Federal Register Vol. 83, No.189,

Federal Register Volume 83, Issue 189 (September 28, 2018)

Page Range48905-49263
FR Document

83_FR_189
Current View
Page and SubjectPDF
83 FR 49153 - Conforming Amendment and Modification to Section 301 Action: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and InnovationPDF
83 FR 48957 - Minerals Management: Adjustment of Cost Recovery FeesPDF
83 FR 48964 - Military Licensing and State Commercial Driver's License ReciprocityPDF
83 FR 48905 - State of Wyoming: Discontinuance of Certain Commission Regulatory Authority Within the State; Notice of Agreement Between the NRC and the State of WyomingPDF
83 FR 49155 - Notice of Submission Deadline for Schedule Information for Chicago O'Hare International Airport, John F. Kennedy International Airport, Los Angeles International Airport, Newark Liberty International Airport, and San Francisco International Airport for the Summer 2019 Scheduling SeasonPDF
83 FR 49157 - Notice of Intent of Waiver With Respect to Land; Indianapolis International Airport, Indianapolis, IndianaPDF
83 FR 49067 - International Work SharingPDF
83 FR 49070 - Submission for OMB Review; Comment Request; “Post Patent Public Submissions”PDF
83 FR 49069 - Submission for OMB Review; Comment Request; “Fee Deficiency Submissions”PDF
83 FR 49069 - Submission for OMB Review; Comment Request; “Patent Reexamination and Supplemental Examinations”PDF
83 FR 49099 - John D. McCoy; Denial of Hearing; Final Debarment OrderPDF
83 FR 49095 - Richard M. Fleming; Denial of Hearing; Final Debarment OrderPDF
83 FR 49107 - Agency Information Collection Activities; Announcement of Office of Management and Budget ApprovalsPDF
83 FR 49158 - Petition for Exemption; Summary of Petition Received; Wing Aviation, LLCPDF
83 FR 49159 - Notice of Industry MeetingPDF
83 FR 49123 - Notice of Availability of Draft Environmental Impact Statement for the Proposed East Smoky Panel Mine Project at Smoky Canyon Mine, Caribou County, IDPDF
83 FR 49026 - Safety Zone; Delaware River; Penn's Landing; Philadelphia, PA; Fireworks DisplayPDF
83 FR 49024 - Special Local Regulation; Manasquan Inlet, Manasquan, NJPDF
83 FR 49130 - Heliophysics Advisory Committee; MeetingPDF
83 FR 49103 - Use of the Names of Dairy Foods in the Labeling of Plant-Based ProductsPDF
83 FR 49102 - GlaxoSmithKline, LLC, et al.; Withdrawal of Approval of 24 Abbreviated New Drug ApplicationsPDF
83 FR 48962 - Nonsubstantive, Editorial Revisions of Rules and Regulations To Correct Authority CitationsPDF
83 FR 49216 - Oil and Gas and Sulphur Operations on the Outer Continental Shelf-Oil and Gas Production Safety SystemsPDF
83 FR 49091 - Request for Nominations of Experts To Consider for ad hoc Participation on Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), Scientific Advisory Panel (SAP)PDF
83 FR 48985 - Fisheries of the Northeastern United States; Northeast Skate Complex; Framework Adjustment 5 and 2018-2019 SpecificationsPDF
83 FR 49089 - Agency Information Collection Activities; Proposed Renewal of an Existing Collection (EPA ICR No. 2511.02); Comment RequestPDF
83 FR 49146 - Determination Pursuant to Section 7041(A)(3)(B) of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2017PDF
83 FR 49090 - National and Governmental Advisory CommitteesPDF
83 FR 49145 - Certification Pursuant to Section 7041(a)(1) of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2018PDF
83 FR 49028 - Safety Zone; Annual Fireworks Displays Within the Sector Columbia River Captain of the Port ZonePDF
83 FR 49152 - San Pedro Valley Holdings, LLC-Acquisition Exemption-San Pedro and Southwestern Railroad Company in Cochise County, Ariz.PDF
83 FR 49151 - Gregory B. Cundiff, Connie Cundiff, CGX, Inc. and Ironhorse Resources, Inc.-Continuance in Control Exemption-San Pedro Valley Holdings, LLC in Cochise County, Ariz.; Gregory B. Cundiff, Connie Cundiff, CGX, Inc. and Ironhorse Resources, Inc.-Continuance in Control Exemption-San Pedro Valley Railroad, LLC in Cochise County, Ariz.PDF
83 FR 49070 - Procurement List; DeletionsPDF
83 FR 49071 - Procurement List; Proposed DeletionsPDF
83 FR 49148 - San Pedro Valley Railroad, LLC-Operation Exemption-San Pedro Valley Holdings, LLC in Cochise County, Ariz.PDF
83 FR 49066 - Western Pacific Fishery Management Council; Public MeetingPDF
83 FR 49065 - South Atlantic Fishery Management Council; Public MeetingsPDF
83 FR 49066 - Fisheries of the South Atlantic; South Atlantic Fishery Management Council; Public MeetingPDF
83 FR 49113 - Center for Scientific Review; Notice of Closed MeetingsPDF
83 FR 49112 - National Human Genome Research Institute; Notice of Closed MeetingsPDF
83 FR 49114 - National Institute on Deafness and Other Communication Disorders; Notice of Closed MeetingsPDF
83 FR 49111 - National Institute of Neurological Disorders and Stroke; Notice of Closed MeetingsPDF
83 FR 49064 - South Atlantic Fishery Management Council; Public MeetingsPDF
83 FR 49094 - Agency Information Collection Activities: Proposed Collection; Comment RequestPDF
83 FR 49146 - Notice of Public Meeting of the International Telecommunication Advisory Committee and Preparations for Upcoming International Telecommunications MeetingsPDF
83 FR 49112 - Notice of Listing of Members of the National Institutes of Health's Senior Executive Service 2018 Performance Review Board (PRB)PDF
83 FR 49062 - Submission for OMB Review; Comment RequestPDF
83 FR 49063 - Proposed Information Collection; Comment Request; Procedures for Submitting Requests for Objections From the Section 232 National Security Adjustments of Imports of Steel and AluminumPDF
83 FR 49064 - Proposed Information Collection; Comment Request; Procedures for Submitting Request for Exclusions From the Section 232 National Security Adjustments of Imports of Steel and AluminumPDF
83 FR 49139 - Proposed Revisions to Standard Review Plan Section 2.5.3, Surface DeformationPDF
83 FR 49065 - Magnuson-Stevens Act Provisions; General Provisions for Domestic Fisheries; Application for Exempted Fishing PermitsPDF
83 FR 49062 - Boundary Establishment for Black Butte National Wild and Scenic River, Including Portions of Cold Creek, Mendocino National Forest, Mendocino County, CaliforniaPDF
83 FR 49072 - Request for Information Regarding Bureau Data CollectionsPDF
83 FR 49151 - New York State Department of Environmental Conservation-Adverse Abandonment-Saratoga and North Creek Railway in Town of Johnsburg, NYPDF
83 FR 49121 - Agency Information Collection Activities; Federal Subsistence Regulations and Associated FormsPDF
83 FR 49126 - FM Approvals LLC: Grant of Expansion of Recognition and Modification to the Nationally Recognized Testing Laboratory (NRTL) Program's List of Appropriate Test StandardsPDF
83 FR 49128 - Underwriters Laboratories, Inc.: Grant of Expansion of Recognition and Modification to the Nationally Recognized Testing Laboratory (NRTL) Program's List of Appropriate Test StandardsPDF
83 FR 49131 - Submission for OMB Review; Comment RequestPDF
83 FR 49077 - Notice of Availability of the Final Missouri River Recovery Management Plan and Environmental Impact StatementPDF
83 FR 49075 - Intent To Prepare an Environmental Impact Statement for Chehalis River Basin Flood Damage Reduction Project Proposed by the Chehalis River Basin Flood Control Zone District, Lewis County, WAPDF
83 FR 49060 - Chugach National Forest; Alaska; Notice of a Proposed Amendment to the Chugach National Forest Land and Resource Management Plan, Applying Only to the Sterling Highway Milepost 45-60 ProjectPDF
83 FR 49074 - Intent To Grant an Exclusive License for U.S. Government-Owned InventionPDF
83 FR 49067 - BroadbandUSA Webinar SeriesPDF
83 FR 49108 - Agency Information Collection Activities; Submission for Office of Management and Budget Review; Comment Request; Early Food Safety Evaluation of New Non-Pesticidal Proteins Produced by New Plant Varieties Intended for Food UsePDF
83 FR 48950 - New Animal Drugs; Withdrawal of Approval of New Animal Drug ApplicationsPDF
83 FR 48940 - New Animal Drugs; Approval of New Animal Drug Applications; Withdrawal of Approval of New Animal Drug Applications; Changes of Sponsorship; Change of a Sponsor's NamePDF
83 FR 49022 - Label Requirement for Food That Has Been Refused Admission Into the United StatesPDF
83 FR 49048 - Petition To Permit Waivers of Maximum Line Speeds for Young Chicken Establishments Operating Under the New Poultry Inspection System; Criteria for Consideration of Waiver Requests for Young Chicken Establishments To Operate at Line Speeds of Up to 175 Birds per MinutePDF
83 FR 49146 - National Express LLC-Acquisition of Control-Wise Coaches, Inc.PDF
83 FR 49097 - The Special 510(k) Program; Draft Guidance for Industry and Food and Drug Administration Staff; AvailabilityPDF
83 FR 49132 - Proposed Revisions to Standard Review Plan Section 2.4.6, Tsunami Hazards; Section 2.4.9, Channel Migration or Diversion; and Section 2.3.3, Onsite Meteorological Measurements ProgramPDF
83 FR 49149 - 30-Day Notice of Intent To Seek Extension of Approval of Collections: Rail Carrier Financial ReportsPDF
83 FR 49101 - Vaccines and Related Biological Products Advisory Committee; Notice of MeetingPDF
83 FR 49141 - Public Inquiry on Service Performance Measurement SystemsPDF
83 FR 48954 - Regulated Navigation Area; Upper Mississippi River, Sabula Railroad Drawbridge, Mile Marker 535, Sabula, IAPDF
83 FR 49023 - Use of Materials Derived From Cattle in Medical Products Intended for Use in Humans and Drugs Intended for Use in Ruminants; Reporting Information Regarding Falsification of DataPDF
83 FR 49124 - Steel Trailer Wheels From ChinaPDF
83 FR 49077 - Notice of Complaint; Owensboro Municipal Utilities v. Louisville Gas and Electric Company, Kentucky Utilities CompanyPDF
83 FR 49077 - Combined Notice of FilingsPDF
83 FR 49078 - Combined Notice of Filings #1PDF
83 FR 49092 - Proposed Agency Information Collection Activities; Comment RequestPDF
83 FR 49132 - Notice of Permit Modification Received Under the Antarctic Conservation Act of 1978PDF
83 FR 49132 - Notice of Permits Issued Under the Antarctic Conservation Act of 1978PDF
83 FR 49118 - Final Flood Hazard DeterminationsPDF
83 FR 49115 - Changes in Flood Hazard DeterminationsPDF
83 FR 48950 - Schedules of Controlled Substances: Placement in Schedule V of Certain FDA-Approved Drugs Containing Cannabidiol; Corresponding Change to Permit RequirementsPDF
83 FR 49138 - Meeting of the Advisory Committee on Reactor Safeguards (ACRS) Subcommittee on Structural AnalysisPDF
83 FR 49117 - Final Flood Hazard DeterminationsPDF
83 FR 49145 - Interest RatesPDF
83 FR 49118 - Minnesota; Major Disaster and Related DeterminationsPDF
83 FR 49115 - Nebraska; Major Disaster and Related DeterminationsPDF
83 FR 49046 - Advance Notice of Proposed Rulemaking; Request for InformationPDF
83 FR 48976 - Endangered and Threatened Wildlife and Plants; Final Rule To List the Chambered Nautilus as Threatened Under the Endangered Species ActPDF
83 FR 49145 - Administrative Declaration Amendment of an Economic Injury Disaster for the State of FloridaPDF
83 FR 48908 - Ownership and Control of Service-Disabled Veteran-Owned Small Business ConcernsPDF
83 FR 49089 - Environmental Impact Statements; Notice of AvailabilityPDF
83 FR 49144 - Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Rename the “Extended Trading Hours” to “Global Trading Hours” in Its Rules and Fees SchedulePDF
83 FR 49143 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Designation of a Longer Period for Commission Action on a Proposed Rule Change To Amend NYSE Rule 104 Governing Transactions by Designated Market MakersPDF
83 FR 49142 - Self-Regulatory Organizations; NYSE Arca, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change Regarding Investments of the REX BKCM ETFPDF
83 FR 49160 - Proposed Agency Information Collection Activities; Comment RequestPDF
83 FR 48918 - Airworthiness Directives; Gulfstream Aerospace Corporation AirplanesPDF
83 FR 49120 - Agency Information Collection Activities; Revision of a Currently Approved Collection: Request for Fee Waiver; ExemptionsPDF
83 FR 49109 - Prospective Grant of an Exclusive Patent License: Development and Commercialization of Cell Therapies for CancerPDF
83 FR 49125 - Tapered Roller Bearings From ChinaPDF
83 FR 48953 - Special Local Regulations for Marine Events; San Francisco Bay Navy Fleet Week Parade of Ships and Blue Angels Demonstration, San Francisco, CAPDF
83 FR 49113 - National Cancer Institute; Notice of Closed MeetingsPDF
83 FR 49111 - National Heart, Lung, and Blood Institute; Notice of Closed MeetingsPDF
83 FR 49040 - Wireline Competition Bureau Seeks Comment on Procedures To Identify and Resolve Location Discrepancies in Eligible Census Blocks Within Winning Bid AreasPDF
83 FR 49112 - National Institute on Aging; Notice of Closed MeetingPDF
83 FR 49031 - Proposed Priorities, Requirements, Definitions, and Performance Measures-Comprehensive Centers Program Catalog of Federal Domestic Assistance (CFDA) Number: 84.283BPDF
83 FR 49119 - Intent To Request Extension From OMB of One Current Public Collection of Information: Generic Clearance for the Collection of Qualitative Feedback on Agency Service DeliveryPDF
83 FR 49181 - Defense Federal Acquisition Regulation Supplement: Repeal of DFARS Clause “Indefinite Quantities-Fixed Charges” (DFARS Case 2018-D039)PDF
83 FR 49180 - Defense Federal Acquisition Regulation Supplement: Repeal of DFARS Clause “Award Fee” (DFARS Case 2018-D037)PDF
83 FR 49179 - Defense Federal Acquisition Regulation Supplement: Repeal of DFARS Clause “Indefinite Quantities-No Fixed Charges” (DFARS Case 2018-D034)PDF
83 FR 49178 - Defense Federal Acquisition Regulation Supplement: Repeal of DFARS Clause “Additional Services” (DFARS Case 2018-D027)PDF
83 FR 48920 - Airworthiness Directives; Airbus SAS AirplanesPDF
83 FR 48930 - Airworthiness Directives; Airbus SAS AirplanesPDF
83 FR 48935 - Airworthiness Directives; Embraer S.A. AirplanesPDF
83 FR 48924 - Airworthiness Directives; Dassault Aviation AirplanesPDF
83 FR 48938 - Airworthiness Directives; BAE Systems (Operations) Limited AirplanesPDF
83 FR 48932 - Airworthiness Directives; Airbus SAS AirplanesPDF
83 FR 49017 - Airworthiness Directives; The Boeing Company AirplanesPDF
83 FR 49020 - Airworthiness Directives; Fokker Services B.V. AirplanesPDF
83 FR 48927 - Airworthiness Directives; The Boeing Company AirplanesPDF
83 FR 48915 - Airworthiness Directives; The Boeing Company AirplanesPDF
83 FR 48990 - Regulatory Capital Treatment for High Volatility Commercial Real Estate (HVCRE) ExposuresPDF
83 FR 49001 - Express Loan Programs; Affiliation StandardsPDF
83 FR 49091 - Public Water System Supervision Program Revision for the State of HawaiiPDF
83 FR 49074 - Submission for OMB Review; Comment RequestPDF
83 FR 49079 - Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) or Superfund, Section 128(a); Notice of Grant Funding Guidance for State and Tribal Response Programs for FY2019PDF
83 FR 49184 - Waste Prevention, Production Subject to Royalties, and Resource Conservation; Rescission or Revision of Certain RequirementsPDF
83 FR 49075 - Submission for OMB Review; Comment RequestPDF
83 FR 49125 - Agency Information Collection Activities; Proposed eCollection eComments Requested; Revision of a Currently Approved Collection: Records Modification Form (FD-1115)PDF

Issue

83 189 Friday, September 28, 2018 Contents Agriculture Agriculture Department See

Food Safety and Inspection Service

See

Forest Service

Army Army Department NOTICES Intent to Grant Exclusive License: U.S. Government-Owned Invention, 49074 2018-21152 Consumer Financial Protection Bureau of Consumer Financial Protection NOTICES Requests for Information: Bureau Data Collections, 49072-49074 2018-21162 Safety Enviromental Enforcement Bureau of Safety and Environmental Enforcement RULES Oil and Gas and Sulphur Operations on the Outer Continental Shelf: Oil and Gas Production Safety Systems, 49216-49263 2018-21197 Centers Medicare Centers for Medicare & Medicaid Services NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 49094-49095 2018-21171 Coast Guard Coast Guard RULES Regulated Navigation Areas: Upper Mississippi River, Sabula Railroad Drawbridge, Mile Marker 535, Sabula, IA, 48954-48957 2018-21135 Special Local Regulations: San Francisco Bay Navy Fleet Week Parade of Ships and Blue Angels Demonstration, San Francisco, CA, 48953-48954 2018-21094 PROPOSED RULES Safety Zones: Annual Fireworks Displays within Sector Columbia River Captain of the Port Zone, 49028-49031 2018-21186 Penn's Landing, Delaware River, Philadelphia, PA; Fireworks Display, 49026-49028 2018-21203 Special Local Regulations: Manasquan Inlet, Manasquan, NJ, 49024-49026 2018-21202 Commerce Commerce Department See

Industry and Security Bureau

See

National Oceanic and Atmospheric Administration

See

National Telecommunications and Information Administration

See

Patent and Trademark Office

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 49062-49063 2018-21168
Committee for Purchase Committee for Purchase From People Who Are Blind or Severely Disabled NOTICES Procurement List; Additions and Deletions, 49070-49072 2018-21182 2018-21183 Comptroller Comptroller of the Currency PROPOSED RULES Regulatory Capital Treatment for High Volatility Commercial Real Estate Exposures, 48990-49001 2018-20875 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 49160-49175 2018-21105 Defense Acquisition Defense Acquisition Regulations System RULES Defense Federal Acquisition Regulation Supplement: Repeal of DFARS Clause Additional Services, 49178-49179 2018-20971 Repeal of DFARS Clause Award Fee, 49180-49181 2018-20973 Repeal of DFARS Clause Indefinite Quantities—Fixed Charges, 49181-49182 2018-20974 Repeal of DFARS Clause Indefinite Quantities—No Fixed Charges, 49179-49180 2018-20972 Defense Department Defense Department See

Army Department

See

Defense Acquisition Regulations System

See

Engineers Corps

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 49074-49075 2018-20671 2018-20777
Drug Drug Enforcement Administration RULES Schedules of Controlled Substances: Placement in Schedule V of Certain FDA-Approved Drugs Containing Cannabidiol; Corresponding Change to Permit Requirements, 48950-48953 2018-21121 Education Department Education Department PROPOSED RULES Proposed Priorities, Requirements, Definitions, and Performance Measures—Comprehensive Centers Program, 49031-49040 2018-21089 Energy Department Energy Department See

Federal Energy Regulatory Commission

Engineers Engineers Corps NOTICES Environmental Impact Statements; Availability, etc.: Chehalis River Basin Flood Damage Reduction Project Proposed by the Chehalis River Basin Flood Control Zone District, Lewis County, WA, 49075-49077 2018-21154 Final Missouri River Recovery Management Plan, 49077 2018-21155 Environmental Protection Environmental Protection Agency NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 49089-49090 2018-21190 Environmental Impact Statements; Availability, etc.: Weekly Receipts, 49089 2018-21111 Grant Funding Guidance: CERCLA; State and Tribal Response Programs for FY2019, 49079-49088 2018-20736 Meetings: National and Governmental Advisory Committees, 49090 2018-21188 Public Water System Supervision Program; Revisions: Hawaii, 49091 2018-20853 Requests for Nominations: Experts to Consider for ad hoc Participation on Federal Insecticide, Fungicide, and Rodenticide Act, Scientific Advisory Panel, 49091-49092 2018-21196 Federal Aviation Federal Aviation Administration RULES Airworthiness Directives: Airbus SAS Airplanes, 48920-48924, 48930-48935 2018-20921 2018-20931 2018-20951 BAE Systems (Operations) Limited Airplanes, 48938-48940 2018-20923 Dassault Aviation Airplanes, 48924-48926 2018-20924 Embraer S.A. Airplanes, 48935-48938 2018-20929 Gulfstream Aerospace Corporation Airplanes, 48918-48920 2018-21103 The Boeing Company Airplanes, 48915-48917, 48927-48930 2018-20917 2018-20918 PROPOSED RULES Airworthiness Directives: Fokker Services B.V. Airplanes, 49020-49022 2018-20919 The Boeing Company Airplanes, 49017-49020 2018-20920 NOTICES Intent of Waiver with Respect to Land: Indianapolis International Airport, Indianapolis, IN, 49157-49158 2018-21216 Meetings: Industry Meeting, 49159-49160 2018-21205 Petitions for Exemptions; Summaries: Wing Aviation, LLC, 49158-49159 2018-21206 Submission Deadlines for Schedule Information: Chicago O'Hare International Airport, John F. Kennedy International Airport, Los Angeles International Airport, Newark Liberty International Airport, and San Francisco International Airport for the Summer 2019 Scheduling Season, 49155-49157 2018-21217 Federal Bureau Federal Bureau of Investigation NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Records Modification Form, 49125-49126 2018-20353 Federal Communications Federal Communications Commission RULES Nonsubstantive, Editorial Revisions of Rules and Regulations to Correct Authority Citations, 48962-48964 2018-21198 PROPOSED RULES Requests for Comments: Procedures to Identify and Resolve Location Discrepancies in Eligible Census Blocks within Winning Bid Areas, 49040-49046 2018-21091 Federal Deposit Federal Deposit Insurance Corporation PROPOSED RULES Regulatory Capital Treatment for High Volatility Commercial Real Estate Exposures, 48990-49001 2018-20875 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 49160-49175 2018-21105 Federal Emergency Federal Emergency Management Agency NOTICES Flood Hazard Determinations, 49117-49119 2018-21119 2018-21123 Flood Hazard Determinations; Changes, 49115-49117 2018-21122 Major Disaster and Related Determinations: Minnesota, 49118 2018-21117 Nebraska, 49115 2018-21116 Federal Energy Federal Energy Regulatory Commission NOTICES Combined Filings, 49077-49079 2018-21127 2018-21128 Complaints: Owensboro Municipal Utilities v. Louisville Gas and Electric Co. and Kentucky Utilities Co., 49077 2018-21129 Federal Motor Federal Motor Carrier Safety Administration RULES Military Licensing and State Commercial Driver's License Reciprocity, 48964-48976 2018-21289 Federal Reserve Federal Reserve System PROPOSED RULES Regulatory Capital Treatment for High Volatility Commercial Real Estate Exposures, 48990-49001 2018-20875 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 49092-49094, 49160-49175 2018-21105 2018-21126 Fish Fish and Wildlife Service NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Federal Subsistence Regulations and Associated Forms, 49121-49123 2018-21160 Food and Drug Food and Drug Administration RULES New Animal Drugs: Approval of New Animal Drug Applications; Withdrawal of Approval of New Animal Drug Applications; Changes of Sponsorship; Change of a Sponsor's Name, 48940-48950 2018-21146 Withdrawal of Approval of New Animal Drug Applications, 48950 2018-21147 PROPOSED RULES Label Requirement for Food that has been Refused Admission into the United States; Withdrawal, 49022-49023 2018-21145 Use of Materials Derived from Cattle in Medical Products Intended for Use in Humans and Drugs Intended for Use in Ruminants; Reporting Information Regarding Falsification of Data; Withdrawal, 49023-49024 2018-21133 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 49107-49108 2018-21209 Agency Information Collection Activities; Proposals, Submissions, and Approvals: Early Food Safety Evaluation of New Non-Pesticidal Proteins Produced by New Plant Varieties Intended for Food Use, 49108-49109 2018-21148 Debarment Orders: John D. McCoy, 49099-49101 2018-21211 Richard M. Fleming, 49095-49097 2018-21210 Food Labeling: Use of the Names of Dairy Foods in the Labeling of Plant-Based Products, 49103-49107 2018-21200 Guidance: The Special 510(k) Program, 49097-49099 2018-21141 Meetings: Vaccines and Related Biological Products Advisory Committee, 49101-49102 2018-21137 New Drug Applications: GlaxoSmithKline, LLC, et al.; Withdrawal of Approval of 24 Abbreviated New Drug Applications, 49102-49103 2018-21199 Food Safety Food Safety and Inspection Service NOTICES Petition to Permit Waivers of Maximum Line Speeds: Young Chicken Establishments Operating under the New Poultry Inspection System; Criteria for Consideration of Waiver Requests for Young Chicken Establishments to Operate at Line Speeds of up to 175 Birds Per Minute, 49048-49060 2018-21143 Forest Forest Service NOTICES Boundary Establishment: Black Butte National Wild and Scenic River, including Portions of Cold Creek, Mendocino National Forest, Mendocino County, CA, 49062 2018-21163 Environmental Impact Statements; Availability, etc.: Chugach National Forest; AK; Proposed Amendment to the Chugach National Forest Land and Resource Management Plan, Applying Only to the Sterling Highway Milepost 45-60 Project, 49060-49062 2018-21153 Proposed East Smoky Panel Mine Project at Smoky Canyon Mine, Caribou County, ID, 49123-49124 2018-21204 Health and Human Health and Human Services Department See

Centers for Medicare & Medicaid Services

See

Food and Drug Administration

See

National Institutes of Health

Homeland Homeland Security Department See

Coast Guard

See

Federal Emergency Management Agency

See

Transportation Security Administration

See

U.S. Citizenship and Immigration Services

Industry Industry and Security Bureau NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Procedures for Submitting Request for Exclusions from the Section 232 National Security Adjustments of Imports of Steel and Aluminum, 49064 2018-21166 Procedures for Submitting Requests for Objections from the Section 232 National Security Adjustments of Imports of Steel and Aluminum, 49063 2018-21167 Interior Interior Department See

Bureau of Safety and Environmental Enforcement

See

Fish and Wildlife Service

See

Land Management Bureau

International Trade Com International Trade Commission NOTICES Investigations; Determinations, Modifications, and Rulings, etc.: Steel Trailer Wheels from China, 49124-49125 2018-21130 Tapered Roller Bearings from China, 49125 2018-21095 Justice Department Justice Department See

Drug Enforcement Administration

See

Federal Bureau of Investigation

Labor Department Labor Department See

Occupational Safety and Health Administration

Land Land Management Bureau RULES Minerals Management: Adjustment of Cost Recovery Fees, 48957-48961 2018-21298 Waste Prevention, Production Subject to Royalties, and Resource Conservation; Rescission or Revision of Certain Requirements, 49184-49214 2018-20689 NOTICES Environmental Impact Statements; Availability, etc.: Proposed East Smoky Panel Mine Project at Smoky Canyon Mine, Caribou County, ID, 49123-49124 2018-21204 NASA National Aeronautics and Space Administration NOTICES Meetings: Heliophysics Advisory Committee, 49130-49131 2018-21201 National Credit National Credit Union Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 49131 2018-21157 National Institute National Institutes of Health NOTICES Meetings: Center for Scientific Review, 49113-49114 2018-21176 2018-21177 National Cancer Institute, 49113 2018-21093 National Heart, Lung, and Blood Institute, 49111-49112 2018-21092 National Human Genome Research Institute, 49112 2018-21175 National Institute of Neurological Disorders and Stroke, 49111 2018-21173 National Institute on Aging, 49112 2018-21090 National Institute on Deafness and Other Communication Disorders, 49114-49115 2018-21174 Prospective Grant of an Exclusive Patent License: Development and Commercialization of Cell Therapies for Cancer, 49109-49111 2018-21096 Senior Executive Service 2018 Performance Review Board, 49112 2018-21169 National Oceanic National Oceanic and Atmospheric Administration RULES Endangered and Threatened Species: List the Chambered Nautilus as Threatened under the Endangered Species Act, 48976-48985 2018-21114 Fisheries of the Northeastern United States: Northeast Skate Complex; Framework Adjustment 5 and 2018-2019 Specifications, 48985-48989 2018-21192 PROPOSED RULES Atlantic Large Whale Take Reduction Plan Massachusetts Trap/Pot Restricted Area and the Great South Channel Trap/Pot Restricted Area, 49046-49047 2018-21115 NOTICES Exempted Fishing Permit; Applications: General Provisions for Domestic Fisheries, 49065-49066 2018-21164 Meetings: South Atlantic Fishery Management Council, 49064-49067 2018-21172 2018-21178 2018-21179 Western Pacific Fishery Management Council, 49066 2018-21180 National Science National Science Foundation NOTICES Permit Modifications Received under Antarctic Conservation Act, 49132 2018-21125 Permits Issued under the Antarctic Conservation Act, 49132 2018-21124 National Telecommunications National Telecommunications and Information Administration NOTICES Meetings: BroadbandUSA Webinar Series, 49067 2018-21151 Nuclear Regulatory Nuclear Regulatory Commission RULES Discontinuance of Certain Commission Regulatory Authority within the State; Wyoming, 48905-48908 2018-21229 NOTICES Meetings: Advisory Committee on Reactor Safeguards Subcommittee on Structural Analysis, 49138-49139 2018-21120 Standard Review Plan for the Review of Safety Analysis Reports for Nuclear Power Plants: LWR Edition; Standard Review Plan—Section Revision, 49132-49138 2018-21140 Standard Review Plan Section 2.5.3, Surface Deformation, 49139-49141 2018-21165 Occupational Safety Health Adm Occupational Safety and Health Administration NOTICES Grant of Expansion of Recognition and Modification to the Nationally Recognized Testing Laboratory Program's List of Appropriate Test Standards: FM Approvals, LLC, 49126-49128 2018-21159 Nationally Recognized Testing Laboratories: Underwriters Laboratories, Inc.; Grant of Expansion of Recognition and Modification to the Program's List of Appropriate Test Standards, 49128-49130 2018-21158 Patent Patent and Trademark Office NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Fee Deficiency Submissions, 49069-49070 2018-21213 International Work Sharing, 49067-49069 2018-21215 Patent Reexamination and Supplemental Examinations, 49069 2018-21212 Post Patent Public Submissions, 49070 2018-21214 Postal Regulatory Postal Regulatory Commission NOTICES Public Inquiry on Service Performance Measurement Systems, 49141 2018-21136 Securities Securities and Exchange Commission NOTICES Self-Regulatory Organizations; Proposed Rule Changes: Cboe Exchange, Inc., 49144-49145 2018-21110 New York Stock Exchange, LLC, 49143-49144 2018-21108 NYSE Arca, Inc., 49142-49143 2018-21107 Small Business Small Business Administration RULES Ownership and Control of Service-Disabled Veteran-Owned Small Business Concerns, 48908-48915 2018-21112 PROPOSED RULES Express Loan Programs; Affiliation Standards, 49001-49017 2018-20869 NOTICES Disaster Declarations: Florida; Declaration of Economic Injury, Amendment 1, 49145 2018-21113 Interest Rates, 49145 2018-21118 State Department State Department NOTICES Determinations under Department of State, Foreign Operations, and Related Programs Appropriations Act: Government of Egypt, 49145-49146 2018-21187 Waiver of Requirement, 49146 2018-21189 Meetings: International Telecommunication Advisory Committee; Preparations for Upcoming International Telecommunications Meetings, 49146 2018-21170 Surface Transportation Surface Transportation Board NOTICES Acquisition Exemptions: San Pedro Valley Holdings, LLC; San Pedro and Southwestern Railroad Co. in Cochise County, AZ, 49152-49153 2018-21185 Acquisitions of Control: National Express, LLC; Wise Coaches, Inc., 49146-49148 2018-21142 Adverse Abandonments: New York State Department of Environmental Conservation; Saratoga and North Creek Railway in Town of Johnsburg, NY, 49151-49152 2018-21161 Agency Information Collection Activities; Proposals, Submissions, and Approvals: Rail Carrier Financial Reports, 49149-49151 2018-21138 Continuances in Control Exemptions: Gregory B. Cundiff, Connie Cundiff, CGX, Inc. and Ironhorse Resources, Inc.; San Pedro Valley Holdings, LLC and San Pedro Valley Railroad, LLC in Cochise County, AZ, 49151 2018-21184 Operation Exemptions: San Pedro Valley Railroad, LLC; San Pedro Valley Holdings, LLC in Cochise County, AZ, 49148-49149 2018-21181 Trade Representative Trade Representative, Office of United States NOTICES China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 49153-49155 2018-21303 Transportation Department Transportation Department See

Federal Aviation Administration

See

Federal Motor Carrier Safety Administration

Security Transportation Security Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Generic Clearance for the Collection of Qualitative Feedback on Agency Service Delivery, 49119-49120 2018-21011 Treasury Treasury Department See

Comptroller of the Currency

U.S. Citizenship U.S. Citizenship and Immigration Services NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Request for Fee Waiver; Exemptions, 49120-49121 2018-21101 Separate Parts In This Issue Part II Defense Department, Defense Acquisition Regulations System, 49178-49182 2018-20971 2018-20973 2018-20974 2018-20972 Part III Interior Department, Land Management Bureau, 49184-49214 2018-20689 Part IV Interior Department, Bureau of Safety and Environmental Enforcement, 49216-49263 2018-21197 Reader Aids

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83 189 Friday, September 28, 2018 Rules and Regulations NUCLEAR REGULATORY COMMISSION 10 CFR Part 150 [NRC-2018-0104] State of Wyoming: Discontinuance of Certain Commission Regulatory Authority Within the State; Notice of Agreement Between the NRC and the State of Wyoming AGENCY:

Nuclear Regulatory Commission.

ACTION:

Final State agreement.

SUMMARY:

This document is announcing that on September 25, 2018, Kristine L. Svinicki, Chairman of the U.S. Nuclear Regulatory Commission (NRC or Commission), and Governor Matthew H. Mead of the State of Wyoming, signed an Agreement as authorized by Section 274b. of the Atomic Energy Act of 1954, as amended (the Act). Under the Agreement the Commission discontinues its regulatory authority, and the State of Wyoming assumes regulatory authority over the management and disposal of byproduct material as defined in Section 11e.(2) of the Act and a subcategory of source material or ores involved in extraction or concentration of uranium or thorium milling in the State. As of the effective date of the Agreement, a person in Wyoming possessing these materials is exempt from certain Commission regulations. The exemptions have been previously published in the Federal Register (FR) and are codified in the Commission's regulations. The Agreement is published here as required by Section 274e. of the Act.

DATES:

The effective date of the Agreement is September 30, 2018.

ADDRESSES:

Please refer to Docket ID NRC-2018-0104 when contacting the NRC about the availability of information regarding this document. You may obtain publicly-available information related to this document using any of the following methods:

Federal Rulemaking Website: Go to http://www.regulations.gov and search for Docket ID NRC-2018-0104. Address questions about dockets in Regulations.gov to Jennifer Borges; telephone: 301-287-9127; email: [email protected] For technical questions, contact the individual listed in the FOR FURTHER INFORMATION CONTACT section of this document.

NRC's Agencywide Documents Access and Management System (ADAMS): You may obtain publicly available documents online in the ADAMS Public Document collection at http://www.nrc.gov/reading-rm/adams.html. To begin the search, select “Begin Web-based ADAMS Search”. For problems with ADAMS, contact the NRC's PDR reference staff at 1-800-397-4209, 301-415-4737, or by email to [email protected] The ADAMS Accession numbers for the request for an Agreement by the Governor of Wyoming, including all information and documentation submitted in support of the request, and the NRC staff assessment are: ML16300A294, ML17319A921, ML18094B074, and ML18192B111 (includes final staff assessment).

NRC's Public Document Room (PDR): The public may examine and purchase copies of public documents at the NRC's PDR, Room O1 F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852.

FOR FURTHER INFORMATION CONTACT:

Stephen Poy, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-7135; e-mail: [email protected]

SUPPLEMENTARY INFORMATION:

The NRC published the proposed Agreement in the Federal Register for comment once each week for 4 consecutive weeks on June 26, 2018 (83 FR 29828), July 3, 2018 (83 FR 31174), July 10, 2018 (83 FR 31981), and July 17, 2018 (83 FR 33257), as required by the Act. The comment period ended on July 26, 2018. The Commission received 11 comment letters and responses—two supporting the Agreement, three opposing the Agreement, and the remaining not stating an opinion or providing statements related to the proposed Agreement. The comments did not alter the NRC staff's finding that the Wyoming Agreement State program is adequate to protect public health and safety and compatible with the NRC's program. The Wyoming Agreement is consistent with Commission policy and thus meets the criteria for an Agreement with the Commission.

After considering the request for an Agreement by the Governor of Wyoming, the supporting documentation submitted with the request for an Agreement, and its interactions with the staff of the Wyoming Department of Environmental Quality, the NRC staff completed an assessment of the Wyoming program. The agency made a copy of the staff assessment available in the NRC's Public Document Room (PDR) and electronically on the NRC's Web site. Based on the staff's assessment, the Commission determined on September 10, 2018, that the Wyoming program for control of radiation hazards is adequate to protect public health and safety and compatible with the Commission's program. This Agreement is a rule as defined in the Congressional Review Act (5 U.S.C. 801-808). However, the Office of Management and Budget has not found it to be a major rule as defined in the Congressional Review Act.

Dated at Rockville, Maryland, this 25th day of September, 2018.

For the Nuclear Regulatory Commission.

Annette L. Vietti-Cook, Secretary of the Commission.
ATTACHMENT AN AGREEMENT BETWEEN THE UNITED STATES NUCLEAR REGULATORY COMMISSION AND THE STATE OF WYOMING FOR THE DISCONTINUANCE OF CERTAIN COMMISSION REGULATORY AUTHORITY AND RESPONSIBILITY WITHIN THE STATE PURSUANT TO SECTION 274 OF THE ATOMIC ENERGY ACT OF 1954, AS AMENDED

WHEREAS, The United States Nuclear Regulatory Commission (hereinafter referred to as “the Commission”) is authorized under Section 274 of the Atomic Energy Act of 1954, as amended, 42 U.S.C. Section 2011 et seq. (hereinafter referred to as “the Act”), to enter into agreements with the Governor of any State providing for discontinuance of the regulatory authority of the Commission within the State under Chapters 6, 7, and 8, and Section 161 of the Act with respect to byproduct material as defined in Section 11e.(2) of the Act and source material involved in the extraction or concentration of uranium or thorium in source material or ores at milling facilities; and,

WHEREAS, The Governor of the State of Wyoming is authorized under Wyoming Statute Section 35-11-2001 to enter into this Agreement with the Commission; and,

WHEREAS, The Governor of the State of Wyoming certified on November 14, 2017, that the State of Wyoming (hereinafter referred to as “the State”) has a program for the control of radiation hazards adequate to protect public health and safety with respect to the materials within the State covered by this Agreement and that the State desires to assume regulatory responsibility for such materials; and,

WHEREAS, The Commission found on September 10, 2018, that the program of the State for the regulation of the materials covered by this Agreement is compatible with the Commission's program for the regulation of such materials and is adequate to protect public health and safety; and,

WHEREAS, The State and the Commission recognize the desirability and importance of cooperation between the Commission and the State in the formulation of standards for protection against hazards of radiation and in assuring that State and Commission programs for protection against hazards of radiation will be coordinated and compatible; and,

WHEREAS, The Commission and the State recognize the desirability of the reciprocal recognition of licenses, and of the granting of limited exemptions from licensing of those materials subject to this Agreement; and,

WHEREAS, This Agreement is entered into pursuant to the Act;

NOW, THEREFORE, It is hereby agreed between the Commission and the Governor of the State of Wyoming acting on behalf of the State as follows:

ARTICLE I

Subject to the exceptions provided in Articles II, IV, and V, the Commission shall discontinue, as of the effective date of this Agreement, the regulatory authority of the Commission in the State under Chapters, 7, and 8, and Section 161 of the Act with respect to the following materials:

A. Byproduct material as defined in Section 11e.(2) of the Act; and, B. Source material involved in the extraction or concentration of uranium or thorium in source material or ores at uranium or thorium milling facilities (hereinafter referred to as “source material associated with milling activities”). ARTICLE II A. This Agreement does not provide for the discontinuance of any authority, and the Commission shall retain authority and responsibility, with respect to: 1. Byproduct material as defined in Section 11e.(1) of the Act; 2. Byproduct material as defined in Section 11e.(3) of the Act; 3. Byproduct material as defined in Section 11e.(4) of the Act; 4. Source material except for source material as defined in Article I.B. of this Agreement; 5. Special nuclear material; 6. The regulation of the land disposal of byproduct, source, or special nuclear material received from other persons, excluding 11e.(2) byproduct material or source material described in Article I.A. and B. of this Agreement; 7. The evaluation of radiation safety information on sealed sources or devices containing byproduct, source, or special nuclear material and the registration of the sealed sources or devices for distribution, as provided for in regulations or orders of the Commission; 8. The regulation of the construction and operation of any production or utilization facility or any uranium enrichment facility; 9. The regulation of the export from or import into the United States of byproduct, source, or special nuclear material, or of any production or utilization facility; 10. The regulation of the disposal into the ocean or sea of byproduct, source, or special nuclear material waste as defined in the regulations or orders of the Commission; 11. The regulation of the disposal of such other byproduct, source, or special nuclear material as the Commission from time to time determines by regulation or order should, because of the hazards or potential hazards thereof, not to be so disposed without a license from the Commission; 12. The regulation of activities not exempt from Commission regulation as stated in 10 CFR part 150; 13. The regulation of laboratory facilities that are not located at facilities licensed under the authority relinquished under Article I.A. and B. of this Agreement; and, 14. Notwithstanding this Agreement, the Commission shall retain regulatory authority over the American Nuclear Corporation license (License No. SUA-667; Docket No. 040-04492). B. Notwithstanding this Agreement, the Commission retains the following authorities pertaining to byproduct material as defined in Section 11e.(2) of the Act: 1. Prior to the termination of a State license for such byproduct material, or for any activity that results in the production of such material, the Commission shall have made a determination that all applicable standards and requirements pertaining to such material have been met. 2. The Commission reserves the authority to establish minimum standards governing reclamation, long-term surveillance or maintenance, and ownership of such byproduct material and of land used as its disposal site for such material. Such reserved authority includes: a. The authority to establish terms and conditions as the Commission determines necessary to assure that, prior to termination of any license for such byproduct material, or for any activity that results in the production of such material, the licensee shall comply with decontamination, decommissioning, and reclamation standards prescribed by the Commission and with ownership requirements for such material and its disposal site; b. The authority to require that prior to termination of any license for such byproduct material or for any activity that results in the production of such material, title to such byproduct material and its disposal site be transferred to the United States or the State at the option of the State (provided such option is exercised prior to termination of the license); d. The authority to permit use of the surface or subsurface estates, or both, of the land transferred to the United States or a State pursuant to paragraph 2.b. in this section in a manner consistent with the provisions of the Uranium Mill Tailings Radiation Control Act of 1978, provided that the Commission determines that such use would not endanger public health, safety, welfare, or the environment; e. The authority to require, in the case of a license for any activity that produces such byproduct material (which license was in effect on November 8, 1981), transfer of land and material pursuant to paragraph 2.b. in this section taking into consideration the status of such material and land and interests therein and the ability of the licensee to transfer title and custody thereof to the United States or a State; f. The authority to require the Secretary of the United States Department of Energy, other Federal agency, or State, whichever has custody of such byproduct material and its disposal site, to undertake such monitoring, maintenance, and emergency measures as are necessary to protect public health and safety and other actions as the Commission deems necessary; and, g. The authority to enter into arrangements as may be appropriate to assure Federal long-term surveillance or maintenance of such byproduct material and its disposal site on land held in trust by the United States for any Indian Tribe or land owned by an Indian Tribe and subject to a restriction against alienation imposed by the United States. 3. The Commission retains the authority to reject any State request to terminate a license that proposes to bifurcate the ownership of 11e.(2) byproduct material and its disposal site between the State and the Federal government. Upon passage of a revised Wyoming Statute Section 35-11-2004(c) that the NRC finds compatible with Section 83b.(1)(A) of the Act, this paragraph expires and is no longer part of this Agreement. ARTICLE III With the exception of those activities identified in Article II, A.8 through A.11, this Agreement may be amended, upon application by the State and approval by the Commission to include one or more of the additional activities specified in Article II, A.1 through A.7, whereby the State may then exert regulatory authority and responsibility with respect to those activities. ARTICLE IV Notwithstanding this Agreement, the Commission may from time to time by rule, regulation, or order, require that the manufacturer, processor, or producer of any equipment, device, commodity, or other product containing source, byproduct, or special nuclear material shall not transfer possession or control of such product except pursuant to a license or an exemption for licensing issued by the Commission. ARTICLE V This Agreement shall not affect the authority of the Commission under Subsection 161b. or 161i. of the Act to issue rules, regulations, or orders to protect the common defense and security, to protect restricted data, or to guard against the loss or diversion of special nuclear material. ARTICLE VI The Commission will cooperate with the State and other Agreement States in the formulation of standards and regulatory programs of the State and the Commission for protection against hazards of radiation and to assure that Commission and State programs for protection against hazards of radiation will be coordinated and compatible. The State agrees to cooperate with the Commission and other Agreement States in the formulation of standards and regulatory programs of the State and the Commission for protection against hazards of radiation and to assure that the State's program will continue to be compatible with the program of the Commission for the regulation of materials covered by this Agreement.

The State and the Commission agree to keep each other informed of proposed changes in their respective rules and regulations and to provide each other the opportunity for early and substantive contribution to the proposed changes. The State and the Commission agree to keep each other informed of events, accidents, and licensee performance that may have generic implication or otherwise be of regulatory interest.

ARTICLE VII The Commission and the State agree that it is desirable to provide reciprocal recognition of licenses for the materials listed in Article I licensed by the other party or by any other Agreement State. Accordingly, the Commission and the State agree to develop appropriate rules, regulations, and procedures by which reciprocity will be accorded. ARTICLE VIII A. The Commission, upon its own initiative after reasonable notice and opportunity for hearing to the State or upon request of the Governor of the State, may terminate or suspend all or part of this Agreement and reassert the licensing and regulatory authority vested in it under the Act if the Commission finds that (1) such termination or suspension is required to protect public health and safety, or (2) the State has not complied with one or more of the requirements of Section 274 of the Act. 1. This Agreement will terminate without further NRC action if the State does not amend Wyoming Statute Section 35-11-2004(c) to be compatible with Section 83b.(1)(A) of the Act by the end of the 2019 Wyoming legislative session. Upon passage of a revised Wyoming Statute Section 35-11-2004(c) that the NRC finds compatible with Section 83b.(1)(A) of the Act, this paragraph expires and is no longer part of the Agreement. B. The Commission may also, pursuant to Section 274j. of the Act, temporarily suspend all or part of this Agreement if, in the judgment of the Commission, an emergency situation exists requiring immediate action to protect public health and safety and the State has failed to take necessary steps. The Commission shall periodically review actions taken by the State under this Agreement to ensure compliance with Section 274 of the Act, which requires a State program to be adequate to protect public health and safety with respect to the materials covered by this Agreement and to be compatible with the Commission's program. ARTICLE IX In the licensing and regulation of byproduct material as defined in Section 11e.(2) of the Act, or of any activity that results in production of such material, the State shall comply with the provisions of Section 274o. of the Act, if in such licensing and regulation, the State requires financial surety arrangements for reclamation or long-term surveillance and maintenance of such material. A. The total amount of funds the State collects for such purposes shall be transferred to the United States if custody of such material and its disposal site is transferred to the United States upon termination of the State license for such material or any activity that results in the production of such material. Such funds include, but are not limited to, sums collected for long-term surveillance or maintenance. Such funds do not, however, include monies held as surety where no default has occurred and the reclamation or other bonded activity has been performed; and, B. Such surety or other financial requirements must be sufficient to ensure compliance with those standards established by the Commission pertaining to bonds, sureties, and financial arrangements to ensure adequate reclamation and long-term management of such byproduct material and its disposal site. ARTICLE X This Agreement shall become effective on September 30, 2018, and shall remain in effect unless and until such time as it is terminated pursuant to Article VIII. Done at Cheyenne, Wyoming, in triplicate, this 25th day of September, 2018. FOR THE UNITED STATES NUCLEAR REGULATORY COMMISSION. /RA/ Kristine L. Svinicki, Chairman FOR THE STATE OF WYOMING. /RA/ Matthew H. Mead, Governor
[FR Doc. 2018-21229 Filed 9-27-18; 8:45 am] BILLING CODE 7590-01-P
SMALL BUSINESS ADMINISTRATION 13 CFR Part 125 RIN 3245-AG85 Ownership and Control of Service-Disabled Veteran-Owned Small Business Concerns AGENCY:

U.S. Small Business Administration.

ACTION:

Final rule.

SUMMARY:

The U.S. Small Business Administration (SBA or Agency) is amending its regulations to implement provisions of the National Defense Authorization Act for Fiscal Year 2017 (NDAA 2017). The NDAA 2017 placed the responsibility for issuing regulations relating to ownership and control for the Department of Veterans Affairs verification of Veteran-Owned (VO) and Service-Disabled Veteran-Owned (SDVO) Small Business Concerns (SBCs) with the SBA. Pursuant to NDAA 2017, SBA issues one definition of ownership and control for these concerns, which applies to the Department of Veterans Affairs in its verification and Vets First Contracting Program procurements, and all other government acquisitions which require self-certification. The legislation also provided that in certain circumstances a firm can qualify as VO or SDVO when there is a surviving spouse or an employee stock ownership plan (ESOP).

DATES:

This rule is effective October 1, 2018.

FOR FURTHER INFORMATION CONTACT:

Brenda Fernandez, Office of Policy, Planning and Liaison, 409 Third Street SW, Washington, DC 20416; (202) 205-7337; [email protected].

SUPPLEMENTARY INFORMATION: Introduction

The Vets First Contracting Program within the Department of Veterans Affairs (VA) was created under the Veterans Benefits, Health Care, and Information Technology Act of 2006 (Pub. L. 109-461), 38 U.S.C. 501, 513. This contracting program was created for Veteran-Owned Small Businesses and expanded the Service-Disabled Veteran-Owned contracting program for VA procurements. Approved firms are eligible to participate in Veteran-Owned Small Business (VOSB) and Service-Disabled Veteran-Owned Small Business (SDVOSB) set-asides issued by VA. More information regarding the Vets First Contracting Program can be found on the Department of Veterans Affairs website at https://www.va.gov/osdbu/faqs/109461.asp.

This rule complies with the directive in the National Defense Authorization Act of 2017 (Pub. L. 114-328), section 1832, to standardize definitions for VOSBs and SDVOSBs between VA and SBA. As required by section 1832, the Secretary of Veterans Affairs will use SBA's regulations to determine ownership and control of VOSBs and SDVOSBs. The Secretary would continue to determine whether individuals are veterans or service-disabled veterans and would be responsible for verification of applicant firms. Challenges to the status of a VOSB or SDVOSB based upon issues of ownership or control would be decided by the administrative judges at the SBA's Office of Hearings and Appeals (OHA).

The VA proposed its companion rule, VA Veteran-Owned Small Business (VOSB) Verification Guidelines (RIN 2900-AP97) on January 10, 2018 (83 FR 1203)(Docket Number: VA-2018-VACO-0004). Their proposed rule sought to remove all references related to ownership and control and to add and clarify certain terms and references that are currently part of the verification process. The NDAA also provides that in certain circumstances a firm can qualify as VOSB or Service-Disabled Veteran Owned Small Business (SDVOSB) when there is a surviving spouse or an employee stock ownership plan (ESOP). The final VA rule was issued on September 24, 2018 and is effective October 1, 2018. 83 FR 48221.

Similarly, SBA has finalized another related rule on March 30, 2018. SBA Final Rule: Rules of Practice for Protests and Appeals Regarding Eligibility for Inclusion in the U.S. Department of Veterans Affairs Center for Verification and Evaluation Database (83 FR 13626; RIN: 3245-AG87; Docket Number: SBA-2017-0007). This rule, also effective October 1, 2018, amends the rules of practice of SBA's Office of Hearings and Appeals (OHA) to implement procedures for protests of eligibility for inclusion in the Department of Veterans Affairs (VA) Center for Verification and Evaluation (CVE) database, and procedures for appeals of denials and cancellations of inclusion in the CVE database. OHA added two subparts to 13 CFR part 134: one for protests; the other for appeals. These amendments are issued in accordance with sections 1832 and 1833 of the National Defense Authorization Act for Fiscal Year 2017 (NDAA 2017).

SBA proposed this rule on January 29, 2018 (83 FR 4005; Docket Number: SBA-2018-0001). Sixty-eight comments were received, not all of which were germane to the rulemaking.

SBA received several comments related to this rulemaking as a whole. Two comments were supportive of the rule because the rule would align SBA's and VA's regulations, and would help to define elements previously addressed only outside the regulations through OHA decisions or case-by-case determinations. Six commenters opposed the proposed rule for addressing issues beyond just standardizing SBA's and VA's definitions. As explained in the section-by-section analysis, this rule codifies standards and practices that SBA has applied consistently through determinations and OHA decisions. SBA believes it benefits VOSB and SDVOSBs to have these standards and practices reflected in the regulations.

One commenter stated that SBA and VA should jointly issue regulations. SBA has consulted with VA in order to properly understand VA's positions and implement the statutory requirements in a way that is consistent with both SBA's and VA's interpretations. SBA and VA will each issue regulations effective on October 1, 2018, which will have the effect of creating a single ownership and control rule for both agencies.

Section-by-Section Analysis, Comments, and SBA's Responses Section 125.11

In response to the NDAA 2017 changes, SBA proposed to amend the definitions in §  125.11 by incorporating language from VA's regulations and also from SBA's 8(a) Business Development (BD) program regulations. 13 CFR part 124, subpart A. SBA is defining a surviving spouse and the requirements for a surviving spouse-owned SDVO SBC to maintain program eligibility. Further, SBA is adding definitions for Daily Business Operations, Negative Control, Participant, and Unconditional Ownership. The added definitions are being adopted from SBA's 8(a) BD regulations found in part 124. SBA received two comments on the proposed definition of “Daily business operations.” One comment advised that “setting of the strategic direction of the firm” is better categorized as long-term operations. SBA agrees and has deleted the reference to “setting of the strategic direction of the firm” from the definition of “daily business operations.” A second comment objected to the inclusion of executive oversight, company policy, and strategic direction. SBA's deletion of strategic direction addresses this comment because, although the definition includes executive supervision and policy implementation, the definition does not address oversight or the creation of policy.

SBA received one comment on the “unconditional ownership” definition stating that it should be subject to the same conditions as extraordinary circumstances. SBA does not see a reason to conflate ownership and control requirements, and therefore is not changing the “unconditional ownership” definition.

SBA is adding a definition for Employee Stock Ownership Plan (ESOP). This definition is adopted from section 1832(a)(6). SBA is also replacing the definitions of permanent caregiver, service-disabled veteran, and surviving spouse. SBA is adding a new definition for service-disabled veteran with a permanent and severe disability. These definitions are being updated in consultation with VA in an effort to ensure consistency across programs at both Agencies. SBA is also adding a definition for small business concerns. Concerns will need to meet all the requirements of part 121, including §  121.105(a)(1), which requires that the firm be organized for profit, “with a place of business located in the United States, and which operates primarily within the United States or which makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor.” This definition will address how to generally determine the size of a concern. VO and SDVO SBCs will still be required to meet size standards corresponding to the NAICS code assigned to each contract pursuant to §§  125.14 and 125.15. SBA did not receive any comments on these definitions.

SBA proposed to add a definition for “extraordinary circumstances” under which a service disabled veteran owner would not have full control over a firm's decision-making process, but would not render the firm ineligible as a firm owned and controlled by one or more service disabled veterans. This definition will be used to identify discrete circumstances that SBA views as rare. The new definition will be used to allow minority equity holders to have negative control over these enumerated instances. SBA listed five limited circumstances in which a service-disabled veteran owner will not have full control over the decision making process. These five circumstances are exclusive, and SBA will not recognize any other facts or circumstances that would allow negative control by individuals that are not service-disabled. SBA received four comments on the definition for “extraordinary circumstances.” One comment was supportive, and three comments suggested that SBA either eliminate the list, or add more protection for non-service-disabled-veteran owners. One commenter cited two SBA Office and Hearing Appeals size decisions to argue that the new rule is more restrictive than SBA's affiliation regulations. Upon reviewing those two cases, Size Appeal of EA Engineering, Science and Technology, Inc., SBA No. SIZ-4973 (2008), and Size Appeal of Carntribe-Clement 8AJV #1, LLC, SBA No. SIZ-5357 (2012), SBA does not agree that they govern the matter of control of an SDVO SBC by a service-disabled veteran. In Firewatch Contracting of Florida, LLC, SBA No. VET-137 (2008), OHA specifically stated that EA Engineering does not interpret the SDVO SBC regulations. The “extraordinary circumstances” definition already includes both of the powers addressed in Carntribe-Clement, adding a new stakeholder and dissolution. Other cases involving the SDVO SBC regulations, including Apex Ventures, LLC, VET-219 (2011), show that SBA's current regulation requiring that the service-disabled veteran control “all” decisions is stricter than the proposed definition. SBA believes that current definition strikes a clear balance in favor of ensuring that SDVO SBCs are actually controlled by the service-disabled veteran. SBA has decided not to change the definition of “extraordinary circumstances.”

Section 125.12

SBA proposed to amend §  125.12(b), which pertains to the requirement for ownership of a partnership. SBA's prior regulation required service-disabled veterans to own at least 51% of each type of partnership interest. Therefore, if a partnership had general partners and limited partners it was required that the service disabled veteran be both a general and limited partner. SBA is changing the requirement so that service-disabled veterans will need to own at least 51% of the aggregate voting interest in the partnership. SBA received one comment on this change that stated that the proposed rule was inconsistent with the treatment of corporations. SBA does not find that the treatment of partnership and corporations must be identical, and therefore SBA is adopting § 125.12(b) as proposed.

SBA proposed to add coverage to §  125.12(d) to address statutory language with regard to public companies and ownership. This language does not include any equity held by an ESOP when determining ownership for a publicly owned business. SBA did not receive any comments on this change.

SBA proposed to add a new §  125.12(g) to provide clarity with regard to requirements for dividends and distributions. In general, one's right to receive benefits, compensation, and the ultimate value of one's equity should be consistent with the purported amount of equity. For example, it is not consistent with SBA's regulations for a firm to state that a service-disabled veteran owns 60 percent of the equity but records show that he or she is entitled only to a smaller amount of the firm's profit, or that the residual value of that equity is less than 60 percent if the firm is sold. SBA received two comments on § 125.12(g). One commenter argued that this new rule would be inconsistent with SBA's regulations for joint ventures which require profit distribution based on workshare. SBA does not find that the SDVO SBC regulation needs to be consistent with the joint venture regulations, which address an entirely different situation. A joint venture is not itself an SDVO SBC and is therefore treated differently. SBA does not see a benefit of treating joint ventures and SDVO SBCs as if they were the same. One commenter indicated that requiring that the service-disabled veteran be entitled to the full value of the veteran's stated equity would prevent the veteran from being able to secure commercial loans. As noted from the proposed rule, the proposed language is similar to already existing 8(a) BD requirements. Through experience with that program, SBA has not witnessed the adverse effects predicted by this comment. The commenter presented no evidence to support the prediction, so SBA is adopting the proposed rule.

Under the new §  125.12(h), ownership decisions will be decided without regard to community property laws. This provision is similar to SBA's ownership regulations for women owned businesses. See 13 CFR 127.201. SBA did not receive any comments on this change.

The new §  125.12(i) allows the transfer of ownership in a SDVO SBC from a service-disabled veteran to his or her spouse upon the death of the service-disabled veteran without adversely affecting the firm's status as a SDVO SBC. SBA received two comments requesting that SBA extend survivor benefits beyond 100% service-disabled veterans. This allowance is taken from statute and can be seen in the definition of Surviving spouse in the proposed changes to § 125.11. As noted in the definition, the statutory provision can be found at 38 U.S.C. 101(3). SBA does not believe it has the authority to modify the definition and its application in the manner requested by the commenters. As such SBA is retaining the proposed language as is.

Section 125.13

SBA proposed to add several new paragraphs to §  125.13 to incorporate provisions from SBA's 8(a) BD program and VA's former ownership and control regulations. SBA will continue to rely on the 8(a) program rules in part 124 for guidance in interpreting these control requirements.

SBA proposed to add language to describe how to determine if a service-disabled veteran controls the Board of Directors in §  125.13(e). This language is adopted from SBA's 8(a) BD regulations and is added to provide more clarity. In § 125.13(f), SBA added language that will require firms to provide notification of supermajority voting requirements. This regulation will simplify the procedures for reviewing eligibility criteria related to super majority requirements. SBA did not receive any comments on these changes.

SBA proposed that §  125.13(g), (h), (i), and (j) would adopt policies and language from SBA's 8(a) BD program and VA's regulations. These provisions provide guidance on when SBA may find that a non-service-disabled veteran controls the firm. These regulations add more clarity and detail to specific issues such as quorum requirements and loan arrangements with non-service-disabled veterans. SBA received several comments on § 125.13(i). One comment recommended that SBA present the requirement as a rebuttable presumption. SBA agrees that language about a rebuttable presumption adds clarity and consistency. As such, SBA has adopted the suggestion.

SBA received three comments on the provision in § 125.13(i)(1) that a non-service-disabled veteran owner or manager not be a former employer or principal of a former employer. Specifically, the commenters mentioned that as written the requirement is not easily understood. One commenter recommended that SBA add “current” employer to the requirement because being a current employer is even more likely to lead to issues than being a former employer. SBA agrees and is adding “current.” SBA also agrees that that the regulation could be clearer, and as such SBA has changed the language based on the suggestions in the comments. SBA does not believe that these changes affect the intent of the requirement.

SBA received three comments on the provision in § 125.13(i)(2) that a non-service-disabled veteran cannot receive higher compensation than the highest officer. One comment requested that SBA remove the requirement in its entirety. SBA believes this rule is necessary and has enough options for high payment of sought-after professionals to not hinder business progress. VA's regulations had a similar regulation, and SBA's 8(a) BD program currently includes this regulation. Two commenters requested changes to the language without challenging the intent of the regulation. One of these commenters requested that SBA adopt VA's position that a non-service-disabled veteran that is the highest-compensated employee should not be an officer or a manager. The proposed language mirrors language from SBA's 8(a) BD program. SBA believes that this language has a track record of providing clarity to participants about compensation expectations, while also allowing the flexibility for firms to make business decisions that benefit the concern without harming the service-disabled veteran.

SBA received two comments on § 125.13(i)(3), relating to when an SDVO SBC is co-located with another firm. One comment suggested a revision and another suggested deletion. SBA believes the co-location regulation is necessary to address a common situation where a service-disabled veteran is not in control of the concern because of reliance on the co-located firm. Like the other elements in the control regulation, this co-location element is a rebuttable presumption, so it is still possible to find control by the service-disabled veteran if the SDVO SBC presents sufficient evidence to rebut the presumption. SBA changed the last word in the proposed regulation to clarify that the regulation will apply when the co-located firm or individual has an equity interest in the concern seeking SDVO SBC status.

SBA proposed to add rebuttable presumptions to §  125.13(k) and (l). Paragraph (k) adds a rebuttable presumption that a person not working for a firm regularly during normal working hours does not control the firm. As a rebuttable presumption, this is not a full-time devotion requirement and can be rebutted by providing evidence of control. SBA received four comments on this proposed rule. All commenters stated that this regulation was a new hindrance placed on SDVO SBCs and should not be included. The rule, however, reflects a control element that SBA and VA are already applying to current SDVO SBCs. This has always been a factor that SBA will consider, but now it is clearly rebuttable by providing evidence of control. If a service-disabled veteran is not working during the firm's normal hours or has outside employment, SBA may presume that another individual is assuming the management role not being filled by the service-disabled veteran. This recognizes the reality of day-to-day control. SBA's regulations have always required that the day-to-day management and administration of SDVO SBC business operations must be conducted by one or more service-disabled veterans. The rebuttable presumption in paragraph (k) provides clarity on how SBA has always viewed the “day-to-day management” requirement and such is not a new requirement. Day-to-day management typically requires that an individual manage on a daily basis. In this case, if a firm does not require, and does not have an individual providing, management on a daily basis, the firm may provide that evidence to SBA to rebut the presumption.

Similarly, SBA proposed §  125.13(l) to add a rebuttable presumption regarding place of work. SBA received four comments on this proposed rule. All commenters stated that this regulation was a new hindrance placed on SDVO SBCs and should not be included. As with § 125.13(k), this is not a new policy by SBA. This is how SBA has been treating this issue already, and how SBA would treat this issue even if this paragraph was not included. A case from OHA supports SBA's position. See In the Matter of First Capital Interiors, Inc., VET-2006-10-25-07 (2006). That decision makes clear that an inquiry into how an individual manages a firm remotely is reasonable, and that it is the SDVO SBC's responsibility to demonstrate that a service-disabled veteran actually controls the firm. With this regulation, SBA is attempting to address the situation where no service-disabled veteran owner lives or works near the firm's headquarters or worksites. SBA will presume that this indicates a lack of control because there is work at the headquarters and jobsites being managed and directed by individuals that are not service-disabled veterans. All of the comments focused on the ability to work remotely in today's current environment, but this does not address SBA's main concern. As noted in SBA's proposed regulation, the main issue in these place of work instances is not remote management, but over-delegation of authority to non-service-disabled-veteran individuals who work at the office and who are at the work sites, namely, when there is evidence that individuals located at the headquarters and onsite are providing day-to-day management that should be provided by a service-disabled veteran. SBA's regulations require control over day-to-day operations, but remote observation and over-delegation do not meet this requirement. As noted in the proposed rule, this is a rebuttable presumption in which the firm may present evidence that the service-disabled has not abdicated authority to others to run the firm. Therefore, SBA is adopting the rule as proposed.

SBA is adopting § 125.13(m) and (n) as proposed. SBA did not receive comments on either subsection. The new §  125.13(m) is an exception to the control requirements in “extraordinary circumstances.” As noted above, SBA has defined extraordinary circumstances to include a limited and exhaustive list of five circumstances. The rule will allow an exception to the general requirement that SDVs control long term decision making. The new §  125.13(n) is an exception to the control requirements when an individual in the reserves is recalled to active duty. SBA and VA do not think a firm owned by a service-disabled veteran should lose its status due to the necessary military commitments of its owner when serving the nation.

SBA had proposed to make technical changes to §§ 125.22 and 125.23. These technical changes along with several others have already been implemented pursuant to other rulemaking. 83 FR 13849. As such, SBA has removed the proposed changes from this final rule.

Justification for the October 1, 2018 Effective Date

The Administrative Procedure Act (APA) requires that “publication or service of a substantive rule shall be made not less than 30 days before its effective date, except * * * as otherwise provided by the agency for good cause found and published with the rule.” 5 U.S.C. 553(d)(3). The purpose of the APA provision delaying the effective date of a rule for 30 days after publication is to provide interested and affected members of the public sufficient time to adjust their behavior before the rule takes effect. For the reasons set forth below, SBA finds that good cause exists to make this final rule become effective on October 1, 2018, less than 30 days after it is published in the Federal Register.

As noted above, SBA and the VA have been working together to jointly implement the provisions of NDAA 2017. In doing so, SBA and the VA believe a single date on which all of the changes go into effect is the most effective path for implementation. SBA and the VA consider October 1, 2018 to be the best date for implementation of new unified rules for the programs. October 1, 2018 is the start of the new fiscal year, and is therefore the best date for separation of contract actions between different sets of regulations. Having contracts actions applying different regulations in the same fiscal year can often lead to confusion among contracting officials, and program participants. Procurements conducted in fiscal year 2018 will generally follow the old rules, while all new procurements in fiscal year 2019 will follow the new jointly developed regulations which SBA believes will lead to less confusion.

In addition to the joint effort in implementing these provisions of NDAA 2017, SBA has in a parallel rule making process implemented Sections 1932 and 1833 of NDAA 2017. These sections dealt with the transition of certain protest and appeal functions from the VA to SBA's Office of Hearing and Appeals. The final rule implementing those sections also has an implementation date of October 1, 2018. 83 FR 13626.

SBA and VA believe that a uniform transition combining the programs ownership and control requirements is extremely important. As such, SBA believes that an earlier effective date that aligns with the new fiscal year for contracting, and with the other changes implementing NDAA 2017 is the best course of action.

Compliance With Executive Orders 12866, 12988, 13132, 13771, the Paperwork Reduction Act (44 U.S.C. Ch. 35), and the Regulatory Flexibility Act (5 U.S.C. 601-612) Executive Order 12866

OMB has determined that this rule does not constitute a “significant regulatory action” under Executive Order 12866. This rule is also not a major rule under the Congressional Review Act, 5 U.S.C. 800. This rule amends the rules concerning ownership and control of VO and SDVO SBCs. As such, the rule has no effect on the amount or dollar value of any Federal contract requirements or of any financial assistance provided through SBA or VA. Therefore, the rule is not likely to have an annual economic effect of $100 million or more, result in a major increase in costs or prices, or have a significant adverse effect on competition or the United States economy. In addition, this rule does not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency, materially alter the budgetary impact of entitlements, grants, user fees, loan programs or the rights and obligations of such recipients, nor raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

This rule is part of a joint effort by the VA and SBA to reduce the regulatory burden on the veteran business community. This rule consolidates ownership and control requirements in one regulation thus eliminating duplicate functions. Prior to the enactment of this regulation business owners had the burden of complying with both regulations. This regulation will eliminate that burden. The single rule helps streamline the verification and certification processes which will save business owners time and money. This will also lead to less confusion.

Executive Order 12988

This action meets applicable standards set forth in section 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. The action does not have retroactive or preemptive effect.

Executive Order 13132

This rule does not have Federalism implications as defined in Executive Order 13132. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in the Executive Order. As such it does not warrant the preparation of a Federalism Assessment.

Executive Order 13771

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

Paperwork Reduction Act

The SBA has determined that this rule does not impose additional reporting or recordkeeping requirements under the Paperwork Reduction Act, 44 U.S.C. Chapter 35. However, this rule does include an information collection for the VA and the OMB approval number for this collection is 2900-0675.

Regulatory Flexibility Act

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. Small entities include small businesses, small not-for-profit organizations, and small governmental jurisdictions. Section 605 of the RFA allows an agency to certify a rule, in lieu of preparing an analysis, if the rulemaking is not expected to have a significant economic impact on a substantial number of small entities.

This rule merges SBA and VA regulations concerning ownership and control of VO and SDVO SBCs as directed by Congress. The regulation is not attempting to create new regulation, but to streamline two already existing regulations into a single regulatory framework. In SBA's determination, this rule will not have a significant economic impact on any small business.

There are approximately 21,000 firms registered as SDVO SBCs in the System for Award Management (SAM) and approximately 13,000 firms that have been certified by the VA. To a large extent SBA's and the VA's ownership and control rules were substantially similar in terms of the regulatory language, and in many instances identical. Thus, the vast majority of these firms will not be impacted by this rule. For example, this rule will not impact firms that are 100% owned and control by a service-disabled veteran. To the extent there are differences in SBA's and the VA's ownership and control rules, this rule will reduce cost and positively impact all SDVO firms, because there will be one set of criteria to measure service-disabled-veteran ownership and control throughout the Federal government. Further, SBA's current rules do not ignore ESOPs when determining ownership, which means firms that are majority owned by ESOPs are not eligible for SDVO set-asides or sole source awards. We have no data on the number of firms that this rule will be impact, but the number is very small. After consulting with industry representatives, many firms owned by ESOPs are entirely owned by the ESOP, especially those that operate in industries with employee based size standards. Those firms will still not qualify if this rule is finalized because there is still a 51% service-disabled-veteran ownership requirement of the remaining ownership interest, not including ESOPs. However, some firms that intend to institute an ESOP may do so in way that allows the firm to qualify under this rule. With respect to surviving spouse, SBA's current rules do not recognize ownership or control by a surviving spouse. Although the VA does allow firms owned and controlled by surviving spouses to qualify under its certification program, the number of firms that qualify under the exception is extremely small. To the extent firms qualify under the surviving spouse exception the benefit will be positive, not negative. Firms that were previously not eligible to continue as SDVO firms will be able to continue for a period of time.

Therefore, the Administrator of SBA determines, under 5 U.S.C. 605(b), that this rule would not have a significant economic impact on a substantial number of small entities.

List of Subjects in 13 CFR Part 125

Government contracts, Government procurement, Reporting and recordkeeping requirements, Small businesses, Technical assistance, Veterans.

Accordingly, for the reasons stated in the preamble, SBA amends 13 CFR part 125 as follows:

PART 125—GOVERNMENT CONTRACTING PROGRAMS 1. The authority citation for part 125 is revised to read as follows: Authority:

15 U.S.C. 632(p), (q), 634(b)(6), 637, 644, 657(f), 657q, and 657s; 38 U.S.C. 501 and 8127.

2. Revise § 125.11 to read as follows:
§ 125.11 What definitions are important in the Service-Disabled Veteran-Owned (SDVO) Small Business Concern (SBC) Program?

Contracting officer has the meaning given such term in section 27(f)(5) of the Office of Federal Procurement Policy Act (41 U.S.C. 423(f)(5)).

Daily business operations include, but are not limited to, the marketing, production, sales, and administrative functions of the firm, as well as the supervision of the executive team, and the implementation of policies.

ESOP has the meaning given the term “employee stock ownership plan” in section 4975(e)(7) of the Internal Revenue Code of 1986 (26 U.S.C. 4975(e)(7)).

Extraordinary circumstances, for purposes of this part, are only the following:

(1) Adding a new equity stakeholder;

(2) Dissolution of the company;

(3) Sale of the company;

(4) The merger of the company; and

(5) Company declaring bankruptcy.

Negative control has the same meaning as that set forth in § 121.103(a)(3) of this chapter.

Participant means a veteran-owned small business concern that has verified status in the Vendor Information Pages database, available at https://www.vip.vetbiz.gov/.

Permanent caregiver, for purposes of this part, is the spouse, or an individual, 18 years of age or older, who is legally designated, in writing, to undertake responsibility for managing the well-being of the service-disabled veteran with a permanent and severe disability, as determined by Department of Veterans Affairs' Veterans Benefits Administration, to include housing, health and safety. A permanent caregiver may, but does not need to, reside in the same household as the service-disabled veteran with a permanent and severe disability. In the case of a service-disabled veteran with a permanent and severe disability lacking legal capacity, the permanent caregiver shall be a parent, guardian, or person having legal custody. There may be no more than one permanent caregiver per service-disabled veteran with a permanent and severe disability.

(1) A permanent caregiver may be appointed, in a number of ways, including:

(i) By a court of competent jurisdiction;

(ii) By the Department of Veterans Affairs, National Caregiver Support Program, as the Primary Family Caregiver of a Veteran participating in the Program of Comprehensive Assistance for Family Caregivers (this designation is subject to the Veteran and the caregiver meeting other specific criteria as established by law and the Secretary and may be revoked if the eligibility criteria do not continue to be met); or

(iii) By a legal designation.

(2) Any appointment of a permanent caregiver must in all cases be accompanied by a written determination from the Department of Veterans Affairs that the veteran has a permanent and total service-connected disability as set forth in 38 CFR 3.340 for purposes of receiving disability compensation or a disability pension. The appointment must also delineate why the permanent caregiver is given the appointment, must include the consent of the veteran to the appointment and how the appointment would contribute to managing the veteran's well-being.

Service-connected has the meaning given that term in 38 U.S.C. 101(16).

Service-disabled veteran is a veteran who possesses either a valid disability rating letter issued by the Department of Veterans Affairs, establishing a service-connected rating between 0 and 100 percent, or a valid disability determination from the Department of Defense or is registered in the Beneficiary Identification and Records Locator Subsystem maintained by Department of Veterans Affairs' Veterans Benefits Administration as a service-disabled veteran. Reservists or members of the National Guard disabled from a disease or injury incurred or aggravated in line of duty or while in training status also qualify.

Service-disabled veteran with a permanent and severe disability means a veteran with a service-connected disability that has been determined by the Department of Veterans Affairs, in writing, to have a permanent and total service-connected disability as set forth in 38 CFR 3.340 for purposes of receiving disability compensation or a disability pension.

Small business concern means a concern that, with its affiliates, meets the size standard corresponding to the NAICS code for its primary industry, pursuant to part 121 of this chapter.

Small business concern owned and controlled by service-disabled veterans (also known as a Service-Disabled Veteran-Owned SBC) means any of the following:

(1) A small business concern—

(i) Not less than 51 percent of which is owned by one or more service-disabled veterans or, in the case of any publicly owned business, not less than 51 percent of the stock (not including any stock owned by an ESOP) of which is owned by one or more service-disabled veterans; and

(ii) The management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran;

(2) A small business concern—

(i) Not less than 51 percent of which is owned by one or more service-disabled veterans with a disability that is rated by the Secretary of Veterans Affairs as a permanent and total disability who are unable to manage the daily business operations of such concern; or

(ii) In the case of a publicly owned business, not less than 51 percent of the stock (not including any stock owned by an ESOP) of which is owned by one or more such veterans.

Surviving spouse has the meaning given the term in 38 U.S.C. 101(3).

Unconditional ownership means ownership that is not subject to conditions precedent, conditions subsequent, executory agreements, voting trusts, restrictions on or assignments of voting rights, or other arrangements causing or potentially causing ownership benefits to go to another (other than after death of incapacity). The pledge or encumbrance of stock or other ownership interest as collateral, including seller-financed transactions, does not affect the unconditional nature of ownership if the terms follow normal commercial practices and the owner retains control absent violations of the terms.

Veteran has the meaning given the term in 38 U.S.C. 101(2). A Reservist or member of the National Guard called to Federal active duty or disabled from a disease or injury incurred or aggravated in line of duty or while in training status also qualify as a veteran.

Veteran owned small business concern means a small business concern:

(1) Not less than 51 percent of which is owned by one or more veterans or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more veterans; and

(2) The management and daily business operations of which are controlled by one or more veterans. All of the provisions of subpart B of this part apply for purposes of determining ownership and control.

3. Amend § 125.12 by: a. Revising the introductory text; b. Revising the first sentence in paragraph (b); c. Adding a sentence at the end of paragraph (d); and d. Adding paragraphs (g) through (i).

The revisions and additions read as follows:

§ 125.12 Who does SBA consider to own an SDVO SBC?

Generally, a concern must be at least 51% unconditionally and directly owned by one or more service-disabled veterans. More specifically:

(b) * * * In the case of a concern which is a partnership, at least 51% of aggregate voting interest must be unconditionally owned by one or more service-disabled veterans. * * *

(d) * * * In the case of a publicly owned business, not less than 51 percent of the stock (not including any stock owned by an ESOP) must be unconditionally owned by one or more veterans.

(g) Dividends and distributions. One or more service-disabled veterans must be entitled to receive:

(1) At least 51 percent of the annual distribution of profits paid to the owners of a corporation, partnership, or limited liability company concern;

(2) 100 percent of the value of each share of stock owned by them in the event that the stock or member interest is sold; and

(3) At least 51 percent of the retained earnings of the concern and 100 percent of the unencumbered value of each share of stock or member interest owned in the event of dissolution of the corporation, partnership, or limited liability company.

(4) An eligible individual's ability to share in the profits of the concern must be commensurate with the extent of his/her ownership interest in that concern.

(h) Community property. Ownership will be determined without regard to community property laws.

(i) Surviving spouse. (1) A small business concern owned and controlled by one or more service-disabled veterans immediately prior to the death of a service-disabled veteran who was the owner of the concern, the death of whom causes the concern to be less than 51 percent owned by one or more service-disabled veterans, will continue to qualify as a small business concern owned and controlled by service-disabled veterans during the time period if:

(i) The surviving spouse of the deceased veteran acquires such veteran's ownership interest in such concern;

(ii) Such veteran had a service-connected disability (as defined in 38 U.S.C. 101(16)) rated as 100 percent disabling under the laws administered by the Secretary of Veterans Affairs or such veteran died as a result of a service-connected disability; and

(iii) For a participant, immediately prior to the death of such veteran, and during the period described in paragraph (i)(2) of this section, the small business concern is included in the database described in 38 U.S.C. 8127(f).

(2) The time period described in paragraph (i)(1)(iii) of this section is the time period beginning on the date of the veteran's death and ending on the earlier of—

(i) The date on which the surviving spouse remarries;

(ii) The date on which the surviving spouse relinquishes an ownership interest in the small business concern; or

(iii) The date that is 10 years after the date of the death of the veteran.

4. Amend § 125.13 by revising paragraph (e) and adding paragraphs (f) through (n) to read as follows:
§ 125.13 Who does SBA consider to control an SDVO SBC?

(e) Control over a corporation. One or more service-disabled veterans (or in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran) must control the Board of Directors of the concern.

(1) SBA will deem service-disabled veteran individuals to control the Board of Directors where:

(i) A single service-disabled veteran individual owns 100% of all voting stock of an applicant or concern;

(ii) A single service-disabled veteran individual owns at least 51% of all voting stock of an applicant or concern, the individual is on the Board of Directors and no super majority voting requirements exist for shareholders to approve corporation actions. Where super majority voting requirements are provided for in the concern's articles of incorporation, its by-laws, or by state law, the service-disabled veteran individual must own at least the percent of the voting stock needed to overcome any such super majority voting requirements; or

(iii) More than one service-disabled veteran shareholder seeks to qualify the concern (i.e., no one individual owns 51%), each such individual is on the Board of Directors, together they own at least 51% of all voting stock of the concern, no super majority voting requirements exist, and the service-disabled veteran shareholders can demonstrate that they have made enforceable arrangements to permit one of them to vote the stock of all as a block without a shareholder meeting. Where the concern has super majority voting requirements, the service-disabled veteran shareholders must own at least that percentage of voting stock needed to overcome any such super majority ownership requirements. In the case of super majority ownership requirements, the service-disabled veteran shareholders can demonstrate that they have made enforceable arrangements to permit one of them to vote the stock of all as a block without a shareholder meeting.

(2) Where an applicant or concern does not meet the requirements set forth in paragraph (e)(1) of this section, the service-disabled veteran individual(s) upon whom eligibility is based must control the Board of Directors through actual numbers of voting directors or, where permitted by state law, through weighted voting (e.g., in a concern having a two-person Board of Directors where one individual on the Board is service-disabled veteran and one is not, the service-disabled veteran vote must be weighted—worth more than one vote—in order for the concern to be eligible). Where a concern seeks to comply with this paragraph (e)(2):

(i) Provisions for the establishment of a quorum cannot permit non-service-disabled veteran Directors to control the Board of Directors, directly or indirectly; and

(ii) Any Executive Committee of Directors must be controlled by service-disabled veteran directors unless the Executive Committee can only make recommendations to and cannot independently exercise the authority of the Board of Directors.

(3) Non-voting, advisory, or honorary Directors may be appointed without affecting service-disabled veteran individuals' control of the Board of Directors.

(4) Arrangements regarding the structure and voting rights of the Board of Directors must comply with applicable state law.

(f) Super majority requirements. One or more service-disabled veterans must meet all super majority voting requirements. An applicant must inform the Department of Veterans Affairs, when applicable, of any super majority voting requirements provided for in its articles of incorporation, its by-laws, by state law, or otherwise. Similarly, after being verified, a participant must inform the Department of Veterans Affairs of changes regarding super majority voting requirements.

(g) Licenses. A firm must obtain and keep current any and all required permits, licenses, and charters, required to operate the business.

(h) Unexercised rights. A service-disabled veteran owner's unexercised right to cause a change in the control or management of the applicant concern does not in itself constitute control and management, regardless of how quickly or easily the right could be exercised.

(i) Control by non-service-disabled veterans. Non-service-disabled veteran individuals or entities may not control the firm. There is a rebuttable presumption that non-service-disabled veteran individuals or entities control or have the power to control a firm in any of the following circumstances, which are illustrative only and not inclusive:

(1) The non-service-disabled veteran individual or entity who is involved in the management or ownership of the firm is a current or former employer or a principal of a current or former employer of any service-disabled veteran individual upon whom the firm's eligibility is based. However, a firm may provide evidence to demonstrate that the relationship does not give the non-service-disabled veteran actual control over the concern and such relationship is in the best interests of the concern.

(2) One or more non-service-disabled veterans receive compensation from the firm in any form as directors, officers or employees, including dividends, that exceeds the compensation to be received by the highest-ranking officer (usually CEO or President). The highest ranking officer may elect to take a lower amount than the total compensation and distribution of profits that are received by a non-veteran only upon demonstrating that it helps the concern.

(3) In circumstances where the concern is co-located with another firm in the same or similar line of business, and that firm or an owner, director, officer, or manager, or a direct relative of an owner, director, officer, or manager of that firm owns an equity interest in the concern.

(4) In circumstances where the concern shares employees, resources, equipment, or any type of services, whether by oral or written agreement with another firm in the same or similar line of business, and that firm or an owner, director, officer, or manager, or a direct relative of an owner, director, officer, or manager of that firm owns an equity interest in the concern.

(5) A non-service-disabled veteran individual or entity, having an equity interest in the concern, provides critical financial or bonding support.

(6) In circumstances where a critical license is held by a non-service-disabled individual, or other entity, the non-service-disabled individual or entity may be found to control the firm. A critical license is considered any license that would normally be required of firms operating in the same field or industry, regardless of whether a specific license is required on a specific contract.

(7) Business relationships exist with non-service-disabled veteran individuals or entities which cause such dependence that the applicant or concern cannot exercise independent business judgment without great economic risk.

(j) Critical financing. A non-service-disabled veteran individual or entity may be found to control the concern through loan arrangements with the concern or the service-disabled veteran(s). Providing a loan or a loan guaranty on commercially reasonable terms does not, by itself, give a non-service-disabled veteran individual or entity the power to control a firm, but when taken into consideration with other factors may be used to find that a non-service-disabled firm or individual controls the concern.

(k) Normal business hours. There is a rebuttable presumption that a service-disabled veteran does not control the firm when the service-disabled veteran is not able to work for the firm during the normal working hours that businesses in that industry normally work. This may include, but is not limited to, other full-time or part-time employment, being a full-time or part-time student, or any other activity or obligation that prevents the service-disabled veteran from actively working for the firm during normal business operating hours.

(l) Close proximity. There is rebuttable presumption that a service-disabled veteran does not control the firm if that individual is not located within a reasonable commute to firm's headquarters and/or job-sites locations, regardless of the firm's industry. The service-disabled veteran's ability to answer emails, communicate by telephone, or to communicate at a distance by other technological means, while delegating the responsibility of managing the concern to others is not by itself a reasonable rebuttal.

(m) Exception for “extraordinary circumstances.” SBA will not find that a lack of control exists where a service-disabled veteran does not have the unilateral power and authority to make decisions in “extraordinary circumstances.” The only circumstances in which this exception applies are those articulated in the definition.

(n) Exception for active duty. Notwithstanding the provisions of this section requiring a service-disabled veteran to control the daily business operations and long-term strategic planning of a concern, where a service-disabled veteran individual upon whom eligibility is based is a reserve component member in the United States military who has been called to active duty, the concern may elect to designate in writing one or more individuals to control the concern on behalf of the service-disabled veteran during the period of active duty. The concern will not be considered ineligible based on the absence of the service-disabled veteran during the period of active duty. The concern must keep records evidencing the active duty and the written designation of control, and provide those documents to VA, and if requested to SBA.

Dated: September 21, 2018. Linda E. McMahon, Administrator.
[FR Doc. 2018-21112 Filed 9-27-18; 8:45 am] BILLING CODE 8025-01-P
DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0452; Product Identifier 2017-NM-150-AD; Amendment 39-19439; AD 2018-20-05] 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 all The Boeing Company Model 727C, 727-100, 727-100C, 727-200, and 727-200F series airplanes. This AD was prompted by the results of a fleet survey, which revealed cracking in bulkhead frame webs at a certain body station. This AD requires repetitive inspections of the bulkhead frame web at a certain body station and applicable on-condition actions. We are issuing this AD to address the unsafe condition on these products.

DATES:

This AD is effective November 2, 2018.

The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of November 2, 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-2018-0452.

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-2018-0452; 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:

George Garrido, Aerospace Engineer, Airframe Section, FAA, Los Angeles ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-5232; 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 727C, 727-100, 727-100C, 727-200, and 727-200F series airplanes. The NPRM published in the Federal Register on May 29, 2018 (83 FR 24433). The NPRM was prompted by the results of a fleet survey on retired Model 737 airplanes, which revealed cracking in bulkhead frame webs at a certain body station. No cracks have been reported on Model 727 airplanes but Model 727 and Model 737 airplanes have a similar frame installation at station 259.5. The NPRM proposed to require repetitive inspections of the bulkhead frame web at a certain body station and applicable on-condition actions.

We are issuing this AD to address cracking in the station 259.5 bulkhead frame web from the first stiffener above stringer S-10 to S-13. Such cracking may lead to subsequent failure of the skin and cockpit window surround structure, and could result in rapid decompression.

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 concurred with the NPRM.

Request To Specify Repetitive Inspection Interval

The commenter, Lynise Hogue, indicated that the reports mentioned in the Discussion section of the NPRM revealed cracking in the bulkhead frame of retired Boeing Model 737 airplanes but there was no evidence of cracking in the bulkhead frame of Boeing Model 727 airplanes, despite those airplanes having a similar frame installation. The commenter stated this posed concerns and asked how often would “. . . said repetitive inspections be conducted?”

We infer the commenter is asking about the repetitive inspections required by this AD and agree to clarify the inspection interval. As stated in paragraph (g) of this AD inspections are done at the applicable times specified in the “Compliance” paragraph of Boeing Alert Requirements Bulletin 727-53A0235 RB, dated October 12, 2017, which is at intervals not to exceed 8,600 flight cycles. We have determined that these intervals and inspections are adequate to address the unsafe condition. This AD has not been changed in this regard.

Request To Clarify Unsafe Condition

The commenter, Lynise Hogue, inquired if the unsafe product was confined to a certain batch or if it is an overall poor product. The commenter further questioned that if it is indeed an overall poor product, what measures other than an annual inspection are being taken to prevent cracking in additional bulkhead frames.

We agree to clarify. Airplane maintenance and inspection programs include many types of inspections, which are designed to detect and address potential unsafe conditions. However, when those inspections are not adequate to prevent an unsafe condition, we issue an AD to address the identified unsafe condition, such as this one. We are currently not planning additional rulemaking on other bulkhead frames. However, as we obtain and analyze additional data, we might consider further rulemaking. This AD has not been changed in this regard.

Request To Expand Applicability to All Boeing Airplanes

The commenter, Lynise Hogue, requested that we change the applicability to all Boeing airplanes because the proposed AD addresses “an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.” The commenter provided no further justification for the request.

We do not agree with the commenter's request to change the applicability of this AD. The commenter has not provided any additional data, views, or arguments to support this request. Furthermore, such a change would expand the scope of this AD and therefore require additional public review and delay issuance of this final rule. This AD applies only to those airplanes affected by the identified unsafe condition. We are currently not planning additional rulemaking for other airplanes. However, as we obtain and analyze additional data, we might consider further rulemaking. 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 as proposed, 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.

Related Service Information Under 1 CFR Part 51

We reviewed Boeing Alert Requirements Bulletin 727-53A0235 RB, dated October 12, 2017. The service information describes procedures for repetitive high frequency eddy current inspections and low frequency eddy current inspections for cracks of the station 259.5 bulkhead frame web from the first stiffener above S-10 to S-13, on the left and right sides of the airplane, 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 106 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 41 work-hours × $85 per hour = $3,485 per inspection cycle $0 $3,485 per inspection cycle $369,410 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): 2018-20-05 The Boeing Company: Amendment 39-19439; Docket No. FAA-2018-0452; Product Identifier 2017-NM-150-AD. (a) Effective Date

This AD is effective November 2, 2018.

(b) Affected ADs

None.

(c) Applicability

This AD applies to all The Boeing Company Model 727C, 727-100, 727-100C, 727-200, and 727-200F series airplanes, certificated in any category.

(d) Subject

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

(e) Unsafe Condition

This AD was prompted by the results of a fleet survey, which revealed cracking in bulkhead frame webs at a certain body station. We are issuing this AD to address cracking in the station 259.5 bulkhead frame web from the first stiffener above stringer S-10 to S-13. Such cracking may lead to subsequent failure of the skin and cockpit window surround structure, and could result in rapid decompression.

(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 727-53A0235 RB, dated October 12, 2017, do all applicable actions identified in, and in accordance with, the Accomplishment Instructions of Boeing Alert Requirements Bulletin 727-53A0235 RB, dated October 12, 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 727-53A0235, dated October 12, 2017, which is referred to in Boeing Alert Requirements Bulletin 727-53A0235 RB, dated October 12, 2017.

(h) Exceptions to Service Information Specifications

(1) For purposes of determining compliance with the requirements of this AD: Where Boeing Alert Requirements Bulletin 727-53A0235 RB, dated October 12, 2017, uses the phrase “the original issue date of Requirements Bulletin 727-53A0235 RB,” this AD requires using “the effective date of this AD.”

(2) Where Boeing Alert Requirements Bulletin 727-53A0235 RB, dated October 12, 2017, specifies contacting Boeing, this AD requires repair using a method approved in accordance with the procedures specified in paragraph (j) of this AD.

(i) Special Flight Permit

Special flight permits, as described in Section 21.197 and Section 21.199 of the Federal Aviation Regulations (14 CFR 21.197 and 21.199), may be issued to operate the airplane to a location where the requirements of this AD can be accomplished, but concurrence by the Manager, Los Angeles ACO Branch, FAA, is required before issuance of the special flight permit.

(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 George Garrido, Aerospace Engineer, Airframe Section, FAA, Los Angeles ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-5232; 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 727-53A0235 RB, dated October 12, 2017.

(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 September 13, 2018. Michael Kaszycki, Acting Director, System Oversight Division, Aircraft Certification Service.
[FR Doc. 2018-20917 Filed 9-27-18; 8:45 am] BILLING CODE 4910-13-P
DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0870; Product Identifier 2018-CE-047-AD; Amendment 39-19438; AD 2018-20-04] RIN 2120-AA64 Airworthiness Directives; Gulfstream Aerospace Corporation Airplanes AGENCY:

Federal Aviation Administration (FAA), DOT.

ACTION:

Final rule; request for comments.

SUMMARY:

We are adopting a new airworthiness directive (AD) for all Gulfstream Aerospace Corporation (Gulfstream) Model GVI airplanes. This AD requires revising the Normal and Abnormal Procedures sections of the airplane flight manual (AFM). This AD was prompted by potential failure of the bi-directional data bus that sends and receives critical signals between the flight control computer (FCC) and the flight control surfaces. We are issuing this AD to address the unsafe condition on these products.

DATES:

This AD is effective October 15, 2018.

The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of October 15, 2018.

We must receive comments on this AD by November 13, 2018.

ADDRESSES:

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

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

Fax: 202-493-2251.

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

Hand Delivery: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

For service information identified in this final rule, contact Gulfstream Aerospace Corporation, Technical Publications Dept., P.O. Box 2206, Savannah, GA 31402-2206; telephone: 800-810-4853; fax: 912-965-3520; email: [email protected]; internet: http://www.gulfstream.com/product-support/technical-publications. You may view this service information at the FAA, Policy and Innovation Division, 901 Locust, Kansas City, Missouri 64106. For information on the availability of this material at the FAA, call (816) 329-4148. It is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0870.

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-2018-0870; 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 street address for Docket Operations (phone: 800-647-5527) is listed above. Comments will be available in the AD docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT:

Myles Jalalian, Aerospace Engineer, Systems and Equipment Section, AIR-7A3, Atlanta ACO Branch, FAA, 1701 Columbia Avenue, College Park, GA 30337; phone: 404-474-5572; fax: 404-474-5606; email: [email protected].

SUPPLEMENTARY INFORMATION: Discussion

On Gulfstream Model GVI airplanes, the FCC and the remote electronics unit (REU) communicate with each other by means of bi-directional data buses, referred to as BD429. Gulfstream notified us that loss of bi-directional (Transmit/Receive) BD429 communication, due to wire/connector failures, between the REU and the FCC would result in the display of a cyan “FCS MAINTENANCE REQUIRED” advisory message on the crew alerting system (CAS). Because this cyan advisory message does not directly indicate that BD429 communication has failed, the aircraft can be dispatched with this advisory message. The Model GVI system depends on the BD429 bus to assure signal transmission to address a linear variable differential transformer (LVDT) disconnect monitor and/or surface oscillatory monitor event.

During recent developmental testing, Gulfstream discovered that certain BD429 failures prevent the shutdown of a flight control surface that would normally occur during an oscillatory or LVDT disconnect event. The only indication of the failure is a cyan “FCS MAINTENANCE REQUIRED” advisory message on the CAS.

If the FCC cannot receive information from the REU that a particular flight control surface had an event, then the FCC cannot issue a command to place that particular flight control surface into standby/damped bypass mode. The REU will still receive flight control commands from the FCC via the secondary (receive only) bus; however, because the secondary bus is receive-only for certain REUs, the FCC will no longer receive REU data needed for the LVDT disconnect monitor and/or surface oscillatory monitor for the impacted flight control surface.

This condition (results in a cyan CAS message, but does not indicate the exact reason) can remain latent for up to one year. To date, there have been no known events or failures of the BD429 communications bus wiring or connectors in the field. However, the Gulfstream GVI fleet has experienced multiple in-flight flight control events requiring a standby command sent over the BD429 bus to keep the airplane safe. Since the GVI system uses these monitors to mitigate potentially unsafe failure modes, dispatch with their loss leaves the aircraft one failure away from a potential loss of control event.

This condition, if not addressed, could result in the FCC's inability to identify when a problematic flight control surface needs to be damped, which could result in loss of control of the airplane.

Related Service Information Under 1 CFR Part 51

We reviewed Gulfstream Aerospace G650 AFM Supplement No. G650-2018-01, dated August 14, 2018; and Gulfstream Aerospace G650ER AFM Supplement No. G650ER-2018-01, dated August 14, 2018. For each applicable airplane configuration, the AFM supplement provides instructions and warnings to the Normal Procedures and Abnormal Procedures section of the AFM for the pilot to follow if a cyan “FCS MAINTENANCE REQUIRED” CAS message displays with the airplane on the ground or in flight. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

FAA's Determination

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

AD Requirements

This AD requires revising the Normal and Abnormal Procedures sections of the AFM by adding instructions and warnings for the pilot if a cyan “FCS MAINTENANCE REQUIRED” CAS message displays with the airplane on the ground or in flight.

Interim Action

We consider this AD interim action. Gulfstream is analyzing the failures and working to develop a terminating action that will address the unsafe condition identified in this AD. Once this action is developed, approved, and available, we might consider additional rulemaking.

FAA's Justification and Determination of the Effective Date

An unsafe condition exists that requires the immediate adoption of this AD without providing an opportunity for public comments prior to adoption. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because the inability of the FCC to send a standby command when the BD429 bus is in a failed state could leave the airplane with only one level of protection from a catastrophic flight control failure. Therefore, we find good cause that notice and opportunity for prior public comment are impracticable. In addition, for the reason stated above, we find that good cause exists for making this amendment effective in less than 30 days.

Comments Invited

This AD is a final rule that involves requirements affecting flight safety and was not preceded by notice and an opportunity for public comment. However, we invite you to send any written data, views, or arguments about this final rule. Send your comments to an address listed under the ADDRESSES section. Include the docket number FAA-2018-0870 and Product Identifier 2018-CE-047-AD at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this final rule. We will consider all comments received by the closing date and may amend this final rule because of those comments.

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

Costs of Compliance

We estimate that this AD affects 213 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
    Revise Gulfstream AFM 1 work-hour × $85 per hour = $85 Not applicable $85 $18,105
    Authority for This Rulemaking

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

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

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

    Regulatory Findings

    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): 2018-20-04 Gulfstream Aerospace Corporation: Amendment 39-19438; Docket No. FAA-2018-0870; Product Identifier 2018-CE-047-AD. (a) Effective Date

    This AD is effective October 15, 2018.

    (b) Affected ADs

    None.

    (c) Applicability

    This AD applies to Gulfstream Aerospace Corporation Model GVI airplanes, all serial numbers, certificated in any category.

    (d) Subject

    Joint Aircraft System Component (JASC)/Air Transport Association (ATA) of America Code 27, Flight Controls.

    (e) Unsafe Condition

    This AD was prompted by the potential for an un-annunciated failure of the bi-directional data bus that sends critical signals from the flight control computer to the flight controls. This unsafe condition, if not addressed, could result in the flight control computer's inability to identify when a problematic flight control surface needs to be damped, which could result in loss of control of the airplane.

    (f) Compliance

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

    (g) Airplane Flight Manual Revisions

    Within 30 days after October 15, 2018 (the effective date of this AD), revise the Normal Procedures and Abnormal Procedures sections of the airplane flight manual by adding the information in Gulfstream Aerospace G650 Airplane Flight Manual Supplement No. G650-2018-01, dated August 14, 2018; or Gulfstream Aerospace G650ER Airplane Flight Manual Supplement No. G650ER-2018-01, dated August 14, 2018; as applicable to the model configuration of your airplane.

    (h) Alternative Methods of Compliance (AMOCs)

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

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

    (i) Related Information

    For more information about this AD, contact Myles Jalalian, Aerospace Engineer, Systems and Equipment Section, AIR-7A3, Atlanta ACO Branch, FAA, 1701 Columbia Avenue, College Park, GA 30337; phone: 404-474-5572; fax: 404-474-5606; email: [email protected].

    (j) 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) Gulfstream Aerospace G650 Airplane Flight Manual, Supplement No. G650-2018-01, dated August 14, 2018.

    (ii) Gulfstream Aerospace G650ER Airplane Flight Manual, Supplement No. G650ER-2018-01, dated August 14, 2018.

    (3) For service information identified in this AD, contact Gulfstream Aerospace Corporation, Technical Publications Dept., P.O. Box 2206, Savannah, GA 31402-2206; telephone: 800-810-4853; fax: 912-965-3520; email: [email protected]; internet: http://www.gulfstream.com/product-support/technical-publications.

    (4) You may view this service information at the FAA, Policy and Innovation Division, 901 Locust, Kansas City, Missouri 64106. For information on the availability of this material at the FAA, call (816) 329-4148.

    (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 Kansas City, Missouri, on September 20, 2018. Melvin J. Johnson, Aircraft Certification Service, Deputy Director, Policy and Innovation Division, AIR-601.
    [FR Doc. 2018-21103 Filed 9-27-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0455; Product Identifier 2017-NM-121-AD; Amendment 39-19436; AD 2018-20-02] RIN 2120-AA64 Airworthiness Directives; Airbus SAS Airplanes AGENCY:

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

    ACTION:

    Final rule.

    SUMMARY:

    We are superseding Airworthiness Directive (AD) 98-18-24, which applied to certain Airbus SAS Model A320 series airplanes. AD 98-18-24 required repetitive inspections to detect cracking in the inner flange of a certain door frame, and corrective actions, if necessary. AD 98-18-24 also provided an optional terminating action for the repetitive inspections. This AD continues to require the repetitive inspections of the inner flange of a certain door frame, with reduced repetitive inspection intervals, and corrective action if necessary. This AD was prompted by a report of cracks on the inner flange of a certain door frame, and by the results of a full scale fatigue test that indicated the intervals for the repetitive inspections required by AD 98-18-24 must be reduced. We are issuing this AD to address the unsafe condition on these products.

    DATES:

    This AD is effective November 2, 2018.

    The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of November 2, 2018.

    ADDRESSES:

    For service information identified in this final rule, contact Airbus SAS, Airworthiness Office—EIAS, Rond-Point Emile Dewoitine No: 2, 31700 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email [email protected]; internet http://www.airbus.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. It is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0455.

    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-2018-0455; 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 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:

    Sanjay Ralhan, Aerospace Engineer, International Section, Transport Standards Branch, FAA; 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3223.

    SUPPLEMENTARY INFORMATION: Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 98-18-24, Amendment 39-10740 (63 FR 49272, September 15, 1998) (“AD 98-18-24”). AD 98-18-24 applied to certain Airbus SAS Model A320 series airplanes. The NPRM published in the Federal Register on May 30, 2018 (83 FR 24690). The NPRM was prompted by a report of cracks on the inner flange of door frame 66 at stringer positions 18 and 20, and by the results of a full scale fatigue test that indicated the intervals for the repetitive inspections required by AD 98-18-24 must be reduced. The NPRM proposed to continue to require the repetitive inspections of the inner flange of a certain door frame, with reduced repetitive inspection intervals, and corrective actions if necessary. We are issuing this AD to address fatigue cracking in the inner flange of door frame 66, which could result in reduced structural integrity of the airplane.

    The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2017-0128, dated July 24, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus SAS Model A320-211 and A320-231 airplanes. The MCAI states:

    During fatigue test on simulated flights, cracks developed on the inner flange of door frame 66 at stringer 18 and 20 positions. These cracks were located in the gusset plate attachment holes and were hidden by the plates.

    This condition, if not detected and corrected, could affect the structural integrity of the fuselage.

    To address this potential unsafe condition, Airbus issued Service Bulletin (SB) A320-53-1071, later revised, to provide instructions to inspect and repair the gusset plate attachment holes at frame 66, at stringers 18, 20 and 22 both left hand (LH) and right hand (RH) side of the fuselage (hereafter collectively referred to as “the attachment holes” in this [EASA] AD), and [Airbus] SB A320-53-1072, providing instructions for reworking of the attachment holes.

    Consequently, DGAC France issued [French] AD 1996-234-087, later revised [which corresponds to FAA AD 98-18-24], requiring repetitive inspections and, depending on findings, repair of the attachment holes, and including reference to a reworking procedure, which constitutes optional terminating action for the repetitive inspections of the attachment holes.

    Since that [French] AD was issued, based on results from a full scale fatigue test, it was determined that the inspection intervals must be reduced. Airbus issued SB A320-53-1071 Revision 03, modifying the inspection threshold and intervals, and not changing the inspection instructions.

    For the reason described above, this [EASA] AD retains the requirement of DGAC France AD 1996-234-087 R1, which is superseded, and requires reduction of the repetitive inspection interval.

    You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0455.

    Comments

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

    Conclusion

    We reviewed the relevant data and determined that air safety and the public interest require adopting this final rule as proposed, 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.

    Related Service Information Under 1 CFR Part 51

    Airbus has issued Service Bulletin A320-53-1071, Revision 03, dated July 20, 2017. This service information describes procedures for detailed inspections of the gusset plate attachment holes at door frame 66 for cracking and corrective action.

    Airbus also issued Service Bulletin A320-53-1072, Revision 02, dated May 5, 2016. This service information describes procedures for modification of the gusset frame attachment at door frame 66.

    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 3 airplanes of U.S. registry.

    The actions required by AD 98-18-24, and retained in this AD, take about 8 work-hours per product, at an average labor rate of $85 per work-hour. Based on these figures, the estimated cost of the actions that are required by AD 98-18-24 is $680 per product.

    We estimate that it would take about 19 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of this AD on U.S. operators to be $4,845, or $1,615 per product.

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

    In addition, we estimate that the optional terminating action would take about 20 work-hours per product, at an average labor rate of $85 per work-hour. Required parts costs would be about $60. Based on these figures, the estimated cost of the optional terminating action would be $1,760 per product.

    We also estimate that it would take about 1 work-hour per product to comply with the proposed reporting requirement in this AD. The average labor rate is $85 per hour. Based on these figures, we estimate the cost of reporting the inspection results on U.S. operators to be $255, or $85 per product.

    Paperwork Reduction Act

    A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB control number. The control number for the collection of information required by this AD is 2120-0056. The paperwork cost associated with this AD has been detailed in the Costs of Compliance section of this document and includes time for reviewing instructions, as well as completing and reviewing the collection of information. Therefore, all reporting associated with this AD is mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA at 800 Independence Ave. SW, Washington, DC 20591, ATTN: Information Collection Clearance Officer, AES-200.

    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

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

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

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

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

    3. Will not affect intrastate aviation in Alaska; and

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

    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 removing Airworthiness Directive (AD) 98-18-24, Amendment 39-10740 (63 FR 49272, September 15, 1998), and adding the following new AD: 2018-20-02 Airbus SAS: Amendment 39-19436; Docket No. FAA-2018-0455; Product Identifier 2017-NM-121-AD. (a) Effective Date

    This AD is effective November 2, 2018.

    (b) Affected ADs

    This AD replaces AD 98-18-24, Amendment 39-10740 (63 FR 49272, September 15, 1998) (“AD 98-18-24”).

    (c) Applicability

    This AD applies to Airbus SAS Model A320-211 and Model A320-231 airplanes, certificated in any category, serial numbers 0029, 0045, 0046, 0049 through 0057 inclusive, 0059, 0064, and 0065.

    (d) Subject

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

    (e) Reason

    This AD was prompted by a report of cracks on the inner flange of door frame 66 at stringer positions 18 and 20, and by the results of a full scale fatigue test that indicated the intervals for the repetitive inspections required by AD 98-18-24 must be reduced. We are issuing this AD to address fatigue cracking in the inner flange of door frame 66, which could result in reduced structural integrity of the airplane.

    (f) Compliance

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

    (g) Retained Eddy Current Inspection, With No Changes

    This paragraph restates the requirements of paragraph (a) of AD 98-18-24, with no changes. For Model A320 series airplanes on which Airbus Modification 21778 (reference Airbus Service Bulletin A320-53-1072, dated November 7, 1995, as revised by Change Notice 0A, dated July 5, 1996) has not been accomplished: Prior to the accumulation of 20,000 total flight cycles, or within 1 year after October 20, 1998 (the effective date of AD 98-18-24), whichever occurs later: Perform a rotating probe eddy current inspection to detect cracking around the edges of the gusset plate attachment holes of the inner flange of door frame 66, left and right, at stringer positions P18, P20, and P22, in accordance with Airbus Service Bulletin A320-53-1071, dated November 7, 1995, as revised by Change Notice 0A, dated July 5, 1996. If any crack is detected, prior to further flight, repair in accordance with a method approved by the Manager, International Section, Transport Standards Branch, FAA. Repeat the inspection thereafter at intervals not to exceed 20,000 flight cycles.

    (h) Retained Optional Terminating Action, With No Changes

    This paragraph restates the optional terminating action of paragraph (b) of AD 98-18-24, with no changes. Modification of the gusset plate attachment holes of the inner flange of door frame 66, left and right (Airbus Modification 21778), in accordance with Airbus Service Bulletin A320-53-1072, dated November 7, 1995, as revised by Change Notice 0A, dated July 5, 1996, constitutes terminating action for the repetitive inspection requirements of paragraph (g) of this AD.

    (i) New Requirement of This AD: Repetitive Inspections

    At the applicable compliance time specified in figure 1 to paragraph (i) of this AD, do a rotating probe eddy current inspection to detect cracking around the edges of the gusset plate attachment holes of the inner flange of door frame 66, left and right, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-53-1071, Revision 03, dated July 20, 2017. Repeat the inspection thereafter at intervals not to exceed 10,900 flight cycles.

    ER28SE18.001 (j) Corrective Actions

    (1) If, during any inspection required by paragraph (i) of this AD, any crack is found on a gusset plate attachment hole: Before further flight, repair the affected attachment hole, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-53-1071, Revision 03, dated July 20, 2017, except as required by paragraph (n) of this AD.

    (2) If, during any inspection required by paragraph (i) of this AD, any crack is found on any other hole of the gusset plate: Before further flight, contact the Manager, International Section, Transport Standards Branch, FAA; or the European Aviation Safety Agency (EASA); or Airbus's EASA Design Organization Approval (DOA); for approved repair instructions and accomplish those instructions accordingly. If approved by the DOA, the approval must include the DOA-authorized signature.

    (k) Terminating Action for This AD

    (1) Repair of a gusset plate attachment hole area as required by paragraph (j)(1) of this AD terminates the repetitive inspections required by paragraph (i) of this AD for that attachment hole area on that airplane only.

    (2) Repair of any other hole of the gusset plate, as required by paragraph (j)(2) of this AD, does not terminate the repetitive inspections required by paragraph (i) of this AD for that airplane, unless specified otherwise in the repair instructions provided by the Manager, International Section, Transport Standards Branch, FAA; or the EASA; or Airbus's EASA DOA.

    (3) Accomplishing the initial inspection required by paragraph (i) of this AD terminates the inspections required by paragraph (g) of this AD.

    (l) Optional Modification

    Modification of the gusset plate attachment holes of the inner flange of door frame 66, left and right, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-53-1072, Revision 02, dated May 5, 2016, terminates the repetitive inspections required by paragraph (i) of this AD for that airplane.

    (m) Reporting

    Report the results of the inspection required by paragraph (i) of this AD that are done on or after the effective date of this AD to Airbus Service Bulletin Reporting Online Application on Airbus World (https://w3.airbus.com/), or submit the results to Airbus in accordance with the instructions of Airbus Service Bulletin A320-53-1071, Revision 03, dated July 20, 2017. Submit the report within 30 days after accomplishing the inspection required by paragraph (i) of this AD. The report must include the inspection results, a description of any discrepancies found, the airplane serial number, and the number of landings and flight hours on the airplane. If operators have reported findings as part of obtaining any corrective actions approved by the EASA DOA, operators are not required to report those findings as specified in this paragraph.

    (n) Service Information Exception

    Where Airbus Service Bulletin A320-53-1071, Revision 03, dated July 20, 2017, specifies to contact Airbus for appropriate action, and specifies that action as “RC” (Required for Compliance): Before further flight, accomplish corrective actions in accordance with the procedures specified in paragraph (q)(2) of this AD.

    (o) Credit for Previous Actions

    (1) This paragraph provides credit for actions required by paragraph (i) of this AD, if those actions were performed before the effective date of this AD using Airbus Service Bulletin A320-53-1071, Revision 01, dated July 4, 2002; or Airbus Service Bulletin A320-53-1071, Revision 02, dated May 5, 2016.

    (2) This paragraph provides credit for actions identified in paragraph (l) of this AD, if those actions were performed before the effective date of this AD using Airbus Service Bulletin A320-53-1072, dated November 7, 1995, as revised by Change Notice 0A, dated July 5, 1996; or Airbus Service Bulletin A320-53-1072, Revision 01, dated July 4, 2002.

    (p) Paperwork Reduction Act Burden Statement

    A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB Control Number. The OMB Control Number for this information collection is 2120-0056. Public reporting for this collection of information is estimated to be approximately 1 hour per response, including the time for reviewing instructions, completing and reviewing the collection of information. All responses to this collection of information are mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA at: 800 Independence Ave. SW, Washington, DC 20591, Attn: Information Collection Clearance Officer, AES-200.

    (q) Other FAA AD Provisions

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

    (i) 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.

    (ii) AMOCs approved previously for AD 98-18-24 are approved as AMOCs for the corresponding provisions of this AD.

    (2) Contacting the Manufacturer: As of the effective date of this AD, for any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Section, Transport Standards Branch, FAA; or the EASA; or Airbus SAS's EASA DOA. If approved by the DOA, the approval must include the DOA-authorized signature.

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

    (r) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA AD 2017-0128, dated July 24, 2017, for related information. This MCAI may be found in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0455.

    (2) For more information about this AD, contact Sanjay Ralhan, Aerospace Engineer, International Section, Transport Standards Branch, FAA; 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3223.

    (3) Service information identified in this AD that is not incorporated by reference is available at the addresses specified in paragraphs (s)(3) and (s)(4) of this AD.

    (s) 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 this AD specifies otherwise.

    (i) Airbus Service Bulletin A320-53-1071, Revision 03, dated July 20, 2017.

    (ii) Airbus Service Bulletin A320-53-1072, Revision 02, dated May 5, 2016.

    (3) For service information identified in this AD, contact Airbus SAS, Airworthiness Office—EIAS, Rond-Point Emile Dewoitine No: 2, 31700 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email [email protected]; internet http://www.airbus.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 September 13, 2018. Michael Kaszycki, Acting Director, System Oversight Division, Aircraft Certification Service.
    [FR Doc. 2018-20951 Filed 9-27-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0306; Product Identifier 2018-NM-039-AD; Amendment 39-19426; AD 2018-19-25] RIN 2120-AA64 Airworthiness Directives; Dassault Aviation Airplanes AGENCY:

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

    ACTION:

    Final rule.

    SUMMARY:

    We are adopting a new airworthiness directive (AD) for all Dassault Aviation Model FALCON 2000 airplanes. This AD was prompted by a determination that new or more restrictive airworthiness limitations are necessary. This AD requires revising the maintenance or inspection program, as applicable, to incorporate new maintenance requirements and airworthiness limitations. We are issuing this AD to address the unsafe condition on these products.

    DATES:

    This AD is effective November 2, 2018.

    The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of November 2, 2018.

    ADDRESSES:

    For service information identified in this final rule, contact Dassault Falcon Jet Corporation, Teterboro Airport, P.O. Box 2000, South Hackensack, NJ 07606; telephone 201-440-6700; internet http://www.dassaultfalcon.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-2018-0306.

    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-2018-0306; 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 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:

    Tom Rodriguez, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3226.

    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 Dassault Aviation Model FALCON 2000 airplanes. The NPRM published in the Federal Register on April 30, 2018 (83 FR 18749). The NPRM was prompted by a determination that new or more restrictive airworthiness limitations are necessary. The NPRM proposed to require revising the maintenance or inspection program, as applicable, to incorporate new maintenance requirements and airworthiness limitations.

    We are issuing this AD to prevent reduced controllability of the airplane.

    The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2017-0236, dated November 30, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Dassault Aviation Model FALCON 2000 airplanes. The MCAI states:

    The airworthiness limitations for Dassault Falcon 2000 aeroplanes, which are approved by EASA, are currently defined and published in Aircraft Maintenance Manual (AMM) Airworthiness Limitations Section (ALS) Chapter 5-40. These instructions have been identified as mandatory for continued airworthiness.

    Failure to accomplish these instructions could result in an unsafe condition [i.e., reduced controllability of the airplane].

    EASA previously issued [EASA] AD 2012-0156 [which corresponds to FAA AD 2014-03-12, Amendment 39-17749 (79 FR 11693, March 3, 2014) (“AD 2014-03-12”)], requiring the actions described in Dassault Falcon 2000 AMM Chapter 5-40 (DGT 113876) at Revision 17.

    Since that [EASA] AD was issued, Dassault published Revision 18 of Dassault Falcon 2000 AMM Chapter 5-40 (DGT 113876), containing new and/or more restrictive maintenance tasks and introducing (among other changes) the Corrosion Prevention and Control Programme.

    For the reason described above, this [EASA] AD retains the requirements of EASA AD 2012-0156, which is superseded, and requires accomplishment of the actions specified in Dassault Falcon 2000 AMM Chapter 5-40 (DGT 113876) at Revision 18 * * * .

    You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0306.

    Comments

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

    Conclusion

    We reviewed the relevant data and determined that air safety and the public interest require adopting this final rule as proposed, 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.

    Related Service Information Under 1 CFR part 51

    Dassault Aviation has issued Chapter 5-40, Airworthiness Limitations, DGT 113876, Revision 19, dated November 2017, of the Dassault Falcon 2000 Maintenance Manual. This service information describes instructions applicable to airworthiness and safe life limitations. 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 195 airplanes of U.S. registry.

    We estimate the following costs to comply with this AD:

    We have determined that revising the maintenance or inspection program takes an average of 90 work-hours per operator, although this figure may vary from operator to operator. In the past, we have estimated that this action takes 1 work-hour per airplane. Since operators incorporate maintenance or inspection program changes for their affected fleet(s), we have determined that a per-operator estimate is more accurate than a per-airplane estimate. Therefore, we estimate the total cost per operator to be $7,650 (90 work-hours × $85 per work-hour).

    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 the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

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

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

    List of Subjects in 14 CFR Part 39

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

    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): 2018-19-25 Dassault Aviation: Amendment 39-19426; Docket No. FAA-2018-0306; Product Identifier 2018-NM-039-AD. (a) Effective Date

    This AD is effective November 2, 2018.

    (b) Affected ADs

    This AD affects AD 2010-26-05, Amendment 39-16544 (75 FR 79952, December 21, 2010) (“AD 2010-26-05”); and AD 2014-03-12, Amendment 39-17749 (79 FR 11693, March 3, 2014) (“AD 2014-03-12”).

    (c) Applicability

    This AD applies to all Dassault Aviation Model FALCON 2000 airplanes, certificated in any category, all serial numbers.

    (d) Subject

    Air Transport Association (ATA) of America Code 05, Time limits/maintenance checks.

    (e) Reason

    This AD was prompted by manufacturer revisions to the airplane maintenance manual (AMM) that introduce new or more restrictive maintenance requirements and airworthiness limitations. We are issuing this AD to prevent reduced controllability of the airplane.

    (f) Compliance

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

    (g) Revision of Maintenance or Inspection Program

    Within 90 days after the effective date of this AD, revise the maintenance or inspection program, as applicable, to incorporate the information specified in Chapter 5-40, Airworthiness Limitations, DGT 113876, Revision 19, dated November 2017, of the Dassault Falcon 2000 Maintenance Manual. The initial compliance times for doing the tasks are at the time specified in Chapter 5-40, Airworthiness Limitations, DGT 113876, Revision 19, dated November 2017, of the Dassault Falcon 2000 Maintenance Manual, or within 90 days after the effective date of this AD, whichever occurs later; except as required by paragraphs (g)(1) through (g)(3) of this AD. The term “LDG” in the “First Inspection” column of any table in Chapter 5-40, Airworthiness Limitations, DGT 113876, Revision 19, dated November 2017, of the Dassault Falcon 2000 Maintenance Manual, means total airplane landings. The term “FH” in the “First Inspection” column of any table in Chapter 5-40, Airworthiness Limitations, DGT 113876, Revision 19, dated November 2017, of the Dassault Falcon 2000 Maintenance Manual, means total flight hours. The term “FC” in the “First Inspection” column of any table in Chapter 5-40, Airworthiness Limitations, DGT 113876, Revision 19, dated November 2017, of the Dassault Falcon 2000 Maintenance Manual, means total flight cycles.

    (1) For Task 30-11-09-350-801 identified in the service information specified in the introductory text of paragraph (g) of this AD, the initial compliance time is the later of the times specified in paragraphs (g)(1)(i) and (g)(1)(ii) of this AD.

    (i) At the earlier of the times specified in paragraphs (g)(1)(i)(A) and (g)(1)(i)(B) of this AD.

    (A) Prior to the accumulation of 2,400 total flight hours or 2,000 total flight cycles, whichever occurs first.

    (B) Within 2,400 flight hours or 2,000 flight cycles after April 7, 2014 (the effective date of AD 2014-03-12), whichever occurs first.

    (ii) Within 30 days after April 7, 2014 (the effective date of AD 2014-03-12).

    (2) For Task 52-20-00-610-801-01 identified in the service information specified in the introductory text of paragraph (g) of this AD, the initial compliance time is within 24 months after April 7, 2014 (the effective date of AD 2014-03-12).

    (3) The limited service life of part number F2MA721512100 is 3,750 total flight cycles on the part or 6 years since the manufacturing date of the part, whichever occurs first.

    (h) No Alternative Actions or Intervals

    After the maintenance or inspection program has been revised as required by paragraph (g) of this AD, no alternative actions (e.g., inspections), or intervals, may be used unless the actions, or intervals, are approved as an alternative method of compliance (AMOC) in accordance with the procedures specified in paragraph (j)(1) of this AD.

    (i) Terminating Actions for Other ADs

    (1) Accomplishing the actions required by this AD terminates all of the requirements of AD 2014-03-12.

    (2) Accomplishing the actions required by paragraph (g) of this AD terminates the requirements of paragraph (g) of AD 2010-26-05 for all Dassault Aviation Model FALCON 2000 airplanes.

    (j) Other FAA AD Provisions

    The following provisions also apply to this AD:

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

    (2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Section, Transport Standards Branch, FAA; or the European Aviation Safety Agency (EASA); or Dassault Aviation's EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.

    (k) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA AD 2017-0236, dated November 30, 2017, for related information. This MCAI may be found in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0306.

    (2) For more information about this AD, contact Tom Rodriguez, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3226.

    (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 this AD specifies otherwise.

    (i) Chapter 5-40, Airworthiness Limitations, DGT 113876, Revision 19, dated November 2017, of the Dassault Falcon 2000 Maintenance Manual.

    (ii) Reserved.

    (3) For service information identified in this AD, contact Dassault Falcon Jet Corporation, Teterboro Airport, P.O. Box 2000, South Hackensack, NJ 07606; telephone 201-440-6700; internet http://www.dassaultfalcon.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 September 14, 2018. John P. Piccola, Acting Director, System Oversight Division, Aircraft Certification Service.
    [FR Doc. 2018-20924 Filed 9-27-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0504; Product Identifier 2018-NM-046-AD; Amendment 39-19433; AD 2018-19-32] 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 707, 720, and 720B series airplanes. This AD was prompted by a report indicating that a fracture of the midspar fitting resulted in the separation of the inboard strut and engine from the airplane, and a determination that existing inspections are not sufficient for timely detection of cracking. This AD requires repetitive inspections of certain nacelle strut spar and overwing fittings, and diagonal braces and associated fittings; replacement of the diagonal brace assembly on certain airplanes; and applicable related investigative and corrective actions. We are issuing this AD to address the unsafe condition on these products.

    DATES:

    This AD is effective November 2, 2018.

    The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of November 2, 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-2018-0504.

    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-2018-0504; 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 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:

    Jeffrey Chang, Aerospace Engineer, Propulsion Section, FAA, Los Angeles ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-5263; fax: 562-627-5210; email: [email protected]; or George Garrido, Aerospace Engineer, Airframe Section, FAA, Los Angeles ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-5232; 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 707, 720, and 720B series airplanes. The NPRM published in the Federal Register on June 7, 2018 (83 FR 26383). The NPRM was prompted by a report indicating that a fracture of the midspar fitting resulted in the separation of the inboard strut and engine from the airplane, and a determination that existing inspections are not sufficient for timely detection of cracking. The NPRM proposed to require repetitive inspections of certain nacelle strut spar and overwing fittings, and diagonal braces and associated fittings; replacement of the diagonal brace assembly on certain airplanes; and applicable related investigative and corrective actions.

    We are issuing this AD to address cracks, which if not detected and corrected, could grow beyond a critical length, allowing the strut fitting to fail and reducing the structural integrity of the nacelle. This, in combination with damage to adjacent attachment structure, could result in the loss of an engine from the airplane.

    Comments

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

    Request To Clarify Service Information Used for Oversizing Certain Holes

    Boeing requested that we revise paragraph (k) of the proposed AD to specify outboard diagonal brace end fitting (forward or aft) attach holes that have been oversized as specified in Boeing 707 Alert Service Bulletin A3364, “Revision 3, dated May 29, 1981,” rather than “Revision 4, dated February 21, 2017.” Boeing noted that Boeing 707 Alert Service Bulletin A3364, Revision 4, dated February 21, 2017, does not contain instructions for oversizing the attach holes, but instead refers to oversizing done as specified in Revision 3. Boeing added that, as written, the proposed AD would not require operators to replace a diagonal brace assembly with attach holes that were oversized as specified in Boeing 707 Alert Service Bulletin A3364, Revision 3, dated May 29, 1981, potentially allowing an unsafe condition to continue.

    We agree with the commenter's request. We have revised paragraph (k) of this AD to specify “. . . outboard diagonal brace end fitting (forward or aft) attach holes have been oversized as specified in Boeing 707 Alert Service Bulletin A3364, Revision 3, dated May 29, 1981.”

    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 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 the following service information.

    • Boeing 707 Alert Service Bulletin A3364, Revision 4, dated February 21, 2017. This service information describes procedures for repetitive detailed inspections of the diagonal brace tube for any crack; repetitive detailed inspections and high frequency eddy current (HFEC) inspections of the nacelle strut diagonal brace end fittings, forward mating fitting, and aft mating fitting for any crack; an alternative dye penetrant inspection of vertical webs on aft mating fitting for any crack; an HFEC inspection of the diagonal brace tube for any crack; and corrective actions.

    • Boeing 707 Alert Service Bulletin A3365, Revision 3, dated March 9, 2017. This service information describes procedures for repetitive detailed, HFEC, and ultrasonic inspections of the overwing support fittings for any crack at the bolt hole forward of the wing front spar and at the holes for the four fasteners attaching the fitting to the spar, and related investigative and corrective actions.

    • Boeing 707 Alert Service Bulletin A3514, Revision 1, dated November 9, 2016. This service information describes procedures for repetitive detailed and surface HFEC inspections of the front spar fittings at nacelle struts numbers 1, 2, 3, and 4 for cracks, and replacement of cracked front spar fittings.

    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 65 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 Detailed inspections per Service Bulletin A3364, Revision 4 36 work-hours × $85 per hour = $3,060 per inspection cycle $0 $3,060 per inspection cycle $198,900 per inspection cycle. HFEC inspections per Service Bulletin A3364, Revision 4 128 work-hours × $85 per hour = $10,880 per inspection cycle 0 $10,880 per inspection cycle $707,200 per inspection cycle. Inspections per Service Bulletin A3365, Revision 3 20 work-hours × $85 per hour = $1,700 per inspection cycle 0 $1,700 per inspection cycle $110,500 per inspection cycle. Detailed inspections per Service Bulletin A3514, Revision 1 12 work-hours × $85 per hour = $1,020 per inspection cycle 0 $1,020 per inspection cycle $66,300 per inspection cycle. HFEC inspections per Service Bulletin A3514, Revision 1 32 work-hours × $85 per hour = $2,720 per inspection cycle 0 $2,720 per inspection cycle $176,800 per inspection cycle.

    We estimate that any necessary replacement of affected fittings would take about 96 work-hours for a cost of $8,160 per fitting. We have received no definitive data on the parts costs of the affected fittings. We have no way of determining the number of aircraft that might need this replacement.

    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): 2018-19-32 The Boeing Company: Amendment 39-19433; Docket No. FAA-2018-0504; Product Identifier 2018-NM-046-AD. (a) Effective Date

    This AD is effective November 2, 2018.

    (b) Affected ADs

    This AD affects AD 82-24-03, Amendment 39-4496 (47 FR 51099, November 12, 1982) (“AD 82-24-03”) and AD 2005-08-15, Amendment 39-14067 (70 FR 21136, April 25, 2005) (“AD 2005-08-15”).

    (c) Applicability

    This AD applies to all The Boeing Company Model 707-100 Long Body, -200, -100B Long Body, and -100B Short Body series airplanes; Model 707-300, -300B, -300C, and -400 series airplanes; and Model 720 and 720B series airplanes; certificated in any category.

    (d) Subject

    Air Transport Association (ATA) of America Code 54, Nacelles/pylons.

    (e) Unsafe Condition

    This AD was prompted by a report indicating that a fracture of the midspar fitting resulted in the separation of the inboard strut and engine from the airplane, and a determination that existing inspections for other nacelle strut fittings are not sufficient for timely detection of cracking. We are issuing this AD to address cracks, which if not detected and corrected, could grow beyond a critical length, allowing the strut fitting to fail and reducing the structural integrity of the nacelle. This, in combination with damage to adjacent attachment structure, could result in the loss of an engine from the airplane.

    (f) Compliance

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

    (g) Repetitive Detailed Inspections of the Front Spar Fittings at Nacelle Struts Numbers 1, 2, 3, and 4

    Prior to the accumulation of 3,500 total flight hours; within 700 flight hours after the most recent inspection specified in Boeing 707 Alert Service Bulletin A3514, dated July 29, 2004, was done; or within three months after the effective date of this AD; whichever occurs later: Do a detailed inspection for cracking of the front spar fittings at nacelle struts numbers 1, 2, 3, and 4, in accordance with the Accomplishment Instructions of Boeing 707 Alert Service Bulletin A3514, Revision 1, dated November 9, 2016. If any cracking is found, before further flight, replace the affected fitting, in accordance with the Accomplishment Instructions of Boeing 707 Alert Service Bulletin A3514, Revision 1, dated November 9, 2016. Repeat the inspections thereafter at intervals not to exceed 700 flight hours.

    (h) Repetitive Surface High Frequency Eddy Current (HFEC) Inspections of the Aft Lugs on the Front Spar Fittings at Nacelle Struts Numbers 1, 2, 3, and 4

    Within 1,500 flight cycles or 48 months after the most recent detailed inspection required by paragraph (g) of this AD was done, whichever occurs first, do a surface HFEC inspection for cracking of the aft lugs on the front spar fittings at nacelle struts numbers 1, 2, 3, and 4, and do all applicable corrective actions, in accordance with the Accomplishment Instructions of Boeing 707 Alert Service Bulletin A3514, Revision 1, dated November 9, 2016, except as required by paragraph (l)(4) of this AD. Do all applicable corrective actions before further flight. Repeat the inspection thereafter at intervals not to exceed 1,500 flight cycles or 48 months, whichever occurs first.

    (i) Repetitive Inspections of the Overwing Support Fitting at Nacelle Struts Numbers 1, 2, 3, and 4

    At the times specified in paragraph 1.E., “Compliance,” of Boeing 707 Alert Service Bulletin A3365, Revision 3, dated March 9, 2017, except as required by paragraph (l)(1) of this AD: Do the inspections specified in paragraphs (i)(1) through (i)(3) of this AD and do all applicable related investigative and corrective actions, in accordance with the Accomplishment Instructions of Boeing 707 Alert Service Bulletin A3365, Revision 3, dated March 9, 2017, except as required by paragraph (l)(3) of this AD. Do all applicable related investigative and corrective actions before further flight. Repeat the inspections thereafter at the applicable time specified in paragraph 1.E., “Compliance,” of Boeing 707 Alert Service Bulletin A3365, Revision 3, dated March 9, 2017.

    (1) Do a detailed inspection for any crack at all five holes in the overwing support fitting, and at the flange radii.

    (2) Do the inspection specified in paragraph (i)(2)(i) or (i)(2)(ii) of this AD.

    (i) Do a surface HFEC inspection for any crack in the overwing support fitting around the hole immediately forward of the spar chord, with the bolt in place, and at the flange radii.

    (ii) Do an open hole HFEC inspection for any crack in the overwing support fitting at the hole immediately forward of the spar chord.

    (3) Do the inspection specified in paragraph (i)(3)(i) or (i)(3)(ii) of this AD.

    (i) Do an ultrasonic inspection for any crack in the overwing support fitting around the four holes common to the fitting and the spar chord, with the bolts in place.

    (ii) Do a surface HFEC inspection for any crack in the overwing support fitting around the four holes common to the fitting and the spar chord, with the bolts in place.

    (j) Inspections of the Nacelle Strut Diagonal Braces and Associated Fittings

    For airplanes with nacelle strut diagonal braces and associated fittings which have accumulated 7,500 flight cycles or more: At the applicable times specified in paragraph 1.E., “Compliance” of Boeing 707 Alert Service Bulletin A3364, Revision 4, dated February 21, 2017, except as required by paragraph (l)(2) of this AD, do the inspections specified in paragraphs (j)(1) through (j)(3) of this AD. Repeat the inspections thereafter at the applicable intervals specified in tables 1, 2, 3, and 4 of paragraph 1.E., “Compliance,” of Boeing 707 Alert Service Bulletin A3364, Revision 4, dated February 21, 2017. If any crack is found during any inspection required by this paragraph, before further flight, do all applicable corrective actions, in accordance with the Accomplishment Instructions of Boeing 707 Alert Service Bulletin A3364, Revision 4, dated February 21, 2017, except as required by paragraph (l)(3) of this AD.

    (1) Do a detailed inspection of the nacelle strut diagonal brace end fittings, diagonal brace tube, forward mating fitting, and aft mating fitting for any crack.

    (2) Do HFEC inspections of the nacelle strut diagonal brace end fittings, forward mating fitting, and aft mating fitting for any crack. As an alternative for the aft mating fitting, do a dye penetrant inspection of vertical webs on aft mating fitting for any crack.

    (3) Do an HFEC inspection of the diagonal brace tube for any crack.

    (k) Replacement

    For Group 3, 4, and 6 airplanes as identified in Boeing 707 Alert Service Bulletin A3364, Revision 4, dated February 21, 2017, on which the outboard diagonal brace end fitting (forward or aft) attach holes have been oversized as specified in Boeing 707 Alert Service Bulletin A3364, Revision 3, dated May 29, 1981: Within 1,000 flight cycles after the effective date of this AD, replace the diagonal brace assembly, in accordance with Figure 3 of Boeing 707 Alert Service Bulletin A3364, Revision 4, dated February 21, 2017.

    (l) Exceptions to Service Information Specifications

    (1) For purposes of determining compliance with the requirements of this AD: Where Boeing 707 Alert Service Bulletin A3365, Revision 3, dated March 9, 2017, uses the phrase “the Revision 3 date of this service bulletin,” this AD requires using “the effective date of this AD.”

    (2) For purposes of determining compliance with the requirements of this AD: Where Boeing 707 Alert Service Bulletin A3364, Revision 4, dated February 21, 2017, uses the phrase “the Revision 4 date of this service bulletin,” this AD requires using “the effective date of this AD.”

    (3) Where Boeing 707 Alert Service Bulletin A3364, Revision 4, dated February 21, 2017; and Boeing 707 Alert Service Bulletin A3365, Revision 3, dated March 9, 2017; specify contacting Boeing: This AD requires repair using a method approved in accordance with the procedures specified in paragraph (o) of this AD.

    (4) Where Boeing 707 Alert Service Bulletin A3514, Revision 1, dated November 9, 2016, specifies contacting Boeing for replacement instructions: This AD requires replacement using a method approved in accordance with the procedures specified in paragraph (o) of this AD.

    (m) Terminating Action for Other ADs

    (1) Accomplishing the initial inspections required by paragraph (j) of this AD terminates all requirements of AD 82-24-03.

    (2) Accomplishing the initial inspections required by paragraph (g) of this AD, terminates all requirements of AD 2005-08-15.

    (n) Parts Installation Prohibition

    As of the effective date of this AD, no person may install, on any airplane, a front spar fitting having a part number other than the part numbers specified in paragraph 2.C.2. of Boeing 707 Alert Service Bulletin A3514, Revision 1, dated November 9, 2016.

    (o) 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(s) identified in paragraph (p)(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, replacement, 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, replacement deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.

    (p) Related Information

    (1) For more information about this AD, contact Jeffrey Chang, Aerospace Engineer, Propulsion Section, FAA, Los Angeles ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-5263; fax: 562-627-5210; email: [email protected]; or George Garrido, Aerospace Engineer, Airframe Section, FAA, Los Angeles ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-5232; fax: 562-627-5210; email [email protected].

    (2) Service information identified in this AD that is not incorporated by reference is available at the addresses specified in paragraphs (q)(3) and (q)(4) of this AD.

    (q) 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 707 Alert Service Bulletin A3364, Revision 4, dated February 21, 2017.

    (ii) Boeing 707 Alert Service Bulletin A3365, Revision 3, dated March 9, 2017.

    (iii) Boeing 707 Alert Service Bulletin A3514, Revision 1, dated November 9, 2016.

    (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 September 17, 2018. John P. Piccola, Acting Director, System Oversight Division, Aircraft Certification Service.
    [FR Doc. 2018-20918 Filed 9-27-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0491; Product Identifier 2017-NM-158-AD; Amendment 39-19432; AD 2018-19-31] RIN 2120-AA64 Airworthiness Directives; Airbus SAS Airplanes AGENCY:

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

    ACTION:

    Final rule.

    SUMMARY:

    We are adopting a new airworthiness directive (AD) for all Airbus SAS Model A310 series airplanes. This AD was prompted by a determination that new or more restrictive maintenance requirements and airworthiness limitations are necessary. This AD requires revising the maintenance or inspection program, as applicable, to incorporate new or more restrictive maintenance requirements and airworthiness limitations. We are issuing this AD to address the unsafe condition on these products.

    DATES:

    This AD is effective November 2, 2018.

    The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of November 2, 2018.

    ADDRESSES:

    For service information identified in this final rule, contact Airbus SAS, Airworthiness Office—EAW, Rond-Point Emile Dewoitine No: 2, 31700 Blagnac Cedex, France; phone: +33 5 61 93 36 96; fax: +33 5 61 93 44 51; email: [email protected]; internet: http://www.airbus.com. You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195. It is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0491.

    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-2018-0491; 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 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:

    Dan Rodina, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; phone and fax: 206-231-3225.

    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 Airbus SAS Model A310 series airplanes. The NPRM published in the Federal Register on June 1, 2018 (83 FR 25412). The NPRM was prompted by a determination that new or more restrictive maintenance requirements and airworthiness limitations are necessary. The NPRM proposed to require revising the maintenance or inspection program, as applicable, to incorporate new or more restrictive maintenance requirements and airworthiness limitations.

    We are issuing this AD to address prevent fatigue cracking, damage, or corrosion in principal structural elements, which could result in reduced structural integrity of the airplane.

    The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2017-0206, dated October 12, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus Model A310 series airplanes. The MCAI states:

    The airworthiness limitations for the Airbus A310 aeroplanes, which are approved by EASA, are currently defined and published in the Airbus A310 Airworthiness Limitations Section (ALS) documents. The Damage Tolerant Airworthiness Limitation Items are specified in the A310 ALS Part 2. These instructions have been identified as mandatory for continuing airworthiness.

    Failure to accomplish these instructions could result in an unsafe condition.

    EASA previously issued AD 2016-0217 [which corresponds to FAA AD 2017-21-08, Amendment 39-19079 (82 FR 48904, October 23, 2017) (“AD 2017-21-08”)] to require compliance with the maintenance requirements and associated airworthiness limitations defined in Airbus A310 ALS Part 2 Revision 01, Variation 1.1 and Variation 1.2.

    Since that [EASA] AD was issued, new or more restrictive maintenance requirements and associated airworthiness limitations were approved by the EASA. Consequently, Airbus published Revision 02 of the A310 ALS Part 2, compiling all ALS Part 2 changes approved since previous Revision 01.

    For the reason described above, this [EASA] AD retains the requirements of EASA AD 2016-0217, which is superseded, and requires accomplishment of the actions specified in Airbus A310 ALS Part 2 Revision 02.

    The unsafe condition is fatigue cracking, damage, or corrosion in principal structural elements, which could result in reduced structural integrity of the airplane. You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0491.

    Comments

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

    Conclusion

    We reviewed the relevant data and determined that air safety and the public interest require adopting this final rule as proposed, 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.

    Related Service Information Under 1 CFR Part 51

    Airbus SAS has issued A310 Airworthiness Limitations Section (ALS), Part 2, “Damage Tolerant Airworthiness Limitation Items (DT-ALI),” Revision 02, dated August 28, 2017. This service information describes airworthiness limitations applicable to the DT-ALIs. 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 6 airplanes of U.S. registry.

    We estimate the following costs to comply with this AD:

    We have determined that revising the maintenance or inspection program takes an average of 90 work-hours per operator, although we recognize that this number may vary from operator to operator. In the past, we have estimated that this action takes 1 work-hour per airplane. Since operators incorporate maintenance or inspection program changes for their affected fleet(s), we have determined that a per-operator estimate is more accurate than a per-airplane estimate. Therefore, we estimate the total cost per operator to be $7,650 (90 work-hours × $85 per work-hour).

    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 the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

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

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

    List of Subjects in 14 CFR Part 39

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

    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): 2018-19-31 Airbus SAS: Amendment 39-19432; Docket No. FAA-2018-0491; Product Identifier 2017-NM-158-AD. (a) Effective Date

    This AD is effective November 2, 2018.

    (b) Affected ADs

    This AD affects AD 2017-21-08, Amendment 39-19079 (82 FR 48904, October 23, 2017) (“AD 2017-21-08”).

    (c) Applicability

    This AD applies to Airbus SAS Model A310-203, -204, -221, -222, -304, -322, -324, and -325 airplanes, certificated in any category, all manufacturer serial numbers.

    (d) Subject

    Air Transport Association (ATA) of America Code 05, Time limits/maintenance checks.

    (e) Reason

    This AD was prompted by a determination that new or more restrictive maintenance requirements and airworthiness limitations are necessary. We are issuing this AD to prevent fatigue cracking, damage, or corrosion in principal structural elements, which could result in reduced structural integrity of the airplane.

    (f) Compliance

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

    (g) Maintenance or Inspection Program Revision

    Within 90 days after the effective date of this AD, revise the maintenance or inspection program, as applicable, to incorporate the information specified in Airbus A310 Airworthiness Limitations Section (ALS), Part 2, “Damage Tolerant Airworthiness Limitation Items (DT-ALI),” Revision 02, dated August 28, 2017. The initial compliance time for doing the tasks is at the time specified in Airbus A310 Airworthiness Limitations Section (ALS), Part 2, “Damage Tolerant Airworthiness Limitation Items (DT-ALI),” Revision 02, dated August 28, 2017, or within 90 days after the effective date of this AD, whichever occurs later.

    (h) No Alternative Actions or Intervals

    After the maintenance or inspection program has been revised as required by paragraph (g) of this AD, no alternative actions (e.g., inspections) or intervals may be used unless the actions or intervals are approved as an alternative method of compliance (AMOC) in accordance with the procedures specified in paragraph (j)(1) of this AD.

    (i) Terminating Action for AD 2017-21-08

    Accomplishing the actions required by this AD terminates all requirements of AD 2017-21-08.

    (j) Other FAA AD Provisions

    The following provisions also apply to this AD:

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

    (2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Section, Transport Standards Branch, FAA; or the European Aviation Safety Agency (EASA); or Airbus's EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.

    (k) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA AD 2017-0206, dated October 12, 2017, for related information. This MCAI may be found in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0491.

    (2) For more information about this AD, contact Dan Rodina, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; phone and fax: 206-231-3225.

    (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 this AD specifies otherwise.

    (i) Airbus A310 Airworthiness Limitations Section (ALS), Part 2, “Damage Tolerant Airworthiness Limitation Items (DT-ALI),” Revision 02, dated August 28, 2017.

    (ii) Reserved.

    (3) For service information identified in this AD, contact Airbus SAS, Airworthiness Office—EAW, Rond-Point Emile Dewoitine No: 2, 31700 Blagnac Cedex, France; phone: +33 5 61 93 36 96; fax: +33 5 61 93 44 51; email: [email protected]; internet: http://www.airbus.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 September 17, 2018. John P. Piccola, Acting Director, System Oversight Division, Aircraft Certification Service.
    [FR Doc. 2018-20931 Filed 9-27-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0360; Product Identifier 2018-NM-009-AD; Amendment 39-19434; AD 2018-19-33] RIN 2120-AA64 Airworthiness Directives; Airbus SAS Airplanes AGENCY:

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

    ACTION:

    Final rule.

    SUMMARY:

    We are adopting a new airworthiness directive (AD) for all Airbus SAS Model A300 B4-600, B4-600R, and F4-600R series airplanes, and Model A300 C4-605R Variant F airplanes (collectively called Model A300-600 series airplanes). This AD was prompted by a determination that more restrictive maintenance requirements and airworthiness limitations are necessary. This AD requires revising the maintenance or inspection program, as applicable, to incorporate new or more restrictive maintenance requirements and airworthiness limitations. We are issuing this AD to address the unsafe condition on these products.

    DATES:

    This AD is effective November 2, 2018.

    The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of November 2, 2018.

    ADDRESSES:

    For service information identified in this final rule, contact Airbus SAS, Airworthiness Office—EAW, Rond-Point Emile Dewoitine No: 2, 31700 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email [email protected]; internet http://www.airbus.com. You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195. It is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0360.

    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-2018-0360; 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 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:

    Dan Rodina, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3225.

    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 Airbus SAS Model A300 B4-600, B4-600R, and F4-600R series airplanes, and Model A300 C4-605R Variant F airplanes (collectively called Model A300-600 series airplanes). The NPRM published in the Federal Register on April 30, 2018 (83 FR 18756). The NPRM was prompted by a determination that more restrictive maintenance requirements and airworthiness limitations are necessary. The NPRM proposed to require revising the maintenance or inspection program, as applicable, to incorporate new or more restrictive maintenance requirements and airworthiness limitations.

    We are issuing this AD to prevent fatigue cracking, damage, or corrosion in principal structural elements, which could result in reduced structural integrity of the airplane.

    The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD EASA AD 2017-0205, dated October 12, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus SAS Model A300 B4-600, B4-600R, and F4-600R series airplanes, and Model A300 C4-605R Variant F airplanes (collectively called Model A300-600 series airplanes). The MCAI states:

    The airworthiness limitations for the Airbus A300-600 aeroplanes, which are approved by EASA, are currently defined and published in the Airbus A300-600 Airworthiness Limitations Section (ALS) documents. The Damage Tolerant Airworthiness Limitation Items are specified in the A300-600 ALS Part 2. These instructions have been identified as mandatory for continuing airworthiness.

    Failure to accomplish these instructions could result in an unsafe condition [i.e., to prevent fatigue cracking, damage, or corrosion in principal structural elements, which could result in reduced structural integrity of the airplane].

    EASA previously issued [EASA] AD 2016-0218 [which corresponds to FAA AD 2018-01-07, Amendment 39-19148 (83 FR 2042, January 16, 2018) (“AD 2018-01-07”)] to require compliance with the maintenance requirements and associated airworthiness limitations defined in Airbus A300-600 ALS Part 2 Revision 01, Variation 1.1 and Variation 1.2.

    Since that [EASA] AD was issued, new or more restrictive maintenance requirements and airworthiness limitations were approved by the EASA. Consequently, Airbus published Revision 02 of the A300-600 ALS Part 2, compiling all ALS Part 2 changes approved since previous Revision 01.

    For the reason described above, this [EASA] AD retains the requirements of EASA AD 2016-0218, which is superseded, and requires accomplishment of the actions specified in Airbus A300-600 ALS Part 2 Revision 02.

    You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0360.

    Comments

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

    Request

    United Parcel Service (UPS) requested that we provide approval for alternative methods of compliance (AMOCs) that were previously approved for AD 2013-13-13, Amendment 39-17501 (79 FR 48957, August 19, 2014) (“AD 2013-13-13”); and AD 2018-01-07, Amendment 39-19148 (83 FR 2042, January 16, 2018) (“AD 2018-01-07”).

    We agree that AMOCs previously approved for AD 2018-01-07 and AD 2013-13-13 should be approved for this AD. The FAA has reviewed the related AMOCs, and it is acceptable to give credit for previous AMOCs approved for AD 2018-01-07, which will be terminated by this AD. AD 2018-01-07 approved the use of AMOCs for AD 2013-13-13, and those AMOCs remain in force. As a result, we have revised paragraph (j)(1) of this AD accordingly.

    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 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

    Airbus SAS has issued A300-600 Airworthiness Limitations Section (ALS), Part 2, “Damage Tolerant Airworthiness Limitation Items (DT-ALI),” Revision 02, dated August 28, 2017. This service information describes airworthiness limitations applicable to the DT-ALIs. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

    FAA's Determination and Requirements of This AD

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

    This AD requires revisions to certain operator maintenance documents to include new actions (e.g., inspections). Compliance with these actions is required by 14 CFR 91.403(c). For airplanes that have been previously modified, altered, or repaired in the areas addressed by this AD, the operator may not be able to accomplish the actions described in the revisions. In this situation, to comply with 14 CFR 91.403(c), the operator must request approval for an AMOC according to paragraph (j)(1) of this AD. The request should include a description of changes to the required actions that will ensure the continued damage tolerance of the affected structure.

    Difference Between the MCAI and This AD

    The MCAI specifies that if there are findings from the ALS inspection tasks, corrective actions must be accomplished in accordance with Airbus SAS maintenance documentation. However, this AD does not include that requirement. Operators of U.S.-registered airplanes are required by general airworthiness and operational regulations to perform maintenance using methods that are acceptable to the FAA. We consider those methods to be adequate to address any corrective actions necessitated by the findings of ALS inspections required by this AD.

    Costs of Compliance

    We estimate that this AD affects 125 airplanes of U.S. registry.

    We estimate the following costs to comply with this AD:

    We have determined that revising the maintenance or inspection program takes an average of 90 work-hours per operator, although we recognize that this number may vary from operator to operator. In the past, we have estimated that this action takes 1 work-hour per airplane. Since operators incorporate maintenance or inspection program changes for their affected fleet(s), we have determined that a per-operator estimate is more accurate than a per-airplane estimate. Therefore, we estimate the total cost per operator to be $7,650 (90 work-hours × $85 per work-hour).

    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 the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

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

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

    List of Subjects in 14 CFR Part 39

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

    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): . 2018-19-33 Airbus SAS: Amendment 39-19434; Docket No. FAA-2018-0360; Product Identifier 2018-NM-009-AD. (a) Effective Date

    This AD is effective November 2, 2018.

    (b) Affected ADs

    This AD affects AD 2018-01-07, Amendment 39-19148 (83 FR 2042, January 16, 2018) (“AD 2018-01-07”).

    (c) Applicability

    This AD applies to Airbus SAS Model A300 B4-601, B4-603, B4-620, B4-622, B4-605R, B4-622R, F4-605R, F4-622R, and C4-605R Variant F airplanes, certificated in any category, all manufacturer serial numbers.

    (d) Subject

    Air Transport Association (ATA) of America Code 05, Time limits/maintenance checks.

    (e) Reason

    This AD was prompted by a determination that more restrictive maintenance requirements and airworthiness limitations are necessary. We are issuing this AD to address fatigue cracking, damage, and corrosion in principal structural elements, which could result in reduced structural integrity of the airplane.

    (f) Compliance

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

    (g) Revision of Maintenance or Inspection Program

    Within 90 days after the effective date of this AD, revise the maintenance or inspection program, as applicable, to incorporate the information specified in Airbus A300-600 Airworthiness Limitations Section (ALS), Part 2, “Damage Tolerant Airworthiness Limitation Items (DT-ALI),” Revision 02, dated August 28, 2017. The initial compliance times for doing the tasks are at the applicable times specified in Airbus A300-600 ALS, Part 2, “Damage Tolerant Airworthiness Limitation Items (DT-ALI),” Revision 02, dated August 28, 2017, or within 90 days after the effective date of this AD, whichever occurs later.

    (h) No Alternative Actions or Intervals

    After the maintenance or inspection program has been revised as required by paragraph (g) of this AD, no alternative actions (e.g., inspections) or intervals may be used unless the actions or intervals are approved as an alternative method of compliance (AMOC) in accordance with the procedures specified in paragraph (j)(1) of this AD.

    (i) Terminating Actions for AD 2018-01-07

    Accomplishing the actions required by this AD terminates all requirements of AD 2018-01-07.

    (j) Other FAA AD Provisions

    The following provisions also apply to this AD:

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

    (i) 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.

    (ii) AMOCs approved previously for AD 2018-01-07 are approved as AMOCs for the corresponding provisions of this AD.

    (2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Section, Transport Standards Branch, FAA; or the European Aviation Safety Agency (EASA); or Airbus SAS's EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.

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

    (k) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA AD 2017-0205, dated October 12, 2017, for related information. This MCAI may be found in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0360.

    (2) For more information about this AD, contact Dan Rodina, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3225.

    (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 this AD specifies otherwise.

    (i) Airbus A300-600 Airworthiness Limitations Section (ALS), Part 2, “Damage Tolerant Airworthiness Limitation Items (DT-ALI),” Revision 02, dated August 28, 2017.

    (ii) Reserved.

    (3) For service information identified in this AD, contact Airbus SAS, Airworthiness Office—EAW, Rond-Point Emile Dewoitine No: 2, 31700 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email [email protected]; internet http://www.airbus.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 September 17, 2018. John P. Piccola, Acting Director, System Oversight Division, Aircraft Certification Service.
    [FR Doc. 2018-20921 Filed 9-27-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0509; Product Identifier 2017-NM-076-AD; Amendment 39-19429; AD 2018-19-28] RIN 2120-AA64 Airworthiness Directives; Embraer S.A. Airplanes AGENCY:

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

    ACTION:

    Final rule.

    SUMMARY:

    We are adopting a new airworthiness directive (AD) for certain Embraer S.A. Model ERJ 190-100 STD, -100 LR, -100 ECJ, and -100 IGW airplanes; and Model ERJ 190-200 STD, -200 LR, and -200 IGW airplanes. This AD was prompted by reports of bushing migration and loss of nut torque on the engine pylon lower inboard and outboard link fittings. This AD requires modification of the attaching parts of the left-hand (LH) and right-hand (RH) pylon lower link fittings, inboard and outboard positions. We are issuing this AD to address the unsafe condition on these products.

    DATES:

    This AD is effective November 2, 2018.

    The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of November 2, 2018.

    ADDRESSES:

    For service information identified in this final rule, contact Embraer S.A., Technical Publications Section (PC 060), Av. Brigadeiro Faria Lima, 2170—Putim—12227-901 São Jose dos Campos—SP—Brazil; phone: +55 12 3927-5852 or +55 12 3309-0732; fax: +55 12 3927-7546; email: [email protected]; internet: http://www.flyembraer.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-2018-0509

    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-2018-0509; 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 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:

    Krista Greer, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; phone and fax: 206-231-3221.

    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 Embraer S.A. Model ERJ 190-100 STD, -100 LR, -100 ECJ, and -100 IGW airplanes; and Model ERJ 190-200 STD, -200 LR, and -200 IGW airplanes. The NPRM published in the Federal Register on June 11, 2018 (83 FR 26877). The NPRM was prompted by reports of bushing migration and loss of nut torque on the engine pylon lower inboard and outboard link fittings. The NPRM proposed to require modification of the attaching parts of the LH and RH pylon lower link fittings, inboard and outboard positions. The NPRM also specified that accomplishing certain proposed actions would terminate certain requirements in AD 2014-16-16, Amendment 39-17940 (79 FR 48018, August 15, 2014).

    We are issuing this AD to address loss of integrity of the engine pylon lower link fittings, possibly resulting in separation of the engine from the wing.

    Agência Nacional de Aviação Civil (ANAC), which is the aviation authority for Brazil, has issued Brazilian AD 2017-04-01, effective April 25, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Embraer S.A. Model ERJ 190-100 STD, -100 LR, -100 ECJ, and -100 IGW airplanes; and Model ERJ 190-200 STD, -200 LR, and -200 IGW airplanes. The MCAI states:

    This [Brazilian] AD was prompted by reports of bushing migration and loss of nut torque on the engine pylon lower inboard and outboard link fittings. We are issuing this [Brazilian] AD to prevent loss of integrity of the engine pylon lower link fittings, which could result in separation of the engine from the wing.

    This [Brazilian] AD requires modifications of the attaching parts of the left handle (LH) and right handle (RH) pylon lower link fittings, inboard and outboard positions.

    You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0509.

    Comments

    We gave the public the opportunity to participate in developing this final rule. We have considered the comment received. The Air Line Pilots Association, International (ALPA) stated that it supported the intent of the NPRM.

    Conclusion

    We reviewed the relevant data, considered the comment received, and determined that air safety and the public interest require adopting this final rule as proposed, 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.

    Related Service Information Under 1 CFR Part 51

    Embraer S.A. has issued Embraer Service Bulletin 190-54-0016, Revision 04, dated December 7, 2017; and Embraer Service Bulletin 190LIN-54-0008, Revision 02, dated May 9, 2018. The service information describes procedures for modification of the attaching parts of the LH and RH pylon lower link fittings, inboard and outboard positions. 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 85 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 Up to 270 work-hours × $85 per hour = $22,950 $3,200 Up to $26,150 Up to $2,222,750.

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

    Authority for This Rulemaking

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

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

    This 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 the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

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

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

    List of Subjects in 14 CFR Part 39

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

    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): 2018-19-28 Embraer S.A.: Amendment 39-19429; Docket No. FAA-2018-0509; Product Identifier 2017-NM-076-AD. (a) Effective Date

    This AD is effective November 2, 2018.

    (b) Affected ADs

    This AD affects AD 2014-16-16, Amendment 39-17940 (79 FR 48018, August 15, 2014) (“AD 2014-16-16”).

    (c) Applicability

    This AD applies to the Embraer S.A. airplanes identified in paragraphs (c)(1) and (c)(2) of this AD, certificated in any category.

    (1) Model ERJ 190-100 STD, -100 LR, and -100 IGW airplanes; and Model ERJ 190-200 STD, -200 LR, and -200 IGW airplanes; as identified in Embraer Service Bulletin 190-54-0016, Revision 04, dated December 7, 2017.

    (2) Model ERJ 190-100 ECJ airplanes as identified in Embraer Service Bulletin 190LIN-54-0008, Revision 02, dated May 9, 2018.

    (d) Subject

    Air Transport Association (ATA) of America Code 54, Nacelles/pylons.

    (e) Reason

    This AD was prompted by reports of bushing migration and loss of nut torque on the engine pylon lower inboard and outboard link fittings. We are issuing this AD to prevent loss of integrity of the engine pylon lower link fittings, possibly resulting in separation of the engine from the wing.

    (f) Compliance

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

    (g) Definitions

    (1) Group 1 airplanes are defined as: Serial numbers 19000002, 19000004, 19000006 through 19000108 inclusive, 19000110 through 19000139 inclusive, 19000141 through 19000158 inclusive, 19000160 through 19000176 inclusive, 19000178 through 19000202 inclusive, 19000204 through 19000224 inclusive, 19000226 through 19000235 inclusive, 19000237 through 19000242 inclusive, 19000244 through 19000260 inclusive, 19000262 through 19000277 inclusive, 19000279 through 19000295 inclusive, 19000297 through 19000306 inclusive, 19000308 through 19000316 inclusive, 19000318 through 19000361 inclusive, 19000363 through 19000437 inclusive, 19000439 through 19000452 inclusive, 19000454 through 19000466 inclusive, 19000468 through 19000525 inclusive, 19000527 through 19000533 inclusive, 19000535 through 19000558 inclusive, 19000560 through 19000570 inclusive, 19000572 through 19000610 inclusive, 19000612 through 19000631 inclusive, and 19000633 through 19000636 inclusive.

    (2) Group 2 airplanes are defined as: Serial numbers 19000637 through 19000640 inclusive, 19000642 through 19000655 inclusive, 19000657 through 19000682 inclusive, 19000684 through 19000686 inclusive, 19000688, 19000689, and 19000692 through 19000694 inclusive.

    (h) Left-Hand (LH) Pylon Lower Link Fitting Attaching Parts Modification

    (1) For Group 1 airplanes as identified in paragraph (g)(1) of this AD: Within 15,000 flight hours or 48 months after the effective date of this AD, whichever occurs later, replace the plain bushings of the lower inboard and outboard link fittings, install the lock washers with the L-profile on the fuse pin's head side, and replace the internal shear pin of the fuse pins with new ones having larger head diameter, in accordance with “PART I” of the Accomplishment Instructions of Embraer Service Bulletin 190-54-0016, Revision 04, dated December 7, 2017.

    (2) For Group 2 airplanes as identified in paragraph (g)(2) of this AD: Within 15,000 flight hours or 48 months after the effective date of this AD, whichever occurs later, replace the internal shear pin of the fuse pins with new ones having larger head diameter, in accordance with “PART I” of the Accomplishment Instructions of Embraer Service Bulletin 190-54-0016, Revision 04, dated December 7, 2017.

    (3) For airplanes identified as Group 1 in Embraer Service Bulletin 190LIN-54-0008, Revision 02, dated May 9, 2018: Within 48 months after the effective date of this AD, replace the plain bushings of the lower inboard and outboard link fittings, install the lock washers with the L-profile on the fuse pin's head side, and replace the internal shear pin of the fuse pins with new ones having larger head diameter, in accordance with “PART I” of the Accomplishment Instructions of Embraer Service Bulletin 190LIN-54-0008, Revision 02, dated May 9, 2018.

    (4) For airplanes identified as Group 2 in Embraer Service Bulletin 190LIN-54-0008, Revision 02, dated May 9, 2018: Within 48 months after the effective date of this AD, replace the internal shear pin of the fuse pins with new ones having larger head diameter, in accordance with “PART I” of the Accomplishment Instructions of Embraer Service Bulletin 190LIN-54-0008, Revision 02, dated May 9, 2018.

    (i) Right-Hand (RH) Pylon Lower Link Fitting Attaching Parts Modification

    (1) For Group 1 airplanes as identified in paragraph (g)(1) of this AD: Within 15,000 flight hours or 48 months after the effective date of this AD, whichever occurs later, replace the plain bushings of the lower inboard and outboard link fittings, install the lock washers with the L-profile on the fuse pin's head side, and replace the internal shear pin of the fuse pins with new ones having larger head diameter, in accordance with “PART II” of the Accomplishment Instructions of Embraer Service Bulletin 190-54-0016, Revision 04, dated December 7, 2017.

    (2) For Group 2 airplanes as identified in paragraph (g)(2) of this AD: Within 15,000 flight hours or 48 months after the effective date of this AD, whichever occurs later, replace the internal shear pin of the fuse pins with new ones having larger head diameter, in accordance with “PART II” of the Accomplishment Instructions of Embraer Service Bulletin 190-54-0016, Revision 04, dated December 7, 2017.

    (3) For airplanes identified as Group 1 in Embraer Service Bulletin 190LIN-54-0008, Revision 02, dated May 9, 2018: Within 48 months after the effective date of this AD, replace the plain bushings of the lower inboard and outboard link fittings, install the lock washers with the L-profile on the fuse pin's head side, and replace the internal shear pin of the fuse pins with new ones having larger head diameter, in accordance with “PART II” of the Accomplishment Instructions of Embraer Service Bulletin 190LIN-54-0008, Revision 02, dated May 9, 2018.

    (4) For airplanes identified as Group 2 in Embraer Service Bulletin 190LIN-54-0008, Revision 02, dated May 9, 2018: Within 48 months after the effective date of this AD, replace the internal shear pin of the fuse pins with new ones having larger head diameter, in accordance with “PART II” of the Accomplishment Instructions of Embraer Service Bulletin 190LIN-54-0008, Revision 02, dated May 9, 2018.

    (j) Terminating Action for AD 2014-16-16

    (1) Accomplishing the actions required by paragraph (h)(1) or (h)(2) of this AD, as applicable, terminates the requirements of paragraphs (g)(1), (h)(1), and (i)(1) of AD 2014-16-16 for that LH pylon lower link fitting.

    (2) Accomplishing the actions required by paragraph (h)(3) or (h)(4) of this AD, as applicable, terminates the requirements of paragraphs (g)(2), (h)(2), and (i)(2) of AD 2014-16-16 for that LH pylon lower link fitting.

    (3) Accomplishing the actions required by paragraph (i)(1) or (i)(2) of this AD, as applicable, terminates the requirements of paragraphs (g)(1), (h)(1), and (i)(1) of AD 2014-16-16 for that RH pylon lower link fitting.

    (4) Accomplishing the actions required by paragraph (i)(3) or (i)(4) of this AD, as applicable, terminates the requirements of paragraphs (g)(2), (h)(2), and (i)(2) of AD 2014-16-16 for that RH pylon lower link fitting.

    (k) Credit for Previous Actions

    (1) This paragraph provides credit for actions required by paragraphs (h)(1), (h)(2), (i)(1), and (i)(2) of this AD, if those actions were performed before the effective date of this AD using Embraer Service Bulletin 190-54-0016, dated September 22, 2015; Embraer Service Bulletin 190-54-0016, Revision 01, dated January 18, 2016; Embraer Service Bulletin 190-54-0016, Revision 02, dated September 12, 2016; or Embraer Service Bulletin 190-54-0016, Revision 03, dated May 18, 2017.

    (2) This paragraph provides credit for actions required by paragraphs (h)(3), (h)(4), (i)(3), and (i)(4) of this AD, if those actions were performed before the effective date of this AD using Embraer Service Bulletin 190LIN-54-0008, dated October 2, 2015; or Embraer Service Bulletin 190LIN-54-0008, Revision 01, dated April 13, 2017.

    (l) Other FAA AD Provisions

    The following provisions also apply to this AD:

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

    (2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Section, Transport Standards Branch, FAA; or the Agência Nacional de Aviação Civil (ANAC); or ANAC's authorized Designee. If approved by the ANAC Designee, the approval must include the Designee's authorized signature.

    (3) Required for Compliance (RC): For service information that contains steps that are labeled as RC, the provisions of paragraphs (l)(3)(i) and (l)(3)(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.

    (m) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information (MCAI) Brazilian AD 2017-04-01, effective April 25, 2017, for related information. This MCAI may be found in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0509.

    (2) For more information about this AD, contact Krista Greer, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; phone and fax: 206-231-3221.

    (n) 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 this AD specifies otherwise.

    (i) Embraer Service Bulletin 190-54-0016, Revision 04, dated December 7, 2017.

    (ii) Embraer Service Bulletin 190LIN-54-0008, Revision 02, dated May 9, 2018.

    (3) For service information identified in this AD, contact Embraer S.A., Technical Publications Section (PC 060), Av. Brigadeiro Faria Lima, 2170—Putim—12227-901 São Jose dos Campos—SP—Brazil; phone: +55 12 3927-5852 or +55 12 3309-0732; fax: +55 12 3927-7546; email: [email protected]; internet: http://www.flyembraer.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 September 14, 2018. John P. Piccola, Acting Director, System Oversight Division, Aircraft Certification Service.
    [FR Doc. 2018-20929 Filed 9-27-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0555; Product Identifier 2017-NM-152-AD; Amendment 39-19431; AD 2018-19-30] RIN 2120-AA64 Airworthiness Directives; BAE Systems (Operations) Limited Airplanes AGENCY:

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

    ACTION:

    Final rule.

    SUMMARY:

    We are adopting a new airworthiness directive (AD) for all BAE Systems (Operations) Limited Model 4101 airplanes. This AD was prompted by a report of an improperly installed spacer around the electrical pins in the cartridge connector for the fire bottle extinguisher cartridge. This AD requires repetitive inspections for excessive or missing spacers, and applicable corrective actions. We are issuing this AD to address the unsafe condition on these products.

    DATES:

    This AD is effective November 2, 2018.

    The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of November 2, 2018.

    ADDRESSES:

    For service information identified in this final rule, contact BAE Systems (Operations) Limited, Customer Information Department, Prestwick International Airport, Ayrshire, KA9 2RW, Scotland, United Kingdom; telephone +44 1292 675207; fax +44 1292 675704; email [email protected]; internet http://www.baesystems.com/Businesses/RegionalAircraft/index.htm. 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-2018-0555.

    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-2018-0555; 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 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:

    Todd Thompson, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3228.

    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 BAE Systems (Operations) Limited Model 4101 airplanes. The NPRM published in the Federal Register on June 28, 2018 (83 FR 30377).

    The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2017-0212, dated October 25, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all BAE Systems (Operations) Limited Model 4101 airplanes. The MCAI states:

    During scheduled maintenance (fire bottle extinguisher cartridge resistance check) it was noted that on the extinguisher cartridge, the blue spacer around the electrical pins appeared to be located too far forward. It was discovered that, inadvertently, an additional spacer (possibly from a previous extinguisher cartridge) was located in the extinguisher cartridge connector. This effectively shortens the electrical pins in the cartridge connector, which could result in insufficient engagement with the associated sockets on the aeroplane connector. A missing spacer would not affect the electrical connection between the extinguisher cartridge and the aeroplane wiring, but could allow moisture ingress over time.

    Both conditions, if not detected and corrected, could prevent the fire extinguisher bottle from discharging when required, possibly resulting in damage to the aeroplane and injury to occupants.

    To address this potential unsafe condition, BAE Systems (Operations) Ltd issued Service Bulletin (SB) J41-26-009, providing inspection instructions to ensure that a single blue spacer is fitted on the inside of the extinguisher cartridge connector.

    For the reason described above, this [EASA] AD requires a one-time [general visual] inspection [and inspection after a maintenance task that involves disconnection or re-connection of the electrical connector] of the extinguisher cartridge electrical connector and the aeroplane's electrical connector and, depending on findings, removal of excessive spacers or replacement of the fire extinguisher bottle.

    You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0555.

    Comments

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

    Conclusion

    We reviewed the relevant data and determined that air safety and the public interest require adopting this final rule as proposed, 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.

    Related Service Information Under 1 CFR Part 51

    BAE Systems (Operations) Limited has issued Service Bulletin J41-26-009, dated November 23, 2016. This service information describes procedures for a general visual inspection of the cartridge electrical connector and the aircraft electrical connector for missing or excessive spacers, and corrective actions including removing excessive spacers or replacing the fire bottle extinguisher cartridge. 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 4 airplanes of U.S. registry.

    We estimate the following costs to comply with this AD:

    Estimated Costs for Required Actions Labor cost Parts cost Cost per
  • product
  • Cost on U.S.
  • operators
  • 1 work-hour × $85 per hour = $85 $0 $85 $340

    We estimate the following costs to do any necessary on-condition actions that would be required based on the results of any required actions. We have no way of determining the number of aircraft that might need these on-condition actions:

    Estimated Costs of On-Condition Actions Labor cost Parts cost Cost per
  • product
  • 1 work-hour × $85 per hour = $85 Up to $1,734 Up to $1,819.
    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 the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

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

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

    List of Subjects in 14 CFR Part 39

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

    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): 2018-19-30 BAE Systems (Operations) Limited: Amendment 39-19431; Docket No. FAA-2018-0555; Product Identifier 2017-NM-152-AD. (a) Effective Date

    This AD is effective November 2, 2018.

    (b) Affected ADs

    None.

    (c) Applicability

    This AD applies to BAE Systems (Operations) Limited Model 4101 airplanes, certificated in any category, all serial numbers.

    (d) Subject

    Air Transport Association (ATA) of America Code 26, Fire protection.

    (e) Reason

    This AD was prompted by a report of an improperly installed spacer around the electrical pins in the cartridge connector for the fire bottle extinguisher cartridge. We are issuing this AD to detect and correct excessive or missing spacers, which could result in the fire extinguisher bottle not discharging when required, possibly resulting in damage to the airplane.

    (f) Compliance

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

    (g) Inspection

    Within 12 months after the effective date of this AD, do a general visual inspection of the inside of the cartridge electrical connector and the inside of the airplane electrical connector in accordance with the Accomplishment Instructions of the BAE Systems (Operations) Limited Service Bulletin J41-26-009, dated November 23, 2016.

    (h) Inspections After Maintenance

    As of the effective date of this AD, before further flight after each accomplishment of a maintenance task involving disconnection or (re-)connection of an electrical connector of a fire bottle extinguisher cartridge, do a general visual inspection of the inside of the cartridge electrical connector and the inside of the airplane electrical connector in accordance with the Accomplishment Instructions of BAE Systems (Operations) Limited Service Bulletin J41-26-009, dated November 23, 2016.

    (i) Corrective Actions

    (1) If, during any inspection as required by paragraph (g) or (h) of this AD, as applicable, more than one spacer is found inside the cartridge electrical connector: Before further flight, remove the excessive spacer(s) from the inside of the cartridge electrical connector in accordance with the Accomplishment Instructions of BAE Systems (Operations) Limited Service Bulletin J41-26-009, dated November 23, 2016.

    (2) If, during any inspection as required by paragraph (g) or (h) of this AD, as applicable, one or more spacers are found inside the airplane electrical connector: Before further flight, remove all spacers from the inside of the airplane electrical connector in accordance with the Accomplishment Instructions of BAE Systems (Operations) Limited Service Bulletin J41-26-009, dated November 23, 2016.

    (3) If, during any inspection as required by paragraph (g) or (h) of this AD, as applicable, no blue spacer is found inside the cartridge electrical connector body: Before further flight, replace the cartridge in accordance with the Accomplishment Instructions of the BAE Systems (Operations) Limited Service Bulletin J41-26-009, dated November 23, 2016.

    (j) Other FAA AD Provisions

    The following provisions also apply to this AD:

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

    (2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Section, Transport Standards Branch, FAA; or the European Aviation Safety Agency (EASA); or BAE Systems (Operations) Limited's EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.

    (k) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA AD 2017-0212, dated October 25, 2017, for related information. This MCAI may be found in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0555.

    (2) For more information about this AD, contact Todd Thompson, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3228.

    (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 this AD specifies otherwise.

    (i) BAE Systems (Operations) Limited Service Bulletin J41-26-009, dated November 23, 2016.

    (ii) Reserved.

    (3) For service information identified in this AD, contact BAE Systems (Operations) Limited, Customer Information Department, Prestwick International Airport, Ayrshire, KA9 2RW, Scotland, United Kingdom; telephone +44 1292 675207; fax +44 1292 675704; email [email protected]; internet http://www.baesystems.com/Businesses/RegionalAircraft/index.htm.

    (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 September 14, 2018. John P. Piccola, Acting Director, System Oversight Division, Aircraft Certification Service.
    [FR Doc. 2018-20923 Filed 9-27-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Parts 510, 520, 522, 524, 529, 556, and 558 [Docket No. FDA-2018-N-0002] New Animal Drugs; Approval of New Animal Drug Applications; Withdrawal of Approval of New Animal Drug Applications; Changes of Sponsorship; Change of a Sponsor's Name AGENCY:

    Food and Drug Administration, HHS.

    ACTION:

    Final rule; technical amendments.

    SUMMARY:

    The Food and Drug Administration (FDA or we) is amending the animal drug regulations to reflect application-related actions for new animal drug applications (NADAs) and abbreviated new animal drug applications (ANADAs) during January, February, and March 2018. FDA is informing the public of the availability of summaries of the basis of approval and of environmental review documents, where applicable. The animal drug regulations are also being amended to reflect the withdrawal of approval of applications, changes of sponsorship of applications, and a change of a sponsor's name, and to make technical amendments to improve the accuracy of the regulations.

    DATES:

    This rule is effective September 28, 2018, except for amendatory instructions 7 to 21 CFR 520.580, 18 to 21 CFR 520.905d, 20 to 21 CFR 520.1182, 29 to 21 CFR 520.1840, 33 to 21 CFR 520.2380a, 37 to 21 CFR 522.1182, 51 to 21 CFR 524.900, 62 to 21 CFR 558.185, 68 to 21 CFR 558.365, and 70 to 21 CFR 558.485, which are effective October 9, 2018.

    FOR FURTHER INFORMATION CONTACT:

    George K. Haibel, Center for Veterinary Medicine (HFV-6), Food and Drug Administration, 7500 Standish Pl., Rockville, MD 20855, 240-402-5689, [email protected]

    SUPPLEMENTARY INFORMATION:

    I. Approval Actions

    FDA is amending the animal drug regulations to reflect approval actions for NADAs and ANADAs during January, February, and March 2018, as listed in table 1. In addition, FDA is informing the public of the availability, where applicable, of documentation of environmental review required under the National Environmental Policy Act (NEPA) and, for actions requiring review of safety or effectiveness data, summaries of the basis of approval (FOI Summaries) under the Freedom of Information Act (FOIA). These public documents may be seen in the office of the Dockets Management Staff (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852, between 9 a.m. and 4 p.m., Monday through Friday. Persons with access to the internet may obtain these documents at the CVM FOIA Electronic Reading Room: https://www.fda.gov/AboutFDA/CentersOffices/OfficeofFoods/CVM/CVMFOIAElectronicReadingRoom/default.htm. Marketing exclusivity and patent information may be accessed in FDA's publication, Approved Animal Drug Products Online (Green Book) at: https://www.fda.gov/AnimalVeterinary/Products/ApprovedAnimalDrugProducts/default.htm.

    Table 1—Original and Supplemental NADAs and ANADAs Approved During January, February, and March 2018 Approval date File No. Sponsor Product name Species Effect of the action Public
  • documents
  • January 5, 2018 141-449 Intervet, Inc., 2 Giralda Farms, Madison, NJ 07940 SAFE-GUARD AquaSol (fenbendazole oral suspension), Suspension Concentrate Chickens Supplemental approval for the treatment and control of certain nematode worms in laying hens; and of a tolerance in chicken eggs FOI Summary; EA/FONSI 1. January 16, 2018 200-563 Norbrook Laboratories, Ltd., Station Works, Newry BT35 6JP, Northern Ireland EPRIZERO (eprinomectin), Pour-On for Beef and Dairy Cattle Cattle Original approval as a generic copy of NADA 141-079 FOI Summary. January 19, 2018 141-494 Elanco US Inc., 2500 Innovation Way, Greenfield, IN 46140 CREDELIO (lotilaner), Chewable Tablet Dogs Original approval for killing adult fleas, and for the treatment of flea infestations and the treatment and control of tick infestations in dogs FOI Summary. January 29, 2018 200-622 Pharmgate LLC, 1800 Sir Tyler Dr., Wilmington, NC 28405 Chlortetracycline and decoquinate, Type C medicated feeds Cattle Original approval as a generic copy of NADA 141-185 FOI Summary. February 28, 2018 141-482 Zoetis Inc., 333 Portage St., Kalamazoo, MI 49007 LINCOMIX (lincomycin) and ROBENZ (robenidine hydrochloride), Type C medicated feeds Chickens Original approval for the control of necrotic enteritis and for the prevention of coccidiosis in broiler chickens FOI Summary. February 28, 2018 141-483 Zoetis Inc., 333 Portage St., Kalamazoo, MI 49007 LINCOMIX (lincomycin) and DECCOX (decoquinate), Type C medicated feeds Chickens Original approval for the control of necrotic enteritis and for the prevention of coccidiosis in broiler chickens FOI Summary. March 2, 2018 141-484 Zoetis Inc., 333 Portage St., Kalamazoo, MI 49007 LINCOMIX (lincomycin) and BIO-COX (salinomycin sodium), Type C medicated feeds Chickens Original approval for the control of necrotic enteritis and for the prevention of coccidiosis in broiler chickens FOI Summary. March 5, 2018 141-489 Zoetis Inc., 333 Portage St., Kalamazoo, MI 49007 LINCOMIX (lincomycin) and ZOAMIX (zoalene), Type C medicated feeds Chickens Original approval for the control of necrotic enteritis and for the prevention and control of coccidiosis in broiler chickens FOI Summary. March 8, 2018 141-492 Merial, Inc., 3239 Satellite Blvd., Bldg. 500, Duluth, GA 30096-4640 CENTRAGARD (eprinomectin and praziquantel transdermal solution) Cats Original approval for the prevention of heartworm disease, and for the treatment and control of roundworms, hookworms, and tapeworms in cats and kittens FOI Summary. March 26, 2018 141-491 Zoetis Inc., 333 Portage St., Kalamazoo, MI 49007 LINCOMIX (lincomycin) and COBAN (monensin), Type C medicated feeds Chickens Original approval for the control of necrotic enteritis and as an aid in the prevention of coccidiosis in broiler chickens FOI Summary. 1 The Agency has carefully considered an environmental assessment (EA) of the potential environmental impact of this action and has made a finding of no significant impact (FONSI).
    II. Change of Sponsorship

    Agri Laboratories Ltd., P.O. Box 3103, St. Joseph, MO 64503 has informed FDA that it has transferred ownership of, and all rights and interest in, the following applications to Huvepharma EOOD, 5th Floor, 3A Nikolay Haytov Str., 1113 Sofia, Bulgaria:

    File No. Product name 21 CFR
  • section
  • 200-030 DI-METHOX (sulfadimethoxine) 12.5% Solution 520.2220a 200-031 DI-METHOX (sulfadimethoxine) Soluble Powder 520.2220a 200-037 LEGACY (gentamicin sulfate) Solution 529.1044a 200-038 DI-METHOX (sulfadimethoxine) Injection 40% 522.2220 200-049 TETRA-BAC 324 (tetracycline hydrochloride) Soluble Powder 520.2345d 200-061 FLU-NIX (flunixin meglumine) Injection 522.970 200-066 AGRIMYCIN-343 (oxytetracycline hydrochloride) Soluble Powder 520.1660d 200-128 AGRIMYCIN-200 (oxytetracycline dihydrate) Injection 522.1660a 200-185 GEN-GARD (gentamicin sulfate) Soluble Powder 520.1044c 200-225 PROHIBIT (levamisole hydrochloride) Soluble Drench Powder 520.1242a 200-271 Levamisole Phosphate Injection 522.1242 200-407 Lincomycin-Spectinomycin (lincomycin hydrochloride/spectinomycin dihydrochloride pentahydrate) Water Soluble Powder 520.1265

    Following this withdrawal of approval, Agri Laboratories Ltd. is no longer the sponsor of an approved application. Accordingly, it will be removed from the list of sponsors of approved applications in § 510.600(c) (21 CFR 510.600(c)).

    Strategic Veterinary Pharmaceuticals, Inc., 100 NW Airport Rd., St. Joseph, MO 64503 has informed FDA that it has transferred ownership of, and all rights and interest in, the following applications to Cronus Pharma LLC, 2 Tower Center Blvd., Suite 1101, East Brunswick, NJ 08816:

    File No. Product name 21 CFR
  • section
  • 011-531 DIZAN (dithiazanine iodide) Tablets 520.763a 011-674 DIZAN (dithiazanine iodide) Powder 520.763b 012-469 DIZAN (dithiazanine iodide) Suspension with Piperazine Citrate 520.763c 031-512 ATGARD (dichlorvos) Swine Wormer 558.205 033-803 TASK (dichlorvos) Dog Anthelmintic 520.600 035-918 EQUIGARD; VERDISOL (dichlorvos) 520.596 039-483 BIO-TAL (thiamylal sodium) Injection 522.2424 040-848 ATGARD C (dichlorvos) Swine Wormer 558.205 043-606 ATGARD V (dichlorvos) Swine Wormer 558.205 045-143 OXYJECT (oxytetracycline hydrochloride) Injection 522.1662a 047-278 BIO-MYCIN OXY-TET 50 (oxytetracycline hydrochloride) Injection 522.1662a 047-712 BIZOLIN-100; BIZOLIN-200 (phenylbutazone) Injection 522.1720 048-010 ANAPLEX (dichlorophene and toluene) Canine and Feline Wormer Caps 520.580 048-237 EQUIGEL (dichlorvos) 520.602 048-271 TASK (dichlorvos) Tablets 520.598 049-032 ATGARD C (dichlorvos) Premix 9.6% 558.205 065-461 ANACETIN (chloramphenicol) Tablets 520.390a 065-481 Calf Scour Boluses (chlortetracycline hydrochloride) 520.443 065-486 CTC Bisulfate (chlortetracycline bisulfate) Soluble Powder 520.441 065-491 MEDICHOL (chloramphenicol) Tablets 520.390a 092-837 NEMACIDE (diethylcarbamazine citrate) Oral Syrup 520.622b 093-516 BIZOLIN (phenylbutazone) Injection 20% 522.1720 097-452 OXYJECT 100 (oxytetracycline hydrochloride) Injection 522.1662a 098-569 MEDACIDE-SDM (sulfadimethoxine) Injection 10% 522.2220 099-618 BIZOLIN (phenylbutazone) 1-G Bolus 520.1720a 108-963 MEDAMYCIN (oxytetracycline hydrochloride) Injectable Solution 522.1662a 117-689 NEUROSYN (primidone) Tablets 520.1900 125-797 Nitrofurazone Dressing 524.1580a 126-236 Nitrofurazone Soluble Powder 524.1580b 126-676 D & T (dichlorophene and toluene) Worm Capsules 520.580 127-627 NEMACIDE; NEMACIDE-C (diethylcarbamazine citrate) Tablets 520.622a 128-069 NEMACIDE (diethylcarbamazine citrate) Chewable Tablets 520.622c 132-028 ANESTATAL (thiamylal sodium) Injectable Solution 522.2424 135-771 Methylprednisolene Tablets 520.1408 136-212 Methylprednisolone Acetate Injection 522.1410 137-310 Gentamicin Sulfate Injectable Solution 522.1044 138-869 Triamcinolone Acetonide Suspension 522.2483 140-442 Xylazine HCl Injection 522.2662 200-023 Gentamicin Sulfate Solution 100 mg/mL 522.1044 200-029 Ketamine Hydrochloride Injection 522.1222 200-165 SDM (sulfadimethoxine) Concentrated Solution 12.5% 520.2220a

    The animal drug regulations are being amended to reflect these changes of sponsorship.

    III. Withdrawals of Approval

    Virbac AH, Inc., 3200 Meacham Blvd., Ft. Worth, TX 76137 has requested that FDA withdraw approval of the NADAs listed in the following table because the products are no longer manufactured or marketed:

    File No. Product name 21 CFR
  • section
  • 011-779 PURINA PIGEMIA 100 (colloidal ferric oxide) 522.1182 040-205 PURINA Horse Wormer Medicated (thiabendazole) 520.2380a 042-116 PURINA 6 DAY WORM-KILL Feed Premix (coumaphos) 558.185 043-215 PURINA GRUB-KILL Pour-on Cattle Insecticide (famphur) 524.900 046-700 STATYL (nequinate) Medicated Premix 558.365 091-260 PULVEX WORM CAPS (piperazine phosphate monohydrate) 520.1804 097-258 PURINA BAN-WORM for Pigs (pyrantel tartrate) 558.485 102-942 PULVEX Multipurpose Worm Caps (dichlorophene, toluene) 520.580 113-748 PURINA PIGEMIA Oral (iron dextran complex) 520.1182 135-941 CHECK-R-TON BM (pyrantel tartrate) 558.485 136-116 PURINA WORM-A-RESTTM Litter Pack Premix (fenbendazole) 520.905d 140-869 PURINA SAF-T-BLOC BG Medicated Feed Block (poloxalene, 6.6%) 520.1840

    Elsewhere in this issue of the Federal Register, FDA gave notice that approval of NADAs 011-779, 040-205, 042-116, 043-215, 046-700, 091-260, 097-258, 102-942, 113-748, 135-941, 136-116, and 140-869, and all supplements and amendments thereto, is withdrawn, effective October 9, 2018. As provided in the regulatory text of this document, the animal drug regulations are amended to reflect these actions.

    IV. Technical Amendments

    JBS United Animal Health II LLC, 322 S Main St., Sheridan, IN 46069 has informed FDA that it has changed its name to United-AH II LLC. Accordingly, we are amending § 510.600(c) to reflect this change.

    We are also making technical amendments to update the scientific name of a pathogenic bacterium and to accurately list the concentrations of new animal drug ingredients in combination drug medicated feeds. These actions are being taken to improve the accuracy of the regulations.

    V. Legal Authority

    This final rule is issued under section 512(i) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 360b(i)), which requires Federal Register publication of “notice[s] . . . effective as a regulation,” of the conditions of use of approved new animal drugs. This rule sets forth technical amendments to the regulations to codify recent actions on approved new animal drug applications and corrections to improve the accuracy of the regulations, and as such does not impose any burden on regulated entities.

    Although denominated a rule pursuant to the FD&C Act, this document does not meet the definition of “rule” in 5 U.S.C. 804(3)(A) because it is a “rule of particular applicability.” Therefore, it is not subject to the congressional review requirements in 5 U.S.C. 801-808. Likewise, this is not a rule subject to Executive Order 12866, which defines a rule as “an agency statement of general applicability and future effect, which the agency intends to have the force and effect of law, that is designed to implement, interpret, or prescribe law or policy or to describe the procedure or practice requirements of an agency.”

    List of Subjects 21 CFR Part 510

    Administrative practice and procedure, Animal drugs, Labeling, Reporting and recordkeeping requirements.

    21 CFR Parts 520, 522, 524, and 529

    Animal drugs.

    21 CFR Part 556

    Animal drugs, Foods.

    21 CFR Part 558

    Animal drugs, Animal feeds.

    Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR parts 510, 520, 522, 524, 529, 556, and 558 are amended as follows:

    PART 510—NEW ANIMAL DRUGS 1. The authority citation for part 510 continues to read as follows: Authority:

    21 U.S.C. 321, 331, 351, 352, 353, 360b, 371, 379e.

    2. In § 510.600, in the table in paragraph (c)(1), remove the entry for “JBS United Animal Health II LLC”, and alphabetically add an entry for “United-AH II LLC”; and in the table in paragraph (c)(2), revise the entry for “051233” to read as follows:
    § 510.600 Names, addresses, and drug labeler codes of sponsors of approved applications.

    (c) * * *

    (1) * * *

    Firm name and address Drug labeler
  • code
  • *         *         *         *         *         *         * United-AH II LLC, 322 S Main St., Sheridan, IN 46069 051233 *         *         *         *         *         *         * *         *         *         *         *         *         *

    (2) * * *

    Drug labeler
  • code
  • Firm name and address
    *         *         *         *         *         *         * 051233 United-AH II LLC, 322 S Main St., Sheridan, IN 46069 *         *         *         *         *         *         *
    PART 520—ORAL DOSAGE FORM NEW ANIMAL DRUGS 3. The authority citation for part 520 continues to read as follows: Authority:

    21 U.S.C. 360b.

    § 520.390a [Amended]
    4. In § 520.390a, in paragraph (b)(1)(i), remove “054628” and in its place add “069043”.
    § 520.441 [Amended]
    5. In § 520.441, in paragraph (b)(3), remove “069254 and 076475” and in its place add “069043, 069254, and 076475”.
    § 520.443 [Amended]
    6. In § 520.443, in paragraph (b), remove “054628” and in its place add “069043”.
    § 520.580 [Amended]
    7. In § 520.580, in paragraph (b)(1), remove “051311”; and in paragraph (b)(2), remove “000061 and 054771”, and in its place add “000061, 054771, and 069043”.
    § 520.600 [Redesignated as § 520.596]
    8. Redesignate § 520.600 as § 520.596 and revise newly redesignated § 520.596 to read as follows:
    § 520.596 Dichlorvos powder.

    (a) Specifications—(1) Each 2-ounce packet contains 2.27 grams (4 percent) dichlorvos.

    (2) Each milligram of powder contains 2.27 milligrams (mg) dichlorvos.

    (b) Sponsor. See No. 069043 in § 510.600(c) of this chapter for use of the product described in paragraph (a)(1) of this section as in paragraph (d)(1) of this section and the product described in paragraph (a)(2) of this section as in paragraph (d)(2) of this section.

    (c) Related tolerances. See § 556.180 of this chapter.

    (d) Conditions of use—(1) Swine (adult gilts, sows, and boars)—(i) Amount. Add powder to the indicated amount of feed and administered shortly after mixing, as follows:

    Weight of animal in pounds Pounds of feed to
  • be mixed with
  • each 0.08
  • ounce of
  • dichlorvos
  • Pounds of mixed
  • feed to be
  • administered to
  • each pig as a
  • single treatment
  • Number of pigs
  • to be treated
  • per 0.08
  • ounce of
  • dichlorvos
  • 20-30 4 0.33 12 31-40 5 0.56 9 41-60 6 1.00 6 61-80 5 1.00 5 81-100 4 1.00 4 16 4.00 4

    (ii) Indications for use. For the removal and control of sexually mature (adult), sexually immature and/or 4th stage larvae of the whipworm (Trichuris suis), nodular worms (Oesophagostomum spp.), large round-worm (Ascaris suum), and the mature thick stomach worm (Ascarops strongylina) occurring in the lumen of the gastrointestinal tract of pigs, boars, and open or bred gilts and sows.

    (iii) Limitations. Do not use this product on animals either simultaneously or within a few days before or after treatment with or exposure to cholinesterase inhibiting drugs, pesticides, or chemicals. The preparation should be mixed thoroughly with the feed on a clean, impervious surface. Do not allow swine access to feed other than that containing the preparation until treatment is complete. Do not treat pigs with signs of scours until these signs subside or are alleviated by proper medication. Resume normal feeding schedule afterwards. Swine may be retreated in 4 to 5 weeks.

    (2) Horses—(i) Amount. Administer in the grain portion of the ration at a dosage of 14.2 to 18.5 mg per pound of body weight as a single dose. Administered at one-half of the single recommended dosage and repeated 8 to 12 hours later in the treatment of very aged, emaciated, or debilitated subjects or those reluctant to consume medicated feed. In suspected cases of severe ascarid infection sufficient to cause concern over mechanical blockage of the intestinal tract, the split dosage should be used.

    (ii) Indications for use. For the removal and control of bots (Gastrophilus intestinalis, G. nasalis), large strongyles (Strongylus vulgaris, S. equinus, S. edentatus), small strongyles (of the genera Cyathostomum, Cylicocercus, Cylicocyclus, Cylicodontophorus, Triodontophorus, Poteriostomum, Gyalocephalus), pinworms (Oxyuris equi), and large roundworm (Parascaris equorum) in horses including ponies and mules. Not for use in foals (sucklings and young weanlings).

    (iii) Limitations. Do not use in horses which are severely debilitated, suffering from diarrhea or severe constipation, infectious disease, toxemia, or colic. Do not administer in conjunction with or within 1 week of administration of muscle relaxant drugs, phenothiazine derived tranquilizers or central nervous system depressant drugs. Horses should not be subjected to insecticide treatment for 5 days prior to or after treating with the drug. Do not administer to horses afflicted with chronic alveolar emphysema (heaves) or related respiratory conditions. The product is a cholinesterase inhibitor and should not be used simultaneously or within a few days before or after treatment with or exposure to cholinesterase inhibiting drugs, pesticides or chemicals. Do not use in animals other than horses, ponies, and mules. Do not use in horses, ponies, and mules intended for food purposes. Do not allow fowl access to feed containing this preparation or to fecal excrement from treated animals.

    9. Add § 520.598 to read as follows:
    § 520.598 Dichlorvos tablets.

    (a) Specifications. Each tablet contains 2, 5, 10, or 20 milligrams (mg) dichlorvos.

    (b) Sponsor. See No. 069043 in § 510.600(c) of this chapter.

    (c) Conditions of use in dogs, puppies, cats, and kittens—(1) Amount. Administer orally at 5 mg dichlorvos per pound of body weight.

    (2) Indications for use—(i) Dogs and puppies: Removal and control of intestinal roundworms (Toxocara canis and Toxascaris leonina) and hookworms (Ancylostoma caninum and Uncinaria stenocephala).

    (ii) Cats and kittens: Removal and control of intestinal roundworms (Toxocara cati and Toxascaris leonina) and hookworms (Ancylostoma tubaeforme and Uncinaria stenocephala).

    (3) Limitations. Federal law restricts this drug to use by or on the order of a licensed veterinarian.

    10. Add § 520.600 to read as follows:
    § 520.600 Dichlorvos capsules and pellets.

    (a) Specifications. Each capsule contains 2.27 milligrams (mg) (4 percent) dichlorvos.

    (b) Sponsor. See No. 069043 in § 510.600(c) of this chapter.

    (c) Conditions of use in dogs—(1) Amount. Administer any combination of capsules and/or pellets so that the animal receives a single dose equaling 12 to 15 mg of dichlorvos per pound of body weight.

    (2) Indications for use. For removal of Toxocara canis and Toxascaris leonina (roundworms), Ancylostoma caninum and Uncinaria stenocephala (hookworms), and Trichuris vulpis (whipworm) residing in the lumen of the gastrointestinal tract.

    (3) Limitations. Federal law restricts this drug to use by or on the order of a licensed veterinarian.

    11. Add § 520.602 to read as follows:
    § 520.602 Dichlorvos gel.

    (a) Specifications. Each milligram (mg) of gel contains 2.27 milligrams (mg) dichlorvos.

    (b) Sponsor. See No. 069043 in § 510.600(c) of this chapter.

    (c) Conditions of use in horses—(1) Amount. Administer 20 mg per kilogram of body weight for the removal of bots and ascarids. Repeat administration every 21 to 28 days for the control of bots and ascarids. For the control of bots only, the repeat dosage is 10 milligrams per kilogram of body weight every 21 to 28 days during bot fly season.

    (2) Indications for use. For the removal and control of first, second, and third instar bots (Gastrophilus intestinalis and G. nasalis), sexually mature and sexually immature (4th stage) ascarids (Parascaris equorum) in horses and foals.

    (3) Limitations. Do not use in horses intended for human consumption. Federal law restricts this drug to use by or on the order of a licensed veterinarian.

    § 520.622a [Amended]
    12. In § 520.622a, in paragraph (a)(6), remove “054628” and in its place add “069043”.
    § 520.622b [Amended]
    13. In § 520.622b, in paragraph (c)(2), remove “054628” and in its place add “069043”.
    § 520.622c [Amended]
    14. In § 520.622c, in paragraph (b)(6), remove “054628” and in its place add “069043”.
    § 520.763a [Amended]
    15. In § 520.763a, in paragraph (b), remove “054628” and in its place add “069043”.
    § 520.763b [Amended]
    16. In § 520.763b, in paragraph (b), remove “000010” and in its place add “069043”.
    § 520.763c [Amended]
    17. In § 520.763c, in paragraph (b), remove “054628” and in its place add “069043”. 18. In § 520.905d, revise paragraphs (a) and (b) to read as follows:
    § 520.905d Fenbendazole powder.

    (a) Specifications. Each 2-ounce packet contains 2.27 grams (4 percent) fenbendazole.

    (b) Sponsor. See No. 000061 in § 510.600(c) of this chapter.

    § 520.1044c [Amended]
    19. In § 520.1044c, in paragraph (b)(2), remove “057561” and in its place add “016592”.
    § 520.1182 [Removed]
    20. Remove § 520.1182.
    § 520.1242a [Amended]
    21. In § 520.1242a, in paragraph (b)(3), remove “057561” and in its place add “016592”.
    § 520.1263c [Amended]
    22. In § 520.1263c, in paragraph (b)(1), remove “Nos. 016592 and 054771” and in its place add “No. 054771”; and in paragraph (b)(2), remove “Nos. 054925, 061623, and 076475” and in its place add “Nos. 016592, 054925, 061623, and 076475”.
    § 520.1265 [Amended]
    23. In § 520.1265, in paragraph (b)(2), remove “057561” and in its place add “016592”. 24. Add § 520.1286 to read as follows:
    § 520.1286 Lotilaner.

    (a) Specifications. Each chewable tablet contains 56.25, 112.5, 225, 450, or 900 milligrams (mg) lotilaner.

    (b) Sponsor. See No. 058198 in § 510.600(c) of this chapter.

    (c) Conditions of use in dogs—(1) Amount. Administer orally once a month at the recommended minimum dosage of 9 mg/lb (20 mg/kg).

    (2) Indications for use. Kills adult fleas, and for the treatment of flea infestations (Ctenocephalides felis), and the treatment and control of tick infestations (Amblyomma americanum (lone star tick), Dermacentor variabilis (American dog tick), Ixodes scapularis (black-legged tick), and Rhipicephalus sanguineus (brown dog tick)) for 1 month in dogs and puppies 8 weeks of age or older and weighing 4.4 pounds or greater.

    (3) Limitations. Federal law restricts this drug to use by or on the order of a licensed veterinarian.

    § 520.1408 [Amended]
    25. In § 520.1408, in paragraph (b)(1), remove “054628” and in its place add “069043”.
    § 520.1660d [Amended]
    26. In § 520.1660d, in paragraph (b)(4), remove “No. 057561” and in its place add “No. 016592”.
    § 20.1720a [Amended]
    27. In § 520.1720a, in paragraph (b)(2), remove “Nos. 054628 and 069043” and in its place add “No. 069043”.
    § 520.1804 [Removed]
    28. Remove § 520.1804.
    § 520.1840 [Amended]
    29. In § 520.1840, remove paragraph (b)(2), redesignate paragraphs (b)(3) and (4) as paragraphs (b)(2) and (3), and remove paragraph (d)(4).
    § 520.1900 [Amended]
    30. In § 520.1900, in paragraph (b)(1), remove “054628” and in its place add “069043”.
    § 520.2220a [Amended]
    31. In § 520.2220a, in paragraph (b)(1), remove “Nos. 016592, 054628, 054771, 054925, and 057561” and in its place add “Nos. 016592, 054771, 054925, and 069043”; and in paragraph (b)(2), remove “Nos. 054771, 054925, 057561, 058829, 061623, and 066104” and in its place add “Nos. 016592, 054771, 054925, 058829, 061623, and 066104”.
    § 520.2345d [Amended]
    32. In § 520.2345d, in paragraph (b)(4), remove “Nos. 054925, 057561, 061623, and 076475” and in its place add “Nos. 016592, 054925, 061623, and 076475”.
    § 520.2380a [Amended]
    33. In § 520.2380a, remove and reserve paragraphs (b)(1) and (d)(1)(i). PART 522—IMPLANTATION OR INJECTABLE DOSAGE FORM NEW ANIMAL DRUGS 34. The authority citation for part 522 continues to read as follows: Authority:

    21 U.S.C. 360b.

    § 522.970 [Amended]
    35. In § 522.970, in paragraph (b)(1), remove “Nos. 000061, 000859, 055529, 057561, and 061623” and in its place add “Nos. 000061, 000859, 016592, 055529, and 061623”.
    § 522.1044 [Amended]
    36. In § 522.1044, in paragraph (b)(3), remove “054628” and in its place add “069043”.
    § 522.1182 [Amended]
    37. In § 522.1182, in paragraph (b)(4), remove “Nos. 051311 and 054771” and in its place add “No. 054771”.
    § 522.1222 [Amended]
    38. In § 522.1222, in paragraph (b), remove “Nos. 000859, 026637, 054628, 054771, 059399, and 063286” and in its place add “Nos. 000859, 026637, 054771, 059399, 063286, and 069043”.
    § 522.1242 [Amended]
    39. In § 522.1242, in paragraph (b), remove “057561” and in its place add “016592”.
    § 522.1410 [Amended]
    40. In § 522.1410, in paragraph (b), remove “054628 and 054771” and in its place add “054771 and 069043”.
    § 522.1660a [Amended]
    41. In § 522.1660a, in paragraph (b), remove “057561,”.
    § 522.1662a [Amended]
    42. In § 522.1662a, in paragraphs (a)(2), (b)(2), (g)(2), and (h)(2), remove “054628” and in its place add “069043”.
    § 522.1720 [Amended]
    43. In § 522.1720, in paragraph (b)(3), remove “054628 and 058005” and in its place add “058005 and 069043”.
    § 522.2220 [Amended]
    44. In § 522.2220, in paragraph (b)(1), remove “054628” and in its place add “069043”; and in paragraph (b)(3), remove “Nos. 016592, 057561, and 061623” and in its place add “Nos. 016592 and 061623”.
    § 522.2424 [Amended]
    45. In § 522.2424, in paragraph (b), remove “054628 and 054771” and in its place add “054771 and 069043”.
    § 522.2483 [Amended]
    46. In § 522.2483, in paragraph (b), remove “054628” and in its place add “069043”.
    § 522.2662 [Amended]
    47. In § 522.2662, in paragraph (b)(1), remove “054628” and in its place add “069043”. PART 524—OPHTHALMIC AND TOPICAL DOSAGE FORM NEW ANIMAL DRUGS 48. The authority citation for part 524 continues to read as follows: Authority:

    21 U.S.C. 360b.

    49. In § 524.814, revise paragraph (b) to read as follows:
    § 524.814 Eprinomectin.

    (b) Sponsors. See Nos. 050604 and 055529 in § 510.600(c) of this chapter.

    50. Add § 524.815 to read as follows:
    § 524.815 Eprinomectin and praziquantel.

    (a) Specifications. Each milliliter (mL) of solution contains 4 milligrams (mg) eprinomectin and 83 mg praziquantel.

    (b) Sponsor. See No. 050604 in § 510.600(c) of this chapter.

    (c) Conditions of use in cats—(1) Amount. Using the 0.3 mL and 0.9 mL unit applicators, administer a minimum dose of 0.23 mg eprinomectin per pound body weight and 4.55 mg praziquantel per pound body weight by topical application on the dorsal midline between the base of the skull and the shoulder blades.

    (2) Indications for use. For the prevention of heartworm disease caused by Dirofilaria immitis, and for the treatment and control of roundworms (adult and fourth stage larval Toxocara cati), hookworms (adult and fourth stage larval Ancylostoma tubaeforme; adult Ancylostoma braziliense), and tapeworms (adult Dipylidium caninum and Echinococcus multilocularis), in cats and kittens 7 weeks of age and older and 1.8 lbs or greater.

    (3) Limitations. Federal law restricts this drug to use by or on the order of a licensed veterinarian.

    § 524.900 [Amended]
    51. In § 524.900, in paragraph (b), remove “Nos. 000061 and 051311” and in its place add “No. 000061”.
    § 524.1580a [Amended]
    52. In § 524.1580a, in paragraph (b)(1), remove “Nos. 054628, 054925, 058005, 059051, and 061623” and in its place add “Nos. 054925, 058005, 059051, 061623, and 069043”.
    § 524.1580b [Amended]
    53. In § 524.1580b, in paragraph (b), remove “054628 and 059051” and in its place add “059051 and 069043”. PART 529—CERTAIN OTHER DOSAGE FORM NEW ANIMAL DRUGS 54. The authority citation for part 529 continues to read as follows: Authority:

    21 U.S.C. 360b.

    § 529.1044a [Amended]
    55. In § 529.1044a, in paragraph (b), remove “Nos. 000061, 000859, 054628, 054771, 057561, 058005, and 061623” and in its place add “Nos. 000061, 000859, 016592, 054628, 054771, 058005, and 061623”. PART 556—TOLERANCES FOR RESIDUES OF NEW ANIMAL DRUGS IN FOOD 56. The authority citation for part 556 continues to read as follows: Authority:

    21 U.S.C. 342, 360b, 371.

    57. In § 556.275, add paragraph (b)(3)(ii) to read as follows:
    § 556.275 Fenbendazole.

    (b) * * *

    (3) * * *

    (ii) Eggs. The tolerance for fenbendazole sulfone (the marker residue) is 1.8 ppm.

    § 556.440 [Removed]
    58. Remove § 556.440. PART 558—NEW ANIMAL DRUGS FOR USE IN ANIMAL FEEDS 59. The authority citation for part 558 continues to read as follows: Authority:

    21 U.S.C. 354, 360b, 360ccc, 360ccc-1, 371.

    § 558.4 [Amended]
    60. In § 558.4, in paragraph (d), in the “Category I” table, remove the row entry for “Nequinate”.
    § 558.128 [Amended]
    61. In § 558.128, in paragraphs (e)(4)(xi) and (xiii), in the “Indications for use” column, remove “P. multocida” and in its place add “P. multocida organisms”. 62. In § 558.185, revise paragraph (b), remove paragraph (e)(1), and redesignate paragraphs (e)(2) and (3) as paragraphs (e)(1) and (2).

    The revision reads as follows:

    § 558.185 Coumaphos.

    (b) Sponsor. See No. 000859 in § 510.600(c) of this chapter.

    § 558.195 [Amended]
    63. In § 558.195, remove and reserve paragraph (e)(2)(v). 64. In § 558.205, revise paragraph (a); redesignate paragraphs (b) through (d) as paragraphs (c) through (e); and add new paragraph (b).

    The revision and addtion read as follows:

    § 558.205 Dichlorvos.

    (a) Specifications. Type A medicated articles containing 3.1 or 9.6 percent dichlorvos.

    (b) Sponsor. See No. 069043 in § 510.600(c) of this chapter.

    65. In § 558.311, revise paragraph (e)(5) to read as follows:
    § 558.311 Lasalocid.

    (e) * * *

    (5) Lasalocid may also be used in combination with:

    (i) Chlortetracycline as in § 558.128.

    (ii) Melengestrol as in § 558.342.

    (iii) Oxytetracycline as in § 558.450.

    (iv) Tylosin alone or in combination with melengestrol acetate as in § 558.625.

    (v) Virginiamycin as in § 558.635.

    66. In § 558.325, redesignate paragraph (e)(1)(ii) as paragraph (e)(1)(v); add reserved paragraphs (e)(1)(ii), (iii), and (vi); and add paragraphs (e)(1)(iv), (vii), (viii), (ix), and (x) to read as follows:
    § 558.325 Lincomycin.

    (e) * * *

    (1) * * *

    Lincomycin
  • grams/ton
  • Combination
  • in grams/ton
  • Indications for use Limitations Sponsor
    *         *         *         *         *         *         * (ii) [Reserved] (iii) [Reserved] (iv) 2 Decoquinate, 2.72 Broiler chickens: For the control of necrotic enteritis caused or complicated by Clostridium spp. or other organisms susceptible to lincomycin; and for the prevention of coccidiosis caused by Eimeria tenella, E. necatrix, E. acervulina, E. brunetti, E. mivati, and E. maxima Feed as the sole ration. Do not use in feeds containing bentonite. Not for use in laying hens, breeding chickens, or turkeys. Do not allow rabbits, hamsters, guinea pigs, horses, or ruminants access to feeds containing lincomycin. Ingestion by these species may result in severe gastrointestinal effects. Decoquinate as provided by No. 054771 in § 510.600 of this chapter 054771 *         *         *         *         *         *         * (vi) [Reserved] (vii) 2 Monensin, 90 to 110 Broiler chickens: For the control of necrotic enteritis caused or complicated by Clostridium spp. or other organisms susceptible to lincomycin, and as an aid the prevention of coccidiosis caused by Eimeria necatrix, E. tenella, E. acervulina, E. brunetti, E. mivati, and E. maxima Feed as the sole ration. Must be thoroughly mixed in feeds before use. Do not feed undiluted. Not for use in laying hens, breeding chickens, or turkeys. Do not allow horses, or other equines, mature turkeys, or guinea fowl access to feed containing monensin. Ingestion of monensin by horses and guinea fowl has been fatal. Do not allow rabbits, hamsters, guinea pigs, horses, or ruminants access to feeds containing lincomycin. Ingestion by these species may result in severe gastrointestinal effects. Monensin as provided by No. 058198 in § 510.600 of this chapter 054771 (viii) 2 Robenidine hydrochloride, 30 Broiler chickens: For the control of necrotic enteritis caused or complicated by Clostridium spp. or other organisms susceptible to lincomycin, and as an aid in the prevention of coccidiosis caused by Eimeria mivati, E. brunetti, E. tenella, E. acervulina, E. maxima, and E. necatrix Feed as the sole ration. Do not use in feeds containing bentonite. Do not feed to laying hens producing eggs for human consumption. Not for use in laying hens, breeding chickens, or turkeys. Do not allow rabbits, hamsters, guinea pigs, horses, or ruminants access to feeds containing lincomycin. Ingestion by these species may result in severe gastrointestinal effects. Withdraw 5 days prior to slaughter. Type C feed containing robenidine hydrochloride must be fed within 50 days from the date of manufacture. Robenidine hydrochloride as provided by No. 054771 in § 510.600 of this chapter 054771 (ix) 2 Salinomycin sodium, 40 to 60 Broiler chickens: For the control of necrotic enteritis caused or complicated by Clostridium spp. or other organisms susceptible to lincomycin, and for the prevention of coccidiosis caused by Eimeria tenella, E. necatrix, E. acervulina, E maxima, E. brunetti, and E. mivati Feed as the sole ration to broiler chickens. Do not feed to laying hens producing eggs for human consumption. Not approved for use with pellet binders. May be fatal if accidentally fed to adult turkeys or horses. Not for use in laying hens, breeding chickens, or turkeys. Do not allow rabbits, hamsters, guinea pigs, horses, or ruminants access to feeds containing lincomycin. Ingestion by these species may result in severe gastrointestinal effects. Salinomycin sodium as provided by No. 054771 in § 510.600 of this chapter 054771 (x) 2 Zoalene, 113.5 Broiler chickens: For the control of necrotic enteritis caused or complicated by Clostridium spp. or other organisms susceptible to lincomycin; and for the prevention and control of coccidiosis Feed as the sole ration from the time chicks are placed in floor pens until slaughtered for meat. Not for use in laying hens, breeding chickens, or turkeys. Do not allow rabbits, hamsters, guinea pigs, horses, or ruminants access to feeds containing lincomycin. Ingestion by these species may result in severe gastrointestinal effects. Zoalene as provided by No. 054771 in § 510.600 of this chapter 054771
    67. In § 558.342, in paragraph (e)(1), revise the table headings, add paragraphs (e)(1)(iii) and (iv), and remove paragraphs (e)(1)(v) through (xi); and in paragraph (e)(2), redesignate paragraphs (e)(2)(i) through (iii) as paragraphs (e)(2)(ii) through (iv) and add new paragraph (e)(2)(i).

    The revisions and additions read as follows:

    § 558.342 Melengestrol.

    (e) * * *

    (1) * * *

    Melengestrol
  • acetate in
  • mg/head/day
  • Combination
  • in grams/ton
  • Indications for use Limitations Sponsor
    *         *         *         *         *         *         * (iii) 0.25 to 0.5 Lasalocid, 10 to 30 Heifers fed in confinement for slaughter: For increased rate of weight gain, improved feed efficiency, and suppression of estrus (heat); and for control of coccidiosis caused by Eimeria bovis and Eimeria zuernii Add at the rate of 0.5 to 2.0 lb/head/day a medicated feed (liquid or dry) containing 0.125 to 1.0 mg melengestrol acetate/lb to a feed containing 10 to 30 g of lasalocid per ton to provide 0.25 to 0.5 mg melengestrol acetate and 100 to 360 milligrams of lasalocid per head/day. See § 558.311(d) of this chapter. Lasalocid as provided by No. 054771 in § 510.600(c) of this chapter 054771
  • 058198
  • (iv) 0.25 to 0.5 Monensin, 10 to 40 Heifers fed in confinement for slaughter: For increased rate of weight gain, improved feed efficiency, and suppression of estrus (heat); and for the prevention and control of coccidiosis due to Eimeria bovis and E. zuernii Add at the rate of 0.5 to 2.0 lb/head/day a medicated feed (liquid or dry) containing 0.125 to 1.0 mg melengestrol acetate/lb to a feed containing 10 to 40 g of monensin per ton to provide 0.25 to 0.5 mg melengestrol acetate/head/day and 0.14 to 0.42 mg monensin/lb body weight, depending on severity of coccidiosis challenge, up to 480 mg monensin/head/day. See § 558.355(d) of this chapter. Monensin as provided by No. 058198 in § 510.600(c) of this chapter 054771
  • 058198
  • (2) * * *

    (i) Oxytetracycline as in § 558.450.

    § 558.365 [Removed]
    68. Remove § 558.365.
    § 558.450 [Amended]
    69. In § 558.450, in paragraph (e)(5)(iv) entries 1 and 2, remove “A. liquefaciens” and in its place add “A. hydrophila”. 70. Revise § 558.485 to read as follows:
    § 558.485 Pyrantel.

    (a) Specifications. Type A medicated articles containing 48 or 80 grams per pound pyrantel tartrate.

    (b) Sponsors. See sponsors in § 510.600(c) of this chapter for uses as in paragraph (e) of this section.

    (1) No. 066104: 48 and 80 grams per pound for use as in paragraph (e)(1) of this section.

    (2) Nos. 017135 and 054771: 48 grams per pound for use as in paragraph (e)(2) of this section.

    (c) Related tolerances. See § 556.560 of this chapter.

    (d) Special considerations—(1) See § 500.25 of this chapter. Consult a veterinarian before using in severely debilitated animals.

    (2) Do not mix in Type B or Type C medicated feeds containing bentonite.

    (e) Conditions of use—(1) Swine

    Pyrantel
  • grams/ton
  • Indications for use Limitations Sponsor
    (i) 96 Swine: As an aid in the prevention of migration and establishment of large roundworm (Ascaris suum) infections; aid in the prevention of establishment of nodular worm (Oesophagostomum) infections Feed continuously as the sole ration in a Type C feed. Withdraw 24 hours prior to slaughter 066104 (ii) 96 Swine: For the removal and control of large roundworm (Ascaris suum) infections Feed for 3 days as the sole ration in a Type C feed. Withdraw 24 hours prior to slaughter 066104 (iii) 800 Swine: For the removal and control of large roundworm (Ascaris suum) and nodular worm (Oesophagostomum) infections Feed as the sole ration for a single therapeutic treatment in Type C feed at a rate of 1 lb of feed per 40 lb of body weight for animals up to 200 lb, and 5 lb of feed per head for animals 200 lb or over. Withdraw 24 hours prior to slaughter 066104

    (2) Horses

    Pyrantel
  • grams/ton
  • Indications for use Limitations Sponsor
    To provide 1.2 mg/lb body weight Prevention of Strongylus vulgaris larval infections; control of adult large strongyles (S. vulgaris, and S. edentatus), adult and 4th stage larvae small strongyles (Cyathostomum spp., Cylicocyclus spp., Cylicostephanus spp., Cylicodontophorus spp., Poteriostomum spp., and Triodontophorus spp.), adult and 4th stage larvae pinworms (Oxyuris equi), and adult and 4th stage larvae ascarids (Parascaris equorum) Feed continuously. Administer either as a top-dress (not to exceed 20,000 g/ton) or mixed in the horse's daily grain ration (not to exceed 1,200 g/ton) during the time that the animal is at risk of exposure to internal parasites. Not for use in horses intended for food. Consult your veterinarian before using in severely debilitated animals and for assistance in the diagnosis, treatment, and control of parasitism 017135
  • 054771
  • (3) Pyrantel may also be used in combination with:

    (i) Carbadox as in § 558.115.

    (ii) Lincomycin as in § 558.325.

    (iii) Tylosin as in § 558.625.

    71. In § 558.625, revise paragraphs (e)(2)(ii) and (iii) to read as follows:
    § 558.625 Tylosin.

    (e) * * *

    (2) * * *

    Tylosin
  • grams/ton
  • Combination
  • in grams/ton
  • Indications for use Limitations Sponsor
    *         *         *         *         *         *         * (ii) 8 to 10 Lasalocid, 100 to 1440; plus melengestrol, 0.25 to 2.0 Heifers fed in confinement for slaughter: For reduction of incidence of liver abscesses caused by Fusobacterium necrophorum and Arcanobacterium pyogenes; and for increased rate of weight gain, improved feed efficiency, and suppression of estrus (heat) Feed continuously as sole ration. Feed to heifers at the rate of 0.5 to 2.0 pound(s) per head per day (specify one level) to provide 0.25 to 0.5 mg melengestrol acetate per head per day (specify one level), 100 to 360 mg lasalocid per head per day (specify one level), and 90 mg tylosin per head per day. This Type C product may be top dressed onto or mixed into a complete feed prior to feeding. Tylosin as provided by Nos. 016592 and 058198; lasalocid as provided by No. 054771; melengestrol as provided by Nos. 054771 and 058198 in § 510.600(c) of this chapter. See §§ 558.311(d) and 558.342(d) in this chapter 016592
  • 054771
  • 058198
  • (iii) 8 to 10 Melengestrol, 0.25 to 2.0 Heifers fed in confinement for slaughter: For reduction of incidence of liver abscesses caused by Fusobacterium necrophorum and Arcanobacterium pyogenes; and for increased rate of weight gain, improved feed efficiency, and suppression of estrus (heat) Feed continuously as sole ration. Each pound contains 0.125 to 1.0 mg melengestrol acetate and 45 to 180 mg of tylosin. Feed to heifers at a rate of 0.5 to 2.0 pounds per head per day to provide 0.25 to 0.5 mg melengestrol acetate and 60 to 90 mg tylosin per head per day. Prior to feeding, this Type C product must be top-dressed onto a complete feed or mixed into the amount of complete feed consumed by an animal per day. Tylosin provided by Nos. 016592 and 058198; melengestrol provided by Nos. 054771 and 058198 in § 510.600(c) of this chapter. See § 558.342(d) in this chapter 016592
  • 054771
  • 058198
  • *         *         *         *         *         *         *
    Dated: September 24, 2018. Leslie Kux, Associate Commissioner for Policy.
    [FR Doc. 2018-21146 Filed 9-27-18; 8:45 am] BILLING CODE 4164-01-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Parts 520, 522, 524, and 558 [Docket No. FDA-2018-N-0002] New Animal Drugs; Withdrawal of Approval of New Animal Drug Applications AGENCY:

    Food and Drug Administration, HHS.

    ACTION:

    Notification of withdrawal.

    SUMMARY:

    The Food and Drug Administration (FDA) is withdrawing approval of 12 new animal drug applications (NADAs) at the sponsor's request because these products are no longer manufactured or marketed.

    DATES:

    Withdrawal of approval is effective October 9, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Sujaya Dessai, Center for Veterinary Medicine (HFV-212), Food and Drug Administration, 7519 Standish Pl., Rockville, MD 20855, 240-402-5761, [email protected].

    SUPPLEMENTARY INFORMATION:

    Virbac AH, Inc., 3200 Meacham Blvd., Ft. Worth, TX 76137, has requested that FDA withdraw approval of the NADAs listed in the following table because the products are no longer manufactured or marketed:

    File No. Product name 21 CFR
  • section
  • 011-779 PURINA PIGEMIA 100 (colloidal ferric oxide) 522.1182 040-205 PURINA Horse Wormer Medicated (thiabendazole) 520.2380a 042-116 PURINA 6 DAY WORM-KILL Feed Premix (coumaphos) 558.185 043-215 PURINA GRUB-KILL Pour-on Cattle Insecticide (famphur) 524.900 046-700 STATYL Medicated Premix (nequinate) 558.365 091-260 PULVEX WORM CAPS (piperazine phosphate monohydrate) 520.1804 097-258 PURINA BAN-WORM for Pigs (pyrantel tartrate) 558.485 102-942 PULVEX Multipurpose Worm Caps (dichlorophene, toluene) 520.580 113-748 PURINA PIGEMIA Oral (iron dextran complex) 520.1182 135-941 CHECK-R-TON BM (pyrantel tartrate) 558.485 136-116 PURINA WORM-A-RESTTM Litter Pack Premix (fenbendazole) 520.905d 140-869 PURINA SAF-T-BLOC BG Medicated Feed Block (poloxalene, 6.6%) 520.1840

    Therefore, under authority delegated to the Commissioner of Food and Drugs, and in accordance with § 514.116 Notice of withdrawal of approval of application (21 CFR 514.116), notice is given that approval of NADAs 011-779, 040-205, 042-116, 043-215, 046-700, 091-260, 097-258, 102-942, 113-748, 135-941, 136-116, and 140-869, and all supplements and amendments thereto, is hereby withdrawn, effective October 9, 2018.

    Elsewhere in this issue of the Federal Register, FDA is amending the animal drug regulations to reflect the voluntary withdrawal of approval of these applications.

    Dated: September 24, 2018. Leslie Kux, Associate Commissioner for Policy.
    [FR Doc. 2018-21147 Filed 9-27-18; 8:45 am] BILLING CODE 4164-01-P
    DEPARTMENT OF JUSTICE Drug Enforcement Administration 21 CFR Parts 1308, 1312 [Docket No. DEA-486] Schedules of Controlled Substances: Placement in Schedule V of Certain FDA-Approved Drugs Containing Cannabidiol; Corresponding Change to Permit Requirements AGENCY:

    Drug Enforcement Administration, Department of Justice.

    ACTION:

    Final order.

    SUMMARY:

    With the issuance of this final order, the Acting Administrator of the Drug Enforcement Administration places certain drug products that have been approved by the Food and Drug Administration (FDA) and which contain cannabidiol (CBD) in schedule V of the Controlled Substances Act (CSA). Specifically, this order places FDA-approved drugs that contain CBD derived from cannabis and no more than 0.1 percent tetrahydrocannabinols in schedule V. This action is required to satisfy the responsibility of the Acting Administrator under the CSA to place a drug in the schedule he deems most appropriate to carry out United States obligations under the Single Convention on Narcotic Drugs, 1961. Also consistent therewith, DEA is adding such drugs to the list of substances that may only be imported or exported pursuant to a permit.

    DATES:

    Effective September 28, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Kathy L. Federico, Regulatory Drafting and Policy Support Section (DPW), Diversion Control Division, Drug Enforcement Administration; Mailing Address: 8701 Morrissette Drive, Springfield, Virginia 22152; Telephone: (202) 598-6812.

    SUPPLEMENTARY INFORMATION:

    Background and Legal Authority

    The United States is a party to the Single Convention on Narcotic Drugs, 1961 (Single Convention), and other international conventions designed to establish effective control over international and domestic traffic in controlled substances. 21 U.S.C. 801(7). The Single Convention entered into force for the United States on June 24, 1967, after the Senate gave its advice and consent to the United States' accession. See Single Convention, 18 U.S.T. 1407. The enactment and enforcement of the Controlled Substances Act (CSA) are the primary means by which the United States carries out its obligations under the Single Convention.1 Various provisions of the CSA directly reference the Single Convention. One such provision is 21 U.S.C. 811(d)(1), which relates to scheduling of controlled substances.

    1See S. Rep. No. 91-613, at 4 (1969) (“The United States has international commitments to help control the worldwide drug traffic. To honor those commitments, principally those established by the Single Convention on Narcotic Drugs of 1961, is clearly a Federal responsibility.”); Control of Papaver Bracteatum, 1 Op. O.L.C. 93, 95 (1977) (“[A] number of the provisions of [the CSA] reflect Congress' intent to comply with the obligations imposed by the Single Convention.”).

    As stated in subsection 811(d)(1), if control of a substance is required “by United States obligations under international treaties, conventions, or protocols in effect on October 27, 1970, the Attorney General shall issue an order controlling such drug under the schedule he deems most appropriate to carry out such obligations, without regard to the findings required by [subsections 811(a) or 812(b)] and without regard to the procedures prescribed by [subsections 811(a) and (b)].” This provision is consistent with the Supremacy Clause of the U.S. Constitution (art. VI, sec. 2), which provides that all treaties made under the authority of the United States “shall be the supreme Law of the Land.” In accordance with this constitutional mandate, under section 811(d)(1), Congress directed the Attorney General (and the Administrator of DEA, by delegation) 2 to ensure that compliance by the United States with our nation's obligations under the Single Convention is given top consideration when it comes to scheduling determinations.

    2 28 CFR 0.100.

    Section 811(d)(1) is relevant here because, on June 25, 2018, the Food and Drug Administration (FDA) announced that it approved a drug that is subject to control under the Single Convention. Specifically, the FDA announced that it approved the drug Epidiolex for the treatment of seizures associated with two rare and severe forms of epilepsy, Lennox-Gastaut syndrome and Dravet syndrome, in patients two years of age and older. www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm611046.htm. Epidiolex is an oral solution that contains cannabidiol (CBD) extracted from the cannabis plant. This is the first FDA-approved drug made from the cannabis plant.3 Now that Epiodiolex has been approved by the FDA, it has a currently accepted medical use in treatment in the United States for purposes of the CSA. Accordingly, Epidiolex no longer meets the criteria for placement in schedule I of the CSA. See 21 U.S.C. 812(b) (indicating that while substances in schedule I have no currently accepted medical use in treatment in the United States, substances in schedules II-V do); see also United States v. Oakland Cannabis Buyers' Cooperative, 532 U.S. 483, 491-92 (2001) (same). DEA must therefore take the appropriate scheduling action to remove the drug from schedule I.

    3 The drug Marinol was approved by the FDA in 1985. Marinol contains a synthetic form of dronabinol (an isomer of tetrahydrocannabinol) and thus is not made from the cannabis plant.

    In making this scheduling determination, as section 811(d)(1) indicates, it is necessary to assess the relevant requirements of the Single Convention. Under the treaty, cannabis, cannabis resin, and extracts and tinctures of cannabis are listed in Schedule I.4 The cannabis plant contains more than 100 cannabinoids. Among these are tetrahydrocannabinols (THC) and CBD.5 Material that contains THC and CBD extracted from the cannabis plant falls within the listing of extracts and tinctures of cannabis for purposes of the Single Convention.6 Thus, such material, which includes, among other things, a drug product containing CBD extracted from the cannabis plant, is a Schedule I drug under the Single Convention.

    4 The text of the Single Convention capitalizes schedules (e.g., “Schedule I”). In contrast, the text of the CSA generally refers to schedules in lower case. This document will follow this approach of using capitalization or lower case depending on whether the schedule is under the Single Convention or the CSA.

    It should also be noted that the schedules of the Single Convention operate somewhat differently than the schedules of the CSA. Unlike the CSA, the Single Convention imposes additional restrictions on drugs listed in Schedule IV that go beyond those applicable to drugs listed in Schedule I. All drugs in Schedule IV of the Single Convention are also in Schedule I of the Convention. Cannabis and cannabis resin are among the drugs listed in Schedule IV of the Single Convention.

    5 There are numerous isomers of cannabidiol, which will be referred to here collectively as “CBD.”

    6 Although the Single Convention does not define the term “extract,” the ordinary meaning of that term would include a product, such as a concentrate of a certain chemical or chemicals, obtained by a physical or chemical process. See, e.g., Webster's Third New International Dictionary 806 (1976). Thus, the term extract of cannabis would include any product that is made by subjecting cannabis material to a physical or chemical process designed to isolate or increase the concentration of one or more of the cannabinoid constituents.

    Parties to the Single Convention are required to impose a number of control measures with regard to drugs listed in Schedule I of the Convention. These include, but are not limited to, the following:

    • Limiting exclusively to medical and scientific purposes the production, manufacture, export, import, distribution of, trade in, use and possession of such drugs. Article 4.

    • Furnishing to the International Narcotics Control Board (INCB) annual estimates of, among other things, quantities of such drugs to be consumed for medical and scientific purposes, utilized for the manufacture of other drugs, and held in stock. Article 19.

    • Furnishing to the INCB statistical returns on the actual production, utilization, consumption, imports and exports, seizures, and stocks of such drugs during the prior year. Article 20.

    • Requiring that licensed manufacturers of such drugs obtain quotas specifying the amounts of such drugs they may manufacture to prevent excessive production and accumulation beyond that necessary to satisfy legitimate needs. Article 29.

    • Requiring manufacturers and distributors of such drugs to be licensed. Articles 29 & 30.

    • Requiring medical prescriptions for the dispensing of such drugs to patients. Article 30.

    • Requiring importers and exporters of such drugs to be licensed and requiring each individual importation or exportation to be predicated on the issuance of a permit. Article 31.

    • Prohibiting the possession of such drugs except under legal authority. Article 33.

    • Requiring those in the legitimate distribution chain (manufacturers, distributors, scientists, and those who lawfully dispense such drugs) to keep records that show the quantities of such drugs manufactured, distributed, dispensed, acquired, or otherwise disposed of during the prior two years. Article 34.

    Because the CSA was enacted in large part to satisfy United States obligations under the Single Convention, many of the CSA's provisions directly implement the foregoing treaty requirements. None of the foregoing obligations of the United States could be satisfied for a given drug if that drug were removed entirely from the CSA schedules. At least one of the foregoing requirements (quotas) can only be satisfied if the drug that is listed in Schedule I of the Single Convention is also listed in schedule I or II of the CSA because, as 21 U.S.C. 826 indicates, the quota requirements generally apply only to schedule I and II controlled substances.

    The permit requirement warrants additional explanation. As indicated above, the Single Convention obligates parties to require a permit for the importation and exportation of drugs listed in Schedule I of the Convention. This permit requirement applies to a drug product containing CBD extracted from the cannabis plant because, as further indicated above, such a product is a Schedule I drug under the Single Convention. However, under the CSA 7 and DEA regulations, the import/export permit requirement does not apply to all controlled substances. Rather, a permit is required to import or export any controlled substance in schedule I and II as well as certain controlled substances in schedules III, IV, and V. See 21 U.S.C. 952 and 953; 21 CFR 1312.11, 1312.12, 1312.21, 1312.22. Thus, in deciding what schedule is most appropriate to carry out the United States' obligations under the Single Convention with respect to the importation and exportation of Epidiolex, I conclude there are two options:

    7 The provisions of federal law relating to the import and export of controlled substances—those found in 21 U.S.C. 951 through 971—are more precisely referred to as the Controlled Substances Import and Export Act (CSIEA). However, federal courts and DEA often use the term “CSA” to refer collectively to all provisions from 21 U.S.C. 801 through 971 and, for ease of exposition, this document will do likewise.

    (i) Control the drug in schedule II, which will automatically require an import/export permit under existing provisions of the CSA and DEA regulations or

    (ii) control the drug in schedule III, IV, or V, and simultaneously amend the regulations to require a permit to import or export Epidiolex.

    It bears emphasis that where, as here, control of a drug is required by the Single Convention, the DEA Administrator “shall issue an order controlling such drug under the schedule he deems most appropriate to carry out such obligations, without regard to the findings required by [21 U.S.C. 811 (a) or 812(b)] and without regard to the procedures prescribed by [21 U.S.C. 811 (a) or (b)].” 21 U.S.C. 811(d)(1) (emphasis added). Thus, in such circumstances, the Administrator is not obligated to request a medical and scientific evaluation or scheduling recommendation from the Department of Health and Human Services (HHS) (as is normally done pursuant to section 811(b)).8 Nonetheless, DEA did seek such an evaluation and recommendation from HHS with respect to the Epidiolex formulation. In responding to that request, HHS advised DEA that it found the Epidiolex formulation to have a very low potential for abuse and, therefore, recommended that, if DEA concluded that control of the drug was required under the Single Convention, Epidiolex should be placed in schedule V of the CSA.9 Although I am not required to consider this HHS recommendation when issuing an order under section 811(d)(1), because I believe there are two legally viable scheduling options (listed above), both of which would satisfy the United States' obligations under the Single Convention, I will exercise my discretion and choose the option that most closely aligns to the HHS recommendation. Namely, I am hereby ordering that the Epidiolex formulation (and any future FDA-approved generic versions of such formulation made from cannabis) be placed in schedule V of the CSA.

    8 In the House Report to the bill that would become the CSA (H. Rep. No. 91-1444, at 36 (1970)), this issue is explained as follows:

    Under subsection [811(d)], where control of a drug or other substance by the United States is required by reason of its obligations under [the Single Convention], the bill does not require that the Attorney General seek an evaluation and recommendation by the Secretary of Health, Education, and Welfare, or pursue the procedures for control prescribed by the bill but he may include the drug or other substance under any of the five schedules of the bill which he considers most appropriate to carry out the obligations of the United States under the international instrument, and he may do so without making the specific findings otherwise required for inclusion of a drug or other substance in that schedule.

    9 HHS most recently updated its medical and scientific evaluation and scheduling recommendation for the Epidiolex formulation by letter to DEA dated June 13, 2018.

    As noted, this order placing the Epidiolex formulation in schedule V will only comport with section 811(d)(1) if all importations and exportations of the drug remain subject to the permit requirement. Until now, since the Epidiolex formulation had been a schedule I controlled substance, the importation of the drug from its foreign production facility has always been subject to the permit requirement. To ensure this requirement remains in place (and thus to prevent any lapse in compliance with the requirements of the Single Convention), this order will amend the DEA regulations (21 CFR 1312.30) to add the Epidiolex formulation to the list of nonnarcotic schedule III through V controlled substances that are subject to the import and export permit requirement.

    Finally, a brief explanation is warranted regarding the quota requirement in connection with the Single Convention. As indicated above, for drugs listed in Schedule I of the Convention, parties are obligated to require that licensed manufacturers of such drugs obtain quotas specifying the amounts of such drugs they may manufacture. The purpose of this treaty requirement is to prevent excessive production and accumulation beyond that necessary to satisfy legitimate needs. Under this scheduling order, the United States will continue to meet this obligation because the bulk cannabis material used to make the Epidiolex formulation (as opposed to the FDA-approved drug product in finished dosage form) will remain in schedule I of the CSA and thus be subject to all applicable quota provisions under 21 U.S.C. 826.10

    10 At present, the cannabis used to make Epidiolex is grown in the United Kingdom and the drug is imported into the United States in finished dosage form.

    Requirements for Handling FDA-Approved Products Containing CBD

    As noted, until now, Epidiolex has been a schedule I controlled substance. By virtue of this order, Epidiolex (and any generic versions of the same formulation that might be approved by the FDA in the future) will be a schedule V controlled substance. Thus, all persons in the distribution chain who handle Epidiolex in the United States (importers, manufacturers, distributors, and practitioners) must comply with the requirements of the CSA and DEA regulations relating to schedule V controlled substances. As further indicated, any material, compound, mixture, or preparation other than Epidiolex that falls within the CSA definition of marijuana set forth in 21 U.S.C. 802(16), including any non-FDA-approved CBD extract that falls within such definition, remains a schedule I controlled substance under the CSA.11 Thus, persons who handle such items will continue to be subject to the requirements of the CSA and DEA regulations relating to schedule I controlled substances.

    11 Nothing in this order alters the requirements of the Federal Food, Drug, and Cosmetic Act that might apply to products containing CBD. In announcing its recent approval of Epidiolex, the FDA Commissioner stated:

    [W]e remain concerned about the proliferation and illegal marketing of unapproved CBD-containing products with unproven medical claims. . . . The FDA has taken recent actions against companies distributing unapproved CBD products. These products have been marketed in a variety of formulations, such as oil drops, capsules, syrups, teas, and topical lotions and creams. These companies have claimed that various CBD products could be used to treat or cure serious diseases such as cancer with no scientific evidence to support such claims.

    www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm611047.htm.

    Regulatory Analyses Administrative Procedure Act

    The CSA provides for an expedited scheduling action where control of a drug is required by the United States' obligations under the Single Convention. 21 U.S.C. 811(d)(1). Under such circumstances, the Attorney General must “issue an order controlling such drug under the schedule he deems most appropriate to carry out such obligations,” without regard to the findings or procedures otherwise required for scheduling actions. Id. (emphasis added). Thus, section 811(d)(1) expressly requires that this type of scheduling action not proceed through the notice-and-comment rulemaking procedures governed by the Administrative Procedure Act (APA), which generally apply to scheduling actions; it instead requires that such scheduling action occur through the issuance of an “order.”

    Although the text of section 811(d)(1) thus overrides the normal APA considerations, it is notable that the APA itself contains a provision that would have a similar effect. As set forth in 21 U.S.C. 553(a)(1), the section of the APA governing rulemaking does not apply to a “foreign affairs function of the United States.” An order issued under section 811(d)(1) may be considered a foreign affairs function of the United States because it is for the express purpose of ensuring that the United States carries out its obligations under an international treaty.

    Executive Order 12866, 13563, and 13771, Regulatory Planning and Review, Improving Regulation and Regulatory Review, and Reducing Regulation and Controlling Regulatory Costs

    This action is not a significant regulatory action as defined by Executive Order 12866 (Regulatory Planning and Review), section 3(f), and the principles reaffirmed in Executive Order 13563 (Improving Regulation and Regulatory Review), and, accordingly, this action has not been reviewed by the Office of Management and Budget (OMB).

    This order is not an Executive Order 13771 regulatory action.

    Executive Order 12988, Civil Justice Reform

    This action meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate drafting errors and ambiguity, minimize litigation, provide a clear legal standard for affected conduct, and promote simplification and burden reduction.

    Executive Order 13132, Federalism

    This action does not have federalism implications warranting the application of Executive Order 13132. This action does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

    Executive Order 13175, Consultation and Coordination With Indian Tribal Governments

    This action does not have tribal implications warranting the application of Executive Order 13175. The action does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes.

    Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612) applies to rules that are subject to notice and comment under section 553(b) of the APA or any other law. As explained above, the CSA exempts this order from the APA notice-and-comment rulemaking provisions. Consequently, the RFA does not apply to this action.

    Paperwork Reduction Act of 1995

    This action does not impose a new collection of information requirement under the Paperwork Reduction Act of 1995. 44 U.S.C. 3501-3521. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

    Congressional Review Act

    As noted above, this action is an order, not a rulemaking. Accordingly, the Congressional Review Act (CRA) is inapplicable, as it applies only to rules. However, the DEA has submitted a copy of this final order to both Houses of Congress and to the Comptroller General, although such filing is not required under the Small Business Regulatory Enforcement Fairness Act of 1996 (CRA), 5 U.S.C. 801-808.

    List of Subjects 21 CFR Part 1308

    Administrative practice and procedure, Drug traffic control, Reporting and recordkeeping requirements.

    21 CFR Part 1312

    Administrative practice and procedure, Drug traffic control, Exports, Imports, Reporting requirements.

    For the reasons set out above, DEA amends 21 CFR parts 1308 and 1312 as follows:

    PART 1308—SCHEDULES OF CONTROLLED SUBSTANCES 1. The authority citation for part 1308 continues to read as follows: Authority:

    21 U.S.C. 811, 812, 871(b), 956(b) unless otherwise noted.

    2. In § 1308.15, add paragraph (f) to read as follows:
    § 1308.15 Schedule V. (f) Approved cannabidiol drugs. (1) A drug product in finished dosage formulation that has been approved by the U.S. Food and Drug Administration that contains cannabidiol (2-[1R-3-methyl-6R-(1-methylethenyl)-2-cyclohexen-1-yl]-5-pentyl-1,3-benzenediol) derived from cannabis and no more than 0.1 percent (w/w) residual tetrahydrocannabinols 7367

    (2) [Reserved]

    PART 1312—IMPORTATION AND EXPORTATION OF CONTROLLED SUBSTANCES 3. The authority citation for part 1312 is revised to read as follows: Authority:

    21 U.S.C. 821, 871(b), 952, 953, 954, 957, 958.

    4. In § 1312.30, revise the introductory text and add pargraph (b) to read as follows:
    § 1312.30 Schedule III, IV, and V non-narcotic controlled substances requiring an import and export permit.

    The following Schedule III, IV, and V non-narcotic controlled substances have been specifically designated by the Administrator of the Drug Enforcement Administration as requiring import and export permits pursuant to sections 201(d)(1), 1002(b)(2), and 1003(e)(3) of the Act (21 U.S.C. 811(d)(1), 952(b)(2), and 953(e)(3)):

    (b) A drug product in finished dosage formulation that has been approved by the U.S. Food and Drug Administration that contains cannabidiol (2-[1R-3-methyl-6R-(1-methylethenyl)-2-cyclohexen-1-yl]-5-pentyl-1,3-benzenediol) derived from cannabis and no more than 0.1 percent (w/w) residual tetrahydrocannabinols.

    Dated: September 21, 2018. Uttam Dhillon, Acting Administrator.
    [FR Doc. 2018-21121 Filed 9-27-18; 8:45 am] BILLING CODE 4410-09-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 100 [Docket No. USCG-2018-0795] Special Local Regulations for Marine Events; San Francisco Bay Navy Fleet Week Parade of Ships and Blue Angels Demonstration, San Francisco, CA AGENCY:

    Coast Guard, DHS.

    ACTION:

    Notice of enforcement of regulation.

    SUMMARY:

    The Coast Guard will enforce the special local regulations in the navigable waters of the San Francisco Bay for the San Francisco Bay Navy Fleet Week Parade of Ships and Blue Angels Demonstration from October 4 through October 7, 2018. This action is necessary to ensure the safety of event participants and spectators. During the enforcement period, unauthorized persons or vessels are prohibited from entering into, transiting through, or anchoring in the regulated area, unless authorized by the Patrol Commander (PATCOM).

    DATES:

    The regulations in 33 CFR 100.1105 will be enforced from 10:30 a.m. until 12:30 p.m. on October 5, 2018; from 12:50 p.m. until 5 p.m. on October 4, 2018; from 12:50 p.m. until 4 p.m. on October 5, 2018; and from 12:35 p.m. until 4 p.m. on October 6 through 7, 2018 as identified in the SUPPLEMENTARY INFORMATION section below.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions on this notice of enforcement, call or email Lieutenant Emily Rowan, U.S. Coast Guard Sector San Francisco; telephone (415) 399-7443 or email at [email protected]

    SUPPLEMENTARY INFORMATION:

    The Coast Guard will enforce the special local regulation for the annual San Francisco Bay Navy Fleet Week Parade of Ships and Blue Angels Demonstration in 33 CFR 100.1105.

    Regulations for the Navy Parade of Ships will be enforced from 10:30 a.m. until 12:30 p.m. on October 5, 2018; the U.S. Navy Blue Angels Activities will be enforced from 12:50 p.m. until 5 p.m. on October 4, 2018, and from 12:50 p.m. until 4 p.m. on October 5, 2018, and from 12:35 p.m. until 4 p.m. on October 6 through 7, 2018. Under the provisions of 33 CFR 100.1105, except for persons or vessels authorized by the PATCOM, in regulated area “Alpha” no person or vessel may enter or remain within 500 yards ahead of any Navy parade vessel. No person or vessel shall anchor, block, loiter in, or impede the through transit of ship parade participants or official patrol vessels in regulated area “Alpha.”

    Except for persons or vessels authorized by the PATCOM, no person or vessel may enter or remain within regulated area “Bravo.”

    When hailed and/or signaled by U.S. Coast Guard patrol personnel by siren, radio, flashing light, or other means, a person or vessel shall come to an immediate stop. Persons or vessels shall comply with all directions given; failure to do so may result in expulsion from the area, citation for failure to comply, or both. The Coast Guard may be assisted by other Federal, State, or local law enforcement agencies in enforcing this regulation.

    The PATCOM shall be designated by the Commander, Coast Guard Sector San Francisco, California. The PATCOM is empowered to forbid and control the movement of all vessels in the regulated area.

    This notice of enforcement is issued under authority of 33 U.S.C. 1233. In addition to this notification in the Federal Register, the Coast Guard will provide the maritime community with extensive advance notification of the regulated area and its enforcement period via the Local Notice to Mariners, and Broadcast Notice to Mariners.

    Dated: September 20, 2018. Anthony J. Ceraolo, Captain, U.S. Coast Guard, Captain of the Port San Francisco.
    [FR Doc. 2018-21094 Filed 9-27-18; 8:45 am] BILLING CODE 9110-04-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket Number USCG-2018-0917] RIN 1625-AA11 Regulated Navigation Area; Upper Mississippi River, Sabula Railroad Drawbridge, Mile Marker 535, Sabula, IA AGENCY:

    Coast Guard, DHS.

    ACTION:

    Temporary final rule; request for comments.

    SUMMARY:

    The Coast Guard is establishing a temporary regulated navigation area (RNA) for certain navigable waters of the Upper Mississippi River under one of the navigable spans of the Sabula Railroad Drawbridge at mile marker (MM) 535. The RNA is necessary to protect persons, vessels, and the marine environment from potential hazards associated with emergency repair work to the Sabula Railroad Bridge following a vessel's allision with the bridge. This regulation applies only to southbound vessel transits through the RNA, and depending on the water flow as measured from Lock and Dam 12, this regulation either prohibits transit or establishes operating requirements unless a deviation is authorized by the Captain of the Port Sector Upper Mississippi River or a designated representative. We invite your comments on this rulemaking.

    DATES:

    This rule is effective without actual notice from September 28, 2018 through November 30, 2018. For the purposes of enforcement, actual notice will be used from September 24, 2018 through September 28, 2018. Comments and related material must be received by the Coast Guard on or before October 15, 2018.

    ADDRESSES:

    To view documents mentioned in this preamble as being available in the docket, go to https://www.regulations.gov, type USCG-2018-0917 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 Lieutenant Commander Kody Stitz, Sector Upper Mississippi River Prevention Department U.S. Coast Guard; telephone 314-269-2568, email [email protected].

    SUPPLEMENTARY INFORMATION: I. Table of Abbreviations CFR Code of Federal Regulations COTP Captain of the Port Sector Upper Mississippi River 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)(3)(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. On September 16, 2018, a vessel allided with the Sabula Railroad Drawbridge and immediate action is needed to respond to the potential hazards associated with emergency bridge repairs. It is impracticable to publish an NPRM because we must establish this regulated navigation area as soon as possible. The NPRM process would delay establishment of the regulated navigation area until after the emergency repairs are necessary and compromise public safety. However, the Coast Guard is providing an opportunity to comment while the rule is in effect and may amend the rule after it becomes effective, if necessary.

    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 contrary to public interest because immediate action is needed to respond to the potential safety hazards associated with emergency bridge repairs.

    III. Legal Authority and Need for Rule

    The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Eighth District Commander has determined that potential hazards associated with emergency bridge repairs following an allision will be a safety concern for vessels transiting southbound through the right descending span, also known as Iowa span, of the Sabula Railroad Drawbridge. This rule is necessary to protect persons, vessels, and the marine environment on the navigable waters of the Upper Mississippi River while the bridge is being repaired. The duration of this rule is intended to cover the period of emergency repairs.

    IV. Discussion of the Rule

    This rule establishes a temporary regulated navigation area from September 21, 2018 through November 30, 2018, or until the emergency bridge repairs are completed, whichever occurs first. The regulated area covers all navigable waters of the Upper Mississippi River under the right descending bank span, also known as the Iowa span, of the Sabula Railroad Drawbridge at mile marker (MM) 535. This rule applies only to southbound vessel transits through the RNA, and depending on the water flow as measured from Lock and Dam 12, this regulation either prohibits transit or establishes operating requirements unless a deviation is authorized by the Captain of the Port Sector Upper Mississippi River or a designated representative.

    When the water flow rate as measured from Lock and Dam 12 is 100kcfs or greater, vessels are prohibited from transiting southbound through the RNA unless authorized by the Captain of the Port Sector Upper Mississippi River (COTP) or a designated representative. When the water flow rate as measured from Lock and Dam 12 is less than 100kcfs, vessels may transit southbound through the RNA only if navigating at their slowest safe speed and avoiding contact with any part of the Sabula Railroad Drawbridge and the unprotected rest pier located on the right descending side of the Sabula Railroad Drawbridge.

    When the water flow rate as measured from Lock and Dam 12 is less than 100kcfs, vessels engaged in towing may transit southbound through the RNA only if the size of the tow does not exceed 15 barges, the towing vessels possess a minimum of 250 horsepower per loaded barge in the tow, and the towing vessel uses an assist vessel of at least 1,000 horsepower when pushing three or more barges. If an assist vessel is required by this rule, the assist vessel and the towing vessel must discuss a plan to transit through the RNA before doing so and both the assist vessel and the towing vessel must be capable of continuous two-way voice communication during the transit.

    The COTP or a designated representative may review, on a case-by-case basis, alternatives to the minimum operating or towing requirements set forth in this rule and may approve a deviation from these requirements should they provide an equivalent level of safety. The COTP or a designated representative may determine, on a case-by-case basis, that although the conditions triggering the RNA may be met, the current potential hazards do not require that each requirement of the RNA be enforced and that only certain of the above-prescribed restrictions are necessary under the circumstances. The COTP or a designated representative may consider environmental factors, the water flow rate at Lock and Dam 12, mitigating safety factors, and the completion progress of the bridge repairs among other factors. The COTP or a designated representative will broadcast notice of such determination and any subsequent changes. Notice that these vessel operational conditions are anticipated to be put into effect, or are in effect, will be given by Broadcast Notice to Mariners, Local Notices to Mariners, Marine Safety Information Broadcasts, and/or actual notice, as appropriate.

    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 limited applicability of rule, the availability of an alternate route, and the ability of the COTP to issue a deviation from the requirements of this rule or suspend enforcement of this rule on a case-by-case basis. This rule only affects southbound vessel transits through the RNA; northbound vessels may transit the RNA at any time without restrictions. In addition, the regulated area only covers the navigable waters under the span of the Sabula Railroad Drawbridge that was damaged in the allision, the right descending span, or Iowa span, of the bridge. Vessels may transit north or southbound through the left descending span, or Illinois span, at any time without restriction. Finally, this rule allows vessels to seek permission to transit through the RNA and/or deviate from the operating requirements, and also allows the COTP to suspend enforcement of particular provisions of the RNA under appropriate circumstances.

    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 temporary regulated area 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 regulated navigation area lasting approximately two months that prohibits entry or establishes vessel operating requirements for southbound transits through the right descending span of the Sabula Railroad Drawbridge on the Upper Mississippi River while emergency repairs are made to the bridge. It is categorically excluded from further review under paragraph L60(d) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A Record of Environmental Consideration supporting this determination will be made 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.

    VI. Public Participation and Request for Comments

    We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. The Coast Guard may amend this temporary final rule if we receive comments from the public that indicate that a change is warranted. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion.

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

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

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

    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.T08-0917 to read as follows:
    § 165.T08-0917 Regulated Navigation Area; Upper Mississippi River, Sabula Railroad Drawbridge, Mile Marker 535, Sabula, IA.

    (a) Location. The following area is a regulated navigation area (RNA): All navigable waters of the Upper Mississippi River under the right descending bank span, also known as the Iowa span, of the Sabula Railroad Drawbridge at mile marker (MM) 535.

    (b) Effective period. This section is effective from September 21, 2018 through November 30, 2018, or until the emergency bridge repairs are completed, whichever occurs first.

    (c) Applicability. This section only applies to vessels transiting southbound through the RNA.

    (d) Regulations. (1) In accordance with the general regulations contained in 33 CFR 165.10, 165.11, and 165.13, when the water flow rate as measured from Lock and Dam 12 is 100kcfs or greater, vessels are prohibited from transiting southbound through the RNA unless authorized by the Captain of the Port Sector Upper Mississippi River (COTP) or a designated representative.

    (2) When the water flow rate as measured from Lock and Dam 12 is less than 100kcfs, vessels may transit southbound through the RNA only under the following conditions:

    (i) Vessels operate at their slowest safe speed; and

    (ii) Vessels avoid contacting any part of the Sabula Railroad Drawbridge and the unprotected rest pier located on the right descending side of the Sabula Railroad Drawbridge.

    (3) When the water flow rate as measured from Lock and Dam 12 is less than 100kcfs, vessels engaged in towing may transit southbound through the RNA only under the following conditions:

    (i) The size of the tow does not exceed 15 barges; and

    (ii) The towing vessel possesses a minimum of 250 horsepower per loaded barge in the tow; and

    (iii) When pushing three or more barges, an assist vessel of at least 1,000 horsepower is utilized.

    (4) If an assist vessel is required under this section, before entering the RNA:

    (i) The assist vessel and the tow vessel shall discuss a plan to transit through the bridge, and

    (ii) Both the assist vessel and the towing vessel shall be capable of continuous two-way voice communication while transiting through the bridge.

    (5) The COTP or a designated representative may review, on a case-by-case basis, alternatives to the minimum operating or towing requirements and conditions set forth in subparagraphs (d)(2)-(d)(4) of this section and may approve a deviation to these requirements and conditions should they provide an equivalent level of safety.

    (6) The COTP or a designated representative may determine, on a case-by-case basis, that although the conditions triggering the RNA may be met, the current potential hazards do not require that each requirement of the RNA be enforced and that only certain of the above-prescribed restrictions are necessary under the circumstances. The COTP or a designated representative may consider environmental factors, the water flow rate at Lock and Dam 12, mitigating safety factors, and the completion progress of bridge the repairs among other factors. The COTP or a designated representative shall broadcast such notice of such determination and any changes under the provisions of paragraph (e).

    (e) Notice of requirements. Notice that these vessel operational conditions are anticipated to be put into effect, or are in effect, will be given by Broadcast Notice to Mariners, Local Notices to Mariners, Marine Safety Information Broadcasts, and/or actual notice, as appropriate.

    Dated: September 24, 2018 P.F. Thomas, Rear Admiral, U.S. Coast Guard, Commander, Eighth Coast Guard District.
    [FR Doc. 2018-21135 Filed 9-27-18; 8:45 am] BILLING CODE 9110-04-P
    DEPARTMENT OF THE INTERIOR Bureau of Land Management 43 CFR Part 3000 [18X.LLWO310000.L13100000.PP0000] RIN 1004-AE57 Minerals Management: Adjustment of Cost Recovery Fees AGENCY:

    Bureau of Land Management, Interior.

    ACTION:

    Final rule.

    SUMMARY:

    This final rule updates the fees set forth in the Bureau of Land Management (BLM) mineral resources regulations for the processing of certain minerals program-related actions. It also adjusts certain filing fees for minerals-related documents. These updated fees include those for actions such as lease renewals and mineral patent adjudications.

    DATES:

    This final rule is effective October 1, 2018.

    ADDRESSES:

    You may send inquiries or suggestions to Director (630), Bureau of Land Management, 2134LM, 1849 C Street NW, Washington, DC 20240; Attention: RIN 1004-AE57.

    FOR FURTHER INFORMATION CONTACT:

    Steve Wells, Chief, Division of Fluid Minerals, 202-912-7143; Mitch Leverette, Chief, Division of Solid Minerals, 202-912-7114; or Mark Purdy, Regulatory Affairs, 202-912-7635. Persons who use a telecommunications device for the deaf (TDD) may leave a message for these individuals with the Federal Relay Service (FRS) at 1-800-877-8339, 24 hours a day, 7 days a week.

    SUPPLEMENTARY INFORMATION:

    I. Background

    The BLM has specific authority to charge fees for processing applications and other documents relating to public lands under section 304 of the Federal Land Policy and Management Act of 1976 (FLPMA), 43 U.S.C. 1734. In 2005, the BLM published a final cost recovery rule (70 FR 58854) establishing or revising fees and service charges for processing documents related to its minerals programs (2005 Cost Recovery Rule). In addition, the 2005 Cost Recovery Rule also established the method the BLM would use to adjust those fees and service charges on an annual basis.

    At 43 CFR 3000.12(a), the regulations provide that the BLM will annually adjust fees established in subchapter C (43 CFR parts 3000 through 3900) according to changes in the Implicit Price Deflator for Gross Domestic Product (IPD-GDP), which is published quarterly by the U.S. Department of Commerce. See also 43 CFR 3000.10. This final rule updates those fees and service charges consistent with that direction. The fee adjustments in this rule are based on the mathematical formula set forth in the 2005 Cost Recovery Rule. The public had an opportunity to comment on that adjustment procedure as part of the 2005 rulemaking. Accordingly, the Department of the Interior for good cause finds under 5 U.S.C. 553(b)(B) and (d)(3) that notice and public comment procedures are unnecessary and that the fee adjustments in this rule may be effective less than 30 days after publication. See 43 CFR 3000.10(c).

    II. Discussion of Final Rule

    As set forth in the 2005 Cost Recovery Rule, the fee updates are based on the change in the IPD-GDP. The BLM's minerals program publishes the updated cost recovery fees, which become effective on October 1, the start of the fiscal year (FY).

    Since the BLM did not publish a fee update for FY 2018, this rule updates the cost recovery fees from FY 2017 for FY 2019. The update is based on the change in the IPD-GDP from the 4th Quarter of 2015 to the 4th Quarter of 2017 and reflects the rate of inflation over a two-year time period (or eight calendar quarters).

    Under this rule, 17 fees will remain the same and 31 fees will increase. Of the 31 fees that are being increased by this rule, 18 of the increases are equal to $5 each. The largest increase, $105, will be applied to the fee for adjudicating a mineral patent application containing more than 10 claims, which will increase from $3,110 to $3,215. The fee for adjudicating a patent application containing 10 or fewer claims will increase by $50, from $1,555 to $1,605.

    The calculations that resulted in the new fees are included in the table below:

    Fixed cost recovery fees Existing fee 1
  • (FY 2017)
  • Existing
  • value 2
  • IPD-GDP
  • increase 3
  • New value 4 New fee 5
  • (FY 2019)
  • Oil & Gas (parts 3100, 3110, 3120, 3130, 3150): Noncompetitive lease application $415 $413.233 $14.050 $427.283 $425 Competitive lease application 160 160.367 5.452 165.819 165 Assignment and transfer of record title or operating rights 95 92.511 3.145 95.656 95 Overriding royalty transfer, payment out of production 10 12.333 0.419 12.752 15 Name change, corporate merger or transfer to heir/devisee 215 215.858 7.339 223.197 225 Lease consolidation 455 456.392 15.517 471.909 470 Lease renewal or exchange 415 413.233 14.050 427.283 425 Lease reinstatement, Class I 80 80.167 2.726 82.893 85 Leasing under right-of-way 415 413.233 14.050 427.283 425 Geophysical exploration permit application—Alaska 6 25 25 Renewal of exploration permit—Alaska 7 25 25 Geothermal (part 3200): Noncompetitive lease application 415 413.233 14.050 427.283 425 Competitive lease application 160 160.367 5.452 165.819 165 Assignment and transfer of record title or operating right 95 92.511 3.145 95.656 95 Name change, corporate merger or transfer to heir/devisee 215 215.858 7.339 223.197 225 Lease consolidation 455 456.392 15.517 471.909 470 Lease reinstatement 80 80.167 2.726 82.893 85 Nomination of lands 115 115.457 3.926 119.383 120 Plus per acre nomination fee 0.12 0.116 0.004 0.12 0.12 Site license application 60 61.674 2.097 63.771 65 Assignment or transfer of site license 60 61.674 2.097 63.771 65 Coal (parts 3400, 3470): License to mine application 10 12.333 0.419 12.752 15 Exploration license application 340 339.216 11.533 350.749 350 Lease or lease interest transfer 70 67.856 2.307 70.163 70 Leasing of Solid Minerals Other Than Coal and Oil Shale (parts 3500, 3580): Applications other than those listed below 35 37.009 1.258 38.267 40 Prospecting permit amendment 70 67.856 2.307 70.163 70 Extension of prospecting permit 110 111.015 3.775 114.79 115 Lease modification or fringe acreage lease 30 30.848 1.049 31.896 30 Lease renewal 530 530.420 18.034 548.454 550 Assignment, sublease, or transfer of operating rights 30 30.848 1.049 31.896 30 Transfer of overriding royalty 30 30.848 1.049 31.897 30 Use permit 30 30.848 1.049 31.897 30 Shasta and Trinity hardrock mineral lease 30 30.848 1.049 31.897 30 Renewal of existing sand and gravel lease in Nevada 30 30.848 1.049 31.897 30 Multiple Use; Mining (Group 3700): Notice of protest of placer mining operations 15 12.333 0.419 12.752 15 Mining Law Administration (parts 3800, 3810, 3830, 3850, 3860, 3870): Application to open lands to location 10 12.333 0.419 12.752 15 Notice of Location 20 18.493 0.629 19.122 20 Amendment of location 10 12.333 0.419 12.752 15 Transfer of mining claim/site 10 12.333 0.419 12.752 15 Recording an annual FLPMA filing 10 12.333 0.419 12.752 15 Deferment of assessment work 110 111.015 3.775 114.79 115 Recording a notice of intent to locate mining claims on Stockraising Homestead Act lands 30 30.848 1.049 31.897 30 Mineral Patent adjudication (more than ten claims) 3,110 3,108.492 105.689 3,214.181 3,215 (ten or fewer claims) 1,555 1,554.230 52.844 1,607.074 1,605 Adverse claim 110 111.015 3.775 114.79 115 Protest 70 67.856 2.307 70.163 70 Oil Shale Management (parts 3900, 3910, 3930): Exploration License Application 325 325.360 11.062 336.422 335 Assignment or sublease of record title or overriding royalty 65 66.181 2.250 68.431 70 1 The Existing Fee was established by the 2016 (FY 2017) cost recovery fee update rule. The 2016 cost recovery fee update rule was published on September 23, 2016 (81 FR 65558) and effective on October 1, 2016. The existing fees were not updated for FY18. 2 The Existing Value was used to derive the Existing Fee column for the 2016 (FY 2017) cost recovery fee update rule. The numbers in the Existing Value column appear in the New Value column in the 2016 cost recovery fee update rule. The values in this column are rounded to 3 decimal places for display purposes only. 3 From 4th Quarter 2015 (110.513) to 4th Quarter 2017 (114.275), the IPD-GDP increased by 3.4 percent. The values in this column equal 3.4 percent multiplied by the corresponding Existing Value. The values in this column are rounded to 3 decimal places for display purposes only. 4 The New Value is used to calculate the new cost recovery fees for FY19. The New Value equals the sum of the corresponding Existing Value and the IPD-GDP Increase. The New Values may not sum due to rounding. The values in this column are rounded to 3 decimal places for display purposes only. 5 The New Fee for FY 2019 is the corresponding New Value rounded to the nearest $5 for values equal to or greater than $1 or rounded to the nearest penny for values under $1. 6 Section 365 of the Energy Policy Act of 2005 (Pub. L. 109-58) directed in subsection (i) that “the Secretary shall not implement a rulemaking that would enable an increase in fees to recover additional costs related to processing drilling-related permit applications and use authorizations.” In the 2005 cost recovery rule, the BLM interpreted this prohibition to apply to geophysical exploration permits. 70 FR 58854—58855. While the $25 fees for geophysical exploration permit applications for Alaska and renewals of exploration permits for Alaska pre-dated the 2005 cost recovery rule and were not affected by the Energy Policy Act prohibition, the BLM interprets the Energy Policy Act provision as prohibiting it from increasing this $25 fee. 7The BLM interprets the Energy Policy Act prohibition discussed in footnote 6, above, as prohibiting it from increasing this $25 fee, as well.  Source for Implicit Price Deflator for Gross Domestic Product data: U.S. Department of Commerce, Bureau of Economic Analysis (May 30, 2018).
    III. How Fees Are Adjusted

    The BLM took the base values (or “existing values”) upon which it derived the FY 2017 cost recovery fees (or “existing fees”) and multiplied it by the percent change in the IDP-GDP (3.4 percent for this update) to generate the “IDP-GDP increases” (in dollars). The BLM then added the “IDP-GDP increases” to the “existing values” to generate the “new values.” The BLM then calculated the “new fees” by rounding the “new values” to the closest multiple of $5 for fees equal to or greater than $1, or to the nearest cent for fees under $1. The “new fees” are the updated cost recovery fees for FY 2019.

    IV. Procedural Matters Regulatory Planning and Review (Executive Order 12866)

    This document is not a significant rule, and the Office of Management and Budget has not reviewed this rule under Executive Order 12866.

    The BLM has determined that the rule will not have an annual effect on the economy of $100 million or more. It will not adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities. The changes in this rule are much smaller than those in the 2005 final rule, which did not approach the threshold in Executive Order 12866. For instructions on how to view a copy of the analysis prepared in conjunction with the 2005 final rule, please contact one of the persons listed in the FOR FURTHER INFORMATION CONTACT section above.

    This rule will not create inconsistencies or otherwise interfere with an action taken or planned by another agency. This rule does not change the relationships of the onshore minerals programs with other agencies' actions. These relationships are included in agreements and memoranda of understanding that will not change with this rule.

    In addition, this final rule does not materially affect the budgetary impact of entitlements, grants, or loan programs, or the rights and obligations of their recipients. This rule applies an inflationary adjustment factor to existing user fees for processing certain actions associated with the onshore minerals programs.

    Finally, this rule will not raise novel legal or policy issues. As explained above, this rule simply implements an annual process to account for inflation that was adopted by and explained in the 2005 Cost Recovery Rule.

    Reducing Regulation and Controlling Regulatory Costs (E.O. 13771)

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

    The Regulatory Flexibility Act

    This final rule will not have a significant economic effect on a substantial number of small entities as defined under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). As a result, a Regulatory Flexibility Analysis is not required. The Small Business Administration defines small entities as individual, limited partnerships, or small companies considered to be at arm's length from the control of any parent companies if they meet the following size requirements as established for each North American Industry Classification System (NAICS) code:

    • Iron ore mining (NAICS code 212210): 750 or fewer employees • Gold ore mining (NAICS code 212221): 1,500 or fewer employees • Silver ore mining (NAICS code 212222): 250 or fewer employees • Uranium-Radium-Vanadium ore mining (NAICS code 212291): 250 or fewer employees • All Other Metal ore mining (NAICS code 212299): 750 or fewer employees • Bituminous Coal and Lignite Surface Mining (NAICS code 212111): 1,250 or fewer employees • Bituminous Coal Underground Mining (NAICS code 212112): 1,500 or fewer employees • Crude Petroleum Extraction (NAICS code 211120): 1,250 or fewer employees • Natural Gas Extraction (NAICS code 211130): 1,250 or fewer employees • All Other Non-Metallic Mineral Mining (NAICS code 212399): 500 or fewer employees

    The SBA would consider many, if not most, of the operators with whom the BLM works in the onshore minerals programs to be small entities. The BLM notes that this final rule does not affect service industries, for which the SBA has a different definition of “small entity.”

    The final rule may affect a large number of small entities because 31 fees for activities on public lands will be increased. The adjustments result in no increase in the fees for processing 17 actions relating to the BLM's minerals programs. The highest adjustment, in dollar terms, is for adjudications of mineral patent applications involving more than 10 mining claims; that fee will increase by $105. Accordingly, the BLM has concluded that the economic effect of the rule's changes will not be significant, even for small entities.

    For the 2005 Cost Recovery Rule, the BLM completed a Regulatory Flexibility Act threshold analysis, which is available for public review in the administrative record for that rule. For instructions on how to view a copy of that analysis, please contact one of the persons listed in the FOR FURTHER INFORMATION CONTACT section above. The analysis for the 2005 rule concluded that the fees would not have a significant economic effect on a substantial number of small entities. The fee increases implemented in this rule are substantially smaller than those provided for in the 2005 rule.

    The Small Business Regulatory Enforcement Fairness Act

    This final rule is not a “major rule” as defined at 5 U.S.C. 804(2). The final rule will not have an annual effect on the economy greater than $100 million; it will not result in major cost or price increases for consumers, industries, government agencies, or regions; and it will not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. Accordingly, a Small Entity Compliance Guide is not required.

    Executive Order 13132, Federalism

    This final rule 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. In accordance with Executive Order 13132, the BLM therefore finds that the final rule does not have federalism implications, and a federalism assessment is not required.

    The Paperwork Reduction Act of 1995

    This rule does not contain information collection requirements that require a control number from the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521). After the effective date of this rule, the new fees may affect the non-hour burdens associated with the following control numbers:

    Oil and Gas (1) 1004-0034 which expires June 30, 2021; (2) 1004-0137 which expires September 30, 2018; 8

    8 A request for renewal is pending with the Office of Management and Budget.

    (3) 1004-0162 which expires October 31, 2018; 9

    9 A request for renewal is pending with the Office of Management and Budget.

    (4) 1004-0185 which expires March 31, 2019; Geothermal (5) 1004-0132 which expires February 29, 2020; Coal (6) 1004-0073 which expires January 31, 2020; Mining Claims (7) 1004-0025 which expires March 31, 2019; (8) 1004-0114 which expires January 31, 2020; and Leasing of Solid Minerals Other Than Oil Shale (9) 1004-0121 which expires August 31, 2019. Takings Implication Assessment (Executive Order 12630)

    As required by Executive Order 12630, the BLM has determined that this rule will not cause a taking of private property. No private property rights will be affected by a rule that merely updates fees. The BLM therefore certifies that this final rule does not represent a governmental action capable of interference with constitutionally protected property rights.

    Civil Justice Reform (Executive Order 12988)

    In accordance with Executive Order 12988, the BLM finds that this final rule will not unduly burden the judicial system and meets the requirements of sections 3(a) and 3(b)(2) of the Executive Order.

    The National Environmental Policy Act (NEPA)

    The BLM has determined that this final rule qualifies as a routine financial transaction and a regulation of an administrative, financial, legal, or procedural nature that is categorically excluded from environmental review under NEPA pursuant to 43 CFR 46.205 and 46.210(c) and (i). The final rule does not meet any of the 12 criteria for exceptions to categorical exclusions listed at 43 CFR 46.215. Therefore, neither an environmental assessment nor an environmental impact statement is required in connection with the rule (40 CFR 1508.4).

    The Unfunded Mandates Reform Act of 1995

    The BLM has determined that this final rule is not significant under the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1501 et seq., because it will not result in State, local, private sector, or tribal government expenditures of $100 million or more in any one year, 2 U.S.C. 1532. This rule will not significantly or uniquely affect small governments. Therefore, the BLM is not required to prepare a statement containing the information required by the Unfunded Mandates Reform Act.

    Consultation and Coordination With Indian Tribal Governments (Executive Order 13175)

    In accordance with Executive Order 13175, the BLM has determined that this final rule does not include policies that have tribal implications. Specifically, the rule would not have substantial direct effects on one or more Indian tribes. Consequently, the BLM did not utilize the consultation process set forth in Section 5 of the Executive Order.

    Information Quality Act

    In developing this rule, the BLM did not conduct or use a study, experiment, or survey requiring peer review under the Information Quality Act (Pub. L. 106-554).

    Effects on the Nation's Energy Supply (Executive Order 13211)

    In accordance with Executive Order 13211, the BLM has determined that this final rule is not likely to have a significant adverse effect on the supply, distribution, or use of energy. It merely adjusts certain administrative cost recovery fees to account for inflation.

    Author

    The principal author of this rule is Mark Purdy of the Division of Regulatory Affairs, Bureau of Land Management.

    List of Subjects in 43 CFR Part 3000

    Public lands—mineral resources, Reporting and recordkeeping requirements.

    Joseph R. Balash, Assistant Secretary for Land and Minerals Management.

    For reasons stated in the preamble, the Bureau of Land Management amends 43 CFR part 3000 as follows:

    PART 3000—MINERALS MANAGEMENT: GENERAL 1. The authority citation for part 3000 continues to read as follows: Authority:

    16 U.S.C. 3101 et seq.; 30 U.S.C. 181 et seq., 301-306, 351-359, and 601 et seq.; 31 U.S.C. 9701; 40 U.S.C. 471 et seq.; 42 U.S.C. 6508; 43 U.S.C. 1701 et seq.; and Pub. L. 97-35, 95 Stat. 357.

    Subpart 3000—General 2. Amend § 3000.12 by revising paragraph (a) to read as follows:
    § 3000.12 What is the fee schedule for fixed fees?

    (a) The table in this section shows the fixed fees that must be paid to the BLM for the services listed for Fiscal Year (FY) 2019. These fees are nonrefundable and must be included with documents filed under this chapter. Fees will be adjusted annually according to the change in the Implicit Price Deflator for Gross Domestic Product (IPD-GDP) by way of publication of a final rule in the Federal Register and will subsequently be posted on the BLM website (http://www.blm.gov) before October 1 each year. Revised fees are effective each year on October 1.

    Table 1 to paragraph (a)—

    FY 2019 Processing and Filing Fee Table Document/action FY 2019 Fee Oil & Gas (parts 3100, 3110, 3120, 3130, 3150): Noncompetitive lease application $425 Competitive lease application 165 Assignment and transfer of record title or operating rights 95 Overriding royalty transfer, payment out of production 15 Name change, corporate merger or transfer to heir/devisee 225 Lease consolidation 470 Lease renewal or exchange 425 Lease reinstatement, Class I 85 Leasing under right-of-way 425 Geophysical exploration permit application—Alaska 25 Renewal of exploration permit—Alaska 25 Geothermal (part 3200): Noncompetitive lease application 425 Competitive lease application 165 Assignment and transfer of record title or operating rights 95 Name change, corporate merger or transfer to heir/devisee 225 Lease consolidation 470 Lease reinstatement 85 Nomination of lands 120 plus per acre nomination fee 0.12 Site license application 65 Assignment or transfer of site license 65 Coal (parts 3400, 3470): License to mine application 15 Exploration license application 350 Lease or lease interest transfer 70 Leasing of Solid Minerals Other Than Coal and Oil Shale (parts 3500, 3580): Applications other than those listed below 40 Prospecting permit application amendment 70 Extension of prospecting permit 115 Lease modification or fringe acreage lease 30 Lease renewal 550 Assignment, sublease, or transfer of operating rights 30 Transfer of overriding royalty 30 Use permit 30 Shasta and Trinity hardrock mineral lease 30 Renewal of existing sand and gravel lease in Nevada 30 Public Law 359; Mining in Powersite Withdrawals: General (part 3730): Notice of protest of placer mining operations 15 Mining Law Administration (parts 3800, 3810, 3830, 3850, 3860, 3870): Application to open lands to location 15 Notice of location * 20 Amendment of location 15 Transfer of mining claim/site 15 Recording an annual FLPMA filing 15 Deferment of assessment work 115 Recording a notice of intent to locate mining claims on Stockraising Homestead Act lands 30 Mineral patent adjudication 1 3,215
  • 2 1,605
  • Adverse claim 115 Protest 70 Oil Shale Management (parts 3900, 3910, 3930): Exploration license application 335 Application for assignment or sublease of record title or overriding royalty 70 * To record a mining claim or site location, this processing fee along with the initial maintenance fee and the one-time location fee required by statute (43 CFR part 3833) must be paid. 1 More than 10 claims. 2 10 or fewer claims.
    [FR Doc. 2018-21298 Filed 9-27-18; 8:45 am] BILLING CODE 4310-84-P
    FEDERAL COMMUNICATIONS COMMISSION 47 CFR Parts 0, 1, 4, 5, 12, 13, 17, 42, 43, 52, 53, 61, 63, 64, 73, 78, 80, 90, and 97 [MD Docket No. 18-285; DA 18-976] Nonsubstantive, Editorial Revisions of Rules and Regulations To Correct Authority Citations AGENCY:

    Federal Communications Commission.

    ACTION:

    Final rule.

    SUMMARY:

    In this document, the Federal Communications Commission makes non-substantive revisions to authority citations in its regulations. These authority citations are required by the rules of the Administrative Committee of the Federal Register, and their format is prescribed by the Document Drafting Handbook of the Office of the Federal Register. Certain of the authority citations currently in the Commission's rules may not conform to those specifications.

    DATES:

    This rule is effective September 28, 2018.

    ADDRESSES:

    Federal Communications Commission, 445 12th Street SW, Washington, DC 20554.

    FOR FURTHER INFORMATION CONTACT:

    Douglas A. Klein, Office of General Counsel, at (202) 418-1720.

    SUPPLEMENTARY INFORMATION:

    This is a summary of the Order adopted by the Commission's Managing Director, DA 18-976, adopted on September 21, 2018, and released on September 21, 2018. The full text of this document is available for public inspection during regular business hours in the FCC Reference Center, Room CY-A257, 445 12th Street SW, Washington, DC 20554, or at https://www.fcc.gov/edocs.

    1. In this Order, the Managing Director makes non-substantive revisions to authority citations in title 47 of the Code of Federal Regulations. These authority citations are required by the rules of the Administrative Committee of the Federal Register (ACFR), and their format is prescribed by the Document Drafting Handbook of the Office of the Federal Register. Certain of the authority citations currently in the Commission's rules may not conform to those specifications.

    2. The changes effected by this Order are intended only to bring the authority citations into conformance with the ACFR regulations and Document Drafting Handbook of the Office of the Federal Register. None of these changes should be construed to change the substantive requirements of the affected rules or the sources of Commission authority for those requirements.

    3. Regulatory Flexibility Act. Because we adopt this Order without notice and comment, the Regulatory Flexibility Act (RFA) does not apply.

    4. Paperwork Reduction Act. The Order does not contain new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, therefore, it does not contain any new or modified “information collection burden for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002.

    5. Congressional Review Act. Because this Order affects only rules of agency organization, procedure, or practice and does not substantially affect the rights or obligations of non-agency parties, it is not subject to the Congressional Review Act.

    6. Petitions for reconsideration pursuant to 47 CFR 1.429 or applications for review pursuant to 47 CFR 1.115 of this Order may be filed within thirty days of publication of a summary of this Order in the Federal Register. Should no petitions for reconsideration or applications for review be timely filed, this proceeding shall be terminated and its docket closed.

    7. Accordingly, it is ordered that, pursuant to the authority contained in sections 4(i), 4(j), and 5 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 155, and § 0.231(b) of the rules of the Federal Communications Commission, 47 CFR 0.231(b), this Order is adopted, effective immediately upon publication in the Federal Register.

    8. It is further ordered that title 47 of the Code of Federal Regulations is amended as set forth in the regulatory text hereto.

    List of Subjects 47 CFR Part 0

    Classified information, Freedom of information, Government publications, Infants and children, Organization and functions (Government agencies), Postal Service, Privacy, Reporting and recordkeeping requirements, Sunshine Act.

    47 CFR Part 1

    Administrative practice and procedure, Civil rights, Claims, Communications common carriers, Cuba, Drug abuse, Environmental impact statements, Equal access to justice, Equal employment opportunity, Federal buildings and facilities, Government employees, Income taxes, Indemnity payments, Individuals with disabilities, Investigations, Lawyers, Metric system, Penalties, Radio, Reporting and recordkeeping requirements, Telecommunications, Television, Wages.

    47 CFR Part 5

    Radio, Reporting and recordkeeping requirements.

    47 CFR Part 12

    Communications equipment, Security measures.

    47 CFR Part 13

    Radio

    47 CFR Part 17

    Aviation safety, Communications equipment, Reporting and recordkeeping requirements.

    47 CFR Part 42

    Communications common carriers, Radio, Reporting and recordkeeping requirements, Telegraph, Telephone.

    47 CFR Part 43

    Communications common carriers, Radio, Reporting and recordkeeping requirements, Telephone.

    47 CFR Part 52

    Communications common carriers, Telecommunications, Telephone.

    47 CFR Part 53

    Accounting, Communications common carriers, Reporting and recordkeeping requirements, Telephone.

    47 CFR Part 61

    Communications common carriers, Radio, Reporting and recordkeeping requirements, Telegraph, Telephone.

    47 CFR Part 64

    Claims, Communications common carriers, Computer technology, Credit, Foreign relations, Individuals with disabilities, Political candidates, Radio, Reporting and recordkeeping requirements, Telecommunications, Telegraph, Telephone.

    47 CFR Part 73

    Civil defense, Communications equipment, Defense communications, Education, Equal employment opportunity, Foreign relations, Mexico, Political candidates, Radio, Reporting and recordkeeping requirements, Television.

    47 CFR Part 78

    Cable television, Communications equipment, Radio, Reporting and recordkeeping requirements, Television.

    47 CFR Part 80

    Alaska, Communications equipment, Great Lakes, Marine safety, Radio, Reporting and recordkeeping requirements, Telegraph, Telephone, Vessels.

    47 CFR Part 90

    Administrative practice and procedure, Business and industry, Civil defense, Common carriers, Communications equipment, Emergency medical services, Individuals with disabilities, Radio, Reporting and recordkeeping requirements.

    47 CFR Part 97

    Aliens, Civil defense, Communications equipment, Radio, Reporting and recordkeeping requirements, Satellites, Volunteers.

    Federal Communications Commission. Mark Stephens, Managing Director.

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

    PART 0—COMMISSION ORGANIZATION 1. The authority citation for part 0 is revised to read as follows: Authority:

    47 U.S.C. 155, 225, unless otherwise noted.

    PART 1—PRACTICE AND PROCEDURE 2. The authority citation for part 1 is revised to read as follows: Authority:

    47 U.S.C. chs. 2, 5, 9, 13; Sec. 102(c), Div. P, Public Law 115-141, 132 Stat. 1084; 28 U.S.C. 2461, unless otherwise noted.

    PART 4—DISRUPTIONS TO COMMUNICATIONS 3. The authority citation for part 4 is revised to read as follows: Authority:

    47 U.S.C. 151, 154(i)-(j) & (o), 251(e)(3), 254, 301, 303(b), 303(g), 303(r), 307, 309(a), 309(j), 316, 332, 403, 615a-1, 615c, 1302, unless otherwise noted.

    PART 5—EXPERIMENTAL RADIO SERVICE 4. The authority citation for part 5 is revised to read as follows: Authority:

    47 U.S.C. 154, 301, 302, 303, 307, 336.

    PART 12—RESILIENCY, REDUNDANCY AND RELIABILITY OF COMMUNICATIONS 5. The authority citation for part 12 is revised to read as follows: Authority:

    47 U.S.C. 151, 154(i), 154(j), 154(o), 155(c), 201(b), 214(d), 218, 219, 251(e)(3), 301, 303(b), 303(g), 303(j), 303(r), 307, 309(a), 316, 332, 403, 405, 615a-1, 615c, 621(b)(3), 621(d), unless otherwise noted.

    PART 13—COMMERCIAL RADIO OPERATORS 6. The authority citation for part 13 is revised to read as follows: Authority:

    47 U.S.C. 154, 303.

    PART 17—CONSTRUCTION, MARKING, AND LIGHTING OF ANTENNA STRUCTURES 7. The authority citation for part 17 is revised to read as follows: Authority:

    47 U.S.C. 154, 301, 303, 309.

    PART 42—PRESERVATION OF RECORDS OF COMMUNICATION COMMON CARRIERS
    8. The authority citation for part 42 is revised to read as follows: Authority:

    47 U.S.C. 154(i), 219, 220.

    PART 43—REPORTS OF COMMUNICATION COMMON CARRIERS, PROVIDERS OF INTERNATIONAL SERVICES AND CERTAIN AFFILIATES 9. The authority citation for part 43 is revised to read as follows: Authority:

    47 U.S.C. 35-39, 154, 211, 219, 220; sec. 402(b)(2)(B), (c), Pub. L. 104-104, 110 Stat. 129.

    PART 52—NUMBERING 10. The authority citation for part 52 is revised to read as follows: Authority:

    47 U.S.C. 151, 152, 153, 154, 155, 201-205, 207-209, 218, 225-227, 251-252, 271, 332, unless otherwise noted.

    PART 53—SPECIAL PROVISIONS CONCERNING BELL OPERATING COMPANIES 11. The authority citation for part 53 is revised to read as follows: Authority:

    47 U.S.C. 151-155, 157, 201-205, 218, 251, 253, 271-275, unless otherwise noted.

    PART 61—TARIFFS 12. The authority citation for part 61 is revised to read as follows: Authority:

    47 U.S.C. 151, 154(i), 154(j), 201-205, 403, unless otherwise noted.

    PART 63—EXTENSION OF LINES, NEW LINES, AND DISCONTINUANCE, REDUCTION, OUTAGE AND IMPAIRMENT OF SERVICE BY COMMON CARRIERS; AND GRANTS OF RECOGNIZED PRIVATE OPERATING AGENCY STATUS 13. The authority citation for part 63 is revised to read as follows: Authority:

    47 U.S.C. 151, 154(i), 154(j), 160, 201-205, 214, 218, 403, 571, unless otherwise noted.

    PART 64—MISCELLANEOUS RULES RELATING TO COMMON CARRIERS 14. The authority citation for part 64 is revised to read as follows: Authority:

    47 U.S.C. 154, 201, 202, 217, 218, 220, 222, 225, 226, 227, 228, 251(a), 251(e), 254(k), 262, 403(b)(2)(B), (c), 616, 620, 1401-1473, unless otherwise noted.

    PART 73—RADIO BROADCAST SERVICES 15. The authority citation for part 73 is revised to read as follows: Authority:

    47 U.S.C. 154, 155, 301, 303, 307, 309, 310, 334, 336, 339.

    § 73.51 [Amended]
    16. The sectional authority citation for § 73.51 is removed.
    § 73.69 [Amended]
    17. The sectional authority citation for § 73.69 is removed. PART 78—CABLE TELEVISION RELAY SERVICE 18. The authority citation for part 78 is revised to read as follows: Authority:

    47 U.S.C. 152, 153, 154, 301, 303, 307, 308, 309.

    PART 80—STATIONS IN THE MARITIME SERVICES 19. The authority citation for part 80 is revised to read as follows: Authority:

    47 U.S.C. 151-155, 301-609; 3 U.S.T. 3450, 3 U.S.T. 4726, 12 U.S.T. 2377.

    PART 90—PRIVATE LAND MOBILE RADIO SERVICES 20. The authority citation for part 90 is revised to read as follows: Authority:

    47 U.S.C. 154(i), 161, 303(g), 303(r), 332(c)(7), 1401-1473

    PART 97—AMATEUR RADIO SERVICE 21. The authority citation for part 97 is revised to read as follows: Authority:

    47 U.S.C. 151-155, 301-609, unless otherwise noted.

    [FR Doc. 2018-21198 Filed 9-27-18; 8:45 am] BILLING CODE 6712-01-P
    DEPARTMENT OF TRANSPORTATION Federal Motor Carrier Safety Administration 49 CFR Parts 383 and 384 [Docket No. FMCSA-2017-0047] RIN 2126-AB99 Military Licensing and State Commercial Driver's License Reciprocity AGENCY:

    Federal Motor Carrier Safety Administration (FMCSA), DOT.

    ACTION:

    Final rule.

    SUMMARY:

    This rule allows, but does not require, State Driver Licensing Agencies (SDLAs) to waive requirements for the commercial learner's permit (CLP) knowledge test for certain individuals who are, or were, regularly employed within the last year in a military position that requires, or required, the operation of a commercial motor vehicle (CMV). This rule includes the option for an SDLA to waive the tests required for a passenger carrier (P) endorsement, tank vehicle (N) endorsement, or hazardous material (H) endorsement, with proof of training and experience.

    DATES:

    This final rule is effective November 27, 2018.

    Petitions for Reconsideration of this final rule must be submitted to the FMCSA Administrator no later than October 29, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Mr. Selden Fritschner, CDL Division, Federal Motor Carrier Safety Administration, 1200 New Jersey Avenue SE, Washington, DC 20590-0001, by email at [email protected], or by telephone at (202) 366-0677. If you have questions on viewing or submitting material to the docket, contact Docket Services, by telephone at (202) 366-9826.

    SUPPLEMENTARY INFORMATION:

    This final rule is organized as follows:

    I. Rulemaking Documents A. Availability of Rulemaking Documents B. Privacy Act II. Executive Summary III. Abbreviations and Acronyms IV. Legal Basis for the Rulemaking V. Regulatory Background A. Current Standards B. Recent Activity C. Notice of Proposed Rulemaking VI. Discussion of Comments and Responses A. Endorsements, License Classes, and License Restrictions B. Military Occupational Specialties, Military Occupational Codes C. Time Period for Waiver D. Extension of the Proposal E. SDLA Compliance F. Driver Training G. Proof of Training and Experience H Converting CLP to CDL I. Other Comments VII. International Impacts VIII. Section-by-Section Analysis A. Section 383.23 Commercial Driver's License B. Section 383.77 Substitute for Knowledge and Driving Skills Tests for Drivers With Military CMV Experience C. Section 383.79 Driving Skills Testing of Out-of-State Students; Knowledge and Driving Skills Testing of Military Personnel D. Section 384.301 Substantial Compliance General Requirements IX. Regulatory Analyses A. Executive Order (E.O.) 12866 (Regulatory Planning and Review), E.O. 13563 (Improving Regulation and Regulatory Review), and DOT Regulatory Policies and Procedures B. E.O. 13771 (Reducing Regulation and Controlling Regulatory Costs) C. Regulatory Flexibility Act (Small Entities) D. Assistance for Small Entities E. Unfunded Mandates Reform Act of 1995 F. Paperwork Reduction Act (Collection of Information) G. E.O. 13132 (Federalism) H. E.O. 12988 (Civil Justice Reform) I. E.O. 13045 (Protection of Children) J. E.O. 12630 (Taking of Private Property) K. Privacy L. E.O. 12372 (Intergovernmental Review) M. E.O. 13211 (Energy Supply, Distribution, or Use) N. E.O. 13783 (Promoting Energy Independence and Economic Growth) O. E.O. 13175 (Indian Tribal Governments) P. National Technology Transfer and Advancement Act (Technical Standards) Q. Environment (NEPA) I. Rulemaking Documents A. Availability of Rulemaking Documents

    For access to docket FMCSA-2017-0047 to read background documents and comments received, go to http://www.regulations.gov at any time, or to Docket Services at U.S. Department of Transportation, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    B. Privacy Act

    In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments without edit including any personal information the commenter provides, to www.regulations.gov, as described in the system of records notice (DOT/ALL-14 FDMS), which can be reviewed at www.transportation.gov/privacy.

    II. Executive Summary

    This rule allows, but does not require, SDLAs to waive the knowledge test requirements and tests required for some endorsements with proof of experience for certain individuals who are regularly employed, or were regularly employed within the last year, in a military position requiring the operation of a vehicle that would be classified as a CMV pursuant to 49 CFR 383.5, if operated in a civilian context. This rulemaking implements part of section 5401 of the Fixing America's Surface Transportation (FAST) Act (Pub. L. 114-94).

    In combination with a recent rulemaking—Commercial Driver's License Requirements of the Moving Ahead for Progress in the 21st Century Act (MAP-21) and the Military Commercial Driver's License Act of 2012 (2012 Act), published on October 13, 2016 (81 FR 70634), hereafter referred to as the Military CDL I Rule—this rule gives States the option to waive both the CDL knowledge and driving skills tests for certain current and former military service members who received training to operate CMVs during active-duty, National Guard or reserve service in military vehicles that are comparable to CMVs. The combined effect of the Military CDL I Rule and this rule will allow certain current or former military drivers, domiciled in participating States, to transition to a civilian CDL more quickly due to their armed forces training and experience.

    FMCSA evaluated potential costs and benefits associated with this rulemaking. The Agency concluded that the final rule would result in a 10-year cost savings of $16.66 million undiscounted, $14.21 million discounted at 3 percent, $11.70 million discounted at 7 percent, and $1.67 million on an annualized basis at both 7 percent and 3 percent discount rates. FMCSA has determined that this final rule is a deregulatory action under Executive Order (E.O.) 13771.

    III. Abbreviations and Acronyms AAMVA American Association of Motor Vehicle Administrators ABA American Bus Association ATA American Trucking Associations BLS Bureau of Labor Statistics CDL Commercial Driver's License CE Categorical Exclusion CLP Commercial Learner's Permit CMV Commercial Motor Vehicle CMVSA Commercial Motor Vehicle Safety Act of 1986 CVTA Commercial Vehicle Training Association DMV Department of Motor Vehicles DOL Department of Labor DOR Department of Revenue DOT Department of Transportation E.O. Executive Order ECEC Employer Costs for Employee Compensation ELDT Entry-Level Driver Training FAST Act Fixing America's Surface Transportation Act FMCSA Federal Motor Carrier Safety Administration H Hazardous Material Endorsement IFDA International Foodservice Distributors Association IFDA MAP-21 Moving Ahead for Progress in the 21st Century Act Michigan Bureau of Driver and Vehicle Programs for the Michigan Department of State MOS Military Occupational Specialties NEPA National Environmental Policy Act of 1969 N Tank Vehicle Endorsement NPGA National Propane Gas Association NSTA National School Transportation Association NTTAA National Technology Transfer and Advancement Act OES Occupational Employment Statistics OMB Office of Management and Budget OOIDA Owner-Operator Independent Drivers Association Oregon Oregon Driver and Motor Vehicle Service PGANE Propane Gas Association of New England P Passenger Carrier Endorsement RFA Regulatory Flexibility Act of 1980 RIA Regulatory Impact Analysis SBREFA Small Business Regulatory Enforcement Fairness Act of 1996 SDLAs State Driver Licensing Agencies TSA Transportation Security Administration IV. Legal Basis for the Rulemaking

    This final rule rests on the authority of the Commercial Motor Vehicle Safety Act of 1986 (CMVSA), as amended, codified at 49 U.S.C. chapter 313 and 49 CFR parts 382, 383, and 384. The rule also responds to section 5401(a) of the FAST Act [Pub. L. 114-94, 129 Stat. 1312, 1546, December 4, 2015]. This section requires FMCSA to modify the minimum testing standards of its CDL regulations to credit the training and knowledge received by certain current or former military drivers in the armed forces, including the reserve components and National Guard, to drive military vehicles similar to civilian CMVs [49 U.S.C. 31305(d)(1)(C)].

    The CMVSA provides broadly that “[t]he Secretary of Transportation shall prescribe regulations on minimum standards for testing and ensuring the fitness of an individual operating a commercial motor vehicle” [49 U.S.C. 31305(a)]. In general, those regulations must include the following: (1) Minimum standards for knowledge and driving (skills) tests; (2) use of a representative vehicle to take the driving test; (3) minimum testing standards; and (4) working knowledge of CMV regulations and vehicle safety systems [49 U.S.C. 31305(a)(1)-(4)].

    Section 5401(a) of the FAST Act, as amended by section (3)(1) of the Jobs for Our Heroes Act (Pub. L. 115-105, 131 Stat. 2263, January 8, 2018) added 49 U.S.C. 31305(d): “Standards for Training and Testing of Operators Who Are Members of the Armed Forces, Reservists, or Veterans.” Section 31305(d)(1)(A) requires the Agency to modify its CDL regulations to “exempt a covered individual from all or a portion of a driving test if the covered individual had experience in the armed forces or reserve components driving vehicles similar to a commercial motor vehicle.” Section 31305(d)(1)(B), as also amended by the Jobs for Our Heroes Act, requires FMCSA to “ensure that a covered individual may apply for an exemption under subparagraph (A)—(i) while serving in the armed forces or reserve components; and (ii) during, at least, the 1-year period beginning on the date on which such individual separates from services in the armed forces or reserve components.” The term “reserve components” includes the Army and Air National Guard, as well as the normal reserve units of all branches of the military service. Section 5401(c) of the FAST Act also directed the Agency to adopt regulations allowing certain military personnel an exemption from the normal CDL domicile requirement, as authorized by the 2012 Act and codified at 49 U.S.C. 31311(a)(12)(C). These three provisions were implemented by the Military CDL I Rule.

    The last element of section 5401(a), which was not addressed in the Military CDL I Rule, directed the Agency to “credit the training and knowledge a covered individual received in the armed forces or reserve components driving vehicles similar to a commercial motor vehicle for purposes of satisfying minimum standards for training and knowledge” [49 U.S.C. 31305(d)(1)(C)]. That requirement is the subject of this final rule. It should be noted that section 31305(d)(2)(B) originally defined a “covered individual” as someone over 21 years of age who is “(i) a former member of the armed forces; or (ii) a former member of the reserve components.” However, section 3(3) of the Jobs for Our Heroes Act amended section 31305(d)(2)(B) to define a “covered individual” as someone over 21 years of age who is “(i) a current or former member of the armed forces; or (ii) a current or former member of one of the reserve components.” Using the broad authority of 49 U.S.C. 31315(b), the Agency implicitly took the same position in granting all SDLAs the temporary option (for a 2-year period) of waiving the CLP knowledge test for current or former members of the military services, including the reserves and National Guard, who had completed certain formal military driver training (81 FR 74861, Oct. 27, 2016). [See “Knowledge Test Exemption Request” discussion below.]

    Federal training standards for CDL drivers were adopted only recently. Section 32304 of MAP-21 [Pub. L. 112-141, July 6, 2012, 126 Stat. 405, 791] required entry-level driver training (ELDT) of CDL applicants [49 U.S.C. 31305(c)]. That requirement was promulgated on December 8, 2016 [81 FR 88732]. However, the ELDT rule provides that “[v]eterans with military CMV experience who meet all the requirements and conditions of § 383.77” are not required to complete the new entry-level training program [49 CFR 380.603(a)(3)]. Because § 383.77 authorizes the States to exempt CDL applicants with military CMV experience from the driving skills test, those drivers are also exempt from ELDT.

    Under 49 CFR 383.77, as amended by the Military CDL I Rule, the Agency now provides credit for military drivers' training and knowledge by allowing States to exempt from the CDL driving skills test those employees who are or were regularly employed within the last year in a military position requiring the operation of a military vehicle that is comparable to a CMV.

    This rule implements 49 U.S.C. 31305(d)(1)(C) by giving States limited discretion, to exempt CDL applicants with military CMV experience from the knowledge test required for a CLP. This final rule completes the requirement of section 31305(d)(1)(C) to “credit the training and knowledge a covered individual received in the armed forces or reserve components driving vehicles similar to a commercial motor vehicle for purposes of satisfying minimum standards for training and knowledge.”

    V. Regulatory Background A. Current Standards Knowledge Test

    As specified in 49 CFR 383.71(a)(2)(ii), any individual applying for a CDL is first required to take and pass a general knowledge test, which authorizes the issuance of a CLP. The general knowledge test must meet the Federal standards contained in subparts F, G, and H of part 383 for the commercial vehicle group that person operates or expects to operate.

    Skills Test

    Any individual applying for a CDL is required to take and pass a general skills test, but only after passing the knowledge test and obtaining a CLP. A final rule published on May 9, 2011 [“Commercial Driver's License Testing and Commercial Learner's Permit Standards” (76 FR 26854)] added a new 49 CFR 383.77, which allows the States to substitute CDL applicants' eligible military CMV experience for the skills test.

    B. Recent Activity Military CDL I Rule

    The Military CDL I Rule addressed the requirements of 49 U.S.C. 31305(d)(1)(A) and (B) (81 FR 70634, Oct. 13, 2016) and allows States to extend the period to apply for a skills test waiver after leaving the military from 90 days to 1 year for an individual who is regularly employed or was regularly employed in a military position requiring operation of a CMV.

    Additionally, the Military CDL I Rule allows the SDLA in the State where military personnel are stationed (State of duty station) to coordinate with the State of domicile to expedite the processing of applications and administer the knowledge and skills tests for a CLP or CDL. The SDLA in the State of domicile could then issue the CLP or CDL based on tests performed by the SDLA in the State of duty station.

    Knowledge Test Exemption Request

    The Missouri Department of Revenue (DOR) submitted a request for an exemption from the FMCSA regulation that requires any driver to pass the general knowledge test before being issued a CLP or CDL. The exemption request is available in docket FMCSA-2016-0130, at: https://www.regulations.gov/document?D=FMCSA-2016-0130-0004. The Missouri DOR asked FMCSA to waive the knowledge test requirement for qualified veterans who participated in dedicated training through approved military programs. The Missouri DOR contended that qualified personnel who participated in such programs had already received the numerous hours of classroom training, practical skills, and one-on-one road training that are essential for safe driving. FMCSA agrees with Missouri DOR's reasoning and granted a 2-year exemption on October 27, 2016 (81 FR 74861), which the Agency extended to allow all SDLAs, at their discretion, to waive the knowledge test requirements to qualified veterans, reservists, National Guard, and active-duty personnel. FMCSA does not have data from all of the States utilizing this exemption. However, since January 1, 2018, Illinois has granted more than 75 exemptions through this program. There have been no reports of serious incidents about any of these drivers.

    C. Notice of Proposed Rulemaking

    On June 12, 2017, FMCSA published an NPRM (82 FR 26894) that proposed allowing SDLAs to waive the requirements for the CLP knowledge tests for certain individuals who are, or were, regularly employed within the last year in a military position that requires, or required, the operation of a CMV.

    VI. Discussion of Comments and Responses

    FMCSA received 17 comments on the NPRM. Of these, 15 supported the proposal, though some requested alterations. The rule was supported by the American Trucking Associations (ATA), the Owner-Operator Independent Drivers Association (OOIDA), the American Bus Association (ABA), the International Foodservice Distributors Association (IFDA), the Propane Gas Association of New England (PGANE), the National Propane Gas Association (NPGA), the Commercial Vehicle Training Association (CVTA), the Oregon Driver and Motor Vehicle Service (Oregon), the Virginia Department of Motor Vehicles (Virginia DMV), the National School Transportation Association (NSTA), a motor carrier, and several individuals. Commenters in favor of the NPRM argued that it would: Build on the success of past waiver programs and recent complementary regulations; reduce the burden to enter the industry for qualified military and veterans; remove duplicative requirements and reduce the time to get licensed; reduce problems in recruiting qualified employees; establish a standard of safety equivalent to that of the CLP knowledge test requirement of the CDL exam; and codify already existing practices by individual SDLAs. Several commenters lauded the Agency, saying the provisions of the proposed rule ensured that individuals receiving a waiver would be well-qualified.

    One commenter, the Bureau of Driver and Vehicle Programs for the Michigan Department of State (Michigan), agreed with the need to help veterans, but not with a waiver of the knowledge test.

    One commenter opposed the NPRM, claiming that there is no way to know if someone meets the knowledge test requirements unless that individual takes the test.

    Several individuals commented on the licensing process, medical standards, and other issues outside the scope of the NPRM.

    A. Endorsements, License Classes, and License Restrictions

    The NPRM did not address the question of waiving the knowledge tests for endorsements, nor did it discuss license classes or license restrictions for current service personnel or veterans.

    The ABA requested clarification on whether the proposed testing waiver would apply to endorsements as well, and stated that it did not support exemptions from the knowledge tests for endorsements.

    Citing an inconsistency between §§ 383.79(c)(1) and 383.111, Oregon asked whether the Agency intended to allow waivers for all knowledge tests or just the general CDL knowledge test. Oregon pointed out that allowing a waiver only of the general knowledge test would limit the type of license that could be issued and acknowledged the concern about waiving other knowledge tests.

    The NPGA and PGANE asked that the proposal be amended to allow SDLAs to waive the knowledge test for the H endorsement for veterans and military service members with applicable experience. They argued that this change would not reduce safety and would increase opportunities for service men and women. One commenter pointed out that military training and experience would likely exceed civilian training and experience, due to military concerns over the transportation of hazardous materials. CVTA stated that many military drivers haul materials that would be considered hazardous in a non-military setting, and that they should have access to the H endorsement via a testing waiver, though only for a Class A license.

    The NSTA asked that the passenger and school bus endorsements be waived only for drivers with applicable experience. CVTA stated that FMCSA should consider a restricted license for a military driver who operated only an automatic, not a manual, transmission.

    FMCSA Response: FMCSA believes that a waiver of certain endorsement tests is appropriate, given that many service members operate vehicles and transport loads using an equivalent endorsement on a civilian CDL.

    In response to these comments, this final rule explicitly allows SDLAs to waive the knowledge tests for H and N endorsements, and the knowledge and driving skills tests for the P endorsement. Several Military Occupational Specialties (MOS) include training that corresponds to the knowledge tests for H, N, and P endorsements. If applicants can demonstrate that they have received such training, SDLAs may waive one or more of these knowledge tests. FMCSA provides regulatory language with which SDLAs must comply to waive the testing requirements for these three endorsements.

    As the D.C. Circuit said in National Mining Ass'n v. Mine Safety and Health Admin., 116 F.3d 520 (1997), “[a]gencies are not limited to adopting final rules identical to proposed rules. No further notice and comment is required if a regulation is a `logical outgrowth' of the proposed rule . . . Our cases offer no precise definition of what counts as a `logical outgrowth.' We ask `whether “the purposes of notice and comment have been adequately served.” ' . . . Notice was inadequate when `the interested parties could not reasonably have “anticipated the final rulemaking from the draft [rule] (internal citations omitted).” ' ” Id. at 531. In this case, the purposes of the NPRM were more than adequately served. Many commenters not only anticipated the possibility that the final rule might waive the knowledge tests for certain endorsements, some argued that the Agency had overlooked that obvious implication of the proposed rule while others, although accepting that implication, argued that such knowledge tests should not be waived, at least in certain cases. The inclusion of three endorsement waivers in this final rule is therefore a logical outgrowth of the purpose and structure of the NPRM.

    No waivers of endorsements are allowed beyond the three discussed above because the various military services provide training equivalent to that required to pass the written endorsement tests only for H, N, and P. Additionally, because this rule is voluntary, SDLAs may decide not to adopt it at all, or may adopt it but decline to offer waivers for the H or N knowledge tests, or P knowledge or driving skills tests. FMCSA believes that allowing waivers for endorsement knowledge testing will resolve nearly all concerns expressed by commenters about the class of licensure, as SDLAs will be able to issue CDLs with certain endorsements.

    There is no need to require restricted licenses based upon the type of transmission installed on military vehicles, because FMCSA recognizes that many military vehicles are fitted with automatic transmissions. However, all service branches have vehicles with manual transmissions in their fleet inventory. Each service branch has documentation of drivers' training, experience, and certification in vehicles with manual transmissions that can be provided to the SDLA when the driver applies for a CDL. The same proof of experience with different braking systems exists, including air brakes and air over hydraulics. As this rule is voluntary, SDLAs are still allowed to test these drivers' brake and manual transmission abilities, if they wish, and to impose a license restriction.

    B. Military Occupational Specialties, Military Occupational Codes

    The NPRM provided examples of training and certification for four MOS: Army—88M—Motor Transport, Operator; Air Force—2T1—Vehicle Operations; Marine Corps—3531—Motor Vehicle Operator; and Navy—EO—Equipment Operator. The NPRM proposed allowing SDLAs to waive the knowledge test for current service members or veterans who are or were regularly employed in a military position requiring operation of a CMV, and are or were operating a vehicle representative of the CMV the driver applicant expects to operate after receiving a CDL, or who operated such a vehicle immediately preceding separation from the military, regardless of MOS.

    The ABA requested that a list of MOS be put into regulatory language or the driver's SDLA record, and suggested that it would be appropriate to add such a list to an appendix to the final rule, a website, or a new ELDT rule. The ABA stated that a driver's use of the waiver and potentially his or her MOS should be included in the driver's record for prospective employers to review and evaluate during pre-employment screening.

    Oregon asked for a list of specific MOS to which the knowledge test waivers would apply and provided a list it said should be used. Oregon stated that the list could be expanded in the future, but was necessary for SDLAs' use.

    Virginia DMV asked if the Agency's intent was to allow test waivers only for the MOS listed in the NPRM; if so the regulatory language should be amended to refer to “a military position occupation specialty requiring completion of a military driver training program that has been approved by FMCSA and operation of a CMV.”

    FMCSA Response: FMCSA agrees with the commenters and has included in the regulatory language a full list of MOS that are eligible for a waiver of the general knowledge test.

    The list of MOS in this final rule has been expanded to include the following:

    • 88M (Army), motor transport operator.

    • 14T (Army), PATRIOT launching station operator.

    • 92F (Army), fueler.

    • 2T1 (Air Force), vehicle operator.

    • 2F0 (Air Force), fueler.

    • 3E2 (Air Force), pavement and construction equipment operator.

    • 3531 (Marine Corps), motor vehicle operator.

    • EO (Navy), equipment operator.

    The Agency has concluded that these programs enable drivers likely to achieve a level of safety equivalent to, or greater than, the level that would be achieved by requiring them to pass the CLP knowledge test. The Army, Air Force, Marine Corps, and Navy provide specific training dedicated to operating heavy-duty vehicles.1

    1Note: Heavy-duty vehicles is a generic description used in the military to describe vehicles that have been determined by FMCSA and the American Association of Motor Vehicle Administrators to have weights equal to or larger than the weights that require a driver to hold a CDL.

    There are three basic military job training classifications, with additional training for other types of heavy-duty specialty vehicles (e.g., fuel haulers, construction vehicles, and military equipment transport oversize/overweight [non-track vehicles]).

    The four core training programs for heavy vehicle operations, based on the occupational specialty code of the service member, are:

    • Army—88M—Motor Transport Operator.

    • Air Force—2T1—Vehicle Operations.

    • Marine Corps—3531—Motor Vehicle Operator.

    • Navy—EO—Equipment Operator.

    Army—88M Training

    The 88M Instructor Training Manual is 142 pages long. The student manual—STP 55-88M14-SM-TG Soldier's Manual and Trainer's Guide 88M, Motor Transport Operator—is 229 pages long and includes four levels of training. The 6-week core curriculum of the Army 88M course contains a total of 221 hours of training, including:

    • Lecture—32 classroom hours.

    • Practical application—road driving—189 hours.

    Motor Transport Operators are responsible primarily for operating wheeled vehicles to transport personnel and cargo. Motor Transport Operator duties include: Interior components/controls and indicators; basic vehicle control; driving vehicles over all types of roads and terrain, traveling alone or in convoys; braking, coupling, backing, and alley docking; adverse/tactical driving operations; pre-trip inspections; reading load plans; checking oil, fuel and other fluid levels, as well as tire pressure; operations in automatic and manual modes; crash prevention; safety check procedures; basic vehicle maintenance and repairs; transporting hazardous materials; and keeping mileage records.

    A fueler for the Army, a driver with an Army classification of 92F, has completed the Army 88M course and additional training specific to the job of a fueler.

    A PATRIOT Launching Station Operator, a driver with an Army classification of 14T, has completed the Army 88M course and additional training specific to the both the vehicle and systems the vehicle transports. Total training for this MOS exceeds 264 hours.

    Air Force—2T1—Vehicle Operations

    The Air Force Tractor Trailer Plan of Instruction (POI) is 226 pages long. The minimum length of instruction for the basic school is 84 hours, including:

    • 22 hours of classroom.

    • 62 hours of hands-on activity, both alone on a training pad and on the road with an instructor.

    The core curriculum is based on the material in the American Association of Motor Vehicle Administrators (AAMVA) CDL Manual—2005 edition (2014 revised). Students participating in the basic 2T1 curriculum learn general principles in the classroom. Specialized training occurs at the installation using the Tractor Trailer Plan of Instruction. A minimum of 40 hours over-the-road time is expected on each vehicle/trailer type.

    Topics covered in the Air Force Vehicle Operations course include: Overview of training and Federal requirements; Federal motor vehicle safety standards; tractor/trailer design; hazards and human factors relative to the environment where used; safety clothing and equipment; driving safely; pre- and post-trip vehicle inspection; basic vehicle control; shifting gears; managing space and speed; driving in mountains, fog, winter, very hot weather, and at night; railroad crossings; defensive awareness to avoid hazards and emergencies; skid control and recovery; what to do in case of a crash; fires; staying alert and fit to drive; hazardous materials—rules for all commercial drivers; preparing, inspecting, and transporting cargo safely; inspecting and driving with air brakes; driving combination vehicles safely; and coupling and uncoupling.

    Air Force fuelers holding 2F0, and Air Force pavement and construction equipment operators holding 3E2, must first complete training for 2T1, before completing additional training specific to the roles of 2F0 and 3E2.

    Marine Corps—3531—Motor Vehicle Operator

    The core curriculum of the Marine Corps 3531 course—TM 11240-15/3G contains three training areas:

    • Lecture—24 classroom hours.

    • Demonstration—classroom/training pad—35 hours.

    • Practical application—road driving—198 hours.

    Instructional breakout includes:

    • Demonstration: 35 hours.

    • Guided discussion: 1.5 hours.

    • Lecture: 24 hours.

    • Performance examination: 62 hours.

    • Practical application (individual): 198 hours.

    • Knowledge examination: 7 hours.

    Classroom instruction includes lectures, demonstration, and practice time for the specific tasks identified. Each classroom session includes knowledge and performance evaluations to ensure students have mastered all learning objectives for the specialty proficiency. Training includes simulators and actual vehicle operation. Practical training includes on-the-road and skills operations, ground guide procedures, and operating a vehicle with a towed load. Students practice their driving and backing, with and without a trailer. Instructors ride with the students as they operate on approved road routes. Specific training areas (pads) are provided for the students to practice their backing skills and ground guide procedures safely.

    The Marine Corps training curriculum includes emergency procedures and cargo loading.

    Navy—EO—Equipment Operator

    The core curriculum of the USN Heavy Vehicle Operator (Truck Driver) (EO) course (53-3032.00) is designed to train Navy personnel to operate passenger and cargo vehicles to rated capacity. They palletize, containerize, load and safely transport various types of cargo and demonstrate knowledge and skills to qualify as a driver journeyman. The complete program covers topics including:

    • Hazardous materials transportation.

    • Line haul planning.

    • Manual tractor-truck operations.

    • Vehicle Recovery Operations.

    The course is taught over 160 hours including 30 hours of classroom and 130 hours of lab (behind the wheel). Upon completion of this course, the Navy driver will be able to:

    • Perform the duties of normal, non-combat conditions driving in accordance with the local State driver licensing agency's CDL driver handbook;

    • Manage hazardous petroleum, oils and lubricants (POL) material required during line haul and worksite activities, to support normal, non-combat operations;

    • Perform preventive maintenance on a non- or up-armored manual truck tractor with drop-neck trailer, consisting of pre-start, during-operations, and after-operations equipment checks, to support normal, non-combat operations, in accordance with local State Driver License Agency CDL handbooks;

    • Operate vehicle controls of a non- or up-armored manual truck-tractor, to support normal, non-combat operations; and

    • Be proficient with the components and controls of a drop-neck trailer relative to a detached/attached gooseneck and a coupled/uncoupled trailer.

    Other topics covered within the Navy EO training program include:

    • Development and maintenance of operational records.

    • Operation of high mobility multi-purpose wheeled vehicles.

    • Weight distribution and load securement.

    • Loading bulk and container cargo.

    • Preventive maintenance.

    • Pre- and post-trip vehicle safety inspections.

    The military training programs described above are thorough and comprehensive, incorporating most of the elements recommended by the Professional Truck Driver Institute, which has been the principal standard-setting organization for private-sector motor carrier training for decades. They are entirely compatible with the requirements of FMCSA's ELDT rule. Although geared to heavy-duty military vehicles, military training is readily transferrable to a civilian context, as the operational characteristics of large military and civilian vehicles are very similar and, in some cases, identical. The Agency believes that exempting these drivers from the CLP knowledge test, in addition to the skills test, will have no adverse effect on highway safety.

    This final rule also provides for waivers involving H, N, and P endorsements of drivers who hold an MOS listed above. Though military service members are not required to comply with 49 CFR, including hazardous materials training (part 172, subpart H), several service branches offer a training curriculum that meets or exceeds FMCSA testing requirements for endorsements. Proof of such training can be confirmed at the SDLA, for example by providing a copy of the U.S. Air Force motor vehicle identification card (AF 2293) which includes an identification of the class of vehicle operated, any endorsement held by the operator, and any restrictions to which he or she are subject. The identification card also includes a list of the vehicles the person is authorized to operate. Similar cards are authorized by the Navy and Marine Corps (both designated as OF 346), and Army (DA 5984). This rule is not applicable to school bus endorsement but, as noted above, is acceptable for the P endorsement if the service member verifies his/her military Passenger credential.

    FMCSA recognizes that military vehicles can carry a variety of hazardous materials. Military personnel who carry fuel and other types of hazardous materials, including powder, weapons, and ammunition, are trained and certified to transport these materials. FMCSA clarifies that service members applying for waivers from the H endorsement knowledge test must still undergo the Hazardous Materials Endorsement Threat Assessment Program through the Transportation Security Administration (TSA) (49 CFR part 1572). SDLAs may not issue the H endorsement until TSA has completed its background check and approved the driver.

    The Agency's ELDT final rule has a compliance date of February 7, 2020. Under 49 CFR 383.603(a)(3) of that rule, “[v]eterans with military CMV experience who meet all the requirements and conditions of § 383.77” are exempt from the rule's training requirements [81 FR 88732, 88790, December 8, 2016]. Section 383.77 allows States to waive the skills test for certain drivers with military CMV experience. This final rule allows a comparable waiver of the knowledge test. However, this rule does not affect 49 CFR 391.31, under which motor carriers must require their drivers to complete a road test before operating a CMV, unless the carrier chooses to accept a valid CDL in lieu of the road test (though it may not waive the road test if the driver has an N endorsement) [49 CFR 391.33]. In short, employers may still require drivers with military CMV experience who obtain a CDL without completing either the skills test or the knowledge test to complete a road test.

    C. Time Period for Waiver

    FMCSA proposed to allow States to exempt from the knowledge test for a CLP or CDL certain current or former military service members who were regularly employed in a military position requiring the operation of a CMV during a 1-year period immediately prior to the application. There would be no time limit for military personnel while on active duty or serving actively within a reserve component or the National Guard to apply for the waiver.

    The NPGA and the PGANE asked that the proposal's 1-year waiver period be extended to 5 years. These commenters argued that the nature of CMV driving does not change so rapidly that a 5-year period would make training obsolete, even if the applicant had not driven in the past year.

    Oregon thought that the time limits for the knowledge and skills test waivers should be identical. Oregon stated that, as proposed, the NPRM did not match the length of the skills test waiver.

    FMCSA Response: FMCSA declines to extend the 1-year waiver period. This rule's intended effect is to allow qualified veterans and service members to waive the knowledge and skills tests simultaneously to obtain licensure. The Military CDL I rule used a 1-year period; FMCSA believes that is appropriate here as well, as the two are now synchronized.

    D. Extension of the Proposal

    One commenter requested that the proposal be extended to non-military personnel. Another stated that veterans should have licenses granted automatically, as they are driving on behalf of the U.S. Military.

    FMCSA Response: The application process for what might be called an “even exchange” of a military truck or bus license for a civilian CDL was directed by the 2012 Act and section 5401 of the FAST Act. That process is limited explicitly to military service members with appropriate experience. As amended by section 5401(a), 49 U.S.C. 31305(d)(1)(C) requires FMCSA to “credit the training and knowledge a covered individual received in the armed forces or reserve components driving vehicles similar to a commercial motor vehicle for purposes of satisfying minimum standards for training and knowledge.” Only individuals currently serving on active duty, including the National Guard and reserve components, or recently separated service men and women with comparable training and experience, will be eligible for a waiver of the knowledge test. There is no equivalent requirement to waive knowledge tests for non-military personnel. In any case, that step would take this rule far beyond its original purpose and scope.

    Federal regulations already exempt active duty military personnel from the need to hold a CDL when driving while on duty in a military vehicle on official military orders (49 CFR 383.3(c)). This final rule, in combination with the Military CDL I final rule, will allow States to make the licensing of current or former military personnel as close to automatic as possible. Other Federal requirements for licensure, like a medical examiner's certification, must be met and cannot be waived. However, qualified current and separated service members will now have significantly reduced obstacles to earning non-military licenses.

    E. SDLA Compliance

    The Agency's June 12, 2017, NPRM proposed that SDLAs may waive the knowledge test; it would be entirely voluntary.

    The CVTA asked FMCSA to consider setting guidelines for the process to increase consistency between SDLAs. ABA asked how the driver's SDLA record will reflect whether certain tests were waived.

    Several commenters, including the two propane gas organizations, supported a voluntary waiver program and stated that a 3-year compliance date for States was appropriate.

    ATA suggested that FMCSA work with AAMVA to develop a required form to verify that a driver has been trained in the ELDT elements to a level at least equivalent to that reflected by passage of the knowledge exam. Oregon asked several questions regarding coordination between the State of duty station and the State of domicile. Oregon asked if it was the Agency's intention to allow a State to administer all knowledge tests for certain military service members not domiciled there, but to limit that provision to just the general knowledge test for all other non-domiciled applicants.

    The Virginia DMV stated that the process outlined in the proposed rule regarding testing for and obtaining a civilian CDL seems unnecessary and burdensome to the applicant because the 2012 Act already allows a State to issue a CDL to military personnel stationed but not domiciled there. The commenter called attention to the CDL rule prohibiting a driver from holding more than one license, noting that issuance of a CDL by the State of domicile would invalidate any other license held by the driver, making it illegal for him or her to drive for a period of several days until the newly-issued CDL arrived. Moreover, the commenter added that the proposed rule did not require States that decide to participate in the program to change their laws, if necessary, and invalidate or destroy the non-CDL, even before the CDL document is delivered to the applicant.

    Another concern of the Virginia DMV was the requirement of 49 CFR 383.71(b)(9) for applicants to provide a proof of citizenship or lawful residency in a State of domicile in cases where they do not have such identification. Moreover, the commenter believed that FMCSA should provide an exception for applicants who do not have an active residential or mailing address in the State of domicile and allow such applicants' CDL or CLP to show an address located in the State of duty station.

    The Virginia DMV was concerned with the provision that permits the State of duty station to accept an application for a CLP or CDL, including an application for waiver of the knowledge test or skills test, only if the State of duty station obtains prior approval from the State of domicile. The commenter wrote that “this creates an excessive burden on States to go state by State in obtaining prior approval agreements with other States. DMV is also concerned that if a duty station State does not obtain prior approval from a State of domicile before proceeding or the duty station State misunderstands what is approved[,] this will result in an undue hardship on military service members who must rely on the duty station State to follow regulations. Therefore, the Virginia DMV recommends that it should be the applicant's responsibility to obtain written approval from the State of domicile prior to beginning any exams in the duty station State since some applicants may be ineligible for domicile accommodation, due to outstanding administrative requirements in the State of domicile (e.g. photograph, compliance, lawful presence, State residency).” Furthermore, given that the NPRM would allow, but not require, States to waive the knowledge test, this commenter stated that permitting States to impose additional conditions and limitations on applicants, beyond those included in the proposed rule, would result in a lack of uniformity from State to State, creating a confusing process for service members to navigate.

    Lastly, Virginia DMV noted that the cost associated with complying with the proposed rule is neither minimal, given the need for changes to State law, nor would the required re-programming of information technology systems would be minor, as the NPRM indicated. FMCSA needs to address these administrative and other costs. Moreover, Virginia DMV said that, if it participates in the waiver program, it would not do so until AAMVA had developed a secure system to transmit knowledge test results and other documentation.

    FMCSA Response: As stated previously, States waiving knowledge tests under this rule are not required to coordinate their programs between States, although all States granting waivers must verify the qualifications of applicants based on various military documents, as specified in this rule. With respect to the CVTA comment, § 383.135(c) currently requires recording of the application for waiver in the driver's file. As for the comments of the propane gas organizations, FMCSA believes this rule should be available to States as soon as possible. The Agency is therefore making this final rule effective 60 days after publication.

    Responding to the ATA's request that FMCSA specify a form demonstrating the equivalence of military training with the standards required for ELDT, the Agency has concluded, after consultation with AAMVA and close examination of the military training and testing manuals and procedures, that training to the prescribed MOS standards meets or exceeds that required by the ELDT rule. The form requested by ATA is therefore unnecessary.

    This final rule makes no changes to the existing domicile requirements or any other provision of part 383. While the 2012 Act does allow States to issue CDLs to military personnel stationed there, no States have done so. The NPRM and this final rule avoid the possibility that CDL applicants could inadvertently lose their “home” State of domicile by accepting a CDL from the State of duty station.

    The requirement and documents needed to provide proof of citizenship or lawful permanent residency in § 383.71(b)(9) are the same, whether the application is being made in the State of domicile or some other State. Without that proof, a CLP or CDL may not be issued. As for Virginia DMV's concern about the possible inability of an applicant to show an active mailing address in his or her “home” State to prove domicile, § 383.71(b)(10) allows the use of a “government issued tax form” to serve as proof. Without such a tax record, there is no good reason to believe an applicant's assertion of domicile in a State.

    F. Driver Training

    The NPRM described the various military training programs and explained that they are thorough and comprehensive. These programs incorporate most of the elements recommended by the Professional Truck Driver Institute. Military training is entirely compatible with the requirements of FMCSA's ELDT rule (81 FR 88732, December 8, 2016, also available in docket FMCSA-2007-27748).

    ATA stated that FMCSA should verify that all military training programs thoroughly cover all elements required by the ELDT rule, and, if they do not, should work with the military branches to secure comparable training.

    CVTA stated that the training manuals from the Army, Navy, Air Force, and Marines all covered, in “considerable detail,” the skills needed under the ELDT rule.

    FMCSA Response: As stated previously, the training and testing by the military meet or exceed FMCSA's various training standards listed in appendices A through E to 49 CFR part 380 (compliance required by February 7, 2020) and the AAMVA testing standard specified in 49 CFR 383.131.

    G. Proof of Training and Experience

    NSTA stated that individuals seeking a waiver should “certify and provide evidence” of their training and experience, specifically for passenger carrier and school bus endorsements. ATA asked the Agency for “explicit acknowledgement” that a driver using the waiver has the knowledge necessary to pass the test. ATA also said that employers may view the waiver as a lesser standard, and that FMCSA should provide the same process for checking the driver's record, experience, restrictions, equipment, etc., as States allow for other drivers. ATA expressed concern that veterans utilizing this program might be perceived as holding a lesser license.

    ABA requested guidance on how an employer could confirm a driver's service and MOS. Oregon asked how to confirm that a driver attempting to use this waiver had proper training and experience. Oregon also asked if certain MOS should be considered proof of appropriate training, and requested a formal definition of “approved training.”

    FMCSA Response: Under this rule, drivers who hold or held such designations have completed “approved training” comparable to that required to pass the general knowledge test. SDLAs will be able to verify a driver's MOS status. As indicated above, the SDLA will be able to check military documents, such as AF 2293, etc. The Agency will also provide SDLAs with guidance and sample documents that can be used to verify an applicant's required training and testing in the appropriate vehicle. A document summarizing that guidance is currently under development, and will be available to SDLAs. Certification to an employer that a driver is qualified is not part of this rulemaking. Individuals who are waived from the tests will receive standard CDLs and be treated the same as all other CDL holders.

    H. CDL Waiting Period

    ATA asked if FMCSA planned to require the usual 14-day waiting period between issuing these two licenses (49 CFR 383.25(e)).

    FMCSA Response: Under this rule, a State may treat military personnel with the appropriate MOS as though they had completed the knowledge test for a CLP. However, because recipients of such waivers are eligible immediately for a CDL, they are not issued a CLP. The 14-day waiting period was adopted to ensure that drivers had time to obtain behind-the-wheel training before attempting to pass the skills test. However, § 383.77 requires applicants with military experience seeking a waiver of the driving skills test to certify certain experience over a 2-year period prior to the application. The MOSs listed in this final rule demonstrate that the applicant has received training equivalent to that required by the ELDT rule, which is also sufficient to pass the general and endorsement knowledge tests. Under these circumstances, a 14-day waiting period would serve no purpose. This rule does not waive other requirements for the issuance of a CDL, including the medical card required of all CDL holders and the TSA background check for applicants for H endorsement.

    I. Other Comments

    FMCSA revised 49 CFR 383.77, Substitute for driving skills tests for drivers with military CMV experience, and 49 CFR 383.79, Skills testing of out-of-State students; Knowledge and skills testing of military personnel, in the 2016 Military CDL I final rule. In the NPRM, FMCSA proposed edits to these two sections to accommodate the provisions related to the knowledge test.

    Virginia DMV submitted multiple comments and questions about parts of the FMCSRs that were not substantively modified by this rulemaking, reflecting misunderstandings about the NPRM. Modifications to the final rule in response to other comments have resolved and clarified the issues raised by Virginia DMV.

    VII. International Impacts

    The FMCSRs, and any exceptions to the FMCSRs, apply only within the United States (and, in some cases, United States territories). Motor carriers and drivers are subject to the laws and regulations of the countries in which they operate unless an international agreement states otherwise. Drivers and carriers should be aware of the regulatory differences among nations.

    VIII. Section-by-Section Analysis A. Section 383.23 Commercial Driver's License

    The reference to “written” tests in paragraph (a)(1) is changed to “knowledge” tests and the term “commercial motor vehicle” is abbreviated as “CMV” to match the terminology used elsewhere in 49 CFR part 383. The word “skills” is added after “driving” to clarify the type of test. No changes are made to other paragraphs in this section.

    B. Section 383.77 Substitute for Knowledge and Driving Skills Tests for Drivers With Military CMV Experience

    This section is retitled as Substitute for knowledge and driving skills tests for drivers with military CMV experience to include knowledge test waivers. The existing introductory paragraph is now contained in new paragraph (b)(1) and the introductory text of paragraph (b)(2).

    FMCSA adds new paragraph (a), titled Knowledge test waivers for certain current or former military service members applying for a CLP or CDL, to outline the requirements for eligibility for knowledge test waivers, including paragraphs (a)(2)(i)(A) through (H) that list specific MOS eligible for knowledge test waivers. Existing paragraph (a) is now contained in new paragraph (b)(2)(ii). The language has been slightly modified to make it consistent with new paragraph (a).

    New paragraph (b) is titled Driving skills test waivers for certain current or former military service members applying for a CDL. Existing paragraph (b) is now contained in new paragraph (b)(2)(i).

    New paragraph (c) is titled Endorsement waivers for certain current or former military service members applying for a CLP or a CDL. Paragraphs (c)(1) through (3) contain the requirements certain applicants must meet for SDLAs to grant them relief from the knowledge and skills tests for P, and the knowledge tests for N and H. New paragraph (c)(4) provides the conditions and limitations that are placed on a waiver of the tests required for a P, N, or H endorsement.

    C. Section 383.79 Driving Skills Testing of Out-of-State Students; Knowledge and Driving Skills Testing of Military Personnel

    The title of this section and paragraph (a) are modified to include the term “driving” before the terms “skills.” Other editorial changes are made to paragraph (a). Existing paragraph (b), Military service member applicants for a CLP or CDL, is removed and replaced by a new paragraph (b), Active duty military service members. New paragraphs (b)(1) and (2) discuss the responsibilities of the State of duty station and the State of domicile, respectively.

    D. Section 384.301 Substantial Compliance General Requirements

    New paragraph (l) is added to provide a compliance date for this rule.

    IX. Regulatory Analyses A. Executive Order (E.O.) 12866 (Regulatory Planning and Review), E.O. 13563 (Improving Regulation and Regulatory Review), and DOT Regulatory Policies and Procedures

    FMCSA performed an analysis of the impacts of the final rule and determined it is not a significant regulatory action under section 3(f) of E.O. 12866, Regulatory Planning and Review, as supplemented by E.O. 13563, Improving Regulation and Regulatory Review. Accordingly, the Office of Management and Budget (OMB) has not reviewed it under that Order. It is also not significant within the meaning of DOT regulatory policies and procedures (DOT Order 2100.5 dated May 22, 1980; 44 FR 11034 (Feb. 26, 1979)).

    This rule will allow, but not require, States to waive the requirements for the CDL knowledge tests for certain current or former military service members who can certify and provide evidence that they were regularly employed within the last year in a military position that requires/required the operation of a CMV. This rule will provide an expedited path for certain military service members to enter the labor market by eliminating the usual 14-day waiting period after passing the knowledge test for the CLP and either taking the driving skills test or applying for a skills test waiver.

    FMCSA evaluated potential costs and benefits that could result from this rulemaking. The Agency estimates that an annual average of 2,460 military service members will be affected by the rule, with each experiencing a reduction in costs related to elimination of the CDL knowledge test and the 14-day waiting period. As presented in Table 1, the final rule will result in a 10-year cost savings of $16.66 million undiscounted, $14.21 million discounted at 3 percent, $11.70 million discounted at 7 percent, and $1.67 million on an annualized basis at 7 percent or 3 percent discount rates.

    Scope and Key Inputs to the Analysis

    The Agency does not know how many military service members will receive CDL knowledge test waivers and uses the number of CDL skills test waivers issued as a proxy for the number of military service members who will be most likely to use the relief provided in this rule. In the Military CDL I final rule, FMCSA estimated that an annual average of 2,460 military service members were granted skills test waivers, and thus estimates that the same number will be granted knowledge test waivers as a result of this final rule. For purposes of this analysis, FMCSA assumed that number would remain constant in future years.

    The Agency evaluated changes in the opportunity cost of time for military service members, or drivers, using the driver wage rate to represent the value of the drivers' time. In the absence of the rule, that time would have been spent taking the CDL knowledge tests and waiting to procure employment as CMV drivers, time that will now be available to drivers for other uses, such as productive employment. The source for driver wages is the median hourly wage data (May 2016) from the U.S. Department of Labor (DOL), Bureau of Labor Statistics (BLS), Occupational Employment Statistics (OES).2 The BLS does not publish data on fringe benefits for specific occupations, but it does for the broad industry groups in its Employer Costs for Employee Compensation (ECEC) release. For drivers, this analysis uses an average hourly wage of $25.75 and average hourly benefits of $14.49 for private industry workers in “transportation and warehousing” 3 to estimate that fringe benefits are equal to 56 percent ($14.49 ÷ $25.75) of wages.

    2 U.S. Department of Labor (DOL), Bureau of Labor Statistics (BLS). Occupational Employment Statistics (OES). National. May 2016. Available at: http://www.bls.gov/oes/special.requests/oesm16nat.zip (accessed January 16, 2018).

    3 U.S. Department of Labor (DOL), Bureau of Labor Statistics (BLS). Table 10: Employer costs per hour worked for employee compensation and costs as a percent of total compensation: Private industry workers, by industry group, September 2017. Available at: https://www.bls.gov/news.release/pdf/ecec.pdf (accessed January 16, 2018).

    FMCSA assumes that military service members are employed while they are waiting to obtain a CDL and uses the light truck or delivery service driver wage rate (industry code 53-3033) as a proxy for the employment opportunities available to non-CDL drivers. Per the BLS definition, drivers in the light truck or delivery service industry drive a truck or van with a capacity of less than 26,000 pounds gross vehicle weight and, as such, do not require a Class A or a Class B CDL. FMCSA uses a driver wage rate of 23 to account for non-CDL driving opportunities available to military service members, which is the base median hourly wage of $14.70 adjusted to account for fringe benefits ($23 = $14.70 × 1.56).

    FMCSA uses the heavy tractor-trailer wage rate (industry code 53-3032) of $31 to represent the employment opportunities available to military service members after they obtain their CDL. This value is the base median wage of $19.87, adjusted to account for fringe benefits ($31 = $19.87 × 1.56).

    Costs

    This rule will reduce driver opportunity cost by creating an expedited path for certain military service members to obtain their CDL and begin working for a motor carrier. First, the affected military service members will receive a waiver for the CDL knowledge tests and will experience a reduction in opportunity cost equal to the length of time they would have spent taking the CDL knowledge tests. FMCSA estimates that each of the 2,460 affected military service members will save approximately 60 minutes, or one hour, and values this time at the wage the driver will be earning in the absence of the CDL knowledge test requirement, $31. As displayed in Table 1, FMCSA estimates that the annual undiscounted cost savings of allowing a CDL knowledge test waiver are approximately $76,000 ($76,000 = 2,460 drivers × 1 hour × $31), and the total 10-year undiscounted cost savings are approximately $760,000.

    Second, because of the waiver, certain military service members will no longer be required to wait 14 days before obtaining their CDL and beginning employment for a motor carrier. Eliminating the waiting period could result in up to 80 hours of increased wages (two 40-hour work weeks). Because the military service members are estimated to be working and earning a wage during the waiting period, the impact of removing the waiting period is the difference between what they are earning under the baseline (estimated at $23), and what they will earn under the rule (estimated at 31). Thus, FMCSA quantified the impact of removing the waiting period at 8 per hour ($8 = $31 − $23). The analysis similarly estimated that this will impact 2,460 service members. As presented in Table 1, FMCSA estimates that the annual undiscounted cost savings are $1.59 million ($8 × 80 × $2,460), and the 10-year total undiscounted cost savings are $15.90 million.

    As presented in Table 1, the total cost savings of the final rule are $16.66 million undiscounted, $14.21 million discounted at 3 percent, $11.70 million discounted at 7 percent, and $1.67 million annualized at both a 3 percent and 7 percent discount rate.

    Table 1—Summary of the Total Costs of the Final Rule [In millions of 2016 $] Year Undiscounted Reduced test time Earlier employment Total costs a Discounted Discounted at 3 percent Discounted at 7 percent A = 2,460 drivers × 31 × −1 hour B = 2,460 drivers × 8 × −80 hours C = A + B 2018 ($0.08) ($1.59) ($1.67) ($1.62) ($1.56) 2019 (0.08) (1.59) (1.67) (1.57) (1.46) 2020 (0.08) (1.59) (1.67) (1.52) (1.36) 2021 (0.08) (1.59) (1.67) (1.48) (1.27) 2022 (0.08) (1.59) (1.67) (1.44) (1.19) 2023 (0.08) (1.59) (1.67) (1.40) (1.11) 2024 (0.08) (1.59) (1.67) (1.35) (1.04) 2025 (0.08) (1.59) (1.67) (1.32) (0.97) 2026 (0.08) (1.59) (1.67) (1.28) (0.91) 2027 (0.08) (1.59) (1.67) (1.24) (0.85) Total (0.76) (15.90) (16.66) (14.21) (11.70) Annualized (1.67) (1.67) (1.67) Notes: a Total cost values may not equal the sum of the components due to rounding (the totals shown in this column are the rounded sum of unrounded components). b Values shown in parentheses are negative values (i.e., less than zero), and represent a decrease in cost or a cost savings. Benefits

    In considering the potential impacts on safety from this rule, the Agency notes that affected military service members have previous training or experience operating a CMV, which serves as an adequate substitute for taking the knowledge test and holding a CLP for a minimum of 14 days. Therefore, the Agency anticipates that there will be no change in potential safety benefits associated with this rule.

    B. E.O. 13771 (Reducing Regulation and Controlling Regulatory Costs)

    This final rule is expected to be an E.O. 13771 deregulatory action. 4 The present value of the cost savings of this rule, measured on an infinite time horizon at a 7 percent discount rate, are approximately $20.8 million. Expressed on an annualized basis, the cost savings are $1.5 million. These values are expressed in 2016 dollars.

    4 Executive Office of the President. Executive Order 13771 of January 30, 2017. Reducing Regulation and Controlling Regulatory Costs. 82 FR 9339-9341. Feb. 3, 2017.

    C. Regulatory Flexibility Act (Small Entities)

    The Regulatory Flexibility Act of 1980 (RFA) (5 U.S.C. 601 et seq.), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) (Pub. L. 104-121, 110 Stat. 857), requires Federal agencies to consider the impact of their regulatory proposals on small entities, analyze effective alternatives that minimize small entity impacts, and make their analyses available for public comment. The term “small entities” means small businesses and not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with a population of less than 50,000.5 Accordingly, DOT policy requires an analysis of the impact of all regulations on small entities and mandates that agencies strive to lessen any adverse effects on these entities.

    5 Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Available at: https://www.sba.gov/advocacy/regulatory-flexibility-act (accessed December 14, 2016).

    When an agency issues a rulemaking proposal, the RFA requires the agency to “prepare and make available for public comment an initial regulatory flexibility analysis” which will “describe the impact of the proposed rule on small entities” (5 U.S.C. 603(a)). Section 605 of the RFA allows an agency to certify, in lieu of preparing an analysis, that the proposed rulemaking is not expected to have a significant economic impact on a substantial number of small entities.

    FMCSA provided a factual basis and certified in the proposal that the rule would not have a significant impact on a substantial number of small entities. FMCSA did not receive comments on the factual basis or the proposal, and has not changed the determination in this final rule.

    D. Assistance for Small Entities

    In accordance with section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996, FMCSA wants to assist small entities in understanding this final rule so that they can better evaluate its effects on themselves and participate in the rulemaking initiative. If the final rule will affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance; please consult the FMCSA point of contact, Selden Fritschner, listed in the FOR FURTHER INFORMATION CONTACT section of this final rule.

    Small businesses may send comments on the actions of Federal employees who enforce or otherwise determine compliance with Federal regulations to the Small Business Administration's Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of FMCSA, call 1-888-REG-FAIR (1-888-734-3247). DOT has a policy regarding the rights of small entities to regulatory enforcement fairness and an explicit policy against retaliation for exercising these rights.

    E. Unfunded Mandates Reform Act of 1995

    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 State, local, or tribal governments, in the aggregate, or by the private sector, of $156 million (which is the equivalent of $100 million in 1995, adjusted for inflation to 2015 levels) or more in any one year. Though this final rule will not result in such expenditure, the Agency does discuss the effects of this rule elsewhere in this preamble.

    F. Paperwork Reduction Act (Collection Information)

    This final rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

    G. E.O. 13132 (Federalism)

    A rule has implications for federalism under Section 1(a) of E.O. 13132 if it has “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”

    FMCSA has determined that this rule would not have substantial direct costs on or for the States, nor will it limit the policymaking discretion of the States. Nothing in this document preempts any State law or regulation. Therefore, this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Impact Statement.

    H. E.O. 12988 (Civil Justice Reform)

    This final rule meets applicable standards in sections 3(a) and 3(b)(2) of E.O. 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

    I. E.O. 13045 (Protection of Children)

    E.O. 13045, Protection of Children from Environmental Health Risks and Safety Risks, requires agencies issuing “economically significant” rules, if the regulation also concerns an environmental health or safety risk that an agency has reason to believe may disproportionately affect children, to include an evaluation of the regulation's environmental health and safety effects on children. The Agency determined this final rule is not economically significant. Therefore, no analysis of the impacts on children is required. In any event, the Agency does not anticipate that this regulatory action could in any respect present an environmental or safety risk that could disproportionately affect children.

    J. E.O. 12630 (Taking of Private Property)

    FMCSA reviewed this final rule in accordance with E.O. 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights, and has determined it will not effect a taking of private property or otherwise have taking implications.

    K. Privacy

    The Consolidated Appropriations Act, 2005, (5 U.S.C. 552a note) requires the Agency to conduct a privacy impact assessment (PIA) of a regulation that will affect the privacy of individuals. Because this final rule does not require the collection of personally identifiable information (PII), the Agency is not required to conduct a PIA.

    Section 208 of the E-Government Act of 2002 (44 U.S.C. 3501 note) requires Federal agencies to conduct a PIA for new or substantially changed technology that collects, maintains, or disseminates information in an identifiable form. No new or substantially changed technology would collect, maintain, or disseminate information as a result of this rule. Accordingly, FMCSA has not conducted a PIA.

    L. E.O. 12372 (Intergovernmental Review)

    The regulations implementing E.O. 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this program.

    M. E.O. 13211 (Energy Supply, Distribution, or Use)

    FMCSA has analyzed this final rule under E.O. 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. The Agency has determined that the rule is not a “significant energy action” under that order because it is not a “significant regulatory action” likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, it does not require a Statement of Energy Effects under E.O. 13211.

    N. E.O. 13783 (Promoting Energy Independence and Economic Growth)

    E.O. 13783 directs executive departments and agencies to review existing regulations that potentially burden the development or use of domestically produced energy resources, and to appropriately suspend, revise, or rescind those that unduly burden the development of domestic energy resources. In accordance with E.O. 13783, DOT prepared and submitted a report to the Director of OMB that provides specific recommendations that, to the extent permitted by law, could alleviate or eliminate aspects of agency action that burden domestic energy production. This final rule has not been identified by DOT under E.O. 13783 as potentially alleviating unnecessary burdens on domestic energy production.

    O. E.O. 13175 (Indian Tribal Governments)

    This rule does not have tribal implications under E.O. 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

    P. National Technology Transfer and Advancement Act (Technical Standards)

    The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through OMB, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) are standards that are developed or adopted by voluntary consensus standards bodies. This rule does not use technical standards. Therefore, FMCSA did not consider the use of voluntary consensus standards.

    Q. Environment (NEPA)

    FMCSA analyzed this rule for the purpose of the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and determined this action is categorically excluded from further analysis and documentation in an environmental assessment or environmental impact statement under FMCSA Order 5610.1(69 FR 9680, March 1, 2004), Appendix 2, paragraphs 6.s.(6) and 6.t.(2). The Categorical Exclusion (CE) in paragraph 6.s.(6) covers a requirement for States to give knowledge and skills tests to all qualified applicants for commercial drivers' licenses which meet the Federal standard. The CE in paragraph 6.t.(2) covers regulations to ensure that the States comply with the provisions of the Commercial Motor Vehicle Safety Act of 1986, by: (2) Having the appropriate laws, regulations, programs, policies, procedures and information systems concerning the qualification and licensing of persons who apply for a commercial driver's license, and persons who are issued a commercial driver's license. The requirements in this rule are covered by these CEs and the proposed action does not have any effect on the quality of the environment. The CE determination is available for inspection or copying in the Federal eRulemaking Portal: http://www.regulations.gov.

    List of Subjects 49 CFR Part 383

    Administrative practice and procedure, Alcohol abuse, Drug abuse, Highway safety, Motor carriers.

    49 CFR Part 384

    Administrative practice and procedure, Alcohol abuse, Drug abuse, Highway safety, Motor carriers.

    In consideration of the foregoing, FMCSA amends 49 CFR chapter III, parts 383 and 384, to read as follows:

    PART 383—COMMERCIAL DRIVER'S LICENSE STANDARDS; REQUIREMENTS AND PENALTIES 1. The authority citation for part 383 is revised to read as follows: Authority:

    49 U.S.C. 521, 31136, 31301 et seq., and 31502; secs. 214 and 215 of Pub. L 106-159, 113 Stat. 1748, 1766, 1767; sec. 1012(b) of Pub. L. 107-56; 115 Stat. 272, 297, sec. 4140 of Pub. L. 109-59, 119 Stat. 1144, 1746; sec. 32934 of Pub. L. 112-141, 126 Stat. 405, 830; secs. 5401 and 7208 of Pub. L. 114- 94, 129 Stat. 1312, 1546, 1593; and 49 CFR 1.87.

    2. Amend § 383.23 by revising paragraph (a)(1) to read as follows:
    § 383.23 Commercial driver's license.

    (a) * * *

    (1) No person shall operate a CMV unless such person has taken and passed knowledge and driving skills tests for a CLP or CDL that meet the Federal standards contained in subparts F, G, and H of this part for the CMV that person operates or expects to operate.

    3. Revise § 383.77 to read as follows:
    § 383.77 Substitute for knowledge and driving skills tests for drivers with military CMV experience.

    (a) Knowledge test waivers for certain current or former military service members applying for a CLP or CDL—(1) In general. For current or former military service members, as defined in § 383.5, who meet the conditions and limitations set forth in paragraph (a)(2) of this section, a State may waive the requirements in §§ 383.23(a)(1) and 383.25(a)(3) that a person must pass a knowledge test for a CLP or CDL.

    (2) Conditions and limitations. A current or former military service member applying for waiver of the knowledge test described in paragraph (a)(1) of this section must certify and provide evidence that, during the 1-year period immediately prior to the application, he/she:

    (i) Is or was regularly employed and designated as a:

    (A) Motor Transport Operator—88M (Army);

    (B) PATRIOT Launching Station Operator—14T (Army);

    (C) Fueler—92F (Army);

    (D) Vehicle Operator—2T1 (Air Force);

    (E) Fueler—2F0 (Air Force);

    (F) Pavement and Construction Equipment Operator—3E2 (Air Force);

    (G) Motor Vehicle Operator—3531 (Marine Corps); or

    (H) Equipment Operator—E.O. (Navy).

    (ii) Is operating a vehicle representative of the CMV type the driver applicant expects to operate upon separation from the military, or operated such a vehicle type immediately preceding separation from the military;

    (iii) Has not simultaneously held more than one civilian license (in addition to a military license);

    (iv) Has not had any license suspended, revoked, or cancelled;

    (v) Has not had any convictions for any type of motor vehicle for the disqualifying offenses contained in § 383.51(b);

    (vi) Has not had more than one conviction for any type of motor vehicle for serious traffic violations contained in § 383.51(c); and

    (vii) Has not had any conviction for a violation of military, State, or local law relating to motor vehicle traffic control (other than a parking violation) arising in connection with any traffic accident, and has no record of an accident in which he/she was at fault.

    (b) Driving skills test waivers for certain current or former military service members applying for a CDL—(1) In general. At the discretion of a State, the driving skills test required by § 383.23(a)(1), and as specified in § 383.113, may be waived for a CMV driver with military CMV experience who is currently licensed at the time of his/her application for a CDL and substituted with an applicant's driving record in combination with certain driving experience.

    (2) Conditions and limitations. The State shall impose conditions and limitations to restrict the applicants from whom a State may accept alternative requirements for the driving skills test described in § 383.113. Such conditions must require at least the following:

    (i) An applicant must provide evidence and certify that he/she:

    (A) Is regularly employed or was regularly employed within the last year in a military position requiring operation of a CMV;

    (B) Was exempted from the CDL requirements in § 383.3(c); and

    (C) Was operating a vehicle representative of the CMV type the driver applicant operates or expects to operate, for at least the 2 years immediately preceding separation from the military.

    (ii) An applicant must certify that, during the 2-year period immediately prior to applying for a CDL, he/she:

    (A) Has not simultaneously held more than one civilian license (in addition to a military license);

    (B) Has not had any license suspended, revoked, or cancelled;

    (C) Has not had any convictions for any type of motor vehicle for the disqualifying offenses contained in § 383.51(b);

    (D) Has not had more than one conviction for any type of motor vehicle for serious traffic violations contained in § 383.51(c); and

    (E) Has not had any conviction for a violation of military, State or local law relating to motor vehicle traffic control (other than a parking violation) arising in connection with any traffic crash, and has no record of a crash in which he/she was at fault.

    (c) Endorsement waivers for certain current or former military service members applying for a CLP or a CDL—(1) Passenger. For current or former military service members, as defined in § 383.5, who meet the conditions and limitations set forth in paragraph (c)(4) of this section, a State may waive the requirements in § 383.25(a)(5)(i), § 383.93(a) and (c)(2) that an applicant must pass a driving skills test and a specialized knowledge test, described in § 383.117, for a passenger (P) endorsement.

    (2) Tank vehicle. For current or former military service members, as defined in § 383.5, who meet the conditions and limitations set forth in paragraph (c)(4) of this section, a State may waive the requirements in §§ 383.25(a)(5)(iii) and 383.93(a) and (c)(3) that an applicant must pass a specialized knowledge test, described in § 383.119, for a tank vehicle (N) endorsement.

    (3) Hazardous materials. For current or former military service members, as defined in § 383.5, who meet the conditions and limitations set forth in paragraph (c)(4) of this section, a State may waive the requirements in § 383.93(a)(1) and (c)(4) that an applicant must pass a specialized knowledge test, described in § 383.121, for a hazardous materials (H) endorsement. States must continue to meet the requirements for a hazardous materials endorsement in subpart I of this part.

    (4) Conditions and limitations. A current or former military service member applying for waiver of the driving skills test or the specialized knowledge test for a passenger carrier endorsement, the knowledge test for the tank vehicle endorsement, or the knowledge test for the hazardous materials endorsement, must certify and provide evidence that, during the 1-year period immediately prior to the application, he/she:

    (i) Is or was regularly employed in a military position requiring operation of a passenger CMV, if the applicant is requesting a waiver of the knowledge and driving skills test for a passenger endorsement; operation of a tank vehicle, if the applicant is requesting a waiver of the knowledge test for a tank vehicle endorsement; or transportation of hazardous materials, if the applicant is requesting a waiver of the knowledge test for a hazardous materials endorsement;

    (ii) Has not simultaneously held more than one civilian license (in addition to a military license);

    (iii) Has not had any license suspended, revoked, or cancelled;

    (iv) Has not had any convictions for any type of motor vehicle for the disqualifying offenses contained in § 383.51(b);

    (v) Has not had more than one conviction for any type of motor vehicle for serious traffic violations contained in § 383.51(c); and

    (vi) Has not had any conviction for a violation of military, State or local law relating to motor vehicle traffic control (other than a parking violation) arising in connection with any traffic crash, and has no record of a crash in which he/she was at fault.

    4. Revise § 383.79 to read as follows:
    § 383.79 Driving skills testing of out-of-State students; knowledge and driving skills testing of military personnel.

    (a) CDL applicants trained out-of-State—(1) State that administers the driving skills test. A State may administer its driving skills test, in accordance with subparts F, G, and H of this part, to a person who has taken training in that State and is to be licensed in another United States jurisdiction (i.e., his or her State of domicile). Such test results must be transmitted electronically directly from the testing State to the licensing State in a direct, efficient and secure manner.

    (2) The State of domicile. The State of domicile of a CDL applicant must accept the results of a driving skills test administered to the applicant by any other State, in accordance with subparts F, G, and H of this part, in fulfillment of the applicant's testing requirements under § 383.71, and the State's test administration requirements under § 383.73.

    (b) Active duty military service members. An active-duty military service member may apply for a CLP or a CDL in the State where the individual is stationed but not domiciled if the requirements of this section are met.

    (1) Role of State of duty station. (i) Upon prior agreement with the State of domicile, a State where active-duty military service members are stationed, but not domiciled, may accept an application for a CLP or CDL, including an application for waiver of the knowledge test or driving skills test prescribed in §§ 383.23(a)(1) and 383.25(a)(3), from such a military service member who:

    (A) Is regularly employed or was regularly employed within the last year in a military position requiring operation of a CMV;

    (B) Has a valid driver's license from his or her State of domicile;

    (C) Has a valid active-duty military identification card; and

    (D) Has a current copy of either the service member's military leave and earnings statement, or his or her orders.

    (ii) A State where active-duty military service members are stationed, but not domiciled, may:

    (A) Administer the knowledge and driving skills tests to the military service member, as appropriate, in accordance with subparts F, G, and H of this part, if the State of domicile requires those tests; or

    (B) Waive the knowledge and driving skills tests in accordance with § 383.77, if the State of domicile has exercised the option to waive those tests; and

    (C) Destroy the military service member's civilian driver's license on behalf of the State of domicile, unless the latter requires the driver's license to be surrendered to its own driver licensing agency.

    (iii) The State of duty station must transmit to the State of domicile by a direct, secure, and efficient electronic system the completed application, any supporting documents, and—if the State of domicile has not exercised its waiver option—the results of any knowledge and driving skills administered.

    (2) Role of State of domicile. Upon completion of the applicant's application pursuant to § 383.71 and any testing administered by the State of duty station pursuant to §§ 383.71 and 383.73, the State of domicile of the military service member applying for a CLP or CDL may:

    (i) Accept the completed application, any supporting documents, and the results of the knowledge and driving skills tests administered by the State of duty station (unless waived at the discretion of the State of domicile); and

    (ii) Issue the applicant a CLP or CDL.

    PART 384—STATE COMPLIANCE WITH COMMERCIAL DRIVER'S LICENSE PROGRAM 5. The authority citation for part 384 is revised to read as follows: Authority:

    49 U.S.C. 31136, 31301 et seq., and 31502; secs. 103 and 215 of Pub. L. 106-59, 113 Stat. 1753, 1767; sec. 32934 of Pub. L. 112-141, 126 Stat. 405, 830; sec. 5401 and 7208 of Pub. L. 114-94, 129 Stat. 1312, 1546, 1593; and 49 CFR 1.87.

    6. Amend § 384.301 by adding paragraph (l) to read as follows:
    § 384.301 Substantial compliance—general requirements.

    (l) A State must come into substantial compliance with the requirements of subpart B of this part and part 383 of this chapter in effect as of November 27, 2018 as soon as practicable, but, unless otherwise specifically provided in this part, not later than November 27, 2021.

    Issued under authority delegated in 49 CFR 1.87. September 25, 2018. Raymond P. Martinez, Administrator.
    [FR Doc. 2018-21289 Filed 9-27-18; 8:45 am] BILLING CODE 4910-EX-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 223 [Docket No. 160614518-8790-03] RIN 0648-XE685 Endangered and Threatened Wildlife and Plants; Final Rule To List the Chambered Nautilus as Threatened Under the Endangered Species Act AGENCY:

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

    ACTION:

    Final rule.

    SUMMARY:

    We, NMFS, announce a final rule to list the chambered nautilus (Nautilus pompilius) as threatened under the Endangered Species Act (ESA). We have reviewed the status of the chambered nautilus, including efforts being made to protect this species, and considered public comments, including new information, submitted on the proposed rule. We have made our final determination based on the best scientific and commercial data available. At this time, we conclude that critical habitat is not determinable because data sufficient to perform the required analyses are lacking; however, we solicit information on habitat features and areas in U.S. waters that may meet the definition of critical habitat for the chambered nautilus.

    DATES:

    This final rule is effective October 29, 2018.

    ADDRESSES:

    Endangered Species Division, NMFS Office of Protected Resources (F/PR3), 1315 East West Highway, Silver Spring, MD 20910. Copies of the petition, status review report, and Federal Register notices are available on our website at https://www.fisheries.noaa.gov/species/chambered-nautilus.

    FOR FURTHER INFORMATION CONTACT:

    Maggie Miller, NMFS, Office of Protected Resources, (301) 427-8403.

    SUPPLEMENTARY INFORMATION: Background

    On May 31, 2016, we received a petition from the Center for Biological Diversity to list the chambered nautilus (N. pompilius) as a threatened species or an endangered species under the ESA. We found that the petitioned action may be warranted for the species and announced the initiation of a status review (81 FR 58895, August 26, 2016). On October 23, 2017, we announced a positive 12-month finding on the petition and published a proposed rule to list the chambered nautilus as a threatened species under the ESA (82 FR 48948). We solicited information on the proposed listing determination, the potential development of proposed protective regulations, and potential designation of critical habitat for the chambered nautilus. The comment period was open through December 22, 2017, and no hearing requests were received. This final rule provides an overview of the ESA listing and status review process for this species; a discussion of the comments and information we received during the public comment period, as well as our responses to those comments; a summary of the statutory listing factors and other considerations supporting the listing determination; and our final ESA listing determination for the chambered nautilus. This rule should be read in conjunction with the proposed rule.

    Listing Species Under the Endangered Species Act

    We are responsible for determining whether species are threatened or endangered under the ESA (16 U.S.C. 1531 et seq.). To make this determination, we first consider whether a group of organisms constitutes a “species” under section 3 of the ESA, then whether the status of the species qualifies it for listing as either threatened or endangered.

    Section 3 of the ESA defines “species” to include any subspecies of fish or wildlife or plants and, for any vertebrate species, any distinct population segment (DPS) that interbreeds when mature (16 U.S.C. 1532(16)). Because the chambered nautilus is an invertebrate, the ESA does not permit us to consider listing populations as DPSs.

    Section 3 of the ESA defines an “endangered species” as a species which is in danger of extinction throughout all or a significant portion of its range and a “threatened species” as one which is likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range. 16 U.S.C. 1532(6); (20). Thus, in the context of the ESA, we interpret an “endangered species” to be one that is presently in danger of extinction. A “threatened species” is not presently in danger of extinction, but is likely to become so in the foreseeable future (that is, at a later time). In other words, the primary statutory difference between a threatened and endangered species is the timing of when a species is or is likely to become in danger of extinction, either presently (endangered) or in the foreseeable future (threatened).

    As we explained in the proposed rule and summarize here, when we consider whether a species might qualify as threatened under the ESA, we must consider the meaning of the term “foreseeable future.” It is appropriate to interpret “foreseeable future” as the horizon over which predictions about the conservation status of the species can be reasonably relied upon. The appropriate timescales for analyzing various threats will vary with the data available about each threat. The foreseeable future considers the life history of the species, habitat characteristics, availability of data, particular threats, ability to predict threats, and the ability to reliably forecast the effects of these threats and future events on the status of the species under consideration. Because a species may be susceptible to a variety of threats for which different data are available, or which operate across different time scales, the foreseeable future is not necessarily reducible to a particular number of years.

    The statute also requires us to determine whether any species is endangered or threatened throughout all or a significant portion of its range as a result of any one or a combination of the following factors: The present or threatened destruction, modification, or curtailment of its habitat or range; overutilization for commercial, recreational, scientific, or educational purposes; disease or predation; the inadequacy of existing regulatory mechanisms to address identified threats; or other natural or manmade factors affecting its continued existence (ESA section 4(a)(1)(A)-(E); 16 U.S.C. 1533(a)(1)(A)-(E). See also 50 CFR 424.11(c)).

    To make a listing determination, we first determine whether a petitioned species meets the ESA definition of a “species.” Next, using the best available information gathered during the status review for the species, we assess the extinction risk of the species. In assessing the extinction risk of a species, in conjunction with the section 4(a)(1) factors, we consider demographic risk factors, such as those developed by McElhany et al. (2000), to organize and evaluate the forms of risks. The demographic risk analysis is an assessment of the manifestation of past threats that have contributed to the species' current status and also informs the consideration of the biological response of the species to present and future threats. The approach of considering demographic risk factors to help frame the consideration of extinction risk has been used in many of our previous status reviews (see https://www.fisheries.noaa.gov/resources/documents?title=&field_category_document_value%5Besa_status_review%5D=esa_status_review&species=&field_species_vocab_target_id=&sort_by=created for links to these reviews). In this approach, the collective condition of individual populations is considered at the species level according to four demographic viability factors: Abundance and trends, population growth rate or productivity, spatial structure and connectivity, and genetic diversity. These viability factors reflect concepts that are well-founded in conservation biology and that individually and collectively provide strong indicators of extinction risk.

    Where a species is found not to warrant listing throughout its range, we must go on to evaluate whether the species may be endangered or threatened in a “significant portion of its range.” Conversely, where a species is found to warrant listing as an endangered species or a threatened species based on a review of its status throughout its range, it is not necessary to proceed to an evaluation of potentially significant portions of the range. As explained more fully in the proposed rule, we interpret the Act to require that, where the best available information allows us to determine a status for the species rangewide, that status determination should be given conclusive weight. Our interpretation is also consistent with the 2014 Final Policy on Interpretation of the Phrase “Significant Portion of its Range” (79 FR 37578, July 1, 2014).1

    1 Although two district courts have held in litigation involving the United States Fish and Wildlife Service (USFWS) that the Final Policy's specific definition of “significant” is too narrow (Center for Biological Diversity, et al. v. Jewell, CV-14-02506 (D. Ariz.); Desert Survivors, et al. v. Dep't of Interior, 16-cv-01165 (N.D. Cal.)), all other provisions of the Final Policy continue in full effect for both Services, including the provisions establishing the overall process for sequencing determinations. Nevertheless, our approach is reached and applied independently of the Final Policy.

    Section 4(b)(1)(A) of the ESA requires us to make listing determinations based solely on the best scientific and commercial data available after conducting a review of the status of the species and after taking into account any efforts being made by any State or foreign nation or political subdivision thereof to protect the species. 16 U.S.C. 1533(b)(1)(A). Therefore, prior to making a listing determination, we also assess such protective efforts to determine if they ameliorate the existing threats to a degree that would affect the listing status of the species under the Act. Any relevant foreign efforts are directly evaluated under standards deducible from section 4(b)(1)(A) and the statute's structure.

    Status Review

    A summary of basic biological and life history information of the chambered nautilus can be found in the proposed rule and the status review report. In reaching our proposed listing determination, we used the best available scientific and commercial data on the chambered nautilus, which are summarized in the status review report and incorporated herein.

    Scientific conclusions about the overall risk of extinction faced by the chambered nautilus under present conditions and in the foreseeable future are based on our evaluation of the species' demographic risks and ESA section 4(a)(1) threat factors. Our assessment of overall extinction risk considered the likelihood and contribution of each particular factor, synergies among contributing factors, and the cumulative impact of all demographic risks and threats on the chambered nautilus. After considering conservation efforts by foreign nations to protect the species, as required under section 4(b)(1)(A), we proposed to list the species as a “threatened species.”

    For the assessment of extinction risk for the chambered nautilus, the “foreseeable future” was considered to extend out several decades (> 40 years). Given the species' life history traits, with longevity estimated to be at least 20 years, maturity ranges from 10 to 17 years, with very low fecundity (potentially 10-20 eggs per year with a 1-year incubation period), it would likely take more than a few decades (i.e., multiple generations) for any recent management actions to be realized and reflected in population abundance indices. Similarly, the impact of present threats to the species could be realized in the form of noticeable population declines within this time frame, as demonstrated in the available survey and fisheries data. As the main potential operative threat to the species is overutilization, this time frame would allow for reliable predictions regarding the impact of current levels of fishery-related mortality on the biological status of the species. Additionally, this time frame allows for consideration of the previously discussed impacts on chambered nautilus habitat from climate change and the potential effects on the status of this species.

    To make our final listing determination, we reviewed all comments and information provided during the public comment period on the proposed rule. In general, this additional information merely supplemented, and did not differ significantly from, the information presented in the proposed rule. Where new information was received, we have reviewed it and present our evaluation of the information in this final rule. The new information received was not so significant that we are relying on it for our final determination.

    With this rule, we finalize our listing determination for the chambered nautilus as a “threatened species.”

    Summary of Comments

    In response to our request for public comments on the proposed rule, we received comments and/or relevant information from 16 parties. The large majority of commenters supported the proposed listing determination but provided no new or substantive data or information relevant to the listing of the chambered nautilus. We also solicited comments from the countries where the chambered nautilus occurs via their ambassadors and received a response from the Philippines Bureau of Fisheries and Aquatic Resources and the Government of India. Summaries of the substantive public comments received and our responses are provided below and organized by topic.

    Comments on Available Data, Trends, and Analysis

    Comment 1: Two commenters provided their personal observations regarding the decline of the chambered nautilus in the Indo-Pacific. One commenter noted that during their 20 years as a researcher studying the chambered nautilus, 1-2 of their study sites are now 100 percent depleted and others are rapidly following suit. Another commenter provided information on historical and current nautilus fishing practices in the Philippines. The commenter stated that nautilus fishing was more lucrative in the 1970s and 1980s in the region of Central Visayas (particularly the Tañon Strait municipalities) compared to the end of the 1990s, resulting in reduced fishing effort of the species. In March 2017, interviews conducted with three shell exporters on Mactan Islands (the major export hub for sea shells from Philippine waters) revealed that they had a few hundred nautilus shells in stock (despite the ban on trade in nautilus shells). The commenter also stated that there are known locations in Central Palawan as well as the southern tip of the island where nautilus fisheries were or still exist. However, the commenter noted that it is unclear whether the nautilus is a target species or just landed as bycatch. The commenter stressed the importance of obtaining information on current and historical fishing activities in order to obtain a better understanding of the present status of nautilus populations in the Philippines.

    Response: We thank the commenters for the information. We have updated the status review report (Miller 2018) to reflect the new information provided regarding the March 2017 interviews, which further supports our conclusion that existing regulations to protect N. pompilius from overutilization throughout the Philippines are inadequate. We agree with the commenter that fisheries information is useful when examining the status of nautilus populations.

    Comment 2: One commenter provided new published information on the genetics of the Nautilus genus, including an estimated effective population size of N. pompilius across the Indo-Pacific. Specifically, the commenter referenced the study by Combosch et al. (2017), which used genome-wide double digest restriction-site associated DNA data to re-analyze nautiloid species taxonomy. The commenter noted that the results from the new study suggest that the geographic distribution of N. pompilius may be smaller than previously thought, and would not include nautilids found in the Coral Sea and Southwest Pacific. However, the commenter noted that further research is needed to validate the results before a final decision on the actual geographical range of N. pompilius is made. In fact, the commenter stated that given that further research is still necessary, NMFS should rely on the best available science and list N. pompilius as one species (one “superspecies”) throughout its range, as stated in the proposed rule.

    In terms of effective population size, the commenter noted that the estimates provided in Combosch et al. (2017) generally tend to be in agreement with previous genetic studies (i.e., Williams et al. (2015)). While the estimates are rather large (for example, ~4.5 million specimens of N. pompilius may potentially exist in the entire Indo-Pacific), the commenter cautioned that the data are more than two decades old and represent what the species could potentially support based on its current genetic diversity, not its current living population abundance estimate. The commenter cautioned that the substantial removal of individuals from N. pompilius populations in recent decades, and potential losses in genetic diversity, would take some time before being reflected in genetic-based effective population sizes. Ultimately, the commenter requested that the new genetic information, discussed above, be included in the final rule.

    Response: We reviewed the paper referenced by the commenter (Combosch et al. 2017) and have updated the status review report with this new information. Specifically, Combosch et al. (2017) indicate the existence of three main Nautilus clades: South Pacific, Coral Sea, and Indo-Pacific. The authors contend that these three clades consist of five distinct genetic clusters of Nautilus that most likely correspond to five different species. Three of these species exist in the South Pacific, including N. macromphalus in New Caledonia and two undescribed species (one around American Samoa and Fiji and the other around Vanuatu). A fourth species is found from the Great Barrier Reef to eastern Papua New Guinea, which the authors consider to be N. stenomphalus. The fifth species, N. pompilius, occurs from Western Australia throughout Indonesia and the Philippines and west to Palau. The authors also suggest that N. belauensis and N. repertus should be synonymized with N. pompilius as they are both nested within this Indo-Pacific clade.

    While the results from Combosch et al. (2017) contrast with our characterization of N. pompilius and its range within the status review report and proposed rule, we find that this new information does not change our recognition of N. pompilius as a valid species for listing under the ESA, or our description of the species and its range based on the best available information. As noted in the status review report and proposed rule, nautilus taxonomy is controversial and is still not fully resolved. Until there is a new scientific agreement regarding the taxonomy of the Nautilus genus, we will continue to follow the latest scientific consensus as acknowledged by the Integrated Taxonomic Information System, with N. pompilius identified as one of five recognized species (N. pompilius, N. belauensis, N. macromphalus, N. repertus, and N. stenomphalus). In terms of range, we find that the best available information suggest that N. pompilius is found throughout the Indo-Pacific and within the South Pacific, including waters off American Samoa, Australia, Fiji, India, Indonesia, Malaysia, New Caledonia, Papua New Guinea, Philippines, Solomon Islands, and Vanuatu. Nautilus pompilius is also possibly native to China, Myanmar, Western Samoa, Thailand, and Vietnam.

    With respect to the new effective population size estimates in Combosch et al. (2017), we have updated the status review report with this data. The authors estimated median current effective population sizes for each of the genetic clades mentioned above (Indo-Pacific, Coral Sea, South Pacific) and found large population sizes in the panmictic Indo-Pacific population (4.5 × 106 specimens; 3.2 × 106 for the Philippines subpopulation) and in the Coral Sea (7.2 × 106 for the Great Barrier Reef and 5.7 × 106 for Papua New Guinea). The South Pacific clade had much smaller effective population sizes, with New Caledonia at 0.34 × 106 specimens, Vanuatu at 0.67 × 106 specimens, and American Samoa/Fiji population at 0.41 × 106 specimens. As the commenters note, these estimates are similar to those from previous genetic studies as reported Williams et al. (2015). Specifically, Williams et al. (2015) estimated an effective population size for the Philippines of 3.2 × 106 individuals, and 2.6 × 106 individuals for Western Australia. While this new data further support the suggestion that the species may have high genetic diversity, we agree with the commenters that the current level of genetic diversity across the entire range of the species remains highly uncertain. Due to the low fecundity and long generation time of the species, genetic responses to current exploitation rates (such as decreases in genetic diversity) may not yet be detectable. We have updated the status review report with this new data but do not find that it changes our conclusions regarding the risk that genetic diversity currently poses to the species.

    Comments on Existing Regulatory Mechanisms

    Comment 3: The Philippines Bureau of Fisheries and Aquatic Resources (the Bureau) provided information regarding existing regulations. Specifically, the Bureau stated that under Section 102 (b) of the Philippine Fisheries Code of 1998 (RA 8550 as amended by RA 10654), it is unlawful to fish, take, catch, gather, sell, purchase, possess, transport, export, forward or ship out aquatic species listed under Appendix II and III of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). Based on the listing of the chambered nautilus in Appendix II of CITES during the Conference of the Parties in 2016, the prohibition became effective on January 2, 2017. However, the export of government-inventoried chambered nautilus Pre-Convention specimens used in the shell craft industry of Cebu, Philippines is allowed until 2018.

    Response: We thank the Bureau for its comment and have updated the status review report to reflect this regulation. However, at this time, we have no information regarding the effectiveness of this prohibition, including subsequent enforcement efforts, in protecting the chambered nautilus from continued overutilization throughout the Philippines. Available information from the status review report suggests enforcement of current regulations may be lacking, with evidence of nautilus products being sold in shops in Cebu, the Western Visayas region, and Palawan as recently as 2017, despite local ordinances that prohibit the trade and harvest of N. pompilius. Given the significant harvest and trade of the chambered nautilus throughout the Philippines (with the Philippines being the number one supplier of nautilus commodities to the United States) and present uncertainty regarding the enforcement of existing regulatory measures and subsequent adequacy in reducing the threat of overutilization to the species in the foreseeable future, we find that our conclusions regarding threats to the species and its extinction risk remains the same.

    Comment 4: The Government of India (the Government) provided information on India's existing regulations related to the protection of the chambered nautilus. Specifically, the Government commented that the chambered nautilus is listed on Schedule I of India's Wild Life (Protection) Act, 1972, which provides the species with the highest degree of protection from hunting and trade. Commercial trade of N. pompilius in India is not permitted. Additionally, the Government states that there are no reports of captures of chambered nautiluses in Indian fishery landing centers. However, the Government notes that illegal trade in the species cannot be ruled out.

    The Government of India also commented that India, along with Fiji and the United States, proposed the listing of Nautilidae on Appendix II of CITES during the 17th meeting of the Conference of the Parties to CITES. Considering this, the Government states that India has no objections to the listing of the species as threatened under the ESA.

    Response: We thank the Government of India for its comment and support of the listing of chambered nautilus under the ESA. In the status review report, we recognized the listing of N. pompilius under Schedule I of the Indian Wild Life (Protection) Act of 1972; however, we found information indicating that N. pompilius shells were still being collected in Indian waters and sold in major coastal tourist curio markets as recently as 2007 (John et al. 2012). In fact, interviews with retail vendors suggested that a large majority were aware of the Indian Wild Life Protection Act and legal ramifications of selling protected species yet continued to sell large quantities of protected marine mollusks and corals in the curio shops (John et al. 2012). Additionally, based on the shell size of the chambered nautiluses in the curio shops, we found it likely that the inventory is comprised entirely of shells from immature individuals. While India may prohibit the harvest and trade of chambered nautilus, the best available information suggests that the species is still being exploited, with the high demand for nautilus shells and profits from the illegal curio trade resulting in the overutilization of N. pompilius that will continue to threaten populations within Indian waters. With no new information to consider regarding the effectiveness of enforcement of India's existing regulatory mechanisms, we find that our conclusions regarding threats to the species and its extinction risk remains the same.

    Comments on Proposed Listing Determination

    Comment 5: We received a number of comments that supported the proposed listing of the chambered nautilus as a threatened species under the ESA. A large majority of the comments were general statements of support for listing and were not accompanied by substantive information or references. Some of the comments were accompanied by information that is consistent with, or cited directly from, our proposed rule or status review report.

    Response: Given that no new substantive information was provided in these comments that was not already considered in the proposed rule or status review report, our conclusion regarding the status of the chambered nautilus remains the same. We acknowledge these comments and the considerable public interest expressed in support of the conservation of the chambered nautilus.

    Comment 6: Several commenters requested that we list the chambered nautilus as an endangered species under the ESA. One commenter stated that listing as endangered is warranted for a host of reasons including: how little is known about the biology and ecology of the chambered nautilus; lack of information on population abundance and trends in vast portions of the species' range; the species' reproductive characteristics (i.e., long-lived, late maturing, slow growing); its patchy distribution, geographic isolation, specialized habitat needs, and genetic distinction between populations; the massive level of international trade in the species (including in to the United States); and the lack of effective regulations protecting the species where it exists. The commenter suggested that the “precautionary principle” would indicate that the species should be listed as an endangered species.

    Response: The commenters did not provide any new information regarding threats to the species or its current status that was not already considered in the status review report or proposed rule. One commenter cited the proposed rule and status review report to support their argument of listing the chambered nautilus as, “preferably,” an endangered species. With no new information to consider, our conclusion regarding the status of the chambered nautilus remains the same.

    Regarding the request to use a precautionary approach when making a listing decision, it would be inappropriate apply a presumption in favor of a particular listing status under the Act. Under the framework of the ESA, the threshold determination of whether or not to list a species is required to be a scientific conclusion based solely on the best available scientific and commercial information. In carrying out other provisions under the ESA that come into play after the time of listing, such as conducting consultations under section 7, it may be appropriate to apply a “precautionary approach” or give the benefit of the doubt to the species. But such considerations do not apply at the step of making a listing determination under Section 4. Trout Unlimited v. Lohn, 645 F. Supp. 2d 929, 947-48 (D. Or. 2007). We simply may not list a species as endangered unless the best available scientific and commercial information supports concluding that it meets the statutory definition of an “endangered species” at the time of listing.

    Comments on Establishing Protective Regulations Under Section 4(d) of the ESA

    Comment 7: Two commenters urged us to promulgate a section 4(d) rule to establish import prohibitions of the species into the United States and other trade regulations, as well as to require permits in order to address the threat of unsustainable overharvesting of the species that supports the international shell trade. As support for their request, one commenter stated that the CITES protection for the species will not be enough to prevent it from becoming endangered in the foreseeable future because illegal trade is likely to happen. Additionally, the commenter noted that without ESA protections, unregulated interstate sale (including from American Samoa) would continue. Thus, even with the CITES Appendix II listing, the commenter stated that regulatory mechanisms remain inadequate to ensure the species' survival in the foreseeable future. The commenters noted that a 4(d) rule restricting trade, including import prohibitions, would allow the U.S. authority to review CITES non-detriment findings and make their own determinations as well as ensure adequate trade restrictions where domestic efforts to protect the species in foreign countries have failed.

    Response: Under the ESA, if a species of fish or wildlife is listed as endangered, a number of protections set out in section 9(a)(1) of the Act (16 U.S.C. 1538(a)(1)) automatically apply. Among other prohibitions, any “take” of, import into or export from the United States, and interstate or foreign commerce in the species, is illegal, subject to certain exceptions. In the case of a species listed as threatened, the protections of section 9 do not automatically apply. However, section 4(d) of the ESA gives the Secretary the authority to issue such regulations as he or she deems necessary and advisable to provide for the conservation of the species. The Secretary may also prohibit with respect to a threatened species any or all of the acts prohibited under section 9(a)(1) of the ESA. 16 U.S.C. 1533(d).

    While the commenter stated that CITES protection for the species would not be sufficient to prevent the chambered nautilus from becoming endangered in the foreseeable future, the commenter pointed to no information regarding current implementation efforts and enforcement of CITES requirements, or overall effectiveness of the CITES Appendix II listing in ensuring the sustainable trade of the chambered nautilus to support their assertion. If sustainable trade in this species is achieved as a result of the CITES Appendix II listing, the need for additional protective measures would be unnecessary; however, at this time, we are still evaluating the effectiveness of the CITES Appendix II listing of the chambered nautilus. Also, in response to the commenter's concerns regarding interstate commerce, as mentioned in the proposed rule and status review report, we found no evidence of local utilization or commercial harvest of chambered nautiluses in American Samoa. Therefore, any sale of non-imported chambered nautilus shells in interstate commerce would likely involve collected drift shells from American Samoa (i.e., the only portion of the species' range in U.S. waters). As such, we do not agree with the commenter that this interstate commerce places the species at risk of extinction at this time.

    Summary of Changes From the Proposed Listing Rule

    We did not receive, nor did we find, data or references that presented substantial new information that would cause us to change our proposed listing determination. We did, however, make several revisions to the final status review report (Miller 2018) to incorporate, as appropriate, relevant information received in response to our request for public comments.

    Specifically, we updated the status review to include new information regarding the sale of nautilus shells in the Philippines (K. Schroeder, pers. comm. 2017), the taxonomy of the species (Combosch et al. 2017), and estimates of effective population sizes for nautilus populations (Combosch et al. 2017). As noted above, with more detailed discussion in the previous comment responses, consideration of this new information did not alter any conclusions (and in some cases further supported our conclusions) regarding the threat assessment or extinction risk analysis for the chambered nautilus. Thus, the conclusion contained in the status review report and determination based on that conclusion in the proposed rule are reaffirmed in this final action.

    Species Determination

    As noted previously, nautilus taxonomy is controversial and still not fully resolved. However, the current scientific consensus is that N. pompilius is a recognized taxonomically-distinct species and, therefore, meets the definition of “species” pursuant to section 3 of the ESA, making it eligible for listing under the ESA.

    Summary of Demographic Risk Analysis

    As stated previously and as discussed in the proposed rule (82 FR 48948, October 23, 2017), we conducted a demographic risk analysis for the chambered nautilus. This analysis evaluated the population viability characteristics and trends data available for the species to determine the potential risks these demographic factors pose to the species. Based on the available data, we found that the species exists as small and isolated populations throughout its range, with low rates of dispersal and little gene flow among populations, particularly those that are separated by large geographic distances and deep ocean expanses. Genetic variability within the species has likely been reduced due to bottleneck events and genetic drift in the small and isolated N. pompilius populations throughout its range. Additionally, the data indicate that the chambered nautilus is a slow-growing and late-maturing species (with maturity estimated between 10 and 17 years, and longevity at least 20 years) with likely very low productivity and, thus, is extremely susceptible to decreases in its abundance. In fact, the data suggest that many chambered nautilus populations are in decline and may be extirpated in the next several decades.

    The comments that we received on the proposed rule provided information that was either already considered in our analysis, was not substantial or relevant, or was consistent with or reinforced information in the status review report and proposed rule. Therefore, our consideration of the information received has not altered our analysis of the demographic risks to the species.

    Summary of ESA Section 4(a)(1) Factors Affecting the Chambered Nautilus

    As stated previously and as discussed in the proposed rule (82 FR 48948, October 23, 2017), we considered whether any one or a combination of the five threat factors specified in section 4(a)(1) of the ESA are contributing to the extinction risk of the chambered nautilus and result in the species meeting the definition of “endangered species” or “threatened species.” The primary threat to the chambered nautilus is overutilization through commercial harvest to meet the demand for the international nautilus shell trade. Out of the 10 nations where N. pompilius is known to occur, potentially half have targeted nautilus fisheries either historically or currently. These waters comprise roughly three-quarters of the species' known range. Current estimated levels of harvest to meet the international demand are projected to lead to extirpations of local N. pompilius populations as has been observed in the past. Additionally, efforts to address overutilization of the species through regulatory measures appear inadequate, with evidence of targeted fishing of and trade in the species, particularly in Indonesia, Philippines, and China, despite prohibitions.

    The comments that we received on the proposed rule provided information that was either already considered in our analysis, was not substantial or relevant, or was consistent with or reinforced information in the status review report and proposed rule. Therefore, our consideration of the information received has not led us to change our conclusions regarding any of the section 4(a)(1) factors or their interactions. All of the information, discussion, and conclusions regarding the factors affecting the chambered nautilus contained in the final status review report (Miller 2018) and the proposed rule is reaffirmed in this final action.

    Extinction Risk

    As discussed previously, the status review report evaluated the demographic risks to the chambered nautilus according to four categories—abundance and trends, population growth/productivity, spatial structure/connectivity, and genetic diversity. As a concluding step, after considering all of the available information regarding demographic and other threats to the species, we rated the species' extinction risk according to a qualitative scale (high, moderate, and low risk). We found that N. pompilius is at a moderate risk of extinction throughout its range. We explained in the proposed rule that a species is at a “moderate risk” of extinction when it is on a trajectory that puts it at a high level of extinction risk in the foreseeable future. A species may be at moderate risk of extinction because of projected threats or declining trends in abundance, productivity, spatial structure, or diversity. While the chambered nautilus is still traded in considerable amounts (upwards of thousands to hundreds of thousands annually), with evidence of new sites being established for nautilus fishing (e.g., in Indonesia, Philippines, Papua New Guinea), and areas of stable, unfished populations (e.g., eastern Australia, American Samoa), we concluded that without adequate measures controlling the overutilization of the species, N. pompilius is on a trajectory where its overall abundance will likely see significant declines within the foreseeable future eventually reaching the point where the species' continued persistence will be in jeopardy. We, therefore, determined that the species is not presently in danger of extinction throughout its range but is likely to become so within the foreseeable future (i.e., the species is a threatened species). Because we find that the chambered nautilus is likely to become an endangered species within the foreseeable future throughout its range, we do not go on to consider whether the species might be threatened or endangered in a significant portion of its range, for the reasons explained in the Listing Species Under the Endangered Species Act section above and more fully in the proposed rule.

    The information received from public comments on the proposed rule was either already considered in our analysis, was not substantial or relevant, or was consistent with or reinforced information in the status review report and proposed rule. Therefore, our consideration of the information received has not altered our view of the extinction risk of the chambered nautilus. Our conclusion regarding the extinction risk for the chambered nautilus remains the same. Therefore, all of the information, discussion, and conclusions on the extinction risk of the chambered nautilus contained in the final status review report and the proposed rule is reaffirmed in this final action.

    Protective Efforts

    In addition to regulatory mechanisms (considered under ESA section 4(a)(1)(D)), we considered other efforts being made to protect the chambered nautilus (pursuant to ESA section 4(b)(1)(A)). The efforts we evaluated included a non-profit campaign devoted to raising the awareness of threats to the chambered nautilus and the potential for aquaculture or artificial propagation programs to satisfy the trade industry demand for shells and restore wild populations. We considered whether such protective efforts sufficiently ameliorated the identified threats to the point that they would alter the conclusions of the extinction risk analysis for the species so as to possibly avoid the need to list. None of the information we received on the proposed rule affected our conclusions regarding conservation efforts to protect the chambered nautilus. Thus, all of the information, discussion, and conclusions on the protective efforts for the chambered nautilus contained in the final status review report and proposed rule are reaffirmed in this final action.

    Final Determination

    We have reviewed the best available scientific and commercial information, including the petition, the information in the final status review report (Miller 2018), the comments of peer reviewers, and public comments. None of the information received since publication of the proposed rule (82 FR 48948, October 23, 2017) altered our analyses or conclusions that led to our determination for the chambered nautilus. Therefore, the determination in the proposed rule is reaffirmed in this final rule and stated below.

    Based on the best available scientific and commercial information, and after considering efforts being made to protect N. pompilius, we conclude that the chambered nautilus is not currently in danger of extinction throughout its range but is likely to become so in the foreseeable future throughout all of its range from threats of overutilization and the inadequacy of existing regulatory mechanisms. Therefore, we have determined that the chambered nautilus meets the definition of a “threatened species” and list it is as such throughout its range under the ESA.

    Effects of Listing

    Conservation measures provided for species listed as endangered or threatened under the ESA include designation of critical habitat, to the maximum extent prudent and determinable (16 U.S.C. 1533(a)(3)(A)); development of recovery plans (16 U.S.C. 1533(f)); Federal agency consultations with NMFS under section 7 of the ESA to ensure their actions are not likely to jeopardize the species or result in adverse modification or destruction of critical habitat, should it be designated (16 U.S.C. 1536); and, for endangered species, prohibitions on taking and certain other activities (16 U.S.C. 1538). Prohibitions on taking, or other protections, may also be extended through regulation to threatened species. (16 U.S.C. 1533(d)). In addition, recognition of the species' imperiled status through listing can indirectly inform voluntary conservation actions by Federal and State agencies, foreign entities, private groups, and individuals.

    Protective Measures and Prohibitions

    Section 7(a)(2) (16 U.S.C. 1536(a)(2)) of the ESA and NMFS/USFWS regulations (50 CFR part 402) require Federal agencies to consult with us to ensure that activities they authorize, fund, or carry out are not likely to jeopardize the continued existence of listed species or destroy or adversely modify critical habitat. Our section 7 regulations require the responsible Federal agency to initiate formal consultation if a Federal action may affect a listed species or its critical habitat (50 CFR 402.14(a)). Examples of Federal actions that may affect the chambered nautilus include: Fishery harvest and management practices, energy projects, discharge of pollution from point sources, non-point source pollution, dredging, mining, pile-driving, military activities, toxic waste and other pollutant disposal, and shoreline development. This list is not exhaustive, and the extent to which consultation is required will depend on the particular facts of any particular proposed Federal action.

    In the case of threatened species, ESA section 4(d) gives the Secretary discretion to issue such regulations as he or she deems necessary and advisable for the conservation of the species. 16 U.S.C. 1533(d). The Secretary may also decide to extend some or all the prohibitions of section 9(a)(1) of the ESA (16 U.S.C. 1538(a)(1)) to the species.

    As mentioned in the status review report and proposed rule, all nautilus species were included on Appendix II of CITES in October 2016, with the listing going into effect in January 2017. Export of nautilus products, such as shells, requires CITES permits that ensure the products were legally acquired and that the Scientific Authority of the State of export has advised that such export will not be detrimental to the survival of that species (after taking into account factors such as its population status and trends, distribution, harvest, and other biological and ecological elements). In the proposed rule, this CITES protection was determined not to have ameliorated the threats to the threatened chambered nautilus because the CITES listing had only recently gone into effect and, therefore, we lacked information that would allow us to fully evaluate its adequacy in decreasing the threat of overutilization. We are still in the process of collecting information in order to evaluate the effectiveness of this CITES Appendix II listing of the chambered nautilus as a tool to ensure the sustainable trade in this species. If we determine that additional measures may be necessary to safeguard the species against future depletion of populations or potential extinction of the chambered nautilus, then we may issue protective regulations under section 4(d) or extend some or all of the prohibitions of section 9(a)(1) of the ESA that automatically apply with respect to endangered species. However, at this time, we are not proposing to apply such prohibitions to the chambered nautilus. We may consider potential protective regulations pursuant to section 4(d) for chambered nautilus in a future rulemaking.

    Critical Habitat

    Critical habitat is defined in section 3 of the ESA (16 U.S.C. 1532(5)) as: (1) The specific areas within the geographical area occupied by a species, at the time it is listed, on which are found those physical or biological features (a) essential to the conservation of the species and (b) that may require special management considerations or protection; and (2) specific areas outside the geographical area occupied by a species at the time it is listed upon a determination that such areas are essential for the conservation of the species. “Conservation” means the use of all methods and procedures needed to bring the species to the point at which listing under the ESA is no longer necessary (i.e., the point at which it is “recovered”). 16 U.S.C. 1532(3). Section 4(a)(3)(A) of the ESA (16 U.S.C. 1533(a)(3)(A)) requires that, to the maximum extent prudent and determinable, critical habitat be designated concurrently with the listing of a species. Designations of critical habitat must be based on the best scientific data available and must take into consideration the economic, national security, and other relevant impacts of specifying any particular area as critical habitat.

    At this time, we find that critical habitat for the chambered nautilus is not determinable because data sufficient to perform the required analyses are lacking. As stated in the status review report and proposed rule, while it is known that chambered nautiluses are extreme habitat specialists, found in association with steep-sloped forereefs with sandy, silty, or muddy-bottomed substrates, and in depths from around 100 meters to 500 meters, the presence of these features does not necessarily indicate the likelihood of chambered nautilus occurrence. Chambered nautiluses have a patchy distribution and, given the difficulty associated with accessing their habitat and observing the species for research purposes, very little is known regarding important aspects of the species' life history, such as reproduction and growth in the wild. As such, we find that sufficient information is not currently available to: (1) Identify the physical and biological features essential to conservation of the species at an appropriate level of specificity, particularly given the uncertainty regarding habitat features necessary to support important life history needs and the irregularity and unpredictability of chambered nautiluses within areas they are known to occur, (2) determine the specific geographical areas that contain the physical and biological features essential to conservation of the species, and (3) assess the impacts of the designation. Therefore, public input on features and areas under U.S. jurisdiction that may meet the definition of critical habitat for the chambered nautilus is invited. Additional details about specific types of information sought are provided in the Information Solicited section later in this document. Input may be sent to the Office of Protected Resources in Silver Spring, Maryland (see ADDRESSES). Please note that we are not required to respond to any input provided on this matter.

    Information Solicited

    Because critical habitat is not currently determinable for the chambered nautilus, we are not proposing to designate critical habitat in this rulemaking. We request interested persons to submit relevant information regarding the identification of critical habitat of the chambered nautilus, including specific areas within the geographical area occupied by the species that include the physical or biological features essential to the conservation of the species and that may require special management considerations or protection. Areas outside the occupied geographical area should also be identified if such areas themselves are essential for the conservation of the species. ESA implementing regulations at 50 CFR 424.12(g) specify that critical habitat shall not be designated within foreign countries or in other areas outside of U.S. jurisdiction. Therefore, we request information only on potential areas of critical habitat within U.S. jurisdiction.

    Section 4(b)(2) of the ESA requires the Secretary to consider the economic impact, impact on national security, and any other relevant impact of designating a particular area as critical habitat. Section 4(b)(2) also gives the Secretary discretion to consider excluding from a critical habitat designation any particular area where the Secretary finds that the benefits of exclusion outweigh the benefits of including the area in the designation, unless excluding that area will result in extinction of the species.

    To inform our consideration of potential critical habitat, we also request information describing the following with respect to the relevant features or areas: (1) Activities that may affect the essential features or threats to the essential features, or to an area of potential critical habitat itself; (2) activities that could be affected by designating specific areas as critical habitat; and (3) the positive and negative economic, national security and other relevant impacts, including benefits to the recovery of the species, likely to result if specific areas are designated as critical habitat. We seek information regarding the conservation benefits of designating areas under U.S. jurisdiction as critical habitat. In keeping with the guidance provided by the Office of Management and Budget (2000; 2003), we seek information that would allow the monetization of these effects to the extent possible, as well as information on qualitative impacts.

    Information submitted may include, but need not be limited to: (1) Scientific or commercial publications; (2) administrative reports, maps or other graphic materials; and (3) information received from experts. Information and data are particularly sought concerning: (1) Maps and specific information describing the amount, distribution, and use type (e.g., foraging, reproduction) of chambered nautilus habitats, as well as any additional information on occupied and unoccupied habitat areas; (2) the reasons why any habitat should or should not be included in a designation of critical habitat under sections 3(5)(A) and 4(b)(2) of the ESA; (3) information regarding the benefits of designating particular areas as critical habitat or of excluding particular areas; (4) current or planned activities in the areas that might be proposed for designation and their possible impacts; (5) any foreseeable economic or other potential impacts resulting from designation, and in particular, any impacts on small entities; (6) whether specific unoccupied areas may be essential to provide additional habitat areas for the conservation of the species; and (7) potential peer reviewers for a proposed critical habitat designation, including persons with biological and economic expertise relevant to the species, region, and designation of critical habitat. We solicit information from the public, other concerned governmental agencies, the scientific community, industry, or any other interested party (see ADDRESSES).

    References

    A list of all references cited in this final rule is available at www.regulations.gov (identified by docket number NOAA-NMFS-2016-0098) or available upon request (see ADDRESSES). The peer review report is available at: http://www.cio.noaa.gov/services_programs/prplans/PRsummaries.html. Additional information can be found on our website at https://www.fisheries.noaa.gov/species/chambered-nautilus.

    Classification National Environmental Policy Act

    The 1982 amendments to the ESA, in section 4(b)(1)(A), restrict the information that may be considered when assessing species for listing. Based on this limitation of criteria for a listing decision and the opinion in Pacific Legal Foundation v. Andrus, 657 F. 2d 829 (6th Cir. 1981), NMFS has concluded that ESA listing actions are not subject to the environmental assessment requirements of the National Environmental Policy Act (NEPA). (See NOAA Administrative Order 216-6A (2016) and Companion Manual “Policy and Procedures for Compliance with the National Environmental Policy Act and Related Authorities” at 2 (2017).

    Executive Order 12866, Regulatory Flexibility Act, and Paperwork Reduction Act

    As noted in the Conference Report on the 1982 amendments to the ESA, economic impacts cannot be considered when assessing the status of a species. Therefore, the economic analysis requirements of the Regulatory Flexibility Act are not applicable to the listing process. In addition, this final rule is exempt from review under Executive Order 12866. This final rule does not contain a collection-of-information requirement for the purposes of the Paperwork Reduction Act.

    Executive Order 13771, Reducing Regulation and Controlling Regulatory Costs

    This rule is not an E.O. 13771 regulatory action because this rule is exempt from review under E.O. 12866.

    Executive Order 13132, Federalism

    E.O. 13132 requires agencies to take into account any federalism impacts of regulations under development. It includes specific directives for consultation in situations where a regulation will preempt state law or impose substantial direct ccompliance costs on state and local governments (unless required by statute). Neither of those circumstances is applicable to this final rule; therefore this action does not have federalism implications as that term is defined in E.O. 13132. In accordance with E.O. 13132, we determined that this final rule does not have significant federalism effects and that a federalism assessment is not required.

    List of Subjects in 50 CFR Part 223

    Endangered and threatened species.

    Dated: September 24, 2018. Samuel D. Rauch, III, Deputy Assistant Administrator for Regulatory Programs, National Marine Fisheries Service.

    For the reasons set out in the preamble, 50 CFR part 223 is amended as follows:

    PART 223—THREATENED MARINE AND ANADROMOUS SPECIES 1. The authority citation for part 223 continues to read as follows: Authority:

    16 U.S.C. 1531-1543; subpart B, § 223.201-202 also issued under 16 U.S.C. 1361 et seq.; 16 U.S.C. 5503(d) for § 223.206(d)(9).

    2. In § 223.102, amend the table in paragraph (e) by adding a subheading for “Molluscs” after the entry for “Sturgeon, green” under the “Fishes” subheading, and by adding an entry for “Nautilus, chambered” underneath the “Molluscs” table subheading to read as follows:
    § 223.102 Enumeration of threatened marine and anadromous species.

    (e) * * *

    Species 1 Common name Scientific name Description of listed entity Citation(s) for listing
  • determination(s)
  • Critical habitat ESA rules
    *         *         *         *         *         *         * Molluscs Nautilus, chambered Nautilus pompilius Entire species [Insert Federal Register page where the document begins], September 28, 2018 NA NA *         *         *         *         *         *         * 1 Species includes taxonomic species, subspecies, distinct population segments (DPSs) (for a policy statement, see 61 FR 4722, February 7, 1996), and evolutionarily significant units (ESUs) (for a policy statement, see 56 FR 58612, November 20, 1991).
    [FR Doc. 2018-21114 Filed 9-27-18; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 648 [Docket No. 180130101-8824-02] RIN 0648-BH57 Fisheries of the Northeastern United States; Northeast Skate Complex; Framework Adjustment 5 and 2018-2019 Specifications AGENCY:

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

    ACTION:

    Final rule.

    SUMMARY:

    NMFS approves regulations to implement Northeast Skate Complex Fishery Management Plan Framework Adjustment 5 management measures and 2018-2019 specifications for the skate fishery. The action is necessary to establish skate specifications to be consistent with the most recent scientific information and improve management of the skate fisheries. This action is intended to establish appropriate catch limits for the skate fishery and to provide additional operational flexibility to fishery participants.

    DATES:

    Effective on September 28, 2018.

    ADDRESSES:

    New England Fishery Management Council staff prepared an environmental assessment (EA) for Northeast Skate Complex Framework Adjustment 5 and 2018-2019 Specifications that describes the proposed action and other considered alternatives. The EA provides an analysis of the biological, economic, and social impacts of the proposed measures and other considered alternatives, a Regulatory Impact Review, and economic analysis. Copies of the Framework 5 and 2018-2019 Specifications EA are available on request from Thomas A. Nies, Executive Director, New England Fishery Management Council, 50 Water Street, Newburyport, MA 01950. This document is also available from the following internet addresses: http://www.nefmc.org and www.regulations.gov/#!docketDetail;D=NOAA-NMFS-2018-0054.

    FOR FURTHER INFORMATION CONTACT:

    Debra Lambert, Fishery Policy Analyst, (301) 427-8560.

    SUPPLEMENTARY INFORMATION:

    Background

    The Northeast Skate Complex Fishery Management Plan (FMP), developed by the New England Fishery Management Council and implemented in 2003, manages a complex of seven skate species (barndoor, clearnose, little, rosette, smooth, thorny, and winter skate) off the New England and mid-Atlantic coasts. Skates are harvested and managed in two different fisheries: One for food (the wing fishery) and one for lobster and crab bait (the bait fishery). Additional information on the skate fisheries can be found online at https://www.greateratlantic.fisheries.noaa.gov/sustainable/species/skate/index.html.

    On July 5, 2018, we proposed management modifications to implement Framework Adjustment 5 to the Northeast Skate Complex FMP and specifications for fishing years 2018-2019 (83 FR 31354). After reviewing public comments in response to the proposed rule, we are approving Framework 5 and 2018-2019 specifications as detailed in our proposed rule.

    Specifications for Fishing Years 2018-2019

    Specifications including the acceptable biological catch (ABC), annual catch limit (ACL), annual catch target (ACT), total allowable landings (TAL) for the skate wing and bait fisheries, and possession limits may be specified for up to 2 years. We are approving the Council's recommended specifications for 2018-2019. As recommended, the 2018-2019 skate complex ABC and ACL is 31,327 mt. The ACT is set at 23,495 mt (75 percent of the ACL) to account for management uncertainty. After deducting projected dead discards and state landings, the overall TAL is 13,157 mt. Tables 1 and 2 (below) detail TALs and possession limits for the skate wing and skate bait fisheries. The skate wing and whole skate possession limits are status quo and the possession limits for barndoor skate are described further below.

    Table 1—Total Allowable Landings for Fishing Years 2018-2019 Total allowable landings (TAL) mt Skate Wing Fishery: Season 1 (May 1-August 31) 4,987 Season 2 (September 1-April 30) 3,762 Skate Bait Fishery: Season 1 (May 1-July 31) 1,358 Season 2 (August 1-October 31) 1,635 Season 3 (November 1-April 30) 1,415 Table 2—Possession Limits per Trip for Fishing Years 2018-2019 Skate possession limits * Trip limits Skate wings Whole skates Barndoor ** skate wings Whole barndoor ** skates NE Multispecies, Scallop, or Monkfish Day-At-Sea (DAS): Season 1 (May 1-August 31) 2,600 lb, 1,179 kg 5,902 lb, 2,677 kg 650 lb, 295 kg 1,476 lb, 670 kg. Season 2 (September 1-April 30) 4,100 lb, 1,860 kg 9,307 lb, 4,222 kg 1,025 lb, 465 kg 2,327 lb, 1,056 kg. NE Multispecies B DAS: May 1-April 30 220 lb, 100 kg 500 lb, 227 kg 0 0. Non-DAS: May 1-April 30 500 lb, 227 kg 1,135 lb, 515 kg 0 0. Whole skate with bait Letter of Authorization: May 1-October 31 0 25,000 lb, 11,340 kg 0 0. November 1-April 30 0 12,000 lb, 5,443 kg 0 0. * Possession limits may be modified in-season in order to prevent catch from exceeding quotas. ** Barndoor skate trip limits are within the overall skate possession limit for each trip, not in addition to it. Measures To Allow Possession of Barndoor Skates

    Possession and landing of barndoor skate has been prohibited since 2003, when the Northeast Skate Complex FMP was first implemented, as part of efforts to rebuild the stock. NMFS declared the stock rebuilt in 2016, and Framework 5 allows for limited retention of barndoor skate in the directed wing fishery. This action specifies a proportional possession limit per trip that corresponds to the barndoor skate contribution (25 percent) to the overall skate catch based on observer data. Specifically, vessels fishing under a Northeast multispecies, scallop, or monkfish DAS, may possess and land up to 650 lb (295 kg) of wings per trip in Season 1 and 1,025 lb (465 kg) of wings per trip in Season 2. The possession limits for barndoor skate wings are included within the overall wing possession limit per trip (i.e., total pounds of skate wings on board, including barndoor skate wings, are not allowed to exceed 2,600 lb (1,179 kg) in Season 1 and 4,100 lb (1,860 kg) in Season 2). NMFS notes that the full barndoor wing possession limit may be retained, even if the full wing possession limit for a trip is not caught. For example, a vessel may possess 650 lb (295 kg) of barndoor skate wings in Season 1, even if the vessel does not reach the full 2,600 lb (1,179 kg) wing possession limit for that trip.

    The regulations for the skate wing fishery include in-season adjustments to possession limits once certain trigger points are met (see 50 CFR 600.322(b)(3)). This action specifies that when an in-season adjustment of the skate wing possession limit for the directed wing fishery is needed and the wing possession limit is reduced to 500 lb (227 kg) per trip, the possession limit for barndoor skate wings will be reduced to 125 lb (57 kg) per trip.

    This action prohibits the discarding of any skate wings when a vessel is in possession of barndoor skate. This measure is intended to prevent high-grading and thereby minimize bycatch. Further, this action requires that barndoor skate wings and carcasses on board a vessel must be separated from other species of fish (including other skates) and stored so as to be readily available for inspection. This provision was not part of the Council's recommended measures under Framework 5, but we determined it is necessary to aid in the enforcement of barndoor possession trip limits by segregating barndoor skates to facilitate identification and compliance with the trip limit. We are establishing the measure under the authority of section 305(d) of the Magnuson-Stevens Act.

    As described in the proposed rule, Framework 5 did not propose, discuss, or analyze options for allowing barndoor possession for vessels operating under other possession limits for skates, including: Vessels fishing for bait skate under a bait letter of authorization (§ 648.322(c)); vessels fishing under a Northeast multispecies Category B DAS (§ 648.322(b)); vessels fishing under the incidental skate possession limit for vessels not under a DAS (§ 648.322(b)); or when fishing in a Northeast multispecies DAS exemption program area that allows possession and landing of skate or skate parts in an amount not to exceed 10 percent by weight of all other species on board (as specified in § 648.80(b)(3)(ii)) without a Northeast multispecies or monkfish DAS. Therefore, this action does not allow vessels operating under the above mentioned scenarios to possess barndoor skates.

    Northwest Atlantic Fisheries Organization (NAFO) Regulatory Area Exemption Program

    Framework 5 exempts vessels from domestic skate regulations when fishing exclusively within the NAFO Regulatory Area, except for the prohibition on possessing, retaining, or landing prohibited species. U.S. vessels fishing in the NAFO Regulatory Area are currently exempt from domestic Northeast multispecies and monkfish permit, mesh size, effort-control, and possession limit restrictions (see § 648.17). U.S. vessels in the NAFO area are largely targeting yellowtail flounder and Atlantic halibut, and exempting these vessels from domestic skate regulations would provide them additional flexibility to retain and land skates in the United States. NAFO specifies an annual quota and possession limits for skates, and the quota is not allocated to particular countries; access to skates is on a first come, first served basis.

    This action specifies that vessels fishing under a High Seas Permit exclusively within the NAFO Regulatory Area are exempt from domestic skate regulations (e.g., skate permit and possession limit restrictions), except for the prohibition on possessing, retaining, or landing prohibited species. U.S. vessels fishing in the NAFO Regulatory Area would be allowed to possess barndoor skate consistent with the NAFO-established incidental possession limits given the aforementioned domestic regulatory changes regarding barndoor skates, but would not be exempt from the prohibition on possessing, retaining, or landing other prohibited skate species (i.e., thorny skate and smooth skates) specified in §§ 648.14(v) and 648.322(g). Further, the skate catch from the NAFO Regulatory Area would not count against domestic skate TALs.

    Comments and Responses

    We received five public comments on the proposed rule, two of which were not responsive to the action.

    Comment 1: The following three commenters expressed support for the action: The Atlantic Offshore Lobstermen's Association; the Cape Cod Commercial Fishermen's Alliance; and Tremont Fisheries LLC. The Atlantic Offshore Lobstermen's Association expressed support for increasing TALs in 2018 and 2019, based on recent updated scientific information about skates. The Cape Cod Commercial Fishermen's Alliance supported the proportional barndoor skate possession limits for the skate wing fishery, measures to prevent high-grading of skate, and the TAL specifications for 2018 and 2019. Lastly, Tremont Fisheries LLC supported the proposed measures to exempt vessels from some domestic skate regulations when fishing exclusively within the NAFO Regulatory Area.

    Response: We are approving Framework 5, specifications for 2018 and 2019, and the accompanying measures because the specifications are consistent with the most recent scientific information, and the measures provide additional operational flexibility to fishery participants.

    Changes From the Proposed Rule

    NMFS has not made any changes to the regulatory text that was specified in the proposed rule.

    Classification

    The Administrator, Greater Atlantic Region, NMFS, determined that Framework 5 to the FMP and the 2018-2019 specifications is necessary for the conservation and management of the northeast skate complex and that it is consistent with the Magnuson-Stevens Fishery Conservation and Management Act and other applicable law.

    The Assistant Administrator for Fisheries, NOAA, finds that because this rule relieves restrictions and grants an exemption, it is excepted from the 30-day delay in effectiveness under 5 U.S.C. 533(d)(1). This rule relieves restrictions by increasing the ACL and allowing possession of barndoor skate (previously a prohibited species) in the directed skate wing fishery, and exempts vessels from some specific domestic skate regulations when fishing exclusively within the NAFO Regulatory Area. The 2018 fishing year began on May 1, 2018, and the skate fishery has been operating under the catch limits implemented as part of Framework Adjustment 3 to the FMP and the 2016-2017 specifications (81 FR 54744; August 17, 2016). Under this action, the ACL for the skate complex will increase from 31,081 mt in 2017 to 31,327 mt in 2018. Further, possession and landing of barndoor skate has been prohibited since 2003. This action will allow possession and landing of barndoor skate in the directed wing fishery and will set possession trip limits for the stock. The price of barndoor skate is expected to be higher than that of other skate species currently landed in the fishery; therefore, allowing barndoor possession is expected to provide positive economic impacts. Lastly, U.S. vessels that are permitted to fish in the NAFO Regulatory Area are currently required to comply with domestic skate regulations (e.g., permit requirements, possession limits) if they were to land skate in the U.S. This action would exempt U.S. vessels from domestic skate regulations when fishing exclusively in the NAFO area, except for the prohibition on possessing, retaining, or landing prohibited species. This additional flexibility for NAFO-participating vessels is also expected to provide additional operational flexibility and result in positive economic impacts.

    This final rule has been determined to be not significant for purposes of Executive Order 12866.

    The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration during the proposed rule stage that this action would not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here. No comments were received regarding this certification. As a result, a regulatory flexibility analysis was not required and none was prepared.

    List of Subjects in 50 CFR Part 648

    Fisheries, Fishing, Recordkeeping and reporting requirements.

    Dated: September 25, 2018. Samuel D. Rauch, III, Deputy Assistant Administrator for Regulatory Programs, National Marine Fisheries Service.

    For the reasons set out in the preamble, 50 CFR part 648 is amended as follows:

    PART 648—FISHERIES OF THE NORTHEASTERN UNITED STATES 1. The authority citation for part 648 continues to read as follows: Authority:

    16 U.S.C. 1801 et seq.

    2. In § 648.14, revise paragraphs (v)(2) and (4) to read as follows:
    § 648.14 Prohibitions.

    (v) * * *

    (2) All Federal permit holders. It is unlawful for any owner or operator of a vessel holding a valid Federal permit to do any of the following:

    (i) Retain, possess, or land thorny skates taken in or from the EEZ portion of the skate management unit specified at § 648.2.

    (ii) Retain, possess, or land barndoor skates taken in or from the EEZ portion of the skate management unit when fishing under a bait letter of authorization as described in § 648.322(c); when fishing under a NE multispecies Category B DAS as described under § 648.322(b); when fishing under the incidental skate possession limit for vessels not under a DAS as described in § 648.322(b)(4); or when fishing in a NE multispecies DAS exemption program that allows the possession of skate or skate parts in an amount not to exceed 10 percent by weight of all other species on board, as specified in § 648.80(b)(3)(ii), without a NE multispecies or monkfish DAS.

    (iii) Discard any skate wings when in possession of barndoor skate wings.

    (iv) Retain, possess, or land smooth skates taken in or from the GOM RMA described at § 648.80(a)(1)(i).

    (4) Presumption. For purposes of this part, the following presumption applies: All skates retained or possessed on a vessel are deemed to have been harvested in or from the Skate Management Unit, unless the preponderance of evidence demonstrates that such skates were harvested by a vessel, that has not been issued a Federal skate permit, fishing exclusively outside of the EEZ portion (such as fishing within the NAFO Regulatory Area under § 648.17(a)(3)) of the skate management unit or only in state waters.

    3. In § 648.17, add paragraph (a)(3) to read as follows:
    § 648.17 Exemptions for vessels fishing in the NAFO Regulatory Area.

    (a) * * *

    (3) Skates. A vessel issued a valid High Seas Fishing Compliance Permit under part 300 of this title and that complies with the requirements specified in paragraph (b) of this section is exempt from skate permit and possession limit restrictions, specified in §§ 648.4 and 648.322, respectively, and from Atlantic sea scallop, NE multispecies, or monkfish DAS effort control restrictions specified in §§ 648.53, 648.82, and 648.92, respectively, and from mesh size and gear restrictions specified in §§ 648.51, 648.80, and 648.91, respectively, while transiting the EEZ with skates on board the vessel, or landing skates in U.S. ports that were caught while fishing in the NAFO Regulatory Area. These vessels may possess, retain, and land barndoor skate; however, they may not possess, retain, or land other prohibited skate species specified in §§ 648.14(v) and 648.322(g).

    4. In § 648.80, revise paragraph (b)(3)(ii) to read as follows:
    § 648.80 NE Multispecies regulated mesh areas and restrictions on gear and methods of fishing.

    (b) * * *

    (3) * * *

    (ii) Possession and net stowage requirements. Vessels may possess regulated species while in possession of nets with mesh smaller than the minimum size specified in paragraphs (a)(4) and (b)(2) of this section when fishing in the SNE Exemption Area defined in paragraph (b)(10) of this section, provided that such nets are stowed and are not available for immediate use as defined in § 648.2, and provided that regulated species were not harvested by nets of mesh size smaller than the minimum mesh size specified in paragraphs (a)(4) and (b)(2) of this section. Vessels fishing for the exempted species identified in paragraph (b)(3)(i) of this section may also possess and retain the following species, with the restrictions noted, as incidental take to these exempted fisheries: Conger eels; sea robins; black sea bass; red hake; tautog (blackfish); blowfish; cunner; John Dory; mullet; bluefish; tilefish; longhorn sculpin; fourspot flounder; alewife; hickory shad; American shad; blueback herring; sea raven; Atlantic croaker; spot; swordfish; monkfish and monkfish parts—up to 10 percent, by weight, of all other species on board or up to 50 lb (23 kg) tail-weight/166 lb (75 kg) whole weight of monkfish per trip, as specified in § 648.94(c)(4), whichever is less; American lobster—up to 10 percent, by weight, of all other species on board or 200 lobsters, whichever is less; and skate and skate parts (except for barndoor skate and other prohibited skate species (see §§ 648.14(v)(2) and 648.322(g))—up to 10 percent, by weight, of all other species on board.

    5. In § 648.322, revise paragraphs (b) and (g) to read as follows:
    § 648.322 Skate allocation, possession, and landing provisions.

    (b) Skate wing possession and landing limits—(1) Vessels fishing under an Atlantic sea scallop, NE multispecies, or monkfish DAS. (i) A vessel or operator of a vessel that has been issued a valid Federal skate permit under this part, and fishes under an Atlantic sea scallop, NE multispecies, or monkfish DAS as specified at §§ 648.53, 648.82, and 648.92, respectively, unless otherwise exempted under § 648.80 or paragraph (c) of this section, may fish for, possess, and/or land up to the allowable trip limits specified as follows: Up to 2,600 lb (1,179 kg) of skate wings (5,902 lb (2,677 kg) whole weight) per trip in Season 1 (May 1 through August 31), and 4,100 lb (1,860 kg) of skate wings (9,307 lb (4,222 kg) whole weight) per trip in Season 2 (September 1 through April 30), or any prorated combination of the allowable landing forms defined at paragraph (b)(5) of this section.

    (ii) When fishing under the possession limits specified in paragraph (b)(1)(i) of this section, a vessel is allowed to possess and land up to 650 lb (295 kg) of barndoor skate wings (1,476 lb (670 kg) whole weight) per trip in Season 1, and 1,025 lb (465 kg) of barndoor skate wings (2,327 lb (1,056 kg) whole weight) per trip in Season 2. The possession limits for barndoor skate wings are included within the overall possession limit (i.e., total pounds of skate wings on board, including barndoor skate wings, are not allowed to exceed 2,600 lb in Season 1 and 4,100 lb in Season 2). Vessels are prohibited from discarding any skate wings when in possession of barndoor skate wings. Barndoor skate wings and carcasses on board a vessel subject to this possession limit must be separated from other species of fish and stored so as to be readily available for inspection.

    (2) NE multispecies Category B DAS. A vessel fishing on a declared NE multispecies Category B DAS described under § 648.85(b), is limited to no more than 220 lb (100 kg) of skate wings (500 lb (227 kg) whole weight) per trip, or any prorated combination of the allowable landing forms defined at paragraph (b)(5) of this section. These vessels may not possess or land barndoor skate, or any other prohibited skate species (see § 648.14(v)(2) and paragraph (g) of this section).

    (3) In-season adjustment of skate wing possession limits. The Regional Administrator has the authority, through a notice in the Federal Register consistent with the Administrative Procedure Act, to reduce the skate wing possession limit to 500 lb (227 kg) of skate wings (1,135 lb (515 kg) whole weight) or any prorated combination of the allowable landing forms defined at paragraph (b)(5) of this section) for the remainder of the applicable quota season. When the incidental possession limit is implemented, a vessel is allowed to possess and land up to 125 lb (57 kg) of barndoor skate wings (284 lb (129 kg) whole weight) per trip. The possession limits for barndoor skate wings are included within the overall possession limit (i.e., total pounds of skate wings on board, including barndoor skate wings, are not allowed to exceed 500 lb). Vessels are prohibited from discarding any skate wings when in possession of barndoor skate wings. Barndoor skate wings and carcasses on board a vessel subject to this possession limit must be separated from other species of fish and stored so as to be readily available for inspection. The in-season adjustment of skate wing possession limits will be implemented under the following circumstances:

    (i) When 85 percent of the Season 1 skate wing quota is projected to be landed between May 1 and August 17, the Regional Administrator shall reduce the skate wing possession limit to the incidental level described in paragraph (b)(3) of this section.

    (ii) When 85 percent of the Season 1 skate wing quota is projected to be landed between August 18 and August 31, the Regional Administrator may reduce the skate wing possession limit to the incidental level described in paragraph (b)(3) of this section.

    (iii) When 85 percent of the annual skate wing fishery TAL is projected to be landed in Season 2, the Regional Administrator may reduce the skate wing possession limit to the incidental level described in paragraph (b)(3) of this section, unless such a reduction would be expected to prevent attainment of the annual TAL.

    (4) Incidental possession limit for vessels not under a DAS. A vessel issued a Federal skate permit that is not fishing under an Atlantic sea scallop, NE multispecies, or monkfish DAS as specified at §§ 648.53, 648.82, and 648.92, respectively, or is a limited access multispecies vessel participating in an approved sector described under § 648.87 but not fishing on one of the DAS specified at § 648.53, § 648.82, or § 648.92, may retain up to 500 lb (227 kg) of skate wings or 1,135 lb (515 kg) of whole skate, or any prorated combination of the allowable landing forms defined at paragraph (b)(5) of this section. These vessels may not possess or land barndoor skate, or any other prohibited skate species (see § 648.14(v)(2) and paragraph (g) of this section).

    (5) Allowable forms of skate landings. Except for vessels fishing under a skate bait letter of authorization as specified at paragraph (c) of this section, a vessel may possess and/or land skates as wings only (wings removed from the body of the skate and the remaining carcass discarded), wings with associated carcasses possessed separately (wings removed from the body of the skate but the associated carcass retained on board the vessel), or in whole (intact) form, or any combination of the three, provided that the weight of the skate carcasses on board the vessel does not exceed 1.27 times the weight of skate wings on board. When any combination of skate wings, carcasses, and whole skates are possessed and/or landed, the applicable possession or landing limit shall be based on the whole weight limit, in which any wings are converted to whole weight using the wing to whole weight conversion factor of 2.27. For example, if the vessel possesses 100 lb (45.4 kg) of skate wings, the whole weight equivalent would be 227 lb (103.0 kg) of whole skates (100 lb (45.4 kg) × 2.27), and the vessel could possess up to 127 lb (57.6 kg) of skate carcasses (100 lb (45.4 kg) of skate wings × 1.27). A vessel may not possess and/or land skate carcasses and only whole skates.

    (g) Prohibitions on possession of skates. A vessel fishing in the EEZ portion of the Skate Management Unit may not:

    (1) Retain, possess, or land thorny skates taken in or from the EEZ portion of the Skate Management Unit.

    (2) Retain, possess, or land barndoor skates taken in or from the EEZ portion of the skate management unit when fishing under a bait letter of authorization as described in paragraph (c) of this section; when fishing under a NE multispecies Category B DAS as described under paragraph (b) of this section; when fishing under the incidental skate possession limit for vessels not under a DAS as described in paragraph (b)(4) of this section; or when fishing in a NE multispecies DAS exemption program that allows the possession of skate or skate parts in an amount not to exceed 10 percent by weight of all other species on board, as specified in § 648.80(b)(3)(ii), without a NE multispecies or monkfish DAS.

    (3) Discard any skate wings when in possession of barndoor skate wings.

    (4) Retain, possess, or land smooth skates taken in or from the GOM RMA described at § 648.80(a)(1)(i).

    [FR Doc. 2018-21192 Filed 9-27-18; 8:45 am] BILLING CODE 3510-22-P
    83 189 Friday, September 28, 2018 Proposed Rules DEPARTMENT OF THE TREASURY Office of the Comptroller of the Currency 12 CFR Part 3 [Docket ID OCC-2018-0026] RIN 1557-AE48 FEDERAL RESERVE SYSTEM 12 CFR Part 217 [Regulation Q; Docket No. R-1621] RIN 7100—AF15 FEDERAL DEPOSIT INSURANCE CORPORATION 12 CFR Part 324 RIN 3064—AE90 Regulatory Capital Treatment for High Volatility Commercial Real Estate (HVCRE) Exposures AGENCY:

    Office of the Comptroller of the Currency, Treasury; the Board of Governors of the Federal Reserve System; and the Federal Deposit Insurance Corporation.

    ACTION:

    Notice of proposed rulemaking.

    SUMMARY:

    The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively, the agencies) are proposing to amend the regulatory capital rule to revise the definition of “high volatility commercial real estate (HVCRE) exposure” to conform to the statutory definition of “high volatility commercial real estate acquisition, development, orconstruction (HVCRE ADC) loan,” in accordance with section 214 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). Additionally, to facilitate the consistent application of the revised HVCRE exposure definition, the agencies propose to interpret certain terms in the revised HVCRE exposure definition generally consistent with their usage in other relevant regulations or the instructions to the Consolidated Reports of Condition and Income (Call Report), where applicable, and request comment on whether any other terms in the revised definition would also require interpretation.

    DATES:

    Comments must be received by November 27, 2018.

    ADDRESSES:

    Comments should be directed to: OCC: Commenters are encouraged to submit comments through the Federal eRulemaking Portal or email, if possible. Please use the title “Regulatory Capital Treatment for High Volatility Commercial (HVCRE) Exposures to facilitate the organization and distribution of the comments. You may submit comments by any of the following methods:

    Federal eRulemaking Portal—“regulations.gov”: Go to www.regulations.gov. Enter “Docket ID OCC-2018-0026” in the Search Box and click “Search.” Click on “Comment Now” to submit public comments.

    • Click on the “Help” tab on the Regulations.gov home page to get information on using Regulations.gov, including instructions for submitting public comments.

    Email: [email protected]

    Mail: Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, 400 7th Street SW, Suite 3E-218, Washington, DC 20219.

    Hand Delivery/Courier: 400 7th Street SW, Suite 3E-218, Washington, DC 20219.

    Fax: (571) 465-4326.

    Instructions: You must include “OCC” as the agency name and “Docket ID OCC-2018-0026” in your comment. In general, the OCC will enter all comments received into the docket and publish them on the Regulations.gov website without change, including any business or personal information that you provide such as name and address information, email addresses, or phone numbers. Comments received, including attachments and other supporting materials, are part of the public record and subject to public disclosure. Do not include any information in your comment or supporting materials that you consider confidential or inappropriate for public disclosure.

    You may review comments and other related materials that pertain to this rulemaking action by any of the following methods:

    Viewing Comments Electronically: Go to www.regulations.gov. Enter “Docket ID OCC-2018-0026” in the Search box and click “Search.” Click on “Open Docket Folder” on the right side of the screen and then “Comments.” Comments can be filtered by clicking on “View All” and then using the filtering tools on the left side of the screen.

    • Click on the “Help” tab on the Regulations.gov home page to get information on using Regulations.gov. Supporting materials may be viewed by clicking on “Open Docket Folder” and then clicking on “Supporting Documents.” The docket may be viewed after the close of the comment period in the same manner as during the comment period.

    Viewing Comments Personally: You may personally inspect comments at the OCC, 400 7th Street SW, Washington, DC 20219. For security reasons, the OCC requires that visitors make an appointment to inspect comments. You may do so by calling (202) 649-6700 or, for persons who are hearing impaired, TTY, (202) 649-5597. Upon arrival, visitors will be required to present valid government-issued photo identification and submit to security screening in order to inspect comments.

    Board: You may submit comments, identified by Docket No. R-1621; RIN 7100-AF-15, by any of the following methods:

    Agency website: http://www.federalreserve.gov. Follow the instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.

    Email: [email protected] Include docket number and RIN 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 will be made available on the Board's website at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, unless modified for technical reasons or to remove personally identifiable information at the commenter's request. Accordingly, comments will not be edited to remove any identifying or contact information. Public comments may also be viewed electronically or in paper in Room 3515, 1801 K Street NW (between 18th and 19th Streets NW), between 9:00 a.m. and 5:00 p.m. on weekdays.

    FDIC: You may submit comments, identified by RIN 3064-AE90, by any of the following methods:

    Agency website: http://www.FDIC.gov/regulations/laws/federal/propose.html. Follow instructions for submitting comments on the Agency website.

    Mail: Robert E. Feldman, Executive Secretary, Attention: Comments/Legal ESS, Federal Deposit Insurance Corporation, 550 17th Street NW, Washington, DC 20429.

    Hand Delivered/Courier: Comments may be hand-delivered to the guard station at the rear of the 550 17th Street Building (located on F Street) on business days between 7:00 a.m. and 5:00 p.m.

    Email: [email protected] Include RIN 3064-AE90 on the subject line of the message.

    Public Inspection: All comments received must include the agency name and RIN 3064-AE90 for this rulemaking. All comments received will be posted without change to http://www.fdic.gov/regulations/laws/federal/, including any personal information provided. Paper copies of public comments may be ordered from the FDIC Public Information Center, 3501 North Fairfax Drive, Room E-1002, Arlington, VA 22226 by telephone at (877) 275-3342 or (703) 562-2200.

    FOR FURTHER INFORMATION CONTACT: 

    OCC: Mark Ginsberg, Senior Risk Expert (202) 649-6983; or Benjamin Pegg, Risk Expert (202) 649-7146, Capital and Regulatory Policy; or Carl Kaminski, Special Counsel, or Rima Kundnani, Attorney, Chief Counsel's Office, (202) 649-5490, for persons who are hearing impaired, TTY, (202) 649-5597, Office of the Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219.

    Board: Constance M. Horsley, Deputy Associate Director, (202) 452-5239; Elizabeth MacDonald, Manager, (202) 475-6216; Andrew Willis, Senior Supervisory Financial Analyst, (202) 912-4323; Matthew McQueeney, Supervisory Financial Analyst (202) 452-2942; Sean Healey, Supervisory Financial Analyst, (202) 912-4611, Division of Supervision and Regulation; or Benjamin McDonough, Assistant General Counsel (202) 452-2036; David Alexander, Counsel, (202) 452-2877; Mary Watkins, Attorney (202) 452-3722, Legal Division, Board of Governors of the Federal Reserve System, 20th and C Streets NW, Washington, DC 20551. For the hearing impaired only, Telecommunication Device for the Deaf (TDD), (202) 263-4869.

    FDIC: Benedetto Bosco, Chief, Capital Policy Section; [email protected]; David Riley, Senior Policy Analyst, Capital Policy Section; [email protected]; Stephanie Lorek, Senior Policy Analyst, [email protected]; Michael Maloney, Senior Policy Analyst, [email protected]; [email protected]; Capital Markets Branch, Division of Risk Management Supervision, (202) 898-6888; Beverlea S. Gardner, Senior Examination Specialist, [email protected], Policy and Program Development; Michael Phillips, Acting Supervisory Counsel, [email protected]; Catherine Wood, Counsel, [email protected]; or Alexander Bonander, Attorney, [email protected]; Supervision and Legislation Branch, Legal Division, Federal Deposit Insurance Corporation, 550 17th Street NW, Washington, DC 20429.

    SUPPLEMENTARY INFORMATION:

    Table of Contents I. Background and Summary of Proposal II. Proposed Rule A. Revised Scope of an HVCRE Exposure B. Exclusions From an HVCRE Exposure 1. One- to Four-Family Residential Properties 2. Community Development Investment 3. Agricultural Land 4. Loans on Existing Income Producing Properties That Qualify as Permanent Financings 5. Certain Commercial Real Property Projects a. Contributed Capital b. “As Completed” Value Appraisal c. Project 6. Reclassification as a Non-HVCRE Exposure III. Regulatory Analyses A. Paperwork Reduction Act B. Regulatory Flexibility Act Analysis C. Plain Language D. OCC Unfunded Mandates Reform Act of 1995 Determination E. Riegle Community Development and Regulatory Improvement Act of 1994 I. Background and Summary of Proposal

    In 2013, the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), and the Federal Deposit Insurance Corporation (FDIC) (collectively, the agencies) adopted a revised regulatory capital rule (capital rule) that, among other things, addressed weaknesses in the regulatory framework that became apparent in the financial crisis of 2007-08.1 The capital rule strengthened the capital requirements applicable to banking organizations 2 supervised by the agencies by improving both the quality and quantity of regulatory capital and increasing risk-sensitivity. To better capture the risk of certain kinds of real estate exposures, the capital rule defines a “high volatility commercial real estate (HVCRE) exposure” as a credit facility that, prior to conversion to permanent financing, finances or has financed the acquisition, development, or construction (ADC) of real property. The HVCRE exposure definition generally excludes ADC credit facilities that finance one- to-four family residential properties, community development, or agricultural land exposures, and commercial real estate projects where the borrower meets certain contributed capital requirements and other prudential criteria.3 HVCRE exposures were observed to have increased risk characteristics relative to other credit exposures,4 and thus were assigned a heightened risk weight of 150 percent under the capital rule.

    1 The Board and OCC issued a joint final rule on October 11, 2013 (78 FR 62018) and the FDIC issued a substantially identical interim final rule on September 10, 2013 (78 FR 55340). On April 14, 2014 (79 FR 20754), the FDIC adopted the interim final rule as a final rule with no substantive changes.

    2 Banking organizations subject to the agencies' capital rule include national banks, state member banks, insured state nonmember banks, savings associations, and top-tier bank holding companies and savings and loan holding companies domiciled in the United States not subject to the Board's Small Bank Holding Company and Savings and Loan Holding Company Policy Statement (12 CFR part 225, appendix C), excluding certain savings and loan holding companies that are substantially engaged in insurance underwriting or commercial activities or that are estate trusts, and bank holding companies and savings and loan holding companies that are employee stock ownership plans.

    3 See 12 CFR 217.2 (Board); 12 CFR 3.2 (OCC); 12 CFR 324.2 (FDIC).

    4 See 12 CFR part 217 (Board); 12 CFR part 3 (OCC); 12 CFR part 324 (FDIC).

    On May 24, 2018, EGRRCPA became law. Section 214 of EGRRCPA 5 amends the Federal Deposit Insurance Act (FDI Act) 6 by adding a new section 51 to provide a statutory definition of a high volatility commercial real estate acquisition, development, or construction (HVCRE ADC) loan. The statute states the agencies may only require a depository institution to assign a heightened risk weight to an HVCRE exposure, as defined under the capital rule, if such exposure is an HVCRE ADC loan under EGRRCPA. The statutory HVCRE ADC loan definition excludes any loan made prior to January 1, 2015. Section 214 was effective upon enactment of the statute.7

    5 Public Law 115-174, 132 Stat. 1296 (2018). Section 214 of EGRRCPA adds a new Section 51 to the FDI Act, stating that the appropriate Federal banking agencies may only require a depository institution to assign a heightened risk weight to a high volatility commercial real estate (HVCRE) exposure (as such term is defined under 12 CFR 324.2, as of October 11, 2017, or if a successor regulation is in effect as of the date of the enactment of this section, such term or any successor term contained in such successor regulation) under any risk-based capital requirement if such exposure is an HVCRE ADC loan.

    HVCRE ADC Loan is defined for the purposes of section 51 and with respect to a depository institution, as a credit facility secured by land or improved real property that, prior to being reclassified by the depository institution as a non-HVCRE ADC loan pursuant to subsection (d)—(A) primarily finances, has financed, or refinances the acquisition, development, or construction of real property; (B) has the purpose of providing financing to acquire, develop, or improve such real property into income-producing real property; and (C) is dependent upon future income or sales proceeds from, or refinancing of, such real property for the repayment of such credit facility;

    It does not include a credit facility financing—(A) the acquisition, development, or construction of properties that are—(i) one- to four-family residential properties; (ii) real property that would qualify as an investment in community development; (iii) agricultural land; (B) the acquisition or refinance of existing income-producing real property secured by a mortgage on such property, if the cash flow being generated by the real property is sufficient to support the debt service and expenses of the real property, in accordance with the institution's applicable loan underwriting criteria for permanent financings; (C) improvements to existing income-producing improved real property secured by a mortgage on such property, if the cash flow being generated by the real property is sufficient to support the debt service and expenses of the real property, in accordance with the institution's applicable loan underwriting criteria for permanent financings; or (D) commercial real property projects in which—(i) the loan-to-value ratio is less than or equal to the applicable maximum supervisory loan-to-value ratio as determined by the appropriate Federal banking agency; (ii) the borrower has contributed capital of at least 15 percent of the real property's appraised, `as completed' value to the project in the form of—(I) cash; (II) unencumbered readily marketable assets; (III) paid development expenses out-of-pocket; or (IV) contributed real property or improvements; and (iii) the borrower contributed the minimum amount of capital described under clause (ii) before the depository institution advances funds (other than the advance of a nominal sum made in order to secure the depository institution's lien against the real property) under the credit facility, and such minimum amount of capital contributed by the borrower is contractually required to remain in the project until the credit facility has been reclassified by the depository institution as a non-HVCRE ADC loan under subsection (d); Further, it does not include any loan made prior to January 1, 2015; and does not include a credit facility reclassified as a non-HVCRE ADC loan under subsection (d).

    Value of Contributed Real Property. The value of any real property contributed by a borrower as a capital contribution shall be the appraised value of the property as determined under standards prescribed pursuant to section 1110 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3339), in connection with the extension of the credit facility or loan to such borrower.

    6See 12 U.S.C. 1811 et seq.

    7 On October 27, 2017, the agencies issued a proposal, titled, Simplifications to the Capital Rule Pursuant to the Economic Growth and Regulatory Paperwork Reduction Act of 1996. 82 FR 49984 (October 27, 2017). In connection with that proposal, the agencies requested comment on a definition, “high volatility acquisition, development, or construction (HVADC) exposure,” that would have replaced HVCRE in the capital rule. In light of section 214 of EGRRCPA, the agencies will take no further action regarding the HVADC aspect of the proposal. Other aspects of the October 2017 proposal, including simplifications to regulatory capital adjustments and deductions, are still under consideration.

    The agencies issued an interagency statement on July 6, 2018 (interagency statement) that provided information on rules and associated reporting requirements that the agencies jointly administer and that EGRRCPA immediately affected.8 With respect to section 214, the interagency statement provides that institutions may use available information to reasonably estimate and report only HVCRE ADC loans in their Consolidated Reports of Condition and Income (Call Report) 9 and may refine these estimates in good faith as they obtain additional information. The interagency statement also states that institutions will not be required to amend previously filed regulatory reports as these estimates are adjusted. As an alternative to reporting HVCRE ADC loans, the interagency statement indicates that an institution may continue to report and risk-weight HVCRE exposures in a manner consistent with the current instructions to the Call Report, until the agencies take further action. Further, to avoid the regulatory burden associated with different definitions for HVCRE exposures within a single organization, the interagency statement confirms that the Board will not take action to require a bank holding company, savings and loan holding company, or intermediate holding company of a foreign bank to estimate and report HVCRE on the FR Y-9C 10 consistent with the existing regulatory reporting requirements and reporting form instructions if the holding company reports HVCRE in the same manner as its subsidiary institution(s).

    8 Board, FDIC, and OCC, Interagency statement regarding the impact of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA), https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20180706a1.pdf. (last visited August 21, 2018).

    9 OMB Control Nos.: OCC, 1557-0081; Board, 7100-0036; and FDIC, 3064-0052.

    10 Consolidated Financial Statements for Holding Companies, OMB Control No.: Board, 7100-0128.

    In accordance with section 214 of EGRRCPA, the agencies are proposing to revise the HVCRE exposure definition in section 2 of the capital rule to conform to the statutory definition of an HVCRE ADC loan.11 The revised definition of an HVCRE exposure would be applicable to the calculation of risk-weighted assets under both the standardized approach and the internal ratings-based (“advanced approaches”) approach.12 A banking organization that calculates its risk-weighted assets under the advanced approaches of the capital rule would refer to the definition of an HVCRE exposure in section 2 of the capital rule for purposes of identifying wholesale exposure categories and wholesale exposure subcategories.13 Other than the definition change, no change to the calculation of risk-weighted assets is being proposed. Loans that meet the revised definition of an HVCRE exposure would receive a 150 percent risk weight under the capital rule's standardized approach.14

    11See 12 CFR 217.2 (Board); 12 CFR 3.2 (OCC); 12 CFR 324.2 (FDIC).

    12See 12 CFR 217 subparts D and E (Board); 12 CFR 3 subparts D and E (OCC); 12 CFR 324 subparts D and E (FDIC).

    13See 12 CFR 217.131 (Board); 12 CFR 3.131 (OCC); 12 CFR 324.131 (FDIC).

    14See 12 CFR 217.32(j) (Board); 12 CFR 3.32(j) (OCC); 12 CFR 324.32(j) (FDIC).

    Section 214 excludes from the statutory definition of HVCRE ADC loan any loan made prior to January 1, 2015.15 Unless a lower risk weight would apply, banking organizations may apply a 100 percent risk weight to ADC loans originated prior to January 1, 2015, that were classified as an HVCRE exposure under the superseded HVCRE exposure definition provided the loans are not past due 90 days or more or on nonaccrual. For ADC exposures issued on or after January 1, 2015, banking organizations would follow the interagency statement that permits them to either apply the statute on a best efforts basis or classify HVCRE exposures according to the superseded definition until the final rule is effective.

    15 On January 1, 2015, the heightened risk weight for HVCRE exposures became effective for all banking organizations.

    Question 1: The agencies invite comment as to whether the final rule should require reevaluation of ADC loans originated on or after January 1, 2015 under the revised HVCRE exposure definition. What are the advantages and disadvantages of requiring reevaluation? What alternative treatments, if any, should the agencies consider?

    By its terms, the statutory definition of an HVCRE ADC loan applies to depository institutions. The Board has considered the statutory definition of HVCRE ADC loan and the appropriateness of applying the definition to holding companies in addition to depository institutions. The application of separate definitions for HVCRE ADC loans at the depository institution and for HVCRE exposures at the holding company levels within an organization could result in undue burden without contributing meaningfully to any regulatory objective. Accordingly, the proposal would apply the revised definition of an HVCRE exposure to all Board-regulated institutions that are subject to the Board's capital rule, including bank holding companies, savings and loan holding companies, and intermediate holding companies of foreign banking organizations. The Board would make conforming changes to the instructions for regulatory reports for holding companies that are Board-regulated institutions, including to Schedule HC-R, Part II of the FR Y-9C. Similarly, the agencies would make conforming changes to the Call Report instructions.

    II. Proposed Rule

    The agencies are revising the definition of an HVCRE exposure in the capital rule to conform to the statutory definition of an HVCRE ADC loan. Additionally, to facilitate the consistent application of the revised HVCRE exposure definition, the agencies propose to interpret terms not defined in the statutory definition of an HVCRE ADC loan. The agencies would generally look to substantially similar or the same terms in the agencies' regulations or the Call Report instructions.

    A. Revised Scope of an HVCRE Exposure

    Section 214 of EGRRCPA defines an HVCRE ADC loan as “a credit facility secured by land or improved real property.” 16 While the statute does not define “a credit facility secured by land or improved real property,” the Call Report instructions provide a definition for a “loan secured by real estate.” To ensure consistent reporting and because the two terms appear substantially similar, the agencies interpret the term “credit facility secured by land or improved real property” for the purpose of the revised HVCRE exposure definition in a manner that is consistent with the current Call Report definition for “a loan secured by real estate.” To meet the Call Report definition of “a loan is secured by real estate,” the estimated value of the real estate collateral at origination (after deducting all senior liens held by others) is greater than 50 percent of the principal amount of the loan at origination.17 As a result, the agencies intend to interpret a “credit facility secured by land or improved real property” as a facility that meets this collateral criterion.

    16See supra fn. 6.

    17See Federal Financial Institutions Examination Council, Instructions for Preparation of Consolidated Reports of Condition and Income: FFIEC 031 and FFIEC 041, GLOSSARY A-58 (2018); and FFIEC 051, GLOSSARY A-74 (2018).

    Section 214 of EGRRCPA provides that a credit facility that is secured by land or improved real property is required to meet three criteria before being classified as an HVCRE ADC loan. First, the credit facility must primarily finance or refinance the acquisition, development, or construction of real property. Second, the purpose of the credit facility must be to provide financing to acquire, develop, or improve such real property into income-producing real property. Finally, the repayment of the credit facility must depend upon future income or sales proceeds from, or refinancing of, such real property. The proposal will incorporate these criteria into the revised definition of an HVCRE exposure. Under the proposal, the determination of whether or not a loan is considered an HVCRE exposure under the revised definition would be made once, at the loan's origination.

    In addition, the agencies' propose to interpret that other land loans (generally loans secured by vacant land except land known to be used for agricultural purposes) would be included in the scope of the revised HVCRE exposure definition. This approach would be consistent with the Call Report's inclusion of other land loans with construction and development loans.

    Question 2: The agencies request comment on whether the terms “secured by land or improved real property,” “primarily finances,” and “income-producing real property” are clear or whether further discussion or interpretation would be needed. The agencies also request comment on whether their proposed interpretations of these terms are appropriate and whether loans secured by vacant land except agricultural land should be included in the scope of the revised HVCRE exposure definition.

    B. Exclusions From an HVCRE Exposure

    A loan secured by land or improved real property that meets the three criteria for the revised HVCRE exposure categorization may be excluded from a heightened risk weight if it meets one or more of the following statutory exclusions:

    1. One- to Four-Family Residential Properties

    Consistent with section 214, the revised definition of an HVCRE exposure would exclude credit facilities financing the acquisition, development, or construction of properties that are one- to four-family residential properties. The agencies are generally aligning the scope of exposures that finance acquisition, development, or construction of one- to four-family residential properties under the capital rule with the definition of a one- to four-family residential property provided in the codified interagency real estate lending standards.18 The interagency real estate lending standards define a one- to four-family residential property as a property containing fewer than five individual dwelling units, including manufactured homes permanently affixed to the underlying property (when deemed to be real property under state law). The interagency real estate lending standards further state that the construction of condominiums and cooperatives are multifamily construction. Accordingly, loans to finance the construction of condominiums and cooperatives would generally not be included in the scope of the one- to four-family residential properties exclusion under the revised HVCRE exposure definition.19 Additionally, the agencies are proposing that credit facilities for the purpose of the acquisition, development, or construction of properties that are one- to four-family residential properties would include both loans to construct one- to four-family residential structures and loans that combine the land acquisition, development, or construction of one- to four-family structures, including lot development loans. However, loans used solely to acquire undeveloped land would not be within the scope of one- to four-family residential properties exclusion regardless of how the land is zoned.

    18See Board, OCC, and FDIC, Interagency Guidelines For Real Estate Lending Policies (real estate lending standards), 12 CFR part 208 Appendix C (Board); 12 CFR part 34 Appendix A (OCC); 12 CFR part 365 Appendix A (FDIC).

    19 As an alternative to the interagency real estate lending standards, the agencies considered alignment with the definition of a one- to-four family residential property in the Call Report instructions for purposes of the HVCRE exposure exclusion. However, the Call Report's usage of the one- to-four family residential property definition—as a category of permanent financings—as well as the Call Report's distinct additional definition for “residential construction loans” are for different reporting purposes. See Call Report instructions for Schedule RC-C, Part I, Item 1.c (“Loans secured by 1-4 family residential properties”) and Item 1.a.(1) (“1-4 family residential construction loans”).

    Question 3: The agencies invite comment on whether their proposed interpretations of the scope of the one- to four-family residential properties exclusion for purposes of the revised HVCRE exposure definition are appropriate and clear, including which types of townhomes, condominiums, cooperatives, and mobile home-related loans are excluded. The agencies also invite comment on whether it is appropriate to include one- to four- family lot development loans within the scope of this exclusion.

    2. Community Development Investment

    Consistent with section 214, the revised HVCRE exposure definition will exclude loans financing the acquisition, development, or construction of real property that would qualify as an investment in community development. For purposes of this exclusion, the proposal refers to the agencies' Community Reinvestment Act (CRA) regulations and the definition of community development investment in these regulations.20 Accordingly, this exclusion would apply to credit facilities that finance the acquisition, development, or construction of real property projects for which the primary purpose is community development, as defined by the agencies' CRA regulations, which generally includes affordable housing, community services targeted to low- and moderate-income individuals, and various forms of economic development and small business financing. Under the agencies' CRA regulations, loans have to be evaluated to determine whether they meet the criteria for community development. For example, an ADC loan that is conditionally taken out with U.S. Small Business Administration section 504 financing would have to be evaluated against the criteria for community development in order to determine if the loan would qualify for this exclusion.

    20 12 CFR part 24 (OCC); 12 CFR part 345 (FDIC); 12 CFR part 228 (Board).

    Question 4: The agencies invite comment on whether the proposed interpretation of the term “community development” in the revised definition of HVCRE exposure is appropriate and clear, or whether it requires further discussion or interpretation.

    3. Agricultural Land

    Consistent with section 214, the revised HVCRE exposure definition will exclude credit facilities financing the acquisition, development, or construction of agricultural land. The Call Report instructions include a definition for “farmland,” which excludes loans for farm property construction and land development purposes. As used in the Call Report, the term “farmland” includes all land known to be used or usable for agricultural purposes. To ensure consistent reporting, the agencies propose that “agricultural land” for the purpose of the revised HVCRE exposure definition would have the same meaning as “farmland,” as used in the Call Report instructions.21

    21 For the definition of loans secured by farmland, refer to the Call Report Instructions for Schedule RC-C, Part I, Item 1.b.

    Question 5: The agencies invite comment on whether their proposed interpretation of the term “agricultural land” in the revised definition of an HVCRE exposure is appropriate and clear, or whether it requires further discussion or interpretation.

    4. Loans on Existing Income-Producing Properties That Qualify as Permanent Financings

    In addition to the exclusions described above, the revised HVCRE exposure definition will exclude additional categories of exposures. Consistent with the statutory definition of an HVCRE ADC loan in section 214, the revised HVCRE exposure definition will exclude credit facilities for the acquisition or refinance of existing income-producing real property secured by a mortgage on such property, so long as the cash flow generated by the real property covers the debt service and expenses of the property in accordance with a depository institution's underwriting criteria for permanent loans. The revised HVCRE exposure definition similarly excludes credit facilities financing improvements to existing income-producing real property secured by a mortgage on such property. The agencies may review the reasonableness of a depository institution's underwriting criteria for permanent loans through the regular supervisory process.

    Question 6: The agencies invite comment on whether the term “permanent financings” in the revised definition of an HVCRE exposure is clear or whether further discussion or interpretation would be appropriate.

    5. Certain Commercial Real Property Projects

    Consistent with section 214, the revised definition of an HVCRE exposure will exclude certain commercial real property projects that have been underwritten in accordance with supervisory underwriting standards, and when the borrower has contributed a specified amount of capital to the project. In order to qualify for this exclusion from the revised HVCRE exposure definition, a credit facility that finances a commercial real property project will be required to meet four distinct criteria. First, the loan-to-value ratio is less than or equal to the applicable supervisory maximum. Under the interagency real estate lending standards, maximum loan-to-value ratios vary from 65 to 85 percent, depending on the applicable loan category.22 Second, the borrower has contributed capital of at least 15 percent of the real property's appraised “as completed” value to the project. Third, the 15 percent amount is contributed prior to the institution's advance of funds other than a nominal sum to secure the depository institution's lien on the real property. Fourth, the 15 percent amount of contributed capital is contractually required to remain in the project until the loan can be reclassified as a non-HVCRE exposure. Each of the four proposed criteria aligns with the corresponding statutory criterion under section 214 for exclusion from the statutory definition of an HVCRE ADC loan. The proposed interpretations of terms relevant to the four criteria for exclusion of a credit facility that finances a commercial real property project are discussed in further detail below.

    22See supra fn. 17.

    a. Contributed Capital

    Under section 214, cash, unencumbered readily marketable assets, paid development expenses out-of-pocket, and contributed real property or improvements count as forms of capital for purposes of the capital contribution criteria. The proposal will incorporate these forms of capital into the revised definition of an HVCRE exposure. The agencies consider costs incurred by the project and paid by the borrower prior to the advance of funds by the banking organization as paid development expenses out-of-pocket.

    The statute provides that the value of contributed real property means the appraised value of real property contributed by the borrower as determined under the standards prescribed by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3339). The proposal will incorporate this criterion into the revised definition of an HVCRE exposure. The agencies would reduce the value of the real property that counts towards the 15 percent contributed capital requirement by the aggregate amount of any liens on the real property securing the HVCRE exposure.

    Question 7: The agencies invite comment on whether their proposed interpretation of the 15 percent contributed capital exclusion is appropriate and clear or whether further discussion or interpretation would be appropriate. What other issues, if any, relating to the contributed capital exclusion require interpretation? What issues are there relating to the contribution of cash, unencumbered readily marketable assets, real property or improvements that require interpretation? What expenses should or should not qualify as development expenses and are there any other issues relating to paid development expenses that would require interpretation? The agencies also invite comment on whether it is appropriate and clear that the cross-collateralization of land in a project would not be included as contributed real property for purposes of the contributed capital exclusion.

    b. “As Completed” Value Appraisal

    Under the revised HVCRE exposure definition, the 15 percent capital contribution will be required to be calculated using the real property's appraised “as completed” value. However, an “as completed” value appraisal may not always be available, such as in the case of purchasing raw land without plans for development in the near term, which would typically have an “as is” value appraisal. Therefore, the agencies would permit the use of an “as is” appraisal, where applicable, for purposes of the 15 percent capital contribution. In addition, the agencies' regulations permit the use of an evaluation in place of an “as completed” value appraisal for a commercial real estate transaction under $500,000 that is not secured by a single one-to-four family residential property.23 The agencies note that section 214 does not distinguish between credit exposures based on size; however, the agencies' appraisal regulations permit the use of evaluations under certain circumstances. The agencies thus would allow the use of an evaluation to replace the “as completed” appraised value, for purposes of the revised HVCRE exposure definition, for transactions under $500,000 that are not secured by a single one- to four-family residential property and for certain transactions with values of less than $400,000 involving real property or an interest in real property that is located in a rural area.24

    23 83 FR 15019 (April 9, 2018).

    24 Section 103 of EGRRCPA provides an exclusion to the appraisal requirements for certain transactions with values of less than $400,000 involving real property or an interest in real property that is located in a rural area. This exclusion was effective upon EGRRCPA's enactment.

    Question 8: The agencies invite comment on whether the proposed interpretation on the required use of an as-completed value appraisal for purposes of the contributed capital exclusion is appropriate and clear and whether there are additional issues relating to the appraisal requirement for purposes of the contributed capital exclusion that need interpretation.

    c. Project

    Under the revised HVCRE exposure definition, when considering whether a credit facility is excluded as a “certain commercial real property project” as described above, the 15 percent capital contribution calculation and the “as completed” value appraisal are measured in relation to a “project.” The agencies recognize that some credit facilities for the acquisition, development, or construction of real property may have multiple phases as part of a larger construction or development project. The agencies are proposing that in the case of a project with multiple phases or stages, in order for a loan financing a phase or stage to be eligible for the contributed capital exclusion, the phase or stage must have its own appraised “as completed” value or an appropriate evaluation in order for it to be deemed a separate “project” for purposes of the 15 percent capital contribution calculation.

    Question 9: The agencies invite comment on whether their proposed interpretation of the term “project” is appropriate and clear, and whether the term “project” requires further discussion or interpretation.

    6. Reclassification as a Non-HVCRE Exposure

    Consistent with section 214, under the proposal, a banking organization may reclassify an HVCRE exposure as a non-HVCRE exposure when the substantial completion of the development or construction on the real property has occurred and the cash flow generated by the property covers the debt service and expenses on that property in accordance with the banking organization's loan underwriting standards for permanent financings.

    Question 10: The agencies invite comment on whether additional terms included in the text of section 214 of the statute that are not discussed above are ambiguous or need interpretation? The agencies invite comment on what, if any, operational challenges would banking organizations generally expect when determining whether an HVCRE exposure under the proposed revised definition can be reclassified as a non-HVCRE exposure?

    Question 11: The agencies invite comment on the potential advantages and disadvantages of incorporating the agencies' interpretations of the terms used in the revised HVCRE exposure definition into the rule text or in another published format. What type of information should be included? What, if any, additional aspects of the revised HVCRE exposure definition, or its application and usage, should be included?

    III. Regulatory Analyses A. Paperwork Reduction Act

    Certain provisions of the proposed rule contain “collection of information” requirements within the meaning of the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3521). In accordance with the requirements of the PRA, the agencies may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The OMB control number for the OCC is 1557-0318, Board is 7100-0313, and FDIC is 3064-0153. These information collections will be extended for three years, with revision. The information collection requirements contained in this proposed rulemaking have been submitted by the OCC and FDIC to OMB for review and approval under section 3507(d) of the PRA (44 U.S.C. 3507(d)) and section 1320.11 of the OMB's implementing regulations (5 CFR 1320). The Board reviewed the proposed rule under the authority delegated to the Board by OMB.

    Comments are invited on:

    a. Whether the collections of information are necessary for the proper performance of the agencies' functions, including whether the information has practical utility;

    b. The accuracy or the estimate of the burden of the information collections, 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 the information collections 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.

    All comments will become a matter of public record. Comments on aspects of this notice that may affect reporting, recordkeeping, or disclosure requirements and burden estimates should be sent to the addresses listed in the ADDRESSES section of this document. A copy of the comments may also be submitted to the OMB desk officer for the agencies by mail to U.S. Office of Management and Budget, 725 17th Street NW, #10235, Washington, DC 20503; facsimile to (202) 395-6974; or email to [email protected], Attention, Federal Banking Agencies Desk Officer.

    Information Collection Proposed To Be Revised

    Title of Information Collection: Recordkeeping and Disclosure Requirements Associated with Capital Adequacy.

    Frequency: Quarterly, annual.

    Affected Public: Businesses or other for-profit.

    Respondents:

    OCC: National banks and federal savings associations.

    Board: State member banks (SMBs), bank holding companies (BHCs), U.S. intermediate holding companies (IHCs), savings and loan holding companies (SLHCs), and global systemically important bank holding companies (G-SIBs).

    FDIC: State nonmember banks and state savings associations.

    Current Actions: The proposal would amend the regulatory capital rule to conform the definition of HVCRE exposure to the statutory definition of HVCRE ADC loan. Because the agencies' regulatory capital rules require respondents to disclose and keep a record of their amount of HVCRE exposures, this definitional change revises respondents' disclosure and recordkeeping requirements associated with the agencies' regulatory capital rules. This amendment, however, will not result in changes to the burden. In an effort to be consistent across the agencies, the agencies are applying a conforming methodology for calculating the burden estimates. The agencies are also updating the number of respondents based on the current number of supervised entities. The agencies believe that any changes to the information collections associated with the proposed rule are the result of the conforming methodology and updates to the respondent count, and not the result of the proposed rule changes.

    PRA Burden Estimates OCC

    OMB control number: 1557-0318.

    Estimated number of respondents: 1,365 (of which 18 are advanced approaches institutions).

    Estimated average hours per response:

    Minimum Capital Ratios (1,365 institutions affected).

    Recordkeeping (Ongoing)—16.

    Standardized Approach (1,365 institutions affected for ongoing).

    Recordkeeping (Initial setup)—122.

    Recordkeeping (Ongoing)—20.

    Disclosure (Initial setup)—226.25.

    Disclosure (Ongoing quarterly)—131.25.

    Advanced Approach (18 institutions affected for ongiong).

    Recordkeeping (Initial setup)—460.

    Recordkeeping (Ongoing)—540.77.

    Recordkeeping (Ongoing quarterly)—20.

    Disclosure (Initial setup)—280.

    Disclosure (Ongoing)—5.78.

    Disclosure (Ongoing quarterly)—35.

    Estimated annual burden hours: 1,088.25 hours initial setup, 64,929.42 hours for ongoing.

    Board

    Agency form number: FR Q.

    OMB control number: 7100-0313.

    Estimated number of respondents: 1,431 (of which 17 are advanced approaches institutions).

    Estimated average hours per response:

    Minimum Capital Ratios (1,431 institutions affected for ongoing).

    Recordkeeping (Ongoing)—16.

    Standardized Approach (1,431 institutions affected for ongoing).

    Recordkeeping (Initial setup)—122.

    Recordkeeping (Ongoing)—20.

    Disclosure (Initial setup)—226.25.

    Disclosure (Ongoing quarterly)—131.25.

    Advanced Approach (17 institutions affected).

    Recordkeeping (Initial setup)—460.

    Recordkeeping (Ongoing)—540.77.

    Recordkeeping (Ongoing quarterly)—20.

    Disclosure (Initial setup)—280.

    Disclosure (Ongoing)—5.78.

    Disclosure (Ongoing quarterly)—35.

    Disclosure (Table 13 quarterly)—5.

    Risk-based Capital Surcharge for GSIBs (21 institutions affected).

    Recordkeeping (Ongoing)—0.5.

    Estimated annual burden hours: 1,088 hours initial setup, 78,183 hours for ongoing.

    FDIC

    OMB control number: 3064-0153.

    Estimated number of respondents: 3,604 (of which 2 are advanced approaches institutions).

    Estimated average hours per response:

    Minimum Capital Ratios (3,604 institutions affected).

    Recordkeeping (Ongoing)—16.

    Standardized Approach (3,604 institutions affected for ongoing).

    Recordkeeping (Initial setup)—122.

    Recordkeeping (Ongoing)—20.

    Disclosure (Initial setup)—226.25.

    Disclosure (Ongoing quarterly)—131.25.

    Advanced Approach (2 institutions affected for ongoing).

    Recordkeeping (Initial setup)—460.

    Recordkeeping (Ongoing)—540.77.

    Recordkeeping (Ongoing quarterly)—20.

    Disclosure (Initial setup)—280.

    Disclosure (Ongoing)—5.78.

    Disclosure (Ongoing quarterly)—35.

    Estimated annual burden hours: 1,088 hours initial setup, 131,802 hours for ongoing.

    The proposed rule will also require changes to the Call Reports (FFIEC 031, FFIEC 041, and FFIEC 051; OMB Nos. 1557-0081 (OCC), 7100-0036 (Board), and 3064-0052 (FDIC)) and Risk-Based Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework (FFIEC 101; OMB Nos. 1557-0239 (OCC), 7100-0319 (Board), and 3064-0159 (FDIC)), and Consolidated Financial Statements for Holding Companies (FR Y-9C; OMB No. 7100-0128), which will be addressed in separate Federal Register notices.

    B. Regulatory Flexibility Act Analysis

    OCC: The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., (RFA), requires an agency, in connection with a proposed rule, to prepare an Initial Regulatory Flexibility Analysis describing the impact of the rule on small entities (defined by the SBA for purposes of the RFA to include commercial banks and savings institutions with total assets of $550 million or less and trust companies with total assets of $38.5 million of less) or to certify that the proposed rule would not have a significant economic impact on a substantial number of small entities.

    As of June 30, 2018, the OCC supervises 886 small entities.25

    25 The OCC calculated the number of small entities using the SBA's size thresholds for commercial banks and savings institutions, and trust companies, which are $550 million and $38.5 million, respectively. Consistent with the General Principles of Affiliation, 13 CFR 121.103(a), the OCC counted the assets of affiliated financial institutions when determining whether to classify a national bank or Federal savings association as a small entity.

    Currently, 211 small OCC-supervised institutions hold HVCRE loans and thus will be directly impacted by the proposed rule. Therefore, the proposed rule potentially affects a substantial number of small entities. However, the OCC does not find that the impact of this proposal would be economically significant.

    Therefore, the OCC certifies that the proposed rule would not have a significant economic impact on a substantial number of OCC-supervised small entities.

    Board: The RFA requires an agency to either provide an initial regulatory flexibility analysis with a proposal or certify that the proposal will not have a significant impact on a substantial number of small entities. Under regulations issued by the SBA, a small entity includes a bank, bank holding company, or savings and loan holding company with assets of $550 million or less (small banking organization).26 As of June 30, 2018, there were approximately 3,304 small bank holding companies, 216 small savings and loan holding companies, and 535 small SMBs.

    26See 13 CFR 121.201. Effective July 14, 2014, the SBA revised the size standards for banking organizations to $550 million in assets from $500 million in assets. 79 FR 33647 (June 12, 2014).

    The Board has considered the potential impact of the proposed rule on small entities in accordance with the RFA. Based on the Board's analysis, and for the reasons stated below, the Board believes that this proposed rule will not have a significant economic impact on a substantial of number of small entities. Nevertheless, the Board is providing an initial regulatory flexibility analysis with respect to this proposed rule. A final regulatory flexibility analysis will be conducted after comments received during the public comment period have been considered. The Board welcomes comment on all aspects of its analysis. In particular, the Board requests that commenters describe the nature of any impact on small entities and provide empirical data to illustrate and support the extent of the impact.

    As discussed in the Supplemental Information, the proposal would revise the definition of HVCRE exposure to conform to the statutory definition of “high volatility commercial real estate acquisition, development, or construction (HVCRE ADC) loan,” in accordance with section 214 of EGRRCPA. To facilitate the consistent application of the revised HVCRE exposure definition, the proposal also provides that the Board would generally look to substantially similar terms in relevant regulations or the Call Report instructions for interpretation of undefined terms used in section 214, where applicable.

    For purposes of the standardized approach, loans that meet the revised definition of an HVCRE exposure would receive a 150 percent risk weight under the capital rule's standardized approach. A banking organization that calculates its risk-weighted assets under the advanced approaches of the capital rule would refer to the definition of an HVCRE exposure in section 2 of the capital rule for purposes of identifying wholesale exposure categories and wholesale exposure subcategories. Based upon data reported on the FR Y-9C and on Call Report information, as of June 30, 2018, about 14 percent of state member banks, bank holding companies, and savings and loan holding companies report holdings of HVCRE exposures.

    The proposal would apply to all state member banks, as well as all bank holding companies and savings and loan holding companies that are subject to the Board's capital rule. Certain bank holding companies, and savings and loan holding companies are excluded from the application of the Board's capital rule. In general, the Board's capital rule only applies to bank holding companies and savings and loan holding companies that are not subject to the Board's Small Bank Holding Company and Small Savings and Loan Holding Company Policy Statement, which applies to bank holding companies and savings and loan holding companies with less than $3 billion in total assets that also meet certain additional criteria.27 Thus, most bank holding companies and savings and loan holding companies that would be subject to the proposed rule exceed the $550 million asset threshold at which a banking organization would qualify as a small banking organization.

    27See 12 CFR 217.1(c)(1)(ii) and (iii); 12 CFR part 225, appendix C; 12 CFR 238.9.

    The agencies anticipate updating the relevant reporting forms at a later date to the extent necessary to align with the capital rule. Given that the proposed rule does not impact the recordkeeping and reporting requirements that affected small banking organizations are currently subject to, there would be no change to the information that small banking organizations must track and report.

    The Board does not believe that the proposed rule duplicates, overlaps, or conflicts with any other Federal rules. In addition, there are no significant alternatives to the proposed rule. In light of the foregoing, the Board does not believe that the proposed rule, if adopted in final form, would have a significant economic impact on a substantial number of small entities.

    FDIC: The RFA generally requires that, in connection with a proposed rulemaking, an agency prepare and make available for public comment an initial regulatory flexibility analysis describing the impact of the proposed rule on small entities.28 However, a regulatory flexibility analysis is not required if the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. The SBA has defined “small entities” to include banking organizations with total assets of less than or equal to $550 million that are independently owned and operated or owned by a holding company with less than or equal to $550 million in total assets.29 For the reasons described below and under section 605(b) of the RFA, the FDIC certifies that this proposed rule will not have a significant economic impact on a substantial number of small entities.

    28 5 U.S.C. 601 et seq.

    29 The SBA defines a small commercial bank to have $550 million or less in total assets. See 13 CFR 121.201 (as amended, effective December 2, 2014). The SBA requires agencies to “consider assets of affiliated and acquired financial institutions reported in the previous four quarters.” See 13 CFR 121.104. Therefore, the FDIC utilizes merger-adjusted and affiliated assets, averaged over the previous four quarters, to identify whether a bank is a “small entity” for the purposes of RFA.

    The FDIC supervises 3,604 depository institutions,30 of which 2,804 are considered small entities for the purposes of RFA.31 According to recent data, 2,472 small, FDIC-supervised institutions report holding some volume of acquisition, development, and construction loans, while 770 report holding some volume of HVCRE loans. Therefore, the FDIC estimates that the proposed rule is likely to affect a substantial number, 770 (27.5 percent), of small, FDIC-supervised institutions.32

    30 FDIC-supervised institutions are set forth in 12 U.S.C. 1813(q)(2).

    31 FDIC Call Report, March 31st, 2018.

    32Id.

    This proposal would remove certain loans from the definition of an HVCRE exposure and therefore, would reduce the risk weight from 150 percent to 100 percent on some of the HVCRE loans held in portfolio by small FDIC-supervised institutions, resulting in a modest reduction in their risk-based capital requirements. Assuming all HVCRE loans reported by small, FDIC-supervised institutions were weighted at 100 percent and that covered institutions would maintain the same ratio of risk-based capital to risk-weighted assets after the proposal goes into effect, the maximum potential effect of the proposed rule would result in an estimated decline of $183 million (0.8 percent) in required risk-based capital for small, FDIC-insured institutions, or $237,000 per institution.33

    33Id.

    The proposed rule could pose some administrative costs for covered institutions. It is likely that covered institutions who hold some volume of HVCRE loans will incur some costs to evaluate their portfolios to determine if they are excluded from the proposed definition of HVCRE. It is difficult to accurately estimate the costs associated with evaluating each institution's portfolio of HVCRE because it depends on the characteristics of each institution's portfolio, the resources each institution has to manage these assets, and the labor decisions of senior management at each institution. However, the FDIC assumes that each institution will require 40 hours of labor on average to complete the review. Assuming an hourly cost of $75.82,34 that amounts to $3,033 per institution or $2,335,410 for all small, FDIC-supervised institutions. These administrative costs amount to 0.15 percent of average non-interest expense for small, FDIC-supervised institutions directly affected by the proposed rule.35

    34 Estimated total hourly compensation of Financial Analysts in the Depository Credit Intermediation sector as of March 2018. The estimate includes the May 2017 90th percentile hourly wage rate reported by the Bureau of Labor Statistics, National Industry-Specific Occupational Employment, and Wage Estimates. This wage rate has been adjusted for changes in the Consumer Price Index for all Urban Consumers between May 2017 and March 2018 (2.28 percent) and grossed up by 55.03 percent to account for non-monetary compensation as reported by the March 2018 Employer Costs for Employee Compensation Data.

    35 FDIC Call Report, March 31st, 2018.

    The proposed rule is likely to reduce capital requirements for some loans currently classified as an HVCRE exposure, which could increase the volume of lending by small, FDIC-supervised institutions. The FDIC believes that this effect will likely be small given that the proposed amendments only affect a subset of HVCRE loans, which represent a small portion of total assets for small FDIC-supervised institutions. Finally, reductions in required capital could make institutions more vulnerable in the event of an economically stressful scenario. Since the changes affect only a narrowly defined segment of institutions' loan portfolios, the FDIC believes any increase in risk resulting from the changes is unlikely to be material.

    Based on this supporting information, the FDIC does not believe that the rule will have a significant economic impact on a substantial number of small entities.

    The FDIC invites comments on all aspects of the supporting information provided in this RFA section. In particular, how long would it take for small institutions to review their HVCRE portfolios to identify loans that qualify for a lower risk weight? Also, would this rule have any significant effects on small entities that the FDIC has not identified?

    C. Plain Language

    Section 722 of the Gramm-Leach-Bliley Act 36 requires the Federal banking agencies to use plain language in all proposed and final rules published after January 1, 2000. The agencies have sought to present the proposed rule in a simple and straightforward manner, and invite comment on the use of plain language. For example:

    36 Public Law 106-102, section 722, 113 Stat. 1338, 1471 (1999).

    • Have the agencies organized the material to suit your needs? If not, how could they present the proposed rule more clearly?

    • Are the requirements in the proposed rule clearly stated? If not, how could the proposed rule be more clearly stated?

    • Do the regulations contain technical language or jargon that is not clear? If so, which language requires clarification?

    • Would a different format (grouping and order of sections, use of headings, paragraphing) make the regulation easier to understand? If so, what changes would achieve that?

    • Would more, but shorter, sections be better? If so, which sections should be changed?

    • What other changes can the agencies incorporate to make the regulation easier to understand?

    D. OCC Unfunded Mandates Reform Act of 1995 Determination

    The OCC analyzed the proposed rule under the factors set forth in the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1532). Under this analysis, the OCC considered whether the proposed rule includes a Federal mandate that may result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year (adjusted for inflation). The OCC has determined that this proposed rule would not result in expenditures by State, local, and Tribal governments, or the private sector, of $100 million or more in any one year. Accordingly, the OCC has not prepared a written statement to accompany this proposal.

    E. Riegle Community Development and Regulatory Improvement Act of 1994

    Pursuant to section 302(a) of the Riegle Community Development and Regulatory Improvement Act (RCDRIA),37 in determining the effective date and administrative compliance requirements for new regulations that impose additional reporting, disclosure, or other requirements on insured depository institutions, each Federal banking agency must consider, consistent with principles of safety and soundness and the public interest, any administrative burdens that such regulations would place on depository institutions, including small depository institutions, and customers of depository institutions, as well as the benefits of such regulations. In addition, section 302(b) of RCDRIA requires new regulations and amendments to regulations that impose additional reporting, disclosures, or other new requirements on insured depository institutions generally to take effect on the first day of a calendar quarter that begins on or after the date on which the regulations are published in final form.38

    37 12 U.S.C. 4802(a).

    38Id.

    The agencies note that comment on these matters has been solicited in other sections of this Supplementary Information section, and that the requirements of RCDRIA will be considered as part of the overall rulemaking process. In addition, the agencies also invite any other comments that further will inform the agencies' consideration of RCDRIA.

    List of Subjects 12 CFR Part 3

    Administrative practice and procedure, Banks, Banking, Capital adequacy, Capital requirements, Asset risk—weighting methodologies, Reporting and recordkeeping requirements, National banks, Federal savings associations, Risk.

    12 CFR Part 217

    Administrative practice and procedure, Banks, Banking, Capital adequacy, Capital requirements, Asset risk—weighting methodologies, Reporting and recordkeeping requirements, Holding companies, State member banks, Risk.

    12 CFR Part 324

    Administrative practice and procedure, Banks, Banking, Capital adequacy, Capital requirements, Asset risk—weighting methodologies, Reporting and recordkeeping requirements, State savings associations, State non-member banks, Risk.

    Office of the Comptroller of the Currency

    For the reasons set out in the joint preamble, the OCC proposes to amend 12 CFR part 3 as follows.

    PART 3—CAPITAL ADEQUACY STANDARDS 1. The authority citation for Part 3 continues to read as follows: Authority:

    12 U.S.C. 93a, 161, 1462, 1462a, 1463, 1464, 1818, 1828(n), 1828 note, 1831n note, 1835, 3907, 3909, and 5412(b)(2)(B).

    2. Amend § 3.2 by revising the definition of a “high volatility commercial real estate (HVCRE) exposure” as follows:
    § 3.2 Definitions.

    High volatility commercial real estate (HVCRE) exposure means:

    (1) A credit facility secured by land or improved real property that, prior to being reclassified by the depository institution as a non-HVCRE exposure pursuant to paragraph (6) of this definition—

    (i) Primarily finances, has financed, or refinances the acquisition, development, or construction of real property;

    (ii) Has the purpose of providing financing to acquire, develop, or improve such real property into income-producing real property; and

    (iii) Is dependent upon future income or sales proceeds from, or refinancing of, such real property for the repayment of such credit facility;

    (2) Does not include a credit facility financing—

    (i) The acquisition, development, or construction of properties that are—

    (A) One- to four-family residential properties;

    (B) Real property that would qualify as an investment in community development; or

    (C) Agricultural land;

    (ii) The acquisition or refinance of existing income-producing real property secured by a mortgage on such property, if the cash flow being generated by the real property is sufficient to support the debt service and expenses of the real property, in accordance with the national bank's or Federal savings association's applicable loan underwriting criteria for permanent financings;

    (iii) Improvements to existing income-producing improved real property secured by a mortgage on such property, if the cash flow being generated by the real property is sufficient to support the debt service and expenses of the real property, in accordance with the national bank's or Federal savings association's applicable loan underwriting criteria for permanent financings; or

    (iv) Commercial real property projects in which—

    (A) The loan-to-value ratio is less than or equal to the applicable maximum supervisory loan-to-value ratio as determined by the OCC;

    (B) The borrower has contributed capital of at least 15 percent of the real property's appraised, `as completed' value to the project in the form of—

    (1) Cash;

    (2) Unencumbered readily marketable assets;

    (3) Paid development expenses out-of-pocket; or

    (4) Contributed real property or improvements; and

    (C) The borrower contributed the minimum amount of capital described under paragraph (2)(iv)(B) of this definition before the national bank or Federal savings association advances funds (other than the advance of a nominal sum made in order to secure the national bank's or Federal savings association's lien against the real property) under the credit facility, and such minimum amount of capital contributed by the borrower is contractually required to remain in the project until the HVCRE exposure has been reclassified by the national bank or Federal savings association as a non-HVCRE exposure under paragraph (6) of this definition;

    (3) Does not include any loan made prior to January 1, 2015; and

    (4) Does not include a credit facility reclassified as a non-HVCRE exposure under paragraph (6) of this definition.

    (5) Value Of Contributed Real Property.—For the purposes of this HVCRE exposure definition, the value of any real property contributed by a borrower as a capital contribution shall be the appraised value of the property as determined under standards prescribed pursuant to section 1110 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3339), in connection with the extension of the credit facility or loan to such borrower.

    (6) Reclassification As A Non-HVCRE exposure.—For purposes of this HVCRE exposure definition and with respect to a credit facility and a national bank or Federal savings association, a national bank or Federal savings association may reclassify an HVCRE exposure as a non-HVCRE exposure upon—

    (i) The substantial completion of the development or construction of the real property being financed by the credit facility; and

    (ii) Cash flow being generated by the real property being sufficient to support the debt service and expenses of the real property, in accordance with the national bank's or Federal savings association's applicable loan underwriting criteria for permanent financings.

    Board of Governors of the Federal Reserve System

    For the reasons set out in the joint preamble, part 217 of chapter II of title 12 of the Code of Federal Regulations is proposed to be amended as follows:

    PART 217—CAPITAL ADEQUACY OF BANK HOLDING COMPANIES, SAVINGS AND LOAN HOLDING COMPANIES, AND STATE MEMBER BANKS (REGULATION Q) Subpart A—General Provisions 3. The authority citation for part 217 continues to read as follows: Authority:

    12 U.S.C. 248(a), 321-338a, 481-486, 1462a, 1467a, 1818, 1828, 1831n, 1831o, 1831p-l, 1831w, 1835, 1844(b), 1851, 3904, 3906-3909,4808, 5365, 5368, 5371.

    4. Section 217.2 is amended by revising the definition of a “high volatility commercial real estate (HVCRE) exposure” as follows:
    § 217.2 Definitions.

    High volatility commercial real estate (HVCRE) exposure means:

    (1) A credit facility secured by land or improved real property that, prior to being reclassified by the Board-regulated institution as a non-HVCRE exposure pursuant to paragraph (6) of this definition—

    (i) Primarily finances, has financed, or refinances the acquisition, development, or construction of real property;

    (ii) Has the purpose of providing financing to acquire, develop, or improve such real property into income-producing real property; and

    (iii) Is dependent upon future income or sales proceeds from, or refinancing of, such real property for the repayment of such credit facility; provided that:

    (2) An HVCRE exposure does not include a credit facility financing—

    (i) The acquisition, development, or construction of properties that are—

    (A) One- to four-family residential properties;

    (B) Real property that would qualify as an investment in community development; or

    (C) Agricultural land;

    (ii) The acquisition or refinance of existing income-producing real property secured by a mortgage on such property, if the cash flow being generated by the real property is sufficient to support the debt service and expenses of the real property, in accordance with the Board-regulated institution's applicable loan underwriting criteria for permanent financings;

    (iii) Improvements to existing income-producing improved real property secured by a mortgage on such property, if the cash flow being generated by the real property is sufficient to support the debt service and expenses of the real property, in accordance with the Board-regulated institution's applicable loan underwriting criteria for permanent financings; or

    (iv) Commercial real property projects in which—

    (A) The loan-to-value ratio is less than or equal to the applicable maximum supervisory loan-to-value ratio as determined by the Board;

    (B) The borrower has contributed capital of at least 15 percent of the real property's appraised, `as completed' value to the project in the form of—

    (1) Cash;

    (2) Unencumbered readily marketable assets;

    (3) Paid development expenses out-of-pocket; or

    (4) Contributed real property or improvements; and

    (C) The borrower contributed the minimum amount of capital described under paragraph (2)(iv)(B) of this definition before the Board-regulated institution advances funds (other than the advance of a nominal sum made in order to secure the Board-regulated institution's lien against the real property) under the credit facility, and such minimum amount of capital contributed by the borrower is contractually required to remain in the project until the HVCRE exposure has been reclassified by the Board-regulated institution as a non-HVCRE exposure under paragraph (6) of this definition;

    (3) An HVCRE exposure does not include any loan made prior to January 1, 2015;

    (4) An HVCRE exposure does not include a credit facility reclassified as a non-HVCRE exposure under paragraph (6).

    (5) Value of contributed real property. For the purposes of this definition of HVCRE exposure, the value of any real property contributed by a borrower as a capital contribution is the appraised value of the property as determined under standards prescribed pursuant to section 1110 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3339), in connection with the extension of the credit facility or loan to such borrower.

    (6) Reclassification as a non-HVCRE exposure. For purposes of this definition of HVCRE exposure and with respect to a credit facility and an Board-regulated institution, an Board-regulated institution may reclassify an HVCRE exposure as a non-HVCRE exposure upon—

    (i) The substantial completion of the development or construction of the real property being financed by the credit facility; and

    (ii) Cash flow being generated by the real property being sufficient to support the debt service and expenses of the real property, in accordance with the Board-regulated institution's applicable loan underwriting criteria for permanent financings.

    12 CFR Part 324 Federal Deposit Insurance Corporation

    For the reasons set out in the joint preamble, the FDIC proposes to amend 12 CFR part 324 as follows.

    PART 324—CAPITAL ADEQUACY OF FDIC--SUPERVISED INSTITUTIONS Subpart A—General Provisions 5. The authority citation for part 324 continues to read as follows: Authority:

    12 U.S.C. 1815(a), 1815(b), 1816, 1818(a), 1818(b), 1818(c), 1818(t), 1819(Tenth), 1828(c), 1828(d), 1828(i), 1828(n), 1828(o), 1831o, 1835, 3907, 3909, 4808; 5371; 5412; Pub. L. 102-233, 105 Stat. 1761, 1789, 1790 (12 U.S.C. 1831n note); Pub. L. 102-242, 105 Stat. 2236, 2355, as amended by Pub. L. 103-325, 108 Stat. 2160, 2233 (12 U.S.C. 1828 note); Pub. L. 102-242, 105 Stat. 2236, 2386, as amended by Pub. L. 102-550, 106 Stat. 3672, 4089 (12 U.S.C. 1828 note); Pub. L. 111-203, 124 Stat. 1376, 1887 (15 U.S.C. 78o-7 note).

    6. Section 324.2 is amended by revising the definition of a “high volatility commercial real estate (HVCRE) exposure” as follows:
    § 324.2 Definitions.

    High volatility commercial real estate (HVCRE) exposure means:

    (1) A credit facility secured by land or improved real property that, prior to being reclassified by the FDIC-supervised institution as a non-HVCRE exposure pursuant to paragraph (6) of this definition —

    (i) Primarily finances, has financed, or refinances the acquisition, development, or construction of real property;

    (ii) Has the purpose of providing financing to acquire, develop, or improve such real property into income-producing real property; and

    (iii) Is dependent upon future income or sales proceeds from, or refinancing of, such real property for the repayment of such credit facility; provided that:

    (2) An HVCRE exposure does not include a credit facility financing—

    (i) The acquisition, development, or construction of properties that are—

    (A) One- to four-family residential properties;

    (B) Real property that would qualify as an investment in community development; or

    (C) Agricultural land;

    (ii) The acquisition or refinance of existing income-producing real property secured by a mortgage on such property, if the cash flow being generated by the real property is sufficient to support the debt service and expenses of the real property, in accordance with the FDIC-supervised institution's applicable loan underwriting criteria for permanent financings;

    (iii) Improvements to existing income-producing improved real property secured by a mortgage on such property, if the cash flow being generated by the real property is sufficient to support the debt service and expenses of the real property, in accordance with the FDIC-supervised institution's applicable loan underwriting criteria for permanent financings; or

    (iv) Commercial real property projects in which—

    (A) The loan-to-value ratio is less than or equal to the applicable maximum supervisory loan-to-value ratio as determined by the FDIC;

    (B) The borrower has contributed capital of at least 15 percent of the real property's appraised, `as completed' value to the project in the form of—

    (1) Cash;

    (2) Unencumbered readily marketable assets;

    (3) Paid development expenses out-of-pocket; or

    (4) Contributed real property or improvements; and

    (C) The borrower contributed the minimum amount of capital described under paragraph (2)(iv)(B) of this definition before the FDIC-supervised institution advances funds (other than the advance of a nominal sum made in order to secure the FDIC-supervised institution's lien against the real property) under the credit facility, and such minimum amount of capital contributed by the borrower is contractually required to remain in the project until the HVCRE exposure has been reclassified by the FDIC-supervised institution as a non-HVCRE exposure under paragraph (6) of this definition;

    (3) An HVCRE exposure does not include any loan made prior to January 1, 2015;

    (4) An HVCRE exposure does not include a credit facility reclassified as a non-HVCRE exposure under paragraph (6).

    (5) Value Of contributed real property.—For the purposes of this definition of HVCRE exposure, the value of any real property contributed by a borrower as a capital contribution is the appraised value of the property as determined under standards prescribed pursuant to section 1110 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3339), in connection with the extension of the credit facility or loan to such borrower.

    (6) Reclassification as a non-HVCRE exposure.—For purposes of this definition of HVCRE exposure and with respect to a credit facility and an FDIC-supervised institution, an FDIC-supervised institution may reclassify an HVCRE exposure as a non-HVCRE exposure upon—

    (i) The substantial completion of the development or construction of the real property being financed by the credit facility; and

    (ii) Cash flow being generated by the real property being sufficient to support the debt service and expenses of the real property, in accordance with the FDIC-supervised institution's applicable loan underwriting criteria for permanent financings.

    Dated: September 11, 2018. Joseph M. Otting, Comptroller of the Currency. By order of the Board of Governors of the Federal Reserve System, September 18, 2018. Ann E. Misback, Secretary of the Board. Dated at Washington, DC, on September 12, 2018.

    By order of the Board of Directors.

    Federal Deposit Insurance Corporation. Robert E. Feldman, Executive Secretary.
    [FR Doc. 2018-20875 Filed 9-27-18; 8:45 am] BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P
    SMALL BUSINESS ADMINISTRATION 13 CFR Parts 103, 120 and 121 RIN 3245-AG74 Express Loan Programs; Affiliation Standards AGENCY:

    U.S. Small Business Administration.

    ACTION:

    Proposed rule.

    SUMMARY:

    The U.S. Small Business Administration (SBA or Agency) is proposing to amend various regulations governing its business loan programs, including the SBA Express and Export Express Loan Programs and the Microloan and Development Company (504) loan programs.

    DATES:

    SBA must receive comments to the proposed rule on or before November 27, 2018.

    ADDRESSES:

    You may submit comments, identified by RIN: 3245-AG74, by any of the following methods:

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

    Mail: Kimberly Chuday or Thomas Heou, Office of Financial Assistance, Office of Capital Access, Small Business Administration, 409 Third Street SW, Washington, DC 20416.

    Hand Delivery/Courier: Kimberly Chuday or Thomas Heou, Office of Financial Assistance, Office of Capital Access, Small Business Administration, 409 Third Street SW, Washington, DC 20416.

    SBA will post all comments on www.regulations.gov. If you wish to submit confidential business information (CBI) as defined in the User Notice at www.regulations.gov, please submit the information to Kimberly Chuday or Thomas Heou, Office of Financial Assistance, Office of Capital Access, 409 Third Street SW, Washington, DC 20416. Highlight the information that you consider to be CBI and explain why you believe SBA should hold this information as confidential. SBA will review the information and make the final determination whether it will publish the information.

    FOR FURTHER INFORMATION CONTACT:

    Robert Carpenter, Acting Chief, 7(a) Program and Policy Branch, Office of Financial Assistance, Office of Capital Access, Small Business Administration, 409 Third Street SW, Washington, DC 20416; telephone: (202) 205-7654; email://[email protected]

    SUPPLEMENTARY INFORMATION: I. Background Information

    The SBA Express Loan Program (SBA Express) is established in section 7(a)(31) of the Small Business Act (the Act) (15 U.S.C. 636(a)(31)). Under SBA Express, designated Lenders (SBA Express Lenders) are permitted to use, to the maximum extent practicable, their own analyses, procedures, and documentation in making, closing, servicing, and liquidating SBA Express loans. They also have reduced requirements for submitting documentation to SBA and obtaining the Agency's prior approval. These loan analyses, procedures, and documentation must meet prudent lending standards; be consistent with those the Lenders use for their similarly-sized, non-SBA guaranteed commercial loans; and conform to all requirements imposed upon Lenders generally and SBA Express Lenders in particular by Loan Program Requirements (as defined in 13 CFR 120.10), as such requirements are issued and revised by SBA from time to time, unless specifically identified by SBA as inapplicable to SBA Express loans. In exchange for the increased authority and autonomy provided under the SBA Express Program, SBA Express Lenders agree to accept a maximum guaranty of 50 percent.

    The Export Express Loan Program (Export Express) is established in section 7(a)(34) of the Act (15 U.S.C. 636(a)(34)). This program is designed to help SBA meet the export financing needs of small businesses. Although it is a separate program, Export Express is generally subject to the same loan processing, making, closing, servicing, and liquidation requirements as well as the same interest rates and applicable fees as SBA Express. However, Export Express loans have a higher maximum loan amount than is available under SBA Express, and a maximum guaranty percentage of 75 or 90 percent, depending on the amount of the Export Express loan.

    A. Proposed Amendments

    This proposed rule would:

    1. Incorporate into the regulations governing the 7(a) Loan Program the requirements specifically applicable to the SBA Express and Export Express Loan Programs in order to provide additional clarity for SBA Express and Export Express Lenders;

    2. Add a new regulation to require certain owners of the small business Applicant to inject excess liquid assets into the business to reduce the amount of SBA-guaranteed funds that otherwise would be needed;

    3. Revise the regulations concerning allowable fees for the 7(a) Loan Program to limit the fees payable by the small business Applicant and to clarify what SBA considers reasonable with respect to such fees;

    4. Amend the regulation that explains the Agency's policy governing SBA-guaranteed loans to qualified employee trusts to require that all such applications be processed under non-delegated procedures;

    5. Incorporate a change to implement SBA's long-standing policy regarding the responsibility of a Lender for the contingent liabilities (including repairs and denials) for Lenders purchasing 7(a) loans from the Federal Deposit Insurance Corporation (FDIC) (as receiver, conservator, or other liquidator of a failed insured depository institution), whether such loans are acquired through a loan sale where SBA has not already purchased the guaranty or through a whole bank transfer;

    6. Revise the regulations governing the use of microloan grant funds by Microloan Intermediaries and extend the maximum maturity of a microloan;

    7. Modify the affiliation principles applicable to SBA's financial assistance programs to include additional circumstances when a small business Applicant will be deemed to be affiliated with another entity for purposes of determining the small business Applicant's size;

    8. Amend the regulation identifying when the size status of an Applicant for financial assistance is determined with respect to applications under the SBA Express and Export Express Loan Programs; and

    9. Make technical corrections to the regulation identifying prohibited fees in the 7(a) Loan Program and the regulation discussing the application for the Accredited Lenders Program (ALP) in the 504 Loan Program, as well as conforming amendments to two existing regulations for consistency with the proposed regulations governing SBA Express and Export Express, and a conforming amendment to one existing regulation for consistency with the proposed changes to the allowable fees that may be charged in connection with a 7(a) loan.

    B. Affected Programs

    The SBA programs affected by this proposed rule are:

    1. The 7(a) Loan Program authorized pursuant to Section 7(a) of the Act (15 U.S.C. 636(a));

    2. The Business Disaster Loan Programs (collectively, the Economic Injury Disaster Loans, Military Reservist Economic Injury Disaster Loans, and Physical Disaster Business Loans) authorized pursuant to Section 7(b) of the Act;

    3. The Microloan Program authorized pursuant to Section 7(m) of the Act (15 U.S.C. 636(m));

    4. The Intermediary Lending Pilot (ILP) Program authorized pursuant to Section 7(l) of the Act (15 U.S.C. 636(l));

    5. The Surety Bond Guarantee Program authorized pursuant to Part B of Title IV of the Small Business Investment Act of 1958 (15 U.S.C. 694b et seq.); and

    6. The Development Company Program (the 504 Loan Program) authorized pursuant to Title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.).

    (The 7(a), Microloan, ILP, and 504 Loan Programs are collectively referred to as the Business Loan Programs.)

    The Agency requests comments on all aspects of the regulatory revisions in this proposed rule and on any related issues affecting the Business Loan, Surety Bond Guarantee, and Business Disaster Loan Programs.

    II. Summary of Proposed Changes A. Business Loan Programs 1. SBA Express and Export Express Loan Programs Sections 120.441 through 120.447 SBA Express and Export Express Loan Programs

    SBA proposes adding a new undesignated center heading entitled “SBA Express and Export Express Loan Programs” and several new regulations that describe the two loan programs and the specific requirements applicable to them, as described more fully below. These proposed regulations are drafted based on the current statutory limits applicable to the SBA Express and Export Express Loan Programs. In the event that the SBA Express or Export Express statutory loan limits are increased by Congress, SBA will revise the regulations, including making necessary changes to mitigate any additional risk associated with an increase in loan size.

    Section 120.441 SBA Express and Export Express Loan Programs. SBA proposes adding a regulation providing general descriptions of the SBA Express and Export Express Loan Programs.

    Section 120.442 Process to obtain or renew SBA Express or Export Express authority. SBA proposes adding a regulation that sets forth the criteria and process to obtain or renew SBA Express or Export Express authority. In evaluating an existing 7(a) Lender's application for SBA Express or Export Express authority, SBA will consider the delegated authority criteria and follow the procedures set forth in § 120.440. Lending institutions that do not currently participate with SBA may apply to be SBA Express and/or Export Express Lenders, but must become 7(a) Lenders in order to participate in SBA Express and/or Export Express. Such institutions may request SBA 7(a) lending and SBA Express and/or Export Express authority simultaneously. In evaluating such institutions, in addition to the criteria set forth in §§ 120.410 (requirements for all participating Lenders) and 120.440 (delegated authority criteria), SBA will consider whether the institution has acceptable experience making small commercial loans, and whether its employees have received appropriate training on SBA's policies and procedures. Currently, SBA considers a Lender to have acceptable experience making small commercial loans when the Lender has at least 20 commercial loans of $350,000 or less with acceptable performance.

    As set forth in § 120.440, the decision to grant SBA Express or Export Express authority will be made by the appropriate SBA official in accordance with Delegations of Authority, and is final. If SBA Express or Export Express authority is approved, SBA will provide the Lender with the appropriate supplemental guarantee agreement, which the Lender must execute and return to SBA before the Lender's SBA Express or Export Express authority will become effective.

    In renewing a Lender's SBA Express or Export Express authority and determining the term of the renewal, SBA will consider the criteria and follow the process set forth in § 120.440. Currently, in renewing a Lender's Export Express authority, SBA also will consider whether the Export Express Lender can effectively process, make, close, service, and liquidate Export Express loans; has received a major substantive objection regarding renewal from the Field Office(s) covering the territory where the Lender generates significant numbers of Export Express loans; and has received acceptable review results on the Export Express portion of any SBA-administered Lender reviews. In this rule, SBA proposes to incorporate the additional considerations identified above for Export Express authority, but modify them to apply to both SBA Express and Export Express authority. Thus, in addition to the criteria set out in § 120.440, SBA also would consider whether the Lender can effectively process, make, close, service, and liquidate SBA Express or Export Express loans, as applicable; has received a major substantive objection regarding renewal from the Field Office(s) covering the territory where the Lender generates significant numbers of SBA Express or Export Express loans, as applicable; and has received acceptable review results on the SBA Express or Export Express portion, as applicable, of any SBA-administered Lender reviews.

    SBA may approve a Lender's initial application for authority to participate in SBA Express or Export Express for a maximum term of two years. SBA may approve a lesser term or limit a Lender's maximum SBA Express or Export Express loan volume if, in SBA's sole discretion, a Lender's qualifications, performance, experience with SBA lending, or other factors so warrant (e.g., Lenders with little or no experience with SBA lending).

    SBA is proposing to include in the regulations that the Agency may renew a Lender's authority to participate in SBA Express for a maximum term of three years if, in SBA's sole discretion, a Lender's qualifications, performance, SBA experience, or other factors so warrant. Although renewals of other types of delegated authority (e.g., Preferred Lender Program (PLP)) are for a maximum term of two years, SBA is proposing a longer renewal term for Lenders participating in SBA Express because SBA Express Lenders have accepted more of the risk in their SBA Express loans than other SBA Lenders, including Export Express Lenders.

    SBA may renew a Lender's authority to participate in Export Express for a maximum term of two years. SBA may approve a shorter renewal term or limit a Lender's maximum SBA Express or Export Express loan volume if, in SBA's sole discretion, a Lender's qualifications, performance, experience with SBA lending, or other factors so warrant.

    SBA is proposing a conforming amendment to the delegated authority criteria regulation at § 120.440(c) to clarify that a Lender's authority to participate in SBA Express may be renewed for a maximum term of three years. In addition, SBA is proposing some technical corrections to § 120.440(c).

    Section 120.443 SBA Express and Export Express loan processing requirements. SBA proposes adding a regulation that sets forth the requirements for loan processing under the SBA Express and Export Express loan programs. The regulations applicable to all Business Loans in Subparts A and B of Part 120, and 7(a) Loans specifically, govern the making of SBA Express and Export Express loans, unless specifically identified by SBA as inapplicable. For example, the same types of businesses that are ineligible for 7(a) loans under § 120.110 also are ineligible for SBA Express and Export Express loans. SBA Express and Export Express Lenders must follow all 7(a) eligibility requirements and maintain appropriate documentation supporting their eligibility determination in the loan file.

    Certain types of loans and loan programs are not eligible for processing under a Lender's delegated authority (including under a Lender's SBA Express or Export Express authority), as described in SBA's Standard Operating Procedure (SOP) 50 10 (Lender and Development Company Loan Programs). These loans currently include, but are not limited to: Special purpose loans (e.g., Disabled Assistance Loans, loans to Employee Stock Ownership Plans or equivalent trusts, Pollution Control Loans, or CAPLines); a loan that would reduce an SBA Express or Export Express Lender's existing credit exposure for a single Borrower, including its affiliates as defined in 13 CFR 121.301(f); a loan to a business that has an outstanding 7(a) loan where the Applicant is unable to certify that the loan is current at the time the SBA Express or Export Express Lender approves the SBA Express or Export Express loan; a loan that would have as its primary collateral real estate or personal property that will not meet SBA's environmental requirements; and complex loan structures or eligibility situations.

    For all other loans, SBA has authorized SBA Express and Export Express Lenders to make the credit decision without prior SBA review (i.e., using the Lender's delegated authority). As with all 7(a) loans, Lenders must not make an SBA-guaranteed loan that would be available on reasonable terms from either the Lender itself or another non-federal source without an SBA guaranty. In addition, the Lender's credit analysis must demonstrate that there is reasonable assurance of repayment. SBA Express and Export Express Lenders must use appropriate and prudent credit analysis processes and procedures that are generally accepted in the commercial lending industry and consistent with those used for their similarly-sized, non-SBA guaranteed commercial loans. As part of their prudent credit analysis, SBA Express and Export Express Lenders may use a business credit scoring model (such a model cannot rely solely on consumer credit scores) to assess the credit history of the Applicant and/or repayment ability if they do so for their similarly-sized, non-SBA guaranteed commercial loans. If used, the business credit scoring results must be documented in each loan file and available for SBA review. Lenders that do not use credit scoring for their similarly-sized, non-SBA guaranteed commercial loans may not use credit scoring for SBA Express or Export Express. Although Small Business Lending Companies (SBLCs), as defined in § 120.10, do not make non-SBA guaranteed loans, SBA has determined that they may use credit scoring as part of their prudent credit analysis for their SBA Express or Export Express loans.

    All SBA Express and Export Express Lenders must validate (and document) with appropriate statistical methodologies that their credit analysis procedures are predictive of loan performance, and they must provide that documentation to SBA upon request. SOP 50 10 includes the requirement that SBLCs provide credit scoring model validation to SBA for review and approval on an annual basis.

    The credit decision, including for example, how much to factor in a past bankruptcy and whether to require an equity injection (outside of any injection of excess personal resources under the proposed new § 120.102, as discussed below), is left to the business judgment of the SBA Express or Export Express Lender. Also, if the SBA Express or Export Express Lender requires an equity injection and, as part of its standard processes for its similarly-sized, non-SBA guaranteed loans verifies the equity injection, it must do so for its SBA Express or Export Express loans. SBLCs must follow the written policies and procedures that have been reviewed by SBA. While the credit decision is left to the business judgment of the SBA Express or Export Express Lender, early loan defaults will be reviewed by SBA pursuant to SOP 50 57 (7(a) Loan Servicing and Liquidation).

    SBA Express and Export Express Lenders are responsible for all loan decisions, including eligibility for 7(a) loans (including size), creditworthiness and compliance with all Loan Program Requirements (as defined in § 120.10). SBA Express and Export Express Lenders also are responsible for confirming that all loan closing decisions are correct and that they have complied with all requirements of law and Loan Program Requirements.

    SBA Express and Export Express Lenders must ensure all required forms are obtained and are complete and properly executed. Appropriate documentation must be maintained in the Lender's loan file, including adequate information to support the eligibility of the Applicant and the loan.

    Section 120.444 Eligible uses of SBA Express and Export Express loan proceeds. SBA is proposing to add a regulation to identify the eligible uses of loan proceeds for SBA Express and Export Express loans. Under SBA Express, loan proceeds must be used exclusively for eligible business-related purposes, as described in 13 CFR 120.120 and 120.130, which set forth the eligible uses of loan proceeds for 7(a) loans. In addition, it is the SBA Express Lender's responsibility to take reasonable steps to ensure and document that the loan proceeds are used exclusively for business-related purposes.

    Notwithstanding 13 CFR 120.130(c), revolving lines of credit are eligible for SBA Express, subject to certain conditions related to maturities and disbursement as set forth in SOP 50 10. Currently, SBA Express revolving loans have a maximum maturity of 10 years and must be structured with a term-out period that is not less than the draw period, with no draws permitted during the term-out period. For example, an SBA Express loan can have an eight year maturity with a two year draw period and a term-out period of six years. Conversely, a loan with an eight year maturity cannot have a draw period of six years and term-out period of two years. Further, as set forth in 13 CFR part 120, subpart F, revolving loans cannot be sold on the secondary market. (SBA is proposing a conforming amendment to § 120.130(c) (“Restrictions on uses of proceeds”) to include a reference to this new § 120.444 to clarify that revolving lines of credit are an eligible use of 7(a) loan proceeds under SBA Express and Export Express.)

    SBA Express and Export Express Lenders may refinance certain outstanding debts with SBA Express or Export Express loans, under the conditions set forth in SOP 50 10. An SBA Express Lender may refinance an existing non-SBA guaranteed loan held by another lender with an SBA Express loan if the Lender determines that the existing debt no longer meets the needs of the Applicant and, for certain types of debt, the new loan will provide a 10 percent improvement in the debt service coverage ratio. An SBA Express Lender may refinance its own non-SBA guaranteed debt, provided that: (1) The Lender determines that the existing debt no longer meets the needs of the Applicant; (2) the new loan will provide a 10 percent improvement in the debt service coverage ratio (for certain types of loans as explained in SOP 50 10); (3) the debt to be refinanced is, and has been, current for the past 36 months (“current” means no required payment has been more than 29 days past due); and (4) the Lender's credit exposure to the Applicant will not be reduced. Existing SBA-guaranteed loans may not be refinanced under SBA Express, unless: (1) The transaction is the purchase of an existing business that has an existing SBA loan that is not with the requesting SBA Express Lender; or (2) the Applicant needs additional financing and the existing Lender is unable or unwilling to increase the existing SBA loan or make a second loan, and (3) the new loan will provide a 10 percent improvement in debt service coverage. An SBA Express Lender may not refinance its own existing SBA-guaranteed debt under SBA Express.

    Export Express loans must be used for an export development activity, which is defined in section 7(a)(34)(A)(i) of the Act and includes the following:

    (1) Obtaining a Standby Letter of Credit when required as a bid bond, performance bond, or advance payment guarantee;

    (2) Participation in a trade show that takes place outside the United States;

    (3) Translation of product brochures or catalogues for use in markets outside the United States;

    (4) Obtaining a general line of credit for export purposes;

    (5) Performing a service contract for buyers located outside the United States;

    (6) Obtaining transaction-specific financing associated with completing export orders;

    (7) Purchasing real estate or equipment to be used in the production of goods or services for export;

    (8) Providing term loans and other financing to enable a small business concern, including an export trading company and an export management company, to develop a market outside the United States; and

    (9) Acquiring, constructing, renovating, modernizing, improving or expanding a production facility or equipment to be used in the United States in the production of goods or services for export.

    As noted above, Export Express loans may be used to refinance certain outstanding debts, under the conditions set forth in SOP 50 10. Specifically, Export Express loans may be used to refinance existing non-SBA guaranteed debt, whether held by another lender or by the Export Express Lender, if the Export Express Lender follows the guidance for refinancing under SBA Express and verifies and documents that the new loan will be used to finance an export development activity. Export Express loans may be used to refinance an existing Export Express loan held by another Export Express Lender only if the original Export Express Lender is unable or unwilling to increase or make a second Export Express loan, which must be documented in the loan file. An Export Express Lender may not refinance one of its own Export Express loans with a new Export Express loan.

    Export Express loans may not be used to finance overseas operations, except for the marketing and/or distribution of products/services exported from the United States.

    Export Express Lenders are responsible for ensuring that U.S. companies are authorized to conduct business with the Persons and countries to which the Borrower will be exporting. Specific guidance as to how Export Express Lenders will be expected to do so will be included in SOP 50 10.

    Specific documentation requirements related to the use of proceeds for Export Express loans are described more fully in SOP 50 10.

    Section 120.445 Terms and conditions of SBA Express and Export Express loans. While generally the terms and conditions applicable to 7(a) loans also apply to SBA Express and Export Express loans, there are some differences. SBA is proposing to add a new regulation to identify those terms and conditions of SBA Express and Export Express loans that are unique to these two programs, including maximum loan amounts and guaranty percentages, maturities, interest rates, collateral and insurance requirements, allowable fees and requirements concerning loan increases. With respect to the maximum loan amounts, the proposed rule refers to the maximum loan amount for each program as set forth in the applicable section of the Small Business Act (sections 7(a)(31)(D) and 7(a)(34)(C)(i), respectively). Currently, the maximum loan amount for SBA Express is $350,000 and the maximum loan amount for Export Express is $500,000.

    With respect to collateral, currently, for loans of $25,000 or less, SBA Express and Export Express Lenders are not required to take collateral to secure the loan. For loans over $25,000, SBA Express and Export Express Lenders must, to the maximum extent practicable, follow the written collateral policies and procedures that they have established and implemented for their similarly-sized, non-SBA guaranteed commercial loans, except for Export Express lines of credit over $25,000 used to support the issuance of a standby letter of credit. Export Express lines of credit over $25,000 used to support the issuance of a standby letter of credit must have collateral (cash, cash equivalent or project) that will provide coverage for at least 25% of the issued standby letter of credit amount.

    SBA proposes to incorporate these collateral requirements into new § 120.445(e), with the exception of the dollar thresholds. Rather than include the current thresholds in the proposed rule, SBA is proposing to include language in the regulation giving the Agency the ability to establish a threshold below which SBA Express and Export Express Lenders will not be required to take collateral to secure an SBA Express or Export Express loan. The threshold would be described more fully in SOP 50 10. This will provide the Agency with the flexibility to adjust the threshold if necessary.

    Additionally, this proposed regulation provides that SBA Express and Export Express Lenders may sell the guaranteed portions of SBA Express and Export Express term loans on the secondary market in accordance with 13 CFR subpart F, but may not sell the guaranteed portions of SBA Express or Export Express revolving lines of credit on the secondary market.

    SBA Express and Export Express Lenders must pay the same fees to SBA that all 7(a) Lenders pay, which are identified in § 120.220. The fees and expenses that 7(a) Lenders may collect from an Applicant or Borrower are set forth in the regulation at § 120.221. Currently, with the exception of renewal fees, SBA Express and Export Express Lenders may charge an Applicant or Borrower on an SBA Express or Export Express loan the same types of fees they charge on their similarly-sized, non-SBA guaranteed commercial loans, provided that the fees are directly related to the service provided and are reasonable and customary for the services performed. The fees charged on SBA Express or Export Express loans may not be higher than those charged on the Lender's similarly-sized, non-SBA guaranteed commercial loans. In this rule, SBA proposes to require SBA Express and Export Express Lenders to comply with the same rules that apply to all other 7(a) Lenders with respect to the fees that may be collected from an Applicant or Borrower on SBA Express and Export Express loans. As noted above, the regulation at § 120.221 sets forth the fees and expenses that 7(a) Lenders may collect from an Applicant or Borrower. In addition, 13 CFR part 103 of the regulations governs Agents, including their fees and provision of services. As discussed more fully in Section 3 below, SBA is proposing changes to §§ 120.221, 103.4(g), and 103.5 with respect to the fees that may be collected from an Applicant or Borrower by a 7(a) Lender or Agent. These changes will be applicable to all 7(a) loans, including SBA Express and Export Express loans.

    Consistent with SBA Loan Program Requirements, if an SBA Express or Export Express Lender requests that SBA honor its guaranty, the Agency will not purchase any portion of the loan balance that consists of fees charged to the borrower, with the exception of the SBA guaranty fee. Also, as set forth in § 120.222, SBA Express and Export Express Lenders and their Associates are prohibited from sharing any premium received from the sale of an SBA guaranteed loan in the secondary market with a Service Provider, packager, or other loan-referral source. Lenders may be subject to enforcement or other appropriate action, including suspension or revocation of their privilege to sell loans in the secondary market, in the event of a violation of this prohibition.

    Because SBA will require SBA Express and Export Express Lenders to comply with the same rules that apply to all other 7(a) Lenders with respect to the fees and expenses that may be collected from an Applicant or Borrower in connection with an SBA-guaranteed loan (including SBA Express and Export Express loans), SBA is not including language regarding fees in proposed § 120.445.

    Section 120.446 SBA Express and Export Express loan closing, servicing, liquidation, and litigation requirements. SBA proposes to add a new regulation providing that SBA Express and Export Express Lenders must close, service, liquidate, and litigate their SBA Express and Export Express loans using the same documentation and procedures they use for their similarly-sized, non-SBA guaranteed commercial loans, which must comply with law, prudent lending practices, and Loan Program Requirements. Additionally, the proposed regulation provides that SBA Express and Export Express Lenders must comply with the loan servicing and liquidation responsibilities set forth for 7(a) Lenders in 13 CFR part 120, subpart E and other Loan Program Requirements. Additional guidance on loan closing, servicing, liquidation and litigation is provided in SOPs 50 10 and 50 57.

    The proposed regulation also describes the circumstances under which SBA will honor the guaranty on SBA Express and Export Express Loans. As is true for 7(a) loans generally, SBA will purchase the guaranteed portion of an SBA Express or Export Express loan in accordance with § 120.520 and other Loan Program Requirements, in particular SOP 50 57. In accordance with § 120.520(a)(1), for loans approved on or after May 14, 2007, unless the Borrower filed for bankruptcy, the SBA Express or Export Express Lender may request that SBA honor the guaranty on the loan if there is an uncured payment default of more than 60 days and the Lender has liquidated the business personal property collateral securing the defaulted loan. In accordance with § 120.520(a)(2) and SOP 50 57, for loans approved before May 14, 2007, an SBA Express Lender must liquidate all collateral for the loan and pursue all cost-effective means of recovery to collect the debt before the Lender can request that SBA honor its guaranty. For Export Express loans, however, the Lender does not have to liquidate all of the collateral and pursue all cost-effective means of recovery prior to requesting that SBA honor its guaranty if the outstanding principal balance is $50,000 or less or there is protracted litigation or other circumstances that will extend the liquidation process. It is important to note that, while non-financial default provisions are allowed under SBA Express and Export Express under certain conditions set forth in SOP 50 10, an SBA Express or Export Express Lender may not request purchase of the guaranty based solely on a violation of a non-financial default provision.

    SBA will be released of its liability on an SBA Express or Export Express loan guaranty in accordance with § 120.524.

    Section 120.447 Lender oversight of SBA Express and Export Express Lenders. SBA proposes to add a new regulation explaining that SBA Express and Export Express Lenders are subject to the same risk-based lender oversight as 7(a) Lenders, including supervision and enforcement provisions, in accordance with 13 CFR part 120, subpart I. Additional guidance concerning Lender supervision and enforcement is provided in SOPs 50 53 (Lender Supervision and Enforcement) and 51 00 (On-Site Lender Reviews/Examinations).

    2. Credit Elsewhere and the Personal Resources of Owners of the Small Business Applicant

    Section 120.102 Funds not available from alternative sources, including the personal resources of owners. Effective April 21, 2014, SBA removed § 120.102 from the regulations, thereby eliminating what was commonly known as the “personal resources test” from the requirements to determine eligibility for the Business Loan Programs. This regulation required certain owners of the Applicant business to inject personal liquid assets into the business to reduce the amount of SBA-guaranteed funds that would otherwise be needed. The Agency eliminated this requirement in 2014 because it was concerned, at that time, that even borrowers whose principals had significant personal resources may have been unable to obtain long-term fixed asset financing from private sources at reasonable rates. The Agency also questioned whether the existence of personal resources directly correlated to the ability to obtain commercial credit on reasonable terms. In addition, the Agency determined that financing more robust borrowers in the program would offset some of the risks to SBA. However, SBA is now concerned that borrowers with large amounts of personal assets are receiving government-backed loans. In order to ensure that SBA financial assistance is provided only to those small businesses that are unable to obtain credit from alternative sources without a government guaranty, including the personal resources of the owners of the small business, SBA proposes to reinstitute a personal resources test.

    SBA proposes to add a regulation that would require SBA Lenders (i.e., both 7(a) Lenders and Certified Development Companies (CDCs)) to analyze the resources of individuals and entities that own 20 percent or more of the Applicant business in order to determine if any of the owners have liquid assets available that can provide some or all of the desired financing. (The resources of an owner who is an individual include the resources of the owner's spouse and minor children.) When an owner of 20 percent or more has liquid assets that exceed stated thresholds, SBA is proposing to require an injection of cash from any such owner to reduce the SBA loan amount. Specifically, when the total financing package (i.e., any SBA loans and any other financing, including loans from any other source, requested by the Applicant business at or about the same time):

    (1) Is $350,000 or less, each 20 percent owner of the Applicant must inject any liquid assets that are in excess of one and three-quarter times the total financing package, or $200,000, whichever is greater;

    (2) Is between $350,001 and $1,000,000, each 20 percent owner of the Applicant must inject any liquid assets that are in excess of one and one-half times the total financing package, or $1,000,000, whichever is greater;

    (3) Exceeds $1,000,000, each 20 percent owner of the Applicant must inject any liquid assets that are in excess of one times the total financing package, or $2,500,000, whichever is greater.

    SBA, in its sole discretion, may permit exceptions to the required injection of an owner's excess liquid assets only in extraordinary circumstances, such as when the excess funds are needed for medical expenses of a family member or education/college expenses for children.

    3. Permissible Fees That a Lender or Agent May Collect From an Applicant or Borrower in Connection With a 7(a) Loan Application.

    The regulations governing permissible fees a Lender may collect from a loan Applicant or Borrower in connection with an SBA-guaranteed loan are set forth in § 120.221. In addition, the regulations governing Agents, including their fees and provision of services, are set forth in 13 CFR part 103. Based on feedback obtained when conducting lender oversight activities and the numerous questions SBA receives concerning permissible fees, it is apparent that there is a significant amount of confusion surrounding who may charge an Applicant fees in connection with an SBA-guaranteed loan, what fees may be charged to the Applicant, what fees may be charged to the Lender, and what is a “reasonable fee.” In addition, in many cases, Applicants are being charged multiple fees by multiple providers (e.g., the Lender and a third party), on the same loan. On numerous occasions, SBA has had to require that a Lender or Agent refund amounts to an Applicant or Borrower that the Agency deemed were unreasonable or prohibited.

    The regulations governing Agents, including their fees and provision of services to either an Applicant or a Lender are set forth in Part 103, not in Part 120 of the regulations. The regulations in Part 103 provide key definitions, including but not limited to Agents, Lender Service Providers, Packagers and Referral Agents. (See § 103.1.) The definition of a Referral Agent in § 103.1(f) states that a Referral Agent may be compensated by either an Applicant or a Lender. Thus, Agents are permitted to charge an Applicant a referral fee, while Lenders are not. In addition, while SBA permits Lenders to engage with Lender Service Providers (LSPs) (as defined in § 103.1(d)) to assist the Lender with lender functions in connection with SBA-guaranteed loans, the cost of the LSP services may not be charged to the Applicant or Borrower. (See § 103.5(c).) To further complicate matters, the regulation at § 103.4(g) states that a Lender Service Provider may not act as both a Lender Service Provider or Referral Agent and a Packager for an Applicant on the same SBA business loan and receive compensation for such activity from both the Applicant and Lender. However, that regulation provides a limited exception to this “two master” prohibition when an Agent acts as a Packager and is compensated by the Applicant for packaging services, and the same Agent also acts as a Referral Agent and is compensated by the Lender for referral activities in connection with the same loan application, provided the packaging services are disclosed to the Lender and the referral services are disclosed to the Applicant.

    In order to simplify who may charge fees to the Applicant and/or the Lender, and to limit the total amount of fees that an Applicant may be charged in order to obtain an SBA-guaranteed loan, SBA proposes to revise certain portions of the regulations at §§ 120.221, 103.4, and 103.5.

    Section 120.221 Fees and expenses which the Lender may collect from a loan Applicant or Borrower. Currently, § 120.221(a) permits a Lender to charge an Applicant reasonable fees (customary for similar Lenders in the geographic area where the loan is being made) for packaging and other services. Under the current regulation, SBA permits Lenders to charge an Applicant a reasonable fee to assist the Applicant with the preparation of the application and supporting materials. However, SBA does not permit Lenders (or their Associates) to charge an Applicant a commitment, broker, referral, or similar fee.

    SBA proposes to amend § 120.221(a) to limit the total fees an Applicant can be charged by a Lender for assistance in obtaining an SBA-guaranteed loan. Regardless of what the fee is called (e.g., a packaging fee, application fee, etc.), the Lender would be permitted to collect a fee from the Applicant that is no more than $2,500 for a loan up to and including $350,000 and no more than $5,000 for a loan over $350,000. With the exception of necessary out-of-pocket costs, such as filing or recording fees permitted in § 120.221(c), this is the only fee that a Lender may collect directly or indirectly from an Applicant for assistance with obtaining an SBA-guaranteed loan. In addition, the Lender may not split a loan into two loans for the purpose of charging an additional fee to an Applicant. If there is a legitimate business need for the Applicant's loan request to be split into two loans (e.g., a term loan and a line of credit), the Lender may only charge the Applicant one fee within the maximums set forth above, based on the combined loan amounts. For example, if the Applicant needs a $2 million term loan to purchase real estate and a building and a $350,000 line of credit for working capital, the Lender may charge one fee for both loans not to exceed $5,000.

    SBA considers these fees to be reasonable for the services provided by a Lender to an Applicant for assistance with obtaining an SBA-guaranteed loan. SBA will monitor these fees and, if adjustments are necessary, SBA may revise these amounts from time to time.

    If the Lender charges the Applicant a fee for assistance with obtaining an SBA-guaranteed loan, the Lender must disclose the fee to the Applicant and SBA by completing the Compensation Agreement (SBA Form 159) in accordance with the regulation at § 103.5 and the procedures set forth in SOP 50 10.

    SBA also proposes to amend § 120.221(b) to permit extraordinary servicing fees in excess of 2 percent for Export Working Capital Program (EWCP) loans and Working Capital CAPLines that are disbursed based on a Borrowing Base Certificate. In these programs, the fees charged must be reasonable and prudent based on the level of extraordinary effort required, and cannot be higher than the fees charged on the Lender's similarly-sized, non-SBA guaranteed commercial loans. In addition, the fees charged cannot exceed the actual cost of the extra service provided. (SBA is proposing a conforming amendment to § 120.344(b) to ensure extraordinary servicing fees charged on EWCP loans are reasonable and prudent.)

    The remaining sections of § 120.221 (sections (c) through (e)) remain unchanged. Thus, in appropriate circumstances as set forth in current §§ 120.221(c) through (e) and further clarified in SOP 50 10, a Lender may charge an Applicant or Borrower out of pocket expenses, a late payment fee, and for legal services charged on an hourly basis.

    Section 103.4 What is “good cause” for suspension or revocation? As noted above, the regulation at § 103.4(g) currently permits a limited exception to the “two master” prohibition when an Agent acts as a Packager and is compensated by the Applicant for packaging services, and the same Agent also acts as a Referral Agent and is compensated by the Lender for those activities in connection with the same loan application. SBA believes there is, at a minimum, an appearance of a conflict of interest when an Agent represents both the Applicant and the SBA Lender on the same loan application. In addition, the definition of an “Associate” of a SBA Lender set forth in § 120.10 includes “an agent involved in the loan process.” Therefore, an LSP or Referral Agent acting on behalf of the SBA Lender meets the definition of an Associate of the SBA Lender and is prohibited under current Loan Program Requirements from charging the Applicant certain fees or expenses in connection with an SBA-guaranteed loan. Further, when conducting Lender oversight activities, SBA has observed numerous instances where Applicants have been erroneously charged for services that were provided for the SBA Lender, not the Applicant. In order to prevent any conflicts of interest from arising and to ensure the Applicants are not improperly charged for services provided to the SBA Lender, SBA proposes to eliminate the limited exception to the “two master prohibition” and prevent an Agent, including an LSP, from providing services to both the Applicant and the SBA Lender and being compensated by both parties in connection with the same loan application. SBA proposes to use the defined term “SBA Lender” in the revised regulation to clarify that it applies to both 7(a) Lenders and CDCs. SBA also proposes to revise the remaining text of § 103.4(g) for clarity.

    Section 103.5 How does SBA regulate an Agent's fees and provision of service? The regulation at § 103.5 sets forth, among other things, the requirement for all Agents to disclose to SBA the compensation received for services provided to an Applicant and requires that fees charged must be considered reasonable by SBA. In an effort to clarify what SBA considers reasonable and to prevent Applicants from being overcharged by Agents, SBA proposes to amend this section to limit the total fees that an Agent may charge an Applicant in connection with obtaining an SBA-guaranteed loan.

    SBA proposes the following limitations on the fees that an Agent may charge an Applicant:

    (1) For loans up to and including $350,000: A maximum of up to 2.5% of the loan amount, or $7,000, whichever is less;

    (2) For loans $350,001-$1,000,000: A maximum of up to 2% of the loan amount, or $15,000, whichever is less; and

    (3) For loans over $1,000,000: A maximum of up to 1.5% of the loan amount, or $30,000, whichever is less.

    If an Agent provides more than one service (e.g., packaging and referral services), only one fee would be permitted for all services performed by the Agent. Further, if more than one Agent (e.g., a Packager and a Referral Agent) provides assistance to the Applicant in obtaining the loan, the amount of all fees that the Applicant may be required to pay would be combined to meet the maximum allowable fee set by SBA. (However, a fee charged to the Applicant by the Lender in accordance with proposed § 120.221(a) will not be counted toward the maximum allowable fee for an Agent or Agents.) These maximum limits would apply regardless of whether the Agent's fee is based on a percentage of the loan amount or on an hourly basis.

    SBA considers these fees to be reasonable for the services provided by an Agent or Agents to an Applicant in connection with obtaining an SBA-guaranteed loan. SBA will monitor these fees and, if adjustments are necessary, SBA may revise these amounts from time to time by publishing a notice with request for comments in the Federal Register.

    If an Agent or Agents charge an Applicant fees in connection with obtaining an SBA-guaranteed loan, the Agent or Agents must disclose the fees to SBA by completing a Compensation Agreement (SBA Form 159) in accordance with the regulation at § 103.5 and must provide supporting documentation as set forth in SOP 50 10.

    Additionally, SBA proposes to remove the word “directly” from the last sentence of § 103.5(c) to clarify that compensation paid by the Lender to a Lender Service Provider may not be charged to Applicants, either directly or indirectly.

    4. Loans to Qualified Employee Trusts

    The regulations governing SBA-guaranteed loans to qualified employee trusts or “ESOPs” are set forth in §§ 120.350 through 120.354. Currently, the regulation at § 120.350 describes the Agency's policy concerning such loans and states that SBA is authorized under section 7(a)(15) of the Act to provide guaranteed loans to ESOPs to help finance the growth of the employer small business or to purchase ownership or voting control of the employer. Because of the complex nature of these transactions, SBA is proposing to amend the regulation at § 120.350 to require such applications to be processed only on a non-delegated basis.

    5. A Lender's Responsibility When Purchasing 7(a) Loans From the FDIC as Receiver, Conservator, or Other Liquidator of a Failed Financial Institution

    Generally, when the FDIC takes over a failed insured depository institution, it sells the 7(a) loan assets of the institution to either an Assuming Institution (through a purchase and assumption transaction) or to an investor in one or more FDIC loan sales. SBA has a long-standing policy of holding Assuming Institutions and investors responsible for the contingent liabilities (including repairs and denials) associated with 7(a) loans originated by failed insured depository institutions, whether the 7(a) loans are purchased by a Lender through an FDIC loan sale where SBA has not already purchased the guaranty or to an Assuming Institution through a whole bank transfer.

    Under § 120.432(a), for 7(a) loan sales that do not involve the FDIC (i.e., the sale of a Lender's entire interest in a 7(a) loan to another Lender), SBA holds a purchasing Lender responsible for the contingent liabilities associated with the 7(a) loans acquired (even if the guaranteed portion of the loan has already been sold on the secondary market). SBA is proposing to amend the regulation at § 120.432(a) to implement its long-established policy for 7(a) loans acquired by Lenders from the FDIC (as receiver, conservator, or other liquidator of a failed insured depository institution).

    6. Microloan Program

    Section 120.707 What conditions apply to loans by Intermediaries to Microloan borrowers? In order to provide more flexibility for the Microloan borrower, SBA proposes to revise the regulation at § 120.707(b) to increase the maximum maturity of a loan from an Intermediary to a Microloan borrower from six years to seven years. This change would allow for a longer repayment period for these small loans.

    Section 120.712 How does an Intermediary get a grant to assist Microloan borrowers? SBA proposes to revise the regulation at § 120.712(b) to incorporate recent statutory changes to the percentage of grant funds that may be used by the Intermediary for marketing, managerial, and technical assistance to prospective Microloan borrowers from 25 percent to 50 percent. The balance of grant funds must be used to provide technical assistance to actual borrowers (i.e., small businesses that have received loan funds from the Intermediary). In § 120.712(d), SBA proposes to incorporate an identical recent statutory change to the percentage of grant funds the Intermediary may use to contract with third parties to provide technical assistance to Microloan borrowers. In addition, SBA proposes to revise § 120.712(b) to limit the amount of grant funds that an Intermediary may use to market or advertise the Microloan program to prospective borrowers to no more than 5 percent of the amount of the grant. None of the grant funds may be used by the Intermediary to market or advertise its non-SBA products or services. Furthermore, in accordance with the Office of Management and Budget guidance for grants and agreements set forth in 2 CFR 200.403 and 200.404, the amount of grant funds used by the Intermediary to market or advertise the Microloan program to prospective borrowers must be reasonable.

    7. Technical Corrections

    Section 120.222 Prohibition on sharing premiums for secondary market sales. SBA proposes a technical correction to § 120.222 to remove an extra word (“in”) that was inserted in error.

    Section 120.840 Accredited Lenders Program (ALP). In § 120.840(b), SBA is proposing to replace the reference to the Director, Office of Financial Assistance with “appropriate SBA official in accordance with Delegations of Authority.”

    B. Affiliation Principles for the Business Loan, Business Disaster Loan, and Surety Bond Guarantee Programs

    Section 121.301 What size standards and affiliation principles are applicable to financial assistance programs? SBA proposes to amend the affiliation principles applicable to Applicants for assistance in the financial assistance programs set forth in § 121.301(f). Specifically, SBA proposes to expand the principle of affiliation arising from “identity of interest” to include common investments and economic dependence through contractual or other relationships between any two or more individuals or businesses, reinstate the “newly organized concern” rule, reinstate the “totality of the circumstances” analysis when determining affiliation between an Applicant for financial assistance and other entities, and clarify affiliation based on a franchise or license agreement.

    Currently, the regulation at § 121.301(f)(4) defines affiliation based on “identity of interest” for the Business Loan, Business Disaster Loan, and Surety Bond Guarantee Programs as arising only when there are “close relatives” with identical or substantially identical business or economic interests (such as where the close relatives operate concerns in the same or similar industry in the same geographic area). Prior to 2016, this regulation also defined affiliation to include identity of interest based on other grounds, including common investments or economic dependence among other parties (not just close relatives). The current regulation also differs from the principles of affiliation SBA uses for all its other programs, all of which include common investments and economic dependence as grounds for affiliation. By limiting the regulation to close relatives only, SBA has allowed businesses that are economically dependent on one another to be treated as independent businesses (i.e., not affiliated) for the purposes of the programs referenced in this paragraph. SBA has also allowed individuals with multiple common investments to have their ownership interests be considered separately in the Business Loan Programs, whereas other SBA programs would find those individuals to have an identity of interest. SBA believes the 2016 regulatory change should be reversed in order to better reflect the controlling effect of an identity of interest through common investments or economic dependence and to conform more closely to other SBA programs. Accordingly, SBA is now proposing to expand this regulation to include affiliation between individuals or firms that have identical or substantially identical business or economic interests (individuals or firms with common investments, or firms that are economically dependent through contractual or other relationships).

    Under the proposed rule, SBA would find affiliation based on common investments under the identity of interest rule when multiple entities are owned by the same individuals or firms, and the entities owned by such investors conduct business with each other or share resources. In order to find an identity of interest between investors, the common investments would need to be substantial, either in number of investments or total value. As an example, in the Size Appeal of W. Harris, Government Services Contractor, Inc., SBA No. SIZ-5717 (2016), SBA found two individuals to have an identity of interest based on common investments where they each owned 50% of one firm, and split the ownership of a second firm on a 55%/45% basis. While there were only two common investments, based on the fact that the two individuals' combined ownership of the two firms was 100%, their common investments were deemed to be substantial in value. Because of the substantial common investments, the two firms were affiliated with each other and with a firm wholly owned by one of the individuals. The proposed rule adopts the standard in W. Harris with the following modification: Under the proposed rule, SBA would consider businesses to be affiliated based on common investments only if they conduct business with each other, or share resources, equipment, locations or employees; or provide loan guaranties or other financial or managerial support to each other.

    As a hypothetical example, ABC Company is owned by four unrelated individuals: Ann owns 60% of the business; Barbara owns 15%; Charlie owns 15%; and David owns 10%. ABC Company applies for a 504 loan to acquire land and build a hotel. XYZ Company is owned by the same four unrelated individuals, but in different ownership percentages: Ann owns 10% of the business; Barbara owns 60%; Charlie owns 15%; and David owns 15%. XYZ Company, a management company, applies for a 7(a) loan for working capital. DEF Company also is owned by the same four unrelated individuals in different ownership percentages, but with a new member as well: Ann owns 5% of the business; Barbara owns 10%; Charlie owns 55%; David owns 15%; and Ella owns 15%. DEF Company applies for a 504 loan to acquire land and build a hotel. XYZ Company has agreements with ABC Company and DEF Company to manage both of the hotels. Under the proposed rule, SBA will consider Ann, Barbara, Charlie and David to have an identity of interest because of their substantial common investments in the three companies, and the fact that XYZ Company manages the hotels owned by ABC Company and DEF Company. Any firm in which Ann, Barbara, Charlie, or David individually or collectively own more than 50% also will be considered affiliated with ABC Company, XYZ Company, and DEF Company, if the business owned by Ann, Barbara, Charlie, or David conducts business or shares resources with, or provides financial or managerial support to, any of the co-owned firms. Any other businesses in which Ella may have an ownership interest, however, will not be considered affiliated because Ella only has a small ownership percentage in DEF Company.

    Also under the proposed identity of interest rule, if a small business Applicant derived more than 85% of its revenue from another business over the previous three fiscal years, SBA would find that the small business Applicant is economically dependent on the other business and, therefore, that the two businesses are affiliated. For example, Company A manufactures tires and has a contract with Company B to supply the vast majority of Company B's tires. The sales to Company B accounted for 86%-88% of Company A's revenues over the previous three fiscal years. Under the proposed rule, Company A would be economically dependent on Company B and the two businesses would be deemed affiliated. The proposed rule departs from SBA's other programs in using a higher threshold of 85% of the Applicant's revenues to establish economic dependence, rather than 70%. SBA believes the higher threshold is more appropriate to establish affiliation in the programs discussed in this Section II.B. As in SBA's other programs, this basis of affiliation would include an exception for a business that is new or a start-up. New or start-up businesses may only have a few customers or obtained a few contracts, and do not have as many partners and clients as established businesses. In order to be eligible for the exception for new or start-up businesses, these businesses would need to have a plan to diversify and become less dependent on one entity. For example, in the matter of Size Appeal of Argus And Black, Inc., SBA No. SIZ-5204, 2011 WL 1168302 (February 22, 2011), the SBA Office of Hearings and Appeals held that where a small business has only recently begun operations either initially or after a period of dormancy, and is dependent upon its alleged affiliate for only one small contract of short duration, which by itself could not sustain a business, a finding of economic dependence is not warranted.

    SBA recognizes that, if the proposed identity of interest rule is adopted as final, SBA Lenders may need assistance in applying the rule to certain agricultural business relationships or agreements. In particular, the agreement between a poultry farmer and a large poultry producer (integrator) may be critical to the determination of whether the farmer is an independent small business but, due to the complexity of the typical integrator agreement, SBA Lenders may be uncertain as to the correct outcome of the affiliation analysis for such a business relationship. SBA is considering reviewing these agreements and making the affiliation determination itself so that SBA Lenders will not be reluctant to make loans to small poultry farmers operating under such agreements. SBA will provide further information on this in the final rule, if necessary.

    Additionally, SBA proposes to add the newly organized concern rule to § 121.301(f), which will create uniformity among SBA's various affiliation rules. The newly organized concern rule applied to the Business Loan Programs prior to the 2016 rule change, but was removed at SBA's own initiative. Under the proposed newly organized concern rule, a newly organized spin-off company may be found affiliated with the original company where all of the following conditions are met: (1) Former or current officers, directors, principal stockholders, managing members, general partners, or key employees of one concern organize a new concern; (2) the new concern is in the same or related industry or field of operation; (3) the individuals who organized the new concern serve as the new concern's officers, directors, principal stockholders, managing members, general partners, or key employees; and (4) the original concern is furnishing or will furnish the new concern with contracts, financial or technical assistance, indemnification on bid or performance bonds, and/or other facilities, whether for a fee or otherwise. The proposed rule would define a key employee to be an employee who, because of his or her position in the concern, has a critical influence in or substantive control over the operations or management of the concern. The proposed rule further defines a “newly organized” concern to be one that has been actively operating continuously for two years or less. The proposed newly organized concern basis of affiliation would be a rebuttable presumption that may be rebutted if there is a clear line of fracture between the new concern and the other firm.

    Finally, SBA proposes to amend § 121.301(f) by adding a new paragraph 6 to explain that, when making affiliation determinations, SBA will consider the totality of the circumstances, and may find affiliation even though no single factor is sufficient to constitute affiliation. The totality of the circumstances criterion for determining affiliation was removed in 2016 in response to comments received on the proposed revisions to the affiliation rules. Commenters requested that SBA either eliminate the criterion or provide examples of when it would be used. SBA stated that, generally, examples of when this criterion was used involved negative control or control through management agreements. Rather than include examples in the rule, SBA provided additional specific guidance in §§ 121.301(f)(1) and (f)(3) to address negative control and control through management agreements. However, SBA now believes that there are other examples of when affiliation may be present and, therefore, is reinstating the totality of the circumstances criterion.

    Examples of affiliation between small businesses based on the totality of the circumstances include:

    (1) SBA found a newly established firm to be affiliated with the firm owned by its 40% owner where both firms were construction companies; they had similar names (Specialized Services, Inc. and Specialized Veterans, LLC); the 40% owner provided a $300,000 initial capital contribution compared to the 60% owner's $1,000 contribution; the majority owner was previously the Chief Operating Officer of the affiliate; the majority owner had no construction experience; and the affiliate provided indemnification to the firm's surety. (Size Appeal of Specialized Veterans, LLC, SBA No. SIZ-5138 (2010).)

    (2) SBA found a newly established firm to be affiliated with its minority owner, an entity in the same line of business, where the other owners were previously key employees of the affiliate; the affiliate provided guarantees for the firm's financing and required the firm to seek the affiliate's approval before undertaking long-term commitments; the affiliate supplied the firm with machines and equipment for free; the affiliate promised the firm a large amount of business; and the sales the firm made to the affiliate accounted for the vast majority, 86%-88%, of its revenues. (Size Appeal of Pointe Precision, LLC, SBA No. SIZ-4466 (2001).)

    SBA notes that a business found affiliated under the totality of the circumstances test (or any other ground of affiliation) in the Business Loan Programs may challenge the determination by requesting a formal size determination from SBA's Office of Government Contracting in accordance with 13 CFR 121.1001(b)(1)(i). A business can appeal a formal size determination to SBA's Office of Hearings and Appeals in accordance with 13 CFR 121.1101.

    Finally, SBA proposes to revise § 121.301(f)(5) to clarify that the term “franchise” has the meaning given by the Federal Trade Commission (FTC) in its definition of “franchise” as set forth in 16 CFR 436. SBA proposes to cross reference the FTC definition of “franchise” in the regulation to clarify that the regulation applies to all agreements or relationships, whatever they may be called, that meet the FTC definition of a franchise. All such agreements will be referred to in the regulation as “franchise agreements” and the parties to such agreements will be referred to as “franchisor” and “franchisee.” Further, SBA proposes to add to this regulation a statement that SBA will maintain a centralized list of franchise and other similar agreements that are eligible for SBA financial assistance. SBA will make this centralized list available to SBA Lenders and the public. The proposed changes discussed in this paragraph are consistent with SBA's current policy and procedure.

    Although not included in the regulations, SBA is providing below a description of the franchise procedures currently in effect for lending to franchisees in the Business Loan Programs. As of January 1, 2018, SBA created the SBA Franchise Directory (the “Directory”) of all franchise and other brands reviewed by SBA that are eligible for SBA financial assistance. The Directory only includes business models that SBA determines are eligible under SBA's affiliation rules and other eligibility criteria. If the Applicant's brand meets the FTC definition of a franchise, it must be on the Directory in order to obtain SBA financing. (To help minimize confusion over brands that may appear to be franchises but that do not meet the FTC definition, SBA includes such brands on the Directory at their request if they are eligible in all other respects.) SBA Lenders are able to rely on the Directory and no longer need to review franchise or other brand documentation for affiliation or eligibility.

    The Directory will continue to be maintained on SBA's website at www.sba.gov. It will contain the following information:

    (1) Whether the brand meets the FTC definition of a franchise;

    (2) The SBA Franchise Identifier Code, if applicable (a code will only be issued if the agreement meets the FTC definition of a franchise);

    (3) Whether an addendum is needed in order to resolve any affiliation issues as a result of provisions in the franchise agreement and, if so, whether the franchisor will use the SBA Addendum to Franchise Agreement (SBA Form 2462) or an SBA Negotiated Addendum (with respect to an SBA Negotiated Addendum, the Directory will reference the addendum most recently negotiated with SBA, which will not be earlier than 2015); and

    (4) Whether there are additional issues the Lender must consider with respect to the brand (e.g., documentation that the business will be open to all, review of any third party management agreement to ensure Applicant is not a passive business or affiliated with the management company).

    For applications involving a franchise or similar relationship that meets the FTC definition of a franchise, before submitting the application to SBA for non-delegated processing or approving the loan under the SBA Lender's delegated authority, the SBA Lender must check the Directory to determine if it includes the Applicant's brand. If the Applicant's brand is on the Directory, the SBA Lender may proceed with submitting the application to SBA for non-delegated processing, or approving the loan under its delegated authority. If the Applicant's brand is not on the Directory, the SBA Lender cannot submit the application to SBA for non-delegated processing, or approve the loan under its delegated authority. (See, SOP 50 10 for a full discussion of the procedures for processing franchise loans.)

    Section 121.302 When does SBA determine the size status of an applicant? SBA proposes to incorporate the SBA Express and Export Express programs into this regulation to clarify that, with respect to applications for financial assistance under these programs, size is determined as of the date of approval of the loan by the SBA Express or Export Express Lender.

    Compliance With Executive Orders 12866, 12988, 13132, 13563, and 13771, the Paperwork Reduction Act (44 U.S.C., Ch. 35), and the Regulatory Flexibility Act (5 U.S.C. 601-612). Executive Order 12866

    The Office of Management and Budget (OMB) has determined that this proposed rule is not a “significant” regulatory action for the purposes of Executive Order 12866. However, SBA has drafted a Regulatory Impact Analysis in the next section. This is not a major rule under the Congressional Review Act, 5 U.S.C. 800.

    Regulatory Impact Analysis 1. Is there a need for this regulatory action?

    The Agency believes it is necessary to provide regulatory guidance for SBA Express and Export Express loans, which are authorized by statute. Current regulatory guidance provides an extensive framework for the delivery of SBA's 7(a) guaranteed loans through participating private sector lenders. However, currently there are not regulations identifying the specific Loan Program Requirements applicable to SBA Express and Export Express. Congress has authorized SBA to permit qualified lenders to make SBA Express and Export Express loans using, to the maximum extent practicable, their own analyses, procedures, and documentation. It is necessary to provide clear and succinct regulatory guidance for lenders to encourage participation in extending these smaller dollar loans, and to enable these lenders to extend credit with confidence in their ability to rely on payment by SBA of the guaranty if necessary.

    The Small Business 7(a) Lending Oversight Reform Act of 2018 was signed into law on June 21, 2018. As part of this legislation, Congress has authorized the Agency to direct the methods by which Lenders determine whether a borrower is able to obtain credit elsewhere. SBA will be implementing that legislation in a separate rulemaking, but in this rule SBA proposes to reinstate a personal resources test in an effort to provide clear direction to SBA Lenders when analyzing whether a borrower has credit available elsewhere on reasonable terms from non-Federal or alternative sources.

    The statutory changes in the Consolidated Appropriations Act of 2018 (Pub. L. 115-141) regarding the Microloan Program require amendments to existing regulations for the percentage of grant funds that may be used by the Microloan Intermediary for marketing, managerial, and technical assistance to prospective Microloan borrowers. Existing regulations must be revised as proposed to reflect the statutory changes.

    Further, the Agency believes it needs to streamline and reduce regulatory burdens to facilitate robust participation in the business loan programs that assist small and underserved U.S. businesses. For that reason, SBA is proposing the changes to the regulatory provisions related to allowable fees that a Lender or Agent may collect from an Applicant for financial assistance. The proposed changes are needed to simplify the regulations regarding fees that may be collected from an Applicant. The proposal would establish clear limits on the amount of fees that may be charged by a Lender and/or an Agent. In addition, the proposed changes to the affiliation principles applicable to the Business Loan, Disaster Loan, and Surety Bond Guarantee Programs are needed in order to simplify and clarify the determination of eligibility of a business as a small concern.

    2. What are the potential benefits and costs of this regulatory action?

    SBA does not anticipate any additional costs or impact on the subsidy to operate the business loan programs under these proposed regulations. SBA anticipates that providing clear regulatory guidance for the SBA Express and Export Express Loan Programs will result in an increase in the number of participating lenders and loans in both programs, which would mean increased access to capital for small businesses. SBA does not anticipate any additional cost from the addition of the SBA Express and Export Express regulations because both programs have been in use and performing for over 5 years. Additionally, portfolio performance of both programs, including prepayment, default and recovery behaviors is already being captured in the 7(a) program's annual subsidy calculation.

    In return for the additional autonomy and authority granted under SBA Express, Lenders who participate in the SBA Express program agree to receive a maximum guaranty of 50% on loans of $350,000 or less. The ability for SBA Express Lenders to use the same forms, procedures and policies that they already follow for their similarly-sized, non-SBA guaranteed commercial loans removes an additional layer of documents and permits a lender to move more quickly to a decision and funding of small dollar small business loans. This reduces the time and costs, as well as the paperwork involved in making these smaller loans (up to $350,000 for SBA Express and up to $500,000 for Export Express).

    The Export Express Loan Program provides lenders with a maximum guaranty of 90% for loans of $350,000 or less and 75% for loans over $350,000 up to $500,000, as well as the authority to use their own forms, procedures and policies to the maximum extent possible. As with SBA Express, the increased autonomy and authority reduces redundancy in documentation, time and costs associated with underwriting smaller export loans.

    Cost to deliver is an important consideration for lenders when assessing the benefits of participating with SBA programs. Streamlined rules result in increased lender participation, particularly for community banks, credit unions and other mission-based lenders who generally serve more rural communities and underserved populations with smaller dollar loans. While SBA does not have specific statistics, cost savings to the lender generally trickle down to the small business Applicant. Further, providing plain language regulatory guidance for the SBA Express and Export Express Loan Programs will reduce improper payment risk for lenders and SBA by ensuring that lenders are fully informed and understand the program requirements.

    3. What alternatives have been considered?

    SBA has provided guidance on the SBA Express and Export Express Loan Programs in SOP 50 10, Lender and Development Company Programs, SOP 50 57, 7(a) Loan Servicing and Liquidation, SOP 50 53, Lender Supervision and Enforcement, and 51 00, On-Site Reviews and Examinations, and official Agency notices. The Agency recognizes, however, that regulations are important for the proper implementation of the two programs.

    Executive Order 13563

    This executive order supplements and reaffirms the principles and requirements in E.O. 12866, including the requirement to provide the public with an opportunity to participate in the regulatory process. In compliance with the executive order, a description of the need for this regulatory action and benefits and costs associated with this action, including possible distributional impacts are included above in the Regulatory Impact Analysis. The Agency has participated in public forums and meetings, which have included outreach to many of its program participants to seek valuable insight, guidance, and suggestions for program reform. Some of the proposed changes in this rule are a direct result of the feedback SBA has received from program participants.

    Executive Order 13771

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

    Executive Order 12988

    This action meets applicable standards set forth in Sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. The action does not have retroactive or preemptive effect.

    Executive Order 13132

    SBA has determined that this proposed rule would not have substantial, direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, for the purposes of Executive Order 13132, SBA has determined that this proposed rule has no federalism implications warranting preparation of a federalism assessment.

    Paperwork Reduction Act, 44 U.S.C., Ch. 35

    SBA has determined that this proposed rule would impose additional reporting or recordkeeping requirements under the Paperwork Reduction Act (PRA). Applicants for SBA Express and Export Express loans, as well as SBA Express and Export Express Lenders, use the same forms as all other 7(a) loans in order to apply for an SBA guaranteed loan. These forms include: SBA Form 1919, Borrower Information Form; SBA Form 1920, Lender's Application for Guaranty; SBA Form 1971, Religious Eligibility Worksheet (for those businesses that may have a religious aspect); and SBA Form 2237 (to request modifications to an approved loan). These forms are all OMB-approved forms under OMB Control number 3245-0348. SBA Form 1920 would need to be revised due to the proposed new regulation at § 120.102, which would require Lenders to analyze the personal resources of certain owners of the Applicant business to determine if they have liquid assets that can provide some or all of the desired financing. The change would have a de minimis impact on Lenders since the personal resource analysis is already part of the credit analysis Lenders currently conduct in determining an Applicant's eligibility for SBA financial assistance. SBA Form 1920 is completed by the Lender, not by the Applicant.

    The rule also proposes changes that would require revisions to SBA Form 159, Fee Disclosure and Compensation Agreement (OMB Control number 3245-0201), which is used to collect information from Lenders and Agents on the fees that they charge to Applicants for assistance with obtaining an SBA-guaranteed loan. SBA Form 159 is also used to collect information from Lenders on referral fees that it pays to Referral Agents in connection with an SBA-guaranteed loan. The specific proposed revisions to SBA Form 159 would implement the proposed changes to §§ 120.221, 103.4(g), and 103.5 that limit the amount and types of fees that may be charged to an Applicant. The proposed revisions to SBA Form 159 would reduce the hour burden for Lenders because they will no longer have to itemize the fees charged to Applicants in excess of $2,500, but merely disclose the amount charged. The revisions would have no material effect on the reporting burden for Agents. They will continue to report on all fees imposed on Applicants as they do now. The proposed changes to SBA Forms 1920 and 159 will be submitted to OMB as part of a broader, comprehensive revision of the forms that is not affected by this proposed rule, but is part of the Agency's efforts to streamline and simplify the information collected from Applicants and Lenders. SBA will make it clear in the final rule that the specific revisions affected by this proposed rule will not take effect until the rule is finalized. SBA invites comments on the proposed changes to the underlying regulations that would impact these forms by the deadline for comments noted in the DATES section.

    Finally, this proposed rule proposes to put into the regulations the existing requirement for SBLCs to submit to SBA for review and approval on an annual basis the validation of any credit scoring model they are using in connection with SBA Express and Export Express loans. This reporting requirement will be included in OMB-approved collection, SBA Lender Reporting Requirements (OMB Approval Number 3245-0365). This information collection expires September 30, 2018 and will be submitted to OMB for renewal prior to that date. The proposed regulatory change does not impact that requirement; it merely codifies the requirement in the regulation instead of the SOP.

    Regulatory Flexibility Act, 5 U.S.C. 601-612

    When an agency issues a rulemaking proposal, the Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, requires the agency to “prepare and make available for public comment an initial regulatory analysis” which will “describe the impact of the proposed rule on small entities.” Section 605 of the RFA allows an agency to certify a rule, in lieu of preparing an analysis, if the proposed rulemaking is not expected to have a significant economic impact on a substantial number of small entities. Although the rulemaking will impact all of the approximately 4,500 7(a) Lenders, all of the approximately 214 CDCs, all of the approximately 146 Microloan Intermediaries, all of the approximately 33 ILP Intermediaries, and all of the approximately 32 Sureties that participate in the SBG Program, SBA does not believe the impact will be significant because this proposal modifies existing regulations and procedures to provide bright-line guidance.

    SBA has determined that by proposing a limit to fees that a Lender or an Agent may charge to a small business Applicant or Borrower for SBA 7(a) loans, small business borrowers will be protected from incurring excessive expense to obtain a loan. SBA issued guaranties on 288,398 7(a) loans from fiscal year 2013 through fiscal year 2017. Fees charged to the Borrower or Applicant for packaging or other services were disclosed on 21% of the total 7(a) loans approved in that period. Applicants or Borrowers were charged fees that exceed the limits proposed in this rulemaking on 3.8% of total 7(a) loans approved.

    Based on the analysis above, SBA has determined that the proposed fee limits will not cause undue financial burden to the Lenders or Agents. Having this bright-line test, Lenders, Borrowers, and Agents will, in fact, save time and costs in analyzing and documenting that fees charged to the Applicant are reasonable.

    SBA's proposal to reinstate a personal resources test will have no impact, either directly or indirectly, to Applicants for 7(a) or 504 loans. Currently, the regulation (13 CFR 120.101) and program guidance require SBA Lenders to analyze the ability of the business to obtain credit from non-federal sources, including the personal resources of individuals and entities that own 20 percent or more of the Applicant business. The proposed change reinstates a bright-line test for SBA Lenders to appropriately consider the personal resources of the principals.

    SBA's proposal to presume affiliation between a small business Applicant and another business from which the Applicant has derived more than 85% of its revenue over the previous three fiscal years includes an exception for new or start-up businesses. The exception will require the new or start-up Applicant to prepare a diversification plan demonstrating how it plans to become less dependent on any single source of income. This requirement to create a diversification plan may create an additional regulatory burden on those Applicants eligible for the exception. However, SBA considers this impact to be de minimis to the overall cost and time burden of the Applicant in preparing an application and business plan.

    SBA believes that this proposed rule encompasses best practice guidance that aligns with the Agency's mission to increase access to capital for small businesses and facilitate American job preservation and creation with the removal of unnecessary regulatory requirements. For these reasons, SBA has determined that there is no significant economic impact on a substantial number of small entities. SBA invites comment from members of the public who believe there will be a significant impact on sureties, microloan intermediaries, participant lenders, CDCs, or small businesses.

    List of Subjects 13 CFR Part 103

    Administrative practice and procedure.

    13 CFR Part 120

    Community development, Environmental protection, Equal employment opportunity, Exports, Loan programs—business, Reporting and recordkeeping requirements, Small businesses.

    13 CFR Part 121

    Loan programs—business, Reporting and recordkeeping requirements, Small businesses.

    For the reasons stated in the preamble, SBA proposes to amend 13 CFR parts 103, 120 and 121 as follows:

    PART 103—STANDARDS FOR CONDUCTING BUSINESS WITH SBA 1. The authority citation for part 103 is revised to read as follows: Authority:

    15 U.S.C. 634, 642.

    2. Amend § 103.4 by revising paragraph (g) to read as follows:
    § 103.4 What is “good cause” for suspension or revocation?

    (g) Acting as an Agent (including a Lender Service Provider) for an SBA Lender and an Applicant on the same SBA business loan and receiving compensation from both the Applicant and SBA Lender.

    3. Amend § 103.5 by revising paragraph (b) and the last sentence of paragraph (c) to read as follows:
    § 103.5 How does SBA regulate an Agent's fees and provision of service?

    (b) Total compensation charged by an Agent or Agents to an Applicant for services rendered in connection with obtaining an SBA-guaranteed loan must be reasonable. In cases where the compensation exceeds the amount SBA deems reasonable, the Agent(s) must reduce the charge and refund to the Applicant any sum in excess of the amount SBA deems reasonable. SBA considers the following amounts to be reasonable for the total compensation that an Applicant can be charged by an Agent or Agents:

    (1) For loans up to and including $350,000: A maximum of up to 2.5% of the loan amount, or $7,000, whichever is less;

    (2) For loans $350,001-$1,000,000: A maximum of up to 2% of the loan amount, or $15,000, whichever is less; and

    (3) For loans over $1,000,000: A maximum of up to 1.5% of the loan amount, or $30,000, whichever is less.

    (c) * * * However, such compensation may not be charged to an Applicant or Borrower.

    PART 120—BUSINESS LOANS 4. The authority citation for part 120 continues to read as follows: Authority:

    15 U.S.C. 634(b)(6), (b)(7), (b)(14), (h), and note, 636(a), (h) and (m), 650, 687(f), 696(3), and 697(a) and (e); Pub. L. 111-5, 123 Stat. 115; Pub. L. 111-240, 124 Stat. 2504.

    5. Add § 120.102 to read as follows:
    § 120.102 Funds not available from alternative sources, including the personal resources of owners.

    (a) An Applicant for a business loan must show that the desired funds are not available from the resources of any individual or entity owning 20 percent or more of the Applicant. SBA will require the use of liquid assets from any such owner as an injection to reduce the SBA loan amount when that owner's liquid assets exceed the amounts specified in paragraphs (a)(1) through (3) of this section. When the total financing package (i.e., any SBA loans and any other financing, including loans from any other source, requested by the Applicant business at or about the same time):

    (1) Is $350,000 or less, each 20 percent owner of the Applicant must inject any liquid assets that are in excess of one and three-quarter times the total financing package, or $200,000, whichever is greater;

    (2) Is between $350,001 and $1,000,000, each 20 percent owner of the Applicant must inject any liquid assets that are in excess of one and one-half times the total financing package, or $1,000,000, whichever is greater;

    (3) Exceeds $1,000,000, each 20 percent owner of the Applicant must inject any liquid assets that are in excess of one times the total financing package, or $2,500,000, whichever is greater.

    (b) Any liquid assets in excess of the applicable amount set forth in paragraph (a) of this section must be used to reduce the SBA loan amount. These funds must be injected prior to the disbursement of the proceeds of any SBA financing. In extraordinary circumstances, SBA may, in its sole discretion, permit exceptions to the required injection of an owner's excess liquid assets.

    (c) For purposes of this section, “liquid assets” means cash or cash equivalents, including savings accounts, CDs, stocks, bonds, or other similar assets. Equity in real estate holdings and other fixed assets are not to be considered liquid assets. In addition, the liquid assets of any 20 percent owner who is an individual include the liquid assets of the owner's spouse and any minor children.

    (d) SBA Lenders must document their analysis and determination in the loan file.

    6. Amend § 120.130 by revising paragraph (c) to read as follows:
    § 120.130 Restrictions on uses of proceeds.

    (c) Floor plan financing or other revolving line of credit, except under § 120.340, § 120.390, or § 120.444;

    7. Amend § 120.221 by revising the section heading and paragraphs (a) and (b) to read as follows:
    § 120.221 Fees and expenses that the Lender may collect from an Applicant or Borrower.

    (a) Fees that can be collected from the Applicant for assistance in obtaining a loan. The Lender may collect a fee from an Applicant for assistance with obtaining an SBA-guaranteed loan. The fee may not exceed $2,500 for a loan up to and including $350,000 and may not exceed $5,000 for a loan over $350,000. The Lender must advise the Applicant in writing that the Applicant is not required to obtain or pay for unwanted services. In cases where the compensation exceeds what SBA deems reasonable, the Lender must reduce the charge and refund to the Applicant any amount in excess of what SBA deems reasonable. If the Lender charges the Applicant a fee for assistance with obtaining an SBA-guaranteed loan, the fee must be disclosed to SBA in accordance with § 103.5 and documented in accordance with Loan Program Requirements.

    (b) Extraordinary servicing. Subject to prior written SBA approval, if all or part of a loan will have extraordinary servicing needs, the Lender may charge extraordinary servicing fees in excess of 2 percent per year on the outstanding balance of the part requiring special servicing for certain revolving lines of credit made under § 120.390 and on Export Working Capital Program loans (as allowed under § 120.344(b)), provided the fees are reasonable and prudent.

    § 120.222 [Amended]
    8. Amend § 120.222 by removing the word “in” before the words “any premium received”.
    § 120.344 [Amended]
    9. Amend § 120.344(b) by removing the period at the end of the paragraph and adding “, provided the fees are reasonable and prudent.” 10. Revise § 120.350 to read as follows:
    § 120.350 Policy.

    (a) Section 7(a)(15) of the Act authorizes SBA to guarantee a loan to a qualified employee trust (“ESOP”) to:

    (1) Help finance the growth of the employer small business; or

    (2) Purchase ownership or voting control of the employer.

    (b) Applications for SBA-guaranteed loans to a qualified employee trust may not be processed under a Lender's delegated authority.

    11. Amend § 120.432 by adding a sentence at the end of paragraph (a) to read as follows:
    § 120.432 Under what circumstances does this subpart permit sales of, or sales of participating interests in, 7(a) loans?

    (a) * * * This paragraph applies to all 7(a) loans purchased from the FDIC (as receiver, conservator, or other liquidator of a failed insured depository institution), whether through a loan sale where SBA has not already purchased the guarantee or through a whole bank transfer.

    12. Amend § 120.440 by revising paragraph (c) to read as follows:
    § 120.440 How does a 7(a) Lender obtain delegated authority?

    (c) If delegated authority is approved or renewed, Lender must execute a supplemental guarantee agreement, which will specify a term not to exceed two years. As provided in § 120.442(c)(2)(i), when SBA renews a Lender's authority to participate in SBA Express, SBA may grant a longer term, but not to exceed three years. For approval or renewal of any delegated authority, SBA may grant shortened approvals or renewals based on risk or any of the other delegated authority criteria. Lenders with less than three years of SBA lending experience will be limited to an initial term of one year or less.

    13. Add a new undesignated center heading after § 120.440 to read as follows:

    “SBA EXPRESS AND EXPORT EXPRESS LOAN PROGRAMS”.

    14. Add §§ 120.441 through 120.447 to read as follows:
    § 120.441 SBA Express and Export Express Loan Programs.

    (a) SBA Express. Under the SBA Express Loan Program (SBA Express), designated Lenders (SBA Express Lenders) process, close, service, and liquidate SBA-guaranteed 7(a) loans using their own loan analyses, procedures, and documentation to the maximum extent practicable, with reduced requirements for submitting documentation to, and prior approval by, SBA. These loan analyses, procedures, and documentation must meet prudent lending standards; be consistent with those an SBA Express Lender uses for its similarly-sized, non-SBA guaranteed commercial loans; and conform to all requirements imposed upon Lenders generally and SBA Express Lenders in particular by Loan Program Requirements, as such requirements are issued and revised by SBA from time to time, unless specifically identified by SBA as inapplicable to SBA Express loans. In return for the expanded authority and autonomy provided by the program, SBA Express Lenders agree to accept a maximum SBA guaranty of 50 percent of the SBA Express loan amount.

    (b) Export Express. The Export Express Loan Program (Export Express) is designed to help current and prospective small exporters. It is subject to the same loan processing, making, closing, servicing, and liquidation requirements, as well as the same interest rates and applicable fees, as SBA Express, except as otherwise provided in Loan Program Requirements.

    § 120.442 Process to obtain or renew SBA Express or Export Express authority.

    The decision to grant or renew SBA Express or Export Express authority will be made by the appropriate SBA official in accordance with Delegations of Authority, and is final. If SBA Express or Export Express authority is approved or renewed, the Lender must execute a supplemental guarantee agreement before the Lender's SBA Express or Export Express authority will become effective.

    (a) Criteria and process for initial approval of SBA Express or Export Express authority. A Lender that wishes to participate in SBA Express or Export Express must submit a written request to SBA.

    (1) Existing 7(a) Lenders. In evaluating an existing 7(a) Lender's application for SBA Express or Export Express authority, SBA will consider the criteria and follow the procedures set forth in § 120.440.

    (2) Lending institutions that do not currently participate with SBA. Lending institutions that do not currently participate with SBA must become 7(a) Lenders to participate in SBA Express and/or Export Express. Such institutions may request SBA 7(a) lending and SBA Express and/or Export Express authority simultaneously. In evaluating such institutions, in addition to the criteria set forth in §§ 120.410 and 120.440, SBA will consider whether the institution:

    (i) Has acceptable experience with small commercial loans, including an acceptable number of performing small commercial loans outstanding at its most recent fiscal year end; and

    (ii) Has received appropriate training on SBA's policies and procedures.

    (b) Criteria and process for renewal of SBA Express or Export Express authority. In renewing a Lender's SBA Express or Export Express authority and determining the term of the renewal, SBA will consider the criteria and follow the process set forth in § 120.440 and also will consider whether the Lender:

    (1) Can effectively process, make, close, service, and liquidate SBA Express or Export Express loans, as applicable;

    (2) Has received a major substantive objection regarding renewal from the Field Office(s) covering the territory where the Lender generates significant numbers of SBA Express or Export Express loans, as applicable; and

    (3) Has received acceptable review results on the SBA Express or Export Express portion, as applicable, of any SBA-administered Lender reviews.

    (c) Term.—(1) Initial Approval. SBA may approve a Lender's authority to participate in SBA Express or Export Express for a maximum term of two years. SBA may approve a shorter term or limit a Lender's maximum SBA Express or Export Express loan volume if, in SBA's sole discretion, a Lender's qualifications, performance, experience with SBA lending, or other factors so warrant.

    (2) Renewal.—(i) SBA Express. SBA may renew a Lender's authority to participate in SBA Express for two years or, in SBA's sole discretion, a maximum of three years if a Lender's qualifications, performance, experience with SBA lending, or other factors so warrant.

    (ii) Export Express. SBA may renew a Lender's authority to participate in Export Express for a maximum term of two years.

    (iii) SBA may renew a Lender's authority to participate in SBA Express or Export Express for a shorter term or limit a Lender's maximum SBA Express or Export Express loan volume if, in SBA's sole discretion, a Lender's qualifications, performance, experience with SBA lending, or other factors so warrant.

    § 120.443 SBA Express and Export Express loan processing requirements.

    (a) SBA Express and Export Express loans are subject to all of the requirements set forth in Subparts A and B of this part, unless such requirements are specifically identified by SBA as inapplicable.

    (b) Certain types of loans and loan programs are not eligible for SBA Express or Export Express, as detailed in official SBA policy and procedures, including but not limited to:

    (1) A loan that would reduce the Lender's existing credit exposure to a single Borrower, including its affiliates as defined in § 121.301(f) of this chapter;

    (2) A loan to a business that has an outstanding 7(a) loan where the Applicant is unable to certify that the loan is current at the time of approval of the SBA Express or Export Express loan;

    (3) A loan that would have as its primary collateral real estate or personal property that do not meet SBA's environmental requirements; and

    (4) Complex loan structures or eligibility situations.

    (c) SBA has authorized SBA Express and Export Express Lenders to make the credit decision without prior SBA review. Lenders must not make an SBA guaranteed loan that would be available on reasonable terms from either the Lender itself or another source without an SBA guaranty. The credit analysis must demonstrate that there is reasonable assurance of repayment. SBA Express and Export Express Lenders must use appropriate and prudent credit analysis processes and procedures that are generally accepted in the commercial lending industry and are consistent with those used for their similarly-sized, non-SBA guaranteed commercial loans. As part of their prudent credit analysis, SBA Express and Export Express Lenders may use a business credit scoring model (such a model cannot rely solely on consumer credit scores) to assess the credit history of the Applicant and/or repayment ability if they do so for their similarly-sized, non-SBA guaranteed commercial loans. SBA Express and Export Express Lenders must validate (and document) with appropriate statistical methodologies that their credit analysis procedures are predictive of loan performance, and they must provide that documentation to SBA upon request. SBLCs must provide such credit scoring model validation and documentation to SBA for review and approval on an annual basis.

    (d) SBA Express and Export Express Lenders are responsible for all loan decisions, including eligibility for 7(a) loans (including size), creditworthiness and compliance with Loan Program Requirements. SBA Express and Export Express Lenders also are responsible for confirming that all loan closing decisions are correct and that they have complied with all requirements of law and Loan Program Requirements.

    (e) SBA Express and Export Express Lenders must ensure all required forms are obtained and are complete and properly executed. Appropriate documentation must be maintained in the Lender's loan file, including adequate information to support the eligibility of the Applicant and the loan.

    § 120.444 Eligible uses of SBA Express and Export Express loan proceeds.

    (a) SBA Express.—(1) SBA Express loan proceeds must be used exclusively for eligible business-related purposes, as described in §§ 120.120 and 120.130.

    (2) Revolving lines of credit are eligible for SBA Express, provided they comply with official SBA policy and procedures.

    (b) Export Express. (1) Export Express loans must be used for an export development activity, which includes the following:

    (i) Obtaining a Standby Letter of Credit when required as a bid bond, performance bond, or advance payment guarantee;

    (ii) Participation in a trade show that takes place outside the United States;

    (iii) Translation of product brochures or catalogues for use in markets outside the United States;

    (iv) Obtaining a general line of credit for export purposes;

    (v) Performing a service contract for buyers located outside the United States;

    (vi) Obtaining transaction-specific financing associated with completing export orders;

    (vii) Purchasing real estate or equipment to be used in the production of goods or services for export;

    (viii) Providing term loans and other financing to enable a small business concern, including an export trading company and an export management company, to develop a market outside the United States; and

    (ix) Acquiring, constructing, renovating, modernizing, improving or expanding a production facility or equipment to be used in the United States in the production of goods or services for export.

    (2) Revolving lines of credit for export purposes are eligible for Export Express, provided they comply with official SBA policy and procedures.

    (3) Export Express loans may not be used to finance overseas operations, except for the marketing and/or distribution of products/services exported from the U.S.

    (4) Export Express Lenders are responsible for ensuring that U.S. companies are authorized to conduct business with the Persons and countries to which the Borrower will be exporting.

    (c) An SBA Express or Export Express Lender may use loan proceeds to refinance certain outstanding debts, subject to official SBA policy and procedures. However, an SBA Express or Export Express Lender may not refinance its own existing SBA-guaranteed debt under SBA Express or Export Express.

    § 120.445 Terms and conditions of SBA Express and Export Express loans.

    SBA Express and Export Express loans are subject to the same terms and conditions as other 7(a) loans except as set forth in this section:

    (a) Maximum loan amount and maximum aggregate loan amount.

    (1) SBA Express. The maximum loan amount for an SBA Express loan is set forth in section 7(a)(31)(D) of the Small Business Act. The aggregate amount of all outstanding SBA Express loans to a single Borrower, including the Borrower's affiliates as defined in § 121.301(f) must not exceed the statutory maximum.

    (2) Export Express. The maximum loan amount for an Export Express loan is set forth in section 7(a)(34)(C)(i) of the Small Business Act. The aggregate amount of all outstanding Export Express loans to a single Borrower, including the Borrower's affiliates as defined in § 121.301(f), must not exceed the statutory maximum.

    (b) Maximum SBA guarantee.—(1) SBA Express. The maximum SBA guarantee on an SBA Express loan is 50 percent of the SBA Express loan amount. In addition, the guaranteed amount of all SBA Express loans to a single Borrower, including the Borrower's affiliates, counts toward the maximum guaranty amount as described in § 120.151.

    (2) Export Express. The maximum SBA guarantee on an Export Express loan of $350,000 or less is 90 percent and for a loan over $350,000 is 75 percent of the Export Express loan amount. In addition, the guaranteed amount of all Export Express loans to a single Borrower, including the Borrower's affiliates, counts toward the maximum guaranty amount as described in § 120.151.

    (c) Maturity.—(1) SBA Express. SBA Express loans must have a stated maturity and the maximum maturities are the same as any other 7(a) loan, except that revolving SBA Express loans are limited to a maximum of 10 years, as described more fully in official SBA policy and procedures.

    (2) Export Express. Export Express loans must have a stated maturity and the maximum maturities are the same as any other 7(a) loan, except that revolving Export Express loans are limited to a maximum maturity of 7 years, as described more fully in official SBA policy and procedures.

    (d) Interest rates.—(1) SBA Express and Export Express Lenders may charge up to 4.5% over the prime rate on loans over $50,000 and up to 6.5% over the prime rate for loans of $50,000 or less, regardless of the maturity of the loan. The prime rate will be that which is in effect on the first business day of the month, as printed in a national financial newspaper published each business day.

    (2) For variable interest rate loans, SBA Express and Export Express Lenders are not required to use the base rate identified in § 120.214(c). SBA Express and Export Express Lenders may use the same base rate of interest they use on their similarly-sized, non-SBA guaranteed commercial loans, as well as their established change intervals, payment accruals, and other interest rate terms. However, the interest rate must never exceed the maximum allowable interest rate stated in paragraph (d)(1) of this section. Additionally, the loan may be sold on the Secondary Market only if the base rate is one of the base rates allowed in § 120.214(c).

    (3) The amount of interest SBA will pay to a Lender following default of an SBA Express or Export Express loan is capped at the maximum interest rates for the standard 7(a) loan program set forth in §§ 120.213 through 120.215.

    (e) Collateral.—(1) With the exception of paragraphs (e)(2) and (e)(3) of this section, to the maximum extent practicable, SBA Express and Export Express Lenders must follow the same collateral policies and procedures that they have established and implemented for their similarly-sized, non-SBA guaranteed commercial loans, including those concerning identification of collateral. Such policies and procedures must be commercially reasonable and prudent.

    (2) SBA may establish a threshold below which SBA Express and Export Express Lenders will not be required to take collateral to secure an SBA Express or Export Express loan. Such a threshold will be described more fully in official SBA policy and procedures.

    (3) Export Express lines of credit over $25,000 used to support the issuance of a standby letter of credit must have collateral (cash, cash equivalent or project) that will provide coverage for at least 25% of the issued standby letter of credit amount.

    (f) Insurance. SBA Express and Export Express Lenders must follow the same policies they have established and implemented for their similarly-sized, non-SBA guaranteed commercial loans.

    (g) Sale on the secondary market. SBA Express and Export Express Lenders may sell the guaranteed portion of an SBA Express or Export Express term loan on the secondary market under the policies and procedures described in Subpart F of this part. SBA Express or Export Express Lenders may not sell the guaranteed portion of an SBA Express or Export Express revolving line of credit on the secondary market.

    (h) Loan increases. With SBA's prior written consent, an SBA Express or Export Express Lender may increase an SBA Express or Export Express loan based on the needs of the Borrower and its credit situation, as further specified in Loan Program Requirements.

    § 120.446 SBA Express and Export Express loan closing, servicing, liquidation and litigation requirements.

    (a) Closing. Except as set forth in this paragraph, SBA Express and Export Express Lenders must close their SBA Express and Export Express loans using the same documentation and procedures that they use for their similarly-sized, non-SBA guaranteed commercial loans. Such documentation and procedures must comply with law, prudent lending practices, and Loan Program Requirements. When closing an SBA Express or Export Express loan, the Lender must require the Borrower to execute a promissory note that is legally enforceable and assignable. Before the first disbursement of any SBA Express or Export Express loan proceeds, the Lender must obtain all required collateral, including obtaining valid and enforceable security interests in such collateral, and also must meet all other required pre-closing loan conditions as set forth in official SBA policy and procedures.

    (b) Servicing, Liquidation, and Litigation. Servicing, liquidation, and litigation responsibilities for SBA Express and Export Express Lenders are set forth in Subpart E of this Part.

    (c) SBA's purchase of the guaranteed portion of an SBA Express or Export Express loan. (1) SBA will purchase the guaranteed portion of an SBA Express or Export Express loan in accordance with § 120.520 and official SBA policy and procedures. An SBA Express or Export Express Lender may not request purchase of the guaranty based solely on a violation of a non-financial default provision.

    (2) How much SBA will pay upon purchase?—(i) SBA Express. SBA will pay a maximum of 50 percent of the total principal balance of the SBA Express loan outstanding after liquidation, including up to 120 days of interest at the rate in effect at the time of the earliest uncured default (if liquidation proceeds collected by the SBA Express Lender were insufficient for the Lender to recover a full 120 days of interest).

    (ii) Export Express. SBA will pay a maximum of 75 or 90 percent (as applicable) of the total principal balance of the Export Express loan outstanding after liquidation, including up to 120 days of interest at the rate in effect at the time of the earliest uncured default (if liquidation proceeds collected by the Export Express Lender were insufficient for the Lender to recover a full 120 days of interest).

    (3) Release of SBA liability under its guarantee. SBA will be released from its liability to purchase the guaranteed portion of an SBA Express or Export Express loan, either in whole or in part, in SBA's sole discretion, under any of the circumstances described in § 120.524.

    § 120.447 Lender oversight of SBA Express and Export Express Lenders.

    SBA Express and Export Express Lenders are subject to the same risk-based lender oversight as 7(a) Lenders, including the supervision and enforcement provisions, in accordance with Subpart I of this Part.

    § 120.707 [Amended]
    15. Amend the last sentence of § 120.707(b) by removing the word “six” and add in its place “seven”. 16. Amend § 120.712 as follows: a. Revise paragraph (b)(1); and b. In paragraph (d) remove the number “25” and add in its place the number “50”.

    The revision and addition read as follows:

    § 120.712 How does an Intermediary get a grant to assist Microloan borrowers?

    (b) * * *

    (1) Up to 50 percent of the grant funds may be used to provide information and technical assistance to prospective Microloan borrowers; provided, however, that no more than 5 percent of the grant funds may be used to market or advertise the products and services of the Microloan Intermediary directly related to the Microloan Program; and

    § 120.840 [Amended]
    17. Amend § 120.840 by removing the term “D/FA” from the second sentence of paragraph (b) and adding in its place the phrase “appropriate SBA official in accordance with Delegations of Authority”. PART 121—SMALL BUSINESS SIZE REGULATIONS 18. The authority citation for Part 121 continues to read as follows: Authority:

    15 U.S.C. 632, 634(b)(6), 662, and 649a(9).

    19. Amend § 121.301 by: a. Revising paragraph (f)(4); b. Redesignating paragraphs (f)(5), (f)(6), and (f)(7) as paragraphs (f)(7), (f)(8), and (f)(9) respectively; c. Adding new paragraphs (f)(5) and (f)(6) and revising the redesignated (f)(7).

    The revisions and additions read as follows:

    § 121.301 What size standards and affiliation principles are applicable to financial assistance programs?

    (f) * * *

    (4) Affiliation based on identity of interest. (i) Affiliation may arise among two or more individuals or firms with an identity of interest. Individuals or firms that have identical or substantially identical business or economic interests (such as close relatives, individuals or firms with common investments, or firms that are economically dependent through contractual or other relationships) may be treated as one party with such interests aggregated. Where SBA determines that such interests should be aggregated, an individual or firm may rebut that determination with evidence showing that the interests deemed to be one are in fact separate.

    (ii) Affiliation arises when there is an identity of interest between close relatives, as defined in § 120.10 of this chapter, with identical or substantially identical business or economic interests (such as where the close relatives operate concerns in the same or similar industry in the same geographic area).

    (iii) Affiliation arises through common investments where the same individuals or firms together own a substantial portion of multiple concerns, and concerns owned by such investors conduct business with each other (such as subcontracts or joint ventures), or share resources, equipment, locations or employees with one another, or provide loan guaranties or other financial or managerial support to each other.

    (iv) SBA will find affiliation based upon economic dependence if the concern in question derived more than 85% of its receipts from another concern over the previous three fiscal years, unless the concern has been in business for a short amount of time and has a plan to lessen its dependence on the other concern.

    (5) Affiliation based on the newly organized concern rule. Affiliation may arise where current or former officers, directors, principal stockholders, managing members, or key employees of one concern organize a new concern in the same or related industry or field of operation, and serve as the new concern's officers, directors, principal stockholders, managing members, or key employees, and the original concern is furnishing or will furnish the new concern with contracts, financial or technical assistance, indemnification on bid or performance bonds, and/or other facilities, whether for a fee or otherwise. A concern may rebut such an affiliation determination by demonstrating a clear line of fracture between the two concerns. For the purpose of this rule, a “key employee” is an employee who, because of his/her position in the concern, has a critical influence in or substantive control over the operations or management of the concern. A concern will be considered “new” for the purpose of this rule if it has been actively operating continuously for two years or less.

    (6) Affiliation based on totality of the circumstances. In determining whether affiliation exists, SBA will consider the totality of the circumstances, and may find affiliation even though no single factor is sufficient to constitute affiliation.

    (7) Affiliation based on franchise agreements. (i) The restraints imposed on a franchisee by its franchise agreement generally will not be considered in determining whether the franchisor is affiliated with an applicant franchisee provided the applicant franchisee has the right to profit from its efforts and bears the risk of loss commensurate with ownership. SBA will only consider the franchise agreements of the applicant concern. SBA will maintain a centralized list of franchise and other similar agreements that are eligible for SBA financial assistance, which will identify any additional documentation necessary to resolve any eligibility or affiliation issues between the franchisor and the small business applicant.

    (ii) For purposes of this section, “franchise” means any continuing commercial relationship or arrangement, whatever it may be called, that meets the Federal Trade Commission definition of “franchise” in 16 CFR 436.

    20. Amend § 121.302 by revising paragraphs (a) and (b) to read as follows:
    § 121.302 When does SBA determine the size status of an applicant?

    (a) The size status of an applicant for SBA financial assistance is determined as of the date the application for financial assistance is accepted for processing by SBA, except for applications under the Preferred Lenders Program (PLP), the SBA Express Loan Program (SBA Express), the Export Express Loan Program (Export Express), the Disaster Loan Program, the SBIC Program, and the New Markets Venture Capital (NMVC) Program.

    (b) For PLP, SBA Express, and Export Express, size is determined as of the date of approval of the loan by the Lender.

    Dated: September 18, 2018. Linda E. McMahon, Administrator.
    [FR Doc. 2018-20869 Filed 9-27-18; 8:45 am] BILLING CODE 8025-01-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0803; Product Identifier 2018-NM-098-AD] RIN 2120-AA64 Airworthiness Directives; The Boeing Company Airplanes AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    We propose to adopt a new airworthiness directive (AD) for all The Boeing Company Model 727 airplanes. This proposed AD was prompted by a report of cracking in the inboard lower flange and adjacent web near the forward attachment of the outboard flap track at a certain position on a Model 737-300 airplane. The flap tracks of Model 737-300 airplanes are similar to the flap tracks of Model 727 airplanes. This proposed AD would require repetitive detailed inspections and surface high frequency eddy current (HFEC) inspections of each outboard flap track at certain positions for any crack and discrepancy, and applicable on-condition actions. We are proposing this AD to address the unsafe condition on these products.

    DATES:

    We must receive comments on this proposed AD by November 13, 2018.

    ADDRESSES:

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

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

    Fax: 202-493-2251.

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

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

    For service information identified in this NPRM, contact 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. It is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0803.

    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-2018-0803; or in person at Docket Operations between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this NPRM, the regulatory evaluation, any comments received, and other information. The street address for Docket Operations (phone: 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

    FOR FURTHER INFORMATION CONTACT:

    Muoi Vuong, Aerospace Engineer, Airframe Section, FAA, Los Angeles ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-5205; fax: 562-627-5210; email: [email protected]

    SUPPLEMENTARY INFORMATION:

    Comments Invited

    We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2018-0803; Product Identifier 2018-NM-098-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. We will consider all comments received by the closing date and may amend this NPRM because of those comments.

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

    Discussion

    We have received a report indicating cracking in the inboard lower flange and adjacent web near the forward attachment of the outboard flap track at position 8, which was found during a tear down of a Model 737-300 airplane. The flap tracks of Model 737-300 airplanes are similar to the flap tracks of Model 727 airplanes. This condition, if not addressed, could result in the inability of a principal structural element to sustain required flight load, which could result in loss of the outboard trailing edge flap and reduced controllability of the airplane.

    Related Rulemaking

    We have issued AD 2018-18-13, Amendment 39-19392 (83 FR 46380, September 13, 2018) (“AD 2018-18-13”), for The Boeing Company Model 737-100, -200, -200C, -300, -400, -500 series airplanes. AD 2018-18-13 requires an inspection to determine the part number of the wing outboard flap track assembly; repetitive inspections of each affected wing outboard flap track for discrepancies, and applicable on-condition actions; and repetitive overhaul of each wing outboard flap track. AD 2018-18-13 addresses cracking of the rear spar attachment, and cracking of the wing outboard flap tracks. Cracking in the area between the forward and rear spar attachments of the wing outboard flap tracks could lead to the inability of a principal structural element to sustain required flight load, and result in loss of the outboard trailing edge flap and consequent reduced controllability of the airplane.

    Related Service Information Under 1 CFR Part 51

    We reviewed Boeing Alert Requirements Bulletin 727-57A0188 RB, dated May 31, 2018. The service information describes procedures for repetitive detailed inspections for discrepancies and surface HFEC inspections for cracks of each outboard flap track at positions 1, 2, 7, and 8, and applicable on-condition actions. On-condition actions include repairs and installation of a new or serviceable flap track. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

    FAA's Determination

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

    Proposed AD Requirements

    This proposed AD would require accomplishment of the actions identified in Boeing Alert Requirements Bulletin 727-57A0188 RB, dated May 31, 2018, described previously, except for any differences identified as exceptions in the regulatory text of this proposed AD.

    For information on the procedures and compliance times, see this service information at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0803.

    Explanation of Requirements Bulletin

    The FAA worked in conjunction with industry, under the Airworthiness Directives Implementation Aviation Rulemaking Committee (AD ARC), to enhance the AD system. One enhancement is a process for annotating which steps in the service information are “required for compliance” (RC) with an AD. Boeing has implemented this RC concept into Boeing service bulletins.

    In an effort to further improve the quality of ADs and AD-related Boeing service information, a joint process improvement initiative was worked between the FAA and Boeing. The initiative resulted in the development of a new process in which the service information more clearly identifies the actions needed to address the unsafe condition in the “Accomplishment Instructions.” The new process results in a Boeing Requirements Bulletin, which contains only the actions needed to address the unsafe condition (i.e., only the RC actions).

    Costs of Compliance

    We estimate that this proposed AD affects 16 airplanes of U.S. registry. We estimate the following costs to comply with this proposed AD:

    Estimated Costs for Required Actions Action Labor cost Parts cost Cost per product Cost on U.S. operators Inspections 113 work-hours × $85 per hour = $9,605 per inspection cycle $0 $9,605 per inspection cycle $153,680 per inspection cycle.

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

    Authority for This Rulemaking

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

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

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

    Regulatory Findings

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

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

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

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

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

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

    List of Subjects in 14 CFR Part 39

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

    The Proposed Amendment

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

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

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

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): The Boeing Company: Docket No. FAA-2018-0803; Product Identifier 2018-NM-098-AD. (a) Comments Due Date

    We must receive comments by November 13, 2018.

    (b) Affected ADs

    None.

    (c) Applicability

    This AD applies to all The Boeing Company Model 727, 727-100, 727-100C, 727-200, 727-200F, and 727C series airplanes, certificated in any category.

    (d) Subject

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

    (e) Unsafe Condition

    This AD was prompted by a report of cracking in the inboard lower flange and adjacent web near the forward attachment of the outboard flap track at position 8 on a Model 737-300 airplane. The flap tracks of Model 737-300 airplanes are similar to the flap tracks of Model 727 airplanes. We are issuing this AD to address the inability of a principal structural element to sustain required flight load, which could result in loss of the outboard trailing edge flap and reduced controllability of the airplane.

    (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 727-57A0188 RB, dated May 31, 2018, do all applicable actions identified in, and in accordance with, the Accomplishment Instructions of Boeing Alert Requirements Bulletin 727-57A0188 RB, dated May 31, 2018.

    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 727-57A0188, dated May 31, 2018, which is referred to in Boeing Alert Requirements Bulletin 727-57A0188 RB, dated May 31, 2018.

    (h) Exceptions to Service Information Specifications

    (1) For purposes of determining compliance with the requirements of this AD: Where Boeing Alert Requirements Bulletin 727-57A0188 RB, dated May 31, 2018, uses the phrase “the original issue date of Requirements Bulletin 727-57A0188 RB,” this AD requires using “the effective date of this AD.”

    (2) Where Boeing Requirements Bulletin 727-57A0188 RB, dated May 31, 2018, specifies contacting Boeing for repair instructions, this AD requires repair before further flight using a method approved in accordance with the procedures specified in paragraph (j) of this AD.

    (i) Parts Installation Limitation

    As of the effective date of this AD, no person may install, on any airplane, a wing outboard flap track having a part number listed in paragraph 1.B. of Boeing Alert Requirements Bulletin 727-57A0188 RB, dated May 31, 2018, unless the inspections and applicable on-condition actions specified in the Accomplishment Instructions of Boeing Alert Requirements Bulletin 727-57A0188 RB, dated May 31, 2018, are accomplished concurrently with the installation of the part on the airplane.

    (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)(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.

    (k) Related Information

    (1) For more information about this AD, contact Muoi Vuong, Aerospace Engineer, Airframe Section, FAA, Los Angeles ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-5205; 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.

    Issued in Des Moines, Washington, on September 14, 2018. John P. Piccola, Acting Director, System Oversight Division, Aircraft Certification Service.
    [FR Doc. 2018-20920 Filed 9-27-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0802; Product Identifier 2018-NM-082-AD] RIN 2120-AA64 Airworthiness Directives; Fokker Services B.V. Airplanes AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    We propose to adopt a new airworthiness directive (AD) for all Fokker Services B.V. Model F28 Mark 0070 and 0100 airplanes. This proposed AD was prompted by reports of electrical arcing between the auxiliary power unit (APU) starter motor positive terminal and the APU fuel drain line. This proposed AD would require the removal of certain clamps and replacement of the flexible APU fuel drain line. We are proposing this AD to address the unsafe condition on these products.

    DATES:

    We must receive comments on this proposed AD by November 13, 2018.

    ADDRESSES:

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

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

    Fax: 202-493-2251.

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

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

    For service information identified in this NPRM, contact Fokker Services B.V., Technical Services Dept., P.O. Box 1357, 2130 EL Hoofddorp, the Netherlands; telephone +31 (0)88-6280-350; fax +31 (0)88-6280-111; email [email protected]; internet http://www.myfokkerfleet.com. You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.

    Examining the AD Docket

    You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0802; or in person at Docket Operations between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this NPRM, the regulatory evaluation, any comments received, and other information. The street address for Docket Operations (phone: 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

    FOR FURTHER INFORMATION CONTACT:

    Tom Rodriguez, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3226.

    SUPPLEMENTARY INFORMATION:

    Comments Invited

    We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2018-0802; Product Identifier 2018-NM-082-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. We will consider all comments received by the closing date and may amend this NPRM because of those comments.

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

    Discussion

    The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2017-0008, dated January 16, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Fokker Services B.V. Model F28 Mark 0070 and 0100 airplanes. The MCAI states:

    Reports were received of electrical arcing between the auxiliary power unit (APU) starter motor positive terminal and the APU fuel drain line. Investigation showed that these events were due to contact between the metal braiding on the APU fuel drain line and the positive terminal of the APU starter motor.

    This condition, if not corrected, could lead to a fire during APU start, possibly resulting in damage to the aeroplane.

    In response to these findings, Fokker issued Service Bulletin (SB) SBF100-49-023, later amended by SB Change Notification (SBCN), with instructions to install two additional clamps on the APU fuel supply line and the flexible APU fuel drain line. Consequently, CAA-NL [Civil Aviation Authority—the Netherlands] issued the Netherlands AD 92-139 [which corresponds to FAA AD 95-21-20, Amendment 39-9407 (60 FR 53857, October 18, 1995) (“AD 95-21-20”)] to require the actions described in Fokker SBF100-49-023.

    Since that [the Netherlands] AD was issued, following reports of arcing and chafing damage to the APU fuel drain line, the investigation revealed that the two additional clamps and the instructions in SBF100-49-023 would not meet the intent of ensuring sufficient clearance between the APU fuel drain line and the positive terminal of the APU starter motor.

    To address this potential unsafe condition, Fokker Services [B.V.] published SBF100-49-037 to introduce a new flexible APU fuel drain line that is one inch shorter and has one elbow flange, thus enabling to restore sufficient clearance with the positive terminal of the APU starter motor.

    For the reasons described above, this AD supersedes CAA-NL [the Netherlands] AD 92-139 and requires replacement of the flexible APU fuel drain line, removal of the additional clamps introduced by SBF100-49-023, and a check to verify sufficient clearance between the APU fuel drain line and the positive terminal of the APU starter motor.

    You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0802.

    Relationship Between Proposed AD and AD 95-21-20

    This NPRM would not propose to supersede AD 95-21-20. Rather, we have determined that a stand-alone AD would be more appropriate to address the changes in the MCAI. This NPRM would require the removal of certain clamps and replacement of the flexible APU fuel drain line. Accomplishment of the proposed actions would then terminate all requirements of AD 95-21-20.

    Related Service Information Under 1 CFR Part 51

    Fokker Services B.V. has issued Fokker Service Bulletin SBF100-49-037, dated October 31, 2016. This service information describes procedures for removing certain clamps and replacing the flexible APU fuel drain line (which includes making sure there is sufficient clearance between the new APU fuel drain line and the positive terminal of the APU starter motor and that the earth lead is not chafing against the fuel supply or the fuel drain line). This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

    FAA's Determination

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

    Proposed Requirements of This NPRM

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

    Costs of Compliance

    We estimate that this proposed AD affects 5 airplanes of U.S. registry. We estimate the following costs to comply with this proposed AD:

    Estimated Costs Labor cost Parts cost Cost per
  • product
  • Cost on U.S.
  • operators
  • 1 work-hour × $85 per hour = $85 $963 $1,048 $5,240
    Authority for This Rulemaking

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

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

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

    Regulatory Findings

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

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

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

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

    3. Will not affect intrastate aviation in Alaska; and

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

    List of Subjects in 14 CFR Part 39

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

    The Proposed Amendment

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

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

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

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): Fokker Services B.V.: Docket No. FAA-2018-0802; Product Identifier 2018-NM-082-AD. (a) Comments Due Date

    We must receive comments by November 13, 2018.

    (b) Affected ADs

    This AD affects AD 95-21-20, Amendment 39-9407 (60 FR 53857, October 18, 1995) (“AD 95-21-20”).

    (c) Applicability

    This AD applies to Fokker Services B.V. Model F28 Mark 0070 and 0100, certificated in any category, all serial numbers.

    (d) Subject

    Air Transport Association (ATA) of America Code 49, Airborne auxiliary power.

    (e) Reason

    This AD was prompted by reports of electrical arcing between the auxiliary power unit (APU) starter motor positive terminal and the APU fuel drain line. We are issuing this AD to address this unsafe condition, which could lead to a fire during APU start and possibly result in damage to the airplane.

    (f) Compliance

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

    (g) Modification

    Within 12 months after the effective date of this AD: Remove the two additional clamps, part number (P/N) MS21919WCH5 and P/N MS21919WCH13, and replace APU fuel drain line P/N D67066-409 with a new APU fuel drain line P/N W67066-401, in accordance with the Accomplishment Instructions of Fokker Service Bulletin SBF100-49-037, dated October 31, 2016.

    (h) Terminating Actions for AD 95-21-20

    Accomplishing the actions required by paragraph (g) of this AD terminates all requirements of AD 95-21-20.

    (i) Parts Installation Prohibition

    No person may install APU fuel drain line P/N D67066-409 after modification of an airplane as required by paragraph (g) of this AD.

    (j) Other FAA AD Provisions

    The following provisions also apply to this AD:

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

    (2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Section, Transport Standards Branch, FAA; or the European Aviation Safety Agency (EASA); or Fokker Services B.V.'s EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.

    (k) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA Airworthiness Directive 2017-0008, dated January 16, 2017, for related information. This MCAI may be found in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0802.

    (2) For more information about this AD, contact Tom Rodriguez, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3226.

    (3) For service information identified in this AD, contact Fokker Services B.V., Technical Services Dept., P.O. Box 1357, 2130 EL Hoofddorp, the Netherlands; telephone +31 (0)88-6280-350; fax +31 (0)88-6280-111; email [email protected]; internet http://www.myfokkerfleet.com. You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.

    Issued in Des Moines, Washington, on September 14, 2018. John P. Piccola, Acting Director, System Oversight Division, Aircraft Certification Service.
    [FR Doc. 2018-20919 Filed 9-27-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Part 1 [Docket No. FDA-2007-N-0465] Label Requirement for Food That Has Been Refused Admission Into the United States AGENCY:

    Food and Drug Administration, HHS.

    ACTION:

    Proposed rule; withdrawal.

    SUMMARY:

    The Food and Drug Administration (FDA, the Agency, or we) is announcing the withdrawal of a proposed rule that published in the Federal Register. This proposed rule is not currently considered a viable candidate for final action. FDA is taking this action because this proposed rule does not reflect current technology and industry practice.

    DATES:

    The proposed rule published September 18, 2008, at 73 FR 54106 is withdrawn as of September 28, 2018.

    ADDRESSES:

    For access to the docket, go to https://www.regulations.gov and insert the docket number found in brackets in the heading of this document into the “Search” box and follow the prompts, and/or go to the Dockets Management Staff, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    FOR FURTHER INFORMATION CONTACT:

    Holli Kubicki, Office of Regulatory Affairs, Office of Strategic Planning and Operational Policy, Food and Drug Administration, 12420 Parklawn Dr., Rockville, MD 20857, 240-402-4557, [email protected]

    SUPPLEMENTARY INFORMATION:

    In 1990, FDA began a process of periodically conducting comprehensive reviews of its regulation process, including reviewing the backlog of proposed rulemakings that had not been finalized. As FDA removed many proposed rules not finalized, the Agency implemented a process of reviewing existing proposed rules every 5 years.

    As part of this process and the Administration's regulatory reform initiative, we continue to conduct reviews of existing proposed rules. The review determines if the proposals are outdated, unnecessary, or can be revised to reduce regulatory burden while allowing FDA to achieve our public health mission and fulfill statutory obligations.

    As part of these efforts, FDA is withdrawing the proposed rule entitled “Label Requirement for Food That Has Been Refused Admission Into the United States” (September 18, 2008, 73 FR 54106).

    The proposed rule does not reflect current technology and industry practice. For example, the proposed rule directed owners or consignees to affix labels to physical documents such as invoices, packing lists, bills of lading, and any other documents accompanying refused food. Many of these documents are now electronic. Therefore, since implementation of the proposed rule would not adequately address how to permanently mark electronic documentation accompanying refused food, it would not achieve the public health and efficiency benefits discussed in the notice of proposed rulemaking. As directed by section 304 of the FDA Food Safety Modernization Act (Pub. L. 111-353) that was enacted after FDA issued the proposed rule, FDA now requires, as part of its prior notice regulations, notice to FDA of the name of any country to which imported food has been refused entry. (See 21 CFR 1.281(a)(18).) This includes situations where the United States has refused entry, and it therefore provides FDA with information related to what the proposed marking rule would require.

    FDA may reassess how to effectively implement the labeling of documentation accompanying refused food and consider whether to issue a revised proposed rule in the future.

    The withdrawal of the proposal identified in this document does not preclude the Agency from reinstituting rulemaking concerning the issues addressed. Should we decide to undertake such a rulemaking in the future, we will re-propose the action and provide a new opportunity for comment. Furthermore, this proposed rule withdrawal is only intended to address the specific actions identified in this document, and not any other pending proposals that the Agency has issued or is considering. If you need additional information about the subject matter of the withdrawn proposed rule, you may review the Agency's website (https://www.fda.gov) for any current information on the matter.

    Dated: September 25, 2018. Leslie Kux, Associate Commissioner for Policy.
    [FR Doc. 2018-21145 Filed 9-27-18; 8:45 am] BILLING CODE 4164-01-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Chapter I [Docket Nos. FDA-2005-N-0033, FDA-2008-N-0115] Use of Materials Derived From Cattle in Medical Products Intended for Use in Humans and Drugs Intended for Use in Ruminants; Reporting Information Regarding Falsification of Data AGENCY:

    Food and Drug Administration, HHS.

    ACTION:

    Proposed rule; withdrawal.

    SUMMARY:

    The Food and Drug Administration (FDA, Agency, we) is announcing the withdrawal of two proposed rules that published in the Federal Register. These proposed rules are not currently considered viable candidates for final action. FDA is taking this action because the regulatory requirements set forth in the proposed rules are not needed at this time to protect the public health.

    DATES:

    As of September 28, 2018, the proposed rules published on January 12, 2007, at 72 FR 1582, and February 19, 2010, at 75 FR 7412 are withdrawn.

    ADDRESSES:

    For access to the docket, go to https://www.regulations.gov and insert the docket number found in brackets in the heading of this document into the “Search” box and follow the prompts, and/or go to the Dockets Management Staff, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    FOR FURTHER INFORMATION CONTACT:

    Brian Pendleton, Office of Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 32, Rm. 4250, Silver Spring, MD 20993-0002, 301-796-4614, [email protected]

    SUPPLEMENTARY INFORMATION:

    In 1990, FDA began a process of periodically conducting comprehensive reviews of its regulation process, including reviewing the backlog of proposed rulemakings that had not been finalized. As FDA removed many proposed rules not finalized, the Agency implemented a process of reviewing existing proposed rules every 5 years.

    As part of this process and the Administration's regulatory reform initiative, we continue to conduct reviews of existing proposed rules. The review determines if the proposals are outdated, unnecessary, or can be revised to reduce regulatory burden while allowing FDA to achieve our public health mission and fulfill statutory obligations.

    As part of these efforts, FDA is withdrawing the following proposed rules:

    Title of proposed rule Publication date,
  • Federal Register
  • citation
  • Docket No. Reason for withdrawal
    1. Use of Materials Derived from Cattle in Medical Products Intended for Use in Humans and Drugs Intended for Use in Ruminants January 12, 2007, 72 FR 1582 FDA-2005-N-0033 We are withdrawing the proposed rule because the risk to public health posed by the potential use of materials derived from cattle in medical products has been significantly diminished since the issuance of the proposed rule, and we believe we can address any potential concerns through application of our premarketing review authority. 2. Reporting Information Regarding Falsification of Data February 19, 2010, 75 FR 7412 FDA-2008-N-0115 The rule is not needed to protect research subjects or to help ensure the integrity of clinical trial data submitted to FDA in support of marketing applications and petitions for product approvals. Existing regulations require study sponsors to notify FDA when they end an investigator's participation in an investigation (21 CFR 312.56(b)), and institutional review boards must notify us when they suspend or terminate their approval of research (21 CFR 56.113). Based on our review of recent data, we conclude that we are receiving adequate notice of falsification of data, and we do not believe that adopting the proposed requirements would provide us with substantial additional information.

    The withdrawal of the proposed rules does not preclude the Agency from reinstituting rulemaking concerning the issues addressed in the proposed rules listed in the table. Should we decide to undertake such rulemakings in the future, we will re-propose the actions and provide new opportunities for comment. Furthermore, these proposed rules' withdrawal is only intended to address the specific actions identified in this document, and not any other pending proposals that the Agency has issued or is considering. If you need additional information about the subject matter of the withdrawn proposed rules, you may review the Agency's website (https://www.fda.gov) for any current information on the matter.

    Dated: September 24, 2018. Leslie Kux, Associate Commissioner for Policy.
    [FR Doc. 2018-21133 Filed 9-27-18; 8:45 am] BILLING CODE 4164-01-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 100 [Docket Number USCG-2018-0883] RIN 1625-AA08 Special Local Regulation; Manasquan Inlet, Manasquan, NJ AGENCY:

    Coast Guard, DHS.

    ACTION:

    Notice of proposed rulemaking.

    SUMMARY:

    The Coast Guard proposes to establish a temporary special local regulation for certain waters of the Manasquan Inlet between Manasquan, NJ, and Point Pleasant Beach, NJ. This action is necessary to protect event participants, spectators, and vessels transiting the area from potential hazards during the Manasquan Inlet Intercoastal Tug marine event. During the enforcement period, unauthorized persons or vessels would be prohibited from entering into, remaining within, transiting through, or anchoring in the regulated area unless authorized by the Captain of the Port Delaware Bay or a designated representative of the Captain of the Port. We invite your comments on this proposed rulemaking.

    DATES:

    Comments and related material must be received by the Coast Guard on or before October 5, 2018.

    ADDRESSES:

    You may submit comments identified by docket number USCG-2018-0883 using the Federal eRulemaking Portal at https://www.regulations.gov. See the “Public Participation and Request for Comments” portion of the SUPPLEMENTARY INFORMATION section for further instructions on submitting comments.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions about this proposed rulemaking, call or email Petty Officer Thomas Welker, 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 COTP Captain of the Port DHS Department of Homeland Security FR Federal Register NPRM Notice of proposed rulemaking § Section U.S.C. United States Code II. Background, Purpose, and Legal Basis

    The Manasquan Beach and Recreation Department notified the Coast Guard that it will be conducting a tug of war event from 11 a.m. to 1:30 p.m. on October 20, 2018. The tug of war will consist of teams on opposing sides of the Manasquan Inlet with a rope extended between the sides. The event will span the entire width of the inlet. Vessel operation in the area of the event could be hazardous to both event participants and vessels. The Captain of the Port Delaware Bay (COTP) has determined that a safety concern exists for non-participant vessels within 400 feet of the tug of war rope.

    The purpose of this rulemaking is to ensure the safety of participants and vessels transiting the regulated area during the event. The Coast Guard proposes this rulemaking under authority in 33 U.S.C. 1231.

    III. Discussion of Proposed Rule

    The COTP proposes to establish a temporary special local regulation to be in effect from 11 a.m. to 1:30 p.m. on October 20, 2018. The regulated area would cover all waters within 400 feet of the event located between approximate locations 40°6′9.22″ N, 74°2′7.8″ W and 40°6′9.22″ N, 74°2′8.2″ W. During the event, the inlet would be closed to all non-participant vessel traffic. There is a 30-minute break tentatively planned for midway through the event. If circumstances permit, during the break the rope will be removed from navigable waters and vessels may be allowed to transit through the area at the discretion of the COTP or COTP's designated representative. The regulation is intended to ensure the safety of event participants and vessels during the scheduled 11 a.m. to 1:30 p.m. tug of war event. No vessel or person would be permitted to enter the regulated area without obtaining permission from the COTP or a designated representative of the Captain of the Port. The regulatory text we are proposing appears at the end of this document.

    IV. Regulatory Analyses

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

    A. Regulatory Planning and Review

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

    This regulatory action determination is based on the size, location, and duration of the regulated area. While this regulated area would impact a designated area of the Manasquan River Inlet for 2 and 1/2 hours, the event sponsor has organized a 30 minute time period during the event where vessels would be able to transit through the inlet. 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 during the 30 minute time period during the event.

    B. Impact on Small Entities

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

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

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

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

    C. Collection of Information

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

    D. Federalism and Indian Tribal Governments

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

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

    E. Unfunded Mandates Reform Act

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

    F. Environment

    We have analyzed this proposed rule under Department of Homeland Security Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves a regulated area lasting 2 and 1/2 hours that would prohibit entry within 400 feet of a tug of war event across an inlet. Normally such actions are categorically excluded from further review under paragraph L61 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A preliminary Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

    G. Protest Activities

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

    V. Public Participation and Request for Comments

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

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

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

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

    List of Subjects in 33 CFR Part 100

    Maritime safety, Navigation (water), Reporting and recordkeeping requirements, Waterways.

    For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 100 as follows:

    PART 100—SAFETY OF LIFE ON NAVIGABLE WATERS 1. The authority citation for part 100 continues to read as follows: Authority:

    33 U.S.C. 1233; 33 CFR 1.05-1.

    2. Add § 100.T05-0883 to read as follows.
    § 100.T05-0883 Special Local Regulation; Manasquan River; Manasquan, NJ.

    (a) Location. The following area is a regulated area: All waters of the Manasquan River within the Manasquan Inlet within 400 feet of the event located between approximate locations 40°6′9.22″ N, 74°2′7.8″ W and 40°6′9.22″ N, 74°2′8.2″ W. All coordinates are based on World Geodetic System 1984.

    (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 Delaware Bay (COTP) in the enforcement of the safety zone.

    (c) Regulations. (1) All non-participant persons and vessels are prohibited from entering into, remaining within, transiting through, or anchoring in the regulated area 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 designated representative via VHF-FM channel 16 or by telephone at 215-271-4807.

    (3) If authorization to enter into, remain within, transit through, or anchor in the regulated area is granted, all persons and vessels receiving such authorization shall comply with the instructions of the COTP or the COTP's designated representative.

    (4) The Coast Guard will provide notice of the regulated areas by Local Notice to Mariners, Broadcast Notice to Marines, or by on-scene designated representatives.

    (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 11 a.m. through 1:30 p.m. on October 20, 2018.

    K.A. Clarke, Captain, U.S. Coast Guard, Acting Captain of the Port Delaware Bay.
    [FR Doc. 2018-21202 Filed 9-27-18; 8:45 am] BILLING CODE 9110-04-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket Number USCG-2018-0711] RIN 1625-AA00 Safety Zone; Delaware River; Penn's Landing; Philadelphia, PA; Fireworks Display AGENCY:

    Coast Guard, DHS.

    ACTION:

    Notice of proposed rulemaking.

    SUMMARY:

    The Coast Guard proposes to establish a temporary safety zone on a portion of the Delaware River in Philadelphia, PA. This action is necessary to protect the surrounding public and vessels on these navigable waters adjacent to Penn's Landing, Philadelphia, PA, during a fireworks display on October 19, 2018. This proposed rulemaking would prohibit persons and vessels from entering, transiting, or remaining within the safety zone unless authorized by the Captain of the Port Delaware Bay or a designated representative. We invite your comments on this proposed rulemaking.

    DATES:

    Comments and related material must be received by the Coast Guard on or before October 5, 2018.

    ADDRESSES:

    You may submit comments identified by docket number USCG-2018-0711 using the Federal eRulemaking Portal at http://www.regulations.gov. See the “Public Participation and Request for Comments” portion of the SUPPLEMENTARY INFORMATION section for further instructions on submitting comments.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions about this proposed rulemaking, call or email Petty Officer Thomas Welker, 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, Purpose, and Legal Basis

    On June 18, 2018, a wedding party notified the Coast Guard that it will be conducting a fireworks display from 11:15 p.m. to 11:45 p.m. on October 19, 2018. The fireworks are to be launched from a barge in the Delaware River adjacent to Penn's Landing in Philadelphia, PA. Hazards from firework display include accidental discharge of fireworks, dangerous projectiles, and falling hot embers or other debris. The Captain of the Port Delaware Bay (COTP) has determined that potential hazards associated with the fireworks to be used in this display would be a safety concern for anyone within a 500-foot radius of the barge.

    The purpose of this rulemaking is to ensure the safety of vessels and the navigable waters within a 500-foot radius of the fireworks barge before, during, and after the scheduled event. The Coast Guard proposes this rulemaking under authority in 33 U.S.C. 1231.

    III. Discussion of Proposed Rule

    The COTP proposes to establish a safety zone from 11:00 p.m. through 11:59 p.m. on October 19, 2018. The safety zone would cover all navigable waters within 500 feet of a fireworks barge in the Delaware River adjacent to Penn's Landing in Philadelphia, PA. The barge will be anchored in approximate position 39°57′05.26″ N Latitude 075°08′10.85″ W Longitude. The duration of the zone is intended to ensure the safety of vessels and these navigable waters before, during, and after the scheduled 11:15 p.m. to 11:45 p.m. fireworks display. No vessel or person would be permitted to enter, transit, or remain within the safety zone without obtaining permission from the COTP or a designated representative. The regulatory text we are proposing appears at the end of this document.

    IV. Regulatory Analyses

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

    A. Regulatory Planning and Review

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

    This regulatory action determination is based on the size, location, duration, and time-of-day of the safety zone. Vessel traffic would be able to safely transit around this safety zone which would impact a small designated area of the Delaware River for one hour during the evening when vessel traffic is normally low. 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 certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities.

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

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

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

    C. Collection of Information

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

    D. Federalism and Indian Tribal Governments

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

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

    E. Unfunded Mandates Reform Act

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

    F. Environment

    We have analyzed this proposed rule under Department of Homeland Security Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves a safety zone lasting one hour that would prohibit entry within 500 feet of a fireworks barge. Normally such actions are 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 preliminary Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

    G. Protest Activities

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

    V. Public Participation and Request for Comments

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

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

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

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

    List of Subjects in 33 CFR Part 165

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

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

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

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

    2. Add § 165.T05-0711 to read as follows:
    § 165.T05-0711 Safety Zone; Safety Zone; Delaware River; Penn's Landing; Philadelphia, PA; Fireworks Display.

    (a) Location. The following area is a safety zone: All waters of the Delaware River within a 500-foot radius of the fireworks barge, which will be anchored in approximate position 39°57′05.26″ N Latitude 075°08′10.85″ W Longitude. 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, Delaware Bay in the enforcement of the safety zone.

    (c) Regulations. (1) Under the general safety zone regulations in subpart C of this part—(a) 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; and (b) all persons and vessels in the safety zone must comply with all lawful orders or directions given to them by the COTP or the COTP's designated representative.

    (2) To request permission to enter the safety zone, contact the COTP or the COTP's representative on marine band radio VHF-FM channel 16 (156.8 MHz) or 215-271-4807.

    (3) No vessel may take on bunkers or conduct lightering operations within the safety zone during the enforcement period.

    (4) 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 11:15 p.m. through 11:45 p.m. on October 19, 2018.

    K.A. Clarke, Captain, U.S. Coast Guard, Acting Captain of the Port Delaware Bay.
    [FR Doc. 2018-21203 Filed 9-27-18; 8:45 am] BILLING CODE 9110-04-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket Number USCG-2018-0868] RIN 1625-AA00 Safety Zone; Annual Fireworks Displays Within the Sector Columbia River Captain of the Port Zone AGENCY:

    Coast Guard, DHS.

    ACTION:

    Notice of proposed rulemaking.

    SUMMARY:

    The Coast Guard proposes to amend the regulations establishing safety zones for annual fireworks displays in the Captain of the Port Zone Columbia River. This action would include updating 3 existing safety zones, adding 1 safety zone for a fireworks display that was previously published under a temporary regulation, and removing 10 safety zones for inactive fireworks displays. We invite your comments on this proposed rulemaking.

    DATES:

    Comments and related material must be received by the Coast Guard on or before October 29, 2018.

    ADDRESSES:

    You may submit comments identified by docket number USCG-2018-0868 using the Federal eRulemaking Portal at http://www.regulations.gov. See the “Public Participation and Request for Comments” portion of the SUPPLEMENTARY INFORMATION section for further instructions on submitting comments.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions about this proposed rulemaking, call or email LCDR Dixon Whitley, Waterways Management Division, Marine Safety Unit Portland, Coast Guard; telephone 503-240-9319, 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, Purpose, and Legal Basis

    Our regulation for safety zones for fireworks displays in Captain of the Port Zone Columbia River, 33 CFR 165.1315, was revised (82 FR 28556, June 23, 2017) in 2017. This proposed rule would remove 10 safety zones for inactive fireworks displays, add 1 safety zone for a new, recurring fireworks display that was previously published as a temporary safety zone, and update the date or location for 3 existing fireworks displays. The purpose of this revision would provide the public accurate information regarding safety zones for annual fireworks displays in Captain of the Port Zone Columbia River.

    The Coast Guard proposes this rulemaking under authority in 33 U.S.C. 1231. The Captain of the Port Sector Columbia River has determined that fireworks displays create hazardous conditions for the maritime public because of the large number of vessels near the displays, as well as the noise, falling debris, and explosions that occur during the event. Because firework discharge sites pose a potential hazard to the maritime public, these safety zones are necessary in restricting vessel movement and to reduce vessel congregation in the proximity of the firework discharge sites.

    III. Discussion of Proposed Rule

    The Coast Guard proposes to remove 10 fireworks display safety zones in 33 CFR 165.1315 that are listed in Table 1 below because the Coast Guard has not received an application to conduct these fireworks displays within the past 3 years.

    Table 1—List of Safety Zone We Propose To Remove From 33 CFR 165.1315 Cinco de Mayo Fireworks Portland, OR One day in May 45°30′58″ N 122°40′12″ W Newport High School Graduation Fireworks Newport, OR One day in June 44°36′48″ N 124°04′10″ W Celebrate Milwaukie Milwaukie, OR One day in July 45°26′33″ N 122°38′44″ W Arlington 4th of July Arlington, OR One day in July 45°43′23″ N 120°12′11″ W East County 4th of July Fireworks Gresham, OR One day in July 45°33′32″ N 122°27′10″ W Rufus 4th of July Fireworks Rufus, OR One day in July 45°41′39″ N 120°45′16″ W Maritime Heritage Festival St. Helens, OR One day in July 45°51′54″ N 122°47′26″ W Lynch Picnic West Linn, OR One day in July 45°23′37″ N 122°37′52″ W First Friday Milwaukie Milwaukie, OR One day in September 45°26′33″ N 122°38′44″ W Willamette Falls Heritage Festival Oregon City, OR One day in October 45°21′44″ N 122°36′21″ W

    Additionally, the Coast Guard proposes to add a new fireworks display safety zone. This safety zone was previously listed as a temporary safety zone (83 FR 30869, July 2, 2018), and after conferring with the event sponsor, it will become a recurring fireworks display. This safety zone would cover all navigable waters within a 450 yard radius of the fireworks barge in the Willamette River located at 45°24′37″ N, 122°39′30″ W in the vicinity of George Rogers Park in Lake Oswego, OR. The following would be added to the table in 33 CFR 165.1315:

    City of Lake Oswego 4th of July Fireworks Lake Oswego, OR One day in July 45°24′37″ N 122°39′30″ W

    Finally, the Coast Guard proposes to revise three existing fireworks display safety zones. These revisions include updating the date for 4th of July at Pekin Ferry to more precisely describe when the fireworks display would occur, correcting the wrong state listed for the Independence Day at the Port and updating the location for the Leukemia and Lymphoma Light the Night Fireworks.

    These updates would eliminate any confusion caused by the fireworks display safety zones listed in the 33 CFR165.1315 table and any subsequent temporary safety zones resulting from changes. The regulatory text we are proposing appears at the end of this document.

    IV. Regulatory Analyses

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

    A. Regulatory Planning and Review

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

    This regulatory action determination is based on size, location, duration, and time-of-day of the safety zone. Vessel traffic would be able to safely transit around these safety zones which would impact small designated areas of the Oregon coast, Tillamook Bay, the Columbia River and its tributaries, and the Clatskanie River for approximately 2 hours during the evening when commercial vessel traffic is normally low. 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 certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities.

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

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

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

    C. Collection of Information

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

    D. Federalism and Indian Tribal Governments

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

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

    E. Unfunded Mandates Reform Act

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

    F. Environment

    We have analyzed this proposed rule under Department of Homeland Security Directive 023-01, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves safety zones lasting approximately two hours in duration and would prohibit entry within 450 yards of the launch sites. Normally such actions are 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 preliminary Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

    G. Protest Activities

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

    V. Public Participation and Request for Comments

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

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

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

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

    List of Subjects in 33 CFR Part 165

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

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

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

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

    2. In § 165.1315, revise paragraph (a) to read as follows:

    (a) Safety zones. The following areas are designated safety zones: Waters of the Columbia River and its tributaries, waters of the Siuslaw River, Yaquina River, Umpqua River, Clatskanie River, Tillamook Bay and waters of the Washington and Oregon Coasts, within a 450 yard radius of the launch site at the approximate locations listed in the following table:

    Event name (typically) Event location Date of event Latitude Longitude Portland Rose Festival Fireworks Portland, OR One day in May or June 45°30′58″ N 122°40′12″ W Tri-City Chamber of Commerce Fireworks/River of Fire Festival Kennewick, WA One day in July 46°13′37″ N 119°08′47″ W Astoria-Warrenton 4th of July Fireworks Astoria, OR One day in July 46°11′34″ N 123°49′28″ W Waterfront Blues Festival Fireworks Portland, OR One day in July 45°30′42″ N 122°40′14″ W Florence Independence Day Celebration Florence, OR One day in July 43°58′09″ N 124°05′50″ W Oaks Park Association 4th of July Portland, OR One day in July 45°28′22″ N 122°39′59″ W City of Rainier/Rainier Days Rainier, OR One day in July 46°05′46″ N 122°56′18″ W Ilwaco July 4th Committee Fireworks/Independence Day at the Port Ilwaco, WA One day in July 46°18′17″ N 124°02′00″ W Splash Aberdeen Waterfront Festival Aberdeen, WA One day in July 46°58′40″ N 123°47′45″ W City of Coos Bay July 4th Celebration/Fireworks Over the Bay Coos Bay, OR One day in July 43°22′06″ N 124°12′24″ W Port of Cascade Locks 4th of July Fireworks Cascade Locks, OR One day in July 45°40′15″ N 121°53′43″ W Clatskanie Heritage Days Fireworks Clatskanie, OR One Day in July 46°6′17″ N 123°12′02″ W Washougal 4th of July Washougal, WA One day in July 45°34′32″ N 122°22′53″ W City of St. Helens 4th of July Fireworks St. Helens, OR One day in July 45°51′54″ N 122°47′26″ W Waverly Country Club 4th of July Fireworks Milwaukie, OR One day in July 45°27′03″ N 122°39′18″ W Hood River 4th of July Hood River, OR One day in July 45°42′58″ N 121°30′32″ W Winchester Bay 4th of July Fireworks Winchester Bay, OR One day in July 43°40′56″ N 124°11′13″ W Brookings, OR July 4th Fireworks Brookings, OR One day in July 42°02′39″ N 124°16′14″ W Yachats 4th of July Yachats, OR One day in July 44°18′38″ N 124°06′27″ W Lincoln City 4th of July Lincoln City, OR One day in July 44°55′28″ N 124°01′31″ W July 4th Party at the Port of Gold Beach Gold Beach, OR One day in July 42°25′30″ N 124°25′03″ W Gardiner 4th of July Gardiner, OR One day in July 43°43′55″ N 124°06′48″ W Huntington 4th of July Huntington, OR One day in July 44°18′02″ N 117°13′33″ W Toledo Summer Festival Toledo, OR One day in July 44°37′08″ N 123°56′24″ W Port Orford 4th of July Port Orford, OR One day in July 42°44′31″ N 124°29′30″ W The Dalles Area Fourth of July The Dalles, OR One day in July 45°36′18″ N 121°10′23″ W Roseburg Hometown 4th of July Roseburg, OR One day in July 43°12′58″ N 123°22′10″ W Newport 4th of July Newport, OR One day in July 44°37′40″ N 124°02′45″ W Cedco Inc./The Mill Casino Independence Day North Bend, OR One day in July 43°23′42″ N 124°12′55″ W Waldport 4th of July Waldport, OR One day in July 44°25′31″ N 124°04′44″ W Westport 4th of July Westport, WA One day in July 46°54′17″ N 124°05′59″ W The 4th of July at Pekin Ferry Ridgefield, WA Saturday before July 4th 45°52′07″ N 122°43′53″ W Bandon 4th of July Bandon, OR One day in July 43°07′29″ N 124°25′05″ W Garibaldi Days Fireworks Garibaldi, OR One day in July 45°33′13″ N 123°54′56″ W Bald Eagle Days Cathlamet, WA One day in July 46°12′14″ N 123°23′17″ W Independence Day at the Fort Vancouver Vancouver, WA One Day in July 45°36′57″ N 122°40′09″ W Oregon Symphony Concert Fireworks Portland, OR One day in August or September 45°30′42″ N 122°40′14″ W Astoria Regatta Astoria, OR One day in August 46°11′34″ N 123°49′28″ W Leukemia and
  • Lymphoma Light the Night Fireworks
  • Portland, OR One day in October 45°30′23″ N 122°40′4″ W
    Veterans Day Celebration The Dalles, OR One day in November 45°36′18″ N 121°10′34″ W
    Dated: September 24, 2018. J.C. Smith, Captain, U.S. Coast Guard, Captain of the Port Columbia River.
    [FR Doc. 2018-21186 Filed 9-27-18; 8:45 am] BILLING CODE 9110-04-P
    DEPARTMENT OF EDUCATION 34 CFR Chapter II [Docket ID ED-2018-OESE-0069] Proposed Priorities, Requirements, Definitions, and Performance Measures—Comprehensive Centers Program Catalog of Federal Domestic Assistance (CFDA) Number: 84.283B AGENCY:

    Office of Elementary and Secondary Education, Department of Education.

    ACTION:

    Proposed priorities.

    SUMMARY:

    The Assistant Secretary for Elementary and Secondary Education (Assistant Secretary), U.S. Department of Education (Department) proposes priorities, requirements, definitions, and performance measures under the Comprehensive Centers program. The Assistant Secretary may use these priorities, requirements, definitions, and performance measures for competitions in fiscal year (FY) 2019 and later years. We intend to use the priorities, requirements, and definitions to award grants to eligible applicants seeking to provide capacity-building services to State educational agencies (SEAs), regional educational agencies (REAs), local educational agencies (LEAs), and schools that improve educational outcomes for all students, close achievement gaps, and improve the quality of instruction.

    DATES:

    We must receive your comments on or before October 29, 2018.

    ADDRESSES:

    Submit your comments through the Federal eRulemaking Portal or via postal mail, commercial delivery, or hand delivery. We will not accept comments submitted by fax or by email or those submitted after the comment period. To ensure that we do not receive duplicate copies, please submit your comments only once. In addition, please include the Docket ID at the top of your comments.

    Federal eRulemaking Portal: Go to www.regulations.gov to submit your comments electronically. Information on using Regulations.gov, including instructions for accessing agency documents, submitting comments, and viewing the docket, is available on the site under “How to Use Regulations.gov.”

    Postal Mail, Commercial Delivery, or Hand Delivery: If you mail or deliver your comments about this notice of proposed priorities, requirements, definitions, and performance measures, address them to Kim Okahara, U.S. Department of Education, 400 Maryland Avenue SW, Room 3E204, Washington, DC 20202-6132.

    Privacy Note:

    The Department's policy is to make all comments received from members of the public available for public viewing in their entirety on the Federal eRulemaking Portal at www.regulations.gov. Therefore, commenters should be careful to include in their comments only information that they wish to make publicly available.

    FOR FURTHER INFORMATION CONTACT:

    Kim Okahara, U.S. Department of Education, 400 Maryland Avenue SW, Room 3E204, Washington, DC 20202-6135. Telephone: (202) 453-6930. Email: [email protected]

    If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-800-877-8339.

    SUPPLEMENTARY INFORMATION:

    Invitation to Comment: We invite you to submit comments regarding the proposed priorities, requirements, definitions, and performance measures. To ensure that your comments have maximum effect in developing the final priorities, requirements, definitions, and performance measures, we urge you to identify clearly the specific section or sections of the proposed priorities, requirements, definitions, and performance measures that each of your comments addresses and to arrange your comments in the same order as the proposed priorities, requirements, definitions, and performance measures.

    We invite you to assist us in complying with the specific requirements of Executive Orders 12866, 13563, and 13771 and their overall requirement of reducing regulatory burden that might result from these proposed priorities, requirements, definitions, and performance measures. Please let us know of any further ways we could reduce potential costs or increase potential benefits while preserving the effective and efficient administration of the program.

    During and after the comment period, you may inspect all public comments about these proposed priorities, requirements, definitions, and performance measures by accessing Regulations.gov. You may also inspect the comments in person in Room 3E204, 400 Maryland Avenue SW, Washington, DC, between 8:30 a.m. and 4:00 p.m., Eastern Time, Monday through Friday of each week except Federal holidays. Please contact the person listed under FOR FURTHER INFORMATION CONTACT.

    Assistance to Individuals with Disabilities in Reviewing the Rulemaking Record: On request, we will provide an appropriate accommodation or auxiliary aid to an individual with a disability who needs assistance to review the comments or other documents in the public rulemaking record for these proposed priorities, requirements, definitions, and performance measures. If you want to schedule an appointment for this type of accommodation or auxiliary aid, please contact the person listed under FOR FURTHER INFORMATION CONTACT.

    Purpose of Program: The Comprehensive Centers program supports the establishment of not less than 20 Comprehensive Centers to provide capacity-building services to SEAs, REAs, LEAs, and schools that improve educational outcomes for all students, close achievement gaps, and improve the quality of instruction.

    Program Authority:

    Section 203 of the Educational Technical Assistance Act of 2002 (ETAA) (20 U.S.C. 9601 et seq.).

    Background: The Elementary and Secondary Education Act of 1965 (ESEA), as amended by the Every Student Succeeds Act (ESSA),1 holds States accountable for closing achievement gaps and ensuring that all children, regardless of race, ethnicity, family income, English language proficiency, or disability, receive a high-quality education and meet challenging State academic standards.

    1 Throughout this document, unless otherwise indicated, citations to the ESEA refer to the ESEA, as amended by the ESSA.

    The ETAA authorizes support for not less than 20 grants to local entities, or consortia of such entities, with demonstrated expertise in providing capacity-building services in reading, mathematics, science, and technology, especially to low-performing schools and districts, including the administration and implementation of programs authorized under the ESEA. Under section 203(a)(2) of the ETAA, the Department is required to establish at least one Center in each of the 10 geographic regions served by the Department's Regional Educational Laboratories (RELs) authorized under section 941(h) of the Educational Research, Development, Dissemination, and Improvement Act of 1994. The proposed funding for Regional Centers established under the ETAA must take into consideration the school-age population, proportion of economically disadvantaged students, increased cost burdens of service delivery in rural areas, and number of schools identified for improvement under ESEA section 1111(d). Accordingly, the regions for the proposed Regional Centers take into account total SEAs, LEAs, REAs, SEAs, and LEAs eligible for the Small, Rural School Achievement Program and the Rural Low-Income School Program, schools, and the associated RELs.

    The Department conducted a competition in 2012 and made five-year awards to 15 Regional Centers and seven Content Centers. The 15 Regional Centers provided direct technical assistance to SEAs within their assigned geographic region through a variety of approaches, such as identifying best practices and resources, providing training, and helping States plan strategically and engage key stakeholders. In addition, seven Content Centers provided specialized support in the following key areas: Standards and assessments implementation, great teachers and leaders, school turnaround, enhancing early learning outcomes, college- and career-readiness and success, building State capacity and productivity, and innovations in learning. Content Centers developed materials, such as guides, tools, and training modules, and they provided direct technical assistance to States in collaboration with Regional Centers.2

    2 In 2016, the Department established a National Comprehensive Center on Improving Literacy for Students with Disabilities pursuant to provisions included in the ESSA. The Center is authorized as part of the Comprehensive Centers program and managed by the Office of Special Education and Rehabilitative Services. See https://improvingliteracy.org/ for more information.

    On March 13, 2017, the Department granted waivers to extend the performance period of the Comprehensive Centers from October 1, 2017, through September 30, 2019 (82 FR 13452). The Department concluded it would be in the public interest to hold a competition only after all new statutory requirements under the reauthorized ESEA went into effect. Delaying the competition until after the Department and States began to implement the new provisions under the ESEA allowed applicants to familiarize themselves with the new statutory requirements and submit applications that better serve States under the new law.

    Additionally, pursuant to authority granted to the Secretary in Title III of Division H of the Consolidated Appropriations Act, 2016 (Pub. L. 114-113), and subsequent Consolidated Appropriations Acts, Comprehensive Center services may be provided to the Bureau of Indian Education (BIE) and schools within its jurisdiction.

    Proposed Priorities

    We propose two priorities. The Assistant Secretary may use one or more of these priorities for the FY 2019 Comprehensive Centers program competition or for any subsequent competition.

    Background: In accordance with ETAA section 206, the Secretary established 10 Regional Advisory Committees (RACs) to identify each region's most critical educational needs and develop recommendations for technical assistance to meet those needs. The RACs met and engaged their respective constituencies between July 19, 2016, and August 26, 2016. Final RAC reports were published in October 2016.