| Page Range | 52751-52941 | |
| FR Document |
| Page and Subject | |
|---|---|
| 83 FR 52941 - Continuation of the National Emergency With Respect to Significant Narcotics Traffickers Centered in Colombia | |
| 83 FR 52937 - Blind Americans Equality Day, 2018 | |
| 83 FR 52935 - National School Lunch Week, 2018 | |
| 83 FR 52933 - Minority Enterprise Development Week, 2018 | |
| 83 FR 52832 - Sunshine Act Meeting | |
| 83 FR 52850 - Sunshine Act; Notice of Matters To Be Deleted From the Agenda of a Previously Announced Agency Meeting | |
| 83 FR 52849 - Government in the Sunshine Act Meeting Notice | |
| 83 FR 52841 - Posting of the National Security Presidential Memorandum 14, “Support for National Biodefense” | |
| 83 FR 52849 - Notice of Open Meeting | |
| 83 FR 52868 - Wisconsin Central Ltd.-Discontinuance of Service Exemption-in Ashland and Price Counties, Wis. | |
| 83 FR 52833 - Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding Company | |
| 83 FR 52851 - Submission for OMB Review, Comment Request, Proposed Collection: IMLS Accelerating Promising Practices for Small Libraries (APP) Notice of Funding Opportunity | |
| 83 FR 52770 - Special Local Regulation; San Diego Bay, San Diego, CA | |
| 83 FR 52815 - Open Meeting of the Information Security and Privacy Advisory Board | |
| 83 FR 52822 - DOE/NSF Nuclear Science Advisory Committee | |
| 83 FR 52849 - The Performance Review Board | |
| 83 FR 52767 - Government Securities Act Regulations: Large Position Reporting Rules | |
| 83 FR 52768 - Certifications and Exemptions Under the International Regulations for Preventing Collisions at Sea, 1972 | |
| 83 FR 52851 - 30-Day Notice for the “Our Town Program Implementation Study” Proposed Collection; Comment Request | |
| 83 FR 52824 - Blackstone Hydro, Inc.; Notice of Application Tendered for Filing With the Commission and Soliciting Additional Study Requests and Establishing Procedural Schedule for Relicensing and a Deadline for Submission of Final Amendments | |
| 83 FR 52828 - Rio Grande LNG, LLC, Rio Bravo Pipeline Company, LLC; Notice of Availability of the Draft Environmental Impact Statement for the Proposed Rio Grande LNG Project | |
| 83 FR 52816 - Supervisory Highlights: Summer 2018 | |
| 83 FR 52845 - Center for Scientific Review; Notice of Closed Meetings | |
| 83 FR 52847 - Eunice Kennedy Shriver National Institute of Child Health and Human Development; Notice of Meeting | |
| 83 FR 52847 - Eunice Kennedy Shriver National Institute of Child Health & Human Development; Notice of Closed Meeting | |
| 83 FR 52843 - Government-Owned Inventions; Availability for Licensing; Correction | |
| 83 FR 52834 - Partnership Opportunity To List in a Public Database (PPE-Info) Appropriate Personnel Protective Equipment Products That Protect Workers Against Fentanyl Exposure | |
| 83 FR 52804 - Certain Uncoated Paper From Brazil: Final Results of Antidumping Duty Administrative Review; 2015-2017 | |
| 83 FR 52809 - Drawn Stainless Steel Sinks From the People's Republic of China: Partial Rescission of Antidumping Duty Administrative Review; 2017-2018 | |
| 83 FR 52775 - Endangered and Threatened Wildlife and Plants; Removing Deseret Milkvetch (Astragalus desereticus) From the Federal List of Endangered and Threatened Plants | |
| 83 FR 52826 - GRP Madison, LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization | |
| 83 FR 52829 - GRP Franklin, LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization | |
| 83 FR 52827 - North Rosamond Solar, LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization | |
| 83 FR 52832 - Combined Notice of Filings #2 | |
| 83 FR 52826 - Combined Notice of Filings #1 | |
| 83 FR 52830 - Combined Notice of Filings | |
| 83 FR 52824 - Keystone Power Pass-Through Holders LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization | |
| 83 FR 52827 - Conemaugh Power Pass-Through Holders LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization | |
| 83 FR 52830 - Combined Notice of Filings #1 | |
| 83 FR 52840 - Agency Information Collection Activities: Proposed Collection: Public Comment Request: Information Collection Request Title: Bureau of Health Workforce Performance Data Collection, OMB No. 0915-0061-Revision | |
| 83 FR 52872 - Hours of Service of Drivers: Wolfe House Movers, LLC and Wolfe House Movers of Indiana, LLC; Application for Exemption | |
| 83 FR 52873 - Hours of Service of Drivers: Transco, Inc.; Application for Exemption | |
| 83 FR 52822 - Distribution of Residual Citronelle Settlement Agreement Funds | |
| 83 FR 52869 - Hours of Service of Drivers: Rota-Mill, Inc.; Application for Exemption | |
| 83 FR 52875 - Hours of Service of Drivers: RJR Transportation, Inc.; Application for Exemption | |
| 83 FR 52870 - Hours of Service of Drivers: Application for Exemption; Fiat Chrysler Automobiles (FCA) | |
| 83 FR 52835 - Proposed Information Collection Activity; Comment Request | |
| 83 FR 52837 - Determination of Regulatory Review Period for Purposes of Patent Extension; OCREVUS | |
| 83 FR 52789 - Medicare and Medicaid Programs; Regulation To Require Drug Pricing Transparency | |
| 83 FR 52835 - Content of Premarket Submissions for Management of Cybersecurity in Medical Devices; Draft Guidance for Industry and Food and Drug Administration Staff; Availability | |
| 83 FR 52839 - Determination of Regulatory Review Period for Purposes of Patent Extension; AFSTYLA | |
| 83 FR 52868 - Presidential Declaration Amendment of a Major Disaster for Public Assistance Only for the State of California | |
| 83 FR 52868 - Presidential Declaration Amendment of a Major Disaster for the State of North Carolina | |
| 83 FR 52848 - Collection of Information Under Review by Office of Management and Budget; OMB Control Number: 1625-0014 | |
| 83 FR 52801 - Meetings | |
| 83 FR 52800 - U.S. Codex Program: FY2019-2023 Strategic Plan | |
| 83 FR 52760 - Fisheries of the Exclusive Economic Zone off Alaska; Pacific Halibut and Sablefish Individual Fishing Quota Program; Community Development Quota Program; Modifications to Recordkeeping and Reporting Requirements | |
| 83 FR 52801 - Notice of Petitions by Firms for Determination of Eligibility To Apply for Trade Adjustment Assistance | |
| 83 FR 52865 - Self-Regulatory Organizations; Miami International Securities Exchange, LLC; Order Granting Approval of a Proposed Rule Change To List and Trade Options on the SPIKESTM | |
| 83 FR 52854 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change To Amend the Listed Company Manual for Acquisition Companies To Reduce the Continued Listing Standards for Public Holders From 300 to 100 and To Enable the Exchange To Exercise Discretion To Allow Acquisition Companies a Reasonable Time Period Following a Business Combination To Demonstrate Compliance With the Applicable Quantitative Listing Standards | |
| 83 FR 52857 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Approving a Proposed Rule Change To Amend the Arbitrator Payment Rule To Pay Each Arbitrator a $200 Honorarium To Decide Without a Hearing Session a Contested Subpoena Request or a Contested Order for Production or Appearance | |
| 83 FR 52844 - Center for Scientific Review; Notice of Closed Meetings | |
| 83 FR 52847 - National Center for Complementary & Integrative Health; Notice of Meeting | |
| 83 FR 52848 - National Center for Complementary & Integrative Health; Notice of Meeting | |
| 83 FR 52852 - Privacy Act of 1974; System of Records | |
| 83 FR 52860 - Audax Credit BDC Inc., et al.; Notice of Application | |
| 83 FR 52833 - Board Meeting | |
| 83 FR 52802 - Corporation for Travel Promotion Board of Directors | |
| 83 FR 52833 - Formations of, Acquisitions by, and Mergers of Bank Holding Companies | |
| 83 FR 52850 - Notice of Intent To Grant Partially Exclusive License | |
| 83 FR 52849 - Membership of the Merit Systems Protection Board's Performance Review Board | |
| 83 FR 52787 - Receipt of Several Pesticide Petitions Filed for Residues of Pesticide Chemicals in or on Various Commodities | |
| 83 FR 52811 - Aluminum Wire and Cable From the People's Republic of China: Initiation of Less-Than-Fair-Value Investigation | |
| 83 FR 52805 - Aluminum Wire and Cable From the People's Republic of China: Initiation of Countervailing Duty Investigation | |
| 83 FR 52772 - Approval and Promulgation of Air Quality Implementation Plans; West Virginia; Update to Materials Incorporated by Reference | |
| 83 FR 52803 - Large Residential Washers From the Republic of Korea: Final Results of the First Five-Year Sunset Review of the Antidumping Duty Order | |
| 83 FR 52808 - Quarterly Update to Annual Listing of Foreign Government Subsidies on Articles of Cheese Subject to an In-Quota Rate of Duty | |
| 83 FR 52810 - Certain Uncoated Paper From Portugal: Final Results of Antidumping Duty Administrative Review; 2015-2017 | |
| 83 FR 52902 - Registration and Compliance Requirements for Commodity Pool Operators and Commodity Trading Advisors | |
| 83 FR 52751 - Airworthiness Directives; Bombardier, Inc., Airplanes | |
| 83 FR 52754 - Airworthiness Directives; Bombardier, Inc., Airplanes | |
| 83 FR 52756 - Airworthiness Directives; Bombardier, Inc., Airplanes | |
| 83 FR 52878 - Hazardous Materials: Notification of the Pilot-in-Command and Response to Air Related Petitions for Rulemaking |
The U.S. Codex Office
Economic Development Administration
International Trade Administration
National Institute of Standards and Technology
National Oceanic and Atmospheric Administration
Navy Department
Federal Energy Regulatory Commission
Centers for Disease Control and Prevention
Centers for Medicare & Medicaid Services
Children and Families Administration
Food and Drug Administration
Health Resources and Services Administration
National Institutes of Health
Coast Guard
Fish and Wildlife Service
Institute of Museum and Library Services
National Endowment for the Arts
Federal Aviation Administration
Federal Motor Carrier Safety Administration
Pipeline and Hazardous Materials Safety Administration
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
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Federal Aviation Administration (FAA), Department of Transportation (DOT).
Final rule.
We are adopting a new airworthiness directive (AD) for certain Bombardier, Inc., Model DHC-8-102, -103, and -106 airplanes, Model DHC-8-200 series airplanes, and Model DHC-8-300 series airplanes. This AD was prompted by reports of arcing and smoke emanating from the windshield, caused by loose or damaged windshield heater terminal lugs. This AD requires revising the maintenance or inspection program to incorporate maintenance review board (MRB) tasks for general visual inspections of the windshield moisture seal. This AD also requires re-torqueing the windshield heater terminal lugs, applying a coating to the windshield heater screw heads, doing a chemical cleaning of the wiring and components, doing a visual inspection of the wiring and components, doing an operational test of the pilot's and co-pilot's windshield heating system, and repair if necessary We are issuing this AD to address the unsafe condition on these products.
This AD is effective November 23, 2018.
The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of November 23, 2018.
For service information identified in this final rule, contact Bombardier, Inc., Q-Series Technical Help Desk, 123 Garratt Boulevard, Toronto, Ontario M3K 1Y5, Canada; telephone 416-375-4000; fax 416-375-4539; email
You may examine the AD docket on the internet at
John P. DeLuca, Aerospace Engineer, Avionics and Administrative Services Section, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7369; fax 516-794-5531; email
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Bombardier, Inc., Model DHC-8-102, -103, and -106 airplanes, Model DHC-8-200 series airplanes, and Model DHC-8-300 series airplanes. The NPRM published in the
We are issuing this AD to address loose terminal lugs and terminal lugs damaged due to fluid ingress between the windshields and side window posts, which could lead to burning of the lugs and cracking of the windshields, and could ultimately cause a loss of cabin pressure, resulting in an emergency descent.
Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian AD CF-2017-25, dated July 31, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Bombardier, Inc., Model DHC-8-102, -103, and -106 airplanes, Model DHC-8-200 series airplanes, and Model DHC-8-300 series airplanes. The MCAI states:
There have been several reports of arcing and smoke emanating from the windshields. Investigation of these incidents revealed that de-icing fluid and water could enter between the windshields and side window posts, leading to possible damage of the windshield heater terminal lugs creating arcing and smoke. In addition, investigation also revealed that the windshield heater terminal lugs tend to loosen over time. Loose terminal lugs could also have a similar effect of arcing and smoke. Both events could lead to burning of the lugs and, due to the excessive heat, cracking of the windshields. If not corrected, these conditions could cause a loss of cabin pressure resulting in an emergency descent.
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) indicated its support for the NPRM.
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.
Bombardier has issued Service Bulletin 8-30-41, Revision A, dated March 24, 2017. This service information describes procedures for re-torqueing the windshield heater terminal lugs and applying Humiseal coating to the screw heads of the windshield heater, doing a chemical cleaning and general visual inspection of the wiring and components, and doing an operational test of the windshield heating system.
Bombardier has also issued the following service information, which describes airworthiness limitation tasks for a general visual inspection of the windshield moisture seal. These documents are distinct since they apply to different airplane models.
• de Havilland Inc. Dash 8 Series 100 Maintenance Task Card Task Number 5610/01, “General Visual Inspection of the Windshield Moisture Seal,” dated August 5, 2017.
• de Havilland Inc. Dash 8 Series 200 Maintenance Task Card Task Number 5610/01, “General Visual Inspection of the Windshield Moisture Seal,” dated August 5, 2017.
• de Havilland Inc. Dash 8 Series 300 Maintenance Task Card Task Number 5610/01, “General Visual Inspection of the Windshield Moisture Seal,” dated March 15, 2017.
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
We estimate that this AD affects 63 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).
We have received no definitive data that would enable us to provide cost estimates for the on-condition actions specified in this AD.
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.
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.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective November 23, 2018.
None.
This AD applies to Bombardier, Inc., Model DHC-8-102, -103, -106, -201, -202,
Air Transport Association (ATA) of America Code 30, Ice and rain protection.
This AD was prompted by reports of arcing and smoke emanating from the windshield, caused by loose or damaged windshield heater terminal lugs. We are issuing this AD to address loose terminal lugs and terminal lugs damaged due to fluid ingress between the windshields and side window posts, which could lead to burning of the lugs and cracking of the windshields, and could ultimately cause a loss of cabin pressure, resulting in an emergency descent.
Comply with this AD within the compliance times specified, unless already done.
Within 30 days after the effective date of this AD, revise the existing maintenance or inspection program, as applicable, to incorporate the applicable task identified in paragraphs (g)(1), (g)(2), and (g)(3) of this AD into the applicable program support manual (PSM) identified in table 1 to paragraph (g) of this AD, which is included in the existing maintenance or inspection program. The initial compliance time for the tasks are within 1,600 flight hours or 12 months, whichever occurs first after the effective date of this AD.
(1) de Havilland Inc. Dash 8 Series 100 Maintenance Task Card Task Number 5610/01, “General Visual Inspection of the Windshield Moisture Seal,” dated August 5, 2017.
(2) de Havilland Inc. Dash 8 Series 200 Maintenance Task Card Task Number 5610/01, “General Visual Inspection of the Windshield Moisture Seal,” dated August 5, 2017.
(3) de Havilland Inc. Dash 8 Series 300 Maintenance Task Card Task Number 5610/01, “General Visual Inspection of the Windshield Moisture Seal,” dated March 15, 2017.
After the maintenance or inspection program has been revised as required by paragraph (g) of this AD, no alternative actions (
Within 8,000 flight hours or 60 months, whichever occurs first after the effective date of this AD: Perform a chemical cleaning of the wiring and components, do a general visual inspection of the wiring and components for signs of cracking, erosion, wear, or other damage, re-torque the windshield heater terminal lugs, apply Humiseal coating to the screw heads of the windshield heater, and do an operational test of the pilot's and co-pilot's windshield heating system, in accordance with the Accomplishment Instructions of Bombardier Service Bulletin 8-30-41, Revision A, dated March 24, 2017. If the operational test fails, before further flight, do corrective actions, repeat the test, and do applicable corrective actions until the operational test is passed. If any cracking, erosion, wear, or other damage is found, before further flight, repair using a method approved by the Manager, New York ACO Branch, FAA; or Transport Canada Civil Aviation (TCCA); or Bombardier, Inc.'s TCCA Design Approval Organization (DAO). If approved by the DAO, the approval must include the DAO-authorized signature.
This paragraph provides credit for the actions required by paragraph (i) of this AD, if those actions were performed before the effective date of this AD using Bombardier Service Bulletin 8-30-41, dated March 31, 2016.
The following provisions also apply to this AD:
(1)
(2)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) Canadian Airworthiness Directive CF-2017-25, dated July 31, 2017, for related information. This MCAI may be found in the AD docket on the internet at
(2) For more information about this AD, contact John P. DeLuca, Aerospace Engineer, Avionics and Administrative Services Section, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7369; fax 516-794-5531; email
(3) Service information identified in this AD that is not incorporated by reference is available at the addresses specified in paragraphs (m)(3) and (m)(4) of this AD.
(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) Bombardier Service Bulletin 8-30-41, Revision A, dated March 24, 2017.
(ii) de Havilland Inc. Dash 8 Series 100 Maintenance Task Card Task Number 5610/01, “General Visual Inspection of the Windshield Moisture Seal,” dated August 5, 2017.
(iii) de Havilland Inc. Dash 8 Series 200 Maintenance Task Card Task Number 5610/01, “General Visual Inspection of the Windshield Moisture Seal,” dated August 5, 2017.
(iv) de Havilland Inc. Dash 8 Series 300 Maintenance Task Card Task Number 5610/01, “General Visual Inspection of the Windshield Moisture Seal,” dated March 15, 2017.
(3) For service information identified in this AD, contact Bombardier, Inc., Q-Series Technical Help Desk, 123 Garratt Boulevard, Toronto, Ontario M3K 1Y5, Canada; telephone 416-375-4000; fax 416-375-4539; email
(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:
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Final rule.
We are adopting a new airworthiness directive (AD) for certain Bombardier, Inc., Model DHC-8-300 series airplanes. This AD was prompted by reports indicating that a certain emergency exit door could not be opened during maintenance. This AD requires a detailed inspection of the ball bearings of an emergency exit, replacement of bearings if necessary, application of corrosion inhibiting compound (CIC), and revision of the maintenance or inspection program, as applicable. We are issuing this AD to address the unsafe condition on these products.
This AD is effective November 23, 2018.
The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of November 23, 2018.
For service information identified in this final rule, contact Bombardier, Inc., Q-Series Technical Help Desk, 123 Garratt Boulevard, Toronto, Ontario M3K 1Y5, Canada; telephone 416-375-4000; fax 416-375-4539; email
You may examine the AD docket on the internet at
Darren Gassetto, Aerospace Engineer, Airframe and Propulsion Section, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7323; fax 516-794-5531; email
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Bombardier, Inc., Model DHC-8-300 series airplanes. The NPRM published in the
We are issuing this AD to address corrosion of the emergency exit door ball bearings, which could result in the inability to open the emergency exit door during an emergency evacuation and consequently impede airplane egress.
Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF-2017-30, dated August 30, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Bombardier, Inc., Model DHC-8-300 series airplanes. The MCAI states:
An operator has reported the inability to open the Forward Right Hand Type I emergency exit door with either the internal or external handle during maintenance. Investigation has determined that the handle was found to be jammed due to corroded center and lower shaft ball bearings. Condensation has been found to be the root cause of the Forward Right Hand Type I emergency exit door hardware corrosion. Other Forward Right Hand Type I emergency exit door ball bearings are also susceptible to corrosion. Inability to open the Forward Right Hand Type I emergency exit door during an emergency evacuation may impede aircraft egress.
This [Canadian] AD mandates the inspection for corrosion and replacement, as required, of all Forward Right Hand Type I emergency exit door ball bearings, and the application of corrosion inhibiting compound (CIC), to ensure that the Forward Right Hand Type I emergency exit door can be opened when required.
You may examine the MCAI in the AD docket on the internet at
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) indicated its support for the NPRM.
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.
Bombardier has issued the following service information:
• Service Bulletin 8-52-65, dated July 26, 2017, which describes procedures for a detailed inspection of the forward right-hand type I emergency exit door ball bearings for corrosion, seal damage, and loss of lubricant; applying CIC; and replacing emergency exit door ball bearings if necessary.
• de Havilland Inc. Dash 8 Series 300 MaintenanceTask Card Task Number 5220/12 (“Servicing of Forward RH Emergency Exit Mechanisms”), dated March 15, 2017, which describes procedures for servicing the forward right-hand emergency exit door mechanisms.
• Temporary Revision (TR) 54-042, dated April 10, 2018, to the DHC-8-300 Aircraft Maintenance Manual (AMM), which describes procedures for servicing the type I emergency exit door mechanisms.
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
We estimate that this AD affects 16 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).
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:
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.
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.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective November 23, 2018.
None.
This AD applies to Bombardier, Inc., Model DHC-8-301, -311, and -315 airplanes, certificated in any category, serial numbers 100 through 672 inclusive.
Air Transport Association (ATA) of America Code 52, Doors.
This AD was prompted by reports indicating that the forward right-hand type I emergency exit door could not be opened during maintenance. An investigation determined that the exit door handle was jammed due to corroded center and lower shaft ball bearings. We are issuing this AD to address corrosion of the emergency exit door ball bearings, which could result in the inability to open the emergency exit door
Comply with this AD within the compliance times specified, unless already done.
Within 60 days after the effective date of this AD: Revise the maintenance or inspection program, as applicable, to incorporate de Havilland Inc. Dash 8 Series 300 Maintenance Task Card Task Number 5220/12 (“Servicing of Forward RH Emergency Exit Mechanisms”), dated March 15, 2017; and Temporary Revision 54-042, dated April 10, 2018, to the DHC-8-300 Aircraft Maintenance Manual (AMM). The initial compliance time for doing the task is at the time specified in de Havilland Inc. Dash 8 Series 300 Maintenance Task Card Task Number 5220/12 (“Servicing of Forward RH Emergency Exit Mechanisms”), dated March 15, 2017, or within 60 days after the effective date of this AD, whichever occurs later.
Within 5,000 flight hours or 36 months, whichever occurs first, after the effective date of this AD: Do a detailed inspection of all ball bearings of the forward right-hand type I emergency exit for corrosion, seal damage, and loss of lubricant; replace bearings as applicable; and apply corrosion inhibiting compound (CIC); in accordance with the Accomplishment Instructions of Bombardier Service Bulletin 8-52-65, dated July 26, 2017. Do all applicable replacements before further flight.
After the maintenance or inspection program has been revised as required by paragraph (g) of this AD, no alternative actions (
The following provisions also apply to this AD:
(1)
(2)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) Canadian Airworthiness Directive CF-2017-30, dated August 30, 2017, for related information. This MCAI may be found in the AD docket on the internet at
(2) For more information about this AD, contact Darren Gassetto, Aerospace Engineer, Airframe and Propulsion Section, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7323; fax 516-794-5531; email
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.
(i) Bombardier Service Bulletin 8-52-65, dated July 26, 2017.
(ii) de Havilland Inc. Dash 8 Series 300 Maintenance Task Card Task Number 5220/12 (“Servicing of Forward RH Emergency Exit Mechanisms”), dated March 15, 2017.
(iii) Temporary Revision (TR) 54-042, dated April 10, 2018, to the DHC-8-300 Aircraft Maintenance Manual (AMM).
(3) For service information identified in this AD, contact Bombardier, Inc., Q-Series Technical Help Desk, 123 Garratt Boulevard, Toronto, Ontario M3K 1Y5, Canada; telephone 416-375-4000; fax 416-375-4539; email
(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:
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Final rule.
We are superseding Airworthiness Directive (AD) 2013-11-12, which applied to certain Bombardier, Inc., Model BD-100-1A10 airplanes. AD 2013-11-12 required inspecting for the correct serial number of a certain hydraulic system accumulator, and replacing affected hydraulic system accumulators with new or serviceable accumulators. This AD expands the applicability and requires modifying or replacing certain hydraulic brake system accumulators. This AD also requires revising the maintenance or inspection program to add life limits for the accumulators. This AD was prompted by a determination that certain other hydraulic system accumulators must be modified or replaced and life limits must be added. We are issuing this AD to address the unsafe condition on these products.
This AD is effective November 23, 2018.
The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of November 23, 2018.
The Director of the Federal Register approved the incorporation by reference of a certain other publication listed in this AD as of July 9, 2013 (78 FR 33206, June 4, 2013).
For service information identified in this final rule, contact Bombardier, Inc., 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone 514-855-5000; fax 514-855-7401; email
You may examine the AD docket on the internet at
Cesar Gomez, Aerospace Engineer, Airframe and Mechanical Systems Section, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7318; fax 516-794-5531.
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2013-11-12, Amendment 39-17472 (78 FR 33206, June 4, 2013) (“AD 2013-11-12”). AD 2013-11-12 applied to certain Bombardier, Inc., Model BD-100-1A10 airplanes. The NPRM published in the
Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF-2011-41R1, dated March 27, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Bombardier, Inc. Model BD-100-1A10 airplanes. The MCAI states:
Seven cases of on-ground hydraulic accumulator screw cap/end cap failure have been experienced on CL-600-2B19 aeroplanes, resulting in loss of the associated hydraulic system and high-energy impact damage to adjacent systems and structure. To date, the lowest number of flight cycles accumulated at the time of failure has been 6991.
Although there have been no failures to date on any BD-100-1A10 aeroplanes, accumulators similar to those installed on the CL-600-2B19 are installed on the BD-100-1A10. The affected part numbers (P/Ns) of the accumulators installed on BD-100-1A10 are 900095-1 (Auxiliary Hydraulic System accumulator), 33-155500 (Inboard Brake accumulator), and 33-147500 (Outboard Brake accumulator).
A detailed analysis of the calculated line of trajectory of a failed screw cap/end cap for the accumulators has been conducted, resulting in the identification of areas where systems and/or structural components could potentially be damaged. Although all of the failures on the CL-600-2B19 to date have occurred on the ground, an in-flight failure affecting such components could potentially have an adverse effect on the controllability of the aeroplane.
Revision 1 of this [Canadian] AD is issued to mandate the [inspection and] replacement [of] Brake System Hydraulic accumulators that are not identified by the letter “E” or “NAE” after the serial number on the identification plate. Revision 1 also mandates the re-orientation of the brake accumulators P/N 33-147500 and P/N 33-155500 and the insertion of three discard tasks in the Challenger 300 Time Limits/Maintenance Checks (TLMC) Manual.
You may examine the MCAI in the AD docket on the internet at
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.
NetJets Aviation stated that paragraph (n) of the proposed AD, which requires revising the maintenance or inspection program to incorporate certain life limit tasks, does not reference the Bombardier Challenger 350 Time Limits/Maintenance Check (TLMC) Manual. NetJets Aviation noted that only the Bombardier Challenger 300 TLMC Manual is referenced.
We infer that the commenter is asking that the Bombardier Challenger 350 TLMC Manual be added as another source of service information for accomplishing the actions required by paragraph (n) of this AD. We agree with the commenter's request and have changed paragraph (n) accordingly. Although the tasks identified in the Bombardier Challenger 300 TLMC Manual also apply to Bombardier Challenger 350 airplanes, we have included the Bombardier Challenger 350 TLMC in this AD for clarity.
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 this change will not increase the economic burden on any operator or increase the scope of this final rule.
Bombardier has issued the following service information:
• Service Bulletin 100-32-20, Revision 02, dated April 14, 2015, which describes procedures for modifying (
• Service Bulletin 100-32-21, dated May 24, 2012, which describes procedures for replacing the hydraulic brake system accumulators.
• Task 29-21-13-101 Discard the Auxiliary Hydraulic System Accumulator, Part No. 900095-1, of Section 5-10-11 of Part 2, “Airworthiness Limitations,” of Bombardier Challenger 300 BD-100 Time Limits/Maintenance Checks Manual, Revision 17, dated December 15, 2016; and Bombardier Challenger 350, BD-100 Time Limits/Maintenance Checks Manual, Revision 9, dated December 18, 2017, which describes procedures for removal and installation of the hydraulic brake system accumulators. These tasks are distinct since they apply to different airplane models.
• Task 32-43-37-101 Discard the Brake Accumulator, Part No. 33-147500, of Section 5-10-11 of Part 2, “Airworthiness Limitations,” of Bombardier Challenger 300 BD-100 Time Limits/Maintenance Checks Manual, Revision 17, dated December 15, 2016; and Bombardier Challenger
• Task 32-44-05-101 Discard the Emergency/Parking Brake Accumulator, Part No. 33-155500, of Section 5-10-11 of Part 2, “Airworthiness Limitations,” of Bombardier Challenger 300 BD-100 Time Limits/Maintenance Checks Manual, Revision 17, dated December 15, 2016; and Bombardier Challenger 350, BD-100 Time Limits/Maintenance Checks Manual, Revision 9, dated December 18, 2017, which describes procedures for removal and installation of the emergency parking brake accumulators. These tasks 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
We estimate that this AD affects 187 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).
We estimate the following costs to do any necessary replacements that will be required based on the results of the inspection. We have no way of determining the number of aircraft that might need these replacements.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes to the Director of the System Oversight Division.
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.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective November 23, 2018.
This AD replaces AD 2013-11-12, Amendment 39-17472 (78 FR 33206, June 4, 2013) (“AD 2013-11-12”).
This AD applies to Bombardier, Inc., Model BD-100-1A10 airplanes, certificated in any category, having serial numbers 20003 through 20604 inclusive.
Air Transport Association (ATA) of America Code 29, Hydraulic Power.
This AD was prompted by reports of failure of a screw cap or end cap of the hydraulic system accumulator while on the ground, which resulted in loss of use of that hydraulic system and high-energy impact damage to adjacent systems and structures. We are issuing this AD to prevent failure of a screw cap or end cap and loss of the related hydraulic system, which could result in damage to airplane structure and consequent reduced controllability of the airplane.
Comply with this AD within the compliance times specified, unless already done.
This paragraph restates the requirements of paragraph (g) of AD 2013-11-12 with no changes. For airplanes having serial numbers 20003 through 20335 inclusive: At the applicable time specified in paragraph (g)(1), (g)(2), or (g)(3) of this AD: Inspect the identification plate on the hydraulic system accumulator having part number (P/N) 900095-1 to determine if an “E” is part of the suffix of the serial number stamped on the identification plate, as listed in paragraph 2.B. of the Accomplishment Instructions of Bombardier Service Bulletin 100-29-14, dated December 16, 2010. A review of airplane maintenance records is acceptable in lieu of this inspection if the suffix of the serial number can be conclusively determined from that review.
(1) For an accumulator that has accumulated more than 3,150 total flight cycles as of July 9, 2013 (the effective date of AD 2013-11-12), inspect that accumulator within 350 flight cycles after July 9, 2013.
(2) For an accumulator that has accumulated 3,150 or fewer total flight cycles as of July 9, 2013 (the effective date of AD 2013-11-12), inspect that accumulator before it has accumulated 3,500 total flight cycles.
(3) For an accumulator on which it is not possible to determine the total flight cycles accumulated as of July 9, 2013 (the effective date of AD 2013-11-12), inspect that accumulator within 350 flight cycles after July 9, 2013.
This paragraph restates the requirements of paragraph (h) of AD 2013-11-12 with no changes. If, during the inspection required by paragraph (g) of this AD, any accumulator having P/N 900095-1 is found on which the letter “E” is not part of the suffix of the serial number on the identification plate: Before further flight, replace the accumulator with a new or serviceable accumulator, in accordance with paragraph 2.C. of the Accomplishment Instructions of Bombardier Service Bulletin 100-29-14, dated December 16, 2010.
This paragraph restates the requirements of paragraph (i) of AD 2013-11-12 with no changes. For airplanes having serial numbers 20003 through 20335 inclusive: As of July 9, 2013 (the effective date of AD 2013-11-12), no person may install on any airplane a hydraulic system accumulator having P/N 900095-1, on which the letter “E” is not part of the suffix of the serial number on the identification plate.
For airplanes having serial numbers 20003 through 20347 inclusive: At the applicable time specified in paragraph (j)(1), (j)(2), or (j)(3) of this AD, replace all brake system hydraulic accumulators having P/N 33-147500 or P/N 33-155500 that are not identified by the letter “E” or “NAE” after the serial number on the identification plate with an accumulator of the same part number that is identified by the letter “E” or “NAE” after the serial number. Do the replacement in accordance with the Accomplishment Instructions of Bombardier Service Bulletin 100-32-21, dated May 24, 2012.
(1) For an accumulator that has accumulated more than 4,700 total flight cycles as of the effective date of this AD, inspect that accumulator within 300 flight cycles after the effective date of this AD.
(2) For an accumulator that has accumulated 4,700 or fewer total flight cycles as of the effective date of this AD, inspect that accumulator before it has accumulated 5,000 total flight cycles.
(3) For an accumulator on which it is not possible to determine the total flight cycles accumulated as of the effective date of this AD, inspect that accumulator within 300 flight cycles after the effective date of this AD.
For airplanes having serial numbers 20003 through 20347 inclusive: As of the effective date of this AD, no person may install on any airplane a hydraulic system accumulator having P/N 33-147500 or P/N 33-155500, on which the letter “E” or “NAE” is not after the serial number on the identification plate.
For airplanes having serial numbers 20003 through 20395 inclusive: Within 1,600 flight hours or 14 months after the effective date of this AD, whichever occurs first, modify (re-orient) the installation of the inboard and outboard brake accumulators, in accordance with the Accomplishment Instructions of Bombardier Service Bulletin 100-32-20, Revision 02, dated April 14, 2015.
This paragraph provides credit for the actions specified in paragraph (l) of this AD, if those actions were performed before the effective date of this AD using Bombardier Service Bulletin 100-32-20, dated February 25, 2013; or Revision 01, dated March 5, 2015.
For airplanes having serial numbers 20003 through 20604 inclusive: Within 30 days after the effective date of this AD, revise the maintenance or inspection program, as applicable, to incorporate life limit tasks 29-21-13-101, 32-43-37-101, and 32-44-05-101 of Section 5-10-11 of Part 2, “Airworthiness Limitations”, of Bombardier Challenger 300 BD-100 Time Limits/Maintenance Checks Manual, Revision 17, dated December 15, 2016; or Bombardier Challenger 350 BD-100 Time Limits/Maintenance Checks Manual, Revision 9, dated December 18, 2017, as applicable. The initial compliance time for the tasks is within the applicable time specified in that service information, or within 30 days after the effective date of this AD, whichever occurs later.
After the maintenance or inspection program has been revised as required by paragraph (n) of this AD, no alternative actions (
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) Canadian Airworthiness Directive CF-2011-41R1, dated March 27, 2017, for related information. This MCAI may be found in the AD docket on the internet at
(2) For more information about this AD, contact Cesar Gomez, Aerospace Engineer, Airframe and Mechanical Systems Section, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone: 516-228-7318; fax: 516-794-5531.
(3) Service information identified in this AD that is not incorporated by reference is available at the addresses specified in paragraphs (r)(5) and (r)(6) of this AD.
(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.
(3) The following service information was approved for IBR on November 23, 2018.
(i) Bombardier Service Bulletin 100-32-20, Revision 02, dated April 14, 2015.
(ii) Bombardier Service Bulletin 100-32-21, dated May 24, 2012.
(iii) Bombardier Challenger 300 BD-100 Time Limits/Maintenance Checks Manual, Revision 17, dated December 15, 2016, Part 2, Airworthiness Limitations, Section 5-10-11:
(A) Task 29-21-13-101 Discard the Auxiliary Hydraulic System Accumulator, Part No. 900095-1;
(B) Task 32-43-37-101 Discard the Brake Accumulator, Part No. 33-147500;
(C) Task 32-44-05-101 Discard the Emergency/Parking Brake Accumulator, Part No. 33-155500.
(iv) Bombardier Challenger 350 BD-100 Time Limits/Maintenance Checks Manual, Revision 9, dated December 18, 2017, Part 2, Airworthiness Limitations, Section 5-10-11:
(A) Task 29-21-13-101 Discard the Auxiliary Hydraulic System Accumulator, Part No. 900095-1;
(B) Task 32-43-37-101 Discard the Brake Accumulator, Part No. 33-147500;
(C) Task 32-44-05-101 Discard the Emergency/Parking Brake Accumulator, Part No. 33-155500.
(4) The following service information was approved for IBR on July 9, 2013 (78 FR 33206, June 4, 2013).
(i) Bombardier Service Bulletin 100-29-14, dated December 16, 2010.
(ii) Reserved.
(5) For service information identified in this AD, contact Bombardier, Inc., 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone 514-855-5000; fax 514-855-7401; email
(6) 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.
(7) 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:
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Final rule.
NMFS issues a final rule that modifies regulations governing the Halibut and Sablefish Individual Fishing Quota (IFQ) Program. This rule includes three actions. The first action allows Western Alaska Community Development Quota (CDQ) groups to lease (to receive by transfer) halibut IFQ in IFQ regulatory areas 4B, 4C, and 4D in years of extremely low halibut commercial catch limits. This action is necessary to provide additional harvest opportunities to CDQ groups and community residents, and provide IFQ holders with the opportunity to receive value for their IFQ when the halibut commercial catch limits may not be large enough to provide for an economically viable fishery for IFQ holders. The second action removes an obsolete reference in the IFQ Program regulations. The third action clarifies IFQ vessel use cap regulations. This final rule is intended to promote the goals and objectives of the Northern Pacific Halibut Act of 1982 (Halibut Act), the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), the Fishery Management Plan (FMP) for Groundfish of the Bering Sea and Aleutian Islands (BSAI) Management Area, and other applicable laws.
This rule is effective on November 19, 2018.
Electronic copies of the Regulatory Impact Review (Analysis) prepared for this action are available from
Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this final rule may be submitted by mail to NMFS, Alaska Region, P.O. Box 21668, Juneau, AK 99082-1668, Attn: Ellen Sebastian, Records Officer; in person at NMFS, Alaska Region, 709 West 9th Street, Room 420A, Juneau, AK; and by email to
Stephanie Warpinski, (907) 586-7228.
The International Pacific Halibut Commission (IPHC) and NMFS manage fishing for Pacific halibut through regulations established under the authority of the Halibut Act. The IPHC promulgates regulations governing the halibut fishery under the Convention between the United States and Canada for the Preservation of the Halibut Fishery of the Northern Pacific Ocean and Bering Sea (Convention). The IPHC's regulations are subject to approval by the Secretary of State with the concurrence of the Secretary of Commerce (Secretary). NMFS publishes the IPHC's regulations as annual management measures pursuant to 50 CFR 300.62.
The Halibut Act, at sections 773c(a) and (b), provides the Secretary with general responsibility to carry out the Convention and the Halibut Act. The Halibut Act, at section 773c(c), also provides the North Pacific Fishery Management Council (Council) with authority to develop regulations, including limited access regulations, that are in addition to, and not in
The Council developed the IFQ Program for the commercial halibut and sablefish fisheries. The IFQ Program for the halibut fishery is implemented by Federal regulations at 50 CFR part 679 under the authority of section 773 of the Halibut Act. The IFQ Program for the sablefish fishery is implemented by the BSAI FMP and Federal regulations at 50 CFR part 679 under the authority of section 303(b) of the Magnuson-Stevens Act.
On February 23, 2018, NMFS published a proposed rule (83 FR 8028) and invited public comment. The following summarizes the IFQ Program, the CDQ Program, the need for this final rule, and the anticipated effects of the final rule. Additional detail about the action is provided in the preamble of the proposed rule and in the Analysis.
The IFQ Program for the management of the fixed gear (hook-and-line and pot gear) halibut and sablefish fisheries off Alaska was implemented by NMFS in 1995 (58 FR 59375, November 9, 1993). A central objective of the IFQ Program is to support the social and economic character of the fisheries and the coastal fishing communities where many of these fisheries are based. A detailed description of the IFQ Program can be found in the proposed rule for this action (83 FR 8028, February 23, 2018) and the Analysis.
Under the IFQ Program, access to the fixed gear sablefish and halibut fisheries is limited to those persons holding quota share (QS). QS is an exclusive, revocable privilege that allows the holder to harvest a specific percentage of either the total allowable catch (TAC) in the sablefish fishery or the annual commercial catch limit in the halibut fishery. QS is designated for specific geographic areas of harvest, a specific vessel operation type (catcher vessel or catcher/processor), and for a specific range of vessel sizes that may be used to harvest the sablefish or halibut (vessel category).
This final rule uses the term “Area” to refer to a specific IFQ regulatory area. The IFQ Program designates four vessel categories of halibut QS: Category A shares designated for catcher/processors, vessels that process their catch at sea, and do not have a vessel length restriction; Category B shares designated for catcher vessels greater than 60 feet length overall (LOA); Category C shares designated for catcher vessels greater than 35 feet but less than or equal to 60 feet LOA; and Category D shares designated for catcher vessels less than or equal to 35 feet LOA.
NMFS annually issues IFQ permits to each QS holder. An annual IFQ permit authorizes the permit holder to harvest a specified amount of the IFQ species in a regulatory area from a specific operation type and vessel category. The Council and the public frequently use the terms “IFQ lease” or “lease” to refer to the transfer of IFQ without a transfer of the underlying quota shares (QS). However, NMFS does not generally use the term “lease” in its IFQ Program regulations governing the transfer of IFQ. Therefore, for consistency with the terminology used in the existing regulations and for clarity, this rule uses the term “transfer of IFQ.”
NMFS issues halibut IFQ consistent with the IPHC's regulatory areas. NMFS' IFQ regulatory areas (Areas) are defined in 50 CFR part 679 and described in Figure 15 to part 679 and Section 1.3 of the Analysis. The first action in this rule pertains to Areas 4B, 4C, 4D, and 4E. Area 4B includes waters in the Central and Western Aleutian Islands. Areas 4C, 4D, and 4E include waters north of the Aleutian Islands, in the Bering Sea, and around the Pribilof Islands. The IPHC considers Areas 4C, 4D, and 4E a single stock unit for assessment and management purposes, and the combined Areas are referred to as Area 4CDE in this final rule.
The commercial catch limits for Areas 4B and 4CDE are allocated between two distinct management programs, the CDQ Program and the IFQ Program. Throughout the duration of the IFQ Program, the Area 4E commercial catch limit has been exclusively allocated to the CDQ Program; therefore, no Area 4E QS or IFQ is allocated.
Overall, the halibut IFQ commercial catch limits in Areas 4B and 4CDE have trended downward over the past 15 years (see Section 3.6.1 of the Analysis). The Area 4B commercial catch limit has dropped substantially from 2001 to 2015. In 2015, the Area 4B commercial catch limit for IFQ was less than a quarter of what it was in 2001. The combined commercial catch limit for IFQ in Areas 4C and 4D has seen more fluctuation during this period, but has still experienced an overall downward trend since 2007. In 2007, the combined commercial catch limit for IFQ in Areas 4C and 4D was about 2.2 million pounds; in 2015, it was about 0.7 million pounds.
The CDQ Program was implemented in 1992, and in 1996, the Magnuson-Stevens Act was amended to include provisions specific to the CDQ Program. The purposes of the CDQ Program are (1) to provide eligible western Alaska villages with the opportunity to participate and invest in fisheries in the BSAI management area; (2) to support economic development in western Alaska; (3) to alleviate poverty and provide economic and social benefits for residents of western Alaska; and (4) to achieve sustainable and diversified local economies in western Alaska (16 U.S.C. 1855(i)(1)(A)).
The CDQ Program consists of six different non-profit managing organizations (CDQ groups) representing different geographical regions in Alaska. The CDQ Program receives annual allocations of TAC for a variety of commercially valuable species in the BSAI groundfish, crab, and halibut fisheries, which are in turn allocated among the CDQ groups. Among the species CDQ groups are allocated for commercial fishing, Pacific halibut is an important species for community resident employment and income. NMFS allocates halibut to CDQ groups for commercial fisheries in four Areas: 4B, 4C, 4D, and 4E (see Section 3.5.1 of the Analysis). See Section 3.5.2 of the Analysis for additional detail on the history of the halibut CDQ fishery.
The resident halibut CDQ fleets and criteria for participation in CDQ fisheries vary among the CDQ groups. The resident halibut CDQ fleets are impacted by internal economic decisions made by the CDQ groups and in the ways the CDQ groups choose to promote economic development in their communities. Many of the small boat fishermen in CDQ communities are dependent on the halibut fishery (Section 3.5.3 of the Analysis).
The downward trend of halibut commercial catch limits in Areas 4B and 4CDE over the past 15 years has been dramatic, with current limits significantly lower than those of the recent past years. The recent years of low halibut abundance and the resulting low commercial catch limits in Areas 4B and 4CDE have made it increasingly difficult for most CDQ groups to create a viable commercial halibut fishing opportunity for their community residents.
Under current regulations, CDQ groups cannot receive by transfer any IFQ derived from catcher vessel QS. Current regulations also prohibit halibut
To address these problems, this final rule creates a voluntary option for IFQ holders in Areas 4B, 4C, or 4D to temporarily transfer their halibut IFQ to a CDQ group in years of extremely low halibut abundance. This flexibility allows CDQ groups to expand the fishing opportunities for the small boat fleets operating out of the CDQ group's communities and provides IFQ holders with the opportunity to receive value for their IFQ when extremely low halibut commercial catch limits may not be large enough to provide for an economically viable fishery for IFQ holders.
This final rule includes three actions. The primary action, Action 1, creates a voluntary option for an IFQ holder to temporarily transfer his or her halibut IFQ to a CDQ group in years of extremely low halibut abundance. Actions 2 and 3 make minor regulatory adjustments to remove an obsolete reference in the IFQ Program regulations and to clarify IFQ vessel use cap regulations, respectively. The following paragraphs provide additional detail on the actions.
This final rule (1) defines the halibut commercial catch limits under which CDQ groups may receive IFQ by transfer, (2) establishes limits on the types and amounts of IFQ that can be transferred, and (3) establishes reporting requirements for CDQ groups receiving IFQ by transfer. This final rule does not convert transferred IFQ to CDQ. Allocations of halibut CDQ will not change under this final rule.
Under this final rule, CDQ groups may receive transfers of halibut catcher vessel IFQ (Categories B, C, and D IFQ) in Areas 4C and 4D when the halibut annual commercial catch limit is less than 1.5 million pounds in Area 4CDE. CDQ groups may receive transfers of halibut catcher vessel IFQ (Categories B, C, and D IFQ) in Area 4B when the annual halibut commercial catch limit is less than 1 million pounds in Area 4B. IFQ holders may transfer both blocked and unblocked IFQ to CDQ groups. This final rule does not revise current regulations that authorize an IFQ holder in Areas 4B, 4C and 4D to transfer his or her Category A halibut IFQ to any qualified person, including a CDQ group. However, as explained later, this rule provides additional harvesting flexibility for Category A halibut IFQ transferred to a CDQ group in years of extremely low halibut abundance.
The Council recommended and NMFS is implementing these thresholds based on an analysis of commercial catch limits between 2008 and 2017, a period of time representing a range of different halibut commercial catch limits and decreasing opportunities for CDQ community fishermen. The Council considered a range of different commercial catch limit thresholds for both Areas 4B and 4CDE before selecting these thresholds. The preamble to the proposed rule provides additional information on the factors considered by the Council and NMFS (83 FR 8028, March 26, 2018).
These thresholds are intended to balance the goal of providing additional halibut fishing opportunities for CDQ residents when the halibut CDQ allocation alone may not be large enough to sustain small vessel resident fisheries, with the need to avoid potential adverse distributional impacts on other halibut IFQ users that could result if IFQ transfers were permitted without restrictions. These thresholds provide the flexibility to transfer halibut IFQ in Areas 4B, 4C, and 4D only during worst case scenarios for halibut commercial catch limits in these areas (Section 2.3 of the Analysis). For Area 4CDE, the Council determined and NMFS agrees that a halibut commercial catch limit below 1.5 million pounds reflects a worst case scenario for Area 4CDE as it represents an extremely low commercial catch limit for these areas. For Area 4B, the Council determined and NMFS agrees that a halibut commercial catch limit below 1 million pounds, which has not been experienced during the last 10 years, reflects a worst case scenario for Area 4B as it represents an extremely low commercial catch limit for this area.
This final rule establishes several limits on the catcher vessel IFQ that can be transferred while providing some flexibility with transferred catcher vessel and catcher/processor IFQ. The rationale for the limits can be found in Section 2.2 of the Analysis and in the preamble to the proposed rule (83 FR 8028, March 26, 2018). The limits are: (1) A CDQ group will be able to receive catcher vessel IFQ by transfer only for an area in which it also holds halibut CDQ; (2) no vessel greater than 51 feet length overall (LOA) may be used to harvest catcher vessel IFQ transferred to a CDQ group; (3) catcher vessel IFQ resulting from QS acquired after December 14, 2015, may not be transferred to a CDQ group until 3 years after the QS was acquired (
The first limit prevents a CDQ group from receiving catcher vessel halibut IFQ by transfer for an area in which that CDQ group does not hold halibut CDQ. The Council recommended and NMFS is implementing this limit so that any catcher vessel IFQ transferred to a CDQ group is available for use in conjunction with halibut CDQ that is issued to a CDQ group.
Additionally, under this final rule at § 679.42(a)(1)(iii), a CDQ group that is eligible to receive a transfer of Area 4D catcher vessel IFQ will be able to harvest that IFQ, and any Category A IFQ it holds, in Area 4E (Section 3.5.2 of the Analysis). This flexibility is consistent with section 12(8) of the IPHC annual management measures (83 FR 10390, March 9, 2018), which allows Area 4D halibut CDQ to be harvested in Area 4E.
The second limit prohibits the use of vessels greater than 51 feet LOA to harvest catcher vessel IFQ that is transferred to a CDQ group. The Council recommended and NMFS is implementing this vessel size limit because this is the largest size vessel owned by CDQ community residents that has landed halibut CDQ during the past 10 years, 2008 through 2017 (Section 3.5.3 of the Analysis). Current regulations provide sufficient flexibility to allow IFQ that could be transferred to a CDQ group under this final rule to be fished on a vessel of any length up to 51 feet LOA (see Section 2.4 of the Analysis).
This final rule clarifies that any Area 4D Category A IFQ that is held by a CDQ group or transferred to a CDQ group may be fished in Area 4E by vessels less than or equal to 51 feet LOA when the commercial catch limit threshold in Area 4CDE is triggered. This final rule does not revise current regulations that authorize Category A IFQ for Areas 4B, 4C, or 4D to be fished in the corresponding area on a vessel of any length.
Under the third limit, IFQ resulting from QS acquired after December 14, 2015, may not be transferred to a CDQ group until 3 years after the QS was acquired (
The fourth limit prohibits an IFQ holder from transferring catcher vessel halibut IFQ for a specific IFQ regulatory area to a CDQ group for more than two consecutive years. This two-year limit applies to calendar years and only to years in which the commercial catch limit is below the threshold. Additionally, this limit applies to the transfer of any halibut IFQ for a specific area. If an IFQ holder chooses to transfer some but not all of his or her IFQ for a particular area during a year when the annual commercial catch limit for that area is set below the threshold, that transfer will count towards the two-year limit. Transfers of IFQ for one area will not affect the ability to transfer IFQ for another area. This final rule limits the potential for an IFQ holder to continuously transfer IFQ to CDQ groups rather than fishing that IFQ or transferring the underlying QS to other new entrants in the fishery.
Under the fifth limit, only catcher vessel QS holders that hold fewer than 76,355 QS units specified for Area 4B may transfer their catcher vessel IFQ to CDQ groups. NMFS will consider all categories of Area 4B QS holdings regardless of blocked or unblocked status. This limit ensures that persons holding larger amounts of QS units continue to be active fishermen in the Area 4B halibut fishery while providing an opportunity for persons holding smaller amounts of QS units to transfer catcher vessel IFQ to CDQ groups if the 1 million pound commercial catch limit threshold to allow IFQ transfers is met. As described in the proposed rule (83 FR 8028, March 26, 2018), this limitation applies only for Area 4B to accommodate the specific nature of IFQ operations in the remote Aleutian Island communities in Area 4B.
This final rule establishes a reporting requirement for CDQ groups that receive IFQ by transfer. The report is required only for those years in which CDQ groups received IFQ by transfer. CDQ groups that receive IFQ by transfer will be required to report the annual amount and vessel category of Area 4 halibut IFQ transferred to the CDQ group, the criteria used to select IFQ holders to transfer Area 4 halibut IFQ to the CDQ group, and the criteria used to determine the person(s) eligible to fish Area 4 halibut IFQ received by transfer. This report will allow the Council, NMFS, and the public to monitor the use of IFQ transferred to CDQ groups and provide the Council with information to determine whether the use of transferred IFQ is consistent with its intent for the action. This final rule requires the report to be submitted to NMFS and the Council no later than January 31 of the year after the IFQ was transferred to the CDQ group. This deadline is consistent with other reports required under the IFQ Program and ensures that NMFS and the Council have received the report prior to the issuance of IFQ, which typically occurs in mid-February. If a CDQ group is required to submit a report and does not do so by the deadline, the CDQ group will be ineligible to receive transfers of catcher vessel IFQ until the report is submitted.
Under this final rule, a CDQ group that wants to receive halibut IFQ by transfer will make an arrangement with an IFQ holder to transfer his or her IFQ. The CDQ group must complete an Application for Temporary Transfer of Halibut and Sablefish IFQ and submit the application to NMFS for approval. Once approved, NMFS will issue the CDQ group an IFQ permit with the pounds of halibut IFQ that will be available to be fished. After determining who will fish the halibut IFQ, the CDQ group with the IFQ permit must apply to NMFS for a hired master permit for the vessel operator designated to fish the halibut IFQ. Current regulations authorize a vessel operator to harvest halibut IFQ and CDQ on the same fishing trip. A vessel operator harvesting both halibut CDQ and IFQ transferred to a CDQ group is required to carry (1) a halibut CDQ permit, (2) a CDQ hired master permit, (3) a copy of the IFQ permit of the CDQ group, and (4) an IFQ hired master permit. Additionally, any vessels fishing halibut IFQ transferred to a CDQ group will be subject to the current IFQ vessel use caps under § 679.42(h)(1). If a vessel harvests both halibut IFQ and CDQ, only the halibut IFQ accrues towards, and is subject to, the vessel use cap.
Halibut that is landed by a vessel operator harvesting CDQ and IFQ will be debited off two separate catch limits. Therefore, for purposes of catch accounting, participants are required to track what amount of halibut harvest is associated with the group's CDQ and what amount is associated with the IFQ permit held by the CDQ group. This distinction must be recorded on the fish ticket (Section 3.8.11.3 of the Analysis). NMFS updated the database that monitors transfers of IFQ between permit holders and that is used to issue hired master permits to allow for this new type of transfer (see Section 3.8.11.4 of the Analysis).
Under this final rule, CDQ groups are responsible for cost recovery fees based on the amount of IFQ pounds held on the IFQ permit. Section 304(d)(2)(A) of the Magnuson-Stevens Act obligates NMFS to recover the actual costs of management, data collection, and enforcement (direct program cost) of the IFQ fisheries. Therefore, NMFS implemented a cost recovery fee program for the IFQ fisheries in 2000 (65 FR 14919, March 20, 2000). While costs specific to the CDQ Program for halibut are recoverable through a separate cost recovery program (81 FR 150, January 5, 2016), this final rule requires regulatory changes to the IFQ transfer and hired master use provisions and therefore constitutes a change in management of the IFQ Program. CDQ group participants receiving IFQ transfers will be required to pay an IFQ cost recovery fee as a portion of the ex-vessel value of their landed halibut.
Section 8(2) of the IPHC annual management measures (83 FR 10390, March 9, 2018) authorizes a vessel operator harvesting halibut CDQ in Areas 4D or 4E to retain halibut that are less than the size limit established by the IPHC for personal use. Under the status quo, a vessel operator harvesting halibut IFQ held by a CDQ group along with halibut CDQ may retain halibut less than legal size for personal use. Vessel operators harvesting both halibut CDQ and halibut IFQ transferred to a CDQ group in Areas 4D or 4E may retain halibut smaller in length than the size limit established by the IPHC for personal use as specified in section 8 of the IPHC annual management measures. The personal use allotment applies to all halibut IFQ transferred to a CDQ group under this exemption. Section 8(3) of the IPHC annual management measures requires a CDQ group to report on all retained halibut for personal use that are smaller than legal size and harvested on behalf of a CDQ group.
This final rule modifies the definition of “annual commercial catch limit” at 50 CFR 300.61 to include definitions for Areas 3B and 4A, and for Areas 4B, 4C, 4D, and 4E.
This final rule modifies § 679.41 to allow transfer of halibut IFQ in Areas 4B, 4C, and 4D in years of low halibut commercial catch limits in Areas 4B and 4CDE to CDQ groups along with the specific conditions under which this transfer activity may occur.
This final rule adds a reporting requirement under § 679.5(l)(10) to require a CDQ group to submit a report to NMFS and the Council on the criteria it used to select IFQ holders from whom IFQ transfers were received, the criteria it used to determine the persons who
This final rule adds a provision under § 679.42 to allow Area 4D IFQ that is transferred to a CDQ group to be harvested in Area 4E.
The preamble to the proposed rule describes the anticipated effects of Action 1 on CDQ groups, CDQ residents, IFQ holders, and halibut QS holders (83 FR 8028, March 26, 2018).
Overall, this final rule provides IFQ holders and CDQ groups with an opportunity to alleviate the adverse economic, social, and cultural impacts of extremely low levels of commercial halibut catch limits on Western Alaskan communities. This final rule could also provide distributional benefits to some processing plants, secondary service providers, and communities as a whole. This final rule could benefit halibut QS holders in Areas 4B, 4C, and 4D by permitting them to transfer their Area 4B, 4C, and 4D halibut IFQ in years of extremely low commercial catch limits. This final rule could also result in some consolidation of the number of IFQ trips, and could affect the decisions of QS holders to transfer their QS if they have the ability to transfer their IFQ to CDQ groups. The preamble of the proposed rule (83 FR 8028, March 26, 2018) and Section 3.8 of the Analysis have additional details on the anticipated effects of Action 1.
This final rule removes an obsolete reference in § 679.42(a)(2)(i). Currently, this regulation provides an exception to a prohibition at § 679.42(a)(2). However, the exception refers to § 679.42(k), which was modified in 2008 by the final rule to revise regulations governing the use of commercial halibut QS and the processing of non-IFQ species when processed halibut is on board a vessel (73 FR 8822; February 15, 2008). That final rule removed paragraph (k) and re-designated § 679.42(l) as paragraph (k). NMFS inadvertently neglected to remove the cross-reference to paragraph (k) in § 679.42(a)(2)(i). Therefore, with this final rule, NMFS removes the cross-reference to paragraph (k) to clarify that persons possessing unused Category B, C, or D halibut QS may be on board a catcher/processor vessel when that vessel is harvesting and processing Category A halibut or sablefish IFQ, or is harvesting and processing non-IFQ species. The effects of this action are expected to be minor and beneficial by improving the clarity of the regulations.
This final rule clarifies existing regulations pertaining to the IFQ vessel limitations, also referred to as the vessel use caps. NMFS adds language to § 679.42(h)(1) and (h)(2) to clarify that the vessel use caps apply to halibut and sablefish IFQ and not to halibut and sablefish CDQ. This action improves the clarity of the regulations and helps IFQ and CDQ participants understand the regulations to which they are subject. The effects of this action are expected to be minor and beneficial by improving the clarity of the regulations.
NMFS received 4 comment letters on the proposed rule. One of the comment letters was outside the scope of this action. NMFS has summarized and responded to the six unique comments in the remaining three comment letters.
Section 3507(c)(B)(i) of the Paperwork Reduction Act (PRA) requires that agencies inventory and display a current control number assigned by the Director of the Office of Management and Budget (OMB), for each agency's information collection. Section 902.1(b) identifies the location of NOAA regulations for which OMB approval numbers have been issued. Because this final rule adds a new collection-of-information for recordkeeping and reporting requirements, 15 CFR 902.1(b) is revised to reference correctly the section resulting from this final rule.
NMFS makes two minor changes to the proposed regulatory text in this final rule. First, § 679.5(l)(10) is changed to include the words “and the Council.” New regulations at § 679.5(w) require a CDQ group to submit a report to both NMFS and the Council. Adding this language to § 679.5(l)(10) creates consistency between these sections. Second, NMFS changes “halibut IFQ” to “IFQ halibut” in § 679.42(h)(1) and “sablefish IFQ” to “IFQ sablefish” in § 679.42(h)(2). The proposed changes were intended to refer to the type of fish (IFQ halibut and IFQ sablefish defined at § 679.2) that will count towards the vessel limits prescribed by these paragraphs rather than the type of fishing rights (halibut IFQ and sablefish IFQ).
The NMFS Alaska Region Administrator determined that this final rule is necessary for the conservation and management of the IFQ halibut fishery off Alaska and that it is consistent with the Magnuson-Stevens Fishery Conservation and Management Act, the Halibut Act, and other applicable laws.
Regulations governing the U.S. fisheries for Pacific halibut are developed by the IPHC, the Pacific Fishery Management Council, the Council, and the Secretary of Commerce. Section 5 of the Northern Pacific Halibut Act of 1982 (Halibut Act, 16 U.S.C. 773c) allows the Regional Council having authority for a particular geographical area to develop regulations governing the allocation and catch of halibut in U.S. Convention waters as long as those regulations are in addition to, and not in conflict with, IPHC regulations. This final rule is consistent with the Council's authority to allocate halibut catches among fishery participants in the waters in and off Alaska.
This final rule has been determined to be not significant for the 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 or on the economic impacts of the rule more generally. As a result, a regulatory flexibility analysis was not required, and none was prepared, pursuant to 5 U.S.C. 605.
This final rule contains collection-of-information requirements subject to the PRA, which have been approved by OMB under OMB control number 0648-0764. After this final rule's effective date, OMB Control Number 0648-0764 will be merged with OMB Control Numbers 0648-0272 and 0648-0711.
Public reporting burden is estimated to average per response: 2 hours for Application for Temporary Transfer of Halibut and Sablefish IFQ, 40 hours for the annual report, and 1 minute for electronic submission of cost recovery fees or 30 minutes for non-electronic fee submission. These estimates include the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.
Send comments regarding these burden estimates or any other aspect of this data collection, including suggestions for reducing the burden, to NMFS (see
Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to penalty for failure to comply with, a collection of information subject to the requirement of the PRA, unless that collection of information displays a currently valid OMB control number. All currently approved NOAA collections of information may be viewed at:
Reporting and recordkeeping requirements.
Administrative practice and procedure, Fisheries, Fishing, Reporting and recordkeeping requirements.
Alaska, Fisheries, Reporting and recordkeeping requirements.
For the reasons set out in the preamble, NMFS amends 15 CFR part 902 and 50 CFR parts 300 and 679 as follows:
44 U.S.C. 3501
(b) * * *
16 U.S.C. 773-773k.
(1) Commission regulatory areas 2C and 3A, means the annual commercial allocation minus an area-specific estimate of commercial halibut wastage.
(2) Commission regulatory areas 3B and 4A, means the annual total allowable halibut removals by persons fishing IFQ.
(3) Commission regulatory areas 4B, 4C, 4D, and 4E, means the annual total allowable halibut removals by persons fishing IFQ and CDQ.
16 U.S.C. 773
(l) * * *
(10) A report on annual IFQ regulatory areas 4B, 4C, and 4D Halibut IFQ transfer activities must be submitted to NMFS and the Council by a CDQ group as required at § 679.5(w).
(w)
(2)
(3)
(4)
(i) The annual amount, IFQ regulatory area, and vessel category of IFQ regulatory area 4B, 4C, and 4D halibut IFQ transferred to the CDQ group;
(ii) The criteria used to select IFQ holders to transfer IFQ regulatory area 4B, 4C, and 4D halibut IFQ to the CDQ group; and
(iii) The criteria used to determine the person(s) eligible to harvest IFQ regulatory area 4B, 4C, and 4D halibut IFQ received by transfer.
The additions and revisions read as follows:
(c) * * *
(13) If the person applying to receive halibut IFQ assigned to vessel categories B, C, or D in IFQ regulatory areas 4B, 4C, or 4D is a CDQ group, the following determinations are required:
(i) The CDQ group applying to receive halibut IFQ for an IFQ regulatory area receives an annual allocation of halibut CDQ for that IFQ regulatory area pursuant to § 679.31(b)(1);
(ii) The QS holder applying to transfer halibut IFQ to a CDQ group has not transferred any halibut IFQ assigned to vessel categories B, C, or D for that IFQ regulatory area to a CDQ group during the last two consecutive fishing years;
(iii) If the IFQ to be transferred to a CDQ group results from QS that was transferred to the QS holder after December 14, 2015, the QS holder applying to transfer halibut IFQ to a CDQ group has held the underlying QS for that IFQ for a minimum of 3 years from the date NMFS approved the transfer;
(iv) If the IFQ to be transferred to a CDQ group is assigned to vessel categories B, C, or D in IFQ regulatory area 4B, the QS holder applying to transfer that halibut IFQ to a CDQ group holds fewer than 76,355 halibut QS units in IFQ regulatory area 4B; and
(v) The CDQ group applying to receive halibut IFQ has submitted a complete report if required to do so by § 679.5(w).
(d) * * *
(1)
(i) An Application for Eligibility is not required for a CQE if a complete application to become a CQE, as described in paragraph (l)(3) of this section, has been approved by the Regional Administrator on behalf of an eligible community.
(ii) An Application for Eligibility is not required for a CDQ group.
(g) * * *
(1) Except as provided in paragraph (f), paragraph (g)(2), paragraph (l), paragraph (n) or paragraph (o) of this section, only persons who are IFQ crew members, or who were initially issued QS assigned to vessel categories B, C, or D, and meet the eligibility requirements in this section, may receive by transfer QS assigned to vessel categories B, C, or D, or the IFQ resulting from it.
(h) * * *
(2) IFQ resulting from categories B, C, or D QS may not be transferred separately from its originating QS, except as provided in paragraph (d), paragraph (f), paragraph (k), paragraph (l), paragraph (m), or paragraph (o) of this section.
(o)
(2) A QS holder in IFQ regulatory areas 4C or 4D may transfer halibut IFQ assigned to vessel categories B, C, or D in IFQ regulatory areas 4C or 4D to a CDQ group that receives an allocation of halibut CDQ in that IFQ regulatory area if the annual commercial halibut catch limit, as defined in § 300.61 of this title, for Area 4CDE is less than 1.5 million pounds in that calendar year.
(3) A QS holder must meet the requirements in paragraph (c)(13) of this section to transfer halibut IFQ assigned to vessel categories B, C, or D in IFQ regulatory areas 4B, 4C, or 4D to a CDQ group.
(4) A CDQ group that receives halibut IFQ by transfer may not transfer that halibut IFQ to any other person.
The revisions and additions read as follows:
(a) * * *
(1) The QS or IFQ specified for one IFQ regulatory area must not be used in a different IFQ regulatory area, except for the following:
(i) All or part of the QS and IFQ specified for regulatory area 4C may be harvested in either Area 4C or Area 4D.
(ii) All or part of the halibut CDQ specified for regulatory area 4D may be harvested in either Area 4D or Area 4E.
(iii) If a CDQ group is authorized to receive a transfer of halibut IFQ assigned to vessel categories B, C, or D in IFQ regulatory area 4D as specified in § 679.41(o) of this part, all or part of the halibut IFQ specified for regulatory area 4D that is held by or transferred to a CDQ group may be harvested in either Area 4D or Area 4E.
(2) * * *
(iv) Halibut IFQ assigned to vessel category B, C, or D held by a CDQ group may not be used on a vessel over 51 feet LOA, irrespective of the vessel category assigned to the IFQ.
(h) * * *
(1)
(2)
Office of the Assistant Secretary for Financial Markets, Treasury.
Final rule.
The Department of the Treasury (Treasury) is issuing a final rule to amend its Large Position Reporting rules (LPR Rules). These technical amendments make no substantive changes to the rules but are designed to provide Treasury with additional flexibility to specify in its notice requesting large position reports where and how reports are to be filed. Accordingly, Treasury will provide notice by issuing a public announcement and subsequently publishing the notice in the
The amendments are effective November 17, 2018.
This final rule is available at
Lori Santamorena, Kurt Eidemiller, Kevin Hawkins, or John Garrison, Department of the Treasury, Bureau of the Fiscal Service, Government Securities Regulations Staff, (202) 504-3632 or email us at
The LPR Rules
Treasury's LPR Rules apply to all foreign and domestic persons and entities that control a reportable position in a Treasury security, including but not limited to: Government securities brokers and dealers; registered investment companies; registered investment advisers; custodians, including depository institutions that exercise investment discretion; hedge funds; pension funds; insurance companies; and foreign affiliates of U.S. entities. Central banks (including U.S. Federal Reserve Banks for their own account), foreign governments, and international monetary authorities may voluntarily submit large position reports when they meet or exceed a reporting threshold.
Under the current LPR Rules, reports are required to be filed by facsimile (fax) or delivered by hardcopy to FRBNY. A report is considered filed when received by FRBNY. Reporting entities typically have three and one-half business days to submit reports, and most reports are filed by fax with FRBNY. Following previous calls for large position reports, many reporting entities have commented that it is difficult to find functional fax machines and would prefer an alternate means of submission. In response to this feedback, Treasury is currently exploring alternate options for the submission of reports.
These technical amendments make no substantive changes to the LPR Rules. They are designed to provide Treasury with the flexibility to specify in its notice requesting large position reports where and how reports are to be filed. These amendments will also provide Treasury with the added flexibility to consider alternate means of submission, which may further reduce the burden on reporting entities. Treasury will provide notice of a request for reports, and how the reports are to be delivered, by issuing a public announcement and subsequently publishing the notice in the
Specifically, the technical amendments replace references to “press release” with “public announcement;” provide the option for Treasury to specify in its public announcement that reports can be submitted to Treasury directly; and provide the option for Treasury to specify in its public announcement how reports are to be submitted by removing references to “facsimile” and “delivered hard copy.”
Executive Orders 13563 and 12866 direct agencies to assess costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule is not a significant regulatory action for purposes of Executive Order 12866.
This final rule is procedural in nature under 5 U.S.C. 553(b)(A) and therefore prior notice and comment procedures are not required. In addition, because the final rule makes no substantive change to the existing rules and imposes no additional requirements, we find under 5 U.S.C. 553(b)(B) that there is good cause that notice and public procedures are unnecessary, and that the rule can be issued in final form.
Because no notice of proposed rulemaking is required, the provisions of the Regulatory Flexiblity Act (5 U.S.C. 601
Banks, Banking, Brokers, Government securities, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, 17 CFR part 420 is amended as follows:
15 U.S.C. 78o-5(f).
(a) * * * Treasury will provide notice of the large position thresholds by issuing a public announcement and subsequently publishing the notice in the
(h) The report must be filed before noon Eastern Time on the fourth business day following issuance of a public announcement.
(i) A report to be filed pursuant to paragraph (c) of this section will be considered filed when received by Treasury or the Federal Reserve Bank of New York according to the instructions provided in the public announcement.
(j) A reporting entity that has filed a report pursuant to paragraph (c) of this section shall, at the request of Treasury, or the Federal Reserve Bank of New York at the direction of Treasury, timely provide any supplemental information pertaining to such report.
Department of the Navy (DoN), Department of Defense (DoD).
Final rule.
The Department of the Navy (DoN) is amending its certifications and exemptions under the International Regulations for Preventing Collisions at Sea, 1972 (72 COLREGS), to reflect that the Deputy Assistant Judge Advocate General (DAJAG) (Admiralty and Maritime Law) has determined that USS BILLINGS (LCS 15) is a vessel of the Navy which, due to its special construction and purpose, cannot fully comply with certain provisions of the 72 COLREGS without interfering with its special function as a naval ship. The intended effect of this rule is to warn mariners in waters where 72 COLREGS apply.
This rule is effective October 18, 2018 and is applicable beginning October 5, 2018.
Lieutenant Commander Kyle Fralick, JAGC, U.S. Navy, Admiralty Attorney, (Admiralty and Maritime Law), Office of the Judge Advocate General, Department of the Navy, 1322 Patterson Ave. SE, Suite 3000, Washington Navy Yard, DC 20374-5066, telephone number: 202-685-5040.
Pursuant to the authority granted in 33 U.S.C. 1605, the DoN amends 32 CFR part 706.
This amendment provides notice that the DAJAG (Admiralty and Maritime Law), under authority delegated by the Secretary of the Navy, has certified that USS BILLINGS (LCS 15) is a vessel of the Navy which, due to its special construction and purpose, cannot fully comply with the following specific provisions of 72 COLREGS without interfering with its special function as a naval ship: Annex I paragraph 2 (a)(i), pertaining to the height of the forward masthead light above the hull: And Annex I paragraph 3(a), pertaining to the location of the forward masthead light in the forward quarter of the ship, and the horizontal distance between the forward and after masthead light. The DAJAG (Admiralty and Maritime Law) has also certified that the lights involved are located in closest possible compliance with the applicable 72 COLREGS requirements.
Moreover, it has been determined, in accordance with 32 CFR parts 296 and 701, that publication of this amendment for public comment prior to adoption is impracticable, unnecessary, and contrary to public interest since it is based on technical findings that the placement of lights on this vessel in a manner differently from that prescribed herein will adversely affect the vessel's ability to perform its military functions.
Marine safety, Navigation (water).
For the reasons set forth in the preamble, the DoN amends part 706 of title 32 of the Code of Federal Regulations as follows:
33 U.S.C. 1605.
The additions read as follows:
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary special local regulation for navigable waters of the San Diego Bay offshore of Harbor Island bound landward of a line by the following coordinates starting west at 32°43.033′ N and 117°12.792′ W and proceeding east to 32°43.166′ N and 117°12.266′ W, proceeding east to 32°43.166′ N and 117°11.633′ W, and ending at 32°43.100′ N and 117°11.300′ W. This special local regulation is necessary to provide for the safety of life on navigable waters during the event. This action will restrict vessel traffic in these waters of the San Diego Bay, from 10:00 a.m. to 6:00 p.m. on October 17, 2018 through October 21, 2018.
This rule is effective without actual notice from October 18, 2018 until October 21, 2018. For the purposes of enforcement from 10 a.m. to 6 p.m. daily, actual notice will be used from 10 a.m. on October 17, 2018 until October 18, 2018.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email Lieutenant Junior Grade Briana Biagas, Waterways Management, U.S. Coast Guard Sector San Diego, Coast Guard; telephone 619-278-7656, email
The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because doing so would be impracticable. Due to the timing of the event, we are unable to issue a NPRM before the event is scheduled.
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The Coast Guard is issuing this rule under authority in 33 U.S.C. 1233, which authorizes the Coast Guard to establish and define special local regulations. The COTP San Diego is establishing a special local regulation for the waters of the San Diego Bay bound landward of a line by coordinates starting west at 32°43.033′ N and 117°12.792′ W and proceeding east to 32°43.166′ N and 117°12.266′ W, proceeding east to 32°43.166′ N and 117°11.633′ W, and ending at 32°43.100′ N and 117°11.300′ W. The purpose of this rule is to ensure safety of participants, vessels and the navigable waters in the regulated area before, during, and after the scheduled event.
This rule establishes a special local regulation from 10:00 a.m. to 6:00 p.m. on October 17, 2018 through October 21, 2018. The special local regulation will cover all navigable waters of the San Diego Bay bound landward of a line by coordinates starting west at 32°43.033′ N and 117°12.792′ W and proceeding east to 32°43.166′ N and 117°12.266′ W, proceeding east to 32°43.166′ N and 117°11.633′ W, and ending at 32°43.100′ N and 117°11.300′ W. The purpose of this rule is to ensure safety of participants, vessels and the navigable waters in the regulated area before, during, and after the scheduled event. Persons and vessels will be prohibited from anchoring, blocking, loitering, or impeding within this regulated waterway unless authorized by the COTP, or his designated representative, during the specified dates and times. Additionally, movement of all vessels within the regulated area and entry of all vessels into the regulated area will be restricted. The Coast Guard will publish information on the event in the weekly LNM.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance, it is exempt from the requirements of Executive Order 13771.
This regulatory action determination is based on size, location, duration, and time-of-day of the special local regulation. The Coast Guard will publish a LNM that details the vessel restrictions of the regulated area.
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
This rule will affect the following entities, some of which may be small entities: The owners or operators of vessels intending to transit or anchor in the impacted portion of the San Diego Bay bound landward of a line by coordinates starting west at 32°43.033′ N and 117°12.792′ W and proceeding east to 32°43.166′ N and 117°12.266′ W, proceeding east to 32°43.166′ N and 117°11.633′ W, and ending at 32°43.100′ N and 117°11.300′ W from 10:00 a.m. to 6:00 p.m. on October 17, 2018 through October 21, 2018.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves establishment of marine event special local regulations on a portion of the navigable waters of the San Diego Bay. It is categorically excluded from further review under paragraph L61 and L63(b) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A Record of Environmental Consideration supporting this determination is available in the docket where indicated under
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
Marine safety, Navigation (water), Reporting and recordkeeping requirements, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 100 as follows:
33 U.S.C. 1233; 33 CFR 1.05-1.
(a)
(b)
(c)
(2) Movement of all vessels within the regulated area and entry of all vessels into the regulated area will be restricted.
(3) To seek permission to enter the regulated area, contact the Captain of the Port (COTP) San Diego or the COTP's designated representative.
(4) The Coast Guard will publish a notice in the Eleventh Coast Guard District Local Notice to Mariners and issue a Safety Marine Information Broadcast of VHF-FM marine band radio announcing specific event location, dates and times.
(d)
Environmental Protection Agency (EPA).
Final rule; administrative change.
The Environmental Protection Agency (EPA) is updating the materials that are incorporated by reference (IBR) into the West Virginia state implementation plan (SIP). The regulations affected by this update have been previously submitted by the West Virginia Department of Environmental Protection (WV DEP) and approved by EPA. This update affects the SIP materials that are available for public inspection at the National Archives and Records Administration (NARA) and the EPA Regional Office.
This action is effective October 18, 2018.
SIP materials which are incorporated by reference into 40 CFR part 52 are available for inspection at the following locations: Air Protection Division, U.S. Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania 19103; and the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Erin Trouba, (215) 814-2023 or by email at
Each state has a SIP containing the control measures and strategies used to attain and maintain the national ambient air quality standards (NAAQS). The SIP is extensive, containing such elements as air pollution control regulations, emission inventories, monitoring networks, attainment demonstrations, and enforcement mechanisms.
Each state must formally adopt the control measures and strategies in the SIP after the public has had an opportunity to comment on them and then submit the proposed SIP revisions to EPA. Once these control measures and strategies are approved by EPA, and after notice and comment, they are incorporated into the federally-approved SIP and are identified in part 52 “Approval and Promulgation of Implementation Plans,” title 40 of the Code of Federal Regulations (40 CFR part 52). The full text of the state regulation approved by EPA is not reproduced in its entirety in 40 CFR part 52, but is “incorporated by reference.” This means that EPA has approved a given state regulation with a specific effective date. The public is referred to the location of the full text version should they want to know which measures are contained in a given SIP. The information provided allows EPA and the public to monitor the extent to which a state implements a SIP to attain and maintain the NAAQS and to take enforcement action if necessary.
The SIP is a living document which a state revises as necessary to address its unique air pollution problems. Therefore, EPA, from time to time, must take action on SIP revisions containing new and/or revised regulations as being part of the SIP. On May 22, 1997 (62 FR 27968), EPA revised the procedures for incorporating by reference federally-approved SIPs, as a result of consultations between EPA and the Office of the Federal Register (OFR). The description of the revised SIP document, IBR procedures and “Identification of plan” format are discussed in further detail in the May 22, 1997,
None.
In this action, EPA is announcing the update to the IBR material as of May 1, 2018 and revising the text within 40 CFR 52.2520(b). In addition, notice is provided of correcting
EPA has determined that this rule falls under the “good cause” exemption in section 553(b)(3)(B) of the Administrative Procedures Act (APA) which, upon finding “good cause,” authorizes agencies to dispense with public participation and section 553(d)(3) which allows an agency to make a rule effective immediately (thereby avoiding the 30-day delayed effective date otherwise provided for in the APA). This rule simply codifies provisions which are already in effect as a matter of law in federal and approved state programs. Under section 553 of the APA, an agency may find good cause where procedures are “impractical, unnecessary, or contrary to the public interest.” Public comment is “unnecessary” and “contrary to the public interest” since the codification only reflects existing law. Immediate notice in the CFR benefits the public by
In this rule, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of previously EPA approved regulations promulgated by the State of West Virginia and federally effective prior to May 1, 2018. EPA has made, and will continue to make, these materials generally available through
Under the Clean Air Act (CAA), the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866.
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.
The Congressional Review Act, 5 U.S.C. 801
EPA has also determined that the provisions of section 307(b)(1) of the CAA pertaining to petitions for judicial review are not applicable to this action. Prior EPA rulemaking actions for each individual component of the West Virginia SIP compilations had previously afforded interested parties the opportunity to file a petition for judicial review in the United States Court of Appeals for the appropriate circuit within 60 days of such rulemaking action. Thus, EPA sees no need in this action to reopen the 60-day period for filing such petitions for judicial review for this “Identification of plan” update action for West Virginia.
Environmental protection, Air pollution control, Carbon monoxide, Incorporation by reference, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and record keeping requirements, Sulfur oxides, Volatile organic compounds.
40 CFR part 52 is amended as follows:
42 U.S.C. 7401
The revisions read as follows:
(b)
(2) EPA Region III certifies that the materials provided by EPA at the addresses in paragraph (b)(3) of this section are an exact duplicate of the officially promulgated state rules/regulations which have been approved as part of the state implementation plan as of the dates referenced in paragraph (b)(1) of this section.
(3) Copies of the materials incorporated by reference into the state implementation plan may be inspected at the Environmental Protection Agency,
(c)
Fish and Wildlife Service, Interior.
Final rule; document availability.
We, the U.S. Fish and Wildlife Service (Service), are removing Deseret milkvetch (
This final rule is effective November 19, 2018.
Comments, materials received and supporting documentation used in the preparation of this final rule are available on the internet at
Larry Crist, Field Supervisor, telephone: 801-975-3330. Direct all questions or requests for additional information to: DESERET MILKVETCH QUESTIONS, U.S. Fish and Wildlife Service; Utah Ecological Services Field Office; 2369 Orton Circle, Suite 50; West Valley City, UT 84119. If you use a telecommunications device for the deaf (TDD), you may call the Federal Relay Service at 800-877-8339.
On October 2, 2017, we published a proposed rule to remove Deseret milkvetch from the List of Endangered and Threatened Plants (
Deseret milkvetch was first collected in 1893, again in 1909, then not located again until 1981 (Barnaby 1989, p. 126; Franklin 1990, p. 2). The gap in collections may be due to confusion regarding initial records, which were wrongly attributed to Sanpete County, Utah (Franklin 1990, p. 2). The 1964 description and classification of Deseret milkvetch by Barneby is the accepted taxonomic status (Barneby 1989, p. 126; ITIS 2015).
Deseret milkvetch is a perennial, herbaceous plant in the legume family with silvery-gray pubescent leaves that are 2 to 5 inches (4 to 12 centimeters) long and flower petals that are white to pinkish with lilac-colored tips (Barneby 1989, p. 126). The flower structure indicates an adaptation to pollination primarily by large bees, likely bumblebees (
Deseret milkvetch is endemic to Utah County in central Utah, with the only known population near the town of Birdseye (Stone 1992, p. 2). It occurs exclusively on sandy-gravelly soils weathered from the Moroni geological formation, which are limited to an area of approximately 100 square miles (mi
Deseret milkvetch is found on steep south- and west-facing slopes with scattered Colorado pinyon pine (
Deseret milkvetch is probably a relatively new species on the scale of geologic time. The species' genus has the ability to colonize disturbed or unstable habitats in dry climates. This ability has likely hastened the evolution of the genus and given rise to many species of
In 1990, surveys for Deseret milkvetch estimated fewer than 5,000 plants in a single population (Franklin 1990, p. 3). A subsequent survey at the same site in 1992 estimated more than 10,000 plants, indicating that a large seed bank likely exists (Stone 1992, p. 7). Consequently, at the time of listing, we estimated a total population of 5,000 to 10,000 plants (64 FR 56590, October 20, 1999).
In 2008, the Utah Natural Heritage Program surveyed suitable habitats and provided a total population estimate for the species (Fitts 2008, p. 1). The surveyors found new plant sites (hereafter referred to as a colony) to the north and west of the previously known population. The total population estimate was 152,229 plants--including seedlings, juveniles, and adults (Fitts and Fitts 2009, p. 4), well above the number of plants known to occur in 1990. If only adults were counted in the 2008 survey, the population estimate was 86,775 to 98,818 plants (U.S. Fish and Wildlife Service 2011, p. 10). The species remains known from a single population, with multiple colonies.
In 2009, surveys were expanded, and the updated total population estimate was 197,277 to 211,915 juvenile and adult plants (Fitts and Fitts 2010, p. 6); however, the survey methodology in this year was not clearly described. More plants likely occurred on nearby private land with exposed Moroni Formation outcrops, but the landowner did not give permission to survey (Fitts and Fitts 2010, p. 7). These surveys may have overestimated the species' population using the partial census method due to extrapolation from earlier hand-drawn colony boundaries; the small number of transects; and the inclusion of seedlings, which have a high rate of mortality (U.S. Fish and Wildlife Service 2011, p. 10).
In 2016, partial surveys were conducted showing dense levels of occupancy in the northmost portion of the range, in areas that were known to be occupied but had not been previously surveyed (Fitts 2018, pers. comm.). In 2017, surveys of all accessible habitats were conducted in accordance with the protocol used in 2008, resulting in a population estimate of 88,427 (adults and juveniles) in the population total, with 50,483 on State lands (UNHP 2018, p. 4-5). Surveys in 2017 did not include private lands, and so we estimated the total population by applying known densities of adjacent State lands to the private land acreages (UNHP 2018, entire).
The 2017 population estimates represent a reduction in population from the surveys conducted in 2008 and 2009 but are still well above the number of plants known in 1990. We believe the reduction in numbers from 2009 to 2017 is consistent with what we know about the species' response to drought conditions. In 2015 and 2016, the habitat experienced moderate to severe drought conditions (National Drought Resilience Partnership 2018, entire). In late 2016 and early 2017, the habitat received above-average precipitation levels, and the lower overall population coupled with the increased proportion of juvenile plants recorded in spring of 2017 would be consistent with a response to two seasons of drought followed by increased precipitation in the preceding fall causing a germination event. The proportion of juvenile plants increased from 15 percent in 2008 to 44 percent in 2017 (USFWS 2011, p. 10; UNHP 2018, p. 4). We believe this represents a natural response cycle to annual precipitation patterns and not a declining trend caused by anthropogenic stressors. Additionally, the consistent presence of seedlings and juveniles in the 2008, 2009, 2016, and 2017 surveys indicates that recruitment occurs regularly and a robust seedbank exists. Although 2018 survey results are not yet available, we expect they will be reflective of the low precipitation level in 2018.
At the time of listing, we estimated the occupied habitat of Deseret milkvetch to include approximately 300 acres (ac) (122 hectares (ha)) in an area 1.6 miles (mi) (2.6 kilometers (km)) by 0.3 mi (0.5 km) (64 FR 56590; October 20, 1999). The most recent occupied habitat estimate is approximately 345 ac (140 ha) in an area 2.8 mi (4.5 km) by 0.3 mi (0.5 km) (Fitts and Fitts 2010, p. 6; SWCA Environmental Consultants 2015, p. 2). The species remains known from one population (Birdseye) of scattered colonies on the Moroni formation soils near Birdseye, Utah (U.S. Fish and Wildlife Service 2011, p. 8).
In summary, periodic surveys of Deseret milkvetch were completed from 1990 through 2017. The available information indicates a substantial population increase since 1990 when the first surveys were conducted (from an estimated 5,000-10,000 plants in 1999 to an estimated 88,000 plants in 2017). Population and demographic fluctuations between 2008 and 2017 are likely a natural part of this species' lifecycle that is related to precipitation. While the exact distribution of colonies has shifted over time, there has been no overall reduction in the area occupied since the time of listing and additional colonies have been located (UNHP 2018, p. 3). Therefore, we conclude that the population has been stable to increasing overall since the time of listing.
An estimated 230 ac (93 ha; 67 percent) of the 345 ac (140 ha) of total occupied habitat for Deseret milkvetch are in the Birdseye Unit of the Northwest Manti Wildlife Management Area (WMA) owned by the Utah Division of Wildlife Resources (UDWR). Of the remaining habitat, 25 ac (10 ha; 7 percent) are owned by the Utah Department of Transportation (UDOT) and 90 ac (36 ha; 26 percent) are privately owned (UDWR
A recovery plan for Deseret milkvetch was not prepared; therefore, specific delisting criteria were not developed for the species. However, in 2005, we invited agencies with management or ownership authorities within the species' habitat to serve on a team to develop an interagency conservation agreement for Deseret milkvetch intended to facilitate a coordinated conservation effort between the agencies (UDWR
•
A draft wildlife management plan completed by UDWR proposes closing some unauthorized, unpaved roads within the WMA, which likely would further benefit the species by reducing habitat fragmentation and reducing future human access to the population (Howard 2018, pers. comm.). We anticipate that the plan will be finalized within the next year (Howard 2018, pers. comm.). Because this plan is currently only in draft, we do not rely on it in this final rule to delist the species. However, it provides an indication of future management intentions of UDWR to the continuing benefit of the species from the ongoing management of the WMA.
Removal of juniper in the WMA to improve habitat may occur, but areas occupied by Deseret milkvetch will be avoided to prevent plant damage and mortality associated with this type of surface-disturbing activity (Howard 2018, pers. comm.). The steep terrain associated with Deseret milkvetch makes grazing, juniper removal, and livestock grazing in the species' occupied habitat unlikely.
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In summary, most of the conservation actions described in the Conservation Agreement have been successfully implemented and are part of an ongoing management strategy for conserving Deseret milkvetch. Potential threats from residential development, livestock grazing, and highway maintenance and widening are addressed by conservation actions on the approximately 74 percent of the species' occupied habitat that is owned and managed by either UDWR or UDOT. The Conservation Agreement will continue to be implemented through at least 2036.
As described above, we have new information on Deseret milkvetch since our listing decision, and the species' status has improved. This improvement is likely due to expanded surveys, as well as the amelioration of threats and an improved understanding of the stressors affecting the species (see Summary of Factors Affecting the Species, below). In addition to the conservation actions identified in the Conservation Agreement, new opportunities for conservation of the species may be implemented in the future. For example, a new power line proposed near the species' habitat will use the same corridor as an existing transmission line (see Factor A discussion, below). However, this future action is not a factor in our delisting determination.
Survey results from 2017 (the most recent population estimates available) estimated that the total population was 88,427 juvenile and adult plants occurring on approximately 345 ac (140 ha) of habitat, which is a significant increase when compared to estimates of 5,000 to 10,000 plants occurring on approximately 300 ac (122 ha) at the time of listing. The majority of Deseret milkvetch occupied habitat (74 percent) is managed by UDWR and UDOT, and we have no information that indicates the species faces significant threats on private lands. All of the conservation actions for UDWR- and UDOT-managed habitat have been successfully implemented, with the exception of acquiring conservation easements. These measures have been effective in preventing impacts to the species and its habitat on State-managed lands. Additionally, as described below, threats identified at the time of listing in 1999 are not as significant as originally anticipated (U.S. Fish and Wildlife Service 2011, p. 21).
We have made updates to our discussions of the species' population status (including 2017 information) and factors affecting the species, based on comments submitted by the public and information provided by peer reviewers. In addition, we now refer to the species primarily by its common name, rather than its scientific name, throughout this rule.
Section 4 of the Act (16 U.S.C. 1531
A species may be determined to be an endangered or threatened species because of one or more of the five factors described in section 4(a)(1) of the Act: (A) The present or threatened destruction, modification, or curtailment of its habitat or range; (B) overutilization for commercial, recreational, scientific, or educational purposes; (C) disease or predation; (D) the inadequacy of existing regulatory mechanisms; or (E) other natural or manmade factors affecting its continued existence. We must consider these same five factors in delisting a species.
For species that are already listed as endangered or threatened and being considered for delisting, the five-factor analysis is an evaluation of the threats currently facing the species and the threats that are reasonably likely to affect the species in the foreseeable future following the removal of the Act's protections. We may delist a species according to 50 CFR 424.11(d) if the best available scientific and commercial data indicate that the species is neither endangered nor threatened for the following reasons: (1) The species is extinct; (2) the species has recovered and is no longer endangered or threatened; and/or (3) the original scientific data used at the time the species was classified were in error. A recovered species has had threats removed or reduced to the point that it no longer meets the Act's definitions of endangered or threatened.
Deseret milkvetch is listed as a threatened species. For the purposes of this analysis, we will evaluate whether or not the currently listed species, Deseret milkvetch, should continue to be listed as a threatened species, based on the best scientific and commercial information available.
We consider 20 years to be a reasonably foreseeable future within which reliable predictions can be made for Deseret milkvetch. This time period includes multiple generations of the species, coincides with the duration of the Conservation Agreement, and falls within the planning period used by UDOT. We consider 20 years a conservative timeframe in view of the much longer-term protections in place for 67 percent of the species' occupied habitat that occurs within the UDWR WMA.
In considering what factors might constitute threats, we must look beyond the exposure of the species to a particular factor to evaluate whether the species may respond to the factor in a way that causes actual impacts to the species. If there is exposure to a factor and the species responds negatively, the factor may be a threat, and during the five-factor threats analysis, we will attempt to determine the significance of the threat. The threat is significant if it drives or contributes to the risk of extinction of the species such that the species warrants listing as endangered or threatened as those terms are defined by the Act. However, the identification of factors that could affect a species negatively may not be sufficient to justify a finding that the species warrants listing or should remain listed. The information must include evidence sufficient to suggest that the potential threat is likely to materialize and that it has the capacity (sufficient magnitude and extent) to affect the species' status such that it meets the definition of endangered or threatened under the Act. This determination does not necessarily require empirical proof of a threat. The combination of exposure and some corroborating evidence of how the species is likely impacted could suffice. The following analysis examines the factors currently affecting Deseret milkvetch, or that are likely to affect it within the foreseeable future.
Deseret milkvetch is found in three different land use zones, as categorized by Utah County Land Use Ordinance (Jorgensen 2016b, pers. comm.; Utah County 2016, chapter 5). Approximately 74.6 percent of the species' habitat occurs in Critical Environment Zone 1, which has the primary purpose of supporting water resources for culinary use, irrigation, recreation, natural vegetation, and wildlife. Approximately 16.7 percent occurs in Residential Agricultural Zone 5, which has the primary purpose of preserving agricultural lands. The remaining 8.6 percent occurs in Critical Environment Zone 2, which has the primary purpose of preserving fragile environmental uses (Jorgensen 2016b, pers. comm.). These zones do not strictly regulate management or land use and, therefore, are not discussed under Factor D, below; however, the Utah County Land Use Ordinance prioritizes uses and provides management guidance for all lands in Utah County, unless specifically exempted (Utah County 2016, chapter 5). All of the conservation actions in place for the species meet the guidelines under their respective land use zone, and we are not aware of any occupied habitat specifically exempted from the guidance described for the aforementioned land use zones.
The following potential stressors were identified for this species at the time of listing: (1) Residential development, (2) highway maintenance and widening, and (3) livestock grazing and trampling. For this final rule, we also considered: (4) Mineral development, (5) transmission lines, and (6) climate change. Each of these stressors is assessed below.
In our October 20, 1999, final listing rule (64 FR 56590), substantial human population growth and urban expansion were predicted in the Provo, Spanish Fork, and Weber River drainages east of the Wasatch Mountains. In that rule, increased residential development was considered a threat to the species due to the potential for loss of plants and habitat that results from the construction of roads, buildings, and associated infrastructure (
The majority of Deseret milkvetch habitat occurs on steep, rocky, erosive slopes that are not favorable for development; consequently, we do not anticipate any future residential development in the species' occupied habitat (Fitts 2016, pers. comm.). Additionally, as previously described,
We conclude, based on the available information, that residential development is not a threat to Deseret milkvetch due to: (1) The minimal disturbance from residential development that has occurred on the species' habitat to date and the minimal amount of disturbance anticipated in the future; (2) the steep, rocky, erosive nature of the species' habitat, which precludes most development; and (3) the amount of habitat (67 percent) that is protected from residential development.
In our October 20, 1999, final listing rule (64 FR 56590), potential widening of Highway 89 was considered a threat to plants growing in the highway right-of-way. Highway 89 widening would likely result in the loss of Deseret milkvetch plants and habitat that are directly adjacent to Highway 89. Regular highway maintenance activities include herbicide use to control weeds and could also result in the loss of plants and habitat within the right-of-way. The species appears to tolerate some levels of disturbance related to road maintenance because it recolonizes areas that have been disturbed by tracked vehicles, road grading equipment, and road cuts (Franklin 1990, p. 2; Fitts and Fitts 2009, p. 5; SWCA 2015, p. 7).
Widening of Highway 89 has not occurred and is not anticipated by UDOT through at least 2040, which is as far as planning extends (Kisen 2016, pers. comm.). The nearest highway development project is a modification of the intersection of Highway 89 and Highway 6 (Kisen 2016, pers. comm.). This project is approximately seven mi (11 km) north of Birdseye and four mi (6 km) north of the nearest occurrence of the species. Therefore, we do not anticipate any direct or indirect impacts to the species. No other highway projects are currently planned within 20 mi (32 km) of Birdseye (Kisen 2016, pers. comm.).
Road maintenance on Highway 89 is ongoing. However, as committed to in the Conservation Agreement, UDOT avoids herbicide use and other disturbance in the species' habitat (Lewinsohn 2016, pers. comm.; UDWR
In summary, highway widening is not anticipated within the vicinity of occupied Deseret milkvetch habitat. We are not aware of planned road-widening construction projects in or near the species' habitat, and UDOT has committed to avoiding herbicide use and other disturbance in occupied Deseret milkvetch habitat during maintenance activities (Lewinsohn 2016, pers. comm.; UDWR
In our October 20, 1999, final listing rule (64 FR 56590), livestock grazing and trampling were considered threats to the species because of direct consumption of plants, trampling of plants and the burrows of ground-dwelling pollinators, and increased soil erosion. In contrast to many species of
Prior to UDWR acquiring the Northwest Manti WMA in 1967, livestock grazing occurred for more than 50 years on habitat occupied by Deseret milkvetch and may help to explain why attempts to locate the species were unsuccessful for decades (UDWR
The UDWR does not currently allow livestock grazing on the Birdseye Unit of the WMA and does not plan for any future grazing within the portion of the WMA that contains Deseret milkvetch habitat (Howard 2018, pers. comm.). Avoidance of livestock grazing in the species' habitat that is managed by UDWR is stipulated in the Conservation Agreement (UDWR
In summary, livestock grazing and trampling were considered a threat to Deseret milkvetch in our October 20, 1999, final listing rule (64 FR 56590) because grazing occurred historically over much of the species' habitat and we were concerned about trampling and erosion impacts. However, livestock grazing no longer occurs on the UDWR WMA, representing 67 percent of the species' habitat. Additionally, occupied Deseret milkvetch habitat on both private and protected lands is steep and rocky, with sparse forage for cattle. Consequently, minimal grazing impacts have been documented. We conclude, based on the available information, that livestock grazing and trampling are not a threat to Deseret milkvetch.
Impacts from mineral development were not considered in our October 20, 1999, final listing rule (64 FR 56590). At the time the Conservation Agreement was signed, there was no information indicating that mineral development was going to occur in or near occupied Deseret milkvetch habitat (UDWR
In summary, mineral development was not considered a threat when Deseret milkvetch was listed under the Act. According to the compliance office of SITLA, there have been no inquiries regarding mineral development in this area. It is a severed estate, therefore, SITLA does not own the mineral rights, but would manage surface disturbance associated with mineral development and the area is flagged in their business system as being under a conservation agreement (Wallace 2017, pers. comm.). Therefore, based on the available information, we conclude that mineral development is not a threat to Deseret milkvetch.
Impacts from transmission lines were not considered in our October 20, 1999, final listing rule (64 FR 56590). The Mona to Bonanza high-voltage transmission line is an existing power line near Deseret milkvetch habitat located at the easternmost extent of the known range of the species (Miller 2016,
In summary, Deseret milkvetch maintains a large, robust population next to the existing Mona to Bonanza transmission line, and only a very minimal amount of habitat (less than 0.25 ac (0.10 ha)) would be disturbed by the proposed future construction of the TransWest transmission line. We conclude, based on the available information, that transmission lines are not a threat to Deseret milkvetch.
Impacts from climate change were not considered in our October 20, 1999, final listing rule (64 FR 56590). Our current analyses for species classification under the Act include consideration of ongoing and projected changes in climate. The terms “climate” and “climate change” are defined by the Intergovernmental Panel on Climate Change (IPCC). “Climate” refers to the mean and variability of different types of weather conditions over time, with 30 years being a typical period for such measurements, although shorter or longer periods also may be used (IPCC 2007, p. 78). The term “climate change” thus refers to a change in the mean or variability of one or more measures of climate (
Estimates regarding the risk of future persistent droughts in the southwestern United States range from 50 to 90 percent (Ault
The
Deseret milkvetch appears well-adapted to a dry climate and can quickly colonize after disturbance. Plants growing in high-stress landscapes (
In summary, climate change is affecting and will continue to affect temperature and precipitation events. We expect that Deseret milkvetch, like other narrow endemics, could experience future climate change-related drought. However, the scope of any effects is mostly speculative at this time because current data are not reliable at the local level. The information we do have indicates the species and the genus are adapted to drought and are able to recolonize disturbed areas. Therefore, based upon available information, we conclude that
The following stressors warranted consideration as possible current or future threats to Deseret milkvetch under Factor A: (1) Residential development, (2) highway maintenance and widening, (3) livestock grazing and trampling, (4) mineral development, (5) transmission lines, and (6) climate change. However, these stressors either have not occurred to the extent anticipated at the time of listing or are being adequately managed, or the species is tolerant of the stressor as described below.
• Minimal disturbance from residential development has occurred on Deseret milkvetch habitat to date or is anticipated in the future because of the steep, rocky, erosive nature of the species' habitat. In addition, 67 percent of the species' habitat is protected from residential development due to its inclusion in a State WMA.
• UDOT anticipates no highway widening in habitat occupied by Deseret milkvetch, and herbicide use and other disturbances are avoided in habitat for the species.
• The steep, rocky nature of Deseret milkvetch habitat and sparse forage availability minimize livestock grazing, and 67 percent of all of the species' known habitat is carefully managed by UDWR to restrict it from grazing.
• The lack of inquiries and severed estate status of the habitat occupied by Deseret milkvetch indicate that mineral development is not a threat.
• The existing transmission line is not a threat to Deseret milkvetch, and activity associated with the proposed transmission line occurring within the species' occupied habitat will be confined to existing access roads.
• Deseret milkvetch and its genus are likely adapted to drought related to climate change.
• Deseret milkvetch appears able to recolonize disturbed areas readily.
Therefore, based on the available information, we do not consider there to be any threats related to the present or threatened destruction, modification, or curtailment of habitat or range of Deseret milkvetch.
Overutilization for any purpose was not considered a threat in the final rule to list the species (64 FR 56590; October 20, 1999). The only collections of the species that we are aware of were for scientific purposes. An unknown number of seeds were collected in 2007, and approximately 850 seeds were collected from 45 plants in 2008. In addition, 1,016 seeds were collected from 55 plants in 2009, for germination trials and long-term seed storage at Red Butte Gardens and Arboretum in Salt Lake City, Utah, and the National Center for Genetic Resources Preservation in Fort Collins, Colorado (Dodge 2009, p. 4). This amount of collection is insignificant given the current population estimates for the species, and overall it is beneficial because it will improve our understanding of species propagation and ensure genetic preservation. We are not aware of any other utilization of the species. Therefore, based on the available information, we do not consider there to be any threats related to overutilization for commercial, recreational, scientific, or educational purposes of Deseret milkvetch.
Disease and predation were not considered threats in the final rule to list the species (64 FR 56590; October 20, 1999). We are not aware of any issues or potential stressors regarding disease or insect predation. As described in more detail above under Factor A, grazing—which could be considered a form of predation—is limited in the species' habitat and does not affect the species throughout its range or at a population level. Therefore, based on the available information, we do not consider there to be any threats related to disease or predation of Deseret milkvetch.
Section 4(b)(1)(A) of the Act requires the Service to take into account “those efforts, if any, being made by any State or foreign nation, or any political subdivision of a State or foreign nation, to protect such species.” In relation to Factor D under the Act, we interpret this language to require us to consider relevant Federal, State, and Tribal laws, regulations, and other such mechanisms that may minimize any of the threats we describe in the threats analyses under the other four factors or otherwise enhance conservation of the species. We give the strongest weight to statutes and their implementing regulations and to management direction that stems from those laws and regulations; an example would be State governmental actions enforced under a State statute, constitution, or regulation or Federal action under statute or regulation.
For currently listed species that are being considered for delisting, we consider the adequacy of existing regulatory mechanisms to address threats to the species absent the protections of the Act. We examine whether other regulatory mechanisms would remain in place if the species were delisted, and the extent to which those mechanisms would continue to help ensure that future threats will be reduced or minimized.
In our discussion under Factors A, B, C, and E, we evaluate the significance of threats as mitigated by any conservation efforts and existing regulatory mechanisms. Where threats exist, we analyze the extent to which conservation measures and existing regulatory mechanisms address the specific threats to the species. Regulatory mechanisms, if they exist, may reduce or eliminate the impacts from one or more identified threats. As previously discussed, conservation measures initiated by UDWR, SITLA, and UDOT under the Conservation Agreement manage potential threats caused by residential development, highway maintenance and widening, and livestock grazing and trampling, as well as the more recently identified proposed transmission line. In addition to these conservation measures, relevant Utah State statutes and UDWR administrative rules that will remain in effect regardless of Deseret milkvetch's status under the Act include:
1. Title 23—Wildlife Resources Code of Utah, Chapter 21—Lands and Waters for Wildlife Purposes, Section 5—State-owned lands authorized for use as wildlife management areas, fishing waters and other recreational activities. This statute authorizes the creation, operation, maintenance, and management of wildlife management areas including the Birdseye Unit of the Northwest Manti WMA. The Birdseye Unit contains 67 percent of all known habitat occupied by Deseret milkvetch. Consequently, two-thirds of all known habitat is currently managed and will continue to be managed as wildlife habitat regardless of the species' status under the Act.
2. Utah Administrative Code, Rule R657-28—Use of Division Lands. This administrative rule describes the lawful uses and activities on UDWR lands including Birdseye Unit of the Northwest Manti WMA. These uses cannot conflict with the intended land use or be detrimental to wildlife or wildlife habitat. This administrative rule provides further support to beneficial management on the 67 percent of occupied habitat managed by
We are not aware of any habitat occupied by Deseret milkvetch on Federal lands. We anticipate that the conservation measures initiated by UDWR, SITLA, and UDOT under the Conservation Agreement will continue through at least 2036. Consequently, we find that conservation measures along with existing State regulatory mechanisms are adequate to address specific stressors absent protections under the Act.
In our October 20, 1999, final listing rule (64 FR 56590), small population size was considered a concern for the species because of the potential for low levels of genetic diversity as compared to other more widespread, related species. A species may be considered rare due to: (1) Limited geographic range, (2) occupation of specialized habitats, or (3) small population numbers (Primack 1998, p. 176). This species meets each of these qualifications.
Deseret milkvetch is likely a localized neoendemic, that is, it is a relatively new species on the scale of geologic time and likely has always been geographically restricted (rare) (Stone 1992, p. 6). A species that has always been rare, yet continues to survive, could be well-equipped to continue to exist in the future. Many naturally rare species exhibit traits that allow them to persist for long periods within small geographic areas, despite their small population size. Consequently, the fact that a species is rare does not necessarily indicate that it may be endangered or threatened. Rarity alone, in the absence of other stressors, is not a threat. Despite the species' unique habitat characteristics and limited range, its current population numbers and preliminary demographic analyses show that its known population (via information at monitored sites) is much larger than in 1990, when the first surveys were conducted, and will likely be sustained due to the species' resiliency and the absence of significant stressors. Additionally, as noted under Factor B, above, seeds have been collected for long-term seed storage at Red Butte Gardens and Arboretum in Salt Lake City, Utah, and the National Center for Genetic Resources Preservation in Fort Collins, Colorado (Dodge 2009, p. 4). This collection provides added security for the species.
In our October 20, 1999, final listing rule (64 FR 56590), stochastic events—particularly fire, drought, and disease—were considered a threat because of the species' small population size and highly restricted range. Because rare species may be vulnerable to single event occurrences, it is important to have information on how likely it is such an event may occur and how it may affect the species. Demographic stochasticity—random events in survival and reproductive success—and genetic stochasticity—from inbreeding and changes in gene frequency—are not significant threats based on limited abundance trends and the known population size of Deseret milkvetch (Stone 1992, pp. 8-10).
Environmental stochasticity—such as fire, drought, and disease—may also be a threat to the species (Stone 1992, p. 10). However, we have concluded that fire is unlikely in the open, a sparsely wooded habitat that the species favors (72 FR 3379, January 25, 2007; U.S. Fish and Wildlife 2011, p. 21). As explained above under “Climate Change” in the Factor A discussion, the species appears to be drought tolerant, showing an ability to rebound the following drought and recolonize disturbed areas in progressively dry climates. Lastly, as noted above in the Factor C discussion, there is no evidence of disease or insect pests affecting Deseret milkvetch. Since listing in 1999, survey data have shown that the species' known range is somewhat larger and its population numbers are much higher than previously thought, thus indicating tolerance to stochastic events. These increases are likely due to a combination of expanded surveys and increases in population.
Given the lack of threats within the Deseret milkvetch population and the robust population size, we conclude that rarity and stochastic events are not threats to the species.
Many of the stressors discussed in this analysis could work in concert with each other and result in a cumulative adverse effect to Deseret milkvetch,
However, most of the potential stressors we identified either have not occurred to the extent originally anticipated at the time of listing in 1999 or are adequately managed as described in this final rule. Furthermore, those stressors that are evident, such as drought and rarity, appear well-tolerated by the species. In addition, we do not anticipate stressors to increase on UDWR lands that afford protections to the species on 67 percent of occupied habitat for the reasons discussed earlier in this rule. Furthermore, the increases documented in the abundance and distribution of the species since it was listed in 1999 do not support a conclusion that cumulative activities threaten the species.
In the proposed rule published in the
In accordance with our peer review policy published on July 1, 1994 (59 FR 34270) and updated guidance issued on August 22, 2016 (USFWS 2016, entire), we solicited expert opinion from three knowledgeable individuals with scientific expertise that included familiarity with Deseret milkvetch, its habitat, its biological needs and potential threats, or principles of conservation biology. We received responses from all of the peer reviewers.
We reviewed all comments we received from the peer reviewers for substantive issues and new information regarding the proposed delisting of Deseret milkvetch. The peer reviewers provided additional information, clarifications, and suggestions to improve the final rule. We included their information in this final rule. Two peer reviewers were supportive of the delisting action. The third provided only minor technical comments and editorial suggestions on the rule and did
We received 15 letters from the public (as well as one from a peer reviewer) that provided comments on the proposed rule. Of these, six commenters stated their support for the delisting of Deseret milkvetch, and six commenters believed that it does not warrant delisting. We also received three comments that were not directly related to the proposed action in any way and are not addressed below.
Relevant public comments are addressed in the following summary, and new information was incorporated into the final rule as appropriate.
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Section 4 of the Act (16 U.S.C. 1533), and its implementing regulations at 50 CFR part 424, set forth the procedures for determining whether a species meets the definition of “endangered species” or “threatened species.” The Act defines an endangered species as any species that is “in danger of extinction throughout all or a significant portion of its range” and a threatened species as any species “that is likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range.” The Act
(A) The present or threatened destruction, modification, or curtailment of its habitat or range;
(B) Overutilization for commercial, recreational, scientific, or educational purposes;
(C) Disease or predation;
(D) The inadequacy of existing regulatory mechanisms; or
(E) Other natural or manmade factors affecting its continued existence.
The same factors apply whether we are analyzing the species' status throughout all of its range or a significant portion of its range.
We conducted a review of the status of Deseret milkvetch and assessed the five factors to evaluate whether Deseret milkvetch is in danger of extinction, or likely to become so in the foreseeable future, throughout all of its range. We also consulted with species experts and land management staff with UDWR and UDOT who are actively managing for the conservation of the species. We carefully assessed the best scientific and commercial information available regarding the past, present, and future threats to the species. We considered all of the stressors identified at the time of listing (1999) as well as newly identified potential stressors such as mineral development, transmission lines, and climate change. As previously described, the stressors considered in our five-factor analysis fall into one or more of the following categories:
• Stressors including residential development, highway widening, and livestock grazing and trampling have not occurred to the extent anticipated at the time of listing, and existing information indicates that the extent of the impact will not change in the future.
• Stressors including highway maintenance, livestock grazing, transmission lines, and mineral development are adequately managed through the Conservation Agreement.
• The species is tolerant of stressors including climate change, rarity, stochastic events, and cumulative effects, and existing information indicates that this tolerance will not change in the future.
These conclusions are supported by the available information regarding species abundance, distribution, and trends, and are in agreement with information presented in our advance notice of proposed rulemaking (72 FR 3379; January 25, 2007), in our 5-year review (U.S. Fish and Wildlife Service 2011), and in our proposed delisting rule (82 FR 45779; October 2, 2017). Thus, after assessing the best available information, we conclude that Deseret milkvetch is not in danger of extinction throughout all of its range, nor is it likely to become so in the foreseeable future.
Because we determined that Deseret milkvetch is not in danger of extinction or likely to become so in the foreseeable future throughout all of its range, we will consider whether the Deseret milkvetch is in danger of extinction or likely to become so in the foreseeable future within any significant portions of its range.
Under the Act and our implementing regulations, a species may warrant listing if it is in danger of extinction or likely to become so in the foreseeable future throughout all or a significant portion of its range. The Act defines “endangered species” as any species which is “in danger of extinction throughout all or a significant portion of its range,” and “threatened species” as any species which is “likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range.” The term “species” includes “any subspecies of fish or wildlife or plants, and any distinct population segment [DPS] of any species of vertebrate fish or wildlife which interbreeds when mature.” We published a final policy interpreting the phrase “significant portion of its range” (SPR) (79 FR 37578; July 1, 2014). The final policy states that: (1) If a species is found to be an in danger of extinction or likely to become so in the foreseeable future throughout a significant portion of its range, the entire species is listed as an endangered species or a threatened species, respectively, and the Act's protections apply to all individuals of the species wherever found; (2) a portion of the range of a species is “significant” if the species is not currently in danger of extinction or likely to become so in the foreseeable future throughout all of its range, but the portion's contribution to the viability of the species is so important that, without the members in that portion, the species would be in danger of extinction, or likely to become so in the foreseeable future, throughout all of its range; (3) the range of a species is considered to be the general geographical area within which that species can be found at the time the Service or the National Marine Fisheries Service makes any particular status determination; and (4) if a vertebrate species is in danger of extinction or likely to become so in the foreseeable future throughout an SPR, and the population in that significant portion is a valid DPS, we will list the DPS rather than the entire taxonomic species or subspecies.
The SPR policy is applied to all status determinations, including analyses for the purposes of making the listing, delisting, and reclassification determinations. However, we acknowledge the recent adverse ruling by the United States District Court for the Northern District of California, which has vacated the “significant portion” part of the Services' SPR Policy (
When we conduct an SPR analysis, we first identify any portions of the species' range that warrant further consideration. The range of a species can theoretically be divided into portions in an infinite number of ways. However, there is no purpose in analyzing portions of the range that are not reasonably likely to be significant and either in danger of extinction or likely to become so in the foreseeable future. To identify only those portions that warrant further consideration, we determine whether there is substantial information indicating that (1) the portions may be significant and (2) the species may be in danger of extinction in those portions or likely to become so within the foreseeable future. We emphasize that answering these questions in the affirmative is not a determination that the species is in danger of extinction or likely to become so in the foreseeable future throughout a significant portion of its range—rather, it is a step in determining whether a more detailed analysis of the issue is required. In practice, a key part of this analysis is whether the threats are geographically concentrated in some way. If the threats to the species are
If we identify any portions that may be both (1) significant and (2) in danger of extinction or likely to become so in the foreseeable future, we engage in a more detailed analysis to determine whether both of these standards are indeed met. The identification of an SPR does not create a presumption, prejudgment, or other determination as to whether the species in that identified SPR is in danger of extinction or likely to become so in the foreseeable future. We must go through a separate analysis to determine whether the species is in danger of extinction or likely to become so in the foreseeable future in the SPR. To determine whether a species is in danger of extinction or likely to become so in the foreseeable future throughout an SPR, we will use the same standards and methodology that we use to determine if a species is in danger of extinction or likely to become so in the foreseeable future throughout its range.
Depending on the biology of the species, its range, and the threats it faces, it may be more efficient to address the “significant” question first, or the status question first. Thus, if we determine that a portion of the range is not “significant,” we do not need to determine whether the species is in danger of extinction or likely to become so in the foreseeable future. If we determine that the species is not in danger of extinction or likely to become so in the foreseeable future in a portion of its range, we do not need to determine if that portion is “significant.”
Applying the process described above, to identify whether any portions warrant further consideration for Deseret milkvetch, we determine whether there is substantial information indicating that (1) particular portions may be significant and (2) the species may be in danger of extinction in those portions or likely to become so within the foreseeable future. To identify portions that may be significant, we consider whether any natural divisions within the range might be of biological or conservation importance. To identify portions where the species may be in danger of extinction or likely to become so in the foreseeable future, we consider whether the threats are geographically concentrated in any portion of the species' range.
We evaluated the range of Deseret milkvetch to determine if any area may be a significant portion of the range. Based on the small range of Deseret milkvetch—approximately 345 ac (140 ha) in an area 2.8 mi (4.5 km) by 0.3 mi (0.5 km)—we determined that the species is a single, contiguous population and that no separate areas of the range are significantly different from others or likely to be of greater biological or conservation importance than any other areas due to natural biological reasons alone. Therefore, there is not substantial information that logical, biological divisions exist within the species' range.
After determining no natural biological divisions are delineating separate portions of the Deseret milkvetch population, we next examined whether any threats are geographically concentrated in some way that would indicate the species could be in danger of extinction, or likely to become so, in that area. There is some difference in livestock grazing between State and private lands, with little or no grazing on the 67 percent of habitat occurring on State lands and occasional potential grazing on the remaining private lands. However, steep topography limits grazing everywhere, and no fences are separating State and private lands (U.S. Fish and Wildlife Service 2011, p. 17). We have reviewed other potential threats and conclude that none of them is concentrated in any portion of the species' range to affect the representation, redundancy, or resiliency of the species.
We did not identify any portions of the species' range that are likely to be both significant and in danger of extinction or likely to become so in the foreseeable future. Therefore, no portion warrant further consideration to determine whether the species is in danger of extinction or likely to become so in the foreseeable future in a significant portion of its range. We conclude that the species is, therefore, not an endangered species or threatened species based on its status in a significant portion of its range.
We have carefully assessed the best scientific and commercial information available regarding the past, present, and future threats to Deseret milkvetch. After review and analysis of the information regarding stressors as related to the five statutory factors, we find that the ongoing stressors are not of sufficient imminence, intensity, or magnitude to indicate that this species is presently in danger of extinction throughout all or a significant portion of its range. Additionally, no threats exist currently, nor are any potential stressors expected to rise to the level that would likely cause the species to become in danger of extinction in the foreseeable future, throughout all or a significant portion of the species' range. Because the species is not in danger of extinction now or the foreseeable future throughout all of its range or any significant portion of its range, it does not meet the definition of an endangered species or threatened species. Therefore we find that Deseret milkvetch no longer requires the protection of the Act, and we are removing the species from the List of Endangered and Threatened Plants.
This final rule revises 50 CFR 17.12(h) by removing Deseret milkvetch from the Federal List of Endangered and Threatened Plants. The prohibitions and conservation measures provided by the Act, particularly through sections 7 and 9, no longer apply to this species. Federal agencies will no longer be required to consult with the Service under section 7 of the Act in the event that activities they authorize, fund, or carry out may affect Deseret milkvetch. There is no critical habitat designated for this species; therefore, this rule does not affect 50 CFR 17.96.
Section 4(g)(1) of the Act requires us, in cooperation with the States, to implement a monitoring program for not less than five years for all species that have been delisted due to recovery. The purpose of this requirement is to verify that a species remains secure from risk of extinction after it has been removed from the protection of the Act. The monitoring is designed to detect the failure of any delisted species to sustain itself without the protective measures provided by the Act. If at any time during the monitoring period, data indicate that protective status under the Act should be reinstated, we can initiate listing procedures, including, if appropriate, emergency listing under section 4(b)(7) of the Act. Section 4(g) of the Act explicitly requires us to cooperate with the States in development and implementation of post-delisting monitoring programs, but we remain responsible for compliance with section 4(g) of the Act and, therefore, must remain actively engaged in all phases of post-delisting monitoring. We also seek active participation of other entities that are
We are delisting Deseret milkvetch based on new information we have received as well as recovery actions taken. Since delisting will be due in part to recovery, we have prepared the post-delisting monitoring (PDM) plan for Deseret milkvetch. The PDM plan was prepared in coordination with the Utah Department of Natural Resources (UDNR) and UDWR. Monitoring will be a joint effort between UDNR and the Service. The PDM plan discusses the current status of the species and describes the methods proposed for monitoring if the species is removed from the Federal List of Endangered and Threatened Plants. Monitoring will occur annually for at least five years, beginning in 2019. At the end of 5 years, the species' population status will be evaluated, with three possible outcomes: (1) If the population is stable or increasing with no new or increasing stressors, PDM will conclude; (2) if the population is decreasing, but may be correlated with precipitation levels and remains above 20,000 plants on the WMA, PDM will be extended for an additional 3 to 5 years and then the population status will be reevaluated; or (3) if the population is decreasing without correlation to precipitation levels, and fewer than 20,000 plants exist on the WMA, a formal status review will be initiated.
A final PDM plan is available (see
We have determined that we do not need to prepare an environmental assessment or environmental impact statement, as defined under the authority of the National Environmental Policy Act of 1969 (42 U.S.C. 4321
In accordance with the President's memorandum of April 29, 1994, Government-to-Government Relations with Native American Tribal Governments (59 FR 22951), E.O. 13175, and the Department of the Interior's manual at 512 DM 2, we readily acknowledge our responsibility to communicate meaningfully with recognized Federal Tribes on a government-to-government basis. In accordance with Secretarial Order 3206 of June 5, 1997 (American Indian Tribal Rights, Federal-Tribal Trust Responsibilities, and the Endangered Species Act), we readily acknowledge our responsibilities to work directly with Tribes in developing programs for healthy ecosystems, to acknowledge that tribal lands are not subject to the same controls as Federal public lands, to remain sensitive to Indian culture, and to make information available to Tribes. We have determined that no Tribes will be affected by this rule because no tribal lands are within or adjacent to Deseret milkvetch habitat.
A complete list of all references cited in this final rule is available at
The primary authors of this final rule are staff members of the Service's Mountain-Prairie Region and the Utah Ecological Services Field Office.
Endangered and threatened species, Exports, Imports, Reporting and recordkeeping requirements, Transportation.
Accordingly, we amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as set forth below:
16 U.S.C. 1361-1407; 1531-1544; and 4201-4245, unless otherwise noted.
Environmental Protection Agency (EPA).
Notice of filing of petitions and request for comment.
This document announces the Agency's receipt of several initial filings of pesticide petitions requesting the establishment or modification of regulations for residues of pesticide chemicals in or on various commodities.
Comments must be received on or before November 19, 2018.
Submit your comments, identified by the docket identification (ID) number and the pesticide petition number (PP) of interest as shown in the body of this document, by one of the following methods:
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Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
Michael Goodis, Registration Division (7505P), main telephone number: (703) 305-7090, email address:
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under
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EPA is announcing its receipt of several pesticide petitions filed under section 408 of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a, requesting the establishment or modification of regulations in 40 CFR part 180 for residues of pesticide chemicals in or on various food commodities. The Agency is taking public comment on the requests before responding to the petitioners. EPA is not proposing any particular action at this time. EPA has determined that the pesticide petitions described in this document contain the data or information prescribed in FFDCA section 408(d)(2), 21 U.S.C. 346a(d)(2); however, EPA has not fully evaluated the sufficiency of the submitted data at this time or whether the data support granting of the pesticide petitions. After considering the public comments, EPA intends to evaluate whether and what action may be warranted. Additional data may be needed before EPA can make a final determination on these pesticide petitions.
Pursuant to 40 CFR 180.7(f), a summary of each of the petitions that are the subject of this document, prepared by the petitioner, is included
As specified in FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), EPA is publishing notice of the petitions so that the public has an opportunity to comment on these requests for the establishment or modification of regulations for residues of pesticides in or on food commodities. Further information on the petitions may be obtained through the petition summaries referenced in this unit.
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Centers for Medicare & Medicaid Services (CMS), HHS.
Proposed rule.
This proposed rule would revise the Federal Health Insurance Programs for the Aged and Disabled by amending the Medicare Parts A, B, C and D programs, as well as the Medicaid program, to require direct-to-consumer (DTC) television advertisements of prescription drugs and biological products for which payment is available through or under Medicare or Medicaid to include the Wholesale Acquisition Cost (WAC, or “list price”) of that drug or biological product. We are proposing this regulation to improve the efficient administration of the Medicare and Medicaid programs by ensuring that beneficiaries are provided with relevant information about the costs of prescription drugs and biological products so they can make informed decisions that minimize not only their out-of-pocket costs, but also expenditures borne by Medicare and Medicaid, both of which are significant problems.
To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on December 17, 2018.
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Cheri Rice, (410) 786-6499.
The purpose of this proposed rule is to reduce the price to consumers of prescription drugs and biological products. This rule would require direct-to-consumer (DTC) television advertisements for prescription drug and biological products for which reimbursement is available, directly or indirectly, through or under Medicare or Medicaid to include the list price of that product. We are proposing this regulation to improve the efficient administration of the Medicare and Medicaid programs by ensuring that beneficiaries are provided with relevant information about the costs of prescription drugs and biological products so they can make informed decisions that minimize not only their out-of-pocket costs, but also unreasonable expenditures borne by Medicare and Medicaid, both of which are significant problems.
Markets operate more efficiently when consumers have relevant information about a product, including its price, as well as alternative products and their prices, before making an informed decision whether to buy that product or, instead, a competing one. Consumers price shop when looking to purchase a new car, a new house, or even a new coffee maker. Price shopping is the mark of rational
That has not been the case with prescription drugs or biological products, where consumers often need to make decisions without information about a product's price. Price transparency is a necessary element of an efficient market that allows consumers to make informed decisions when presented with relevant information, but for consumers of prescription drugs, including those whose drugs are covered through Medicare or Medicaid, both the list price and actual price to the consumer remain hard to find. Third-party payment, a dominant feature of health care markets, is not a prominent feature of other markets and causes distortions, such as an absence of meaningful prices and the information and incentives that prices provide. In many cases prescription drug coverage is provided by an employer to its employees, or by the federal government to Medicare and Medicaid beneficiaries. These entities providing prescription drug coverage are known as payors.
List price plays a role in negotiations between payors, Pharmacy Benefit Managers (PBMs), and manufacturers, which all impact beneficiary cost sharing. Payors hire third party providers such as PBMs to manage the payor's prescription drug benefit for the payor's employees and negotiate improved drug pricing for medications based on the level of utilization management a payor is willing to apply to the benefit. Prescription drug benefit designs are typically based on the manufacturer's list price, however, in many cases the PBM can negotiate a lower price than a manufacturer's list price if there is high deductible plans, copay or coinsurance, formulary either tiered or closed, utilization management including step therapy and prior authorizations. The willingness of a payor to apply varying degrees of utilization control impacts savings for each individual payor and beneficiary. A PBM could have ten different clients with ten different benefit designs and it would be possible that an employee from each client could get the exact same product and all ten could pay a different price.
A number of factors make list price relevant across a variety of drug benefit designs, even though the PBM may have negotiated a lower price for the product dispensed to the beneficiary. First, in the commercial market, over 40% of beneficiaries are in high deductible plans. Under such plans, beneficiaries pay the full list price of the product until they meet their deductible, which can be thousands of dollars. Second, benefit designs are built off of list price, because the negotiated rebate rate is not paid until months after the product was dispensed. Third, co-insurance has become a standard payor mechanism applicable to high cost drugs, requiring the patient to pay a percentage of the list price. All of the top 10 PDPs use coinsurance rather than fixed dollar copayments for medications on nonpreferred drug tiers, charging 30 percent to 50 percent of each prescription's full price in 2017.
Due at least in part to the market-distorting effects of third-party payors, pharmaceutical manufacturers tend not to compete based on list price, and hence there is little to no market pressure voluntarily to disclose a product's list price. Not only does transparency promote a more competitive environment, but data indicate that it will likely motivate manufacturers to be less willing to raise prices, which have dramatically increased over the past decade.
This proposed rule seeks to fill this informational gap by adding a new subpart L to part 403 to title 42 that would require that for prescription drug and biological products that can be reimbursed directly or indirectly through or under Medicare or Medicaid, DTC ads on television (including broadcast, cable, streaming, and satellite communication) for such products must include the product's current list price, defined as the Wholesale Acquisition Cost.
HHS recognizes that “an administrative agency's power to regulate . . . must always be grounded in a valid grant of authority from Congress.”
HHS has concluded that the proposed rule has a clear nexus to the Social Security Act. In numerous places in the Act, Congress recognized the importance of administering the Medicare and Medicaid programs in a manner that minimizes unreasonable expenditures.
In addition, although Congress has not explicitly provided HHS with authority to compel the disclosure of list prices to the public, Congress has explicitly directed HHS to operate Medicare and Medicaid programs efficiently. Promoting pricing transparency, and thus efficient markets, for drugs funded through those programs falls within the scope of that mandate. Drugs and biological products are covered under the Medicare Part B benefit (authorized by various provisions including sections 1832, 1861(s)(2) of the Social Security Act (the Act)), the Medicare Part D benefit (authorized by section 1860D-1
The Secretary has determined that the proposed regulation is necessary to the efficient administration of the Medicare and Medicaid programs. The Secretary has an obligation to ensure the wise expenditure of federal trust fund dollars, and may promulgate regulations to advance these goals.
The cost of drugs and biological products over the past decade has increased dramatically, and are projected to continue to rise faster than overall health spending, thereby increasing this sector's share of health care spending. The HHS Office of the Assistant Secretary for Planning and Evaluation estimates that prescription drug spending in the United States was about $457 billion in 2015, or 16.7 percent of overall personal health care services. Of that $457 billion, $328 billion (71.9 percent) was for retail drugs and $128 billion (28.1 percent) was for non-retail drugs. Factors underlying the rise in prescription drug spending from 2010 to 2014 can be roughly allocated as follows: 10 percent of that rise was due to population growth; 30 percent to an increase in prescriptions per person; 30 percent to overall, economy-wide inflation; and 30 percent to either changes in the composition of drugs prescribed toward higher price products or price increases for drugs that together drove average price increases in excess of general inflation.
Manufacturers of prescription drugs in competitive classes often offer price concessions in the form of rebates that are paid after the prescription is filled. Manufacturer rebates have grown approximately 10% of gross Part D drug costs in 2008 to 20% of gross Part D drug costs in 2016. The CMS Office of the Actuary projects rebates will exceed 28% of gross Part D drug costs over the next ten years.
Because the list price of a drug does not reflect manufacturer rebates paid to a PBM, insurer, health plan, or government program, obscuring these discounts can shift costs to consumers in commercial health plans and Medicare beneficiaries. Many incentives in the current system reward higher list prices, all participants in the chain of distribution,
Furthermore, consumers who have not met their deductible or are subject to coinsurance, pay based on the pharmacy list price, which is not reduced by the substantial drug manufacturer rebates paid to PBMs and health plans. As a result, the growth in list prices, and the widening gap between list and net prices, markedly increases consumer out-of-pocket spending, particularly for high-cost drugs not subject to negotiation.
The Centers for Medicare & Medicaid Services (CMS) is the single largest drug
For Part D, according to the 2018 Trustees' Report, CMS's costs have grown,
In other words, the per beneficiary cost of drugs through Part D has increased nearly 40% over the past decade, while the consumer price index has increased only 19% during this same period.
Over the period 2013-2016, Medicare Parts D and B, and Medicaid expenditures on a per beneficiary basis increased by 22%, 32%, and 42% respectively. Drug price inflation accounts for some of this growth. Between 2006 and 2015, Part D brand drug prices rose by an average 66% cumulatively.
Price transparency will help improve the efficiency of Medicare and Medicaid programs by reducing wasteful and abusive increases in drug and biological list prices—spiraling drug costs that are then passed on to federal healthcare program beneficiaries and American taxpayers more broadly. First, it will provide manufacturers with an incentive to reduce their list prices by exposing overly costly drugs to public scrutiny. Second, it will provide some consumers with more information to better position them as active and well-informed participants in their health care decision-making. As discussed further below, consumers make a series of critical health care decisions related to their treatment with prescription drugs, and the list price of those drugs may be informative to those decisions. Even where the consumer may be insured, and therefore will be paying substantially less than the list price, the coinsurance borne by some consumers will necessarily increase as the prices negotiated by PBMs increase.
Prescription drugs, by definition, cannot be accessed directly by the consumer; they must be prescribed by a licensed health care practitioner. We know, however, that consumers are responsible for critical choices related to their treatment with prescription drugs. For example, consumers decide whether to make the initial appointment with a physician; whether to ask the physician about a particular drug or drugs; whether to fill a prescription; whether to take the drug; and whether to continue taking it in adherence to the prescribed regimen. Drug manufacturers, therefore, spend billions of dollars annually promoting their prescription drugs directly to consumers through television advertisements and other media. In 2017, over $5.5 billion was spent on prescription drug advertising, including nearly $4.2 billion on television advertising.
DTC advertising appears to directly affect drug utilization.
To have the necessary information in making critical decisions related to prescription drugs, consumers need some idea of the magnitude of the cost of the advertised drug. More informed consumer decision making will impact not only each individual beneficiary's own finances, but also positively affect the shared taxpayer responsibility to fund the Medicare and Medicaid drug benefit programs.
Both Titles XVIII and XIX of the Act reflect the importance of administering the Medicare and Medicaid programs in a manner that minimizes unreasonable expenditures.
As discussed above, DTC advertisements that do not provide pricing information may contribute to rising drug prices and rising premiums. Consumers of pharmaceuticals are currently missing information that consumers of other products can more readily access, namely the list price of the product, which acts as a point of comparison when judging the reasonableness of prices offered for potential substitute products. In an age where price information is ubiquitous, the prices of pharmaceuticals remain shrouded and limited to those who subscribe to expensive drug price reporting services.
Consumers may be able to obtain some pricing information by going on-line to the websites of larger chain pharmacies. However, there are several reasons consumers are not likely to do this. First, while consumers make many critical decisions that bring about the ultimate writing of the prescription—making the appointment, asking the doctor about particular drugs, etc.—the physician, rather than the patient, ultimately controls the writing of the prescription, and the patient may not even know exactly which drug is prescribed. Second, meaningful price shopping is further hindered because the average consumer has no anchor price, such as an MSRP for automobiles, to gauge the reasonableness of the various price quotes.
Arming a beneficiary with basic price information will provide him or her with an anchor price, in other words, a reference comparison to be used when making decisions about therapeutic options. Triggering conversations about a particular drug or biological and its substitutes may lead to conversations not only about price, but also efficacy and side effects, which in turn may cause both the consumer and the prescriber to consider the cost of various alternatives (after taking into account the safety, efficacy, and advisability of each treatment for the particular patient). Ultimately, providing consumers with basic price information may result in the selection of lesser cost alternatives, all else being equal relative to the patient's care. We seek comment on how providing consumers with the list price of a medication may influence interactions with prescribers, the selection of drug products, and the perceived efficacy of the prescribed drug. We also seek comment about how benefit design influences these choices.
Requiring DTC television ads to disclose pricing information to consumers, as proposed in this rule, is consistent with First Amendment jurisprudence. Rules, such as this one, that require certain factual commercial disclosures pass muster under the First Amendment where the disclosure advances a government interest and does not unduly burden speech.
When the government requires accurate disclosures in the marketing of regulated products under appropriate circumstances, it does not infringe on protected First Amendment interests. As the United States Supreme Court recognized in
In this proposed rule, the required disclosure consists of purely factual and uncontroversial information about a firm's own product, namely the list price of the drug or biological product. The required disclosure here advances the government's substantial interest in the efficient administration of both Medicare and Medicaid programs by minimizing unreasonable expenditures. Increased price transparency will help reduce unreasonable expenditures associated with soaring drug costs by providing manufacturers with an incentive to reduce their list prices by exposing overly costly drugs compared to alternatives to public scrutiny, and providing consumers with price information to facilitate more informed health care decisions.
Those whom the suppression of prescription drug price information hits the hardest are the poor, the sick, and particularly the aged. A disproportionate amount of their income tends to be spent on prescription drugs; yet they are the least able to learn, by shopping from pharmacist to pharmacist, where their scarce dollars are best spent. When drug prices vary as strikingly as they do, information as to who is charging what becomes more than a convenience. It could mean the alleviation of physical pain or the enjoyment of basic necessities.
Furthermore, these price disclosures would neither “drown[ ] out the [speaker's] own message” or “effectively rule[ ] out” a mode of communication.
As discussed at length above, we are proposing this regulation to improve the efficient administration of the Medicare and Medicaid programs by ensuring that beneficiaries are provided with relevant information about the costs of prescription drugs and biological products so they can make informed decisions that minimize not only their out-of-pocket costs, but also unreasonable Medicare and Medicaid expenditures, both of which are significant problems.
Keeping these principles in mind, we are proposing to amend subchapter A, part 403 by adding a new subpart L. Proposed § 403.1202 sets forth the requirement that advertisements for certain prescription drug or biological products on television (including broadcast, cable, streaming, and satellite), must contain a statement or statements indicating the Wholesale Acquisition Cost (referred to as the “list price”) for a typical 30-day regimen or for a typical course of treatment, whichever is most appropriate, as determined on the first day of the quarter during which the advertisement is being aired or otherwise broadcast, as follows: “The list price for a [30-day supply of ] [typical course of treatment with] [name of prescription drug or biological product] is [insert list price]. If you have health insurance that covers drugs, your cost may be different.” Manufacturers set the Wholesale Acquisition Cost, also known as list price, for their products. The Department recognizes that other prices may be paid by distributors, pharmacies, patients, and others in the supply chain. Because these other prices vary by contracts established by payors or others, only the Wholesale Acquisition Cost is certain to be known by the manufacturer when creating DTC ads.
The price stated in the advertisement must be current as of the date of publication or broadcast. This provision would specify that where the price is related to the “typical course of treatment,” and the course of treatment varies depending on the indication for which the drug is prescribed, the list price used should be the one for the “course of treatment” associated with the primary indication addressed in the advertisement. To the extent permissible under current laws, manufacturers would be permitted to include an up-to-date competitor product's list price, so long as they do so in a truthful, non-misleading way. In § 403.1200(b) we are proposing an exception to the requirement at proposed § 403.1202(a) to provide that an advertisement for any prescription drug or biological product and that has a list price, as defined herein, of less than $35 per month for a 30-day supply or typical course of treatment will be exempt from these transparency requirements.
We are also proposing that § 403.1200 set forth the scope of applicability to specify that this requirement will apply to any advertisement for a prescription drug or biological product distributed in the United States, for which payment is available, directly or indirectly, under titles XVIII or XIX of the Social Security Act.
We are further proposing in § 403.1203 that the required price disclosure set forth in proposed § 403.1202 be conveyed in a legible textual statement at the end of the advertisement, meaning that it is placed appropriately and is presented against a contrasting background for sufficient duration and in a size and style of font that allows the information to be read easily. We seek comment on whether the final rule should include more specific requirements with respect to the textual statement, such as specific text size, contrast requirements, and/or duration and specifically what those requirements should be.
We are proposing in § 403.1204(a) that the Secretary shall maintain a public list that will include the drugs and biological products identified by the Secretary to be advertised in violation of this rule. We expect that this information will be posted publicly on a CMS internet website no less than annually. No other HHS-specific enforcement mechanism is proposed in this rule. However, we anticipate that the primary enforcement mechanism will be the threat of private actions under the Lanham Act Section 43(a), 15 U.S.C. 1125(a), for unfair competition in the form of false or misleading advertising.
Under principles of implied preemption, to the extent State law makes compliance with both Federal law and State law impossible or would frustrate Federal purposes and objectives, the State requirement would be preempted.
Because this proposed rule is part of a broader initiative to reduce the price to consumers of prescription drugs and biological products, it would be counterproductive if this rule were to increase transactional costs in defending meritless litigation. We believe that the existing authority cited above, namely the Lanham Act, is the appropriate mechanism for enforcing against deceptive trade practices. Accordingly, consistent with our not including any HHS-specific enforcement mechanism in this proposal, we are proposing at § 403.1204(b) that this rule preempt any state-law-based claim which depends in whole or in part on any pricing statement required by this rule.
In publishing this proposed rule, we are seeking comment on the specifics of the proposal. In particular, we seek comment on whether Wholesale Acquisition Cost is the amount that best reflects the “list price” for the stated purposes of price transparency and comparison shopping under this proposed regulation. We also seek comment on whether 30-day supply and typical course of treatment are
We also seek comment as to whether the cost threshold of $35 to be exempt from compliance with this rule is the appropriate level and metric for such an exemption. This threshold was selected because it approximates the average copayment for a preferred brand drug. Given that the public is already accustomed to pay roughly this amount for drugs—and thus, in the absence of new information, may presume that patients will pay this amount for a drug—the public's interest in being informed of prices that are equal to or less than this amount is less strong than for prices in excess of this amount. We also considered incorporating a range for exempted drugs defined as less than $20 per month for a chronic condition or less than $50 for a course of treatment for an acute condition. In particular, we considered whether “chronic condition” and “acute condition” are sufficiently distinguishable to accomplish the stated regulatory purpose. These prices are also well below the lowest list price of advertised drugs. We seek comment on alternative approaches to determining a cost threshold, whether or not the threshold should be updated periodically, and if so, how the threshold should be updated.
We also seek comment on the content of the proposed pricing information statement as described herein, including whether other specifications should be incorporated. For example, we seek comment as to whether a statement expressing an expiration date of the current price reflected in the advertisement should be incorporated into the required disclosure language so that consumers are informed that drug prices are subject to frequent changes and a drug price may differ from the date the advertisement is broadcast to the date that the drug is dispensed.
We considered whether this regulation should apply to advertisements that are in other media forums such as radio, magazines, newspapers, internet websites and other forms of social media, but concluded that the purpose of this regulation is best served by limiting the requirements to only those identified herein. We seek comment as to whether we should apply this regulation to other media formats and, if so, what the presentation requirements should be.
We further seek comment as to whether compliance with this rule should be a condition of payment, directly or indirectly, from these federal health programs.
We are also considering additional solutions to provide beneficiaries with relevant information about the costs of prescription drugs and biological products so they can make informed decisions that minimize not only their out-of-pocket costs but also expenditures borne by Medicare and Medicaid. We seek comment on whether the following approaches could support price transparency and informed decision making, either in addition to or in lieu of the measures proposed in this notice of proposed rulemaking: (1) Kan enhanced CMS drug pricing dashboard, (2) a new payment code for drug pricing counseling, and (3) intelligent plan selection or use of intelligent assignment. We are also interested in other approaches to price transparency and informed decision making that we have not contemplated.
CMS has released several information products that provide greater transparency on spending for drugs in the Medicare and Medicaid programs. The CMS Drug Spending Dashboards are interactive, web-based tools that provide spending information for drugs in the Medicare Part B and D programs as well as Medicaid. The Dashboards focus on average spending per dosage unit and change in average spending per dosage unit over time. The tools also include additional manufacturer-level drug spending information as well as consumer-friendly descriptions of the drug uses and clinical indications. We seek comment on whether manufacturers or others submitting additional information such as list price, typical out-of-pocket cost, therapeutic alternatives, pharmacoeconomic research, and other data could be helpful for consumers and what information would be most useful. We are also interested in feedback about the ease of which CMS dashboard data could be used by a non-government entity creating and maintaining such a price transparency resource for consumers and others. Additionally, CMS could announce updated information when a new DTC ad campaign is launched and public service announcements could be made to draw attention to the dashboard.
In an effort to incentivize provider engagement with patients on their prescription drug out-of-pocket costs, CMS could create a new payment code, in a budget neutral manner, for doctors to dialogue with patients on the benefits of drugs and drug alternatives. This would likely decrease the number of prescriptions that go unfilled because of unexpected high out-of-pocket costs, thus improving adherence, but also could increase provider awareness of drug pricing which may influence prescribing when appropriate cheaper options are available.
Through intelligent plan selection or use of intelligent assignment, beneficiaries could be provided with an auto-generated list of plans each year, based upon their most recent drug utilization, that would highlight opportunities for savings though competitor plans or alternative drugs (
Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
• The need for the information collection and its usefulness in carrying out the proper functions of our agency.
• The accuracy of our estimate of the information collection burden.
• The quality, utility, and clarity of the information to be collected.
• Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.
To derive average costs, we used data from the U.S. Bureau of Labor Statistics' (BLS') May 2016 National Occupational Employment and Wage Estimates for all salary estimates (
As indicated, we are adjusting our employee hourly wage estimates by a factor of 100 percent. This is necessarily a rough adjustment, both because fringe benefits and overhead costs vary significantly from employer to employer, and because methods of estimating these costs vary widely from study to study. Nonetheless, there is no practical alternative and we believe that doubling the hourly wage to estimate total cost is a reasonably accurate estimation method.
Proposed § 403.1202 would require that advertisements for certain prescription drug or biological products on television (including broadcast, cable, streaming, and satellite), contain a statement or statements indicating the Wholesale Acquisition Cost (referred to as the “list price”) for a typical 30-day regimen or for a typical course of treatment, whichever is most appropriate, as determined on the first day of the quarter during which the advertisement is being aired or otherwise broadcast. The presentation of this information must appear in a specific format. As stated earlier in Section II of this notice of proposed rulemaking, the notification must be presented as follows, “The list price for a [30-day supply of ] [typical course of treatment with] [name of prescription drug or biological product] is [insert list price]. If you have health insurance that covers drugs, your cost may be different.”
We estimate that 25 pharmaceutical companies will run an estimated 300 distinct pharmaceutical ads that appear on television each quarter and will be affected by this rule. For these ads, we estimate that administrative support staff and marketing managers will need to verify the prescribed language and that the correct price appears in each advertisement each quarter. We estimate that this will require 10 minutes and $24.08 ($34.48/hr × .66) per advertisement for administrative support staff. We also estimate 5 minutes and $41.96 ($127.14/hr × .33) per advertisement for marketing managers, for a total of 15 minutes (0.25 hours) and $66.04 ($24.08 + $41.96) per advertisement per quarter or 300 hours per year across all pharmaceutical companies running affected televised advertisements ((300 ads/quarter) × (4 quarters/year) × (.25 hours/ad). As a result, using wage information provided in Table 1, we estimate costs of $19,812 (300 ads × $66.04/ad) per quarter or $79,248 in each year following publication of the final rule after adjusting for overhead and benefits.
We have submitted a copy of this proposed rule to OMB for its review of the rule's information collection and recordkeeping requirements. These requirements are not effective until they have been approved by the OMB.
To obtain copies of the supporting statement and any related forms for the proposed collections discussed above, please visit CMS' website at website address at
We invite public comments on these potential information collection requirements. If you wish to comment, please submit your comments electronically as specified in the
See the
Because of the large number of public comments we normally receive on
This proposed rule aims to improve the quality, accessibility and affordability of the Medicare Part C and Part D programs and to improve the CMS customer experience by providing transparency into drug prices with the goal of reducing the price to beneficiaries of certain prescription drugs and biological products. Currently, consumers have incomplete information regarding the cost of pharmaceutical products. As a result, they lack important information needed to inform their decisions, which likely leads to inefficient utilization of prescription drugs. This proposal will require disclosure of prescription drug prices to the general public for products advertised on television. This may improve awareness and allow the general public to respond, potentially increasing the efficiency of prescription drug utilization.
We acknowledge that examination of the impact of this proposed rule is required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the (RFA) (September 19, 1980, Pub. L. 96-354), Section 1102(b) of the Social Security Act, Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) (March 22, 1995; Pub. L., Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999), the Congressional Review Act (5 U.S.C. 804(2)), and Executive Order 13771 on Reducing Regulation and Controlling Regulatory Costs (January 30, 2017).
The Regulatory Flexibility Analysis (RFA), as amended, requires agencies to analyze options for regulatory relief of small businesses, if a rule has a significant impact on a substantial number of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions.
In addition, section 1102(b) of the Act requires us to prepare a regulatory analysis for any rule or regulation proposed under Title XVIII, Title XIX,
Section 202 of UMRA also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending that may result in expenditures in any one year of $100 million in 1995 dollars, updated annually for inflation. In 2018, that threshold is approximately $150 million. This proposed rule is not anticipated to have an effect only on State, local, or tribal governments, in the aggregate, of $150 million or more, adjusted for inflation. We believe that the proposed rule would impose mandates on the private sector that would result in an expenditure of $150 million in at least one year.
Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirements or costs on state and local governments, preempts state law, or otherwise has Federalism implications. Since reviewing this rule does not impose any substantial costs on state or local governments, under the requirements threshold criteria of Executive Order 13132 are not applicable, we have determined that this proposed rule would not significantly affect the rights, roles, and responsibilities of State or local governments.
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). The Office of Management and Budget has determined that this is an economically significant regulatory action. In accordance with the provisions of Executive Order 12866, this rule was reviewed by the Office of Management and Budget.
Executive Order 13771 (January 30, 2017) requires that the costs associated with significant new regulations “to the extent permitted by law, be offset by the elimination of existing costs associated with at least two prior regulations.” The Department believes that this proposed rule is a significant regulatory action as defined by Executive Order 12866 which imposes costs, and therefore is considered a regulatory action under Executive Order 13771.
This proposed rule would affect the operations of prescription drug manufacturers. According to the U.S. Census, there were 1,775 pharmaceutical and medicine manufacturing firms operating in the U.S. in 2015.
In order to comply with the regulatory changes proposed in this proposed rule, affected businesses would first need to review the rule. We estimate that this would require an average of 2 hours for affected businesses to review, divided evenly between marketing managers and lawyers, in the first year following publication of the final rule. As a result, using wage information provided in Table 1, this implies costs of $0.47 million in the first year following publication of a final rule after adjusting for overhead and benefits.
After reviewing the rule, prescription drug manufacturers will review their marketing strategies in the context of these new requirements, and determine how to respond. For some affected entities, this may mean substantially changing their advertising paradigm or pricing strategy. For others, much more modest changes are likely needed. We estimate that this would result in affected businesses spending an average of 20 hours reviewing their policies and determining how to respond, with 5 hours spent by lawyers and 15 hours spent by marketing managers, in the first year following publication of the final rule. In subsequent years, we estimate this would result in marketing managers at affected businesses spending an average of 10 hours implementing policy changes. As a result, using wage information provided in Table 1, we estimate costs of $4.74 million in the first year and $2.36 million in subsequent years following publication of the final rule after adjusting for overhead and benefits.
We estimate that 25 pharmaceutical companies will run an estimated 300 distinct pharmaceutical ads that appear on television each quarter and will be affected by this rule. For these ads, we estimate that administrative support staff and marketing managers will need to verify the prescribed language and that the correct price appears in each advertisement each quarter. We estimate that this will require 10 minutes and $24.08 ($34.48/hr × .66) per advertisement for administrative support staff. We also estimate 5 minutes and $41.96 ($127.14/hr × .33) per advertisement for marketing managers, for a total of 15 minutes (0.25 hours) and $66.04 ($24.08 + $41.96) per advertisement per quarter or 300 hours per year across all pharmaceutical companies running affected televised advertisements ((300 ads/quarter) × (4 quarters/year) × (.25 hours/ad). As a result, using wage information provided in Table 1, we estimate costs of $19,812 (300 ads × $66.04/ad) per quarter or $79,248 in each year following publication of the final rule after adjusting for overhead and benefits.
In markets for prescription drugs and biological products, consumers often need to make decisions with incomplete information about prices. As a result, consumers are unable to market decisions that best suit their needs. This rule may improve price transparency for consumers in order to ensure that their decisions better align with their preferences and their budget, potentially improving the allocation of resources in the prescription drug market. On the other hand, consumers, intimidated and confused by high list prices, may be deterred from contacting their physicians about drugs or medical conditions. Consumers might believe they are being asked to pay the list price rather than a co-pay or co-insurance and wonder why they are paying so much when they already paid a premium for their drug plan. This could discourage patients from using beneficial medications, reduce access, and
In addition, we believe that this rule may provide a moderating force to counteract prescription drug increases. This rule will provide direct evidence of prescription drug prices to the general public, potentially improving awareness and allowing the general public to signal in some cases that prescription drug prices have risen beyond their willingness to pay. We believe that this, in turn, may further improve the rule's effect on the efficient utilization of prescription drugs. We lack data to quantify these effects, and seek public comment on these impacts.
We believe that this rule may also have impacts along other dimensions. In particular, it may affect the number of televised DTC advertisements, the rate at which televised DTC advertisements are updated, prices for prescription drugs, the set of pharmaceutical products available for sale, and utilization of various prescription drugs. A possibility not reflected in the quantitative estimates above is that, with this proposed rule, drug companies would find the cost of revising their ads to be prohibitively expensive (for example, if they change their WACs so frequently that there is extensive monitoring and revision necessary to ensure that ads airing on a particular day match the WAC for that day). In this case, TV drug advertising would be reduced. However, we think this is unlikely as prices are usually changed on a twice-a-year cycle, and manufacturers may already frequently revise their ads to align with quarterly marketing plans. We therefore request comment on the following questions:
• What is the frequency with which WACs are changed?
• What would be the effect of this potential advertising reduction on patient behavior, including as regards the information they seek out from their medical providers?
• How might patient outcomes vary depending on advertising choices among competitor drug companies? For example, if only some producers of drugs that treat a particular condition cease advertising on television, are patients likely to switch between drug brands—from the no-longer-advertised to the advertised? If all producers of drugs for a condition cease advertising on television, to what extent are patients likely to switch to other forms of treatment—such as surgery—or to forgo treatment?
• To what extent will drug companies, in order to increase the feasibility of continuing to advertise on television, reduce the frequency of changing their WACs? What would be the consequences for drug supply chains and the prices experienced by patients and other payers?
Furthermore, the Department recognizes that some studies indicate direct-to-consumer advertising increases disease awareness, and that if this rule decreases disease awareness such that untreated illness occurs, there may be other impacts. We lack data to quantify the effects of this rule along these dimensions, and we seek public comment on these impacts. In addition, we acknowledge that we may not have considered all areas in which the rule may have effects, and we seek public comment on impacts of the rule in areas we have not discussed here.
As discussed above, the RFA requires agencies that issue a regulation to analyze options for regulatory relief of small entities if a proposed rule has a significant impact on a substantial number of small entities. HHS considers a rule to have a significant economic impact on a substantial number of small entities if at least 5 percent of small entities experience an impact of more than 3 percent of revenue. As discussed below, we calculate the costs of the proposed changes per affected business over 2020-2024. The estimated average costs of the rule per business peak in 2020 at approximately $2,900, and are approximately $1,300 in subsequent years. We note that relatively large entities are likely to experience proportionally higher costs. As discussed below, total costs of the rule are estimated to be $5.2 million in 2020 and $2.4 million in subsequent years. According to the U.S. Census, 1,775 pharmaceutical and medicine manufacturing firms operating in the U.S. in 2015 had annual payroll of $23.2 billion. Since the estimated costs of this proposed rule are a tiny fraction of payroll for covered entities, the Department anticipates that the proposed rule will not have a significant economic impact on a substantial number of small entities. We seek public comment on this determination, and the rule's impact on small entities.
We carefully considered the alternative of maintaining the status quo and not pursuing regulatory action. However, we believe that the price transparency is fundamental to ensuring that prescription drug and biological product markets function properly. This rule may improve price transparency in order for consumers to make better decisions. As a result, we have determined that the benefits of the rule justify the costs imposed on industry, and as a result we chose to pursue this regulatory action.
We also carefully considered requiring the disclosure of alternative or additional prices. If an alternative definition were used for list price, burden imposed by the rule would likely be higher. For example, manufacturers set the Wholesale Acquisition Cost, also known as list price, for their products. The Department recognizes that other prices may be paid by distributors, pharmacies, patients, and others in the supply chain. Because these other prices vary by contracts established by payors or others, only the Wholesale Acquisition Cost is certain to be known by the manufacturer when creating DTC ads. As such, it would be harder for manufacturers to report prices other than Wholesale Acquisition Cost. We believe that requiring the disclosure of WAC minimizes administrative burden among feasible alternatives and balances the need to provide information to the general public. We seek comments on these regulatory alternatives.
Grant programs—health, Health insurance, Hospitals, Intergovernmental relations, Medicare, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services proposes to amend 42 CFR chapter IV as set forth below:
42 U.S.C. 1302, and 1395hh.
(a)
(b)
(a)
(b)
(c)
(d)
Any advertisement for any prescription drug or biological product on television (including broadcast, cable, streaming, or satellite) must contain a textual statement indicating the current list price for a typical 30-day regimen or for a typical course of treatment, whichever is most appropriate, as determined on the first day of quarter during which the advertisement is being aired or otherwise broadcast, as follows: “The list price for a [30-day supply of] [typical course of treatment with] [name of prescription drug or biological product] is [insert list price]. If you have health insurance that covers drugs, your cost may be different.” Where the price is related to the “typical course of treatment” and that course of treatment varies depending on the indication for which a drug is prescribed, the list price to be used is the one for the “course of treatment” associated with the primary indication addressed in the advertisement.
The textual statement described in § 403.1202 shall be presented at the end of an advertisement in a legible manner, meaning that it is placed appropriately and is presented against a contrasting background for sufficient duration and in a size and style of font that allows the information to be read easily.
(a)
(b)
U.S. Codex Office, Department of Agriculture.
Notice of public meeting and request for comments.
The U.S Codex Office is finalizing the U.S. Codex Program's FY-2019-2023 Strategic Plan and is sponsoring a public meeting on November 2, 2018. The objective of the public meeting is to provide briefing information and receive public comments on the Plan's Goals and Objectives. The U.S Manager for Codex Alimentarius and the Under Secretary, Office of Trade and Foreign Agricultural Affairs recognize the importance of providing interested parties the opportunity to provide comments.
The public meeting is scheduled for Friday, November 2, 2018, at 10:00 a.m. to 12:00 p.m.
The public meeting will take place at the United States Department of Agriculture (USDA), Jamie L. Whitten Building, 1400 Independence Avenue SW, Room 107-A, Washington, DC 20250.
Codex was established in 1963 by two United Nations organizations, the Food and Agriculture Organization and the World Health Organization. Through adoption of food standards, codes of practice, and other guidelines developed by its committees, and by promoting their adoption and implementation by governments, Codex seeks to protect the health of consumers and ensure fair practices in the food trade.
The U.S. Codex Program is a U.S. Government interagency partnership that engages stakeholders in advancing science-based international food standards to protect the health of consumers and ensure fair practices in the food trade. The U.S. Codex Office (USCO), housed in USDA's Trade and Foreign Agricultural Affairs mission area, acts as the national focal point for the U.S. Program. USCO manages the planning, support, policy development, and coordination of U.S. involvement in Codex, develops strategies to accomplish U.S. objectives, and serves as secretariat for U.S.-hosted committees.
At the November 2, 2018, public meeting, U.S. Codex Program Goals and Objectives will be discussed, and attendees will have the opportunity to pose questions and offer comments. Written comments may be offered at the public meeting, or submitted after the meeting (by November 6, 2018) to
Public awareness of all segments of rulemaking and policy development is important. Consequently, the U.S. Codex Office will announce this
No agency, officer, or employee of the USDA shall, on the grounds of race, color, national origin, religion, sex, gender identity, sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, or political beliefs, exclude from participation in, deny the benefits of, or subject to discrimination any person in the United States under any program or activity conducted by the USDA.
To file a complaint of discrimination, complete the USDA Program Discrimination Complaint Form, which may be accessed online at
Persons with disabilities who require alternative means for communication (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at (202) 720-2600 (voice and TDD).
Architectural and Transportation Barriers Compliance Board
Notice of meetings.
The Architectural and Transportation Barriers Compliance Board (Access Board) plans to hold its regular committee and Board meetings in Washington, DC,
Monday through Wednesday, November 5-7, 2018 at the times and location listed below.
The schedule of events is as follows:
Meetings will be held at the Access Board Conference Room, 1331 F Street NW, Suite 800, Washington, DC 20004.
For further information regarding the meetings, please contact David Capozzi, Executive Director, (202) 272-0010 (voice); (202) 272-0054 (TTY).
At the Board meeting scheduled on the afternoon of Wednesday, November 7, the Access Board will consider the following agenda items:
Members of the public can provide comments either in-person or over the telephone during the final 15 minutes of the Board meeting on Wednesday, November 7, 2018. Any individual interested in providing comment is asked to pre-register by sending an email to
All meetings are accessible to persons with disabilities. An assistive listening system, Communication Access Realtime Translation (CART), and sign language interpreters will be available at the Board meeting and committee meetings.
Persons attending Board meetings are requested to refrain from using perfume, cologne, and other fragrances for the comfort of other participants (see
You may view the Wednesday, November 7, 2018 meeting through a live webcast from 1:30 p.m. to 3:00 p.m. at:
Economic Development Administration, U.S. Department of Commerce.
Notice and opportunity for public comment.
The Economic Development Administration (EDA) has received petitions for certification of eligibility to apply for Trade Adjustment Assistance from the firms listed below. Accordingly, EDA has initiated investigations to determine whether increased imports into the United States of articles like or directly competitive with those produced by each of the firms contributed importantly to the total or partial separation of the firms' workers, or threat thereof, and to a decrease in sales or production of each petitioning firm.
Any party having a substantial interest in these proceedings may request a public hearing on the matter. A written request for a hearing must be submitted to the Trade Adjustment Assistance Division, Room 71030, Economic Development Administration, U.S. Department of Commerce, Washington, DC 20230, no later than ten (10) calendar days following publication of this notice. These petitions are
Please follow the requirements set forth in EDA's regulations at 13 CFR 315.9 for procedures to request a public hearing. The Catalog of Federal Domestic Assistance official number and title for the program under which these petitions are submitted is 11.313, Trade Adjustment Assistance for Firms.
International Trade Administration, U.S. Department of Commerce.
Second notice of an opportunity for travel and tourism industry leaders to apply for membership on the Board of Directors of the Corporation for Travel Promotion.
The Department of Commerce is again seeking applications from travel and tourism leaders from specific industries for membership on the Board of Directors (Board) of the Corporation for Travel Promotion (doing business as Brand USA). The purpose of the Board is to guide the Corporation for Travel Promotion on matters relating to the promotion of the United States as a travel destination and communication of travel facilitation issues, among other tasks. On July 19, 2018, the Department published in the
Interested parties who have already applied in response to that
All applications must be received by the National Travel and Tourism Office by close of business on Friday, October 26, 2018.
Please submit application information by email to
Julie Heizer, National Travel and Tourism Office, U.S. Department of Commerce, 1401 Constitution Avenue NW, MS10003, Washington, DC 20230; telephone: 202-482-0140; email:
The Travel Promotion Act of 2009 (TPA) was signed into law on March 4, 2010 and was amended in July 2010 and December 2014. The TPA established the Corporation for Travel Promotion (the Corporation), as a non-profit corporation charged with the development and execution of a plan to (A) provide useful information to those interested in traveling to the United States; (B) identify and address perceptions regarding U.S. entry policies; (C) maximize economic and diplomatic benefits of travel to the United States through the use of various promotional tools; (D) ensure that international travel benefits all States and the District of Columbia, and (E) identify opportunities to promote tourism to rural and urban areas equally, including areas not traditionally visited by international travelers.
The Corporation is governed by a Board of Directors, consisting of 11 members with knowledge of international travel promotion or marketing, broadly representing various regions of the United States. The TPA directs the Secretary of Commerce (after consultation with the Secretary of Homeland Security and the Secretary of State) to appoint the Board of Directors for the Corporation.
On July 19, 2018, the Department published in the
At this time, the Department will be selecting four individuals with the appropriate expertise and experience from specific sectors of the travel and tourism industry to serve on the Board as follows:
(A) 1 shall have appropriate expertise and experience in the hotel accommodations sector;
(B) 1 shall have appropriate expertise and experience as an official of a city convention and visitors' bureau;
(C) 1 shall have appropriate expertise and experience in the restaurant sector; and
(D) 1 shall have appropriate expertise and experience as an official of a state tourism office.
To be eligible for Board membership, individuals must have international travel and tourism marketing experience, be a current or former chief executive officer, chief financial officer, or chief marketing officer or have held an equivalent management position. Additional consideration will be given to individuals who have experience working in U.S. multinational entities with marketing budgets, and/or who are audit committee financial experts as defined by the Securities and Exchange Commission (in accordance with 15 U.S.C. 7265). Individuals must be U.S. citizens, and in addition, cannot be federally registered lobbyists or registered as a foreign agent under the Foreign Agents Registration Act of 1938, as amended.
Those selected for the Board must be able to meet the time and effort commitments of the Board.
Board members serve at the discretion of the Secretary of Commerce (who may remove any member of the Board for good cause). The terms of office of each member of the Board appointed by the Secretary shall be three (3) years. Board members can serve a maximum of two consecutive full three-year terms. Board members are not considered Federal government employees by virtue of their service as a member of the Board and will receive no compensation from the Federal government for their participation in Board activities. Members participating in Board meetings and events may be paid actual travel expenses and per diem by the Corporation when away from their usual places of residence.
Individuals who want to be considered for appointment to the Board should submit the following information by the Friday, October 26, 2018 deadline to the address listed in the
1. Name, title, and personal resume of the individual requesting consideration, including address, email address and phone number.
2. A brief statement of why the person should be considered for appointment to the Board. This statement should also address the individual's relevant international travel and tourism marketing experience and audit committee financial expertise, if any, and indicate clearly the sector or sectors
3. An affirmative statement that the applicant is a U.S. citizen and further, is not required to register as a foreign agent under the Foreign Agents Registration Act of 1938, as amended.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) finds that revocation of the antidumping duty (AD) order on large residential washers from the Republic of Korea (Korea) would be likely to lead to continuation or recurrence of dumping at the levels indicated in the “Final Results of Sunset Review” section of this notice.
Applicable October 18, 2018.
David Goldberger, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: 202-482-4136.
On April 26, 2018, Commerce published the
The products covered by the
All issues raised for the final results of this sunset review are addressed in the Issues and Decision Memorandum, dated concurrently with this final notice, which is hereby adopted by this notice. The issues discussed in the Issues and Decision Memorandum include the likelihood of the continuation or recurrence of dumping and the magnitude of the margins of dumping likely to prevail. A list of the issues addressed in the Issues and Decision Memorandum is included in the Appendix to this notice. The Issues and Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at
We determine that revocation of the AD
This notice also serves as the only reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
We are issuing and publishing the final results of this full sunset review, in accordance with sections 751(c)(5)(A), 752(c), and 777(i) of the Tariff Act of 1930, as amended, and 19 CFR 351.218(f)(3).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) determines that certain uncoated paper (uncoated paper) from Brazil is being sold at less than normal value during the period of review (POR), August 27, 2015, through February 28, 2017.
Applicable October 18, 2018.
Jerry Huang, AD/CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-4047.
On April 10, 2018, Commerce published the preliminary results of the antidumping duty administrative review on uncoated paper from Brazil.
The product covered by this review is uncoated paper from Brazil. For a full description of the scope, see the Issues and Decision Memorandum dated concurrently with and hereby adopted by this notice.
All issues raised in the case and rebuttal briefs by parties to this administrative review are addressed in the Issues and Decision Memorandum.
Based on a review of the record and comments received from interested parties, we have recalculated Suzano's weighted-average dumping margin and, based on our findings at verification, we have made certain changes to Suzano's margin calculation. For further discussion,
We determine that the following weighted-average dumping margin exists for the period August 27, 2015 through February 28, 2017.
Commerce shall determine, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries covered by this review. For entries of subject merchandise during the period of review produced by Suzano for which they did not know their merchandise was destined for the United States, we will instruct CBP to liquidate unreviewed entries at the all-others rate if there is no rate for the intermediate company(ies) involved in the transaction. We intend to issue liquidation instructions to CBP 15 days after publication of the final results of this review.
The following cash deposit requirements will be effective upon publication of the notice of final results of this review for all shipments of uncoated paper from Brazil entered, or withdrawn from warehouse, for consumption on or after the date of publication as provided by section 751(a)(2) of the Act: (1) The cash deposit rate for companies subject to this review will be equal to the weighted-average dumping margins established in the final results of the review; (2) for merchandise exported by companies not covered in this review but covered in a prior segment of this proceeding, the cash deposit rate will continue to be the company-specific rate published for the most recent period; (3) if the exporter is not a firm covered in this review or the original investigation but the producer is, the cash deposit rate will be the rate established for the most recently completed segment for the producer of the merchandise; (4) the cash deposit rate for all other producers or exporters will continue to be 27.11 percent, the all-others rate established in the less-than-fair-value investigation.
This notice also serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this POR. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping and/or countervailing duties occurred and the subsequent assessment of doubled antidumping duties.
This notice also serves as a reminder to parties subject to administrative protective orders (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return/destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
Commerce is issuing and publishing these results in accordance with sections 751(a)(1) and 777(i) of the Act and 19 CFR 351.221(b)(5).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Applicable October 11, 2018.
Nancy Decker at (202) 482-0196 or Mark Hoadley at (202) 482-3148, AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230.
On September 21, 2018, the U.S. Department of Commerce (Commerce) received a countervailing duty (CVD) Petition concerning imports of aluminum wire and cable from the People's Republic of China (China), filed in proper form on behalf of Encore Wire Corporation and Southwire Company, LLC (the petitioners), which are domestic producers of aluminum wire and cable.
On September 25 and 26, 2018, Commerce requested supplemental information pertaining to certain aspects of the Petition in two separate supplemental questionnaires, one dealing with general issues with the Petition and the other with issues related to Volume III of the Petition (
In accordance with section 702(b)(1) of the Tariff Act of 1930, as amended (the Act), the petitioners allege that the Government of China (GOC) is providing countervailable subsidies, within the meaning of sections 701 and 771(5) of the Act, to producers of aluminum wire and cable in China and that imports of such products are materially injuring, or threatening material injury to, the domestic industry producing aluminum wire and cable in the United States. Consistent with section 702(b)(1) of the Act and 19 CFR 351.202(b), for those alleged programs on which we are initiating a CVD investigation, the Petition is accompanied by information reasonably available to the petitioners supporting their allegations.
Commerce finds that the petitioners filed the Petition on behalf of the domestic industry because the petitioners are an interested party as defined in section 771(9)(C) of the Act. Commerce also finds that the petitioners demonstrated sufficient industry support necessary for the initiation of the requested CVD investigation.
Because the Petition was filed on September 28, 2018, the period of investigation is January 1, 2017, through December 31, 2017.
The product covered by this investigation is aluminum wire and cable from China. For a full description of the scope of this investigation,
During our review of the Petition, Commerce contacted the petitioners regarding the proposed scope language to ensure that the scope language in the Petition is an accurate reflection of the products for which the domestic industry is seeking relief.
As discussed in the
Commerce requests that any factual information parties consider relevant to the scope of the investigation be submitted during this period. However, if a party subsequently finds that additional factual information pertaining to the scope of the investigation may be relevant, the party may contact Commerce and request
All submissions to Commerce must be filed electronically using Enforcement and Compliance's Antidumping Duty and Countervailing Duty Centralized Electronic Service System (ACCESS).
Pursuant to sections 702(b)(4)(A)(i) and (ii) of the Act, Commerce notified representatives of the GOC of the receipt of the Petition and provided them the opportunity for consultations with respect to the CVD Petition.
Section 702(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 702(c)(4)(A) of the Act provides that a petition meets this requirement if the domestic producers or workers who support the petition account for: (i) At least 25 percent of the total production of the domestic like product; and (ii) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the petition. Moreover, section 702(c)(4)(D) of the Act provides that, if the petition does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, Commerce shall: (i) Poll the industry or rely on other information in order to determine if there is support for the petition, as required by subparagraph (A); or (ii) determine industry support using a statistically valid sampling method to poll the “industry.”
Section 771(4)(A) of the Act defines the “industry” as the producers as a whole of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs Commerce to look to producers and workers who produce the domestic like product. The International Trade Commission (ITC), which is responsible for determining whether “the domestic industry” has been injured, must also determine what constitutes a domestic like product in order to define the industry. While both Commerce and the ITC must apply the same statutory definition regarding the domestic like product,
Section 771(10) of the Act defines the domestic like product as “a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this title.” Thus, the reference point from which the domestic like product analysis begins is “the article subject to an investigation” (
With regard to the domestic like product, the petitioners do not offer a definition of the domestic like product distinct from the scope of the investigation.
In determining whether the petitioners have standing under section 702(c)(4)(A) of the Act, we considered the industry support data contained in the Petition with reference to the domestic like product as defined in the “Scope of the Investigation,” in the Appendix to this notice. To establish industry support, the petitioners provided their own shipment values of the domestic like product in 2017 and compared this to the estimated total shipment value of the domestic like product for the entire industry.
Our review of the data provided in the Petition, the Petition Supplement, and other information readily available to Commerce indicates that the petitioners have established industry support for the Petition.
Commerce finds that the petitioners filed the Petition on behalf of the domestic industry because they are interested parties as defined in section 771(9)(C) of the Act, and they have demonstrated sufficient industry support with respect to the CVD investigation that they are requesting that Commerce initiate.
Because China is a “Subsidies Agreement Country” within the meaning of section 701(b) of the Act, section 701(a)(2) of the Act applies to this investigation. Accordingly, the ITC must determine whether imports of the subject merchandise from China materially injure, or threaten material injury to, a U.S. industry.
The petitioners allege that imports of the subject merchandise are benefitting from countervailable subsidies and that such imports are causing, or threaten to cause, material injury to the U.S. industry producing the domestic like product. In addition, the petitioners allege that subject imports exceed the negligibility threshold provided for under section 771(24)(A) of the Act.
The petitioner contends that the industry's injured condition is illustrated by a significant and increasing volume of subject imports; underselling and price depression or suppression; depressed absolute level of capacity utilization; decline in the domestic industry's financial performance; and lost sales and revenues.
Based on the examination of the Petition, we find that the Petition meets the requirements of section 702 of the Act. Therefore, we are initiating a CVD investigation to determine whether imports of aluminum wire and cable from China benefit from countervailable subsidies conferred by the GOC. In accordance with section 703(b)(1) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determination no later than 65 days after the date of this initiation.
Based on our review of the Petition, we find that there is sufficient information to initiate a CVD investigation on all of the subsidy programs alleged in the Petition, with certain limitations. For a full discussion of the basis for our decision to initiate on each program,
The petitioners named 27 producers/exporters as accounting for the majority of exports of aluminum wire and cable to the United States from China.
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305(b). Instructions for filing such applications may be found on the Commerce's website at
Comments regarding respondent selection must be filed electronically using ACCESS. An electronically filed document must be received successfully, in its entirety, by ACCESS no later than 5:00 p.m. ET on the date established by Commerce. We intend to finalize our decisions regarding respondent selection within 20 days of publication of this notice.
In accordance with section 702(b)(4)(A)(i) of the Act and 19 CFR 351.202(f), copies of the public versions of the Petition have been provided to the GOC
We will notify the ITC of our initiation, as required by section 702(d) of the Act.
The ITC will preliminarily determine, within 45 days after the date on which the Petition was filed, whether there is a reasonable indication that imports of aluminum wire and cable from China are materially injuring, or threatening material injury to, a U.S. industry.
Factual information is defined in 19 CFR 351.102(b)(21) as: (i) Evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by Commerce; and (v) evidence other than factual information described in (i)-(iv). 19 CFR 351.301(b) requires any party, when submitting factual information, to specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted
Parties may request an extension of time limits before the expiration of a time limit established under 19 CFR 351.301, or as otherwise specified by the Secretary. In general, an extension request will be considered untimely if it is filed after the expiration of the time limit established under 19 CFR 351.301. For submissions that are due from multiple parties simultaneously, an extension request will be considered untimely if it is filed after 10:00 a.m. ET on the due date. Under certain circumstances, we may elect to specify a different time limit by which extension requests will be considered untimely for submissions which are due from multiple parties simultaneously. In such a case, we will inform parties in the letter or memorandum of the deadline (including a specified time) by which extension requests must be filed to be considered timely. An extension request must be made in a separate, stand-alone submission; under limited circumstances we will grant untimely-filed requests for the extension of time limits. Parties should review
Any party submitting factual information in an AD or CVD proceeding must certify to the accuracy and completeness of that information.
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305. On January 22, 2008, Commerce published
This notice is issued and published pursuant to sections 702 and 777(i) of the Act and 19 CFR 351.203(c).
The scope of the investigation covers aluminum wire and cable, which is defined as an assembly of one or more electrical conductors made from 8000 Series Aluminum Alloys (defined in accordance with ASTM B800), Aluminum Alloy 1350 (defined in accordance with ASTM B230/B230M or B609/B609M), and/or Aluminum Alloy 6201 (defined in accordance with ASTM B398/B398M), provided that: (1) At least one of the electrical conductors is insulated; (2) each insulated electrical conductor has a voltage rating greater than 80 volts and not exceeding 1000 volts; and (3) at least one electrical conductor is stranded and has a size not less than 16.5 thousand circular mil (kcmil) and not greater than 1000 kcmil. The assembly may: (1) Include a grounding or neutral conductor; (2) be clad with aluminum, steel, or other base metal; or (3) include a steel support center wire, one or more connectors, a tape shield, a jacket or other covering, and/or filler materials.
Most aluminum wire and cable products conform to National Electrical Code (NEC) types THHN, THWN, THWN-2, XHHW-2, USE, USE-2, RHH, RHW, or RHW-2, and also conform to Underwriters Laboratories (UL) standards UL-44, UL-83, UL-758, UL-854, UL-1063, UL-1277, UL-1569, UL-1581, or UL-4703, but such conformity is not required for the merchandise to be included within the scope.
The scope of the investigation specifically excludes conductors that are included in equipment already assembled at the time of importation. Also excluded are aluminum wire and cable products in actual lengths less than six feet.
The merchandise covered by the investigation is currently classifiable under subheading 8544.49.9000 of the Harmonized Tariff Schedule of the United States (HTSUS). Products subject to the scope may also enter under HTSUS subheading 8544.42.9090. The HTSUS subheadings are provided for convenience and customs purposes. The written description of the scope of the investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Applicable October 18, 2018.
Stephanie Moore, AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Ave. NW, Washington, DC 20230, telephone: (202) 482-3692.
On August 8, 2018, the Department of Commerce (Commerce), pursuant to section 702(h) of the Trade Agreements Act of 1979 (as amended) (the Act), published the quarterly update to the annual listing of foreign government subsidies on articles of cheese subject to an in-quota rate of duty covering the period January 1, 2018, through March 31, 2018.
Pursuant to section 702(h) of the Act, we hereby provide Commerce's update of subsidies on articles of cheese that were imported during the period April 1, 2018, through June 30, 2018. The appendix to this notice lists the country, the subsidy program or programs, and the gross and net amounts of each subsidy for which information is currently available.
Commerce will incorporate additional programs which are found to constitute subsidies, and additional information on the subsidy programs listed, as the information is developed. Commerce encourages any person having
This determination and notice are in accordance with section 702(a) of the Act.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) is partially rescinding its administrative review of the antidumping duty (AD) order on drawn stainless steel sinks (drawn sinks) from the People's Republic of China (China) for the period of review (POR) April 1, 2017, through March 31, 2018.
Applicable October 18, 2018.
Joshua Tucker, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2044.
On April 2, 2018, Commerce published in the
In April 2018, Commerce received multiple timely requests to conduct an administrative review of the AD order on drawn sinks from China.
On June 6, 2018, in accordance with section 751(a) of the Tariff Act of 1930, as amended (the Act), Commerce published in the
Pursuant to 19 CFR 351.213(d)(1), Commerce will rescind an administrative review, in whole or in part, if a party that requested a review withdraws its request within 90 days of the date of publication of the notice of initiation of the requested review. The petitioner withdrew its request for an administrative review of the following companies within 90 days of the date of publication of the
The instant review will continue with respect to the following companies: B&R Industries Limited; Elkay (China) Kitchen Solutions, Co., Ltd.; Feidong Import and Export Co., Ltd.; Guangdong G-Top Import and Export Co., Ltd.; Guangdong New Shichu Import & Export Company Limited; Jiangmen
Commerce will instruct U.S. Customs and Border Protection (CBP) to assess antidumping duties on all appropriate entries. For the companies for which this review is rescinded, antidumping duties shall be assessed at rates equal to the cash deposit of estimated antidumping duties required at the time of entry, or withdrawal from warehouse, for consumption, in accordance with 19 CFR 351.212(c)(1)(i). Commerce intends to issue appropriate assessment instructions directly to CBP 15 days after the date of publication of this notice in the
This notice serves as the only reminder to importers whose entries will be liquidated as a result of this rescission notice, of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties and/or countervailing duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement may result in the presumption that reimbursement of antidumping duties and/or countervailing duties occurred and the subsequent assessment of double antidumping duties.
This notice serves as the only reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
This notice is published in accordance with section 751 of the Act and 19 CFR 351.213(d)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) is amending its final results of the administrative review of the antidumping duty (AD) order on certain uncoated paper from Portugal to correct a ministerial error.
Applicable October 18, 2018.
Carrie Bethea, AD/CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-1491.
On August 13, 2018, the Department of Commerce (Commerce) published its
Commerce reviewed the record and agrees in part with Navigator that it committed a ministerial error in our application of AFA.
Commerce also agrees with Navigator that we incorrectly published the period of review (POR) in the “Final Results of Review” section in the
We determine that, for the period of August 26, 2015, through February 28, 2017, the following weighted-average dumping margin exists:
We intend to disclose the calculation performed for these amended final results in accordance with 19 CFR 351.224(b).
Commerce shall determine, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries covered by this review.
In accordance with Commerce's “automatic assessment” practice, for entries of subject merchandise during the POR produced by Navigator for which it did not know that the merchandise was destined for the United States, we will instruct CBP to liquidate those entries at the all-others rate if there is no rate for the intermediate company(ies) involved in the transaction.
We intend to issue instructions to CBP 15 days after the publication date of the final results of this review.
The following cash deposit requirements will be effective upon publication of the notice of final results of administrative review for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(2)(C) of the Act: (1) The cash deposit rate for Navigator will be the rate established in the final results of this administrative review; (2) for merchandise exported by producers or exporters not covered in this administrative review but covered in a prior segment of the proceeding, the cash deposit rate will continue to be the company-specific rate published for the most recently completed segment of this proceeding; (3) if the exporter is not a firm covered in this review, a prior review, or the original investigation, but the producer is, the cash deposit rate will be the rate established for the most recently completed segment of this proceeding for the producer of the subject merchandise; and (4) the cash deposit rate for all other manufacturers or exporters will continue to be 7.80 percent, the all-others rate established in the investigation.
This notice also serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this POR. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping and/or countervailing duties occurred and the subsequent assessment of doubled antidumping duties.
This notice also serves as a reminder to parties subject to administrative protective orders (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return/destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
We are issuing and publishing this notice in accordance with section 735(e) of the Act and 19 CFR 351.224(e) and (f).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Applicable October 11, 2018.
Kathryn Turlo at (202) 482-3870 or Mark Hoadley at (202) 482-3148; AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC, 20230.
On September 21, 2018, the U.S. Department of Commerce (Commerce) received an antidumping duty (AD) petition concerning imports of aluminum wire and cable from the People's Republic of China (China), filed in proper form on behalf of Encore Wire Corporation (Encore) and Southwire Company, LLC (the petitioners), domestic producers of aluminum wire and cable.
On September 25 and 26, 2018, Commerce requested supplemental information pertaining to certain aspects of the Petition in two separate supplemental questionnaires, one dealing with general issues with the Petition and the other with issues related to Volume I and Volume II of the Petition (
In accordance with section 732(b) of the Tariff Act of 1930, as amended (the Act), the petitioners allege that imports of aluminum wire and cable from China are being, or are likely to be, sold in the United States at less-than-fair-value (LTFV) within the meaning of section 731 of the Act, and that such imports are materially injuring, or threatening material injury to, the domestic industry producing aluminum wire and cable in the United States. Consistent with section 732(b)(1) of the Act, the Petition is accompanied by information reasonably available to the petitioners supporting their allegation.
Commerce finds that the petitioners filed the Petition on behalf of the domestic industry because the petitioners are interested parties as defined in section 771(9)(C) of the Act. Commerce also finds that the petitioners demonstrated sufficient industry support with respect to the initiation of the requested AD investigation.
Because China is a non-market economy (NME) country, pursuant to 19 CFR 351.204(b)(1), the period of investigation (POI) is January 1, 2018, through June 30, 2018.
The product covered by this investigation is aluminum wire and cable from China. For a full description of the scope of this investigation,
During our review of the Petition, Commerce contacted the petitioners regarding the proposed scope language to ensure that the scope language in the Petition is an accurate reflection of the products for which the domestic industry is seeking relief.
As discussed in the
Commerce requests that any factual information parties consider relevant to the scope of the investigation be submitted during this period. However, if a party subsequently finds that additional factual information pertaining to the scope of the investigation may be relevant, the party may contact Commerce and request permission to submit the additional information. All such submissions must be filed on the records of the concurrent AD and CVD investigations.
All submissions to Commerce must be filed electronically using Enforcement and Compliance's Antidumping Duty and Countervailing Duty Centralized Electronic Service System (ACCESS).
Commerce is providing interested parties an opportunity to comment on the appropriate physical characteristics of aluminum wire and cable to be reported in response to Commerce's AD questionnaire. This information will be used to identify the key physical characteristics of the merchandise under consideration in order to report the relevant factors of production accurately, as well as to develop appropriate product-comparison criteria.
Interested parties may provide any information or comments that they feel are relevant to the development of an accurate list of physical characteristics. In order to consider the suggestions of interested parties in developing and issuing the AD questionnaire, all product characteristics comments must be filed by 5:00 p.m. ET on October 31, 2018, which is 20 calendar days from the signature date of this notice.
Section 732(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 732(c)(4)(A) of the Act provides that a petition meets this requirement if the domestic producers or workers who support the petition account for: (i) At least 25 percent of the total production of the domestic like product; and (ii) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the petition. Moreover, section 732(c)(4)(D) of the Act provides that, if the petition does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, Commerce shall: (i) Poll the industry or rely on other information in order to determine if there is support for the petition, as required by subparagraph (A); or (ii) determine industry support using a statistically valid sampling method to poll the “industry.”
Section 771(4)(A) of the Act defines the “industry” as the producers as a whole of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs Commerce to look to producers and workers who produce the domestic like product. The International Trade Commission (ITC), which is responsible for determining whether “the domestic industry” has been injured, must also determine what constitutes a domestic like product in order to define the industry. While both Commerce and the ITC must apply the same statutory definition regarding the domestic like product,
Section 771(10) of the Act defines the domestic like product as “a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this title.” Thus, the reference point from which the domestic like product analysis begins is
With regard to the domestic like product, the petitioners do not offer a definition of the domestic like product distinct from the scope of the Petition.
In determining whether the petitioners have standing under section 732(c)(4)(A) of the Act, we considered the industry support data contained in the Petition with reference to the domestic like product as defined in the “Scope of the Investigation,” in the Appendix to this notice. To establish industry support, the petitioners provided their own shipment values of the domestic like product in 2017, and compared this to the estimated total shipment value of the domestic like product for the entire domestic industry.
Our review of the data provided in the Petition, the Petition Supplement, and other information readily available to Commerce indicates that the petitioners have established industry support for the Petition.
Commerce finds that the petitioners filed the Petition on behalf of the domestic industry because they are interested parties as defined in section 771(9)(C) of the Act, and they have demonstrated sufficient industry support with respect to the AD investigation that they are requesting that Commerce initiate.
The petitioners allege that the U.S. industry producing the domestic like product is being materially injured, or is threatened with material injury, by reason of the imports of the subject merchandise sold at less than normal value (NV). In addition, the petitioners allege that subject imports exceed the negligibility threshold provided for under section 771(24)(A) of the Act.
The petitioners contend that the industry's injured condition is illustrated by a significant and increasing volume of subject imports; underselling and price depression or suppression; depressed absolute level of capacity utilization; decline in the domestic industry's financial performance; and lost sales and revenues.
The following is a description of the allegations of sales at LTFV upon which Commerce based its decision to initiate an AD investigation of imports of aluminum wire and cable from China. The sources of data for the deductions and adjustments relating to U.S. price and NV are discussed in greater detail in the China AD Initiation Checklist.
The petitioners based U.S. export price (EP) on price sheets for aluminum wire and cable offered for sale in the United States. The price sheet was from a U.S. distributor of aluminum wire and cable in the United States who is the leading U.S. distributor of aluminum wire and cable produced by a Chinese producer/exporter of subject merchandise.
Commerce considers China to be an NME country.
The petitioners claim that Mexico is an appropriate surrogate country for China because (1) Mexico is a market economy and at a comparable level of economic development as China, based on per capita gross national income,
Interested parties will have the opportunity to submit comments regarding surrogate country selection and, pursuant to 19 CFR 351.301(c)(3)(i), will be provided an opportunity to submit publicly available information to value FOPs within 30 days before the scheduled date of the preliminary determination.
Based on their assertion that the specifications for aluminum wire and cable products are standard across all producers in the United States and China, the petitioners used Encore's own consumption rates to estimate FOPs of Chinese producers/exporters.
Based on the data provided by the petitioners, there is reason to believe that imports of aluminum wire and cable from China are being, or are likely to be, sold in the United States at LTFV. Based on comparisons of EP to NV in accordance with sections 772 and 773 of the Act, the estimated dumping margins for aluminum wire and cable from China are 53.54—63.47 percent.
Based upon the examination of the Petition, we find that the Petition meets the requirements of section 732 of the Act. Therefore, we are initiating an AD investigation to determine whether imports of aluminum wire and cable from China are being, or are likely to be, sold in the United States at LTFV. In accordance with section 733(b)(1)(A) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determination no later than 140 days after the date of this initiation.
The petitioners named 27 producers/exporters as accounting for the majority of exports of aluminum wire and cable to the United States from China.
Producers/exporters of aluminum wire and cable from China that do not receive Q&V questionnaires by mail may still submit a response to the Q&V questionnaire and can obtain a copy of the Q&V questionnaire from Enforcement & Compliance's website. The Q&V questionnaire response must be submitted by the relevant Chinese exporters/producers no later than 5:00 p.m. ET on October 25, 2018, which is two weeks from the signature date of this notice. All Q&V responses must be filed electronically via ACCESS.
In order to obtain separate-rate status in an NME investigation, exporters and producers must submit a separate-rate application.
Commerce will calculate combination rates for certain respondents that are eligible for a separate rate in an NME investigation. The Separate Rates and Combination Rates Bulletin states:
{w}hile continuing the practice of assigning separate rates only to exporters, all separate rates that the Department will now assign in its NME Investigation will be specific to those producers that supplied the exporter during the period of investigation. Note, however, that one rate is calculated for the exporter and all of the producers which supplied subject merchandise to it during the period of investigation. This practice applies both to mandatory respondents receiving an individually calculated separate rate as well as the pool of non-investigated firms receiving the weighted-average of the individually calculated rates. This practice is referred to as the application of “combination rates” because such rates apply to specific combinations of exporters and one or more producers. The cash-deposit rate assigned to an exporter will apply only to merchandise both exported by the firm in question
In accordance with section 732(b)(3)(A) of the Act and 19 CFR 351.202(f), copies of the public version of the Petition have been provided to the government of China
We will notify the ITC of our initiation, as required by section 732(d) of the Act.
The ITC will preliminarily determine, within 45 days after the date on which the Petition was filed, whether there is a reasonable indication that imports of aluminum wire and cable from China are materially injuring or threatening material injury to a U.S. industry.
Factual information is defined in 19 CFR 351.102(b)(21) as: (i) Evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by Commerce; and (v) evidence other than factual information described in (i)-(iv). Section 351.301(b) of Commerce's regulations requires any party, when submitting factual information, to specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted
Parties may request an extension of time limits before the expiration of a time limit established under 19 CFR 351.301, or as otherwise specified by the Secretary. In general, an extension request will be considered untimely if it is filed after the expiration of the time limit established under 19 CFR 351.301. For submissions that are due from multiple parties simultaneously, an extension request will be considered untimely if it is filed after 10:00 a.m. ET on the due date. Under certain circumstances, we may elect to specify a different time limit by which extension requests will be considered untimely for submissions which are due from multiple parties simultaneously. In such a case, we will inform parties in a letter or memorandum of the deadline (including a specified time) by which extension requests must be filed to be considered timely. An extension request must be made in a separate, stand-alone submission; under limited circumstances we will grant untimely-filed requests for the extension of time limits. Parties should review
Any party submitting factual information in an AD or CVD proceeding must certify to the accuracy and completeness of that information.
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305. On January 22, 2008, Commerce published
This notice is issued and published pursuant to sections 732(c)(2) and 777(i) of the Act, and 19 CFR 351.203(c).
The scope of the investigation covers aluminum wire and cable, which is defined as an assembly of one or more electrical conductors made from 8000 Series Aluminum Alloys (defined in accordance with ASTM B800), Aluminum Alloy 1350 (defined in accordance with ASTM B230/B230M or B609/B609M), and/or Aluminum Alloy 6201 (defined in accordance with ASTM B398/B398M), provided that: (1) At least one of the electrical conductors is insulated; (2) each insulated electrical conductor has a voltage rating greater than 80 volts and not exceeding 1000 volts; and (3) at least one electrical conductor is stranded and has a size not less than 16.5 thousand circular mil (kcmil) and not greater than 1000 kcmil. The assembly may: (1) Include a grounding or neutral conductor; (2) be clad with aluminum, steel, or other base metal; or (3) include a steel support center wire, one or more connectors, a tape shield, a jacket or other covering, and/or filler materials.
Most aluminum wire and cable products conform to National Electrical Code (NEC) types THHN, THWN, THWN-2, XHHW-2, USE, USE-2, RHH, RHW, or RHW-2, and also conform to Underwriters Laboratories (UL) standards UL-44, UL-83, UL-758, UL-854, UL-1063, UL-1277, UL-1569, UL-1581, or UL-4703, but such conformity is not required for the merchandise to be included within the scope.
The scope of the investigation specifically excludes conductors that are included in equipment already assembled at the time of importation. Also excluded are aluminum wire and cable products in actual lengths less than six feet.
The merchandise covered by the investigation is currently classifiable under subheading 8544.49.9000 of the Harmonized Tariff Schedule of the United States (HTSUS). Products subject to the scope may also enter under HTSUS subheading 8544.42.9090. The HTSUS subheadings are provided for convenience and customs purposes. The written description of the scope of the investigation is dispositive.
National Institute of Standards and Technology, Department of Commerce.
Notice.
The Information Security and Privacy Advisory Board (ISPAB) will meet Thursday, November 01, 2018 from 9:00 a.m. until 5:00 p.m., Eastern Time, and Friday, November 02, 2018 from 9:00 a.m. until 4:30 p.m. Eastern Time. All sessions will be open to the public.
The meeting will be held on Thursday, November 01, 2018, from 9:00 a.m. until 5:00 p.m., Eastern Time, and Friday, November 02, 2018, from 9:00 a.m. until 4:30 p.m. Eastern Time.
The meeting will be held at the American University Washington College of Law, 4300 Nebraska Ave. NW, Washington, DC, 20016.
Jeff Brewer, Information Technology Laboratory, NIST, 100 Bureau Drive, Stop 8930, Gaithersburg, MD 20899-8930, Telephone: (301) 975-2489, Email address:
Pursuant to the Federal Advisory Committee Act, as amended, 5 U.S.C. App., notice is hereby given that the ISPAB will meet Thursday, November 01, 2018, from 9:00 a.m. until 5:00 p.m., Eastern Time, and Friday, November 02, 2018 from 9:00 a.m. until 4:30 p.m. Eastern Time. All sessions will be open to the public. The ISPAB is authorized by 15 U.S.C. 278g-4, as amended, and advises the National Institute of Standards and Technology (NIST), the Secretary of Homeland Security, and the Director of the Office of Management and Budget (OMB) on information security and privacy issues pertaining to Federal government information systems, including thorough review of proposed standards and guidelines developed by NIST. Details regarding the ISPAB's activities are available at
The agenda is expected to include the following items:
Note that agenda items may change without notice. The final agenda will be posted on the website indicated above. Seating will be available for the public and media. Pre-registration is not required to attend this meeting.
Speakers who wish to expand upon their oral statements, those who had wished to speak but could not be accommodated on the agenda, and those who were unable to attend in person are invited to submit written statements. In addition, written statements are invited and may be submitted to the ISPAB at any time. All written statements should be directed to the ISPAB Secretariat, Information Technology Laboratory, 100 Bureau Drive, Stop 8930, National Institute of Standards and Technology, Gaithersburg, MD 20899-8930.
Bureau of Consumer Financial Protection.
Supervisory Highlights; notice.
The Bureau of Consumer Financial Protection (Bureau) is issuing its seventeenth edition of its
The Bureau released this edition of the Supervisory Highlights on its website on September 06, 2018.
Adetola Adenuga, Consumer Financial Protection Analyst, Office of Supervision Policy, at (202) 435-9373. If you require this document in an alternative electronic format, please contact
The Bureau of Consumer Financial Protection (Bureau) is committed to a consumer financial marketplace that is free, innovative, competitive, and transparent, where the rights of all parties are protected by the rule of law, and where consumers are free to choose the products and services that best fit their individual needs. To effectively accomplish this, the Bureau remains committed to sharing with the public key findings from its supervisory work to help industry limit risks to consumers and comply with Federal consumer financial law.
The findings included in this report cover examinations in the areas of automobile loan servicing, credit cards, debt collection, mortgage servicing, payday lending, and small business lending that were generally completed between December 2017 and May 2018 (unless otherwise stated).
It is important to keep in mind that institutions are subject only to the requirements of relevant laws and regulations. The information contained in
Recent supervisory observations are reported in the areas of automobile loan servicing, credit cards, debt collection, mortgage servicing, payday lending, and, for the first time, small business lending.
The Bureau continues to examine auto loan servicing activities, primarily to assess whether servicers have engaged in unfair, deceptive, or abusive acts or practices prohibited by the Consumer Financial Protection Act of 2010 (CFPA). Recent auto loan servicing examinations identified deceptive and unfair acts or practices related to billing statements and wrongful repossessions.
One or more examinations observed instances in which notes required that insurance proceeds from a total vehicle loss be applied as a one-time payment to the loan with any remaining balance to be collected according to the consumer's regular billing schedule. However, in some instances after consumers experienced a total vehicle loss, the servicers sent billing statements showing that the insurance proceeds had been applied to the loan payments so that the loan was paid ahead and that the next payment on the remaining balance was due many months or years in the future. Servicers then treated consumers who failed to pay by the next month as late and in some cases also reported the negative information to consumer reporting agencies.
The examination found that servicers engaged in a deceptive practice by sending billing statements indicating that consumers did not need to make a payment until a future date when in fact the consumer needed to make a monthly payment.
Many auto servicers provide options to consumers to avoid repossession once a loan is delinquent or in default. Servicers may offer formal extension agreements that allow consumers to forbear payments for a certain period of time or may cancel a repossession order once a consumer makes a payment.
One or more recent examinations found that servicers repossessed vehicles after the repossession was supposed to be cancelled. In these instances, the servicers incorrectly coded the account as remaining delinquent or customer service representatives did not timely cancel the repossession order after the consumer's agreement with the servicers to avoid repossession. The examinations identified this as an unfair practice.
The Bureau continues to examine the credit card account management operations of one or more supervised entities. Typically, examinations assess advertising and marketing, account origination, account servicing, payments and periodic statements, dispute resolution, and the marketing, sale and servicing of credit card add-on products. With some notable exceptions, the examinations found that supervised entities generally are complying with applicable Federal consumer financial laws.
Regulation Z, as revised to implement the Card Accountability Responsibility and Disclosure (CARD) Act, requires credit card issuers to periodically re-evaluate consumer credit card accounts subjected to certain increases in the applicable Annual Percentage Rate(s) (APR or rate) to assess whether it is appropriate to reduce the account's APR(s).
One or more examinations between January and July 2018 found that entities: (a) Failed to re-evaluate all eligible accounts, (b) failed to consider the appropriate factors when re-evaluating eligible accounts, or (c) failed to appropriately reduce the rates of accounts eligible for rate reduction. In one or more instances, the issuers failed to re-evaluate all eligible accounts because they inadvertently excluded some eligible accounts from the pool of accounts they re-evaluated. In one or more instances, the issuers failed to consider the appropriate factors because they inappropriately conflated re-evaluation factors, among other reasons. In one or more instances, the issuers failed to appropriately reduce the rates for eligible accounts because they effectively imposed additional criteria for a rate reduction. The issuers have undertaken, or developed plans to undertake, remedial and corrective actions in response to these examination findings.
The Bureau's Supervision program has authority to examine certain entities that engage in consumer debt collection activities, including nonbanks that are larger participants in the consumer debt collection market. Recent examinations
Section 809(b) of the FDCPA requires a debt collector, upon receipt of a written debt validation request from a consumer, to cease collection of the debt until it obtains verification of the debt and mails it to the consumer.
Bureau examinations continue to focus on the loss mitigation process and, in particular, on how servicers handle trial modifications where consumers are paying as agreed. One or more recent mortgage servicing examinations observed unfair acts or practices relating to conversion of trial modifications to permanent status and initiation of foreclosures after consumers accepted loss mitigation offers. Recent examinations also identified unfair acts or practices when institutions charged consumers amounts not authorized by modification agreements or by mortgage notes.
Past editions of
One or more recent examinations reviewed the practices of servicers with policies providing for permanent modifications of loans if consumers made four timely trial modification payments. However, for nearly 300 consumers who successfully completed the trial modification, the servicers delayed processing the permanent modification for more than 30 days. During these delays, consumers accrued interest and fees that would not have been accrued if the permanent modification had been processed. The servicers did not remediate all of the affected consumers nor did they have policies or procedures for remediating consumers in such circumstances. The servicers attributed the modification delays to insufficient staffing.
As a result, one or more examinations identified an unfair act or practice. Consumers experienced substantial injury that could not be reasonably avoided. The accrued fees and interest that the servicers failed to fully remediate were likely significant because the delays were more than 30 days. And consumers could not reasonably avoid these injuries. They could neither control the processing of their loan modifications nor compel remediation from the servicers. The harm to consumers outweighs the cost to consumers or to competition, given that the servicers acknowledged that the delay was in error and did not indicate that the cost of remediation was burdensome. In response to examination findings, the servicers are fully remediating affected consumers and developing and implementing policies and procedures to timely convert trial modifications to permanent modifications where the consumers have met the trial modification conditions.
In September 2017, examinations also found that one or more servicers mitigated the potential consumer harm associated with trial conversion delays by maintaining communication with consumers during the delay and by proactively remediating individual consumers for the costs associated with the delay after eventually making the consumers' modifications permanent.
One or more examinations found instances in which mortgage servicers charged consumers more than the amounts authorized by their loan modification agreements. The overcharges were caused by data errors affecting the modified loan's starting balance, step-rate and interest-rate changes, deferred interest, and amortization maturity date when the loan was entered into the servicing system. The examinations identified this as an unfair practice.
When one or more mortgage servicers approved borrowers for a loss mitigation option on a non-primary residence, the servicers represented to borrowers that the servicers would not initiate foreclosure if the borrower accepted loss mitigation offers in writing or by phone by a specified date. However, the servicers then initiated foreclosure even if borrowers had called or written to accept the loss mitigation offers by that date. Examinations identified this as a deceptive act or practice.
The misrepresentations were likely to mislead borrowers when the servicers expressly indicated that the servicers would not initiate foreclosure proceedings if borrowers accepted the
Examinations observed that when borrowers submitted complete loss mitigation applications less than 37 days from a scheduled foreclosure sale date, one or more servicers sent the borrowers notices indicating that the applications were complete and stating that the servicer(s) would notify the borrowers of the decision on the applications in writing within 30 days. But after sending these notices, the servicers proceeded to conduct the scheduled foreclosure sales without making a decision on the borrowers' loss mitigation applications.
The examinations did not find that this conduct amounted to a legal violation but observed that it could pose a risk of a deceptive practice. The notices could potentially mislead borrowers by stating that the borrowers would receive a decision on their loss mitigation applications. Borrowers reasonably could take that statement to mean that foreclosure sales would be postponed until a decision was reached.
The Bureau's Supervision program covers entities that offer or provide payday loans. Examinations of payday lenders identified unfair and deceptive acts or practices as well as violations of Regulation E.
Examinations observed one or more entities engaging in a deceptive act or practice in their collection letters. These entities represented in their letters that they will, or may have no choice but to, repossess consumers' vehicles if the consumers fail to make payments or contact the entities. This was despite the fact that these entities did not have business relationships with any party to repossess vehicles and, as a general matter, did not repossess vehicles. Given these facts, the examination concluded that the net impression of these representations in the context of each letter was to mislead consumers to believe that these entities would repossess or were likely to repossess consumers' vehicles. The representations were material because they were likely to affect the behavior of consumers who were misled. The representations were likely to induce consumers to make payments to these entities, as opposed to allocating their funds toward other expenses. In response to the examination findings, the entity or entities are ensuring that their collection letters do not contain deceptive content.
Examinations observed one or more entities using debit card numbers or Automated Clearing House (ACH) credentials that consumers had not validly authorized the entities to use to debit funds in connection with a single-payment or installment loan in default. Upon a consumer's failure to repay the loan obligation as agreed, one or more entities attempted to initiate electronic fund transfers (EFTs) using debit card numbers or ACH credentials that borrowers had identified on authorization forms executed in connection with the defaulted loan at issue. If those attempts were unsuccessful, the entities would then seek to collect balances due and owing via EFTs using debit card numbers or ACH credentials that the borrowers had supplied to the entities for other purposes, such as when obtaining other loans or making one-time payments on other loans or the loan at issue. Through these invalidly authorized EFTs, the entities sought payment of up to the entire amount due on the loan.
The examinations identified these as unfair acts or practices and also, in some cases, as violations of Regulation E. With respect to unfairness, the invalidly authorized debits caused substantial injury in the form of debits that consumers could not anticipate, leading to potential fees. Because the credentials were provided to the entities for other purposes, such as account information consumers provided in previous credit applications, consumers could not anticipate that the entities would use them for the defaulted loan at issue and thus could not reasonably avoid such injury. Finally, the injury was not outweighed by any countervailing benefits to consumers, such as satisfying their debts, or to competition, such as passing on lower costs to consumers derived from easier debt collection. By giving an unfair advantage over other entities that obtain authorization to initiate debits from consumers pursuant to clear and readily understandable terms, the unfair acts or practices likely harmed competition.
With respect to loans for which the consumer entered into preauthorized EFTs that recurred at substantially regular intervals, the examinations identified this practice as a violation of Regulation E, which requires that preauthorized EFTs from a consumer's account be authorized only by a writing signed or similarly authenticated by the consumer.
In response to examination findings, the entity or entities are ceasing the violations, remediating borrowers impacted by the invalid EFTs, and revising loan agreement templates and ACH authorization forms.
The Equal Credit Opportunity Act (ECOA) prohibition against discrimination is not limited to consumer transactions; it also applies to business-purpose credit transactions, including credit extended to small businesses. In 2016 and 2017, the Bureau began conducting supervision work to assess ECOA compliance in institutions' small business lending product lines, focusing in particular on the risks of an ECOA violation in underwriting, pricing, and redlining. The Bureau anticipates an ongoing dialogue with supervised institutions and other stakeholders as the Bureau moves forward with supervision work in small business lending.
In the course of conducting ECOA small business lending reviews, Bureau examination teams have observed instances in which one or more financial institutions effectively managed the risks of an ECOA violation in their small business lending programs.
Examinations at one or more institutions observed that the board of directors and management maintained active oversight over the institutions' compliance management system (CMS) framework. Institutions developed and
With regard to self-monitoring, one or more institutions implemented small business lending monitoring programs and conducted semi-annual ECOA risk assessments that include assessments of small business lending. In addition, one or more institutions actively monitored pricing-exception practices and volume through a committee.
When examinations included file reviews of manual underwriting overrides at one or more institutions, they found that credit decisions made by the institutions were consistent with the requirements of ECOA, and thus the examinations did not find any violations of ECOA.
At one or more institutions, however, examinations observed that institutions collect and maintain (in useable form) only limited data on small business lending decisions. Limited availability of data could impede an institution's ability to monitor and test for the risks of ECOA violations through statistical analyses.
The Bureau's supervisory activities resulted in or supported the following public enforcement actions.
On June 29, 2018, the Bureau announced an enforcement action against Citibank, N.A., (Citibank or Bank). The Bureau found Citibank violated the Truth in Lending Act (TILA) and its implementing regulation, Regulation Z, by failing to properly periodically re-evaluate and reduce the Annual Percentage Rates (rates) applicable to credit card accounts that had been subject to certain rate increases between 2011 and 2017 and by failing to have in place reasonable written policies and procedures to do so.
In 2016, Citibank initiated a significant compliance review program across its credit cards line of business. That review led to Citibank's self-identifying several deficiencies and errors in its rate re-evaluation methodologies. After the Bank promptly self-disclosed the violations, the Bureau ultimately found through its supervisory process that Citibank violated TILA by failing to reevaluate and reduce the APRs for approximately 1.75 million consumer credit card accounts and thereby imposed on those accounts excess interest charges of $335 million.
Under the terms of the resulting consent order, Citibank was required to correct these practices and pay $335 million in restitution to the impacted consumers.
On July 19, 2018, the Bureau entered into a consent order with Triton Management Group, Inc., a payday lender that operates in Alabama, Mississippi, and South Carolina under several names including “Always Money” and “Quik Pawn Shop.” The Bureau found that Triton violated the CFPA and the disclosure requirements of TILA by failing to properly disclose finance charges associated with their auto title loans in Mississippi. The Bureau also found that Triton used advertisements that failed to disclose the annual percentage rate and other information in violation of TILA. The consent order bars Triton from misrepresenting the costs of its loans and requires Triton to remediate consumers $1,522,298. Based on Triton's inability to pay, it will remediate consumers $500,000.
On March 8, 2018, the Bureau issued a final rule to help mortgage servicers communicate with certain borrowers facing bankruptcy. The final rule gives mortgage servicers a clearer and more straightforward standard for providing periodic statements to consumers entering or exiting bankruptcy by amending the Bureau's 2016 mortgage servicing rule. Specifically, the final rule provides a clear single-statement exemption for servicers to make the transition, superseding the single-billing-cycle exemption included in the 2016 rule. The effective date for the rule was April 19, 2018.
On August 11, 2017, the Bureau published a final rule
On May 2, 2018, the Bureau published a final rule in the
On December 21, 2017, the Bureau provided the following statement regarding HMDA implementation:
Recognizing the impending January 1, 2018 effective date of the Bureau's amendments to Regulation C and the significant systems and operational challenges needed to adjust to the revised regulation, for HMDA data collected in 2018 and reported in 2019 the Bureau does not intend to require data resubmission unless data errors are material. Furthermore, the Bureau does not intend to assess penalties with respect to errors in data collected in 2018 and reported in 2019. Collection and submission of the 2018 HMDA data will provide financial institutions an opportunity to identify any gaps in their implementation of amended Regulation C and make improvements in their HMDA CMS for future years. Any examinations of 2018 HMDA data will be diagnostic to help institutions identify compliance weaknesses and will credit good faith compliance efforts. The Bureau intends to engage in a rulemaking to reconsider various aspects of the 2015 HMDA Rule such as the institutional and transactional coverage tests and the rule's discretionary data points. For data collected in 2017, financial institutions will submit their reports in 2018 in accordance with the current Regulation C using the Bureau's HMDA Platform.
On July 5, 2018, the Bureau provided the following statement regarding recent HMDA amendments:
The President signed the Economic Growth, Regulatory Relief, and Consumer Protection Act (the Act) on May 24, 2018, a section of which amends the Home Mortgage Disclosure Act (HMDA). The Act provides partial exemptions for some insured depository institutions and insured credit unions from certain HMDA requirements.
For closed-end mortgage loans if the institution originated fewer than 500 closed-end mortgage loans in each of the two preceding calendar years.
For open-end lines of credit if the institution originated fewer than 500 open-end lines of credit in each of the two preceding calendar years.
For closed-end mortgage loans or open-end lines of credit subject to the partial exemptions, the Act states that the “requirements of [HMDA section 304(b)(5) and (6)]” shall not apply. Accordingly, for these transactions, those institutions are exempt from the collection, recording, and reporting requirements for some, but not all, of the data points specified in current Regulation C.
The Bureau expects to provide further guidance soon on the applicability of the Act to HMDA data collected in 2018.
For all institutions filing HMDA data collected in 2018, the Act will not affect the format of the LARs:
LARs will be formatted according to the previously released 2018 Filing Instructions Guide for HMDA Data Collected in 2018 (2018 FIG).
If an institution does not report information for a certain data field due to the Act's partial exemptions, the institution will enter an exemption code for the field specified in a revised 2018 FIG that the Bureau expects to release later this summer.
All LARs will be submitted to the same HMDA Platform. A beta version of the HMDA Platform for submission of data collected in 2018 will be available later this year for filers to test.
Each ECOA small business lending review includes a fair lending assessment of the institution's CMS related to small business lending. To conduct this portion of the review, examinations use Module II of the ECOA Baseline Review Modules. CMS reviews include assessments of the institution's board and management oversight, compliance program (policies and procedures, training, monitoring and/or audit, and complaint response), and service provider oversight.
Examinations also use the Interagency Fair Lending Examination Procedures, which have been adopted in the Bureau's Supervision and Examination Manual. In some ECOA small business lending reviews, examination teams may evaluate an institution's fair lending risks and controls related to origination or pricing of small business lending products. Some reviews may include a geographic distribution analysis of small business loan applications, originations, loan officers, or marketing and outreach, in order to assess potential redlining risk.
As with other in-depth ECOA reviews, ECOA small business lending reviews may include statistical analysis of lending data in order to identify fair lending risks and appropriate areas of focus during the examination. Notably, statistical analysis is only one factor taken into account by examination teams that review small business lending for ECOA compliance. Reviews typically include other methodologies to assess compliance, including policy and procedure reviews, interviews with management and staff, and reviews of individual loan files.
On August 22, 2017, the Federal Financial Institutions Examination Council (FFIEC) members, including the Bureau, announced new FFIEC Home Mortgage Disclosure Act (HMDA) Examiner Transaction Testing Guidelines for all financial institutions that report HMDA data.
The Bureau is continuing to monitor Upstart Network, Inc. (Upstart) regarding its compliance with the terms of the no-action letter (NAL) it received from Bureau staff. As part of its request for a NAL, Upstart agreed to conduct ongoing fair lending testing of its underwriting model, notify the Bureau before new variables are considered eligible for use in production, and maintain a robust model-related compliance management system.
In addition to the ongoing fair lending testing discussed above, Upstart agreed as part of its request for a NAL to employ other consumer safeguards. These safeguards, which are described in the application materials posted on the Bureau's website, include ensuring compliance with requirements to provide adverse action notices under Regulation B and the Fair Credit Reporting Act and its implementing regulation, Regulation V, and ensuring that all of its consumer-facing communications are timely, transparent, and clear, and use plain language to convey to consumers the type of information that will be used in underwriting. Upstart has committed to monitoring the effectiveness of all safeguards and sharing the results of its testing, along with other relevant information, with the Bureau during the term of the NAL.
On July 18, 2018, the Bureau announced the creation of its Office of Innovation, to foster consumer-friendly innovation, which is now a key priority for the Bureau. The Office of Innovation is in the process of revising the Bureau's NAL and trial disclosure policies, in order to increase participation by companies seeking to advance new products and services.
The Bureau expects that the publication of
Office of Science, Department of Energy.
Notice of open meeting.
This notice announces a meeting of the DOE/NSF Nuclear Science Advisory Committee (NSAC). The Federal Advisory Committee Act requires that public notice of these meetings be announced in the
Friday, November 2, 2018; 8:30 a.m.-4:30 p.m.
Crystal City Marriott at Reagan National Airport, 1999 Jefferson Davis Highway, Potomac Ballroom, Arlington, Virginia 22202, 703-413-5500.
Brenda L. May, U.S. Department of Energy; SC-26/Germantown Building, 1000 Independence Avenue SW, Washington, DC 20585-1290; Telephone: 301-903-0536 or email:
The most current information concerning this meeting can be found on the website:
The NSAC Meeting will be broadcast live on the internet. You may find out how to access the broadcast by going to the following site prior to the start of the meeting. A video record of the meeting, including presentations that are made, will be archived at this site after the meeting ends:
Office of Hearings and Appeals, Department of Energy.
Implementation of special refund procedures.
The Office of Hearings and Appeals (OHA) of the Department of Energy (DOE) finalizes the procedures for the disbursement of residual funds (totaling approximately $59,000) remaining in various Citronelle Settlement Agreement escrow accounts to the parties to the Agreement.
This plan is applicable October 18, 2018.
Inquiries should be sent to the Office of Hearings and Appeals, U.S. Department of Energy, 1000 Independence Ave. SW, Washington, DC 20585-0107, (202) 287-1550, Email:
Kristin L. Martin, Attorney-Advisor, Office of Hearings and Appeals, U.S. Department of Energy, 1000 Independence Ave. SW, Washington, DC 20585-0107, (202) 287-1550, Email:
In this Notice, we announce the final procedures for the distribution of the remaining Citronelle Settlement Agreement Funds.
The Office of Hearings and Appeals published a Notice of proposed final procedures for the distribution of the Citronelle Settlement Agreement Funds in the
The Office of Hearings and Appeals provided a 30 day opportunity for public comment on the proposed plan. No comments were submitted during that time. Accordingly, no changes have been made to the final plan.
The Citronelle Settlement Agreement funds will be distributed according to the following plan. Any funds remaining after the final distributions made in accordance with this plan will be considered unclaimed and will be transferred to the U.S. Treasury. Final distribution amounts will be calculated using the distribution percentages listed in an appendix to this Notice on October 18, 2018.
The Agreement requires that the balance of the Non-Litigant Refiners account be distributed to the Refiner-Litigants through an escrow account established for that purpose for the initial distribution of Citronelle funds and managed by the law firm Miller & Chevalier. Miller & Chevalier no longer represents the Refiner-Litigants. Further, DOE has not been able to obtain documentation regarding how previous Citronelle distributions were made among the various firms comprising the Refiner-Litigants. In light of these facts and because the Citronelle distribution proportions agreed to by the Refiner-Litigants were not a part of the Agreement and thus not binding on DOE, we propose that the Refiner-Litigant portion of the funds be divided in equal proportions for the firms, or successor firms, listed in Exhibit A of the Agreement. A list of these firms is included as an appendix to this Notice. If a listed firm, or successor firm, does not submit the Required Information described below by the specified deadline, the funds will be considered unclaimed and will be transferred to the U.S. Treasury.
The remaining Airlines account funds will be split according to the percentages prescribed in the Settlement Agreement. Two sevenths of the Airlines account funds will be distributed to the United States Treasury. Two sevenths of the Airlines account funds will be distributed to the Refiner-Litigants Escrow Account. Two sevenths of the Airlines account funds will be distributed to the States in the proportions listed in Exhibit L of the Agreement.
One seventh of the Airlines account funds will be allocated to the End-Users account, which will be distributed in the same proportions as the residual Subpart V funds were distributed pursuant to our notice in 72 FR 46461, 46462 (August 14, 2007). The funds will be split equally, with half distributed to the United States Treasury and half distributed to the States. The funds distributed to the States will be divided in the proportions used for the final distribution of the Subpart V funds, which are identical to those listed in Exhibit L of the Agreement. All funds distributed to the States are subject to the same restricted uses as those received by that State as a result of the settlement of the case known as
In order to receive its allotted funds, each Recipient, including State Recipients, must submit the following no later than January 16, 2019.
•
•
○ If a Recipient has not ever submitted the relevant Release of Claims, it should contact DOE at the below address to obtain a copy of the release, and should submit the executed release with the other required information described in this section.
○ If a Recipient has previously submitted the relevant Release of Claims, it should submit to DOE a notarized statement certifying that it has submitted the release. The notarized statement should be submitted with the other required information described in this section.
•
Submissions should in PDF format and must be submitted by email to
• Each Refiner-Litigant Entity is entitled to 0.865800865800867% of the total Airline Account Funds.
• Each Refiner-Litigant Entity is entitled to 3.03% of the Non-Litigant Refiners Account Funds.
This is a supplemental notice in the above-referenced proceeding of Keystone Power Pass-Through Holders LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is October 30, 2018.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the website that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection.
a.
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k. Pursuant to section 4.32(b)(7) of 18 CFR of the Commission's regulations, if any resource agency, Indian Tribe, or person believes that an additional scientific study should be conducted in order to form an adequate factual basis for a complete analysis of the application on its merit, the resource agency, Indian Tribe, or person must file a request for a study with the Commission not later than 60 days from the date of filing of the application, and serve a copy of the request on the applicant.
l.
The Commission strongly encourages electronic filing. Please file additional study requests and requests for cooperating agency status using the Commission's eFiling system at
m. The application is not ready for environmental analysis at this time.
n.
The project bypasses approximately 1 mile of the Blackstone River, and there is currently no required minimum instream flow for the bypassed reach. Blackstone Hydro operates the project in a run-of-river (ROR) mode with an annual average generation of approximately 4,027 megawatt-hours.
o. A copy of the application is available for review at the Commission in the Public Reference Room or may be viewed on the Commission's website at
You may also register online at
p.
q. Final amendments to the application must be filed with the Commission no later than 30 days from the issuance date of the notice of ready for environmental analysis.
This is a supplemental notice in the above-referenced proceeding of GRP Madison, LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is November 1, 2018.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the website that enables subscribers
to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
This is a supplemental notice in the above-referenced proceeding of Conemaugh Power Pass-Through Holders LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is October 30, 2018.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the website that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
This is a supplemental notice in the above-referenced proceeding of North Rosamond Solar, LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the website that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
The staff of the Federal Energy Regulatory Commission (FERC or Commission) has prepared a draft environmental impact statement (EIS) for the Rio Grande LNG Project (Project) proposed by Rio Grande LNG, LLC (RG LNG) and Rio Bravo Pipeline Company, LLC (RB Pipeline) (collectively referred to as the RG Developers) in the above-referenced dockets. RG LNG requests authorization pursuant to section 3(a) of the Natural Gas Act (NGA) to construct and operate liquefied natural gas (LNG) export facilities in Cameron County, Texas, and RB Pipeline requests a Certificate of Public Convenience and Necessity pursuant to section 7(c) of the NGA to construct, operate, and maintain a new pipeline system in Jim Wells, Kleberg, Kenedy, Willacy, and Cameron Counties, Texas.
The draft EIS assesses the potential environmental effects of the construction and operation of the Project in accordance with the requirements of the National Environmental Policy Act (NEPA). The FERC staff concludes that construction and operation of the Rio Grande LNG Project would result in some adverse environmental impacts, but these impacts would be reduced to less than significant levels. However, the Rio Grande LNG Project, combined with other projects within the geographic scope, would result in certain significant cumulative impacts.
The U.S. Army Corps of Engineers, U.S. Coast Guard, U.S. Department of Energy, U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration, the DOT's Federal Aviation Administration, the U.S. Fish and Wildlife Service, the National Park Service, the U.S. Environmental Protection Agency, and the National Oceanic and Atmospheric Administration—National Marine Fisheries Service participated as cooperating agencies in the preparation of the EIS. Cooperating agencies have jurisdiction by law or special expertise with respect to resources potentially affected by the proposal and participate in the NEPA analysis. Although the cooperating agencies provided input to the conclusions and recommendations presented in the draft EIS, the agencies will present their own conclusions and recommendations in their respective Records of Decision for the Project.
The draft EIS addresses the potential environmental effects of the construction and operation of the following proposed facilities:
• Six liquefaction trains at the Rio Grande LNG Terminal, each with a nominal capacity of 4.5 million tons per annum of LNG for export, resulting in the total nominal capacity of 27.0 million tons per annum;
• four LNG storage tanks, each with a net capacity of 180,000 cubic meters;
• LNG truck loading facilities with four loading bays, each with the capacity to load 12 to 15 trucks per day;
• a refrigerant storage area and truck unloading facilities;
• a condensate storage area and truck loading facilities;
• a new marine slip with two LNG vessel berths to accommodate simultaneous loading of two LNG vessels, an LNG vessel and support vessel maneuvering area, and an LNG transfer system;
• a materials off-loading facility;
• 2.4 miles of 42-inch-diameter pipeline, including 0.8 mile of dual pipeline, to gather gas from existing systems in Kleberg and Jim Wells Counties (referred to as the Header System);
• 135.5 miles of parallel 42-inch-diameter pipelines originating in Kleberg County and terminating at the Rio Grande LNG Terminal in Cameron County (referred to as Pipelines 1 and 2);
• four stand-alone metering sites along the Header System;
• two new interconnect booster compressor stations, each with a metering site;
• three new compressor stations (one at the LNG Terminal site); and
• other associated utilities, systems, and facilities (yards, access roads, etc.).
The Commission mailed a copy of the
Any person wishing to comment on the draft EIS may do so. Your comments should focus on draft EIS's disclosure and discussion of potential environmental effects, reasonable alternatives, and measures to avoid or lessen environmental impacts. To ensure consideration of your comments on the proposal in the final EIS, it is important that the Commission receive
For your convenience, there are four methods you can use to submit your comments to the Commission. The Commission will provide equal consideration to all comments received, whether filed in written form or provided verbally. The Commission encourages electronic filing of comments and has staff available to assist you at (866) 208-3676 or
(1) You can file your comments electronically using the eComment feature on the Commission's website (
(2) You can file your comments electronically by using the eFiling feature on the Commission's website (
(3) You can file a paper copy of your comments by mailing them to the following address. Be sure to reference the Project docket numbers (CP16-454-000, CP16-455-000) with your submission: Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 888 First Street NE, Room 1A, Washington, DC 20426
(4) In lieu of sending written or electronic comments, the Commission invites you to attend one of the public comment sessions its staff will conduct in the Project area to receive comments on the draft EIS, scheduled as follows:
The primary goal of these comment sessions is to have you identify the specific environmental issues and concerns with the draft EIS. Individual verbal comments will be taken on a one-on-one basis with a court reporter. This format is designed to receive the maximum amount of verbal comments in a convenient way during the timeframe allotted.
The Kingsville and Raymondville scoping sessions are scheduled from 5:00 p.m. to 8:00 p.m. local time, and the Port Isabel scoping session is scheduled from 5:00 p.m. to 9:00 p.m. local time. You may arrive at any time after 5:00 p.m. There will not be a formal presentation by Commission staff when the session opens. If you wish to speak, the Commission staff will hand out numbers in the order of your arrival. Comments will be taken until the closing hour for all scoping sessions. However, if no additional numbers have been handed out and all individuals who wish to provide comments have had an opportunity to do so, staff may conclude the session 30 minutes before the closing hour. Please see appendix 1 for additional information on the session format and conduct.
Your verbal comments will be recorded by the court reporter (with FERC staff or representative present) and become part of the public record for this proceeding. Transcripts will be publicly available on FERC's eLibrary system (see below for instructions on using eLibrary). If a significant number of people are interested in providing verbal comments in the one-on-one settings, a time limit of 5 minutes may be implemented for each commentor.
It is important to note that verbal comments hold the same weight as written or electronically submitted comments. Although there will not be a formal presentation, Commission staff will be available throughout the comment session to answer your questions about the environmental review process.
Any person seeking to become a party to the proceeding must file a motion to intervene pursuant to Rule 214 of the Commission's Rules of Practice and Procedures (18 CFR part 385.214). Motions to intervene are more fully described at
Additional information about the Projects is available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC website (
In addition, the Commission offers a free service called eSubscription that allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. Go to
This is a supplemental notice in the above-referenced proceeding of GRP Franklin, LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426,
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is November 1, 2018.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the website that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following electric rate filings:
Description: Baseline eTariff Filing: Application for Market-Based Rates to be effective 10/10/2018.
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Tuesday, October 23, 2018 at 10:00 a.m.
1050 First Street NE, Washington, DC.
This meeting will be closed to the public.
Judith Ingram, Press Officer, Telephone: (202) 694-1220.
The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than November 5, 2018.
1.
In addition, the Notificants will join the Rasmussen family shareholder group acting in concert.
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 4 of the BHC Act (12 U.S.C. 1843). Unless otherwise noted, nonbanking activities will be conducted throughout the United States.
Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than November 13, 2018.
1.
The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than November 1, 2018.
1.
Material covered by 5 U.S.C. (c)(9)(B).
Kimberly Weaver, Director, Office of External Affairs, (202) 942-1640.
National Institute for Occupational Safety and Health (NIOSH) of the Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice.
The National Institute for Occupational Safety and Health of the Centers for Disease Control and Prevention announces the opportunity for manufacturers to participate in an evolution of the PPE-Info database to include products identified as protection against fentanyl exposure. To view the notice and related materials, visit
Electronic or written comments expressing willingness to participate must be received by November 19, 2018. Other types of comments are not being requested. Product information is not required to be submitted in this timeframe.
You may submit comments, identified by CDC-2018-0085; NIOSH-319, by any of the following methods:
•
•
PPE-Info is a collection of national personal protective equipment (PPE) information. The database provides PPE standards setting organizations, manufacturers, suppliers, purchasers, and end users with the ability to conduct general- or advanced-criteria searches of (1) relevant standards, (2) associated product types, (3) target occupational groups, (4) basic conformity assessment specifications, and (5) additional pertinent information. PPE-Info is the only U.S. database that is maintained with comprehensive information about national PPE standards and select product information. Using this collection of information, PPE-Info currently offers the following capabilities:
• Identification of PPE standards, searchable by PPE type, hazard category, Standards Development Organization, Standard Occupational Classification (SOC) code, standard type, and standard status, with basic- and advanced-search functions;
• A PPE-Selection Logic Tool for potential Ebola exposure; and
• Identification of 3rd party testing laboratories whose scope of accreditation includes testing to the identified standard.
In compliance with the requirements of the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. chap 35), the Administration for Children and Families is soliciting public comment on the specific aspects of the information collection described above. Copies of the proposed collection of information can be obtained and comments may be forwarded by writing to the Administration for Children and Families, Office of Planning, Research and Evaluation, 330 C Street SW, Washington DC 20201. Attn: ACF Reports Clearance Officer. Email address:
The Department specifically requests comments on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information; (c) the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted within 60 days of this publication.
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of the draft guidance entitled “Content of Premarket Submissions for Management of Cybersecurity in Medical Devices.” As more medical devices are becoming interconnected, cybersecurity threats have become more numerous, more frequent, more severe, and more clinically impactful. There is a need to provide manufacturers with specific technical recommendations (
Submit either electronic or written comments on the draft guidance by March 18, 2019 to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance.
You may submit comments on any guidance at any time as follows:
Submit electronic comments in the following way:
• Federal eRulemaking Portal:
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
An electronic copy of the guidance document is available for download from the internet. See the
Suzanne Schwartz, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 5434, Silver Spring, MD 20993-0002, 301-796-6937, or Stephen Ripley, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 7301, Silver Spring, MD 20993, 240-402-7911.
The need for effective cybersecurity to assure medical device functionality and safety has become more important with the increasing use of wireless, internet- and network-connected devices, and the frequent electronic exchange of medical device-related health information. In addition, cybersecurity threats to the healthcare sector have become more frequent, more severe, and more clinically impactful. Cybersecurity incidents have rendered medical devices and hospital networks inoperable, disrupting the delivery of patient care across healthcare facilities in the United States and globally. Such cyberattacks and exploits can delay diagnoses and/or treatment and may lead to patient harm.
Although FDA issued guidance addressing recommendations for device cybersecurity information in premarket submissions in 2014,
FDA plans to hold a public workshop on January 29th and January 30th, 2019.
This draft guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent the current thinking of FDA on Content of Premarket Submissions for Management of Cybersecurity in Medical Devices. It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations. This guidance is not subject to Executive Order 12866.
Persons interested in obtaining a copy of the draft guidance may do so by downloading an electronic copy from the internet. A search capability for all Center for Devices and Radiological Health guidance documents is available at
This draft guidance refers to previously approved collections of information. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in the following FDA regulations and guidance have been approved by OMB as listed in the following table:
The Agency invites comments on the “Content of Premarket Submissions for Management of Cybersecurity in Medical Devices” draft guidance, in general, and on the following topics, in particular:
• Definition of CBOM:
• Type of information and level of detail that should be included in a CBOM
• Effective mechanisms for sharing CBOM information
• Format the CBOM should take:
• Appropriate frequency for updating the CBOM
• Features of a CBOM that would make it automatically consumable
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or the Agency) has determined the regulatory review period for OCREVUS and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of applications to the Director of the U.S. Patent and Trademark Office (USPTO), Department of Commerce, for the extension of a patent which claims that human biological product.
Anyone with knowledge that any of the dates as published (see the
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before December 17, 2018. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Beverly Friedman, Office of Regulatory Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6250, Silver Spring, MD 20993, 301-796-3600.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100-670) generally provide that a patent may be extended for a period of up to 5 years so long as the patented item (human drug product, animal drug product, medical device, food additive, or color additive) was subject to regulatory review by FDA before the item was marketed. Under these acts, a product's regulatory review period forms the basis for determining the amount of extension an applicant may receive.
A regulatory review period consists of two periods of time: A testing phase and an approval phase. For human biological products, the testing phase begins when the exemption to permit the clinical investigations of the biological product becomes effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the human biological product and continues until FDA grants permission to market the biological product. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of USPTO may award (for example, half the testing phase must be subtracted as well as any time that may have occurred before the patent was issued), FDA's determination of the length of a regulatory review period for a human biological product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(1)(B).
FDA has approved for marketing the human biologic product OCREVUS (ocrelizumab). OCREVUS is indicated for the treatment of patients with relapsing or primary progressive forms of multiple sclerosis. Subsequent to this approval, the USPTO received a patent term restoration application for OCREVUS (U.S. Patent Nos. 7,799,900 and 8,562,992) from Genentech, Inc., and the USPTO requested FDA's assistance in determining this patent's eligibility for patent term restoration. In a letter dated February 6, 2018, FDA advised the USPTO that this human biological product had undergone a regulatory review period and that the approval of OCREVUS represented the first permitted commercial marketing or use of the product. Thereafter, the USPTO requested that FDA determine the product's regulatory review period.
FDA has determined that the applicable regulatory review period for OCREVUS is 4,844 days. Of this time, 4,509 days occurred during the testing phase of the regulatory review period, while 335 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the USPTO applies several statutory limitations in its calculations of the actual period for patent extension. In its applications for patent extension, this applicant seeks 1,358 days or 795 days of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit either electronic or written comments and, under 21 CFR 60.24, ask for a redetermination (see
Submit petitions electronically to
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or the Agency) has determined the regulatory review period for AFSTYLA and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of an application to the Director of the U.S. Patent and Trademark Office (USPTO), Department of Commerce, for the extension of a patent which claims that human biological product.
Anyone with knowledge that any of the dates as published (see the
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before December 17, 2018. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Beverly Friedman, Office of Regulatory Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6250, Silver Spring, MD 20993, 301-796-3600.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100-670) generally provide that a patent may be extended for a period of up to 5 years so long as the patented item (human drug product, animal drug product, medical device, food additive, or color additive) was subject to regulatory review by FDA before the item was marketed. Under these acts, a product's regulatory review period forms the basis for determining the amount of extension an applicant may receive.
A regulatory review period consists of two periods of time: A testing phase and an approval phase. For human biological products, the testing phase begins when the exemption to permit the clinical investigations of the biological product becomes effective and runs until the approval phase
FDA has approved for marketing the human biologic product AFSTYLA (Antihemophilic Factor (Recombinant), Single Chain). AFSTYLA is indicated in children and adults with hemophilia A (congenital Factor VIII deficiency) for: (1) On-demand treatment and control of bleeding episodes, (2) routine prophylaxis to reduce the frequency of bleeding episodes, and (3) perioperative management of bleeding. Subsequent to this approval, the USPTO received a patent term restoration application for AFSTYLA (U.S. Patent No. 7,041,635) from SK Chemicals Co, LTD., and the USPTO requested FDA's assistance in determining this patent's eligibility for patent term restoration. In a letter dated August 1, 2017, FDA advised the USPTO that this human biological product had undergone a regulatory review period and that the approval of AFSTYLA represented the first permitted commercial marketing or use of the product. Thereafter, the USPTO requested that FDA determine the product's regulatory review period.
FDA has determined that the applicable regulatory review period for AFSTYLA is 1,734 days. Of this time, 1,371 days occurred during the testing phase of the regulatory review period, while 363 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the USPTO applies several statutory limitations in its calculations of the actual period for patent extension. In its application for patent extension, this applicant seeks 1,047 days of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit either electronic or written comments and, under 21 CFR 60.24, ask for a redetermination (see
Submit petitions electronically to
Health Resources and Services Administration (HRSA), Department of Health and Human Services (HHS).
Notice.
In compliance with the requirement for opportunity for public comment on proposed data collection projects of the Paperwork Reduction Act of 1995, HRSA announces plans to submit an Information Collection Request (ICR), described below, to the Office of Management and Budget (OMB). Prior to submitting the ICR to OMB, HRSA seeks comments from the public regarding the burden estimate, below, or any other aspect of the ICR.
Comments on this ICR should be received no later than December 17, 2018.
Submit your comments to
To request more information on the proposed project or to obtain a copy of the data collection plans and draft instruments, email
When submitting comments or requesting information, please include the information request collection title for reference.
HRSA specifically requests comments on (1) the necessity and utility of the proposed information collection for the proper performance of the agency's functions; (2) the accuracy of the estimated burden; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) the use of automated collection techniques or other forms of information technology to minimize the information collection burden.
Notice.
National Security Presidential Memorandum 14 directs implementation of the National Biodefense Strategy. The Secretary is authorized and directed to publish the Memorandum in the
National Security Presidential Memorandum 14 was signed on September 18, 2018.
Robert P. Kadlec, MD, MTM&H, MS, Assistant Secretary for Preparedness and Response, Office of the Secretary, Department of Health and Human Services, 200 Independence Avenue SW, Washington, DC 20201; Telephone: 202-205-2882.
It is a vital interest of the United States to prepare for, counter, respond to, and recover from biological incidents at home and abroad. Nearly all executive departments and agencies (agencies) contribute to the biodefense mission of the United States Government. Those contributions occur through a variety of authorities and programs. To ensure an integrated, comprehensive approach, agencies shall coordinate and manage biodefense activities in support of the broader biodefense enterprise, which consists of all stakeholders with a role in the detection of, prevention of, preparedness for, response to, and recovery from biological incidents, including Federal, State, local, tribal, and territorial governments, the private sector, and international partners.
(b) The foundation for the United States Government's role in the biodefense enterprise is the National Biodefense Strategy and its implementation plan (Strategy), which serve as the authoritative sources for the goals, objectives, and definitions for United States Government activities in support of the broader biodefense enterprise. Agency biodefense activities shall be conducted consistent with section 1086 of the National Defense Authorization Act for Fiscal Year 2017 and the Strategy, including activities undertaken to implement prior Executive Orders and Presidential Directives, such as Homeland Security Presidential Directive (HSPD)-5 of February 28, 2003 (Management of Domestic Incidents); HSPD-9 of January 30, 2004 (Defense of United States Agriculture and Food); HSPD-18 of January 31, 2007 (Medical Countermeasures against Weapons of Mass Destruction); HSPD-21 of October 18, 2007 (Public Health and Medical Preparedness); Executive Order 13676 of September 18, 2014 (Combating Antibiotic-Resistant Bacteria); and Executive Order 13747 of November 4, 2016 (Advancing the Global Health Security Agenda To Achieve a World Safe and Secure From Infectious Disease Threats).
(a) Consistent with the Strategy, the heads of agencies shall:
(i) Prioritize the implementation of the Strategy and include Strategy-related activities within their strategic planning and budgetary processes;
(ii) coordinate their biodefense policies with other agencies that have responsibilities or capabilities pertaining to biodefense, as well as with appropriate non-Federal entities;
(iii) share information, as appropriate, and coordinate decision-making related to the biodefense enterprise; and
(iv) monitor, evaluate, and hold their agencies accountable for implementation of the Strategy.
(b) The Assistant to the President for National Security Affairs (APNSA) shall serve as the lead for policy coordination and review, acting through the process described in National Security Presidential Memorandum (NSPM)-4 of April 4, 2017 (Organization of the National Security Council, the Homeland Security Council, and Subcommittees), to provide strategic input and facilitate policy integration for Federal biodefense efforts.
(c) There is hereby established a Biodefense Steering Committee (Committee), which shall be chaired by the Secretary of Health and Human Services (Secretary). The other members of the Committee shall include the Secretary of State, the Secretary of Defense, the Attorney General, the Secretary of Agriculture, the Secretary of Veterans Affairs, the Secretary of Homeland Security, and the Administrator of the Environmental Protection Agency. The heads of other agencies with responsibilities or capabilities pertaining to biodefense shall participate at the invitation of the Committee, as appropriate. The Committee shall be responsible for monitoring and coordinating the implementation of the Strategy. The Committee shall seek consensus, with disagreements being addressed through the NSPM-4 process. The Committee may establish appropriate consultative or advisory mechanisms to facilitate interaction with non-Federal stakeholders. The Secretary, as the Chair of the Committee, shall serve as the Federal lead in coordinating implementation of the Strategy.
(d) To assist the Committee in carrying out the responsibilities described in subsection (c) of this section, the Secretary shall, within 90 days of the date of this memorandum, establish a Biodefense Coordination Team (Team) administratively located within the Department of Health and Human Services.
(i) The Secretary shall designate a senior official of, or detailed to, the Department of Health and Human Services to serve as the director of the Team, who shall report to the Secretary.
(ii) The Secretary, the Secretary of State, the Secretary of Defense, the Attorney General, the Secretary of Agriculture, the Secretary of Veterans Affairs, the Secretary of Homeland Security, the Administrator of the Environmental Protection Agency, and the heads of other agencies with responsibilities or capabilities pertaining to biodefense shall support the work of the Team, including, where appropriate, through the detail of personnel to the Team, consistent with law.
(iii) The Secretary, in consultation with the Committee, shall ensure that appropriate resources are provided by the Department of Health and Human Services to facilitate the Team's activities.
(iv) The Team shall, in consultation with existing governance bodies with responsibilities or capabilities pertaining to biodefense, assist the Committee in monitoring and coordinating implementation of the Strategy. The Team may convene working groups with relevant agencies as appropriate. In addition, the Team shall, on an ongoing basis, maintain awareness of biodefense activities conducted by agencies, relevant interagency entities, and non Federal partners in the broader biodefense enterprise, including relevant private sector stakeholders. The Team shall identify opportunities to increase coordination with non-Federal partners, including international organizations. Subject to the approval of the Committee, the Team shall establish policies, processes, and procedures to govern its activities.
(v) The Secretary shall notify the APNSA when the Team is established.
(e) To ensure effective implementation of the Strategy, within 30 days of the formation of the Team and annually thereafter in alignment with the annual budget process, the
(i) The Secretary of State;
(ii) the Secretary of the Treasury;
(iii) the Secretary of Defense;
(iv) the Attorney General;
(v) the Secretary of the Interior;
(vi) the Secretary of Agriculture;
(vii) the Secretary of Commerce;
(viii) the Secretary of Labor;
(ix) the Secretary of Health and Human Services;
(x) the Secretary of Transportation;
(xi) the Secretary of Energy;
(xii) the Secretary of Veterans Affairs;
(xiii) the Secretary of Homeland Security;
(xiv) the Administrator of the Environmental Protection Agency;
(xv) the Director of National Intelligence;
(xvi) the Administrator of the United States Agency for International Development; and
(xvii) the Director of the Federal Bureau of Investigation.
(f) These requests shall ask how agency programs and activities contribute to the objectives of the Strategy. Covered Officials shall respond to these requests within 60 days of receipt of the request through a Biodefense Memorandum, as described in paragraphs (i)-(ii) of this subsection.
(i) The Biodefense Memorandum shall identify those activities, programs, and projects that are planned, programmed, or have been executed that advance or are expected to advance the Strategy; quantify, to the extent feasible, resources allocated to biodefense within the agency; assess the extent to which the goals, objectives, and sub-objectives of the Strategy are being met; and identify impediments to timely and effective implementation and options for their resolution. Each agency shall provide its Biodefense Memorandum to the Committee, the Team, the National Security Council (NSC) staff, and the Office of Management and Budget (OMB). The Team shall distribute the collected Memoranda to Covered Officials.
(ii) Covered Officials are not required to provide information on specific law enforcement activities, counterproliferation activities, military plans or operations, intelligence activities, or criminal investigations.
(g) The Team, as informed by each Biodefense Memorandum and consultations with the agencies, shall prepare a Biodefense Assessment (Assessment) to identify any gaps, shortfalls, and redundancies; describe any challenges to the implementation and execution of the Strategy; and recommend any necessary updates or changes to the Strategy. The Assessment shall include an analysis of the extent to which current United States Government resources support the goals and objectives of the Strategy, how existing programs and resources could be better executed or allocated to align with the Strategy, and how additional resources could, if available, be applied to support the goals of the Strategy. The Team shall coordinate the Assessment with the NSC staff and the OMB prior to its finalization. The Assessment shall be submitted to the Committee for approval and provided to the APNSA and the Director of the OMB within 180 days of the formation of the Team and annually thereafter.
(h) Each year, within 90 days of the approval of the Assessment, the Team shall summarize the Assessment and prepare, subject to the approval of the Committee and in coordination with the NSC staff, a public report describing the actions taken to reduce the risk of biological threats to the American people.
(i) Each year, Covered Officials, in coordination with the APNSA through the NSPM-4 process, shall prepare joint policy guidance (Guidance) on priority areas of biodefense. The Guidance shall be informed by the Assessment, and Covered Officials shall consider the Guidance when they develop their annual budget requests. Based on the Guidance, the Covered Officials shall include in their respective annual budget requests to the OMB information on the programs within the budget requests that support the implementation of the Strategy and conform to budget formulation requirements established by the OMB, including specified funding levels. Concurrently, Covered Officials shall submit a memorandum to the NSC staff and the OMB conveying their response to the policy Guidance. Covered Officials shall ensure that new and existing activities are prioritized and can be accommodated within budget guidance from the OMB.
(j) Within 120 days of the issuance of this memorandum, the Team, in coordination with the NSC staff through the NSPM-4 process, shall develop a proposal for metrics, milestones, end states, and roles and responsibilities of agencies, with respect to biodefense activities, particularly in meeting the goals, objectives, and sub-objectives of the Strategy. This proposal will be approved by Deputies, consistent with the NSPM-4 process.
(k) Within 2 years of the date of this memorandum, and every 2 years thereafter, Covered Officials shall review and, as appropriate, revise the Strategy. The APNSA, acting through the NSC staff, shall coordinate the development of updates to the Strategy. The updates to the Strategy shall be submitted to the President through the APNSA and, to the extent permitted by and consistent with applicable law and policy, released to the public.
(l) The APNSA, with the approval of every member of the Committee, may designate a different member of the Committee to serve as Chair of the Committee and perform the responsibilities specified in subsection 2(c).
(i) The authority granted by law to an executive department or agency, or the head thereof; or
(ii) the functions of the Director of the OMB relating to budgetary, administrative, or legislative proposals.
(b) This memorandum shall be implemented consistent with applicable laws and subject to the availability of appropriations.
(c) This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
(d) The Secretary is hereby authorized and directed to publish this memorandum in the
National Institutes of Health, HHS.
Notice; correction.
The Department of Health and Human Services, National Institutes of Health published a Notice in the
Peter Soukas, J.D., 301-594-8730;
In the
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the Special Emphasis Panel.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(a) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of a meeting of the National Advisory Board on Medical Rehabilitation Research.
The meeting will be open to the public, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
Information is also available on the Institute's/Center's home page:
The Board meeting will be videocast out to the public and will be archived for later viewing at:
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended notice is hereby given of a meeting of the Special Emphasis Panel.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Coast Guard, DHS.
Thirty-day notice requesting comments.
In compliance with the Paperwork Reduction Act of 1995 the U.S. Coast Guard is forwarding an Information Collection Request (ICR), abstracted below, to the Office of Management and Budget (OMB), Office of Information and Regulatory Affairs (OIRA), requesting an extension of its approval for the following collection of information: 1625-0014, Request for Designation and Exemption of Oceanographic Research Vessels; without change. Our ICR describes the information we seek to collect from the public. Review and comments by OIRA ensure we only impose paperwork burdens commensurate with our performance of duties.
Comments must reach the Coast Guard and OIRA on or before November 19, 2018.
You may submit comments identified by Coast Guard docket number [USCG-2018-0784] to the Coast Guard using the Federal eRulemaking Portal at
(1)
(2)
A copy of the ICR is available through the docket on the internet at
Contact Mr. Anthony Smith, Office of Information Management, telephone 202-475-3532, or fax 202-372-8405, for questions on these documents.
This Notice relies on the authority of the Paperwork Reduction Act of 1995; 44 U.S.C. Chapter 35, as amended. An ICR is an application to OIRA seeking the approval, extension, or renewal of a Coast Guard collection of information (Collection). The ICR contains information describing the Collection's purpose, the Collection's likely burden on the affected public, an explanation of the necessity of the Collection, and other important information describing the Collection. There is one ICR for each Collection.
The Coast Guard invites comments on whether this ICR should be granted based on the Collection being necessary for the proper performance of Departmental functions. In particular, the Coast Guard would appreciate comments addressing: (1) The practical utility of the Collection; (2) the accuracy of the estimated burden of the Collection; (3) ways to enhance the quality, utility, and clarity of information subject to the Collection; and (4) ways to minimize the burden of the Collection on respondents, including the use of automated collection techniques or other forms of information technology. These comments will help OIRA determine whether to approve the ICR referred to in this Notice.
We encourage you to respond to this request by submitting comments and related materials. Comments to Coast Guard or OIRA must contain the OMB Control Number of the ICR. They must also contain the docket number of this request, [USCG-2018-0784], and must be received by November 19, 2018.
We encourage you to submit comments through the Federal eRulemaking Portal at
We accept anonymous comments. All comments received will be posted without change to
OIRA posts its decisions on ICRs online at
This request provides a 30-day comment period required by OIRA. The Coast Guard published the 60-day notice (83 FR 39769, August 10, 2018) required by 44 U.S.C. 3506(c)(2). That Notice elicited no comments. Accordingly, no changes have been made to the Collections.
The Paperwork Reduction Act of 1995; 44 U.S.C. Chapter 35, as amended.
Office of the Deputy Secretary, HUD.
Notice of appointments.
The Department of Housing and Urban Development announces the establishment of two Performance Review Boards to make recommendations to the appointing authority on the performance of its senior executives. Patricia Hoban-Moore, Felicia Purifoy, Danielle Bastarache, John Benison, Virginia Sardone, Bryan Greene, Ivery Himes, George Tomchick, and Kurt Usowski will serve as members of the Departmental Performance Review Board to review career SES performance. Seth D. Appleton, Maren Kasper, John Bravacos, Ralph Gaines, and Joseph Grassi will serve as members of the Departmental Performance Review Board to review noncareer SES performance. The address is: Department of Housing and Urban Development, Washington, DC 20410-0050.
Persons desiring any further information about the Performance Review Board and its members may contact Lynette Warren, Director, Office of Executive Resources, Department of Housing and Urban Development, Washington, DC 20410. Telephone (202) 708-1381. (This is not a toll-free number)
Agency Holding the Meeting:
United States International Trade Commission.
October 23, 2018 at 11:00 a.m.
Room 101, 500 E Street SW, Washington, DC 20436, Telephone: (202) 205-2000.
Open to the public.
1. Agendas for future meetings: None.
2. Minutes.
3. Ratification List.
4. Vote on Inv. No. 731-TA-1203 (Review) (Xanthan Gum from China). The Commission is currently scheduled to complete and file its determination and views of the Commission by November 15, 2018.
5. Vote on Inv. Nos. 731-TA-873-875, 878-880, and 882 (Third Review) (Steel Concrete Reinforcing Bar from Belarus, China, Indonesia, Latvia, Moldova, Poland, and Ukraine). The Commission is currently scheduled to complete and file its determinations and views of the Commission by November 15, 2018.
6. Outstanding action jackets: None.
In accordance with Commission policy, subject matter listed above, not disposed of at the scheduled meeting, may be carried over to the agenda of the following meeting.
By order of the Commission:
Merit Systems Protection Board.
Notice.
Notice is hereby given of the members of the Merit Systems Protection Board's Performance Review Board.
October 18, 2018.
Pervis Lee, Director of Human Resources, Merit Systems Protection Board, 1615 M Street NW, Washington, DC 20419; telephone: (202) 254-4413; or email:
The Merit Systems Protection Board is publishing the names of the current members of the Performance Review Board (PRB) as required by 5 U.S.C. 4314(c)(4). Laura M. Albornoz serves as Chair of the PRB. Louis Lopez, Office of Special Counsel, Susan M. Swafford, Merit Systems Protection Board, and William L. Boulden, Merit Systems Protection Board, serve as members of the PRB.
Millennium Challenge Corporation.
Notice.
In accordance with the requirements of the Federal Advisory
Monday, November 5, 2018, from 9:00 a.m.-2:00 p.m. EST which includes a working lunch.
The meeting will be held at the Millennium Challenge Corporation, 1099 14th Street NW, Suite 700, Washington, DC 20005.
Carisa Graf-Suleman, 202.766.0286,
National Aeronautics and Space Administration.
Notice of intent to grant partially exclusive license.
NASA hereby gives notice of its intent to grant a partially exclusive license in the United States to practice the invention described and claimed in U.S. Patent Application Serial No. 62/555,416 entitled “Real-Time Six Degree of Freedom Shape Sensing Algorithm”, to Safety Technology Holding, Inc., having its principal place of business in Plymouth, MI. The fields of use may be limited to anthropomorphic dummies used in the automotive testing industry. NASA has not yet made a determination to grant the requested license and may deny the requested license even if no objections are submitted within the comment period.
The prospective partially exclusive term license may be granted unless NASA receives written objections, including evidence and argument no later than November 2, 2018 that establish that the grant of the license would not be consistent with the requirements regarding the licensing of federally owned inventions as set forth in the Bayh-Dole Act and implementing regulations. Competing applications completed and received by NASA no later than November 2, 2018 will also be treated as objections to the grant of the contemplated exclusive license. Objections submitted in response to this notice will not be made available to the public for inspection and, to the extent permitted by law, will not be released under the Freedom of Information Act.
Objections relating to the prospective license may be submitted to Mr. Mark Homer, Patent Counsel, Jet Propulsion Laboratory, 4800 Oak Grove Drive, M/S 180-800, Pasadena, CA 91109, (818) 354-7770.
Ms. Janeya Griffin, Technology Transfer Branch, Armstrong Flight Research Center, 4800 Lilly Drive M/S 1100 Edwards, California 93524, (661) 276-5743.
This notice of intent to grant an exclusive patent license is issued in accordance with 35 U.S.C. 209(e) and 37 CFR 404.7(a)(1)(i). The patent rights in these inventions have been assigned to the United States of America as represented by the Administrator of the National Aeronautics and Space Administration. The prospective partially exclusive license will comply with the requirements of 35 U.S.C. 209 and 37 CFR 404.7.
Information about other NASA inventions available for licensing can be found online at
October 15, 2018 (83 FR 51986).
9:00 a.m., Thursday, October 18, 2018.
Board Room, 7th Floor, Room 7047, 1775 Duke Street, Alexandria, VA 22314-3428.
Closed.
Pursuant to the provisions of the “Government in Sunshine Act” notice is hereby given that the NCUA Board gave notice on October 11, 2018 of the regular meeting of the NCUA Board scheduled for October 18, 2018. Prior to the meeting, on October 16, 2018, the NCUA Board unanimously determined that agency business required the deletion of the first and second items on the closed agenda with less than seven days' notice to the public, and that no earlier notice of the deletion was possible.
1. Supervisory Enforcement Matter. Closed pursuant to Exemptions (6), (8), (9)(ii), and (10).
2. Supervisory Enforcement Matter. Closed pursuant to Exemptions (6), (8), (9)(ii), and (10).
Gerard Poliquin, Secretary of the Board, Telephone: 703-518-6304.
Institute of Museum and Library Services, National Foundation on the Arts and the Humanities.
Submission for OMB review, comment request.
The Institute of Museum and Library Services announces the following information collection has been submitted to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act. This program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. This notice proposes the clearance of the instructions for the IMLS Accelerating Promising Practices for Small Libraries (APP) Notice of Funding Opportunity.
A copy of the proposed information collection request can be obtained by contacting the individual listed below in the
Comments must be submitted to the office listed in the
OMB is particularly interested in comments that help the agency to:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology (
Comments should be sent to Office of Information and Regulatory Affairs,
Dr. Sandra Webb, Director of Grant Policy and Management, Institute of Museum and Library Services, 955 L'Enfant Plaza North, SW, Suite 4000, Washington, DC 20024-2135. Dr. Webb can be reached by Telephone: 202-653-4718 Fax: 202-653-4608, or by email at
The Institute of Museum and Library Services is the primary source of federal support for the nation's libraries and museums. We advance, support, and empower America's museums, libraries, and related organizations through grant making, research, and policy development. Our vision is a nation where museums and libraries work together to transform the lives of individuals and communities. To learn more, visit
The goal of the IMLS initiative Accelerating Promising Practices for Small Libraries (APP) is to support projects that strengthen the ability of small and rural libraries and archives to serve their communities. IMLS invites applications that focus on transforming school library practice, community memory, or digital inclusion, and are clearly linked to an individual institution's broader community needs. IMLS Accelerating Promising Practices for Small Libraries (APPL) is being offered as a special initiative with funding from the National Leadership Grants for Libraries Program. This action is to create the forms and instructions for this initiative as a Notice of Funding Opportunity for the next three years.
National Endowment for the Arts, National Foundation on the Arts and the Humanities.
Notice.
The National Endowment for the Arts (NEA), as part of its continuing effort to reduce paperwork and respondent burden, conducts a preclearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act of 1995. This program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. Currently, the NEA is soliciting comments concerning the proposed information collection for the Evaluation of the Our Town Program. A copy of the current information collection request can be obtained by contacting the office listed below in the address section of this notice.
Written comments must be submitted to the office listed in the address section below within 30 days from the date of this publication in the
Send comments to: Sunil Iyengar, National Endowment for the Arts, 400 7th Street SW, Washington, DC 20506-0001, telephone (202) 682-5424 (this is not a toll-free number), fax (202) 682-5677, or send via email to
The Office of Information and Regulatory Affairs, Attn: Sharon Mar, OMB Desk Officer for the National Endowment for the Arts, Office of Management and
The NEA is particularly interested in comments which:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
This study is a new information collection request, and the data to be collected are not available elsewhere unless obtained through this information collection. A web-based survey of the National Endowment for the Arts' (NEA)
Occupational Safety and Health Review Commission.
Notice of a modified system of records and rescindment of a system of records notice.
In accordance with the Privacy Act of 1974, as amended, the Occupational Safety and Health Review Commission (OSHRC) is revising the notice for system-of-records OSHRC-7 and is rescinding the notice for system-of-records OSHRC-8.
Comments must be received by OSHRC on or before November 19, 2018. The revisions to the system-of-records notice for OSHRC-7, and the rescindment of the notice for OSHRC-8, will become effective on that date, without any further notice in the
You may submit comments by any of the following methods:
•
•
•
•
Ron Bailey, Attorney-Advisor, Office of the General Counsel, via telephone at (202) 606-5410, or via email at
The Privacy Act of 1974, 5 U.S.C. 552a(e)(4), requires federal agencies such as OSHRC to publish in the
OSHRC is also rescinding the notice for OSHRC-8—Identification Card and Office Key Distribution Records. Most of the records covered by OSHRC-8 are no longer maintained by OSHRC due to the issuance and use of personal identity verification (PIV) cards, in accordance with Homeland Security Presidential Directive (HSPD) 12. Records concerning these PIV cards are maintained by the General Services Administration (GSA) and are covered by the governmentwide system-of-records notice GSA/GOVT-7 (HSPD-12 USAccess). OSHRC does, however, maintain records, as described above, on office access cards. OSHRC has concluded, however, that such records are related to personnel security and therefore should be included in OSHRC-7, Personnel Security Records.
The notices for the rescission of OSHRC-8, and for modified system-of-records OSHRC-7, are as follows.
Identification Card and Office Key Distribution Records, OSHRC-8.
April 14, 2006, 71 FR 19556; August 4, 2008, 73 FR 45256; October 5, 2015, 80 FR 60182; and September 28, 2017, 82 FR 45324.
Personnel Security Records, OSHRC-7.
Unclassified.
The Office of the Executive Director maintains the records in this system. The office is located at 1120 20th Street NW, Ninth Floor, Washington, DC 20036-3457.
Human Resources Specialist, 1120 20th Street NW, Ninth Floor, Washington, DC 20036-3457; (202) 606-5100.
Executive Orders 10450, 10577, 13467, and 13488; Homeland Security Presidential Directive (HSPD) 12; and Federal Information Processing Standard (FIPS) 201.
The information collected by OSHRC allows the Office of Personnel Management (OPM) to conduct background investigations on those individuals being credentialed, assists in verifying the identity of those for whom credentials have been requested, and provides the necessary information for issuance of identification and access cards.
This system of records covers current OSHRC employees, contractors, and Commission members, and, as to records concerning office access cards, also former employees, contractors, and Commission members.
This system of records may include an individual's name and former names; signature; date and place of birth; social security number; citizenship information; residential history; education; employment history; criminal history and police records; names of associates and references, and their contact information; military history and selective service record; illegal drug activities; telephone numbers; hair and eye color, weight, and height; gender; financial records; investigative records; foreign countries visited; marital status and name, date and place of birth, address, and social security number of spouse; names of certain relatives who work for the government; names, addresses, dates and countries of birth, and citizenship of certain relatives. As to office access cards, the records include only the individual's name, and the date that the access card was activated, deactivated, and turned in.
Most of these records are decentralized copies from OPM and remain subject to the practices and policies set forth in system-of-records notice OPM/CENTRAL-9 (Personnel Investigations Records).
Information contained in the system is obtained from individuals subject to the credentialing process, OSHRC employees involved in the credentialing process, and investigative record materials furnished by OPM.
In addition to disclosures generally permitted under 5 U.S.C. 552a(b), all or a portion of the records or information contained in this system of records may be disclosed as a routine use pursuant to 5 U.S.C. 552a(b)(3) under the circumstances or for the purposes described below, to the extent such disclosures are compatible with the purposes for which the information was collected:
(1) To the Department of Justice (DOJ), or to a court or adjudicative body before which OSHRC is authorized to appear, when any of the following entities or individuals—(a) OSHRC, or any of its components; (b) any employee of OSHRC in his or her official capacity; (c) any employee of OSHRC in his or her individual capacity where DOJ (or OSHRC where it is authorized to do so) has agreed to represent the employee; or (d) the United States, where OSHRC determines that litigation is likely to affect OSHRC or any of its components—is a party to litigation or has an interest in such litigation, and OSHRC determines that the use of such records by DOJ, or by a court or other tribunal, or another party before such tribunal, is relevant and necessary to the litigation.
(2) To an appropriate agency, whether federal, state, local, or foreign, charged with investigating or prosecuting a violation or enforcing or implementing a law, rule, regulation, or order, when a record, either on its face or in conjunction with other information, indicates a violation or potential violation of law, which includes civil, criminal or regulatory violations, and such disclosure is proper and consistent with the official duties of the person making the disclosure.
(3) To a federal, state, or local agency maintaining civil, criminal or other relevant enforcement information, such as current licenses, if necessary to obtain information relevant to an OSHRC decision concerning the hiring, appointment, or retention of an employee; the issuance, renewal, suspension, or revocation of a security clearance; the execution of a security or suitability investigation; the letting of a contract; or the issuance of a license, grant or other benefit.
(4) To a federal, state, or local agency, in response to that agency's request for a record, and only to the extent that the information is relevant and necessary to the requesting agency's decision in the matter, if the record is sought in connection with the hiring, appointment, or retention of an
(5) To an authorized appeal grievance examiner, formal complaints manager, equal employment opportunity investigator, arbitrator, or other duly authorized official engaged in investigation or settlement of a grievance, complaint, or appeal filed by an employee, only to the extent that the information is relevant and necessary to the case or matter.
(6) To OPM in accordance with the agency's responsibilities for evaluation and oversight of federal personnel management.
(7) To officers and employees of a federal agency for the purpose of conducting an audit, but only to the extent that the record is relevant and necessary to this purpose.
(8) To OMB in connection with the review of private relief legislation at any stage of the legislative coordination and clearance process, as set forth in Circular No. A-19.
(9) To a Member of Congress or to a person on his or her staff acting on the Member's behalf when a written request is made on behalf and at the behest of the individual who is the subject of the record.
(10) To the National Archives and Records Administration (NARA) for records management inspections and such other purposes conducted under the authority of 44 U.S.C. 2904 and 2906.
(11) To appropriate agencies, entities, and persons when: (a) OSHRC suspects or has confirmed that there has been a breach of the system of records; (b) OSHRC has determined that as a result of the suspected or confirmed breach there is a risk of harm to individuals, OSHRC, the Federal Government, or national security; and (c) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with OSHRC's efforts to respond to the suspected or confirmed breach or to prevent, minimize, or remedy such harm.
(12) To NARA, Office of Government Information Services (OGIS), to the extent necessary to fulfill its responsibilities in 5 U.S.C. 552(h), to review administrative agency policies, procedures and compliance with FOIA, and to facilitate OGIS' offering of mediation services to resolve disputes between persons making FOIA requests and administrative agencies.
(13) To another federal agency or federal entity, when OSHRC determines that information from this system of records is reasonably necessary to assist the recipient agency or entity in (a) responding to a suspected or confirmed breach or (b) preventing, minimizing, or remedying the risk of harm to individuals, the recipient agency or entity (including its information systems, programs, and operations), the Federal Government, or national security, resulting from a suspected or confirmed breach.
Records are stored on paper in locked file cabinets.
Records are retrieved by an individual's name.
Office access card records are retained and disposed of in accordance with NARA's General Records Schedule 5.6, Item 21. However, paper copies of personnel security records from OPM are shredded once an employee, contractor, or Commission member no longer works at OSHRC.
Records are maintained in a locked file cabinet. Access to the cabinet is limited to personnel having a need for access to perform their official functions.
Individuals who wish to gain access to their records should notify: Privacy Officer, OSHRC, 1120 20th Street NW, Ninth Floor, Washington, DC 20036-3457. For an explanation on how such requests should be drafted, refer to 29 CFR 2400.6 (procedures for requesting records).
Individuals who wish to contest their records should notify: Privacy Officer, OSHRC, 1120 20th Street NW, Ninth Floor, Washington, DC 20036-3457. For an explanation on the specific procedures for contesting the contents of a record, refer to 29 CFR 2400.8 (Procedures for requesting amendment), and 29 CFR 2400.9 (Procedures for appealing).
Individuals interested in inquiring about their records should notify: Privacy Officer, OSHRC, 1120 20th Street NW, Ninth Floor, Washington, DC 20036-3457. For an explanation on how such requests should be drafted, refer to 29 CFR 2400.5 (notification), and 29 CFR 2400.6 (procedures for requesting records).
None.
April 14, 2006, 71 FR 19556; August 4, 2008, 73 FR 45256; October 5, 2015, 80 FR 60182; and September 28, 2017, 82 FR 45324.
Pursuant to Section 19(b)(1)
The Exchange proposes to proposes to amend the Listed Company Manual (the
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
Section 102.06 of the Manual sets forth initial listing requirements applicable to a company whose business plan is to complete an initial public offering and engage in a merger or acquisition with one or more unidentified companies within a specific period of time (an “Acquisition Company” or “AC”).
Section 802.01B of the Manual sets forth the continued listing standards for ACs. The Exchange proposes to change its initial and continued listing standards for Acquisition Companies as follows:
• Reduce the 300 total [sic] holders continued listing requirement to 100 total [sic] holders.
• Amend the rule text in Section 802.01B to enable the Exchange to exercise discretion to allow companies a reasonable period of time following the Business Combination to demonstrate compliance with all applicable quantitative listing standards.
Acquisition Companies often have difficulty demonstrating compliance with the 300 total [sic] shareholder requirement for continued listing. The shareholder requirement is designed to help ensure that a security has a sufficient number of investors to provide a liquid trading market.
In addition, because the price of an Acquisition Company is based primarily on the value of the funds it holds in trust, and the Acquisition Company's shareholders have the right to redeem their shares for a pro rata share of that trust in conjunction with the Business Combination, the impact of the number of shareholders on an Acquisition Company security's price is less relevant than is the case for operating company common stocks. For this reason, Acquisition Companies, historically, trade close to the value in the trust, even when they have had few shareholders. These trading patterns suggest that Acquisition Companies' low number of shareholders has not resulted in distorted prices.
The Exchange believes that an Exchange Traded Fund (“ETF”) is somewhat similar to an Acquisition Company in this regard in that an arbitrage mechanism keeps the ETF's price close to the value of its underlying securities, even when trading in the ETF's shares is relatively illiquid. The initial listing requirements for ETFs do not include a shareholder requirement and only 50 shareholders are required for continued listing after the ETF has been listed for one year.
Accordingly, given the short life of an Acquisition Company, the trading characteristics of Acquisition Companies, and the requirement to meet the initial listing standards at the time of the Business Combination, the Exchange proposes to reduce from 300 holders to 100 holders the minimum total number of [sic] holders required on a continued listing basis for Acquisition Companies.
Section 802.01B of the Manual currently states that:
After consummation of its Business Combination, a company that had originally listed as an AC will be subject to Section 801 and Section 802.01 in its entirety and will be required immediately upon consummation of the Business Combination to meet the following requirements:
(i) A price per share of at least $4.00;
(ii) a global market capitalization of at least $150,000,000;
(iii) an aggregate market value of publicly-held shares of at least $40,000,000 *; and
(iv) the requirements with respect to shareholders and publicly-held shares set forth in Section 102.01A for companies listing in connection with an initial public offering.
* Shares held by directors, officers, or their immediate families and other concentrated holding of 10 percent or more are excluded in calculating the number of publicly-held shares.
Section 802.01B also provides that an Acquisition Company failing to meet these requirements will be promptly subject to suspension and delisting proceedings.
The Exchange notes that it can be difficult for a company, once listed, to obtain evidence demonstrating the number of its shareholders because
The Exchange proposes to amend Section 802.01B to provide that “[f]
These proposed changes will be effective upon approval of this rule by the Commission.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Exchange Act,
Thus, this change will remove impediments to and perfect the mechanism of a free and open market by removing listing requirements that prohibit certain companies from remaining listed without any concomitant investor protection benefits.
The proposal to allow Acquisition Companies to demonstrate that they meet the applicable quantitative requirements following a Business Combination is intended in particular to address the difficulty companies have in identifying the number of holders they have immediately upon consummation of their Business Combination. Acquisition Company shareholders typically have the right to request redemption of their securities until immediately before consummation and it is therefore impracticable for companies to identify the number of round-lot holders immediately to demonstrate their qualification for initial listing. This proposed change is consistent with the protection of investors and the public interest, as it does not alter the substantive quantitative requirements a company must meet to remain listed.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The purpose of the proposed rule is to adopt continued listing standards for Acquisition Companies that better reflect the characteristics and trading market for Acquisition Companies. While the rule may permit more Acquisition Companies to list, or remain listed, on the Exchange, other exchanges could adopt similar rules to compete for such listings. As such, the Exchange does not believe it imposes any burden on competition.
No written comments were solicited or received with respect to the proposed rule change.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On July 13, 2018, Financial Industry Regulatory Authority, Inc. (“FINRA”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Exchange Act”)
The proposed rule change was published for comment in the
Parties to an arbitration typically exchange documents and information with each other to prepare for the arbitration through the discovery process.
Currently, under FINRA Rule 12214(d),
If a hearing session is required to decide the motion, each arbitrator who participates in the hearing session will receive a $300 honorarium instead.
The Codes do not expressly provide an honorarium for arbitrators who decide requests for orders for production or appearance without a hearing session. FINRA does, however, provide arbitrators a $200 honorarium to decide discovery-related motions without a hearing.
FINRA is proposing to amend FINRA Rules 12214(c) and 13214(c) to provide that FINRA would pay each arbitrator an honorarium of $200 to decide, without a hearing session: (i) A discovery-related motion;
Specifically, the proposed rule change would reduce the honorarium that an arbitrator receives to decide a contested subpoena request from $250 to $200; however, it would also remove the per-case cap on these payments. Thus, under the proposed rule change, an arbitrator would receive a $200 honorarium for each contested subpoena request that he or she decides.
In addition, the proposed rule change would now expressly provide a $200 honorarium for arbitrators deciding a contested order for production or appearance without a hearing session. Specifically, FINRA would not need to categorize requests to issue orders for production as discovery-related motions. Similarly, arbitrators would receive an honorarium for deciding without a hearing session, a contested arbitrator order for appearance as well as for production. Under the proposal, however, arbitrators would no longer receive an honorarium for deciding unopposed requests to issue an order for production.
The proposed rule change would describe what constitutes a contested order for production or appearance by modeling the description on that of a contested subpoena request. Specifically, proposed FINRA Rule 12214(c)(2)(iii) would provide that a contested order for production or appearance shall include a motion requesting the issuance of an order for production or appearance, a written objection from the party opposing the issuance of the order, and any other documents supporting a party's position.
Moreover, like a contested subpoena request, a party would be permitted to request the issuance of one or more orders in one motion,
The proposed rule change would also amend Rules 12214(a) and 13214(a) to make a few non-substantive changes.
As noted above, the Commission received four comment letters on the proposed rule change, supporting the proposal.
One commenter also suggests that FINRA take additional action regarding the assessment of fees related to discovery-related motions for subpoenas and orders. Specifically, the commenter suggests that FINRA should “informally advise arbitrators to consider assessing all fees to the non-prevailing party on contested discovery motions, where in the arbitrators' view the non-prevailing party's position lacked merit.”
In response, FINRA states that its arbitration forum already provides a mechanism for parties to argue their positions regarding the assessments of fees associated with an arbitration proceeding.
After careful review of the proposed rule change and the comment letters, the Commission finds that the proposal is consistent with the requirements of the Exchange Act and the rules and regulations thereunder that are applicable to a national securities association.
The Commission agrees with FINRA and the commenters that the proposed rule change would protect investors and the public interest by improving the FINRA arbitration forum for the parties that use it and the arbitrators who preside over claims.
The proposal would make the rules more transparent and consistent for both parties and arbitrators by providing for payments to each arbitrator of an honorarium of $200 to decide, without a hearing session: (i) A discovery-related motion; (ii) a motion that contains one or more contested subpoena requests or contested orders for production or appearance; or (iii) a motion that contains one or more contested subpoena requests and contested orders for production or appearance.
The Commission believes the proposal would also help FINRA retain and recruit qualified arbitrators to its forum by helping ensure arbitrators are paid honoraria commensurate with the time and effort they devote to deciding each request. As stated in the Notice, arbitrators must review several documents related to contested discovery-related requests: The motions requesting the issuance of the order or subpoena; the draft order or subpoena; and, any written objections to the motion. Arbitrators must then consider the arguments before making decisions on the merits of the request.
The Commission believes that by structuring the arbitrator honorarium rules so that arbitrators receive the same amount of honorarium for each contested subpoena request or contested request for an order for production or appearance they decide without a hearing, the proposed rules would align the payment of honoraria to arbitrators based on the amount of time and effort required to revolve certain discovery-related motions rather than based on the characterization of those requests.
The Commission acknowledges that the proposed rule change could increase fees for certain parties. For example, under the proposed rule change parties would be subject to fees for contested requests to issue orders of appearance without a hearing session; and, the proposal would remove the per-case cap on fees for contested subpoena requests so that parties would be assessed additional fees if they submit multiple contested requests for subpoenas.
The Commission also acknowledges that the proposed rule change could lower fees for certain parties. For example, the proposal would: (i) Eliminate payment of honoraria to arbitrators deciding an unopposed order for production; and (ii) lower the amount of honoraria paid to arbitrators for deciding a contested subpoena request from $250 to $200. In addition, the proposal would permit a party or parties to use one motion to request the issuance of one or more contested subpoenas or orders so that parties could mitigate their fees.
On balance, the Commission believes that the proposed rule change is designed to protect investors and the public interest. Notwithstanding the potential increase in fees to some parties in arbitration, the Commission believes that the proposal would improve the FINRA arbitration forum for its users.
In addition, notwithstanding the potential decrease in honoraria in some cases, the Commission believes that the proposal would help FINRA retain and recruit qualified arbitrators to its forum.
The Commission acknowledges one commenter's request that FINRA provide additional guidance to arbitrators regarding their authority to assess all fees to the non-prevailing party on contested discovery motions, where in the arbitrators' view the non-prevailing party's position lacked
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Securities and Exchange Commission (“Commission”).
Notice.
Notice of an application for an order under sections 17(d) and 57(i) of the Investment Company Act of 1940 (the “Act”) and rule 17d-1 under the Act permitting certain joint transactions otherwise prohibited by sections 17(d) and 57(a)(4) of the Act and rule 17d-1 under the Act.
Applicants request an order to permit a business development company (“BDC”) and certain closed-end investment companies to co-invest in portfolio companies with each other and with affiliated investment funds.
Audax Credit BDC Inc. (the “Company”), Audax Credit Strategies (SCS), L.P. (“SCS”), Audax Credit Opportunities (SBA), LLC (“SBA”), Audax Senior Debt (MP), LLC (“MP”), Audax Senior Debt (WCTPT), LLC (“WCTPT”), Audax Senior Debt (AZ), LLC (“AZ”), Audax Senior Loan Fund I, L.P. (“SLF I”), Audax Senior Loan Fund I (Offshore), L.P. (“SLF I(O)”), Audax Senior Loan Fund, L.P. (“SLF”), Audax Senior Loan Fund III, L.P. (“SLF III”), Audax Senior Loan Fund III (Offshore), L.P. (“SLF III(O)”), Audax Senior Loan Fund (ST), LP (“SLF(ST)”), Audax Direct Lending Solutions Fund-A, L.P. (“Direct Lending-A”), Audax Direct Lending Solutions Fund-B, L.P. (“Direct Lending-B”), Audax Direct Lending Solutions Fund-C, L.P. (“Direct Lending-C”), Audax Direct Lending Solutions Fund-D, L.P. (“Direct Lending-D” and, collectively with SCS, SBA, MP, WCTPT, AZ, SLF I, SLF I(O), SLF, SLF III, SLF III(O), SLF(ST), Direct Lending-A, Direct Lending-B, and Direct Lending-C, the “Private Funds”), and Audax Management Company (NY), LLC (the “Company Adviser,” and collectively with the Company and the Private Funds, the “Applicants”).
The application was filed on December 29, 2017 and amended on June 14, 2018.
An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on November 6, 2018 and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Pursuant to rule 0-5 under the Act, hearing requests should state the nature of the writer's interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary.
Secretary, U.S. Securities and Exchange Commission, 100 F St. NE, Washington, DC 20549-1090. Applicants: 101 Huntington Avenue, Boston, Massachusetts 02199.
Jill Ehrlich, Senior Counsel, at (202) 551-6819, or Andrea Ottomanelli Magovern, Branch Chief, at (202) 551-6821 (Chief Counsel's Office, Division of Investment Management).
The following is a summary of the application. The complete application may be obtained via the Commission's website by searching for the file number, or for an applicant using the Company name box, at
1. The Company was organized as a corporation under the General Corporation Law of the State of Delaware on January 29, 2015 and elected to be treated as a BDC
2. SCS was formed as a Delaware limited partnership on March 10, 2014 and would be an investment company but for the exclusion from the definition of investment company provided by section 3(c)(7) of the Act. SCS's investment objective is to invest primarily in a portfolio of secured and unsecured loans and other debt instruments, seeking low volatility, principal protection and current income. SCS has an investment strategy that is similar to the Company's investment strategy.
3. SBA was formed as a Delaware limited liability company on March 10, 2010 and would be an investment company but for the exclusion from the definition of investment company provided by section 3(c)(7) of the Act. SBA's investment objective is to invest primarily in a portfolio of secured and unsecured loans and other debt instruments, seeking low volatility, principal protection and current
4. MP was formed as a Delaware limited liability company on June 28, 2017 and would be an investment company but for the exclusion from the definition of investment company provided by section 3(c)(7) of the Act. MP's investment objective is to invest primarily in a portfolio of secured and unsecured loans and other debt instruments, seeking low volatility, principal protection and current income. MP has an investment strategy that is similar to the Company's investment strategy.
5. WCTPT was formed as a Delaware limited liability company on October 25, 2011 and would be an investment company but for the exclusion from the definition of investment company provided by section 3(c)(7) of the Act. WCTPT's investment objective is to invest in a portfolio of first lien senior secured loans, seeking low volatility, principal protection and current income for WCTPT. WCTPT has an investment strategy that is similar to the Company's investment strategy.
6. AZ was formed as a Delaware limited liability company on November 20, 2017 and would be an investment company but for the exclusion from the definition of investment company provided by section 3(c)(7) of the Act. AZ's investment objective is to invest primarily in a portfolio of secured and unsecured loans and other debt instruments, seeking low volatility, principal protection and current income. AZ has an investment strategy that is similar to the Company's investment strategy.
7. SLF I was formed as a Delaware limited partnership on July 23, 2007 and would be an investment company but for the exclusion from the definition of investment company provided by section 3(c)(7) of the Act. SLF I's investment objective is to invest primarily in a portfolio of secured and unsecured loans and other debt instruments, seeking low volatility, principal protection and current income. SLF I has an investment strategy that is similar to the Company's investment strategy.
8. SLF I(O) was formed as a Cayman Islands exempted limited partnership on October 2, 2007 and would be an investment company but for the exclusion from the definition of investment company provided by section 3(c)(7) of the Act. SLF I(O)'s investment objective is to invest primarily in a portfolio of secured and unsecured loans and other debt instruments, seeking low volatility, principal protection and current income. SLF(IO) has an investment strategy that is similar to the Company's investment strategy.
9. SLF was formed as a Delaware limited partnership on August 10, 2012 and would be an investment company but for the exclusion from the definition of investment company provided by section 3(c)(7) of the Act. The investment objective of SLF is to invest primarily in a portfolio of first lien senior secured loans to North American middle market companies, although a portion of the its portfolio may be invested in mezzanine, second lien, distressed and other securities or instruments, including securities or instruments of non-North American companies. SLF has an investment strategy that is similar to the Company's investment strategy.
10. SLF III was formed as a Delaware limited partnership on January 19, 2016 and would be an investment company but for the exclusion from the definition of investment company provided by section 3(c)(7) of the Act. The investment objective of SLF III is to invest primarily in a portfolio of first lien senior secured loans to North American middle market companies, although a portion of the its portfolio may be invested in mezzanine, second lien, distressed and other securities or instruments, including securities or instruments of non-North American companies. SLF III has an investment strategy that is similar to the Company's investment strategy.
11. SLF III(O) was formed as a Cayman Islands exempted limited partnership on May 25, 2016 and would be an investment company but for the exclusion from the definition of investment company provided by section 3(c)(7) of the Act. The investment objective of SLF III(O) is to invest primarily in a portfolio of first lien senior secured loans to North American middle market companies, although a portion of the its portfolio may be invested in mezzanine, second lien, distressed and other securities or instruments, including securities or instruments of non-North American companies. SLF III(O) has an investment strategy that is similar to the Company's investment strategy.
12. SLF (ST) was formed as a Delaware limited partnership on May 16, 2018 and would be an investment company but for the exclusion from the definition of investment company provided by section 3(c)(7) of the Act. The investment objective of SLF (ST) is to invest primarily in a portfolio of secured and unsecured loans and other debt instruments, seeking low volatility, principal protection and current income. SLF (ST) has an investment strategy that is similar to the Company's investment strategy.
13. Direct Lending-A, Direct Lending-B and Direct Lending-C were each formed as a Delaware limited partnership on October 12, 2017, October 12, 2017 and April 5, 2017, respectively, and each would be an investment company but for the exclusion from the definition of investment company provided by section 3(c)(7) of the Act. Direct Lending-D was formed as a Cayman Islands exempted limited partnership on April 10, 2018 and would be an investment company but for the exclusion from the definition of investment company provided by section 3(c)(7) of the Act. The investment objective of each of Direct Lending-A, Direct Lending-B, Direct Lending-C, and Direct Lending-D is to engage in direct lending to private middle market companies based in the United States and Canada through a variety of structures, and primarily via unitranche and stretch senior secured loans, with selected positions in senior secured first or second lien loans, equity and similar investments. The investment strategy of each of Direct Lending-A, Direct Lending-B, Direct Lending-C, and Direct Lending-D overlaps with the Company's investment strategy.
14. The Company Adviser, a Delaware limited liability company and an investment adviser registered with the Commission under the Investment Advisers Act of 1940 (“Advisers Act”), serves as investment adviser to both the Company and each of the Private Funds. Under the investment advisory agreements of the Company and the Private Funds, the Company Adviser manages the portfolio of each entity in accordance with the investment objective and policies of each, makes investment decisions for each entity, places purchase and sale orders for portfolio transactions for each entity, and otherwise manages the day-to-day operations of each entity, subject, in the case of the Company, to the oversight of its Board.
15. Applicants seek an order (“Order”) to permit one or more Regulated Funds
16. Applicants state that a Regulated Fund may, from time to time, form one or more Wholly-Owned Investment Subsidiaries. Such a subsidiary would be prohibited from investing in a Co-Investment Transaction with any Affiliated Fund or Regulated Fund because it would be a company controlled by its parent Regulated Fund for purposes of section 57(a)(4) and rule 17d-1. Applicants request that each Wholly-Owned Investment Subsidiary be permitted to participate in Co-Investment Transactions in lieu of its parent Regulated Fund and that the Wholly-Owned Investment Subsidiary's participation in any such transaction be treated, for purposes of the requested Order, as though the parent Regulated Fund were participating directly. Applicants represent that this treatment is justified because a Wholly-Owned Investment Subsidiary would have no purpose other than serving as a holding vehicle for the parent Regulated Fund's investments and, therefore, no conflicts of interest could arise between a Regulated Fund and its Wholly-Owned Investment Subsidiary. The applicable Regulated Fund's Board would make all relevant determinations under the conditions with regard to a Wholly-Owned Investment Subsidiary's participation in a Co-Investment Transaction, and the Regulated Fund's Board would be informed of, and take into consideration, any proposed use of a Wholly-Owned Investment Subsidiary in the Regulated Fund's place. If the Regulated Fund proposes to participate in the same Co-Investment Transaction with any of its Wholly-Owned Investment Subsidiaries, the Board will also be informed of, and take into consideration, the relative participation of the Regulated Fund and the Wholly-Owned Investment Subsidiary.
17. When considering Potential Co-Investment Transactions for any Regulated Fund, the applicable Adviser will consider only the Objectives and Strategies, investment policies, investment positions, capital available for investment (“Available Capital”), and other pertinent factors applicable to that Regulated Fund. The Board of each Regulated Fund, including the Non-Interested Directors, has (or will have prior to relying on the requested Order) determined that it is in the best interests of the Regulated Fund to participate in the Co-Investment Transaction.
18. Other than pro rata dispositions and Follow-On Investments as provided in conditions 7 and 8, and after making the determinations required in conditions 1 and 2(a), the Adviser will present each Potential Co-Investment Transaction and the proposed allocation to the directors of the Board eligible to vote under section 57(o) of the Act (“Eligible Directors”), and the “required majority,” as defined in section 57(o) of the Act (“Required Majority”)
19. With respect to the pro rata dispositions and Follow-On Investments provided in conditions 7 and 8, a Regulated Fund may participate in a pro rata disposition or Follow-On Investment without obtaining prior approval of the Required Majority if, among other things: (i) The proposed participation of each Regulated Fund and Affiliated Fund in such disposition is proportionate to its outstanding investments in the issuer immediately preceding the disposition or Follow-On Investment, as the case may be; and (ii) the Board of the Regulated Fund has approved that Regulated Fund's participation in pro rata dispositions and Follow-On Investments as being in the best interests of the Regulated Fund. If the Board does not so approve, any such disposition or Follow-On Investment will be submitted to the Regulated Fund's Eligible Directors. The Board of any Regulated Fund may at any time rescind, suspend or qualify its approval of pro rata dispositions and Follow-On Investments with the result that all dispositions and/or Follow-On Investments must be submitted to the Eligible Directors.
20. Applicants also represent that if the Advisers, the principals of the Advisers (“Principals”), or any person controlling, controlled by, or under common control with an Adviser or the Principals, and the Affiliated Funds (collectively, the “Holders”) own in the aggregate more than 25% of the outstanding voting shares of a Regulated Fund (the “Shares”), then the Holders will vote such Shares as required under condition 14. Applicants believe this condition will ensure that the Non-Interested Directors will act independently in evaluating the Co-Investment Program, because the ability of the Advisers or the Principals to influence the Non-Interested Directors by a suggestion, explicit or implied, that the Non-Interested Directors can be removed will be limited significantly. Applicants represent that the Non-Interested Directors will evaluate and approve any such independent third party, taking into account its qualifications, reputation for independence, cost to the stockholders, and other factors that they deem relevant.
1. Section 57(a)(4) of the Act prohibits certain affiliated persons of a BDC from participating in joint transactions with the BDC or a company controlled by a BDC in contravention of rules as prescribed by the Commission. Under section 57(b)(2) of the Act, any person who is directly or indirectly controlling, controlled by, or under common control with a BDC is subject to section 57(a)(4). Applicants submit that each of the Regulated Funds and Affiliated Funds could be deemed to be a person related to each Regulated Fund in a manner described by section 57(b) by virtue of being under common control. Section 57(i) of the Act provides that, until the Commission prescribes rules under section 57(a)(4), the Commission's rules under section 17(d) of the Act applicable to registered closed-end investment companies will be deemed to apply to transactions subject to section 57(a)(4). Because the Commission has not adopted any rules under section 57(a)(4), rule 17d-1 also applies to joint transactions with Regulated Funds that are BDCs. Section 17(d) of the Act and rule 17d-1 under the Act are applicable to Regulated Funds that are registered closed-end investment companies.
2. Section 17(d) of the Act and rule 17d-1 under the Act prohibit affiliated persons of a registered investment company from participating in joint transactions with the company unless the Commission has granted an order permitting such transactions. In passing upon applications under rule 17d-1, the Commission considers whether the company's participation in the joint transaction is consistent with the provisions, policies, and purposes of the Act and the extent to which such participation is on a basis different from or less advantageous than that of other participants.
3. Applicants state that in the absence of the requested relief, the Regulated Funds would be, in some circumstances, limited in their ability to participate in attractive and appropriate investment opportunities. Applicants believe that the proposed terms and conditions will ensure that the Co-Investment Transactions are consistent with the protection of each Regulated Fund's shareholders and with the purposes intended by the policies and provisions of the Act. Applicants state that the Regulated Funds' participation in the Co-Investment Transactions will be consistent with the provisions, policies, and purposes of the Act and on a basis that is not different from or less advantageous than that of other participants.
Applicants agree that the Order will be subject to the following conditions:
1. Each time an Adviser considers a Potential Co-Investment Transaction for an Affiliated Fund or another Regulated Fund that falls within a Regulated Fund's then-current Objectives and Strategies, the Regulated Fund's Adviser will make an independent determination of the appropriateness of the investment for the Regulated Fund in light of the Regulated Fund's then-current circumstances.
2.
(a) If the Adviser deems a Regulated Fund's participation in any Potential Co-Investment Transaction to be appropriate for the Regulated Fund, it will then determine an appropriate level of investment for the Regulated Fund.
(b) If the aggregate amount recommended by the applicable Adviser to be invested by the applicable Regulated Fund in the Potential Co-Investment Transaction, together with the amount proposed to be invested by the other participating Regulated Funds and Affiliated Funds, collectively, in the same transaction, exceeds the amount of the investment opportunity, the investment opportunity will be allocated among them pro rata based on each participant's Available Capital, up to the amount proposed to be invested by each. The applicable Adviser will provide the Eligible Directors of each participating Regulated Fund with information concerning each participating party's Available Capital to assist the Eligible Directors with their review of the Regulated Fund's investments for compliance with these allocation procedures.
(c) After making the determinations required in conditions 1 and 2(a), the applicable Adviser will distribute written information concerning the Potential Co-Investment Transaction (including the amount proposed to be invested by each participating Regulated Fund and Affiliated Fund) to the Eligible Directors of each participating Regulated Fund for their consideration. A Regulated Fund will co-invest with one or more other Regulated Funds and/or one or more Affiliated Funds only if, prior to the Regulated Fund's participation in the Potential Co-Investment Transaction, a Required Majority concludes that:
(i) The terms of the Potential Co-Investment Transaction, including the consideration to be paid, are reasonable and fair to the Regulated Fund and its stockholders and do not involve overreaching in respect of the Regulated Fund or its stockholders on the part of any person concerned;
(ii) the Potential Co-Investment Transaction is consistent with:
(A) The interests of the Regulated Fund's stockholders; and
(B) the Regulated Fund's then-current Objectives and Strategies;
(iii) the investment by any other Regulated Funds or Affiliated Funds would not disadvantage the Regulated Fund, and participation by the Regulated Fund would not be on a basis different from or less advantageous than that of any other Regulated Funds or Affiliated Funds; provided that if any other Regulated Funds or Affiliated Funds, but not the Regulated Fund itself, gains the right to nominate a director for election to a portfolio company's board of directors or the right to have a board observer or any similar right to participate in the governance or management of the portfolio company, such event shall not be interpreted to prohibit the Required Majority from reaching the conclusions required by this condition (2)(c)(iii), if:
(A) The Eligible Directors will have the right to ratify the selection of such director or board observer, if any;
(B) the applicable Adviser agrees to, and does, provide periodic reports to the Regulated Fund's Board with respect to the actions of such director or the information received by such board observer or obtained through the exercise of any similar right to participate in the governance or management of the portfolio company; and
(C) any fees or other compensation that any Affiliated Fund or any Regulated Fund or any affiliated person of any Affiliated Fund or any Regulated Fund receives in connection with the right of the Affiliated Fund or Regulated Fund to nominate a director or appoint a board observer or otherwise to participate in the governance or management of the portfolio company will be shared proportionately among the participating Affiliated Funds (who each may, in turn, share its portion with its affiliated persons) and the participating Regulated Fund in accordance with the amount of each party's investment; and
(iv) the proposed investment by the Regulated Fund will not benefit the Advisers, any Affiliated Funds or other Regulated Funds or any affiliated person of any of them (other than the parties to the Co-Investment Transaction), except (A) to the extent permitted by condition 13, (B) to the extent permitted by section 17(e) or 57(k) of the Act, as applicable, (C) indirectly, as a result of
3. Each Regulated Fund has the right to decline to participate in any Potential Co-Investment Transaction or to invest less than the amount proposed.
4. The applicable Adviser will present to the Board of each Regulated Fund, on a quarterly basis, a record of all investments in Potential Co-Investment Transactions made by any of the other Regulated Funds or Affiliated Funds during the preceding quarter that fell within the Regulated Fund's then-current Objectives and Strategies that were not made available to the Regulated Fund, and an explanation of why the investment opportunities were not offered to the Regulated Fund. All information presented to the Board pursuant to this condition will be kept for the life of the Regulated Fund and at least two years thereafter, and will be subject to examination by the Commission and its staff.
5. Except for Follow-On Investments made in accordance with condition 8,
6. A Regulated Fund will not participate in any Potential Co-Investment Transaction unless the terms, conditions, price, class of securities to be purchased, settlement date, and registration rights will be the same for each participating Regulated Fund and Affiliated Fund. The grant to an Affiliated Fund or another Regulated Fund, but not the Regulated Fund, of the right to nominate a director for election to a portfolio company's board of directors, the right to have an observer on the board of directors or similar rights to participate in the governance or management of the portfolio company will not be interpreted so as to violate this condition 6, if conditions 2(c)(iii)(A), (B) and (C) are met.
7.
(a) If any Affiliated Fund or any Regulated Fund elects to sell, exchange or otherwise dispose of an interest in a security that was acquired in a Co-Investment Transaction, the applicable Advisers will:
(i) Notify each Regulated Fund that participated in the Co-Investment Transaction of the proposed disposition at the earliest practical time; and
(ii) formulate a recommendation as to participation by each Regulated Fund in the disposition.
(b) Each Regulated Fund will have the right to participate in such disposition on a proportionate basis, at the same price and on the same terms and conditions as those applicable to the participating Affiliated Funds and Regulated Funds.
(c) A Regulated Fund may participate in such disposition without obtaining prior approval of the Required Majority if: (i) The proposed participation of each Regulated Fund and each Affiliated Fund in such disposition is proportionate to its outstanding investments in the issuer immediately preceding the disposition; (ii) the Board of the Regulated Fund has approved as being in the best interests of the Regulated Fund the ability to participate in such dispositions on a pro rata basis (as described in greater detail in the application); and (iii) the Board of the Regulated Fund is provided on a quarterly basis with a list of all dispositions made in accordance with this condition. In all other cases, the Adviser will provide its written recommendation as to the Regulated Fund's participation to the Eligible Directors, and the Regulated Fund will participate in such disposition solely to the extent that a Required Majority determines that it is in the Regulated Fund's best interests.
(d) Each Affiliated Fund and each Regulated Fund will bear its own expenses in connection with any such disposition.
8.
(a) If any Affiliated Fund or Regulated Fund desires to make a Follow-On Investment in a portfolio company whose securities were acquired in a Co-Investment Transaction, the applicable Advisers will:
(i) Notify each Regulated Fund that participated in the co-investment transaction of the proposed Follow-On Investment at the earliest practical time; and
(ii) formulate a recommendation as to the proposed participation, including the amount of the proposed Follow-On Investment, by each Regulated Fund.
(b) A Regulated Fund may participate in such Follow-On Investment without obtaining prior approval of the Required Majority if: (i) The proposed participation of each Regulated Fund and each Affiliated Fund in such investment is proportionate to its outstanding investments in the issuer immediately preceding the Follow-On Investment; and (ii) the Board of the Regulated Fund has approved as being in the best interests of the Regulated Fund the ability to participate in Follow-On Investments on a pro rata basis (as described in greater detail in the application). In all other cases, the Adviser will provide its written recommendation as to the Regulated Fund's participation to the Eligible Directors, and the Regulated Fund will participate in such Follow-On Investment solely to the extent that a Required Majority determines that it is in the Regulated Fund's best interests.
(c) If, with respect to any Follow-On Investment:
(i) The amount of the opportunity is not based on the Regulated Funds' and the Affiliated Funds' outstanding investments immediately preceding the Follow-On Investment; and
(ii) the aggregate amount recommended by the applicable Adviser to be invested by the applicable Regulated Fund in the Follow-On Investment, together with the amount proposed to be invested by other participating Regulated Funds and Affiliated Funds, collectively, in the same transaction, exceeds the amount of the investment opportunity, then the investment opportunity will be allocated among them pro rata based on each participant's Available Capital, up to the amount proposed to be invested by each.
(d) The acquisition of Follow-On Investments as permitted by this condition will be considered a Co-Investment Transaction for all purposes and subject to the other conditions set forth in the application.
9. The Non-Interested Directors of each Regulated Fund will be provided quarterly for review all information concerning Potential Co-Investment Transactions and Co-Investment Transactions, including investments made by any other Regulated Funds or Affiliated Funds that the Regulated Fund considered but declined to participate in, so that the Non-Interested Directors may determine whether all investments made during the preceding quarter, including those investments that the Regulated Fund considered but declined to participate in, comply with the conditions of the Order. In addition, the Non-Interested Directors will consider at least annually the continued appropriateness for the Regulated Fund of participating in new and existing Co-Investment Transactions.
10. Each Regulated Fund will maintain the records required by section 57(f)(3) of the Act as if each of the Regulated Funds were a BDC and each of the investments permitted under these conditions were approved by the
11. No Non-Interested Director of a Regulated Fund will also be a director, general partner, managing member or principal, or otherwise an “affiliated person” (as defined in the Act) of an Affiliated Fund.
12. The expenses, if any, associated with acquiring, holding or disposing of any securities acquired in a Co-Investment Transaction (including, without limitation, the expenses of the distribution of any such securities registered for sale under the 1933 Act) will, to the extent not payable by the Advisers under their respective investment advisory agreements with Affiliated Funds and the Regulated Funds, be shared by the Regulated Funds and the Affiliated Funds in proportion to the relative amounts of the securities held or to be acquired or disposed of, as the case may be.
13. Any transaction fee
14. If the Holders own in the aggregate more than 25% of the Shares of a Regulated Fund, then the Holders will vote such Shares as directed by an independent third party when voting on (1) the election of directors; (2) the removal of one or more directors; or (3) any other matter under either the Act or applicable state law affecting the Board's composition, size or manner of election.
15. Each Regulated Fund's chief compliance officer, as defined in rule 38a-1(a)(4) under the Act, will prepare an annual report for the Board of such Regulated Fund that evaluates (and documents the basis of that evaluation) the Regulated Fund's compliance with the terms and conditions of the application and procedures established to achieve such compliance.
For the Commission, by the Division of Investment Management, under delegated authority.
On June 28, 2018, Miami International Securities Exchange, LLC (“MIAX Options” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to list and trade cash-settled, European-style options on the Index, which measures expected thirty-day volatility of SPY.
As more fully set forth in the Notice, the Index is calculated using a methodology developed by T3i Pty Ltd, which uses published real-time prices and bid/ask quotes of SPY options.
The Index will be updated on a real-time basis on each trading day beginning at 9:30 a.m. and ending at
The Exchange proposes that the standard trading hours for index options (9:30 a.m. to 4:15 p.m., New York time) will apply to options on the Index. Options on the Index will expire on the Wednesday that is thirty days prior to the third Friday of the calendar month immediately following the expiration month.
To determine the final settlement value of the Index, the Exchange will perform an Index settlement price calculation, which includes all SPY options that expire thirty days after the SPIKES settlement that are included in the settlement (“constituent options”). To perform the Index settlement price calculation, each constituent option will be assigned a Settlement Reference Price (“SRP”). Each SRP will be determined through the proposed “SPIKES Special Settlement Auction,” which will be conducted once per month, in the constituent options traded on the Exchange, on final settlement day. The SPIKES Special Settlement Auction will utilize the Exchange's existing standard opening process, as described in Exchange Rule 503(f), with a proposed modification to account for situations where there remains an order imbalance
All orders for participation in the SPIKES Special Settlement Auction that are related to positions in, or a trading strategy involving, Index options (“SPIKES Strategy Orders”) and any change to or cancellation of any such order: (i) Must be received prior to the applicable SPIKES Strategy Order cut-off time for the constituent option series, as determined by the Exchange, which may be no earlier than the opening of the live order window (currently, 7:30 a.m.) or the live quote window (for the SPIKES Special Settlement Auction, anticipated to be 8:30 a.m.), and no later than the opening of trading in the series; and (ii) may not be cancelled or modified after the applicable SPIKES Strategy Order cut-off time, unless the SPIKES Strategy Order is not executed in the SPIKES Special Settlement Auction and the cancellation or modification is submitted after the SPIKES Special Settlement Auction is concluded. The Exchange states that it will generally consider orders to be SPIKES Strategy Orders if the orders possess the following characteristics: (i) They are for options with the expiration that will be used to calculate the exercise or final settlement value of the applicable volatility index option contract; (ii) they are for options spanning the full range of strike prices for the appropriate expiration for options that will be used to calculate the exercise or final settlement value of the applicable volatility index option contract, but not necessarily every available strike price; and (iii) they are for put options with strike prices less than the at-the-money strike price, for call options with strike prices greater than the at-the-money strike price, or for put and call options with at-the-money strike prices. The Exchange notes that it may also deem order types other than those provided above as SPIKES Strategy Orders if the Exchange determines that to be the case based on the applicable facts and circumstances.
The Exchange believes that the Index, including the settlement value, will not be readily susceptible to manipulation.
The Exchange proposes to adopt minimum trading increments for options on the Index to be $0.05 for series trading below $3, and $0.10 for series trading at or above $3. The Exchange also proposes to set the minimum strike price interval for options on the Index at $0.50 where the strike price is less than $15, $1 or greater where the strike price is between $15 and $200, and $5 or greater where the strike price is greater than $200. Currently, when new series of options on the Index with a new expiration date are opened for trading, or when additional series of options on the Index in an existing expiration date are opened for trading as the current value of the Index moves substantially from the exercise prices of series already opened, the exercise prices of such new or additional series must be reasonably related to the current value of the Index at the time such series are first opened for trading.
The Exchange initially proposes to list options on the Index in up to twelve standard monthly expirations. In addition, long-term option series having up to sixty months to expiration,
The Exchange believes that the Index is a broad-based index, as that term is defined in Exchange Rule 1801(k).
In addition, the Exchange proposes that the trading of options on the Index will be subject to the same rules governing the trading of Exchange index options, including sales practice rules, margin requirements, and trading rules. Trading of options on the Index will also be subject to the trading halt procedures applicable to other index options traded on the Exchange.
The Exchange represents that it has an adequate surveillance program in place for options on the Index and intends to apply those same program procedures that it applies to the Exchange's other options products. In addition, the Exchange notes that several new surveillances related to the Index will be added to its surveillance program.
After careful consideration of the proposal, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange,
The Commission believes that the Exchange's proposal is consistent with the Act.
The Commission also believes that permitting $0.50 strike price intervals if the strike price is less than $15 and $1.00 strike price intervals if the strike price is between $15 and $200 will provide investors with added flexibility in the trading of these options and will further the public interest by allowing investors to establish positions that are better tailored to meet their investment objectives. As noted above, the Exchange proposes to provide an exception for the proposed Index options from the existing requirement that exercise prices of new or additional series must be reasonably related to the current value of the Index at the time such series are first opened for trading.
The Commission also believes that it is consistent with the Act to apply margin requirements to the proposed Index options that are otherwise applicable to options on broad-based indexes. The Commission further believes that the Exchange's proposed minimum trading increment, series openings, and other aspects of the proposed rule change are appropriate and consistent with the Act.
As a national securities exchange, the Exchange is required, under Section 6(b)(1) of the Act,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
U.S. Small Business Administration.
Amendment 4.
This is an amendment of the Presidential declaration of a major disaster for the State of North Carolina (FEMA-4393-DR), dated 09/14/2018.
Issued on 10/10/2018.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for the State of North Carolina, dated 09/14/2018, is hereby amended to establish the incident period for this disaster as beginning 09/07/2018 and continuing through09/29/2018.
All other information in the original declaration remains unchanged.
U.S. Small Business Administration.
Amendment 2.
This is an amendment of the Presidential declaration of a major disaster for Public Assistance Only for the State of California (FEMA-4382-DR), dated 08/04/2018.
Issued on 10/04/2018.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for Private Non-Profit organizations in the State of California, dated 08/04/2018, is hereby amended to include the following areas as adversely affected by the disaster.
All other information in the original declaration remains unchanged.
Wisconsin Central Ltd. (WCL) has filed a verified notice of exemption under 49 CFR pt. 1152 subpart F—
WCL has certified that: (1) No local traffic has moved over the Line for at least two years; (2) there is no overhead traffic to be rerouted over other lines; (3)
As a condition to this exemption, any employee adversely affected by the discontinuance of service shall be protected under
Provided no formal expression of intent to file an offer of financial assistance (OFA)
A copy of any petition filed with Board should be sent to WCL's representative, Bradon J. Smith, Fletcher & Sippel LLC, 29 North Wacker Drive, Suite 800, Chicago, IL 60606.
If the verified notice contains false or misleading information, the exemption is void ab initio.
Board decisions and notices are available on our website at
By the Board, Scott M. Zimmerman, Acting Director, Office of Proceedings.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of application for exemption; request for comments.
FMCSA announces that it has received an application from Rota-Mill, Inc. (Rota-Mill) requesting exemptions from two requirements of the hours-of-service (HOS) regulations for drivers of commercial motor vehicles (CMVs): (1) The 30-minute rest break provision and (2) the requirement that short-haul drivers utilizing the record of duty status (RODS) exception return to their work-reporting location within 12 hours of coming on duty. The first exemption would enable drivers engaged in the transportation of milled asphalt and related materials and equipment to use 30 minutes or more of on-duty “waiting time” at a jobsite to satisfy the requirement for the 30-minute rest break, provided they do not perform any other work during the break. The second exemption would allow these drivers to use the short-haul exception, but return to their work-reporting location within 14 hours instead of the current 12 hours. FMCSA requests public comment on Rota-Mill's application for exemptions.
Comments must be received on or before November 19, 2018.
You may submit comments identified by Federal Docket Management System Number FMCSA-2018-0236 by any of the following methods:
•
•
•
•
Each submission must include the Agency name and the docket number for this notice. Note that DOT posts all comments received without change to
For information concerning this notice, please contact Mr. Richard Clemente, FMCSA Driver and Carrier Operations Division; Telephone: (202) 366-2722; Email:
FMCSA encourages you to participate by submitting comments and related materials.
If you submit a comment, please include the docket number for this notice (FMCSA-2018-0236), indicate the specific section of this document to which the comment applies, and provide a reason for suggestions or recommendations. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so the Agency can contact you if it has questions regarding your submission.
To submit your comment online, go to
FMCSA has authority under 49 U.S.C. 31136(e) and 31315 to grant exemptions from certain Federal Motor Carrier Safety Regulations (FMCSRs). FMCSA must publish a notice of each exemption request in the
The Agency reviews safety analyses and public comments submitted, and determines whether granting the exemption would likely achieve a level of safety equivalent to, or greater than, the level that would be achieved by the current regulation (49 CFR 381.305). The decision of the Agency must be published in the
Rota-Mill seeks exemptions for all of its drivers transporting milled asphalt and related materials and equipment from the HOS 30-minute rest break provision in 49 CFR 395.3(a)(3)(ii) and the restriction of the RODS exception for short-haul operations to drivers who return to their normal work-reporting location within 12 hours [49 CFR 395.1(e)(1)(ii)(A)].
Rota-Mill employs approximately 21 commercial driver's license holders who are the operators of the heavy equipment. They drive to the job location, then operate the equipment they deliver. Their driving time for any given day would be less than 5 hours. A considerable amount of Rota-Mill's jobs are between one and one-and-a-half hours away. If the job is for 8 hours, these drivers can easily return to Rota-Mill's facility within the 12-hour limit of the short-haul exception in 395.1(e). The issue arises when Rota-Mill's crews arrive on a job, and the job increases in size as a result of some unforeseen circumstance. In this case, the Rota-Mill drivers are sometimes required to work longer than 12 hours.
The first exemption from the HOS rest break provision, if granted, would enable drivers engaged in the transportation of milled asphalt and related materials to use 30 minutes or more of on-duty “waiting time” to satisfy the requirement for the 30-minute rest break, provided they do not perform any other work during the break. This would apply when the drivers are not eligible for the short-haul exception. According to Rota-Mill, the requirement for the 30-minute break after the first 8 hours on duty is difficult for their drivers, because the time actually driving a CMV is typically only a few hours per day, with the rest of the day assigned to some other task. Rota-Mill dump truck operators are required to wait at quarries and various other locations, and cannot get out of line to take their required 30-minute break. Extending the short-haul exception without the 30-minute mandatory break would help make Rota-Mill's system run more efficiently and ultimately be safer.
The second exemption, if granted, would allow these same drivers to use the short-haul RODS exception but with a 14-hour duty period instead of 12 hours. Rota-Mill advises that providing the requested relief would allow all of their drivers to get home in a compliant amount of time without the burden of having to maintain a full record of duty status or taking the currently required 30-minute break if they exceed the 12-hour work day. Additionally, granting these requested exemptions would ease confusion and provide clarity for Rota-Mill drivers who may mistakenly believe they are covered under the short-haul exception.
Rota-Mill states in its application that drivers would receive sufficient rest due to the nature of their operations that limits driving to an average of six to seven hours per day or less during the road milling season. Rota-Mill believes that granting these exemptions would achieve the same level of safety provided by the two HOS rules. In an effort to ensure the same level of safety is maintained by complying with the regulations, Rota-Mill will add fatigue management training for its drivers. The requested exemptions are for 5 years. A copy of Rota-Mill's application for exemptions is available for review in the docket for this notice.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of application for exemption; request for comments.
FMCSA announces that Fiat Chrysler Automobiles (FCA) has requested an exemption from the requirement that a motor carrier install and require each of its drivers to use an electronic logging device (ELD) to record the driver's hours-of-service (HOS). FCA has requested a two-year exemption for all its operators of commercial motor vehicles (CMVs) including engineers, technicians, and other drivers who operate CMVs on public roads. FCA's product development activities encompass working with suppliers on validating engineering redesigns for future vehicles, and they estimate that 85% to 90% of such testing occurs on-site at its facilities. The remaining testing occurs off-site on public roads which is the reason FCA is requesting the exemption from the ELD regulations. FCA believes that granting this exemption will have no adverse safety impacts while its CMV operators are performing product development on off-site public road trips. FMCSA requests public comment on FCA's application for exemption.
Comments must be received on or before November 19, 2018.
You may submit comments identified by Federal Docket Management System (FDMS) Number FMCSA-2018-0299 by any of the following methods:
•
•
•
•
• Each submission must include the Agency name and the docket number for this notice. Note that DOT posts all comments received without change to
Mr. Richard Clemente, FMCSA Driver and Carrier Operations Division; Office of Carrier, Driver and Vehicle Safety Standards; Telephone: 202-366-2722. Email:
FMCSA encourages you to participate by submitting comments and related materials.
If you submit a comment, please include the docket number for this notice (FMCSA-2018-0299), indicate the specific section of this document to which the comment applies, and provide a reason for suggestions or recommendations. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so the Agency can contact you if it has questions regarding your submission.
To submit your comments online, go to
FMCSA has authority under 49 U.S.C. 31136(e) and 31315 to grant exemptions from certain parts of the Federal Motor Carrier Safety Regulations (FMCSRs). FMCSA must publish a notice of each exemption request in the
The Agency reviews safety analyses and public comments submitted, and determines whether granting the exemption would likely achieve a level of safety equivalent to, or greater than, the level that would be achieved by the current regulation (49 CFR 381.305). The decision of the Agency must be published in the
FCA's CMVs include RAM trucks and other product families, which when configured with a trailer have a gross combination weight rating greater than 10,000 pounds. When operated in interstate commerce, this subjects the company and its drivers to the 49 CFR part 300-399 series of Federal regulations including the hours-of-service (HOS) rules. Procedures and processes are in place to ensure that only FCA and supplier employees with an active driver qualification file operate these vehicles. In any given year, up to 100 FCA employees may be involved in driving its CMVs on product development off-site road trips. All of its engineers and technicians are infrequent drivers who on average drive less than 2,500 miles/year on public roads. Additionally, all Engineering Groups conduct off-site road trips to evaluate systems and components to support future product development activities. Including non-CMV support vehicles, FCA normally sends between 8 to 12 vehicles with 4 to 5 trailers. This type of trip would include up to 20 drivers (engineers and technicians) who possess either a commercial driver's license or a chauffer's license. Most road trips involve a smaller number of vehicles and drivers, and according to FCA, a significant amount of testing occurs while the vehicles are stationary.
FCA's product development activities encompass working with suppliers on validating engineering redesigns for future vehicles. FCA tests “next generation” vehicles against competing products from other original equipment manufacturers in dynamics settings. FCA estimates that 85% to 90% of such testing occurs on-site at its facilities or proving grounds, and the remaining testing occurs off-site on public roads. Specifically, FCA conducts tests to benchmark vehicles against competing brands, and some of these programs involve calibration and thermal validation of complete vehicle systems at various locations in the United States and Canada. On occasion, the instrumented vehicles and trailers are shipped to the off-site testing location, and on other occasions, FCA's engineers, technicians and suppliers drive these vehicles to the off-site test locations. None of its CMVs are involved in package delivery or passenger transportation.
FCA has already tested several portable electronic logging device (ELD) units and found that the device interferes with the ability of their data loggers to capture high-speed data from vehicle control modules and networks
According to FCA, the granting of this exemption will have no negative impact on public safety or compliance with the HOS regulations. FCA takes the safety of its employees and the general public seriously. All product development off-site road trips are planned months in advance, and the participants, details of the testing protocol, routing and choice of lodgings are selected to maintain HOS compliance. Its employees have been using paper RODS to record HOS for the past five years. FCA utilizes print and on-line training tools to instruct its employees in CMV Driver Basics; Compliance, Safety, Accountability Know the Basics; Driver Vehicle and Road Side Inspections; and HOS Driver Training. FCA further recognizes that employees rotate annually between vehicle platforms and therefore conducts several safe driving workshops annually at its facilities to introduce and reinforce the following: Preparing to drive a CMV and driver fatigue; the basics of vehicle handling and safe braking with and without a trailer; truck-trailer backing skills including backing up an inclined road and parking; downhill braking techniques with ballasted trailers; and demonstration of proper truck/trailer connections (conventional, fifth wheel and gooseneck). All FCA attendees will have an opportunity to practice driving, parking and safe backing skills. FCA requests a two-year exemption from the ELD requirements in 49 CFR part 395 subpart B.
A copy of FCA's application for exemption is available for review in the docket for this notice.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of application for exemption; request for comments.
FMCSA announces that it has received a joint application from Wolfe House Movers, LLC and Wolfe House Movers of Indiana, LLC (Wolfe) requesting an exemption from the hours-of-service (HOS) regulations for drivers operating commercial motor vehicles (CMV) that transport steel beams and dollies to and from various job sites for lifting and moving buildings. Wolfe requests an exemption to use the 70-hour/8-day rule for its CMV operations although the company does not operate CMVs 7 days a week. FMCSA requests public comment on this application for exemption.
Comments must be received on or before November 19, 2018.
You may submit comments identified by Federal Docket Management System Number FMCSA-2018-0235 by any of the following methods:
•
•
•
•
Each submission must include the Agency name and the docket number for this notice. Note that DOT posts all comments received without change to
For information concerning this notice, please contact Ms. Pearlie Robinson, FMCSA Driver and Carrier Operations Division; Telephone: (202) 366-4225; Email:
FMCSA encourages you to participate by submitting comments and related materials.
If you submit a comment, please include the docket number for this notice (FMCSA-2018-0235), indicate the specific section of this document to which the comment applies, and provide a reason for suggestions or recommendations. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so the Agency can contact you if it has questions regarding your submission.
To submit your comment online, go to
FMCSA has authority under 49 U.S.C. 31136(e) and 31315 to grant exemptions from certain Federal Motor Carrier Safety Regulations (FMCSRs). FMCSA must publish a notice of each exemption request in the
The Agency reviews safety analyses and public comments submitted, and determines whether granting the exemption would likely achieve a level of safety equivalent to, or greater than, the level that would be achieved by the current regulation (49 CFR 381.305). The decision of the Agency must be published in the
Wolfe House Movers, LLC (USDOT 1279267), and Wolfe House Movers of Indiana, LLC (USDOT 1679025) (Wolfe) seek an exemption from the HOS requirements of 49 CFR 395.3(b)(1) which prohibits a motor carrier from permitting or requiring a driver to drive a property-carrying CMV after the driver has been on duty 60 hours within a period of 7 consecutive days if the employing motor carrier does not operate CMVs every day of the week. Wolfe does not operate CMVs every day of the week and is prohibited from using the 70-hour/8-day rule in 49 CFR 395.3(b)(2) for its business operations.
According to Wolfe, its primary line of business is lifting and moving buildings. Drivers employed by Wolfe transport steel beams and dollies to and from various jobsites where work is performed. Wolfe advises that its owners believe that Sunday is a day of rest and worship and refuse any business opportunities that would require Sunday work.
Because Wolfe does not conduct business on Sunday, its commericial business operations are subject to the 60-hours-in-7-day rule set forth in 49 CFR 395.3(b)(1). Due to the geographical spread of its operations, Wolfe asserts that the 60 hour limitation is a substantial burden. Wolfe explained in its application that the company attempts to schedule work so that all crews can be at their home terminal before the 60th on-duty hour of the week. However, weather, traffic, or jobsite conditions sometimes delay completion of projects causing crews to be stranded one or two hours' drive from the home terminal. When delays occur relief drivers are sent in non-commercial vehicles to pick up stranded drivers so that the drivers who have run out of hours can drive back to the home terminal using the non-commercial vehicles while the relief drivers return the CMVs to the terminal.
Wolfe reports that it is a small company and it is difficult to have relief drivers available on short notice and it is unproductive and costly for the company. Wolfe asserts that the stress and pressure associated with approaching the 60-hour cut-off is likely to have a detrimental effect on the safety performance of even well-trained and well-qualified drivers.
According to Wolfe, allowing it to use the 70-hour/8-day HOS ruleset for all drivers not operating CMVs on Sundays would provide the following significant safety benefits:
• The need for relief drivers would be significantly reduced or completely eliminated. This would result in fewer on-road miles driven (by eliminating the need for a relief driver to drive up to 100 miles out to pick up the CMV and for the regular driver to drive the non-CMV back the same 100 miles). This would also mean that the CMV would continue to be driven by the driver most familiar with it, rather than a part-time driver.
• Drivers would be less stressed, knowing that they have sufficient time to complete their weekly schedule even if they are delayed by heavy traffic, weather conditions, etc.
A copy of Wolfe'ss application for exemption is available for review in the docket for this notice.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of application for exemption; request for comments.
FMCSA announces that it has received an application from Transco, Inc. (Transco) for an exemption from the 30-minute rest break provision of the Agency's hours-of-service (HOS) regulations for commercial motor vehicle (CMV) drivers. Transco requests that its drivers be permitted to comply with the 30-minute rest break requirement while performing on-duty, not-driving tasks. The requested exemption would apply to all Transco drivers in its grocery and food service divisions who make wholesale deliveries to grocery and convenience stores. Transco believes that the exemption, if granted, will achieve a level of safety equivalent to the level that would be achieved absent the exemption. FMCSA requests public comment on Transco's application for exemption.
Comments must be received on or before November 19, 2018.
You may submit comments identified by Federal Docket Management System (FDMS) Number FMCSA-2018-0302 by any of the following methods:
•
•
•
•
Each submission must include the Agency name and the docket number for this notice. Note that DOT posts all comments received without change to
Mr. Richard Clemente, FMCSA Driver and Carrier Operations Division; Office of Carrier, Driver and Vehicle Safety Standards; Telephone: (202) 366-2722; Email:
FMCSA encourages you to participate by submitting comments and related materials.
If you submit a comment, please include the docket number for this notice (FMCSA-2018-0302), indicate the specific section of this document to which the comment applies, and provide a reason for suggestions or recommendations. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so the Agency can contact you if it has questions regarding your submission.
To submit your comment online, go to
FMCSA has authority under 49 U.S.C. 31136(e) and 31315 to grant exemptions from certain Federal Motor Carrier Safety Regulations. FMCSA must publish a notice of each exemption request in the
The Agency reviews safety analyses and public comments submitted, and determines whether granting the exemption would likely achieve a level of safety equivalent to, or greater than, the level that would be achieved by the current regulation (49 CFR 381.305). The decision of the Agency must be published in the
Transco seeks an exemption from the 30-minute rest break provision in 49 CFR 395.3(a)(3)(ii). Specifically, Transco requests an exemption that would allow its drivers to take a 30-minute on-duty, non-driving break in place of the 30-minute off-duty rest break currently required. McLane, Transco's parent company, is one of the nation's largest entities engaged in supply chain services, providing grocery and foodservice supply chain solutions for convenience stores, mass merchants, drug stores and restaurants throughout the United States. Approximately 3,580 Transco drivers would be eligible for the requested exemption. These drivers utilize approximately 1,700 CMVs in Transco's fleet, which consist almost exclusively of tractors equipped with sleeper berths, usually hauling 48 or 53-foot trailers. In most cases Transco's drivers operate in two-driver teams. Routes for these drivers include numerous, frequent stops to make deliveries of groceries to retailers. On these trips, Driver B goes directly into the sleeper berth at the beginning of the trip while Driver A conducts all pre-departure inspection requirements and then drives to the first delivery. This allows Driver B to delay starting his duty period until a time that is less than 14 hours from the work tour completion, thereby ensuring compliance with the 14-hour rule. Depending on travel times, Driver B usually starts working sometime between the first and third delivery stop. When Driver B comes out of the sleeper berth, he or she rides in the passenger seat while Driver A drives between stops. The two drivers have overlapping working tours and unload together at most stops in the middle of the trip. Until the end of Driver A's 14-hour duty period, the drivers may alternate driving and resting in the passenger seat between deliveries. Once Driver A reaches his or her 14-hour limit, Driver A will often go into the sleeper berth, but is allowed to remain on duty and perform non-driving activities. Therefore, at some point, usually when approximately one-half of the driving for a work tour has been completed, Driver B will take over driving duties and Driver A will sit in the passenger seat between stops. Since Driver B did not begin his or her duty period until exiting the sleeper berth, Driver B will have sufficient time available to drive during the rest of the work tour. Similarly, because Driver A ceases driving when approximately one-half of the work tour has been completed, he or she does not drive beyond the 14 hour on-duty window in which driving is permitted. Total trip time averages 17.2 hours. However, total driving time for both drivers combined averages just 9.1 hours. Each driver spends, on average, only 4.55 hours or 32.9% of their working tour engaged in driving, again much less than the 11 hours maximum time allowed.
Transco contends that itsoperations are characterized by several factors that make the driving involved low risk and less susceptible to the type of fatigue associated with long-haul driving for the following reasons:
• Transco's drivers operate largely on local roads at low speeds, which reduces fatigue risk. According to Transco, most drowsiness-related crashes occur at night in low-traffic conditions on rural interstates or other rural highways. By and large these conditions are the opposite of the conditions experienced by Transco's drivers, who spend most of their driving time on local roads at low speeds;
• Its operations are characterized by multiple short driving periods interrupted by breaks, which precludes
• Its drivers have regular schedules and routes and return home after every trip. Approximately 85% of Transco's drivers work fixed schedules and routes with minimal trip-to-trip variations. Transco's trips begin and end at the same place.
• Transco practices proactive safety management. In its application, Transco highlights several additional proactive safety management practices currently in place in connection with its grocery operations. These include DriveCam video monitoring; increased safety inspections and meetings; mandatory driver safety training; and manufacturer-installed collision avoidance systems on the vehicles.
According to Transco, as a result of these operational differences, the 30-minute rest break requirement does not increase safety when applied to their drivers; instead, it claims the requirement may very well decrease road safety for its drivers. For the typical long-haul CMV driver, the 30-minute rest break serves as an opportunity to break the monotony of driving and relieve some of the stress of continuous driving, but Transco's drivers currently have breaks, which includes physical exercise, several times each day. Providing this exemption would in fact increase safety overall by reducing Transco's mileage exposure, and thus crash risk, by over 4 million additional miles per year.
Transco believes that the requested exemption would achieve a level of safety that is equivalent to, or greater than, the level of safety that would be obtained by complying with the current regulation. Transco gives the following reasons why the Agency should approve the exemption request: (1) Allowing its drivers to substitute a 30-minute on-duty, non-driving break for a 30-minute off-duty break will not reduce safety; (2) No more than 50% of their logged time per working tour is “on-duty driving” time and the non-driving on-duty time is primarily devoted to pick-ups, deliveries and like operations; (3) They return to their point of origin at the end of their trip; (4) No driving is performed 14 hours after coming on duty; (5) Drivers do not drive if more than 8 hours have passed since the driver engaged in 30 consecutive minutes of on-duty non-driving activity; and, (6) The drivers operate CMVs equipped with electronic logging devices compliant with the Agency's regulations or compliant automatic on-board recorders for the period allowed for the use of such devices by FMCSA regulations.
A copy of Transco's application for exemptions is available for review in the docket for this notice.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of application for exemption; request for comments.
FMCSA announces that it has received an application from RJR Transportation, Inc. (RJR) requesting an exemption to increase the 100 air-mile radius in “short-haul operations” to 150 air-miles for its drivers. This would enable the drivers not exceeding the 150 air-mile radius to utilize time records instead of a complete record of duty status (RODS) for that day. RJR believes that the exemption, if granted, will achieve a level of safety equivalent to the level that would be achieved absent the exemption. FMCSA requests public comment on RJR's application for exemption.
Comments must be received on or before November 19, 2018.
You may submit comments identified by Federal Docket Management System Number FMCSA-2018-0271 by any of the following methods:
•
•
•
•
Each submission must include the Agency name and the docket number for this notice. Note that DOT posts all comments received without change to
Mr. Richard Clemente, FMCSA Driver and Carrier Operations Division; Office of Carrier, Driver and Vehicle Safety Standards; Telephone: (202) 366-2722; Email:
FMCSA encourages you to participate by submitting comments and related materials.
If you submit a comment, please include the docket number for this notice (FMCSA-2018-0271), indicate the specific section of this document to which the comment applies, and provide a reason for suggestions or recommendations. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so the Agency can contact you if it has questions regarding your submission.
To submit your comment online, go to
FMCSA has authority under 49 U.S.C. 31136(e) and 31315 to grant exemptions from certain Federal Motor Carrier Safety Regulations. FMCSA must publish a notice of each exemption request in the
The Agency reviews safety analyses and public comments submitted, and determines whether granting the exemption would likely achieve a level of safety equivalent to, or greater than, the level that would be achieved by the current regulation (49 CFR 381.305). The decision of the Agency must be published in the
RJR Transportation, Inc. (RJR), USDOT 629200, is requesting an exemption to increase the 100 air-mile radius in 49 CFR 395.1(e)(1) to 150 air-miles for its drivers. This would enable the drivers not exceeding the 150 air-mile radius to utilize time records instead of a complete record of duty status (RODS) for that day.
RJR is a local trucking operation based in Northern California operating on dedicated routes, with more than 98 percent of its trips within the 100 air-mile radius, short-haul exception. RJR primarily operates commercial motor vehicles (CMVs) with a gross vehicle weight rating (GVWR) over 55,000 pounds.
Most of RJR's drivers qualify for and operate under the 100 air-mile radius exemption in 49 CFR 395.1(e)(1); on a weekly or monthly basis, fewer than 5 percent of its drivers may exceed the 100 air-mile radius but not a 150 air-mile radius. Specifically, RJR services three areas outside the 100 air-mile radius which are all between 100 to 140 air-miles from the normal work reporting location. RJR states that it will be forced to make a substantial investment in updating its vehicle fleet to include electronic logging devices (ELDs) for just this short extension of the 100 air-mile radius.
Currently, RJR has five drivers who maintain paper RODS, but all of its 60 CMVs need to be equipped with ELDs in order to give the company the flexibility to put any driver in any vehicle, as it does now. Local pickup and delivery services operate under significantly different circumstances than interstate or long-haul over-the-road truck drivers. This not only presents a substantial and ongoing financial commitment in updating its fleet, but it also creates an additional regulatory requirement that will have to be managed on a daily basis.
RJR states in its application that in order to insure an equivalent level of safety, it will continue to require its drivers to attend and participate in monthly safety meetings, including the promotion of safety through the company's Safety Incentive Program rewarding drivers for driving records free from accidents and moving violations. RJR will further continue to utilize continuous automatic event recorders, which capture among other things, speed, global positioning system location, hard braking events, and sudden turns. RJR believes that granting the exemption will achieve a level of safety equivalent to the level that would be achieved absent the proposed exemption. A copy of RJR's application for exemptions is available for review in the docket for this notice.
Pipeline and Hazardous Materials Safety Administration (PHMSA), Department of Transportation (DOT).
Final rule.
PHMSA, in consultation with the Federal Aviation Administration, issues this final rule to align the U.S. Hazardous Materials Regulations with current international standards for the air transportation of hazardous materials. These amendments revise certain special provisions, packaging requirements, information to the pilot-in-command requirements, and exceptions for passengers and crewmembers. In addition to facilitating harmonization with international standards, several of the amendments in this rule are responsive to petitions for rulemaking submitted by the regulated community.
Aaron Wiener, Office of Hazardous Materials Standards, International Standards, (202) 366-4579, Pipeline and Hazardous Materials Safety Administration, U.S. Department of Transportation, 1200 New Jersey Avenue SE, 2nd Floor, Washington, DC 20590-0001.
On December 5, 2016, PHMSA (also “we”), in consultation with the Federal Aviation Administration (FAA), published a notice of proposed rulemaking (NPRM) [Docket No. PHMSA-2015-0100 (HM-259); 81 FR 87510] to amend the Hazardous Materials Regulations (HMR; 49 CFR parts 171-180) to align more closely with certain provisions of the International Civil Aviation Organization's Technical Instructions for the Safe Transport of Dangerous Goods by Air (ICAO Technical Instructions). These amendments update miscellaneous regulatory requirements for hazardous materials offered for transportation, or transported, in commerce by aircraft. In addition, the NPRM proposed amendments in response to four petitions for rulemaking submitted by the regulated community. The petitions are included in the docket for this proceeding and are discussed at length in Section II (Comment Discussion) of this rulemaking. In the NPRM, the phrase “notification to the pilot-in-command” and the acronym “NOTOC” were used. In this final rule, consistent with the ICAO Technical Instructions, the phrase “information to the pilot-in-command” is used.
In response to the NPRM [81 FR 87510], PHMSA received comments from the following organizations:
The DGAC petitioned PHMSA to remove the additional intermediate packaging requirements found in special provisions A3 and A6,
• Special provision A3 states that if glass inner packagings are used for transportation of referenced commodities, they must be packed with absorbent material in tightly closed metal receptacles before being packed in outer packagings.
• Special provision A6 states that if plastic inner packagings are used for transportation of referenced commodities, they must be packed in tightly closed metal receptacles before being packed in outer packagings.
The petitioner notes that the packaging requirements imposed by special provisions A3 and A6 are domestic provisions not found in the ICAO Technical Instructions and that maintaining these differences creates both a trade barrier to U.S. exports and a burden to the domestic market. The petitioner contends that the requirement for “metal receptacles” is overly restrictive and provides a competitive advantage to shippers in countries that allow these products to be shipped without additional intermediate packagings.
The petitioner further notes that the following requirements in § 173.27(d) and (e) of the HMR make special provisions A3 and A6 unnecessary: (1) When transported by air, inner packagings of Packing Group (PG) I materials currently assigned A3, A6, or both are already required to be packed in either a rigid and leakproof receptacle or an intermediate packaging containing sufficient absorbent material to absorb the entire contents of the inner
Section 173.27(d) of the HMR establishes the type of closure required for transportation of liquid hazardous materials by air. It states that the inner packaging for PG I liquid hazardous materials must have a secondary means of closure applied. The inner packaging for PG II or III liquid hazardous materials must have a secondary closure applied unless the secondary closure is impracticable. If the secondary closure is impracticable, the closure requirements for PG II and III liquids may be satisfied by securely closing the inner packaging and placing it in a leakproof liner or bag before placing the inner packaging in the outer packaging.
Section 173.27(e) sets the absorbency requirements for PG I liquid hazardous materials of Classes 3, 4, or 8, or Divisions 5.1 or 6.1, when the materials are packaged in glass, earthenware, plastic, or metal inner packagings and offered for transport by air. It requires that inner packagings be packed in a rigid and leakproof receptacle or intermediate packaging that is sufficiently absorbent to absorb the entire contents of the inner packaging before the inner package is packed in the outer package.
In the NPRM, PHMSA proposed to: (1) Amend special provision A3 in § 172.102 to authorize rigid and leakproof receptacles for intermediate packaging; (2) remove references to special provision A3 from assigned PG I entries in the HMT; and (3) remove references to special provision A6 from assigned liquids in the HMT.
PHMSA received positive feedback from commenters. Specifically, ALPA and UPS expressed support for this amendment. The DGAC also expressed support for the proposed amendment; however, consistent with their petition, DGAC continues to believe that the secondary closure requirements in § 173.27(d) satisfy the provisions in A3, making A3 unnecessary for PG II and III materials.
As stated in the NPRM, PHMSA agrees that current requirements in § 173.27(d) and (e) make special provisions A3 and A6 unnecessarily redundant for liquid PG I materials. We also agree that the requirements in § 173.27(d) for inner packagings to have a secondary means of closure or a leakproof liner or bag adequately address the hazards that special provision A6 was designed to mitigate for PG II and III materials. As commenters did not provide any supplemental information or justification for the removal of special provision A3 from the assigned PG II and III entries other than originally included in the petition, PHMSA maintains its position stated in the NPRM that the material of construction of the inner packaging referenced in special provision A3 (glass) necessitates an intermediate packaging to perform a containment function in the event an inner packaging breaks. Therefore, PHMSA is maintaining the intermediate packaging requirements for PG II and III materials in special provision A3; however, we are amending special provision A3 to authorize rigid and leakproof receptacles for use as intermediate packagings that are currently limited to metal construction. This will provide a wider range of intermediate packaging options to shippers of hazardous materials subject to special provision A3.
Additionally, in the NPRM, PHMSA solicited comment on maintaining special provision A6 for currently assigned solid materials or whether revisions to the packaging provisions for these materials should be considered in a future rulemaking. Special provision A6 is currently assigned to four solid materials (UN Nos. 1326, 1390, 1889, and 3417) in the HMT. Unlike the liquids currently assigned special provision A6, these solid materials are not subject to the intermediate or secondary packaging provisions in § 173.27. PHMSA received two comments in support of removing special provision A6 from the currently assigned solid materials. The DGAC commented that the special provision is unnecessary because these solid materials are not subject to the intermediate or secondary packaging requirements. UPS supports removing the special provision provided the packaging provisions in § 173.27 are modified to require secondary or intermediate containment for these commodities. Based on the comments received, PHMSA will consider removing special provision A6 from the four solid materials in a future rulemaking.
Phillips Healthcare petitioned PHMSA to revise § 175.10(a)(18)(i) to increase the quantity limits applicable to the transportation of portable medical electronic devices (
A global increase in air travel, as well as a growing aged population in many countries, makes it reasonable to assume that there will be a significant increase in older passengers and passengers with illness. An automated external defibrillator can make the difference between life and death during cardiac arrest.
The petitioner further asserted that the current HMR requirements prohibit many people who need to travel with their portable medical electronic devices from doing so because the lithium content exceeds the amount allowed.
In addition, the petitioner noted that increasing the quantity limits for portable medical electronic devices containing lithium metal batteries and spare batteries would be consistent with section 828 of the “FAA Modernization and Reform Act of 2012” (Pub. L. 112-98, 126 Stat. 133; Feb. 14, 2012),
In the NPRM, PHMSA proposed to amend § 175.10(a)(18)(i) to authorize passengers and crewmembers to carry on board an aircraft lithium metal battery-powered portable medical electronic devices and two spare batteries for those devices exceeding 2 grams of lithium content per battery, but not exceeding 8 grams of lithium content per battery, with the approval of the operator.
PHMSA received three comments from A4A, COSTHA, and DGAC in support of the proposed amendment.
In contrast, ALPA provided comments that oppose the proposed amendment, stating that they do not support changing regulations based on the end use of batteries. Specifically, ALPA notes “batteries installed in a medical device can be the same as used in a non-medical device . . . and are not inherently safer than non-medical devices.” PHMSA agrees with ALPA that hazardous materials are not generally regulated by end-use application when offered as cargo, but rather on the hazard posed during transport. In addition, PHMSA does not dispute ALPA's assertion that lithium batteries used in medical devices present the same hazard as lithium batteries used in non-medical devices. However, the exceptions for passengers and crewmembers prescribed in § 175.10 do not apply to cargo consignments. Instead, they are based on the need of individual passengers and crewmembers to carry personal items containing relatively small quantities of hazardous materials for common “end-use” items subject to certain conditions. In the 2011-2012 edition of the ICAO Technical Instructions, the 2-gram limit was expanded for medical devices only. Specifically, the limit was expanded to allow for medical devices known to exceed these limits, notably Automated External Defibrillators (AEDs), which typically had a lithium content between 4 and 8 grams.
In addition to the comments above, A4A and COSTHA recommended that PHMSA extend this allowance for lithium metal battery-powered portable medical electronic devices exceeding current regulatory limits to all portable electronic devices powered by lithium metal batteries. They stated that maintaining differences between medical and non-medical devices increases training costs, adds confusion, and the risk of potential inadvertent non-compliance by aircraft operators who elect to approve portable medical devices exceeding 2 grams of lithium content per battery, but not exceeding 8 grams of lithium content per battery. As this proposal was not presented in the December 5, 2016 NPRM, it is considered beyond the scope of the rulemaking and is not addressed in this final rule.
UPS petitioned PHMSA to revise the information to the pilot-in-command requirements to match the ICAO Technical Instructions. The pilot-in-command must receive the information in order to appropriately consider the presence, amount, and location of hazardous materials onboard the aircraft in an emergency.
In its petition, UPS asked PHMSA to amend the domestic information to the pilot-in-command requirements in § 175.33 to reduce what it considers extraneous information and more closely align the HMR with existing international practices. The petitioner stated that harmonization with more elements of the ICAO Technical Instructions' information to the pilot-in-command requirements will reduce the regulatory burden for operators, as well as the costs associated with training employees and contract personnel to two sets of standards.
In the NPRM, PHMSA proposed adding each of the following requirements to the HMR:
1. The operator must provide to the flight dispatcher
2. The information must be provided to the pilot-in-command and flight dispatchers prior to an aircraft moving under its own power;
3. The air operator must retain the pilot-in-command's confirmation via signature or other appropriate indication that the required information was received; and
4. The person responsible for loading the aircraft must provide a signed confirmation or other form of indication that no damaged or leaking packages or packages showing evidence of damage or leakage were loaded on the aircraft.
PHMSA received comments from A4A, ALPA, DGAC, COSTHA, and UPS providing general support for aligning the information to the pilot-in-command requirements with the ICAO Technical Instructions. UPS commented, “This action will improve consistency between the HMR and ICAO, thereby promoting clarity of requirements, and overall compliance and safety in flight for operations around the world.” DGAC commented, “. . . Harmonizing the provisions of the HMR with those in the ICAO will provide for enhanced safety, minimize potential for errors, enhance training in only one set of harmonized requirements, and otherwise minimize costs of maintaining two systems of operations.”
These and other general changes discussed below will result in PHMSA harmonizing with the ICAO Technical Instructions in regards to the information required to be provided in the information to the pilot-in-command.
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Consistent with the ICAO Technical Instructions, operators are responsible to specify the personnel to be provided the information to the pilot-in-command in their operations manual and/or other appropriate manuals. The term “provided” covers the information to the pilot-in-command when made available in a handwritten, printed, or electronic format.
Providing an additional and potentially quicker means for airport rescue and firefighting (ARFF) personnel to receive the information to the pilot-in-command underscores that the ARFF community is as much an intended consumer of the information as is the pilot-in-command. ARFF training in hazardous materials incidents is required under 14 CFR part 139, which specifies the FAA's requirements for certificated airports.
PHMSA received comments from A4A, COSTHA, and UPS concerning use of the term “written” in the proposed paragraphs § 175.33(a) and (b)(2). A4A and COSTHA commented that the “accurate and legible written information” language in proposed § 175.33(a) and the “copy of the written notification” language in proposed § 175.33(b)(2) do not support electronic notification method as air operators continue to move away from paper documents towards electronic systems for messaging and direct information upload to, and retrieval from, the cockpit. In their comments, A4A stated, “Electronic storage and messaging allows the most up-to-date and accurate documentation to be retrieved by flight crews, dispatchers and ground personnel at any time, providing a safety enhancement in addition to considerable cost and environmental benefits.” UPS commented that including the “legible written” language in the proposed § 175.33(a) allows for the interpretation that a printed information to the pilot-in-command is required for issuance to the pilot-in-command, as well as having the unintended effect of requiring printed information to be furnished to a flight dispatcher or equivalent operator employee. UPS explained that large carrier operations such as theirs would face difficulties as “information is readily available in other formats and the task of managing printed copies would be inefficient and contrary to technological advances.” The three commenters provided similar alternative language removing the word “written” from paragraphs (a) and (b)(2).
The intent of the NPRM was to more closely align the information to the pilot-in-command provisions in the HMR with those in the ICAO Technical Instructions. Consistent with the language in the NPRM, the current requirements in both regulations require that the operator of the aircraft provide the pilot-in-command with “accurate and legible written information.” Chapter 7;4.1.1 b) of the ICAO Technical Instructions requires that the aircraft operator provide personnel with responsibilities for operation control of the aircraft (
PHMSA agrees that the term “written” may not be clear to everyone that the use of an electronic format for the information to the pilot-in-command is allowed. Based on the information provided by the three commenters, this final rule revises paragraphs (a) and (b)(2) to clarify that for the purposes of § 175.33, “written” means in a handwritten, printed, or an electronic format. Therefore, the information provided to both the pilot-in-command and the flight dispatcher may be provided legibly in writing (
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The current HMR contain a requirement that the information to the pilot-in-command prepared in accordance with the ICAO Technical Instructions must also include any additional elements required to be shown on shipping papers by subpart C of part 171 of this subchapter. The additional elements currently required are: An indication of the “EX Number” for Division 1.4G safety devices; an indication of “RQ” and technical names if applicable for hazardous substances; an indication that the hazardous material is a “Waste” for hazardous wastes; and the inclusion of the words “Poison-Inhalation Hazard” or “Toxic-Inhalation Hazard” and the words “Zone A,” “Zone B,” “Zone C,” or “Zone D” for gases, or “Zone A” or “Zone B” for liquids, as appropriate for Division 2.3 materials meeting the definition of a material poisonous by inhalation. PHMSA is removing the requirement for the information to the pilot-in-command made in accordance with the ICAO Technical Instructions to include these additional elements. This information will still be required on shipping papers.
General harmonization between the HMR information to the pilot-in-command requirements and those found in the ICAO Technical Instructions ensures consistency for operators subject to both regulatory systems, thus reducing the cost of complying with two different sets of standards. However, the HMR will continue to require that the date of the flight be included on the information to the pilot-in-command, while the current ICAO Technical Instructions do not. Maintaining the flight date adds another safety control to ensure the pilot-in-command has the correct form. As many operators already include the date as a part of their information provided to the pilot-in-command, this amendment will not create an undue administrative burden. PHMSA received one comment from UPS providing support for maintaining the flight date on the information to the pilot-in-command. The ICAO Dangerous Goods Panel (DGP) took action in October 2016 to amend the ICAO Technical Instructions to include the flight date as one of the required fields on the information to the pilot-in-command. This change will align with the HMR and is expected to be reflected in the 2019-2020 ICAO Technical Instructions.
In the NPRM, PHMSA proposed maintaining the existing requirement that a hazardous material carried under the terms of a special permit must be indicated on the information to the pilot-in-command. PHMSA received a comment from UPS stating that the existing term “special permit” is too focused on U.S. regulations. They note that parallel ICAO provision, in Part 7; Section 4.1.1.1 j) refers to a requirement to include, “where applicable, an indication that the dangerous goods are being carried under a State exemption.” UPS suggested that the proposed language should be broadened to include a reference to an “equivalent document issued by the appropriate authority of another country,” thereby reducing potential variation from the ICAO requirement. PHMSA agrees. Therefore, consistent with the ICAO Technical Instructions, this final rule adds “or under a State exemption as prescribed in the ICAO Technical Instructions” in addition to “special permit.” ICAO defines “exemption” as being equivalent to a special permit under the HMR. An “exemption” does not include approvals, which are not required to be indicated on the information to the pilot-in-command.
In their comments, A4A and COSTHA stated that carriers do not prepare the information to the pilot-in-command when the hazardous material does not require a shipping paper, noting that the HMR do not require a shipping paper for lithium cells or batteries prepared in accordance with § 173.185(c) or the corresponding Section II of ICAO Packing Instructions (PI) 965-970. The commenters noted that part 7;4.1.11, Table 7-9 provides a list of dangerous goods not required to appear in the information to the pilot-in-command. The list includes entries for lithium batteries consigned under the entries UN3090, UN3091, UN3480, and UN3481 when meeting the requirements of Section II of PI 965-970. The commenters noted that the HMR do not have a corresponding exception for these same materials prepared even though a shipping paper is not required. Both commenters suggested incorporating the ICAO provisions by either adding Table 7-9 into § 175.33 or by adding a specific exception stating that lithium batteries prepared in accordance with § 173.185(c) are not required to appear on the information to the pilot-in-command. COSTHA suggested adding exceptions in § 175.33 for all materials listed in Table 7-9 of the ICAO Technical Instructions such as excepted quantities and “UN3373 and Biological substance, Category B” among others.
PHMSA agrees that in instances when a shipping paper is not required, the information for that material is generally not required to appear on the information to the pilot-in-command either. Because a shipping paper contains the information from which the elements of the information to the pilot-in-command are derived, it is impracticable to prepare the information for materials not requiring a shipping paper. We also agree that the HMR do not have a clear exception from the information to the pilot-in-command requirement for lithium batteries prepared in accordance with § 173.185(c), which corresponds with Section II of ICAO PI 965-970. Other materials listed in Table 7-9, such as those offered in excepted quantities (§ 173.4a), and “UN3373 and Biological substance, Category B” (§ 173.199) are sufficiently addressed in their relevant section of the HMR, with an indication that the materials are not otherwise subject to the requirements of the subchapter, to include the requirements of § 175.33, if the applicable conditions are met. Therefore, this final rule clarifies in § 175.33(a)(13) that lithium batteries prepared in accordance with § 173.185(c) are not required to appear on the information to the pilot-in-command, which corresponds with Section II of the applicable ICAO packing instruction.
Labelmaster Services petitioned PHMSA to amend § 175.30(c)(1) by removing language prohibiting any package, outside container, or overpack
PHMSA believes the current restriction prohibiting acceptance of any of these containment methods with holes to be overly prescriptive, especially as the paramount safety requirement is that there must not be any indication that the integrity of the containment method has been compromised. In the NPRM, consistent with the ICAO Technical Instructions, PHMSA proposed to amend § 175.30(c)(1) to remove language prohibiting packages or overpacks containing hazardous materials from being transported on an aircraft simply due to the presence of holes when the holes do not compromise the integrity of the containment device.
PHMSA received comments from A4A, COSTHA, DGAC, and UPS in response to the proposed revision. The DGAC commented in support of the proposed revision as it enhances harmonization and does not compromise safety. UPS commented in support of the proposed revision, noting that the risk of transporting such packages aboard aircraft would not be elevated, and was also supportive of the NPRM preamble language, stating operators are ultimately responsible for the decision to accept such a package for transportation. In their comments, A4A and COSTHA provided support for the NPRM preamble language, stating that operators may continue to have more restrictive standards as a part of their business practice; however, they expressed concern on how package integrity determinations are to be made and whether enforcement officials will accept the aircraft operator's conclusion. COSTHA also commented that aircraft operators receive “knowing” or “constructive knowledge” violations for non-compliance with the HMR, further noting that accidental damage is not a “knowing” violation but that an operator accepting a package with a small hole or abrasion could be considered a “knowing” violation as operators are prohibited from transporting damaged packages aboard aircraft.
PHMSA expects that the majority of determinations applicable to small holes on the integrity of a package or overpack will be quite evident. If an air operator has any doubt on whether the integrity of the package or overpack has been compromised, and potentially is not suitable for transportation aboard aircraft, it should not be accepted for transport in its present condition. Further, a package or overpack containing only superficial damage not affecting the integrity, and not prohibited by § 175.30(c)(1), would not be considered a damaged package or overpack.
As stated in the NPRM, PHMSA believes the current restriction prohibiting acceptance of any package or overpack with holes to be overly prescriptive, especially as the paramount safety requirement is that there must not be any indication that the integrity of the containment method has been compromised. Therefore, this final rule adopts the revision to § 175.30 as proposed in the December 5, 2016 NPRM with minor editorial clarifications. In reviewing the section during development of the final rule, PHMSA determined that the term “outside container” is not applicable. As per the definition of “strong outer packaging” in § 171.8, it is synonymous with “strong outer container”. Therefore “outside container” has the same meaning as outer packaging. Outer packaging is a component of a package, which is already listed. As a result, in this final rule PHMSA is removing “outside container” from paragraphs (b) and (c). In addition, in the NPRM, PHMSA proposed to include “freight container” and “unit load device” in the list of containment devices contained in paragraph (c). The intent was to align with the provisions in ICAO Technical Instructions, but further review found that there is no such provision in the ICAO Technical Instructions. In Part 7;1.3.1 i) of the ICAO Technical Instructions there is a requirement to verify freight containers and unit load devices are not leaking and there is no indication that the integrity has been compromised; however, this is under the activity of conducting an acceptance checklist which the HMR do not require. As a result, in this final rule, we are not listing “freight containers” or “unit load devices” in paragraph (c).
Section 175.88 prescribes requirements for inspection, orientation, and securing packages of hazardous materials aboard aircraft. In the NPRM, PHMSA proposed revisions to § 175.88(c) to require hazardous materials loaded in an aircraft to be protected from damage, including by the movement of baggage, mail, stores, or other cargo, and further harmonize specific portions of the general loading/securement requirements pertaining to appropriate securing and loading practices of the HMR with those found in the ICAO Technical Instructions. Specifically, PHMSA proposed to revise § 175.88(c) by separating the provisions of the existing paragraph (c) into new subparagraphs (1) and (4), and adding subparagraphs (2) and (3) to align with part 7;2.4.3 of the ICAO Technical Instructions that reads as follows:
When dangerous goods subject to the provisions herein are loaded in an aircraft, the operator must protect the packages of dangerous goods from being damaged, including by the movement of baggage, mail, stores or other cargo. Particular attention must be paid to the handling of packages during their preparation for transport, the type of aircraft on which they are to be carried and the method required to load that aircraft, so that accidental damage is not caused through dragging or mishandling of the packages.
PHMSA received three comments from A4A, COSTHA, and UPS in response to the proposed revisions. The commenters stated that the manner in which the proposed paragraphs are structured may have the unintended effect of applying to activities outside of the aircraft loading process, resulting in subjective conditions that could lead to inappropriate enforcement. COSTHA commented that the proposed requirements “could be interpreted to prohibit industry standard processing and movement of packages and baggage at sorting facilities or conveyor belt operations used to move packages.” A4A and UPS commented on the use of “dragging” in proposed paragraph (c)(3). A4A asserted that normal cargo handling practices could be “construed by an inspector” as “dragging” or inadequate protection resulting in a violation and that “such practices include loading of unit load devices and the holds of narrow-body, non-containerized aircraft by leveraging smooth floor surfaces to slide packages into place.” UPS commented that the established industry practice of sliding of packages on surfaces (
In addition, the commenters suggested that the proposed text is unnecessary because other requirements in the HMR, such as those in §§ 175.30 and 175.90(c), already prevent the loading of damaged packages containing hazardous materials aboard aircraft.
The intent of the revisions to § 175.88(c) is to ensure that hazardous materials are not loaded in an inappropriate manner and that accidental damage is not caused during the loading process. The safety gap addressed in this final rule covers the movement of hazardous materials during the aircraft loading process until the cargo is secured aboard the aircraft. PHMSA acknowledges that certain aircraft types or configurations necessitate sliding or dragging to position the cargo aboard the aircraft. An example of this type of aircraft would be passenger aircraft, which contain smaller “lower hold” cargo configurations. These “lower hold” configurations are typically 3-4 feet in height, in which operator personnel must get on their knees due to the small hold area and items must be maneuvered by pushing, pulling, and sliding cargo.
PHMSA has reviewed the existing requirements in § 175.88(c), and while these requirements ensure that packages are inspected for damage upon initial acceptance by the operator and forbid placing aboard an aircraft baggage or cargo that is contaminated with hazardous material or appears to be leaking, they do not address accidental damage that may be caused through mishandling of the packages during the loading process. PHMSA agrees that the paragraph structure could be misinterpreted to apply to situations outside of the loading process. Therefore, this final rule revises paragraph (c)(3) consistent with the language suggested by COSTHA in their comments.
The following is a section-by-section review of the amendments in this final rule:
Section 172.101 contains the Hazardous Materials Table (HMT) and provides instructions for its use. Section 172.101(h) describes column (7) of the HMT, which specifies codes for special provisions applicable to hazardous materials. In this final rule, PHMSA is revising the column (7) special provisions.
Specifically, PHMSA is removing: (1) Special provision A3 from all assigned PG I HMT entries in column (7); and (2) special provision A6 from all assigned liquid HMT entries in column (7). Table 1 illustrates the HMT entries for which changes are proposed:
Section 172.102 lists special provisions applicable to the transportation of specific hazardous materials. Special provisions contain packaging requirements, prohibitions, and exceptions applicable to particular quantities or forms of hazardous materials. PHMSA is replacing the existing requirement for tightly closed metal receptacles in special provision A3 from § 172.102(b)(2), which applies only to transportation by aircraft, with a requirement for rigid and leakproof receptacles or intermediate packaging packed with absorbent material.
Section 175.10 provides exceptions for passengers, crewmembers, and air operators. PHMSA is revising § 175.10(a)(18)(i) to authorize passengers and crewmembers to carry on board aircraft portable medical electronic devices containing lithium metal batteries with a lithium content exceeding 2 grams per battery, but not exceeding 8 grams of lithium content per battery, and no more than two individually protected lithium metal spare batteries for these portable medical electronic devices each exceeding 2 grams of lithium content, but not exceeding 8 grams of lithium content, with the approval of the operator. Consistent with the ICAO Technical Instructions and the current HMR prohibitions, spare lithium batteries (
Section 175.30 prescribes requirements for the inspection and acceptance of hazardous materials.
Section 175.33 establishes requirements for shipping papers and the information to the pilot-in-command when hazardous materials are transported by aircraft. PHMSA is making revisions to harmonize the information to the pilot-in-command requirements in the HMR with those found in the ICAO Technical Instructions. Specifically, we are making revisions to:
• Align the elements that are required to be provided in the information to the pilot-in-command;
• Clarify that information to the pilot-in-command may be in an electronic form;
• Ensure the information to the pilot-in-command is provided to flight dispatchers or, when flight dispatchers are not utilized, other ground support personnel with operational control of the aircraft;
• Harmonize with ICAO requirements addressing when the information must be provided to the pilot-in-command and flight dispatchers;
• Require confirmation via signature or other appropriate indication by the pilot-in-command to indicate that the required information was received;
• Clarify that UN3480, UN3481, UN3090, and UN3091 prepared in accordance with § 173.185(c), except § 173.185(c)(4)(vi), are not required to appear on the information to the pilot-in-command; and
• Require that the information provided to the pilot-in-command contain confirmation via signature or other appropriate indication by the person responsible for loading the aircraft that no damaged or leaking packages or packages showing evidence of damage or leakage have been loaded on the aircraft.
Consistent with the ICAO Technical Instructions, we are also amending § 175.33 by removing the requirement to include additional informational requirements in § 175.33(a)(1)(i) and (ii). This information will continue to be required on shipping papers.
PHMSA has restructured § 175.33 to separate the requirements for the information to the pilot-in-command from those for shipping papers to address comments to the NPRM from UPS stating that the proposed text is confusing and suggesting revisions to improve clarity.
Section 175.88 prescribes requirements for inspection, orientation, and securing packages of hazardous materials aboard aircraft. PHMSA is amending § 175.88(c) by separating the provisions of the existing paragraph (c) into new subparagraphs (1) and (4), and adding subparagraphs (2) and (3) to align with part 7;2.4.3 of the ICAO Technical Instructions. Specifically, these new paragraphs will require that hazardous materials be: (1) Secured in an aircraft in a manner that will prevent any change in the orientation of the packages; (2) protected from damage, including by the movement of baggage, mail, stores, or other cargo; (3) loaded so that accidental damage is not caused through dragging or mishandling; and (4) Class 7 (radioactive) materials be secured in a manner that ensures that the separation requirements of §§ 175.701 and 175.702 will be maintained at all times during flight.
This final rule is published under the statutory authority of the Federal hazardous materials transportation law (Federal hazmat law). 49 U.S.C. 5101
This final rule amends regulations to increase alignment with international standards by incorporating various amendments, including changes to special provisions, packaging requirements, air transport information to the pilot-in-command requirements, and allowances for hazardous materials to be carried on board an aircraft by passengers and crewmembers. To this end, this final rule amends regulations to more fully align the HMR with the ICAO Technical Instructions. The large volume of hazardous materials transported in international commerce warrants the harmonization of domestic and international requirements to the greatest extent possible.
Harmonization serves to facilitate international commerce, while also promoting the safety of people, property, and the environment by reducing the potential for confusion and misunderstanding that could result if shippers and operators were required to comply with two or more conflicting sets of regulatory requirements. PHMSA's goal is to harmonize without sacrificing the current HMR level of safety or imposing undue burdens on the regulated community. We consulted the FAA in the development of this rule.
This final rule is not considered a significant regulatory action under section 3(f) of Executive Order 12866, “Regulatory Planning and Review,” 58 FR 51735 (Oct. 4, 1993) and, therefore, was not reviewed by the Office of Management and Budget. Accordingly, this final rule is not considered a significant rule under the Regulatory Policies and Procedures of the Department of Transportation. 44 FR 11034 (Feb. 26, 1979).
PHMSA analyzed the expected benefits of these provisions in this final rule. Typically, the benefits of rules are derived from (1) enhanced health and safety factors and (2) reduced expenditures, such as private-sector savings, government administrative savings, gains in work time, harmonization impacts, and costs of compliance. In the case of this final rule, most of the benefits will be derived from health and safety factors, as well as reduced compliance costs.
The health and safety benefits specifically attributable to modifications of the information to the pilot-in-command requirements are not easily calculable with any degree of accuracy. The requirements for pilot-in-command's signature and confirmation from the person responsible for loading the aircraft will result in more effective and efficient response in the event of an aviation incident. The requirement that packages be protected from damage during loading operations will result in increased safety and environmental protection. Benefits will also be realized through a more efficient response time because of emergency response personnel having quicker access to hazardous materials information for each flight.
The primary cost savings expected from this final rule result from reduced packaging costs in relation to the removal of special provision A3 from all assigned PG I HMT entries and special provision A6 from all assigned liquid HMT entries. Additionally, while they have not been quantified, PHMSA expects cost savings from the final rule's general harmonization of information to the pilot-in-command requirements and support for the use of electronic formats.
Currently, compliance with special provisions A3 and A6 requires domestic shippers to use extra
To arrive at these cost savings, PHMSA (1) analyzed commodity flow survey data for commodities assigned A3, A6, or both in the HMR; (2) determined an estimate of total tons of freight for affected commodities offered for transportation by aircraft annually; (3) used this general commodity flow survey data to estimate the number of impacted packages; and (4) determined a cost basis for packages prepared under existing requirements versus requirements in this final rule.
A summary of the cost savings calculation method is as follows. PHMSA estimated the cost savings by comparing the difference in costs between the pre- and post-final rule options for each shipping scenario identified for commodities potentially subject to A3 or A6. For the purposes of this analysis, we assumed that relatively inexpensive metal, plastic, and glass packaging could be used for inner and intermediate receptacles. There are no costs specifically attributable to the A3 compliance requirements because the least cost option for shipping is to use metal or plastic containers, and A3 applies to shipments in glass containers. While some commodities are shipped in glass containers due to various factors (
PHMSA estimated the compliance costs attributable to A6 compliance requirements, which vary by type of shipment and packaging type. For example, the difference in the compliance cost for a one-gallon shipment using UN specification packaging for materials corrosive to metal is estimated at $3.82 for Packing Groups I, II or III. The estimated number of tons subject to A6 for UN specification packaging (corrosive to metal and PG I) is 641. The number of packages affected depends on the average inner receptacle volumes applicable to each packing group and restriction type. These calculations assume that the density of the chemicals is the same as that of water (
The reduced expenditure cost savings associated with the general harmonization of the information to the pilot-in-command requirements are not easily calculable. Inconsistent hazardous materials regulations result in additional compliance costs for industry and increase compliance training efforts, whereas consistency of regulations reduces regulatory compliance costs and helps to avoid rejected or frustrated shipments. Clarifying that the term “written” in the information to the pilot-in-command applies to handwritten, printed, or electronic formats supports the use of electronic methods as air operators continue to move away from paper documents and towards electronic systems. Cost savings may be realized by utilizing existing messaging systems for direct upload of information to and retrieval from, the cockpit. In addition, there may be cost savings for operators electing to use electronic information methods as they will not have to physically print the information for use and retention purposes. PHMSA expects the increased harmonization of the HMR and ICAO Technical Instructions to generate cost savings by streamlining the processes for information to the pilot-in-command generation.
The primary costs associated with this final rule are time costs related to requirements for (1) confirmation via signature or other appropriate indication by the person responsible for loading the aircraft that no damaged or leaking packages were loaded on the aircraft, and (2) confirmation via signature or other appropriate indication by the pilot-in-command to indicate that the required information was received. PHMSA estimates the annual costs associated with harmonizing the HMR information to the pilot-in-command requirements with those found in the ICAO Technical Instructions to be $795,318. This estimate is the total annual costs in 2016 dollars of the additional costs for pilot ($465,966) and loader ($106,845) acknowledgements plus HMR training costs ($222,507).
A summary of the annual cost calculation is as follows. PHMSA estimates there are between 1,056 and 9,920 projected flights
Under current practice, the information is transmitted to the pilot-in-command. We assume the additional provision of identical information to the flight dispatcher (or other personnel) will incur negligible costs, if any, especially as we understand this to be a common industry practice. In the NPRM, PHMSA invited comments on this assumption and on any unanticipated costs associated with the proposed requirement. While PHMSA did not receive any specific comments on additional costs associated with providing the same information to the flight dispatcher, all of the commenters provided strong support for harmonizing with the information to the pilot-in-command provisions of the ICAO Technical Instructions.
Based on the previous discussions of benefits, costs, and cost savings PHMSA estimates the net annual cost savings associated with this final rule (2137-AF10) to be $1,019,325.
Executive Order 13771 (“Reducing Regulation and Controlling Regulatory Costs”), issued January 30, 2017, provides that “it is essential to manage the costs associated with the governmental imposition of private expenditures required to comply with Federal regulations.” Toward that end, E.O. 13771 directs agencies to (1) identify two potential deregulatory actions for each new E.O. 13771 regulatory action, and (2) limit the incremental costs of new regulations overall on a fiscal year basis. This final rule is considered an E.O. 13771 deregulatory action. Details on the estimated cost savings of this final rule are described above.
This final rule has been analyzed in accordance with the principles and criteria contained in Executive Order 13132, “Federalism,” 64 FR 43255 (Aug. 10, 1999). The regulatory changes in this final rule preempt State, local, and Indian tribe requirements but do not have substantial direct effects on the States, the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government. Therefore, the consultation and funding requirements of Executive Order 13132 do not apply.
The Federal hazardous materials transportation law, 49 U.S.C. 5101-5128, contains an express preemption provision, 49 U.S.C. 5125(b), that preempts State, local, and Indian tribe requirements on certain covered subjects, as follows:
(1) The designation, description, and classification of hazardous material;
(2) The packing, repacking, handling, labeling, marking, and placarding of hazardous material;
(3) The preparation, execution, and use of shipping documents related to hazardous material and requirements related to the number, contents, and placement of those documents;
(4) The written notification, recording, and reporting of the unintentional release in transportation of hazardous material; and
(5) The design, manufacture, fabrication, inspection, marking, maintenance, reconditioning, repair, or testing of a packaging or container represented, marked, certified, or sold as qualified for use in transporting hazardous material in commerce.
This final rule addresses covered subject items (2), (3), and (5) above and preempts State, local, and Indian tribe requirements not meeting the “substantively the same” standard. This final rule is necessary to harmonize with international standards. If the changes are not adopted into the HMR, U.S. companies—including numerous small entities competing in foreign markets—would be at an economic disadvantage because of their need to comply with a dual system of regulations. The changes in this rulemaking are intended to avoid this result. Federal hazardous materials transportation law provides that, if DOT issues a regulation concerning any of the covered subjects, DOT must determine and publish in the
This final rule was analyzed in accordance with the principles and criteria contained in Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments,” 65 FR 67249 (Nov. 9, 2000). Because this final rule does not have tribal implications, does not impose substantial direct compliance costs, and is required by statute, the funding and consultation requirements of Executive Order 13175 do not apply.
This final rule was developed in accordance with Executive Order 13272, “Proper Consideration of Small Entities in Agency Rulemaking,” 67 FR 53461 (Aug. 16, 2002) and DOT's Policies and Procedures to promote compliance with the Regulatory Flexibility Act, 5 U.S.C. 601
This final rule facilitates the transportation of hazardous materials in international commerce by increasing consistency with international standards. It applies to offerors and carriers of hazardous materials, some of whom are small entities, such as chemical manufacturers, users and suppliers, packaging manufacturers, distributors, aircraft operators, and training companies. As previously discussed in Section IV, Subsection B (Executive Order 12866, Executive Order 13563, and DOT Regulatory Policies and Procedures), PHMSA expects that the majority of amendments in this final rule will result in cost savings and ease the regulatory compliance burden for shippers engaged in domestic and international
PHMSA currently has an approved information collection under Office of Management and Budget (OMB) Control Number 2137-0034, “Hazardous Materials Shipping Papers and Emergency Response Information.” We anticipate that this final rule will result in an increase in the annual burden of this information collection because of an increase in the amount of time needed to complete the information to the pilot-in-command due to additional requirements for (1) confirmation via signature or other appropriate indication by the person responsible for loading the aircraft that no damaged or leaking packages were loaded on the aircraft, and (2) confirmation via signature or other appropriate indication by the pilot-in-command that the required information was received. PHMSA did not receive any comments on the changes to this information collection burden in response to the NPRM.
This rulemaking identifies a revised information collection that PHMSA will submit to OMB for approval based on the requirements in this final rule. PHMSA has developed burden estimates to reflect changes and estimates that the information collection and recordkeeping burden in this rule are as follows:
PHMSA will submit the revised information collection and recordkeeping requirements to OMB for approval.
A regulation identifier number (RIN) is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in the Spring and Fall of each year. The RIN contained in the heading of this document can be used to cross-reference this action with the Unified Agenda.
This final rule does not impose unfunded mandates under the Unfunded Mandates Reform Act of 1995. It does not result in costs of $141.3 million or more, adjusted for inflation, to either State, local, or tribal governments, in the aggregate, or to the private sector in any one year, and is the least burdensome alternative that achieves the objective of the rule.
The National Environmental Policy Act of 1969, 42 U.S.C. 4321-4375, requires that Federal agencies analyze proposed actions to determine whether the action will have a significant impact on the human environment. The Council on Environmental Quality requires agencies to conduct an environmental review considering (1) the need for the proposed action, (2) alternatives to the proposed action, (3) probable environmental impacts of the action and the alternatives, and (4) the agencies and persons consulted during the consideration process. 40 CFR 1508.9(b).
In this final rule, PHMSA is amending the HMR to increase harmonization with international standards and to address four petitions for rulemaking submitted by shippers, carriers, manufacturers, and industry representatives. These revisions are intended to harmonize with international standards, while also maintaining or enhancing safety. Specifically, PHMSA, consistent with P-1487, is harmonizing the HMR with the 2017-2018 ICAO Technical Instructions' requirements for the information to the pilot-in-command, for the air operator to provide the information to the pilot-in-command to the flight dispatcher, and for the air operator to obtain and retain a confirmation that the information to the pilot-in-command was received by the pilot-in-command. This final rule addresses three additional petitions for rulemaking (P-1637, P-1649, and P-1671) to: (1) More closely harmonize with the ICAO Technical Instructions in regard to intermediate packaging requirements for certain low and medium danger hazardous materials; (2) add an exception to allow passengers to bring on board an aircraft portable medical electronic devices containing lithium metal batteries that exceed the current lithium battery limits in § 175.10(a)(18)(i), as well as spare batteries for these devices with the approval of the operator; and (3) remove language prohibiting any package or overpack containing hazardous materials from being transported on an aircraft if it has holes when there is no indication that the integrity of the package or overpack has been compromised. All of these amendments more closely harmonize U.S. regulations with international standards.
This action is necessary to: (1) Fulfill PHMSA's statutory directive to promote transportation safety; (2) fulfill PHMSA's statutory directive under the Administrative Procedure Act (APA) that requires Federal agencies to give interested persons the right to petition an agency to issue, amend, or repeal a rule, 5 U.S.C. 553(e); (3) align the HMR with international transport standards and requirements to the extent practicable in accordance with Federal hazmat law, 49 U.S.C. 5120; and (4) simplify and clarify the regulations in order to promote understanding and compliance. Specifically, this rulemaking achieves these goals by responding to petitions (P-1487, P-1637, P-1649, and P-1671).
With this action, we are more closely align the HMR with international transport standards and requirements, without diminishing the level of safety currently provided by the HMR or imposing undue burdens on the regulated public.
In developing this rulemaking, PHMSA considered the following alternatives:
If PHMSA had selected the No Action Alternative, regulations would remain in place and no new provisions would be added. However, efficiencies gained through harmonization in updates to information to the pilot-in-command requirements; intermediate packaging requirements; passenger carriage of portable medical electronic devices containing certain lithium metal batteries; acceptance/transport of packages with small holes that do not compromise the package integrity; ensuring that hazardous materials loaded in an aircraft are protected from damage; etc., would not be realized.
PHMSA selected the Preferred Alternative. The amendments included in this alternative are more fully addressed in the preamble and regulatory text sections of this final rule. However, they include the following:
(1)
(2)
(3)
(4)
If PHMSA had selected the No Action Alternative, regulations would remain in place and no new provisions would be added. However, efficiencies gained through harmonization of transport standards would not be realized. Foregone efficiencies in the No Action Alternative include freeing up limited resources to concentrate on air transport hazard communication issues of potentially much greater environmental impact.
Additionally, the Preferred Alternative encompasses enhanced and clarified regulatory requirements, which would result in increased compliance and less environmental and safety incidents. Not adopting the environmental and safety requirements under the No Action Alternative would result in a lost opportunity for reducing environmental and safety-related incidents.
Greenhouse gas emissions would remain the same under the No Action Alternative.
PHMSA selected the Preferred Alternative. We believe that safety and environmental risks will be reduced and that protections to human health and environmental resources will be increased. Consistency between U.S. and international information to the pilot-in-command requirements can enhance the safety and environmental protection of hazardous materials transportation, reduce compliance costs, increase the flow of hazardous materials from their points of origin to their points of destination (or diversion airport when required), and improve the emergency response in the event of a hazardous materials incident or accident.
Overall, harmonization will result in more targeted and effective training and thereby enhanced environmental protection. These amendments will reduce inconsistent hazardous materials regulations, which can increase the time and cost of compliance training. For ease of compliance with appropriate regulations, operators engaged in the transportation of hazardous materials generally elect to accept and transport hazardous materials in accordance with the ICAO Technical Instructions, as appropriate. Increasing consistency between these international regulations and the HMR allows shippers and carriers to more efficiently train hazmat employees in their responsible functions. PHMSA believes that these amendments, which will increase standardization and consistency of regulations, will result in greater protection of human health and the environment:
(1)
Greenhouse gas emissions would remain the same under this amendment.
(2)
Greenhouse gas emissions would remain the same under this amendment.
(3)
Greenhouse gas emissions would remain the same under this amendment.
(4)
Greenhouse gas emissions would remain the same under this amendment.
PHMSA coordinated with the U.S. Federal Aviation Administration, the Federal Motor Carrier Safety Administration, the Federal Railroad Administration, and the U.S. Coast Guard, in the development of this final rule. PHMSA considered the views expressed in comments to the NPRM submitted by members of the public, State and local governments, and industry.
The provisions of this final rule build on current regulatory requirements to enhance the transportation safety and security of shipments of hazardous materials transported by aircraft, thereby reducing the risks of an accidental or intentional release of hazardous materials and consequent environmental damage. PHMSA concludes that the net environmental impact will be positive and that there are no significant environmental impacts associated with this final rule.
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
Under Executive Order 13609, “Promoting International Regulatory Cooperation,” 77 FR 26413 (May 4, 2012), agencies must consider whether the impacts associated with significant variations between domestic and international regulatory approaches are unnecessary or may impair the ability of American business to export and compete internationally. In meeting shared challenges involving health, safety, labor, security, environmental, and other issues, international regulatory cooperation can identify approaches that are at least as protective as those that are or would be adopted in the absence of such cooperation. International regulatory cooperation can also reduce, eliminate, or prevent unnecessary differences in regulatory requirements.
Similarly, the Trade Agreements Act of 1979, Public Law 96-39, as amended by the Uruguay Round Agreements Act, Public Law 103-465, prohibits Federal agencies from establishing any standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. For purposes of these requirements, Federal agencies may participate in the establishment of international standards, so long as the standards have a legitimate domestic objective, such as providing for safety, and do not operate to exclude imports that meet this objective. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards.
PHMSA and the FAA participate in the establishment of international standards to protect the safety of the American public. We have assessed the effects of this final rule to ensure that it does not cause unnecessary obstacles to foreign trade. In fact, the final rule is designed to facilitate international trade by eliminating differences between the domestic and international air transportation requirements. Accordingly, this rulemaking is consistent with Executive Order 13609 and PHMSA's obligations under the Trade Agreement Act, as amended.
The National Technology Transfer and Advancement Act of 1995, 15 U.S.C. 272 note, directs Federal agencies to use voluntary consensus standards in their regulatory activities unless doing so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (
Education, Hazardous materials transportation, Hazardous waste, Incorporation by reference, Labeling, Markings, Packaging and containers, Reporting and recordkeeping requirements.
Hazardous materials transportation, Incorporation by reference, Operators, Reporting and recordkeeping requirements.
In consideration of the foregoing, PHMSA is amending 49 CFR chapter I as follows:
49 U.S.C. 5101-5128, 44701; 49 CFR 1.81, 1.96 and 1.97.
(c) * * *
(2) * * *
A3 For combination packagings, if glass inner packagings (including ampoules) are used, they must be packed with absorbent material in tightly closed rigid and leakproof receptacles before packing in outer packagings.
49 U.S.C. 5101-5128, 44701; 49 CFR 1.81 and 1.97.
(a) * * *
(18) Except as provided in § 173.21 of this subchapter, portable electronic devices (
(i) For a lithium metal battery, the lithium content must not exceed 2 grams. With the approval of the operator, portable medical electronic devices (
(b) Except as provided in paragraph (d) of this section, no person may carry a hazardous material in a package or overpack aboard an aircraft unless the package or overpack is inspected by the operator of the aircraft immediately before placing it:
(c) A hazardous material may be carried aboard an aircraft only if, based on the inspection by the operator, the package or overpack containing the hazardous material:
(1) Has no leakage or other indication that its integrity has been compromised; and
(a) When a hazardous material subject to the provisions of this subchapter is carried in an aircraft, the operator of the aircraft must provide the pilot-in-command and the flight dispatcher or other ground support personnel with responsibilities for operational control of the aircraft with accurate and legible written information (
(1) The date of the flight;
(2) The air waybill number (when issued);
(3) The proper shipping name (the technical name(s) shown on the shipping paper is not required), hazard class or division, subsidiary risk(s) corresponding to a required label(s), packing group and identification number of the material as specified in § 172.101 of this subchapter or the ICAO Technical Instructions (IBR, see § 171.7 of this subchapter). In the case of Class 1 materials, the compatibility group letter also must be shown.
(4) The total number of packages;
(5) The exact loading location of the packages;
(6) The net quantity or gross mass, as applicable, for each package except those containing Class 7 (radioactive) materials. For a shipment consisting of multiple packages containing hazardous materials bearing the same proper shipping name and identification number, only the total quantity and an indication of the quantity of the largest and smallest package at each loading location need to be provided. For consumer commodities, the information provided may be either the gross mass of each package or the average gross mass of the packages as shown on the shipping paper;
(7) For Class 7 (radioactive) materials, the number of packages overpacks or freight containers, their category, transport index (if applicable), and their exact loading location;
(8) Confirmation that the package must be carried on cargo-only aircraft;
(9) The airport at which the package(s) is to be unloaded;
(10) An indication, when applicable, that a hazardous material is being carried under terms of a special permit or under a State exemption as prescribed in the ICAO Technical Instructions (IBR, see § 171.7 of this subchapter);
(11) The telephone number from whom the information contained in the information to the pilot-in-command can be obtained. The aircraft operator must ensure the telephone number is monitored at all times the aircraft is in flight. The telephone number is not required to be placed on the information to the pilot-in-command if the phone number is in a location in the cockpit available and known to the pilot-in-command;
(12) For UN1845, Carbon dioxide, solid (dry ice), the information required by this paragraph (a) may be replaced by the UN number, proper shipping name, hazard class, total quantity in each cargo compartment aboard the aircraft, and the airport at which the package(s) is to be unloaded; and
(13)(i) For UN3480, Lithium ion batteries, and UN3090, Lithium metal batteries, the information required by this paragraph (a) may be replaced by the UN number, proper shipping name, hazard class, total quantity at each specific loading location, and whether the package must be carried on cargo-only aircraft.
(ii) For UN3480, Lithium ion batteries, and UN3090, Lithium metal batteries, carried under a special permit or a State exemption as prescribed in the ICAO Technical Instructions (IBR, see § 171.7 of this subchapter), must
(iii) For UN3480, UN3481, UN3090, and UN3091 prepared in accordance with § 173.185(c), except those prepared in accordance with § 173.185(c)(4)(vi), are not required to appear on the information to the pilot-in-command.
(b)(1) The information provided to the pilot-in-command must also include a signed confirmation or some other indication from the person responsible for loading the aircraft that there was no evidence of any damage to or leakage from the packages or any leakage from the unit load devices loaded on the aircraft;
(2) The information to the pilot-in-command and the emergency response information required by subpart G of part 172 of this subchapter shall be readily available to the pilot-in-command and flight dispatcher during flight.
(3) The pilot-in-command must indicate in writing (
(c) The aircraft operator must—
(1)
(ii) Retain a copy of the shipping paper required by § 175.30(a)(2) or an electronic image thereof, that is accessible at or through its principal place of business and must make the shipping paper available, upon request, to an authorized official of a federal, state, or local government agency at reasonable times and locations. For a hazardous waste, each shipping paper copy must be retained for three years after the material is accepted by the initial carrier. For all other hazardous materials, each shipping paper copy must be retained by the operator for one year after the material is accepted by the initial carrier. Each shipping paper copy must include the date of acceptance by the carrier. The date on the shipping paper may be the date a shipper notifies the air carrier that a shipment is ready for transportation, as indicated on the air waybill or bill of lading, as an alternative to the date the shipment is picked up or accepted by the carrier. Only an initial carrier must receive and retain a copy of the shipper's certification, as required by § 172.204 of this subchapter.
(2)
(3) Have the shipping paper and information to the pilot-in-command readily accessible at the airport of departure and the intended airport of arrival for the duration of the flight.
(4) Make available, upon request, to an authorized official of a Federal, State, or local government agency (which includes emergency responders) at reasonable times and locations, the documents or information required to be retained by this paragraph. In the event of a reportable incident, as defined in § 171.15 of this subchapter, the aircraft operator must make immediately available to an authorized official of a Federal, State, or local government agency (which includes emergency responders), the documents or information required to be retained by this paragraph (c).
(5) Specify the personnel to be provided the information required by paragraph (a) of this section in their operations manual and/or other appropriate manuals.
(d) The information required by paragraph (a) of this section and the shipping paper required by (c)(1) of this section may be combined into one document.
(c) Packages containing hazardous materials must be:
(1) Secured in an aircraft in a manner that will prevent any shifting or change in the orientation of the packages;
(2) Protected from being damaged, including by the shifting of baggage, mail, stores, or other cargo;
(3) Loaded so that accidental damage is not caused through dragging or mishandling; and
(4) When containing Class 7 (radioactive) materials, secured in a manner that ensures that the separation requirements of §§ 175.701 and 175.702 will be maintained at all times during flight.
Commodity Futures Trading Commission.
Notice of proposed rulemaking.
The Commodity Futures Trading Commission (CFTC or Commission) is proposing amendments to its regulations to permit commodity pool operators (CPOs) that only solicit and/or accept funds from non-U.S. persons for participation in offshore commodity pools to claim an exemption from CPO registration and compliance requirements with respect to such pools, while permitting the maintenance of registration with respect to commodity pools for which CPO registration is required. The Commission also is proposing to allow U.S.-based CPOs of offshore commodity pools with U.S. participants to maintain the commodity pool's original books and records in the offshore location of the pool, in lieu of the CPO's main U.S. business location. Additionally, the Commission is proposing to prohibit a person that would be statutorily disqualified from registering with the Commission as a CPO from claiming or affirming an exemption from CPO registration. The Commission also is proposing registration relief for the CPOs and CTAs of entities qualifying as “family offices” and investment advisers of “business development companies,” as defined in the proposed regulations. The Commission is further proposing to permit qualifying CPOs to engage in general solicitation in their pool offerings, as contemplated by the Jumpstart Our Business Start-ups Act of 2012 (JOBS Act). Finally, the Commission is proposing to relieve certain CPOs and commodity trading advisors (CTAs) of the requirement to file Forms CPO-PQR and CTA-PR.
Comments must be received on or before December 17, 2018.
You may submit comments, identified by RIN number 3038-AE76, by any of the following methods:
•
•
•
Please submit your comments using only one of these methods. To avoid possible delays with mail or in-person deliveries, submissions through the CFTC Comments Portal are encouraged.
All comments must be submitted in English, or if not, accompanied by an English translation. Comments will be posted as received to
The Commission reserves the right, but shall have no obligation, to review, pre-screen, filter, redact, refuse or remove any or all of your submission from
For any of the proposed amendments: Amanda Olear, Associate Director, at 202-418-5283 or
As amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act),
The Commission also has the power to make and promulgate such rules and regulations as, in the judgment of the Commission, are reasonably necessary to effectuate the provisions or to accomplish any purposes of the CEA.
In March of 2017, Commission staff initiated an agency-wide internal review of CFTC regulations and practices to identify those areas that could be simplified to make them less burdensome.
The Investment Advisers Association (IAA) submitted suggested modifications for numerous rules in response to the Commission's Request for Information.
In response to the information received as part of the Project KISS initiative, as well as CFTC staff's internal review of the Commission's regulatory regime, the Commission has today determined to propose several amendments to part 4 (the Proposal or NPRM). Specifically, the CFTC is proposing to amend § 4.13 to permit CPOs that solicit and/or accept funds from only non-U.S. persons for participation in offshore commodity pools to claim an exemption from CPO registration requirements with respect to such pools, while permitting the maintenance of registration with respect to commodity pools for which CPO registration is required. This proposed amendment would have the effect of expanding relief currently available
Moreover, the Commission plans to continue its efforts to amend 17 CFR part 4 by proposing regulatory exemptions consistent with existing CFTC staff exemptive relief letters available to qualifying CPOs. These efforts include proposing to add exemptive relief consistent with that provided by CFTC Staff Letter 14-116, which permits the use of general solicitation by qualifying CPOs, as contemplated by the Jumpstart Our Business Start-ups Act of 2012 (as defined above, the JOBS Act), through targeted amendments to §§ 4.7 and 4.13(a)(3) in a manner consistent with that exemptive letter.
In response, the Commission is proposing to adopt amendments that would provide relief from filing Form CPO-PQR to registered CPOs that only operate commodity pools exempt or excluded under §§ 4.5 and 4.13, consistent with CFTC Staff Letter 14-115,
The Commission is aware that a number of CPOs only operate U.S.-based commodity pools soliciting and accepting funds from persons located in the U.S., whereas other CPOs solicit and accept funds from participants, whether U.S. or non-U.S., for investment in commodity pools in both domestic and international locales; still others solicit and accept funds solely from persons located outside the United States for investment in offshore pools. Based on communications with industry and Commission registrants, the Commission preliminarily believes that the variety of location in CPO business activities continues to grow, and that CPOs today frequently participate in the markets of, solicit and/or accept funds for investment from potential participants in, and operate commodity pools simultaneously in multiple jurisdictions.
In promulgating relief from registration, through the adoption of § 3.10(c)(3),
The Commission also preliminarily believes that the operation of offshore pools by exempt CPOs, who may also register solely with respect to the pools they operate that solicit and/or accept funds from persons in the U.S., would pose limited risk to the participants in those pools requiring registration due to the application of § 4.20. Section 4.20(c), in particular, prohibits a CPO from commingling the property of any commodity pool that it operates, or that it intends to operate, with the property of any other person.
Consequently, the Commission preliminarily believes that providing CPO registration relief beyond that currently provided by § 3.10(c)(3)(i) and by the staff relief in Advisory 18-96 would be beneficial and consistent with the Commission's past prioritization of agency resources for the regulation of intermediary activities affecting U.S. participants. The Commission is, therefore, proposing to adopt, among other amendments, an exemption from CPO registration in § 4.13 that would permit a CPO that solicits,
On April 11, 1996, staff from the Commission's Division of Trading and Markets (T&M), a predecessor of today's Division of Swap Dealer and Intermediary Oversight (DSIO or Division), issued Advisory 18-96,
Section 4.22 governs the periodic reporting required for commodity pools and generally requires each CPO registered or required to be registered to periodically distribute to each participant in a pool it operates periodic Account Statements and Annual Reports, which also must be filed with the Commission through the National Futures Association. 17 CFR 4.22.
Section 4.23 requires each CPO registered or required to be registered to make and keep certain books and records concerning both the commodity pool(s) it operates and the CPO itself; paragraphs (a)(10) and (a)(11) particularly require a CPO to make and keep with respect to a commodity pool it operates a Statement of Financial Condition on a monthly or quarterly basis dependent on the amount of the net assets of the commodity pool, as well as a corresponding Statement of Income (Loss). 17 CFR 4.23(a)(10) and (a)(11).
At the time of its adoption in 1996, Advisory 18-96 provided relief from the more robust compliance burdens then applicable to CPOs,
Generally, to qualify for the broadest relief available under Advisory 18-96, a CPO must meet the following requirements:
1. The CPO claiming the relief is registered as such with the Commission;
2. The commodity pool is, and will remain, organized and operated outside of the United States;
3. The commodity pool will not hold meetings or conduct administrative activities within the United States;
4. No shareholder of or other participant in the commodity pool is or will be a United States person;
5. The commodity pool will not receive, hold or invest any capital directly or indirectly contributed from sources within the United States; and
6. The CPO, the commodity pool and any person affiliated therewith will not undertake any marketing activity for the purpose, or that could reasonably have the effect, of soliciting participation from United States persons.
To qualify for the recordkeeping location relief under the Advisory, a registered CPO must represent the following:
1. The CPO will maintain the original books and records of the commodity pool at the main business office of the commodity pool located outside the United States;
2. The CPO desires to maintain such books and records outside the United States in furtherance of compliance with the Internal Revenue Service (IRS) requirements for relief from United States federal income taxation;
3. The CPO will maintain duplicate books and records of the commodity pool at a designated office in the United States; and
4. Within 72 hours after the request of a representative from the Commission, the United States Department of Justice, or the National Futures Association (NFA), the original books and records will be provided to such representative at a place located in the United States that is specified by the representative.
The Advisory additionally requires all claimants of either type of relief thereunder to represent that, “neither the CPO nor any of its principals is subject to any statutory disqualification under CEA section 8a(2) or 8a(3) unless such disqualification arises from a matter which (a) was previously disclosed in connection with a previous application for registration if such registration was granted, or (b) was disclosed to the Commission or the NFA more than thirty days prior to the filing of this notice.”
Given the increase in the Commission's jurisdiction resulting from the passage of the Dodd-Frank Act,
The amendments proposed today would incorporate both types of relief provided by Advisory 18-96 in their entirety in the Commission's existing part 4 regulatory framework by providing registration and compliance exemptions for qualifying persons operating offshore pools, with respect to CPO registration and, in the case of those domestic, registered CPOs operating offshore pools, with respect to the books and records location requirement in § 4.23.
Currently, none of the CPO registration exemptions in § 4.13 prohibits statutory disqualifications as a condition of relief. In contrast, one of the requirements to obtain relief under Advisory 18-96 is that neither the registered CPO nor its principals is subject to any statutory disqualification under sections 8a(2) or 8a(3) of the Act,
The Commission is concerned that it poses undue risk from a customer protection standpoint for its regulations in their current form to permit statutorily disqualified persons or entities to legally operate exempt commodity pools, especially when those same persons would not be permitted to register with the Commission.
Consequently, the Commission is proposing to require any person claiming a registration exemption under § 4.13(a)(1), (2), (3), or (5), or proposed § 4.13(a)(4),
Additionally, the Commission is proposing to amend the
The Commission preliminarily believes that permitting non-U.S. person participants, regardless of their financial sophistication, in § 4.13(a)(3) exempt pools would generally be consistent with the Commission's policy approach in proposing to add the 18-96 Exemption to the 17 CFR part 4 regulatory framework. With limited participation in U.S. commodity interest markets subject to Commission jurisdiction, commodity pools exempt under § 4.13(a)(3) do not trigger the same level of regulatory interest for the Commission as commodity pools requiring CPO registration and compliance with all or part of the requirements in 17 CFR part 4. Additionally, § 4.7 already permits non-U.S. persons,
The Commission is also proposing today amendments consistent with two Commission staff no-action letters that currently provide relief from CPO
A Family Office is generally understood to be a professional organization that is wholly-owned by clients in a family, including members of a family and/or entities controlled by a family or family member,
As discussed above, the operations of a Family Office frequently involve the collective management of pooled assets from a variety of sources, notwithstanding that those sources may all be members of a single family, or organizations, trusts, or foundations for the benefit of those family members. If such pooled assets are invested in commodity interests,
In the 1990s and early 2000s, Commission staff frequently responded to individual requests from Family Offices for relief from CPO and CTA regulation with one-off relief letters determining the Family Office not to be a commodity pool or providing no-action relief from such registration to certain family members or staff.
Prior to the exemption's rescission in 2012, many Family Offices claimed former § 4.13(a)(4) to legally operate their investment vehicles, invest in commodity interests, and provide commodity trading advice to Family Clients, without being required to register with the Commission in any capacity.
The Commission does not believe that “grandfathering” is appropriate in this context. As the Commission stated in its Proposal, part of the purpose of rescinding § 4.13(a)(4) is to ensure that entities that are engaged in derivatives trading are subject to substantively identical registration and compliance obligations and oversight by the Commission. Grandfathering is not consistent with the stated goals of the Commission's rescission and would result in disparate treatment of similarly situated entities. Therefore, the Commission will implement the rescission of § 4.13(a)(4) for all entities currently claiming exemptive relief thereunder.
The Commission, therefore, believes that it is prudent to withhold consideration of a family offices exemption until the Commission has developed a comprehensive view regarding such firms to enable the Commission to better assess the universe of firms that may be appropriate to include within the exemption, should the Commission decide to adopt one. Therefore, the Commission is directing its staff to look into the possibility of adopting a family offices exemption in the future.
Finally, the Commission stated that Family Offices would “continue to be permitted to write in on a firm by firm basis to request interpretative relief from the registration and compliance obligations under the Commission's rules and to rely on those interpretative letters already issued to the extent permissible under the Commission's regulations.”
In 2011, the SEC adopted an exclusion from the term “investment adviser,” (IA) as defined by the Investment Advisers Act of 1940, as amended (IA Act),
Because Family Offices, as such term is commonly understood, are not intended to be marketed as an option for investing by the general public, Family Offices are restricted, by definition and in practice, to accepting assets for management from or providing services to solely “family clients.” As a result, the SEC Family Office Exclusion defines a Family Client as including family members, including non-blood relatives such as spouses and adopted children, former family members, key employees of the Family Office, former key employees (under certain conditions), as
Pursuant to the Commission's instructions in the CPO CTA Final Rule, many Family Offices sought relief from DSIO staff following the 2012 rescission of § 4.13(a)(4). Certain representatives of the Family Office industry requested relief that would be available to Family Offices on a global basis and would be based upon the SEC Family Office Exclusion. In the request for relief, industry representatives asserted that Family Offices are not operations of the type and nature that warrant regulatory oversight by the Commission, because, by definition, a Family Office is not a vehicle in which non-Family Clients would be solicited or permitted to invest. Because a Family Office is comprised of participants with close relationships, and there is a direct relationship between the clients and the CPO or advisor, it was argued that such relationships greatly reduce the need for the customer protections available pursuant to the regulations in 17 CFR part 4.
Having met with Family Office industry representatives and observed the SEC's experience after adopting the SEC Family Office Exclusion, Commission staff thoroughly considered the issue and ultimately determined to grant registration relief for Family Offices meeting the requirements of the SEC Family Office Exclusion. On November 29, 2012, DSIO issued CFTC Staff Letter 12-37, a no-action letter permitting Family Offices complying with the SEC Family Office Exclusion to operate and manage the assets of Family Clients without having to register with the Commission as a CPO.
In granting the no-action relief from CPO registration, DSIO staff considered the requesters' assertion that, “this issue has similarly been addressed by the [SEC], which resulted in an exclusion for family offices that would otherwise be required to register as an investment adviser[,]” and that “SEC staff ha[d] devoted substantial time and resources to addressing this issue.”
In the six years since the rescission of § 4.13(a)(4) and the issuance of the CPO Family Office No-Action Letter, Commission staff has gained additional familiarity with the Family Office industry. This experience was gained through the continued availability of the CPO Family Office No-Action Letter and the subsequent issuance and utilization by industry of the CTA Family Office No-Action Letter, as well as through the consideration of and response to the few additional requests received by DSIO from Family Offices unable to meet the criteria of either of the global no-action letters.
Based on this experience, and pursuant to the Commission's instructions to its staff in 2012 to consider the future adoption of registration exemptions for Family Offices, the Commission is proposing to adopt for qualifying Family Offices CPO and CTA registration exemptions with terms similar to those in the CPO Family Office No-Action Letter and the CTA Family Office No-Action Letter by amending §§ 4.13 and 4.14. The Commission preliminarily believes that the familial relationships inherent in Family Offices provide a reasonable mechanism for protecting the interests of Family Clients and resolving disputes amongst them, and that the regulatory interest is lower than in typical, arms-length transactions where the CPO and the pool participants, or the CTA and its advisory clients, do not have close relationships and/or long-standing family history between them. The Commission also preliminarily believes that these characteristics are a reasonable substitute for the benefits and protections afforded by the Commission's regulatory regime for CPOs and CTAs.
Consistent with its statements in prior rulemakings impacting Family Offices, the Commission notes that Family Offices unable to meet the requirements of the exemptions proposed herein today may still avail themselves of the relief provided in § 4.13(a)(3), if they so qualify, or they may continue to seek relief on an individual, firm-by-firm basis through requests submitted to Commission staff.
On April 5, 2012, Congress enacted the JOBS Act for the stated purpose of increasing American job creation and
Section 5 of the 33 Act requires the registration of securities offerings with the SEC and compliance with prospectus delivery requirements, unless an exemption is available.
Through JOBS Act Section 201, Congress directed the SEC to amend 17 CFR 230.506 of Regulation D, to provide that the prohibition against general solicitation or general advertising in section 230.502(c) of title 17 shall not apply to offers and sales of securities made pursuant to section 230.506, provided that all purchasers are accredited investors.
The SEC explained that it was retaining the exemption for traditional Regulation D offerings in § 230.506(b), “for those issuers that either do not wish to engage in general solicitation in their Rule 506 offerings . . . or wish to sell privately to non-accredited investors who meet Rule 506(b)'s sophistication requirements.”
Under certain circumstances, persons relying on the new exemption in § 230.506(c) (506(c) Issuers) or reselling securities pursuant to Rule 144A (144A Resellers) may also be issuing interests in a commodity pool, the CPOs of which are subject to Commission regulation. Certain of the Commission's regulations applicable to CPOs currently contain restrictions on marketing and solicitation that conflict with the statutory and regulatory amendments effected and prompted by the passing of the JOBS Act. Specifically, certain persons who offer, market, or sell securities from 506(c) Issuers or 144A Resellers may be subject to Commission regulation under §§ 4.7 or 4.13(a)(3), both of which currently prohibit the general marketing and solicitation that is now permitted by the JOBS Act.
Section 4.7 provides relief from certain of the disclosure, periodic and annual reporting, and recordkeeping requirements in Part 4 of the Commission's regulations to registrants who file claims pursuant to § 4.7(d).
Generally, all commodity pools relying on the exemption in 33 Act section 4(a)(2), including pursuant to § 230.506(b), remain subject to prohibitions on general solicitation and general advertising, and such pools' CPOs may continue to claim relief under §§ 4.7(b) or 4.13(a)(3) in their current states. However, as noted above, amendments to securities regulations prompted by the JOBS Act and the requirements for exemptive relief under §§ 4.7(b) or 4.13(a)(3) are incompatible. In response to the SEC's amendments, the Division issued CFTC Staff Letter 14-116, an exemptive letter clarifying how securities issuers and resellers, and their CPOs, could avail themselves of relief both in the securities and commodity interest sectors.
Subject to certain conditions, the JOBS Act Relief Letter provides exemptive relief to claimants from the specific provisions of §§ 4.7(b) or 4.13(a)(3) outlined above, to make the relief provided by those regulations compatible with amended Regulation D and Rule 144A. Specifically, the CPOs of 506(c) Issuers and 144A Resellers that filed a notice with DSIO staff received exemptive relief from the requirements in § 4.7(b) that an offering be exempt pursuant to section 4(a)(2) of the 33 Act and offered solely to QEPs, and from the requirement in § 4.13(a)(3)(i) that the securities “be offered and sold without marketing to the public.”
In an effort to harmonize the impact of the JOBS Act on, and to provide legal certainty with respect to the transactions engaged in by, dually-regulated CFTC and SEC entities, the Commission is proposing to adopt tailored amendments to §§ 4.7(b) and 4.13(a)(3) that would generally be consistent with the JOBS Act Relief Letter, as explained further below.
Section 4.5 provides an exclusion for certain otherwise regulated persons from the CPO definition with respect to the operation of a “qualifying entity” specified in that regulation.
BDCs are closed-end companies subject to regulation by the SEC under the ICA. Although BDCs meet the definition of an “investment company” under ICA section 3,
BDCs are primarily engaged in investing in, and providing managerial assistance to, operating companies.
In 2012, DSIO staff received correspondence requesting interpretative guidance from the Division regarding BDCs
Following internal deliberations and further discussions with the requester, the Division determined to issue no-action relief, rather than interpretative guidance, which was accomplished on December 4, 2012, through the publication of CFTC Staff Letter 12-40 (BDC No-Action Letter).
On September 28, 2012, the U.S. District Court for the District of Columbia vacated §§ 1.3(z)(1) and 151.5 as part of the total vacation of the Commission's position limits rule.
Since the issuance of CFTC Staff Letter 12-40, the Commission has received 55 claims of relief. Division staff issued the BDC No-Action Letter because BDCs are subject to oversight by the SEC that is comparable to the regulation of RICs, and because BDCs use commodity interests primarily for bona fide hedging purposes. For these same reasons, the Commission has determined to exercise its authority to propose to amend § 4.5 to provide IAs of BDCs with comparable exclusionary relief.
The Commission adopted § 4.27 on November 16, 2011,
The entities required to file a Form CPO-PQR for CPOs, or a Form CTA-PR for CTAs, are identified by the “reporting person” definition (Reporting Person) contained in § 4.27(b).
To address this issue, DSIO issued several staff letters that provided exemptive relief from the requirement to file either a Form CPO-PQR or CTA-PR, for CPOs
The Commission is proposing today to amend § 4.27 in a manner consistent with the exemptive relief currently made available in CFTC Staff Letters 14-115 and 15-47, such that CPOs that operate only pools for which they are otherwise excluded from the CPO definition or exempt from CPO registration are not required to file a Form CPO-PQR, and CTAs that do not direct client accounts are not required to file a Form CTA-PR.
Section 4.14(a)(4) provides that a person is exempt from registering as a CTA, if that person is registered under the CEA and the Commission's regulations as a CPO, and the person's commodity trading advice is directed solely to the commodity pool or pools for which it is registered as a CPO.
Further, consistent with the foregoing, the Commission also proposes to exclude from the Reporting Person definition any CTA that directs only the accounts of a pool that it operates as an exempt CPO. Specifically, § 4.14(a)(5) exempts from CTA registration any person that is exempt from CPO registration, if that person's commodity trading advice is directed solely to the pool for which it is exempt from CPO registration.
The Commission is proposing to amend § 4.13 by adding a new exemption from CPO registration in the currently reserved paragraph (a)(4) for qualifying persons operating commodity pools outside of the United States. The 18-96 Exemption would incorporate the vast majority of the requirements in the Advisory (with the exception of requiring CPO registration) and would be limited in application to each pool for which the person claims exemption from registration under paragraph (a)(4).
Proposed § 4.13(a)(4)(i) through (vi) explain the substantive conditions that must be met to be eligible for the exemption. Because the 18-96 Exemption is based on the location of the pool and/or its participants, the exemption requirements, much like the Advisory, would focus on the location or base of activities for the pool, including the location and source of any capital invested in the exempt offshore pool. The 18-96 Exemption would include the following parameters: (i) The pool is, and will remain, organized and operated outside of the United States; (ii) the pool will not hold meetings or conduct administrative activities within the United States; (iii) no shareholder of or other participant in the pool is or will be a U.S. person; (iv) the pool will not receive, hold or invest any capital directly or indirectly contributed from sources within the United States; and (v) the person, the pool, and any person affiliated therewith will not undertake any marketing activity for the purpose, or that could reasonably be expected to have the effect, of soliciting participation in the pool from U.S. persons.
Consistent with its past prioritization of resources, the Commission intends that the requirements of the 18-96 Exemption would limit that exemption's availability to those persons operating commodity pools offshore, soliciting, accepting funds from, and managing assets from solely persons located
The Commission also proposes to amend § 4.13(a) by adding a new paragraph (a)(6). Proposed § 4.13(a)(6) would require any person claiming an exemption under paragraphs (a)(1) through (a)(5) of § 4.13 to represent that neither the person nor any of its principals is subject to any statutory disqualification under sections 8a(2) or 8a(3) of the Act, unless such disqualification arises from a matter which was previously disclosed in connection with a previous application, if such registration was granted, or which was disclosed more than thirty days prior to the claim of this exemption. As discussed above, the Commission believes preliminarily that this proposed amendment would provide additional customer protection because statutorily disqualified, unregisterable persons would no longer be permitted to claim the CPO exemptions under § 4.13(a)(1) through (a)(5).
The Commission is proposing to amend § 4.13(b) to incorporate the 18-96 Exemption into the existing timing and claims process for other CPO exemptions, which the Commission preliminarily believes establishes a reasonable timing requirement for such claims. Once adopted, this provision would apply to persons claiming the 18-96 Exemption for newly established offshore commodity pools. If this rulemaking is adopted, the Commission intends to permit all existing claimants under Advisory 18-96 to claim the 18-96 Exemption.
As proposed, § 4.13(b)(2)(i) would require a person claiming the 18-96 Exemption to do so within 30 days of engaging in CPO activities that would make relief under § 3.10(c)(3)(i) unavailable to that person. Until that point in time, the person could freely rely on § 3.10(c)(3)(i), which is self-executing; such reliance would no longer be permitted, however, once the person is required to register or claim a CPO exemption with respect to a commodity pool that is marketed to U.S. persons, that contains funds belonging to U.S. persons, or that is otherwise operated in the U.S., its territories, or possessions. Therefore, proposed § 4.13(b)(2)(i) would require a person to claim the 18-96 Exemption within 30 days of such an occurrence, which the Commission preliminarily believes is sufficient time for a person to achieve compliance with the terms of the 18-96 Exemption.
It is crucial to the proper functioning of the 18-96 Exemption that it be available on a pool-by-pool basis. This feature would permit claiming CPOs to be exempt with respect to their qualifying offshore commodity pools, while permitting them to maintain CPO registration for any commodity pools engaged in activities requiring such registration,
Without any additional amendment, current § 4.13(a)(6) (proposed to be renumbered as paragraph (a)(7)) contains a reference to § 4.13(a)(4), where the 18-96 Exemption is proposed to be housed. That reference is a holdover from the original exemption in § 4.13(a)(4) rescinded by the Commission in 2012, and would require any person claiming the 18-96 Exemption to furnish in written communication physically delivered or delivered through electronic transmission to each prospective participant in the pool: (A) A statement that the person is exempt from registration with the Commission as a commodity pool operator, and that therefore, unlike a registered commodity pool operator, it is not required to deliver a Disclosure Document and a certified annual report to participants in the pool; and (B) a description of the criteria pursuant to which it qualifies for such exemption from registration.
Because disclosure documents and certified annual reports are two of the most significant compliance burdens in part 4 of the Commission's regulations, it is critical that prospective participants be informed as to which, if any, customer protections apply to them and their investment, and as to what information they are entitled to receive from the CPO of their pool. Nonetheless, the Commission understands that currently, as proposed, only non-U.S. persons would be the participants in qualifying pools operated by persons claiming the 18-96 Exemption. The Commission notes that such disclosures generally would be more informative or helpful to U.S. person investors in exempt pools, but inquires whether non-U.S. persons would expect or otherwise benefit from such disclosures, such that the reference to § 4.13(a)(4) should be retained.
The Commission is also amending § 4.13(a)(3)(iii)(E) to remove a cross-reference to rescinded § 4.13(a)(4) and replace it with “non-U.S. persons.” This amendment would effectively adopt the interpretation in CFTC Staff Letter 04-13, discussed
As discussed above, the Commission has also determined to preserve Advisory 18-96's relief from the generally applicable recordkeeping location requirement in § 4.23. Specifically, the Commission is proposing to amend § 4.23 by adding a new paragraph (c), such that registered onshore CPOs operating offshore commodity pools may seek relief from the requirement in that regulation that all books and records concerning the pool and CPO be kept at the CPO's main business office, provided that the person meets the requirements thereunder incorporated from the Advisory. Proposed § 4.23(c) contains exemptive relief for this specific type of CPO with regard to the offshore commodity pool(s) it operates, and contains the vast majority of the requirements for claiming the equivalent relief under Advisory 18-96. Because § 4.23 applies to CPOs registered or required to be registered, the Commission preliminarily believes it is not necessary to incorporate the prohibition on statutory disqualifications in the requirements for claiming this proposed exemptive relief.
The Commission is also proposing a series of organizational, non-substantive amendments to § 4.23, which the Commission preliminarily believes would clarify the existing recordkeeping location requirement applicable to all CPOs registered or required to be registered, would retain current exemptive relief provided by that regulation, and overall, would make the regulation easier to read and understand, even with the addition of the exemptive relief also being proposed today. The Commission requests comment on whether these proposed amendments effectively incorporate in § 4.23 the recordkeeping location requirement relief currently found in Advisory 18-96, and whether the proposed technical amendments improve or otherwise alter that regulation or its application in any way.
Consistent with the CPO Family Office No-Action Letter, the Commission proposes to adopt for qualifying Family Offices a new regulatory exemption in § 4.13(a)(8). New § 4.13(a)(8) would provide relief from registration equivalent to the CPO Family Office No-Action letter, and the exemption's availability would be contingent on the Family Office: (1) Meeting the requirements for being deemed a Family Office pursuant to the SEC Family Office Exclusion in 17 CFR 275.202(a)(11)G-1; (2) restricting its investing and advisory activities solely to Family Clients, as defined in the SEC Family Office Exclusion; and (3) not engaging in the solicitation of persons other than Family Clients permitted under the SEC Family Office Exclusion. The prohibition against solicitation of non-Family Clients ensures that the exempt CPO is limiting its activities to those associated with the operation of a Family Office, as contemplated by the SEC Family Office Exclusion, which the Commission preliminarily believes would reduce its regulatory interest in such investment vehicles, when compared to other commodity pools.
As part of claiming exemptive relief under § 4.13, each person must file an annual notice under § 4.13(b)(4) confirming that the person remains exempt from registration. The Commission proposes to maintain the annual notice filing for all persons claiming relief under § 4.13, including persons claiming the new proposed exemption for Family Offices. The Commission believes that the notice requirement should ensure at least an annual assessment of whether the CPO of the Family Office remains eligible to rely upon the proposed exemption.
With respect to the CTA Family Office No-Action Letter, the Commission also proposes adding a new CTA registration exemption at § 4.14(a)(11) consistent with that relief. The Commission preliminarily believes that Family Offices that are also claiming relief from CPO registration under proposed § 4.13(a)(8) would already be eligible for relief from CTA registration by virtue of the existing exemption in § 4.14(a)(5), which provides an exemption from CTA registration for persons exempt from CPO registration that only advise a pool or pools for which the person is so exempt.
The Commission proposes today to add to part 4 regulatory harmonization consistent with the JOBS Act Relief Letter, through specific amendments to §§ 4.7(b) and 4.13(a)(3). In § 4.7, the paragraph (b) introductory text currently sets forth the eligibility requirements for CPOs claiming relief thereunder with respect to certain pools they operate. The Commission proposes to remove the reference to “section 4(2) of [the 33] Act,” to remove references to the act of “offering” the § 4.7 exempt pool, and to delete the text, “without marketing to the public.” The Commission intends that these amendments would permit CPOs claiming the exemptive relief in § 4.7(b) to engage in general solicitation or marketing, if eligible to do so under their securities law exemptions.
Additionally, the Commission is proposing to break out the eligible claimants of the relief in § 4.7(b) into two new paragraphs, paragraphs (b)(1)(i) and (b)(1)(ii), and to renumber the remaining subparagraphs of § 4.7(b). These changes are intended to improve the readability and clarity of that regulation. With today's proposed amendments, the operative requirements remaining in § 4.7(b) for non-bank CPOs claiming relief thereunder are that: (1) The CPO must be registered with respect to the exempt pool/offering; (2) participations in the exempt pool must be exempt from the Securities Act and/or offered and sold pursuant to Regulation D (under either § 230.506(b) or 230.506(c)) or resold pursuant to Rule 144A, 17 CFR 230.144A, or offered pursuant to Regulation S;
The Commission is also proposing similar amendments to the registration exemption provided to eligible CPOs in § 4.13(a)(3). In § 4.13(a)(3)(i), the Commission proposes to delete the language, “such interests are offered and sold without marketing to the public in the United States,” and to replace it with a conditional statement
The Commission proposes to amend § 4.5 to include investment advisers (as defined above, IAs) of BDCs under paragraph (a) as a type of entity that shall be excluded from the CPO definition with respect to the operation of a “qualifying entity,”
The Commission proposes to amend § 4.27 to exclude certain registered CPOs and CTAs from the definition of “reporting person” in § 4.27(b). Specifically, the Commission proposes to place the definition of “reporting person” in a new paragraph (b)(1) and to add a new paragraph § 4.27(b)(2) that would limit the application of the “reporting person” definition, such that the registered CPOs and CTAs discussed above would no longer be required to report on Forms CPO-PQR and CTA-PR, as applicable. The Commission is also proposing to revise the title of § 4.27 to more accurately reflect the substance of the section.
The Commission requests comment on all aspects of the Proposal. Additionally, the Commission would appreciate consideration of the following specific questions.
1. Should CPOs claiming the 18-96 Exemption be required to disclose the exemption to participants in their offshore commodity pools? Would such disclosure be meaningful to offshore investors? If the Commission were to require such disclosure, what timing requirement should be established? Should it be identical to, or different from, the timing requirement proposed in the NPRM for claiming the 18-96 Exemption?
2. Do the proposed amendments to § 4.13(e) clearly establish that the 18-96 Exemption is available to CPOs for each individual commodity pool meeting the terms therein, without regard to the claimant's registration status? If not, how could the amendments be improved?
3. The Commission also requests comment on the prohibition on statutory disqualifications proposed in § 4.13 generally, the impact of adopting this provision on industry participants and currently exempt CPOs, and also, on what, if any, other statutory disqualifications should be permissible for exempt CPOs and their principals. In particular, comments should address any or all of the following questions: What are the concerns and benefits associated with the expansion of the prohibition on statutory disqualifications to the CPO registration exemptions set forth in § 4.13(a)(1), (a)(2), (a)(3), and (a)(5), or proposed to be set forth in § 4.13(a)(4)? Do the limited exceptions that would permit certain statutory disqualifications successfully address any unintended consequences of adding the prohibition to § 4.13, while still providing a base level of customer protection by preventing statutorily disqualified individuals from legally operating exempt commodity pools? Generally, how should the Commission handle the implementation of the statutory disqualification prohibition? Specifically, how should the prohibition apply to current claimants under § 4.13? How much time should the Commission allow for filing updated exemption claims subject to the prohibition? How much time should the Commission allow for an exempt CPO to replace statutorily disqualified principals, in order to maintain eligibility for a § 4.13 exemption?
4. When a qualifying CPO is transitioning from reliance upon § 3.10(c)(3)(i) to the 18-96 Exemption, is 30 days sufficient time in which to claim the 18-96 Exemption for qualifying offshore pools? Generally, please provide comment on whether the interaction between § 3.10(c)(3)(i) and the 18-96 Exemption, as proposed, is understood.
5. Is the language in proposed § 4.13(e)(3) effective to make the 18-96 Exemption available on a pool-by-pool basis, such that a claim for the 18-96 Exemption would be able to co-exist with a simultaneous CPO registration or even other exemption claims? If not, why not?
6. Should the Commission adopt all of the proposed requirements for the relief under proposed § 4.23(c)? Which requirements could be dropped? Why? Are there additional or different conditions to this relief that the Commission should consider adopting?
7. Should CPOs of Family Offices organized as commodity pools be required to annually recertify their eligibility for the proposed exemption under § 4.13(a)(8)? What are the costs and burdens that an annual notice requirement would impose?
8. Information on BASIC is provided to the public as a means of ensuring that basic information regarding a person's registration status with the Commission is readily available. Given that the persons claiming the proposed CPO exemption for the operation of Family Offices are proposed to be prohibited from soliciting non-Family Client participants, should notices filed by
9. Does the proposed bifurcation of the CTA relief provided to (a) CTAs of Family Offices organized as commodity pools, and (b) CTAs of individual Family Clients clearly and effectively provide relief from registration for CTAs that advise Family Offices in their capacity as an exempt CPO and/or as a CTA to individual Family Clients? Is there a clearer or more advantageous way to effectuate such relief?
10. Should a notice be required in order to claim the proposed exemption in § 4.14(a)(11) for CTAs of Family Clients? If so, should such CTAs be required to recertify eligibility for such exemption on an annual, or longer term, basis? What are the costs and burdens that such an annual notice requirement would impose on those CTAs?
11. Do the amendments to §§ 4.7(b) and 4.13(a)(3) effectively incorporate in 17 CFR part 4 the general marketing and solicitation permitted by the JOBS Act, consistent with the JOBS Act Relief Letter? Are there additional amendments the Commission should consider that would ensure this relief is completely added to the part 4 regulatory regime?
12. Are there any additional classes of registered CPOs or CTAs that should be excluded from the definition of “Reporting Person” in § 4.27(b)? If yes, please identify the class or classes, and explain why they should be so excluded.
The Regulatory Flexibility Act (RFA) requires Federal agencies, in promulgating regulations, to consider whether the rules they propose will have a significant economic impact on a substantial number of small entities and, if so, to provide a regulatory flexibility analysis regarding the economic impact on those entities. Each Federal agency is required to conduct an initial and final regulatory flexibility analysis for each rule of general applicability for which the agency issues a general notice of proposed rulemaking.
The regulatory amendments proposed by the Commission in this release would affect only persons registered or required to be registered as CPOs and CTAs, persons claiming exemptions from registration as such, and certain persons excluded from the CPO definition. The Commission has previously established certain definitions of “small entities” to be used by the Commission in evaluating the impact of its rules on such entities in accordance with the requirements of the RFA.
Regarding CTAs, the Commission has previously considered whether such registrants should be deemed small entities for purposes of the RFA on a case-by-case basis, in the context of the particular Commission regulation at issue.
The portions of this Proposal directly impacting CTAs propose a registration exemption consistent with DSIO's CTA Family Office No-Action Letter, as well as expanded exemptive relief from the Form CTA-PR filing requirement in § 4.27 for certain categories of CTAs. These proposed amendments are not expected to impose any new burdens on market participants or Commission registrants. Rather, to the extent that this Proposal provides an exemption from the requirement to register as a CTA or from the Form CTA-PR filing requirement in § 4.27, the Commission preliminarily believes it is reasonable to infer that such exemptions would be much less burdensome to those persons than either CTA registration or the preparation and filing of Form CTA-PR. In fact, the Commission has not proposed herein to require a notice filing for either the proposed exemption for CTAs of Family Offices and Family Clients, or the expanded relief proposed for certain CTAs under § 4.27.
Similarly, the Commission preliminarily does not believe that the benefits associated with the exemption from CTA registration for CTAs of Family Offices and Family Clients, or the expanded relief from the requirement to prepare and file Form CTA-PR, will result in a significant economic impact on small CTAs. The regulatory obligations associated with CTA registration and compliance are not significantly burdensome, being limited to the completion of a registration application, the preparation and distribution of a disclosure document (if required), the maintenance of certain books and records, and the annual completion of Form CTA-PR, which consists of two questions with several subparts. Although relief from these obligations is beneficial to small CTAs, the Commission preliminarily believes that this does not rise to the level of significant economic impact.
Therefore, the Commission has preliminarily determined that, to the extent that the Proposal affects CTAs, it will not create a significant economic impact on a substantial number of small entities. Accordingly, the Chairman, on behalf of the Commission, hereby certifies pursuant to 5 U.S.C. 605(b) that these proposed amendments, if adopted, will not have a significant economic impact on a substantial number of small entities.
The Paperwork Reduction Act (PRA) imposes certain requirements on Federal agencies in connection with their conducting or sponsoring any collection of information as defined by the PRA.
The Proposal amends two collections of information for which the Commission has previously received control numbers from OMB. The first collection of information is, “Rules Relating to the Operations and Activities of Commodity Pool Operators and Commodity Trading Advisors and to Monthly Reporting by Futures Commission Merchants, OMB control number 3038-0005” (Collection 3038-0005). Collection 3038-0005 primarily accounts for the burden associated with part 4 of the Commission's regulations that concern compliance obligations generally applicable to CPOs and CTAs, as well as certain enumerated exemptions from registration as such and exclusions from those definitions, and available relief from compliance with certain regulatory requirements. The Commission is proposing to amend this collection to reflect the notices proposed to be required to claim certain of the registration exemptions and the CPO exclusion proposed herein, as well as the expected reduction in the number of registered CPOs and CTAs filing Forms CPO-PQR and CTA-PR, pursuant to the proposed revisions to § 4.27.
The Commission also proposes to amend a second collection entitled, “Part 3—Registration, OMB control number 3038-0023” (Collection 3038-0023), which pertains to the registration of intermediaries generally, to reduce the number of persons registering as CPOs and CTAs as a result of the regulatory amendments proposed herein. Therefore, the Commission is proposing adjustments to each of these collections accordingly. The responses to these collections of information are mandatory.
The collections of information in the Proposal would make available to eligible persons: (1) The 18-96 Exemption in proposed § 4.13(a)(4), which incorporates the majority of the relief provided by Advisory 18-96, and which would exempt from CPO registration qualifying CPOs with regard to their offshore pools; (2) the Advisory 18-96 recordkeeping location relief for qualifying, registered CPOs, which is proposed to be added to § 4.23; (3) the exemptions from CPO and CTA registration for qualifying Family Offices in proposed §§ 4.13(a)(8) and 4.14(a)(11); (4) the proposed expansion of the exclusion in § 4.5 for IAs of BDCs; and (5) the proposed exemptive relief made available through amendments to the Reporting Person definition in § 4.27(b), such that qualifying CPOs and CTAs no longer have to file Forms CPO-PQR or CTA-PR.
In each instance, eligible persons have the option to elect the proposed registration or compliance exemption or exclusion if they are so qualified, but have no obligation to do so. For this reason, except to the extent that the Commission is amending Collection 3038-0005 for PRA purposes to reflect these alternatives, and Collection 3038-0023 to reduce the number of persons registering as CPOs or CTAs, today's Proposal is not expected to impose any significant new burdens on CPOs or CTAs. Rather, to the extent that the proposed amendments provide registration exemptions or definitional exclusions, and/or alternatives to comprehensive compliance with Commission regulations, through the adoption of amendments consistent with existing exemptive and no-action letter relief, it is reasonable for the Commission to infer that the proposed amendments will generally prove to be less burdensome for persons eligible to claim the proposed alternative relief.
Collection 3038-0005 is currently in force with its control number having been provided by OMB, and it was renewed recently on March 14, 2017.
For example, the Commission estimates that the number of persons responding to the portion of the collection associated with § 4.13(b)(1) (the requirement to file a claim for an exemption under that section) will increase by at least the number of persons currently claiming the CPO Family Office No-Action Letter,
Conversely, no adjustments need to be made to Collection 3038-0005 to account for the proposed JOBS Act amendments because persons relying on the exemptive relief therein are, as a condition of relief, currently required to claim an exemption under §§ 4.7 or 4.13, as applicable to them, and therefore, are already counted in this collection. The Commission further proposes an increase to the number of respondents under § 4.5, which will account for new claims the Commission anticipates receiving from IAs of BDCs seeking to claim the expanded exclusion from the CPO definition.
With regard to § 4.27, the Commission is proposing to reduce the number of persons filing all schedules of Forms CPO-PQR and CTA-PR to reflect the categories of registered CPOs and CTAs that are proposed to be considered outside the Reporting Person definition in § 4.27(b). Because there is no notice filing required for this relief, there is no new burden associated with the actual claiming of the relief provided under the revisions to § 4.27 proposed herein.
The currently approved total burden associated with Collection 3038-0005, in the aggregate, is as follows:
The Commission estimates that the proposed amendments to § 4.23 will add the following burden:
The Commission estimates that the proposed CPO registration exemptions under § 4.13(a)(4) and 4.13(a)(8) will result in 250 additional notice filings under § 4.13(b)(1). Therefore, the Commission proposes to increase the burden associated with § 4.13(b)(1) to be as follows:
The Commission estimates that the proposed exclusion for IAs of BDCs under § 4.5 will result in 50 additional notice filings under § 4.5. Therefore, the Commission proposes to increase the burden associated with § 4.5 to be as follows:
With respect to the burden associated with the proposed amendments to § 4.27, the Commission is updating the number of respondents. Specifically, the Commission is modifying the number of respondents to better reflect the average number of CPOs registered with the Commission, less those CPOs that will be eligible for the relief provided by the proposed amendments to the Reporting Person definition in § 4.27. The Commission has historically averaged approximately 1,800 registered CPOs. Based on the number of exemptions filed by CPOs pursuant to §§ 4.5 and 4.13, and filed under Advisory 18-96, the Commission estimates that approximately 100 of those CPOs would be eligible for relief from filing Form CPO-PQR under the proposed amendments to § 4.27. Therefore, the Commission is proposing to set the number of respondents filing Schedule A of Form CPO-PQR on an annual basis at 1,700. The total respondents for this revised collection is further broken out below into two categories, based on the size of the CPO and whether the CPO files Form PF: 1,450 respondents on Schedule A of Form CPO-PQR for non-large CPOs and CPOs filing Form PF, and 250 respondents on Schedule A of Form CPO-PQR for Large CPOs not filing Form PF.
The Commission is similarly considering the number of registered CTAs with respect to the filing of Form CTA-PR, and then reducing the number of filers by the number of CTAs the Commission anticipates will be eligible for the relief proposed herein. Specifically, the Commission has historically averaged approximately 1,600 registered CTAs. Based on the information collected on Form CTA-PR, the Commission estimates that 720 registered CTAs would be eligible for the relief proposed herein, resulting in the difference of 880 CTAs being required to file Form CTA-PR. Therefore, the Commission estimates that the total burden associated with the proposed amendments to § 4.27, reflecting the revised average number of CPOs and CTAs registered with the Commission, to be as follows:
For Schedule A of Form CPO-PQR for non-Large CPOs and Large CPOs filing Form PF:
For Schedule A of Form CPO-PQR for Large CPOs not filing Form PF:
For Schedule B of Form CPO-PQR for Mid-size CPOs:
For Schedule B of Form CPO-PQR for Large CPOs not filing Form PF:
For Schedule C of Form CPO-PQR for Large CPOs not filing Form PF:
For Form CTA-PR:
The total new burden associated with Collection 3038-0005, in the aggregate, reflecting the reduction in burden associated with § 4.27 and the new burden associated with the other amendments proposed by the NPRM, is as follows:
The Commission expects that persons that are currently counted among the estimates for Collection 3038-0023 with respect to CPO and CTA registration with the Commission will deregister as such, due to the availability of the additional registration exemptions and exclusion proposed herein. Therefore, the Commission proposes to deduct the expected claimants of that relief from the total number of persons required to register with the Commission as CPOs and CTAs.
The currently approved total burden associated with Collection 3038-0023, in the aggregate, excluding the burden associated with § 3.21(e), is as follows:
The currently approved total burden associated with § 3.21(e) under Collection 3038-0023, which remains unchanged under the Proposal, is as follows:
The Commission is proposing to reduce the number of registrants by the estimated number of claimants with respect to each of the registration exemptions and exclusion proposed today. Specifically, the Commission estimates 50 persons will claim relief from CPO registration under the 18-96
The Commission invites the public and other Federal agencies to comment on any aspect of the proposed information collection requirements discussed above. Pursuant to 44 U.S.C. 3506(c)(2)(B), the Commission solicits comments in order to (i) evaluate whether the proposed collections of information are necessary for the proper performance of the functions of the Commission, including whether the information will have practical utility; (ii) evaluate the accuracy of the Commission's estimate of the burden of the proposed collections of information; (iii) determine whether there are ways to enhance the quality, utility, and clarity of the information proposed to be collected; and (iv) minimize the burden of the proposed collections of information on those who are to respond, including through the use of appropriate automated collection techniques or other forms of information technology.
Those desiring to submit comments on the proposed information collection requirements should submit them directly to the Office of Information and Regulatory Affairs, OMB, by fax at (202) 395-6566, or by email at
Section 15(a) of the CEA requires the Commission to consider the costs and benefits of its actions before promulgating a regulation under the CEA.
The Commission notes that the consideration of costs and benefits below is based on the understanding that the markets function internationally, with many transactions involving U.S. firms taking place across international boundaries; with some Commission registrants being organized outside of the United States; with some leading industry members typically conducting operations both within and outside the United States; and with industry members commonly following substantially similar business practices wherever located. Where the Commission does not specifically refer to matters of location, the discussion of costs and benefits below refers to the effects of this NPRM on all activity subject to the proposed regulations, whether by virtue of the activity's physical location in the United States or by virtue of the activity's connection with or effect on U.S. commerce under CEA section 2(i).
The baseline for the Commission's consideration of the costs and benefits of the Proposal is the regulatory status quo, as determined by the CEA and the Commission's existing regulations in 17 CFR part 4. The Commission recognizes, however, that to the extent that market participants have relied on relevant Commission staff action, the actual costs and benefits of the proposed rulemaking, as realized in the market, may not be as significant. Because each proposed amendment addresses a discrete issue, which may impact a unique subgroup within the universe of entities captured by the CPO and CTA statutory definitions, the Commission has determined to analyze the costs and benefits associated with each proposed change separately, as presented below. The Commission has endeavored to assess the expected costs and benefits of the proposed amendments in quantitative terms wherever possible. Where estimation or quantification is not feasible, however, the Commission has provided its assessment in qualitative terms.
As discussed in greater detail below, and in the foregoing preamble, the Commission preliminarily believes that the amendments proposed herein enable the Commission to discharge its regulatory oversight function with respect to the commodity interest markets, while reducing the potential burden on persons whose commodity interest activities are subject to the Commission's regulations applicable to CPOs and CTAs. Specifically, the CFTC is proposing to amend §§ 4.13 and 4.23 by adopting new exemptions that would permit a CPO that solicits and/or accepts funds from solely non-U.S. persons to participate in offshore commodity pools it operates to claim a registration exemption with respect to such pools, and to permit an onshore, registered CPO of an offshore commodity pool to keep the pool's original books and records at the pool's offshore location, rather than with the onshore CPO.
Importantly, a CPO claiming the 18-96 Exemption, as proposed in new § 4.13(a)(4), would still be subject to the anti-manipulation and anti-fraud provisions of the CEA (just like Advisory 18-96 claimants currently), and by virtue of § 4.13(c), would be required to make and keep books and records for an exempt pool, and to submit to such special calls as the Commission may make to demonstrate eligibility for and compliance with the criteria of the 18-96 Exemption. In conjunction with the proposed 18-96 Exemption, the Commission is also proposing to adopt a prohibition on statutory disqualifications applicable to any exemption claimed under § 4.13, and to amend the
The Commission is also proposing to amend existing 17 CFR part 4 regulations in a manner consistent with DSIO's CPO Family Office Letter and CTA Family Office Letter by adopting new CPO and CTA registration exemptions under §§ 4.13 and 4.14. The Commission further proposes regulatory amendments consistent with current letter relief available to BDCs, through certain revisions to the exclusion from the definition of CPO for IAs of RICs in § 4.5. Additionally, the Commission is proposing to amend 17 CFR part 4 to incorporate the relief in CFTC Staff Letter 14-115
The Commission intends that the 18-96 Exemption, as proposed, will ultimately provide more comprehensive relief from CPO and pool regulation. As stated above, the Commission preliminarily believes that providing CPO registration relief beyond that currently provided by § 3.10(c)(3)(i) or available in Advisory 18-96 would be beneficial and consistent with the Commission's past prioritization of agency resources for the regulation of intermediary activities affecting U.S. participants in commodity interest markets. Consequently, the Commission also preliminarily believes that eligible persons will receive several benefits from the adoption of the proposed 18-96 Exemption. Because the relief available under the proposed 18-96 Exemption would primarily be an exemption from CPO registration with respect to the operated offshore pools, a claiming CPO would no longer be required to include such offshore pools on Form CPO-PQR filings, relief which is currently not provided by the terms of Advisory 18-96. This will result in a meaningful, significant reduction in the burdens imposed by the Commission's regulations on CPOs of commodity pools, whose only connections with the U.S. are the location of the CPO and participation in the U.S. commodity interest markets.
Moreover, by enabling the 18-96 exemption to be claimed on a pool-by-pool basis, the Commission is providing additional flexibility to CPOs that operate and offer to participants a mix of onshore and offshore pools. Under § 3.10(c)(3)(i), an offshore CPO that wished to operate pools offered to U.S. persons would be required to choose between the potentially more costly options of having such pools operated by an affiliate registered with the Commission or otherwise eligible for other relief, operating all pools (regardless of location) consistent with another registration exemption, or registering as a CPO and listing all operated pools with the Commission. In contrast, the proposed 18-96 Exemption would enable the CPO to register, or claim an alternative registration exemption such as § 4.13(a)(3), with respect to its commodity pools offered to U.S. persons, but remain exempt from CPO registration, pursuant to proposed § 4.13(a)(4), with respect to its qualifying offshore pools. This would permit the CPO to utilize the operational efficiencies inherent in being able to deploy the same institutional resources across all pools it operates, rather than bifurcating staff and assets across affiliates for purposes of minimizing regulatory costs.
The Commission is aware of some offshore CPOs that are currently limiting their CPO activities solely to offshore pools with offshore participants precisely to remain eligible for the exemption provided by § 3.10(c)(3)(i). By making proposed § 4.13(a)(4) available on a pool-by-pool basis, the Commission preliminarily believes it likely that more offshore CPOs may choose to create pools available to U.S. participants because such CPOs would no longer be required to bear the costs of compliance for offshore pools qualifying for the proposed 18-96 Exemption. Therefore, such CPOs may provide additional investment choices to domestic participants and additional competition for CPOs already operating onshore.
Furthermore, by proposing new exemptions with respect to both the CPO registration of an offshore pool's operator, and the recordkeeping location of an offshore pool's books and records, the Commission intends to confirm the continued availability of Advisory 18-96 relief in the form of amendments to 17 CFR part 4. The Commission is hopeful that the adoption of these new regulatory exemptions will eliminate the need for persons to search for a Commission staff advisory that is over 20 years old, and which, even in 2018, may only be claimed by eligible persons through a paper filing with the Commission. Rather, under the Proposal, a person would now be able to utilize NFA's Online Registration System (ORS) to submit claims of relief electronically, consistent with the mechanism used to claim all other regulatory registration and compliance exemptions available to CPOs and CTAs. This amendment would modernize the effort needed to effectuate such claims and eliminate the costs and expenses to claimants associated with paper filings,
The proposed amendments also would require persons claiming new § 4.13(a)(4) to annually affirm their claims of exemption for qualifying exempt pools. The Commission preliminarily believes that this requirement promotes transparency regarding the number of entities that would be exempt from CPO registration pursuant to the 18-96 Exemption as proposed, and would also enable the Commission to reassess the exemption's efficacy over time by collecting data on its usage by industry. Consistent with the annual notice requirement for the other exemptions in § 4.13, the Commission proposes to mandate the filing of these notices within 60 days of the calendar year end; the Commission preliminarily believes this to be the most operationally efficient time for filing such an annual notice.
Additionally, the Commission preliminarily believes that there are significant benefits to adopting the prohibition on statutory disqualifications from the terms of Advisory 18-96, as a criteria for all exemptions under § 4.13(a)(1) through (a)(5). The Commission also preliminarily believes that currently, pool participants may be exposed to risk posed by regulations permitting the operation of an offered pool by a person who, generally, would not otherwise be permitted to register with the Commission. Even if the activities of a CPO do not rise to a level warranting Commission oversight through registration, a prospective participant should be able to be confident that a collective investment vehicle using commodity interests is not operated by a person who, for example, is enjoined from engaging in fraud or
Finally, consistent with prioritizing the application of 17 CFR part 4 requirements to CPOs with respect to pools offered and operated on behalf of U.S. person participants, the 18-96 Exemption, as proposed, would permit a claiming CPO thereunder to remain registered with respect to its operation of commodity pools onshore and/or on behalf of U.S. persons. The Commission would retain all of its authority associated with oversight of its registrants and could still take corrective action, should the CPO engage in wrongdoing in the U.S. commodity interest markets.
The Commission expects that the addition of CPO and CTA registration exemptions for qualifying Family Offices will result in two main benefits. First, qualifying Family Offices will not be subject to the costs associated with registration, NFA membership, or compliance with part 4 of the Commission's regulations. The elimination of these costs should result in a reduction of the costs associated with the establishment and operation of a Family Office, which should ultimately benefit the Family Clients.
Second, because the proposed exemptions harmonize the Commission's treatment of Family Offices with that of the SEC, Family Offices will generally only be required to comply with one standard to determine their registration and compliance obligations with respect to both their securities and commodity interest transactions. Although DSIO had previously issued no-action relief letters for both CPO and CTA registration, Family Offices wishing to avail themselves of this relief were required to prepare a notice making specific representations and to submit the document electronically to a specific email inbox. It is anticipated that, upon finalization of the Proposal, Family Offices would be able to claim the proposed exemption under new § 4.13(a)(8) through NFA's ORS without having to create and submit their own document to claim the exemption. Moreover, for Family Offices claiming relief from CTA registration, the Commission is proposing to make that exemption available without a notice filing, consistent with the majority of the existing exemptions available to CTAs under § 4.14.
Like the other exemptions available under § 4.13, the Commission is proposing to require Family Offices claiming relief from CPO registration to file an annual notice affirming their eligibility. The Commission preliminarily believes that this annual assessment of eligibility would promote transparency regarding the number of entities exempt from registration pursuant to the proposed Family Office exemption and would enable the Commission to assess its efficacy over time. Consistent with the notices required to annually affirm compliance with other exemptions in § 4.13, the notices would be required to be filed within 60 days of the end of the calendar year. The Commission preliminarily believes proposing a timeframe consistent with that already required for annual notices of other existing CPO registration exemptions would reduce complexity in the regulation, and would employ a requirement to which claiming CPOs have already grown accustomed.
The Commission preliminarily believes that the proposed alignment of §§ 4.7(b) and 4.13(a)(3) with the SEC's JOBS Act amendments to Regulation D and Rule 144A would result in several benefits. By harmonizing Commission regulations that specifically reference the statutory and regulatory provisions governing unregistered, exempt securities offerings, the proposed amendments would facilitate full implementation of the JOBS Act by making the relief from the prohibition on general solicitation more widely available. Moreover, the Proposal would eliminate the distinction between private offerings of commodity pools and other privately offered collective investment vehicles that do not transact in commodity interests, thereby treating similarly situated offerors in a consistent manner.
The Commission notes that persons complying with the terms of Rule 506(c) or Rule 144A and claiming relief under either § 4.7 or § 4.13(a)(3), as proposed to be amended, would still generally be required to limit participants in the offered pool to QEPs. As such, the Commission preliminarily believes that adopting these proposed amendments would neither result in an erosion of the customer protections provided to non-sophisticated pool participants under 17 CFR part 4, nor would it cause an expansion of the relief available under §§ 4.7 and 4.13(a)(3), beyond the discrete issue of solicitation with respect to an exempt securities offering. Thus, the Commission preliminarily believes that there would be a substantial benefit in aligning its regulations with those of its sister regulator, in the interest of fostering cooperation and comity, especially where there is limited customer protection risk for the retail public.
The Commission preliminarily believes that there would be several benefits arising from the proposed exclusion of IAs of BDCs
As described more fully above, BDCs are subject to oversight by the SEC that is comparable to that agency's regulation of RICs, and BDCs use commodity interests primarily for bona fide hedging purposes. Because of this similarity to a type of investment vehicle that is already included within the universe of “qualifying entities” under § 4.5, the proposed amendments would treat substantively comparable entities in a consistent manner, thereby enabling members of the public and industry to better predict their regulatory obligations when establishing new investment vehicles. Absent these amendments, IAs of BDCs wishing to avail themselves of the no-action relief from CPO registration are required to prepare a notice filing containing specific representations and to submit the document electronically to a specific email inbox. The Commission anticipates that, upon finalization of this NPRM, registered IAs operating and advising BDCs would be able to claim the proposed exclusion under § 4.5 through NFA's ORS without having to create their own document to claim the proposed exclusion.
The Commission preliminarily believes that there would be several benefits associated with providing relief from the filings required by § 4.27 to registered CPOs only operating pools pursuant to claimed exclusions under § 4.5 or exemptions under § 4.13, and to registered CTAs that, during the Reporting Period, either only advised pools of which they were also the registered or exempt CPO, or did not direct the trading of any commodity interest accounts whatsoever. Removing the § 4.27 reporting requirement for these persons would eliminate the costs associated with the preparation and filing of Forms CPO-PQR or CTA-PR. The Commission preliminarily believes that this could provide a significant cost savings for these persons, and ultimately, for their participants or clients.
The Commission preliminarily believes there would be some costs associated with the 18-96 Exemption, as proposed. For instance, persons claiming the proposed exemption under new § 4.13(a)(4) would be required to file an annual notice affirming their eligibility for the exemption, consistent with the requirement applicable to persons claiming all other exemptions available under § 4.13. For purposes of calculating costs of this proposed amendment, the Commission has estimated that a CPO may require 0.5 hours per pool to complete and electronically file the notice with NFA, at an average salary cost of $57 per hour.
With respect to the expansion of the statutory disqualification prohibition to exemption claimants under § 4.13(a)(1) through (a)(5), the Commission lacks data sufficient to determine how many CPOs might be required to cease operating commodity pools pursuant to the exemptions available thereunder, due to the presence of statutorily disqualified principals. There are certainly costs associated with either divesting from commodity interests held within a collective investment vehicle, or in completely winding up a commodity pool's operations, some of which may be experienced by pool participants as opportunity costs and possibly realized losses. The Commission preliminarily believes, however, that these costs would be limited to the first year following adoption of the Proposal, and that, in subsequent years, participants would benefit from the assurance that any CPO that is soliciting them or accepting their funds for investment in an exempt pool operated pursuant to § 4.13(a)(1)-(a)(5) is, at a minimum, registerable.
With respect to the new exemption under § 4.23, which proposes relief consistent with Advisory 18-96 permitting a domestic, registered CPO to keep its pool's original books and records at the office of the operated offshore pool, the Commission has estimated, for purposes of calculating the costs of this proposed amendment, that a CPO may require 0.5 hours per pool to complete and file the notice with NFA at an average salary cost of $57 per hour. The Commission further estimates that 50 CPOs may be affected,
The Commission preliminarily believes there would be some costs associated with the proposed exemptions from CPO and CTA registration for Family Offices. As proposed herein, persons claiming relief under proposed § 4.13(a)(8) would be required to file an annual notice affirming their eligibility, consistent with the requirement applicable to persons claiming most other exemptions available under § 4.13. For purposes of calculating costs of the Proposal, the Commission has estimated that a CPO may require 0.5 hours per pool to complete and electronically file the notice with NFA at an average salary cost of $57 per hour. The Commission further estimates that 200 CPOs may be affected,
With respect to persons claiming relief under proposed § 4.14(a)(11), because the Commission is not proposing to require a notice filing to claim the relief, the Commission expects that the costs associated with the exemption would be limited to the expenses associated with making the determination as to the person's initial and ongoing eligibility for the proposed exemption. The Commission currently does not have the necessary data to estimate the magnitude of that expense, but would encourage commenters to submit information as to the costs and benefits associated with the exemption from CTA registration, and how such expenses would compare to those required to register as a CTA and to generally comply with 17 CFR part 4.
The Commission does not anticipate any costs associated with this proposed rulemaking beyond those already identified and analyzed by the SEC when it finalized its amendments to Regulation D and Rule 144A pursuant to the JOBS Act.
The Commission preliminarily believes there would be some costs associated with the exclusion from the definition of CPO for registered IAs of BDCs proposed today. As proposed herein, persons claiming the new exclusion from the definition of CPO with respect to the operation of BDCs under § 4.5 would be required to file an annual notice affirming eligibility, consistent with that required of the registered IAs of RICs. For purposes of calculating costs of the proposed amendment, the Commission has estimated that a person may require 0.5 hours per pool to complete and electronically file the notice with NFA at an average salary cost of $57 per hour. The Commission further estimates that 50 persons may be affected,
Registered IAs of BDCs that claim the proposed exclusion under § 4.5 would also have to expend resources to monitor compliance with the applicable trading thresholds in proposed § 4.5(c)(2)(iii). The Commission preliminarily believes that the initial year of compliance with those thresholds would likely be the most costly, as the IAs would possibly need to increase compliance staff and/or provide training for existing compliance staff to ensure effective monitoring of ongoing compliance with the exclusion's terms. The Commission anticipates that certain aspects of this compliance program might be automated to lower substantially the annual costs in subsequent years.
The Commission does not anticipate any costs associated with this proposed amendment, as it is not requiring any action to be taken by CPOs and CTAs that qualify for the proposed exemptions from the Reporting Person definition in § 4.27 to claim that relief.
Section 15(a) of the CEA requires the Commission to consider the effects of its actions in light of the following five factors:
The Commission preliminarily believes that the amendments proposed in this release maintain the efficacy of the customer protections of the Commission's regulatory regime while reducing costs. Specifically, with respect to the 18-96 Exemption, as proposed, the Commission would maintain its oversight with respect to commodity pools with U.S. person participants, while providing relief with respect to the operation of offshore pools, the potential and actual participants of which are generally located outside of the U.S. Moreover, by extending the prohibition on statutory disqualifications to CPOs claiming exemptive relief under § 4.13(a)(1) through (a)(5), the Commission preliminarily believes that it would be providing additional protection to members of the public by reducing the possibility of fraud and other illegal conduct in exempt pools offered by such persons.
The Commission preliminarily believes that the proposed exemptions for Family Offices would also have a limited impact on the protections provided to market participants and the public—because Family Offices, by definition, are not offered to persons other than Family Clients, the general public would not be negatively affected by their failure to register as CPOs and CTAs with the Commission. Moreover, as discussed above, the Commission preliminarily believes that the familial relationships inherent in Family Offices would provide a reasonable alternative mechanism to protect the interests of Family Clients. The Commission preliminarily believes that its regulatory interest in Family Offices is distinct from and much lower than in the case of arms-length transactions between CPOs and pool participants, or CTAs and advisory clients.
With respect to the proposed alignment with the SEC's revisions to Regulation D and Rule 144A pursuant to the JOBS Act, the Commission does not believe that its proposed amendments to §§ 4.7 and 4.13(a)(3) would alter the protections currently available to market participants and the public. Pools offered pursuant to claims of relief under either § 4.7 or § 4.13(a)(3) would still be limited in their permitted participants to QEPs, and the relief provided by those regulations would otherwise remain unchanged. As such, less sophisticated members of the American public would not be able to purchase interests in pools that would not be subject to the full panoply of the compliance obligations under 17 CFR part 4. Therefore, there would be no reduction in the protections in place now by virtue of the proposed JOBS Act amendments.
The Commission preliminarily believes that the proposed exclusion for registered IAs of BDCs would not negatively impact the protection of market participants or the public. BDCs, as well as their registered IAs, continue to be regulated by the SEC under the
With respect to the relief provided to certain CPOs and CTAs from the reporting requirements of § 4.27, the Commission does not believe, preliminarily, that eliminating reporting from those persons described herein would have a deleterious impact on the Commission's protection of market participants and the public because of such persons' extremely limited activity in the commodity interest markets.
Section 15(a)(2)(B) of the CEA requires the Commission to evaluate the costs and benefits of a proposed regulation in light of efficiency, competitiveness, and financial integrity considerations. The Commission has not identified a specific effect on the efficiency, competitiveness, and financial integrity of markets as a result of the proposed regulations.
Section 15(a)(2)(C) of the CEA requires the Commission to evaluate the costs and benefits of a proposed regulation in light of price discovery considerations. The Commission preliminarily believes that the proposed amendments will not have a significant impact on price discovery.
Section 15(a)(2)(D) of the CEA requires the Commission to evaluate the costs and benefits of a proposed regulation in light of sound risk management practices. The proposed amendments to the regulations reflect the Commission's preliminary determination that such amendments should harmonize Commission regulations with other federal laws to exempt and reduce the regulatory burden on certain entities.
Section 15(a)(2)(E) of the CEA requires the Commission to evaluate the costs and benefits of a proposed regulation in light of other public interest considerations. The Commission has not identified other public interest considerations relevant to the costs and benefits of the proposed regulations.
The Commission invites comment on its preliminary consideration of the costs and benefits associated with the various changes to 17 CFR part 4 proposed herein, especially with respect to the five factors that the Commission is required to consider under section 15(a) of the CEA. In addressing these areas and any other aspect of the Commission's preliminary cost-benefit considerations, the Commission encourages commenters to submit any data or other information they may have quantifying and/or qualifying the costs and benefits of the Proposal. The Commission specifically requests comment on the following questions, in addition to those posed above:
13. Has the Commission accurately identified the benefits of the Proposal? Are there other benefits to market participants or the public that may result from the adoption of this NPRM that the Commission should consider? Please provide specific examples and explanations of any such benefits.
14. Has the Commission accurately identified the costs of the Proposal? Are there additional costs to market participants or the public that may result from the adoption of this NPRM that the Commission should consider? Please provide specific examples and explanations of any such costs.
15. Does the Proposal impact the section 15(a) factors in any way that is not described above? Please provide specific examples and explanations of any such impact.
Section 15(b) of the CEA requires the Commission to take into consideration the public interest to be protected by the antitrust laws and endeavor to take the least anticompetitive means of achieving the purposes of the CEA, in issuing any order or adopting any Commission rule or regulation (including any exemption under CEA section 4(c) or 4c(b)), or in requiring or approving any bylaw, rule, or regulation of a contract market or registered futures association established pursuant to section 17 of the CEA.
The Commission preliminarily believes that the public interest to be protected by the antitrust laws is generally to protect competition. The Commission requests comment on whether the Proposal implicates any other specific public interest to be protected by the antitrust laws.
The Commission has considered the Proposal to determine whether it is anticompetitive and has preliminarily identified no anticompetitive effects. The Commission requests comment on whether the Proposal is anticompetitive and, if it is, what the anticompetitive effects are.
Because the Commission has preliminarily determined that the Proposal is not anticompetitive and has no anticompetitive effects, the Commission has not identified any less anticompetitive means of achieving the purposes of the Act. The Commission requests comment on whether there are less anticompetitive means of achieving the relevant purposes of the Act that would otherwise be served by adopting the Proposal.
Advertising, Brokers, Commodity futures, Commodity pool operators, Commodity trading advisors, Consumer protection, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, the Commodity Futures Trading Commission proposes to amend 17 CFR chapter I as follows:
7 U.S.C. 1a, 2, 6(c), 6b, 6c, 6l, 6m, 6n, 6o, 12a, and 23.
(a) * * *
(1) An investment adviser registered as such under the Investment Advisers Act of 1940, as amended;
(b) * * *
(1) With respect to any person specified in paragraph (a)(1) of this section, an investment company registered as such, under the Investment Company Act of 1940, as amended, or a business development company that elected an exemption from registration as an investment company under the Investment Company Act of 1940;
(c) * * *
(2) The notice of eligibility must contain representations that such person will operate the qualifying entity specified therein in the following ways, as applicable:
(i) The person will disclose in writing to each participant, whether existing or prospective, that the qualifying entity is
(ii) The person will submit to such special calls as the Commission may make to require the qualifying entity to demonstrate compliance with the provisions of this paragraph (c);
(iii) If the person is an investment adviser claiming an exclusion with respect to the operation of a qualifying entity under paragraph (b)(1) of this section, then the notice of eligibility must also contain representations that such person will operate that qualifying entity in a manner such that the qualifying entity:
The addition and revisions read as follows:
(b)
(i) Regarding an offering that is exempt from registration under section 4(a)(2) of the Securities Act of 1933 and/or offered and sold pursuant to Regulation D, §§ 230.500-230.508 of this title, or resold pursuant to Rule 144A, § 230.144A of this title, or an offering that is offered and sold pursuant to Regulation S, §§ 230.901-230.905 of this title, any registered commodity pool operator who sells participations in such a pool solely to qualified eligible persons may claim any or all of the relief described in this paragraph (b) with respect to such pool.
(ii) Regarding the operation of a pool that is a collective trust fund, the securities of which are exempt from registration pursuant to section 3(a)(2) of the Securities Act of 1933 and sold solely to qualified eligible persons, any bank registered as a commodity pool operator may claim any or all of the relief described in this paragraph (b) with respect to such pool.
(3)
(A) The net asset value of the exempt pool as of the end of the reporting period;
(B) The change in net asset value from the end of the previous reporting period; and
(C) Either the net asset value per outstanding participation unit in the exempt pool as of the end of the reporting period, or the total value of the participant's interest or share in the exempt pool as of the end of the reporting period.
(ii) Where the pool is comprised of more than one ownership class or series, the net asset value of the series or class on which the account statement is reporting, and the net asset value per unit or value of the participant's share, also must be included in the statement required by this paragraph (b)(3); except that, for a pool that is a series fund structured with limitation on liability among the different series, the account statement required by this paragraph (b)(3) is not required to include the consolidated net asset value of all series of the pool.
(iii) A commodity pool operator that meets the conditions specified in § 4.22(d)(2)(i) to present and compute the commodity pool's financial statements contained in the Annual Report other than in accordance with generally accepted accounting principles and has filed notice pursuant to § 4.22(d)(2)(iii) may also use the alternative accounting principles, standards or practices identified in the notice with respect to the computation and presentation of the account statement.
The revisions and additions read as follows:
(a) * * *
(3) * * *
(i) Interests in the pool are exempt from registration under the Securities Act of 1933, and the interests are marketed and advertised to the public in the United States solely, if at all, in compliance with Regulation D, §§ 230.500 through 230.508 of this title, or with Rule 144A, § 230.144A of this title;
(iii) * * *
(E) A non-U.S. person; and
(4) For each pool for which the person claims exemption from registration under this paragraph (a)(4):
(i) The pool is, and will remain, organized and operated outside of the United States;
(ii) The pool will not hold meetings or conduct administrative activities within the United States;
(iii) No shareholder of or other participant in the pool is or will be a U.S. person;
(iv) The pool will not receive, hold or invest any capital directly or indirectly contributed from sources within the United States; and
(v) The person, the pool, and any person affiliated therewith will not undertake any marketing activity for the purpose, or that could reasonably be expected to have the effect, of soliciting participation in the pool from U.S. persons.
(6) Any person who desires to claim an exemption under paragraphs (a)(1), (a)(2), (a)(3), (a)(4), or (a)(5) of this section must represent that neither the person nor any of its principals is subject to any statutory disqualification under section 8a(2) or 8a(3) of the Act, unless such disqualification arises from a matter which was previously disclosed in connection with a previous application, if such registration was granted, or which was disclosed more than thirty days prior to the claim of this exemption.
(8) For each pool for which the person claims exemption from registration under this paragraph (a)(8):
(i) Interests in the pool are exempt from registration under the Securities Act of 1933, and such interests are offered and sold only to “family clients,” as defined in § 275.202(a)(11)(G)-1 of this title;
(ii) The pool qualifies as a “family office,” as defined in § 275.202(a)(11)(G)-1 of this title; and
(iii) The person reasonably believes, at the time of investment, or in the case of an existing pool, at the time of conversion to a pool meeting the criteria of paragraph (a)(8) of this section, that each person who participates in the pool is a “family client” of a “family office,” as defined in § 275.202(a)(11)(G)-1 of this title.
(b)(1) * * *
(ii) Contain the section number pursuant to which the operator is filing the notice (
(2)(i) The person must file the notice by no later than the time that the pool operator delivers a subscription agreement for the pool to a prospective participant in the pool;
(A) In the case of a claim for relief under § 4.13(a)(4), the person must file the notice within 30 days of registering as a commodity pool operator, or claiming an exemption pursuant to this section with respect to pools marketed to U.S. persons, containing funds belonging to U.S. persons, or otherwise operated in the U.S., its territories, or possessions.
(B) In the case of a claim for relief under § 4.13(a)(5), the person must file the notice by the later of the effective date of the pool's registration statement under the Securities Act of 1933 or the date on which the person first becomes a director or trustee; and
(C) Where a person registered with the Commission as a commodity pool operator intends to withdraw from registration in order to claim exemption hereunder, the person must notify its pool's participants in written communication physically delivered or delivered through electronic transmission that it intends to withdraw from registration and claim the exemption, and it must provide each such participant with a right to redeem its interest in the pool prior to the person filing a notice of exemption from registration.
(e)(1) Subject to the provisions of paragraphs (e)(2) and (e)(3) of this section, if a person who is eligible for exemption from registration as a commodity pool operator under this section nonetheless registers as a commodity pool operator, the person must comply with the provisions of this part with respect to each commodity pool identified on its registration application or supplement thereto.
(3) If a person operates one or more commodity pools described in paragraph (a)(4) of this section, and one or more commodity pools for which it must be, and is, registered as a commodity pool operator, the person is exempt from the requirements applicable to a registered commodity pool operator with respect to the pool or pools described in paragraph (a)(4) of this section.
(a) * * *
(11) The person's commodity trading advice is solely directed to, and is for the sole use of, “family clients,” as defined in § 275.202(a)(11)(G)-1 of this title.
(a) Each commodity pool operator registered or required to be registered under the Act must make and keep the following books and records concerning any commodity pool it operates, as well as the pool operator itself, in an accurate, current and orderly manner, and maintain such books and records in accordance with § 1.31 of this chapter.
Unless otherwise noted, all books and records required to be kept under this section shall be kept and maintained at the pool operator's main business office. Books and records that are not maintained at the pool operator's main business office shall be maintained by one or more of the pool's administrator, distributor, or custodian, or a bank or registered broker or dealer acting in a similar capacity with respect to the pool, pursuant to the relief provided in paragraphs (b) or (c) of this section.
(1)
(ii) A journal of original entry or other equivalent record showing all receipts and disbursements of money, securities and other property.
(iii) The acknowledgment specified by § 4.21(b) for each participant in the pool.
(iv) A subsidiary ledger or other equivalent record for each participant in the pool showing the participant's name and address and all funds, securities and other property that the pool received from or distributed to the participant. This requirement may be satisfied through a transfer agent's maintenance of records or through a list of relevant intermediaries where shares are held in an omnibus account or through intermediaries.
(v) Adjusting entries and any other records of original entry or their equivalent forming the basis of entries in any ledger.
(vi) A general ledger or other equivalent record containing details of all asset, liability, capital, income and expense accounts.
(vii) Copies of each confirmation or acknowledgment of a commodity interest transaction of the pool, and each purchase and sale statement and each monthly statement for the pool
(viii) Cancelled checks, bank statements, journals, ledgers, invoices, computer generated records, and all other records, data and memoranda prepared or received in connection with the operation of the pool.
(ix) The original or a copy of each report, letter, circular, memorandum, publication, writing, advertisement or other literature or advice (including the texts of standardized oral presentations and of radio, television, seminar or similar mass media presentations) distributed or caused to be distributed by the commodity pool operator to any existing or prospective pool participant or received by the pool operator from any commodity trading advisor of the pool, showing the first date of distribution or receipt if not otherwise shown on the document.
(x) A Statement of Financial Condition as of the close of:
(A) Each regular monthly period if the pool had net assets of $500,000 or more at the beginning of the pool's fiscal year, or
(B) Each regular quarterly period for all other pools. The Statement must be completed within 30 days after the end of that period.
(xi) A Statement of Income (Loss) for the period between:
(A) The later of: The date of the most recent Statement of Financial Condition furnished to the Commission pursuant to § 4.22(c), April 1, 1979 or the formation of the pool, and
(B) The date of the Statement of Financial Condition required by paragraph (a)(1)(x) of this section. The Statement must be completed within 30 days after the end of that period.
(xii) A manually signed copy of each Account Statement and Annual Report provided pursuant to § 4.22, 4.7(b) or 4.12(b), and records of the key financial balances submitted to the National Futures Association for each commodity pool Annual Report, which records must clearly demonstrate how the key financial balances were compiled from the Annual Report.
(2)
(ii) Each confirmation of a commodity interest transaction, each purchase and sale statement and each monthly statement furnished by a futures commission merchant or retail foreign exchange dealer to:
(A) The commodity pool operator relating to a personal account of the pool operator; and
(B) Each principal of the pool operator relating to a personal account of such principal.
(iii) Books and records of all other transactions in all other activities in which the pool operator engages. Those books and records must include cancelled checks, bank statements, journals, ledgers, invoices, computer generated records and all other records, data and memoranda which have been prepared in the course of engaging in those activities.
(3) All books and records required to be kept by this section, except those required by paragraphs (a)(1)(iii), (a)(1)(iv), (a)(2)(i), (a)(2)(ii), and (a)(2)(iii), must be made available to participants for inspection and copying during normal business hours. Upon request, copies must be sent by mail to any participant within five business days if reasonable reproduction and distribution costs are paid by the pool participant.
(4) If the books and records are maintained at the commodity pool operator's main business address that is outside the United States, its territories or possessions, then upon the request of a Commission representative, the pool operator must provide such books and records as requested at the place in the United States, its territories or possessions designated by the representative within 72 hours after the pool operator receives the request.
(b) If the pool operator does not maintain its books and records at its main business office, the pool operator shall:
(1) At the time it registers with the Commission or delegates its recordkeeping obligations, whichever is later, file a statement that:
(i) Identifies the name, main business address, and main business telephone number of the person(s) who will be keeping required books and records in lieu of the pool operator;
(ii) Sets forth the name and telephone number of a contact for each person who will be keeping required books and records in lieu of the pool operator;
(iii) Specifies, by reference to the respective paragraph of this section, the books and records that such person will be keeping; and
(iv) Contains representations from the pool operator that:
(A) It will promptly amend the statement if the contact information or location of any of the books and records required to be kept by this section changes, by identifying in such amendment the new location and any other information that has changed;
(B) It remains responsible for ensuring that all books and records required by this section are kept in accordance with § 1.31;
(C) Within 48 hours after a request by a representative of the Commission, it will obtain the original books and records from the location at which they are maintained, and provide them for inspection at the pool operator's main business office;
(D) It will disclose in the pool's Disclosure Document the location of its books and records that are required under this section.
(2) The pool operator shall also file electronically with the National Futures Association a statement from each person who will be keeping required books and records in lieu of the pool operator wherein such person:
(i) Acknowledges that the pool operator intends that the person keep and maintain required pool books and records;
(ii) Agrees to keep and maintain such records required in accordance with § 1.31 of this chapter; and
(iii) Agrees to keep such required books and records open to inspection by any representative of the Commission or the United States Department of Justice in accordance with § 1.31 of this chapter and to make such required books and records available to pool participants in accordance with this section.
(c) Each registered commodity pool operator whose main business office is located in the United States, its territories or possessions, and who operates a commodity pool that has its main business office outside of the United States, its territories or
(1) The pool operator will maintain the original books and records of the commodity pool at the main office of the commodity pool located outside the United States, its territories or possessions, and states the name, title, full mailing address, telephone number, and relationship to the commodity pool of the person who will have custody of the pool's original books and records and the location outside the United States where those books and records will be kept;
(2) The pool operator desires to maintain such books and records outside the United States in furtherance of compliance with Internal Revenue Service requirements for relief from U.S. federal income taxation;
(3) The pool operator will maintain duplicate books and records of the commodity pool at a designated office in the United States, its territories or possessions listed in the notice;
(4) The claim is electronically signed by an individual duly authorized to bind the pool operator; and
(5) Within 72 hours after the request from the Commission, the United States Department of Justice, or the National Futures Association, the original books and records will be provided to such representative at a place located in the United States that is specified by the representative.
(b)
(i) Any commodity pool operator that is registered or required to be registered under the Commodity Exchange Act and the Commission's regulations thereunder; or
(ii) Any commodity trading advisor that is registered or required to be registered under the Commodity Exchange Act and the Commission's regulations thereunder.
(2) The following categories of persons shall not be considered reporting persons, as that term is defined in paragraph (b)(1) of this section:
(i) A commodity pool operator that is registered, but operates only pools for which it maintains an exclusion from the definition of the term “commodity pool operator” in § 4.5 and/or an exemption from registration as a commodity pool operator in § 4.13;
(ii) A commodity trading advisor that is registered, but does not direct, as that term is defined in § 4.10(f), the trading of any commodity interest accounts;
(iii) A commodity trading advisor that is registered, but directs only the accounts of commodity pools for which it is registered as a commodity pool operator and, though registered, complies with § 4.14(a)(4); and
(iv) A commodity trading advisor that is registered, but directs only the accounts of commodity pools for which it is exempt from registration as a commodity pool operator, and though registered, complies with § 4.14(a)(5).
The following appendices will not appear in the Code of Federal Regulations.
On this matter, Chairman Giancarlo and Commissioners Quintenz, Behnam, Stump, and Berkovitz voted in the affirmative. No Commissioner voted in the negative.
In response to the Request for Information issued as part of Project KISS, the Commission received a number of letters from members of the asset management industry suggesting areas of potential rulemaking that, in their view, would make the Commission's regulations more efficient and less burdensome. I believe that today's notice of proposed rulemaking furthers both of those interests.
This proposal would incorporate relief from registration and compliance obligations for commodity pool operators (CPOs) and commodity trading advisors (CTAs) consistent with relief currently provided by staff letters and advisories. By integrating this relief now into the Commission's regulations, the Commission is eliminating the need to search for a staff advisory that is over 20 years old and is providing legal certainty to entities currently relying upon the staff relief. This will make regulatory obligations clearer and thereby facilitate compliance.
Specifically, today's notice of proposed rulemaking would reduce burdens for CPOs that operate pools in multiple jurisdictions by permitting them to register with respect to the pools that solicit or accept U.S. domiciled participants. It would maintain an exemption with respect to those offshore activities whose only nexus to the U.S. is that the CPO also manages some U.S. derived assets. It would also shore up our consumer protection provisions by prohibiting statutorily disqualified persons from operating exempt pools and soliciting and accepting funds, thereby giving such pool participants more confidence in their pool's operator. It would ensure that the Commission's regulations treat similarly situated entities in a commensurate manner by excluding the investment advisers of business development companies under terms identical to those under which the investment advisers of registered investment companies are already excluded. It would also eliminate the burden of filing data collection forms for persons with no meaningful, reportable information. Finally, it would provide appropriate relief to the operators and advisors of asset management vehicles whose clients are limited to a single family, consistent with the terms of a comparable regulation adopted by the SEC, furthering our efforts at harmonizing with our fellow regulators in how we treat market participants in this space.
In short, this proposal appropriately tailors regulation and codifies decades-old no action relief in line with the goals of the CFTC's Project KISS. I expect this proposal to be the first in a series of staff recommendations to streamline and simplify regulation of commodity pool operators and commodity trading advisors.
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration |