non-default events, such as damage to its physical assets, a cyber-attack, or custody and investment losses, and (ii) the strategy for implementation of such tools. The R&W Plan would also establish the strategy and framework for the orderly wind-down of NSCC and the transfer of its business in the remote event the implementation of the available recovery tools does not successfully return NSCC to financial viability.

    As discussed in greater detail below, the R&W Plan would provide, among other matters, (i) an overview of the business of NSCC and its parent, The Depository Trust & Clearing Corporation (“DTCC”); (ii) an analysis of NSCC's intercompany arrangements and critical links to other financial market infrastructures (“FMIs”); (iii) a description of NSCC's services, and the criteria used to determine which services are considered critical; (iv) a description of the NSCC and DTCC governance structure; (v) a description of the governance around the overall recovery and wind-down program; (vi) a discussion of tools available to NSCC to mitigate credit/market and liquidity risks, including recovery indicators and triggers, and the governance around management of a stress event along a “Crisis Continuum” timeline; (vii) a discussion of potential non-default losses and the resources available to NSCC to address such losses, including recovery triggers and tools to mitigate such losses; (viii) an analysis of the recovery tools' characteristics, including how they are comprehensive, effective, and transparent, how the tools provide appropriate incentives to Members to, among other things, control and monitor the risks they may present to NSCC, and how NSCC seeks to minimize the negative consequences of executing its recovery tools; and (ix) the framework and approach for the orderly wind-down and transfer of NSCC's business, including an estimate of the time and costs to effect a recovery or orderly wind-down of NSCC.

    The R&W Plan would be structured as a roadmap, and would identify and describe the tools that NSCC may use to effect a recovery from the events and scenarios described therein. Certain recovery tools that would be identified in the R&W Plan are based in the Rules (including the Proposed Rules) and, as such, descriptions of those tools would include descriptions of, and reference to, the applicable Rules and any related internal policies and procedures. Other recovery tools that would be identified in the R&W Plan are based in contractual arrangements to which NSCC is a party, including, for example, existing committed or pre-arranged liquidity arrangements. Further, the R&W Plan would state that NSCC may develop further supporting internal guidelines and materials that may provide operationally for matters described in the Plan, and that such documents would be supplemental and subordinate to the Plan.

    Key factors considered in developing the R&W Plan and the types of tools available to NSCC were its governance structure and the nature of the markets within which NSCC operates. As a result of these considerations, many of the tools available to NSCC that would be described in the R&W Plan are NSCC's existing, business-as-usual risk management and Member default management tools, which would continue to be applied in scenarios of increasing stress. In addition to these existing, business-as-usual tools, the R&W Plan would describe NSCC's other principal recovery tools, which include, for example, (i) identifying, monitoring and managing general business risk and holding sufficient liquid net assets funded by equity (“LNA”) to cover potential general business losses pursuant to the Clearing Agency Policy on Capital Requirements (“Capital Policy”),9 (ii) maintaining the Clearing Agency Capital Replenishment Plan (“Replenishment Plan”) as a viable plan for the replenishment of capital should NSCC's equity fall close to or below the amount being held pursuant to the Capital Policy,10 and (iii) the process for the allocation of losses among Members, as provided in Rule 4.11 The R&W Plan would provide governance around the selection and implementation of the recovery tool or tools most relevant to mitigate a stress scenario and any applicable loss or liquidity shortfall.

    9See Securities Exchange Act Release No. 81105 (July 7, 2017), 82 FR 32399 (July 13, 2017) (SR-DTC-2017-003, SR-FICC-2017-007, SR-NSCC-2017-004).

    10See id.

    11See Rule 4 (Clearing Fund), supra note 6. NSCC is proposing changes to Rule 4 and other related rules regarding allocation of losses in a separate filing submitted simultaneously with the Original Filing. See Securities Exchange Act Release Nos. 82430 (January 2, 2018), 83 FR 841 (January 8, 2018) (SR-NSCC-2017-017) and 82581 (January 24, 2018), 83 FR 4327 (January 30, 2018) (SR-NSCC-2017-805) (collectively referred to herein as the “Loss Allocation Filing”). NSCC has submitted an amendment to the Loss Allocation Filing. A copy of the amendment to the Loss Allocation Filing is available at http://www.dtcc.com/legal/sec-rule-filings.aspx. NSCC expects the Commission to review both proposals, as amended, together, and, as such, the proposal described in this filing anticipates the approval and implementation of those proposed changes to the Rules.

    The development of the R&W Plan is facilitated by the Office of Recovery & Resolution Planning (“R&R Team”) of DTCC.12 The R&R Team reports to the DTCC Management Committee (“Management Committee”) and is responsible for maintaining the R&W Plan and for the development and ongoing maintenance of the overall recovery and wind-down planning process. The Board, or such committees as may be delegated authority by the Board from time to time pursuant to its charter, would review and approve the R&W Plan biennially, and would also review and approve any changes that are proposed to the R&W Plan outside of the biennial review.

    12 DTCC operates on a shared services model with respect to NSCC and its other subsidiaries. Most corporate functions are established and managed on an enterprise-wide basis pursuant to intercompany agreements under which it is generally DTCC that provides a relevant service to a subsidiary, including NSCC.

    As discussed in greater detail below, the Proposed Rules would define the procedures that may be employed in the event of NSCC's default and its wind-down, and would provide for NSCC's authority to take certain actions on the occurrence of a “Market Disruption Event,” as defined therein. Significantly, the Proposed Rules would provide Members and Limited Members with transparency and certainty with respect to these matters. The Proposed Rules would facilitate the implementation of the R&W Plan, particularly NSCC's strategy for winding down and transferring its business, and would provide NSCC with the legal basis to implement those aspects of the R&W Plan.

    NSCC R&W Plan

    The R&W Plan is intended to be used by the Board and NSCC's management in the event NSCC encounters scenarios that could potentially prevent it from being able to provide its critical services as a going concern. The R&W Plan would be structured to provide a roadmap, define the strategy, and identify the tools available to NSCC to either (i) recover in the event it experiences losses that exceed its prefunded resources (such strategies and tools referred to herein as the “Recovery Plan”) or (ii) wind-down its business in a manner designed to permit the continuation of its critical services in the event that such recovery efforts are not successful (such strategies and tools referred to herein as the “Wind-down Plan”). The description of the R&W Plan below is intended to highlight the purpose and expected effects of the material aspects of the R&W Plan, and to provide Members and Limited Members with appropriate transparency into these features.

    Business Overview, Critical Services, and Governance

    The introduction to the R&W Plan would identify the document's purpose and its regulatory background, and would outline a summary of the Plan. The stated purpose of the R&W Plan is that it is to be used by the Board and NSCC management in the event NSCC encounters scenarios that could potentially prevent it from being able to provide its critical services as a going concern. The R&W Plan would be maintained by NSCC in compliance with Rule 17Ad-22(e)(3)(ii) under the Act 13 by providing plans for the recovery and orderly wind-down of NSCC.

    13 17 CFR 240.17Ad-22(e)(3)(ii).

    The R&W Plan would describe DTCC's business profile, provide a summary of NSCC's services, and identify the intercompany arrangements and links between NSCC and other entities, including other FMIs. This overview section would provide a context for the R&W Plan by describing NSCC's business, organizational structure and critical links to other entities. By providing this context, this section would facilitate the analysis of the potential impact of utilizing the recovery tools set forth in later sections of the Recovery Plan, and the analysis of the factors that would be addressed in implementing the Wind-down Plan.

    DTCC is a user-owned and user-governed holding company and is the parent company of NSCC and its affiliates, The Depository Trust Company (“DTC”) and Fixed Income Clearing Corporation (“FICC”, and, together with NSCC and DTC, the “Clearing Agencies”). The Plan would describe how corporate support services are provided to NSCC from DTCC and DTCC's other subsidiaries through intercompany agreements under a shared services model.

    The Plan would provide a description of established links between NSCC and other FMIs, including The Options Clearing Corporation (“OCC”), CDS Clearing and Depository Services Inc. (“CDS”), and DTC. For example, the arrangement between NSCC and OCC governs the process by which OCC submits transactions to NSCC for settlement, and sets the time when the settlement obligations and the central counterparty trade guaranty shifts from OCC to NSCC with respect to these transactions.14 The arrangement with CDS enables participants of CDS to clear and settle OTC trades with U.S. broker-dealers through subaccounts maintained by CDS through its own membership with NSCC.15 The interface between DTC and NSCC permits transactions to flow between DTC's system and NSCC's Continuous Net Settlement (“CNS”) system in a collateralized environment.16 NSCC's CNS relies on this interface with DTC for the book-entry movement of securities to settle transactions. This section of the Plan, identifying and briefly describing NSCC's established links, would provide a mapping of critical connections and dependencies that may need to be relied on or otherwise addressed in connection with the implementation of either the Recovery Plan or the Wind-down Plan.

    14See Securities Exchange Act Release Nos. 81266 (July 31, 2017), 82 FR 36484 (August 4, 2017) (SR-NSCC-2017-007, SR-OCC-2017-013); 81260 (July 31, 2017), 82 FR 36476 (August 4, 2017) (SR-NSCC-2017-803, SR-OCC-2017-804); Procedure III (Trade Recording Service (Interface with Qualified Clearing Agencies)), supra note 6.

    15See Rule 61 (International Links), supra note 6.

    16See Rule 11 (CNS System) and Procedure VII (CNS Accounting Operation), supra note 6.

    The Plan would define the criteria for classifying certain of NSCC's services as “critical,” and would identify those critical services and the rationale for their classification. This section would provide an analysis of the potential systemic impact from a service disruption, and is important for evaluating how the recovery tools and the wind-down strategy would facilitate and provide for the continuation of NSCC's critical services to the markets it serves. The criteria that would be used to identify an NSCC service or function as critical would include consideration as to (1) whether there is a lack of alternative providers or products; (2) whether failure of the service could impact NSCC's ability to perform its central counterparty services; (3) whether failure of the service could impact NSCC's ability to perform its netting services, and, as such, the availability of market liquidity; and (4) the service is interconnected with other participants and processes within the U.S. financial system, for example, with other FMIs, settlement banks, broker-dealers, and exchanges. The Plan would then list each of those services, functions or activities that NSCC has identified as “critical” based on the applicability of these four criteria. Such critical services would include, for example, trade capture and recording through the Universal Trade Capture system,17 services supporting Correspondent Clearing relationships,18 the CNS system,19 the Balance Order Netting system,20 Mutual Funds Services,21 and the settlement of money payments with respect to transactions processed by NSCC.22 The R&W Plan would also include a non-exhaustive list of NSCC services that are not deemed critical.

    17See Rule 7 (Comparison and Trade Recording Operation) and Procedure II (Trade Comparison and Recording Service), supra note 6.

    18See Procedure IV (Special Representative Service), supra note 6.

    19See Rule 11 (CNS System) and Procedure VII (CNS Accounting Operation), supra note 6.

    20See Rule 8 (Balance Order and Foreign Security Systems) and Procedure V (Balance Order Accounting Operation), supra note 6.

    21See Rule 52 (Mutual Funds Services), supra note 6.

    22See Rule 12 (Settlement) and Procedure VIII (Money Settlement Service), supra note 6.

    The evaluation of which services provided by NSCC are deemed critical is important for purposes of determining how the R&W Plan would facilitate the continuity of those services. As discussed further below, while NSCC's Wind-down Plan would provide for the transfer of all critical services to a transferee in the event NSCC's wind-down is implemented, it would anticipate that any non-critical services that are ancillary and beneficial to a critical service, or that otherwise have substantial user demand from the continuing membership, would also be transferred.

    The Plan would describe the governance structure of both DTCC and NSCC. This section of the Plan would identify the ownership and governance model of these entities at both the Board of Directors and management levels. The Plan would state that the stages of escalation required to manage recovery under the Recovery Plan or to invoke NSCC's wind-down under the Wind-down Plan would range from relevant business line managers up to the Board through NSCC's governance structure. The Plan would then identify the parties responsible for certain activities under both the Recovery Plan and the Wind-down Plan, and would describe their respective roles. The Plan would identify the Risk Committee of the Board (“Board Risk Committee”) as being responsible for oversight of risk management activities at NSCC, which include focusing on both oversight of risk management systems and processes designed to identify and manage various risks faced by NSCC, and, due to NSCC's critical role in the markets in which it operates, oversight of NSCC's efforts to mitigate systemic risks that could impact those markets and the broader financial system.23 The Plan would identify the DTCC Management Risk Committee (“Management Risk Committee”) as primarily responsible for general, day-to-day risk management through delegated authority from the Board Risk Committee. The Plan would state that the Management Risk Committee has delegated specific day-to-day risk management, including management of risks addressed through margining systems and related activities, to the DTCC Group Chief Risk Office (“GCRO”), which works with staff within the DTCC Financial Risk Management group. Finally, the Plan would describe the role of the Management Committee, which provides overall direction for all aspects of NSCC's business, technology, and operations and the functional areas that support these activities.

    23The charter of the Board Risk Committee is available at http://www.dtcc.com/~/media/Files/Downloads/legal/policy-and-compliance/DTCC-BOD-Risk-Committee-Charter.pdf.

    The Plan would describe the governance of recovery efforts in response to both default losses and non-default losses under the Recovery Plan, identifying the groups responsible for those recovery efforts. Specifically, the Plan would state that the Management Risk Committee provides oversight of actions relating to the default of a Member, which would be reported and escalated to it through the GCRO, and the Management Committee provides oversight of actions relating to non-default events that could result in a loss, which would be reported and escalated to it from the DTCC Chief Financial Officer (“CFO”) and the DTCC Treasury group that reports to the CFO, and from other relevant subject matter experts based on the nature and circumstances of the non-default event.24 More generally, the Plan would state that the type of loss and the nature and circumstances of the events that lead to the loss would dictate the components of governance to address that loss, including the escalation path to authorize those actions. As described further below, both the Recovery Plan and the Wind-down Plan would describe the governance of escalations, decisions, and actions under each of those plans.

    24 The Plan would state that these groups would be involved to address how to mitigate the financial impact of non-default losses, and in recommending mitigating actions, the Management Committee would consider information and recommendations from relevant subject matter experts based on the nature and circumstances of the non-default event. Any necessary operational response to these events, however, would be managed in accordance with applicable incident response/business continuity process; for example, processes established by the DTCC Technology Risk Management group would be followed in response to a cyber event.

    Finally, the Plan would describe the role of the R&R Team in managing the overall recovery and wind-down program and plans for each of the Clearing Agencies.

    NSCC Recovery Plan

    The Recovery Plan is intended to be a roadmap of those actions that NSCC may employ to monitor and, as needed, stabilize its financial condition. As each event that could lead to a financial loss could be unique in its circumstances, the Recovery Plan would not be prescriptive and would permit NSCC to maintain flexibility in its use of identified tools and in the sequence in which such tools are used, subject to any conditions in the Rules or the contractual arrangement on which such tool is based. NSCC's Recovery Plan would consist of (1) a description of the risk management surveillance, tools, and governance that NSCC would employ across evolving stress scenarios that it may face as it transitions through a “Crisis Continuum,” described below; (2) a description of NSCC's risk of losses that may result from non-default events, and the financial resources and recovery tools available to NSCC to manage those risks and any resulting losses; and (3) an evaluation of the characteristics of the recovery tools that may be used in response to either default losses or non-default losses, as described in greater detail below. In all cases, NSCC would act in accordance with the Rules, within the governance structure described in the R&W Plan, and in accordance with applicable regulatory oversight to address each situation in order to best protect NSCC, Members, and the markets in which it operates.

    Managing Member Default Losses and Liquidity Needs Through the Crisis Continuum. The Recovery Plan would describe the risk management surveillance, tools, and governance that NSCC may employ across an increasing stress environment, which is referred to as the “Crisis Continuum.” This description would identify those tools that can be employed to mitigate losses, and mitigate or minimize liquidity needs, as the market environment becomes increasingly stressed. The phases of the Crisis Continuum would include (1) a stable market phase, (2) a stress market phase, (3) a phase commencing with NSCC's decision to cease to act for a Member or Affiliated Family of Members (referred to in the Plan as the ” Member default phase”),25 and (4) a recovery phase. This section of the Recovery Plan would address conditions and circumstances relating to NSCC's decision to cease to act for a Member pursuant to the Rules.26 In the Plan, “cease to act” and the events that may lead to such decision, are used within the context of Rule 46 of the Rules.27 Further, for ease of reference, the R&W Plan would, for purposes of the Plan, use the term “Member default” to refer to the event or events that precipitate NSCC ceasing to act for a Member or an Affiliated Family, would use the term “Defaulting Member” to refer to a Member for which NSCC has ceased to act, and would use the term “Member Default Losses” to refer to losses that arise out of or relate to the Member default (including any losses that arise from liquidation of that Member's portfolio), and to distinguish such losses from those that arise out of the business or other events not related to a Member default, which are separately addressed in the Plan.

    25 The Plan would define an “Affiliated Family” of Members as a number of affiliated entities that are all Members of NSCC.

    26See Rule 46 (Restrictions on Access to Services), supra note 6.

    27Id.

    The Recovery Plan would provide context to its roadmap through this Crisis Continuum by describing NSCC's ongoing management of credit, market and liquidity risk, and its existing process for measuring and reporting its risks as they align with established thresholds for its tolerance of those risks. The Recovery Plan would discuss the management of credit/market risk and liquidity exposures together, because the tools that address these risks can be deployed either separately or in a coordinated approach in order to address both exposures. NSCC manages these risk exposures collectively to limit their overall impact on NSCC and its membership. As part of its market risk management strategy, NSCC manages its credit exposure to Members by determining the appropriate Required Deposits to the Clearing Fund and monitoring its sufficiency, as provided for in the Rules.28 NSCC manages its liquidity risks with an objective of maintaining sufficient resources to be able to fulfill obligations that have been guaranteed by NSCC in the event of a Member default that presents the largest aggregate liquidity exposure to NSCC over the settlement cycle.29

    28See Rule 4 (Clearing Fund) and Procedure XV (Clearing Fund Formula and Other Matters), supra note 6. Because NSCC does not maintain a guaranty fund separate and apart from the Clearing Fund it collects from Members, NSCC monitors its credit exposure to its Members by managing the market risks of each Member's unsettled portfolio through the collection of the Clearing Fund. The aggregate of all Members' Required Fund Deposits comprises the Clearing Fund that represents NSCC's prefunded resources to address uncovered loss exposures, as provided for in proposed Rule 4. Therefore, NSCC's market risk management strategy is designed to comply with Rule 17Ad-22(e)(4) under the Act, where these risks are referred to as “credit risks.” See also 17 CFR 240.17Ad-22(e)(4).

    29 NSCC's liquidity risk management strategy, including the manner in which NSCC utilizes its liquidity tools, is described in the Clearing Agency Liquidity Risk Management Framework. See Securities Exchange Act Release Nos. 80489 (April 19, 2017), 82 FR 19120 (April 25, 2017) (SR-DTC-2017-004, SR-NSCC-2017-005, SR-FICC-2017-008); 81194 (July 24, 2017), 82 FR 35241 (July 28, 2017) (SR-DTC-2017-004, SR-NSCC-2017-005, SR-FICC-2017-008).

    The Recovery Plan would outline the metrics and indicators that NSCC has developed to evaluate a stress situation against established risk tolerance thresholds. Each risk mitigation tool identified in the Recovery Plan would include a description of the escalation thresholds that allow for effective and timely reporting to the appropriate internal management staff and committees, or to the Board. The Recovery Plan would make clear that these tools and escalation protocols would be calibrated across each phase of the Crisis Continuum. The Recovery Plan would also establish that NSCC would retain the flexibility to deploy such tools either separately or in a coordinated approach, and to use other alternatives to these actions and tools as necessitated by the circumstances of a particular Member default, in accordance with the Rules. Therefore, the Recovery Plan would both provide NSCC with a roadmap to follow within each phase of the Crisis Continuum, and would permit it to adjust its risk management measures to address the unique circumstances of each event.

    The Recovery Plan would describe the conditions that mark each phase of the Crisis Continuum, and would identify actions that NSCC could take as it transitions through each phase in order to both prevent losses from materializing through active risk management, and to restore the financial health of NSCC during a period of stress.

    The stable market phase of the Crisis Continuum would describe active risk management activities in the normal course of business. These activities would include (1) routine monitoring of margin adequacy through daily review of back testing and stress testing results that review the adequacy of NSCC's margin calculations, and escalation of those results to internal and Board committees; 30 and (2) routine monitoring of liquidity adequacy through review of daily liquidity studies that measure sufficiency of available liquidity resources to meet cash settlement obligations of the Member that would generate the largest aggregate payment obligation.31

    30 NSCC's stress testing practices are described in the Clearing Agency Stress Testing Framework (Market Risk). See Securities Exchange Act Release Nos. 80485 (April 19, 2017), 82 FR 19131 (April 25, 2017) (SR-DTC-2017-005, SR-FICC-2017-009, SR-NSCC-2017-006); 81192 (July 24, 2017), 82 FR 35245 (July 28, 2017) (SR-DTC-2017-005, SR-FICC-2017-009, SR-NSCC-2017-006).

    31See supra note 29.

    The Recovery Plan would describe some of the indicators of the stress market phase of the Crisis Continuum, which would include, for example, volatility in market prices of certain assets where there is increased uncertainty among market participants about the fundamental value of those assets. This phase would involve general market stresses, when no Member default would be imminent. Within the description of this phase, the Recovery Plan would provide that NSCC may take targeted, routine risk management measures as necessary and as permitted by the Rules.

    Within the Member default phase of the Crisis Continuum, the Recovery Plan would provide a roadmap for the existing procedures that NSCC would follow in the event of a Member default and any decision by NSCC to cease to act for that Member.32 The Recovery Plan would provide that the objectives of NSCC's actions upon a Member or Affiliated Family default are to (1) minimize losses and market exposure of the affected Members and NSCC's non-Defaulting Members; and (2), to the extent practicable, minimize disturbances to the affected markets. The Recovery Plan would describe tools, actions, and related governance for both market risk monitoring and liquidity risk monitoring through this phase. For example, in connection with managing its market risk during this phase, NSCC would, pursuant to the Rules, (1) monitor and assess the adequacy of Clearing Fund resources; (2), when necessary and appropriate pursuant to the Rules, assess and collect additional margin requirements; and (3) follow its operational procedures to liquidate the Defaulting Member's portfolio. Management of liquidity risk through this phase would involve ongoing monitoring of the adequacy of NSCC's liquidity resources, and the Recovery Plan would identify certain actions NSCC may deploy as it deems necessary to mitigate a potential liquidity shortfall, which would include, for example, adjusting its strategy for closing out the Defaulting Member's portfolio or seeking additional liquidity resources. The Recovery Plan would state that, throughout this phase, relevant information would be escalated and reported to both internal management committees and the Board Risk Committee.

    32See Rule 18 (Procedures for When the Corporation Declines or Ceases to Act) and Rule 46 (Restrictions on Access to Services), supra note 6.

    The Recovery Plan would also identify financial resources available to NSCC, pursuant to the Rules, to address losses arising out of a Member default. Specifically, Rule 4, as proposed to be amended by the Loss Allocation Filing, would provide that losses remaining after application of the Defaulting Member's resources be satisfied first by applying a “Corporate Contribution,” and then, if necessary, by allocating remaining losses among the membership in accordance with such Rule 4.33

    33See supra note 11. The Loss Allocation Filing proposes to amend Rule 4 to define the amount NSCC would contribute to address a loss resulting from either a Member default or a non-default event as the “Corporate Contribution.” This amount would be 50 percent (50%) of the “General Business Risk Capital Requirement,” which is calculated pursuant to the Capital Policy and is an amount sufficient to cover potential general business losses so that NSCC can continue operations and services as a going concern if those losses materialize, in compliance with Rule 17Ad-22(e)(15) under the Act. See also supra note 9; 17 CFR 240.17Ad-22(e)(15).

    In order to provide for an effective and timely recovery, the Recovery Plan would describe the period of time that would occur near the end of the Member default phase, during which NSCC may experience stress events or observe early warning indicators that allow it to evaluate its options and prepare for the recovery phase (referred to in the Plan as the “Recovery Corridor”). The Recovery Plan would then describe the recovery phase of the Crisis Continuum, which would begin on the date that NSCC issues the first Loss Allocation Notice of the second loss allocation round with respect to a given “Event Period.” 34 The recovery phase would describe actions that NSCC may take to avoid entering into a wind down of its business.

    34 The Loss Allocation Filing proposes to amend Rule 4 to introduce the concept of an “Event Period” as the ten (10) Business Days beginning on (i) with respect to a Member default, the day on which NSCC notifies Members that it has ceased to act for a Member under the Rules, or (ii) with respect to a non-default loss, the day that NSCC notifies Members of the determination by the Board that there is a non-default loss event, as described in greater detail in that filing. The proposed Rule 4 would define a “round” as a series of loss allocations relating to an Event Period, and would provide that the first Loss Allocation Notice in a first, second, or subsequent round shall expressly state that such notice reflects the beginning of a first, second, or subsequent round. The maximum allocable loss amount of a round is equal to the sum of the “Loss Allocation Caps” (as defined in the proposed Rule 4) of those Members included in the round. See supra note 11.

    NSCC expects that significant deterioration of liquidity resources would cause it to enter the Recovery Corridor. As such, the Plan would describe the actions NSCC may take aimed at replenishing those resources. Recovery Corridor indicators may include, for example, a rapid and material change in market prices or substantial intraday activity volume by the Member that subsequently defaults, neither of which are mitigated by intraday margin calls, or subsequent defaults by other Members or Affiliated Families during a compressed time period. Throughout the Recovery Corridor, NSCC would monitor the adequacy of its resources and the expected timing of replenishment of those resources, and would do so through the monitoring of certain corridor indicator metrics.

    The majority of the corridor indicators, as identified in the Recovery Plan, relate directly to conditions that may require NSCC to adjust its strategy for hedging and liquidating a Defaulting Member's portfolio, and any such changes would include an assessment of the status of the corridor indicators. Corridor indicators would include, for example, effectiveness and speed of NSCC's efforts to close out the portfolio of the Defaulting Member, and an impediment to the availability of its financial resources. For each corridor indicator, the Recovery Plan would identify (1) measures of the indicator, (2) evaluations of the status of the indicator, (3) metrics for determining the status of the deterioration or improvement of the indicator, and (4) “Corridor Actions,” which are steps that may be taken to improve the status of the indicator,35 as well as management escalations required to authorize those steps. Because NSCC has never experienced the default of multiple Members, it has not, historically, measured the deterioration or improvements metrics of the corridor indicators. As such, these metrics were chosen based on the business judgment of NSCC management.

    35 The Corridor Actions that would be identified in the Plan are indicative, but not prescriptive; therefore, if NSCC needs to consider alternative actions due to the applicable facts and circumstances, the escalation of those alternative actions would follow the same escalation protocol identified in the Plan for the Corridor Indicator to which the action relates.

    The Recovery Plan would also describe the reporting and escalation of the status of the corridor indicators throughout the Recovery Corridor. Significant deterioration of a corridor indicator, as measured by the metrics set out in the Recovery Plan, would be escalated to the Board. NSCC management would review the corridor indicators and the related metrics at least annually, and would modify these metrics as necessary in light of observations from simulations of Member defaults and other analyses. Any proposed modifications would be reviewed by the Management Risk Committee and the Board Risk Committee. The Recovery Plan would estimate that NSCC may remain in the Recovery Corridor between one day and two weeks. This estimate is based on historical data observed in past Member defaults, the results of simulations of Member defaults, and periodic liquidity analyses conducted by NSCC. The actual length of a Recovery Corridor would vary based on actual market conditions observed at the time, and NSCC would expect the Recovery Corridor to be shorter in market conditions of increased stress.

    The Recovery Plan would outline steps by which NSCC may allocate its losses, which would occur when and in the order provided in Rule 4, as amended.36 The Recovery Plan would also identify tools that may be used to address foreseeable shortfalls of NSCC's liquidity resources following a Member default, and would provide that these tools may be used as appropriate during the Crisis Continuum to address liquidity shortfalls if they arise. The goal in managing NSCC's qualified liquidity resources is to maximize resource availability in an evolving stress situation, to maintain flexibility in the order and use of sources of liquidity, and to repay any third party lenders of liquidity in a timely manner. These liquidity tools include, for example, NSCC's committed 364-day credit facility,37 and the issuance and private placement of additional short-term promissory notes (“commercial paper”) and extendible notes, the cash proceeds of which provide NSCC with prefunded liquidity.38 Additional voluntary or uncommitted tools to address potential liquidity shortfalls, for example uncommitted bank loans, which may supplement NSCC's other liquid resources described herein, would also be identified in the Recovery Plan. The Recovery Plan would state that, due to the extreme nature of a stress event that would cause NSCC to consider the use of these liquidity tools, the availability and capacity of these liquidity tools, and the willingness of counterparties to lend, cannot be accurately predicted and are dependent on the circumstances of the applicable stress period, including market price volatility, actual or perceived disruptions in financial markets, the costs to NSCC of utilizing these tools, and any potential impact on NSCC's credit rating.

    36 As these matters are described in greater detail in the Loss Allocation Filing and in the proposed amendments to Rule 4, described therein, reference is made to that filing and the details are not repeated here. See supra note 11.

    37See Securities Exchange Act Release No. 80605 (May 5, 2017), 82 FR 21850 (May 10, 2017) (SR-DTC-2017-802, SR-NSCC-2017-802).

    38See Securities Exchange Act Release No. 75730 (August 19, 2015), 80 FR 51638 (August 25, 2015) (SR-NSCC-2015-802).

    As stated above, the Recovery Plan would state that NSCC will have entered the recovery phase on the date that it issues the first Loss Allocation Notice of the second loss allocation round with respect to a given Event Period. The Recovery Plan would provide that, during the recovery phase, NSCC would continue and, as needed, enhance, the monitoring and remedial actions already described in connection with previous phases of the Crisis Continuum, and would remain in the recovery phase until its financial resources are expected to be or are fully replenished, or until the Wind-down Plan is triggered, as described below.

    The Recovery Plan would describe governance for the actions and tools that may be employed within each phase of the Crisis Continuum, which would be dictated by the facts and circumstances applicable to the situation being addressed. Such facts and circumstances would be measured by the various indicators and metrics applicable to that phase of the Crisis Continuum, and would follow the relevant escalation protocols that would be described in the Recovery Plan. The Recovery Plan would also describe the governance procedures around a decision to cease to act for a Member, pursuant to the Rules, and around the management and oversight of the subsequent liquidation of the Defaulting Member's portfolio. The Recovery Plan would state that, overall, NSCC would retain flexibility in accordance with the Rules, its governance structure, and its regulatory oversight, to address a particular situation in order to best protect NSCC and the Members, and to meet the primary objectives, throughout the Crisis Continuum, of minimizing losses and, where consistent and practicable, minimizing disturbance to affected markets.

    Non-Default Losses. The Recovery Plan would outline how NSCC may address losses that result from events other than a Member default. While these matters are addressed in greater detail in other documents, this section of the Plan would provide a roadmap to those documents and an outline for NSCC's approach to monitoring and managing losses that could result from a non-default event. The Plan would first identify some of the risks NSCC faces that could lead to these losses, which include, for example, the business and profit/loss risks of unexpected declines in revenue or growth of expenses; the operational risks of disruptions to systems or processes that could lead to large losses, including those resulting from, for example, a cyber-attack; and custody or investment risks that could lead to financial losses. The Recovery Plan would describe NSCC's overall strategy for the management of these risks, which includes a “three lines of defense” approach to risk management that allows for comprehensive management of risk across the organization.39 The Recovery Plan would also describe NSCC's approach to financial risk and capital management. The Plan would identify key aspects of this approach, including, for example, an annual budget process, business line performance reviews with management, and regular review of capital requirements against LNA. These risk management strategies are collectively intended to allow NSCC to effectively identify, monitor, and manage risks of non-default losses.

    39 This “three lines of defense” approach to risk management includes (1) a first line of defense comprised of the various business lines and functional units that support the products and services offered by NSCC; (2) a second line of defense comprised of control functions that support NSCC, including the risk management, legal and compliance areas; and (3) a third line of defense, which is performed by an internal audit group. The Clearing Agency Risk Management Framework includes a description of this “three lines of defense” approach to risk management, and addresses how NSCC comprehensively manages various risks, including operational, general business, investment, custody, and other risks that arise in or are borne by it. See Securities Exchange Act Release No. 81635 (September 15, 2017), 82 FR 44224 (September 21, 2017) (SR-DTC-2017-013, SR-FICC-2017-016, SR-NSCC-2017-012). The Clearing Agency Operational Risk Management Framework describes the manner in which NSCC manages operational risks, as defined therein. See Securities Exchange Act Release No. 81745 (September 28, 2017), 82 FR 46332 (October 4, 2017) (SR-DTC-2017-014, SR-FICC-2017-017, SR-NSCC-2017-013).

    The Plan would identify the two categories of financial resources NSCC maintains to cover losses and expenses arising from non-default risks or events as (1) LNA, maintained, monitored, and managed pursuant to the Capital Policy, which include (a) amounts held in satisfaction of the General Business Risk Capital Requirement,40 (b) the Corporate Contribution,41 and (c) other amounts held in excess of NSCC's capital requirements pursuant to the Capital Policy; and (2) resources available pursuant to the loss allocation provisions of Rule 4.42

    40See supra note 33.

    41See supra note 33.

    42See supra note 11.

    The Plan would address the process by which the CFO and the DTCC Treasury group would determine which available LNA resources are most appropriate to cover a loss that is caused by a non-default event. This determination involves an evaluation of a number of factors, including the current and expected size of the loss, the expected time horizon over when the loss or additional expenses would materialize, the current and projected available LNA, and the likelihood LNA could be successfully replenished pursuant to the Replenishment Plan, if triggered.43 Finally the Plan would discuss how NSCC would apply its resources to address losses resulting from a non-default event, including the order of resources it would apply if the loss or liability exceeds NSCC's excess LNA amounts, or is large relative thereto, and the Board has declared the event a “Declared Non-Default Loss Event” pursuant to Rule 4.44

    43See supra note 9.

    44See supra note 11.

    The Plan would also describe proposed Rule 60 (Market Disruption and Force Majeure), which NSCC is proposing to adopt in the Rules. This Proposed Rule would provide transparency around how NSCC would address extraordinary events that may occur outside its control. Specifically, the Proposed Rule would define a “Market Disruption Event” and the governance around a determination that such an event has occurred. The Proposed Rule would also describe NSCC's authority to take actions during the pendency of a Market Disruption Event that it deems appropriate to address such an event and facilitate the continuation of its services, if practicable, as described in greater detail below.

    The Plan would describe the interaction between the Proposed Rule and NSCC's existing processes and procedures addressing business continuity management and disaster recovery (generally, the “BCM/DR procedures”), making clear that the Proposed Rule is designed to support those BCM/DR procedures and to address circumstances that may be exogenous to NSCC and not necessarily addressed by the BCM/DR procedures. Finally, the Plan would describe that, because the operation of the Proposed Rule is specific to each applicable Market Disruption Event, the Proposed Rule does not define a time limit on its application. However, the Plan would note that actions authorized by the Proposed Rule would be limited to the pendency of the applicable Market Disruption Event, as made clear in the Proposed Rule. Overall, the Proposed Rule is designed to mitigate risks caused by Market Disruption Events and, thereby, minimize the risk of financial loss that may result from such events.

    Recovery Tool Characteristics. The Recovery Plan would describe NSCC's evaluation of the tools identified within the Recovery Plan, and its rationale for concluding that such tools are comprehensive, effective, and transparent, and that such tools provide appropriate incentives to Members and minimize negative impact on Members and the financial system, in compliance with guidance published by the Commission in connection with the adoption of Rule 17Ad-22(e)(3)(ii) under the Act.45 NSCC's analysis and the conclusions set forth in this section of the Recovery Plan are described in greater detail in Item 3(b) of this filing, below.

    45 Standards for Covered Clearing Agencies, Securities Exchange Act Release No. 78961 (September 28, 2016), 81 FR 70786 (October 13, 2016) (S7-03-14).

    NSCC Wind-Down Plan

    The Wind-down Plan would provide the framework and strategy for the orderly Wind-down of NSCC if the use of the recovery tools described in the Recovery Plan do not successfully return NSCC to financial viability. While NSCC believes that, given the comprehensive nature of the recovery tools, such event is extremely unlikely, as described in greater detail below, NSCC is proposing a Wind-down strategy that provides for (1) the transfer of NSCC's business, assets and membership to another legal entity, (2) such transfer being effected in connection with proceedings under Chapter 11 of the U.S. Federal Bankruptcy Code,46 and (3) after effectuating this transfer, NSCC liquidating any remaining assets in an orderly manner in bankruptcy proceedings. NSCC believes that the proposed transfer approach to a wind-down would meet its objectives of (1) assuring that NSCC's critical services will be available to the market as long as there are Members in good standing, and (2) minimizing disruption to the operations of Members and financial markets generally that might be caused by NSCC's failure.

    46 11 U.S.C. 1101 et seq.

    In describing the transfer approach to NSCC's Wind-down Plan, the Plan would identify the factors that NSCC considered in developing this approach, including the fact that NSCC does not own material assets that are unrelated to its clearance and settlement activities. As such, a business reorganization or “bail-in” of debt approach would be unlikely to mitigate significant losses. Additionally, NSCC's approach was developed in consideration of its critical and unique position in the U.S. markets, which precludes any approach that would cause NSCC's critical services to no longer be available.

    First, the Wind-down Plan would describe the potential scenarios that could lead to the wind-down of NSCC, and the likelihood of such scenarios. The Wind-down Plan would identify the time period leading up to a decision to wind-down NSCC as the “Runway Period.” This period would follow the implementation of any recovery tools, as it may take a period of time, depending on the severity of the market stress at that time, for these tools to be effective or for NSCC to realize a loss sufficient to cause it to be unable to effectuate settlements and repay its obligations.47 The Wind-down Plan would identify some of the indicators that it has entered this Runway Period, which would include, for example, successive Member defaults, significant Member retirements thereafter, and NSCC's inability to replenish its financial resources following the liquidation of the portfolio of the Defaulting Member(s).

    47 The Wind-down Plan would state that, given NSCC's position as a user-governed financial market utility, it is possible that Members might voluntarily elect to provide additional support during the recovery phase leading up to a potential trigger of the Wind-down Plan, but would also make clear that NSCC cannot predict the willingness of Members to do so.

    The trigger for implementing the Wind-down Plan would be a determination by the Board that recovery efforts have not been, or are unlikely to be, successful in returning NSCC to viability as a going concern. As described in the Plan, NSCC believes this is an appropriate trigger because it is both broad and flexible enough to cover a variety of scenarios, and would align incentives of NSCC and the Members to avoid actions that might undermine NSCC's recovery efforts. Additionally, this approach takes into account the characteristics of NSCC's recovery tools and enables the Board to consider (1) the presence of indicators of a successful or unsuccessful recovery, and (2) potential for knock-on effects of continued iterative application of NSCC's recovery tools.

    The Wind-down Plan would describe the general objectives of the transfer strategy, and would address assumptions regarding the transfer of NSCC's critical services, business, assets and membership, and the assignment of NSCC's links with other FMIs, to another legal entity that is legally, financially, and operationally able to provide NSCC's critical services to entities that wish to continue their membership following the transfer (“Transferee”). The Wind-down Plan would provide that the Transferee would be either (1) a third party legal entity, which may be an existing or newly established legal entity or a bridge entity formed to operate the business on an interim basis to enable the business to be transferred subsequently (“Third Party Transferee”); or (2) an existing, debt-free failover legal entity established ex-ante by DTCC (“Failover Transferee”) to be used as an alternative Transferee in the event that no viable or preferable Third Party Transferee timely commits to acquire NSCC's business. NSCC would seek to identify the proposed Transferee, and negotiate and enter into transfer arrangements during the Runway Period and prior to making any filings under Chapter 11 of the U.S. Federal Bankruptcy Code.48 As stated above, the Wind-down Plan would anticipate that the transfer to the Transferee be effected in connection with proceedings under Chapter 11 of the U.S. Federal Bankruptcy Code, and pursuant to a bankruptcy court order under Section 363 of the Bankruptcy Code, such that the transfer would be free and clear of claims against, and interests in, NSCC, except to the extent expressly provided in the court's order.49

    48See 11 U.S.C. 1101 et seq.

    49See id. at 363.

    In order to effect a timely transfer of its services and minimize the market and operational disruption of such transfer, NSCC would expect to transfer all of its critical services and any non-critical services that are ancillary and beneficial to a critical service, or that otherwise have substantial user demand from the continuing membership. Following the transfer, the Wind-down Plan would anticipate that the Transferee and its continuing membership would determine whether to continue to provide any transferred non-critical service on an ongoing basis, or terminate the non-critical service following some transition period. NSCC's Wind-down Plan would anticipate that the Transferee would enter into a transition services agreement with DTCC so that DTCC would continue to provide the shared services it currently provides to NSCC, including staffing, infrastructure and operational support. The Wind-down Plan would also anticipate the assignment of NSCC's link arrangements, including those with DTC, CDS and OCC, described above, to the Transferee.50 The Wind-down Plan would provide that Members' open positions existing prior to the effective time of the transfer would be addressed by the provisions of the proposed Wind-down Rule and Corporation Default Rule, as defined and described below, and that the Transferee would not acquire any pending or open transactions with the transfer of the business. The Wind-down Plan would anticipate that the Transferee would accept transactions for processing with a trade date from and after the effective time of the transfer.

    50 The proposed transfer arrangements outlined in the Wind-down Plan do not contemplate the transfer of any credit or funding agreements, which are generally not assignable by NSCC. However, to the extent the Transferee adopts rules substantially identical to those NSCC has in effect prior to the transfer, it would have the benefit of any rules-based liquidity funding. The Wind-down Plan contemplates that no Clearing Fund would be transferred to the Transferee, as it is not held in a bankruptcy remote manner and it is the primary prefunded liquidity resource to be accessed in the recovery phase.

    The Wind-down Plan would provide that, following the effectiveness of the transfer to the Transferee, the wind-down of NSCC would involve addressing any residual claims against NSCC through the bankruptcy process and liquidating the legal entity. As such, and as stated above, the Wind-down Plan does not contemplate NSCC continuing to provide services in any capacity following the transfer time, and any services not transferred would be terminated.

    The Wind-down Plan would also identify the key dependencies for the effectiveness of the transfer, which include regulatory approvals that would permit the Transferee to be legally qualified to provide the transferred services from and after the transfer, and approval by the applicable bankruptcy court of, among other things, the proposed sale, assignments, and transfers to the Transferee.

    The Wind-down Plan would address governance matters related to the execution of the transfer of NSCC's business and its wind-down. The Wind-down Plan would address the duties of the Board to execute the wind-down of NSCC in conformity with (1) the Rules, (2) the Board's fiduciary duties, which mandate that it exercise reasonable business judgment in performing these duties, and (3) NSCC's regulatory obligations under the Act as a registered clearing agency. The Wind-down Plan would also identify certain factors the Board may consider in making these decisions, which would include, for example, whether NSCC could safely stabilize the business and protect its value without seeking bankruptcy protection, and NSCC's ability to continue to meet its regulatory requirements.

    The Wind-down Plan would describe (1) actions NSCC or DTCC may take to prepare for wind-down in the period before NSCC experiences any financial distress, (2) actions NSCC would take both during the recovery phase and the Runway Period to prepare for the execution of the Wind-down Plan, and (3) actions NSCC would take upon commencement of bankruptcy proceedings to effectuate the Wind-down Plan.

    Finally, the Wind-down Plan would include an analysis of the estimated time and costs to effectuate the plan, and would provide that this estimate be reviewed and approved by the Board annually. In order to estimate the length of time it might take to achieve a recovery or orderly wind-down of NSCC's critical operations, as contemplated by the R&W Plan, the Wind-down Plan would include an analysis of the possible sequencing and length of time it might take to complete an orderly wind-down and transfer of critical operations, as described in earlier sections of the R&W Plan. The Wind-down Plan would also include in this analysis consideration of other factors, including the time it might take to complete any further attempts at recovery under the Recovery Plan. The Wind-down Plan would then multiply this estimated length of time by NSCC's average monthly operating expenses, including adjustments to account for changes to NSCC's profit and expense profile during these circumstances, over the previous twelve months to determine the amount of LNA that it should hold to achieve a recovery or orderly wind-down of NSCC's critical operations. The estimated wind-down costs would constitute the “Recovery/Wind-down Capital Requirement” under the Capital Policy.51 Under that policy, the General Business Risk Capital Requirement is calculated as the greatest of three estimated amounts, one of which is this Recovery/Wind-down Capital Requirement.52

    51See supra note 9.

    52See supra note 9.

    The R&W Plan is designed as a roadmap, and the types of actions that may be taken both leading up to and in connection with implementation of the Wind-down Plan would be primarily addressed in other supporting documentation referred to therein.

    The Wind-down Plan would address proposed Rule 41 (Corporation Default) and proposed Rule 42 (Wind-down of the Corporation), which would be adopted to facilitate the implementation of the Wind-down Plan, and are discussed below.

    Proposed Rules

    In connection with the adoption of the R&W Plan, NSCC is proposing to adopt the Proposed Rules, each described below. The Proposed Rules would facilitate the execution of the R&W Plan and would provide Members and Limited Members with transparency as to critical aspects of the Plan, particularly as they relate to the rights and responsibilities of both NSCC and Members. The Proposed Rules also provide a legal basis to these aspects of the Plan.

    Rule 41 (Corporation Default)

    The proposed Rule 41 (“Corporation Default Rule”) would provide a mechanism for the termination, valuation and netting of unsettled, guaranteed CNS transactions in the event NSCC is unable to perform its obligations or otherwise suffers a defined event of default, such as entering insolvency proceedings. The proposed Corporation Default Rule would provide Members with transparency and certainty regarding what would happen if NSCC were to fail (defined in the proposed Rule as a “Corporation Default”).

    The proposed rule would define the events that would constitute a Corporation Default, which would generally include (1) the failure of NSCC to make any undisputed payment or delivery to a Member if such failure is not remedied within seven days after notice of such failure is given to NSCC; (2) NSCC is dissolved; (3) NSCC institutes a proceeding seeking a judgment of insolvency or bankruptcy, or a proceeding is instituted against it seeking a judgment of bankruptcy or insolvency and such judgment is entered; or (4) NSCC seeks or becomes subject to the appointment of a receiver, trustee or similar official pursuant to the federal securities laws or Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act 53 for it or for all or substantially all of its assets.

    53 12 U.S.C. 5381-5394.

    Upon a Corporation Default, the proposed Corporation Default Rule would provide that all unsettled, guaranteed CNS transactions would be terminated and, no later than forty-five days from the date on which the event that constitutes a Corporation Default occurred (or “Default Date”), the Board would determine a single net amount owed by or to each Member with respect to such transactions pursuant to the valuation procedures set forth in the Proposed Rule. Essentially, for each affected position in a CNS Security, the “CNS Market Value” would be determined by using the Current Market Price for that security as determined in the CNS System as of the close of business on the next Business Day following the Default Date. NSCC would determine a “Net Contract Value” for each Member's net unsettled long or short position in a CNS Security by netting the Member's (i) contract price for such net position that, as of the Default Date, has not yet passed the Settlement Date, and (ii) the Current Market Price in the CNS System on the Default Date for its fail positions. To determine each Member's “CNS Close-out Value,” (i) the Net Contract Value for each CUSIP would be subtracted from the CNS Market Value for such CUSIP, and (ii) the resulting difference for all CUSIPS in which the Member had a net long or short position would be summed, and would be netted and offset against any other amounts that may be due to or owing from the Member under the Rules. The proposed Corporation Default Rule would provide for notification to each Member of its CNS Close-out Value, and would also address interpretation of the Rules in relation to certain terms that are defined in the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”).54

    54 12 U.S.C. 1811 et seq.

    NSCC believes this valuation approach, which is comparable to the approach adopted by other central counterparties, is appropriate for NSCC given the market in which NSCC operates and the volumes of transactions it processes in CNS, because it would provide for a common, clear and transparent valuation methodology and price per CUSIP applicable to all affected Members.

    Rule 42 (Wind-Down of the Corporation)

    The proposed Rule 42 (“Wind-down Rule”) would be adopted to facilitate the execution of the Wind-down Plan. The Wind-down Rule would include a proposed set of defined terms that would be applicable only to the provisions of this Proposed Rule. The Wind-down Rule would make clear that a wind-down of NSCC's business would occur (1) after a decision is made by the Board, and (2) in connection with the transfer of NSCC's services to a Transferee, as described therein. Generally, the proposed Wind-down Rule is designed to create clear mechanisms for the transfer of Eligible Members, Eligible Limited Members, and Settling Banks (as these terms would be defined in the Wind-down Rule), and NSCC's business, in order to provide for continued access to critical services and to minimize disruption to the markets in the event the Wind-down Plan is initiated.

    Wind-down Trigger. First, the Proposed Rule would make clear that the Board is responsible for initiating the Wind-down Plan, and would identify the criteria the Board would consider when making this determination. As provided for in the Wind-down Plan and in the proposed Wind-down Rule, the Board would initiate the Plan if, in the exercise of its business judgment and subject to its fiduciary duties, it has determined that the execution of the Recovery Plan has not or is not likely to restore NSCC to viability as a going concern, and the implementation of the Wind-down Plan, including the transfer of NSCC's business, is in the best interests of NSCC, Members and Limited Members, its shareholders and creditors, and the U.S. financial markets.

    Identification of Critical Services; Designation of Dates and Times for Specific Actions. The Proposed Rule would provide that, upon making a determination to initiate the Wind-down Plan, the Board would identify the critical and non-critical services that would be transferred to the Transferee at the Transfer Time (as defined below and in the Proposed Rule), as well as any non-critical services that would not be transferred to the Transferee. The proposed Wind-down Rule would establish that any services transferred to the Transferee will only be provided by the Transferee as of the Transfer Time, and that any non-critical services that are not transferred to the Transferee would be terminated at the Transfer Time. The Proposed Rule would also provide that the Board would establish (1) an effective time for the transfer of NSCC's business to a Transferee (“Transfer Time”), (2) the last day that transactions may be submitted to NSCC for processing (“Last Transaction Acceptance Date”), and (3) the last day that transactions submitted to NSCC will be settled (“Last Settlement Date”).

    Treatment of Pending Transactions. The Wind-down Rule would also authorize the Board to provide for the settlement of pending transactions prior to the Transfer Time, so long as the Corporation Default Rule has not been triggered. For example, the Proposed Rule would provide the Board with the ability to, if it deems practicable, based on NSCC's resources at that time, allow pending transactions to complete prior to the transfer of NSCC's business to a Transferee. The Board would also have the ability to allow Members to only submit trades that would effectively offset pending positions or provide that transactions will be processed in accordance with special or exception processing procedures. The Proposed Rule is designed to enable these actions in order to facilitate settlement of pending transactions and reduce claims against NSCC that would have to be satisfied after the transfer has been effected. If none of these actions are deemed practicable (or if the Corporation Default Rule has been triggered), then the provisions of the proposed Corporation Default Rule would apply to the treatment of open, pending transactions.

    The Proposed Rule would make clear, however, that NSCC would not accept any transactions for processing after the Last Transaction Acceptance Date or which are designated to settle after the Last Settlement Date. Any transactions to be processed and/or settled after the Transfer Time would be required to be submitted to the Transferee, and would not be NSCC's responsibility.

    Notice Provisions. The proposed Wind-down Rule would provide that, upon a decision to implement the Wind-down Plan, NSCC would provide Members and Limited Members and its regulators with a notice that includes material information relating to the Wind-down Plan and the anticipated transfer of NSCC's membership and business, including, for example, (1) a brief statement of the reasons for the decision to implement the Wind-down Plan; (2) identification of the Transferee and information regarding the transaction by which the transfer of NSCC's business would be effected; (3) the Transfer Time, Last Transaction Acceptance Date, and Last Settlement Date; and (4) identification of Eligible Members and Eligible Limited Members, and the critical and non-critical services that would be transferred to the Transferee at the Transfer Time, as well as those Non-Eligible Members and Non-Eligible Limited Members (as defined in the Proposed Rule), and any non-critical services that would not be included in the transfer. NSCC would also make available the rules and procedures and membership agreements of the Transferee.

    Transfer of Membership. The proposed Wind-down Rule would address the expected transfer of NSCC's membership to the Transferee, which NSCC would seek to effectuate by entering into an arrangement with a Failover Transferee, or by using commercially reasonable efforts to enter into such an arrangement with a Third Party Transferee. Therefore, the Wind-down Rule would provide Members, Limited Members and Settling Banks with notice that, in connection with the implementation of the Wind-down Plan and with no further action required by any party, (1) their membership with NSCC would transfer to the Transferee, (2) they would become party to a membership agreement with such Transferee, and (3) they would have all of the rights and be subject to all of the obligations applicable to their membership status under the rules of the Transferee. These provisions would not apply to any Member or Limited Member that is either in default of an obligation to NSCC or has provided notice of its election to withdraw from membership. Further, the proposed Wind-down Rule would make clear that it would not prohibit (1) Members and Limited Members that are not transferred by operation of the Wind-down Rule from applying for membership with the Transferee, or (2) Members, Limited Members, and Settling Banks that would be transferred to the Transferee from withdrawing from membership with the Transferee.55

    55 The Members and Limited Members whose membership is transferred to the Transferee pursuant to the proposed Wind-down Rule would submit transactions to be processed and settled subject to the rules and procedures of the Transferee, including any applicable margin charges or other financial obligations.

    Comparability Period. The proposed automatic mechanism for the transfer of NSCC's membership is intended to provide NSCC's membership with continuous access to critical services in the event of NSCC's wind-down, and to facilitate the continued prompt and accurate clearance and settlement of securities transactions. Further to this goal, the proposed Wind-down Rule would provide that NSCC would enter into arrangements with a Failover Transferee, or would use commercially reasonable efforts to enter into arrangements with a Third Party Transferee, providing that, in either case, with respect to the critical services and any non-critical services that are transferred from NSCC to the Transferee, for at least a period of time to be agreed upon (“Comparability Period”), the business transferred from NSCC to the Transferee would be operated in a manner that is comparable to the manner in which the business was previously operated by NSCC. Specifically, the proposed Wind-down Rule would provide that: (1) the rules of the Transferee and terms of membership agreements would be comparable in substance and effect to the analogous Rules and membership agreements of NSCC; (2) the rights and obligations of any Members, Limited Members and Settling Banks that are transferred to the Transferee would be comparable in substance and effect to their rights and obligations as to NSCC; and (3) the Transferee would operate the transferred business and provide any services that are transferred in a comparable manner to which such services were provided by NSCC. The purpose of these provisions and the intended effect of the proposed Wind-down Rule is to facilitate a smooth transition of NSCC's business to a Transferee and to provide that, for at least the Comparability Period, the Transferee (1) would operate the transferred business in a manner that is comparable in substance and effect to the manner in which the business was operated by NSCC, and (2) would not require sudden and disruptive changes in the systems, operations and business practices of the new members of the Transferee.

    Subordination of Claims Provisions and Miscellaneous Matters. The proposed Wind-down Rule would also include a provision addressing the subordination of unsecured claims against NSCC of Members and Limited Members who fail to participate in NSCC's recovery efforts (i.e., such firms are delinquent in their obligations to NSCC or elect to retire from NSCC in order to minimize their obligations with respect to the allocation of losses, pursuant to the Rules). This provision is designed to incentivize Members to participate in NSCC's recovery efforts.56

    56 Nothing in the proposed Wind-down Rule would seek to prevent a Member, Limited Member or Settling Bank that retired its membership at NSCC from applying for membership with the Transferee. Once its NSCC membership is terminated, however, such firm would not be able to benefit from the membership assignment that would be effected by this proposed Wind-down Rule, and it would have to apply for membership directly with the Transferee, subject to its membership application and review process.

    The proposed Wind-down Rule would address other ex-ante matters including provisions providing that Members, Limited Members and Settling Banks (1) will assist and cooperate with NSCC to effectuate the transfer of NSCC's business to a Transferee, (2) consent to the provisions of the rule, and (3) grant NSCC power of attorney to execute and deliver on their behalf documents and instruments that may be requested by the Transferee. Finally, the Proposed Rule would include a limitation of liability for any actions taken or omitted to be taken by NSCC pursuant to the Proposed Rule. The purpose of the limitation of liability is to facilitate and protect NSCC's ability to act expeditiously in response to extraordinary events. As noted, such limitation of liability would be available only following triggering of the Wind-down Plan. In addition, and as a separate matter, the limitation of liability provides Members with transparency for the unlikely situation when those extraordinary events could occur, as well supporting the legal framework within which NSCC would take such actions. These provisions, collectively, are designed to enable NSCC to take such acts as the Board determines necessary to effectuate an orderly transfer and wind-down of its business should recovery efforts prove unsuccessful.

    Rule 60 (Market Disruption and Force Majeure)

    The proposed Rule 60 (“Force Majeure Rule”) would address NSCC's authority to take certain actions upon the occurrence, and during the pendency, of a “Market Disruption Event,” as defined therein. The Proposed Rule is designed to clarify NSCC's ability to take actions to address extraordinary events outside of the control of NSCC and of its membership, and to mitigate the effect of such events by facilitating the continuity of services (or, if deemed necessary, the temporary suspension of services). To that end, under the proposed Force Majeure Rule, NSCC would be entitled, during the pendency of a Market Disruption Event, to (1) suspend the provision of any or all services, and (2) take, or refrain from taking, or require Members and Limited Members to take, or refrain from taking, any actions it considers appropriate to address, alleviate, or mitigate the event and facilitate the continuation of NSCC's services as may be practicable.

    The proposed Force Majeure Rule would identify the events or circumstances that would be considered a “Market Disruption Event,” including, for example, events that lead to the suspension or limitation of trading or banking in the markets in which NSCC operates, or the unavailability or failure of any material payment, bank transfer, wire or securities settlement systems. The proposed Force Majeure Rule would define the governance procedures for how NSCC would determine whether, and how, to implement the provisions of the rule. A determination that a Market Disruption Event has occurred would generally be made by the Board, but the Proposed Rule would provide for limited, interim delegation of authority to a specified officer or management committee if the Board would not be able to take timely action. In the event such delegated authority is exercised, the proposed Force Majeure Rule would require that the Board be convened as promptly as practicable, no later than five Business Days after such determination has been made, to ratify, modify, or rescind the action. The proposed Force Majeure Rule would also provide for prompt notification to the Commission, and advance consultation with Commission staff, when practicable, including notification when an event is no longer continuing and the relevant actions are terminated. The Proposed Rule would require Members and Limited Members to notify NSCC immediately upon becoming aware of a Market Disruption Event, and, likewise, would require NSCC to notify Members and Limited Members if it has triggered the Proposed Rule and of actions taken or intended to be taken thereunder.

    Finally, the Proposed Rule would address other related matters, including a limitation of liability for any failure or delay in performance, in whole or in part, arising out of the Market Disruption Event. The purpose of the limitation of liability would be similar to the purpose of the analogous provision in the proposed Wind-down Rule, which is to facilitate and protect NSCC's ability to act expeditiously in response to extraordinary events.

    Proposed Change to the Rule Numbers

    In order to align the order of the Proposed Rules with the order of comparable rules in the rulebooks of the other Clearing Agencies, NSCC is also proposing to re-number the current Rule 42 (Wind-down of a Member, Fund Member or Insurance Carrier/Retirement Services Member) to Rule 40, which is currently reserved for future user, as shown on Exhibit 5b, hereto.

    Expected Effect on and Management of Risk

    NSCC believes the proposal to adopt the R&W Plan and the Proposed Rules would enable it to better manage its risks. As described above, the Recovery Plan would identify the recovery tools and the risk management activities that NSCC may use to address risks of uncovered losses or shortfalls resulting from a Member default and losses arising from non-default events. By creating a framework for its management of risks across an evolving stress scenario and providing a roadmap for actions it may employ to monitor and, as needed, stabilize its financial condition, the Recovery Plan would strengthen NSCC's ability to manage risk. The Wind-down Plan would also enable NSCC to better manage its risks by establishing the strategy and framework for its orderly wind-down and the transfer of NSCC's business when the Wind-down Plan is triggered. By creating clear mechanisms for the transfer of NSCC's membership and business, the Wind-down Plan would facilitate continued access to NSCC's critical services and minimize market impact of the transfer and enable NSCC to better manage risks related to its wind-down.

    NSCC believes the Proposed Rules would enable it to better manage its risks by facilitating, and providing a legal basis for, the implementation of critical aspects of the R&W Plan. The Proposed Rules would provide Members and Limited Members with transparency around those provisions of the R&W Plan that relate to their and NSCC's rights, responsibilities and obligations. Therefore, NSCC believes the Proposed Rules would enable it to better manage its risks by providing this transparency and creating certainty, to the extent practicable, around the occurrence of a Market Disruption Event or a Corporation Default (as such terms are defined in the respective Proposed Rules), and around the implementation of the Wind-down Plan.

    Consistency With the Clearing Supervision Act

    The stated purpose of Title VIII of the Clearing Supervision Act is to mitigate systemic risk in the financial system and promote financial stability by, among other things, promoting uniform risk management standards for systemically important financial market utilities and strengthening the liquidity of systemically important financial market utilities.57 Section 805(a)(2) of the Clearing Supervision Act 58 also authorizes the Commission to prescribe risk management standards for the payment, clearing, and settlement activities of designated clearing entities, like NSCC, for which the Commission is the supervisory agency. Section 805(b) of the Clearing Supervision Act 59 states that the objectives and principles for risk management standards prescribed under Section 805(a) shall be to promote robust risk management, promote safety and soundness, reduce systemic risks, and support the stability of the broader financial system.

    57 12 U.S.C. 5461(b).

    58Id. at 5464(a)(2).

    59Id. at 5464(b).

    NSCC believes that the proposal is consistent with Section 805(b) of the Clearing Supervision Act because it is designed to address each of these objectives. The Recovery Plan and the proposed Force Majeure Rule would promote robust risk management and would reduce systemic risks by providing NSCC with a roadmap for actions it may employ to monitor and manage its risks, and, as needed, to stabilize its financial condition in the event those risks materialize. Further, the Recovery Plan would identify the triggers of recovery tools, but would not provide that those triggers necessitate the use of those tools. Instead, the Recovery Plan would provide that the triggers of these tools lead to escalation to an appropriate management body, which would have the authority and flexibility to respond appropriately to the situation. Essentially, the Recovery Plan and the proposed Force Majeure Rule are designed to minimize losses to both NSCC and Members by giving NSCC the ability to determine the most appropriate way to address each stress situation. This approach would allow for proper evaluation of the situation and the possible impacts of the use of the available recovery tools in order to minimize the negative effects of the stress situation, and would reduce systemic risks related to the implementation of the Recovery Plan and the underlying recovery tools.

    The Wind-down Plan and the proposed Corporation Default Rule and Wind-down Rule, which would facilitate the implementation of the Wind-down Plan, would promote safety and soundness and would support the stability of the broader financial system, because they would establish a framework for the orderly wind-down of NSCC's business and would set forth clear mechanics for the transfer of its critical services and membership, as well as clear provisions concerning the treatment of open, guaranteed CNS transactions in the event of NSCC's default. By designing the Wind-down Plan and these Proposed Rules to enable the continuity of NSCC's critical services and membership, NSCC believes they would promote safety and soundness and would support stability in the broader financial system in the event the Wind-down Plan is implemented.

    By assisting NSCC to promote robust risk management, promote safety and soundness, reduce systemic risks, and support the stability of the broader financial system, as described above, NSCC believes the proposal is consistent with Section 805(b) of the Clearing Supervision Act.60

    60Id.

    NSCC also believes that the proposal is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a registered clearing agency. In particular, NSCC believes that the R&W Plan, each of the Proposed Rules, and the proposed change to Rule numbers are consistent with Section 17A(b)(3)(F) of the Act,61 the R&W Plan and each of the Proposed Rules are consistent with Rule 17Ad-22(e)(3)(ii) under the Act,62 and the R&W Plan is consistent with Rule 17Ad-22(e)(15)(ii) under the Act,63 for the reasons described below.

    61 15 U.S.C. 78q-1(b)(3)(F).

    62 17 CFR 240.17Ad-22(e)(3)(ii).

    63Id. at 240.17Ad-22(e)(15)(ii).

    Section 17A(b)(3)(F) of the Act requires, in part, that the rules of NSCC be designed to promote the prompt and accurate clearance and settlement of securities transactions, and to assure the safeguarding of securities and funds which are in the custody or control of NSCC or for which it is responsible.64 The Recovery Plan and the proposed Force Majeure Rule would promote the prompt and accurate clearance and settlement of securities transactions by providing NSCC with a roadmap for actions it may employ to mitigate losses, and monitor and, as needed, stabilize, its financial condition, which would allow it to continue its critical clearance and settlement services in stress situations. Further, as described above, the Recovery Plan is designed to identify the actions and tools NSCC may use to address and minimize losses to both NSCC and Members. The Recovery Plan and the proposed Force Majeure Rule would provide NSCC's management and the Board with guidance in this regard by identifying the indicators and governance around the use and application of such tools to enable them to address stress situations in a manner most appropriate for the circumstances. Therefore, the Recovery Plan and the proposed Force Majeure Rule would also contribute to the safeguarding of securities and funds which are in the custody or control of NSCC or for which it is responsible by enabling actions that would address and minimize losses.

    64 15 U.S.C. 78q-1(b)(3)(F).

    The Wind-down Plan and the proposed Corporation Default Rule and Wind-down Rule, which would both facilitate the implementation of the Wind-down Plan, would also promote the prompt and accurate clearance and settlement of securities transactions and assure the safeguarding of securities and funds which are in the custody or control of NSCC or for which it is responsible. The Wind-down Plan and the proposed Corporation Default Rule and Wind-down Rule would collectively establish a framework for the transfer and orderly wind-down of NSCC's business. These proposals would establish clear mechanisms for the transfer of NSCC's critical services and membership, and for the treatment of open, guaranteed CNS transactions in the event of NSCC's default. By doing so, the Wind-down Plan and these Proposed Rules are designed to facilitate the continuity of NSCC's critical services and enable Members and Limited Members to maintain access to NSCC's services through the transfer of its membership in the event NSCC defaults or the Wind-down Plan is triggered by the Board. Therefore, by facilitating the continuity of NSCC's critical clearance and settlement services, NSCC believes the proposals would promote the prompt and accurate clearance and settlement of securities transactions. Further, by creating a framework for the transfer and orderly wind-down of NSCC's business, NSCC believes the proposals would enhance the safeguarding of securities and funds which are in the custody or control of NSCC or for which it is responsible.

    Finally, the proposed change to the Rule numbers would align the order of the Proposed Rules with the order of comparable rules in the rulebooks of the other Clearing Agencies. Therefore, NSCC believes the proposed change would create ease of reference, particularly for Members that are also participants of the other Clearing Agencies, and, as such, would assist in promoting the prompt and accurate clearance and settlement of securities transactions.

    Therefore, NSCC believes the R&W Plan, each of the Proposed Rules, and the proposed change to Rule numbers are consistent with the requirements of Section 17A(b)(3)(F) of the Act.65

    65Id.

    Rule 17Ad-22(e)(3)(ii) under the Act requires NSCC to establish, implement, maintain and enforce written policies and procedures reasonably designed to maintain a sound risk management framework for comprehensively managing legal, credit, liquidity, operational, general business, investment, custody, and other risks that arise in or are borne by the covered clearing agency, which includes plans for the recovery and orderly wind-down of the covered clearing agency necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses.66 The R&W Plan and the Proposed Rules are designed to meet the requirements of Rule 17Ad-22(e)(3)(ii).67

    66 17 CFR 240.17Ad-22(e)(3)(ii).

    67Id.

    The R&W Plan would be maintained by NSCC in compliance with Rule 17Ad-22(e)(3)(ii) in that it provides plans for the recovery and orderly wind-down of NSCC necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses, as described above.68 Specifically, the Recovery Plan would define the risk management activities, stress conditions and indicators, and tools that NSCC may use to address stress scenarios that could eventually prevent it from being able to provide its critical services as a going concern. Through the framework of the Crisis Continuum, the Recovery Plan would address measures that NSCC may take to address risks of credit losses and liquidity shortfalls, and other losses that could arise from a Member default. The Recovery Plan would also address the management of general business risks and other non-default risks that could lead to losses.

    68Id.

    The Wind-down Plan would be triggered by a determination by the Board that recovery efforts have not been, or are unlikely to be, successful in returning NSCC to viability as a going concern. Once triggered, the Wind-down Plan would set forth clear mechanisms for the transfer of NSCC's membership and business, and would be designed to facilitate continued access to NSCC's critical services and to minimize market impact of the transfer. By establishing the framework and strategy for the execution of the transfer and wind-down of NSCC in order to facilitate continuous access to NSCC's critical services, the Wind-down Plan establishes a plan for the orderly wind-down of NSCC. Therefore, NSCC believes the R&W Plan would provide plans for the recovery and orderly wind-down of the covered clearing agency necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses, and, as such, meets the requirements of Rule 17Ad-22(e)(3)(ii).69

    69Id.

    As described in greater detail above, the Proposed Rules are designed to facilitate the execution of the R&W Plan, provide Members and Limited Members with transparency regarding the material provisions of the Plan, and provide NSCC with a legal basis for implementation of those provisions. As such, NSCC also believes the Proposed Rules meet the requirements of Rule 17Ad-22(e)(3)(ii).70

    70Id.

    NSCC has evaluated the recovery tools that would be identified in the Recovery Plan and has determined that these tools are comprehensive, effective, and transparent, and that such tools provide appropriate incentives to NSCC's Members to manage the risks they present. The recovery tools, as outlined in the Recovery Plan and in the proposed Force Majeure Rule, provide NSCC with a comprehensive set of options to address its material risks and support the resiliency of its critical services under a range of stress scenarios. NSCC also believes the recovery tools are effective, as NSCC has both legal basis and operational capability to execute these tools in a timely and reliable manner. Many of the recovery tools are provided for in the Rules; Members are bound by the Rules through their membership agreements with NSCC, and the Rules are adopted pursuant to a framework established by Rule 19b-4 under the Act,71 providing a legal basis for the recovery tools found therein. Other recovery tools have legal basis in contractual arrangements to which NSCC is a party, as described above. Further, as many of the tools are embedded in NSCC's ongoing risk management practices or are embedded into its predefined default-management procedures, NSCC is able to execute these tools, in most cases, when needed and without material operational or organizational delay.

    71Id. at 240.19b-4.

    The majority of the recovery tools are also transparent, as they are, or are proposed to be, included in the Rules, which are publicly available. NSCC believes the recovery tools also provide appropriate incentives to the Members, as they are designed to control the amount of risk they present to NSCC's clearance and settlement system. Members' financial obligations to NSCC, particularly their Required Deposits to the Clearing Fund, are measured by the risk posed by the Members' activity in NSCC's systems, which incentivizes them to manage that risk which would correspond to lower financial obligations. Finally, NSCC's Recovery Plan provides for a continuous evaluation of the systemic consequences of executing its recovery tools, with the goal of minimizing their negative impact. The Recovery Plan would outline various indicators over a timeline of increasing stress, the Crisis Continuum, with escalation triggers to NSCC management or the Board, as appropriate. This approach would allow for timely evaluation of the situation and the possible impacts of the use of a recovery tool in order to minimize the negative effects of the stress scenario. Therefore, NSCC believes that the recovery tools that would be identified and described in its Recovery Plan, including the authority provided to it in the proposed Force Majeure Rule, would meet the criteria identified within guidance published by the Commission in connection with the adoption of Rule 17Ad-22(e)(3)(ii).72

    72Supra note 45.

    Therefore, NSCC believes the R&W Plan and each of the Proposed Rules are consistent with Rule 17Ad-22(e)(3)(ii).73

    73 17 CFR 240.17Ad-22(e)(3)(ii).

    Rule 17Ad-22(e)(15)(ii) under the Act requires NSCC to establish, implement, maintain and enforce written policies and procedures reasonably designed to identify, monitor, and manage its general business risk and hold sufficient LNA to cover potential general business losses so that NSCC can continue operations and services as a going concern if those losses materialize, including by holding LNA equal to the greater of either (x) six months of the covered clearing agency's current operating expenses, or (y) the amount determined by the board of directors to be sufficient to ensure a recovery or orderly wind-down of critical operations and services of the covered clearing agency.74 While the Capital Policy addresses how NSCC holds LNA in compliance with these requirements, the Wind-down Plan would include an analysis that would estimate the amount of time and the costs to achieve a recovery or orderly wind-down of NSCC's critical operations and services, and would provide that the Board review and approve this analysis and estimation annually. The Wind-down Plan would also provide that the estimate would be the “Recovery/Wind-down Capital Requirement” under the Capital Policy. Under that policy, the General Business Risk Capital Requirement, which is the sufficient amount of LNA that NSCC should hold to cover potential general business losses so that it can continue operations and services as a going concern if those losses materialize, is calculated as the greatest of three estimated amounts, one of which is this Recovery/Wind-down Capital Requirement. Therefore, NSCC believes the R&W Plan, as it interrelates with the Capital Policy, is consistent with Rule 17Ad-22(e)(15)(ii).75

    74Id. at 240.17Ad-22(e)(15)(ii).

    75Id.

    III. Date of Effectiveness of the Advance Notice, and Timing for Commission Action

    The proposed change may be implemented if the Commission does not object to the proposed change within 60 days of the later of (i) the date that the proposed change was filed with the Commission or (ii) the date that any additional information requested by the Commission is received. The clearing agency shall not implement the proposed change if the Commission has any objection to the proposed change.

    A proposed change may be implemented in less than 60 days from the date the advance notice is filed, or the date further information requested by the Commission is received, if the Commission notifies the clearing agency in writing that it does not object to the proposed change and authorizes the clearing agency to implement the proposed change on an earlier date, subject to any conditions imposed by the Commission.

    The clearing agency shall post notice on its website of proposed changes that are implemented.

    The proposal shall not take effect until all regulatory actions required with respect to the proposal are completed.

    IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and arguments concerning the foregoing. 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-NSCC-2017-805 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-NSCC-2017-805. 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 Advance Notice that are filed with the Commission, and all written communications relating to the Advance Notice 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 NSCC and on DTCC's website (http://dtcc.com/legal/sec-rule-filings.aspx). 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-NSCC-2017-805 and should be submitted on or before August 21, 2018.

    By the Commission.

    Robert W. Errett, Deputy Secretary.
    [FR Doc. 2018-16711 Filed 8-3-18; 8:45 am] BILLING CODE 8011-01-P
    SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83743; File No. SR-DTC-2017-803] Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing of Amendment No. 1 to an Advance Notice To Adopt a Recovery & Wind-Down Plan and Related Rules July 31, 2018.

    On December 18, 2017, The Depository Trust Company (“DTC”) filed with the Securities and Exchange Commission (“Commission”) advance notice SR-DTC-2017-803 (“Advance Notice”) 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 (“Clearing Supervision Act”) and Rule 19b-4(n)(1)(i) under the Securities Exchange Act of 1934 (“Act”).1 The notice of filing and extension of the review period of the Advance Notice was published for comment in the Federal Register on January 30, 2018.2

    1 12 U.S.C. 5465(e)(1) and 17 CFR 240.19b-4(n)(1)(i), respectively. On December 18, 2017, DTC filed the Advance Notice as a proposed rule change (SR-DTC-2017-021) with the Commission pursuant to Section 19(b)(1) of the Act and Rule 19b-4 thereunder (“Proposed Rule Change”). (17 CFR 240.19b-4 and 17 CFR 240.19b-4, respectively.) The Proposed Rule Change was published in the Federal Register on January 8, 2018. See Securities Exchange Act Release No. 82432 (January 2, 2018), 83 FR 884 (January 8, 2018) (SR-DTC-2017-021). On February 8, 2018, the Commission designated a longer period within which to approve, disapprove, or institute proceedings to determine whether to approve or disapprove the Proposed Rule Change. See Securities Exchange Act Release No. 82669 (February 8, 2018), 83 FR 6653 (February 14, 2018) (SR-DTC-2017-021; SR-FICC-2017-021; SR-NSCC-2017-017). On March 20, 2018, the Commission instituted proceedings to determine whether to approve or disapprove the Proposed Rule Change. See Securities Exchange Act Release No. 82912 (March 20, 2018), 83 FR 12999 (March 26, 2018) (SR-DTC-2017-021). On June 25, 2018, the Commission designated a longer period for Commission action on the proceedings to determine whether to approve or disapprove the Proposed Rule Change. Therefore, September 5, 2018 is the date by which the Commission should either approve or disapprove the Proposed Rule Change. See Securities Exchange Act Release No. 83509 (June 25, 2018), 83 FR 30785 (June 29, 2018) (SR-DTC-2017-021; SR-FICC-2017-021; SR-NSCC-2017-017). On June 28, 2018, DTC filed Amendment No. 1 to the Proposed Rule Change. See Securities Exchange Act Release No. 83628 (July 13, 2018), 83 FR 34263 (July 19, 2018) (SR-DTC-2017-021). As of the date of this release, the Commission has not received any comments on the Proposed Rule Change.

    2 Securities Exchange Act Release No. 82579 (January 24, 2018), 83 FR 4310 (January 30, 2018) (SR-DTC-2017-803). Pursuant to Section 806(e)(1)(H) of the Clearing Supervision Act, the Commission may extend the review period of an advance notice for an additional 60 days, if the changes proposed in the advance notice raise novel or complex issues, subject to the Commission providing the clearing agency with prompt written notice of the extension. 12 U.S.C. 5465(e)(1)(H). The Commission found that the Advance Notice raised novel and complex issues and, accordingly, extended the review period of the Advance Notice for an additional 60 days until April 17, 2018, pursuant to Section 806(e)(1)(H). Id.

    On April 10, 2018, the Commission required additional information from DTC pursuant to Section 806(e)(1)(D) of the Clearing Supervision Act, which tolled the Commission's period of review of the Advance Notice.3 On June 28, 2018, DTC filed Amendment No. 1 to the Advance Notice to amend and replace in its entirety the Advance Notice as originally submitted on December 18, 2017.4 On July 6, 2018, the Commission received a response to its request for additional information in consideration of the Advance Notice, which added a further 60-days to the review period pursuant to Section 806(e)(1)(E) and (G) of the Clearing Supervision Act.5

    3 12 U.S.C. 5465(e)(1)(D); see Memorandum from the Office of Clearance and Settlement Supervision, Division of Trading and Markets, titled “Commission's Request for Additional Information,” available at http://www.sec.gov/rules/sro/dtc-an.shtml.

    4 To promote the public availability and transparency of its post-notice amendment, DTC submitted a copy of Amendment No. 1 through the Commission's electronic public comment letter mechanism. Accordingly, Amendment No. 1 has been posted on the Commission's website at http://www.sec.gov/rules/sro/dtc-an.shtml and thus been publicly available since June 29, 2018.

    5 12 U.S.C. 5465(e)(1)(E) and (G); see Memorandum from the Office of Clearance and Settlement Supervision, Division of Trading and Markets, titled “Response to the Commission's Request for Additional Information,” available at http://www.sec.gov/rules/sro/dtc-an.shtml.

    The Advance Notice, as amended by Amendment No. 1, is described in Items I and II below, which Items have been prepared by DTC. The Commission is publishing this notice to solicit comments on the Advance Notice, as amended by Amendment No. 1, from interested persons.

    I. Clearing Agency's Statement of the Terms of Substance of the Advance Notice

    The Advance Notice of DTC proposes to (1) adopt the Recovery & Wind-down Plan of DTC (“R&W Plan” or “Plan”); and (2) amend the Rules, By-Laws and Organization Certificate of DTC (“Rules”) 6 in order to adopt Rule 32(A) (Wind-down of the Corporation) and Rule 38 (Market Disruption and Force Majeure) (each proposed Rule 32(A) and proposed Rule 38, a “Proposed Rule” and, collectively, the “Proposed Rules”).

    6 Capitalized terms used herein and not otherwise defined herein are defined in the Rules, available at http://www.dtcc.com/~/media/Files/Downloads/legal/rules/DTC_rules.pdf.

    The R&W Plan would be maintained by DTC in compliance with Rule 17Ad-22(e)(3)(ii) under the Act by providing plans for the recovery and orderly wind-down of DTC necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses, as described below.7 The Proposed Rules are designed to (1) facilitate the implementation of the R&W Plan when necessary and, in particular, allow DTC to effectuate its strategy for winding down and transferring its business; (2) provide Participants with transparency around critical provisions of the R&W Plan that relate to their rights, responsibilities and obligations; and (3) provide DTC with the legal basis to implement those provisions of the R&W Plan when necessary, as described below.

    7 17 CFR 240.17Ad-22(e)(3)(ii).

    II. Clearing Agency's Statement of the Purpose of, and Statutory Basis for, the Advance Notice

    In its filing with the Commission, the clearing agency included statements concerning the purpose of and basis for the Advance Notice and discussed any comments it received on the Advance Notice. The text of these statements may be examined at the places specified in Item IV below. The clearing agency has prepared summaries, set forth in sections A and B below, of the most significant aspects of such statements.

    (A) Clearing Agency's Statement on Comments on the Advance Notice Received From Members, Participants, or Others

    While DTC has not solicited or received any written comments relating to this proposal, DTC has conducted outreach to its Members in order to provide them with notice of the proposal. DTC will notify the Commission of any written comments received by DTC.

    (B) Advance Notice Filed Pursuant to Section 806(e) of the Clearing Supervision Act Description of Amendment No. 1

    This filing constitutes Amendment No. 1 (“Amendment”) to the Advance Notice (also referred to below as the “Original Filing”) previously filed by DTC.8 DTC is amending the proposed R&W Plan and the Original Filing in order to clarify certain matters and make minor technical and conforming changes to the R&W Plan, as described below and as marked on Exhibit 4 hereto. To the extent such changes to the Plan require changes to the Original Filing, the information provided under “Description of Proposed Changes” in the Original Filing has been amended and is restated in its entirety below. Other sections of the Original Filing are unchanged and are restated in their entity for convenience.

    8See Securities Exchange Act Release No. 82579 (January 24, 2018), 83 FR 4310 (January 30, 2018) (SR-DTC-2017-803).

    First, this Amendment would clarify the use in the Plan of the term “Participant Default Losses.” This Amendment would also clarify the actions and tools available in the third phase of the Crisis Continuum, which is referred to as the “Participant Default phase.” This Amendment would also make conforming changes as necessary to reflect the use of these terms.

    Second, this Amendment would clarify that actions and tools described in the Plan that are available in one phase of the Crisis Continuum may be used in subsequent phases of the Crisis Continuum, when appropriate to address the applicable situation. This Amendment would also clarify that allocation of losses resulting from a Participant Default would be applied when provide for in, and in accordance with, Rule 4.

    Third, this Amendment would clarify that the Recovery Corridor (as defined therein) is not a “sub-phase” of the recovery phase. Rather, the Recovery Corridor is a period of time that would occur toward the end of the Participant Default phase, when indicators are that DTC may transition into the recovery phase. Thus, the Recovery Corridor precedes the recovery phase.

    Fourth, this Amendment would make revisions to address the allocation of losses resulting from a Participant Default in order to more closely conform such statements to the changes proposed by the Loss Allocation Filing, as defined below.

    Fifth, this Amendment would clarify the notifications that DTC would be required to make under the Proposed Rule 38 (Market Disruption and Force Majeure).

    Finally, this Amendment would make minor, technical and conforming revisions to correct typographical errors and to simplify descriptions. For example, such revisions would use lower case for terms that are not defined therein, and would use upper case for terms that are defined. The Amendment would also simplify certain descriptions by removing extraneous words and statements that are repetitive. These minor, technical revisions would not alter the substance of the proposal.

    Description of Proposed Changes

    DTC is proposing to adopt the R&W Plan to be used by the Board and management in the event DTC encounters scenarios that could potentially prevent it from being able to provide its critical services as a going concern. The R&W Plan would identify (i) the recovery tools available to DTC to address the risks of (a) uncovered losses or liquidity shortfalls resulting from the default of one or more of its Participants, and (b) losses arising from non-default events, such as damage to its physical assets, a cyber-attack, or custody and investment losses, and (ii) the strategy for implementation of such tools. The R&W Plan would also establish the strategy and framework for the orderly wind-down of DTC and the transfer of its business in the remote event the implementation of the available recovery tools does not successfully return DTC to financial viability.

    As discussed in greater detail below, the R&W Plan would provide, among other matters, (i) an overview of the business of DTC and its parent, The Depository Trust & Clearing Corporation (“DTCC”); (ii) an analysis of DTC's intercompany arrangements and critical links to other financial market infrastructures (“FMIs”); (iii) a description of DTC's services, and the criteria used to determine which services are considered critical; (iv) a description of the DTC and DTCC governance structure; (v) a description of the governance around the overall recovery and wind-down program; (vi) a discussion of tools available to DTC to mitigate credit/market and liquidity risks, including recovery indicators and triggers, and the governance around management of a stress event along a “Crisis Continuum” timeline; (vii) a discussion of potential non-default losses and the resources available to DTC to address such losses, including recovery triggers and tools to mitigate such losses; (viii) an analysis of the recovery tools' characteristics, including how they are comprehensive, effective, and transparent, how the tools provide appropriate incentives to Participants to, among other things, control and monitor the risks they may present to DTC, and how DTC seeks to minimize the negative consequences of executing its recovery tools; and (ix) the framework and approach for the orderly wind-down and transfer of DTC's business, including an estimate of the time and costs to effect a recovery or orderly wind-down of DTC.

    The R&W Plan would be structured as a roadmap, and would identify and describe the tools that DTC may use to effect a recovery from the events and scenarios described therein. Certain recovery tools that would be identified in the R&W Plan are based in the Rules (including the Proposed Rules) and, as such, descriptions of those tools would include descriptions of, and reference to, the applicable Rules and any related internal policies and procedures. Other recovery tools that would be identified in the R&W Plan are based in contractual arrangements to which DTC is a party, including, for example, existing committed or pre-arranged liquidity arrangements. Further, the R&W Plan would state that DTC may develop further supporting internal guidelines and materials that may provide operationally for matters described in the Plan, and that such documents would be supplemental and subordinate to the Plan.

    Key factors considered in developing the R&W Plan and the types of tools available to DTC were its governance structure and the nature of the markets within which DTC operates. As a result of these considerations, many of the tools available to DTC that would be described in the R&W Plan are DTC's existing, business-as-usual risk management and default management tools, which would continue to be applied in scenarios of increasing stress. In addition to these existing, business-as-usual tools, the R&W Plan would describe DTC's other principal recovery tools, which include, for example, (i) identifying, monitoring and managing general business risk and holding sufficient liquid net assets funded by equity (“LNA”) to cover potential general business losses pursuant to the Clearing Agency Policy on Capital Requirements (“Capital Policy”),9 (ii) maintaining the Clearing Agency Capital Replenishment Plan (“Replenishment Plan”) as a viable plan for the replenishment of capital should DTC's equity fall close to or below the amount being held pursuant to the Capital Policy,10 and (iii) the process for the allocation of losses among Participants as provided in Rule 4.11 The R&W Plan would provide governance around the selection and implementation of the recovery tool or tools most relevant to mitigate a stress scenario and any applicable loss or liquidity shortfall.

    9See Securities Exchange Act Release No. 81105 (July 7, 2017), 82 FR 32399 (July 13, 2017) (SR-DTC-2017-003; SR-FICC-2017-007; SR-NSCC-2017-004).

    10See id.

    11See Rule 4 (Participants Fund and Participants Investment), supra note 6. DTC is proposing changes to Rule 4 regarding allocation of losses in a separate filing submitted simultaneously with the Original Filing. See Securities Exchange Act Release Nos. 82432 (January 2, 2018), 83 FR 884 (January 8, 2018) (SR-DTC-2017-021) and 82579 (January 24, 2018), 83 FR 4310 (January 30, 2018) (SR-DTC-2017-803) (collectively referred to herein as the “Loss Allocation Filing”). DTC has submitted an amendment to the Loss Allocation Filing. A copy of the amendment to the Loss Allocation Filing is available at http://www.dtcc.com/legal/sec-rule-filings.aspx. DTC expects the Commission to review both proposals, as amended, together, and, as such, the proposal described in this filing anticipates the approval and implementation of those proposed changes to the Rules.

    The development of the R&W Plan is facilitated by the Office of Recovery & Resolution Planning (“R&R Team”) of DTCC.12 The R&R Team reports to the DTCC Management Committee (“Management Committee”) and is responsible for maintaining the R&W Plan and for the development and ongoing maintenance of the overall recovery and wind-down planning process. The Board, or such committees as may be delegated authority by the Board from time to time pursuant to its charter, would review and approve the R&W Plan biennially, and would also review and approve any changes that are proposed to the R&W Plan outside of the biennial review.

    12 DTCC operates on a shared services model with respect to DTC and its other subsidiaries. Most corporate functions are established and managed on an enterprise-wide basis pursuant to intercompany agreements under which it is generally DTCC that provides a relevant service to a subsidiary, including DTC.

    As discussed in greater detail below, the Proposed Rules would define the procedures that may be employed in the event of a DTC wind-down, and would provide for DTC's authority to take certain actions on the occurrence of a “Market Disruption Event,” as defined therein. Significantly, the Proposed Rules would provide Participants with transparency and certainty with respect to these matters. The Proposed Rules would facilitate the implementation of the R&W Plan, particularly DTC's strategy for winding down and transferring its business, and would provide DTC with the legal basis to implement those aspects of the R&W Plan.

    DTC R&W Plan

    The R&W Plan is intended to be used by the Board and DTC's management in the event DTC encounters scenarios that could potentially prevent it from being able to provide its critical services as a going concern. The R&W Plan would be structured to provide a roadmap, define the strategy, and identify the tools available to DTC to either (i) recover, in the event it experiences losses that exceed its prefunded resources (such strategies and tools referred to herein as the “Recovery Plan”) or (ii) wind-down its business in a manner designed to permit the continuation of its critical services in the event that such recovery efforts are not successful (such strategies and tools referred to herein as the “Wind-down Plan”). The description of the R&W Plan below is intended to highlight the purpose and expected effects of the material aspects of the R&W Plan, and to provide Participants with appropriate transparency into these features.

    Business Overview, Critical Services, and Governance

    The introduction to the R&W Plan would identify the document's purpose and its regulatory background, and would outline a summary of the Plan. The stated purpose of the R&W Plan is that it is to be used by the Board and DTC management in the event DTC encounters scenarios that could potentially prevent it from being able to provide its critical services as a going concern. The R&W Plan would be maintained by DTC in compliance with Rule 17Ad-22(e)(3)(ii) under the Act 13 by providing plans for the recovery and orderly wind-down of DTC.

    13 17 CFR 240.17Ad-22(e)(3)(ii).

    The R&W Plan would describe DTCC's business profile, provide a summary of DTC's services, and identify the intercompany arrangements and critical links between DTC and other FMIs. This overview section would provide a context for the R&W Plan by describing DTC's business, organizational structure and critical links to other entities. By providing this context, this section would facilitate the analysis of the potential impact of utilizing the recovery tools set forth in later sections of the Recovery Plan, and the analysis of the factors that would be addressed in implementing the Wind-down Plan.

    DTCC is a user-owned and user-governed holding company and is the parent company of DTC and its affiliates, National Securities Clearing Corporation (“NSCC”) and Fixed Income Clearing Corporation (“FICC,” and, together with NSCC and DTC, the “Clearing Agencies”). The Plan would describe how corporate support services are provided to DTC from DTCC and DTCC's other subsidiaries through intercompany agreements under a shared services model.

    The Plan would provide a description of established links between DTC and other FMIs, both domestic and foreign, including central securities depositories (“CSDs”) and central counterparties (“CCPs”), as well as the twelve U.S. Federal Reserve Banks. In general, these links are either “inbound” or “issuer” links, in which the other FMI is a Participant and/or a Pledgee and maintains one or more accounts at DTC, or “outbound” or “investor” links in which DTC maintains one or more accounts at another FMI. Key FMIs with which DTC maintains critical links include CDS Clearing and Depository Services Inc. (“CDS”), the Canadian CSD, with participant links in both directions; Euroclear Bank SA/NV (“EB”) for cross-border collateral management services; and The Options Clearing Corporation (“OCC”) and the Federal Reserve Bank of New York (“FRBNY”), each of which is both a Participant and a Pledgee. The critical link for the U.S. marketplace is the relationship between DTC and NSCC, through which continuous net settlement (“CNS”) transactions are completed by settlement at DTC, and DTC acts as settlement agent for NSCC for end-of-day funds settlement.14 This section of the Plan, identifying and briefly describing DTC's established links, would provide a mapping of critical connections and dependencies that may need to be relied on or otherwise addressed in connection with the implementation of either the Recovery Plan or the Wind-down Plan.

    14 DTC has other links in addition to those mentioned above. The current list of linked CSDs is available on the DTCC website.

    The Plan would define the criteria for classifying certain of DTC's services as “critical,” and would identify those critical services and the rationale for their classification. This section would provide an analysis of the potential systemic impact from a service disruption, and is important for evaluating how the recovery tools and the wind-down strategy would facilitate and provide for the continuation of DTC's critical services to the markets it serves. The criteria that would be used to identify a DTC service or function as critical would include consideration as to (1) whether there is a lack of alternative providers or products; (2) whether failure of the service could impact DTC's ability to perform its book-entry and settlement services; (3) whether failure of the service could impact DTC's ability to perform its payment system functions; and (4) whether the service is interconnected with other participants and processes within the U.S. financial system, for example, with other FMIs, settlement banks and broker-dealers. The Plan would then list each of those services, functions or activities that DTC has identified as “critical” based on the applicability of these four criteria. Such critical services would include, for example, MMIs and Commercial Paper Processing,15 Mandatory and Voluntary Corporate Actions,16 Cash and Stock Distributions,17 and End of Day Net Money Settlement.18 The R&W Plan would also include a non-exhaustive list of DTC services that are not deemed critical.

    15See Rule 9(C) (Transactions in MMI Securities), supra note 6.

    16See DTC Reorganizations Service Guide, available at www.dtcc.com/~/media/Files/Downloads/legal/service-guides/Reorganizations.pdf.

    17See DTC Distributions Service Guide, available at http://www.dtcc.com/~/media/Files/Downloads/legal/service-guides/Service%20Guide%20Distributions.pdf.

    18See DTC Settlement Service Guide, available at www.dtcc.com/~/media/Files/Downloads/legal/service-guides/Settlement.pdf.

    The evaluation of which services provided by DTC are deemed critical is important for purposes of determining how the R&W Plan would facilitate the continuity of those services. As discussed further below, while DTC's Wind-down Plan would provide for the transfer of all critical services to a transferee in the event DTC's wind-down is implemented, it would anticipate that any non-critical services that are ancillary and beneficial to a critical service, or that otherwise have substantial user demand from the continuing membership, would also be transferred.

    The Plan would describe the governance structure of both DTCC and DTC. This section of the Plan would identify the ownership and governance model of these entities at both the Board of Directors and management levels. The Plan would state that the stages of escalation required to manage recovery under the Recovery Plan or to invoke DTC's wind-down under the Wind-down Plan would range from relevant business line managers up to the Board through DTC's governance structure. The Plan would then identify the parties responsible for certain activities under both the Recovery Plan and the Wind-down Plan, and would describe their respective roles. The Plan would identify the Risk Committee of the Board (“Board Risk Committee”) as being responsible for oversight of risk management activities at DTC, which include focusing on both oversight of risk management systems and processes designed to identify and manage various risks faced by DTC, and, due to DTC's critical role in the markets in which it operates, oversight of DTC's efforts to mitigate systemic risks that could impact those markets and the broader financial system.19 The Plan would identify the DTCC Management Risk Committee (“Management Risk Committee”) as primarily responsible for general, day-to-day risk management through delegated authority from the Board Risk Committee. The Plan would state that the Management Risk Committee has delegated specific day-to-day risk management, including management of risks addressed through margining systems and related activities, to the DTCC Group Chief Risk Office (“GCRO”), which works with staff within the DTCC Financial Risk Management group. Finally, the Plan would describe the role of the Management Committee, which provides overall direction for all aspects of DTC's business, technology, and operations and the functional areas that support these activities.

    19 The charter of the Board Risk Committee is available at http://www.dtcc.com/~/media/Files/Downloads/legal/policy-and-compliance/DTCC-BOD-Risk-Committee-Charter.pdf.

    The Plan would describe the governance of recovery efforts in response to both default losses and non-default losses under the Recovery Plan, identifying the groups responsible for those recovery efforts. Specifically, the Plan would state that the Management Risk Committee provides oversight of actions relating to the default of a Participant, which would be reported and escalated to it through the GCRO, and the Management Committee provides oversight of actions relating to non-default events that could result in a loss, which would be reported and escalated to it from the DTCC Chief Financial Officer (“CFO”) and the DTCC Treasury group that reports to the CFO, and from other relevant subject matter experts based on the nature and circumstances of the non-default event.20 More generally, the Plan would state that the type of loss and the nature and circumstances of the events that lead to the loss would dictate the components of governance to address that loss, including the escalation path to authorize those actions. As described further below, both the Recovery Plan and the Wind-down Plan would describe the governance of escalations, decisions, and actions under each of those plans.

    20 The Plan would state that these groups would be involved to address how to mitigate the financial impact of non-default losses, and in recommending mitigating actions, the Management Committee would consider information and recommendations from relevant subject matter experts based on the nature and circumstances of the non-default event. Any necessary operational response to these events, however, would be managed in accordance with applicable incident response/business continuity process; for example, processes established by the DTCC Technology Risk Management group would be followed in response to a cyber event.

    Finally, the Plan would describe the role of the R&R Team in managing the overall recovery and wind-down program and plans for each of the Clearing Agencies.

    DTC Recovery Plan

    The Recovery Plan is intended to be a roadmap of those actions that DTC may employ to monitor and, as needed, stabilize its financial condition. As each event that could lead to a financial loss could be unique in its circumstances, the Recovery Plan would not be prescriptive and would permit DTC to maintain flexibility in its use of identified tools and in the sequence in which such tools are used, subject to any conditions in the Rules or the contractual arrangement on which such tool is based. DTC's Recovery Plan would consist of (1) a description of the risk management surveillance, tools, and governance that DTC would employ across evolving stress scenarios that it may face as it transitions through a “Crisis Continuum,” described below; (2) a description of DTC's risk of losses that may result from non-default events, and the financial resources and recovery tools available to DTC to manage those risks and any resulting losses; and (3) an evaluation of the characteristics of the recovery tools that may be used in response to either losses arising out of a Participant Default (as defined below) or non-default losses, as described in greater detail below. In all cases, DTC would act in accordance with the Rules, within the governance structure described in the R&W Plan, and in accordance with applicable regulatory oversight to address each situation in order to best protect DTC, its Participants and the markets in which it operates.

    Managing Participant Default Losses and Liquidity Needs Through the Crisis Continuum. The Plan would describe the risk management surveillance, tools, and governance that DTC may employ across an increasing stress environment, which is referred to as the “Crisis Continuum.” This description would identify those tools that can be employed to mitigate losses, and mitigate or minimize liquidity needs, as the market environment becomes increasingly stressed. The phases of the Crisis Continuum would include (1) a stable market phase, (2) a stressed market phase, (3) a phase commencing with DTC's decision to cease to act for a Participant or Affiliated Family of Participants (referred to in the Plan as the “Participant Default phase”),21 and (4) a recovery phase. This section of the Recovery Plan would address conditions and circumstances relating to DTC's decision to cease to act for a Participant pursuant to the Rules.22 For ease of reference, the R&W Plan would, for purposes of the Plan, use the term “Participant Default Losses” to refer to losses that arise out of or relate to the Participant Default and resulting cease to act (including any losses that arise from liquidation of the Participant's Collateral).

    21 The Plan defines an “Affiliated Family” of Participants as a number of affiliated entities that are all Participants of DTC.

    22 In the Plan, “cease to act” and the actions that may lead to such decision, are used within the context of the Rules, including Rule 4 (Participants Fund and Participants Investment), Rule 9(A) (Transactions in Securities and Money Payments), Rule 9(B) (Transactions in Eligible Securities), Rule 9(C) (Transactions in MMI Securities), Rule 10 (Discretionary Termination), Rule 11 (Mandatory Termination) and Rule 12 (Insolvency), supra note 6. Further, the term “Participant Default” would also be used in the Plan as such term is defined in Rule 4, as proposed to be amended by the Loss Allocation filing, supra note 11.

    The Recovery Plan would provide context to its roadmap through this Crisis Continuum by describing DTC's ongoing management of credit, market risk and liquidity risk, and its existing process for measuring and reporting its risks as they align with established thresholds for its tolerance of those risks. The Recovery Plan would discuss the management of credit/market risk and liquidity exposures together, because the tools that address these risks can be deployed either separately or in a coordinated approach in order to address both exposures. DTC manages these risk exposures collectively to limit their overall impact on DTC and its Participants. DTC has built-in mechanisms to limit exposures and replenish financial resources used in a stress event, in order to continue to operate in a safe and sound manner. DTC is a closed, collateralized system in which liquidity resources are matched against risk management controls, so, at any time, the potential net settlement obligation of the Participant or Affiliated Family of Participants with the largest net settlement obligation cannot exceed the amount of liquidity resources.23 While Collateral securities are subject to market price risk, DTC manages its liquidity and market risks through the calculation of the required deposits to the Participants Fund 24 and risk management controls, i.e., collateral haircuts, the Collateral Monitor 25 and Net Debit Cap.26

    23 DTC's liquidity risk management strategy, including the manner in which DTC would deploy liquidity tools as well as its intraday use of liquidity, is described in the Clearing Agency Liquidity Risk Management Framework. See Securities Exchange Act Release No. 80489 (April 19, 2017), 82 FR 19120 (April 25, 2017) (SR-DTC-2017-004, SR-DTC-2017-005, SR-FICC-2017-008).

    24See Rule 4 (Participants Fund and Participants Investment), supra note 6.

    25See Rule 1, Section 1, supra note 6. For DTC, credit risk and market risk are closely related, as DTC monitors credit exposures from Participants through these risk management controls, which limit Participant settlement obligations to the amount of available liquidity resources and require those obligations to be fully collateralized. The pledge or liquidation of collateral in an amount sufficient to restore liquidity resources depends on market values and demand, i.e., market risk exposure. Such risk management controls are part of DTC's market risk management strategy and are designed to comply with Rule 17Ad-22(e)(4) under the Act, where these risks are referred to as “credit risks.” See also 17 CFR 240.17Ad-22(e)(4).

    26Id.

    The Recovery Plan would outline the metrics and indicators that DTC has developed to evaluate a stress situation against established risk tolerance thresholds. Each risk mitigation tool identified in the Recovery Plan would include a description of the escalation thresholds that allow for effective and timely reporting to the appropriate internal management staff and committees, or to the Board. The Recovery Plan would make clear that these tools and escalation protocols would be calibrated across each phase of the Crisis Continuum. The Recovery Plan would also establish that DTC would retain the flexibility to deploy such tools either separately or in a coordinated approach, and to use other alternatives to these actions and tools as necessitated by the circumstances of a particular Participant Default event, in accordance with the Rules. Therefore, the Recovery Plan would both provide DTC with a roadmap to follow within each phase of the Crisis Continuum, and would permit it to adjust its risk management measures to address the unique circumstances of each event.

    The Recovery Plan would describe the conditions that mark each phase of the Crisis Continuum, and would identify actions that DTC could take as it transitions through each phase in order to both prevent losses from materializing through active risk management, and to restore the financial health of DTC during a period of stress.

    The stable market phase of the Crisis Continuum would describe active risk management activities in the normal course of business. These activities would include performing (1) backtests to evaluate the adequacy of the collateral level and the haircut sufficiency for covering market price volatility and (2) stress testing to cover market price moves under real historical and hypothetical scenarios to assess the haircut adequacy under extreme but plausible market conditions. The backtesting and stress testing results are escalated, as necessary, to internal and Board committees.27

    27 DTC's stress testing practices are described in the Clearing Agency Stress Testing Framework (Market Risk). See Securities Exchange Act Release No. 80485 (April 19, 2017), 82 FR 19131 (April 25, 2017) (SR-DTC-2017-005, SR-FICC-2017-009, SR-NSCC-2017-006).

    The Recovery Plan would describe some of the indicators of the stress market phase of the Crisis Continuum, which would include, for example, volatility in market prices of certain assets where there is increased uncertainty among market participants about the fundamental value of those assets. This phase would involve general market stresses, when no Participant Default would be imminent. Within the description of this phase, the Recovery Plan would provide that DTC may take targeted, routine risk management measures as necessary and as permitted by the Rules.

    Within the Participant Default phase of the Crisis Continuum, the Recovery Plan would provide a roadmap for the existing procedures that DTC would follow in the event of a Participant Default and any decision by DTC to cease to act for that Participant.28 The Recovery Plan would provide that the objectives of DTC's actions upon a Participant Default are to (1) minimize losses and market exposure, and (2), to the extent practicable, minimize disturbances to the affected markets. The Recovery Plan would describe tools, actions, and related governance for both market risk monitoring and liquidity risk monitoring through this phase. For example, in connection with managing its market risk during this phase, DTC would, pursuant to its Rules and existing procedures, (1) monitor and assess the adequacy of its Participants Fund and Net Debit Caps; and (2) follow its operational procedures relating to the execution of a liquidation of the Defaulting Participant's Collateral securities through close collaboration and coordination across multiple functions. Management of liquidity risk through this phase would involve ongoing monitoring of, among other things, the adequacy of the Participants Fund and risk controls, and the Recovery Plan would identify certain actions DTC may deploy as it deems necessary to mitigate a potential liquidity shortfall, which would include, for example, the reduction of Net Debit Caps of some or all Participants, or seeking additional liquidity resources. The Recovery Plan would state that, throughout this phase, relevant information would be escalated and reported to both internal management committees and the Board Risk Committee.

    28See Rule 10 (Discretionary Termination); Rule 11 (Mandatory Termination); Rule 12 (Insolvency), supra note 6.

    The Recovery Plan would also identify financial resources available to DTC, pursuant to the Rules, to address losses arising out of a Participant Default. Specifically, Rule 4, as proposed to be amended by the Loss Allocation Filing, would provide that losses remaining after application of the Defaulting Participant's resources be satisfied first by applying a “Corporate Contribution,” and then, if necessary, by allocating remaining losses among the membership in accordance with such Rule 4, as amended.29

    29See supra note 11. The Loss Allocation Filing proposes to amend Rule 4 to define the amount DTC would contribute to address a loss resulting from either a Participant Default or a non-default event as the “Corporate Contribution.” This amount would be 50 percent (50%) of the “General Business Risk Capital Requirement,” which is calculated pursuant to the Capital Policy and is an amount sufficient to cover potential general business losses so that DTC can continue operations and services as a going concern if those losses materialize, in compliance with Rule 17Ad-22(e)(15) under the Act. See also supra note 9; 17 CFR 240.17Ad-22(e)(15).

    In order to provide for an effective and timely recovery, the Recovery Plan would describe the period of time that would occur near the end of the Participant Default phase, during which DTC may experience stress events or observe early warning indicators that allow it to evaluate its options and prepare for the recovery phase (referred to in the Plan as the “Recovery Corridor”). The Recovery Plan would then describe the recovery phase of the Crisis Continuum, which would begin on the date that DTC issues the first Loss Allocation Notice of the second loss allocation round with respect to a given “Event Period.” 30 The recovery phase would describe actions that DTC may take to avoid entering into a wind-down of its business.

    30 The Loss Allocation Filing proposes to amend Rule 4 to introduce the concept of an “Event Period” as the ten (10) Business Days beginning on (i) with respect to a Participant Default, the day on which DTC notifies Participants that it has ceased to act for a Participant, or (ii) with respect to a non-default loss, the day that DTC notifies Participants of the determination by the Board of Directors that there is a non-default loss event, as described in greater detail in that filing. The proposed Rule 4 would define a “round” as a series of loss allocations relating to an Event Period, and would provide that the first Loss Allocation Notice in a first, second, or subsequent round shall expressly state that such notice reflects the beginning of a first, second, or subsequent round. The maximum allocable loss amount of a round is equal to the sum of the “Loss Allocation Caps” (as defined in the proposed Rule 4) of those Participants included in the round. See supra note 11.

    DTC expects that significant deterioration of liquidity resources would cause it to enter the Recovery Corridor. As such, the Plan would describe the actions DTC may take aimed at replenishing those resources Recovery Corridor indicators may include, for example, a rapid and material increase in market prices or sequential or simultaneous failures of multiple Participants or Affiliated Families of Participants over a compressed time period. Throughout the Recovery Corridor, DTC would monitor the adequacy of its resources and the expected timing of replenishment of those resources, and would do so through the monitoring of certain corridor indicator metrics.

    The majority of the corridor indicators, as identified in the Recovery Plan, relate directly to conditions that may require DTC to adjust its strategy for hedging and liquidating Collateral securities, and any such changes would include an assessment of the status of the corridor indicators. Corridor indicators would include, for example, effectiveness and speed of DTC's efforts to liquidate Collateral securities, and an impediment to the availability of its resources to repay any borrowings due to any Participant default. For each corridor indicator, the Recovery Plan would identify (1) measures of the indicator, (2) evaluations of the status of the indicator, (3) metrics for determining the status of the deterioration or improvement of the indicator, and (4) “Corridor Actions,” which are steps that may be taken to improve the status of the indicator,31 as well as management escalations required to authorize those steps. Because DTC has never experienced the default of multiple Participants, it has not, historically, measured the deterioration or improvements metrics of the corridor indicators. As such, these metrics were chosen based on the business judgment of DTC management.

    31 The Corridor Actions that would be identified in the Plan are indicative, but not prescriptive; therefore, if DTC needs to consider alternative actions due to the applicable facts and circumstances, the escalation of those alternative actions would follow the same escalation protocol identified in the Plan for the Corridor Indicator to which the action relates.

    The Recovery Plan would also describe the reporting and escalation of the status of the corridor indicators throughout the Recovery Corridor. Significant deterioration of a corridor indicator, as measured by the metrics set out in the Recovery Plan, would be escalated to the Board. DTC management would review the corridor indicators and the related metrics at least annually, and would modify these metrics as necessary in light of observations from simulations of Participant Defaults and other analyses. Any proposed modifications would be reviewed by the Management Risk Committee and the Board Risk Committee. The Recovery Plan would estimate that DTC may remain in the Recovery Corridor stage between one day and two weeks. This estimate is based on historical data observed in past Participant Default events, the results of simulations of Participant Defaults, and periodic liquidity analyses conducted by DTC. The actual length of a Recovery Corridor would vary based on actual market conditions observed at the time, and DTC would expect the Recovery Corridor to be shorter in market conditions of increased stress.

    The Recovery Plan would outline steps by which DTC may allocate its losses, which would occur when and in the order provided in Rule 4, as amended.32 The Recovery Plan would also identify tools that may be used to address foreseeable shortfalls of DTC's liquidity resources following a Participant Default, and would provide that these tools may be used as appropriate during the Crisis Continuum to address liquidity shortfalls if they arise. The goal in managing DTC's liquidity resources is to maximize resource availability in an evolving stress situation, to maintain flexibility in the order and use of sources of liquidity, and to repay any third party lenders in a timely manner. Liquidity tools include, for example, DTC's committed 364-day credit facility 33 and Net Credit Reductions.34 The Recovery Plan would state that the availability and capacity of these liquidity tools cannot be accurately predicted and are dependent on the circumstances of the applicable stress period, including market price volatility, actual or perceived disruptions in financial markets, the costs to DTC of utilizing these tools, and any potential impact on DTC's credit rating.

    32 As these matters are described in greater detail in the Loss Allocation Filing and in the proposed amendments to Rule 4, described therein, reference is made to that filing and the details are not repeated here. See supra note 11.

    33See Securities Exchange Act Release No. 80605 (May 5, 2017), 82 FR 21850 (May 10, 2017) (SR-DTC-2017-802; SR-NSCC-2017-802).

    34 DTC may borrow amounts needed to complete settlement from Participants by net credit reductions to their settlement accounts, secured by the Collateral of the defaulting Participant. See Securities Exchange Act Release Nos. 24689 (July 9, 1987), 52 FR 26613 (July 15, 1987) (SR-DTC-87-4); 41879 (September 15, 1999), 64 FR 51360 (September 22, 1999) (SR-DTC-99-15); 42281 (December 28, 1999), 65 FR 1420 (January 10, 2000) (SR-DTC-99-25).

    As stated above, the Recovery Plan would state that DTC will have entered the recovery phase on the date that it issues the first Loss Allocation Notice of the second loss allocation round with respect to a given Event Period. The Recovery Plan would provide that, during the recovery phase, DTC would continue and, as needed, enhance, the monitoring and remedial actions already described in connection with previous phases of the Crisis Continuum, and would remain in the recovery phase until its financial resources are expected to be or are fully replenished, or until the Wind-down Plan is triggered, as described below.

    The Recovery Plan would describe governance for the actions and tools that may be employed within each phase of the Crisis Continuum, which would be dictated by the facts and circumstances applicable to the situation being addressed. Such facts and circumstances would be measured by the various indicators and metrics applicable to that phase of the Crisis Continuum, and would follow relevant escalation protocol that would be described in the Recovery Plan. The Recovery Plan would also describe the governance procedures around a decision to cease to act for a Participant, pursuant to the Rules, and around the management and oversight of the subsequent liquidation of Collateral securities. The Recovery Plan would state that, overall, DTC would retain flexibility in accordance with the Rules, its governance structure, and its regulatory oversight, to address a particular situation in order to best protect DTC and its Participants, and to meet the primary objectives, throughout the Crisis Continuum, of minimizing losses and, where consistent and practicable, minimizing disturbance to affected markets.

    Non-Default Losses. The Recovery Plan would outline how DTC may address losses that result from events other than a Participant Default. While these matters are addressed in greater detail in other documents, this section of the Plan would provide a roadmap to those documents and an outline for DTC's approach to monitoring and managing losses that could result from a non-default event. The Plan would first identify some of the risks DTC faces that could lead to these losses, which include, for example, the business and profit/loss risks of unexpected declines in revenue or growth of expenses; the operational risks of disruptions to systems or processes that could lead to large losses, including those resulting from, for example, a cyber-attack; and custody or investment risks that could lead to financial losses. The Recovery Plan would describe DTC's overall strategy for the management of these risks, which includes a “three lines of defense” approach to risk management that allows for comprehensive management of risk across the organization.35 The Recovery Plan would also describe DTC's approach to financial risk and capital management. The Plan would identify key aspects of this approach, including, for example, an annual budget process, business line performance reviews with management, and regular review of capital requirements against LNA. These risk management strategies are collectively intended to allow DTC to effectively identify, monitor, and manage risks of non-default losses.

    35 This “three lines of defense” approach to risk management includes (1) a first line of defense comprised of the various business lines and functional units that support the products and services offered by DTC; (2) a second line of defense comprised of control functions that support DTC, including the risk management, legal and compliance areas; and (3) a third line of defense, which is performed by an internal audit group. The Clearing Agency Risk Management Framework includes a description of this “three lines of defense” approach to risk management, and addresses how DTC comprehensively manages various risks, including operational, general business, investment, custody, and other risks that arise in or are borne by it. See Securities Exchange Act Release No. 81635 (September 15, 2017), 82 FR 44224 (September 21, 2017) (SR-DTC-2017-013; SR-FICC-2017-016; SR-NSCC-2017-012). The Clearing Agency Operational Risk Management Framework describes the manner in which DTC manages operational risks, as defined therein. See Securities Exchange Act Release No. 81745 (September 28, 2017), 82 FR 46332 (October 4, 2017) (SR-DTC-2017-014; SR-FICC-2017-017; SR-NSCC-2017-013).

    The Plan would identify the two categories of financial resources DTC maintains to cover losses and expenses arising from non-default risks or events as (1) LNA, maintained, monitored, and managed pursuant to the Capital Policy, which include (a) amounts held in satisfaction of the General Business Risk Capital Requirement,36 (b) the Corporate Contribution,37 and (c) other amounts held in excess of DTC's capital requirements pursuant to the Capital Policy; and (2) resources available pursuant to the loss allocation provisions of Rule 4.38

    36See supra note 29.

    37See supra note 29.

    38See supra note 11.

    The Plan would address the process by which the CFO and the DTCC Treasury group would determine which available LNA resources are most appropriate to cover a loss that is caused by a non-default event. This determination involves an evaluation of a number of factors, including the current and expected size of the loss, the expected time horizon over when the loss or additional expenses would materialize, the current and projected available LNA, and the likelihood LNA could be successfully replenished pursuant to the Replenishment Plan, if triggered.39 Finally the Plan would discuss how DTC would apply its resources to address losses resulting from a non-default event, including the order of resources it would apply if the loss or liability is expected to exceed DTC's excess LNA amounts, or is large relative thereto, and the Board has declared the event a “Declared Non-Default Loss Event” pursuant to Rule 4.40

    39See supra note 9.

    40See supra note 11.

    The Plan would also describe proposed Rule 38 (Market Disruption and Force Majeure), which DTC is proposing to adopt in its Rules. This Proposed Rule would provide transparency around how DTC would address extraordinary events that may occur outside its control. Specifically, the Proposed Rule would define a “Market Disruption Event” and the governance around a determination that such an event has occurred. The Proposed Rule would also describe DTC's authority to take actions during the pendency of a Market Disruption Event that it deems appropriate to address such an event and facilitate the continuation of its services, if practicable, as described in greater detail below.

    The Plan would describe the interaction between the Proposed Rule and DTC's existing processes and procedures addressing business continuity management and disaster recovery (generally, the “BCM/DR procedures”), making clear that the Proposed Rule is designed to support those BCM/DR procedures and to address circumstances that may be exogenous to DTC and not necessarily addressed by the BCM/DR procedures. Finally, the Plan would describe that, because the operation of the Proposed Rule is specific to each applicable Market Disruption Event, the Proposed Rule does not define a time limit on its application. However, the Plan would note that actions authorized by the Proposed Rule would be limited to the pendency of the applicable Market Disruption Event, as made clear in the Proposed Rule. Overall, the Proposed Rule is designed to mitigate risks caused by Market Disruption Events and, thereby, minimize the risk of financial loss that may result from such events.

    Recovery Tool Characteristics. The Recovery Plan would describe DTC's evaluation of the tools identified within the Recovery Plan, and its rationale for concluding that such tools are comprehensive, effective, and transparent, and that such tools provide appropriate incentives to Participants and minimize negative impact on Participants and the financial system, in compliance with guidance published by the Commission in connection with the adoption of Rule 17Ad-22(e)(3)(ii) under the Act.41 DTC's analysis and the conclusions set forth in this section of the Recovery Plan are described in greater detail in Item 3(b) of this filing, below.

    41 Standards for Covered Clearing Agencies, Securities Exchange Act Release No. 78961 (September 28, 2016), 81 FR 70786 (October 13, 2016) (S7-03-14).

    DTC Wind-Down Plan

    The Wind-down Plan would provide the framework and strategy for the orderly wind-down of DTC if the use of the recovery tools described in the Recovery Plan do not successfully return DTC to financial viability. While DTC believes that, given the comprehensive nature of the recovery tools, such event is extremely unlikely, as described in greater detail below, DTC is proposing a wind-down strategy that provides for (1) the transfer of DTC's business, assets, securities inventory, and membership to another legal entity, (2) such transfer being effected in connection with proceedings under Chapter 11 of the U.S. Federal Bankruptcy Code,42 and (3) after effectuating this transfer, DTC liquidating any remaining assets in an orderly manner in bankruptcy proceedings. DTC believes that the proposed transfer approach to a wind-down would meet its objectives of (1) assuring that DTC's critical services will be available to the market as long as there are Participants in good standing, and (2) minimizing disruption to the operations of Participants and financial markets generally that might be caused by DTC's failure.

    42 11 U.S.C. 1101 et seq.

    In describing the transfer approach to DTC's Wind-down Plan, the Plan would identify the factors that DTC considered in developing this approach, including the fact that DTC does not own material assets that are unrelated to its clearance and settlement activities. As such, a business reorganization or “bail-in” of debt approach would be unlikely to mitigate significant losses. Additionally, DTC's approach was developed in consideration of its critical and unique position in the U.S. markets, which precludes any approach that would cause DTC's critical services to no longer be available.

    First, the Wind-down Plan would describe the potential scenarios that could lead to the wind-down of DTC, and the likelihood of such scenarios. The Wind-down Plan would identify the time period leading up to a decision to wind-down DTC as the “Runway Period.” This period would follow the implementation of any recovery tools, as it may take a period of time, depending on the severity of the market stress at that time, for these tools to be effective or for DTC to realize a loss sufficient to cause it to be unable to borrow to complete settlement and to repay such borrowings.43 The Plan would identify some of the indicators that DTC has entered this Runway Period, which would include, for example, simultaneous successive Participant Defaults, significant Participant retirements, and DTC's inability to replenish financial resources following the liquidation of Collateral securities.

    43 The Wind-down Plan would state that, given DTC's position as a user-governed financial market utility, it is possible that its Participants might voluntarily elect to provide additional support during the recovery phase leading up to a potential trigger of the Wind-down Plan, but would also make clear that DTC cannot predict the willingness of Participants to do so.

    The trigger for implementing the Wind-down Plan would be a determination by the Board that recovery efforts have not been, or are unlikely to be, successful in returning DTC to viability as a going concern. As described in the Plan, DTC believes this is an appropriate trigger because it is both broad and flexible enough to cover a variety of scenarios, and would align incentives of DTC and Participants to avoid actions that might undermine DTC's recovery efforts. Additionally, this approach takes into account the characteristics of DTC's recovery tools and enables the Board to consider (1) the presence of indicators of a successful or unsuccessful recovery, and (2) potential for knock-on effects of continued iterative application of DTC's recovery tools.

    The Wind-down Plan would describe the general objectives of the transfer strategy, and would address assumptions regarding the transfer of DTC's critical services, business, assets, securities inventory, and membership 44 to another legal entity that is legally, financially, and operationally able to provide DTC's critical services to entities that wish to continue their membership following the transfer (“Transferee”). The Wind-down Plan would provide that the Transferee would be either (1) a third party legal entity, which may be an existing or newly established legal entity or a bridge entity formed to operate the business on an interim basis to enable the business to be transferred subsequently (“Third Party Transferee”); or (2) an existing, debt-free failover legal entity established ex-ante by DTCC (“Failover Transferee”) to be used as an alternative Transferee in the event that no viable or preferable Third Party Transferee timely commits to acquire DTC's business. DTC would seek to identify the proposed Transferee, and negotiate and enter into transfer arrangements during the Runway Period and prior to making any filings under Chapter 11 of the U.S. Federal Bankruptcy Code.45 As stated above, the Wind-down Plan would anticipate that the transfer to the Transferee, including the transfer and establishment of the Participant and Pledgee securities accounts on the books of the Transferee, be effected in connection with proceedings under Chapter 11 of the U.S. Federal Bankruptcy Code, and pursuant to a bankruptcy court order under Section 363 of the Bankruptcy Code, such that the transfer would be free and clear of claims against, and interests in, DTC, except to the extent expressly provided in the court's order.46

    44 Arrangements with FAST Agents and DRS Agents (each as defined in proposed Rule 32(A)) and with Settling Banks would also be assigned to the Transferee, so that the approach would be transparent to issuers and their transfer agents, as well as to Settling Banks.

    45 11 U.S.C. 1101 et seq.

    46See id. at 363.

    In order to effect a timely transfer of its services and minimize the market and operational disruption of such transfer, DTC would expect to transfer all of its critical services and any non-critical services that are ancillary and beneficial to a critical service, or that otherwise have substantial user demand from the continuing membership. Given the transfer of the securities inventory and the establishment on the books of the Transferee Participant and Pledgee securities accounts, DTC anticipates that, following the transfer, it would not itself continue to provide any services, critical or not. Following the transfer, the Wind-down Plan would anticipate that the Transferee and its continuing membership would determine whether to continue to provide any transferred non-critical service on an ongoing basis, or terminate the non-critical service following some transition period. DTC's Wind-down Plan would anticipate that the Transferee would enter into a transition services agreement with DTCC so that DTCC would continue to provide the shared services it currently provides to DTC, including staffing, infrastructure and operational support. The Wind-down Plan would also anticipate the assignment of DTC's “inbound” link arrangements to the Transferee. The Wind-down Plan would provide that in the case of “outbound” links, DTC would seek to have the linked FMIs agree, at a minimum, to accept the Transferee as a link party for a transition period.47

    47 The proposed transfer arrangements outlined in the Wind-down Plan do not contemplate the transfer of any credit or funding agreements, which are generally not assignable by DTC. However, to the extent the Transferee adopts rules substantially identical to those DTC has in effect prior to the transfer, it would have the benefit of any rules-based liquidity funding. The Wind-down Plan contemplates that no Participants Fund would be transferred to the Transferee, as it is not held in a bankruptcy remote manner and it is the primary prefunded liquidity resource to be accessed in the recovery phase.

    The Wind-down Plan would provide that, following the effectiveness of the transfer to the Transferee, the wind-down of DTC would involve addressing any residual claims against DTC through the bankruptcy process and liquidating the legal entity. As such, and as stated above, the Wind-down Plan does not contemplate DTC continuing to provide services in any capacity following the transfer time, and any services not transferred would be terminated.

    The Wind-down Plan would also identify the key dependencies for the effectiveness of the transfer, which include regulatory approvals that would permit the Transferee to be legally qualified to provide the transferred services from and after the transfer, and approval by the applicable bankruptcy court of, among other things, the proposed sale, assignments, and transfers to the Transferee.

    The Wind-down Plan would address governance matters related to the execution of the transfer of DTC's business and its wind-down. The Wind-down Plan would address the duties of the Board to execute the wind-down of DTC in conformity with (1) the Rules, (2) the Board's fiduciary duties, which mandate that it exercise reasonable business judgment in performing these duties, and (3) DTC's regulatory obligations under the Act as a registered clearing agency. The Wind-down Plan would also identify certain factors the Board may consider in making these decisions, which would include, for example, whether DTC could safely stabilize the business and protect its value without seeking bankruptcy protection, and DTC's ability to continue to meet its regulatory requirements.

    The Wind-down Plan would describe (1) actions DTC or DTCC may take to prepare for wind-down in the period before DTC experiences any financial distress, (2) actions DTC would take both during the recovery phase and the Runway Period to prepare for the execution of the Wind-down Plan, and (3) actions DTC would take upon commencement of bankruptcy proceedings to effectuate the Wind-down Plan.

    Finally, the Wind-down Plan would include an analysis of the estimated time and costs to effectuate the plan, and would provide that this estimate be reviewed and approved by the Board annually. In order to estimate the length of time it might take to achieve a recovery or orderly wind-down of DTC's critical operations, as contemplated by the R&W Plan, the Wind-down Plan would include an analysis of the possible sequencing and length of time it might take to complete an orderly wind-down and transfer of critical operations, as described in earlier sections of the R&W Plan. The Wind-down Plan would also include in this analysis consideration of other factors, including the time it might take to complete any further attempts at recovery under the Recovery Plan. The Wind-down Plan would then multiply this estimated length of time by DTC's average monthly operating expenses, including adjustments to account for changes to DTC's profit and expense profile during these circumstances, over the previous twelve months to determine the amount of LNA that it should hold to achieve a recovery or orderly wind-down of DTC's critical operations. The estimated wind-down costs would constitute the “Recovery/Wind-down Capital Requirement” under the Capital Policy.48 Under that policy, the General Business Risk Capital Requirement is calculated as the greatest of three estimated amounts, one of which is this Recovery/Wind-down Capital Requirement.49

    48See supra note 9.

    49See supra note 9.

    The R&W Plan is designed as a roadmap, and the types of actions that may be taken both leading up to and in connection with implementation of the Wind-down Plan would be primarily addressed in other supporting documentation referred to therein.

    The Wind-down Plan would address proposed Rule 32(A) (Wind-down of the Corporation and proposed Rule 38 (Force Majeure and Market Disruption)), which would be adopted to facilitate the implementation of the Wind-down Plan, as discussed below.

    Proposed Rules

    In connection with the adoption of the R&W Plan, DTC is proposing to adopt the Proposed Rules, each described below. The Proposed Rules would facilitate the execution of the R&W Plan and would provide Participants with transparency as to critical aspects of the Plan, particularly as they relate to the rights and responsibilities of both DTC and its Participants. The Proposed Rules also provide a legal basis to these aspects of the Plan.

    Rule 32(A) (Wind-Down of the Corporation)

    The proposed Rule 32(A) (“Wind-down Rule”) would be adopted to facilitate the execution of the Wind-down Plan. The Wind-down Rule would include a proposed set of defined terms that would be applicable only to the provisions of this Proposed Rule. The Wind-down Rule would make clear that a wind-down of DTC's business would occur (1) after a decision is made by the Board, and (2) in connection with the transfer of DTC's services to a Transferee, as described therein. Generally, the proposed Wind-down Rule is designed to create clear mechanisms for the transfer of Eligible Participants and Pledgees, Settling Banks, DRS Agents, and FAST Agents (as these terms would be defined in the Wind-down Rule), and DTC's inventory of financial assets in order to provide for continued access to critical services and to minimize disruption to the markets in the event the Wind-down Plan is initiated.

    Wind-down Trigger. First, the Proposed Rule would make clear that the Board is responsible for initiating the Wind-down Plan, and would identify the criteria the Board would consider when making this determination. As provided for in the Wind-down Plan and in the proposed Wind-down Rule, the Board would initiate the Plan if, in the exercise of its business judgment and subject to its fiduciary duties, it has determined that the execution of the Recovery Plan has not or is not likely to restore DTC to viability as a going concern, and the implementation of the Wind-down Plan, including the transfer of DTC's business, is in the best interests of DTC, its Participants and Pledgees, its shareholders and creditors, and the U.S. financial markets.

    Identification of Critical Services; Designation of Dates and Times for Specific Actions. The Proposed Rule would provide that, upon making a determination to initiate the Wind-down Plan, the Board would identify the critical and non-critical services that would be transferred to the Transferee at the Transfer Time (as defined below and in the Proposed Rule), as well as any non-critical services that would not be transferred to the Transferee. The proposed Wind-down Rule would establish that any services transferred to the Transferee will only be provided by the Transferee as of the Transfer Time, and that any non-critical services that are not transferred to the Transferee would be terminated at the Transfer Time. The Proposed Rule would also provide that the Board would establish (1) an effective time for the transfer of DTC's business to a Transferee (“Transfer Time”), and (2) the last day that instructions in respect of securities and other financial products may be effectuated through the facilities of DTC (the “Last Activity Date”). The Proposed Rule would make clear that DTC would not accept any transactions for settlement after the Last Activity Date. Any transactions to be settled after the Transfer Time would be required to be submitted to the Transferee, and would not be DTC's responsibility.

    Notice Provisions. The proposed Wind-down Rule would provide that, upon a decision to implement the Wind-down Plan, DTC would provide its Participants, Pledgees, DRS Agents, FAST Agents, Settling Banks and regulators with a notice that includes material information relating to the Wind-down Plan and the anticipated transfer of DTC's Participants and business, including, for example, (1) a brief statement of the reasons for the decision to implement the Wind-down Plan; (2) identification of the Transferee and information regarding the transaction by which the transfer of DTC's business would be effected; (3) the Transfer Time and Last Activity Date; and (4) identification of Participants and the critical and non-critical services that would be transferred to the Transferee at the Transfer Time, as well as those Non-Eligible Participants (as defined below and in the Proposed Rule) and any non-critical services that would not be included in the transfer. DTC would also make available the rules and procedures and membership agreements of the Transferee.

    Transfer of Membership. The proposed Wind-down Rule would address the expected transfer of DTC's membership to the Transferee, which DTC would seek to effectuate by entering into an arrangement with a Failover Transferee, or by using commercially reasonable efforts to enter into such an arrangement with a Third Party Transferee. Thus, under the proposal, in connection with the implementation of the Wind-down Plan and with no further action required by any party:

    (1) Each Eligible Participant would become (i) a Participant of the Transferee and (ii) a party to a Participants agreement with the Transferee;

    (2) each Participant that is delinquent in the performance of any obligation to DTC or that has provided notice of its election to withdraw as a Participant (a “Non-Eligible Participant”) as of the Transfer Time would become (i) the holder of a transition period securities account maintained by the Transferee on its books (“Transition Period Securities Account”) and (ii) a party to a Transition Period Securities Account agreement of the Transferee;

    (3) each Pledgee would become (i) a Pledgee of the Transferee and (ii) a party to a Pledgee agreement with the Transferee;

    (4) each DRS Agent would become (i) a DRS Agent of the Transferee and (ii) a party to a DRS Agent agreement with the Transferee;

    (5) each FAST Agent would become (i) a FAST Agent of the Transferee and (ii) a party to a FAST Agent agreement with the Transferee; and

    (6) each Settling Bank for Participants and Pledgees would become (i) a Settling Bank for Participants and Pledgees of the Transferee and (ii) a party to a Settling Bank Agreement with the Transferee.

    Further, the Proposed Rule would make clear that it would not prohibit (1) Non-Eligible Participants from applying for membership with the Transferee, (2) Non-Eligible Participants that have become holders of Transition Period Securities Accounts (“Transition Period Securities Account Holders”) of the Transferee from withdrawing as a Transition Period Securities Account Holder from the Transferee, subject to the rules and procedures of the Transferee, and (3) Participants, Pledgees, DRS Agents, FAST Agents, and Settling Banks that would be transferred to the Transferee from withdrawing from membership with the Transferee, subject to the rules and procedures of the Transferee. Under the Proposed Rule, Non-Eligible Participants that have become Transition Period Securities Account Holders of the Transferee shall have the rights and be subject to the obligations of Transition Period Securities Account Holders set forth in special provisions of the rules and procedures of the Transferee applicable to such Transition Period Securities Account Holder. Specifically, Non-Eligible Participants that become Transition Period Securities Account Holders must, within the Transition Period (as defined in the Proposed Rule), instruct the Transferee to transfer the financial assets credited to its Transition Period Securities Account (i) to a Participant of the Transferee through the facilities of the Transferee or (ii) to a recipient outside the facilities of the Transferee, and no additional financial assets may be delivered versus payment to a Transition Period Securities Account during the Transition Period.

    Transfer of Inventory of Financial Assets. The proposed Wind-down Rule would provide that DTC would enter into arrangements with a Failover Transferee, or would use commercially reasonable efforts to enter into arrangements with a Third Party Transferee, providing that, in either case, at Transfer Time:

    (1) DTC would transfer to the Transferee (i) its rights with respect to its nominee Cede & Co. (“Cede”) (and thereby its rights with respect to the financial assets owned of record by Cede), (ii) the financial assets held by it at the FRBNY, (iii) the financial assets held by it at other CSDs, (iv) the financial assets held in custody for it with FAST Agents, (v) the financial assets held in custody for it with other custodians and (vi) the financial assets it holds in physical custody.

    (2) The Transferee would establish security entitlements on its books for Eligible Participants of DTC that become Participants of the Transferee that replicate the security entitlements that DTC maintained on its books immediately prior to the Transfer Time for such Eligible Participants, and DTC would simultaneously eliminate such security entitlements from its books.

    (3) The Transferee would establish security entitlements on its books for Non-Eligible Participants of DTC that become Transition Period Securities Account Holders of the Transferee that replicate the security entitlements that DTC maintained on its books immediately prior to the Transfer Time for such Non-Eligible Participants, and DTC would simultaneously eliminate such security entitlements from its books.

    (4) The Transferee would establish pledges on its books in favor of Pledgees that become Pledgees of the Transferee that replicate the pledges that DTC maintained on its books immediately prior to the Transfer Time in favor of such Pledgees, and DTC shall simultaneously eliminate such pledges from its books.

    Comparability Period. The proposed automatic mechanism for the transfer of DTC's membership is intended to provide DTC's membership with continuous access to critical services in the event of DTC's wind-down, and to facilitate the continued prompt and accurate clearance and settlement of securities transactions. Further to this goal, the proposed Wind-down Rule would provide that DTC would enter into arrangements with a Failover Transferee, or would use commercially reasonable efforts to enter into arrangements with a Third Party Transferee, providing that, in either case, with respect to the critical services and any non-critical services that are transferred from DTC to the Transferee, for at least a period of time to be agreed upon (“Comparability Period”), the business transferred from DTC to the Transferee would be operated in a manner that is comparable to the manner in which the business was previously operated by DTC. Specifically, the proposed Wind-down Rule would provide that: (1) The rules of the Transferee and terms of Participant, Pledgee, DRS Agent, FAST Agent and Settling Bank agreements would be comparable in substance and effect to the analogous Rules and agreements of DTC, (2) the rights and obligations of any Participants, Pledgees, DRS Agents, FAST Agents, and Settling Banks that are transferred to the Transferee would be comparable in substance and effect to their rights and obligations as to DTC, and (3) the Transferee would operate the transferred business and provide any services that are transferred in a comparable manner to which such services were provided by DTC.

    The purpose of these provisions and the intended effect of the proposed Wind-down Rule is to facilitate a smooth transition of DTC's business to a Transferee and to provide that, for at least the Comparability Period, the Transferee (1) would operate the transferred business in a manner that is comparable in substance and effect to the manner in which the business was operated by DTC, and (2) would not require sudden and disruptive changes in the systems, operations and business practices of the new Participants, Pledgees, DRS Agents, FAST Agents, and Settling Banks of the Transferee.

    Subordination of Claims Provisions and Miscellaneous Matters. The proposed Wind-down Rule would also include a provision addressing the subordination of unsecured claims against DTC of its Participants who fail to participate in DTC's recovery efforts (i.e., such firms are delinquent in their obligations to DTC or elect to retire from DTC in order to minimize their obligations with respect to the allocation of losses, pursuant to the Rules). This provision is designed to incentivize Participants to participate in DTC's recovery efforts.50

    50 Nothing in the proposed Wind-down Rule would seek to prevent a Participant that retired its membership at DTC from applying for membership with the Transferee. Once its DTC membership is terminated, however, such firm would not be able to benefit from the membership assignment that would be effected by this proposed Wind-down Rule, and it would have to apply for membership directly with the Transferee, subject to its membership application and review process.

    The proposed Wind-down Rule would address other ex-ante matters, including provisions providing that its Participants, Pledgees, DRS Agents, FAST Agents and Settling Banks (1) will assist and cooperate with DTC to effectuate the transfer of DTC's business to a Transferee, (2) consent to the provisions of the rule, and (3) grant DTC power of attorney to execute and deliver on their behalf documents and instruments that may be requested by the Transferee. Finally, the Proposed Rule would include a limitation of liability for any actions taken or omitted to be taken by DTC pursuant to the Proposed Rule. The purpose of the limitation of liability is to facilitate and protect DTC's ability to act expeditiously in response to extraordinary events. As noted, such limitation of liability would be available only following triggering of the Wind-down Plan. In addition, and as a separate matter, the limitation of liability provides Participants with transparency for the unlikely situation when those extraordinary events could occur, as well supporting the legal framework within which DTC would take such actions. These provisions, collectively, are designed to enable DTC to take such acts as the Board determines necessary to effectuate an orderly transfer and wind-down of its business should recovery efforts prove unsuccessful.

    Rule 38 (Market Disruption and Force Majeure)

    The proposed Rule 38 (“Force Majeure Rule”) would address DTC's authority to take certain actions upon the occurrence, and during the pendency, of a “Market Disruption Event,” as defined therein. The Proposed Rule is designed to clarify DTC's ability to take actions to address extraordinary events outside of the control of DTC and of its membership, and to mitigate the effect of such events by facilitating the continuity of services (or, if deemed necessary, the temporary suspension of services). To that end, under the proposed Force Majeure Rule, DTC would be entitled, during the pendency of a Market Disruption Event, to (1) suspend the provision of any or all services, and (2) take, or refrain from taking, or require its Participants and Pledgees to take, or refrain from taking, any actions it considers appropriate to address, alleviate, or mitigate the event and facilitate the continuation of DTC's services as may be practicable.

    The proposed Force Majeure Rule would identify the events or circumstances that would be considered a “Market Disruption Event,” including, for example, events that lead to the suspension or limitation of trading or banking in the markets in which DTC operates, or the unavailability or failure of any material payment, bank transfer, wire or securities settlement systems. The proposed Force Majeure Rule would define the governance procedures for how DTC would determine whether, and how, to implement the provisions of the rule. A determination that a Market Disruption Event has occurred would generally be made by the Board, but the Proposed Rule would provide for limited, interim delegation of authority to a specified officer or management committee if the Board would not be able to take timely action. In the event such delegated authority is exercised, the proposed Force Majeure Rule would require that the Board be convened as promptly as practicable, no later than five Business Days after such determination has been made, to ratify, modify, or rescind the action. The proposed Force Majeure Rule would also provide for prompt notification to the Commission, and advance consultation with Commission staff, when practicable, including notification when an event is no longer continuing and the relevant actions are terminated. The Proposed Rule would require Participants and Pledgees to notify DTC immediately upon becoming aware of a Market Disruption Event, and, likewise, would require DTC to notify its Participants and Pledgees if it has triggered the Proposed Rule and of actions taken or intended to be taken thereunder.

    Finally, the Proposed Rule would address other related matters, including a limitation of liability for any failure or delay in performance, in whole or in part, arising out of the Market Disruption Event. The purpose of the limitation of liability would be similar to the purpose of the analogous provision in the proposed Wind-down Rule, which is to facilitate and protect DTC's ability to act expeditiously in response to extraordinary events.

    Expected Effect on and Management of Risk

    DTC believes the proposal to adopt the R&W Plan and the Proposed Rules would enable it to better manage its risks. As described above, the Recovery Plan would identify the recovery tools and the risk management activities that DTC may use to address risks of uncovered losses or shortfalls resulting from a Participant Default and losses arising from non-default events. By creating a framework for its management of risks across an evolving stress scenario and providing a roadmap for actions it may employ to monitor and, as needed, stabilize its financial condition, the Recovery Plan would strengthen DTC's ability to manage risk. The Wind-down Plan would also enable DTC to better manage its risks by establishing the strategy and framework for its orderly wind-down and the transfer of DTC's business, including the transfer of the securities inventory and establishment of the Participant and Pledgee securities accounts on the books of the transferee, when the Wind-down Plan is triggered. By creating clear mechanisms for the transfer of DTC's membership and business, the Wind-down Plan would facilitate continued access to DTC's critical services and minimize market impact of the transfer and enable DTC to better manage risks related to the wind-down of DTC.

    DTC believes the Proposed Rules would enable it to better manage its risks by facilitating, and providing a legal basis for, the implementation of critical aspects of the R&W Plan. The Proposed Rules would provide Participants with transparency around those provisions of the R&W Plan that relate to their and DTC's rights, responsibilities and obligations. Therefore, DTC believes the Proposed Rules would enable it to better manage its risks by providing this transparency and creating some certainty, to the extent practicable, around the occurrence of a Market Disruption Event (as such term is defined in the Proposed Rule), and around the implementation of the Wind-down Plan.

    Consistency With the Clearing Supervision Act

    The stated purpose of Title VIII of the Clearing Supervision Act is to mitigate systemic risk in the financial system and promote financial stability by, among other things, promoting uniform risk management standards for systemically important financial market utilities and strengthening the liquidity of systemically important financial market utilities.51 Section 805(a)(2) of the Clearing Supervision Act 52 also authorizes the Commission to prescribe risk management standards for the payment, clearing, and settlement activities of designated clearing entities, like DTC, for which the Commission is the supervisory agency. Section 805(b) of the Clearing Supervision Act 53 states that the objectives and principles for risk management standards prescribed under Section 805(a) shall be to promote robust risk management, promote safety and soundness, reduce systemic risks, and support the stability of the broader financial system.

    51 12 U.S.C. 5461(b).

    52Id. at 5464(a)(2).

    53Id. at 5464(b).

    DTC believes that the proposed change is consistent with Section 805(b) of the Clearing Supervision Act because it is designed to address each of these objectives. The Recovery Plan and the proposed Force Majeure Rule would promote robust risk management and would reduce systemic risks by providing DTC with a roadmap for actions it may employ to monitor and manage its risks, and, as needed, to stabilize its financial condition in the event those risks materialize. Further, the Recovery Plan would identify the triggers of recovery tools, but would not provide that those triggers necessitate the use of that tool. Instead, the Recovery Plan would provide that the triggers of these tools lead to escalation to an appropriate management body, which would have authority and flexibility to respond appropriately to the situation. Essentially, the Recovery Plan and the proposed Force Majeure Rule are designed to minimize losses to both DTC and its Participants by giving DTC the ability to determine the most appropriate way to address each stress situation. This approach would allow for proper evaluation of the situation and the possible impacts of the use of a recovery tool in order to minimize the negative effects of the stress situation, and would reduce systemic risks related to the implementation of the Recovery Plan and the underlying recovery tools.

    The Wind-down Plan and the proposed Wind-down Rule, which would facilitate the implementation of the Wind-down Plan, would promote safety and soundness and would support the stability of the broader financial system because they would establish a framework for the orderly wind-down of DTC's business and would set forth clear mechanics for the transfer of its critical services and membership as well as clear provisions concerning the transfer of the securities inventory that DTC holds in fungible bulk on behalf of its Participants. By designing the Wind-down Plan and the proposed Wind-down Rule to provide for the continued access to DTC's critical services and membership, DTC believes they would promote safety and soundness and would support stability in the broader financial system in the event the Wind-down Plan is implemented.

    By assisting DTC to promote robust risk management, promote safety and soundness, reduce systemic risks, and support the stability of the broader financial system, as described above, DTC believes the proposal is consistent with Section 805(b) of the Clearing Supervision Act.54

    54Id.

    DTC also believes that the proposal is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a registered clearing agency. In particular, DTC believes that the R&W Plan and each of the Proposed Rules are consistent with Section 17A(b)(3)(F) of the Act,55 the R&W Plan and each of the Proposed Rules are consistent with Rule 17Ad-22(e)(3)(ii) under the Act,56 and the R&W Plan is consistent with Rule 17Ad-22(e)(15)(ii) under the Act,57 for the reasons described below.

    55 15 U.S.C. 78q-1(b)(3)(F).

    56 17 CFR 240.17Ad-22(e)(3)(ii).

    57Id. at 240.17Ad-22(e)(15)(ii).

    Section 17A(b)(3)(F) of the Act requires, in part, that the rules of DTC be designed to promote the prompt and accurate clearance and settlement of securities transactions, and to assure the safeguarding of securities and funds which are in the custody or control of DTC or for which it is responsible.58 The Recovery Plan and the proposed Force Majeure Rule would promote the prompt and accurate clearance and settlement of securities transactions by providing DTC with a roadmap for actions it may employ to mitigate losses, and monitor and, as needed, stabilize, its financial condition, which would allow it to continue its critical clearance and settlement services in stress situations. Further, as described above, the Recovery Plan is designed to identify the actions and tools DTC may use to address and minimize losses to both DTC and its Participants. The Recovery Plan and the proposed Force Majeure Rule would provide DTC's management and the Board with guidance in this regard by identifying the indicators and governance around the use and application of such tools to enable them to address stress situations in a manner most appropriate for the circumstances. Therefore, the Recovery Plan and the proposed Force Majeure Rule would also contribute to the safeguarding of securities and funds which are in the custody or control of DTC or for which it is responsible by enabling actions that would address and minimize losses.

    58 15 U.S.C. 78q-1(b)(3)(F).

    The Wind-down Plan and the proposed Wind-down Rule, which would facilitate the implementation of the Wind-down Plan, would also promote the prompt and accurate clearance and settlement of securities transactions and assure the safeguarding of securities and funds which are in the custody or control of DTC or for which it is responsible. The Wind-down Plan and the proposed Wind-down Rule would collectively establish a framework for the transfer and orderly wind-down of DTC's business. These proposals would establish clear mechanisms for the transfer of DTC's critical services and membership as well as clear provision for the transfer of the securities inventory it holds in fungible bulk for Participants. By doing so, the Wind-down Plan and these Proposed Rules are designed to facilitate the continuity of DTC's critical services and enable its Participants and Pledgees to maintain access to DTC's services through the transfer of its membership in the event DTC defaults or the Wind-down Plan is triggered by the Board. Therefore, by facilitating the continuity of DTC's critical clearance and settlement services, DTC believes the proposals would promote the prompt and accurate clearance and settlement of securities transactions. Further, by creating a framework for the transfer and orderly wind-down of DTC's business, DTC believes the proposals would enhance the safeguarding of securities and funds which are in the custody or control of DTC or for which it is responsible.

    Therefore, DTC believes the R&W Plan and each of the Proposed Rules are consistent with the requirements of Section 17A(b)(3)(F) of the Act.59

    59Id.

    Rule 17Ad-22(e)(3)(ii) under the Act requires DTC to establish, implement, maintain and enforce written policies and procedures reasonably designed to maintain a sound risk management framework for comprehensively managing legal, credit, liquidity, operational, general business, investment, custody, and other risks that arise in or are borne by the covered clearing agency, which includes plans for the recovery and orderly wind-down of the covered clearing agency necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses.60 The R&W Plan and each of the Proposed Rules are designed to meet the requirements of Rule 17Ad-22(e)(3)(ii).

    60 17 CFR 240.17Ad-22(e)(3)(ii).

    The R&W Plan would be maintained by DTC in compliance with Rule 17Ad-22(e)(3)(ii) in that it provides plans for the recovery and orderly wind-down of DTC necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses, as described above.61 Specifically, the Recovery Plan would define the risk management activities, stress conditions and indicators, and tools that DTC may use to address stress scenarios that could eventually prevent it from being able to provide its critical services as a going concern. Through the framework of the Crisis Continuum, the Recovery Plan would address measures that DTC may take to address risks of credit losses and liquidity shortfalls, and other losses that could arise from a Participant Default. The Recovery Plan would also address the management of general business risks and other non-default risks that could lead to losses.

    61Id.

    The Wind-down Plan would be triggered by a determination by the Board that recovery efforts have not been, or are unlikely to be, successful in returning DTC to viability as a going concern. Once triggered, the Wind-down Plan would set forth clear mechanisms for the transfer of DTC's membership and business, and would be designed to facilitate continued access to DTC's critical services and to minimize market impact of the transfer. By establishing the framework and strategy for the execution of the transfer and wind-down of DTC in order to facilitate continuous access to DTC's critical services, the Wind-down Plan establishes a plan for the orderly wind-down of DTC. Therefore, DTC believes the R&W Plan would provide plans for the recovery and orderly wind-down of the covered clearing agency necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses, and, as such, meets the requirements of Rule 17Ad-22(e)(3)(ii).62

    62Id.

    As described in greater detail above, the Proposed Rules are designed to facilitate the execution of the R&W Plan, provide Participants with transparency regarding the material provisions of the Plan, and provide DTC with a legal basis for implementation of those provisions. As such, DTC also believes the Proposed Rules meet the requirements of Rule 17Ad-22(e)(3)(ii).63

    63Id.

    DTC has evaluated the recovery tools that would be identified in the Recovery Plan and has determined that these tools are comprehensive, effective, and transparent, and that such tools provide appropriate incentives to DTC's Participants to manage the risks they present. The recovery tools, as outlined in the Recovery Plan and in the proposed Force Majeure Rule, provide DTC with a comprehensive set of options to address its material risks and support the resiliency of its critical services under a range of stress scenarios. DTC also believes the recovery tools are effective, as DTC has both legal basis and operational capability to execute these tools in a timely and reliable manner. Many of the recovery tools are provided for in the Rules; Participants are bound by the Rules through their Participants Agreements with DTC, and the Rules are adopted pursuant to a framework established by Rule 19b-4 under the Act,64 providing a legal basis for the recovery tools found therein. Other recovery tools have legal basis in contractual arrangements to which DTC is a party, as described above. Further, as many of the tools are embedded in DTC's ongoing risk management practices or are embedded into its predefined default-management procedures, DTC is able to execute these tools, in most cases, when needed and without material operational or organizational delay.

    64Id. at 240.19b-4.

    The majority of the recovery tools are also transparent, as they are or are proposed to be included in the Rules, which are publicly available. DTC believes the recovery tools also provide appropriate incentives to its owners and Participants, as they are designed to control the amount of risk they present to DTC's clearance and settlement system. Finally, DTC's Recovery Plan provides for a continuous evaluation of the systemic consequences of executing its recovery tools, with the goal of minimizing their negative impact. The Recovery Plan would outline various indicators over a timeline of increasing stress, the Crisis Continuum, with escalation triggers to DTC management or the Board, as appropriate. This approach would allow for timely evaluation of the situation and the possible impacts of the use of a recovery tool in order to minimize the negative effects of the stress scenario. Therefore, DTC believes that the recovery tools that would be identified and described in its Recovery Plan, including the authority provided to it in the proposed Force Majeure Rule, would meet the criteria identified within guidance published by the Commission in connection with the adoption of Rule 17Ad-22(e)(3)(ii).65

    65Supra note 41.

    Therefore, DTC believes the R&W Plan and each of the Proposed Rules are consistent with Rule 17Ad-22(e)(3)(ii).66

    66 17 CFR 240.17Ad-22(e)(3)(ii).

    Rule 17Ad-22(e)(15)(ii) under the Act requires DTC to establish, implement, maintain and enforce written policies and procedures reasonably designed to identify, monitor, and manage its general business risk and hold sufficient LNA to cover potential general business losses so that DTC can continue operations and services as a going concern if those losses materialize, including by holding LNA equal to the greater of either (x) six months of the covered clearing agency's current operating expenses, or (y) the amount determined by the board of directors to be sufficient to ensure a recovery or orderly wind-down of critical operations and services of the covered clearing agency.67 While the Capital Policy addresses how DTC holds LNA in compliance with these requirements, the Wind-down Plan would include an analysis that would estimate the amount of time and the costs to achieve a recovery or orderly wind-down of DTC's critical operations and services, and would provide that the Board review and approve this analysis and estimation annually. The Wind-down Plan would also provide that the estimate would be the “Recovery/Wind-down Capital Requirement” under the Capital Policy. Under that policy, the General Business Risk Capital Requirement, which is the sufficient amount of LNA that DTC should hold to cover potential general business losses so that it can continue operations and services as a going concern if those losses materialize, is calculated as the greatest of three estimated amounts, one of which is this Recovery/Wind-down Capital Requirement. Therefore, DTC believes the R&W Plan, as it interrelates with the Capital Policy, is consistent with Rule 17Ad-22(e)(15)(ii).68

    67Id. at 240.17Ad-22(e)(15)(ii).

    68Id.

    III. Date of Effectiveness of the Advance Notice, and Timing for Commission Action

    The proposed change may be implemented if the Commission does not object to the proposed change within 60 days of the later of (i) the date that the proposed change was filed with the Commission or (ii) the date that any additional information requested by the Commission is received. The clearing agency shall not implement the proposed change if the Commission has any objection to the proposed change.

    A proposed change may be implemented in less than 60 days from the date the advance notice is filed, or the date further information requested by the Commission is received, if the Commission notifies the clearing agency in writing that it does not object to the proposed change and authorizes the clearing agency to implement the proposed change on an earlier date, subject to any conditions imposed by the Commission.

    The clearing agency shall post notice on its website of proposed changes that are implemented.

    The proposal shall not take effect until all regulatory actions required with respect to the proposal are completed.

    IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and arguments concerning the foregoing. 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-DTC-2017-803 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-DTC-2017-803. 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 Advance Notice that are filed with the Commission, and all written communications relating to the Advance Notice 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 DTC and on DTCC's website (http://dtcc.com/legal/sec-rule-filings.aspx). 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-DTC-2017-803 and should be submitted on or before August 21, 2018.

    By the Commission.

    Robert W. Errett, Deputy Secretary.
    [FR Doc. 2018-16708 Filed 8-3-18; 8:45 am] BILLING CODE 8011-01-P
    SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83746; File No. SR-DTC-2017-804] Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing of Amendment No. 1 to an Advance Notice To Amend the Loss Allocation Rules and Make Other Changes July 31, 2018.

    On December 18, 2017, The Depository Trust Company (“DTC”) filed with the Securities and Exchange Commission (“Commission”) advance notice SR-DTC-2017-804 (“Advance Notice”) 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 (“Clearing Supervision Act”) and Rule 19b-4(n)(1)(i) under the Securities Exchange Act of 1934 (“Act”).1 The notice of filing and extension of the review period of the Advance Notice was published for comment in the Federal Register on January 30, 2018.2

    1 12 U.S.C. 5465(e)(1) and 17 CFR 240.19b-4(n)(1)(i), respectively. On December 18, 2017, DTC filed the Advance Notice as a proposed rule change (SR-DTC-2017-022) with the Commission pursuant to Section 19(b)(1) of the Act and Rule 19b-4 thereunder (“Proposed Rule Change”). (17 CFR 240.19b-4 and 17 CFR 240.19b-4, respectively.) The Proposed Rule Change was published in the Federal Register on January 8, 2018. See Securities Exchange Act Release No. 82426 (January 2, 2018), 83 FR 913 (January 8, 2018) (SR-DTC-2017-022). On February 8, 2018, the Commission designated a longer period within which to approve, disapprove, or institute proceedings to determine whether to approve or disapprove the Proposed Rule Change. See Securities Exchange Act Release No. 82670 (February 8, 2018), 83 FR 6626 (February 14, 2018) (SR-DTC-2017-022; SR-FICC-2017-022; SR-NSCC-2017-018). On March 20, 2018, the Commission instituted proceedings to determine whether to approve or disapprove the Proposed Rule Change. See Securities Exchange Act Release No. 82914 (March 20, 2018), 83 FR 12978 (March 26, 2018) (SR-DTC-2017-022). On June 25, 2018, the Commission designated a longer period for Commission action on the proceedings to determine whether to approve or disapprove the Proposed Rule Change. Therefore, September 5, 2018 is the date by which the Commission should either approve or disapprove the Proposed Rule Change. See Securities Exchange Act Release Nos. 83510 (June 25, 2018), 83 FR 30791 (June 29, 2018) (SR-DTC-2017-022; SR-FICC-2017-022; SR-NSCC-2017-018). On June 28, 2018, DTC filed Amendment No. 1 to the Proposed Rule Change. See Securities Exchange Act Release No. 83629 (July 13, 2018), 83 FR 34246 (July 19, 2018) (SR-DTC-2017-022). As of the date of this release, the Commission has not received any comments on the Proposed Rule Change.

    2 Securities Exchange Act Release No. 82582 (January 24, 2018), 83 FR 4297 (January 30, 2018) (SR-DTC-2017-804). Pursuant to Section 806(e)(1)(H) of the Clearing Supervision Act, the Commission may extend the review period of an advance notice for an additional 60 days, if the changes proposed in the advance notice raise novel or complex issues, subject to the Commission providing the clearing agency with prompt written notice of the extension. 12 U.S.C. 5465(e)(1)(H). The Commission found that the Advance Notice raised complex issues and, accordingly, extended the review period of the Advance Notice for an additional 60 days until April 17, 2018, pursuant to Section 806(e)(1)(H). Id.

    On April 10, 2018, the Commission required additional information from DTC pursuant to Section 806(e)(1)(D) of the Clearing Supervision Act, which tolled the Commission's period of review of the Advance Notice.3 On June 28, 2018, DTC filed Amendment No. 1 to the Advance Notice to amend and replace in its entirety the Advance Notice as originally submitted on December 18, 2017, and on July 6, 2018, submitted a response to the Commission's request for additional information in consideration of the Advance Notice, which added a further 60-days to the review period pursuant to Section 806(e)(1)(E) and (G) of the Clearing Supervision Act.4

    3 12 U.S.C. 5465(e)(1)(D); See Memorandum from the Office of Clearance and Settlement Supervision, Division of Trading and Markets, titled “Commission's Request for Additional Information,” available at http://www.sec.gov/rules/sro/dtc-an.shtml.

    4 To promote the public availability and transparency of its post-notice amendment, DTC submitted a copy of Amendment No. 1 through the Commission's electronic public comment letter mechanism. Accordingly, Amendment No. 1 has been posted on the Commission's website at http://www.sec.gov/rules/sro/dtc-an.shtml and thus been publicly available since June 29, 2018. 12 U.S.C. 5465(e)(1)(E) and (G); see Memorandum from the Office of Clearance and Settlement Supervision, Division of Trading and Markets, titled “Response to the Commission's Request for Additional Information,” available at http://www.sec.gov/rules/sro/dtc-an.shtml.

    The Advance Notice, as amended by Amendment No. 1, is described in Items I and II below, which Items have been prepared by DTC. The Commission is publishing this notice to solicit comments on the Advance Notice, as amended by Amendment No. 1, from interested persons.

    I. Clearing Agency's Statement of the Terms of Substance of the Advance Notice

    This advance notice is filed by The Depository Trust Company (“DTC”) in connection with proposed modifications to the Rules, By-Laws and Organization Certificate of DTC (“Rules”).5 The proposed rule change would revise Rule 4 (Participants Fund and Participants Investment) to (i) provide separate sections for (x) the use of the Participants Fund as a liquidity resource for settlement and (y) loss allocation among Participants of losses and liabilities arising out of Participant defaults or due to non-default events; and (ii) enhance the resiliency of DTC's loss allocation process so that DTC can take timely action to contain multiple loss events that occur in succession during a short period of time. In connection therewith, the proposed rule change would (i) align the loss allocation rules of the three clearing agencies of The Depository Trust & Clearing Corporation (“DTCC”), namely DTC, National Securities Clearing Corporation (“NSCC”), and Fixed Income Clearing Corporation (“FICC”) (collectively, the “DTCC Clearing Agencies”), so as to provide consistent treatment, to the extent practicable and appropriate, especially for firms that are participants of two or more DTCC Clearing Agencies, (ii) increase transparency and accessibility of the provisions relating to the use of the Participants Fund as a liquidity resource for settlement and the loss allocation provisions, by enhancing their readability and clarity, (iii) require a defined corporate contribution to losses and liabilities that are incurred by DTC prior to any allocation among Participants, whether such losses and liabilities arise out of Participant defaults or due to non-default events, (iv) reduce the time within which DTC is required to return a former Participant's Actual Participants Fund Deposit, and (v) make conforming and technical changes. In addition, the proposed rule change would amend Section 6 of Rule 4 to clarify the requirements for a Participant that wants to voluntarily terminate its business with DTC, and to align, where appropriate, with the proposed voluntary termination provisions of the NSCC and FICC rules. The proposed rule change would also amend Rule 1 (Definitions; Governing Law) to add cross-references to terms that would be defined in proposed Rule 4, and would amend Rule 2 (Participants and Pledgees), in relevant part, to align with proposed Section 6 of Rule 4, as discussed below.

    5 Each capitalized term not otherwise defined herein has its respective meaning as set forth in the Rules, available at http://www.dtcc.com/legal/rules-and-procedures.aspx.

    II. Clearing Agency's Statement of the Purpose of, and Statutory Basis for, the Advance Notice

    In its filing with the Commission, the clearing agency included statements concerning the purpose of and basis for the Advance Notice and discussed any comments it received on the Advance Notice. The text of these statements may be examined at the places specified in Item IV below. The clearing agency has prepared summaries, set forth in sections A and B below, of the most significant aspects of such statements.

    (A) Clearing Agency's Statement on Comments on the Advance Notice Received From Members, Participants, or Others

    Written comments relating to this proposal have not been solicited or received. DTC will notify the Commission of any written comments received by DTC.

    (B) Advance Notice Filed Pursuant to Section 806(e) of the Clearing Supervision Act Description of Amendment No. 1

    This filing constitutes Amendment No. 1 (“Amendment”) to the Advance Notice previously filed by DTC on December 18, 2017.6 This Amendment amends and replaces the Advance Notice in its entirety. DTC submits this Amendment in order to further clarify the operation of the proposed rule changes on loss allocation by providing additional information and examples. This Amendment would also clarify the requirements for a Participant that wants to voluntarily terminate its business with DTC. In particular, this Amendment would:

    6See Securities Exchange Act Release No. 82582 (January 24, 2018), 83 FR 4297 (January 30, 2018) (SR-DTC-2017-804).

    (i) Clarify that the term “Participant Default,” referring to the failure of a Participant to satisfy any obligation to DTC, includes the failure of a Defaulting Participant to satisfy its obligations as provided in Rule 9(B).7

    7 Although Rule 4 is being amended to align with NSCC and FICC, where appropriate, a “Defaulting Participant” is not analogous to a “Defaulting Member” under the proposed NSCC and FICC rules. This is because the term “Defaulting Participant” already has a specific meaning pursuant to Rule 9(B) which is necessary and appropriate to that Rule. Instead, the proposed new term “CTA Participant” would be analogous to the NSCC and FICC proposed term “Defaulting Member.”

    (ii) Add the defined term “CTA Participant,” which would be defined as a Participant for which the Corporation has ceased to act pursuant to Rule 10 (Discretionary Termination), Rule 11 (Voluntary Termination) or Rule 12 (Insolvency).

    (iii) Clarify which Participants would be subject to loss allocation with respect to Default Loss Events (defined below) and Declared Non-Default Loss Events (defined below) occurring during an Event Period (defined below). Specifically, pursuant to the Amendment, proposed Section 5 of Rule 4 would provide that each Participant that is a Participant on the first day of an Event Period would be obligated to pay its pro rata share of losses and liabilities arising out of or relating to each Default Loss Event (other than a Default Loss Event with respect to which it is the CTA Participant) and each Declared Non-Default Loss Event occurring during the Event Period. In addition, proposed Section 5 of Rule 4 would make it clear that any CTA Participant for which DTC ceases to act on a non-Business Day, triggering an Event Period that commences on the next Business Day, would be deemed to be a Participant on the first day of that Event Period.

    (iv) Clarify the obligations and Loss Allocation Cap (defined below) of a Participant that terminates its business with DTC in respect of a loss allocation round. Specifically, pursuant to the Amendment, the Participant would nevertheless remain obligated for its pro rata share of losses and liabilities with respect to any Event Period for which it is otherwise obligated under Rule 4; however, its aggregate obligation would be limited to the amount of its Loss Allocation Cap, as fixed in the loss allocation round for which it withdrew.

    (v) Clarify that each CTA Participant would be obligated to DTC for the entire amount of any loss or liability incurred by DTC arising out of or relating to any Default Loss Event with respect to such CTA Participant. To the extent that such loss or liability is not satisfied pursuant to proposed Section 3 of Rule 4, DTC would apply a Corporate Contribution and charge the remaining amount of such loss or liability as provided in proposed Section 5 of Rule 4.

    (vi) Clarify that, although a CTA Participant would not be allocated a ratable share of losses and liabilities arising out of or relating to its own Default Loss Event, it would remain obligated to DTC for such losses and liabilities. More particularly, pursuant to the Amendment, the proposed rule change would provide that no loss allocation under proposed Rule 4 would constitute a waiver of any claim DTC may have against a Participant for any losses or liabilities to which the Participant is subject under DTC Rules and Procedures, including, without limitation, any loss or liability to which it may be subject under proposed Rule 4.

    (vii) For enhanced transparency and to align, where appropriate, with the rules of NSCC and FICC, clarify the process for the Voluntary Retirement (defined below) of a Participant.

    In addition, pursuant to the Amendment, DTC is making other clarifying and technical changes to the proposed rule change, as proposed herein.

    Nature of the Proposed Change

    The proposed rule change would revise Rule 4 (Participants Fund and Participants Investment) to (i) provide separate sections for (x) the use of the Participants Fund as a liquidity resource for settlement and (y) loss allocation among Participants of losses and liabilities arising out of Participant defaults or due to non-default events; and (ii) enhance the resiliency of DTC's loss allocation process so that DTC can take timely action to contain multiple loss events that occur in succession during a short period of time. In connection therewith, the proposed rule change would (i) align the loss allocation rules of the DTCC Clearing Agencies, so as to provide consistent treatment, to the extent practicable and appropriate, especially for firms that are participants of two or more DTCC Clearing Agencies,8 (ii) increase transparency and accessibility of the provisions relating to the use of the Participants Fund as a liquidity resource for settlement and the loss allocation provisions, by enhancing their readability and clarity, (iii) require a defined corporate contribution to losses and liabilities that are incurred by DTC prior to any allocation among Participants, whether such losses and liabilities arise out of Participant defaults or due to non-default events, (iv) reduce the time within which DTC is required to return a former Participant's Actual Participants Fund Deposit, and (v) make conforming and technical changes. In addition, the proposed rule change would amend Section 6 of Rule 4 to clarify the requirements for a Participant that wants to voluntarily terminate its business with DTC, and to align, where appropriate, with the proposed voluntary termination provisions of the NSCC and FICC rules. The proposed rule change would also amend Rule 1 (Definitions; Governing Law) to add cross-references to terms that would be defined in proposed Rule 4, and would amend Rule 2 (Participants and Pledgees), in relevant part, to align with proposed Section 6 of Rule 4, as discussed below.

    8 On December 18, 2017, NSCC and FICC submitted proposed rule changes and advance notices to enhance their rules regarding allocation of losses. Securities Exchange Act Release Nos. 82428 (January 2, 2018), 83 FR 897 (January 8, 2018) (SR-NSCC-2017-018), and 82584 (January 24, 2018), 83 FR 4377 (January 30, 2018) (SR-NSCC-2017-806); Securities Exchange Act Release Nos. 82427 (January 2, 2018), 83 FR 854 (January 8, 2018) (SR-FICC-2017-022) and 82583 (January 24, 2018), 83 FR 4358 (January 30, 2018) (SR-FICC-2017-806). On June 28, 2018, NSCC and FICC filed proposed amendments to the proposed rule changes and advance notices with the Commission and the Board of Governors of the Federal Reserve System, respectively, available at http://www.dtcc.com/legal/sec-rule-filings.aspx.

    (i) Background

    Current Rule 4 provides a single set of tools and a common process for the use of the Participants Fund for both liquidity purposes to complete settlement among non-defaulting Participants, if one or more Participants fails to settle,9 and for the satisfaction of losses and liabilities due to Participant defaults 10 or certain other losses or liabilities incident to the business of DTC.11 The proposed rule change would amend and add provisions to separate use of the Participants Fund as a liquidity resource to complete settlement, reflected in proposed Section 4 of Rule 4, and for loss allocation, reflected in proposed Section 5 of Rule 4. There wouldn't be any substantive change to the rights and obligations of Participants under proposed Sections 4 and 5 of Rule 4.12 The proposed rule changes reinforce the distinction, conceptual and sequential, between the mechanisms to complete settlement on a Business Day and to mutualize losses that may result from a failure to settle, or other loss-generating events. The change is also proposed so that the loss allocation provisions of proposed Section 5 of Rule 4 more closely align to similar provisions of the NSCC and FICC rules, to the extent appropriate.

    9 DTC is a central securities depository providing key services that are structured to support daily settlement of book-entry transfers of securities, in accordance with its Rules and Procedures. In particular, Rule 9(A) (Transactions in Securities and Money Payments), Rule 9(B) (Transactions in Eligible Securities), Rule 9(C) (Transactions in MMI Securities), Rule 9(D) (Settling Banks), and Rule 9(E) (Clearing Agency Agreements) provide the mechanism to achieve a “DVP Model 2 Deferred Net Settlement System” (as defined in Annex D of the Principles for Financial Market Infrastructures issued by The Committee on Payments and Market Infrastructures and the Technical Committee of the International Organization of Securities Commissions (April 2012), available at https://www.bis.org/cpmi/publ/d101a.pdf. Briefly, in relevant part, Rule 9(B) provides that “[e]ach Participant and the Corporation shall settle the balance of the Settlement Account of the Participant on a daily basis in accordance with these Rules and the Procedures. Except as provided in the Procedures, the Corporation shall not be obligated to make any settlement payments to any Participants until the Corporation has received all of the settlement payments that Settling Banks and Participants are required to make to the Corporation.” Supra note 5. Pursuant to these provisions of Rule 9(B), securities will be delivered to Participants that satisfy their settlement obligations in the end-of-day net settlement process.

    10 The failure of a Participant to satisfy its settlement obligation constitutes a liability to DTC. Insofar as DTC undertakes to complete settlement among Participants other than the Participant that failed to settle, that liability may give rise to losses as well. DTC is designed to provide settlement finality at the end of the day and notwithstanding the failure to settle of a Participant or Affiliated Family of Participants with the largest net settlement obligation, a “cover 1” standard. There are no reversals of deliveries; a Participant that fails to settle will not receive securities that were intended to be delivered to it, because it has not paid for them. These securities, among others, serve as collateral for DTC to use to secure a borrowing of funds in order, in accordance with its Rules and Procedures, to settle with non-defaulting Participants (including those delivering Participants that delivered to the non-settling Participant). To this end, delivery versus payment transactions (“DVP”) will not be processed intraday to a receiving Participant that will incur a related payment obligation unless that Participant satisfies risk management controls. The two risk management controls are the Collateral Monitor and Net Debit Cap. Net Debit Caps limit the potential settlement obligation of any Participant to an amount for which DTC has sufficient liquidity resources to cover this risk. The Collateral Monitor tests whether a Participant has sufficient collateral for DTC to pledge or liquidate if that Participant were to fail to meet its settlement obligation. To process a DVP, the value of the delivery that is debited to the receiving Participant cannot cause the net debit balance of the Participant to exceed its Net Debit Cap, and the amount of the net debit balance after giving effect to the debit must be fully collateralized. Accordingly, DTC may incur a liability or loss whenever it completes settlement despite the failure to settle of a Participant, or Affiliated Family of Participants, because it is either using the Participants Fund deposits of other Participants in the manner specified in existing and proposed Rule 4 and/or borrowing the necessary funds. DTC obligations under the line of credit include the obligation to pay interest on loans outstanding and to repay the loan; the Participants Fund is designed as not only a direct liquidity resource but as a back-up liquidity resource to satisfy these liabilities. As to the Participants Fund itself, DTC undertakes in Section 9 of existing and proposed Rule 4, to restore funds to Participants whose deposits may have been charged if there is ultimately any excess recovery. It should be noted that the Defaulting Participant remains principally obligated for all losses, costs and expenses associated with its Participant Default and, so, a recovery out of the estate of a Defaulting Participant is at least a hypothetical possibility.

    11 Section 1(f) of Rule 4 defines the term “business” with respect to DTC as “the doing of all things in connection with or relating to the Corporation's performance of the services specified in the first and second paragraphs of Rule 6 or the cessation of such services.” Supra note 5.

    12 It may be noted that absent extreme circumstances, DTC believes that it is unlikely that DTC would need to act under proposed Sections 4 or 5 of Rule 4.

    The proposed rule change would retain the core principles of current Rule 4 for both application of the Participants Fund as a liquidity resource to complete settlement and for loss allocation, while clarifying or refining certain provisions and introducing certain new concepts relating to loss allocation. In connection with the use of the Participants Fund as a liquidity resource to complete settlement when a Participant fails to settle, the proposed rule would introduce the term “pro rata settlement charge,” for the use of the Participants Fund to complete settlement as apportioned among non-defaulting Participants. The existing term generically applied to such a use or to a loss allocation is simply a “pro rata charge”.13

    13See Rule 4, Section 5, supra note 5.

    For loss allocation, the proposed rule change, like current Rule 4, would continue to apply to both default and non-default losses and liabilities, and, to the extent allocated among Participants, would be charged ratably in accordance with their Required Participants Fund Deposits.14 A new provision would require DTC to contribute to a loss or liability, either arising from a Participant default or non-default event, prior to any allocation among Participants. The proposed rule change would also introduce the new concepts of an “Event Period” and a “round” to address the allocation of losses arising from multiple events that occur in succession during a short period of time. These proposed rule changes would be substantially similar in these respects to analogous proposed rule changes for NSCC and FICC.

    14 It may be noted that for NSCC and FICC, the proposed rule changes for loss allocation include a “look-back” period to calculate a member's pro rata share and cap. The concept of a look-back or average is already built into DTC's calculation of Participants Fund requirements, which are based on a rolling sixty (60) day average of a Participant's six highest intraday net debit peaks.

    Current Rule 4 Provides for Application of the Participants Fund Through Pro Rata Charges

    Current Rule 4 addresses the Participants Fund and Participants Investment requirements and, among other things, the permitted uses of the Participants Fund and Participants Investment.15 Pursuant to current Rule 4, DTC maintains a cash Participants Fund. The Required Participants Fund Deposit for any Participant is based on the liquidity risk it poses to DTC relative to other Participants.

    15 Each Participant is required to invest in DTC Series A Preferred Stock, ratably on a basis calculated in substantially the same manner as the Required Participants Fund Deposit. The Preferred Stock constitutes capital of DTC and is also available for use as provided in current and proposed Section 3 of Rule 4. This proposed rule change does not alter the Required Preferred Stock Investment.

    Default of a Participant. Under current Section 3 of Rule 4, if a Participant is obligated to DTC and fails to satisfy any obligation, DTC may, in such order and in such amounts as DTC shall determine in its sole discretion: (a) Apply some or all of the Actual Participants Fund Deposit of such Participant to such obligation; (b) Pledge some or all of the shares of Preferred Stock of such Participant to its lenders as collateral security for a loan under the End-of-Day Credit Facility; 16 and/or (c) sell some or all of the shares of Preferred Stock of such Participant to other Participants (who shall be required to purchase such shares pro rata their Required Preferred Stock Investments at the time of such purchase), and apply the proceeds of such sale to satisfy such obligation.

    16 As part of its liquidity risk management regime, DTC maintains a 364-day committed revolving line of credit with a syndicate of commercial lenders, renewed every year. The committed aggregate amount of the End-of-Day Credit Facility (currently $1.9 billion) together with the Participants Fund constitute DTC's liquidity resources for settlement. Based on these amounts, DTC sets Net Debit Caps that limit settlement obligations.

    Application of the Participants Fund. Current Section 4 of Rule 4 addresses the application of the Participants Fund if DTC incurs a loss or liability, which would include application of the Participants Fund to complete settlement 17 or the allocation of losses once determined, including non-default losses. For both liquidity and loss scenarios, current Section 4 of Rule 4 provides that an application of the Participants Fund would be apportioned among Participants ratably in accordance with their Required Participants Fund Deposits, less any additional amount that a Participant was required to Deposit to the Participants Fund pursuant to Section 2 of Rule 9(A).18 It also provides for the optional use of an amount of DTC's retained earnings and undivided profits.

    17 In contrast to NSCC and FICC, DTC is not a central counterparty and does not guarantee obligations of its membership. The Participants Fund is a mutualized pre-funded liquidity and loss resource. As such, in contrast to NSCC and FICC, DTC does not have an obligation to “repay” the Participants Fund, and the application of the Participants Fund does not convert to a loss. See supra note 10.

    18 Section 2 of Rule 9(A) provides, in part, “At the request of the Corporation, a Participant or Pledgee shall immediately furnish the Corporation with such assurances as the Corporation shall require of the financial ability of the Participant or Pledgee to fulfill its commitments and shall conform to any conditions which the Corporation deems necessary for the protection of the Corporation, other Participants or Pledgees, including deposits to the Participants Fund . . .” Supra note 5. Pursuant to the proposed rule change, the additional amount that a Participant is required to Deposit to the Participants Fund pursuant to Section 2 of Rule 9(A) would be defined as an “Additional Participants Fund Deposit.” This is not a new concept, only the addition of a defined term for greater clarity.

    After the Participants Fund is applied pursuant to current Section 4, DTC must promptly notify each Participant and the Commission of the amount applied and the reasons therefor.

    Current Rule 4 further requires Participants whose Actual Participants Fund Deposits have been ratably charged to restore their Required Participants Fund Deposits, if such charges create a deficiency. Such payments are due upon demand. Iterative pro rata charges relating to the same loss or liability are permitted in order to satisfy the loss or liability.

    Rule 4 currently provides that a Participant may, within ten (10) Business Days after receipt of notice of any pro rata charge, notify DTC of its election to terminate its business with DTC, and the exposure of the terminating Participant for pro rata charges would be capped at the greater of (a) the amount of its Aggregate Required Deposit and Investment, as fixed immediately prior to the time of the first pro rata charge, plus 100% of the amount thereof, or (b) the amount of all prior pro rata charges attributable to the same loss or liability with respect to which the Participant has not timely exercised its right to terminate.

    Overview of the Proposed Rule Changes A. Application of Participants Fund to Participant Default and for Settlement

    Proposed Section 3 of Rule 4 would retain the concept that when a Participant is obligated to DTC and fails to satisfy such obligation, which would be defined as a “Participant Default,” DTC may apply the Actual Participants Fund Deposit of the Participant to such obligation to satisfy the Participant Default. The proposed rule change would reflect that the defined term “Participant Default,” referring to the failure of a Participant to satisfy any obligation to DTC, includes the failure of a Defaulting Participant to satisfy its obligations as provided in Rule 9(B) (where “Defaulting Participant” is defined). The proposed definition of “Participant Default” is for drafting clarity and use in related provisions of proposed Rule 4.

    Proposed Section 4 would address the situation of a Defaulting Participant failure to settle (which is one type of Participant Default) if the application of the Actual Participants Fund Deposit of that Defaulting Participant, pursuant to proposed Section 3, is not sufficient to complete settlement among Participants other than the Defaulting Participant (each, a “non-defaulting Participant”).19

    19 As described above, proposed Rule 4 splits the liquidity and loss provisions to more closely align to similar loss allocation provisions in NSCC and FICC rules. Pursuant to the proposed rule change, DTC would also align, where appropriate, the liquidity and loss provisions within proposed Rule 4. DTC would retain the existing Rule 4 concepts of calculating the ratable share of a Participant, charging each non-defaulting Participant a pro rata share of an application of the Participants Fund to complete settlement, providing notice to Participants of such charge, and providing each Participant the option to cap its liability for such charges by electing to terminate its business with DTC. However, pursuant to the proposed rule change, DTC would modify these concepts and certain associated processes to more closely align with the analogous proposed loss allocation provisions in proposed Rule 4 (e.g., Loss Allocation Notice, Loss Allocation Termination Notification Period, and Loss Allocation Cap).

    Proposed Section 4 would expressly state that the Participants Fund shall constitute a liquidity resource which may be applied by DTC, in such amounts as it may determine, in its sole discretion, to fund settlement among non-defaulting Participants in the event of the failure of a Defaulting Participant to satisfy its settlement obligation on any Business Day. Such an application of the Participants Fund would be charged ratably to the Actual Participants Fund Deposits of the non-defaulting Participants on that Business Day. The pro rata charge per non-defaulting Participant would be based on the ratio of its Required Participants Fund Deposit to the sum of the Required Participants Fund Deposits of all such Participants on that Business Day (excluding any Additional Participants Fund Deposits in both the numerator and denominator of such ratio). The proposed rule change would identify this as a “pro rata settlement charge,” in order to distinguish application of the Participants Fund to fund settlement from pro rata loss allocation charges that would be established in proposed Section 5 of Rule 4.

    The calculation of each non-defaulting Participant's pro rata settlement charge would be similar to the current Section 4 calculation of a pro rata charge except that, for greater simplicity, it would not include the current distinction for common members of another clearing agency pursuant to a Clearing Agency Agreement.20 For enhanced clarity as to the date of determination of the ratio, it would be based on the Required Participants Fund Deposits as fixed on the Business Day of the application of the Participants Fund, as opposed to the current language “at the time the loss or liability was discovered.” 21

    20 Rule 4, Section 4(a)(1), supra note 5. DTC has determined that this option is unnecessary because, in practice, DTC would never have liability under a Clearing Agency Agreement that exceeds the excess assets of the Participant that defaulted.

    21 DTC believes that this change would provide an objective date that is more appropriate for the application of the Participants Fund to complete settlement, because the “time the loss or liability was discovered” would necessarily have to be the day the Participants Fund was applied to complete settlement.

    The proposed rule change would retain the concept that requires DTC, following the application of the Participants Fund to complete settlement, to notify each Participant and the Commission of the charge and the reasons therefor (“Settlement Charge Notice”).

    The proposed rule change also would retain the concept of providing each non-defaulting Participant an opportunity to elect to terminate its business with DTC and thereby cap its exposure to further pro rata settlement charges. The proposed rule change would shorten the notification period for the election to terminate from ten (10) Business Days to five (5) Business Days,22 and would also change the beginning date of such notification period from the receipt of the notice to the date of the issuance of the Settlement Charge Notice.23 A Participant that elects to terminate its business with DTC would, subject to its cap, remain responsible for (i) its pro rata settlement charge that was the subject of the Settlement Charge Notice and (ii) all other pro rata settlement charges until the Participant Termination Date (as defined below and in the proposed rule change). The proposed cap on pro rata settlement charges of a Participant that has timely notified DTC of its election to terminate its business with DTC would be the amount of its Aggregate Required Deposit and Investment, as fixed on the day of the pro rata settlement charge that was the subject of the Settlement Charge Notice, plus 100% of the amount thereof (“Settlement Charge Cap”). The proposed Settlement Charge Cap would be no greater than the current cap.24

    22 DTC believes this shorter period would be sufficient for a Participant to decide whether to give notice to terminate its business with DTC in response to a settlement charge. In addition, a five (5) Business Day pro rata settlement charge notification period would conform to the proposed loss allocation notification period in this proposed rule change and in the proposed rule changes for NSCC and FICC. See infra note 37.

    23 DTC believes that setting the start date of the notification period to an objective date would enhance transparency and provide a common timeframe to all affected Participants.

    24 Current Section 8 of Rule 4 provides for a cap that is equal to the greater of (a) the amount of its Aggregate Required Deposit and Investment, as fixed immediately prior to the time of the first pro rata charge, plus 100% of the amount thereof, or (b) the amount of all prior pro rata charges attributable to the same loss or liability with respect to which the Participant has not timely exercised its right to limit its obligation as provided above. Supra note 5. The alternative limit in clause (b) would be eliminated in proposed Section 8(a) in favor of a single defined standard.

    The pro rata application of the Actual Participants Fund Deposits of non-defaulting Participants to complete settlement when there is a Participant Default is not the allocation of a loss. A pro rata settlement charge would relate solely to the completion of settlement. New proposed loss allocation concepts described below, including, but not limited to, a “round,” “Event Period,” and “Corporate Contribution,” would not apply to pro rata settlement charges.25

    25 Proposed Sections 3, 4 and 5 of Rule 4 together relate, in whole or in part, to what may happen when there is a Participant Default. Proposed Section 3 is the basic provision of remedies if a Participant fails to satisfy an obligation to DTC. Proposed Section 4 is a specific remedy for a failure to settle by a Defaulting Participant, i.e., a specific type of Participant Default. Proposed Section 5 is also a remedial provision for a Participant Default when, additionally, DTC ceases to act for the Participant and there are remaining losses or liabilities. If a Participant Default occurs, the application of proposed Section 3 would be required, the application of proposed Section 4 would be at the discretion of DTC. Whether or not proposed Section 4 has been applied, once there is a loss due to a Participant Default and DTC ceases to act for the Participant, proposed Section 5 would apply. See supra note 10.

    A principal type of Participant Default is a failure to settle. A Participant's obligation to pay any amount due in settlement is secured by Collateral of the Participant. When the Defaulting Participant fails to pay its settlement obligation, under Rule 9(B), Section 2, DTC has the right to Pledge or sell such Collateral to satisfy the obligation. Supra note 5. (It is more likely that DTC would borrow against the Collateral to complete settlement on the Business Day, because it is unlikely to be able to liquidate Collateral for same day funds in time to settle on that Business Day.) If DTC Pledges the Collateral to secure a loan to fund settlement (e.g., under the End-of-Day Credit Facility), the Collateral would have to be sold to obtain funds to repay the loan. In any such sale of the Collateral, there is a risk, heightened in times of market stress, that the proceeds of the sale would be insufficient to repay the loan. That deficiency would be a liability or loss to which proposed Section 5 of Rule 4 would apply, i.e., a Default Loss Event.

    B. Changes To Enhance Resiliency of DTC's Loss Allocation Process

    In order to enhance the resiliency of DTC's loss allocation process and to align, to the extent practicable and appropriate, its loss allocation approach to that of the other DTCC Clearing Agencies, DTC proposes to introduce certain new concepts and to modify other aspects of its loss allocation waterfall. The proposed rule change would adopt an enhanced allocation approach for losses, whether arising from Default Loss Events or Declared Non-Default Loss Events (as defined below and in the proposed rule change). In addition, the proposed rule change would clarify the loss allocation process as it relates to losses arising from or relating to multiple default or non-default events in a short period of time.

    Accordingly, DTC is proposing four (4) key changes to enhance DTC's loss allocation process:

    (1) Mandatory Corporate Contribution

    Current Section 4 of Rule 4 provides that if there is an unsatisfied loss or liability, DTC may, in its sole discretion and in such amount as DTC would determine, “charge the existing retained earnings and undivided profits” of DTC.

    Under the proposed rule change, DTC would replace the discretionary application of an unspecified amount of retained earnings and undivided profits with a mandatory, defined Corporate Contribution (as defined below and in the proposed rule change). The Corporate Contribution would be used for losses and liabilities that are incurred by DTC with respect to an Event Period (as defined below and in the proposed rule change), whether arising from a Default Loss Event or Declared Non-Default Loss Event, before the allocation of losses to Participants.

    The proposed “Corporate Contribution” would be defined to be an amount equal to fifty percent (50%) of DTC's General Business Risk Capital Requirement.26 DTC's General Business Risk Capital Requirement, as defined in DTC's Clearing Agency Policy on Capital Requirements,27 is, at a minimum, equal to the regulatory capital that DTC is required to maintain in compliance with Rule 17Ad-22(e)(15) under the Securities Exchange Act of 1934, as amended (the “Act”).28 The proposed Corporate Contribution would be held in addition to DTC's General Business Risk Capital Requirement.

    26 DTC calculates its General Business Risk Capital Requirement as the amount equal to the greatest of (i) an amount determined based on its general business profile, (ii) an amount determined based on the time estimated to execute a recovery or orderly wind-down of DTC's critical operations, and (iii) an amount determined based on an analysis of DTC's estimated operating expenses for a six (6) month period.

    27See Securities Exchange Act Release No. 81105 (July 7, 2017), 82 FR 32399 (July 13, 2017) (SR-DTC-2017-003).

    28 17 CFR 240.17Ad-22(e)(15).

    The proposed Corporate Contribution would apply to losses arising from Default Loss Events and Declared Non-Default Loss Events, and would be a mandatory contribution of DTC prior to any allocation among Participants.29 As proposed, if the proposed Corporate Contribution is fully or partially used against a loss or liability relating to an Event Period, the Corporate Contribution would be reduced to the remaining unused amount, if any, during the following two hundred fifty (250) Business Days in order to permit DTC to replenish the Corporate Contribution.30 To ensure transparency, Participants would receive notice of any such reduction to the Corporate Contribution.

    29 The proposed rule change would not require a Corporate Contribution with respect to a pro rata settlement charge. However, as discussed above, if, after a Participant Default, the proceeds of the sale of the Collateral of the Participant are insufficient to repay the lenders under the End-of-Day Credit Facility, and DTC has ceased to act for the Participant, the shortfall would be a loss arising from a Default Loss Event, subject to the Corporate Contribution.

    30 DTC believes that two hundred fifty (250) Business Days would be a reasonable estimate of the time frame that DTC would require to replenish the Corporate Contribution by equity in accordance with DTC's Clearing Agency Policy on Capital Requirements, including a conservative additional period to account for any potential delays and/or unknown exigencies in times of distress.

    By requiring a defined contribution of DTC corporate funds towards losses and liabilities arising from Default Loss Events and Declared Non-Default Loss Events, the proposed rule change would limit Participant obligations to the extent of such Corporate Contribution and thereby provide greater clarity and transparency to Participants as to the calculation of their exposure to losses and liabilities.

    Proposed Rule 4 would also further clarify that DTC can voluntarily apply amounts greater than the Corporate Contribution against any loss or liability (including non-default losses) of DTC, if the Board of Directors, in its sole discretion, believes such to be appropriate under the factual situation existing at the time.

    The proposed rule changes relating to the calculation and mandatory application of the Corporate Contribution are set forth in proposed Section 5 of Rule 4.

    (2) Introducing an Event Period

    The proposed rule change would clearly define the obligations of DTC and its Participants regarding the allocation of losses or liabilities relating to or arising out of a Default Loss Event or a Declared Non-Default Loss Event. The proposed rule change would define “Default Loss Event” as the determination by DTC to cease to act for a Participant pursuant to Rule 10, Rule 11, or Rule 12 (such Participant, a “CTA Participant”). “Declared Non-Default Loss Event” would be defined as the determination by the Board of Directors that a loss or liability incident to the clearance and settlement business of DTC may be a significant and substantial loss or liability that may materially impair the ability of DTC to provide clearance and settlement services in an orderly manner and will potentially generate losses to be mutualized among Participants in order to ensure that DTC may continue to offer clearance and settlement services in an orderly manner. In order to balance the need to manage the risk of sequential loss events against Participants' need for certainty concerning maximum loss allocation exposures, DTC is proposing to introduce the concept of an “Event Period” to address the losses and liabilities that may arise from or relate to multiple Default Loss Events and/or Declared Non-Default Loss Events that arise in quick succession. Specifically, the proposal would group Default Loss Events and Declared Non-Default Loss Events occurring in a period of ten (10) Business Days (“Event Period”) for purposes of allocating losses to Participants in one or more rounds, subject to the limits of loss allocation set forth in the proposed rule change and as explained below.31 In the case of a loss or liability arising from or relating to a Default Loss Event, an Event Period would begin on the day on which DTC notifies Participants that it has ceased to act for a Participant (or the next Business Day, if such day is not a Business Day). In the case of a Declared Non-Default Loss Event, the Event Period would begin on the day that DTC notifies Participants of the Declared Non-Default Loss Event (or the next Business Day, if such day is not a Business Day). If a subsequent Default Loss Event or Declared Non-Default Loss Event occurs within the Event Period, any losses or liabilities arising out of or relating to any such subsequent event would be resolved as losses or liabilities that are part of the same Event Period, without extending the duration of such Event Period. An Event Period may include both Default Loss Events and Declared Non-Default Loss Events, and there would not be separate Event Periods for Default Loss Events or Declared Non-Default Loss Events occurring within overlapping ten (10) Business Day periods.

    31 DTC believes that having a ten (10) Business Day Event Period would provide a reasonable period of time to encompass potential sequential Default Loss Events and/or Declared Non-Default Loss Events that are likely to be closely linked to an initial event and/or a severe market dislocation episode, while still providing appropriate certainty for Participants concerning their maximum exposure to allocated losses with respect to such events.

    The amount of losses that may be allocated by DTC, subject to the required Corporate Contribution, and to which a Loss Allocation Cap would apply for any Participant that elects to terminate its business with DTC in respect of a loss allocation round, would include any and all losses from any Default Loss Events and any Declared Non-Default Loss Events during the Event Period, regardless of the amount of time, during or after the Event Period, required for such losses to be crystallized and allocated.32

    32 As discussed below, each Participant that is a Participant on the first day of an Event Period would be obligated to pay its pro rata share of losses and liabilities arising out of or relating to each Default Loss Event (other than a Default Loss Event with respect to which it is the CTA Participant) and each Declared Non-Default Loss Event occurring during the Event Period.

    The proposed rule changes relating to the implementation of an Event Period are set forth in proposed Section 5 of Rule 4.

    (3) Introducing the Concept of “Rounds” and Loss Allocation Notice

    Pursuant to the proposed rule change, a loss allocation “round” would mean a series of loss allocations relating to an Event Period, the aggregate amount of which is limited by the sum of the Loss Allocation Caps of affected Participants (a “round cap”). When the aggregate amount of losses allocated in a round equals the round cap, any additional losses relating to the applicable Event Period would be allocated in one or more subsequent rounds, in each case subject to a round cap for that round. DTC would continue the loss allocation process in successive rounds until all losses from the Event Period are allocated among Participants that have not submitted a Termination Notice (as defined below and in the proposed rule change) in accordance with proposed Section 6(b) of Rule 4.

    Each loss allocation would be communicated to Participants by the issuance of a notice that advises each Participant of the amount being allocated to it (each, a “Loss Allocation Notice”). The calculation of each Participant's pro rata allocation charge would be similar to the current Section 4 calculation of a pro rata charge except that, for greater simplicity, it would not include the current distinction for common members of another clearing agency pursuant to a Clearing Agency Agreement.33 In addition, for enhanced clarity as to the date of determination of the ratio, it would be based on the Required Participants Fund Deposits as fixed on the first day of the Event Period, as opposed to the current language “at the time the loss or liability was discovered.”34

    33See supra note 20.

    34 DTC believes that this change would provide an objective date that is appropriate for the new proposed loss allocation process, which would be designed to allocate aggregate losses relating to an Event Period, rather than one loss at a time.

    Each Loss Allocation Notice would specify the relevant Event Period and the round to which it relates. Participants would receive two (2) Business Days' notice of a loss allocation,35 and Participants would be required to pay the requisite amount no later than the second Business Day following the issuance of such notice. 36 Multiple Loss Allocation Notices may be issued with respect to each round, up to the round cap.

    35 DTC believes allowing Participants two (2) Business Days to satisfy their loss allocation obligations would provide Participants sufficient notice to arrange funding, if necessary, while allowing DTC to address losses in a timely manner.

    36 Current Section 4 of Rule 4 provides that if the Participants Fund is applied to a loss or liability, DTC must notify each Participant of the charge and the reasons therefor. Proposed Section 5 would modify this process to (i) require DTC to give prior notice; and (ii) require Participants to pay loss allocation charges, rather than directly charging their Required Participants Fund Deposits. DTC believes that shifting from the two-step methodology of applying the Participants Fund and then requiring Participants to immediately replenish it to requiring direct payment would increase efficiency, while preserving the right to charge the Settlement Account of the Participant in the event the Participant doesn't timely pay. Such a failure to pay would be, self-evidently, a Participant Default, triggering recourse to the Actual Participants Fund Deposit of the Participant under proposed Section 3 of Rule 4. In addition, this change would provide greater stability for DTC in times of stress by allowing DTC to retain the Participants Fund, its critical pre-funded resource, while charging loss allocations. DTC believes doing so would allow DTC to retain the Participants Fund as a liquidity resource which may be applied to fund settlement among non-defaulting Participants, if a Defaulting Participant fails to settle. By being able to manage its liquidity resources throughout the loss allocation process, DTC would be able to continue to provide its critical operations and services during what would be expected to be a stressful period.

    The first Loss Allocation Notice in any first, second, or subsequent round would expressly state that such Loss Allocation Notice reflects the beginning of the first, second, or subsequent round, as the case may be, and that each Participant in that round has five (5) Business Days 37 from the issuance 38 of such first Loss Allocation Notice for the round (such period, a “Loss Allocation Termination Notification Period”) to notify DTC of its election to terminate its business with DTC (such notification, whether with respect to a Settlement Charge Notice or Loss Allocation Notice, a “Termination Notice”) pursuant to proposed Section 8(b) of Rule 4 and thereby benefit from its Loss Allocation Cap.

    37 Current Section 8 of Rule 4 provides that the time period for a Participant to give notice of its election to terminate its business with DTC in respect of a pro rata charge is ten (10) Business Days after receiving notice of a pro rata charge. DTC believes that it is appropriate to shorten such time period from ten (10) Business Days to five (5) Business Days because DTC needs timely notice of which Participants would not be terminating their business with DTC for the purpose of calculating the loss allocation for any subsequent round. DTC believes that five (5) Business Days would provide Participants with sufficient time to decide whether to cap their loss allocation obligations by terminating their business with DTC.

    38See supra note 23.

    The round cap of any second or subsequent round may differ from the first or preceding round cap because there may be fewer Participants in a second or subsequent round if Participants elect to terminate their business with DTC as provided in proposed Section 8(b) of Rule 4 following the first Loss Allocation Notice in any round.

    For example, for illustrative purposes only, after the required Corporate Contribution, if DTC has a $4 billion loss determined with respect to an Event Period and the sum of Loss Allocation Caps for all Participants subject to the loss allocation is $3 billion, the first round would begin when DTC issues the first Loss Allocation Notice for that Event Period. DTC could issue one or more Loss Allocation Notices for the first round until the sum of losses allocated equals $3 billion. Once the $3 billion is allocated, the first round would end and DTC would need a second round in order to allocate the remaining $1 billion of loss. DTC would then issue a Loss Allocation Notice for the $1 billion and this notice would be the first Loss Allocation Notice for the second round. The issuance of the Loss Allocation Notice for the $1 billion would begin the second round.

    The proposed rule change would link the Loss Allocation Cap to a round in order to provide Participants the option to limit their loss allocation exposure at the beginning of each round. As proposed, a Participant could limit its loss allocation exposure to its Loss Allocation Cap by providing notice of its election to terminate its business with DTC within five (5) Business Days after the issuance of the first Loss Allocation Notice in any round.

    The proposed rule changes relating to the implementation of “rounds” and Loss Allocation Notices are set forth in proposed Section 5 of Rule 4.

    (4) Capping Terminating Participants' Loss Allocation Exposure and Related Changes

    As discussed above, the proposed rule change would continue to provide Participants the opportunity to limit their loss allocation exposure by offering a termination option; however, the associated termination process would be modified.

    As proposed, if a Participant timely provides notice of its election to terminate its business with DTC as provided in proposed Section 8(b) of Rule 4, its maximum payment obligation with respect to any loss allocation round would be the amount of its Aggregate Required Deposit and Investment, as fixed on the first day of the Event Period, plus 100% of the amount thereof (“Loss Allocation Cap”),39 provided that the Participant complies with the requirements of the termination process in proposed Section 6(b) of Rule 4. DTC may retain the entire Actual Participants Fund Deposit of a Participant subject to loss allocation, up to the Participant's Loss Allocation Cap. If a Participant's Loss Allocation Cap exceeds the Participant's then-current Required Participants Fund Deposit, it must still pay the excess amount.

    39 The alternative limit in clause (b) would be eliminated in proposed Section 8(b) in favor of a single defined standard. See supra note 24.

    As proposed, Participants would have five (5) Business Days from the issuance of the first Loss Allocation Notice in any round to decide whether to terminate its business with DTC, and thereby benefit from its Loss Allocation Cap. The start of each round 40 would allow a Participant the opportunity to notify DTC of its election to terminate its business with DTC after satisfaction of the losses allocated in such round.

    40i.e., a Participant will only have the opportunity to terminate after the first Loss Allocation Notice in any round, and not after each Loss Allocation Notice in any round.

    Specifically, the first round and each subsequent round of loss allocation would allocate losses up to a round cap of the aggregate of all Loss Allocation Caps of those Participants included in the round. If a Participant provides notice of its election to terminate its business with DTC, it would be subject to loss allocation in that round, up to its Loss Allocation Cap. If the first round of loss allocation does not fully cover DTC's losses, a second round will be noticed to those Participants that did not elect to terminate in the previous round. As noted above, the amount of any second or subsequent round cap may differ from the first or preceding round cap because there may be fewer Participants in a second or subsequent round if Participants elect to terminate their business with DTC as provided in proposed Section 8(b) of Rule 4 following the first Loss Allocation Notice in any round.

    Pursuant to the proposed rule change, in order to avail itself of its Loss Allocation Cap, the Participant would need to follow the requirements in proposed Section 6(b) of Rule 4. In addition to retaining the substance of the existing requirements for any termination that are set forth in current Section 6 of Rule 4, proposed Section 6 also would provide that a Participant that provides a Termination Notice in connection with a loss allocation must: (1) Specify in the Termination Notice an effective date of termination (“Participant Termination Date”), which date shall be no later than ten (10) Business Days following the last day of the applicable Loss Allocation Termination Notification Period; (2) cease all activities and use of the Corporation's services other than activities and services necessary to terminate the business of the Participant with DTC; and (3) ensure that all activities and use of DTC services by such Participant cease on or prior to the Participant Termination Date.

    The proposed rule changes are designed to enable DTC to continue the loss allocation process in successive rounds until all of DTC's losses are allocated. Until all losses related to an Event Period are allocated and paid, DTC may retain the entire Actual Participants Fund Deposit of a Participant subject to loss allocation, up to the Participant's Loss Allocation Cap.

    The proposed rule changes relating to capping terminating Participants' loss allocation exposure and related changes to the termination process are set forth in proposed Sections 5, 6, and 8 of Rule 4.

    C. Clarifying Changes Relating to Loss Allocation for Non-Default Events

    The proposed rule changes are intended to make the provisions in the Rules governing loss allocation more transparent and accessible to Participants. In particular, DTC is proposing the following change relating to loss allocation to provide clarity around the governance for the allocation of losses arising from a non-default event.41

    41 Non-default losses may arise from events such as damage to physical assets, a cyber-attack, or custody and investment losses.

    Currently, DTC can use the Participants Fund to satisfy losses and liabilities arising from a Participant Default or arising from an event that is not due to a Participant Default (i.e., a non-default loss), provided that such loss or liability is incident to the business of DTC.42

    42See supra note 11.

    DTC is proposing to clarify the governance around non-default losses that would trigger loss allocation to Participants by specifying that the Board of Directors would have to determine that there is a non-default loss that may be a significant and substantial loss or liability that may materially impair the ability of DTC to provide clearance and settlement services in an orderly manner and will potentially generate losses to be mutualized among the Participants in order to ensure that DTC may continue to offer clearance and settlement services in an orderly manner. The proposed rule change would provide that DTC would then be required to promptly notify Participants of this determination, which is referred to in the proposed rule as a Declared Non-Default Loss Event, as discussed above.

    Finally, as previously discussed, pursuant to the proposed rule change, proposed Rule 4 would include language to clarify that (i) the Corporate Contribution would apply to losses or liabilities arising from a Default Loss Event or a Declared Non-Default Loss Event, and (ii) the loss allocation waterfall would be applied in the same manner regardless of whether a loss arises from a Default Loss Event or a Declared Non-Default Loss Event.

    The proposed rule changes relating to Declared Non-Default Loss Events and Participants' obligations for such events are set forth in proposed Section 5 of Rule 4.

    D. Loss Allocation Waterfall Comparison

    The following example illustrates the differences between the current and proposed loss allocation provisions:

    Assumptions:

    (i) Participant A defaults on a Business Day (Day 1). On the same day, DTC ceases to act for Participant A, and notifies Participants of the cease to act. After applying Participant A's Participants Fund and liquidating Participant A's Collateral, DTC has a loss of $350 million.

    (ii) Participant X voluntarily retires from membership five Business Days after DTC ceases to act for Participant A (Day 6).

    (iii) Participant B defaults seven Business Days after DTC ceases to act for Participant A (Day 8). On the same day, DTC ceases to act for Participant B, and notifies Participants of the cease to act. After applying Participant B's Participants Fund and liquidating Participant B's Collateral, DTC has a loss of $350 million.

    (iv) The current DTC loss allocation provisions do not require a corporate contribution. DTC may, in its sole discretion and in such amounts as DTC may determine, charge the existing retained earnings and undivided profits of DTC. For the purposes of this example, it is assumed that DTC has determined, in its discretion, that DTC will contribute 25% of its retained earnings and undivided profits. The amount of DTC's retained earnings and undivided profits is $364 million.

    (v) DTC's General Business Risk Capital Requirement is $158 million.

    Current Loss Allocation:

    Under the current loss allocation provisions, with respect to the losses arising out of Participant A's default, DTC will contribute $91 million ($364 million * 25%) from retained earnings and undivided profits, and then allocate the remaining loss of $259 million ($350 million − $91 million) to Participants.

    With respect to the losses arising out of Participant B's default, DTC will contribute $68 million (($364 million − $91 million) * 25%) from the balance of its retained earnings and undivided profits, and then allocate the remaining loss of $282 million ($350 million − $68 million) to Participants. Because Participant X voluntarily retired before DTC ceased to act for Participant B, Participant X is not subject to loss allocation with respect to losses arising out of Participant B's default.

    Altogether, with respect to the losses arising out of defaults of Participant A and Participant B, DTC will contribute $159 million of retained earnings and undivided profits, and will allocate losses of $541 million to Participants.

    Proposed Loss Allocation:

    Under the proposed loss allocation provisions, a Default Loss Event with respect to Participant A's default would have occurred on Day 1, and a Default Loss Event with respect to Participant B's default would have occurred on Day 8. Because the Default Loss Events occurred during a 10-Business Day period they would be grouped together into an Event Period for purposes of allocating losses to Participants. The Event Period would begin on the 1st Business Day and end on the 10th Business Day.

    With respect to losses arising out of Participant A's default, DTC would apply a Corporate Contribution of $79 million ($158 million * 50%) and then allocate the remaining loss of $271 million ($350 million − $79 million) to Participants. With respect to losses arising out of Participant B's default, DTC would not apply a Corporate Contribution since it would have already contributed the maximum Corporate Contribution of 50% of its General Business Risk Capital Requirement. DTC would allocate the loss of $350 million arising out of Participant B's default to Participants. Because Participant X was a Participant on the first day of the Event Period, it would be subject to loss allocation with respect to all events occurring during the Event Period, even if the event occurred after its retirement. Therefore, Participant X would be subject to loss allocation with respect to Participant B's default.

    Altogether, with respect to the losses arising out of defaults of Participant A and Participant B, DTC would apply a Corporate Contribution of $79 million and allocate losses of $621 million to Participants.

    The principal differences in the above example are due to: (i) The proposed changes to the calculation and application of Corporate Contribution, and (ii) the proposed introduction of an Event Period.

    E. Clarifying Changes Regarding Voluntary Retirement

    Section 1 of Rule 2 provides that a Participant may terminate its business with DTC by notifying DTC in the appropriate manner.43 To provide additional transparency to Participants with respect to the voluntary retirement of a Participant, and to align, where appropriate, with the proposed rule changes of NSCC and FICC with respect to voluntary termination, DTC is proposing to add proposed Section 6(a) to Rule 4, which would be titled, “Upon Any Voluntary Retirement.” Proposed Section 6(a) of Rule 4 would (i) clarify the requirements 44 for a Participant that wants to voluntarily terminate its business with DTC, and (ii) address the situation where a Participant submits a Voluntary Retirement Notice (defined below) and subsequently receives a Settlement Charge Notice or the first Loss Allocation Notice in a round on or prior to the Voluntary Retirement Date (defined below).

    43 Section 1 of Rule 2 provides, in relevant part, that “[a] Participant may terminate its business with the Corporation by notifying the Corporation as provided in Sections 7 or 8 of Rule 4 or, if for a reason other than those specified in said Sections 7 and 8, by notifying the Corporation thereof; the Participant shall, upon receipt of such notice by the Corporation, cease to be a Participant. In the event that a Participant shall cease to be a Participant, the Corporation shall thereupon cease to make sits services available to the Participant, except that the Corporation may perform services on behalf of the Participant or its successor in interest necessary to terminate the business of the Participant or its successor with the Corporation, and the Participant or its successor shall pay to the Corporation the fees and charges provided by these Rules with respect to services performed by the Corporation subsequent to the time when the Participant ceases to be a Participant.” Supra note 5. DTC is proposing to modify the provision to clarify that the termination would be subject to proposed Section 6 of Rule 4.

    44 The requirements would reflect current practice.

    Specifically, DTC is proposing that if a Participant elects to terminate its business with DTC pursuant to Section 1 of Rule 2 for reasons other than those specified in proposed Section 8 (a “Voluntary Retirement”), the Participant would be required to:

    (1) Provide a written notice of such termination to DTC (“Voluntary Retirement Notice”), as provided for in Section 1 of Rule 2;

    (2) specify in the Voluntary Retirement Notice a desired date for the termination of its business with DTC (“Voluntary Retirement Date”);

    (3) cease all activities and use of DTC services other than activities and services necessary to terminate the business of the Participant with DTC; and

    (4) ensure that all activities and use of DTC services by the Participant cease on or prior to the Voluntary Retirement Date.45

    45 Typically, a Participant would ultimately submit a notice after having ceased its transactions and transferred all securities out of its Account.

    Proposed Section 6(a) of Rule 4 would provide that if the Participant fails to comply with the requirements of proposed Section 6(a), its Voluntary Retirement Notice would be deemed void.46

    46 The purpose of this proposed provision is to clarify that a failure of a Participant to comply with proposed Section 6(a) of Rule 4 would mean that the Participant would continue to be a Participant, as if the Voluntary Retirement Notice had not been received by DTC. For example, Participant A submits a Voluntary Retirement Notice to DTC on April 1st and indicates a Voluntary Retirement Date of April 15th, but fails to comply with the requirements of proposed Section 6(a) of Rule 4 by the Voluntary Retirement Date. The Participant would continue to be a Participant after the Voluntary Retirement Date. If an Event Period subsequently occurs before the Participant submits a new Voluntary Retirement Notice and voluntarily retires in compliance with proposed Section 6(a), such Participant would be obligated to pay its pro rata shares of losses and liabilities arising from that Event Period.

    Further, proposed Section 6(a) of Rule 4 would provide that if a Participant submits a Voluntary Retirement Notice and subsequently receives a Settlement Charge Notice or the first Loss Allocation Notice in a round on or prior to the Voluntary Retirement Date, such Participant must timely submit a Termination Notice in order to benefit from its Settlement Charge Cap or Loss Allocation Cap, as the case may be. In such a case, the Termination Notice would supersede and void the pending Voluntary Retirement Notice submitted by the Participant.

    F. Changes to the Retention Time for the Actual Participants Fund Deposit of a Former Participant

    Current Rule 4 provides that after three months from when a Person has ceased to be a Participant, DTC shall return to such Person (or its successor in interest or legal representative) the amount of the Actual Participants Fund Deposit of the former Participant plus accrued and unpaid interest to the date of such payment (including any amount added to the Actual Participants Fund Deposit of the former Participant through the sale of the Participant's Preferred Stock), provided that DTC receives such indemnities and guarantees as DTC deems satisfactory with respect to the matured and contingent obligations of the former Participant to DTC. Otherwise, within four years after a Person has ceased to be a Participant, DTC shall return to such Person (or its successor in interest or legal representative) the amount of the Actual Participants Fund Deposit of the former Participant plus accrued and unpaid interest to the date of such payment, except that DTC may offset against such payment the amount of any known loss or liability to DTC arising out of or related to the obligations of the former Participant to DTC.

    DTC is proposing to reduce the time, after a Participant ceases to be a Participant, at which DTC would be required to return the amount of the Actual Participants Fund Deposit of the former Participant plus accrued and unpaid interest, whether the Participant ceases to be such because it elected to terminate its business with DTC in response to a Settlement Charge Notice or Loss Allocation Notice or otherwise. Pursuant to the proposed rule change, the time period would be reduced from four (4) years to two (2) years. All other requirements relating to the return of the Actual Participants Fund Deposit would remain the same.

    The four (4) year retention period was implemented at a time when there were more deposits and processing of physical certificates, as well as added risks related to manual processing, and related claims could surface many years after an alleged event. DTC believes that the change to two (2) years is appropriate because, currently, as DTC and the industry continue to move toward automation and dematerialization, claims typically surface more quickly. Therefore, DTC believes that a shorter retention period of two (2) years would be sufficient to maintain a reasonable level of coverage for possible claims arising in connection with the activities of a former Participant, while allowing DTC to provide some relief to former Participants by returning their Actual Participants Fund Deposits more quickly.

    (ii) Proposed Rule Changes

    The foregoing changes as well as other changes (including a number of technical and conforming changes) that DTC is proposing in order to improve the transparency and accessibility of Rule 4 are described in detail below.

    A. Changes Relating To Participant Default, Pro Rata Settlement Charges and Loss Allocation Section 3

    As discussed above, current Section 3 of Rule 4 provides that, if a Participant fails to satisfy an obligation to DTC, DTC may, in such order and in such amounts as DTC determines, apply the Actual Participants Fund Deposit of the defaulting Participant, Pledge the shares of Preferred Stock of the defaulting Participant to its lenders as collateral security for a loan, and/or sell the shares of Preferred Stock of the defaulting Participant to other Participants. Pursuant to the proposed rule change, Section 3 would retain most of these provisions, with the following modifications:

    DTC proposes to add the term “Participant Default” in proposed Section 3 as a defined term for the failure of a Participant to satisfy an obligation to DTC, for drafting clarity and use in related provisions. The proposed rule change would reflect that the defined term “Participant Default,” referring to the failure of a Participant to satisfy any obligation to DTC, includes the failure of a Defaulting Participant to satisfy its obligations as provided in Rule 9(B). In addition, the proposed rule change clarifies that, in the case of a Participant Default, DTC would first apply the Actual Participants Fund Deposit of the Participant to any unsatisfied obligations, before taking any other actions. This proposed clarification would reflect the current practice of DTC, and would provide Participants with enhanced transparency into the actions DTC would take with respect to the Participants Fund deposits and Participants Investment of a Participant that has failed to satisfy its obligations to DTC.

    DTC proposes to correct the term “End-of-Day Facility,” to the existing defined term “End-of-Day Credit Facility.” DTC further proposes to clarify that, if DTC Pledges some or all of the shares of Preferred Stock of a Participant to its lenders as collateral security for a loan under the End-of-Day Credit Facility, DTC would apply the proceeds of such loan to the obligation the Participant had failed to satisfy, which is not expressly stated in current Section 3 of Rule 4.

    In addition, DTC is proposing to make three ministerial changes to enhance readability by: (i) Removing the duplicative “in,” in the phrase “in such order and in such amounts,” (ii) replacing the word “eliminate” with “satisfy,” and (iii) to conform to proposed changes, renumbering the list of actions that DTC may take when there is a Participant Default.

    DTC is also proposing to add the heading “Application of Participants Fund Deposits and Preferred Stock Investments to Participant Default” to Section 3.

    Section 4 and Section 5

    As noted above, current Section 4 of Rule 4 provides that if DTC incurs a loss or liability which is not satisfied by charging the Participant responsible for the loss pursuant to Section 3 of Rule 4, then DTC may, in any order and in any amount as DTC may determine, in its sole discretion, to the extent necessary to satisfy such loss or liability, ratably apply some or all of the Actual Participants Fund Deposits of all other Participants to such loss or liability and/or charge the existing retained earnings and undivided profits of DTC. This provision relates to losses and liabilities that may be due to the failure of a Participant to satisfy obligations to DTC, if the Actual Participants Fund Deposit of that Participant does not fully satisfy the obligation, or to losses and liabilities for which no single Participant is obligated, i.e., a “non-default loss.”

    As discussed above, current Rule 4 currently provides a single set of tools and common processes for using the Participants Fund as both a liquidity resource and for the satisfaction of other losses and liabilities. The proposed rule change would provide separate liquidity and loss allocation provisions. More specifically, proposed Section 4 of Rule 4 would reflect the process for a “pro rata settlement charge,” the application of the Actual Participants Fund Deposits of non-defaulting Participants for liquidity purposes in order to complete settlement, when a Defaulting Participant fails to satisfy its settlement obligation and the amount charged to its Actual Participants Fund Deposit by DTC pursuant to Section 3 of Rule 4 is insufficient to complete settlement. Proposed Section 5 of Rule 4 would contain the proposed loss allocation provisions.

    Proposed Section 4

    Pursuant to the proposed rule change, current Section 4 would be replaced in its entirety by proposed Section 4, and titled “Application of Participants Fund Deposits of Non-Defaulting Participants.” First, for clarity, proposed Section 4 would expressly state that “[t]he Participants Fund shall constitute a liquidity resource which may be applied by the Corporation in such amounts as the Corporation shall determine, in its sole discretion, to fund settlement if there is a Defaulting Participant and the amount charged to the Actual Participants Fund Deposit of the Defaulting Participant pursuant to Section 3 of this Rule is not sufficient to complete settlement. In that case, the Corporation may apply the Actual Participants Fund Deposits of Participants other than the Defaulting Participant (each, a “non-defaulting Participant”) as provided in this Section and/or apply such other liquidity resources as may be available to the Corporation from time to time, including the End-of-Day Credit Facility.”

    Proposed Section 4 would retain the current principle that DTC must notify Participants and the Commission when it applies the Participants Fund deposits of non-defaulting Participants, by stating that if the Actual Participants Fund Deposits of non-defaulting Participants are applied to complete settlement, DTC must promptly notify each Participant and the Commission of the amount of the charge and the reasons therefor, and would define such notice as a Settlement Charge Notice.

    Proposed Section 4 would retain the current calculation of pro rata charges by providing that each non-defaulting Participant's pro rata share 47 of any such application of the Participants Fund, defined as a “pro rata settlement charge,” would be equal to (i) its Required Participants Fund Deposit, as such Required Participants Fund Deposit was fixed on the Business Day of such application 48 less its Additional Participants Fund Deposit, if any, on that day, divided by (ii) the sum of the Required Participants Fund Deposits of all non-defaulting Participants, as such Required Participants Fund Deposits were fixed on that day, less the sum of the Additional Participants Fund Deposits, if any, of such non-defaulting Participants on that day.

    47See supra note 20.

    48See supra note 21.

    Proposed Section 4 would also provide a period of time within which a Participant could notify DTC of its election to terminate its business with DTC and thereby cap its liability, by providing that a Participant would have a period of five (5) Business Days following the issuance of a Settlement Charge Notice (“Settlement Charge Termination Notification Period”) to notify DTC of its election to terminate its business with DTC pursuant to proposed Section 8(a), and thereby benefit from its Settlement Charge Cap, as set forth in proposed Section 8(a).49 Proposed Section 4 would also require that any Participant that gives DTC notice of its election to terminate its business with DTC must comply with proposed Section 6(b) of Rule 4,50 and if it does not, its election to terminate would be deemed void.

    49See supra note 22.

    50 Proposed Section 6(b) is discussed below.

    Proposed Section 4 would further provide that DTC may retain the entire amount of the Actual Participants Fund Deposit of a Participant subject to a pro rata settlement charge, up to the amount of the Participant's Settlement Charge Cap in accordance with proposed Section 8(a) of Rule 4.

    Current Section 5 of Rule 4 provides that “[e]xcept as provided in Section 8 of this Rule, if a pro rata charge is made pursuant to Section 4 of the current Rule against the Required Participants Fund Deposit of a Participant, and, as a consequence, the Actual Participants Fund Deposit of such Participant is less than its Required Participants Fund Deposit, the Participant shall, upon the demand of the Corporation, within such time as the Corporation shall require, Deposit to the Participants Fund the amount in cash needed to eliminate any resulting deficiency in its Required Participants Fund Deposit. If the Participant shall fail to make such deposit to the Participants Fund, the Corporation may take disciplinary action against the Participant pursuant to these Rules. Any disciplinary action which the Corporation takes pursuant to these Rules, or the voluntary or involuntary cessation of participation by the Participant, shall not affect the obligations of the Participant to the Corporation or any remedy to which the Corporation may be entitled under applicable law.”

    Proposed Section 4 would incorporate current Section 5 of Rule 4, modified as follows: (i) Conformed to reflect the consolidation of Section 5 into proposed Section 4, (ii) replacement of “Except as provided in” with “Subject to,” to harmonize with language used elsewhere in proposed Rule 4, and (iii) corrections of two typographical errors, in order to accurately reflect that the Actual Participants Fund Deposit of a Participant would be applied, and not the Required Participants Fund Deposit, and to capitalize the word “deposit” because it is a defined term.

    Proposed Section 5

    Proposed Section 5 of Rule 4 would address the substantially new and revised proposed loss allocation, which would apply to losses and liabilities relating to or arising out of a Default Loss Event or a Declared Non-Default Loss Event. Pursuant to the proposed rule change, DTC would restructure and modify its existing loss allocation waterfall as described below. The heading “Loss Allocation Waterfall” would be added to proposed Section 5.

    Proposed Section 5 would establish the concept of an “Event Period” to provide for a clear and transparent way of handling multiple loss events occurring in a period of ten (10) Business Days, which would be grouped into an Event Period. As stated above, both Default Loss Events and Declared Non-Default Loss Events could occur within the same Event Period.

    The Event Period with respect to a Default Loss Event would begin on the day on which DTC notifies Participants that it has ceased to act for the Participant (or the next Business Day, if such day is not a Business Day). In the case of a Declared Non-Default Loss Event, the Event Period would begin on the day that DTC notifies Participants of the Declared Non-Default Loss Event (or the next Business Day, if such day is not a Business Day). Proposed Section 5 would provide that if a subsequent Default Loss Event or Declared Non-Default Loss Event occurs during an Event Period, any losses or liabilities arising out of or relating to any such subsequent event would be resolved as losses or liabilities that are part of the same Event Period, without extending the duration of such Event Period.

    As proposed, each CTA Participant would be obligated to DTC for the entire amount of any loss or liability incurred by DTC arising out of or relating to any Default Loss Event with respect to such CTA Participant. Under the proposal, to the extent that such loss or liability is not satisfied pursuant to proposed Section 3 of Rule 4, DTC would apply a Corporate Contribution thereto and charge the remaining amount of such loss or liability as provided in proposed Section 5.

    Under proposed Section 5, the loss allocation waterfall would begin with a new mandatory Corporate Contribution from DTC. Rule 4 currently provides that the use of any retained earnings and undivided profits by DTC is a voluntary contribution of a discretionary amount of its retained earnings. Proposed Section 5 of Rule 4 would, instead, require a defined corporate contribution to losses and liabilities that are incurred by DTC with respect to an Event Period. As proposed, the Corporate Contribution to losses or liabilities that are incurred by DTC with respect to an Event Period would be defined as an amount that is equal to fifty percent (50%) of the amount calculated by DTC in respect of its General Business Risk Capital Requirement as of the end of the calendar quarter immediately preceding the Event Period.51 DTC's General Business Risk Capital Requirement, as defined in DTC's Clearing Agency Policy on Capital Requirements,52 is, at a minimum, equal to the regulatory capital that DTC is required to maintain in compliance with Rule 17Ad-22(e)(15) under the Act.53

    51See supra note 26.

    52See supra note 27.

    53 17 CFR 240.17Ad-22(e)(15).

    If DTC applies the Corporate Contribution to a loss or liability arising out of or relating to one or more Default Loss Events or Declared Non-Default Loss Events relating to an Event Period, then for any subsequent Event Periods that occur during the next two hundred fifty (250) Business Days, the Corporate Contribution would be reduced to the remaining unused portion of the Corporate Contribution amount that was applied for the first Event Period.54 Proposed Section 5 would require DTC to notify Participants of any such reduction to the Corporate Contribution.

    54See supra note 30.

    Proposed Section 5 of Rule 4 would provide that nothing in the Rules would prevent DTC from voluntarily applying amounts greater than the Corporate Contribution against any DTC loss or liability, if the Board of Directors, in its sole discretion, believes such to be appropriate under the factual situation existing at the time.

    Proposed Section 5 of Rule 4 would provide that DTC shall apply the Corporate Contribution to losses and liabilities that arise out of or relate to one or more Default Loss Events and/or Declared Non-Default Loss Events that occur within an Event Period. The proposed rule change also provides that if losses and liabilities with respect to such Event Period remain unsatisfied following application of the Corporate Contribution, DTC would allocate such losses and liabilities to Participants, as described below.

    Proposed Section 5 of Rule 4 would state that each Participant that is a Participant on the first day of an Event Period would be obligated to pay its pro rata share of losses and liabilities arising out of or relating to each Default Loss Event (other than a Default Loss Event with respect to which it is the CTA Participant) and each Declared Non-Default Loss Event occurring during the Event Period. In addition, proposed Section 5 of Rule 4 would make it clear that any CTA Participant for which DTC ceases to act on a non-Business Day, triggering an Event Period that commences on the next Business Day, would be deemed to be a Participant on the first day of that Event Period. In addition, DTC is proposing to clarify that after a first round of loss allocations with respect to an Event Period, only Participants that have not submitted a Termination Notice in accordance with proposed Section 6(b) of Rule 4 would be subject to loss allocations with respect to subsequent rounds relating to that Event Period. The proposed change would also provide that DTC may retain the entire Actual Participants Fund Deposit of a Participant subject to loss allocation, up to the Participant's Loss Allocation Cap in accordance with proposed Section 8(b) of Rule 4.

    Pursuant to the proposed rule change, DTC would notify Participants subject to loss allocation of the amounts being allocated to them by a Loss Allocation Notice in successive rounds of loss allocations. Proposed Section 5 would state that a loss allocation “round” would mean a series of loss allocations relating to an Event Period, the aggregate amount of which is limited by the sum of the Loss Allocation Caps of affected Participants (a “round cap”). When the aggregate amount of losses allocated in a round equals the round cap, any additional losses relating to the applicable Event Period would be allocated in one or more subsequent rounds, in each case subject to a round cap for that round. DTC may continue the loss allocation process in successive rounds until all losses from the Event Period are allocated among Participants that have not submitted a Termination Notice in accordance with proposed Section 6(b) of Rule 4.

    Each Loss Allocation Notice would specify the relevant Event Period and the round to which it relates. The first Loss Allocation Notice in any first, second, or subsequent round would expressly state that such Loss Allocation Notice reflects the beginning of the first, second, or subsequent round, as the case may be, and that each Participant in that round has five (5) Business Days from the issuance of such first Loss Allocation Notice for the round 55 to notify DTC of its election to terminate its business with DTC pursuant to proposed Section 8(b) of Rule 4, and thereby benefit from its Loss Allocation Cap.56

    55i.e., the Loss Allocation Termination Notification Period for that round.

    56See supra note 37.

    Loss allocation obligations would continue to be calculated based upon a Participant's pro rata share of the loss.57 As proposed, each Participant's pro rata share of losses and liabilities to be allocated in any round would be equal to (i) (A) its Required Participants Fund Deposit, as such Required Participants Fund Deposit was fixed on the first day of the Event Period,58 less (B) its Additional Participants Fund Deposit, if any, on such day, divided by (ii) (A) the sum of the Required Participants Fund Deposits of all Participants subject to loss allocation in such round, as such Required Participants Fund Deposits were fixed on such day, less (B) the sum of any Additional Participants Fund Deposits, if any, of all Participants subject to loss allocation in such round on such day.59

    57See supra note 20.

    58See supra note 21.

    59See supra note 16.

    As proposed, Participants would have two (2) Business Days after DTC issues a first round Loss Allocation Notice to pay the amount specified in any such notice. In contrast to the current Section 4, under which DTC may apply the Actual Participants Fund Deposits of Participants directly to the satisfaction of loss allocation amounts, under proposed Section 5, DTC would require Participants to pay their loss allocation amounts (leaving their Actual Participants Fund Deposits intact).60 On a subsequent round (i.e., if the first round did not cover the entire loss of the Event Period because DTC was only able to allocate up to the sum of the Loss Allocation Caps of those Participants included in the round), Participants would also have two (2) Business Days after notice by DTC to pay their loss allocation amounts (again subject to their Loss Allocation Caps), unless a Participant timely notified (or will timely notify) DTC of its election to terminate its business with DTC with respect to a prior loss allocation round.

    60See supra note 36.

    Under the proposal, if a Participant fails to make its required payment in respect of a Loss Allocation Notice by the time such payment is due, DTC would have the right to proceed against such Participant as a Participant that has failed to satisfy an obligation in accordance with proposed Section 3 of Rule 4 described above. For additional clarity, proposed Section 5 of Rule 4 would state that all amounts due from a Participant pursuant to proposed Section 5 of Rule 4 may be debited from the Settlement Account of such Participant. Proposed Section 5 of Rule 4 would also provide that DTC may retain the entire Actual Participants Fund Deposit of a Participant subject to loss allocation, up to the Participant's Loss Allocation Cap in accordance with Section 8(b) of Rule 4. Participants that wish to terminate their business with DTC would be required to comply with the requirements in proposed Section 6(b) of Rule 4, described further below. Specifically, proposed Section 5 would provide that if, after notifying DTC of its election to terminate its business with DTC pursuant to proposed Section 8(b) of Rule 4, the Participant fails to comply with the provisions of proposed Section 6(b) of Rule 4, its notice of termination would be deemed void and any further losses resulting from the applicable Event Period may be allocated against it as if it had not given such notice.

    Section 6

    Section 6 of Rule 4 currently provides that whenever a Participant ceases to be such, it continues to be obligated (a) to satisfy any deficiency in the amount of its Required Participants Fund Deposit and/or Required Preferred Stock Investment that it did not satisfy prior to such time, including (i) any deficiency resulting from a pro rata charge with respect to which the Participant has given notice to DTC of its election to terminate its business with DTC pursuant to Section 8 of Rule 4 and (ii) any deficiency the Participant is required to satisfy pursuant to Sections 3 (an obligation that a Participant failed to satisfy) or 5 (the requirement of a Participant to eliminate the deficiency in its Required Participants Fund Deposit) of Rule 4 and (b) to discharge any liability of the Participant to DTC resulting from the transactions of the Participant open at the time it ceases to be a Participant or on account of transactions occurring while it was a Participant.

    The heading “Obligations of Participant Upon Termination” would be added to Section 6 of Rule 4. As discussed above, DTC is proposing to add proposed Section 6(a) to Rule 4, which would (i) clarify the requirements for the Voluntary Retirement of a Participant, and (ii) address the situation where a Participant submits a Voluntary Retirement Notice and subsequently receives a Settlement Charge Cap or the first Loss Allocation Notice in a round on or prior to the Voluntary Retirement Date. Proposed Section 6(a) of Rule 4 would also provide that if a Participant submits a Voluntary Retirement Notice and subsequently receives a Settlement Charge Notice or the first Loss Allocation Notice in a round on or prior to the Voluntary Retirement Date, such Participant must timely submit a Termination Notice in order to benefit from its Settlement Charge Cap or Loss Allocation Cap, respectively. In such a case, the Termination Notice would supersede and void the pending Voluntary Retirement Notice submitted by the Participant.

    DTC is proposing to add Proposed Section 6(b), titled “Upon Termination Following Settlement Charge or Loss Allocation.” Proposed Section 6(b) would state that if a Participant timely notifies DTC of its election to terminate its business with DTC in respect of a pro rata settlement charge as set forth in proposed Section 4 of Rule 4 or a loss allocation as set forth in proposed Section 5 of Rule 4, defined as a “Termination Notice”, the Participant would be required to: (1) Specify in the Termination Notice a Participant Termination Date, which date shall be no later than ten Business Days following the last day of the applicable Settlement Charge Termination Notification Period or Loss Allocation Termination Notification Period; (2) cease all activities and use of the Corporation's services other than activities and services necessary to terminate the business of the Participant with DTC; and (3) ensure that all activities and use of DTC services by such Participant cease on or prior to the Participant Termination Date.

    Proposed Section 6(b) of Rule 4 would provide that a Participant that terminates its business with DTC in compliance with proposed Section 6(b) would remain obligated for its pro rata share of losses and liabilities with respect to any Event Period for which it is otherwise obligated; however, its aggregate obligation would be limited to the amount of its Loss Allocation Cap (as fixed in the round for which it withdrew).

    DTC is proposing to include a sentence in proposed Section 6(b) to make it clear that if the Participant fails to comply with the requirements set forth in this section, its Termination Notice will be deemed void, and the Participant will remain subject to further pro rata settlement charges pursuant to proposed Section 4 of Rule 4 or loss allocations pursuant to proposed Section 5 of Rule 4, as applicable, as if it had not given such notice.

    For clarity, DTC is proposing to consolidate the requirements from current Section 6 of Rule 4 into proposed Section 6(c) of Rule 4, titled “After Any Termination,” and modify them to conform to other proposed rule changes. In particular, DTC is proposing to clarify that a Participant that ceases to be such would continue to be subject to proposed Section 5 of Rule 4 for any Event Period for which it was a Participant on the first day of the Event Period. Proposed Section 6(c) of Rule 4 would state that whenever a Participant ceases to be such, it would continue to be obligated (i) to satisfy any deficiency in the amounts of its Required Participants Fund Deposit and/or Required Preferred Stock Investment that it did not satisfy prior to such time, including any deficiency the Participant is required to satisfy pursuant to proposed Sections 3 or 4 of Rule 4, (ii) subject to proposed Section 8, to satisfy any loss allocation pursuant to proposed Section 5 of Rule 4, and (iii) to discharge any liability of the Participant to DTC resulting from the transactions of the Participant open at the time it ceases to be a Participant or on account of transactions occurring while it was a Participant.

    Section 8

    Pursuant to the proposed rule change, Section 8 would be titled “Termination; Obligation for Pro Rata Settlement Charges and Loss Allocations,” and would be divided among proposed Section 8(a) “Settlement Charges,” proposed Section 8(b) “Loss Allocations,” proposed Section 8(c) “Maximum Obligation,” and proposed Section 8(d) “Obligation to Replenish Deposit.”

    Pursuant to proposed Section 8(a), if a Participant, within five (5) Business Days after issuance of a Settlement Charge Notice pursuant to proposed Section 4 of Rule 4, gives notice to DTC of its election to terminate its business with DTC, the Participant would remain obligated for (i) its pro rata settlement charge that was the subject of such Settlement Charge Notice and (ii) all other pro rata settlement charges made by DTC until the Participant Termination Date. Subject to proposed Section 8(c), the terminating Participant's obligation would be limited to the amount of its Aggregate Required Deposit and Investment, as fixed on the day of the pro rata settlement charge that was the subject of the Settlement Charge Notice, plus 100% of the amount thereof, which is substantively the same limitation as provided for pro rata charges in current Section 8 of Rule 4.61

    61See supra note 24.

    Pursuant to proposed Section 8(b), if a Participant, within five (5) Business Days after the issuance of a first Loss Allocation Notice for any round pursuant to proposed Section 5 of Rule 4 gives notice to DTC of its election to terminate its business with DTC, the Participant would remain liable for (i) the loss allocation that was the subject of such notice and (ii) all other loss allocations made by DTC with respect to the same Event Period. Subject to proposed Section 8(c), the obligation of a Participant which elects to terminate its business with DTC would be limited to the amount of its Aggregate Required Deposit and Investment, as fixed on the first day of the Event Period, plus 100% of the amount thereof, which is substantiv