Federal Register Vol. 83, No.229,

Federal Register Volume 83, Issue 229 (November 28, 2018)

Page Range61109-61307
FR Document

83_FR_229
Current View
Page and SubjectPDF
83 FR 61109 - Thanksgiving Day, 2018PDF
83 FR 61157 - Federal Financial Participation in State Assistance Expenditures; Federal Matching Shares for Medicaid, the Children's Health Insurance Program, and Aid to Needy Aged, Blind, or Disabled Persons for October 1, 2019 Through September 30, 2020PDF
83 FR 61116 - Indian Electric Power UtilitiesPDF
83 FR 61164 - HEARTH Act Approval of Quinault Indian Nation's Business and Residential Leasing RegulationsPDF
83 FR 61149 - Proposed Collection; Comment RequestPDF
83 FR 61168 - Certain Earpiece Devices and Components Thereof: Notice of a Commission Determination Not To Review an Initial Determination Granting a Motion for Leave To Amend the Complaint and Notice of InvestigationPDF
83 FR 61151 - Proposed Collection; Comment RequestPDF
83 FR 61150 - Proposed Collection; Comment RequestPDF
83 FR 61171 - Information Collection: NRC Form 531, “Request for Taxpayer Identification Number”PDF
83 FR 61169 - Information Collection: Operators' LicensesPDF
83 FR 61170 - Information Collection: Domestic Licensing of Source MaterialPDF
83 FR 61168 - Notice of the December 5, 2018, Meeting of the National Park System Advisory BoardPDF
83 FR 61149 - Charter Renewal of Department of Defense Federal Advisory CommitteesPDF
83 FR 61172 - Exelon Generation Company, LLC; Calvert Cliffs Nuclear Power Plant, Units 1 and 2; Calvert Cliffs Independent Spent Fuel Storage Installation; James A. FitzPatrick Nuclear Power Plant; Nine Mile Point Nuclear Station, Units 1 and 2PDF
83 FR 61121 - Waiver of Certain Consumer Information Requirements for Foreign Institutions of Higher EducationPDF
83 FR 61146 - EKO Development, Ltd. and EKO USA, LLC, Provisional Acceptance of a Settlement Agreement and OrderPDF
83 FR 61152 - Power Holding LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 AuthorizationPDF
83 FR 61153 - Combined Notice of Filings #1PDF
83 FR 61155 - Combined Notice of FilingsPDF
83 FR 61152 - Notice of Preliminary Permit Application Accepted for Filing and Soliciting Comments, Motions To Intervene, and Competing Applications: Badger Mountain Hydro, LLCPDF
83 FR 61155 - Notice of Availability of the Environmental Assessment for the Proposed Northern Natural Gas Company Northern Lights 2019 Expansion and Rochester ProjectsPDF
83 FR 61152 - Notice of Availability of Draft Environmental Assessment: Black Bear Hydro Partners, LLCPDF
83 FR 61154 - Notice of Application: Transcontinental Gas Pipe Line Company, LLCPDF
83 FR 61145 - Proposed Information Collection; Comment Request; External Needs Assessment for NOAA Education Products and ProgramsPDF
83 FR 61144 - Submission for OMB Review; Comment RequestPDF
83 FR 61160 - Habitat Conservation Plan and Draft Environmental Assessment, North Allegheny Wind Facility, Incidental Take Permit Application for Indiana Bat, Blair and Cambria Counties, PennsylvaniaPDF
83 FR 61163 - Endangered Species; Receipt of Recovery Permit ApplicationPDF
83 FR 61134 - Procedural Revisions to the Filing of Open Video System Certification ApplicationsPDF
83 FR 61183 - Agency Information Collection Activity Under OMB Review: Department of Veterans Affairs Acquisition Regulation; Architect-Engineer Fee Proposal; Contractor Production Report; Daily Log and Contract Progress ReportPDF
83 FR 61183 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; Generic Clearance for Meaningful Access Information CollectionsPDF
83 FR 61182 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; Multiple Departmental Offices Information Collection RequestsPDF
83 FR 61125 - Cost of Living Adjustment to Royalty Rates for Webcaster Statutory LicensePDF
83 FR 61126 - Cost of Living Adjustment to Satellite Carrier Compulsory License Royalty RatesPDF
83 FR 61126 - Cost of Living Adjustment to Public Broadcasters Compulsory License Royalty RatePDF
83 FR 61144 - Agenda and Notice of Public Meeting of the Vermont Advisory CommitteePDF
83 FR 61175 - Submission for Review: Notice of Change in Student's Status, RI 25-15PDF
83 FR 61175 - Submission for Review: Reinstatement of a Previously Approved Information Collection With Revision, Office of Personnel Management (OPM) Standard Form (SF) 15, Application for 10-Point Veteran Preference, OMB No. 3206-0001PDF
83 FR 61174 - Information Collection: RI 20-126-Certification of Qualifying District of Columbia Service Under Section 1905 of Public Law 111-84PDF
83 FR 61176 - Information Collection: Application for Death Benefits Under the Federal Employees Retirement System (SF 3104); and Documentation & Elections in Support of Application for Death Benefits When Deceased Was an Employee at the Time of Death (SF 3104B)PDF
83 FR 61177 - Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Certificate of Incorporation and BylawsPDF
83 FR 61127 - Air Quality: Revision to the Regulatory Definition of Volatile Organic Compounds-Exclusion of cis-1,1,1,4,4,4-hexafluorobut-2-ene (HFO-1336mzz-Z)PDF
83 FR 61167 - Notice of Intent for the Potential Amendment to the Approved Resource Management Plan for the Miles City Field Office, Montana, and To Prepare an Associated Supplemental Environmental Impact StatementPDF
83 FR 61165 - Notice of Intent for the Potential Amendment to the Approved Resource Management Plan for the Buffalo Field Office, Wyoming, and To Prepare an Associated Supplemental Environmental Impact StatementPDF
83 FR 61111 - Rules of Practice and ProcedurePDF
83 FR 61186 - Affordable Housing Program AmendmentsPDF
83 FR 61288 - General Provisions; Revised List of Migratory BirdsPDF
83 FR 61161 - Draft List of Bird Species to Which the Migratory Bird Treaty Act Does Not ApplyPDF
83 FR 61156 - Submission for OMB ReviewPDF
83 FR 61250 - Per Diem Paid to States for Care of Eligible Veterans in State HomesPDF
83 FR 61137 - Prosthetic and Rehabilitative Items and ServicesPDF

Issue

83 229 Wednesday, November 28, 2018 Contents Children Children and Families Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 61156-61157 2018-25512 Civil Rights Civil Rights Commission NOTICES Meetings: Vermont Advisory Committee, 61144 2018-25905 Commerce Commerce Department See

National Oceanic and Atmospheric Administration

Consumer Product Consumer Product Safety Commission NOTICES Provisional Acceptance of a Settlement Agreement and Order: EKO Development, Ltd. and EKO USA, LLC, 61146-61149 2018-25928 Copyright Royalty Board Copyright Royalty Board RULES Cost of Living Adjustment to Public Broadcasters Compulsory License Royalty Rate, 61126 2018-25906 Cost of Living Adjustment to Royalty Rates for Webcaster Statutory License, 61125 2018-25908 Cost of Living Adjustment to Satellite Carrier Compulsory License Royalty Rates, 61126-61127 2018-25907 Defense Department Defense Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 61149-61152 2018-25938 2018-25939 2018-25941 Charter Renewals: Vietnam War Commemoration Advisory Committee, 61149-61150 2018-25933 Education Department Education Department RULES Waiver of Certain Consumer Information Requirements for Foreign Institutions of Higher Education, 61121-61125 2018-25929 Energy Department Energy Department See

Federal Energy Regulatory Commission

Environmental Protection Environmental Protection Agency RULES Air Quality: Revision to the Regulatory Definition of Volatile Organic Compounds—Exclusion of cis-1,1,1,4,4,4-hexafluorobut-2-ene (HFO-1336mzz-Z), 61127-61134 2018-25891 Federal Communications Federal Communications Commission RULES Procedural Revisions to the Filing of Open Video System Certification Applications, 61134-61136 2018-25913 Federal Deposit Federal Deposit Insurance Corporation RULES Rules of Practice and Procedure, 61111-61116 2018-25660 Federal Energy Federal Energy Regulatory Commission NOTICES Applications: Transcontinental Gas Pipe Line Co., LLC, 61154-61155 2018-25919 Combined Filings, 61153-61155 2018-25924 2018-25925 Environmental Assessments; Availability, etc.: Black Bear Hydro Partners, LLC, 61152 2018-25920 Northern Natural Gas Co., Northern Lights 2019 Expansion Project and the Rochester Project, 61155-61156 2018-25922 Initial Market-Based Rate Filings Including Requests for Blanket Section 204 Authorizations: Power Holding, LLC, 61152 2018-25926 Preliminary Permit Applications: Badger Mountain Hydro, LLC, 61152-61153 2018-25923 Federal Housing Finance Agency Federal Housing Finance Agency RULES Affordable Housing Program Amendments, 61186-61247 2018-25635 Fish Fish and Wildlife Service PROPOSED RULES List of Migratory Birds; General Provisions, 61288-61307 2018-25634 NOTICES Draft List of Bird Species to Which the Migratory Bird Treaty Act Does Not Apply, 61161-61163 2018-25631 Endangered Species: Recovery Permit Application, 61163-61164 2018-25915 Environmental Assessments; Availability, etc.: Habitat Conservation Plan; North Allegheny Wind Facility, Incidental Take Permit Application for Indiana Bat, Blair and Cambria Counties, Pennsylvania, 61160-61161 2018-25916 Health and Human Health and Human Services Department See

Children and Families Administration

NOTICES Federal Financial Participation in State Assistance Expenditures: Federal Matching Shares for Medicaid, the Childrens Health Insurance Program, and Aid to Needy Aged, Blind, or Disabled Persons for October 1, 2019 through September 30, 2020, 61157-61160 2018-25944
Indian Affairs Indian Affairs Bureau RULES Indian Electric Power Utilities, 61116-61121 2018-25943 NOTICES HEARTH Act Approval of Quinault Indian Nation's Business and Residential Leasing Regulations, 61164-61165 2018-25942 Interior Interior Department See

Fish and Wildlife Service

See

Indian Affairs Bureau

See

Land Management Bureau

See

National Park Service

International Trade Com International Trade Commission NOTICES Investigations; Determinations, Modifications, and Rulings, etc.: Certain Earpiece Devices and Components Thereof, 61168-61169 2018-25940 Land Land Management Bureau NOTICES Environmental Impact Statements; Availability, etc.: Potential Amendment to the Approved Resource Management Plan for the Buffalo Field Office, WY, 61165-61166 2018-25845 Potential Amendment to the Approved Resource Management Plan for the Miles City Field Office, MT, 61167-61168 2018-25847 Library Library of Congress See

Copyright Royalty Board

National Oceanic National Oceanic and Atmospheric Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 61144-61145 2018-25917 Agency Information Collection Activities; Proposals, Submissions, and Approvals: External Needs Assessment for NOAA Education Products and Programs, 61145-61146 2018-25918 National Park National Park Service NOTICES Meetings: National Park System Advisory Board, 61168 2018-25934 Nuclear Regulatory Nuclear Regulatory Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Domestic Licensing of Source Material, 61170-61171 2018-25935 Operators' Licenses, 61169-61170 2018-25936 Request for Taxpayer Identification Number, 61171-61172 2018-25937 Environmental Assessments; Availability, etc.: Exelon Generation Co., LLC; Calvert Cliffs Nuclear Power Plant, Units 1 and 2; Calvert Cliffs Independent Spent Fuel Storage Installation; James A. FitzPatrick Nuclear Power Plant; Nine Mile Point Nuclear Station, Units 1 and 2, 61172-61174 2018-25930 Personnel Personnel Management Office NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Application for 10-Point Veteran Preference, 61175-61176 2018-25903 Application for Death Benefits under the Federal Employees Retirement System; and Documentation and Elections in Support of Application for Death Benefits When Deceased was an Employee at the Time of Death, 61176-61177 2018-25901 Certification of Qualifying District of Columbia Service, 61174-61175 2018-25902 Notice of Change in Student's Status, 61175 2018-25904 Presidential Documents Presidential Documents PROCLAMATIONS Special Observances: Thanksgiving Day (Proc. 9827), 61109-61110 2018-25982 Securities Securities and Exchange Commission NOTICES Self-Regulatory Organizations; Proposed Rule Changes: NYSE National, Inc., 61177-61182 2018-25896 Treasury Treasury Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Generic Clearance for Meaningful Access Information Collections, 61183 2018-25910 Multiple Departmental Offices Information Collection Requests, 61182-61183 2018-25909 Veteran Affairs Veterans Affairs Department RULES Per Diem Paid to States for Care of Eligible Veterans in State Homes, 61250-61286 2018-25115 PROPOSED RULES Prosthetic and Rehabilitative Items and Services, 61137-61143 2018-24474 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Department of Veterans Affairs Acquisition Regulation; Architect-Engineer Fee Proposal; Contractor Production Report; Daily Log and Contract Progress Report, 61183-61184 2018-25911 Separate Parts In This Issue Part II Federal Housing Finance Agency, 61186-61247 2018-25635 Part III Veterans Affairs Department, 61250-61286 2018-25115 Part IV Interior Department, Fish and Wildlife Service, 61288-61307 2018-25634 Reader Aids

Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.

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83 229 Wednesday, November 28, 2018 Rules and Regulations FEDERAL DEPOSIT INSURANCE CORPORATION 12 CFR Parts 308 and 327 RIN 3064-AE75 Rules of Practice and Procedure AGENCY:

Federal Deposit Insurance Corporation.

ACTION:

Final rule.

SUMMARY:

The Federal Deposit Insurance Corporation (FDIC) is amending its rules of practice and procedure to remove duplicative, descriptive regulatory language related to civil money penalty (CMP) amounts that restates existing statutory language regarding such CMPs; codify Congress's recent change to CMP inflation-adjustments in the FDIC's regulations; and direct readers to an annually published notice in the Federal Register—rather than the Code of Federal Regulations (CFR)—for information regarding the maximum CMP amounts that can be assessed after inflation adjustments. These revisions are intended to simplify the CFR by removing unnecessary and redundant text and to make it easier for readers to locate the current, inflation-adjusted maximum CMP amounts by presenting these amounts in an annually published chart. Additionally, the FDIC is correcting four errors and revising cross-references currently found in its rules of practice and procedure.

DATES:

This rule is effective on January 15, 2019.

FOR FURTHER INFORMATION CONTACT:

Graham N. Rehrig, Senior Attorney, Legal Division, (202) 898-3829, [email protected]; or Sydney Mayer, Attorney, Legal Division, (202) 898-3669; Federal Deposit Insurance Corporation, 550 17th Street NW, Washington, DC 20429.

SUPPLEMENTARY INFORMATION: I. Policy Objectives

The policy objective of the Rule is to simplify the presentation of maximum CMP amounts within 12 CFR part 308 to support ease of reference and public understanding. The Rule will amend the presentation of maximum CMP limits to help ensure consistency with similar statutes of other federal financial regulators.1 Additionally, the Rule will implement recent Office of Management and Budget (OMB) guidance on simplifying the publication of annual inflation adjustments.

1See 12 CFR 19.240 (2018) and 83 FR 1657 (Jan. 12, 2018) (table containing the CMP adjustments published by the Office of the Comptroller of Currency); 12 CFR 263.65 (2018) (table containing the CMP adjustments published by the Board of Governors of the Federal Reserve System); 12 CFR 747.1001 (2018) (table containing the CMP adjustments published by the National Credit Union Association).

II. Background

The FDIC assesses CMPs under section 8(i) of the Federal Deposit Insurance Act (FDIA) (12 U.S.C. 1818) and a variety of other statutes.2 Congress has established maximum penalties that can be assessed under these statutes. In many cases, these statutes contain multiple penalty tiers, permitting the assessment of penalties at various levels depending on the severity of the misconduct at issue.3

2See, e.g., 12 U.S.C. 1972(2)(F) (authorizing the FDIC to impose CMPs for violations of the Bank Holding Company Act of 1970 related to prohibited tying arrangements); 15 U.S.C. 78u-2 (authorizing the FDIC to impose CMPs for violations of certain provisions of the Securities Exchange Act of 1934); 42 U.S.C. 4012a(f) (authorizing the FDIC to impose CMPs for pattern or practice violations of the Flood Disaster Protection Act).

3 For example, 12 U.S.C. 1818(i)(2) provides for three tiers of CMPs, with the size of the CMP increasing with the gravity of the misconduct.

Since 1990, Congress has required federal agencies with authority to impose CMPs to periodically adjust the maximum CMP amounts these agencies are authorized to impose.4 These periodic updates have helped to “maintain the deterrent effect of civil monetary penalties and promote compliance with the law.” 5 In 2015, Congress revised the process by which federal agencies adjust applicable CMPs for inflation.6 Under the 2015 Adjustment Act, the FDIC is required to make annual adjustments to its maximum CMP amounts to account for inflation.7 These adjustments apply to all CMPs covered by the 2015 Adjustment Act.8 The 2015 Adjustment Act requires annual adjustments be made by January 15 of each year.9 The FDIC's 2018 adjustments were published on January 12, 2018.10

4See The Federal Civil Penalties Inflation Adjustment Act of 1990, Public Law 101-410.

5See section 2 of the Federal Civil Penalties Inflation Adjustment Act of 1990. Public Law 101-410, 104 Stat. 890 (amended 2015) (codified as amended at 28 U.S.C. 2461 note).

6See The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Public Law 114-74, sec. 701, 129 Stat. 584 (2015 Adjustment Act). Although the 2015 Adjustment Act increased the maximum penalty that may be assessed under each applicable statute, the FDIC still possesses discretion to impose CMP amounts below the maximum level in accordance with the severity of the misconduct at issue. When making a determination as to the appropriate level of any given penalty, the FDIC is guided by statutory factors set forth in 12 U.S.C. 1818(i)(2)(G) and those factors identified in the Interagency Policy Statement Regarding the Assessment of CMPs by the Federal Financial Institutions Regulatory Agencies. See 63 FR 30227 (June 3, 1998). Such factors include, but are not limited to, the gravity and duration of the misconduct and the intent related to the misconduct.

7See 2015 Adjustment Act at sec. 701(b).

8See Public Law 101-410, sec. 3(2), 104 Stat. 890 (amended 2015) (codified as amended at 28 U.S.C. 2461 note).

9 Public Law 114-74, sec. 701(b), 129 Stat. 584.

10See 83 FR 1519, https://www.fdic.gov/news/board/2017/2017-12-19-notice-sum-b-fr.pdf.

The 2015 Adjustment Act directs federal agencies to follow guidance issued by the OMB by December 15 of each year when calculating new maximum penalty amounts.11 The OMB issued guidance for the 2018 CMP adjustments on December 15, 2017.12 The OMB Guidance noted, “Some agencies have chosen to remove their specific penalty amounts from the CFR and have instead codified the statutory formula for inflation adjustments. Agencies must still calculate and publish their penalty adjustments in the Federal Register.” 13

11See Public Law 114-74, sec. 701(b), 129 Stat. 584.

12 OMB, Implementation of Penalty Inflation Adjustments for 2018, Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, M-18-03 (OMB Guidance), https://www.whitehouse.gov/wp-content/uploads/2017/11/M-18-03.pdf.

13 OMB Guidance at 4 (citing 81 FR 41438 (June 27, 2016) (Social Security Administration) (codified at 29 CFR 498.103(g) (2018))).

III. Description and Expected Effects of the Rule

The FDIC is amending its rules of practice and procedure to remove from the CFR descriptive regulatory language related to maximum CMP amounts that duplicates statutory language, codify the statutory formula for inflation adjustments to the maximum CMP amounts, and direct readers to a table published annually in the Federal Register, containing the inflation-adjusted maximum CMP amounts. These changes will be consistent with the OMB Guidance and the practices of other Federal regulators.

Currently, 12 CFR 308.116(b) and 308.132(d) contain the maximum CMP amounts that may be assessed for violations of various statutes, along with lengthy descriptions of these statutes. Rather than providing any interpretation of these statutes or providing guidance regarding the assessment of CMPs for violations of these statutes, the descriptive language contained in sections 308.116(b) and 308.132(d) merely restates the enabling statutory language. The FDIC's current format for identifying inflation-adjusted CMP figures differs significantly from the formats published by other prudential regulators 14 and makes it more difficult for readers to locate applicable maximum CMP amounts. Accordingly, the FDIC is removing descriptive language found in sections 308.116(b) and 308.132(d). The FDIC believes that these changes will remove unnecessary and redundant language from the CFR and improve readability.

14 The OCC, the FRB, and the National Credit Union Association (NCUA) provide a simplified list in a tabular format, identifying each enabling statute and the associated maximum CMP amount, adjusted for inflation. See 12 CFR 19.240 (2018) and 83 FR 1657 (Jan. 12, 2018) (table containing the OCC's CMP adjustments); 12 CFR 263.65 (2018) (table containing the FRB's CMP adjustments); 12 CFR 747.1001 (2018) (table containing the NCUA's CMP adjustments).

A sample annual table containing the current maximum CMP amounts appears at the end of this section, for reference. Under the Rule, the FDIC will calculate and publish a similar chart with inflation-adjusted figures in the Federal Register on or before January 15 of each calendar year, beginning with the January 15, 2019, annual inflation adjustments.

The FDIC, however, will retain language in section 308.116(a), (c) and (d) concerning violations of the Change in Bank Control Act. These regulations, which the FDIC implemented in 1991, address requests for a hearing, mitigating factors, and the consequences of a respondent's failure to answer.15 The language in current section 308.116(b)(1)-(3), however, repeats the relevant statutory language of 12 U.S.C. 1817(j)(16)(A)-(D). Further, current section 308.116(b)(4) merely contains inflation adjustments. Therefore, the FDIC is removing current section 308.116(b) and instead directing readers to section 308.132(d) to determine current maximum CMP amounts.

15See 56 FR 37968 (Aug. 9, 1991).

The FDIC is also keeping language concerning the late filing of Call Reports at current section 308.132(d)(1) and (d)(3). 12 U.S.C. 1817(a) provides the maximum CMP amounts for the late filing of Call Reports. In 1991, however, the FDIC issued regulations that further subdivided these amounts based upon the size of the institution and the lateness of the filing.16 These regulations accordingly differ from other provisions found in section 308.132(d) that simply restate relevant statutory language regarding maximum CMP amounts. The Rule will merge language from current subsections 308.132(d)(1) and (d)(3) into a new section 308.132(e), since, aside from the differing penalty amounts, these two current subsections contain similar language. The new section 308.132(e) will direct readers to the Federal Register to determine the applicable inflation-adjusted penalty amounts.

16See 56 FR 37968, 37992-93 (Aug. 9, 1991).

The FDIC is correcting four errors currently located at section 308.132(d)(1) and (d)(3) concerning the maximum amount that generally will be assessed for violations of 12 U.S.C. 1464(v) and 1817(a) regarding the late filing of Call Reports by certain small institutions. The current text contains the inadvertent overstatement of four fractions of an institution's total assets that are paired with correctly stated basis-point figures. These corrections will align the listed fractions of an institution's total assets with the listed basis-point calculations, and these corrections will be reflected in the annual Federal Register CMP notice.17

17 For example, current section 308.132(d)(1)(i)(A) states, “the amount assessed shall be the greater of [an inflation-adjusted daily penalty] or 1/1,000th of the institution's total assets (1/10th of a basis point)” when it should read, “the amount assessed shall be the greater of [an inflation-adjusted daily penalty] or 1/100,000th of the institution's total assets (1/10th of a basis point).” (Emphasis added.)

Lastly, the FDIC is revising cross-references found at 12 CFR 308.502(a)(6), 12 CFR 308.502(b)(4), 12 CFR 308.530, and 12 CFR 327.3(c) to reflect the revisions to 12 CFR 308.132(d).

Since the Rule will amend the presentation of maximum CMP levels in the Federal Register, the FDIC believes the Rule will not pose any regulatory costs to IDIs or cost to the public in general.

Sample Civil Money Penalty Table U.S. code citation Adjusted maximum CMP 18
  • (beginning January 15, 2018)
  • 12 U.S.C. 1464(v): Tier One CMP $3,928. Tier Two CMP $39,278. Tier Three CMP 19 $1,963,870. 12 U.S.C. 1467(d) $9,819. 12 U.S.C. 1817(a): Tier One CMP 20 $3,928. Tier Two CMP $39,278. Tier Three CMP 21 $1,963,870. 12 U.S.C. 1817(c): Tier One CMP $3,591. Tier Two CMP $35,904. Tier Three CMP 22 $1,795,216. 12 U.S.C. 1817(j)(16): Tier One CMP $9,819. Tier Two CMP $49,096. Tier Three CMP 23 $1,963,870. 12 U.S.C. 1818(i)(2): 24 Tier One CMP $9,819. Tier Two CMP $49,096. Tier Three CMP 25 $1,963,870. 12 U.S.C. 1820(e)(4) $8,977. 12 U.S.C. 1820(k)(6) $323,027. 12 U.S.C. 1828(a)(3) $122. 12 U.S.C. 1828(h): 26 For assessments <$10,000 $122. 12 U.S.C. 1829b(j) $20,521. 12 U.S.C. 1832(c) $2,852. 12 U.S.C. 1884 $285. 12 U.S.C. 1972(2)(F): Tier One CMP $9,819. Tier Two CMP $49,096. Tier Three CMP 27 $1,963,870. 12 U.S.C. 3909(d) $2,443. 15 U.S.C. 78u-2: Tier One CMP (individuals) $9,239. Tier One CMP (others) $92,383. Tier Two CMP (individuals) $92,383. Tier Two CMP (others) $461,916. Tier Three CMP (individuals) $184,767. Tier Three penalty (others) $923,831. 15 U.S.C. 1639e(k): First violation $11,279. Subsequent violations $22,556. 31 U.S.C. 3802 $11,181. 42 U.S.C. 4012a(f) $2,133. CFR citation Adjusted presumptive CMP
  • (beginning January 15, 2018)
  • 12 CFR 308.132(e)(1)(i): Institutions with $25 million or more in assets: 1 to 15 days late $538. 16 or more days late $1,078. Institutions with less than 25 million in assets: 1 to 15 days late 28 $180. 16 or more days late 29 $359. 12 CFR 308.132(e)(1)(ii): Institutions with $25 million or more in assets: 1 to 15 days late $897. 16 or more days late $1,795. Institutions with less than $25 million in assets: 1 to 15 days late 1/50,000th of the institution's total assets. 16 or more days late 1/25,000th of the institution's total assets. 12 CFR 308.132(e)(2) $39,278. 12 CFR 308.132(e)(3): Tier One CMP $3,928. Tier Two CMP $39,278. Tier Three CMP 30 $1,963,870.
    IV. Alternatives Considered

    18 The maximum penalty amount is per day, unless otherwise indicated.

    19 The maximum penalty amount for an institution is the lesser of this amount or 1 percent of total assets.

    20 12 U.S.C. 1817(a) provides the maximum CMP amounts for the late filing of Call Reports. In 1991, however, the FDIC issued regulations that further subdivided these amounts based upon the size of the institution and the lateness of the filing. See 56 FR 37968, 37992-93 (Aug. 9, 1991), to be re-codified at 12 CFR 308.132(e)(1). These adjusted subdivided amounts are found at the end of this chart.

    21 The maximum penalty amount for an institution is the lesser of this amount or 1 percent of total assets.

    22 The maximum penalty amount for an institution is the lesser of this amount or 1 percent of total assets.

    23 The maximum penalty amount for an institution is the lesser of this amount or 1 percent of total assets.

    24 These amounts also apply to CMPs in statutes that cross-reference 12 U.S.C. 1818, such as 12 U.S.C. 2601, 2804(b), 3108(b), 3349(b), 4009(a), 4309(a), 4717(b); 15 U.S.C. 1607(a), 1681s(b), 1691(b), 1691c(a), 1693o(a); 42 U.S.C. 3601.

    25 The maximum penalty amount for an institution is the lesser of this amount or 1 percent of total assets.

    26 The $122-per-day maximum CMP under 12 U.S.C. 1828(h), for failure or refusal to pay any assessment, applies only when the assessment is less than $10,000. When the amount of the assessment is $10,000 or more, the maximum CMP under section 1828(h) is 1 percent of the amount of the assessment for each day that the failure or refusal continues.

    27 The maximum penalty amount for an institution is the lesser of this amount or 1 percent of total assets.

    28 The maximum penalty amount for an institution is the greater of this amount or 1/100,000th of the institution's total assets.

    29 The maximum penalty amount for an institution is the greater of this amount or 1/50,000th of the institution's total assets.

    30 The maximum penalty amount for an institution is the lesser of this amount or 1 percent of total assets.

    During preliminary discussions regarding the Rule, the FDIC considered possible alternatives to issuing the Rule. The primary alternative the FDIC considered was to maintain the current statutory language in the CFR and Federal Register as well as the CMP presentation format. This alternative (1) keeps the redundant statutory language in the CFR and Federal Register, (2) does not improve the clarity and readability of the maximum CMPs, and (3) does not address the fact that the CMP presentation format is inconsistent with the other prudential regulators. Therefore, the FDIC believes the Rule will support ease of reference and public understanding more so than the alternative.

    V. Request for Comment

    The FDIC believes that these changes to Part 308 are ministerial and technical and that, therefore, notice-and-comment rulemaking is unnecessary. Nonetheless, in the interest of transparency, the FDIC invited comments on all aspects of the Rule in a Notice of Proposed Rulemaking, dated August 3, 2018.31 Commenters were specifically encouraged to identify any technical issues raised by the Rule. The FDIC provided a 60-day comment period for this Rule, but the agency did not receive any comments.

    31See 83 FR 38080, https://www.thefederalregister.org/fdsys/pkg/FR-2018-08-03/pdf/2018-16548.pdf.

    VI. Regulatory Analysis Riegle Community Development and Regulatory Improvement Act

    Section 302 of the Riegle Community Development and Regulatory Improvement Act of 1994 32 requires that each Federal banking agency, in determining the effective date and administrative compliance requirements for new regulations that impose additional reporting, disclosure, or other requirements on insured depository institutions, consider, consistent with principles of safety and soundness and the public interest, any administrative burdens that such regulations would place on depository institutions, including small depository institutions, and customers of depository institutions, as well as the benefits of such regulations. In addition, in order to provide an adequate transition period, new regulations that impose additional reporting, disclosures, or other new requirements on IDIs generally must take effect on the first day of a calendar quarter that begins on or after the date on which the regulations are published in final form.

    32 12 U.S.C. 4802.

    The Rule will not impose any new or additional reporting, disclosures, or other requirements on insured depository institutions. Therefore, the Rule is not subject to the requirements of this statute.

    Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires that, in connection with a rulemaking, an agency prepare and make available for public comment a final regulatory flexibility analysis describing the impact of the rulemaking on small entities.33 A regulatory flexibility analysis is not required, however, if the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. The Small Business Administration (SBA) has defined “small entities” to include banking organizations with total assets less than or equal to $550 million.34 The FDIC supervises 3,575 depository institutions,35 of which 2,763 are defined as small banking entities by the terms of the RFA.36 For the reasons described below and under section 605(b) of the RFA, the FDIC certifies that the Rule will not have a significant economic impact on a substantial number of small entities.

    33 5 U.S.C. 601 et seq.

    34 The SBA defines a small banking organization as having $550 million or less in assets, where “a financial institution's assets are determined by averaging the assets reported on its four quarterly financial statements for the preceding year.” 13 CFR 121.201 n.8 (2018). “SBA counts the receipts, employees, or other measure of size of the concern whose size is at issue and all of its domestic and foreign affiliates. . . .” 13 CFR 121.103(a)(6) (2018). Following these regulations, the FDIC uses a covered entity's affiliated and acquired assets, averaged over the preceding four quarters, to determine whether the covered entity is “small” for the purposes of RFA.

    35 FDIC-supervised institutions are listed in 12 U.S.C. 1813(q)(2).

    36 Call Report: June 30, 2018.

    The FDIC believes the amendments to 12 CFR parts 308 and 327 will have a negligible impact on small entities. For a detailed description of the Rule and its expected effects, please review Section III above. The revisions are intended to simplify the text of the CFR by removing unnecessary and redundant text in order to make it easier for readers to reference and understand the current maximum CMP amounts.

    Small Business Regulatory Enforcement Fairness Act

    The OMB has determined that the Rule is not a “major rule” within the meaning of the relevant sections of the Small Business Regulatory Enforcement Act of 1996 (SBREFA).37 As required by the SBREFA, the FDIC will submit the Rule and other appropriate reports to Congress and the Government Accountability Office for review.

    37 5 U.S.C. 801 et seq.

    The Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999: Assessment of Federal Regulations and Policies on Families

    The FDIC determined that the Rule will not affect family wellbeing within the meaning of section 654 of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999.38

    38 Public Law 105-277, 112 Stat. 2681 (1998).

    Paperwork Reduction Act

    The Rule does not create any new, or revise any existing, collections of information under section 3504(h) of the Paperwork Reduction Act of 1980.39 Consequently, no information-collection request will be submitted to the OMB for review.

    39 44 U.S.C. 3501 et seq.

    Plain Language Act

    Section 722 of the Gramm-Leach-Bliley Act requires the FDIC to use plain language in all proposed and final rules published after January 1, 2000.40 Accordingly, the FDIC has attempted to write the Rule in clear and comprehensible language.

    40 Public Law 106-102, 113 Stat. 1338 (Nov. 12, 1999).

    List of Subjects 12 CFR Part 308

    Administrative practice and procedure, Bank deposit insurance, Banks, banking, Claims, Crime, Equal access to justice, Fraud, Investigations, Lawyers, Penalties.

    12 CFR Part 327

    Bank deposit insurance, Banks, banking, Savings associations.

    Authority and Issuance

    For the reasons set forth in the preamble, the FDIC amends 12 CFR parts 308 and 327 to read as follows:

    PART 308—RULES OF PRACTICE AND PROCEDURE 1. The authority citation for part 308 continues to read as follows: Authority:

    5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 164, 505, 1464, 1467(d), 1467a, 1468, 1815(e), 1817, 1818, 1819, 1820, 1828, 1829, 1829(b), 1831i, 1831m(g)(4), 1831o, 1831p-1, 1832(c), 1884(b), 1972, 3102, 3108(a), 3349, 3909, 4717, 5412(b)(2)(C), 5414(b)(3); 15 U.S.C. 78(h) and (i), 78o(c)(4), 78o-4(c), 78o-5, 78q-1, 78s, 78u, 78u-2, 78u-3, 78w, 6801(b), 6805(b)(1); 28 U.S.C. 2461 note; 31 U.S.C. 330, 5321; 42 U.S.C. 4012a; Pub. L. 104-134, sec. 31001(s), 110 Stat. 1321; Pub. L. 109-351, 120 Stat. 1966; Pub. L. 111-203, 124 Stat. 1376; Pub. L. 114-74, sec. 701, 129 Stat. 584.

    2. Amend § 308.116 by revising paragraph (b) to read as follows:
    § 308.116 Assessment of penalties.

    (b) Maximum penalty amounts. Under 12 U.S.C. 1817(j)(16), a civil money penalty may be assessed for violations of change in control of insured depository institution provisions in the maximum amounts calculated and published in accordance with § 308.132(d).

    3. Amend § 308.132 by revising paragraph (d) and adding paragraph (e) to read as follows:
    § 308.132 Assessment of penalties.

    (d) Maximum civil money penalty amounts. Under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, the Board of Directors or its designee may assess civil money penalties in the maximum amounts using the following framework:

    (1) Statutory formula to calculate inflation adjustments. The FDIC is required by statute to annually adjust for inflation the maximum amount of each civil money penalty within its jurisdiction to administer. The inflation adjustment is calculated by multiplying the maximum dollar amount of the civil money penalty for the previous calendar year by the cost-of-living inflation adjustment multiplier provided annually by the Office of Management and Budget and rounding the total to the nearest dollar.

    (2) Notice of inflation adjustments. By January 15 of each calendar year, the FDIC will publish notice in the Federal Register of the maximum penalties that may be assessed after each January 15, based on the formula in paragraph (d)(1) of this section, for conduct occurring on or after November 2, 2015.

    (e) Civil money penalties for violations of 12 U.S.C. 1464(v) and 12 U.S.C. 1817(a)—(1) Late filing—Tier One penalties. Where an institution fails to make or publish its Report of Condition and Income (Call Report) within the appropriate time periods, but where the institution maintains procedures in place reasonably adapted to avoid inadvertent error and the late filing occurred unintentionally and as a result of such error, or where the institution inadvertently transmitted a Call Report that is minimally late, the Board of Directors or its designee may assess a Tier One civil money penalty. The amount of such a penalty shall not exceed the maximum amount calculated and published annually in the Federal Register under paragraph (d)(2) of this section. Such a penalty may be assessed for each day that the violation continues.

    (i) First offense. Generally, in such cases, the amount assessed shall be an amount calculated and published annually in the Federal Register under paragraph (d)(2) of this section. The Federal Register notice will contain a presumptive penalty amount per day for each of the first 15 days for which the failure continues, and a presumptive amount per day for each subsequent days the failure continues, beginning on the 16th day. The annual Federal Register notice will also provide penalty amounts that generally may be assessed for institutions with less than $25,000,000 in assets.

    (ii) Subsequent offense. The FDIC will calculate and publish in the Federal Register a presumptive daily Tier One penalty to be imposed where an institution has been delinquent in making or publishing its Call Report within the preceding five quarters. The published penalty shall identify the amount that will generally be imposed per day for each of the first 15 days for which the failure continues, and the amount that will generally be imposed per day for each subsequent day the failure continues, beginning on the 16th day. The annual Federal Register notice will also provide penalty amounts that generally may be assessed for institutions with less than $25,000,000 in assets.

    (iii) Lengthy or repeated violations. The amounts set forth in this paragraph (e)(1) will be assessed on a case-by-case basis where the amount of time of the institution's delinquency is lengthy or the institution has been delinquent repeatedly in making or publishing its Call Reports.

    (iv) Waiver. Absent extraordinary circumstances outside the control of the institution, penalties assessed for late filing shall not be waived.

    (2) Late-filing—Tier Two penalties. Where an institution fails to make or publish its Call Report within the appropriate time period, the Board of Directors or its designee may assess a Tier Two civil money penalty for each day the failure continues. The amount of such a penalty will not exceed the maximum amount calculated and published annually in the Federal Register under paragraph (d)(2) of this section.

    (3) False or misleading reports or information—(i) Tier One penalties. In cases in which an institution submits or publishes any false or misleading Call Report or information, the Board of Directors or its designee may assess a Tier One civil money penalty for each day the information is not corrected, where the institution maintains procedures in place reasonably adapted to avoid inadvertent error and the violation occurred unintentionally and as a result of such error, or where the institution inadvertently transmits a Call Report or information that is false or misleading. The amount of such a penalty will not exceed the maximum amount calculated and published annually in the Federal Register under paragraph (d)(2) of this section.

    (ii) Tier Two penalties. Where an institution submits or publishes any false or misleading Call Report or other information, the Board of Directors or its designee may assess a Tier Two civil money penalty for each day the information is not corrected. The amount of such a penalty will not exceed the maximum amount calculated and published annually in the Federal Register under paragraph (d)(2) of this section.

    (iii) Tier Three penalties. Where an institution knowingly or with reckless disregard for the accuracy of any Call Report or information submits or publishes any false or misleading Call Report or other information, the Board of Directors or its designee may assess a Tier Three civil money penalty for each day the information is not corrected. The penalty shall not exceed the lesser of 1 percent of the institution's total assets per day or the amount calculated and published annually in the Federal Register under paragraph (d)(2) of this section.

    (4) Mitigating factors. The amounts set forth in paragraphs (e)(1) through (e)(3) of this section may be reduced based upon the factors set forth in paragraph (b) of this section.

    4. Amend § 308.502 by revising paragraphs (a)(6) and (b)(4) to read as follows:
    § 308.502 Basis for civil penalties and assessments.

    (a) * * *

    (6) The amount of any penalty assessed under paragraph (a)(1) of this section will be adjusted for inflation in accordance with § 308.132(d).

    (b) * * *

    (4) The amount of any penalty assessed under paragraph (a)(1) of this section will be adjusted for inflation in accordance with § 308.132(d).

    5. Amend § 308.530 by revising paragraph (d) to read as follows:
    § 308.530 Determining the amount of penalties and assessments.

    (d) Civil money penalties that are assessed under this subpart are subject to annual adjustments to account for inflation as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Pub. L. 114-74, sec. 701, 129 Stat. 584) (see also § 308.132(d)).

    PART 327—ASSESSMENTS 6. The authority citation for part 327 continues to read as follows: Authority:

    12 U.S.C. 1441, 1813, 1815, 1817-19, 1821.

    7. Amend § 327.3 by revising paragraph (c) to read as follows:
    § 327.3 Payment of assessments.

    (c) Necessary action, sufficient funding by institution. Each insured depository institution shall take all actions necessary to allow the Corporation to debit assessments from the insured depository institution's designated deposit account. Each insured depository institution shall, prior to each payment date indicated in paragraph (b)(2) of this section, ensure that funds in an amount at least equal to the amount on the quarterly certified statement invoice are available in the designated account for direct debit by the Corporation. Failure to take any such action or to provide such funding of the account shall be deemed to constitute nonpayment of the assessment. Penalties for failure to timely pay assessments will be calculated and published in accordance with 12 CFR 308.132(d).

    Dated at Washington, DC, on November 20, 2018.

    By order of the Board of Directors.

    Federal Deposit Insurance Corporation. Robert E. Feldman, Executive Secretary.
    [FR Doc. 2018-25660 Filed 11-27-18; 8:45 am] BILLING CODE 6714-01-P
    DEPARTMENT OF THE INTERIOR Bureau of Indian Affairs 25 CFR Part 175 [190A2100DD/AAKC001030/A0A501010.999900 253G] RIN 1076-AF31 Indian Electric Power Utilities AGENCY:

    Bureau of Indian Affairs, Interior.

    ACTION:

    Final rule.

    SUMMARY:

    This rule revises regulations addressing electric power utilities of the Colorado River, Flathead, and San Carlos Indian irrigation projects to use plain language, update definitions, lengthen a regulatory deadline, and make other minor changes.

    DATES:

    This rule is effective December 28, 2018.

    FOR FURTHER INFORMATION CONTACT:

    David Fisher, Branch Chief Irrigation & Power, Division of Water & Power, Bureau of Indian Affairs, telephone (303) 231-5225, [email protected]

    SUPPLEMENTARY INFORMATION:

    I. Background II. Description of Changes III. Procedural Requirements A. Regulatory Planning and Review (E.O.s 12866 and 13563) and Reducing Regulation and Controlling Regulatory Costs (E.O. 13771) B. Regulatory Flexibility Act C. Small Business Regulatory Enforcement Fairness Act D. Unfunded Mandates Reform Act E. Takings (E.O. 12630) F. Federalism (E.O. 13132) G. Civil Justice Reform (E.O. 12988) H. Consultation With Indian Tribes (E.O. 13175) I. Paperwork Reduction Act J. National Environmental Policy Act K. Effects on the Energy Supply (E.O. 13211) I. Background

    Various statutes provide the Bureau of Indian Affairs (BIA) with authority to issue this regulation and for administering electric power utilities for the Colorado River, Flathead (Mission Valley Power), and San Carlos Indian irrigation projects. For example, see 5 U.S.C. 301; 25 U.S.C. 13; 25 U.S.C. 385c; 43 Stat. 475-76; 45 Stat. 210-13; 49 Stat. 1039-40; 49 Stat. 1822-23; 54 Stat. 422; 62 Stat. 269-73; 65 Stat. 254; 99 Stat. 319-20. Each of these power projects provides energy, transmission, and distribution of electrical services to customers in their respective service areas. BIA (or the contracting/compacting Indian Tribe) provides oversight and limited technical assistance for power projects and conducts operations and maintenance of the distribution systems.

    The regulations addressing BIA's administration of the power utilities are at 25 CFR part 175, Indian Electric Power Utilities. This final rule updates the regulations for the first time since 1991.

    II. Description of Changes

    The revisions being finalized today are intended to make the regulations more user-friendly through plain language. The final rule also updates definitions, lengthens the time by which BIA must issue a decision on an appeal from 30 days to 60 days (by referring to 25 CFR 2.19(a)), and requires publication of rate adjustments in the Federal Register. These changes were proposed on December 27, 2017 at 82 FR 61193. BIA received no comments relevant to the proposed rule. The final rule makes no changes to the proposed rule. The following tables summarize the final changes:

    Table 1 Current 25 CFR section New 25 CFR section Summary of changes 175.1 Definitions 175. 100 What terms should I know for this part? Deletes the definitions of “appellant” and “officer-in-charge.”
  • Adds definitions for “bill,” “CFR,” “day(s),” “delinquent,” “due date,” “electric energy,” “energy,” “fee,” “I, me, my, you, and your,” “must,” “past due bill,” “power,” “public notice,” “purchased power,” “taxpayer identification number,” “utility(ies),” and “we, us, and our.”
  • Replaces definition of “Area Director” with a definition of “BIA.” Revises the definition of “customer,” “electric power utility,” “electric service,” “operations manual,” “service,” “service fee.” Revises the definition of “power rate” and replaces it with the terms “rate” and “electric power rate.” Revises the definition of “service agreement” and replaces it with the term “agreement.” Revises the definition of “special contract” and replaces it with the term “special agreement.” 175.2 Purpose 175.105 What is the purpose of this part? Revises for plain language. 175.3 Compliance 175.110 Does this part apply to me? Revises for plain language. 175.4 Authority of area director N/A Deletes provisions containing delegations of authority to eliminate possible conflicts with the Departmental Delegations of Authority. 175.5 Operations manual 175.115 How does BIA administer its electric power utilities?
  • 175.120 What are Operations Manuals?
  • Revises for plain language, deletes specific means by which public notice of changes will be provided, and incorporates instead the definition of “public notice,” which provides for publishing information consistent with the operations manual.
    175.6 Information collection 175.600 How does the Paperwork Reduction Act affect this part? Revises for plain language. 175.10 Revenues collected from power operations 175.200 Why does BIA collect revenue from you and the other customers it serves, and how is that revenue used?
  • 175.205 When are BIA rates and fees reviewed?
  • Revises for plain language and deletes amortization as an example for what BIA may use revenue.
    175.11 Procedures for setting service fees 175.210 What is BIA's procedure for setting service fees? Deletes provisions containing delegations of authority to eliminate possible conflicts with Departmental Delegations of Authority. 175.12 Procedures for adjusting electric power rates except for adjustments due to changes in the cost of purchased power or energy 175.215 What is BIA's procedure for adjusting electric power rates?
  • 175.220 How long do rate and fee adjustments stay in effect?
  • Adds a requirement for BIA to publish a proposed rate adjustment in the Federal Register.
    175.13 Procedures for adjusting electric power rates to reflect changes in the cost of purchased power or energy 175.235 How does BIA include changes in purchased power costs to our electric power rates? Revises for plain language. 175.20 Gratuities N/A This section is deleted because it is already addressed by other laws. 175.21 Discontinuance of service 175.315 What will happen if I do not pay my bill? Revises for plain language. 175.22 Requirements for receiving electrical service 175.125 How do I request and receive service? Revises for plain language. 175.23 Customer responsibilities N/A Deleted because this provision is for a project-specific authority addressed at the local BIA level. 175.24 Utility responsibilities N/A Incorporates the substance into sections 175.115 and 175.120, which refer to operations manual instead of setting out responsibilities. 175.30 Billing 175.300 How does BIA calculate my electric bill? Revises for plain language. 175.31 Methods and terms of payment 175.310 How do I pay my bill? Replaces provision stating that the utility may refuse, for cause, to accept personal checks with a general statement that the electric utility that serves you may provide additional requirements. 175.32 Collections 175.315 What will happen if I do not pay my bill? Revises for plain language. 175.320 What will happen if my service is disconnected and my account remains delinquent? 175.40 Financing of extensions and upgrades 175.400 Will the utility extend or upgrade its electric system to serve new or increased loads? Revises to direct customers to contact the electric power utility for more information. 175.50 Obtaining rights-of-way
  • 175.51 Ownership.
  • 175.500 How does BIA manage rights-of-way? Revises to direct customers to contact the electric power utility for more information.
    175.60 Appeals to the area director
  • 175.61 Appeals to the Interior Board of Indian Appeals.
  • 175.62 Utility actions pending the appeal process.
  • 175.145 Can I appeal a BIA decision? Combines current sections 175.60 and 175.61 into a paragraph that refers to 25 CFR part 2 rather than explicitly stating appeal procedures. Increases the time by which BIA must issue a decision on an appeal from 30 days to 60 days (see 25 CFR 2.19(a)).
  • Adds a new paragraph (b) to clarify that a customer must pay the bill to continue to receive service.
  • Incorporates section 175.62 into new paragraphs (c) through (e).
  • New Provisions Current 25 CFR section New final 25 CFR section Summary of changes N/A 175.130 What information must I provide when I request service? New section. N/A 175.135 Why is BIA collecting this information? New section. N/A 175.140 What is BIA's authority to collect my taxpayer identification number? New section. N/A 175.225 What is the Federal Register, and where can I get it? New section. N/A 175.230 Why are changes to purchased power costs not included in the procedure for adjusting electric power rates? New section. N/A 175.320 What will happen if my service is disconnected and my account remains delinquent? New section. N/A 175.305 When is my bill due? New section. III. Procedural Requirements A. Regulatory Planning and Review (E.O. 12866 and 13563) and Reducing Regulation and Controlling Regulatory Costs (E.O. 13771)

    Executive Order (E.O.) 12866 provides that the Office of Information and Regulatory Affairs in the Office of Management and Budget will review all significant rules. The Office of Information and Regulatory Affairs has determined that this rule is not significant.

    E.O. 13563 reaffirms the principles of E.O. 12866 while calling for improvements in the nation's regulatory system to promote predictability, to reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory ends. The executive order directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. E.O. 13563 emphasizes further that regulations must be based on the best available science and that the rulemaking process must allow for public participation and an open exchange of ideas. We have developed this rule in a manner consistent with these requirements.

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

    B. Regulatory Flexibility Act

    This document will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) because the rule does not make any changes to electric power rates or service fees.

    C. Small Business Regulatory Enforcement Fairness Act

    This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule:

    (a) Does not have an annual effect on the economy of $100 million or more;

    (b) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions;

    (c) Does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises.

    D. Unfunded Mandates Reform Act

    This rule does not impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year. The rule does not have a significant or unique effect on State, local, or tribal governments or the private sector. A statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq.) is not required.

    E. Takings (E.O. 12630)

    This rule does not effect a taking of private property or otherwise have taking implications under E.O. 12630. A takings implication assessment is not required.

    F. Federalism (E.O. 13132)

    Under the criteria in section 1 of E.O. 13132, this rule does not have sufficient Federalism implications to warrant the preparation of a Federalism summary impact statement. A Federalism summary impact statement is not required.

    G. Civil Justice Reform (E.O. 12988)

    This rule complies with the requirements of E.O. 12988. Specifically, this rule:

    (a) Meets the criteria of section 3(a) requiring that all regulations be reviewed to eliminate errors and ambiguity and be written to minimize litigation; and

    (b) Meets the criteria of section 3(b)(2) requiring that all regulations be written in clear language and contain clear legal standards.

    H. Consultation With Indian Tribes (E.O. 13175 and Departmental Policy)

    The Department of the Interior strives to strengthen its government-to-government relationship with Indian Tribes through a commitment to consult with Indian Tribes and recognize their right to self-governance and Tribal sovereignty. We have evaluated this rule under the Department's consultation policy and under the criteria in E.O. 13175 for substantial direct effects on federally recognized Indian Tribes and have consulted with those Tribes served by the electric power utilities subject to this rule. We hosted two in-person Tribal consultation sessions in the vicinity of Tribes served by the electric power utilities: One on April 14, 2016, in Pablo, Montana, and one on April 19, 2016, in Phoenix, Arizona. One Tribe submitted comments on the draft regulation, to which we have responded by letter because the comments are primarily unique to the local utility. We included an offer in the proposed rule for any Tribe that would like additional consultation opportunities on the proposed regulatory changes to contact BIA. No Tribe requested additional consultation opportunities on the rule.

    I. Paperwork Reduction Act

    The information collection requirements contained in 25 CFR part 175 are authorized by OMB Control Number 1076-0021, with an expiration date of June 30, 2019. A submission to the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.) is not required because this rule would not affect the information collection requirements contained in 25 CFR part 175. We may not conduct or sponsor, and you are not required to respond to, a collection of information unless it displays a currently valid OMB control number.

    J. National Environmental Policy Act

    This rule does not constitute a major Federal action significantly affecting the quality of the human environment. A detailed statement under the National Environmental Policy Act of 1969 (NEPA) is not required because the rule is covered by a categorical exclusion. This rule is excluded from the requirement to prepare a detailed statement because it is a regulation of an administrative nature. (For further information, see 43 CFR 46.210(i).) We have also determined that the rule does not involve any of the extraordinary circumstances listed in 43 CFR 46.215 that would require further analysis under NEPA.

    K. Effects on the Energy Supply (E.O. 13211)

    This rule is not a significant energy action under the definition in E.O. 13211. A Statement of Energy Effects is not required.

    List of Subjects in 25 CFR Part 175

    Administrative practice and procedure, Electric power, Indians—lands, Reporting and recordkeeping requirements.

    For the reasons given in the preamble, the Department of the Interior amends chapter 1 of title 25 Code of Federal Regulations by revising part 175 to read as follows. PART 175—ELECTRIC POWER UTILITIES Subpart A—General Provisions Sec. 175.100 What terms should I know for this part? 175.105 What is the purpose of this part? 175.110 Does this part apply to me? 175.115 How does BIA administer its electric power utilities? 175.120 What are Operations Manuals? 175.125 How do I request and receive service? 175.130 What information must I provide when I request service? 175.135 Why is BIA collecting this information? 175.140 What is BIA's authority to collect my taxpayer identification number? 175.145 Can I appeal a BIA decision? Subpart B—Service Fees, Electric Power Rates, and Revenues 175.200 Why does BIA collect revenue from you and the other customers it serves, and how is that revenue used? 175.205 When are BIA rates and fees reviewed? 175.210 What is BIA's procedure for adjusting service fees? 175.215 What is BIA's procedure for adjusting electric power rates? 175.220 How long do rate and fee adjustments stay in effect? 175.225 What is the Federal Register, and where can I get it? 175.230 Why are changes to purchased power costs not included in the procedure for adjusting electric power rates? 175.235 How does BIA include changes in purchased power costs to our electric power rates? Subpart C—Billing, Payments, and Collections 175.300 How does BIA calculate my electric power bill? 175.305 When is my bill due? 175.310 How do I pay my bill? 175.315 What will happen if I do not pay my bill? 175.320 What will happen if my service is disconnected and my account remains delinquent? Subpart D—System Extensions and Upgrades, Rights-of-Way, and Paperwork Reduction Act 175.400 Will the utility extend or upgrade its electric system to serve new or increased loads? 175.500 How does BIA manage rights-of-way? 175.600 How does the Paperwork Reduction Act affect this part? Authority:

    5 U.S.C. 301; 25 U.S.C. 13; 25 U.S.C. 385c; 43 Stat. 475-76; 45 Stat. 210-13; 49 Stat. 1039-40; 49 Stat. 1822-23; 54 Stat. 422; 62 Stat. 269-73; 65 Stat. 254; 99 Stat. 319-20.

    Subpart A—General Provisions
    § 175.100 What terms I should know for this part?

    Agreement means the executed written form between you and the utility providing your service, except for service provided under a Special Agreement.

    BIA means the Bureau of Indian Affairs within the United States Department of the Interior or the BIA's authorized representative.

    Bill means our written statement notifying you of the charges and/or fees you owe the United States for the administration, operation, maintenance, rehabilitation, and/or construction of the electric power utility servicing you.

    CFR means Code of Federal Regulations.

    Customer means any person or entity to whom we provide service.

    Customer service is the assistance or service provided to customers, except for the actual delivery of electric power or energy. Customer service may include: Line extension, system upgrade, meter testing, connections or disconnection, special meter reading, or other assistance or service as provided in the Operations Manual.

    Day(s) means calendar day(s).

    Delinquent means an account that has not been paid and settled by the due date.

    Due date means the date by which you must pay your bill. The due date is printed on your bill.

    Electric energy (see Electric power).

    Electric power means the energy we deliver to meet customers' electrical needs.

    Electric power rate means the charges we establish for delivery of energy to our customers, which includes administration costs and operation and maintenance costs in addition to the cost of purchased power.

    Electric power utility means all structures, equipment, components, and human resources necessary for the delivery of electric service.

    Electric service means the delivery of electric power by our utility to our customers.

    Energy means electric power.

    Fee (see Service fee).

    I, me, my, you, and your means all interested parties, especially persons or entities to which we provide service and receive use of our electric power service.

    Must means an imperative or mandatory act or requirement.

    Operations Manual means the written policies, practices, procedures and requirements of the utility providing your service. The Operations Manual supplements this Part and includes our responsibilities to our customers and our customers' responsibilities to the utility.

    Past due bill means a bill that has not been paid by the due date.

    Power (see Energy).

    Public notice is the notice provided by publishing information consistent with the utility's Operations Manual.

    Purchased power means the power we must purchase from power marketing providers for resale to our customers to meet changing power demands. Each of our utilities establishes its own power purchasing agreement based on its power demands and firm power availability.

    Rate (see Electric power rate).

    Reserve Funds means funds held in reserve for maintenance, repairs, or unexpected expenses.

    Revenue means the monies we collect from our customers through service fees and electric power rates.

    Service (see Electric service).

    Service fee means our charge for providing or performing a specific administrative or customer service.

    Special Agreement means a written agreement between you and us for special conditions or circumstances including unmetered services.

    Taxpayer identification number means either your Social Security Number or your Employer Identification Number.

    Utility(ies) see (Electric power utility).

    Utility office(s) means our facility used for conducting business with our customers and the general public.

    We, us, and our means the United States Government, the Secretary of the Interior, the BIA, and all who are authorized to represent us in matters covered under this Part.

    § 175.105 What is the purpose of this part?

    The purpose of this part is to establish the regulations for administering BIA electric power utilities.

    § 175.110 Does this part apply to me?

    This part applies to you if we provide you service or if you request service from us.

    § 175.115 How does BIA administer its electric power utilities?

    We promote efficient administration, operation, maintenance, and construction of our utilities by following and enforcing:

    (a) Applicable statutes, regulations, Executive Orders, Indian Affairs manuals, Operations Manuals;

    (b) Applicable written policies, procedures, directives, safety codes; and

    (c) Utility industry standards.

    § 175.120 What are Operations Manuals?

    (a) We maintain an Operations Manual for each of our utilities. Each utility's Operations Manual is available at the utility.

    (b) The Operations Manual sets forth the requirements for the administration, management, policies, and responsibilities of that utility and its customers.

    (c) We update our Operations Manual for each utility to reflect changing requirements to administer, operate, or maintain that utility.

    (d) When we determine it necessary to revise an Operations Manual, we will:

    (1) Provide public notice of the proposed revision;

    (2) State the effective date of the proposed revision;

    (3) State how and when to submit your comments on our proposed revision;

    (4) Provide 30 days from the date of the notice to submit your comments; and

    (5) Consider your comments and provide notice of our final decision.

    § 175.125 How do I request and receive service?

    (a) If you need electrical service in an area where we provide service, you must contact our utility in that service area.

    (b) To receive service, you must enter into an Agreement with that utility after it has determined that you have met its requirements.

    § 175.130 What information must I provide when I request service?

    At a minimum, you must provide the utility with the following information when you request service:

    (a) Your full legal name or the legal name of the entity needing service;

    (b) Your taxpayer identification number;

    (c) Your billing address;

    (d) Your service address; and

    (e) Any additional information required by the utility.

    § 175.135 Why is BIA collecting this information?

    We are collecting this information so we can:

    (a) Provide you with service;

    (b) Bill you for the service we provide; and

    (c) Account for monies you pay us, including any deposits as outlined in the Operations Manual.

    § 175.140 What is BIA's authority to collect my tax payer identification number?

    We are required to collect your taxpayer identification number under the authority of, and as prescribed in, the Debt Collection Improvement Act of 1996, Public Law 104-134 (110 Stat. 1321-364).

    § 175.145 Can I appeal a BIA decision?

    (a) You may appeal a decision in accordance with the procedures set out in 25 CFR part 2, unless otherwise prohibited by law.

    (b) If the appeal involves the discontinuation of service, the utility is not required to resume the service during the appeal process unless the customer meets the utility's requirements.

    (c) If you appeal your bill, you must pay your bill in accordance with this part to continue to receive service from us.

    (1) If the appeal involves the amount of your bill, the bill will be considered paid under protest until the final decision has been rendered on appeal.

    (2) If you appeal your bill but do not pay the bill in full, you may not continue to receive service from us. If the final decision rendered in the appeal requires payment of the bill, the bill will be handled as a delinquent account and the amount of the bill may be subject to interest, penalties, and administrative costs pursuant to 31 U.S.C. 3717 and 31 CFR 901.9.

    (3) If the appeal involves an electric power rate, the rate will be applied and remain in effect subject to the final decision on the appeal.

    Subpart B—Service Fees, Electric Power Rates, and Revenues
    § 175.200 Why does BIA collect revenue from you and the other customers it serves, and how is that revenue used?

    (a) The revenue we collect from you and the other customers is authorized by 25 U.S.C. 385c (60 Stat. 895, as amended by 65 Stat. 254).

    (b) The revenue we collect may be used to:

    (1) Pay for operation and maintenance of the utility;

    (2) Maintain Reserve Funds to:

    (i) Make repairs and replacements to the utility;

    (ii) Defray emergency expenses;

    (iii) Ensure the continuous operation of the power system; and

    (iv) Pay other allowable expenses and obligations to the extent required or permitted by law.

    § 175.205 When are BIA rates and fees reviewed?

    We review our rates and fees at least annually to:

    (a) Determine if our financial requirements are being met to ensure the reliable operation of the utility serving you; and

    (b) Determine if revenues are sufficient to meet the statutory requirements.

    § 175.210 What is BIA's procedure for adjusting service fees?

    If, based on our annual review, we determine our service fees need to be adjusted:

    (a) We will notify you at least 30 days prior to the effective date of the adjustment; and

    (b) We will publish a schedule of the adjusted service fees in a local newspaper(s) and post them in the local utility office serving you.

    § 175.215 What is BIA's procedure for adjusting electric power rates?

    Except for purchased power costs, if we determine electric power rates need to be adjusted, we will:

    (a) Hold public meetings and notify you of their respective time, date, and location by newspaper notice and a notice posted in the utility office serving you;

    (b) Provide you notice at least 15 days prior to the meeting;

    (c) Provide you a description of the proposed rate adjustment;

    (d) Provide you information on how, where, and when to submit comments on our proposed rate adjustment;

    (e) Make a final determination on the proposed rate adjustment after all comments have been received, reviewed, and evaluated; and

    (f) Publish the proposed rate adjustment and the final rate in the Federal Register if we determine the rate adjustment is necessary.

    § 175.220 How long do rate and fee adjustments stay in effect?

    These adjustments remain in effect until we conduct a review and determine adjustments are necessary.

    § 175.225 What is the Federal Register, and where can I get it?

    The Federal Register is the official daily publication for rules, proposed rules, and notices of official actions by Federal agencies and organizations, as well as Executive Orders and other Presidential Documents and is produced by the Government Printing Office (GPO). You can get Federal Register publications by:

    (a) Visiting www.federalregister.gov or www.thefederalregister.org/fdsys;

    (b) Writing to the GPO at Superintendent of Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954; or

    (c) Calling the GPO at (202) 512-1800.

    § 175.230 Why are changes to purchased power costs not included in the procedure for adjusting electric power rates?

    Changes to purchased power costs are not included in the procedure for adjusting electric power rates because unforeseen increases in the cost of purchased power are:

    (a) Not under our control;

    (b) Determined by current market rates; and

    (c) Subject to market fluctuations that can occur at an undetermined time and frequency.

    § 175.235 How does BIA include changes in purchased power costs in electric power rates?

    When our cost of purchased power changes:

    (a) We determine the effect of the change;

    (b) We adjust the purchased power component of your bill accordingly;

    (c) We add the purchased power adjustment to the existing electric power rate and put it into effect immediately;

    (d) The purchased power adjustment remains in effect until we determine future adjustments are necessary;

    (e) We must publish in the local newspaper and post at our office a notice of the purchase power adjustment and the basis for the adjustment; and

    (f) Our decision to make a purchased power adjustment must be final.

    Subpart C—Billing, Payments, and Collections
    § 175.300 How does BIA calculate my electric power bill?

    (a) We calculate your electric power bill based on the:

    (1) Current rate schedule for your type service; and

    (2) Applicable service fees for your type service.

    (b) If you have a metered service we must:

    (1) Read your meter monthly;

    (2) Calculate your bill based on your metered energy consumption; and

    (3) Issue your bill monthly, unless otherwise provided in a Special Agreement.

    (c) If we are unable to calculate your metered energy consumption, we must make a reasonable estimate based on one of the following reasons:

    (1) Your meter has failed;

    (2) Your meter has been tampered with; or

    (3) Our utility personnel are unable to read your meter.

    (d) If you have an unmetered service, we calculate your bill in accordance with your Special Agreement.

    § 175.305 When is my bill due?

    The due date is provided on your bill.

    § 175.310 How do I pay my bill?

    You may pay your bill by any of the following methods:

    (a) In person at our utility office;

    (b) Mail your payment to the address stated on your bill; or

    (c) As further provided by the electric utility that serves you.

    § 175.315 What will happen if I do not pay my bill?

    (a) If you do not pay your bill prior to the close of business on the due date, your bill will be past due.

    (b) If your bill is past due we may:

    (1) Disconnect your service; and

    (2) Not reconnect your service until your bill, including any applicable fees, is paid in full.

    (c) Specific regulations regarding non-payment can be found in 25 CFR 143.5(c).

    § 175.320 What will happen if my service is disconnected and my account remains delinquent?

    (a) If your service has been disconnected and you still have an outstanding balance, we will assess you interest, penalties, and administrative costs in accordance with 31 CFR 901.9.

    (b) We must forward your delinquent balance to the United States Treasury if it is not paid within 180 days after the original due date in accordance with 31 CFR 901.1.

    Subpart D—System Extensions and Upgrades, Rights-of-Way, and Paperwork Reduction Act
    § 175.400 Will the utility extend or upgrade its electric system to serve new or increased loads?

    The utility may extend or upgrade its electric system to serve new or increased loads. Contact your electric power utility providing service in your area for further information on new or increased loads.

    § 175.500 How does BIA manage rights-of-way?

    Contact your electric power utility providing service in your area for further information on rights-of-way.

    § 175.600 How does the Paperwork Reduction Act affect this part?

    The collection of information contained in this part have been approved by the Office of Management and Budget under 44 U.S.C. 3501 et seq. and assigned OMB Control Number 1076-0021. Response is required to obtain a benefit. A Federal agency may not conduct or sponsor, and you are not required to respond to, a collection of information unless the form or regulation requesting the information displays a currently valid OMB Control Number. Send comments regarding this collection of information, including suggestions for reducing the burden, to the Information Collection Clearance Officer—Indian Affairs, 1849 C Street NW, Washington, DC 20240.

    Dated: October 31, 2018. Tara Sweeney, Assistant Secretary—Indian Affairs.
    [FR Doc. 2018-25943 Filed 11-27-18; 8:45 am] BILLING CODE 4337-15-P
    DEPARTMENT OF EDUCATION 34 CFR Parts 86 and 668 Waiver of Certain Consumer Information Requirements for Foreign Institutions of Higher Education AGENCY:

    Office of Postsecondary Education, Department of Education.

    ACTION:

    Waiver.

    SUMMARY:

    The Secretary identifies specific provisions governing the student loan programs authorized by title IV of the Higher Education Act of 1965, as amended (HEA), that do not apply to foreign institutions.

    DATES:

    November 28, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Ashley Higgins, U.S. Department of Education, 400 Maryland Avenue SW, Room 294-20, Washington, DC 20202. Telephone: (202) 453-6097. Email: [email protected]

    SUPPLEMENTARY INFORMATION:

    The Department of Education's (Department) regulations governing the eligibility of foreign institutions to participate in the title IV, HEA student loan programs provide that, “[a] foreign institution must comply with all requirements for eligible and participating institutions except when made inapplicable by the HEA or when the Secretary, through publication in the Federal Register, identifies specific provisions as inapplicable to foreign institutions.” 34 CFR 600.51(c)(1). In this document, we identify specific provisions that do not apply to foreign institutions of higher education.

    I. Regulatory Consumer Information Requirements Inapplicable to Foreign Institutions of Higher Education Transfer of Credit Policies and Articulation Agreements (34 CFR 668.43(a)(11))

    Requirement: Each institution must disclose and make available to prospective and enrolled students a statement of the school's transfer of credit policies that includes, at a minimum—

    • Any established criteria the school uses regarding the transfer of credit earned at another school; and

    • A list of schools with which the school has established an articulation agreement.

    Reason: The Secretary believes this requirement is inapplicable to foreign institutions because American students attending a foreign institution are unlikely to need this information. Transfer of credit rules at foreign institutions generally apply to credits earned at institutions in the institution's home country and are of limited use to American students seeking to transfer credits earned at U.S. institutions.

    Copyright Infringement Policies and Sanctions, Including Computer Use and File Sharing (34 CFR 668.43(a)(10))

    Requirement: Institutions must readily make available to current and prospective students the institution's policies and sanctions related to copyright infringement, including—

    • A statement that explicitly informs students that unauthorized distribution of copyrighted material, including unauthorized peer-to-peer file sharing, may subject them to civil and criminal liabilities;

    • A summary of the penalties for violation of Federal copyright laws; and

    • The institution's policies with respect to unauthorized peer-to-peer file sharing, including disciplinary actions taken against students who engage in illegal downloading or unauthorized distribution of copyrighted materials using the institution's information technology system.

    Reason: U.S. copyright laws do not apply in foreign countries and the rules and penalties mentioned in this provision would not apply to U.S. students while attending a foreign institution. Therefore, the Secretary believes that it is unnecessary for foreign institutions to disclose rules and policies that are not applicable to the institution and its students and that may be incompatible with the laws of the country in which the institution is located.

    School and Program Accreditation, Approval, or Licensure (34 CFR 668.43(a)(6))

    Requirement: Each institution must make available to prospective and enrolled students—

    • Names of associations, agencies, or governmental bodies that accredit, approve, or license the institution and its programs; and

    • Procedures for obtaining or reviewing documents describing accreditation, approval, or licensing.

    Reason: Unlike domestic institutions, foreign institutions do not need to be accredited by a body recognized by the Secretary to participate in the title IV, HEA programs. In addition, the requirements for licensing institutions vary by country. Although the foreign institution must have approval of the government of the country in which the institution is located to operate in order to participate in the title IV, HEA programs, the Secretary does not believe accreditation and licensure information, as described for U.S. Institutions will be available at all foreign institutions.

    Drug and Alcohol Abuse Prevention Program (34 CFR 86.100 and 86.103; 20 U.S.C. 1011i)

    Requirement: Each institution must annually distribute in writing to each student and employee—

    • Standards of conduct that clearly prohibit the unlawful possession, use, or distribution of illicit drugs and alcohol by students and employees on the institution's property or as part of any of the institution's activities;

    • A description of the applicable legal sanctions under local, State, or Federal law for the unlawful possession or distribution of illicit drugs and alcohol;

    • A description of the health risks associated with the use of illicit drugs and the abuse of alcohol;

    • A description of available counseling, treatment, rehabilitation, or re-entry programs; and

    • A clear statement that the institution will impose disciplinary sanctions for violation of the standards of conduct and a description of those sanctions.

    In addition, each institution must make available, upon request, to the Department and to the public, the information distributed to students and employees and the results of a biennial review of the institution's program to—

    • Determine the effectiveness of the program and implement needed changes;

    • Determine the number of drug and alcohol-related violations and fatalities that occur on the institution's campus or as part of the institution's activities, and are reported to campus officials;

    • Determine the number and type of sanctions that are imposed by the institution; and

    • Ensure that sanctions are consistently enforced.

    Reason: U.S. drug laws do not apply in foreign countries and the rules and penalties mentioned in this provision would not apply to U.S. students while they are attending a foreign institution. Therefore, the Secretary believes that it is unnecessary for foreign institutions to disclose rules and policies that are not applicable to the institution and its students and that may be incompatible with the laws of the country in which the institution is located.

    Completion/Graduation and Transfer-Out Rates for Students Receiving Athletically Related Student Aid (34 CFR 668.41(f) and 668.48)

    Requirement: Each institution must produce by July 1 each year a report that will be provided to a prospective student athlete and the student's parents, high school guidance counselor, and coach at the time the institution offers athletically related student aid.

    Reason: The college athletics structure in the United States is unique. As a rule, foreign institutions do not have competitive intercollegiate sports programs for which they offer full or partial athletic scholarships. In those countries where athletic scholarships are available, they exist on a far more limited scale than is the case in the United States. Because of this, the Secretary believes that it is unreasonable to hold foreign institutions to the same standards as American institutions given the differences between our systems.

    Intercollegiate Athletic Program Participation Rates and Financial Support (Equity in Athletics Disclosure Act) (34 CFR 668.41(g) and 668.47(c))

    Requirement: The Equity in Athletics Disclosure Act (EADA) is intended to provide prospective students information about an institution's efforts to provide equitable athletic opportunities for its men and women students. Any coeducational institution of higher education that participates in a title IV, HEA program and has an intercollegiate athletic program must prepare an annual EADA report. The report includes participation rates, financial support, and other information on men's and women's intercollegiate athletic programs. Institutions must also submit their EADA report to the Department.

    Reason: The college athletics structure in the United States is unique. Foreign institutions do not generally have significant numbers of U.S. students participating in competitive intercollegiate sports programs for whom this information would be relevant. Moreover, we are not aware of other countries that require compilation of this or similar information for disclosure to students. Because of this, the Secretary believes that it is unreasonable to hold foreign institutions to the same standards as American institutions given the differences between our systems.

    Completion/Graduation and Transfer-Out Rates (Including Disaggregated Completion/Graduation Rates) (34 CFR 668.41(d) and 668.45)

    Requirement: Each institution must annually make available to prospective and enrolled students the completion or graduation rate of certificate- or degree-seeking, first-time, full-time, undergraduate students. The data are to be available by July 1 each year for the most recent cohort that has had 150 percent of normal time for completion by August 31 of the prior year.

    If the information is requested by a prospective student, it must be made available prior to the student's enrolling or entering into any financial obligation with the institution. The disaggregated rates have to be disclosed only if the number of students in each group is sufficient to yield statistically reliable information and not reveal personally identifiable information about an individual student.

    Reason: The Secretary is aware that the laws of other countries may not allow for data to be disaggregated in the way required by these regulations. This situation could make the disclosure both inconsistent with the laws of those countries and unhelpful for American students.

    Placement in Employment (34 CFR 668.41(d))

    Requirement: Institutions must make available to current and prospective students information regarding the placement in employment of, and types of employment obtained by, graduates of the institution's degree or certificate programs. Under this provision, institutions are not required to calculate placement rates, but an institution must disclose any placement rates it calculates for the school or any program.

    Reason: This information is not likely to be helpful to American students studying in foreign institutions, most of whom eventually return to the United States, because it would be based on the placement of students from the institution who work in the institution's host country where conditions for employment may be different.

    Job Placement Rates (34 CFR 668.14(b)(10))

    Requirement: An institution that advertises job placement rates as a means of recruiting students to enroll must make available to prospective students, at or before the time the prospective student applies for enrollment—

    • The most recent available data concerning employment statistics and graduation statistics;

    • Any other information necessary to substantiate the truthfulness of the advertisements; and

    • Relevant State licensing requirements of the State in which the institution is located for any job for which the course of instruction is designed to prepare students.

    Reason: Because American students studying in foreign schools may eventually return to the United States and may not be permitted to work in a foreign country, this information is not likely to be helpful to those students since most of the students in the school are likely to work in the host country where conditions for employment may be different. In addition, the Secretary believes that it is unreasonable to require foreign institutions to track international placements. Moreover, foreign institutions of higher education are not located in a State for which they could provide information on licensing requirements.

    Types of Graduate and Professional Education in Which the Institution's Graduates Enroll (34 CFR 668.41(d)(6))

    Requirement: Institutions must make available to current and prospective students information regarding the types of graduate and professional education in which graduates of the institution's four-year degree programs enroll. Institutions must identify the source of the information, and any timeframes and methodology associated with it.

    Reason: This information is not likely to be helpful to American students studying in foreign institutions, most of whom eventually return to the United States, because most of the students included in the institution's report would be likely to pursue graduate school in the institution's host country where conditions may be different.

    Retention Rate (34 CFR 668.41(d)(3))

    Requirement: Institutions must make available to current and prospective students the retention rate of certificate or degree seeking, first-time, undergraduate students as reported to the Integrated Postsecondary Education Data System (IPEDS).

    Reason: This requirement specifically refers to the retention rate reported to IPEDS. Foreign institutions do not submit information to IPEDS and are not otherwise required to calculate or disclose a retention rate.

    Security Report—Missing Person Notification Policy (34 CFR 668.46(b)(14) and 668.46(h))

    Requirement: An institution that provides any on-campus student housing facility must include in its annual security report a statement of policy regarding missing student notification procedures for students who reside in on-campus housing.

    Reason: This requirement is implemented and administered in connection with the Clery Act, from which Congress specifically exempted foreign institutions. As a result, the Secretary believes requiring foreign institutions to comply with this requirement is inappropriate.

    Fire Safety Report (34 CFR 668.41(e) and 668.49)

    Requirement: By October 1 of each year, an institution that maintains any on-campus student housing facility must distribute an annual fire safety report, or provide a notice of the report, to all enrolled students and current employees.

    Reason: This provision is implemented and administered in connection with the Clery Act, from which Congress specifically exempted foreign institutions. As a result, the Secretary believes requiring foreign institutions to comply with this requirement is inappropriate.

    Fire Log (34 CFR 668.49(d))

    Requirement: An institution that maintains on-campus student housing facilities must maintain a written, easily understood fire log that records, by the date that the fire was reported, any fire that occurred in an on-campus student housing facility. This log must include the nature, date, time, and general location of each fire.

    Reason: This requirement is implemented and administered in connection with the Clery Act, from which Congress specifically exempted foreign institutions. As a result, the Secretary believes requiring foreign institutions to comply with this requirement is inappropriate.

    State Grant Assistance (34 CFR 668.14(b)(11))

    Requirement: Institutions must inform all eligible borrowers enrolled in the institution about the availability of and their eligibility for grant assistance from the State in which the institution is located, and provide sources of information about grant assistance from other States to borrowers from other States.

    Reason: This requirement is inapplicable to foreign institutions because this requirement applied exclusively to student borrowers with Federal Family Education Loan (FFEL) program loans. No new FFEL loans have been made since July 1, 2010, and it is highly unlikely that current students at foreign institutions have FFEL loans.

    II. Non-Regulatory Consumer Information Requirements Inapplicable to Foreign Institutions of Higher Education Notice of Federal Student Financial Aid Penalties for Drug Law Violations (20 U.S.C. 1092(k))

    Requirement: Each institution must provide to every student upon enrollment a separate, clear, and conspicuous written notice with information on the penalties associated with drug-related offenses under section 484(r) of the HEA. Institutions must also timely notify each student who has lost eligibility for any grant, loan, or work-study assistance as a result of penalties under section 484(r)(1) of the HEA of the loss of eligibility and the ways in which to regain eligibility under section 484(r)(2) of the HEA.

    Reason: U.S. drug laws do not apply in foreign countries and the rules and penalties mentioned in this provision would not apply to U.S. students while they are attending a foreign institution. Therefore, the Secretary believes that it is unnecessary for foreign institutions to disclose rules and policies that are not applicable to the institution and its students and that may be incompatible with the laws of the country in which the institution is located.

    Vaccinations Policy (20 U.S.C. 1092(a)(1))

    Requirement: Institutions must make available to current and prospective students information about institutional policies regarding vaccinations.

    Reason: These requirements were created to address specific public health issues in the United States. Any U.S. students seeking to study at a foreign institution must comply with requirements for entry into the institution's home country, including those related to vaccinations. As a result, the Secretary believes that it is inappropriate to apply vaccination requirements in the HEA to foreign institutions.

    Student Body Diversity (20 U.S.C. 1092(a)(1)(Q))

    Requirement: Institutions must make available to current and prospective students information about student body diversity, including the percentage of enrolled, full-time students in the following categories:

    • Male.

    • Female.

    • Self-identified members of a major racial or ethnic group.

    • Federal Pell Grant recipients.

    Reason: Foreign institutions are not eligible to participate in the Pell Grant Program. Further, the racial and ethnic groups used for this disclosure are defined in IPEDS, a system that foreign institutions do not use, and other countries may have different definitions and reporting laws regarding gender, racial, and ethnic groups. For these reasons, the Secretary believes it is impractical for foreign institutions to comply with this requirement.

    Textbook Information (20 U.S.C. 1015b)

    Requirement: To the maximum extent practicable, and in a manner of the institution's choosing, each institution must disclose on its internet course schedule used for preregistration and registration purposes, the International Standard Book Number (ISBN) and retail price information of required and recommended textbooks and supplemental materials for each course listed. If the ISBN is not available, the institution must include in the internet course schedule the author, title, publisher, and copyright date for the textbook or supplemental material.

    If a college bookstore is operated by or affiliated with the institution, the institution must make available as soon as practicable the most accurate information available regarding—

    • The institution's course schedule for the subsequent academic period;

    • The information provided for students regarding the required and recommended textbooks and supplemental materials for each course or class; and

    • The number of students enrolled in each course or class and the maximum student enrollment for each course or class.

    Reason: The textbook requirements were created to address concerns specific to the United States involving the price of textbooks. These concerns are less apparent at foreign institutions. English language programs offered by foreign institutions generally use the international editions of texts, which are usually available for purchase at prices far below those of American editions.1 Accordingly, the Secretary is exempting foreign institutions from these requirements.

    1 Lewin, Tamar. (2003, October 21). Students Find $100 Textbooks Cost $50, Purchased Overseas. The New York Times, Retrieved from https://www.nytimes.com/2003/10/21/us/students-find-100-textbooks-cost-50-purchased-overseas.html.

    Accountability for Programs That Prepare Teachers (20 U.S.C. 1022d-1022g)

    Requirement: Each institution that provides a teacher preparation program and admits students receiving Federal student financial aid must provide a report annually to the State and to the general public. The States must submit to the Department, and make available to the public, an annual report containing institutional and State-level information. The Department makes the State reports available to the public.

    Reason: Foreign institutions are not located in a State and are not required to prepare or submit this report.

    Voter Registration Forms (20 U.S.C. 1094(a)(23))

    Requirement: Each institution must—

    • Make a good faith effort to distribute a mail voter registration form to each student enrolled in a degree or certificate program and physically in attendance at the institution;

    • Make the voter registration form widely available to students; and

    • Request the forms from the State 120 days prior to the deadline for registering to vote within the State.

    Reason: Because foreign institutions are not in a State, this requirement does not apply.

    Constitution Day (36 U.S.C. 106)

    Requirement: Constitution Day is September 17 of each year, commemorating the September 17, 1787 signing of the U.S. Constitution. Institutions that receive Federal funds are required to hold an appropriate educational program about the Constitution for their students.

    Reason: The Secretary believes that it is inappropriate to require institutions located outside the U.S. to conduct an educational program on another nation's Constitution.

    Accessible Format: Individuals with disabilities can obtain this document in an accessible format (e.g., braille, large print, audiotape or compact disc) on request to the program contact person listed under FOR FURTHER INFORMATION CONTACT.

    If you use a telecommunications device for the deaf or a text telephone, call the Federal Relay Service, toll free, at 1-800-877-8339.

    Electronic Access to This Document: The official version of this document is the document published in the Federal Register. You may access the official edition of the Federal Register and the Code of Federal Regulations via the Federal Digital System at: www.thefederalregister.org/fdsys. At this site you can view this document, as well as all other documents of this Department published in the Federal Register, in text or Portable Document Format (PDF). To use PDF you must have Adobe Acrobat Reader, which is available free at the site.

    You may also access documents of the Department published in the Federal Register by using the article search feature at: www.federalregister.gov. Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department.

    Dated: November 23, 2018. Betsy DeVos, Secretary of Education.
    [FR Doc. 2018-25929 Filed 11-23-18; 4:15 pm] BILLING CODE 4000-01-P
    LIBRARY OF CONGRESS Copyright Royalty Board 37 CFR Part 380 [Docket No. 14-CRB-0001-WR (2016-2020) COLA 2019] Cost of Living Adjustment to Royalty Rates for Webcaster Statutory License AGENCY:

    Copyright Royalty Board (CRB), Library of Congress.

    ACTION:

    Final rule; cost of living adjustment.

    SUMMARY:

    The Copyright Royalty Judges announce a cost of living adjustment (COLA) in the royalty rates that commercial and noncommercial noninteractive webcasters pay for eligible transmissions pursuant to the statutory licenses for the public performance of and for the making of ephemeral reproductions of sound recordings.

    DATES:

    Effective date: January 1, 2019.

    Applicability dates: These rates are applicable to the period January 1, 2019, through December 31, 2019.

    FOR FURTHER INFORMATION CONTACT:

    Anita Blaine, CRB Program Assistant, by telephone at (202) 707-7658 or by email at [email protected]

    SUPPLEMENTARY INFORMATION:

    Sections 112(e) and 114(f) of the Copyright Act, title 17 of the United States Code, create statutory licenses for certain digital performances of sound recordings and the making of ephemeral reproductions to facilitate transmission of those sound recordings. On May 2, 2016, the Copyright Royalty Judges (Judges) adopted final regulations governing the rates and terms of copyright royalty payments under those licenses for the license period 2016-2020 for performances of sound recordings via eligible transmissions by commercial and noncommercial noninteractive webcasters. See 81 FR 26316.

    Pursuant to those regulations, at least 25 days before January 1 of each year from 2017 to 2020, the Judges shall publish in the Federal Register notice of a COLA applicable to the royalty fees for performances of sound recordings via eligible transmissions by commercial and noncommercial noninteractive webcasters. 37 CFR 380.10.

    The adjustment in the royalty fee shall be based on a calculation of the percentage increase in the CPI-U from the CPI-U published in November 2015 (237.838), according to the formula (1 + (Cy−237.838)/237.838) × R2016, where Cy is the CPI-U published by the Secretary of Labor before December 1 of the preceding year and R2016 is the royalty rate for 2016; i.e., for commercial webcasters $0.0022 per subscription performance or $0.0017 per nonsubscription performance, or for noncommercial webcasters $0.0018 per performance for all digital audio transmissions in excess of 159,140 Aggregate Tuning Hours (ATH) in a month on a channel or station. The adjustment shall be rounded to the nearest fourth decimal place. 37 CFR 380.10(c). The CPI-U published by the Secretary of Labor from the most recent index published before December 1, 2018, is 252.885.1 Applying the formula in 37 CFR 380.10(c) and rounding to the nearest fourth decimal place results in an increase in the rates for 2019.

    1 As announced on November 14, 2018, by the Bureau of Labor Statistics in its News Release—Consumer Price Index October 2018, available at http://www.bls.gov/news.release/pdf/cpi.pdf at 4.

    The 2019 rate for eligible transmission of sound recordings by commercial webcasters is a rate of $0.0023 per subscription performance and a rate of $0.0018 per nonsubscription performance.

    Application of the increase to rates for noncommercial webcasters results in a 2019 rate of $0.0019 per performance for all digital audio transmissions in excess of 159,140 ATH in a month on a channel or station.

    As provided in 37 CFR 380.10(d), the royalty fee for making ephemeral recordings under section 112 of the Copyright Act to facilitate digital transmission of sound recordings under section 114 of the Copyright Act is included in the section 114 royalty fee and comprises 5% of the total fee.

    List of Subjects in 37 CFR Part 380

    Copyright, Sound recordings.

    Final Regulations

    In consideration of the foregoing, the Judges amend part 380 of title 37 of the Code of Federal Regulations as follows:

    PART 380—RATES AND TERMS FOR TRANSMISSIONS BY ELIGIBLE NONSUBSCRIPTION SERVICES AND NEW SUBSCRIPTION SERVICES AND FOR THE MAKING OF EPHEMERAL REPRODUCTIONS TO FACILITATE THOSE TRANSMISSIONS 1. The authority citation for part 380 continues to read as follows: Authority:

    17 U.S.C. 112(e), 114(f), 804(b)(3).

    2. Section 380.10 is amended by revising paragraph (a) to read as follows:
    § 380.10 Royalty fees for the public performance of sound recordings and the making of ephemeral recordings.

    (a) Royalty fees. For the year 2019, Licensees must pay royalty fees for all Eligible Transmissions of sound recordings at the following rates:

    (1) Commercial webcasters: $0.0023 per performance for subscription services and $0.0018 per performance for nonsubscription services.

    (2) Noncommercial webcasters. $500 per year for each channel or station and $0.0019 per performance for all digital audio transmissions in excess of 159,140 ATH in a month on a channel or station.

    Suzanne M. Barnett, Chief Copyright Royalty Judge.
    [FR Doc. 2018-25908 Filed 11-27-18; 8:45 am] BILLING CODE 1410-72-P
    LIBRARY OF CONGRESS Copyright Royalty Board 37 CFR Part 381 [Docket No. 16-CRB-0002-PBR (2018-2022) COLA (2019)] Cost of Living Adjustment to Public Broadcasters Compulsory License Royalty Rate AGENCY:

    Copyright Royalty Board, Library of Congress.

    ACTION:

    Final rule; cost of living adjustment.

    SUMMARY:

    The Copyright Royalty Judges announce a cost of living adjustment (COLA) to the royalty rate that noncommercial radio stations at certain colleges, universities, and other educational institutions that are not affiliated with National Public Radio must pay for the use in 2019 of published nondramatic musical compositions in the SESAC repertory pursuant to the statutory license under the Copyright Act for noncommercial broadcasting. Because the current rates did not become final until January 2018, the revised regulation includes the revised rate for 2018 that reflects the cost of living adjustment announced in 2017.

    DATES:

    Effective date: December 28, 2018. Applicability dates: These rates are applicable to the period beginning January 1, 2019, and ending December 31, 2019.

    FOR FURTHER INFORMATION CONTACT:

    Anita Blaine, CRB Program Assistant, by telephone at (202) 707-7658 or by email at [email protected]

    SUPPLEMENTARY INFORMATION:

    Section 118 of the Copyright Act, title 17 of the United States Code, creates a statutory license for the use of published nondramatic musical works and published pictorial, graphic, and sculptural works in connection with noncommercial broadcasting.

    On January 19, 2018, the Copyright Royalty Judges (Judges) adopted final regulations governing the rates and terms of copyright royalty payments under section 118 of the Copyright Act for the license period 2018-2022. See 83 FR 2743. Pursuant to these regulations, on or before December 1 of each year, the Judges shall publish in the Federal Register notice of the change in the cost of living and a revised schedule of the rates codified at § 381.5(c)(3) relating to compositions in the repertory of SESAC. The adjustment, fixed to the nearest dollar, shall be the greater of (1) the change in the cost of living as determined by the Consumer Price Index (all consumers, all items) (“CPI-U”) “during the period from the most recent index published prior to the previous notice to the most recent index published prior to December 1, of that year” or (2) 1.5%. 37 CFR 381.10.

    The change in the cost of living as determined by the CPI-U during the period from the most recent index published prior to the previous notice, i.e., before December 1, 2017,1 to the most recent index published before December 1, 2018, is 2.5%.2 In accordance with 37 CFR 381.10(b), the Judges announce that the COLA for calendar year 2019 shall be 2.5%. Application of the 2.5% COLA to the 2018 rate for the performance of published nondramatic musical compositions in the repertory of SESAC—$155 per station 3 —results in an adjusted rate of $159 per station.

    1See Cost of Living Adjustment to Satellite Carrier Compulsory License Royalty Rates, 82 FR 55946 (Nov. 27, 2017) (previous notice of the change in cost of living).

    2 On November 14, 2018, the Bureau of Labor Statistics announced that the CPI-U increased 2.5% over the last 12 months.

    3 The 2018 rate is calculated by applying a 2% COLA (based on the CPI-U published in November 2017) to the rate for 2017 ($152). See https://www.bls.gov/news.release/archives/cpi_11152017.htm (last accessed on November 14, 2018).

    List of Subjects in 37 CFR Part 381

    Copyright, Music, Radio, Television, Rates.

    Final Regulations

    In consideration of the foregoing, the Judges amend part 381 of title 37 of the Code of Federal Regulations as follows:

    PART 381—USE OF CERTAIN COPYRIGHTED WORKS IN CONNECTION WITH NONCOMMERCIAL EDUCATIONAL BROADCASTING 1. The authority citation for part 381 continues to read as follows: Authority:

    17 U.S.C. 118, 801(b)(1), and 803.

    2. Section 381.5 is amended by revising paragraphs (c)(3)(i) and (ii) to read as follows:
    § 381.5 Performance of musical compositions by public broadcasting entities licensed to colleges and universities.

    (c) * * *

    (3) * * *

    (i) 2018: $155 per station.

    (ii) 2019: $159 per station.

    Suzanne M. Barnett, Chief Copyright Royalty Judge.
    [FR Doc. 2018-25906 Filed 11-27-18; 8:45 am] BILLING CODE 1410-72-P
    LIBRARY OF CONGRESS Copyright Royalty Board 37 CFR Part 386 [Docket No. 18-CRB-0011-SA-COLA (2019)] Cost of Living Adjustment to Satellite Carrier Compulsory License Royalty Rates AGENCY:

    Copyright Royalty Board (CRB), Library of Congress.

    ACTION:

    Final rule; cost of living adjustment.

    SUMMARY:

    The Copyright Royalty Judges announce a cost of living adjustment (COLA) of 2.5% in the royalty rates satellite carriers pay for a compulsory license under the Copyright Act. The COLA is based on the change in the Consumer Price Index from October 2017 to October 2018.

    DATES:

    Effective date: January 1, 2019.

    Applicability dates: These rates are applicable to the period January 1, 2019, through December 31, 2019.

    FOR FURTHER INFORMATION CONTACT:

    Anita Blaine, CRB Program Assistant, by telephone at (202) 707-7658 or by email at [email protected]

    SUPPLEMENTARY INFORMATION:

    The satellite carrier compulsory license establishes a statutory copyright licensing scheme for the distant retransmission of television programming by satellite carriers. 17 U.S.C. 119. Congress created the license in 1988 and has reauthorized the license for additional five-year periods, most recently with the passage of the STELA Reauthorization Act of 2014, Public Law 113-200.

    On August 31, 2010, the Copyright Royalty Judges (Judges) adopted rates for the section 119 compulsory license for the 2010-2014 term. See 75 FR 53198. The rates were proposed by Copyright Owners and Satellite Carriers 1 and were unopposed. Id. Section 119(c)(2) of the Copyright Act provides that, effective January 1 of each year, the Judges shall adjust the royalty fee payable under Section 119(b)(1)(B) “to reflect any changes occurring in the cost of living as determined by the most recent Consumer Price Index (for all consumers and for all items) [CPI-U] published by the Secretary of Labor before December 1 of the preceding year.” Section 119 also requires that “[n]otification of the adjusted fees shall be published in the Federal Register at least 25 days before January 1.” 17 U.S.C. 119(c)(2).

    1 Program Suppliers and Joint Sports Claimants comprised the Copyright Owners while DIRECTV, Inc., DISH Network, LLC, and National Programming Service, LLC, comprised the Satellite Carriers.

    The change in the cost of living as determined by the CPI-U during the period from the most recent index published before December 1, 2017, to the most recent index published before December 1, 2018, is 2.5%.2 Application of the 2.5% COLA to the current rate for the secondary transmission of broadcast stations by satellite carriers for private home viewing—28 cents per subscriber per month—results in a rate of 29 cents per subscriber per month (rounded to the nearest cent). See 37 CFR 386.2(b)(1). Application of the 2.5% COLA to the current rate for viewing in commercial establishments—58 cents per subscriber per month—results in a rate of 59 cents per subscriber per month (rounded to the nearest cent). See 37 CFR 386.2(b)(2).

    2 On November 14, 2018, the Bureau of Labor Statistics announced that the CPI-U increased 2.5% over the last 12 months.

    List of Subjects in 37 CFR Part 386

    Copyright, Satellite, Television.

    Final Regulations

    In consideration of the foregoing, the Judges amend part 386 of title 37 of the Code of Federal Regulations as follows:

    PART 386—ADJUSTMENT OF ROYALTY FEES FOR SECONDARY TRANSMISSIONS BY SATELLITE CARRIERS 1. The authority citation for part 386 continues to read as follows: Authority:

    17 U.S.C. 119(c), 801(b)(1).

    2. Section 386.2 is amended by adding paragraphs (b)(1)(x) and (b)(2)(x) to read as follows:
    § 386.2 Royalty fee for secondary transmission by satellite carriers.

    (b) * * *

    (1) * * *

    (x) 2019: 29 cents per subscriber per month.

    (2) * * *

    (x) 2019: 59 cents per subscriber per month.

    Suzanne M. Barnett, Chief Copyright Royalty Judge.
    [FR Doc. 2018-25907 Filed 11-27-18; 8:45 am] BILLING CODE 1410-72-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 51 [EPA-HQ-OAR-2017-0175; FRL-9987-02-OAR] RIN 2060-AT52 Air Quality: Revision to the Regulatory Definition of Volatile Organic Compounds—Exclusion of cis-1,1,1,4,4,4-hexafluorobut-2-ene (HFO-1336mzz-Z) AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Final rule.

    SUMMARY:

    On May 1, 2018, the U.S. Environmental Protection Agency (EPA) published a proposed rule seeking comments in response to a petition requesting the revision of the EPA's regulatory definition of volatile organic compounds (VOC) to exempt cis-1,1,1,4,4,4-hexafluorobut-2-ene (also known as HFO-1336mzz-Z; CAS number 692-49-9). The EPA is now taking final action to revise the regulatory definition of VOC under the Clean Air Act (CAA). This final action adds HFO-1336mzz-Z to the list of compounds excluded from the regulatory definition of VOC on the basis that this compound makes a negligible contribution to tropospheric ozone (O3) formation.

    DATES:

    This final rule is effective on January 28, 2019.

    ADDRESSES:

    The EPA has established a docket for this action under Docket ID No. EPA-HQ-OAR-2017-0175. All documents in the docket are listed on the https://www.regulations.gov website. Although listed in the index, some information is not publicly available, e.g., Confidential Business Information or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted materials, is not placed on the internet and will be publicly available only in hard copy form. Publicly available docket materials are available electronically through https://www.regulations.gov.

    FOR FURTHER INFORMATION CONTACT:

    Dr. Souad Benromdhane, Office of Air Quality Planning and Standards, Health and Environmental Impacts Division, Mail Code C539-07, Environmental Protection Agency, Research Triangle Park, NC 27711; telephone: (919) 541-4359; fax number: (919) 541-5315; email address: [email protected].

    SUPPLEMENTARY INFORMATION: Table of Contents I. Does this action apply to me? II. Background A. The EPA's VOC Exemption Policy B. Petition To List HFO-1336mzz-Z as an Exempt Compound III. The EPA's Assessment of the Petition A. Contribution to Tropospheric Ozone Formation B. Potential Impacts on Other Environmental Endpoints 1. Contribution to Stratospheric Ozone Depletion 2. The Significant New Alternatives Policy (SNAP) Program Acceptability Findings 3. Toxicity 4. Contribution to Climate Change C. Response to Comments and Conclusion IV. Final Action V. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review B. Executive Order 13771: Reducing Regulations and Controlling Regulatory Costs C. Paperwork Reduction Act (PRA) D. Regulatory Flexibility Act (RFA) E. Unfunded Mandates Reform Act (UMRA) F. Executive Order 13132: Federalism G. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments H. Executive Order 13045: Protection of Children From Environmental Health and Safety Risks I. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution or Use J. National Technology Transfer and Advancement Act (NTTAA) K. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations L. Congressional Review Act (CRA) M. Judicial Review I. Does this action apply to me?

    Entities potentially affected by this final rule include, but are not necessarily limited to, the following: State and local air pollution control agencies that adopt and implement regulations to control air emissions of VOC; and industries manufacturing and/or using HFO-1336mzz-Z for use in polyurethane rigid insulating foams, refrigeration, and air conditioning. Potential entities that may be affected by this action include:

    Table 1—Potentially Affected Entities by North American Industrial Classification System (NAICS) Code Category NAICS code Description of regulated entities Industry 326140 Polystyrene Foam Product Manufacturing. Industry 326150 Urethane and Other Foam Product (except Polystyrene) Manufacturing. Industry 333415 Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing. Industry 3363 Motor Vehicle Parts Manufacturing. Industry 336611 Ship Building and Repairing. Industry 336612 Boat Building. Industry 339999 All other Miscellaneous Manufacturing.

    This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities that might be affected by this deregulatory action. This table lists the types of entities that the EPA is now aware of that could potentially be affected to some extent by this action. Other types of entities not listed in the table could also be affected to some extent. To determine whether your entity is directly or indirectly affected by this action, you should consult your state or local air pollution control and/or air quality management agencies.

    II. Background A. The EPA's VOC Exemption Policy

    Tropospheric O3, commonly known as smog, is formed when VOC and nitrogen oxides (NOX) react in the atmosphere in the presence of sunlight. Because of the harmful health effects of O3, the EPA and state governments limit the amount of VOC that can be released into the atmosphere. VOC form O3 through atmospheric photochemical reactions, and different VOC have different levels of reactivity. That is, different VOC do not react to form O3 at the same speed or do not form O3 to the same extent. Some VOC react slowly or form less O3; therefore, changes in their emissions have limited effects on local or regional O3 pollution episodes. It has been the EPA's policy since 1971, that certain organic compounds with a negligible level of reactivity should be excluded from the regulatory definition of VOC in order to focus VOC control efforts on compounds that significantly affect O3 concentrations. The EPA also believes that exempting such compounds creates an incentive for industry to use negligibly reactive compounds in place of more highly reactive compounds that are regulated as VOC. The EPA lists compounds that it has determined to be negligibly reactive in its regulations as being excluded from the regulatory definition of VOC (40 CFR 51.100(s)).

    The CAA requires the regulation of VOC for various purposes. Section 302(s) of the CAA specifies that the EPA has the authority to define the meaning of “VOC” and, hence, what compounds shall be treated as VOC for regulatory purposes. The policy of excluding negligibly reactive compounds from the regulatory definition of VOC was first laid out in the “Recommended Policy on Control of Volatile Organic Compounds” (42 FR 35314, July 8, 1977) (from here forward referred to as the 1977 Recommended Policy) and was supplemented subsequently with the “Interim Guidance on Control of Volatile Organic Compounds in Ozone State Implementation Plans” (70 FR 54046, September 13, 2005) (from here forward referred to as the 2005 Interim Guidance). The EPA uses the reactivity of ethane as the threshold for determining whether a compound has negligible reactivity. Compounds that are less reactive than, or equally reactive to, ethane under certain assumed conditions may be deemed negligibly reactive and, therefore, suitable for exemption from the regulatory definition of VOC. Compounds that are more reactive than ethane continue to be considered VOC for regulatory purposes and, therefore, are subject to control requirements. The selection of ethane as the threshold compound was based on a series of smog chamber experiments that underlay the 1977 Recommended Policy.

    The EPA has used three different metrics to compare the reactivity of a specific compound to that of ethane: (i) The rate constant for reaction with the hydroxyl radical (OH) (known as kOH); (ii) the maximum incremental reactivity (MIR) on a reactivity per unit mass basis; and (iii) the MIR expressed on a reactivity per mole basis. Differences between these three metrics are discussed below.

    The kOH is the rate constant of the reaction of the compound with the OH radical in the air. This reaction is often, but not always, the first and rate-limiting step in a series of chemical reactions by which a compound breaks down in the air and contributes to O3 formation. If this step is slow, the compound will likely not form O3 at a very fast rate. The kOH values have long been used by the EPA as metrics of photochemical reactivity and O3-forming activity, and they were the basis for most of the EPA's early exemptions of negligibly reactive compounds from the regulatory definition of VOC. The kOH metric is inherently a molar-based comparison, i.e., it measures the rate at which molecules react.

    The MIR, both by mole and by mass, is a more updated metric of photochemical reactivity derived from a computer-based photochemical model, and it has been used as a metric of reactivity since 1995. This metric considers the complete O3-forming activity of a compound over multiple hours and through multiple reaction pathways, not merely the first reaction step with OH. Further explanation of the MIR metric can be found in Carter (1994).

    The EPA has considered the choice between MIRs with a molar or mass basis for the comparison to ethane in past rulemakings and guidance. In the 2005 Interim Guidance, the EPA stated:

    [A] comparison to ethane on a mass basis strikes the right balance between a threshold that is low enough to capture compounds that significantly affect ozone concentrations and a threshold that is high enough to exempt some compounds that may usefully substitute for more highly reactive compounds.

    When reviewing compounds that have been suggested for VOC-exempt status, EPA will continue to compare them to ethane using kOH expressed on a molar basis and MIR values expressed on a mass basis.

    The 2005 Interim Guidance notes that the EPA will consider a compound to be negligibly reactive if it is equally as or less reactive than ethane based on either kOH expressed on a molar basis or MIR values expressed on a mass basis.

    The molar comparison of MIR is more consistent with the original smog chamber experiments, which compared equal molar concentrations of individual VOCs, supporting the selection of ethane as the threshold, while the mass-based comparison of MIR is consistent with how MIR values and other reactivity metrics are applied in reactivity-based emission limits. It is, however, important to note that the mass-based comparison is slightly less restrictive than the molar-based comparison in that a few more compounds would qualify as negligibly reactive.

    Given the two goals of the exemption policy articulated in the 2005 Interim Guidance, the EPA believes that ethane continues to be an appropriate threshold for defining negligible reactivity. And, to encourage the use of environmentally beneficial substitutions, the EPA believes that a comparison to ethane on a mass basis strikes the right balance between a threshold that is low enough to capture compounds that significantly affect O3 concentrations and a threshold that is high enough to exempt some compounds that may usefully substitute for more highly reactive compounds.

    The 2005 Interim Guidance also noted that concerns have sometimes been raised about the potential impact of a VOC exemption on environmental endpoints other than O3 concentrations, including fine particle formation, air toxics exposures, stratospheric O3 depletion, and climate change. The EPA has recognized, however, that there are existing regulatory or non-regulatory programs that are specifically designed to address these issues, and the EPA continues to believe in general that the impacts of VOC exemptions on environmental endpoints other than O3 formation can be adequately addressed by these programs. The VOC exemption policy is intended to facilitate attainment of the O3 National Ambient Air Quality Standards (NAAQS) and VOC exemption decisions will continue to be based primarily on consideration of a compound's contribution to O3 formation. However, if the EPA determines that a particular VOC exemption is likely to result in a significant increase in the use of a compound and that the increased use would pose a significant risk to human health or the environment that would not be addressed adequately by existing programs or policies, then the EPA may exercise its judgment accordingly in deciding whether to grant an exemption.

    B. Petition To List HFO-1336mzz-Z as an Exempt Compound

    DuPont Chemicals & Fluoroproducts (DuPont) submitted a petition to the EPA on February 14, 2014, requesting that cis-1,1,1,4,4,4-hexafluorobut-2-ene (HFO-1336mzz-Z; CAS number 692-49-9) be exempted from the regulatory definition of VOC. The petition was based on the argument that HFO-1336mzz-Z has low reactivity relative to ethane. The petitioner indicated that HFO-1336mzz-Z may be used in a variety of applications as a replacement for foam expansion or blowing agents with higher global warming potential (GWP) (>700 GWP) for use in polyurethane rigid insulating foams, among others. It is also a new developmental refrigerant as a potential working fluid for Organic Rankine Cycles (ORC).1

    1 Konstantinos Kontomaris, 2014, HFO-1336mzz-Z High Temperature Chemical Stability and Use as a Working Fluid in Organic Rankine Cycles. International Refrigeration and Air Conditioning Conference. Purdue University: https://www.chemours.com/Refrigerants/en_US/products/Opteon/Stationary_Refrigeration/assets/downloads/2014_Purdue-Paper-Opteon-MZ.pdf.

    To support its petition, DuPont referenced several documents, including one peer-reviewed journal article on HFO-1336mzz-Z reaction rates (Baasandorj, M. et al., 2011). DuPont also provided a supplemental technical report on the MIR of HFO-1336mzz-Z (Carter, 2011a). Per this report, the MIR of HFO-1336mzz-Z is 0.04 gram (g) O3/g HFO-1336mzz-Z on the mass-based MIR scale. This reactivity rate is 86 percent lower than that of ethane (0.28 g O3/g ethane). The reactivity rate kOH for the gas-phase reaction of OH radicals with HFO-1336mzz-Z (kOH) has been measured to be 4.91 × 10−13 centimeter (cm)3/molecule-seconds at ~296 degrees Kelvin (K) (Pitts et al., 1983, Baasandorj et al., 2011). This kOH rate is twice as high as that of ethane (kOH of ethane = 2.4 × 10−13 cm3/molecule-sec at ~298 K) and, therefore, suggests that HFO-1336mzz-Z is twice as reactive as ethane. In most cases, chemicals with high kOH values also have high MIR values, but for HFO-1336mzz-Z, the products that are formed in subsequent reactions are expected to be poly fluorinated compounds, which do not contribute to O3 formation (Baasandorj et al., 2011). Based on the current scientific understanding of tetrafluoroalkene reactions in the atmosphere, it is unlikely that the actual O3 impact on a mass basis would equal or exceed that of ethane in the scenarios used to calculate VOC reactivity (Baasandorj et al., 2011; Carter, 2011a).

    To address the potential for stratospheric O3 impacts, the petitioner contended that, because the atmospheric lifetime of HFO-1336mzz-Z due to loss by OH reaction was estimated to be ~20 days and it does not contain chlorine or bromine, it is not expected to contribute to the depletion of the stratospheric O3 layer.

    III. The EPA's Assessment of the Petition

    On May 1, 2018, the EPA published a proposed rulemaking (83 FR 19026) seeking comments in response to the petition to revise the EPA's regulatory definition of VOC for exemption of HFO-1336mzz-Z. The EPA is taking final action to respond to the petition by exempting HFO-1336mzz-Z from the regulatory definition of VOC. This action is based on consideration of the compound's low contribution to tropospheric O3 and the low likelihood of risk to human health or the environment, including stratospheric O3 depletion, toxicity, and climate change. Additional information on these topics is provided in the following sections.

    A. Contribution to Tropospheric Ozone Formation

    As noted in studies cited by the petitioner, HFO-1336mzz-Z has a MIR value of 0.04 g O3/g VOC for “averaged conditions,” versus 0.28 g O3/g VOC for ethane (Carter, 2011). Therefore, the EPA considers HFO-1336mzz-Z to be negligibly reactive and eligible for VOC-exempt status in accordance with the Agency's long-standing policy that compounds should so qualify where either reactivity metric (kOH expressed on a molar basis or MIR expressed on a mass basis) indicates that the compound is less reactive than ethane. While the overall atmospheric reactivity of HFO-1336mzz-Z was not studied in an experimental smog chamber, the chemical mechanism derived from other chamber studies (Carter, 2011) was used to model the complete formation of O3 for an entire single day under realistic atmospheric conditions (Carter, 2011a). Therefore, the EPA believes that the MIR value calculated in the Carter study submitted by the petitioner is reliable.

    Table 2 presents three reactivity metrics for HFO-1336mzz-Z as they compare to ethane.

    Table 2—Reactivities of Ethane and HFO-1336mzz-Z Compound kOH
  • (cm3/molecule-sec)
  • Maximum incremental reactivity (MIR)
  • (g O3/mole VOC)
  • Maximum incremental reactivity (MIR)
  • (g O3/g VOC)
  • Ethane 2.4 × 10−13 8.4 0.28 HFO-1336mzz-Z 4.91 × 10−13 6.6 0.04 Notes: 1. kOH value at 298 K for ethane is from Atkinson et al., 2006 (page 3626). 2. kOH value at 296 K for HFO-1336mzz-Z is from Baasandorj, 2011. 3. Mass-based MIR value (g O3/g VOC) of ethane is from Carter, 2011. 4. Mass-based MIR value (g O3/g VOC) of HFO-1336mzz-Z is from a supplemental report by Carter, 2011a. 5. Molar-based MIR (g O3/mole VOC) values were calculated from the mass-based MIR (g O3/g VOC) values using the number of moles per gram of the relevant organic compound.

    The reaction rate of HFO-1336mzz-Z with the OH radical (kOH) has been measured to be 4.91 × 10−13 cm3/molecule-sec (Baasandorj et al., 2011); other reactions with O3 and the nitrate radical were negligibly small. The corresponding reaction rate of ethane with OH is 2.4 × 10−13cm3/molecule-sec (Atkinson et al., 2006). The data in Table 2 show that HFO-1336mzz-Z has a higher kOH value than ethane, meaning that it initially reacts twice as fast in the atmosphere as ethane. However, the resulting unsaturated fluorinated compounds in the atmosphere are short lived and react more slowly to form O3 (Baasandorj et al., 2011). The mass based MIR is 0.04 g O3/g VOC and much lower than that of ethane.

    A molecule of HFO-1336mzz-Z is less reactive than a molecule of ethane in terms of complete O3-forming activity as shown by the molar-based MIR (g O3/mole VOC) values. One gram of HFO-1336mzz-Z has a lower capacity than one gram of ethane to form O3 in terms of a mass-based MIR. Thus, following the 2005 Interim Guidance in striking a balance between reactivity on a molar basis as well as a gram basis, the EPA finds HFO-1336mzz-Z to be eligible for exemption from the regulatory definition of VOC based on both the molar- and mass-based MIR.

    B. Potential Impacts on Other Environmental Endpoints

    The EPA's decision to exempt HFO-1336mzz-Z from the regulatory definition of VOC is based on our findings above. However, as noted in the 2005 Interim Guidance, the EPA reserves the right to exercise its judgment in certain cases where an exemption is likely to result in a significant increase in the use of a compound and a subsequent significantly increased risk to human health or the environment. In this case, the EPA does not find that exemption of HFO-1336mzz-Z would result in an increase of risk to human health or the environment, with regard to stratospheric O3 depletion, toxicity and climate change. Additional information on these topics is provided in the following sections.

    1. Contribution to Stratospheric Ozone Depletion

    HFO-1336mzz-Z is unlikely to contribute to the depletion of the stratospheric O3 layer. The O3 depletion potential (ODP) of HFO-1336mzz-Z is expected to be negligible based on several lines of evidence: The absence of chlorine or bromine in the compound and the atmospheric reactions described in Carter (2008). Because HFO-1336mzz-Z has a kOH value that is twice as high as that of ethane (see section III.A “Contribution to Tropospheric Ozone Formation”), it will decay before it has a chance to reach the stratosphere and, thus, will not participate in O3 destruction.

    2. The Significant New Alternatives Policy (SNAP) Program Acceptability Findings

    The SNAP program is the EPA's program to evaluate and regulate substitutes for end-uses historically using O3-depleting chemicals. Under section 612(c) of the CAA, the EPA is required to identify and publish lists of acceptable and unacceptable substitutes for class I or class II O3-depleting substances. Per the SNAP program findings, the ODP of HFO-1336mzz-Z is zero. The SNAP program has listed HFO-1336mzz-Z as an acceptable substitute for a number of foam blowing end-uses provided in 79 FR 62863, October 21, 2014 (USEPA, 2014), and as an acceptable substitute in the refrigeration and air conditioning sector in heat transfer, as well as in chillers and industrial process air conditioning provided in 81 FR 32241, May 23, 2016 (USEPA, 2016).

    3. Toxicity

    Based on screening assessments of the health and environmental risks of HFO-1336mzz-Z, the SNAP program anticipated that users will be able to use the compound without significantly greater health risks than presented by use of other available substitutes for the same uses (USEPA, 2014, 2016).

    The EPA anticipates that HFO-1336mzz-Z will be used consistent with the recommendations specified in the material safety data sheet (SDS) (DuPont, 2011). According to the SDS, potential health effects from inhalation of HFO-1336mzz-Z include skin or eye irritation or frostbite. Exposure to high concentrations of HFO-1336mzz-Z from misuse or intentional inhalation abuse may cause irregular heartbeat. In addition, HFO-1336mzz-Z could cause asphyxiation if air is displaced by vapors in a confined space. The Workplace Environmental Exposure Limit (WEEL) committee of the Occupational Alliance for Risk Science (OARS) reviewed available animal toxicity data and recommends a WEEL for the workplace of 500 parts per million (ppm) (3350 mg/m3) time-weighted average (TWA) for an 8-hour workday as provided in the OARS (OARS, 2014).2 This WEEL was derived based on reduced male body weight in the 13-week rat inhalation toxicity study (Dupont, 2011). The WEEL is also protective against skeletal fluorosis, which may occur at higher exposures because of metabolism. The EPA anticipates that users will be able to meet the WEEL and address potential health risks by following requirements and recommendations in the SDS and other safety precautions common to the refrigeration and air conditioning industry.

    2 Occupational Alliance for Risk Science (OARS-WEELs)—HFO-1336mzz-Z, 2014: https://www.tera.org/OARS/HFO-1336mzz-Z%20WEEL%20FINAL.pdf.

    HFO-1336mzz-Z is not regulated as a hazardous air pollutant (HAP) under title I of the CAA. Also, it is not listed as a toxic chemical under section 313 of the Emergency Planning and Community Right-to-Know Act (EPCRA).

    The Toxic Substances Control Act (TSCA) gives the EPA authority to assess and prevent potential unreasonable risks to human health and the environment before a new chemical substance is introduced into commerce. Section 5 of TSCA requires manufacturers and importers to notify the EPA before manufacturing or importing a new chemical substance by submitting a Premanufacture Notice (PMN) prior to the manufacture (including import) of the chemical. Under the TSCA New Chemicals Program, the EPA then assesses whether an unreasonable risk may, or will, be presented by the expected manufacturing, processing, distribution in commerce, use, and disposal of the new substance. The EPA has determined, however, that domestic manufacturing, use in non-industrial products, or use other than as described in the PMN may cause serious chronic health effects. To mitigate risks identified during the PMN review of HFO-1336mzz-Z, the EPA issued a Significant New Use Rule (SNUR) under TSCA on June 5, 2015, to require persons to submit a Significant New Use Notice (SNUN) to the EPA at least 90 days before they manufacture or process HFO-1336mzz-Z for uses other than those described in the PMN (80 FR 32003, 32005, June 5, 2015). The required notification will provide the EPA with the opportunity to evaluate the intended use and, if necessary, to prohibit or limit that activity before it occurs. The EPA, therefore, believes that existing programs address the risk of toxicity associated with the use of HFO-1336mzz-Z.

    4. Contribution to Climate Change

    The Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report (IPCC AR5) estimated the lifetime of HFO-1336mzz-Z to be approximately 22 days (Baasandorj et al., 2011), and the gas-phase degradation of HFO-1336-mzz-Z is not expected to lead to a significant formation of atmospherically long-lived species. The radiative efficiency of HFO-1336-mzz-Z was calculated to be 0.38 watts per square meter at the earth's surface per part per billion concentration of the material (W m−2 ppb−1) based on Baasandorj et al., 2011. The report estimated the resulting 100-year GWP to be 9, meaning that, over a 100-year period, one ton of HFO-1336mzz-Z traps 9 times as much warming energy as one ton of carbon dioxide (CO2) (IPCC, 2013). HFO-1336mzz-Z's GWP of 9 is lower than those of some of the substitutes in a variety of foam blowing end-uses and in centrifugal and positive displacement chillers, heat transfer, and industrial process air conditioning. HFO-1336mzz-Z was developed to replace other chemicals used for similar end-uses with GWP ranging from 725 to 5,750 such as CFC-11, CFC-113, HCFC-141b and HCFC-22. The petitioner claims that HFO-1336mzz-Z is a better alternative to other substitutes in foam expansion or blowing agents for use in polyurethane rigid insulating foams. Thermal test data and energy efficiency trials indicate that HFO-1336mzz-Z will provide superior insulating value and, thus, reduces climate change impacts both directly by its relatively low GWP and indirectly by decreasing energy consumption throughout the lifecycle of insulated foams in appliances, buildings, refrigerated storage and transportation.

    C. Response to Comments and Conclusion

    The EPA received five comments on the May 1, 2018, notice of proposed rulemaking. One commenter supported the proposed action to exempt HFO-1336mzz-Z from the EPA's definition of VOC in 40 CFR 51.100(s), one opposed the proposed action, and three raised issues that were outside the scope of this rulemaking including a discussion about air and water quality in Asia and Mexico, and climate change. These three anonymous comments failed to identify any specific issue that is germane to our proposal to exempt HFO-1336mzz-Z. Substantial comments and the EPA's responses are provided below.

    Comment: One commenter (ID: EPA-HQ-OAR-2017-0175-0010) expressed concern that “the EPA should not exempt HFO-1336mzz-Z . . . [and that] . . . surely there is a reason it was . . . [regulated as a VOC] in the first place.” The commenter expressed skepticism that “other regulatory groups outside of the EPA” would prevent the compound from being used, if there were other environmental impacts than O3, once the EPA exempted this compound. This commenter also expressed concern that the petitioner's data “could potentially be biased” and they “. . . would like to read a proposal that gets its information from a more unbiased source and considers how it will deal with possible drawbacks of deregulating HFO-1336mzz-Z.”

    Response: The commenter appears to state that HFO-1336mzz-Z should not be exempted from the definition of VOC simply because it is currently included in the definition of VOC. This is a circular argument, and, if followed, the EPA would never be able to exempt any substances from the definition of VOC, even where, as here, scientific data supported such an exemption. The commenter does not provide any scientific evidence that rebuts the petitioner's data supporting the demonstration that HFO-1336mzz-Z is eligible for this exemption.

    The reason HFO-1336mzz-Z is currently regulated as a VOC is because it meets the EPA's definition of VOC in 40 CFR 51.100(s) as “any compound of carbon, excluding carbon monoxide, carbon dioxide, carbonic acid . . . which participates in atmospheric photochemical reactions.” [emphasis added] The petitioner submitted data to the EPA that show HFO-1336mzz-Z negligibly participates in atmospheric photochemical reactions, presenting a better environmental alternative for similar industrial applications, and therefore should be excluded from the definition of VOC. As explained above, our approval would allow states to encourage VOC substitutions with negligibly reactive compounds that would reduce O3 formation.

    The EPA would like to clarify the statement in the proposal which referred to “existing regulatory or non-regulatory programs that are specifically designed to address” other environmental issues besides tropospheric O3 formation, such as fine particle formation, air toxics exposures, stratospheric O3 depletion, and climate change. When referring to existing regulatory or non-regulatory programs, the EPA was not referring to “other regulatory groups outside of the EPA,” as the commenter suggested. Rather, Congress has granted the EPA with other authorities under the CAA that allow the Agency to address these issues specifically (e.g., NAAQS program for fine particle pollution; section 112 for air toxics). As stated in the 2005 Interim Guidance, where an exemption is likely to result in a significant increase in the use of a compound and a subsequent significantly increased risk to human health or the environment, the EPA reserves the right to exercise its judgment and choose not to grant a petition for an exemption from the definition of VOC, even where the substance meets the reactivity metrics. However, as explained in section III.B. of this final rule, the EPA does not believe an exemption of HFO-1336mzz-Z will lead to significant environmental impacts.

    To the extent the commenter is raising concerns that the EPA's action will result in non-EPA organizations treating HFO-1336mzz-Z differently, we note that this action does not prohibit state and local air pollution regulatory agencies from regulating HFO-1336mzz-Z. Some local agencies continue restrictions on the use of certain compounds that have been excluded from the definition of VOC by the EPA.

    With respect to the comment that the petitioner's data could potentially be biased, the EPA uses credible, peer-reviewed information in its review of VOC exemption petitions. In this regard, and as discussed in our proposed rule and in this action, we note that the journal article submitted by DuPont on HFO-1336mzz-Z reaction rates was performed by the National Oceanic and Atmospheric Administration and published in The Journal of Physical Chemistry, a peer-reviewed journal. The other primary document relied on to support the exemption petition was authored by the researcher who developed the MIR scale (Carter, 2011a). Staff in the EPA's Office of Research and Development reviewed these documents as part of the petition assessment process and find that they are consistent with current understanding of atmospheric chemistry. We are not aware of information that would indicate they are biased.

    Therefore, for reasons discussed above, the EPA is finalizing this rule with no changes. The EPA finds that HFO-1336mzz-Z is negligibly reactive with respect to its contribution to tropospheric O3 formation and, thus, may be exempted from the EPA's definition of VOC in 40 CFR 51.100(s). HFO-1336mzz-Z has been listed as acceptable for use in several industrial and commercial refrigeration and air conditioning end-uses, as well as for use as a blowing agent under the SNAP program (USEPA, 2014, 2016). The EPA has also determined that exemption of HFO-1336mzz-Z from the regulatory definition of VOC will not result in an increase of risk to human health and the environment, and, to the extent that use of this compound does have impacts on other environmental endpoints, those impacts are adequately managed by existing programs. For example, HFO-1336mzz-Z has a similar or lower stratospheric O3 depletion potential than available substitutes in those end-uses, and the toxicity risk from using HFO-1336mzz-Z is not significantly greater than the risk from using other available alternatives for the same uses. The EPA has concluded that non-tropospheric O3-related risks associated with potential increased use of HFO-1336mzz-Z are adequately managed by SNAP. The EPA does not expect significant use of HFO-1336mzz-Z in applications not covered by the SNAP program. To the extent that the compound is used in other applications not already reviewed under SNAP or under the New Chemicals Program under TSCA, the SNUR in place under TSCA requires that any significant new use of a chemical be reported to the EPA using a SNUN. Any significant new use of HFO-1336mzz-Z would, thus, need to be evaluated by the EPA, and the EPA will continually review the availability of acceptable substitute chemicals under the SNAP program.

    IV. Final Action

    The EPA is responding to the petition by revising its regulatory definition of VOC at 40 CFR 51.100(s) to add HFO-1336mzz-Z to the list of compounds that are exempt from the regulatory definition of VOC because it is less reactive than ethane based on a comparison of mass-based MIR and molar-based MIR metrics and is, therefore, considered negligibly reactive. As a result of this action, if an entity which uses or produces this compound and is subject to the EPA regulations limiting the use of VOC in a product, limiting the VOC emissions from a facility, or otherwise controlling the use of VOC for purposes related to attaining the O3 NAAQS, this compound will not be counted as a VOC in determining whether these regulatory obligations have been met. This action would affect whether this compound is considered a VOC for state regulatory purposes to reduce O3 formation, if a state relies on the EPA's regulatory definition of VOC. States are not obligated to exclude from control as a VOC those compounds that the EPA has found to be negligibly reactive. However, no state may take credit for controlling this compound in its O3 control strategy. Consequently, reductions in emissions for this compound will not be considered or counted in determining whether states have met the rate of progress requirements for VOC in State Implementation Plans or in demonstrating attainment of the O3 NAAQS.

    V. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive Orders can be found at https://www2.epa.gov/laws-regulations/laws-and-executive-orders.

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

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

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

    This action is considered an Executive Order 13771 deregulatory action. This final rule provides meaningful burden reduction by exempting HFO-1336mzz-Z from the VOC regulatory definition and relieving manufacturers, distributers, and users from recordkeeping or reporting requirements. This action is voluntary in nature and has non-quantifiable cost savings given the unpredictability in who or how much of it will be used.

    C. Paperwork Reduction Act (PRA)

    This action does not impose an information collection burden under the PRA. It does not contain any recordkeeping or reporting requirements.

    D. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on small entities. This action removes HFO-1336mzz-Z from the regulatory definition of VOC and, thereby, relieves manufacturers, distributers, and users of the compound from tropospheric O3 requirements to control emissions of the compound.

    E. Unfunded Mandates Reform Act (UMRA)

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

    F. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.

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

    This action does not have tribal implications, as specified in Executive Order 13175. This final rule removes HFO-1336mzz-Z from the regulatory definition of VOC and, thereby, relieves manufacturers, distributers and users from tropospheric O3 requirements to control emissions of the compound. Thus, Executive Order 13175 does not apply to this action.

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

    This action is not subject to Executive Order 13045, because it is not economically significant as defined in Executive Order 12866, and because the EPA does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. Since HFO-1336mzz-Z is utilized in specific industrial applications where children are not present and dissipates quickly (e.g., lifetime of 22 days) with short-lived end products, there is no exposure or disproportionate risk to children. This action removes HFO-1336mzz-Z from the regulatory definition of VOC and, thereby, relieves manufacturers, distributers and users from tropospheric O3 requirements to control emissions of the compound.

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

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

    J. National Technology Transfer and Advancement Act (NTTAA)

    This rulemaking does not involve technical standards.

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

    The EPA believes that this action does not have disproportionately high and adverse human health or environmental effects on minority populations, low-income populations and/or indigenous peoples, as specified in Executive Order 12898 (59 FR 7629 February 16, 1994). This action removes HFO-1336mzz-Z from the regulatory definition of VOC and, thereby, relieves manufacturers, distributers, and users of the compound from tropospheric O3 requirements to control emissions of the compound.

    L. Congressional Review Act (CRA)

    This action is subject to the CRA, and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

    M. Judicial Review

    Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the District of Columbia Circuit Court within 60 days from the date the final action is published in the Federal Register. Filing a petition for review by the Administrator of this final action does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review must be filed, and shall not postpone the effectiveness of such action. Thus, any petitions for review of this action related to the exemption of HFO-1336mzz-Z from the regulatory definition of VOC must be filed in the Court of Appeals for the District of Columbia Circuit within 60 days from the date the final action is published in the Federal Register.

    References Atkinson, R., Baulch, D.L., Cox, R.A., Crowley, J.N., Hampson, Jr., R.F., Hynes, R.G., Jenkin, M.E., Kerr, J.A., Rossi, M.J., and Troe, J. (2006) Evaluated kinetic and photochemical data for atmospheric chemistry: Volume II—gas phase reactions of organic species. Atmos. Chem. Phys. 6: 3625-4055. Baasandorj, M., Ravishankara, A.R., Burkholder, J.B. (2011) Atmospheric chemistry of (Z)-CF3CH═CHCF3: OH radical reaction rate coefficient and global warming potential. J Phys Chem A. 2011 Sep 29; 115(38):10539-49. doi: 10.1021/jp206195g. Carter, W.P.L. (1994) Development of ozone reactivity scales for volatile organic compounds. J. Air Waste Manage, 44: 881-899. Carter, W.P.L. (2008) Reactivity Estimates for Selected Consumer Product Compounds, Final Report to California Air Resources Board Contract No. 06-408, February 19, 2008. http://www.arb.ca.gov/research/reactivity/consumer_products.pdf. Carter, W.P.L. (2011) SAPRC Atmospheric Chemical Mechanisms and VOC Reactivity Scales, at http://www.engr.ucr.edu/~carter/SAPRC/. Last updated in Sept. 14, 2013. Tables of Maximum Incremental Reactivity (MIR) Values available at http://www.arb.ca.gov/regact/2009/mir2009/mir2009.htm. May 11, 2011. Carter, W.P.L. (2011a) Estimation of the ground-level atmospheric ozone formation potentials of Cis 1,1,1,4,4,4-HexaFluoro-2-Butene, August 8, 2011. DuPont Haskell. FEA-1100: 90-day inhalation toxicity study in rats; Unpublished Report DuPont-17453-785-1; Haskell Laboratory of Industrial Toxicology: Newark, DE, 2011. IPCC, 2007: Climate Change 2007: The Physical Science Basis. Contribution of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change [Solomon, S., D. Qin, M. Manning, Z. Chen, M. Marquis, K.B. Averyt, M. Tignor and H.L. Miller (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA, 996 pp. IPCC, 2013: Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Stocker, T.F., D. Qin, G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex and P.M. Midgley (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA, 1535 pp. Pitts, J.N. Jr., Winer, A.M., Aschmann, S.M., Carter, W.P.L., and Atkinson, K. (1983), Experimental Protocol for Determining Hydroxyl Radical Reaction Rate Constants Environmental Science Research Laboratory, ORD, USEPA. EPA600/3-82-038. USEPA, 2014. Significant New Alternatives Policy Program; Foam Blowing Sector; Risk Screen on Substitutes in Rigid Polyurethane Appliance Foam; Rigid Polyurethane and Polyisocyanurate Laminated Boardstock; Rigid Polyurethane Commercial Refrigeration and Sandwich Panels; Rigid Polyurethane Slabstock and Other; Flexible Polyurethane; Integral Skin Polyurethane; and Phenolic Insulation Board and Bunstock. Substitute: HFO-1336mzz(Z) (Formacel® 1100); October 10, 2014. Available online at: https://www.thefederalregister.org/fdsys/pkg/FR-2014-10-21/pdf/2014-24989.pdf. USEPA, 2016. Significant New Alternatives Policy Program; Refrigeration and Air Conditioning Sector; Risk Screen on Substitutes for Use in Chillers and Industrial Process Air Conditioning Substitute: HFO-1336mzz(Z) (Opteon® MZ); May 23, 2016. Available online at: https://www.thefederalregister.org/fdsys/pkg/FR2016-05-23/pdf/2016-12117.pdf. List of Subjects in 40 CFR Part 51

    Environmental protection, Administrative practice and procedure, Air pollution control, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.

    Dated: November 16, 2018. Andrew R. Wheeler, Acting Administrator.

    For reasons stated in the preamble, part 51 of chapter I of title 40 of the Code of Federal Regulations is amended as follows:

    PART 51—REQUIREMENTS FOR PREPARATION, ADOPTION, AND SUBMITTAL OF IMPLEMENTATION PLANS 1. The authority citation for part 51 continues to read as follows: Authority:

    23 U.S.C. 101; 42 U.S.C. 7401-7671q.

    Subpart F—Procedural Requirements 2. Section 51.100 is amended by revising paragraph (s)(1) introductory text to read as follows:
    § 51.100 Definitions.

    (s) * * *

    (1) This includes any such organic compound other than the following, which have been determined to have negligible photochemical reactivity: Methane; ethane; methylene chloride (dichloromethane); 1,1,1-trichloroethane (methyl chloroform); 1,1,2-trichloro-1,2,2-trifluoroethane (CFC-113); trichlorofluoromethane (CFC-11); dichlorodifluoromethane (CFC-12); chlorodifluoromethane (HCFC-22); trifluoromethane (HFC-23); 1,2-dichloro 1,1,2,2-tetrafluoroethane (CFC-114); chloropentafluoroethane (CFC-115); 1,1,1-trifluoro 2,2-dichloroethane (HCFC-123); 1,1,1,2-tetrafluoroethane (HFC-134a); 1,1-dichloro 1-fluoroethane (HCFC-141b); 1-chloro 1,1-difluoroethane (HCFC-142b); 2-chloro-1,1,1,2-tetrafluoroethane (HCFC-124); pentafluoroethane (HFC-125); 1,1,2,2-tetrafluoroethane (HFC-134); 1,1,1-trifluoroethane (HFC-143a); 1,1-difluoroethane (HFC-152a); parachlorobenzotrifluoride (PCBTF); cyclic, branched, or linear completely methylated siloxanes; acetone; perchloroethylene (tetrachloroethylene); 3,3-dichloro-1,1,1,2,2-pentafluoropropane (HCFC-225ca); 1,3-dichloro-1,1,2,2,3-pentafluoropropane (HCFC-225cb); 1,1,1,2,3,4,4,5,5,5-decafluoropentane (HFC 43-10mee); difluoromethane (HFC-32); ethylfluoride (HFC-161); 1,1,1,3,3,3-hexafluoropropane (HFC-236fa); 1,1,2,2,3-pentafluoropropane (HFC-245ca); 1,1,2,3,3-pentafluoropropane (HFC-245ea); 1,1,1,2,3-pentafluoropropane (HFC-245eb); 1,1,1,3,3-pentafluoropropane (HFC-245fa); 1,1,1,2,3,3-hexafluoropropane (HFC-236ea); 1,1,1,3,3-pentafluorobutane (HFC-365mfc); chlorofluoromethane (HCFC-31); 1 chloro-1-fluoroethane (HCFC-151a); 1,2-dichloro-1,1,2-trifluoroethane (HCFC-123a); 1,1,1,2,2,3,3,4,4-nonafluoro-4-methoxy-butane (C4F9OCH3 or HFE-7100); 2-(difluoromethoxymethyl)-1,1,1,2,3,3,3-heptafluoropropane ((CF3)2CFCF2OCH3); 1-ethoxy-1,1,2,2,3,3,4,4,4-nonafluorobutane (C4F9OC2H5 or HFE-7200); 2-(ethoxydifluoromethyl)-1,1,1,2,3,3,3-heptafluoropropane ((CF3)2CFCF2OC2H5); methyl acetate; 1,1,1,2,2,3,3-heptafluoro-3-methoxy-propane (n-C3F7OCH3, HFE-7000); 3-ethoxy- 1,1,1,2,3,4,4,5,5,6,6,6-dodecafluoro-2-(trifluoromethyl) hexane (HFE-7500); 1,1,1,2,3,3,3-heptafluoropropane (HFC 227ea); methyl formate (HCOOCH3); 1,1,1,2,2,3,4,5,5,5-decafluoro-3-methoxy-4-trifluoromethyl-pentane (HFE-7300); propylene carbonate; dimethyl carbonate; trans-1,3,3,3-tetrafluoropropene; HCF2OCF2H (HFE-134); HCF2OCF2OCF2H (HFE-236cal2); HCF2OCF2CF2OCF2H (HFE-338pcc13); HCF2OCF2OCF2CF2OCF2H (H-Galden 1040x or H-Galden ZT 130 (or 150 or 180)); trans 1-chloro-3,3,3-trifluoroprop-1-ene; 2,3,3,3-tetrafluoropropene; 2-amino-2-methyl-1-propanol; t-butyl acetate; 1,1,2,2- Tetrafluoro -1-(2,2,2-trifluoroethoxy) ethane; cis-1,1,1,4,4,4-hexafluorobut-2-ene (HFO-1336mzz-Z); and perfluorocarbon compounds which fall into these classes:

    [FR Doc. 2018-25891 Filed 11-27-18; 8:45 am] BILLING CODE 6560-50-P
    FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 76 [MB Docket No. 17-105; FCC 18-150] Procedural Revisions to the Filing of Open Video System Certification Applications AGENCY:

    Federal Communications Commission.

    ACTION:

    Final rule.

    SUMMARY:

    In this document, the Federal Communications Commission (FCC or Commission) modernizes the Open Video System (OVS) filing procedures by specifying that OVS applications be required to send certification applications, including FCC Form 1275 and all attachments, as well as notices of intent, via electronic email (email) delivery to a designated Commission email address. The FCC also eliminates certain existing requirements associated with the rule. Parties wishing to respond to a FCC Form 1275 filing must submit comments or oppositions via electronic mail (email).

    DATES:

    Effective date: November 28, 2018.

    FOR FURTHER INFORMATION CONTACT:

    For additional information on this proceeding, contact Sonia Greenaway Mickle, [email protected], of the Policy Division, Media Bureau, (202) 418-1419.

    SUPPLEMENTARY INFORMATION:

    This is a summary of the Commission's Order, FCC 18-150, adopted and released on October 25, 2018. The full text of this document is available for public inspection and copying during regular business hours in the FCC Reference Center, Federal Communications Commission, 445 12th Street SW, Room CY-A257, Washington, DC 20554. This document will also be available via ECFS at http://fjallfoss.fcc.gov/ecfs/. Documents will be available electronically in ASCII, Microsoft Word, and/or Adobe Acrobat. Copies of the materials can be obtained from the FCC's Reference Information Center at (202) 418-0270. Alternative formats are available for people with disabilities (Braille, large print, electronic files, audio format), by sending an email to [email protected] or calling the Commission's Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

    Synopsis

    1. The Commission in this Order establishes electronic filing procedures for parties seeking to operate an Open Video System (OVS) to submit a certification application and notice of intent. By replacing our current paper filing requirements for OVS applications and notices with an electronic filing system, this Order modernizes our regulations, reduces burdens for OVS applicants, and increases the efficiency of the Commission's processing of applications.

    2. The Telecommunications Act of 1996 added section 653 to the Communications Act of 1934, as amended (the Act), establishing OVS as a new framework for entry into the multichannel video programming distribution marketplace.1 Any party seeking to operate an OVS must file an application to be certified as an OVS operator on FCC Form 1275 2 as well as a “notice of intent” to establish an OVS.3 At present, parties cannot file these documents electronically. Instead, they must file paper copies of both documents with the Office of the Secretary and the Office of the Chief of the Media Bureau 4 and file the certification application on a computer disk. The documents are then delivered to the Media Bureau staff who process and review them. After a Form 1275 certification application is processed by Media Bureau staff, a public notice is published on the Commission's website. Comments or oppositions to certification applications must be filed within five calendar days of the date the application is received at the Commission.5 Pursuant to Section 653, the Commission must act to approve or disapprove any OVS certification request within ten days of its receipt.6 To implement this statutory requirement, the Commission's rules provide that “[i]f the Commission does not disapprove the certification application within ten days after receipt of an applicant's request, the certification application will be deemed approved.” 7 Media Bureau staff also provide public notice of OVS notices of intent.8

    1 Telecommunications Act of 1996, Public Law 104-104, 110 Stat. 56, approved February 8, 1996. An open video system is similar to a cable system in that it is a facilities-based system for the delivery of video programming. Unlike cable systems, however, open video systems must set aside up to two thirds of their channel capacity for the delivery of independent programming of third parties. The OVS framework was established to provide competition and lower barriers to entry in the provision of video programming to consumers. See Implementation of Section 302 of the Telecommunications Act of 1996, Open Video Systems, 11 FCC Rcd 18223, 18227, para. 2-3 (1996) (Second Report and Order). The approach developed for the OVS model provides streamlined regulations and reduced regulatory burdens. See 47 U.S.C. 573(c).

    2 47 U.S.C. 573(a)(1); 47 CFR 76.1502. The Form 1275 includes facts and representations regarding the OVS applicant and system information, including the anticipated communities or area to be served upon completion of the open video system. See https://transition.fcc.gov/Forms/Form1275/1275.pdf.

    3 47 CFR 76.1503(b)(1). In order to commence the channel allocation process, an OVS operator is required to file a notice of intent with the Commission. A notice of intent provides details regarding the operator's projected channel capacity, service area, and other technical information about the operator's system. Second Report and Order, 11 FCC Rcd at 18252, para. 45.

    4See Second Report and Order, 11 FCC Rcd at 18247, para. 34 (1996) (stating that “hard copies of the [Form 1275] certification forms be filed with the Office of the Secretary, Federal Communications Commission”); see also id. at Appendix C (“A hard copy of FCC Form 1275 and all attachments must be filed with the Office of the Secretary, Federal Communications Commission . . . and with the Office of the Bureau Chief, Cable Services Bureau”). The Cable Services Bureau was superseded by the Media Bureau in 2002. See Establishment of the Media Bureau and Other Organizational Changes, Order, 17 FCC Rcd 4510 (2002); see also 47 CFR 76.1503(b)(1) (stating that Notices of Intent must be filed with the Secretary of the Federal Communications Commission and directed to the Media Bureau). Some of the specific filing requirements do not appear in the OVS rules, but in other locations such as in the instructions for FCC Form 1275.

    5 47 CFR 76.1502(e)(1).

    6 47 U.S.C. 573(a)(1).

    7 47 CFR 76.1502(f).

    8 47 CFR 76.1503(b)(1).

    3. Because electronic filing is a more modern and efficient way for parties to file and for Commission staff to receive applications, we conclude that the OVS paper filing requirements have outlived their usefulness. The Commission has moved to electronic filing for other applications and filings.9 Moreover, the nature of the OVS application process necessitates immediate receipt by appropriate staff, which can better be assured via electronic means. On several recent occasions, tracking down OVS applications mailed to Commission headquarters has been time consuming for staff and has caused processing delays. In addition, the requirement to file the certification application on a computer disk is an unnecessary, duplicative, and outdated mode of information delivery. Given the very short deadline by which the Commission must act on OVS certification applications, processing delays and outdated requirements have proven to be problematic for both the staff of the Media Bureau and OVS applicants.10

    9See, e.g., Amendment of Certain of the Commission's Part 1 Rules of Practice and Procedure Relating to the Filing of Formal Complaints Under Section 208 of the Communications Act and Pole Attachment Complaints Under Section 224 of the Communications Act, Order, 79 FR 73844, Dec. 12, 2014, 29 FCC Rcd 14078 (2014).

    10 In at least one recent case, an OVS application was received by Media Bureau staff weeks after it was received at the Commission. The Media Bureau failed to have an opportunity to place the application on Public Notice or to review and assess the application within the ten-day timeframe specified by the Communications Act and the Commission's rules, and the application was deemed approved by operation of law. After reviewing the OVS certification application, it was deemed deficient, requiring the Media Bureau to adopt a sua sponte Order on Reconsideration revoking the OVS certification. See Digital Broadcasting Certification to Operate an Open Video System, 32 FCC Rcd 3149 (MB 2017).

    4. Therefore, we modify the procedural rules for the filing of OVS certification applications and notices of intent to make the process less burdensome for applicants and to ensure that these documents are timely received by Commission staff.11 We conclude that the most efficient process is for OVS applicants to send certification applications, including FCC Form 1275 and all attachments, as well as notices of intent, via electronic mail (email) delivery to a designated Commission email address.12 Specifically, under the rule we adopt here, when filing a certification application or notice of intent, applicants will be required to send all documents to the following email address: [email protected]. Comments or oppositions also will be required to be sent via email to this same designated email address.13 The rule changes in this Order do not affect the requirement that the certification application must be served on all local communities in which the applicant intends to operate.14 We note that the rule changes adopted herein involve a non-substantive change to an approved information collection for which we must obtain Office of Management and Budget (OMB) approval under the Paperwork Reduction Act (PRA) before the rule changes can take effect. To expedite the ability of parties and staff to utilize these new procedures, we make these rule revisions effective upon publication of the Order in the Federal Register. The requirement that publication of a “substantive” rule be made at least 30 days before its effective date does not apply to the procedural rules adopted in this Order.15

    11 The rule revisions adopted in this Order and set forth in the Final Rules section are procedural in nature. Because they modify existing agency procedural rules, notice and comment procedures are not required under the Administrative Procedure Act. See 5 U.S.C. 553(b) (stating that notice and comment requirements do not apply to rules of agency procedure); Amendment of Certain of the Commission's Part 1 Rules of Practice and Procedure and Part 0 Rules of Commission Organization, Notice of Proposed Rulemaking, 75 FR 14401, March 25, 2010, 25 FCC Rcd 2430, 2430, para. 1 n.1; 2434, para. 11 n.15; 2436, para. 16 n.23 (2010); Amendment of Certain of the Commission's Part 1 Rules of Practice and Procedure and Part 0 Rules of Commission Organization, Report and Order, 76 FR 24383, May 2, 2011, 26 FCC Rcd 1594, 1598, para. 10 n.23; 1600, para. 15 n.44 (2011) (notice and comment is not required for procedural changes).

    12 Because the certification application will be electronically delivered to a designated OVS email box, a specific cover sheet identifying the filing as an “OVS Certification Application” and “Attention: Media Bureau” is no longer necessary. Therefore, we are eliminating the requirement that a cover sheet be filed with a certification application, comments, or oppositions. See 47 CFR 76.1502(d)(2), (e)(2). We also are eliminating the cover sheet requirements for notices of intent. See 47 CFR 76.1503(b)(1). In addition, computer disks are no longer required to be filed.

    13See the Final Rules section. As under the current rule, comments or oppositions to a certification must be served on the party that filed the certification. 47 CFR 76.1502(e)(1).

    14See 47 CFR 76.1502(d)(1); see also 47 CFR 76.1502(f) (requiring that, if an application is disapproved, a refiled application must be served on any objecting party or parties and on all local communities in which the applicant intends to operate); 47 CFR 76.1503(b)(1)(viii) (requiring that a notice of intent be served on all local franchising authorities).

    15See 5 U.S.C. 553(d)(3) (stating that publication of a “substantive” rule shall be made not less than 30 days before its effective date, except . . . as otherwise provided by the agency for good cause found and published with the rule). We anticipate that these new procedures will significantly decrease the likelihood that a certification application will fail to reach Media Bureau staff prior to the time that it is deemed approved. We likewise expect that, since the new procedures will decrease filing burdens on applicants and other filers, no filing party or opponent of an OVS application is likely to be prejudiced by the rules taking effect upon publication of the Order in the Federal Register.

    5. Paperwork Reduction Act. This document contains a non-substantive and non-material modification of information collection requirements that were previously reviewed and approved by OMB pursuant to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13.16 Filing burdens are reduced with the use of email filings to the Commission.

    16See OMB, Notice of Office of Management and Budget Action, ICR Reference No. 201604-3060-006, OMB Control No. 3060-0700 (May 23, 2016), https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201604-3060-006# (select the “Retrieve Notice of Action (NOA)” hyperlink); 5 CFR 1320.5(g) (stating that an agency may not make “a substantive or material modification to a collection of information” after such collection of information has been approved by OMB, unless the modification has been submitted to OMB for review and approval under 5 U.S.C. part 1320).

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

    7. Accordingly, it is ordered that part 76 of the Commission's rules is amended, as set forth in the Final Rules section, pursuant to the authority contained in sections 4(i), 303(r), and 653 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 303(r), and 573.

    8. It is further ordered that this Order and the rule changes adopted herein shall be effective upon publication in the Federal Register.

    List of Subjects in 47 CFR Part 76

    Administrative practice and procedure, Cable television, Reporting and recordkeeping requirements.

    Federal Communications Commission. Katura Jackson, Federal Register Liaison Officer, Office of the Secretary. Final Rules

    For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 76 as follows:

    PART 76—MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE 1. The authority citation for part 76 continues to read as follows: Authority:

    47 U.S.C. 151, 152, 153, 154, 301, 302, 302a, 303, 303a, 307, 308, 309, 312, 315, 317, 325, 338, 339, 340, 341, 503, 521, 522, 531, 532, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 552, 554, 556, 558, 560, 561, 571, 572, 573.

    2. Amend § 76.1502 by revising paragraphs (d), (e)(2), and (f) to read as follows:
    § 76.1502 Certification.

    (d)(1) All open video system certification applications, including FCC Form 1275 and all attachments, must be filed via electronic mail (email) at the following address: [email protected]. The subject line shall read “Open Video System Certification Application.” Open video system certification applications will not be considered properly filed unless filed as described in this paragraph (d).

    (2) On or before the date an FCC Form 1275 is filed with the Commission, the applicant must serve a copy of its filing on all local communities identified pursuant to paragraph (c)(6) of this section and must include a statement informing the local communities of the Commission's requirements in paragraph (e) of this section for filing oppositions and comments. Service by mail is complete upon mailing, but if mailed, the served documents must be postmarked at least 3 days prior to the filing of the FCC Form 1275 with the Commission.

    (e) * * *

    (2) Parties wishing to respond to a FCC Form 1275 filing must submit comments or oppositions via electronic mail (email) at the following address: [email protected]. The subject line shall read “Open Video System Certification Application Comments.” Comments and oppositions will not be considered properly filed unless filed as described in this paragraph (e).

    (f) If the Commission does not disapprove the certification application within ten days after receipt of an applicant's request, the certification application will be deemed approved. If disapproved, the applicant may file a revised certification or refile its original submission with a statement addressing the issues in dispute in accordance with the procedures described in paragraph (d) of this section. Such refilings must be served on any objecting party or parties and on all local communities in which the applicant intends to operate pursuant to instructions in paragraph (d)(2) of this section. The Commission will consider any revised or refiled FCC Form 1275 to be a new proceeding and any party who filed comments regarding the original FCC Form 1275 will have to refile their original comments if they think such comments should be considered in the subsequent proceeding.

    3. Amend § 76.1503 by revising paragraph (b)(1) introductory text to read as follows:
    § 76.1503 Carriage of video programming providers on open video systems.

    (b) * * *

    (1) Notification. An open video system operator shall file a “Notice of Intent” to establish an open video system, which the Commission will release in a Public Notice. The Notice of Intent must be filed via electronic mail (email) at the following address: [email protected] The subject line shall read “Open Video System Notice of Intent.” An Open Video system notice of intent will not be considered properly filed unless filed as described in this paragraph (b). This Notice of Intent shall include the following information:

    [FR Doc. 2018-25913 Filed 11-27-18; 8:45 am] BILLING CODE 6712-01-P
    83 229 Wednesday, November 28, 2018 Proposed Rules DEPARTMENT OF VETERANS AFFAIRS 38 CFR Part 17 RIN 2900-AP46 Prosthetic and Rehabilitative Items and Services AGENCY:

    Department of Veterans Affairs.

    ACTION:

    Supplemental notice of proposed rulemaking.

    SUMMARY:

    On October 16, 2017, the Department of Veterans Affairs published a proposed rulemaking to amend its regulations on the provision of prosthetic and rehabilitative items and services. This supplemental notice of proposed rulemaking (SNPRM) provides clarification about provisions of that proposed rulemaking and seeks additional public comments on them. This SNPRM also provides notice regarding certain communications between VA and external parties regarding the proposed rule, and a summary of these communications has been added to the public docket of this rulemaking.

    DATES:

    Comments must be received by VA on or before December 28, 2018.

    ADDRESSES:

    Written comments may be submitted by through http://www.Regulations.gov; by mail or hand-delivery to Director, Regulations Management (00REG), Department of Veterans Affairs, 810 Vermont Avenue NW, Room 1063B, Washington, DC 20420; or by fax to (202) 273-9026. Comments should indicate that they are submitted in response to “RIN 2900-AP46, Prosthetic and rehabilitative items and services; Supplemental notice of proposed rulemaking”. Copies of comments received will be available for public inspection in the Office of Regulation Policy and Management, Room 1063B, between the hours of 8:00 a.m. and 4:30 p.m. Monday through Friday (except holidays). Please call (202) 461-4902 for an appointment. (This is not a toll-free number.) In addition, during the comment period, comments may be viewed online through the Federal Docket Management System (FDMS) at http://www.Regulations.gov.

    FOR FURTHER INFORMATION CONTACT:

    Penny Nechanicky, National Program Director for Prosthetic and Sensory Aids Service (10P4RK), Department of Veterans Affairs, 810 Vermont Avenue NW, Washington, DC 20420; (202) 461-0337. (This is not a toll-free number.)

    SUPPLEMENTARY INFORMATION:

    On October 16, 2017, VA published a proposal to amend VA regulations governing the provision of prosthetic and rehabilitative items and services to eligible veterans. Federal Register (82 FR 48018). That rulemaking proposed to reorganize and update the regulations on prosthetic and rehabilitative items and define the types of items and services available to eligible veterans. That rulemaking also proposed to eliminate the existing prosthetics regulations at section 17.150 of title 38, Code of Federal Regulations (CFR) and establish entirely new sections at §§ 17.3200, et seq.

    VA asked for comments on the proposed rule on or before December 15, 2017, and we received 305 comments. A number of those commenters raised concerns about proposed § 17.3240, “Furnishing Authorized Items and Services,” and whether the proposal would alter VA's current practices regarding veterans' choice, particularly with regard to the provision of artificial limbs, as reflected, in part, in two Veterans Health Administration (VHA) Handbooks. Commenters also raised concerns about whether the proposal conflicts with the Veterans Access, Choice, and Accountability Act of 2014 (“Choice Act”), which established VA's Veterans Choice Program.

    With this SNPRM, we seek to clarify the intended effect of proposed § 17.3240, explain our current practices and processes relating to that provision, and request additional comments on it. We also propose edits to proposed § 17.3240 as explained in more detail below. We will address all of the comments that VA received on the proposed rule and any comments VA receives on this SNPRM in our final rulemaking.

    We clarify that the proposed rule and this SNPRM would not result in a different experience for most veterans receiving prosthetics and related care from VA. In proposed § 17.3240, we are codifying our current practice of providing all prosthetic and rehabilitative items and services under § 17.3230. With regard to the provision of artificial limbs under the proposed rule, we propose to revise VHA's existing policies that allow veterans to choose the provider of artificial limbs in limited circumstances. We also propose to align policies and practices to be consistent with the provision of all other prosthetic and rehabilitative items and services, with the community care authorities (e.g., Choice Act), and with our current national preferred process for the provision of artificial limbs (which we intend to continue as the national standard pursuant to this rulemaking). This current national preferred process would be implemented pursuant to this rulemaking as it will provide consistency in how artificial limbs are provided throughout VA. In the provision of artificial limbs across VHA, medical facilities have not consistently applied certain provisions of its current handbooks, specifically paragraph 6.c.(1)(b) of VHA Handbook 1173.2 and paragraphs 4.c. and 7.a. of VHA Handbook 1173.3, as written, and these policies have led to ambiguity and misinterpretation within VA and by the public. Pursuant to this rulemaking, VA proposes to revise these policies, as following them as written in these two handbooks could limit consideration of important factors, such as the veteran's clinical needs. It was not our intent that VA clinical providers would not be involved in this very important decision on how the veteran's needs can be best met. As prosthetists have varying levels of expertise and familiarity with artificial limbs, if VA followed these policies as written, VA would not be able to confirm or validate that the prosthetist chosen by the veteran would be the most appropriate prosthetist to provide the artificial limb and associated services.

    Following these policies would also not be consistent with our contracting authorities, such as the Federal Acquisition Regulations (FAR) and VA Acquisition Regulations (VAAR). These policies have been left to each medical facility to interpret and apply, which has resulted in inconsistent application across the country. In a 2012 audit of the management and acquisition of prosthetic limbs within VHA, VA's Office of the Inspector General (OIG) found varying procurement practices among different test regions in VHA “[d]ue to the inconsistencies in the available guidance.” See, Veterans Health Administration, Audit of the Management and Acquisition of Prosthetic Limbs, Report No. 11-02254-102, VA OIG, Office of Audits and Evaluations, March 8, 2012, page 9. The OIG concluded that such variability led to “overlap and gaps in services” and that “contracting staff may be performing unnecessary workload.” Id. The OIG further concluded that “[i]t is important that VHA monitors contract workload and ensures the contracts it awards and administers are necessary to support veterans' requirements.” Id. Through this rulemaking, we seek to create a uniform standard and process for the provision of artificial limbs to ensure all VA medical facilities are in alignment with the current process for the provision of all other prosthetic and rehabilitative items and services, and with our current national preferred process for the provision of artificial limbs, which we intend to continue pursuant to this rulemaking. In the following paragraphs, we will explain our processes for the provision of all prosthetic and rehabilitative items and services, as well as artificial limbs, and address certain public comments regarding proposed § 17.3240.

    General Current Process for the Provision of Prosthetic and Rehabilitative Items and Services Other Than Artificial Limbs

    The current decision making process for providing prosthetic and rehabilitative items and services starts with a clinical evaluation of a veteran's needs by a VA health care provider or authorized community (i.e., non-Department) provider. The decision on the prosthetic or rehabilitative item or service to be provided to the veteran is a clinical decision made by the veteran's health care provider, in consultation with the veteran, and results in a prescription for a prosthetic or rehabilitative item or service. This ensures that the veteran's clinical needs will be met by the item or service prescribed, that the item or service prescribed is safe, that the veteran is involved in this process because he or she is a necessary member of the health care delivery team, and that the item or service will serve as a direct and active component of the eligible veteran's medical treatment and rehabilitation. A VA prosthetics representative at a VA medical facility then determines how best to provide the item or service to the veteran. While sections 1701 and 1710 of title 38, United States Code (U.S.C.), require VA to furnish medical services, including medically necessary prosthetic and rehabilitative items and services to certain eligible veterans and authorize VA to provide them to other eligible veterans, the decision as to how VA provides such items and services is discretionary. As explained at 82 FR 48025, if VA has the capacity or inventory to directly provide such item or service, VA will do so. VA may use authorized community vendors on a case-by-case basis to provide greater access, lower cost, and a wider range of items and services. Pursuant to the FAR, VA utilizes national and regional agreements to provide prosthetic and rehabilitative items and services and also, on a case by case basis, enters into agreements with vendors in the community who are not part of these national or regional agreements in the instance that VA is unable to provide these items and services directly or pursuant to an existing agreement. While VA has general authority to provide necessary health care services to eligible veterans, VA's authority to provide such services through community sources is constrained by statute and regulation. For example, except where authorized, VA complies with the FAR and the VAAR, which ensure that the prescribed items and services meet the veteran's clinical needs and that VA obtains such items and services in a fiscally responsible and legally sufficient manner.

    We note that the decision of what prosthetic or rehabilitative item or service is to be provided is a clinical decision and results in a prescription. The decision of how that prescribed item or service is provided is a separate decision, and VA retains the authority to make this determination. As long as the prescribed item or service (whether prescribed by a VA or an authorized community provider) serves as a direct and active component of the veteran's medical treatment and rehabilitation, VA prosthetics representatives will honor the prescription and procure the prescribed item or service for the veteran. While the veteran's clinical needs are always considered in the determination of how the item or service is procured, administrative factors are also considered on a case by case basis, as explained in more detail throughout this SNPRM. Under the proposed rulemaking and this SNPRM, we would continue to ensure that the veteran's clinical needs drive how the agency determines whether VA can directly provide the prescribed item or service, or whether VA will use an authorized vendor in the community to provide the item or service. VA's procurement practices with respect to prosthetic and rehabilitative items and services are aimed at ensuring that veterans' needs are met with the most appropriate and highest quality items and services in a consistent manner throughout VA and that VA complies with Federal and VA acquisition regulations as applicable.

    Current National Preferred Process for the Provision of Artificial Limbs

    As previously discussed, there is some variation in the provision of artificial limbs throughout VHA, specifically with regard to the role of the veteran and the clinician in the determination of how prescribed items and services are provided. The following is a discussion on the current national preferred process for the provision of such items and encompasses the process VA intends to continue pursuant to proposed § 17.3240. Similar to the provision of other prosthetic and rehabilitative items and services under proposed 38 CFR 17.3230 as explained above, in the instance of the provision of an artificial limb, VA first requires an evaluation of a veteran's clinical need for such item. This evaluation is typically done by the amputee clinic team. If a veteran has been evaluated by an authorized community provider, any prescription for an artificial limb and related components written by that authorized community provider is referred to the amputee clinic team, particularly because the authorized community provider may not specialize in artificial limb evaluation. Oftentimes, the prescription does not contain sufficient information for VA to provide directly or through a VA-authorized prosthetist all the components, accessories, supplies, and related services necessary to fabricate an artificial limb. Furthermore, agreements with VA-authorized prosthetists for the artificial limb and related services must include Healthcare Common Procedure Coding System (HCPCS) codes, which VA determines based on an evaluation of the patient by the amputee clinic team. The amputee clinic team conducts an assessment to determine the veteran's clinical needs, and along with the veteran, identifies the appropriate artificial limb and related components needed and makes a determination on how the item(s) will be provided. As discussed in the previous section, this decision is in consultation with the veteran and prioritizes veterans' clinical needs. Generally, if a VA medical facility accessible to the veteran offers the orthotic and prosthetic services that meet the veteran's clinical needs, then VA provides the limb and all associated services (e.g., fitting, minor repairs, routine servicing) directly to the veteran. If VA's decision is that the veteran should receive the item and services from a community (i.e., non-Department) prosthetist, VA utilizes its established orthotic and prosthetic agreements in the region to authorize a community prosthetist to provide the artificial limb and associated services to the veteran. The veteran is able to select, in consultation with his or her VA clinician or amputee clinic team, from a list of vendors in the geographic area that have an existing agreement with VA and are able to meet the veteran's clinical needs. While most facilities have a number of established agreements already in place for use, in the instance that there is no prosthetist under an established agreement that is able to meet the veteran's clinical needs, VA and the veteran will work together to identify the appropriate community prosthetist, and VA would seek to establish an agreement with that prosthetist for the needed artificial limb and related services. In purchasing such items and services, VA complies with the FAR and VAAR as applicable. We note that some of the above process may vary if the veteran is eligible for the Veterans Choice Program, operated pursuant to § 17.1500 et seq. Under proposed § 17.3240, we would standardize this process of determining whether to directly provide the artificial limb and associated services or whether to use a VA-authorized vendor (i.e., a community/non-Department prosthetist). This would result in several benefits. First, it would ensure VA provides such items and services in a consistent and standardized manner throughout VA, which would also be consistent with the provision of all other prosthetic and rehabilitative items and services. Second, it would be consistent with the current national preferred practice, while also ensuring compliance with Federal acquisition requirements. Finally, and most importantly, this would ensure veterans receive the most appropriate and highest quality item or service that meets their clinical needs. We note that VA retains authority over this determination to ensure that there is consistency across VHA in the provision of these prescribed items and services, and for quality control purposes.

    Public Comments About Proposed § 17.3240

    Many commenters raised concerns about VA's statement in the proposed rule at 82 FR 48025 that the decision as to whether VA or a VA-authorized vendor (i.e., community/non-Department vendor) will furnish the prescribed item or service to the veteran is an administrative business decision; the commenters stated that this is instead a clinical issue that should also be based on the veterans' preferences. Some commenters were concerned that making this an administrative business decision would restrict veterans' choice of providers and delay care. We agree and now clarify that our description of the proposed rule failed to state that clinical decisions are necessary to issue the clinically-appropriate prosthetic or rehabilitative item or service to a veteran. Furthermore, as mentioned in the discussions above, the decision about what item or service VA will provide to the veteran is a clinical decision made by the veteran's health care provider, in consultation with the veteran, which results in a medical prescription. Additionally, there is a related decision about how VA will provide the prescribed items and services (whether by VA or by a VA-authorized vendor). The veteran's clinical needs will drive this determination. However, while the clinical needs are always part of this determination, VA may consider administrative factors when making this determination. Such administrative factors considered may include, but would not be limited to, VA capacity and availability, geographic availability, and cost. We note that VA capacity and availability can refer to whether a VA medical facility has the resources and equipment to fabricate an authorized item or service, and whether VA providers are available and have the skills, abilities, and experience to provide an authorized item or service. For example, a VA prosthetist may have the ability to fabricate an artificial limb, but may not be able to fabricate the limb because of his or her workload. In that instance, VA may determine that an authorized VA vendor will provide the authorized item or service. If the authorized item or service requires certain expertise or experience that a VA provider does not have, VA may determine that an authorized VA vendor will provide that item or service instead. Relatedly, some VA medical facilities have laboratories in which artificial limbs can be fabricated while others do not, and this would be a consideration in determining whether VA or an authorized VA vendor provides the artificial limb. We also note that how geographic availability is considered in this determination of whether VA or an authorized VA vendor provides the authorized item or service will vary. There would be no set distance or mileage that we would define when considering geographic availability in this determination, as this can be dependent on the health and mobility of the veteran and his or her clinical needs. For example, in considering geographic availability, a veteran amputee who has no other medical conditions that would limit his or her mobility and may have regular access to a vehicle will likely have substantially different clinical needs in this regard than a veteran amputee with medical conditions that impede his or her mobility and who may lack dependable access to a vehicle. For veterans who have mobility issues, geographic availability can vary significantly. In such situations, it would be appropriate for the provider to consider whether a specific limb under consideration can be fabricated, serviced, and repaired by a VA or non-VA prosthetist. We further note that although cost is not a factor providers consider when determining which item or service to prescribe, it may be relevant in determining whether VA or an authorized VA vendor provides the prescribed item or service. For example, if an authorized vendor sells the authorized item at a lower cost than what it would cost VA to provide the item itself, then VA may decide to procure the item from the authorized VA vendor based on cost.

    While the factors VA considers in making the determination of how to provide the authorized item or service will vary, we would continue to ensure that the veteran's clinical needs drive how the agency determines whether VA can directly provide the prescribed item or service, or whether VA will use an authorized vendor in the community to provide the item or service, while also ensuring that VA is administering these benefits in a fiscally responsible and consistent manner.

    Other commenters expressed concern that administrative business decisions would not be consistent with other authorities, particularly the Choice Act. First, we note that since the publication of the proposed rule in October 2017, the President signed into law the VA MISSION Act of 2018 (Pub. L. 115-182). Section 143 of this Act provides that VA may not use the Choice Act authority to furnish care and services after June 6, 2019. While we address, in this SNPRM, the concerns regarding the Choice Act that were raised by commenters, we realize that these concerns and our responses will become moot once VA's authority to furnish care and services pursuant to the Choice Act ends. As a result of the VA MISSION Act of 2018, VA is developing new regulations for the new Veterans Community Care Program required by section 101 of that Act and will also be revising or eliminating the regulations implementing the Choice Act; should any further revisions to VA's prosthetic regulations be needed as a result of these efforts, VA will address those changes through a subsequent rulemaking and further explain or modify these regulations as necessary.

    We note that eligibility for the Veterans Choice Program implemented pursuant to the Choice Act is dependent on meeting certain criteria defined in § 17.1510. In comparison, eligibility for prosthetics and rehabilitative items and services is set forth in proposed § 17.3220, which would only require that the veteran be enrolled in VA health care pursuant to § 17.36 or exempt from enrollment under § 17.37, or that the veteran be otherwise receiving care or services under chapter 17 of title 38 U.S.C. If the veteran meets any of these criteria, he or she would be eligible to receive a prosthetic or rehabilitative item or service so long as such item or service serves as a direct and active component of the veteran's treatment or rehabilitation. Similar to the Choice Program, factors such as geographic availability are considered in making the determination. However, VA always considers clinical factors in making the determination of who will provide the prescribed item or service. While the eligibility criteria for when a veteran is able to seek care from a community provider under the Veterans Choice Program are generally administrative, the determination of who provides the prosthetic and rehabilitative item or service under § 17.3240 is both administrative and clinical. We note that this latter determination is broader and less stringent than the determination under the Veterans Choice Program and provides the veteran with input into whether VA or an authorized VA vendor provides him or her with the prescribed item or service.

    Relatedly, general concerns were raised that proposed § 17.3240 is inconsistent with the Choice Act. While VA may not use the Choice Act to furnish care and services after June 6, 2019, as described above, we believe these authorities are consistent with one another, or where they are potentially inconsistent, they are so in a way to the benefit of the veteran in that this proposed rule is broader and less stringent than the eligibility requirements under the Veterans Choice Program. We note that the Choice Act requires VA approval prior to obtaining care from a community provider, and there are specific criteria that veterans and community providers must meet for care to be authorized and approved. See §§ 17.1500 et seq. If a veteran is eligible and approved by VA to seek care outside VA under § 17.1510, that veteran may obtain care from eligible entities and providers under § 17.1530. An agreement must be in place prior to the authorized care being furnished, and the agreement or authorization for care must be specific as to the care to be provided to the veteran. If the authorized entity or provider prescribes a prosthetic or rehabilitative item or service, VA would then proceed to procure that item or service as long as it is part of the original authorized care and serves as a direct and active component of the veteran's treatment or rehabilitation. In this context, the proposed rule as modified by this SNPRM is consistent with the Choice Act, as the Choice Act requires VA to authorize prosthetic and rehabilitative items and services from a VA-authorized vendor in the community prior to those items or services being provided. See, e.g., Public Law 113-146, sec. 101(a)(1)(A), (c)(1)(B)(i), (d)(4)(B)(iii), and (h). See also 38 CFR 17.1505 (the definition of appointment, in particular), 17.1510(d) (“prior to obtaining authorization for care”), 17.1515(a), and 17.1535(c). Thus, proposed § 17.3240 is consistent with, and less restrictive than, the Choice Act.

    In addition to the Choice Act, commenters raised concerns about whether the proposed rule would implicate other community care authorities, such as 38 U.S.C. 8153 and 1703. Sections 8153 and 1703 are used by VA to obtain medical care in the community; however, we note that section 1703 will be revised significantly by 101 of the VA MISSION Act of 2018. These changes will become effective when VA publishes regulations implementing section 101 of the VA MISSION Act of 2018. The proposed rule, as amended by this SNPRM, would not limit, impact, or be inconsistent with VA's existing or future authorities under sections 8153 and 1703. These are not authorities that we have used to purchase prescribed prosthetic and rehabilitative items or services. Similar to the Choice Program, if the entity or provider authorized under sections 1703 and 8153 to provide care to a veteran prescribes a prosthetic or rehabilitative item or service, VA would then proceed to procure that item or service as long as it is part of the original authorized care and serves as a direct and active component of the veteran's treatment or rehabilitation. VA would then use its prosthetic procurement authorities (i.e., 38 U.S.C. 8123, FAR, and VAAR) to obtain the prescribed prosthetic and rehabilitative items and services. In this context, the proposed rule as modified by this SNPRM is consistent with sections 1703 and 8153. Similar to the Choice Act, these authorities have separate eligibility criteria than what is in proposed § 17.3220. See 38 U.S.C. 1703, 8153, and 38 CFR 17.52. We note that proposed § 17.3220 would be less restrictive than the eligibility criteria for these community care programs, as these community care authorities require facilities to consider only certain factors when determining whether a veteran may obtain care outside VA. For example, pursuant to 38 CFR 17.52, in instances when VA facilities are incapable of furnishing care due to geographic inaccessibility or are not capable of furnishing care or services required, VA may contract with non-VA facilities for the care. As the regulations implementing these community care authorities are undergoing revision due to the enactment of the VA MISSION Act of 2018, should any further revisions to VA's prosthetic regulations be needed as a result, VA will address those changes through a subsequent rulemaking and further explain or modify these regulations as necessary.

    Additionally, we note that 38 U.S.C. 1703 distinguishes between veterans with service connected and nonservice connected disabilities when determining their eligibility to obtain care outside VA under that authority. Section 101 of the VA MISSION Act of 2018 will revise section 1703 to remove this distinction, and to the extent necessary, such elimination would be reflected under these prosthetics regulations. We note that the proposed prosthetics regulations, as amended by this SNPRM, do not distinguish between veterans with service connected conditions and nonservice connected conditions.

    Commenters also raised concerns about the authority for proposed § 17.3240, as VA did not cite to or reference the statutory authority for that section. As mentioned previously in this discussion, 38 U.S.C. 1710, the authorizing statute, requires VA to furnish medical services to certain eligible veterans and authorizes VA to provide them to other eligible veterans. See also, 38 U.S.C. 1701(6), which defines the term “medical services” in a manner that covers prosthetic and rehabilitative items and services. Sections 1701 and 1710 do not, however, mandate how VA provides these items and services. In other words, how VA provides them is discretionary, and VA proposes § 17.3240 pursuant to this authority.

    VA also received many comments stating that the proposed rule contradicted existing VHA policies and practices relating to the provision of artificial limbs and the veteran's choice of provider. We note that VHA Handbooks 1173.2 “Furnishing Prosthetic Appliances and Services” and 1173.3 “Amputee Clinic Teams and Artificial Limbs” indicate that a veteran is able to choose his or her prosthetist, including community (i.e., non-Department) prosthetists, if the veteran has a preexisting relationship with that prosthetist. VHA Handbook 1173.2 paragraph 6.c.(1)(b) states that, “Eligible veterans will select their provider for artificial limbs from the listing of contract vendors, including capable VA Prosthetic and Orthotic Laboratories. Service connected veterans who have obtained their most recent limb from a non-contract provider will be allowed to have their subsequent limb manufactured by the VA non-contract provider as long as the prosthetist is willing to accept the geographic VA preferred provider payment rate for the State in which the prosthetist performs this service.” Paragraph 4.c. of VHA Handbook 1173.3 states, “Eligible veterans, as identified in VHA Handbook 1173.1, who have previously received artificial limbs from commercial sources, will continue to have their choice of vendors on contract with VA or their non-contract prosthetist, providing the prosthetist accepts the VA preferred provider rate for the geographic area.” Paragraph 7.a. of that same Handbook further states, “Eligible veterans will be permitted to obtain authorized artificial limbs and/or terminal devices from any commercial artificial limb dealer who is under a current local contract to the VA or the veteran's preferred prosthetist who agrees to accept the preferred provider rate.”

    As mentioned previously in this document, these provisions in these two handbooks have not been consistently applied as written throughout VA's medical facilities in the provision of artificial limbs. We propose to revise these policies, because following them as written has resulted in inconsistent application, and ambiguity and misinterpretation within VA and by the public. Additionally, as prosthetists have varying levels of expertise and familiarity with artificial limbs, if VA followed these policies as written, VA would not be able to confirm or validate that the prosthetist chosen by the veteran would be the most appropriate prosthetist to provide the artificial limb and associated services. It was not our intent that VA clinical providers would not be involved in this very important decision on how the veteran's needs can be best met. As previously mentioned, the veteran and the VA provider would work together to determine what item or service is needed to meet the veteran's clinical needs, and who may be able to provide such item or service. The veteran's preferences will be part of that decision with the VA provider. Through this rulemaking, we seek to ensure a standardized and consistent process across VA for the provision of artificial limbs that is consistent with the current national preferred process and with the process for the provision of all other prosthetic and rehabilitative items and services.

    After this rulemaking is final, VA will rescind VHA Handbooks 1173.2 and 1173.3 and develop new policies to update and clarify its procedures, consistent with this regulation.

    Corrections to Proposed § 17.3240

    Based on these comments received and the discussion above, VA now proposes to revise the language of § 17.3240, as proposed in 82 FR 48018. In revised proposed § 17.3240(a)(1), we would state that VA providers will prescribe items and services based on the veteran's clinical needs and will do so in consultation with the veteran. Once the prescribed item or service is determined to be authorized under § 17.3230, VA will determine whether VA or a VA-authorized vendor will furnish authorized items and services under § 17.3230 to veterans eligible for such items and services under § 17.3220. We would add paragraph (a)(2) to § 17.3240 to state that this determination on whether VA or a VA-authorized vendor will furnish the authorized item or service under § 17.3230 will be based on, but not limited to, such factors as the veteran's clinical needs, VA capacity and availability, geographic availability, and cost.

    Revising the language of § 17.3240, as proposed in 82 FR 48018, would codify our current practices and the current national preferred process for the provision of artificial limbs; it also would clarify that the item or service that is authorized is prescribed based on the veteran's clinical needs and is done in consultation with the veteran. In response to many comments regarding this clinical decision and the veteran's involvement in that decision, we explicitly note that the prescription is clinical and based on the veteran's clinical needs. For similar reasons, we would also clarify that the prescription is generated in consultation with the veteran. This would be explained in proposed 17.3240(a)(1).

    Additionally, as mentioned, we received comments that the decision on how to provide an authorized item or service should not be administrative, but rather clinical. Relatedly, at least one commenter raised the concern that we did not identify or explain the factors we would use in making this determination. In response to the comments received, we would revise proposed § 17.3240 to clarify that the determination on how the item or service is provided is based on clinical and administrative factors. In proposed § 17.3240(a)(2), we would list factors that would be considered when procuring and providing the authorized item or service. This list of factors is non-exhaustive. Not all factors would be considered in every instance, as the provision of each authorized item or service will vary, and additional factors could be considered as needed. For example, a specific wheelchair may be prescribed as that may be the only wheelchair that would meet the veteran's clinical needs, and there may be only one manufacturer of that wheelchair. In that instance, if the wheelchair meets the direct and active component standard, it will be authorized and VA would proceed to procure that wheelchair directly from the manufacturer without consideration of the other factors. Additionally, a provider may prescribe diabetic shoes to meet a veteran's clinical needs, and if VA has those in its inventory, it will provide those to the veteran. If there are none in inventory and VA needs to procure the prescribed shoes, then we will look at our existing contracts to purchase such items. Additional factors such as cost may be considered in that instance to ensure that we are being fiscally responsible. As explained previously, VA capacity and availability can refer to whether a VA medical facility has the resources and equipment to fabricate an authorized item or service, or whether VA providers are available or have the skills, abilities, and experience to provide an authorized item or service. With regard to geographic availability, we note that how this factor may be considered would vary. There would be no set distance or mileage that we would define when considering geographic availability in this determination, as this can be dependent on the health and mobility of the veteran and his or her clinical needs. Although cost is not a factor providers consider when determining which item or service to prescribe, it may be relevant in determining whether VA or an authorized VA vendor provides the prescribed item or service, as an authorized vendor may sell the authorized item at a lower cost than what it would cost VA to provide the item itself.

    How the authorized item or service is obtained and provided to the veteran will vary based on each individual case. However, we note that the veteran's clinical needs are always prioritized when VA determines how to provide the authorized item or service. Proposed § 17.3240 would ensure that VA is fiscally responsible. VA retains authority over this determination of how the authorized item or service is provided to ensure that there is consistency across VHA in the provision of authorized prosthetic and rehabilitative items and services, and to ensure quality control.

    One commenter also noted that we incorrectly referenced proposed § 17.3210 in proposed § 17.3240. Proposed § 17.3210 is the section on definitions whereas proposed § 17.3220 is the section on eligibility. In order to correctly reference the eligibility section, we would update proposed § 17.3240 to refer to § 17.3220 instead of § 17.3210.

    As previously mentioned, since the publication of VA's proposed rule in October 2017, the President signed into law the VA MISSION Act of 2018(Pub. L. 115-182). VA is working to implement this new authority, and should any further revisions to VA's prosthetic regulations be needed as a result of this recently enacted legislation, VA will address those changes through subsequent rulemaking related specifically to the VA MISSION Act of 2018.

    Certain Communications Between VA and External Parties

    The Office of the VA Secretary also received two inquiry letters during the public comment period for the proposed rule. One from former Senator Bob Dole and the other from Peter Thomas, General Counsel for the National Association for the Advancement of Orthotics and Prosthetics. Both of these letters were treated as public comments and added to docket ID VA-2017-VHA-0023 in regulations.gov. Both of these letters raised concerns regarding proposed § 17.3240 and were similar to the public comments we received that led to the proposed clarification of that section in this SNPRM. The VA Secretary at the time and VHA's Executive in Charge, respectively, responded to these two inquiries in letters sent to Senator Dole and Mr. Thomas.

    The letters stated the intent and purpose of the proposed rule to organize and update the current prosthetic and rehabilitative items and services regulations and define the items and services available. These letters also explained that these rules were proposed in order to ensure standardization and consistency in the provision of such items and services throughout VA, while also ensuring that veterans receive the most appropriate and highest quality items. The then-Secretary's letter to Senator Dole further explained that VA was codifying its practice of determining whether VA has the capacity or capability to provide items and services directly to veterans, or whether a VA-authorized vendor may be utilized, which is based on several factors including the veteran's clinical needs, costs of items and services, or wider selection of items and services. In both letters, VA stated that these letters would be treated as public comments and that VA will consider and respond to their issues in the final rulemaking. Additionally, the Department's letters containing our responses to the two letters have been made publicly available in the supplemental notice of proposed rulemaking docket.

    On June 14, 2018, VHA met with individuals from McGuire Woods Consulting, who represent American Orthotic and Prosthetic Association (AOPA), at their request, to discuss several prosthetic issues, including the proposed rulemaking at 82 FR 48018 (RIN 2900-AP46). During this discussion, VHA was asked the status of RIN 2900-AP46 and where VHA thought the policy on veterans being able to see outside providers was going. VHA explained that we will continue to provide the necessary care inside and outside VA and that reducing the amount of care in the community is not our intent. With regard to RIN 2900-AP46, VHA conveyed that it received comments, including those of AOPA; is considering these comments; and is drafting the final rule, which will have to be approved by the Administration, and VHA cannot say when it anticipates the final rule to be published. VHA was also asked about the impact of the VA MISSION Act of 2018 on RIN 2900-AP46. VHA stated that this Act will provide more flexibility to provide care in the community and that VHA did not believe the Act would affect the provision of prosthetic and rehabilitative items and services. A summary of this meeting has been made publicly available in the supplemental notice of proposed rulemaking.

    Lastly, the House Veterans' Affairs Committee, Health Subcommittee, held a roundtable regarding prosthetics issues on July 25, 2018. VA was a participant at this roundtable. During this roundtable, concerns were raised about the proposed rule, RIN 2900-AP46, that were similar to those concerns raised during the public comment period. Within this SNPRM, we have addressed these concerns, which were similar to those raised during the public comment period.

    Based on all of the comments received regarding proposed § 17.3240, we propose to revise the text of proposed § 17.3240 as explained previously in this SNPRM.

    Effect of Rulemaking

    The Code of Federal Regulations, as proposed to be revised by the proposed rulemaking at 82 FR 48018 and this SNPRM, would represent the exclusive legal authority on this subject. No contrary guidance or procedures would be authorized. All VA guidance would be read to conform with the proposed rulemaking at 82 FR 48018 and this SNPRM if possible or, if not possible, such guidance would be superseded by this SNPRM and the proposed rulemaking at 82 FR 48018.

    Paperwork Reduction Act

    This SNPRM contains no provisions constituting a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521).

    Regulatory Flexibility Act

    The Secretary hereby certifies that this SNPRM would not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. Therefore, pursuant to 5 U.S.C. 605(b), these amendments would be exempt from the initial and final regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604.

    Executive Orders 12866, 13563, and 13771

    Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and other advantages; distributive impacts; and equity). Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 12866 (Regulatory Planning and Review) defines a “significant regulatory action,” requiring review by the Office of Management and Budget (OMB) as “any regulatory action that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive Order.” The economic, interagency, budgetary, legal, and policy implications of this regulatory action have been examined, and it has been determined not to be a significant regulatory action under Executive Order 12866.

    This rule is not an Executive Order 13771 regulatory action because this rule is not significant under Executive Order 12866. VA's impact analysis can be found as a supporting document at http://www.regulations.gov, usually within 48 hours after the rulemaking document is published. Additionally, a copy of the rulemaking and its impact analysis are available on VA's website at http://www.va.gov/orpm/, by following the link for “VA Regulations Published.”

    Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year. This SNPRM would have no such effect on State, local, and tribal governments, or on the private sector.

    Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers and titles for the programs affected by this document are 64.009, Veterans Medical Care Benefits; 64.013, Veterans Prosthetic Appliances.

    List of Subjects in 38 CFR Part 17

    Administrative practice and procedure, Government contracts, Health care, Health facilities, Health professions, Medical devices, Veterans.

    Signing Authority

    The Secretary of Veterans Affairs approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. Robert L. Wilkie, Secretary, Department of Veterans Affairs, approved this document on October 23, 2018, for publication.

    Dated: November 5, 2018. Consuela Benjamin, Regulations Development Coordinator, Office of Regulation Policy & Management, Office of the Secretary, Department of Veterans Affairs.

    For the reasons set forth in the preamble, we propose to amend 38 CFR part 17 as follows:

    PART 17—MEDICAL 1. The authority citation for part 17 continues to read as follows: Authority:

    38 U.S.C. 501, and as noted in specific sections.

    2. Add § 17.3240, to read as follows:
    § 17.3240 Furnishing authorized items and services.

    (a)(1) VA providers will prescribe items and services based on the veteran's clinical needs and will do so in consultation with the veteran. Once the prescribed item or service is determined to be authorized under § 17.3230, VA will determine whether VA or a VA-authorized vendor will furnish authorized items and services under § 17.3230 to veterans eligible for such items and services under § 17.3220.

    (2) This determination on whether VA or a VA-authorized vendor will furnish the authorized item or service under § 17.3230 will be based on, but not limited to, such factors as the veteran's clinical needs, VA capacity and availability, geographic availability, and cost.

    (b) Except for emergency care reimbursable under 38 CFR 17.120 through 17.132 or 38 CFR 17.1000 through 17.1008, prior authorization of items and services under § 17.3230 is required for VA to reimburse VA-authorized vendors for furnishing such items or services to veterans. Prior authorization must be obtained from VA by contacting any VA medical facility.

    [FR Doc. 2018-24474 Filed 11-27-18; 8:45 am] BILLING CODE 8320-01-P
    83 229 Wednesday, November 28, 2018 Notices COMMISSION ON CIVIL RIGHTS Agenda and Notice of Public Meeting of the Vermont Advisory Committee AGENCY:

    Commission on Civil Rights.

    ACTION:

    Announcement of meeting.

    SUMMARY:

    Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission), and the Federal Advisory Committee Act (FACA) that a planning meeting of the Vermont Advisory Committee to the Commission will be convened by teleconference call at 11:00 a.m. (EST) on Friday, December 7, 2018. The purpose of the meeting is for discussing the proposal on school to prison pipeline issues in Vermont.

    DATES:

    Friday, December 7, 2018, at 11:00 a.m. EST.

    Public Call-In Information: Conference call-in number: 1-877-260-1479 and conference call 2568802.

    FOR FURTHER INFORMATION CONTACT:

    Evelyn Bohor at [email protected] or by phone at 202-376-7533.

    SUPPLEMENTARY INFORMATION:

    Interested members of the public may listen to the discussion by calling the following toll-free conference call-in number: 1-877-260-1479 and conference call 2568802. Please be advised that before placing them into the conference call, the conference call operator will ask callers to provide their names, their organizational affiliations (if any), and email addresses (so that callers may be notified of future meetings). Callers can expect to incur charges for calls they initiate over wireless lines, and the Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free conference call-in number.

    Persons with hearing impairments may also follow the discussion by first calling the Federal Relay Service at 1-800-977-8339 and providing the operator with the toll-free conference call-in number: 1-877-260-1479 and conference call 2568802.

    Members of the public are invited to make statements during the open comment period of the meeting or submit written comments. The comments must be received in the regional office approximately 30 days after each scheduled meeting. Written comments may be mailed to the Eastern Regional Office, U.S. Commission on Civil Rights, 1331 Pennsylvania Avenue, Suite 1150, Washington, DC 20425, faxed to (202) 376-7548, or emailed to Evelyn Bohor at [email protected] Persons who desire additional information may contact the Eastern Regional Office at (202) 376-7533.

    Records and documents discussed during the meeting will be available for public viewing as they become available at https://www.facadatabase.gov/FACA/FACAPublicViewCommitteeDetails?id=a10t0000001gzmXAAQ, click the “Meeting Details” and “Documents” links. Records generated from this meeting may also be inspected and reproduced at the Eastern Regional Office, as they become available, both before and after the meetings. Persons interested in the work of this advisory committee are advised to go to the Commission's website, www.usccr.gov, or to contact the Eastern Regional Office at the above phone numbers, email or street address.

    Agenda Friday, December 7, 2018 at 11 a.m. (EST) • Rollcall • Project Planning • Other Business • Open Comment • Adjourn. Dated: November 21, 2018. David Mussatt, Supervisory Chief, Regional Programs Unit.
    [FR Doc. 2018-25905 Filed 11-27-18; 8:45 am] BILLING CODE 6335-01-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration Submission for OMB Review; Comment Request

    The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35).

    Agency: National Oceanic and Atmospheric Administration (NOAA).

    Title: North Pacific Observer Program.

    OMB Control Number: 0648-0318.

    Form Number(s): None.

    Type of Request: Regular (extension of a currently approved information collection).

    Number of Respondents: 875.

    Average Hours per Response: 5 minutes to request full observer coverage, placement in or removed from the Electronic Monitoring (EM) selection pool, close an EM trip in ODDS, pre-cruise meeting notification, physical examination verification, update to provider information; 15 minutes to log a fishing trip in ODDS; 48 hours for a Vessel Monitoring Plan; 1 hour to submit EM data, and observer training registration; 30 minutes for request small catcher/processor placement in partial coverage category; 4 hours for appeals; 2 minutes to notify observer before handling the vessel's Bering Sea pollock catch; 8 hours for candidates' college transcripts and statements; 7 minutes for observer briefing registration, projected observer assignments, and observer deployment and logistics reports; 30 minutes for observer debriefing registration, observer provider contracts, invoice copies, and industry request for assistance; 12 minutes for certificates of insurance; 2 hours for other reports; 60 hours for observer provider permit application.

    Burden Hours: 15,871.

    Needs and Uses: This request is for an extension of a currently approved information collection.

    The North Pacific Observer Program (Observer Program) is implemented under the authority of section 313 of the Magnuson-Stevens Fishery Conservation and Management Act and regulations at 50 CFR 679. Through the Observer Program, the National Marine Fisheries Service (NMFS) collects the data necessary to conserve and manage the groundfish and halibut fisheries off Alaska. Observers collect biological samples and fishery-dependent information used to estimate total catch and interactions with protected species. Managers use data collected by observers to manage groundfish and prohibited species catch within established limits and to document and reduce fishery interactions with protected resources. Scientists use observer data to assess fish stocks, to provide scientific information for fisheries and ecosystem research and fishing fleet behavior, to assess marine mammal interactions with fishing gear, and to assess fishing interactions with habitat.

    All vessels and processors that participate in federally managed or parallel groundfish and halibut fisheries off Alaska are assigned to one of two categories: (1) The full observer coverage category, where vessels and processors obtain observer coverage by contracting directly with observer providers; or (2) the partial coverage category, where NMFS, in consultation with the North Pacific Fishery Management Council determines when and where observer coverage is needed. Some vessels and processors may be in full coverage for part of the year and partial coverage at other times of the year depending on the observer coverage requirements for specific fisheries. Funds for deploying observers on vessels in the partial coverage category are provided through a system of fees based on the gross ex-vessel value of retained groundfish and halibut. This observer fee is assessed on all landings by vessels that are not otherwise in full coverage. Information collected for the observer fee is approved under OMB Control No. 0648-0711.

    Affected Public: Business or other for-profit organizations; individuals or households.

    Frequency: On occasion, weekly and annually.

    Respondent's Obligation: Required to obtain or retain benefits.

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

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

    Dated: November 23, 2018. Sarah Brabson, NOAA PRA Clearance Officer.
    [FR Doc. 2018-25917 Filed 11-27-18; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration Proposed Information Collection; Comment Request; External Needs Assessment for NOAA Education Products and Programs AGENCY:

    National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Notice.

    SUMMARY:

    The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995.

    DATES:

    Written comments must be submitted on or before January 28, 2019.

    ADDRESSES:

    Direct all written comments to Jennifer Jessup, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6616, 14th and Constitution Avenue NW, Washington, DC 20230 (or via the internet at [email protected]).

    FOR FURTHER INFORMATION CONTACT:

    Requests for additional information or copies of the information collection instrument and instructions should be directed to Bruce Moravchik, National Ocean Service (NOS), 1305 East-West Hwy., Bldg. SSMC4, Silver Springs, MD 20910-3278, (240) 533-0874, [email protected] or Shannon Ricles, NOS, Monitor National Marine Sanctuary, 100 Museum Dr., Newport News, VA 23602, (757) 591-7328, [email protected]

    SUPPLEMENTARY INFORMATION:

    I. Abstract

    This request is for a new voluntary information collection.

    NOAA Office of Education is sponsoring a voluntary multi-question survey to assess the needs of educators pertaining to future NOAA multimedia products and programs. In developing multimedia materials that convey NOAA's science, service and stewardship, the Agency must insure that these resources are of the highest quality and meet the needs of formal and informal educators across the United States. To achieve this goal, it will be necessary to conduct surveys identifying the types of educational programs and products of the highest interest and greatest need by formal and informal educators. By surveying external educators to gather this information, budget expenditures will be used optimally to develop appropriate products and programs most desired by educators to support and enhance Ocean, Earth science, and related STEM education subjects throughout our nation.

    II. Method of Collection

    The voluntary needs assessment mechanism will be distributed via email with a link to a Google form to external educators subscribed to NOAA education programs as well as their partners email distribution lists. The voluntary needs assessment mechanism will also be distributed in person (paper and electronically) at education conferences, workshops, and other venues hosting educators.

    III. Data

    OMB Control Number: 0648-xxxx.

    Form Number(s): None.

    Type of Review: New information collection.

    Affected Public: Individuals or households; Business or other for-profit organizations; Not-for-profit institutions.

    Estimated Number of Respondents: 1,000 annually.

    Estimated Time per Response: Five minutes per survey.

    Estimated Total Annual Burden Hours: 83 hours.

    Estimated Total Annual Cost to Public: $0.00 in recordkeeping/reporting costs.

    IV. Request for Comments

    Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.

    Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they also will become a matter of public record.

    Dated: November 23, 2018. Sarah Brabson, NOAA PRA Clearance Officer.
    [FR Doc. 2018-25918 Filed 11-27-18; 8:45 am] BILLING CODE 3510-12-P
    CONSUMER PRODUCT SAFETY COMMISSION [CPSC Docket No. 19-C0002] EKO Development, Ltd. and EKO USA, LLC, Provisional Acceptance of a Settlement Agreement and Order AGENCY:

    Consumer Product Safety Commission.

    ACTION:

    Notice.

    SUMMARY:

    It is the policy of the Commission to publish settlements which it provisionally accepts under the Consumer Product Safety Act in the Federal Register in accordance with the terms of the Consumer Product Safety Commission's regulations. Published below is a provisionally-accepted Settlement Agreement with EKO Development, Ltd. and EKO USA, LLC, containing a civil penalty in the amount of one million dollars ($1,000,000), subject to the terms and conditions of the Settlement Agreement.1

    1 The Commission voted 3-2 to provisionally accept the proposed Settlement Agreement and Order regarding EKO Development, Ltd. and EKO USA, LLC. Acting Chairman Buerkle, Commissioner Baiocco and Commissioner Feldman voted to provisionally accept the Settlement Agreement and Order. Commissioner Adler and Commissioner Kaye voted to take other action. Commissioner Adler and Commissioner Kaye submitted a joint dissenting opinion regarding the matter. The dissenting opinion is available on the CPSC website, www.cpsc.gov.

    DATES:

    Any interested person may ask the Commission not to accept this agreement or otherwise comment on its contents by filing a written request with the Office of the Secretary by December 13, 2018.

    ADDRESSES:

    Persons wishing to comment on this Settlement Agreement should send written comments to Comment 19-C0002, Office of the Secretary, Consumer Product Safety Commission, 4330 East West Highway, Room 820, Bethesda, Maryland 20814-4408.

    FOR FURTHER INFORMATION CONTACT:

    Michele Melnick, Trial Attorney, Division of Compliance, Office of the General Counsel, Consumer Product Safety Commission, 4330 East West Highway, Bethesda, Maryland 20814-4408; telephone (301) 504-7592.

    SUPPLEMENTARY INFORMATION:

    The text of the Agreement and Order appears below.

    Dated: November 23, 2018. Alberta E. Mills, Secretary. UNITED STATES OF AMERICA CONSUMER PRODUCT SAFETY COMMISSION In the Matter of: EKO DEVELOPMENT, LTD. and EKO USA, LLC CPSC Docket No.: 19-C0002 SETTLEMENT AGREEMENT

    1. In accordance with the Consumer Product Safety Act, 15 U.S.C. §§ 2051- 2089 (“CPSA”) and 16 C.F.R. § 1118.20, EKO Development, Ltd. and EKO USA, LLC (collectively, “EKO”) and the United States Consumer Product Safety Commission (“Commission”), through its staff, hereby enter into this Settlement Agreement (“Agreement”). The Agreement and the incorporated attached Order resolve staff's charges set forth below.

    THE PARTIES

    2. The Commission is an independent federal regulatory agency, established pursuant to, and responsible for, the enforcement of the CPSA, 15 U.S.C. §§ 2051-2089. By executing the Agreement, staff is acting on behalf of the Commission, pursuant to 16 C.F.R. § 1118.20(b). The Commission issues the Order under the provisions of the CPSA.

    3. EKO Development, Ltd. (“EKO Development”) is a corporation, organized and existing under the laws of China, with its principal place of business in China. EKO USA, LLC (“EKO USA”) is a corporation, organized and existing under the laws of the state of Nevada, with its principal place of business in Stuart, Florida.

    STAFF CHARGES

    4. Between November 2013 and May 2015, EKO manufactured approximately 367,000 EKO Sensible Eco Living Trash Cans (“Subject Products” or “Trash Cans”). The Trash Cans are 80 liter stainless steel, metal-cylinder Trash Cans with a black plastic protective collar in the opening on the back of the Trash Can.

    5. The Trash Cans were sold exclusively at Costco Wholesale Corporation at its warehouse stores throughout the United States from December 2013 through May 2015.

    6. The Trash Cans are a “consumer product,” “distribut[ed] in commerce,” as those terms are defined or used in sections 3(a)(5) and (8) of the CPSA, 15 U.S.C. § 2052(a)(5) and (8). EKO is a “manufacturer” as such term is defined in section 3(a)(11) of the CPSA, 15 U.S.C. § 2052(a)(11).

    7. The Trash Cans contain a defect which could create a substantial product hazard or create an unreasonable risk of serious injury because the black plastic protective collar in the opening on the back of the Trash Can can detach from the sharp metal handle, posing a laceration hazard to consumers.

    8. Beginning in April 2014, EKO received complaints from consumers who received laceration injuries, including some serious injuries as defined in 16 C.F.R. § 1115.6(c), from the sharp metal handle of the Trash Cans.

    9. In August 2014, EKO approved a design change to the Trash Cans to add a two-piece plastic handle cover to address the laceration hazard. The design change was implemented on the Trash Cans that were produced in August 2014 and shipped to Costco in September 2014.

    10. Despite having information that reasonably supported the conclusion that the Trash Cans contained a defect or created an unreasonable risk of serious injury or death, EKO did not notify the Commission immediately of such defect or risk, as required by sections 15(b)(3) and (4) of the CPSA, 15 U.S.C. §§ 2064(b)(3) and (4).

    11. EKO and the CPSC jointly announced a recall of 367,000 Trash Cans on July 17, 2015, because the Trash Cans posed a laceration risk to consumers.

    12. In failing to immediately inform the Commission about the defect or unreasonable risk associated with the Trash Cans, EKO knowingly violated section 19(a)(4) of the CPSA, 15 U.S.C. § 2068(a)(4), as the term “knowingly” is defined in section 20(d) of the CPSA, 15 U.S.C. § 2069(d).

    13. Pursuant to Section 20 of the CPSA, 15 U.S.C. § 2069, EKO is subject to civil penalties for its knowing violation of section 19(a)(4) of the CPSA, 15 U.S.C. § 2068(a)(4).

    RESPONSE OF EKO

    14. EKO's settlement of this matter does not constitute an admission of staff's charges as set forth in paragraphs 4 through 13 above.

    15. EKO Development, Ltd. is a small Chinese company based in Guangzhou, China. EKO was completely unaware of the CPSC reporting requirements. EKO relied upon its third party insurance administrator to handle the claims received from consumers and was never advised of the potential obligation to report under sections 15(b)(3) and (4) of the CPSA, 15 U.S.C. § 2064(b)(3) and (4). Upon learning about the claims from the sharp edge, EKO immediately re-designed the Trash Can so that all new products would have a two-piece black plastic collar, permanently covering the sharp edge. Upon learning of the potential obligation to report from its retailer customer in May 2015, EKO immediately hired legal counsel in the U.S., reported the issue and conducted a recall of the Trash Can.

    AGREEMENT OF THE PARTIES

    16. Under the CPSA, the Commission has jurisdiction over the matter involving the Trash Cans and over EKO.

    17. The parties enter into the Agreement for settlement purposes only. The Agreement does not constitute an admission by EKO or a determination by the Commission that EKO violated the CPSA's reporting requirements.

    18. In settlement of staff's charges, and to avoid the cost, distraction, delay, uncertainty, and inconvenience of protracted litigation, EKO shall pay a civil penalty in the amount of one million dollars (US $1,000,000). EKO shall pay the one million dollar (US $1,000,000) civil penalty in installments, with $250,000 to be paid within thirty (30) calendar days after the Firm receives service of the Commission's final Order accepting the Agreement (“Final Acceptance”); $250,000 to be paid ninety (90) days after Final Acceptance; $250,000 to be paid one hundred eighty (180) days after Final Acceptance; and $250,000 to be paid one (1) year after Final Acceptance. EKO shall also provide a written affirmation to CPSC's Office of the General Counsel within sixty (60) days after Final Acceptance declaring that EKO has implemented and will enforce a written comprehensive compliance program pursuant to paragraph 27, below.

    19. EKO, through its Principal or Chief Executive Officer, shall notify CPSC's General Counsel in writing at least ten (10) calendar days after any reorganization, consolidation, merger, acquisition, dissolution, assignment, sale, transfer, or similar transaction or series of transactions resulting in a successor entity to EKO, the transfer or disposition of substantially all of the assets of EKO, or any other changes in corporate structure that may affect EKO's obligations arising out of this Agreement.

    20. All payments to be made under the Agreement shall constitute debts owing to the United States and shall be made by electronic wire transfer to the United States via: http://www.pay.gov for allocation to, and credit against, the payment obligations of EKO under this Agreement.

    21. This Agreement has been compromised by the Commission pursuant to its statutory authority under Section 20(c), which requires the Commission to consider, among other things, the appropriateness of the penalty to the size of the business of the person charged, including how to mitigate undue adverse economic impacts on small businesses. EKO represents and warrants that the financial statements of the Firm provided to the Commission and written representations in connection with the matters addressed in this Agreement are complete, accurate, and current, have been prepared on a consistent basis throughout the periods indicated and fairly present the financial condition and results of operations and cash flow of the Firm as of the dates, and for the periods, indicated therein. EKO shall notify the Commission in writing if any information supplied in connection with this Agreement is discovered to be inaccurate or untrue, and shall provide the Commission with documents or information that contain information that accurately conveys such financial information.

    22. The parties agree that immediately upon the occurrence of an “Event of Default,” the entire penalty amount ($1,000,000), plus any accrued and unpaid interest, minus any payments by EKO, shall be come due and payable, and the Commission may take further action as warranted without notice or further action by any party. An “Event of Default” means:

    a. a failure of the Firm to pay the $1,000,000 (or any portion thereof) when due and payable, as set forth in paragraph 18 above;

    b. a breach of any representation or warranty of the Firm made in this Agreement or in connection with this Agreement as it pertains to the Firm's financial status;

    c. a failure by the Firm to observe or perform any of its obligations or agreements as set forth in the Agreement, including the agreement to implement and enforce a compliance program designed to ensure compliance with the CPSA, including section 19(a), as set forth in paragraph 27 below; or

    d. a failure by the Firm to comply with CPSA sections 15(b) and 19(a) for three years after the effective date of this Agreement.

    23. All unpaid amounts, if any, due and owing under the Agreement shall constitute a debt due and immediately owing by EKO to the United States, and interest shall accrue and be paid by EKO at the federal legal rate of interest set forth at 28 U.S.C. § 1961(a) and (b) from the date of Default, until all amounts due have been paid in full (hereinafter “Default Payment Amount” and “Default Interest Balance”). EKO shall consent to a Consent Judgment in the amount of the Default Payment Amount and Default Interest Balance, and the United States, at its sole option, may collect the entire Default Payment Amount and Default Interest Balance, or exercise any other rights granted by law or in equity, including, but not limited to, referring such matters for private collection; and EKO agrees not to contest, and hereby waives and discharges any defenses, to any collection action undertaken by the United States, or its agents or contractors, pursuant to this paragraph. EKO shall pay the United States all reasonable costs of collection and enforcement under this paragraph, respectively, including reasonable attorney's fees and expenses.

    24. After staff receives this Agreement executed on behalf of EKO, staff shall promptly submit the Agreement to the Commission for provisional acceptance. Promptly following provisional acceptance of the Agreement by the Commission, the Agreement shall be placed on the public record and published in the Federal Register, in accordance with the procedures set forth in 16 C.F.R. § 1118.20(e). If the Commission does not receive any written request not to accept the Agreement within fifteen (15) calendar days, the Agreement shall be deemed finally accepted on the 16th calendar day after the date the Agreement is published in the Federal Register, in accordance with 16 C.F.R. § 1118.20(f).

    25. This Agreement is conditioned upon, and subject to, the Commission's final acceptance, as set forth above, and it is subject to the provisions of 16 C.F.R. § 1118.20(h). Upon the later of: (i) the Commission's final acceptance of this Agreement and service of the accepted Agreement upon EKO, and (ii) the date of the issuance of the final Order, this Agreement shall be in full force and effect and shall be binding upon the parties.

    26. Effective upon the later of: (i) the Commission's final acceptance of this Agreement and service of the accepted Agreement upon EKO, and (ii) the date of the issuance of the final Order, for good and valuable consideration, EKO hereby expressly and irrevocably waives and agrees not to assert any past, present or future rights to the following, in connection with the matter described in this Agreement: (i) an administrative or judicial hearing; (ii) judicial review or other challenge or contest of the Commission's actions; (iii) a determination by the Commission of whether EKO failed to comply with the CPSA and the underlying regulations; (iv) a statement of findings of fact and conclusions of law; and (v) any claims under the Equal Access to Justice Act.

    27. EKO shall create, maintain and enforce a compliance program designed to ensure compliance with the CPSA, including section 19(a), of the CPSA with respect to any consumer product imported, manufactured, distributed or sold by EKO, and which shall contain the following elements: (i) written standards, policies and procedures, including those designed to ensure that information that may relate to or impact CPSA compliance (including information obtained by quality control personnel) is conveyed effectively to personnel responsible for CPSA compliance, whether or not an injury is referenced; (ii) a mechanism for confidential employee reporting of compliance-related questions or concerns to either a compliance officer or to another senior manager with authority to act as necessary; (iii) effective communication of company compliance-related policies and procedures regarding the CPSA to all applicable employees through training programs or otherwise; (iv) EKO's senior management participation in a compliance committee responsible for the review and oversight of compliance matters related to the CPSA; (v) retention of all CPSA compliance-related records, and availability of such records to staff upon request; and (vi) procedures designed to ensure that: information required to be disclosed by EKO to the Commission is recorded, processed and reported in accordance with applicable law; that all reporting made to the Commission is timely, truthful, complete, accurate and in accordance with applicable law; and that prompt disclosure is made to EKO's management of any significant deficiencies or material weaknesses in the design or operation of such internal controls that are reasonably likely to affect adversely, in any material respect, EKO's ability to record, process and report to the Commission in accordance with applicable law.

    28. Upon reasonable request of staff, EKO shall provide written documentation of its internal controls and procedures, including, but not limited to, the effective dates of the procedures and improvements thereto. EKO shall cooperate fully and truthfully with staff and shall make available all non-privileged information and materials, and personnel deemed necessary by staff to evaluate EKO's compliance with the terms of the Agreement.

    29. The parties acknowledge and agree that the Commission may publicize the terms of the Agreement and Order including disclosing the name of the Subject Products in this or other public announcements.

    30. EKO represents that the Agreement: (i) is entered into freely and voluntarily, without any degree of duress or compulsion whatsoever; (ii) has been duly authorized; and (iii) constitutes the valid and binding obligation of EKO, enforceable against EKO in accordance with its terms. EKO will not directly or indirectly receive any reimbursement, indemnification, insurance-related payment or other payment in connection with the civil penalty to be paid by EKO pursuant to the Agreement and Order.

    31. The signatories represent that they are duly authorized to execute this Agreement.

    32. The Agreement is governed by the law of the United States.

    33. The Agreement and Order shall apply to, and be binding upon, EKO and each of its parents, successors, subsidiaries, divisions, agents, foreign or domestic corporate affiliates, transferees, and assigns, and a violation of the Agreement or Order may subject EKO, and each of its parents, successors, subsidiaries, divisions, agents, foreign or domestic corporate affiliates, transferees, and assigns, to appropriate legal action.

    34. The Agreement and the Order constitute the complete agreement between the parties on the subject matter contained therein. The Agreement may be used in interpreting the Order. Understandings, agreements, representations, or interpretations apart from those contained in the Agreement and the Order may not be used to vary or contradict their terms. For purposes of construction, the Agreement shall be deemed to have been drafted by both of the parties and shall not, therefore, be construed against any party, for that reason, in any subsequent dispute.

    35. The Agreement may not be waived, amended, modified or otherwise altered, except as in accordance with the provisions of 16 C.F.R. § 1118.20(h). The Agreement may be executed in counterparts.

    36. If any provision of the Agreement or the Order is held to be illegal, invalid, or unenforceable under present or future laws effective during the terms of the Agreement and Order, such provision shall be fully severable. The balance of the Agreement and the Order shall remain in full force and effect, unless the Commission and EKO agree in writing that severing the provision materially affects the purpose of the Agreement and the Order.

    EKO DEVELOPMENT LTD.

    Dated: October 31, 2018

    By: James Chen Principal, EKO Development Ltd. Flat 1013-1015, R & F Profit Plaza, No. 76 Guangzhou Avenue West, Guangzhou, China EKO USA, LLC

    Dated: October 31, 2018

    By: James Chen Principal, EKO USA LLC 2672 SE Willoughby Blvd. Stuart, Florida 34994

    Dated: October 31, 2018

    By: David H. Baker 1701 Pennsylvania Avenue, N.W., Suite 200 Washington, D.C. 20006 Counsel to EKO Development Ltd. U.S. CONSUMER PRODUCT SAFETY COMMISSION 4330 East West Highway Bethesda, Maryland 20814 Patricia M. Hanz General Counsel Mary B. Murphy Assistant General Counsel

    Dated: November 1, 2018

    By: Michele Melnick Trial Attorney Division of Compliance Office of the General Counsel
    United States of America Consumer Product Safety Commission In the Matter of: EKO Development, Ltd. and EKO USA, LLC CPSC Docket No.: 19-C0002 ORDER

    Upon consideration of the Settlement Agreement entered into between EKO Development, Ltd. and EKO USA, LLC (collectively, “EKO”) and the U.S. Consumer Product Safety Commission (“Commission”), and the Commission having jurisdiction over the subject matter and over EKO, and it appearing that the Settlement Agreement and the Order are in the public interest, it is:

    Ordered that the Settlement Agreement be, and is, hereby, accepted; and it is

    Further Ordered that EKO shall comply with the terms of the Settlement Agreement and shall pay a civil penalty in the amount of one million dollars ($1,000,000), subject to the terms and conditions of the Settlement Agreement. Upon the occurrence of an Event of Default, as defined in the Settlement Agreement, the entire penalty amount of $1,000,000, plus any accrued and unpaid interest, minus any penalty amounts paid by EKO, shall immediately become due and payable and the Commission may take further action as warranted.

    Provisionally accepted and provisional Order issued on the 20th day of November, 2018.

    By Order of the Commission:

    Alberta Mills, Secretary, U.S. Consumer Product Safety Commission.
    [FR Doc. 2018-25928 Filed 11-27-18; 8:45 am] BILLING CODE 6355-01-P
    DEPARTMENT OF DEFENSE Office of the Secretary [Docket ID: DOD-2018-OS-0096] Proposed Collection; Comment Request AGENCY:

    Office of the Under Secretary of Defense for Intelligence, DoD.

    ACTION:

    Information collection notice.

    SUMMARY:

    In compliance with the Paperwork Reduction Act of 1995, the Office of the Under Secretary of Defense for Intelligence announces a proposed public information collection and seeks public comment on the provisions thereof. Comments are invited on 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, the accuracy of the agency's estimate of the burden of the proposed information collection, ways to enhance the quality, utility, and clarity of the information to be collected, and ways to minimize the burden of the information collection on respondents, including through the use of automated collection techniques or other forms of information technology.

    DATES:

    Consideration will be given to all comments received by January 28, 2019.

    ADDRESSES:

    You may submit comments, identified by docket number and title, by any of the following methods:

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

    Mail: Department of Defense, Office of the Chief Management Officer, Directorate for Oversight and Compliance, 4800 Mark Center Drive, Mailbox #24 Suite 08D09, Alexandria, VA 22350-1700.

    Instructions: All submissions received must include the agency name, docket number and title for this Federal Register document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing on the internet at http://www.regulations.gov as they are received without change, including any personal identifiers or contact information.

    FOR FURTHER INFORMATION CONTACT:

    To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to the Defense Security Service, Program Integration Office, Project Integration Office Process and Governance Manager, ATTN: Chris Kubricky, Quantico, VA 22134 or call the Program Integration Office at (571)-305-6243.

    SUPPLEMENTARY INFORMATION:

    Title; Associated Form; and OMB Number: Department of Defense National Industrial Security Program (NISP) Contractor Classification System; DD Form 254; OMB Control Number 0704-0567.

    Needs and Uses: This collection is a revision to the collection under OMB Control Number 0704-0567 (DD254) approved in November 2017. Pursuant to 48 CFR, part 27, in conjunction with subpart 4.4 of the Federal Acquisition Regulation, contracting officers shall determine whether access to classified information may be required by a contractor during contract performance. When access to classified information is required, DoD Components shall use the “Contract Security Classification Specification,” DD Form 254, as an attachment to contracts or agreements requiring access to classified information by U.S. contractors. The NISP Contract Classification System (NCCS) will be the new electronic repository for the DD254. It will expedite the processing and distribution of contract classification specifications for contracts requiring access to classified information. NCCS will also provide for workflow processes to share data for: the Facility Clearance Request (FCL), the Request for Approval to Subcontract, and National Interest Determination (NID) which are already approved by the Office of Management and Budget (OMB) control number 0704-0571 for the National Industrial Security System (NISS). Respondents can register for and request access to NCCS at: https://wawf.eb.mil/.

    Affected Public: Business or other for profit.

    Annual Burden Hours: 37,461.67.

    Number of Respondents: 3,211.

    Responses per Respondent: 10.

    Annual Responses: 32,110.

    Average Burden per Response: 70 minutes.

    Frequency: On Occasion.

    The DD Form 254 is used to identify the classified areas of information involved in a contract and to identify the specific items of information that require protection. DoD Components, non-DoD agencies with formal agreements with DoD for industrial security services, or U.S. contractors under DoD security cognizance in the NISP, provide guidance in the body of the DD Form 254 or its attachments for contracts or other agreements requiring access to classified information.

    The respondent is a cleared contractor facility in the NISP under the security cognizance of the Defense Security Service (DSS). Pursuant to security classification guidance of the NISPOM, DoD 5220.22-M, the NISP contractors must provide contract security classification specifications with any contract or agreement that they propose or award. DD Form 254 is the official vehicle for providing this information.

    A respondent submits completed DD Forms 254 with any attachments to the applicable subcontractor and to the DoD NISP Cognizant Security Office (i.e., DSS) for evaluation. In the event that the Government Contracting Activity (GCAs) is a foreign government or an activity of the North Atlantic Treaty Organization, a security aspects letter serves as the equivalent of a DD Form 254 to provide security classification guidance. Both U.S. Government and contractor respondents will be required to electronically complete and submit the DD Form 254 with attachments through the NISP Contracts Classification System (NCCS). Those USG respondents that have a legacy electronic 254 system and will have to interface their data into NCCS, in coordination with DoD.

    Dated: November 23, 2018. Shelly E. Finke, Alternate OSD Federal Register, Liaison Officer, Department of Defense.
    [FR Doc. 2018-25941 Filed 11-27-18; 8:45 am] BILLING CODE 5001-06-P
    DEPARTMENT OF DEFENSE Office of the Secretary Charter Renewal of Department of Defense Federal Advisory Committees AGENCY:

    Department of Defense.

    ACTION:

    Renewal of Federal Advisory Committee.

    SUMMARY:

    The Department of Defense is publishing this notice to announce that it is renewing the charter for the Vietnam War commemoration Advisory Committee (“the Committee”).

    FOR FURTHER INFORMATION CONTACT:

    Jim Freeman, Advisory Committee Management Officer for the Department of Defense, 703-692-5952.

    SUPPLEMENTARY INFORMATION:

    The Committee's charter is being renewed in accordance with the Federal Advisory Committee Act (FACA) of 1972 (5 U.S.C., App) and 41 CFR 102-3.50(d). The Committee's charter and contact information for the Committee's Designated Federal Officer (DFO) can be found at https://www.facadatabase.gov/FACA/apex/FACAPublicAgencyNavigation.

    The Committee provides the Secretary of Defense and the Deputy Secretary of Defense, through the Chief Management Officer (CMO) independent advice and recommendations on the Department of Defense (DoD) program on how to best achieve the following objectives in commemorating the 50th Anniversary of the Vietnam War, as referenced in section 598(c) of Public Law 110-181: (a) Thank and honor veterans of the Vietnam War, including personnel who were held as prisoners of war or listed as missing in action, for their service and sacrifice on behalf of the United States and to thank and honor the families of these veterans; (b) highlight the service of the Armed Forces during the Vietnam War and the contributions of Federal agencies and governmental and non-governmental organizations that served with, or in support of, the Armed Forces; (c) Pay tribute to the contributions made on the home front by the people of the United States during the Vietnam War; (d) Highlight the advances in technology, science, and medicine related to military research conducted during the Vietnam War; and (e) Recognize the contributions and sacrifices made by the allies of the United States during the Vietnam War.

    The Committee will be composed of no more than 20 members that will represent Vietnam Veterans, their families, and the American public. Candidates for the Committee will be selected from the Military Services (both retired veterans and active members who served during the Vietnam era), the DoD, the Department of State, the Department of Veterans Affairs, and the Intelligence Community. In addition, candidates from nongovernmental organizations that support veterans or contribute to the public's understanding of the Vietnam War will be selected. All members of the Committee are appointed to provide advice on the basis of their best judgment and without representing any particular point of view and in a manner that is free from conflict of interest. Except for reimbursement of official Committee-related travel and per diem, Committee members serve without compensation.

    The public or interested organizations may submit written statements to the Committee membership about the Committee's mission and functions. Written statements may be submitted at any time or in response to the stated agenda of planned meeting of the Committee. All written statements shall be submitted to the DFO for the Committee, and this individual will ensure that the written statements are provided to the membership for their consideration.

    Dated: November 19, 2018. Shelly Finke, Alternate OSD Federal Register, Liaison Officer, Department of Defense.
    [FR Doc. 2018-25933 Filed 11-27-18; 8:45 am] BILLING CODE 5001-06-P
    DEPARTMENT OF DEFENSE Office of the Secretary [Docket ID: DOD-2018-OS-0097] Proposed Collection; Comment Request AGENCY:

    Office of the Under Secretary of Defense for Personnel and Readiness, DoD.

    ACTION:

    Information collection notice.

    SUMMARY:

    In compliance with the Paperwork Reduction Act of 1995, the Office of the Under Secretary of Defense for Personnel and Readiness announces a proposed public information collection and seeks public comment on the provisions thereof. Comments are invited on: 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; the accuracy of the agency's estimate of the burden of the proposed information collection; ways to enhance the quality, utility, and clarity of the information to be collected; and ways to minimize the burden of the information collection on respondents, including through the use of automated collection techniques or other forms of information technology.

    DATES:

    Consideration will be given to all comments received by January 28, 2019.

    ADDRESSES:

    You may submit comments, identified by docket number and title, by any of the following methods:

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

    Mail: Department of Defense, Office of the Chief Management Officer, Directorate for Oversight and Compliance, 4800 Mark Center Drive, Mailbox #24 Suite 08D09, Alexandria, VA 22350-1700.

    Instructions: All submissions received must include the agency name, docket number and title for this Federal Register document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing on the internet at http://www.regulations.gov as they are received without change, including any personal identifiers or contact information.

    FOR FURTHER INFORMATION CONTACT:

    To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to the Military Community Support Program, 4800 Mark Center Drive, Alexandria, VA 22350, ATTN: Spouse Education and Career Opportunities, or call 1-888-363-6431.

    SUPPLEMENTARY INFORMATION:

    Title; Associated Form; and OMB Number: My Career Advanced Account (MyCAA) Scholarship Program; OMB Control Number 0704-XXXX.

    Needs and Uses: This information collection is necessary to support the MyCAA scholarship program, a career development and employment assistance program intended to assist military spouses pursue licenses, certificates, certifications or associate's degrees necessary for gainful employment in high demand, high growth portable career fields and occupations.

    Affected Public: Individuals or households.

    Annual Burden Hours: 5,412.25.

    Number of Respondents: 10,148.

    Responses per Respondent: 3.4.

    Annual Responses: 34,503.

    Average Burden per Response: 9.4118 minutes.

    Frequency: On occasion.

    Dated: November 23, 2018. Shelly E. Finke, Alternate OSD Federal Register, Liaison Officer, Department of Defense.
    [FR Doc. 2018-25938 Filed 11-27-18; 8:45 am] BILLING CODE 5001-06-P
    DEPARTMENT OF DEFENSE Office of the Secretary [Docket ID: DOD-2018-OS-0095] Proposed Collection; Comment Request AGENCY:

    Office of the Secretary of Defense, DOD.

    ACTION:

    Information collection notice.

    SUMMARY:

    As part of a Federal Government-wide effort to streamline the process to seek feedback from the public on service delivery, we are seeking comment on the development of the following proposed Generic Information Collection Request (Generic ICR): “Fast Track Generic Clearance for the Collection of Qualitative Feedback on Agency Service Delivery” for approval under the Paperwork Reduction Act (PRA). This notice announces our intent to submit this collection to OMB for approval and solicits comments on specific aspects for the proposed information collection.

    DATES:

    Consideration will be given to all comments received by January 28, 2019.

    ADDRESSES:

    You may submit comments, identified by docket number and title, by any of the following methods:

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

    Mail: Department of Defense, Office of the Chief Management Officer, Directorate for Oversight and Compliance, 4800 Mark Center Drive, Mailbox #24 Suite 08D09, Alexandria, VA 22350-1700.

    Instructions: All submissions received must include the agency name, docket number and title for this Federal Register document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing on the internet at http://www.regulations.gov as they are received without change, including any personal identifiers or contact information.

    FOR FURTHER INFORMATION CONTACT:

    To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to Information Collections Branch, Directives Division, Attn: Mr. Frederick Licari, 4800 Mark Center Drive, Suite 02G09, Alexandria, VA 22350-3100, Phone: 571-372-0493.

    SUPPLEMENTARY INFORMATION:

    Title; Associated Form; and OMB Number: Fast Track Generic Clearance for the Collection of Qualitative Feedback on Agency Service Delivery; OMB Control Number 0704-0553.

    Needs and Uses: The proposed information collection activity provides a means to garner qualitative customer and stakeholder feedback in an efficient, timely manner, in accordance with the Administration's commitment to improving service delivery. By qualitative feedback, we mean information that provides useful insights on perceptions and opinions, but are not statistical surveys that yield quantitative results that can be generalized to the population of study. This feedback will provide insights into customer or stakeholder perceptions, experiences and expectations, provide an early warning of issues with service, or focus attention on areas where communication, training or changes in operations might improve delivery of products or services. These collections will allow for ongoing, collaborative and actionable communications between the Agency and its customers and stakeholders. It will also allow feedback to contribute directly to the improvement of program management.

    The solicitation of feedback will target areas such as: Timeliness, appropriateness, accuracy of information, courtesy, efficiency of service delivery, and resolution of issues with service delivery. Responses will be assessed to plan and inform efforts to improve or maintain the quality of service offered to the public. If this information is not collected, vital feedback from customers and stakeholders on the Agency's services will be unavailable.

    The Agency will only submit a collection for approval under this generic clearance if it meets the following conditions:

    • The collections are voluntary;

    • The collections are low-burden for respondents (based on considerations of total burden hours, total number of respondents, or burden-hours per respondent) and are low-cost for both the respondents and the Federal Government;

    • The collections are noncontroversial and do not raise issues of concern to other Federal agencies;

    • Any collection is targeted to the solicitation of opinions from respondents who have experience with the program or may have experience with the program in the near future;

    • Personally identifiable information (PII) is collected only to the extent necessary and is not retained;

    • Information gathered will be used only internally for general service improvement and program management purposes and is not intended for release outside of the agency;

    • Information gathered will not be used for the purpose of substantially informing influential policy decisions; and

    • Information gathered will yield qualitative information; the collections will not be designed or expected to yield statistically reliable results or used as though the results are generalizable to the population of study.

    Feedback collected under this generic clearance provides useful information, but it does not yield data that can be generalized to the overall population. This type of generic clearance for qualitative information will not be used for quantitative information collections that are designed to yield reliably actionable results, such as monitoring trends over time or documenting program performance. Such data uses require more rigorous designs that address: The target population to which generalizations will be made, the sampling frame, the sample design (including stratification and clustering), the precision requirements or power calculations that justify the proposed sample size, the expected response rate, methods for assessing potential nonresponse bias, the protocols for data collection, and any testing procedures that were or will be undertaken prior to fielding the study. Depending on the degree of influence the results are likely to have, such collections may still be eligible for submission for other generic mechanisms that are designed to yield quantitative results.

    As a general matter, information collections will not result in any new system of records containing privacy information and will not ask questions of a sensitive nature, such as sexual behavior and attitudes, religious beliefs, and other matters that are commonly considered private.

    Affected Public: Individuals or Households; Business or Other For-Profit; Not-For-Profit Institutions; Farms; Federal Government; State, Local, or Tribal Government.

    Estimated Annual Number of Respondents: 100,000.

    Below we provide projected average burden estimates for the next three years.

    Average Expected Annual Number of Activites: 100.

    Average Number of Respondents per Activity: 1,000.

    Responses per Respondent: 1.

    Annual Burden Hours: 16,667.

    Number of Respondents: 1,000.

    Annual Responses: 100,000.

    Average Burden per Response: 10 minutes.

    Frequency: On Occasion.

    Dated: November 23, 2018. Shelly E. Finke, Alternate OSD Federal Register, Liaison Officer, Department of Defense.
    [FR Doc. 2018-25939 Filed 11-27-18; 8:45 am] BILLING CODE 5001-06-P
    DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket No. ER19-381-000] Power Holding LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization

    This is a supplemental notice in the above-referenced proceeding of Power Holding 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 December 11, 2018.

    The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at http://www.ferc.gov. To facilitate electronic service, persons with internet access who will eFile a document and/or be listed as a contact for an intervenor must create and validate an eRegistration account using the eRegistration link. Select the eFiling link to log on and submit the intervention or protests.

    Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426.

    The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the website that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email [email protected] or call (866) 208-3676 (toll free). For TTY, call (202) 502-8659.

    Dated: November 21, 2018. Nathaniel J. Davis, Sr., Deputy Secretary.
    [FR Doc. 2018-25926 Filed 11-27-18; 8:45 am] BILLING CODE 6717-01-P
    DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Project No. 2727-092] Notice of Availability of Draft Environmental Assessment: Black Bear Hydro Partners, LLC

    In accordance with the National Environmental Policy Act of 1969 and the Federal Energy Regulatory Commission's (Commission) regulations, 18 CFR part 380, the Office of Energy Projects has reviewed the application for the relicensing of the Ellsworth Hydroelectric Project, located on the Union River, in Hancock County, Maine, and has prepared a Draft Environmental Assessment (DEA) for the project.

    The DEA contains staff's analysis of the potential environmental impacts of the project and concludes that licensing the project, with appropriate environmental protective measures, would not constitute a major federal action that would significantly affect the quality of the human environment.

    A copy of the DEA is available for review at the Commission in the Public Reference Room or may be viewed on the Commission's website at http://www.ferc.gov using the eLibrary link. Enter the docket number excluding the last three digits in the docket number field to access the document. For assistance, contact FERC Online Support at [email protected], (866) 208-3676 (toll free), or (202) 502-8659 (TTY).

    You may also register online at http://www.ferc.gov/docs-filing/esubscription.asp to be notified via email of new filings and issuances related to this or other pending projects. For assistance, contact FERC Online Support.

    Any comments should be filed within 60 days from the date of this notice.

    The Commission strongly encourages electronic filing. Please file comments using the Commission's eFiling system at http://www.ferc.gov/docs-filing/efiling.asp. Commenters can submit brief comments up to 6,000 characters, without prior registration, using the eComment system at http://www.ferc.gov/docs-filing/ecomment.asp. You must include your name and contact information at the end of your comments. For assistance, please contact FERC Online Support. In lieu of electronic filing, please send a paper copy to: Secretary, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426. The first page of any filing should include docket number P-2727-092.

    For further information, contact Dr. Nicholas Palso at (202) 502-8854, or at [email protected]

    Dated: November 21, 2018. Nathaniel J. Davis, Sr., Deputy Secretary.
    [FR Doc. 2018-25920 Filed 11-27-18; 8:45 am] BILLING CODE 6717-01-P
    DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Project No. 14892-000] Notice of Preliminary Permit Application Accepted for Filing and Soliciting Comments, Motions To Intervene, and Competing Applications: Badger Mountain Hydro, LLC

    On October 2, 2018, Badger Mountain Hydro, LLC filed an application for a preliminary permit, pursuant to section 4(f) of the Federal Power Act, proposing to study the feasibility of the Badger Mountain Pumped Storage Project (project) to be located near East Wenatchee in Douglas County, Washington. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.

    The proposed project will be a closed-loop pumped storage project with initial fill and make up water coming from local water rights holders, tentatively identified as the Greater Wenatchee Irrigation District. Water would be delivered from the District's Veedol Tank via an approximately 0.7-mile-long, 12-inch-diameter buried steel pipe to a new lower reservoir. The proposed project would consist of: An upper 5- to 40-foot-high, 7,500-foot-long zoned earth/rockfill ring dam enclosing the 70-acre upper reservoir with storage capacity of 2,000 acre-feet; a lower 35-foot-high, 540-foot-long zoned earth/rockfill primary dam and 10-foot-high, 830-foot-long earthen supplemental dam enclosing the 80-acre lower reservoir with storage capacity of 2,600 acre-feet; a 600-foot-long, 14-foot-diameter unlined or concrete-lined low pressure tunnel; a 30-foot-diameter, 50-foot-high concrete surge tank; two 5,200-foot-long, 10-foot-diameter steel penstocks; a powerhouse with a 220-foot-high, 65-foot-diameter steel and concrete shaft, and two 150-megawatt (MW) reversible pump-turbines/motor-generators for a total installed capacity of 300 MW; a 1,200-foot-long, 17-foot-diameter concrete-lined tailrace tunnel; a 230-kilovolt (kV), 3.7-mile-long transmission line interconnecting with the existing Puget Sound Energy Rocky Reach-Cascade transmission line, and a possible second transmission line interconnecting with the existing 230-kV Bonneville Power Administration Rocky Reach-Columbia transmission line 500 feet from the powerhouse.

    The estimated average annual generation of the project would be 473,040 megawatt-hours.

    Applicant Contact: Matthew Shapiro, CEO, Gridflex Energy, LLC, 1210 W. Franklin St. #2, Boise, ID 837021, phone (208) 246-9925.

    FERC Contact: Peter McBride, (202) 502-8132, [email protected]

    Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36.

    The Commission strongly encourages electronic filing. Please file comments, motions to intervene, notices of intent, and competing applications using the Commission's eFiling system at http://www.ferc.gov/docs-filing/efiling.asp. Commenters can submit brief comments up to 6,000 characters, without prior registration, using the eComment system at http://www.ferc.gov/docs-filing/ecomment.asp. You must include your name and contact information at the end of your comments. For assistance, please contact FERC Online Support at [email protected], (866) 208-3676 (toll free), or (202) 502-8659 (TTY). In lieu of electronic filing, please send a paper copy to: Secretary, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426. The first page of any filing should include docket number P-14892-000.

    More information about this project, including a copy of the application, can be viewed or printed on the eLibrary link of Commission's website at http://www.ferc.gov/docs-filing/elibrary.asp. Enter the docket number (P-14892) in the docket number field to access the document. For assistance, contact FERC Online Support.

    Dated: November 21, 2018. Nathaniel J. Davis, Sr., Deputy Secretary.
    [FR Doc. 2018-25923 Filed 11-27-18; 8:45 am] BILLING CODE 6717-01-P
    DEPARTMENT OF ENERGY Federal Energy Regulatory Commission Combined Notice of Filings #1

    Take notice that the Commission received the following electric rate filings:

    Docket Numbers: ER13-1667-004.

    Applicants: Battery Utility of Ohio, LLC.

    Description: Notice of Change in Status of Battery Utility of Ohio, LLC.

    Filed Date: 11/20/18.

    Accession Number: 20181120-5221.

    Comments Due: 5 p.m. ET 12/11/18.

    Docket Numbers: ER17-1609-002.

    Applicants: Carroll County Energy LLC.

    Description: Notice of Non-Material Change in Status of Carroll County Energy LLC.

    Filed Date: 11/20/18.

    Accession Number: 20181120-5254.

    Comments Due: 5 p.m. ET 12/11/18.

    Docket Numbers: ER18-2516-000.

    Applicants: Willow Springs Solar, LLC.

    Description: Amendment to September 28, 2018 Willow Springs Solar, LLC tariff filing.

    Filed Date: 11/20/18.

    Accession Number: 20181120-5219.

    Comments Due: 5 p.m. ET 11/27/18.

    Docket Numbers: ER19-104-001.

    Applicants: El Paso Electric Company.

    Description: Tariff Amendment: Concurrence of EPE to APS Service Agreement No. 367 to be effective 9/7/2018.

    Filed Date: 11/20/18.

    Accession Number: 20181120-5167.

    Comments Due: 5 p.m. ET 12/11/18.

    Docket Numbers: ER19-381-000.

    Applicants: Power Holding LLC.

    Description: Baseline eTariff Filing: Application for Market Based Rate to be effective 11/21/2018.

    Filed Date: 11/20/18.

    Accession Number: 20181120-5175.

    Comments Due: 5 p.m. ET 12/11/18.

    Docket Numbers: ER19-382-000.

    Applicants: Duke Energy Carolinas, LLC.

    Description: § 205(d) Rate Filing: DEC-City of Concord NITSA (SA-150) Amendment to be effective 1/1/2019.

    Filed Date: 11/20/18.

    Accession Number: 20181120-5176.

    Comments Due: 5 p.m. ET 12/11/18.

    Docket Numbers: ER19-383-000.

    Applicants: PJM Interconnection, L.L.C.

    Description: § 205(d) Rate Filing: Revisions to OATT and OA re Regulation Market Clearing Price to be effective 1/21/2019.

    Filed Date: 11/20/18.

    Accession Number: 20181120-5182.

    Comments Due: 5 p.m. ET 12/11/18.

    Docket Numbers: ER19-384-000.

    Applicants: Pacific Gas and Electric Company.

    Description: Request for One-time Limited Tariff Waiver, et al. of Pacific Gas and Electric Company under ER19-384.

    Filed Date: 11/20/18.

    Accession Number: 20181120-5218.

    Comments Due: 5 p.m. ET 11/30/18.

    Docket Numbers: ER19-385-000.

    Applicants: NRG Power Marketing LLC.

    Description: Application to Recover Fuel Procurement Costs of NRG Power Marketing, LLC.

    Filed Date: 11/20/18.

    Accession Number: 20181120-5223.

    Comments Due: 5 p.m. ET 12/11/18.

    Docket Numbers: ER19-386-000.

    Applicants: PJM Interconnection, L.L.C.

    Description: § 205(d) Rate Filing: Amendment to ISA, SA No. 2278, Queue# None (Consent) to be effective 4/1/2010.

    Filed Date: 11/21/18.

    Accession Number: 20181121-5054.

    Comments Due: 5 p.m. ET 12/12/18.

    Docket Numbers: ER19-387-000.

    Applicants: PJM Interconnection, L.L.C.

    Description: § 205(d) Rate Filing: Original ISA and CSA, SA Nos. 5231 and 5232; Queue No. AC1-048/AC2-053 to be effective 10/23/2018.

    Filed Date: 11/21/18.

    Accession Number: 20181121-5061.

    Comments Due: 5 p.m. ET 12/12/18.

    Take notice that the Commission received the following qualifying facility filings:

    Docket Numbers: QF18-452-000.

    Applicants: North American Natural Resources, Inc.

    Description: Refund Report of North American Natural Resources, Inc.

    Filed Date: 11/20/18.

    Accession Number: 20181120-5217.

    Comments Due: 5 p.m. ET 12/11/18.

    The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.

    Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.

    eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call (866) 208-3676 (toll free). For TTY, call (202) 502-8659.

    Dated: November 21, 2018. Nathaniel J. Davis, Sr., Deputy Secretary.
    [FR Doc. 2018-25925 Filed 11-27-18; 8:45 am] BILLING CODE 6717-01-P
    DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket No. CP15-138-005] Notice of Application: Transcontinental Gas Pipe Line Company, LLC

    Take notice that on November 14, 2018, Transcontinental Gas Pipe Line Company, LLC (Transco), P.O. Box 1396, Houston, TX 77251-1396, filed an application under section 7(c) of the Natural Gas Act (NGA) requesting authorization to amend its certificate of public convenience and necessity, granted by the Commission on February 3, 2017 in Docket No. CP15-138, which authorized the Atlantic Sunrise Project. Herein, Transco requests authorization to amend its Atlantic Sunrise Project certificate to allow any of the existing compressor units at Compressor Station 605 and Compressor Station 610 to be operated above their currently certificated horsepower. Transco states that the total horsepower utilized at Compressor Station 605 will not exceed the station's total certificated horsepower of 30,000 horsepower and that the total horsepower utilized at Compressor Station 610 will not exceed the station's total certificated horsepower of 40,000 horsepower, all as more fully set forth in the application which is on file with the Commission and open to public inspection. The filing may also be viewed on the web at http://www.ferc.gov using the eLibrary link. Enter the docket number excluding the last three digits in the docket number field to access the document. For assistance, contact FERC at [email protected] or call toll-free, (866) 208-3676 or TTY, (202) 502-8659.

    Any questions regarding the application should be directed to Bill Hammons at Transcontinental Gas Pipe Line Company, LLC, Post Office Box 1396, Houston, TX 77251 or at (713) 215-2130.

    Pursuant to section 157.9 of the Commission's rules (18 CFR 157.9), within 90 days of this Notice, the Commission staff will either: Complete its environmental assessment (EA) and place it into the Commission's public record (eLibrary) for this proceeding; or issue a Notice of Schedule for Environmental Review. If a Notice of Schedule for Environmental Review is issued, it will indicate, among other milestones, the anticipated date for the Commission staff's issuance of the final environmental impact statement (FEIS) or EA for this proposal. The filing of the EA in the Commission's public record for this proceeding or the issuance of a Notice of Schedule for Environmental Review will serve to notify federal and state agencies of the timing for the completion of all necessary reviews, and the subsequent need to complete all federal authorizations within 90 days of the date of issuance of the Commission staff's FEIS or EA.

    There are two ways to become involved in the Commission's review of this project. First, any person wishing to obtain legal status by becoming a party to the proceedings for this project should, on or before the comment date stated below file with the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, a motion to intervene in accordance with the requirements of the Commission's Rules of Practice and Procedure (18 CFR 385.214 or 385.211) and the Regulations under the NGA (18 CFR 157.10). A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies of all documents filed by the applicant and by all other parties. A party must submit 3 copies of filings made in the proceeding with the Commission and must mail a copy to the applicant and to every other party. Only parties to the proceeding can ask for court review of Commission orders in the proceeding.

    However, a person does not have to intervene in order to have comments considered. The second way to participate is by filing with the Secretary of the Commission, as soon as possible, an original and two copies of comments in support of or in opposition to this project. The Commission will consider these comments in determining the appropriate action to be taken, but the filing of a comment alone will not serve to make the filer a party to the proceeding. The Commission's rules require that persons filing comments in opposition to the project provide copies of their protests only to the party or parties directly involved in the protest.

    Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commentors will be placed on the Commission's environmental mailing list and will be notified of any meetings associated with the Commission's environmental review process. Environmental commentors will not be required to serve copies of filed documents on all other parties. However, the non-party commentors will not receive copies of all documents filed by other parties or issued by the Commission and will not have the right to seek court review of the Commission's final order.

    As of the February 27, 2018 date of the Commission's order in Docket No. CP16-4-001, the Commission will apply its revised practice concerning out-of-time motions to intervene in any new Natural Gas Act section 3 or section 7 proceeding.1 Persons desiring to become a party to a certificate proceeding are to intervene in a timely manner. If seeking to intervene out-of-time, the movant is required to show good cause why the time limitation should be waived, and should provide justification by reference to factors set forth in Rule 214(d)(1) of the Commission's Rules and Regulations.2

    1Tennessee Gas Pipeline Company, L.L.C., 162 FERC 61,167 at 50 (2018).

    2 18 CFR 385.214(d)(1).

    The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the eFiling link at http://www.ferc.gov. Persons unable to file electronically should submit an original and 3 copies of the protest or intervention to the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426.

    Comment Date: December 12, 2018. Dated: November 21, 2018. Nathaniel J. Davis, Sr., Deputy Secretary.
    [FR Doc. 2018-25919 Filed 11-27-18; 8:45 am] BILLING CODE 6717-01-P
    DEPARTMENT OF ENERGY Federal Energy Regulatory Commission Combined Notice of Filings

    Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:

    Filings Instituting Proceedings

    Docket Numbers: RP19-304-000.

    Applicants: Alliance Pipeline L.P.

    Description: § 4(d) Rate Filing: APL Waiver and Future Default Filing to be effective 12/20/2018.

    Filed Date: 11/20/18.

    Accession Number: 20181120-5083.

    Comments Due: 5 p.m. ET 12/3/18.

    Docket Numbers: RP19-305-000.

    Applicants: Rockies Express Pipeline LLC.

    Description: § 4(d) Rate Filing: Neg Rate 2018-11-20 BP 553076 to be effective 11/21/2018.

    Filed Date: 11/20/18.

    Accession Number: 20181120-5092.

    Comments Due: 5 p.m. ET 12/3/18.

    Docket Numbers: RP19-306-000.

    Applicants: Greylock Pipeline, LLC.

    Description: eTariff filing per 1430: 501 G filing.

    Filed Date: 11/20/18.

    Accession Number: 20181120-5102.

    Comments Due: 5 p.m. ET 11/26/18.

    The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.

    Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.

    eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call (866) 208-3676 (toll free). For TTY, call (202) 502-8659.

    Dated: November 21, 2018. Nathaniel J. Davis, Sr., Deputy Secretary.
    [FR Doc. 2018-25924 Filed 11-27-18; 8:45 am] BILLING CODE 6717-01-P
    DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket No. CP18-534-000] Notice of Availability of the Environmental Assessment for the Proposed Northern Natural Gas Company Northern Lights 2019 Expansion and Rochester Projects

    The staff of the Federal Energy Regulatory Commission (FERC or Commission) has prepared an environmental assessment (EA) for the Northern Lights 2019 Expansion Project and the Rochester Project, proposed by Northern Natural Gas Company (Northern) in the above-referenced docket. Considering both projects, Northern requests authorization to construct, operate, and maintain new natural gas facilities in Carver, Freeborn, Hennepin, Le Sueur, Morrison, Mower, Olmsted, Rice, Steele, and Wright Counties, Minnesota, and to uprate the maximum allowable operating pressure (MAOP) of a line segment. The projects would allow Northern to provide 138,504 dekatherms per day of new firm natural gas transportation service to serve increased markets for industrial, commercial, and residential uses.

    The EA assesses the potential environmental effects of the construction and operation of the Northern Lights 2019 Expansion Project and the Rochester Project in accordance with the requirements of the National Environmental Policy Act (NEPA). The FERC staff concludes that approval of the proposed projects, with appropriate mitigating measures, would not constitute a major federal action significantly affecting the quality of the human environment.

    The Minnesota Pollution Control Agency participated as a cooperating agency in the preparation of the EA. A cooperating agency has jurisdiction by law or special expertise regarding environmental impacts involved with the proposal, and is involved in the NEPA analysis.

    The proposed projects includes the following facilities (all located in Minnesota):

    Rochester Project

    • Approximately 12.6 miles of new 16-inch-diameter pipeline in Olmsted County;

    • Increase of MAOP on an existing 8-mile-long segment of 16-inch-diameter pipeline in Freeborn and Mower Counties;

    • A new town border station with receiver in Olmsted County;

    • Relocation of a regulator from Freeborn to Mower County; and

    • Appurtenant facilities including two valves and a pig launcher at milepost 0.0 of the Rochester Greenfield Lateral.

    Northern Lights 2019 Project

    • Approximately 10.0 miles of new 24-inch-diameter pipeline in Hennepin and Wright Counties;

    • Approximately 4.3 miles of new 8-inch-diameter pipeline loop extension in Morrison County;

    • Approximately 1.6 miles of new 6-inch-diameter pipeline looping in Le Sueur County;

    • Approximately 3.1 miles of new 24-inch-diameter pipeline extension in Carver County;

    • Αa new 11,153-horsepower (hp) compressor station in Carver County;

    • Αan additional 15,900 hp of compression at the existing Faribault Compressor Station in Rice County;

    • An additional 15,900 hp of compression at the existing Owatonna Compressor Station in Steele County; and

    • Appurtenant facilities including valves, pig launchers, and pig receivers.

    The Commission mailed a copy of the Notice of Availability to federal, state, and local government representatives and agencies; elected officials; environmental and public interest groups; Native American tribes; potentially affected landowners and other interested individuals and groups; and newspapers and libraries in the project areas. The EA is only available in electronic format. It may be viewed and downloaded from the FERC's website (www.ferc.gov), on the Environmental Documents page (https://www.ferc.gov/industries/gas/enviro/eis.asp). In addition, the EA may be accessed by using the eLibrary link on the FERC's website. Click on the eLibrary link (https://www.ferc.gov/docs-filing/elibrary.asp), click on General Search, and enter the docket number in the Docket Number field, excluding the last three digits (i.e. CP18-534). Be sure you have selected an appropriate date range. For assistance, please contact FERC Online Support at [email protected] or toll free at (866) 208-3676, or for TTY, contact (202) 502-8659.

    Any person wishing to comment on the EA may do so. Your comments should focus on EA's disclosure and discussion of potential environmental effects, reasonable alternatives, and measures to avoid or lessen environmental impacts. The more specific your comments, the more useful they will be. To ensure that the Commission has the opportunity to consider your comments prior to making its decision on these projects, it is important that we receive your comments in Washington, DC on or before 5:00 p.m. Eastern Time on December 21, 2018.

    For your convenience, there are three methods you can use to file your comments to the Commission. The Commission encourages electronic filing of comments and has staff available to assist you at (866) 208-3676 or [email protected] Please carefully follow these instructions so that your comments are properly recorded.

    (1) You can file your comments electronically using the eComment feature on the Commission's website (www.ferc.gov) under the link to Documents and Filings. This is an easy method for submitting brief, text-only comments on a project;

    (2) You can also file your comments electronically using the eFiling feature on the Commission's website (www.ferc.gov) under the link to Documents and Filings. With eFiling, you can provide comments in a variety of formats by attaching them as a file with your submission. New eFiling users must first create an account by clicking on eRegister. You must select the type of filing you are making. If you are filing a comment on a particular project, please select Comment on a Filing; or

    (3) You can file a paper copy of your comments by mailing them to the following address. Be sure to reference the project docket number (CP18534-000) with your submission: Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 888 First Street NE, Room 1A, Washington, DC 20426.

    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 385.214). Motions to intervene are more fully described at http://www.ferc.gov/resources/guides/how-to/intervene.asp. Only intervenors have the right to seek rehearing or judicial review of the Commission's decision. The Commission may grant affected landowners and others with environmental concerns intervenor status upon showing good cause by stating that they have a clear and direct interest in this proceeding which no other party can adequately represent. Simply filing environmental comments will not give you intervenor status, but you do not need intervenor status to have your comments considered.

    Additional information about the projects is available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC website (www.ferc.gov) using the eLibrary link. The eLibrary link also provides access to the texts of all formal documents issued by the Commission, such as orders, notices, and rulemakings.

    In addition, the Commission offers a free service called eSubscription which 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 www.ferc.gov/docs-filing/esubscription.asp.

    Dated: November 21, 2018. Nathaniel J. Davis, Sr., Deputy Secretary.
    [FR Doc. 2018-25922 Filed 11-27-18; 8:45 am] BILLING CODE 6717-01-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Administration for Children and Families Submission for OMB Review AGENCY:

    Office of Planning, Research, and Evaluation, Administration for Children and Families, HHS.

    ACTION:

    Request for public comment.

    Title: Evaluation of Employment Coaching for TANF and Related Populations—Second Follow-Up Survey (OMB #0970-0506)

    SUMMARY:

    The Administration for Children and Families (ACF) is proposing an additional data collection activity as part of the Evaluation of Employment Coaching for TANF and Related Populations. The Office of Management and Budget (OMB) Office of Information and Regulatory Affairs approved this information collection in March 2018 (0970-0506). ACF is proposing a second follow-up survey conducted as part of the evaluation.

    DATES:

    Comments due within 30 days of publication. OMB is required to make a decision concerning the collection of information between 30 and 60 days after publication of this document in the Federal Register. Therefore, a comment is best assured of having its full effect if OMB receives it within 30 days of publication.

    ADDRESSES:

    Written comments and recommendations for the proposed information collection should be sent directly to the following: Office of Management and Budget, Paperwork Reduction Project, Email: [email protected], Attn: Desk Officer for the Administration for Children and Families.

    Copies of the proposed collection may be obtained by writing to the Administration for Children and Families, Office of Planning, Research and Evaluation, 330 C Street SW, Washington, DC 20201, Attn: OPRE Reports Clearance Officer. All requests should be identified by the title of the information collection. Email address: [email protected]

    SUPPLEMENTARY INFORMATION:

    This study will provide an opportunity to learn more about the potential of coaching to help clients achieve self-sufficiency and other desired employment-related outcomes. It will take place over five years in the following employment programs: MyGoals for Employment Success in Baltimore, MyGoals for Employment Success in Houston, Family Development and Self-Sufficiency program in Iowa, LIFT in New York City, Chicago, and Los Angeles; Work Success in Utah; and Goal4 It! in Jefferson County, Colorado. Together, these programs will include Temporary Assistance for Needy Families (TANF) agencies and other public or private employment programs that serve low-income individuals. Each site will have a robust coaching component and the capacity to conduct a rigorous impact evaluation. This study will provide information on whether coaching helps people obtain and retain jobs, advance in their careers, move toward self-sufficiency, and improve their overall well-being. To meet these objectives, this study includes an impact and implementation study, as approved by OMB.

    This submission builds on the existing impact study, which randomly assigned participants to either a “program group,” who were paired with a coach, or to a “control group,” who were not paired with a coach. The effectiveness of the coaching will be determined by differences between members of the program and control groups in outcomes such as obtaining and retaining employment, earnings, measures of self-sufficiency, and measures of self-regulation.

    The proposed information collection activity is a second follow-up survey, which will be available to participants approximately 21 months after random assignment. The second follow-up survey will provide rigorous evidence on whether the coaching interventions are effective, for whom, and under what circumstances.

    Respondents: Individuals enrolled in the Evaluation of Employment Coaching for TANF and Related Populations. All participants will be able to opt out of participating in the data collection activities.

    Annual Burden Estimates:

    Instrument Total number of respondents Annual
  • number of
  • respondents
  • Number of
  • responses per
  • respondent
  • Average
  • burden hours
  • per response
  • Annual burden
  • hours
  • Second follow-up survey 4,800 1,600 1 1 1,600

    Estimated Total Annual Burden Hours: 1,600.

    Authority:

    Section 413 of the Social Security Act, as amended by the FY 2017 Consolidated Appropriations Act, 2017 (Pub. L. 115-31).

    Mary B. Jones, ACF/OPRE Certifying Officer.
    [FR Doc. 2018-25512 Filed 11-27-18; 8:45 am] BILLING CODE 4184-09-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Federal Financial Participation in State Assistance Expenditures; Federal Matching Shares for Medicaid, the Children's Health Insurance Program, and Aid to Needy Aged, Blind, or Disabled Persons for October 1, 2019 Through September 30, 2020 AGENCY:

    Office of the Secretary, DHHS.

    ACTION:

    Notice.

    DATES:

    The percentages listed in Table 1 will be effective for each of the four quarter-year periods beginning October 1, 2019 and ending September 30, 2020.

    FOR FURTHER INFORMATION CONTACT:

    Rose Chu, Office of Health Policy, Office of the Assistant Secretary for Planning and Evaluation, Room 447D—Hubert H. Humphrey Building, 200 Independence Avenue SW, Washington, DC 20201, (202) 690-6870.

    SUPPLEMENTARY INFORMATION:

    The Federal Medical Assistance Percentages (FMAP), Enhanced Federal Medical Assistance Percentages (eFMAP), and disaster-recovery FMAP adjustments for Fiscal Year 2020 have been calculated pursuant to the Social Security Act (the Act). These percentages will be effective from October 1, 2019 through September 30, 2020. This notice announces the calculated FMAP rates, in accordance with sections 1101(a)(8) and 1905(b) of the Act, that the U.S. Department of Health and Human Services (HHS) will use in determining the amount of federal matching for state medical assistance (Medicaid), Temporary Assistance for Needy Families (TANF) Contingency Funds, Child Support Enforcement collections, Child Care Mandatory and Matching Funds of the Child Care and Development Fund, Title IV-E Foster Care Maintenance payments, Adoption Assistance payments and Kinship Guardianship Assistance payments, and the eFMAP rates for the Children's Health Insurance Program (CHIP) expenditures. Table 1 gives figures for each of the 50 states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. This notice reminds states of adjustments available for states meeting requirements for disproportionate employer pension or insurance fund contributions and adjustments for disaster recovery. At this time, no state qualifies for such adjustments, and territories are not eligible.

    This notice also contains the increased eFMAPs for CHIP as authorized under section 2705(b) of the Act, as amended by the HEALTHY KIDS Act of 2017, for fiscal year 2020 (October 1, 2019 through September 30, 2020).

    Programs under title XIX of the Act exist in each jurisdiction. Programs under titles I, X, and XIV operate only in Guam and the Virgin Islands. The percentages in this notice apply to state expenditures for most medical assistance and child health assistance, and assistance payments for certain social services. The Act provides separately for federal matching of administrative costs.

    Sections 1905(b) and 1101(a)(8)(B) of the Social Security Act (the Act) require the Secretary of HHS to publish the FMAP rates each year. The Secretary calculates the percentages, using formulas in sections 1905(b) and 1101(a)(8), and calculations by the Department of Commerce of average income per person in each state and for the United States (meaning, for this purpose, the fifty states and the District of Columbia). The percentages must fall within the upper and lower limits specified in section 1905(b) of the Act. The percentages for the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands are specified in statute, and thus are not based on the statutory formula that determines the percentages for the 50 states.

    Federal Medical Assistance Percentage (FMAP)

    Section 1905(b) of the Act specifies the formula for calculating FMAPs as follows:

    “Federal medical assistance percentage” for any state shall be 100 per centum less the state percentage; and the state percentage shall be that percentage which bears the same ratio to 45 per centum as the square of the per capita income of such state bears to the square of the per capita income of the continental United States (including Alaska) and Hawaii; except that (1) the Federal medical assistance percentage shall in no case be less than 50 per centum or more than 83 per centum . . . .

    Section 1905(b) further specifies that the FMAP for Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa shall be 55 percent. Section 4725(b) of the Balanced Budget Act of 1997 amended section 1905(b) to provide that the FMAP for the District of Columbia, for purposes of titles XIX and XXI, shall be 70 percent. For the District of Columbia, we note under Table 1 that other rates may apply in certain other programs. In addition, we note the rate that applies for Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands in certain other programs pursuant to section 1118 of the Act. The rates for the States, District of Columbia and the territories are displayed in Table 1, Column 1.

    Section 1905(y) of the Act, as added by section 2001 of the Patient Protection and Affordable Care Act of 2010 (“Affordable Care Act”), provides for a significant increase in the FMAP for medical assistance expenditures for newly eligible individuals described in section 1902(a)(10)(A)(i)(VIII) of the Act, as added by the Affordable Care Act (the new adult group); “newly eligible” is defined in section 1905(y)(2)(A) of the Act. The FMAP for the new adult group is 100 percent for Calendar Years 2014, 2015, and 2016, gradually declining to 90 percent in 2020, where it remains indefinitely. In addition, section 1905(z) of the Act, as added by section 10201 of the Affordable Care Act, provides that states that offered substantial health coverage to certain low-income parents and nonpregnant, childless adults on the date of enactment of the Affordable Care Act, referred to as “expansion states,” shall receive an enhanced FMAP beginning in 2014 for medical assistance expenditures for nonpregnant childless adults who may be required to enroll in benchmark coverage under section 1937 of the Act. These provisions are discussed in more detail in the Medicaid Program: Eligibility Changes Under the Affordable Care Act of 2010 proposed rule published on August 17, 2011 (76 FR 51148, 51172) and the final rule published on March 23, 2012 (77 FR 17144, 17194). This notice is not intended to set forth the matching rates for the new adult group as specified in section 1905(y) of the Act or the matching rates for nonpregnant, childless adults in expansion states as specified in section 1905(z) of the Act.

    Other Adjustments to the FMAP

    For purposes of Title XIX (Medicaid) of the Social Security Act, the Federal Medical Assistance Percentage (FMAP), defined in section 1905(b) of the Social Security Act, for each state beginning with fiscal year 2006, can be subject to an adjustment pursuant to section 614 of the Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA), Public Law 111-3. Section 614 of CHIPRA stipulates that a state's FMAP under Title XIX (Medicaid) must be adjusted in two situations.

    In the first situation, if a state experiences no growth or positive growth in total personal income and an employer in that state has made a significantly disproportionate contribution to an employer pension or insurance fund, the state's FMAP must be adjusted. The adjustment involves disregarding the significantly disproportionate employer pension or insurance fund contribution in computing the per capita income for the state (but not in computing the per capita income for the United States). Employer pension and insurance fund contributions are significantly disproportionate if the increase in contributions exceeds 25 percent of the total increase in personal income in that state. A Federal Register Notice with comment period was published on June 7, 2010 (75 FR 32182) announcing the methodology for calculating this adjustment; a final notice was published on October 15, 2010 (75 FR 63480).

    The second situation arises if a state experiences negative growth in total personal income. Beginning with Fiscal Year 2006, section 614(b)(3) of CHIPRA specifies that, for the purposes of calculating the FMAP for a calendar year in which a state's total personal income has declined, the portion of an employer pension or insurance fund contribution that exceeds 125 percent of the amount of such contribution in the previous calendar year shall be disregarded in computing the per capita income for the state (but not in computing the per capita income for the United States).

    No Federal source of reliable and timely data on pension and insurance contributions by individual employers and states is currently available. We request that states report employer pension or insurance fund contributions to help determine potential FMAP adjustments for states experiencing significantly disproportionate pension or insurance contributions and states experiencing a negative growth in total personal income. See also the information described in the January 21, 2014 Federal Register notice (79 FR 3385).

    Section 2006 of the Affordable Care Act provides a special adjustment to the FMAP for certain states recovering from a major disaster. This notice does not contain an FY 2020 adjustment for a major statewide disaster for any state (territories are not eligible for FMAP adjustments) because no state had a recent major statewide disaster and had its FMAP decreased by at least three percentage points from FY 2019 to FY 2020. See information described in the December 22, 2010 Federal Register notice (75 FR 80501).

    Enhanced Federal Medical Assistance Percentage (eFMAP) for CHIP

    Section 2105(b) of the Act specifies the formula for calculating the eFMAP rates as follows:

    [T]he “enhanced FMAP”, for a state for a fiscal year, is equal to the Federal medical assistance percentage (as defined in the first sentence of section 1905(b)) for the state increased by a number of percentage points equal to 30 percent of the number of percentage points by which (1) such Federal medical assistance percentage for the state, is less than (2) 100 percent; but in no case shall the enhanced FMAP for a state exceed 85 percent.

    Section 2105(b) of the Social Security Act, as amended by Section 2101 of the Affordable Care Act, specifies a modified eFMAP for FY2016-FY2019, providing that the FMAP under section 1905(b) for the state for the fiscal year shall be increased by 23 percentage points, but in no case shall exceed 100 percent. Section 3005 of the HEALTHY KIDS Act further amended Section 2105(b) to specify a modified eFMAP for FY2020, providing that the FMAP under section 1905(b) for the state for the fiscal year shall be increased by 11.5 percentage points, with the sum not to exceed 100 percent, during the period that begins on October 1, 2019, and ends on September 30, 2020.

    The eFMAP rates are used in the Children's Health Insurance Program under Title XXI, and in the Medicaid program for expenditures for medical assistance provided to certain children as described in sections 1905(u)(2) and 1905(u)(3) of the Act. There is no specific requirement to publish the eFMAP rates. We include them in this notice for the convenience of the states, and display both the eFMAP rates that would apply if section 2105(b) had not been amended by the HEALTHY KIDS Act (Table 1, Column 2) and the increased eFMAP rates as calculated pursuant to the amendments made by the HEALTHY KIDS Act (Table 1, Column 3), for comparison.

    (Catalog of Federal Domestic Assistance Program Nos. 93.558: TANF Contingency Funds; 93.563: Child Support Enforcement; 93.596: Child Care Mandatory and Matching Funds of the Child Care and Development Fund; 93.658: Foster Care Title IV-E; 93.659: Adoption Assistance; 93.769: Ticket-to-Work and Work Incentives Improvement Act (TWWIIA) Demonstrations to Maintain Independence and Employment; 93.778: Medical Assistance Program; 93.767: Children's Health Insurance Program) Alex M. Azar II, Secretary, Department of Health and Human Services. Table 1—Federal Medical Assistance Percentages and Enhanced Federal Medical Assistance Percentages, Effective October 1, 2019-September 30, 2020 [Fiscal year 2020] State Federal Medical
  • Assistance
  • Percentages
  • Enhanced Federal Medical
  • Assistance
  • Percentages
  • Enhanced Federal Medical Assistance Percentages with 11.5 Pt inc ***
    Alabama 71.97 80.38 91.88 Alaska 50.00 65.00 76.50 American Samoa * 55.00 68.50 80.00 Arizona 70.02 79.01 90.51 Arkansas 71.42 79.99 91.49 California 50.00 65.00 76.50 Colorado 50.00 65.00 76.50 Connecticut 50.00 65.00 76.50 Delaware 57.86 70.50 82.00 District of Columbia ** 70.00 79.00 90.50 Florida 61.47 73.03 84.53 Georgia 67.30 77.11 88.61 Guam * 55.00 68.50 80.00 Hawaii 53.47 67.43 78.93 Idaho 70.34 79.24 90.74 Illinois 50.14 65.10 76.60 Indiana 65.84 76.09 87.59 Iowa 61.20 72.84 84.34 Kansas 59.16 71.41 82.91 Kentucky 71.82 80.27 91.77 Louisiana 66.86 76.80 88.30 Maine 63.80 74.66 86.16 Maryland 50.00 65.00 76.50 Massachusetts 50.00 65.00 76.50 Michigan 64.06 74.84 86.34 Minnesota 50.00 65.00 76.50 Mississippi 76.98 83.89 95.39 Missouri 65.65 75.96 87.46 Montana 64.78 75.35 86.85 Nebraska 54.72 68.30 79.80 Nevada 63.93 74.75 86.25 New Hampshire 50.00 65.00 76.50 New Jersey 50.00 65.00 76.50 New Mexico 72.71 80.90 92.40 New York 50.00 65.00 76.50 North Carolina 67.03 76.92 88.42 North Dakota 50.05 65.04 76.54 Northern Mariana Islands * 55.00 68.50 80.00 Ohio 63.02 74.11 85.61 Oklahoma 66.02 76.21 87.71 Oregon 61.23 72.86 84.36 Pennsylvania 52.25 66.58 78.08 Puerto Rico * 55.00 68.50 80.00 Rhode Island 52.95 67.07 78.57 South Carolina 70.70 79.49 90.99 South Dakota 57.62 70.33 81.83 Tennessee 65.21 75.65 87.15 Texas 60.89 72.62 84.12 Utah 68.19 77.73 89.23 Vermont 53.86 67.70 79.20 Virgin Islands * 55.00 68.50 80.00 Virginia 50.00 65.00 76.50 Washington 50.00 65.00 76.50 West Virginia 74.94 82.46 93.96 Wisconsin 59.36 71.55 83.05 Wyoming 50.00 65.00 76.50 * For purposes of section 1118 of the Social Security Act, the percentage used under titles I, X, XIV, and XVI will be 75 per centum. ** The values for the District of Columbia in the table were set for the state plan under titles XIX and XXI and for capitation payments and disproportionate share hospital (DSH) allotments under those titles. For other purposes, the percentage for DC is 50.00, unless otherwise specified by law. *** Section 3005 of the HEALTHY KIDS Act amended Section 2105(b) of the Social Security Act specifying that the enhanced FMAP for states will be calculated by adding 11.5 percentage points to the state's FMAP as provided under section 1905(b) of the Social Security Act, with the sum not to exceed 100 percent, for the period that begins on October 1, 2019 and ends on September 30, 2020 (fiscal year 2020).
    [FR Doc. 2018-25944 Filed 11-27-18; 8:45 am] BILLING CODE P
    DEPARTMENT OF THE INTERIOR Fish and Wildlife Service [FWS-R5-ES-2014-0047; FXES11160500000-189-FF05E00000] Habitat Conservation Plan and Draft Environmental Assessment, North Allegheny Wind Facility, Incidental Take Permit Application for Indiana Bat, Blair and Cambria Counties, Pennsylvania AGENCY:

    Fish and Wildlife Service, Interior.

    ACTION:

    Notice of availability; notice of receipt of permit application; request for public comments.

    SUMMARY:

    We, the U.S. Fish and Wildlife Service (Service), announce the availability of several documents related to an incidental take permit (ITP) application under the Endangered Species Act (ESA). We have received an application from North Allegheny Wind, LLC (NAW) for a 25-year ITP for take of the federally endangered Indiana bat incidental to otherwise lawful activities associated with operation of its North Allegheny Wind Facility, an existing 35-turbine wind farm in Blair and Cambria Counties, Pennsylvania. NAW has proposed a conservation program to minimize and mitigate for the impacts of the incidental take as described in its Draft North Allegheny Wind Indiana Bat Habitat Conservation Plan (HCP). Pursuant to the ESA and the National Environmental Policy Act, we announce the availability of NAW's ITP application, including its HCP, and the Service's draft environmental assessment, for public review and comment. We provide this notice to seek comments from the public and Federal, Tribal, State, and local governments.

    DATES:

    We will accept comments received or postmarked on or before December 28, 2018. Comments submitted electronically using regulations.gov (see ADDRESSES) must be received by 11:59 p.m. Eastern Standard Time on the closing date.

    ADDRESSES:

    Obtaining documents:

    Internet: You may obtain copies of the draft HCP and draft environmental assessment (EA) online in Docket No. FWS-R5-ES-2014-0047 at http://www.regulations.gov.

    U.S. Mail: Copies of the draft documents are available from the U.S. Fish and Wildlife Service, Pennsylvania Field Office, 110 Radnor Road, Suite 101, State College, PA 16801. Please note that your request is in reference to the NAW HCP.

    In-person: Copies of the draft documents are available for public review during regular business hours at the Pennsylvania Field Office, 110 Radnor Road, Suite 101, State College, PA 16801. Call 814-234-4090 to make an appointment.

    Submitting Comments: You may submit comments by one of the following methods:

    Online: http://www.regulations.gov. Follow the instructions for submitting comments on Docket No. FWS-R5-ES-2018-0047.

    U.S. mail or hand-delivery: Public Comments Processing, Attn: Docket No. FWS-R5-ES-2018-0047; U.S. Fish and Wildlife Service; MS: BPHC; 5275 Leesburg Pike, Falls Church, VA 22041-3803.

    We will post all comments on http://www.regulations.gov. This generally means that we will post any personal information you provide online (see Public Availability of Comments under SUPPLEMENTARY INFORMATION).

    We request that you send comments by only the methods described above.

    FOR FURTHER INFORMATION CONTACT:

    Robert Anderson, by phone at 814-234-4090, x7447, or by mail at Pennsylvania Field Office, U.S. Fish and Wildlife Service, 110 Radnor Road, Suite 101, State College, PA 16801.

    SUPPLEMENTARY INFORMATION:

    Background

    Section 9 of the Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531 et seq.), and its implementing regulations prohibit the “take” of animal species listed as endangered or threatened. Take is defined under the ESA as to “harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect listed animal species, or to attempt to engage in such conduct” (16 U.S.C. 1538). However, under section 10(a) of the ESA, we may issue permits to authorize incidental take of listed species. “Incidental take” is defined by the ESA as take that is incidental to, and not the purpose of, carrying out an otherwise lawful activity. Regulations governing incidental take permits for endangered and threatened species, respectively, are found in the Code of Federal Regulations at 50 CFR 17.22 and 50 CFR 17.32.

    Applicant's Proposed Project

    North Allegheny Wind, LLC (NAW) is seeking a permit for the incidental take of the federally endangered Indiana bat (Myotis sodalis) for a term of 25 years. Incidental take of this species may occur due to operation of 35 wind turbines. The proposed conservation strategy in the applicant's proposed HCP is designed to avoid, minimize, and mitigate the impacts of the covered activity on the covered species. The biological goals and objectives are to minimize potential take of Indiana bats through on-site minimization measures and to provide habitat conservation measures for Indiana bats to offset any unavoidable impacts during operation of the project.

    The HCP provides on-site avoidance and minimization measures, which include turbine operational adjustments. The estimated level of Indiana bat take from the project is four Indiana bats and an estimated reproductive potential of 3.2 bats over the 25-year project duration. To provide a conservation benefit to the Indiana bat, NAW will fund and implement one or more of the following types of mitigation projects to meet the mitigation needs of the Indiana bat: Protection of a hibernaculum, as well as surrounding buffer land necessary to ensure that the protection of the hibernaculum is successful; Protection of land that functions as summer habitat for one or more maternity colonies; and protection of summer and/or swarming habitat near a hibernaculum.

    National Environmental Policy Act

    The issuance of an ITP is a Federal action that triggers the need for compliance with NEPA (42 U.S.C. 4321 et seq.). We have prepared a draft EA that analyzes the environmental impacts on the human environment resulting from three alternatives: A no-action alternative, the proposed action, and an alternative consisting of feathering below the manufacturer's cut-in wind speed.

    Next Steps

    We will evaluate the plan and comments we receive to determine whether the permit application meets the requirements of section 10(a) of the ESA (16 U.S.C. 1531 et seq.). We will also evaluate whether issuance of a section 10(a)(1)(B) permit would comply with section 7 of the ESA by conducting an intra-Service section 7 consultation. We will use the results of this consultation, in combination with the above findings, in our final analysis to determine whether to issue a permit. If the requirements are met, we will issue the permit to the applicant.

    Public Comments

    The Service invites the public to comment on the proposed HCP and draft EA during a 30-day public comment period (see DATES). You may submit comments by one of the methods shown under ADDRESSES.

    Public Availability of Comments

    We will post on http://regulations.gov all public comments and information received electronically or via hardcopy. All comments received, including names and addresses, will become part of the administrative record associated with this action. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can request in your comment that we withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so. All submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses, will be made available for public disclosure in their entirety.

    Authority

    This notice is provided pursuant to section 10(c) of the ESA (16 U.S.C. 1531 et seq.) and NEPA regulations (40 CFR 1506.6).

    Dated: June 28, 2018. Spencer Simon, Acting Assistant Regional Director, Ecological Services, Northeast Region. Editorial note:

    THIS DOCUMENT WAS RECEIVED AT THE OFFICE OF THE FEDERAL REGISTER ON NOVEMBER 23, 2018.

    [FR Doc. 2018-25916 Filed 11-27-18; 8:45 am] BILLING CODE 4333-15-P
    DEPARTMENT OF THE INTERIOR Fish and Wildlife Service [Docket No. FWS-HQ-MB-2018-0048; FXMB 12320900000//189//FF09M29000] Draft List of Bird Species to Which the Migratory Bird Treaty Act Does Not Apply AGENCY:

    Fish and Wildlife Service, Interior.

    ACTION:

    Notice of availability; request for comments.

    SUMMARY:

    We, the U.S. Fish and Wildlife Service, are publishing a draft list of the nonnative bird species that have been introduced by humans into the United States or U.S. territories and to which the Migratory Bird Treaty Act (MBTA) does not apply. The Migratory Bird Treaty Reform Act (MBTRA) of 2004 amends the MBTA by stating that the MBTA applies only to migratory bird species that are native to the United States or U.S. territories, and that a native migratory bird species is one that is present as a result of natural biological or ecological processes. The MBTRA requires that we publish a list of all nonnative, human-introduced bird species to which the MBTA does not apply. We published that list in 2005, and are starting the process to update it with this notice. This notice identifies those species that are not protected by the MBTA, even though they belong to biological families referred to in treaties that the MBTA implements, as their presence in the United States or U.S. territories is solely the result of intentional or unintentional human-assisted introductions. This notice presents a draft list of species that are not protected by the MBTA to reflect current taxonomy, to remove one species that no longer occurs in a protected family, and to remove one species as a result of new distributional records documenting its natural occurrence in the United States.

    DATES:

    We will accept comments received or postmarked on or before January 28, 2019. Comments submitted electronically using the Federal eRulemaking Portal (see ADDRESSES, below) must be received by 11:59 p.m. Eastern Time on the closing date.

    ADDRESSES:

    Written comments: You may submit comments by one of the following methods:

    (1) Electronically: Go to the Federal eRulemaking Portal: http://www.regulations.gov. In the Search box, enter FWS-HQ-MB-2018-0048, which is the docket number for this notice. Then, click on the Search button. On the resulting page, in the Search panel on the left side of the screen, under the Document Type heading, click on the Notice box to locate this document. You may submit a comment by clicking on “Comment Now!”

    (2) By hard copy: Submit by U.S. mail or hand-delivery to: Public Comments Processing, Attn: FWS-HQ-MB-2018-0048, U.S. Fish and Wildlife Service, MS: BPHC, 5275 Leesburg Pike, Falls Church, VA 22041-3803.

    We request that you send comments only by the methods described above. We will post all comments on http://www.regulations.gov. This generally means that we will post any personal information you provide us (see Public Comments, below, for more information).

    Document availability: The complete file for this notice is available for inspection, by appointment. Contact Eric L. Kershner, Chief of the Branch of Conservation, Permits, and Regulations; Division of Migratory Bird Management; U.S. Fish and Wildlife Service; MS:MB; 5275 Leesburg Pike, Falls Church, VA 22041-3803; (703) 358-2376.

    FOR FURTHER INFORMATION CONTACT:

    Eric L. Kershner, (703) 358-2376. SUPPLEMENTARY INFORMATION:

    What is the purpose of this notice?

    The purpose of this notice is to provide the public with an opportunity to review and comment on a draft updated list of “all nonnative, human-introduced bird species to which the Migratory Bird Treaty Act (16 U.S.C. 703 et seq.) does not apply,” as described in the MBTRA of 2004. The MBTRA states that “[a]s necessary, the Secretary may update and publish the list of species exempted from protection of the Migratory Bird Treaty Act.”

    This notice is strictly informational. It merely updates our list of the bird species to which the MBTA does not apply. The presence or absence of a species on this list has no legal effect. This list does not change the protections that any of these species might receive under such agreements as the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES; T.I.A.S. 8249), the Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.), or the Wild Bird Conservation Act of 1992 (16 U.S.C. 4901 et seq.). Regulations implementing the MBTA are found in parts 10, 20, and 21 of title 50 of the Code of Federal Regulations (CFR). The list of migratory birds covered by the MBTA is located at 50 CFR 10.13. Elsewhere in today's Federal Register, we propose to revise the list of migratory bird species that are protected under the MBTA at 50 CFR 10.13.

    For more information, refer to our notice published in the Federal Register on January 4, 2005, at 70 FR 372.

    What criteria did we use to identify bird species not protected by the MBTA?

    The criteria remain the same as stated in our notice published on March 15, 2010, at 70 FR 12710.

    Summary of Updates to the 2010 List of Bird Species Not Protected by the MBTA

    This notice presents a draft list of species that are not protected by the MBTA to reflect current taxonomy, to remove one species that no longer occurs in a protected family, and to remove one species as a result of new distributional records documenting its natural occurrence in the United States. The taxonomical updates are presented in the draft list below. Japanese Bush-Warbler (Cettia diphone) and Red-Legged Honeycreeper (Cyanerpes cyaneus) appeared on the March 15, 2010, list (70 FR 12710), but are not on this draft list because Japanese Bush-Warbler (Cettia diphone) no longer occurs in a protected family due to changes in taxonomy, and new distributional records document the natural occurrence of Red-Legged Honeycreeper (Cyanerpes cyaneus) in the United States.

    The Draft List

    What are the nonnative, human-introduced bird species to which the MBTA does not apply that belong to biological families of migratory birds covered under any of the migratory bird conventions with Great Britain (for Canada), Mexico, Russia, or Japan?

    We made this draft list as comprehensive as possible by including all nonnative, human-assisted species that belong to any of the families referred to in the treaties and whose occurrence(s) in the United States or U.S. territories have been documented in the scientific literature. It is not, however, an exhaustive list of all the nonnative species that could potentially appear in the United States or U.S. territories as a result of human assistance. New species of nonnative birds are being reported annually in the United States, and it is impossible to predict which species might appear in the near future.

    The appearance of a species on this list does not preclude its addition to the list of migratory birds protected by the MBTA (50 CFR 10.13) at some later date should substantial evidence come to light confirming natural occurrence in the United States or U.S. territories. The 123 species on this list are arranged by family according to the American Ornithological Society (AOS) (1998, as amended and following taxonomy in the AOS 2017 supplement). Within families, species are arranged alphabetically by scientific name. Common and scientific names follow Clements et al. (2017); any names occurring differently in the AOS 2017 supplement are in parentheses.

    Family Anatidae Mandarin Duck, Aix galericulata Egyptian Goose, Alopochen aegyptiaca Philippine Duck, Anas luzonica Graylag Goose, Anser anser Domestic Goose, Anser anser `domesticus' Swan Goose, Anser cygnoides Bar-headed Goose, Anser indicus Red-breasted Goose, Branta ruficollis Ringed Teal, Callonetta leucophrys Maned Duck, Chenonetta jubata Coscoroba Swan, Coscoroba coscoroba Black Swan, Cygnus atratus Black-necked Swan, Cygnus melancoryphus Mute Swan, Cygnus olor White-faced Whistling-Duck, Dendrocygna viduata Rosy-billed Pochard, Netta peposaca Red-crested Pochard, Netta rufina Cotton Pygmy-Goose, Nettapus coromandelianus Orinoco Goose, Oressochen jubatus (Neochen jubata) Hottentot Teal, Spatula hottentota Ruddy Shelduck, Tadorna ferruginea Common Shelduck, Tadorna tadorna Family Phoenicopteridae Lesser Flamingo, Phoeniconaias minor Chilean Flamingo, Phoenicopterus chilensis Family Columbidae Nicobar Pigeon, Caloenas nicobarica Asian Emerald Dove, Chalcophaps indica Rock Pigeon, Columba livia Common Wood-Pigeon, Columba palumbus Luzon Bleeding-heart, Gallicolumba luzonica Diamond Dove, Geopelia cuneata Bar-shouldered Dove, Geopelia humeralis Zebra Dove, Geopelia striata Spinifex Pigeon, Geophaps plumifera Partridge Pigeon, Geophaps smithii Wonga Pigeon, Leucosarcia melanoleuca Crested Pigeon, Ocyphaps lophotes Common Bronzewing, Phaps chalcoptera Blue-headed Quail-Dove, Starnoenas cyanocephala Island Collared-Dove, Streptopelia bitorquata Spotted Dove, Streptopelia chinensis Eurasian Collared-Dove, Streptopelia decaocto African Collared-Dove, Streptopelia roseogrisea Family Trochilidae Black-throated Mango, Anthracothorax nigricollis Family Rallidae Gray-cowled Wood-Rail, Aramides cajaneus Family Gruiidae Demoiselle Crane, Anthropoides virgo Sarus Crane, Antigone antigone Black Crowned-Crane, Balearica pavonina Gray Crowned-Crane, Balearica regulorum Family Charadriidae Southern Lapwing, Vanellus chilensis Spur-winged Lapwing, Vanellus spinosus Family Laridae Silver Gull, Chroicocephalus novaehollandiae Family Ciconiidae Abdim's Stork, Ciconia abdimii White Stork, Ciconia ciconia Woolly-necked Stork, Ciconia episcopus Black-necked Stork, Ephippiorhynchus asiaticus Family Phalacrocoracidae Red-legged Cormorant, Phalacrocorax gaimardi Family Anhingidae Oriental Darter, Anhinga melanogaster Family Pelecanidae Great White Pelican, Pelecanus onocrotalus Pink-backed Pelican, Pelecanus rufescens Family Threskiornithidae Eurasian Spoonbill, Platalea leucorodia Sacred Ibis, Threskiornis aethiopicus Family Cathartidae King Vulture, Sarcoramphus papa Family Accipitridae Great Black Hawk, Buteogallus urubitinga Variable Hawk, Geranoaetus polyosoma Griffon-type Old World vulture, Gyps sp. Bateleur, Terathopius ecaudatus Family Strigidae Spectacled Owl, Pulsatrix perspicillata Family Corvidae Black-throated Magpie-Jay, Calocitta colliei White-necked Raven, Corvus albicollis Carrion Crow, Corvus corone Cuban Crow, Corvus nasicus House Crow, Corvus splendens Azure Jay, Cyanocorax caeruleus San Blas Jay, Cyanocorax sanblasianus Rufous Treepie, Dendrocitta vagabunda Eurasian Jay, Garrulus glandarius Red-billed Chough, Pyrrhocorax pyrrhocorax Red-billed Blue-Magpie, Urocissa erythroryncha Family Alaudidae Japanese Skylark, Alauda japonica Wood Lark, Lullula arborea Calandra Lark, Melanocorypha calandra Mongolian Lark, Melanocorypha mongolica Family Paridae Eurasian Blue Tit, Cyanistes caeruleus Great Tit, Parus major Varied Tit, Sittiparus varius Family Cinclidae White-throated Dipper, Cinclus cinclus Family Sylviidae Eurasian Blackcap, Sylvia atricapilla Family Muscicapidae Indian Robin, Copsychus fulicatus White-rumped Shama, Copsychus malabaricus Oriental Magpie-Robin, Copsychus saularis European Robin, Erithacus rubecula Japanese Robin, Larvivora akahige Ryukyu Robin, Larvivora komadori Common Nightingale, Luscinia megarhynchos Family Turdidae Song Thrush, Turdus philomelos Red-throated Thrush, Turdus ruficollis Family Prunellidae Dunnock, Prunella modularis Family Fringillidae European Goldfinch, Carduelis carduelis European Greenfinch, Chloris chloris White-rumped Seedeater, Crithagra leucopygia Yellow-fronted Canary, Crithagra mozambica Eurasian Linnet, Linaria cannabina Parrot Crossbill, Loxia pytyopsittacus Island Canary, Serinus canaria Red Siskin, Spinus cucullatus Hooded Siskin, Spinus magellanicus Family Emberizidae Yellowhammer, Emberiza citrinella Family Icteridae Venezuelan Troupial, Icterus icterus Spot-breasted Oriole, Icterus pectoralis Montezuma Oropendola, Psarocolius montezuma Red-breasted Meadowlark, Sturnella militaris Family Cardinalidae Orange-breasted Bunting, Passerina leclancherii Red-hooded Tanager, Piranga rubriceps Family Thraupidae Yellow Cardinal, Gubernatrix cristata Greater Antillean Bullfinch, Loxigilla violacea Cuban Bullfinch, Melopyrrha nigra Yellow-billed Cardinal, Paroaria capitata Red-crested Cardinal, Paroaria coronata Red-cowled Cardinal, Paroaria dominicana Red-capped Cardinal, Paroaria gularis Saffron Finch, Sicalis flaveola Blue-gray Tanager, Thraupis episcopus Cuban Grassquit, Tiaris canorus Public Comments

    We request comments or information on this draft list from other concerned governmental agencies, the scientific community, industry, or any other interested parties.

    Please include sufficient information with your submission (such as electronic copies of scientific journal articles or other publications, preferably in English) to allow us to verify any scientific or commercial information you include.

    You may submit your comments and materials concerning this draft list by one of the methods listed in ADDRESSES. We request that you send comments only by the methods described in ADDRESSES.

    If you submit information via http://www.regulations.gov, your entire submission—including any personal identifying information—will be posted on the website. If your submission is made via a hardcopy that includes personal identifying information, you may request at the top of your document that we withhold this information from public review. However, we cannot guarantee that we will be able to do so. We will post all hardcopy submissions on http://www.regulations.gov.

    Comments and materials we receive will be available for public inspection on http://www.regulations.gov, or by appointment, during normal business hours, at the U.S. Fish and Wildlife Service, Division of Migratory Bird Management (see ADDRESSES).

    Author

    The author of this notice is Jo Anna Lutmerding, U.S. Fish and Wildlife Service, Division of Migratory Bird Management, 5275 Leesburg Pike, Falls Church, VA 22041.

    References Cited American Ornithological Society. 2017. Fifty-eighth to the American Ornithological Society's Check-list of North American Birds. Auk 134:751-773. American Ornithologists' Union. 1998. Check-list of North American birds: the species of birds of North America from the Arctic through Panama, including the West Indies and Hawaiian Islands. 7th edition. Washington, DC. Clements, J.F., T.S. Schulenberg, M.J. Iliff, D. Roberson, T.A. Fredericks, B.L. Sullivan, and C.L. Wood. 2017. The eBird/Clements checklist of birds of the world: v2017. Downloaded from http://www.birds.cornell.edu/clementschecklist/download/. Authority

    The authority for this notice is the Migratory Bird Treaty Reform Act of 2004 (Division E, Title I, Sec. 143 of the Consolidated Appropriations Act, 2005; Pub. L. 108-447), and the Migratory Bird Treaty Act (16 U.S.C. 703-712).

    Dated: November 5, 2018. James W. Kurth, Deputy Director, U.S. Fish and Wildlife Service, Exercising the Authority of the Director, U.S. Fish and Wildlife Service. [FR Doc. 2018-25631 Filed 11-27-18; 8:45 am] BILLING CODE 4333-15-P
    DEPARTMENT OF THE INTERIOR Fish and Wildlife Service [FWS-R1-ES-2018-N136; FXES11130600000-190-FF01E00000] Endangered Species; Receipt of Recovery Permit Application AGENCY:

    Fish and Wildlife Service, Interior.

    ACTION:

    Notice of receipt of a permit application; request for comments.

    SUMMARY:

    We, the U.S. Fish and Wildlife Service, have received an application for a permit to conduct activities intended to enhance the propagation and survival of endangered plant species under the Endangered Species Act of 1973, as amended. We invite the public and local, State, Tribal, and Federal agencies to comment on this application. Before issuing the requested permit, we will take into consideration any information that we receive during the public comment period.

    DATES:

    We must receive your written comments on or before December 28, 2018.

    ADDRESSES:

    Document availability and comment submission: Submit requests for a copy of the application and related documents and submit any comments by one of the following methods. All requests and comments should specify the applicant name and application number (i.e., Colorado State University TE-07859D-0):

    Email: [email protected]

    U.S. Mail: Marilet Zablan, Program Manager, Restoration and Endangered Species Classification, Ecological Services, U.S. Fish and Wildlife Service, Pacific Regional Office, 911 NE 11th Avenue, Portland, OR 97232-4181.

    FOR FURTHER INFORMATION CONTACT:

    Colleen Henson, Recovery Permit Coordinator, Ecological Services, (503) 231-6131 (phone); [email protected] (email). Individuals who are hearing or speech impaired may call the Federal Relay Service at 1-800-877-8339 for TTY assistance.

    SUPPLEMENTARY INFORMATION:

    We, the U.S. Fish and Wildlife Service, invite the public to comment on an application for a permit under section 10(a)(1)(A) of the Endangered Species Act, as amended (ESA; 16 U.S.C. 1531 et seq.). The requested permit would allow the applicant to conduct activities intended to promote recovery of species that are listed as endangered under the ESA.

    Background

    With some exceptions, the ESA prohibits activities that constitute take of listed species unless a Federal permit is issued that allows such activity. The ESA's definition of “take” includes such activities as pursuing, harassing, trapping, capturing, or collecting in addition to hunting, shooting, harming, wounding, or killing.

    A recovery permit issued by us under section 10(a)(1)(A) of the ESA authorizes the permittee to conduct activities with endangered or threatened species for scientific purposes that promote recovery or for enhancement of propagation or survival of the species. These activities often include such prohibited actions as capture and collection. Our regulations implementing section 10(a)(1)(A) for these permits are found in the Code of Federal Regulations at 50 CFR 17.22 for endangered wildlife species, 50 CFR 17.32 for threatened wildlife species, 50 CFR 17.62 for endangered plant species, and 50 CFR 17.72 for threatened plant species.

    Permit Application Available for Review and Comment

    Proposed activities in the following permit request are for the recovery and enhancement of propagation or survival of the species in the wild. The ESA requires that we invite public comment before issuing this permit. Accordingly, we invite local, State, Tribal, and Federal agencies and the public to submit written data, views, or arguments with respect to this application. The comments and recommendations that will be most useful and likely to influence agency decisions are those supported by quantitative information or studies.

    Application No. Applicant, city, state Species Location Take activity Permit
  • action
  • TE-07859D-0 Colorado State University, Fort Collins, CO Eugenia bryanii (no common name), Heritiera longipetiolata (ufa-halom tanu), Serianthes nelsonii (hayun lagu) Guam Remove and reduce to possession including collection, propagation, and salvage New.
    Public Availability of Comments

    Written comments we receive become part of the administrative record associated with this action. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can request in your comment that we withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so. All submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses, will be made available for public disclosure in their entirety.

    Next Steps

    If we decide to issue a permit to the applicant listed in this notice, we will publish a notice in the Federal Register.

    Authority

    We publish this notice under section 10(c) of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq.).

    Sarah B. Hall, Acting Assistant Regional Director—Ecological Services, Pacific Region.
    [FR Doc. 2018-25915 Filed 11-27-18; 8:45 am] BILLING CODE 4333-15-P
    DEPARTMENT OF THE INTERIOR Bureau of Indian Affairs [190A2100DD/AAKC001030/A0A501010.999900] HEARTH Act Approval of Quinault Indian Nation's Business and Residential Leasing Regulations AGENCY:

    Bureau of Indian Affairs, Interior.

    ACTION:

    Notice.

    SUMMARY:

    On October 31, 2018, the Bureau of Indian Affairs (BIA) approved the Quinault Indian Nation's (Tribe) leasing regulations under the Helping Expedite and Advance Responsible Tribal Homeownership Act of 2012 (HEARTH Act). With this approval, the Tribe is authorized to enter into residential and business leases without further BIA approval.

    FOR FURTHER INFORMATION CONTACT:

    Ms. Sharlene Round Face, Bureau of Indian Affairs, Division of Real Estate Services, 1849 C Street NW, MS-4642-MIB, Washington, DC 20240, at (202) 208-3615.

    SUPPLEMENTARY INFORMATION:

    I. Summary of the HEARTH Act

    The HEARTH Act makes a voluntary, alternative land leasing process available to Tribes, by amending the Indian Long-Term Leasing Act of 1955, 25 U.S.C. 415. The HEARTH Act authorizes Tribes to negotiate and enter into agricultural and business leases of Tribal trust lands with a primary term of 25 years, and up to two renewal terms of 25 years each, without the approval of the Secretary of the Interior (Secretary). The HEARTH Act also authorizes Tribes to enter into leases for residential, recreational, religious, or educational purposes for a primary term of up to 75 years without the approval of the Secretary. Participating Tribes develop Tribal leasing regulations, including an environmental review process, and then must obtain the Secretary's approval of those regulations prior to entering into leases. The HEARTH Act requires the Secretary to approve Tribal regulations if the Tribal regulations are consistent with the Department of the Interior's (Department) leasing regulations at 25 CFR part 162 and provide for an environmental review process that meets requirements set forth in the HEARTH Act. This notice announces that the Secretary, through the Assistant Secretary—Indian Affairs, has approved the Tribal regulations for the Quinault Indian Nation.

    II. Federal Preemption of State and Local Taxes

    The Department's regulations governing the surface leasing of trust and restricted Indian lands specify that, subject to applicable Federal law, permanent improvements on leased land, leasehold or possessory interests, and activities under the lease are not subject to State and local taxation and may be subject to taxation by the Indian Tribe with jurisdiction. See 25 CFR 162.017. As explained further in the preamble to the final regulations, the Federal government has a strong interest in promoting economic development, self-determination, and Tribal sovereignty. 77 FR 72,440, 72,447-48 (December 5, 2012). The principles supporting the Federal preemption of State law in the field of Indian leasing and the taxation of lease-related interests and activities applies with equal force to leases entered into under Tribal leasing regulations approved by the Federal government pursuant to the HEARTH Act.

    Section 5 of the Indian Reorganization Act, 25 U.S.C. 5108, preempts State and local taxation of permanent improvements on trust land. Confederated Tribes of the Chehalis Reservation v. Thurston County, 724 F.3d 1153, 1157 (9th Cir. 2013) (citing Mescalero Apache Tribe v. Jones, 411 U.S. 145 (1973)). Similarly, section 5108 preempts State taxation of rent payments by a lessee for leased trust lands, because “tax on the payment of rent is indistinguishable from an impermissible tax on the land.” See Seminole Tribe of Florida v. Stranburg, No. 14-14524, *13-*17, n.8 (11th Cir. 2015). In addition, as explained in the preamble to the revised leasing regulations at 25 CFR part 162, Federal courts have applied a balancing test to determine whether State and local taxation of non-Indians on the reservation is preempted. White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 143 (1980). The Bracker balancing test, which is conducted against a backdrop of “traditional notions of Indian self-government,” requires a particularized examination of the relevant State, Federal, and Tribal interests. We hereby adopt the Bracker analysis from the preamble to the surface leasing regulations, 77 FR at 72,447-48, as supplemented by the analysis below.

    The strong Federal and Tribal interests against State and local taxation of improvements, leaseholds, and activities on land leased under the Department's leasing regulations apply equally to improvements, leaseholds, and activities on land leased pursuant to Tribal leasing regulations approved under the HEARTH Act. Congress's overarching intent was to “allow Tribes to exercise greater control over their own land, support self-determination, and eliminate bureaucratic delays that stand in the way of homeownership and economic development in Tribal communities.” 158 Cong. Rec. H. 2682 (May 15, 2012). The HEARTH Act was intended to afford Tribes “flexibility to adapt lease terms to suit [their] business and cultural needs” and to “enable [Tribes] to approve leases quickly and efficiently.” Id. at 5-6.

    Assessment of State and local taxes would obstruct these express Federal policies supporting Tribal economic development and self-determination, and also threaten substantial Tribal interests in effective Tribal government, economic self-sufficiency, and territorial autonomy. See Michigan v. Bay Mills Indian Community, 134 S. Ct. 2024, 2043 (2014) (Sotomayor, J., concurring) (determining that “[a] key goal of the Federal Government is to render Tribes more self-sufficient, and better positioned to fund their own sovereign functions, rather than relying on Federal funding”). The additional costs of State and local taxation have a chilling effect on potential lessees, as well as on a Tribe that, as a result, might refrain from exercising its own sovereign right to impose a Tribal tax to support its infrastructure needs. See id. at 2043-44 (finding that State and local taxes greatly discourage Tribes from raising tax revenue from the same sources because the imposition of double taxation would impede Tribal economic growth).

    Similar to BIA's surface leasing regulations, Tribal regulations under the HEARTH Act pervasively cover all aspects of leasing. See 25 U.S.C. 415(h)(3)(B)(i) (requiring Tribal regulations be consistent with BIA surface leasing regulations). Furthermore, the Federal government remains involved in the Tribal land leasing process by approving the Tribal leasing regulations in the first instance and providing technical assistance, upon request by a Tribe, for the development of an environmental review process. The Secretary also retains authority to take any necessary actions to remedy violations of a lease or of the Tribal regulations, including terminating the lease or rescinding approval of the Tribal regulations and reassuming lease approval responsibilities. Moreover, the Secretary continues to review, approve, and monitor individual Indian land leases and other types of leases not covered under the Tribal regulations according to the Part 162 regulations.

    Accordingly, the Federal and Tribal interests weigh heavily in favor of preemption of State and local taxes on lease-related activities and interests, regardless of whether the lease is governed by Tribal leasing regulations or Part 162. Improvements, activities, and leasehold or possessory interests may be subject to taxation by the Quinault Indian Nation.

    Dated: October 31, 2018. Tara Sweeney, Assistant Secretary—Indian Affairs.
    [FR Doc. 2018-25942 Filed 11-27-18; 8:45 am] BILLING CODE 4337-15-P
    DEPARTMENT OF THE INTERIOR Bureau of Land Management [L11100000 DS0000 LXSS036E0000 LLWY1610000] Notice of Intent for the Potential Amendment to the Approved Resource Management Plan for the Buffalo Field Office, Wyoming, and To Prepare an Associated Supplemental Environmental Impact Statement AGENCY:

    Bureau of Land Management, Interior.

    ACTION:

    Notice of intent.

    SUMMARY:

    In accordance with the National Environmental Policy Act of 1969, as amended (NEPA), and the Federal Land Policy and Management Act of 1976, as amended (FLPMA), the Bureau of Land Management (BLM) Wyoming Buffalo Field Office intends to prepare a Supplemental Environmental Impact Statement (EIS) and potential amendment for the 2015 Buffalo Field Office Approved Resource Management Plan (RMP). The Supplemental EIS is in response to a United States District Court, District of Montana, opinion and order (Western Organization of Resource Councils, et al vs BLM). This notice announces the beginning of the scoping process to solicit public comments and identify issues presented in the opinion and order.

    DATES:

    To ensure that we can adequately consider all comments, the BLM must receive written comments by December 28, 2018. The BLM will announce a public scoping meeting during this period through local news media, newsletters, our ePlanning website, and the BLM website (http://www.blm.gov/wyoming) at least 15 days prior to the meeting. The BLM will provide additional opportunities for public participation upon publication of the Draft Supplemental EIS.

    ADDRESSES:

    You may submit comments on issues, planning criteria, and resource information by any of the following methods:

    Website: http://go.usa.gov/x9PT8.

    Mail: Buffalo RMP SEIS, Attn: Thomas Bills, Project Manager, BLM Buffalo Field Office, 1425 Fort Street, Buffalo, WY 82834.

    FOR FURTHER INFORMATION CONTACT:

    Thomas (Tom) Bills, RMP Supplemental EIS Project Manager; Telephone 307-684-1133; or at the above mailing address or website. Persons who use a telecommunications device for the deaf (TDD) may call the Federal Relay Service (FRS) at 1-800-877-8339 to contact the above individual during normal business hours. The FRS is available 24 hours a day, seven days a week, to leave a message or question with the above individual. You will receive a reply during normal business hours.

    SUPPLEMENTARY INFORMATION:

    The BLM is preparing this Supplemental EIS in response to a United States District Court of Montana opinion and order (Western Organization of Resource Councils, et al. v. BLM; CV 16-21-GF-BMM; 3/26/2018 and 7/31/2018).

    In September 2015, the BLM approved the Record of Decision for Approved RMPs and Amendments in the Rocky Mountain Region, which included Wyoming's Buffalo Field Office. The 2015 Buffalo Approved RMP provides a single, comprehensive land use plan that guides management of BLM-administered lands and minerals in the Buffalo Field Office. The plan provides goals, objectives, land use allocations, and management direction for the BLM-administered surface and mineral estate based on the BLM's multiple use and sustained yield mission, unless otherwise specified by law (FLPMA Sec. 102(c), 43 U.S.C. 1701 et seq.). The Buffalo Field Office manages approximately 800,000 acres of surface land and 4.7 million acres of mineral estate in Campbell, Johnson, and Sheridan counties in north-central Wyoming.

    On March 26, 2018, the U.S. District Court concluded: (1) NEPA requires the BLM to consider an alternative that would decrease the amount of coal potentially available for leasing, which requires updated coal screening that considers climate change impacts to assess the amount of recoverable coal available in the Approved RMP; (2) the BLM must supplement the Buffalo Final EIS with an analysis of the environmental consequences of downstream combustion of federal coal, oil, and gas open to development under the RMP; and (3) The BLM must provide additional justification and analysis of global warming potential over an appropriate planning period consistent with evolving science. The purpose of this public scoping process is to solicit public input that will influence the scope of the Buffalo Supplemental EIS with respect to the U.S. District Court's determinations.

    There are currently 13 operating coal mines in the planning area. All are in Campbell County (part of the Antelope Mine is in Converse County). There are presently two proposed mining operations on existing Federal coal leases or on privately owned coal in the planning area. One of these proposed mining operations is located in Sheridan County. All of the existing or proposed mining operations are surface coal mines, using truck/shovel or dragline mining methods.

    The 2015 Buffalo RMP relied on coal screening completed during a 2001 RMP update. The 2001 screening reviewed 567,200 acres in two areas identified as acceptable for potential coal leasing in the Buffalo Field Office (494,000 acres in Campbell County and 73,200 acres in Sheridan County), containing an estimated 50.25 billion tons of coal. Based on the update, the BLM determined that 63,600 acres containing more than 6.2 billion tons of coal are unsuitable for surface coal mining operations, while the remainder of the coal lands in these areas remains available for further consideration for coal leasing. The BLM completed and documented surface owner consultation. The BLM estimates about 26 billion tons of coal would be developed under the Approved RMP in the areas made available for coal leasing under the 2001 coal screening. Since 1985, about 10.8 billion tons of coal within the planning area either were leased or are under consideration for leasing. The BLM has projected that the areas it screened and deemed acceptable for leasing will meet the anticipated demand for coal reserves. The BLM determined a new coal screening is not necessary in the Buffalo Field Office because no new lands have been nominated for analysis since the previous screenings, but BLM Wyoming will analyze the downstream impacts of developing federal minerals.

    Call for Coal and Other Resource Information

    The BLM requests that industry, state and local governments, and the public provide relevant coal resource data that can help inform this planning effort. Specifically, the BLM requests information on the development potential (e.g., location, quality, and quantity) of BLM-administered coal mineral estate, and on surface resource values related to multiple use conflicts.

    The purpose of this request is to ensure BLM Wyoming has sufficient information and data to consider a reasonable range of resource uses, management options, and alternatives for managing BLM-administered coal mineral estate. The BLM will use this information to complete the Supplemental EIS and formulate alternatives that identify areas acceptable for further leasing consideration.

    Proprietary data marked as confidential may be submitted in response to this call for coal and other resource information. Please submit all proprietary information to the Buffalo Field Manager at the address listed above. The BLM will treat submissions marked as “Confidential” in accordance with the laws and regulations governing the confidentiality of such information.

    Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, the BLM cannot guarantee that it will be able to do so.

    Authority:

    43 CFR 1610.2(c) and 3420.1-2.

    Dated: November 16, 2018. Mary Jo Rugwell, State Director.
    [FR Doc. 2018-25845 Filed 11-27-18; 8:45 am] BILLING CODE 4310-22-P
    DEPARTMENT OF THE INTERIOR Bureau of Land Management [LLMT930000 L16100000 DS0000 LXSS036E0000 19X] Notice of Intent for the Potential Amendment to the Approved Resource Management Plan for the Miles City Field Office, Montana, and To Prepare an Associated Supplemental Environmental Impact Statement AGENCY:

    Bureau of Land Management, Interior.

    ACTION:

    Notice of intent.

    SUMMARY:

    In accordance with the National Environmental Policy Act of 1969, as amended (NEPA), and the Federal Land Policy and Management act of 1976, as amended (FLPMA), the Bureau of Land Management (BLM), Miles City Field Office, Miles City, Montana, intends to prepare a Supplemental Environmental Impact Statement (EIS) and potential amendment for the 2015 Miles City Field Office Approved Resource Management Plan (RMP). The Supplemental EIS is in response to a United States District Court, District of Montana, opinion and order (Western Organization of Resource Councils, et al vs BLM). This notice announces the beginning of the scoping process to solicit public comments and identify issues presented in the opinion and order.

    DATES:

    To ensure that comments will be considered, the BLM must receive written comments by December 28, 2018. The BLM will announce a public scoping meeting through local news media, newsletters, e-Planning, and the BLM website https://www.blm.gov/montana-dakotas at least 15 days prior to the meeting. The BLM will provide additional opportunities for public participation upon publication of the Draft Supplemental EIS.

    ADDRESSES:

    You may submit comments on issues, planning criteria, and resource information by any of the following methods:

    Website: https://go.usa.gov/xPv49.

    Mail: Miles City RMP Draft Supplemental EIS; Amy Waring, Supplemental EIS Project Manager; Montana/Dakotas State Office, 5001 Southgate Dr., Billings, MT 59101.

    FOR FURTHER INFORMATION CONTACT:

    Amy Waring, Supplemental EIS Project Manager; telephone (406) 896-5095; email [email protected]; or at the mailing address or website listed earlier (see ADDRESSES). Persons who use a telecommunications device for the deaf (TDD) may call the Federal Relay Service (FRS) at 1-800-877-8339 to contact the above individuals during normal business hours. The FRS is available 24 hours a day, 7 days a week, to leave a message or question with the above individuals. You will receive a reply during normal business hours.

    SUPPLEMENTARY INFORMATION:

    The Supplemental EIS is in response to a United States Montana District court opinion and order (Western Organization of Resource Councils, et al. vs BLM; CV 16-21-GF-BMM; 3/26/2018 and 7/31/2018).

    In September 2015, the BLM approved the Record of Decision for the Approved RMPs and Amendments in the Rocky Mountain Region, which included the Montana Miles City Field Office. The 2015 Miles City Approved RMP provides a single, comprehensive land use plan that guides management of BLM-administered surface and mineral estate in the Miles City Field Office. The plan provides goals, objectives, land use allocations, and management direction for the BLM-administered surface and mineral estate based on multiple use and sustained yield, unless otherwise specified by law (FLPMA Sec. 102(c), 43 U.S.C. 1701 et seq.). The Miles City Field Office manages approximately 2.7 million surface acres and 10.6 million acres of Federal mineral estate across 17 counties in eastern Montana.

    On March 26, 2018, the U.S. District Court concluded: (1) NEPA requires the BLM to consider an alternative that would decrease the amount of coal potentially available for leasing, which requires conducting new coal screening that considers climate change impacts to assess the amount of recoverable coal available in the Approved RMP, (2) The BLM must supplement the Miles City Final EIS with an analysis of the environmental consequences of downstream combustion of coal, oil, and gas open to development under the Approved RMP; and (3) The BLM must provide additional justification and analysis of global warming potential over an appropriate planning period consistent with evolving science.

    The purpose of this public scoping process is to solicit public input that will influence the scope of the environmental analysis with respect to the three conclusions by the U.S. District Court.

    There are currently five active coal mining operations in or adjacent to the planning area, four of which operate on Federal coal leases, and are administered by the BLM (Decker, Rosebud, Savage, and Spring Creek), and one mine (Absaloka) that operates entirely on two Indian coal leases. In addition, two additional mines are proposed, the Big Metal Mine (Indian reserves) and Otter Creek Mine (currently private reserves). The Miles City Field Office also authorizes a domestic coal license to a private individual in Fallon County for home heating.

    The 2015 Approved RMP relied upon coal screening completed during two previous RMP revisions: Big Dry (1996) and Powder River (1985). These planning efforts identified approximately 68.38 billion tons of coal that are available for further consideration for coal leasing across the Miles City Field Office (62.20 billion tons in the Power River RMP and 6.18 billion tons of coal in the Big Dry RMP). A reasonable foreseeable development scenario (RFD) was developed for the Final EIS based upon the U.S. Energy Information Administration projections in order for specialists to analyze the potential effects related to Federal coal leasing. The RFD was based upon continued operations of the five existing mines, with no new mines being developed over the 20-year planning timeframe. The RFD did not consider leasing of the entire 68.38 billion tons of coal that may be available. The air quality analysis estimated annual emissions from the RFD estimate of 56.2 million tons of Federal and 26.8 million tons of non-Federal coal produced per year, based upon coal production limits prescribed in each associated Montana Air Quality Permit issued by the Montana Department of Environmental Quality for the five operating mines.

    As defined in 43 CFR 3420.1-4, the four principal factors the BLM must consider for coal resource development during land use planning include:

    1. Estimate coal development potential, and consider only those areas that have development potential for further consideration for leasing.

    2. Apply the unsuitability criteria set out in 43 CFR subpart 3461 to the BLM-administered coal mineral estate to identify areas unsuitable for all, or certain stipulated methods of mining.

    3. Consider multiple land use management conflicts which may eliminate coal deposits from further consideration for leasing to protect other resource values and land uses that are locally, regionally or nationally important or unique, that are not included in the unsuitability criteria.

    4. Consult with qualified surface owners, as defined in 43 CFR 3400.0-5, whose lands overlie BLM-administered coal mineral estate to determine preference for or against mining by other than underground mining techniques.

    Call for Coal and Other Resource Information

    The BLM requests that industry, State and local governments, and the public interested in coal management in the planning area provide the BLM relevant coal resource data that can help inform this project. Specifically, the BLM requests information on the development potential (e.g., location, quality, and quantity) of BLM-administered coal mineral estate, and on surface resource values related to multiple use conflicts.

    The purpose of this request is to assure that the planning effort has sufficient information and data to consider a reasonable range of resource uses, management options, and alternatives for management of the BLM-administered Federal coal mineral estate. The BLM will use this information to complete the Supplemental EIS and formulate alternatives that identify areas acceptable for further consideration for leasing.

    Proprietary data marked as “Confidential” may be submitted in response to this request for coal and other resource information. Please submit all proprietary information submissions to the Montana/Dakotas State Director at the address listed above. The BLM will treat submissions marked as “Confidential” in accordance with the laws and regulations governing the confidentiality of such information.

    Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can request us to withhold your personal identifying information from public review, BLM cannot guarantee that it will be able to do so.

    (Authority: 43 CFR 1610.2(c) and 3420.1-2) Jon K. Raby, Acting State Director.
    [FR Doc. 2018-25847 Filed 11-27-18; 8:45 am] BILLING CODE 4310-DN-P
    DEPARTMENT OF THE INTERIOR National Park Service [NPS-WASO-D-COS-POL-26833; PPWODIREP0][PPMPSAS1Y.YP0000] Notice of the December 5, 2018, Meeting of the National Park System Advisory Board AGENCY:

    National Park Service, Interior.

    ACTION:

    Notice.

    SUMMARY:

    In accordance with the Federal Advisory Committee Act of 1972, the National Park Service is hereby giving notice that the National Park System Advisory Board (Board) will meet as noted below. This notice is being published less than 15 days prior to the meeting date due to unexpected administrative delays.

    DATES:

    The meeting will be held on Wednesday, December 5, 2018, from 9:30 a.m. to 5:00 p.m. (EASTERN).

    ADDRESSES:

    The meeting will be conducted in the Jefferson Room of the Courtyard Marriott Washington, DC/Foggy Bottom, 515 20th Street NW, Washington, DC 20006, telephone (202) 263-7435.

    FOR FURTHER INFORMATION CONTACT:

    Shirley Sears, Office of Policy, National Park Service, 1849 C Street NW, Mail Stop 2659, Washington, DC 20240, telephone (202) 354-3955, or email [email protected]

    SUPPLEMENTARY INFORMATION:

    The Board has been established by authority of the Secretary of the Interior (Secretary) under 54 U.S.C. 100906, and is regulated by the Federal Advisory Committee Act.

    The Board will convene at 9:30 a.m. and adjourn at 5:00 p.m. The board will have briefings on the priorities and programs of the National Park Service, including the National Historic Landmarks and National Natural Landmarks programs. The meeting will be open to the public. There will also be a public comment period. The final agenda will be posted to the Board's website prior to the meeting at https://www.nps.gov/advisoryboard.htm. The order of the agenda may be changed, if necessary.

    The Board also will permit attendees to address the Board, but may restrict the length of the presentations, as necessary, to allow the Board to complete its agenda within the allotted time.

    Anyone may file with the Board a written statement concerning matters to be discussed.

    Statements should be sent to [email protected]

    Public Disclosure of Information: Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.

    Authority:

    5 U.S.C. Appendix 2.

    Alma Ripps, Chief, Office of Policy.
    [FR Doc. 2018-25934 Filed 11-27-18; 8:45 am] BILLING CODE 4312-52-P
    INTERNATIONAL TRADE COMMISSION [Investigation No. 337-TA-1121] Certain Earpiece Devices and Components Thereof: Notice of a Commission Determination Not To Review an Initial Determination Granting a Motion for Leave To Amend the Complaint and Notice of Investigation AGENCY:

    U.S. International Trade Commission.

    ACTION:

    Notice.

    SUMMARY:

    Notice is hereby given that the U.S. International Trade Commission has determined not to review an initial determination (“ID”) (Order No. 10) of the presiding administrative law judge (“ALJ”), granting complainant's motion for leave to amend the complaint and Notice of Investigation to correct the name and/or address of two existing respondents.

    FOR FURTHER INFORMATION CONTACT:

    Cathy Chen, Esq., Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 205-2392. Copies of non-confidential documents filed in connection with this investigation are or will be available for inspection during official business hours (8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 205-2000. General information concerning the Commission may also be obtained by accessing its internet server at https://www.usitc.gov. The public record for this investigation may be viewed on the Commission's electronic docket (EDIS) at https://edis.usitc.gov. Hearing-impaired persons are advised that information on this matter can be obtained by contacting the Commission's TDD terminal on (202) 205-1810.

    SUPPLEMENTARY INFORMATION:

    The Commission instituted this investigation on June 29, 2018, based on a complaint filed on behalf of Bose Corporation of Framingham, Massachusetts (“Bose”). 83 FR 30,776 (Jun. 29, 2018). The complaint alleges violations of Section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337 (“section 337”), based upon the importation into the United States, the sale for importation, and the sale within the United States after importation of certain earpiece devices and components thereof by reason of infringement of one or more of U.S. Patent Nos.: 9,036,852; 9,036,853; 9,042,590; 8,311,253; 8,249,287; and 9,398,364. The complaint further alleges that an industry in the United States exists as required by section 337. The Notice of Investigation named numerous respondents, including iHip of Edison, New Jersey; and SMARTOMI Products, Inc. (“Smartomi”) of Ontario, Canada. The Office of Unfair Import Investigations (“OUII”) was named as a party in this investigation.

    On October 4, 2018, Bose filed a motion to amend the notice of investigation and for leave to file an amended complaint in order to correct the name and/or address of two existing respondents. Order No. 10 at 1 (Oct. 29, 2018). Specifically, Bose sought to correct the name of respondent iHip to Zeikos, Inc., and to correct the name of respondent Smartomi to V4ink, Inc. (“V4ink”). Id. Bose also sought to correct the address of the latter respondent because the Smartomi address cited in the original complaint, 2760 E Philadelphia Street, Ontario, Canada 91761, is the registered agent for V4ink. Id. Bose since learned that V4ink's principal place of business is 1251 S Rockfeller Ave Unit B, Ontario, Canada 91761-2238. Id. No response was filed. Id.

    On October 29, 2018, the ALJ issued the subject ID granting the motion. Id. at 2. The ALJ found that good cause exists to amend the complaint and notice of investigation, and that there is no evidence of any prejudice to the parties in the investigation. Id. No petitions for review were filed.

    The Commission has determined not to review the ID.

    The authority for the Commission's determination is contained in section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and in Part 210 of the Commission's Rules of Practice and Procedure (19 CFR part 210).

    By order of the Commission.

    Issued: November 23, 2018. Katherine Hiner, Supervisory Attorney.
    [FR Doc. 2018-25940 Filed 11-27-18; 8:45 am] BILLING CODE 7020-02-P
    NUCLEAR REGULATORY COMMISSION [NRC-2018-0228] Information Collection: Operators' Licenses AGENCY:

    Nuclear Regulatory Commission.

    ACTION:

    Renewal of existing information collection; request for comment.

    SUMMARY:

    The U.S. Nuclear Regulatory Commission (NRC) invites public comment on the renewal of Office of Management and Budget (OMB) approval for an existing collection of information. The information collection is entitled, Operators' Licenses.

    DATES:

    Submit comments by January 28, 2019. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received on or before this date.

    ADDRESSES:

    You may submit comments by any of the following methods:

    Federal Rulemaking Website: Go to http://www.regulations.gov and search for Docket ID NRC-2018-0228. Address questions about Docket IDs in Regulations.gov to Jennifer Borges; telephone: 301-287-9127; email: [email protected] For technical questions, contact the individual listed in the FOR FURTHER INFORMATION CONTACT section of this document.

    Mail comments to: David Cullison, Office of the Chief Information Officer, Mail Stop: O1-F21, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001.

    For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the SUPPLEMENTARY INFORMATION section of this document.

    FOR FURTHER INFORMATION CONTACT:

    David Cullison, Office of the Chief Information Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2084; email: [email protected]

    SUPPLEMENTARY INFORMATION:

    I. Obtaining Information and Submitting Comments A. Obtaining Information

    Please refer to Docket ID NRC-2018-0228 when contacting the NRC about the availability of information for this action. You may obtain publicly-available information related to this action by any of the following methods:

    Federal Rulemaking Website: Go to http://www.regulations.gov and search for Docket ID NRC-2018-0228.

    NRC's Agencywide Documents Access and Management System (ADAMS): You may obtain publicly-available documents online in the ADAMS Public Documents collection at http://www.nrc.gov/reading-rm/adams.html. To begin the search, select “Begin Web-based ADAMS Search.” For problems with ADAMS, please contact the NRC's Public Document Room (PDR) reference staff at 1-800-397-4209, 301-415-4737, or by email to [email protected] The supporting statement is available in ADAMS under Accession No. ML18218A114.

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

    NRC's Clearance Officer: A copy of the collection of information and related instructions may be obtained without charge by contacting NRC's Clearance Officer, David Cullison, Office of the Chief Information Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2084; email: [email protected]

    B. Submitting Comments

    Please include Docket ID NRC-2018-0228 in the subject line of your comment submission, in order to ensure that the NRC is able to make your comment submission available to the public in this docket.

    The NRC cautions you not to include identifying or contact information in comment submissions that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at http://www.regulations.gov as well as enter the comment submissions into ADAMS, and the NRC does not routinely edit comment submissions to remove identifying or contact information.

    If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.

    II. Background

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the NRC is requesting public comment on its intention to request the OMB's approval for the information collection summarized below.

    1. The title of the information collection: Operators' Licenses.

    2. OMB approval number: 3150-0018.

    3. Type of submission: Extension.

    4. The form number, if applicable: Not applicable.

    5. How often the collection is required or requested: As necessary for the NRC to meet its responsibilities to determine the eligibility for applicants and operators.

    6. Who will be required or asked to respond: Holders of, and applicants for, facility (i.e., nuclear power and non-power research and test reactor) operating licenses and individual operator licensees.

    7. The estimated number of annual responses: 449 (353 reporting responses + 96 recordkeepers).

    8. The estimated number of annual respondents: 96.

    9. The estimated number of hours needed annually to comply with the information collection requirement or request: 172,915 hours (150,869 hours reporting + 22,046 hours recordkeeping).

    10. Abstract: Part 55 of title 10 of the Code of Federal Regulations (10 CFR), “Operators' Licenses,” specifies information and data to be provided by applicants and facility licensees so that the NRC may make determinations concerning the licensing and requalification of operators for nuclear reactors, as necessary to promote public health and safety. The reporting and recordkeeping requirements contained in 10 CFR part 55 are mandatory for the affected facility licensees and applicants.

    III. Specific Requests for Comments

    The NRC is seeking comments that address the following questions:

    1. Is the proposed collection of information necessary for the NRC to properly perform its functions? Does the information have practical utility?

    2. Is the estimate of the burden of the information collection accurate?

    3. Is there a way to enhance the quality, utility, and clarity of the information to be collected?

    4. How can the burden of the information collection on respondents be minimized, including the use of automated collection techniques or other forms of information technology?

    Dated at Rockville, Maryland, this 23rd day of November, 2018.

    For the Nuclear Regulatory Commission.

    David C. Cullison, NRC Clearance Officer, Office of the Chief Information Officer.
    [FR Doc. 2018-25936 Filed 11-27-18; 8:45 am] BILLING CODE 7590-01-P
    NUCLEAR REGULATORY COMMISSION [NRC-2018-0047] Information Collection: Domestic Licensing of Source Material AGENCY:

    Nuclear Regulatory Commission.

    ACTION:

    Notice of submission to the Office of Management and Budget; request for comment.

    SUMMARY:

    The U.S. Nuclear Regulatory Commission (NRC) has recently submitted a request for renewal of an existing collection of information to the Office of Management and Budget (OMB) for review. The information collection is entitled, Domestic Licensing of Source Material.

    DATES:

    Submit comments by December 28, 2018.

    ADDRESSES:

    Submit comments directly to the OMB reviewer at: OMB Office of Information and Regulatory Affairs (3150-0020), Attn: Desk Officer for the Nuclear Regulatory Commission, 725 17th Street NW, Washington, DC 20503; email: [email protected]

    FOR FURTHER INFORMATION CONTACT:

    David Cullison, NRC Clearance Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2084; email: [email protected]

    SUPPLEMENTARY INFORMATION:

    I. Obtaining Information and Submitting Comments A. Obtaining Information

    Please refer to Docket ID NRC-2018-0047 when contacting the NRC about the availability of information for this action. You may obtain publicly-available information related to this action by any of the following methods:

    Federal Rulemaking Website: Go to http://www.regulations.gov and search for Docket ID NRC-2018-0047.

    NRC's Agencywide Documents Access and Management System (ADAMS): You may obtain publicly-available documents online in the ADAMS Public Documents collection at http://www.nrc.gov/reading-rm/adams.html. To begin the search, select “Begin Web-based ADAMS Search.” For problems with ADAMS, please contact the NRC's Public Document Room (PDR) reference staff at 1-800-397-4209, 301-415-4737, or by email to [email protected] The supporting statement and burden spreadsheet are available in ADAMS under Accession Nos. ML18289A608 and ML18289A625.

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

    NRC's Clearance Officer: A copy of the collection of information and related instructions may be obtained without charge by contacting the NRC's Clearance Officer, David Cullison, Office of the Chief Information Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2084; email: [email protected]

    B. Submitting Comments

    The NRC cautions you not to include identifying or contact information in comment submissions that you do not want to be publicly disclosed in your comment submission. All comment submissions are posted at http://www.regulations.gov and entered into ADAMS. Comment submissions are not routinely edited to remove identifying or contact information.

    If you are requesting or aggregating comments from other persons for submission to the OMB, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that comment submissions are not routinely edited to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.

    II. Background

    Under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the NRC recently submitted a request for renewal of an existing collection of information to OMB for review entitled, Domestic Licensing of Source Material. The NRC hereby informs potential respondents that an agency may not conduct or sponsor, and that a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

    The NRC published a Federal Register notice with a 60-day comment period on this information collection on August 1, 2018 (83 FR 37537).

    1. The title of the information collection: Domestic Licensing of Source Material.

    2. OMB approval number: 3150-0020.

    3. Type of submission: Revision.

    4. The form number, if applicable: Not applicable.

    5. How often the collection is required or requested: Reports required under part 40 of title 10 of the Code of Federal Regulations (10 CFR) are collected and evaluated on a continuing basis as events occur. There is a one-time submittal of information to receive a license. Renewal applications need to be submitted every 15 to 40 years. Information in previous applications may be referenced without being resubmitted. In addition, recordkeeping must be performed on an on-going basis.

    6. Who will be required or asked to respond: Applicants for and holders of NRC licenses authorizing the receipt, possession, use, or transfer of radioactive source material.

    7. The estimated number of annual responses: 1,390 (750 reporting responses + 6 third party disclosure responses + 634 recordkeepers).

    8. The estimated number of annual respondents: 634.

    9. The estimated number of hours needed annually to comply with the information collection requirement or request: 16,928 (11,366 reporting + 5,544 recordkeeping + 18 third party disclosure).

    10. Abstract: The NRC regulations in 10 CFR part 40 establish procedures and criteria for the issuance of licenses to receive title to, receive, possess, use, transfer, or deliver source and byproduct material. The application, reporting, recordkeeping, and third party notification requirements are necessary to permit the NRC to make a determination as to whether the possession, use, and transfer of source and byproduct material is in conformance with the Commission's regulations for protection of public health and safety.

    Dated at Rockville, Maryland, this 23rd day of November 2018.

    For the Nuclear Regulatory Commission.

    David C. Cullison, NRC Clearance Officer, Office of the Chief Information Officer.
    [FR Doc. 2018-25935 Filed 11-27-18; 8:45 am] BILLING CODE 7590-01-P
    NUCLEAR REGULATORY COMMISSION [NRC 2018-0151] Information Collection: NRC Form 531, “Request for Taxpayer Identification Number” AGENCY:

    Nuclear Regulatory Commission.

    ACTION:

    Notice of submission to the Office of Management and Budget; request for comment.

    SUMMARY:

    The U.S. Nuclear Regulatory Commission (NRC) has recently submitted a request for revision of an existing collection of information to the Office of Management and Budget (OMB) for review. The information collection is entitled, NRC Form 531, “Request for Taxpayer Identification Number.”

    DATES:

    Submit comments by December 28, 2018.

    ADDRESSES:

    Submit comments directly to the OMB reviewer at: OMB Office of Information and Regulatory Affairs (3150-0188), Attn: Desk Officer for the Nuclear Regulatory Commission, 725 17th Street NW, Washington, DC 20503; email: [email protected]

    FOR FURTHER INFORMATION CONTACT:

    David Cullison, Office of the Chief Information Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2084; email: [email protected]

    SUPPLEMENTARY INFORMATION:

    I. Obtaining Information and Submitting Comments A. Obtaining Information

    Please refer to Docket ID NRC-2018-0151 when contacting the NRC about the availability of information for this action. You may obtain publicly-available information related to this action by any of the following methods:

    Federal Rulemaking Website: Go to http://www.regulations.gov and search for Docket ID NRC-2018-0151. A copy of the collection of information and related instructions may be obtained without charge by accessing Docket ID NRC-2018-0151 on this website.

    NRC's Agencywide Documents Access and Management System (ADAMS): You may obtain publicly-available documents online in the ADAMS Public Documents collection at http://www.nrc.gov/reading-rm/adams.html. To begin the search, select “Begin Web-based ADAMS Search.” For problems with ADAMS, please contact the NRC's Public Document Room (PDR) reference staff at 1-800-397-4209, 301-415-4737, or by email to [email protected] A copy of the collection of information and related instructions may be obtained without charge by accessing ADAMS Accession No. M18291B056. The supporting statement and Request for Taxpayer Identification Number is available in ADAMS under Accession No. ML18114A258.

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

    NRC's Clearance Officer: A copy of the collection of information and related instructions may be obtained without charge by contacting the NRC's Clearance Officer, David Cullison, Office of Information Services, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2084; email: [email protected]

    B. Submitting Comments

    The NRC cautions you not to include identifying or contact information in comment submissions that you do not want to be publicly disclosed in your comment submission. All comment submissions are posted at http://www.regulations.gov and entered into ADAMS. Comment submissions are not routinely edited to remove identifying or contact information.

    If you are requesting or aggregating comments from other persons for submission to the OMB, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that comment submissions are not routinely edited to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.

    II. Background

    Under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the NRC recently submitted a request for renewal of an existing collection of information to OMB for review entitled, NRC Form 531, “Request for Taxpayer Identification Number.” The NRC hereby informs potential respondents that an agency may not conduct or sponsor, and that a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

    The NRC published a Federal Register notice with a 60-day comment period on this information collection on August 1, 2018 (83 FR 37528).

    1. The title of the information collection: NRC Form 531, “Request for Taxpayer Identification Number.”

    2. OMB approval number: 3150-0188.

    3. Type of submission: Extension.

    4. The form number if applicable: NRC Form 531.

    5. How often the collection is required or requested: Licensees are only required to submit once, however, a continuous monthly request is sent until the licensee submits the Taxpayer Identification Number.

    6. Who will be required or asked to respond: NRC Form 531 is used to collect TINs and information sufficient to identify the licensee or applicant for licenses, certificates, approvals and registrations.

    7. The estimated number of annual responses: 300 responses.

    8. The estimated number of annual respondents: 300 respondents.

    9. An estimate of the total number of hours needed annually to comply with the information collection requirement or request: 75 hours.

    10. Abstract: The Debt Collection Improvement Act of 1996 requires that agencies collect taxpayer identification numbers (TINs) from individuals who do business with the Government, including contractors and recipients of credit, licenses, permits, and benefits. The TIN will be used to process all electronic payments (refunds) made to licensees by electronic funds transfer by the Department of the Treasury. The Department of the Treasury will use the TIN to determine whether the refund can be used to administratively offset any delinquent debts reported to the Treasury by other government agencies. In addition, the TIN will be used to collect and report to the Department of the Treasury any delinquent indebtedness arising out of the licensee's or applicant's relationship with the NRC.

    Dated at Rockville, Maryland, this 23rd of November, 2018.

    For the Nuclear Regulatory Commission.

    David C. Cullison, NRC Clearance Officer, Office of the Chief Information Officer.
    [FR Doc. 2018-25937 Filed 11-27-18; 8:45 am] BILLING CODE 7590-01-P
    NUCLEAR REGULATORY COMMISSION [Docket Nos. 50-317, 50-318, 72-8, 50-333, 72-12, 50-220, 50-410, 72-1036; NRC-2018-0262] Exelon Generation Company, LLC; Calvert Cliffs Nuclear Power Plant, Units 1 and 2; Calvert Cliffs Independent Spent Fuel Storage Installation; James A. FitzPatrick Nuclear Power Plant; Nine Mile Point Nuclear Station, Units 1 and 2 AGENCY:

    Nuclear Regulatory Commission.

    ACTION:

    Environmental assessment and finding of no significant impact; issuance.

    SUMMARY:

    The U.S. Nuclear Regulatory Commission (NRC) is considering a request to amend licenses held by Exelon Generation Company, LLC (Exelon, the licensee) for the operation of Calvert Cliffs Nuclear Power Plant (Calvert Cliffs), Units 1 and 2; James A. FitzPatrick Nuclear Power Plant (FitzPatrick); and Nine Mile Point Nuclear Station (Nine Mile Point), Units 1 and 2 (the facilities). Amending these operating licenses would also affect the independent spent fuel storage installations (ISFSIs) at each facility. The proposed license amendments would revise the emergency response organization (ERO) positions identified in the emergency plan for each facility. The NRC is issuing an environmental assessment (EA) and finding of no significant impact (FONSI) associated with the proposed license amendments.

    DATES:

    The EA and FONSI referenced in this document are available on November 28, 2018.

    ADDRESSES:

    Please refer to Docket ID NRC-2018-0262 when contacting the NRC about the availability of information regarding this document. You may obtain publicly-available information related to this document using any of the following methods:

    Federal Rulemaking Website: Go to http://www.regulations.gov and search for Docket ID NRC-2018-0262. Address any questions about Docket IDs in Regulations.gov to Jennifer Borges; telephone: 301-287-9127; email: [email protected] For technical questions, contact the individual listed in the FOR FURTHER INFORMATION CONTACT section of this document.

    NRC's Agencywide Documents Access and Management System (ADAMS): You may obtain publicly-available documents online in the ADAMS Public Documents collection at http://www.nrc.gov/reading-rm/adams.html. To begin the search, select “Begin Web-based ADAMS Search.” For problems with ADAMS, please contact the NRC's Public Document Room (PDR) reference staff at 1-800-397-4209, 301-415-4737, or by email to [email protected] The ADAMS accession number for each document referenced (if it is available in ADAMS) is provided the first time that it is mentioned in this document. In addition, for the convenience of the reader, the ADAMS accession numbers are provided in a table in the “Availability of Documents” section of this document.

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

    FOR FURTHER INFORMATION CONTACT:

    Blake A. Purnell, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-1380; email: [email protected]

    SUPPLEMENTARY INFORMATION:

    I. Introduction

    The NRC is considering a request by Exelon to amend the following operating licenses: (1) Renewed Facility Operating License Nos. DPR-53 and DPR-69 for Calvert Cliffs, Units 1 and 2, respectively, located in Calvert County, Maryland; (2) Renewed Facility Operating License No. DPR-59 for FitzPatrick located in Oswego County, New York; and (3) Renewed Facility Operating License Nos. DPR-63 and NPF-69 for Nine Mile Point, Units 1 and 2, respectively, located in Oswego County, New York. Amending these operating licenses would also affect the Calvert Cliffs ISFSI (Renewed License No. SNM-2505) and the generally licensed FitzPatrick and Nine Mile Point ISFSIs, which are co-located with the reactor facilities.

    In accordance with section 51.21 of title 10 of the Code of Federal Regulations (10 CFR), the NRC prepared the following EA that analyzes the environmental impacts of the proposed licensing action. Based on the results of this EA, and in accordance with 10 CFR 51.31(a), the NRC has determined not to prepare an environmental impact statement for the proposed licensing action, and is issuing a FONSI.

    II. Environmental Assessment Description of the Proposed Action

    The proposed action would revise the ERO positions identified in the emergency plan for each facility, including the on-shift, minimum, and full-augmentation ERO staffing requirements. The proposed revisions include eliminating ERO positions; adding ERO positions; changing position descriptions, duties, and duty locations; and relocating certain position descriptions to other parts of the emergency plan or to implementing procedures.

    The proposed action is in accordance with the licensee's application dated August 31, 2018 (ADAMS Package Accession No. ML18249A096).

    Need for the Proposed Action

    Nuclear power plant owners, Federal agencies, and State and local officials work together to create a system for emergency preparedness and response that will serve the public in the unlikely event of an emergency. An effective emergency preparedness program decreases the likelihood of an initiating event at a nuclear power reactor proceeding to a severe accident. Emergency preparedness cannot affect the probability of the initiating event, but a high level of emergency preparedness increases the probability of accident mitigation if the initiating event proceeds beyond the need for initial operator actions.

    Each licensee is required to establish an emergency plan to be implemented in the event of an accident, in accordance with 10 CFR 50.47 and appendix E to 10 CFR part 50. The emergency plan covers preparation for evacuation, sheltering, and other actions to protect individuals near plants in the event of an accident.

    The NRC, as well as other Federal and State regulatory agencies, reviews emergency plans to ensure that they provide reasonable assurance that adequate protective measures can and will be taken in the event of a radiological emergency.

    In addition to this EA, the NRC is conducting a safety assessment of Exelon's proposed changes to the emergency plan for each facility. This safety review will be documented in a separate safety evaluation. The safety evaluation of the proposed changes to the emergency plans will determine whether there continues to be reasonable assurance that adequate protective measures can and will be taken in the event of a radiological emergency at Calvert Cliffs, FitzPatrick, or Nine Mile Point, in accordance with the standards of 10 CFR 50.47(b) and the requirements in appendix E to 10 CFR part 50.

    The proposed action would align the emergency plans for the facilities with the NRC's alternative guidance for EROs provided in a June 12, 2018, letter to the Nuclear Energy Institute (ADAMS Accession No. ML18022A352). This alternative guidance is also included in draft Revision 2 to NUREG-0654/FEMA-REP-1, “Criteria for Preparation and Evaluation of Radiological Emergency Response Plans and Preparedness in Support of Nuclear Power Plants” (ADAMS Accession Nos. ML14163A605 and ML17083A815). This change would provide Exelon with greater flexibility in staffing ERO positions. Additionally, this change reflects changes in NRC regulations and guidance, as well as advances in technologies and best practices, that have occurred since NUREG-0654/FEMA-REP-1, Revision 1, was published in 1980. The application indicates that Exelon provided the State of New York a draft of the license amendment request for FitzPatrick and Nine Mile Point, and that the State of New York had no concerns. The application also indicates that Exelon provided the State of Maryland a draft of the license amendment request for Calvert Cliffs, and that the State of Maryland found the proposed changes acceptable.

    Environmental Impacts of the Proposed Action

    The proposed action consists of changes related to staffing positions, position descriptions, duties, and duty locations specified in the emergency plans for Calvert Cliffs, FitzPatrick, and Nine Mile Point. The on-shift, minimum, and full-augmentation ERO staffing requirements listed in the emergency plan would be revised. The revisions include eliminating ERO positions; adding ERO positions; changing position descriptions, duties, and duty locations; and relocating certain position descriptions to other parts of the emergency plan or to implementing procedures.

    With regard to potential nonradiological environmental impacts, the proposed changes would have no impacts on land use or water resources, including terrestrial and aquatic biota, as they involve no new construction, ground disturbing activities, or modification of plant operational systems. There would be no changes to the quality or quantity of nonradiological effluents and no changes to the plants' National Pollutant Discharge Elimination System permits. The overall staffing levels are not expected to increase; therefore, worker vehicle air emissions are not expected to increase and established threshold emissions set forth in 40 CFR 93.153(b) for designated nonattainment or maintenance areas would not be exceeded. Since the proposed changes will not increase staffing levels and will not involve ground disturbing activities, modification of plant operation systems, or new construction, there would be no noticeable effect on socioeconomic conditions in the region, no environment justice impacts, and no impacts to historic and cultural resources from the proposed changes. Therefore, there would be no significant nonradiological environmental impacts associated with the proposed action.

    With regard to potential radiological environmental impacts, if the NRC staff's safety review of the proposed changes to the licensee's emergency plans determines that the emergency plans would continue to meet the standards of 10 CFR 50.47(b) and the requirements in appendix E to 10 CFR part 50, then the proposed action would not increase the probability or consequences of radiological accidents. Additionally, the NRC staff has concluded that the proposed changes would have no radiological environmental impacts. There would be no change to the types or amounts of radioactive effluents that may be released and, therefore, no change in occupational or public radiation exposure from the proposed changes. Moreover, no changes would be made to plant buildings or the site property from the proposed changes. Therefore, there would be no significant radiological environmental impacts associated with the proposed action.

    Environmental Impacts of the Alternatives to the Proposed Action

    As an alternative to the proposed action, the NRC staff considered denial of the license amendment request (i.e., the “no-action” alternative). Denial of the license amendment request would result in no change in current environmental impacts. Accordingly, the environmental impacts of the proposed action and the no-action alternative would be similar.

    Alternative Use of Resources

    There are no unresolved conflicts concerning alternative uses of available resources under the proposed action.

    Agencies and Persons Consulted

    No additional agencies or persons were consulted regarding the environmental impact of the proposed action. However, in accordance with 10 CFR 50.91, the licensee provided copies of its application to the States of New York and Maryland, and the NRC staff will consult with these states prior to issuance of the amendments.

    III. Finding of No Significant Impact

    The licensee has requested license amendments pursuant to 10 CFR 50.54(q) to revise the ERO positions identified in the emergency plans for Calvert Cliffs, FitzPatrick, and Nine Mile Point by eliminating ERO positions; adding ERO positions; changing position descriptions, duties, and duty locations; and relocating certain position descriptions to other parts of the emergency plan or to implementing procedures. The NRC is considering issuing the requested amendments. The proposed action would not significantly affect plant safety, would not have a significant adverse effect on the probability of an accident occurring, and would not have any significant radiological or nonradiological impacts. The reason the environment would not be significantly affected is because the proposed changes are not expected to increase the overall staffing levels and do not involve any construction or modification of the specified facilities. This FONSI incorporates by reference the EA in Section II of this notice. Therefore, the NRC concludes that the proposed action would not have a significant effect on the quality of the human environment. Accordingly, the NRC has determined there is no need to prepare an environmental impact statement for the proposed action.

    Previous considerations regarding the environmental impacts of operating Calvert Cliffs, Units 1 and 2; Calvert Cliffs ISFSI; FitzPatrick; and Nine Mile Point, Units 1 and 2, in accordance with their renewed operating licenses, are described in the documents listed in the table in Section IV.

    This FONSI and other related environmental documents may be examined, and/or copied for a fee, at the NRC's PDR, located at One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852. Publicly-available records are also accessible online in the ADAMS Public Documents collection at http://www.nrc.gov/reading-rm/adams.html. Persons who do not have access to ADAMS or who encounter problems in accessing the documents located in ADAMS should contact the NRC's PDR reference staff by telephone at 1-800-397-4209 or 301-415-4737, or by email to [email protected]

    IV. Availability of Documents

    The documents identified in the following table are available to interested persons through one or more of the following methods, as indicated.

    Document ADAMS Accession No. Exelon, License Amendment Request for Approval of Changes to Emergency Plan Staffing Requirements, dated August 31, 2018 ML18249A096 NRC letter to the Nuclear Energy Institute, Alternative Guidance for Licensee Emergency Response Organizations, dated June 12, 2018 ML18022A352 NUREG-0654/FEMA-REP-1, draft Revision 2, “Criteria for Preparation and Evaluation of Radiological Emergency Response Plans and Preparedness in Support of Nuclear Power Plants” ML14163A605 and ML17083A815 NUREG-1437, Supplement 1, “Generic Environmental Impact Statement for License Renewal of Nuclear Plants: Regarding the Calvert Cliffs Nuclear Power Plant,” Final Report, dated October 1999 ML063400277 NRC, “Environmental Assessment for the Proposed Renewal of U.S. Nuclear Regulatory Commission License No. SNM-2505 for Exelon Generation Corporation [sic], LLC's Calvert Cliffs Independent Spent Fuel Storage Installation,” dated October 2014 ML14282A278 NUREG-1437, Supplement 31, “Generic Environmental Impact Statement for License Renewal of Nuclear Plants: Regarding James A. FitzPatrick Nuclear Power Plant,” Final Report, dated January 2008 ML080170183 NUREG-1437, Supplement 24, “Generic Environmental Impact Statement for License Renewal of Nuclear Plants: Regarding James A. FitzPatrick Nuclear Power Plant,” Final Report, dated May 2006 ML061290310 Dated at Rockville, Maryland, on November 23, 2018.

    For the Nuclear Regulatory Commission.

    Blake A. Purnell, Project Manager, Plant Licensing Branch III, Division of Operating Reactor Licensing, Office of Nuclear Reactor Regulation.
    [FR Doc. 2018-25930 Filed 11-27-18; 8:45 am] BILLING CODE 7590-01-P
    OFFICE OF PERSONNEL MANAGEMENT Information Collection: RI 20-126—Certification of Qualifying District of Columbia Service Under Section 1905 of Public Law 111-84 AGENCY:

    Office of Personnel Management.

    ACTION:

    60-Day notice and request for comments.

    SUMMARY:

    The Retirement Services, Office of Personnel Management (OPM) offers the general public and other federal agencies the opportunity to comment on the revision of a currently approved information collection, RI 20-126—Certification of Qualifying District of Columbia Service under Section 1905 of Public Law 111-84.

    DATES:

    Comments are encouraged and will be accepted until January 28, 2019.

    ADDRESSES:

    Interested persons are invited to submit written comments on the proposed information collection to Retirement Services, Office of Personnel Management, 1900 E Street NW, Washington, DC 20415, Attention: Alberta Butler, Room 2347-E, or sent via electronic mail to [email protected]

    FOR FURTHER INFORMATION CONTACT:

    A copy of this information collection instrument with applicable supporting documentation, may be obtained by contacting the Retirement Services Publications Team, Office of Personnel Management, 1900 E Street NW, Room 3316-L, Washington, DC 20415, Attention: Cyrus S. Benson, or sent via electronic mail to [email protected] or faxed to (202) 606-0910 or via telephone at (202) 606-4808.

    SUPPLEMENTARY INFORMATION:

    As required by the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. chapter 35) OPM is soliciting comments for this collection (OMB No. 3206-0268). We are particularly interested in comments that:

    1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of the agency, including whether the information will have practical utility;

    2. Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;

    3. Enhance the quality, utility, and clarity of the information to be collected; and

    4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses.

    RI 20-126 is used to certify that an employee performed certain service with the District of Columbia (DC) that qualifies under section 1905 of Public Law 111-84 for determining retirement eligibility. However, this service cannot be used in the computation of a retirement benefit.

    Analysis

    Agency: Retirement Operations, Retirement Services, Office of Personnel Management.

    Title: Certification of Qualifying District of Columbia Service under Section 1905 of Public Law 111-84 (RI 20-126).

    OMB Number: 3206-0268.

    Frequency: On occasion.

    Affected Public: Individuals or households.

    Number of Respondents: 1,000.

    Estimated Time per Respondent: 30 minutes.

    Total Burden Hours: 500 hours.

    Office of Personnel Management. Alexys Stanley, Regulatory Affairs Analyst.
    [FR Doc. 2018-25902 Filed 11-27-18; 8:45 am] BILLING CODE 6325-38-P
    OFFICE OF PERSONNEL MANAGEMENT Submission for Review: Notice of Change in Student's Status, RI 25-15 AGENCY:

    U.S. Office of Personnel Management.

    ACTION:

    60-Day notice and request for comments.

    SUMMARY:

    The Retirement Services, Office of Personnel Management (OPM) offers the general public and other Federal agencies the opportunity to comment on a revised information collection request (ICR), Notice of Change in Student's Status, RI 25-15.

    DATES:

    Comments are encouraged and will be accepted until January 28, 2019.

    ADDRESSES:

    Interested persons are invited to submit written comments on the proposed information collection to, Retirement Services, U.S. Office of Personnel Management, 1900 E Street, NW, Washington, DC 20415, Attention: Alberta Butler, Room 2347E, or sent by email to [email protected]

    FOR FURTHER INFORMATION CONTACT:

    A copy of this ICR with applicable supporting documentation, may be obtained by contacting the Retirement Services Publications Team, Office of Personnel Management, 1900 E Street NW, Room 3316-L, Washington, DC 20415, Attention: Cyrus S. Benson, or sent by email to [email protected] or faxed to (202) 606-0910 or via telephone at (202) 606-4808.

    SUPPLEMENTARY INFORMATION:

    As required by the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. chapter 35) as amended by the Clinger-Cohen Act (Pub. L. 104-106), OPM is soliciting comments for this collection (OMB No. 3206-0042). The Office of Management and Budget is particularly interested in comments that:

    1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of the agency, including whether the information will have practical utility;

    2. Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;

    3. Enhance the quality, utility, and clarity of the information to be collected; and

    4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses.

    RI 25-15, Notice of Change in Student's Status, is used to collect sufficient information from adult children of deceased Federal employees or annuitants to assure that the child continues to be eligible for payments from OPM.

    Analysis

    Agency: Retirement Operations, Retirement Services, Office of Personnel Management.

    Title: Notice of Change in Student's Status.

    OMB: 3206-0042.

    Frequency: On occasion.

    Affected Public: Individuals or Households.

    Number of Respondents: 2,500.

    Estimated Time per Respondent: 20 minutes.

    Total Burden Hours: 835.

    U.S. Office of Personnel Management. Alexys Stanley, Regulatory Affairs Analyst.
    [FR Doc. 2018-25904 Filed 11-27-18; 8:45 am] BILLING CODE 6325-38-P
    OFFICE OF PERSONNEL MANAGEMENT Submission for Review: Reinstatement of a Previously Approved Information Collection With Revision, Office of Personnel Management (OPM) Standard Form (SF) 15, Application for 10-Point Veteran Preference, OMB No. 3206-0001 AGENCY:

    Office of Personnel Management.

    ACTION:

    30-Day notice and request for comments.

    SUMMARY:

    The Office of Personnel Management (OPM)'s Talent Acquisition and Workforce Shaping Center offers the general public and other Federal agencies the opportunity to comment on a request for reinstatement of a revised information collection for the Standard Form (SF) 15, Application for 10-Point Veteran Preference. As required by the Paperwork Reduction Act of 1995, as amended by the Clinger-Cohen Act, OPM is soliciting comments for this collection. The information collection was previously published in the Federal Register on November 21, 2017, allowing for a 60-day public comment period. Two comments were received for this information collection. The purpose of this notice is to allow an additional 30 days for public comments.

    DATES:

    Comments are encouraged and will be accepted until December 28, 2018. This process is conducted in accordance with 5 CFR 1320.1.

    ADDRESSES:

    Interested persons are invited to submit written comments on the revised information collection to Kimberly A. Holden, Deputy Associate Director for Talent Acquisition and Workforce Shaping, Employee Services, U.S. Office of Personnel Management, Room 6351D, 1900 E Street NW, Washington, DC 20415-9700; email [email protected]; or fax (202) 606-2329; and to OMB Designee, OPM Desk Officer, Office of Management and Budget, Office of Information and Regulatory Affairs, New Executive Office Building NW, Room 10235, Washington, DC 20503; email [email protected]; or fax (202) 395-6974.

    FOR FURTHER INFORMATION CONTACT:

    A copy of this information collection request, with applicable supporting documentation, may be obtained by contacting the Office of Information and Regulatory Affairs, Office of Management Budget, 725 17th Street NW, Washington, DC 20503, Attention: Desk Officer for the Office of Personnel Management or sent via email to [email protected] or faxed to (202) 395-6974. SUPPLEMENTARY INFORMATION:

    The Office of Management and Budget is particularly interested in comments that:

    1. 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;

    2. Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;

    3. Enhance the quality, utility, and clarity of the information to be collected; and

    4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses.

    The SF 15, Application for 10-Point Veteran Preference, is used by veterans as both a request for preference and a guide to determine the appropriate documentation to submit to support their claims of 10-point veterans' preference when applying for Federal employment. The SF 15, and the accompanying documentation, is used by agencies, OPM examining offices, and agency appointing officials to adjudicate individuals' claims for veterans' preference in accordance with the Veterans' Preference Act of 1944, as amended. The proposed revisions to the SF 15 are necessary to update language as a result of the enactment of the Gold Star Fathers Act of 2015 (Pub. L. 114-62), derived veterans' preference for parents, and to make additional corrections on the form, as follows:

    • Page 1, Item 9 is revised to reflect derived veterans' preference for parents.

    • Page 2, Item A, 4th bullet is corrected to read that certification is of an expected discharge or release from active duty service in the armed forces under honorable conditions not later than 120 days after the date the certification is submitted.

    • Page 2, Items C and F are corrected to reflect derived veterans' preference for parents.

    • Several punctuation errors are corrected.

    Comments

    OPM received comments from two Federal agencies. One agency commented that the form has practical utility and is needed to properly adjudicate veterans' preference in case exam announcements. The same agency agreed with OPM's analysis and commented that the changes in the form are likely to provide small increases in the quality, utility and clarity of the information to be collected. This agency made three suggestions on the content of the form. First, on Page 2, Item F, the agency suggested changing “physician” to “health care provider” to be more in line with current regulations and to recognize that patients may be treated by someone other than a physician. OPM agrees and is changing “physician” to “licensed medical professional.”

    Second, the agency asked to have the veteran's signature block added back on the form to certify that the applicant has read, understood, and is providing accurate information. OPM is not adopting this suggestion. Many veterans and other applicants claiming 10-point veterans' preference complete an electronic version of the SF 15 which can make signing the form difficult. After an offer of employment is made and/or at the time of appointment, an applicant signs the Optional Form (OF) 306, Declaration for Federal Employment, certifying that all application material submitted is true, correct, complete, and made in good faith. This covers the SF 15 submitted at the time of application and, therefore, it is unnecessary for the applicant to sign the SF 15 separately.

    Third, the agency suggested adding web links to the general veteran information from OPM to assist applicants. OPM is adopting this suggestion and adding the OPM web address in the instructions section on the form.

    To minimize the burden of collection of information on veterans, another agency suggested adding a statement on page 2 to indicate that questions 1-7 only need to be answered if the person claiming preference is not the veteran. OPM is adopting this suggestion. This same agency suggested adding clarity to item C on page 2 to state that “all of the following” must be included in the documentation provided by spouses and parents. OPM is adopting this suggestion.

    The SF 15 will continue to be available as a PDF fillable form for applicant use. The only acceptable version of this form will be as stated above, but consistent with current practice, the form may be submitted electronically or in hard copy. The SF 15 will be obtainable on the OPM website at https://www.opm.gov/forms/standard-forms/.

    Analysis

    Agency: Talent Acquisition and Workforce Shaping, Office of Personnel Management.

    Title: SF 15, Application for 10-Point Veteran Preference.

    OMB Number: 3206-0001.

    Affected Public: Disabled Veterans.

    Number of Respondents: 18,418.

    Estimated Time per Respondent: 33.5 minutes.

    Total Burden Hours: 10,283 hours.

    Office of Personnel Management. Alexys Stanley, Regulatory Affairs Analyst. [FR Doc. 2018-25903 Filed 11-27-18; 8:45 am] BILLING CODE 6325-39-P
    OFFICE OF PERSONNEL MANAGEMENT Information Collection: Application for Death Benefits Under the Federal Employees Retirement System (SF 3104); and Documentation & Elections in Support of Application for Death Benefits When Deceased Was an Employee at the Time of Death (SF 3104B) AGENCY:

    Office of Personnel Management.

    ACTION:

    60-Day notice and request for comments.

    SUMMARY:

    The Retirement Services, Office of Personnel Management (OPM) offers the general public and other federal agencies the opportunity to comment on the revision of a currently approved information collection, Application for Death Benefits under the Federal Employees Retirement System (SF 3104); and Documentation & Elections in Support of Application for Death Benefits When Deceased Was an Employee at the Time of Death (SF 3104B).

    DATES:

    Comments are encouraged and will be accepted until January 28, 2019.

    ADDRESSES:

    Interested persons are invited to submit written comments on the proposed information collection to Retirement Services, Office of Personnel Management, 1900 E Street NW, Washington, DC 20415, Attention: Alberta Butler, Room 2347-E, or sent via electronic mail to [email protected]

    FOR FURTHER INFORMATION CONTACT:

    A copy of this information collection instrument with applicable supporting documentation, may be obtained by contacting the Retirement Services Publications Team, Office of Personnel Management, 1900 E Street NW, Room 3316-L, Washington, DC 20415, Attention: Cyrus S. Benson, or sent via electronic mail to [email protected] or faxed to (202) 606-0910 or via telephone at (202) 606-4808.

    SUPPLEMENTARY INFORMATION:

    As required by the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. chapter 35) OPM is soliciting comments for this collection (OMB No. 3206-0172). We are particularly interested in comments that:

    1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of the agency, including whether the information will have practical utility;

    2. Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;

    3. Enhance the quality, utility, and clarity of the information to be collected; and

    4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses.

    SF 3104, Application for Death Benefits under the Federal Employees Retirement System, is needed to collect information so that OPM can pay death benefits to the survivor of Federal employees and annuitants. SF 3104B, Documentation in Support of Application for Death Benefits When Deceased Was an Employee at the Time of Death, is needed for deaths in service so that survivors can make the needed elections regarding health benefits, military service and payment of the death benefit.

    Analysis

    Agency: Retirement Operations, Retirement Services, Office of Personnel Management.

    Title: Application for Death Benefits under the Federal Employees Retirement System and Documentation & Elections in Support of Application for Death Benefits When Deceased Was an Employee at the Time of Death.

    OMB Number: 3206-0172.

    Frequency: On occasion.

    Affected Public: Individuals or households.

    Number of Respondents: SF 3104 = 12,734 and SF 3104B = 4,017.

    Estimated Time per Respondent: 60 minutes.

    Total Burden Hours: 16,751 hours.

    Office of Personnel Management. Alexys Stanley, Regulatory Affairs Analyst.
    [FR Doc. 2018-25901 Filed 11-27-18; 8:45 am] BILLING CODE 6325-38-P
    SECURITIES AND EXCHANGE COMMISSION [Release No. 34-84644; File No. SR-NYSENAT-2018-24] Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Certificate of Incorporation and Bylaws November 21, 2018.

    Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (“Act”) 2 and Rule 19b-4 thereunder,3 notice is hereby given that on November 20, 2018, NYSE National, Inc. (“Exchange” or “NYSE National”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

    1 15 U.S.C. 78s(b)(1).

    2 15 U.S.C. 78a.

    3 17 CFR 240.19b-4.

    I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

    The Exchange proposes to amend its certificate of incorporation and bylaws to (1) harmonize certain provisions thereunder with similar provisions in the governing documents of the Exchange's national securities exchange affiliates and parent companies; and (2) make clarifying and updating changes. The proposed rule change is available on the Exchange's website at www.nyse.com, at the principal office of the Exchange, and at the Commission's Public Reference Room.

    II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.

    A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose (1) Generally [sic]

    The Exchange proposes to the amend the Amended and Restated Certificate of Incorporation of the Exchange (“Exchange Certificate”) and the Fifth Amended and Restated Bylaws of the Exchange (“Exchange Bylaws”) to (1) harmonize certain provisions thereunder with similar provisions in the governing documents of the Exchange's national securities exchange affiliates 4 and parent companies; and (2) make clarifying and updating changes.

    4 The Exchange has four registered national securities exchange affiliates: NYSE Arca, Inc. (“NYSE Arca”), New York Stock Exchange LLC (“NYSE”), NYSE American LLC (“NYSE American”), and Chicago Stock Exchange, Inc. (“CHX” and together with the Exchange, NYSE Arca, NYSE American, and NYSE, the “NYSE Group Exchanges”). CHX has filed to change its name to NYSE Chicago, Inc. See Exchange Act Release No. 84494 (October 26, 2018) (SR-CHX-2018-05) (“NYSE Chicago Release”) (notice of filing and immediate effectiveness of proposal to reflect name changes of the Exchange and its direct parent company and to amend certain corporate governance provisions). The rule changes set forth in the NYSE Chicago Release will become operative upon the Second Amended and Restated Certificate of Incorporation of Chicago Stock Exchange, Inc. (“NYSE Chicago Certificate”) becoming effective pursuant to its filing with the Secretary of State of the State of Delaware.

    The Exchange is owned by NYSE Group, Inc. (“NYSE Group”), which in turn is indirectly wholly owned by NYSE Holdings LLC (“NYSE Holdings”). NYSE Holdings is a wholly owned subsidiary of Intercontinental Holdings, Inc. (“ICE Holdings”), which is in turn wholly owned by the Intercontinental Exchange, Inc. (“ICE”).5

    5See Exchange Act Release No. 79902 (January 30, 2017), 82 FR 9258 (February 3, 2017) (SR-NSX-2016-16) (order approving proposed rule change in connection with proposed acquisition of the Exchange by NYSE Group, Inc.).

    The Exchange operates as a separate self-regulatory organization and has rules and membership rosters distinct from the rules and membership rosters of the other NYSE Group Exchanges. At the same time, however, the Exchange believes it is important for each of the NYSE Group Exchanges to have a consistent approach to corporate governance in certain matters, to simplify complexity and create greater consistency among the NYSE Group Exchanges.6

    6See NYSE Chicago Release, supra note 4, at 3.

    Because the Exchange is a Delaware corporation, most of the proposed changes are based on the governing documents of CHX, which is also a Delaware corporation, and NYSE Arca, which is a Delaware non-stock corporation, as the most comparable NYSE Group Exchanges.7 The proposed Exchange Certificate and Exchange Bylaws reflect the expectation that the Exchange will continue to be operated with a governance structure substantially similar to that of other NYSE Group Exchanges, primarily CHX and NYSE Arca.

    7 The other NYSE Group Exchanges, NYSE and NYSE American, are limited liability companies organized under New York and Delaware limited liability company law, respectively.

    The other changes described herein would become operative upon the Exchange Certificate becoming effective pursuant to its filing with the Secretary of State of the State of Delaware.

    The proposed amendments described below are primarily based on the Second Amended and Restated Certificate of Incorporation of Chicago Stock Exchange, Inc. (“NYSE Chicago Certificate”), the Second Amended and Restated By-Laws of NYSE Chicago, Inc. (“NYSE Chicago Bylaws”),8 and the Amended and Restated Bylaws of NYSE Arca, Inc. (“NYSE Arca Bylaws”). In addition, the amendments to the indemnification provisions are based on the Eighth Amended and Restated Bylaws of Intercontinental Exchange, Inc. (“ICE Bylaws”) and the Sixth Amended and Restated Bylaws of Intercontinental Exchange Holdings, Inc. (“ICE Holdings Bylaws”).

    8 The NYSE Chicago Certificate and NYSE Chicago Bylaws have been filed with the SEC, and will become operative when the NYSE Chicago Certificate becomes effective pursuant to its filing with the Secretary of State of the State of Delaware. See NYSE Chicago Release, supra note 4, at 4.

    Proposed Amendments to the Exchange Certificate

    The Exchange proposes to amend the Exchange Certificate as follows.

    Introductory Paragraph

    In a non-substantive change, the Exchange proposes to delete the sentence stating “[t]he Certificate of Incorporation was restated on June 29, 2006, December 30, 2011, and February 18, 2015.”

    Article FIRST

    In a non-substantive change, the Exchange proposes to replace “NYSE NATIONAL, INC.” with “NYSE National, Inc.” in Article FIRST, to reflect that the legal name of the Exchange is not entirely in capital letters.

    Article SECOND and Certificate of Change of Registered Agent and/or Registered Office

    In a non-substantive change, the Exchange proposes to update the address of the registered office and name of the registered agent, as previously filed, and, because such address and office are no longer the initial address and office, delete the word “initial” from the provision. The Exchange also proposes to delete the “Certificate of Change of Registered Agent and/or Registered Office.” 9

    9See Exchange Act Release No. 82925 (March 22, 2018), 83 FR 13165 (March 27, 2018) (SR-NYSENAT-2018-04).

    Article FIFTH

    Current paragraph (b) of Article FIFTH (Removal of Directors) provides that any director may be removed from office by a vote of the stockholders at any time with or without cause, except that Non-Affiliated Directors, as defined in the Exchange Bylaws, may only be removed for cause. The Exchange proposes to amend the definition of “cause” to provide that the list set forth in the provision is inclusive. The Exchange notes that the revised provision would be consistent with Article FIFTH(b) of the NYSE Chicago Certificate.10

    10See NYSE Chicago Release, supra note 4, at 14. See also Eighth Amended and Restated Bylaws of Cboe BZX Exchange, Inc. (“Cboe BZX Bylaws”), Section 3.4(c) (providing that “[n]o Representative Director may be removed from office by a vote of the stockholders at any time except for cause, which shall include, but not limited to, (i) a breach of a Representative Director's duty of loyalty to the Corporation or its stockholders, (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) transactions from which a Representative Director derived an improper personal benefit, or (iv) a failure of a Representative Director to be free from a statutory disqualification (as defined in Section 3(a)(39) of the Act)”) (emphasis added; NYSE Operating Agreement, Article II, Section 2.03(l) (providing that cause “shall include, without limitation, the failure of [a] Director to be free of any statutory disqualification . . .”); and NYSE American Operating Agreement, Article II, Section 2.03(l) (same).

    Article EIGHTH

    In a non-substantive change, the Exchange proposes to correct a typographical error in the title of Article EIGHTH, correcting “Liabilitv” with “Liability”.

    Article NINTH

    In a non-substantive change, the Exchange proposes to amend Article NINTH to replace a reference to “Delaware” with “the State of Delaware.”

    Date

    The Exchange proposes to update the date in the final paragraph.

    Proposed Amendments to the Exchange Bylaws

    The Exchange proposes to amend the Exchange Bylaws as follows.

    Conforming Changes

    In non-substantive changes, the Exchange proposes to delete the cover page and table of contents of the Exchange Bylaws, and amend the title to reflect that the proposed Exchange Bylaws are the “Sixth Amended and Restated Bylaws of NYSE National, Inc.”

    Article III (Board of Directors)

    Section 3.6 (Vacancies): Section 3.6(a)(i) provides that any vacancy on the Board may be filled by the Chairman of the Board, subject to the approval by a majority of the directors then in office, and that any vacancy will be filled with a person who satisfies the classification associated with the vacant seat.

    In an administrative change, the Exchange proposes to add that that the stockholders may also fill any vacancy, and those vacancies resulting from removal from office by a vote of the stockholders for cause may be filled by a vote of the stockholders at the same meeting at which such removal occurs. Because, under Section 3.2(a), the stockholders determine the number of directors, a new directorship may be created. Accordingly, the Exchange proposes to add to Section 3.6(a)(i) that any newly created directorship will be filled with a person who satisfies the classification associated with the seat.

    The first two sentences of the amended paragraph would be as follows (additions italicized):

    Notwithstanding any provision herein to the contrary, any vacancy in the Board, however occurring, including a vacancy resulting from an increase in the number of the directors, may be filled (i) by the Chairman of the Board, subject to the approval by a majority of the directors then in office, or (ii) by action taken by the stockholders of the Exchange, and those vacancies resulting from removal from office by a vote of the stockholders for cause may be filled by a vote of the stockholders at the same meeting at which such removal occurs. Any vacancy or newly-created directorship will be filled with a person who satisfies the classification (e.g., public) associated with the vacant seat.

    The change would be consistent with clause (ii) of Article II, Section 5 of the NYSE Chicago Bylaws, which was amended at the time of its acquisition by ICE.11

    11See Exchange Act Release No. 83635 (July 13, 2018), 83 FR 34182 (July 19, 2018) (SR-CHX-2018-004), and Partial Amendment No. 2 to SR-CHX-2018-004 (June 11, 2018).

    Section 3.7 (Removal): Section 3.7 provides that any director may be removed from office by a vote of the stockholders at any time with or without cause, except that non-affiliated directors may only be removed for cause. The Exchange proposes to amend the definition of “cause” to provide that the list set forth in the provision is inclusive, by replacing “mean only” with “include.” As a result of the proposed amendment, the definition of “cause” would be substantially similar to the definition in Article FIFTH(b) of the NYSE Chicago Certificate.

    In a non-substantive change, the Exchange proposes to amend clause (iii) to replace a reference to “Delaware” with “the State of Delaware.”

    Section 3.9 (Regular Meetings): Section 3.9 specifies that regular meetings may be held, with or without notice, at such time or place as the Board may specify in a resolution. The Exchange proposes an administrative change to eliminate the requirement for a Board resolution. The change would be consistent with the governing documents of the other NYSE Group Exchanges, which do not require a board resolution in order to call a meeting.12

    12See NYSE Arca Bylaws, Article III, Section 3.05; NYSE Chicago Bylaws, Article II, Section 8; NYSE Operating Agreement, Article II, Section 2.03(c); and NYSE American Operating Agreement, Article II, Section 2.03(c).

    Section 3.10 (Special Meetings): Paragraph (a) of Section 3.10 permits special meetings of the Board to be called on two days' notice to each Director by the Chairman or the Chief Executive Officer, or by the Secretary upon the request of any three Directors. In an administrative change, The Exchange proposes to reduce the minimum notice requirement from two days to one day, consistent with Article II, Section 9(a) of the NYSE Chicago Bylaws.13 The Exchange believes that reducing the minimum notice requirement to one day is reasonable as it would facilitate the Board meeting quickly.

    13See NYSE Chicago Release, supra note 4, at 24. One day of notice would be consistent with the bylaws of other national securities exchanges. See NYSE Operating Agreement, Article II, Section 2.03(c) (requiring 12 or 24 hours of notice, with the exception of mailed notice); NYSE American Operating Agreement, Article II, Section 2.03(c) (requiring 12 or 24 hours of notice, with the exception of mailed notice); Cboe BZX Bylaws, Section 3.11 (requiring 24 hours of notice); Tenth Amended and Restated Bylaws of Cboe Exchange, Inc. (“Cboe Exchange Bylaws”), Section 3.11 (requiring 24 hours of notice); and Bylaws of Nasdaq, Inc., Article IV, Section 4.12 (requiring that notice be sent no later than “the day before the day” of the meeting, with the exception of mailed notice).

    Paragraph (b) of Section 3.10 requires the person calling a special meeting to fix the time and place at which the meeting will be held, and deems notice to be given five business days after deposit in the United States mail. In an administrative change, the Exchange proposes to:

    • Eliminate the requirement that the person calling the special meeting fix the time and place of the meeting, as Article III, Section 3.8 already addresses the place and mode of Board meetings;

    • state that notice may be given by written, electronic or telephonic means; and

    • reduce the period for deemed notice of mailed notice from five to two business days.

    The changes would be consistent with Article II, Section 9(b) of the NYSE Chicago Bylaws.

    Sections 3.11 (Voting; Quorum and Action by the Board) and 3.14 (Action in Lieu of Meeting): Section 3.11 provides that the presence of a majority of the directors then in office shall constitute a quorum for Board meetings. Section 3.14 provides that, unless otherwise restricted by statute, the Exchange Certificate or the Exchange By-Laws, action may be taken without a meeting if certain procedural requirements are met. The Exchange proposes to make the following administrative changes to the provisions:

    • In Section 3.11, the Exchange proposes to clarify that the proposed quorum requirement would apply “[e]xcept as otherwise required by law” 14 and to change a reference to “statute” with “law.”

    14See, e.g. DCGL Section 141(b).

    • In Section 3.14, the Exchange proposes to replace “restricted by statute” with “provided by law.”

    The change to add an exception to Section 3.11 would allow the written notice to be consistent with both applicable law and the Exchange Bylaws, should applicable law set forth specific requirements that differ from the Bylaw provision. The Exchange proposes to change “statute” to “law,” as the latter is a broader term, which includes non-statutory law, such as common law. The changes would be consistent with the NYSE Chicago Bylaws.15

    15See NYSE Chicago Bylaws, Article II, Sections 10 and 13; and NYSE Chicago Release, supra note 4, at 26-27.

    Article IV (Stockholders)

    Sections 4.1 (Annual Meeting), 4.2 (Special Meetings), and 4.4 (Quorum and Vote Required for Action): Among other provisions, Sections 4.1 and 4.2 set forth the notice requirements for annual and special meetings of stockholders. Section 4.4 sets forth the quorum and voting requirements. For the reasons set forth above, the Exchange proposes to make the following administrative changes to the provisions:

    • The Exchange proposes to add “[e]xcept as otherwise provided by law,” before the sentences in Sections 4.1 and 4.2 that set forth the written notice requirements.16

    16See Del. Code tit. 8, § 222.

    • In Section 4.4, the Exchange proposes to replace “statute” with “law” in paragraph (a) and “Statute” with “General Corporation Law of the State of Delaware” in paragraph (b).

    The changes would be consistent with the NYSE Chicago Bylaws.17

    17See NYSE Chicago Bylaws, Article III, Sections 1, 2, and 5(b); and NYSE Chicago Release, supra note 4, at 29-31.

    Section 4.3 (List of Stockholders): Section 4.3 provides that the Secretary or a designated person shall have charge of the stock ledger of the Exchange and, before every stockholder meeting, shall prepare a list of stockholders entitled to vote. In an administrative change, the Exchange proposes to amend the provision such that, as permitted by Section 219(a) of the DGCL, the “Exchange” keeps the ledger and prepares the list of stockholders.18 The change would be consistent with Article III, Section 4 of the NYSE Chicago Bylaws.19

    18 Del. Code tit. 8, § 219(a).

    19See NYSE Chicago Release, supra note 4, at 30.

    Section 4.6 (Action in Lieu of Meeting): Section 4.6 permits stockholder action to be taken by written consent and provides certain requirements related to such written consent. In an administrative change, the Exchange proposes to amend the provisions to permit stockholder action to be taken by written consent and to the extent provided by the DGCL, but only if the matter to be voted upon were approved by the Board and the Board had directed that the matter be brought before the stockholders. The amended provision would be substantially similar to Article III, Section 7 of the NYSE Chicago Bylaws.20

    20See id., at 31-32.

    Article V (Committees)

    Section 5.2 (Appointment; Vacancies; and Removal): Section 5.2(b) provides that any vacancy in a Board committee shall be filled by the Chief Executive Officer with the approval of the Board. Consistent with the DGCL and Article IV, Section 2(b) of the NYSE Chicago Bylaws,21 the Exchange proposes to provide that only the Board can fill a vacancy in a Board committee.

    21See Del. Code tit. 8, § 141(c)(1).

    Section 5.6 (Regulatory Oversight Committee): Section 5.6 establishes the powers and responsibilities of the Regulatory Oversight Committee, and is substantially the same as the related provisions in the governing documents of the other NYSE Group Exchanges. 22 Among other things, the provision states that “[t]he Board may, on affirmative vote of a majority of directors, at any time remove a member of the ROC for cause.” The Exchange proposes to add language clarifying that the majority affirmative vote requirement is based on the “directors then in office,” as opposed to total number of seats on the Board. The change would be consistent with Article IV, Section 6 of the NYSE Chicago Bylaws.23

    22See NYSE Arca Rule 3.3; NYSE Operating Agreement, Article II, Section 2.03(h)(ii); NYSE American Operating Agreement, Article II, Section 2.03(h)(ii); NYSE Chicago Bylaws, Article IV, Section 6.

    23See NYSE Chicago Release, supra note 4, at 35. The Exchange understands that NYSE, NYSE American, and NYSE Arca propose to file similar changes to their respective ROC provisions.

    Article VII (Indemnification)

    Current Article VII includes provisions related to indemnification by the Exchange. As a wholly-owned subsidiary of ICE, the Exchange believes it appropriate to harmonize the Exchange's indemnification provisions with those of ICE and the Exchange's intermediate holding company, ICE Holdings.24 The same change was made to Article VI of the NYSE Chicago Bylaws.25

    24See ICE Bylaws, Article X, Section 10.6, and ICE Holdings Bylaws, Article X, Section 10.6.

    25See NYSE Chicago Release, supra note 4, at 41. The Exchange understands that NYSE, NYSE American, and NYSE Arca propose to file similar changes to their respective indemnification provisions.

    Accordingly, the Exchange proposes to delete the text of Section 7.1 (Indemnification) in its entirety and replace it with proposed text that is substantially similar to the CHX, ICE and ICE Holdings provisions, with the exception of changes to be consistent with the Exchange Bylaws' terminology.26 The proposed text follows:

    26 For example, proposed Section 7.1 uses “officer” instead of “Senior Officers,” “Exchange” instead of “Corporation,” and “Section 7.1” instead of “Section 10.6.”

    (a) The Exchange shall, to the fullest extent permitted by law, as those laws may be amended and supplemented from time to time, indemnify any director or officer made, or threatened to be made, a party to any action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of being a director or officer of the Exchange or a predecessor corporation or, at the Exchange's request, a director, officer, partner, member, employee or agent of another corporation or other entity; provided, however, that the Exchange shall indemnify any director or officer in connection with a proceeding initiated by such person only if such proceeding was authorized in advance by the Board of Directors of the Exchange. The indemnification provided for in this Section 7.1 shall: (i) Not be deemed exclusive of any other rights to which those indemnified may be entitled under any bylaw, agreement or vote of stockholders or disinterested directors or otherwise, both as to action in their official capacities and as to action in another capacity while holding such office; (ii) continue as to a person who has ceased to be a director or officer; and (iii) inure to the benefit of the heirs, executors and administrators of an indemnified person.

    (b) Expenses incurred by any such person in defending a civil or criminal action, suit or proceeding by reason of the fact that he is or was a director or officer of the Exchange (or was serving at the Exchange's request as a director, officer, partner, member, employee or agent of another corporation or other entity) shall be paid by the Exchange in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the Exchange as authorized by law. Notwithstanding the foregoing, the Exchange shall not be required to advance such expenses to a person who is a party to an action, suit or proceeding brought by the Exchange and approved by a majority of the Board of Directors of the Exchange that alleges willful misappropriation of corporate assets by such person, disclosure of confidential information in violation of such person's fiduciary or contractual obligations to the Exchange or any other willful and deliberate breach in bad faith of such person's duty to the Exchange or its stockholders.

    (c) The foregoing provisions of this Section 7.1 shall be deemed to be a contract between the Exchange and each director or officer who serves in such capacity at any time while this bylaw is in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any state of facts then or theretofore existing or any action, suit or proceeding theretofore or thereafter brought based in whole or in part upon any such state of facts. The rights provided to any person by this bylaw shall be enforceable against the Exchange by such person, who shall be presumed to have relied upon it in serving or continuing to serve as a director or officer or in such other capacity as provided above.

    (d) The Board of Directors in its discretion shall have power on behalf of the Exchange to indemnify any person, other than a director or officer, made or threatened to be made a party to any action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that such person, or his or her testator or intestate, is or was an officer, employee or agent of the Exchange or, at the Exchange's request, is or was serving as a director, officer, partner, member, employee or agent of another corporation or other entity.

    (e) To assure indemnification under this Section 7.1 of all directors, officers, employees and agents who are determined by the Exchange or otherwise to be or to have been “fiduciaries” of any employee benefit plan of the Exchange that may exist from time to time, Section 145 of the Delaware General Corporation Law shall, for the purposes of this Section 7.1, be interpreted as follows: An “other enterprise” shall be deemed to include such an employee benefit plan, including without limitation, any plan of the Exchange that is governed by the Act of Congress entitled “Employee Retirement Income Security Act of 1974,” as amended from time to time; the Exchange shall be deemed to have requested a person to serve an employee benefit plan where the performance by such person of his duties to the Exchange also imposes duties on, or otherwise involves services by, such person to the plan or participants or beneficiaries of the plan; excise taxes assessed on a person with respect to an employee benefit plan pursuant to such Act of Congress shall be deemed “fines.”

    Article IX (Certificates of Stock and Their Transfer)

    Section 9.1 (Form and Execution of Certificates): Section 9.1 provides requirements related to the execution of stockholder certificates. The Exchange proposes to amend the requirements to provide that the certificate may be signed by “any two authorized officers,” instead of listing the specific officers authorized to execute a certificate, which better reflects the requirements of Section 158 of the DGCL.27 The change would be consistent with Article VIII, Section 1 of the NYSE Chicago Bylaws.28

    27See Del. Code tit. 8, § 158.

    28See NYSE Chicago Release, supra note 4, at 47.

    Article XI (General Provisions)

    Section 11.2 (Dividends): Section 11.2 permits the Board to declare dividends. The Exchange proposes to replace the phrase “[s]ubject to any provisions of any applicable statute,” which qualifies the Board's authority to issue dividends, with “[s]ubject to any applicable law” so as to eliminate redundant language and clarify that proposed Section 11.2 would be subject to any non-statutory law, such as common law. The change would be consistent with Article X, Section 2 of the NYSE Chicago Bylaws.29

    29See id., at 51.

    Section 11.4 (Subsidiaries): Section 11.4 authorizes the Board to constitute any officer of the Exchange to vote the stock of any subsidiary corporation on behalf of the Exchange. In an administrative change, the Exchange proposes to add a second sentence stating that “[i]n the absence of specific action by the Board of Directors, the Chief Executive Officer and Secretary of the Exchange shall have authority to represent the Exchange and to vote, on behalf of the Exchange, the securities of other corporations, both domestic and foreign, held by the Exchange.”

    The Exchange believes that permitting the Secretary of the Exchange to act on behalf of the Exchange pursuant to proposed Section 4 is appropriate given that the Secretary is frequently tasked to execute the Exchange's actions, especially as it relates to corporate governance. Under Section 11.4, the Board may constitute any officer of the Exchange, which includes the Secretary, to vote the stock of any subsidiary of the Exchange. The Board has approved the proposed changes to the Bylaws, including the proposed changes to Section 11.4. By approving the proposed changes to Section 11.4, the Board granted the Secretary the authority described therein. Moreover, proposed Section 11.4 would continue to permit the Board to revoke such voting power or constitute another officer with such voting power. The change would be consistent with Article X, Section 4 of the NYSE Chicago Bylaws.30

    30See id., at 51-52.

    2. Statutory Basis

    The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Exchange Act,31 in general, and furthers the objectives of Section 6(b)(1) 32 in particular, in that it enables the Exchange to be so organized as to have the capacity to be able to carry out the purposes of the Exchange Act and to comply, and to enforce compliance by its exchange members and persons associated with its exchange members, with the provisions of the Exchange Act, the rules and regulations thereunder, and the rules of the Exchange. The Exchange also believes that the proposed rule change is consistent with Section 6(b)(5) of the Exchange Act,33 in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest.

    31 15 U.S.C. 78f(b).

    32 15 U.S.C. 78f(b)(1).

    33 15 U.S.C. 78f(b)(5).

    The Exchange believes that the proposed amendments to harmonize certain provisions of the Exchange Certificate and Bylaws with similar provisions of the governing documents of other NYSE Group Exchanges, ICE and ICE Holdings would contribute to the orderly operation of the Exchange and would enable the Exchange to be so organized as to have the capacity to carry out the purposes of the Exchange Act and comply with the provisions of the Exchange Act by its members and persons associated with members. For example, the proposed changes would create greater conformity between the Exchange's provisions relating to stockholders, officers, and stock certificates and those of its affiliates, particularly CHX and NYSE Arca. The Exchange believes that such conformity would streamline the NYSE Group Exchanges' corporate processes, create more equivalent governance processes among them, and also provide clarity to the Exchange's members, which is beneficial to both investors and the public interest. At the same time, the Exchange will continue to operate as a separate self-regulatory organization and to have rules and membership rosters distinct from the rules and membership rosters of the other NYSE Group Exchanges.

    The Exchange also believes that the greater consistency among the governing documents of the NYSE Group Exchanges, ICE and ICE Holdings would promote the maintenance of a fair and orderly market, the protection of investors and the protection of the public interest. Indeed, the proposed amendments would make the corporate requirements and administrative processes relating to the Board, Board committees, officers, stockholders, and other corporate matters more similar to those of the NYSE Group Exchanges, in particular CHX and NYSE Arca, which have been established as fair and designed to protect investors and the public interest.34

    34See NYSE Chicago Release, supra note 4, Exchange Act Release Nos. 83303 (May 22, 2018), 83 FR 24517 (May 29, 2018) (SR-CHX-2018-004); and 81419 (August 17, 2017), 82 FR 40044 (August 23, 2017) (SR-NYSEArca-2017-40).

    The proposed amendments to clarify the meaning of certain provisions of the Exchange Certificate and the Exchange Bylaws, to better comport certain provisions with the DGCL and to effect non-substantive changes would facilitate the Exchange's continued compliance with the Exchange Certificate and Bylaws and applicable law, which would further enable the Exchange to be so organized as to have the capacity to be able to carry out the purposes of the Exchange Act and to comply, and to enforce compliance by its exchange members and persons associated with its exchange members, with the provisions of the Exchange Act, the rules and regulations thereunder, and the rules of the Exchange. Such amendments would also remove impediments to and perfects the mechanism of a free and open market by removing confusion that may result from corporate governance provisions that are either unclear or inconsistent with the governing law.

    The Exchange also believes that the proposed amendments would remove impediments to and perfect the mechanism of a free and open market by ensuring that persons subject to the Exchange's jurisdiction, regulators, and the investing public can more easily navigate and understand the governing documents. The Exchange further believes that the proposed amendments would not be inconsistent with the public interest and the protection of investors because investors will not be harmed and in fact would benefit from increased transparency and clarity, thereby reducing potential confusion.

    B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act. The proposed rule change is not intended to address competitive issues but rather is concerned solely with the corporate governance and administration of the Exchange.

    C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the proposed rule change.

    III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 35 and Rule 19b-4(f)(6) thereunder.36 Because the proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6)(iii) thereunder.

    35 15 U.S.C. 78s(b)(3)(A)(iii).

    36 17 CFR 240.19b-4(f)(6).

    At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) 37 of the Act to determine whether the proposed rule change should be approved or disapproved.

    37 15 U.S.C. 78s(b)(2)(B).

    IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:

    Electronic Comments

    • Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or

    • Send an email to [email protected] Please include File Number SR-NYSENAT-2018-24 on the subject line.

    Paper Comments

    • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

    All submissions should refer to File Number SR-NYSENAT-2018-24. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's internet website (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission's Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSENAT-2018-24 and should be submitted on or before December 19, 2018.

    For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.38

    38 17 CFR 200.30-3(a)(12).

    Brent J. Fields, Secretary.
    [FR Doc. 2018-25896 Filed 11-27-18; 8:45 am] BILLING CODE 8011-01-P
    DEPARTMENT OF THE TREASURY Agency Information Collection Activities; Submission for OMB Review; Comment Request; Multiple Departmental Offices Information Collection Requests AGENCY:

    Departmental Offices, U.S. Department of the Treasury.

    ACTION:

    Notice.

    SUMMARY:

    The Department of the Treasury will submit the following information collection requests to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. The public is invited to submit comments on these requests.

    DATES:

    Comments should be received on or before December 28, 2018 to be assured of consideration.

    ADDRESSES:

    Send comments regarding the burden estimate, or any other aspect of the information collection, including suggestions for reducing the burden, to (1) Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for Treasury, New Executive Office Building, Room 10235, Washington, DC 20503, or email at [email protected] and (2) Treasury PRA Clearance Officer, 1750 Pennsylvania Ave. NW, Suite 8100, Washington, DC 20220, or email at [email protected]

    FOR FURTHER INFORMATION CONTACT:

    Copies of the submissions may be obtained from Jennifer Quintana by emailing [email protected], calling (202) 622-0489, or viewing the entire information collection request at www.reginfo.gov.

    SUPPLEMENTARY INFORMATION: Departmental Offices (DO) 1. Title: Reporting of International Capital and Foreign Currency Transactions and Positions

    OMB Control Number: 1505-0149.

    Type of Review: Extension without change of a currently approved collection.

    Description: 31 CFR part 128 establishes general guidelines for reporting on U.S. claims on, and liabilities to foreigners; on transactions in securities with foreigners; and on monetary reserve of the U.S. It also establishes guidelines for reporting on the foreign currency of U.S. persons. It includes a record keeping requirement in section 128.5.

    Form: None.

    Affected Public: Businesses or other for-profits.

    Estimated Number of Respondents: 2,134.

    Frequency of Response: On occasion.

    Estimated Total Number of Annual Responses: 21,568.

    Estimated Time per Response: 20 minutes.

    Estimated Total Annual Burden Hours: 7,189.

    2. Title: Request for Transfer of Property Seized/Forfeited by a Treasury Agency

    OMB Control Number: 1505-0152.

    Type of Review: Revision of a currently approved collection.

    Description: Form TD F 92-22.46 is necessary for the application for receipt of seized assets by State and Local Law Enforcement agencies.

    Form: TD F 92-22.46.

    Affected Public: State and local governments.

    Estimated Number of Respondents: 1,000.

    Frequency of Response: On occasion.

    Estimated Total Number of Annual Responses: 7,000.

    Estimated Time per Response: 30 minutes.

    Estimated Total Annual Burden Hours: 3,500.

    3. Title: Assessment of Fees on Large Bank Holding Companies and Nonbank Financial Companies

    OMB Control Number: 1505-0245.

    Type of Review: Revision of a currently approved collection.

    Description: The Financial Research Fund (FRF) Preauthorized Payment Agreement form will collect information with respect to the final rule (31 CFR part 150) on the assessment of fees on large bank holding companies and nonbank financial companies supervised by the Federal Reserve Board to cover the expenses of the FRF.

    Form: TD F 105.1.

    Affected Public: Businesses or other for-profits.

    Estimated Number of Respondents: 39.

    Frequency of Response: Once.

    Estimated Total Number of Annual Responses: 39.

    Estimated Time per Response: 15 minutes.

    Estimated Total Annual Burden Hours: 10.

    Authority:

    44 U.S.C. 3501 et seq.

    Dated: November 21, 2018. Spencer W. Clark, Treasury PRA Clearance Officer.
    [FR Doc. 2018-25909 Filed 11-27-18; 8:45 am] BILLING CODE 4810-25-P
    DEPARTMENT OF THE TREASURY Agency Information Collection Activities; Submission for OMB Review; Comment Request; Generic Clearance for Meaningful Access Information Collections AGENCY:

    Departmental Offices, U.S. Department of the Treasury.

    ACTION:

    Notice.

    SUMMARY:

    The Department of the Treasury will submit the following information collection requests to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. The public is invited to submit comments on these requests.

    DATES:

    Comments should be received on or before December 28, 2018 to be assured of consideration.

    ADDRESSES:

    Send comments regarding the burden estimate, or any other aspect of the information collection, including suggestions for reducing the burden, to (1) Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for Treasury, New Executive Office Building, Room 10235, Washington, DC 20503, or email at [email protected] and (2) Treasury PRA Clearance Officer, 1750 Pennsylvania Ave. NW, Suite 8100, Washington, DC 20220, or email at [email protected]

    FOR FURTHER INFORMATION CONTACT:

    Copies of the submissions may be obtained from Jennifer Quintana by emailing [email protected], calling (202) 622-0489, or viewing the entire information collection request at www.reginfo.gov.

    SUPPLEMENTARY INFORMATION: Bureau of Engraving and Printing (BEP)

    Title: Generic Clearance for Meaningful Access Information Collections (Conferences).

    OMB Control Number: 1520-0009.

    Type of Review: Extension without change of a currently approved collection.

    Description: A court order was issued in American Council of the Blind v. Paulson, 591 F. Supp. 2d 1 (D.D.C. 2008) (“ACB v. Paulson”) requiring the Department of the Treasury and BEP to “provide meaningful access to United States currency for blind and other visually impaired persons, which steps shall be completed, in connection with each denomination of currency, not later than the date when a redesign of that denomination is next approved by the Secretary of the Treasury . . .”

    In compliance with the court's order, BEP intends to meet individually with blind and visually impaired persons and request their feedback about tactile features that BEP is considering for possible incorporation into the next U.S. paper currency redesign. BEP employees will attend national conventions and conferences for disabled persons. At those gatherings, BEP employees will invite blind and visually impaired persons to provide feedback about certain tactile features being considered for inclusion in future United States currency paper designs.

    Form: None.

    Affected Public: Individuals and households.

    Estimated Number of Respondents: 650.

    Frequency of Response: Once.

    Estimated Total Number of Annual Responses: 650.

    Estimated Time per Response: 1 hour.

    Estimated Total Annual Burden Hours: 650.

    Authority:

    44 U.S.C. 3501 et seq.

    Dated: November 21, 2018. Spencer W. Clark, Treasury PRA Clearance Officer.
    [FR Doc. 2018-25910 Filed 11-27-18; 8:45 am] BILLING CODE 4840-01-P
    DEPARTMENT OF VETERANS AFFAIRS [OMB Control No. 2900-0208] Agency Information Collection Activity Under OMB Review: Department of Veterans Affairs Acquisition Regulation; Architect-Engineer Fee Proposal; Contractor Production Report; Daily Log and Contract Progress Report AGENCY:

    Office of Acquisition and Logistics, Department of Veterans Affairs.

    ACTION:

    Notice.

    SUMMARY:

    In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the Office of Acquisition and Logistics, Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden and it includes the actual data collection instrument.

    DATES:

    Comments must be submitted on or before December 28, 2018.

    ADDRESSES:

    Submit written comments on the collection of information through www.Regulations.gov, or to Office of Information and Regulatory Affairs, Office of Management and Budget, Attn: VA Desk Officer; 725 17th St. NW, Washington, DC 20503 or sent through electronic mail to [email protected] Please refer to “OMB Control No. 2900-0208” in any correspondence.

    FOR FURTHER INFORMATION CONTACT:

    Rafael Taylor, Procurement Policy and Warrant Management Service (003A2A), Department of Veterans Affairs, 425 I Street NW, Washington, DC 20001, (202) 382-2787 or email [email protected] Please refer to “OMB Control No. 2900-0208” in any correspondence.

    SUPPLEMENTARY INFORMATION:

    Authority: 44 U.S.C. 3501-21.

    Title: Department of Veterans Affairs Acquisition Regulation (VAAR): VA Form 6298 (formerly 10-6298), Architect-Engineer Fee Proposal; VA Form 10101, Contractor Production Report (formerly VA Form 10-6131, Daily Log and VA Form 10-6001a, Contract Progress Report).

    OMB Control Number: 2900-0208.

    Type of Review: Renewal with changes of a currently approved collection.

    Abstract: This Paperwork Reduction Act (PRA) submission seeks renewal with changes of Office of Management and Budget (OMB) approval No. 2900-0208 as follows:

    • Replace both existing VA Form 10-6131 (Daily Log (Contract Progress Report—Formal Contract)) and VA Form 10-6001a (Contract Progress Report) with one new form, which combines the intended purpose for VA Form 10-6131 and VA Form 10-6001a. The new combined form would now read: “VA Form 10101, Contractor Production Report.”

    • Renumber VA Form 10-6298 Architect-Engineer Fee Proposal, to “VA Form 6298,” and revise the content in the form with updated thresholds and FAR citations.

    The above proposed revisions do not change the currently approved burden hours. The actual VA Form 10101 and VA Form 6298 can be located at VA Forms website https://www.va.gov/vaforms/default.asp.

    The Department of Veterans Affairs, Office of Construction and Facilities Management (CFM), manages a multimillion-dollar construction program that involves the design and construction of medical centers, and other VA facilities including building improvements and conversions. The actual construction work is contracted out to private construction firms.

    VA Form 6298 (formerly 10-6298), Architect-Engineer Fee Proposal: The use of this form is mandatory for obtaining the proposal and supporting cost or pricing data from the contractor and subcontractor in the negotiation of all architect-engineer contracts for design services when the contract price is estimated to be $50,000 or more. It is also used in obtaining proposals and supporting cost or pricing data for architect-engineer services for research study, seismic study, master planning study, construction management and other related services contracts. A Contractor Production Report is also used, but supplemented or modified as needed for the particular project type. (VA Acquisition Regulation (VAAR) 836.606-71, Architect-engineer's proposal, and VAAR 853.236-70.)

    VA Form 10101, Contractor Production Report (formerly VA Form 10-6131), Daily Log—Formal Contract, and VA Form 10-6001a, Contract Progress Report, depending on the size of the contract: Is used to record the data necessary to ensure the contractor provides sufficient labor and materials to accomplish the contract work. Contractors are required to guarantee the performance of the work necessary to complete the project. VAAR 852.236-79 details what needs to be addressed by the contractor on the Contractor Production Report. Failure to receive information from the Contractor Production Report could result in a claim for non-performance and construction delays against the Government if the Government were unable to collect this information to administer the contract.

    An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The Federal Register Notice with a 60-day comment period soliciting comments on this collection of information was published at 83 FR 45482 on September 7, 2018.

    Affected Public: Business or other for-profit and not-for-profit institutions.

    Estimated Annual Burden: VA Form 6298—1,000 Burden Hours. VA Form 10101—4,341 Burden Hours.

    Estimated Average Burden per Respondent: VA Form 6298—4 Hours. VA Form 10101—24 Minutes.

    Frequency of Response: On occasion.

    Estimated Number of Respondents: VA Form 6298—250. VA Form 10101—10,853.

    By direction of the Secretary:

    Cynthia D. Harvey-Pryor, Government Information Specialist, Department of Veterans Affairs.
    [FR Doc. 2018-25911 Filed 11-27-18; 8:45 am] BILLING CODE 8320-01-P
    83 229 Wednesday, November 28, 2018 Presidential Documents Title 3— The President Proclamation 9827 of November 20, 2018 Thanksgiving Day, 2018 By the President of the United States of America A Proclamation On Thanksgiving Day, we recall the courageous and inspiring journey of the Pilgrims who, nearly four centuries ago, ventured across the vast ocean to flee religious persecution and establish a home in the New World. They faced illness, harsh conditions, and uncertainty, as they trusted in God for a brighter future. The more than 100 Pilgrims who arrived at Plymouth, Massachusetts, on the Mayflower, instilled in our Nation a strong faith in God that continues to be a beacon of hope to all Americans. Thanksgiving Day is a time to pause and to reflect, with family and friends, on our heritage and the sacrifices of our forebearers who secured the blessings of liberty for an independent, free, and united country. After surviving a frigid winter and achieving their first successful harvest in 1621, the Pilgrims set aside 3 days to feast and give thanks for God's abundant mercy and blessings. Members of the Wampanoag tribe—who had taught the Pilgrims how to farm in New England and helped them adjust and thrive in that new land—shared in the bounty and celebration. In recognition of that historic event, President George Washington, in 1789, issued a proclamation declaring the first national day of thanksgiving. He called upon the people of the United States to unite in rendering unto God our sincere and humble gratitude “for his kind care and protection of the People of this Country” and “the favorable interpositions of his Providence.” President Abraham Lincoln revived this tradition as our fractured Nation endured the horrors of the Civil War. Ever since, we have set aside this day to give special thanks to God for the many blessings, gifts, and love he has bestowed on us and our country. This Thanksgiving, as we gather in places of worship and around tables surrounded by loved ones, in humble gratitude for the bountiful gifts we have received, let us keep in close memory our fellow Americans who have faced hardship and tragedy this year. In the spirit of generosity and compassion, let us joyfully reach out in word and deed, and share our time and resources throughout our communities. Let us also find ways to give to the less fortunate—whether it be in the form of sharing a hearty meal, extending a helping hand, or providing words of encouragement. We are especially reminded on Thanksgiving of how the virtue of gratitude enables us to recognize, even in adverse situations, the love of God in every person, every creature, and throughout nature. Let us be mindful of the reasons we are grateful for our lives, for those around us, and for our communities. We also commit to treating all with charity and mutual respect, spreading the spirit of Thanksgiving throughout our country and across the world. Today, we particularly acknowledge the sacrifices of our service members, law enforcement personnel, and first responders who selflessly serve and protect our Nation. This Thanksgiving, more than 200,000 brave American patriots will spend the holiday overseas, away from their loved ones. Because of the men and women in uniform who volunteer to defend our liberty, we are able to enjoy the splendor of the American life. We pray for their safety, and for the families who await their return. NOW, THEREFORE, I, DONALD J. TRUMP, President of the United States of America, by virtue of the authority vested in me by the Constitution and the laws of the United States, do hereby proclaim Thursday, November 22, 2018, as a National Day of Thanksgiving. I encourage all Americans to gather, in homes and places of worship, to offer a prayer of thanks to God for our many blessings. IN WITNESS WHEREOF, I have hereunto set my hand this twentieth day of November, in the year of our Lord two thousand eighteen, and of the Independence of the United States of America the two hundred and forty-third. Trump.EPS [FR Doc. 2018-25982 Filed 11-27-18; 8:45 am] Billing code 3295-F9-P 83 229 Wednesday, November 28, 2018 Rules and Regulations Part II Federal Housing Finance Agency 12 CFR Parts 1290 and 1291 Affordable Housing Program Amendments; Rules FEDERAL HOUSING FINANCE AGENCY 12 CFR Parts 1290 and 1291 RIN 2590-AA83 Affordable Housing Program Amendments AGENCY:

    Federal Housing Finance Agency.

    ACTION:

    Final rule.

    SUMMARY:

    The Federal Housing Finance Agency (FHFA or Agency) is amending its regulation addressing requirements for the Federal Home Loan Banks' (Banks) Affordable Housing Program (AHP or Program). The final rule amends the regulation to: Provide the Banks additional authority to allocate their AHP funds; authorize the Banks to establish separate competitive funds that target specific affordable housing needs in their districts; provide the Banks additional flexibility in designing their project selection scoring systems to address affordable housing needs in their districts; remove the requirement for retention agreements for owner-occupied units where the AHP subsidy is used solely for rehabilitation; provide for a calculation of household subsidy repayment amount that prioritizes return of the household's investment in the housing to the household; reduce administrative burdens related to calculating and obtaining household subsidy repayments based on net proceeds of the sale of a home; further align certain project monitoring requirements with those of other federal government funding programs; clarify the requirements for remediating AHP noncompliance; clarify certain operational requirements; and streamline and reorganize the regulation.

    DATES:

    Effective date: This final rule is effective on December 28, 2018.

    Compliance dates: For applicable compliance dates, see the discussions under §§ 1290.8 and 1291.2 in Section I. of the SUPPLEMENTARY INFORMATION below.

    FOR FURTHER INFORMATION CONTACT:

    Ted Wartell, Manager, Office of Housing and Community Investment, 202-649-3157, [email protected]; Marcea Barringer, Senior Policy Analyst, Office of Housing and Community Investment, 202-649-3275, [email protected]; Marshall Adam Pecsek, Senior Counsel, Office of General Counsel, 202-649-3380, [email protected]; or Sharon Like, Managing Associate General Counsel, Office of General Counsel, 202-649-3057, [email protected] These are not toll-free numbers. The mailing address is: Federal Housing Finance Agency, 400 Seventh Street SW, Washington, DC 20219. The telephone number for the Telecommunications Device for the Hearing Impaired is 800-877-8339.

    SUPPLEMENTARY INFORMATION: I. Sections 1291.2 and 1290.8—Compliance Dates

    Section 1291.2 of the final rule provides generally, that through December 31, 2020, a Bank may comply with either the AHP regulation in effect immediately prior to this final rule's effective date, or this final rule. On and after January 1, 2021, a Bank must comply with this final rule. However, for the owner-occupied retention agreement requirements in § 1291.15(a)(7), the final rule provides that through December 31, 2019, a Bank may comply with either § 1291.9(a)(7) of the AHP regulation in effect immediately prior to this final rule's effective date, or § 1291.15(a)(7) of this final rule. On and after January 1, 2020, a Bank must comply with § 1291.15(a)(7) of the final rule. Regarding proxies for determining a subsequent purchaser's income, the final rule provides that a Bank shall comply with § 1291.15(a)(7)(ii)(B) of the final rule on the date set forth in the FHFA guidance on proxies referenced therein.

    Similarly, § 1290.8 of the final rule provides that through December 31, 2020, a Bank must comply with either prior part 1290 (Community Support Requirements regulation) or this part 1290. On and after January 1, 2021, a Bank must comply with this part 1290.

    The proposed rule did not address effective or compliance dates. The Banks requested that the final rule not become effective for at least two years. They stressed that the proposed substantive changes to the regulation, especially the proposed outcome-based scoring framework, would require extensive changes to their existing scoring, information and reporting systems, as well as education and training of Bank staff, members, and potential project sponsors. Bank staff indicated that they would need to consult with their Bank Advisory Councils, boards of directors, and board committees on changes to their Program, including systems and procedures. They would need to seek approval by their boards of changes to their policies for their General Funds and Homeownership Set-Aside Programs, and for establishment of Targeted Funds, along with related changes to their AHP Implementation Plans and Targeted Community Lending Plans (TCLPs). The Banks typically hold their AHP funding rounds in the spring or summer of each year, and would need sufficient time to publish their revised AHP Implementation Plans and TCLPs, and announce their AHP funding allocations, well in advance of the start of that calendar year.

    In view of the publication of the final rule late in 2018, FHFA recognizes that it may not be feasible for the Banks to complete all of the above actions in time for implementation of revised Programs for 2019 or 2020, even though the final rule does not adopt the proposed outcome-based scoring framework and instead adopts a scoring framework more similar to the existing scoring requirements of the Competitive Application Program. A January 1, 2021 compliance date for the final rule, thus, is warranted. However, there are certain changes in the final rule that will benefit households without requiring significant changes to the Banks' information systems and, therefore, can be implemented more quickly. In particular, the final rule establishes a compliance date of January 1, 2020 by which the Banks must implement the new owner-occupied retention agreement provisions in § 1291.15(a)(7), including the requirement to calculate AHP subsidy repayment based on net proceeds and household's investment (§ 1291.15(a)(7)(v)), the de minimis subsidy repayment exception of $2,500 or less (§ 1291.15(a)(7)(ii)(C)), and the elimination of the requirement for owner-occupied retention agreements for rehabilitation (§ 1291.15(a)(7)). Prior to January 1, 2020, or such earlier compliance date as the Bank elects, a Bank must continue to comply with the current regulation, including its requirement that subsidy be recovered only from “net gain,” a concept that in many respects resembles the more clearly articulated standards of “net proceeds” and “household's investment” in the final rule.

    Because some Banks may find it feasible to implement certain provisions of the final rule before the applicable compliance dates, such as the provisions benefiting households, provisions easing operational burdens, or provisions for the establishment of Targeted Funds, the final rule provides that a Bank may choose to comply with any provision of the final rule before the applicable compliance date. A Bank that chooses to comply with a specific provision before the applicable compliance date must also comply with all other provisions related to that specific provision in part 1291 and § 1290.6. For example, if a Bank decides to establish a Targeted Fund before January 1, 2021 pursuant to § 1291.20(b), the Bank must also comply with the funding allocation and phase-in requirements for Targeted Funds in §§ 1291.20(b)(1) and 1291.12(c)(1), respectively, must amend its AHP Implementation Plan to include its requirements for the Targeted Fund pursuant to § 1291.13(b)(3), and must amend its Targeted Community Lending Plan to include the specific housing needs to be addressed by the Targeted Fund pursuant to § 1290.6(a)(5)(vi).

    II. Background A. Overview of Current Program

    The Federal Home Loan Bank Act (Bank Act) requires each Bank to establish a Program to provide subsidies for long-term, low- and moderate-income, owner-occupied and affordable rental housing. Each Bank is required to allocate annually 10 percent of its prior year's net income to fund its Program to help subsidize the purchase, construction, and rehabilitation of affordable rental and owner-occupied housing. Homeowners and homebuyers receiving AHP subsidies must be low- or moderate-income (incomes at or below 80 percent of area median income (AMI)). For rental housing, at least 20 percent of the units must be occupied by very low-income households (incomes at or below 50 percent of AMI) and must be affordable (rents charged do not exceed 30 percent of income).1

    1See 12 U.S.C. 1430(j).

    The current AHP regulation authorizes the Banks to establish and administer two programs for awarding AHP subsidies: a mandatory Competitive Application Program (referred to in the proposed and final rules as the “General Fund”); and an optional Homeownership Set-Aside Program.2 Each Bank must allocate annually at least 65 percent of its required annual AHP contribution to its Competitive Application Program, and may allocate annually up to the greater of $4.5 million or 35 percent of its required annual AHP contribution to its Homeownership Set-Aside Program.3

    2See 12 CFR part 1291.

    3 Where a Bank allocates the alternative maximum amount of $4.5 million to its Homeownership Set-Aside Program, the Bank may allocate less than 65 percent of its total AHP funds to its Competitive Application Program.

    Under the Competitive Application Program, members apply to the Banks for AHP subsidies on behalf of project sponsors, which are typically nonprofit affordable housing developers, but may include for-profit organizations. The Banks are required to develop and implement a scoring system subject to requirements in the regulation, which serves as a mechanism for evaluating and selecting the project applications to receive AHP subsidies. Under the Homeownership Set-Aside Program, members apply to the Banks for grants, which are provided to low- or moderate-income homebuyers or homeowners for purchasing or rehabilitating homes.

    The AHP has played an important role in facilitating the Banks' support of their members' efforts to meet the affordable housing needs of their communities. Between 1990 and 2017, the Banks awarded approximately $5.8 billion in AHP subsidies to assist the financing of over 865,000 affordable housing units. AHP subsidies have proven particularly effective in leveraging additional public and private resources for funding affordable housing projects that present underwriting challenges, such as projects for homeless households and special needs populations. For example, project sponsors have used AHP funds in conjunction with a number of different federal and state funding sources, including Low-Income Housing Tax Credits (LIHTC or tax credits), to develop rental housing for very low-income households. For 2018, the Banks' combined required annual AHP contribution is approximately $384,310,000.

    B. AHP Regulatory History

    FHFA and one of its predecessor agencies, the Federal Housing Finance Board (Finance Board), have engaged in numerous rulemakings over the years to revise, clarify, and streamline the AHP requirements as the Program has evolved and housing markets have changed. Successive rulemakings progressively devolved specific AHP application approval and governance authorities from the Finance Board to the Banks in order to enhance the ability of the Banks to address specific affordable housing needs in their respective districts.

    The genesis of the current AHP rulemaking was the Notice of Regulatory Review published in the Federal Register in 2013 requesting comment on FHFA's existing regulations for purposes of improving their effectiveness and reducing their burden. In response, the Banks jointly submitted a letter to FHFA commenting on the AHP and other FHFA regulations. The letter contended that prescriptive, outdated, or ambiguous provisions of the AHP regulation created inefficiencies and uncertain risk exposures, and recommended that FHFA review the regulation and consider clarifications and enhancements to further empower the Banks in the management of their Programs.

    In response to the Banks' recommendations, FHFA undertook a comprehensive review of the AHP regulation, including AHP issues on which FHFA had provided regulatory guidance. To further inform the review, FHFA conducted outreach with the Banks and a wide range of AHP stakeholders. The Banks and stakeholders uniformly expressed support for the AHP, and noted the critical role it plays in affordable housing initiatives throughout the country and its longstanding reputation as a well-managed program. At the same time, the Banks and stakeholders offered a number of specific recommendations to improve the operation of the AHP. The recommendations were directed largely at: (1) Expanding the Banks' authority to allocate their AHP funds; (2) providing the Banks authority to devise their own project selection methods, including the use of non-competitive processes; (3) clarifying the requirements for determining a project's need for AHP subsidy; (4) aligning the project monitoring requirements with those of other major funding sources; (5) clarifying the Banks' authorities to resolve project noncompliance; (6) clarifying certain operational requirements; and (7) codifying FHFA regulatory guidance in the regulation. Based on FHFA's analyses of the recommendations and its review of the Program, FHFA published a proposed rule to amend the AHP regulation, which is discussed below.

    C. Proposed Rule

    On March 14, 2018, FHFA published a Notice of Proposed Rulemaking (NPRM or proposed rule) in the Federal Register to amend the AHP regulation.4 Taking into account the Banks' and stakeholders' input and recommendations discussed above, the proposed rule would have significantly altered how the Banks approach and implement their AHP project selection responsibilities. The proposed rule would have replaced the current project selection scoring process, a front-end process that requires the Banks to allocate at least 50 percent of the total points for scoring applications to specific statutory and regulatory priorities set forth in the regulation, with a back-end process using a scoring process and “outcome-based approach” for project selection. Under the proposal, each Bank would have been required to establish its own scoring system containing Bank-identified district housing needs priorities for awarding AHP subsidies, subject to meeting certain FHFA-prescribed outcome requirements for statutory and regulatory priorities set forth in the proposed rule. Each Bank would have been evaluated according to whether a certain percentage of its total AHP funds was awarded to projects or households that met the applicable priorities. The NPRM stated that the proposal would address many of the Banks' and stakeholders' concerns by providing the Banks greater flexibility to design their competitive application programs while continuing to ensure the programs fulfilled the statutory requirements.

    4See 83 FR 11344 (Mar. 14, 2018).

    The NPRM also proposed additional options for the Banks to allocate their total annual AHP contributions. Each Bank would have been required to allocate at least 50 percent of its total annual AHP contribution to its General Fund, down from the current 65 percent. Each Bank also would have been authorized to allocate up to 40 percent of its required annual AHP contribution to a maximum of three “Targeted Funds,” a new type of competitive application fund under the AHP, to address specific affordable housing needs within its district, subject to a phase-in period. In addition, the proposed rule would have increased the maximum percentage of a Bank's total annual AHP contribution that could be allocated to its Homeownership Set-Aside Program from 35 to 40 percent, with the existing alternate threshold of $4.5 million retained.

    The proposed rule also would have eliminated the current requirement for an owner-occupied unit retention agreement, under which AHP-assisted households must repay AHP subsidy to the Bank under certain circumstances if they sell or refinance their homes during the AHP five-year retention period. The NPRM discussed that this would ease the administrative burdens on the Banks of recovering subsidy repayments from households, and enhance households' ability to build wealth, which appear to outweigh the retention agreements' potential to deter rare instances of flipping.

    In addition, the proposed rule would streamline the responsibilities of the parties involved in monitoring projects for compliance with AHP income targeting and rent requirements by aligning the AHP project monitoring requirements with those of certain other government funding programs. For example, the proposal would remove certain back-up documentation requirements for the initial monitoring of AHP projects that have received LIHTC, and for initial and long-term monitoring of AHP projects that have received funding from certain other federal government programs.

    In addition, the proposed rule would clarify a number of operational responsibilities. For example, the proposed rule would clarify the process and responsibilities of the various parties for remediating AHP noncompliance. The proposed rule also would have clarified the process for determining a project's need for AHP subsidy.

    Finally, the proposed rule would streamline and reorganize the regulation to enhance its utility and readability.

    D. Overview of Comments Received on the Proposed Rule

    The NPRM initially provided the public 60 days to submit comments on the proposed rule. The Agency received numerous requests from commenters to extend the comment period by an additional 30 days. FHFA also identified an error in the calculation of the outcome requirement in the proposed rule text and related preamble discussion. In response to the requests for an extension of the comment period and to correct the error in the outcome calculation and encourage comments on the corrected calculation, FHFA published a notice in the Federal Register containing the corrected calculation and extending the comment period by an additional 30 days.5 The extended comment period ended on June 12, 2018.

    5See 83 FR 19188 (May 2, 2018).

    FHFA received 394 comment letters in response to the proposed rule. Of those letters, 251 expressed unique comments and recommendations, with the remaining 143 being form letters or requests to extend the original 60-day comment period. The Presidents of the eleven Banks submitted a joint comment letter. Nine Banks also submitted individual comment letters. FHFA received 16 comment letters from the Banks' boards of directors, Affordable Housing Advisory Councils (Bank Advisory Councils), and Community Investment Officers (CIOs). Eighteen members of Congress representing the states of Arkansas, Louisiana, Mississippi, New Mexico, and Texas co-signed a comment letter. A member of Congress representing the state of New Jersey also submitted a comment letter. FHFA received 99 letters from trade associations, nonprofit organizations, and state and local government organizations. Lenders such as banks, credit unions, and Community Development Financial Institutions (CDFIs) submitted 50 comment letters. Nonprofit and for-profit developers submitted 204 comment letters. Individuals submitted the remaining 13 comment letters.

    FHFA also held a number of webinars and meetings with Bank representatives and stakeholders to describe the content of the proposed rule, discuss issues raised by the proposed rule, and obtain clarifications of specific comments made in the letters.6

    6 Summaries of each of these meetings are available on FHFA's website at: https://www.fhfa.gov/SupervisionRegulation/Rules/Pages/Comment-List.aspx?RuleID=612.

    Six proposals received the most comments: The outcome-based approach for project selection; the authority for the Banks to establish Targeted Funds; the increase in the maximum permissible annual funding allocation to a Bank's Homeownership Set-Aside Program from 35 to 40 percent; the removal of the requirement for owner-occupied retention agreements; a clarification of the “cure-first” requirement for project noncompliance; and the responsibility of the full board of directors to approve strategic AHP decisions. The comments on these six proposals and FHFA's decisions in the final rule are discussed in Section III., below. Comments on other provisions of the proposed rule are discussed under each applicable provision in the Section-by-Section Analysis in Section IV., below.

    III. Discussion of Comments on Key Proposals and Decisions in the Final Rule A. Proposed Outcome-Based Approach for Project Selection

    Final rule. The final rule does not adopt the proposal for an outcome-based framework for project selection. Instead, the final rule amends the current regulatory scoring framework for project selection to provide the Banks with additional flexibility in designing their project selection scoring systems to address affordable housing needs in their districts, similar to the recommendations made by the Banks in their joint comment letter, but with certain changes to reflect particular policy objectives.

    Current regulation. The current AHP regulation prescribes a scoring-based project selection system based on a 100-point scale, under which each Bank must allocate:

    • At least 5 points each to two priorities derived from the statute (combined 10 points minimum);

    • At least 5 points each to four regulatory priorities addressing specific housing needs set forth in the regulation, and at least 20 points for the regulatory priority for income targeting (a combined 40 points minimum for the five regulatory priorities).

    • The remaining maximum of 50 points to one or more housing needs specified under the first Bank district priority (from 12 eligible housing needs specified in the regulation, and to one or more housing needs in the Banks' districts selected by the Banks under the second Bank district priority (with at least 5 points allocated to each Priority).

    Proposed rule. The proposed rule would have authorized the Banks to design their own scoring systems, subject to an outcome-based framework under which a specified percentage of each Bank's total annual AHP funds would be required to be awarded to projects meeting specific outcome requirements established by FHFA in the proposed rule. As discussed in Section II.B. and C. above, the proposal was intended to address the Banks' and stakeholders' input on the AHP by providing the Banks greater flexibility to design their competitive application programs to meet their district housing needs while continuing to ensure the Programs fulfill the statutory requirements. The proposed outcome requirements would have included the three statutory priorities for: (1) Projects sponsored by a government or nonprofit entity; (2) use of donated or conveyed government property; and (3) purchase of homes by low- or moderate-income households. Each Bank would have been required to award at least 55 percent of its total AHP funds to projects meeting the donated or conveyed government properties priority or government or nonprofit sponsorship priority, and to award at least 10 percent of its total AHP funds to households or projects meeting the priority for purchase of homes by low- or moderate-income households.

    In addition, the proposed outcome requirements would have included four regulatory priorities, with specified eligible housing needs included under each of the regulatory priorities, for: (1) Very low-income targeting for rental units; (2) underserved communities and populations; (3) creating economic opportunity; and (4) affordable housing preservation. Each Bank would have been required to ensure that at least 55 percent of all rental units in rental projects receiving AHP awards were targeted to very low-income households (households with incomes at or below 50 percent AMI). In addition, each Bank would have been required to award at least 55 percent of its total AHP funds to projects, in the aggregate, meeting at least two of the three other regulatory priorities.

    The proposed rule would have permitted the Banks to re-rank the order of applications, by replacing a higher scoring application that does not contribute to meeting the outcome requirements with a lower scoring project that does, in order to enable the Banks to meet the outcome requirements. If a Bank failed to fulfill the outcome requirements, FHFA would have the authority to require the Bank to develop and implement a housing plan for addressing the Bank's noncompliance, or to order the Bank to reimburse its AHP Fund in the amount of funds necessary to address the dollar shortfall.

    Comments. A large majority of commenters addressed the proposed outcome-based framework for project selection. Most commenters, including several Banks, several trade associations, numerous lenders, many nonprofit and for-profit developers, and some members of Congress, expressed reservations about, or opposition to, the proposed approach. Many of these commenters asserted that the proposal was too prescriptive and complicated, and would result in unintended consequences, such as increased Program complexity, preferences for certain types of projects, and reduced transparency of the AHP. While not explicitly expressing support for the proposal, several commenters acknowledged the potential benefits of the proposed outcome-based approach. For example, a nonprofit intermediary recognized that the approach may facilitate the Banks' ability to increase the diversity of populations receiving AHP funds, as well as fulfill a broader range of district affordable housing needs. Several commenters, including a number of Banks, also acknowledged that the proposed regulatory priorities under the outcome-based approach were germane to the affordable housing needs of their districts.

    However, most of the commenters expressed concern that the proposal would or might restrict the Banks' and members' ability to address the particular housing needs of local communities, which some of these commenters described as a “hallmark” of the AHP, in favor of a national housing needs focus. Some Bank Advisory Councils also expressed concern that the proposal would diminish the role of the Bank Advisory Councils in identifying the affordable housing needs of the districts. Several commenters focused on the proposed percentages that the Banks would be required to meet under the outcome requirements, raising concerns that requiring mathematical calculations of dollar amounts and numbers of rental units would increase the Program's complexity. Many commenters, including the Banks, a Bank Advisory Council, and a trade association, strongly objected to the proposal to permit the Banks to re-rank the order of scored applications as a way to meet the proposed outcome requirements. Commenters expressed concern that the ability to re-rank scored applications would undermine the integrity, predictability, simplicity, and transparency of the AHP, and deter project sponsors from submitting applications to the Program.

    Numerous commenters, including the Banks, a trade association, and lenders, strongly opposed the proposed enforcement provisions for Bank noncompliance with the proposed outcome requirements. Commenters stated that requiring a Bank to reimburse its AHP Fund in the amount of any dollar shortfall would impose a “penalty” and “undue and severe punishment” on the Bank. A Bank noted that requiring such reimbursement would result in a Bank contributing annually more than the statutorily required 10 percent of its net income to its AHP for the particular year. Commenters also suggested that a reimbursement requirement would lead to reductions in the diversity of the projects awarded AHP funds, as the Banks would select conventional and unchallenging housing needs as part of their scoring systems in order to ensure fulfillment of the proposed outcome requirements and avoid having to reimburse their AHP Funds.

    The eleven Banks jointly submitted a proposal for project selection based on the current regulatory scoring system, with certain changes to the regulatory priorities and required minimum allocations of scoring points. The Banks' proposal is discussed further below under § 1291.26 (Scoring Criteria for the General Fund) in Section IV.

    Decision in the final rule. The final rule does not adopt the proposed outcome-based framework. Instead, the final rule amends the current regulatory scoring framework to provide the Banks with additional flexibility in designing their project selection scoring systems to address affordable housing needs in their districts, similar to the recommendations made by the Banks in their joint comment letter but with certain changes to reflect particular policy objectives. Revisions to the existing regulatory scoring system include broader regulatory priorities encompassing more housing needs and additional discretion in allocating scoring points under the Bank district priority.

    FHFA's analyses of the Banks' awards in recent years indicate that most, if not all, of the Banks would have readily met the proposed outcome requirements, especially with the correction to the calculation of the proposed outcome requirement for the three regulatory priorities, while having increased flexibility to target district housing needs. However, the Banks and other commenters expressed concern about the proposed outcome requirements, especially the prospect of accountability for noncompliance with the outcome requirements and the potential to have to reimburse their AHP Funds for any dollar shortfall. Because FHFA has decided not to implement the proposed outcome-based approach, the proposed enforcement provisions for Bank noncompliance with the outcome requirements (proposed §§ 1291.48 and 1291.49) are moot and, therefore, not adopted in the final rule.

    The Agency finds the Banks' proposal for project selection, which is based on both the current scoring system and specific regulatory priorities in the proposed rule, to be a reasonable approach, subject to certain changes to achieve specific policy objectives. The revised scoring-based framework in the final rule is discussed in Section IV. below, under § 1291.25 (Scoring Methodologies), and § 1291.26 (Scoring Criteria for the General Fund).

    B. Authority for the Banks To Establish Targeted Funds

    Final rule. Consistent with the proposed rule, the final rule authorizes the Banks to establish funds targeted to address specific affordable housing needs within their districts that are either unmet, have proven difficult to address through the Bank's General Fund, or align with objectives identified in their strategic plans (referred to as “Targeted Funds”).

    The final rule requires the Banks to adopt and implement parameters to ensure that each Targeted Fund is designed to receive a sufficient number of applicants for the amount of AHP funds allocated to the Targeted Fund such that administration of each Targeted Fund results in a robust competitive scoring process. These parameters include requirements that a Bank must specify the particular type of affordable housing needs the Bank plans to address through any Targeted Funds in its TCLP, and that a Bank must publish its TCLP at least 90 days before the first day that applications may be submitted for that Targeted Fund (unless the Targeted Fund is specifically targeted to address a federal or state-declared disaster). Further, the final rule requires a Bank to establish a minimum of three scoring criteria for each Targeted Fund that assist the Bank in selecting the projects that meet the specified affordable housing needs to be addressed by the Targeted Fund. In addition, the final rule provides that a Bank may not allocate more than 50 points to any one scoring criterion. The final rule also implements a phase-in period for establishing Targeted Funds. A Bank would be limited initially to establishing one Targeted Fund to which it could allocate up to 20 percent of its total annual AHP funds. In the second year, the Bank could establish two Targeted Funds with a maximum allocation of 30 percent, and in the third year three Targeted Funds with a maximum allocation of 40 percent.

    Current regulation. The current regulation does not authorize a Bank to establish Targeted Funds.

    Proposed rule. The proposed rule would authorize the Banks to establish up to three competitive Targeted Funds, and to allocate a maximum of 40 percent of their total annual AHP funds to establish such Targeted Funds, subject to the phase-in requirements described above. The Banks would use these funds to address specific affordable housing needs within their districts that are unmet, have proven difficult to address through the existing General Fund, or align with objectives identified in their strategic plans. FHFA's intent in proposing this authority was to help address challenges the Banks experience when trying to target specific affordable housing needs within their districts, especially in a single AHP funding round. Banks report that the existing regulatory scoring requirements can affect their efforts to fully address affordable housing needs within their districts. Establishing a Targeted Fund with a dedicated funding allocation to a particular housing need would enable competitive projects serving that housing need to receive awards pursuant to the competitive process under that Targeted Fund, while other projects would receive awards under the General Fund, thereby serving multiple housing needs in the same AHP funding round. The Banks would be required to adopt and implement controls to ensure that each Targeted Fund is designed to receive sufficient numbers of applicants for the amount of AHP funds allocated to the Targeted Fund to enable the Bank to facilitate a genuinely competitive scoring process.

    Comments. FHFA received a mix of comments in support of and opposition to the proposal to authorize Targeted Funds. A nonprofit organization commented that Targeted Funds would enhance the interaction between a Bank's board of directors and its Bank Advisory Council. The commenter also noted that Targeted Funds would provide each Bank greater opportunities to address varying market needs, reach more underserved communities, and possibly expand the geographical footprint of its AHP. The Banks and several Bank Advisory Councils stated that Targeted Funds would prove beneficial by providing the Banks with the ability to target specific affordable housing needs within their districts. The Banks also commented that the use of Targeted Funds would provide additional flexibility and responsiveness to changing housing needs by permitting the Banks to establish and tailor separate scoring priorities. The Banks and Bank Advisory Councils stated, however, that implementation of the proposed outcome-based framework would undermine the potential benefits of Targeted Funds. They also asserted that FHFA's proposed regulatory priorities under the outcome-based framework would drive the scoring process and overshadow the local needs of each district.

    Several commenters, including the Banks, Bank Advisory Councils, a trade association, and a policy organization, supported the proposed maximum 40 percent funding allocation for Targeted Funds. In contrast, a nonprofit advocacy organization and a government entity expressed concern that the proposal would lead to a decrease in funding for affordable rental housing. A nonprofit intermediary supported Targeted Funds, but recommended that the Banks be permitted to allocate an unspecified percentage that is less than 40 percent to their Targeted Funds to ensure that a majority of the Banks' AHP subsidies remain available under the General Fund to address a broad spectrum of affordable housing needs within each district. A nonprofit developer asserted that Targeted Funds would compel project sponsors to apply for AHP subsidy under both the General Fund and the Targeted Fund, resulting in costly compliance and administration expenses for the Banks, members, and project sponsors.

    The Banks expressed concern that the proposed regulatory language requiring each Bank to adopt and implement controls to ensure that each Targeted Fund receives sufficient numbers of applicants for the amount of AHP funds allocated to the Targeted Fund is vague, complex, and undefined.

    Decision in the final rule. FHFA has considered the comments received on the proposal for Targeted Funds and continues to be persuaded that Targeted Funds may increase the flexibility of the Banks to emphasize multiple housing needs in a given year, thereby enhancing their ability to address specific affordable housing needs in their districts. The Agency also continues to be persuaded that the Banks should be permitted to allocate up to 40 percent of their total annual AHP funds to Targeted Funds. Although a number of commenters expressed concern that allocation of AHP funds to Targeted Funds would potentially reduce the total amount of AHP funds available for affordable rental housing, they offered no support to substantiate their concerns that the Banks would target their Targeted Funds for owner-occupied housing. The 40 percent limit would provide the Banks significant flexibility to allocate AHP subsidy to Targeted Funds, which could include Targeted Funds for owner-occupied housing or rental housing. In fact, the Banks indicated that they would likely use Targeted Funds for rental housing. The final rule requires that the Banks allocate at least 50 percent of their total annual AHP funds to the competitive General Fund. The final rule also allows a Bank to allocate up to 35 percent of its total annual AHP funds to optional, noncompetitive Homeownership Set-Aside Programs, which are discussed further under § 1291.12 (Allocation of Required Annual AHP Contribution) below. Thus, the final rule ensures that the Banks award a majority of their AHP funds through competitive processes (for example, 50 percent for the General Fund plus 15 percent for Targeted Funds, or 65 percent for the General Fund).

    FHFA also considered the Banks' concerns about the proposed language that each Targeted Fund have controls for ensuring that it is designed to receive sufficient numbers of applicants for the amount of AHP funds allocated to the Targeted Fund. The requirement that the Targeted Fund be designed to receive sufficient numbers of applicants pertains to the scope and scoring methodology of the Targeted Fund, and is not a guarantee of the actual number of applicants received.

    FHFA also acknowledges the commenter's concern that project sponsors may feel compelled to submit applications for the same project to both the General Fund and any applicable Targeted Fund at a Bank. While the final rule does not prohibit applicants from applying to both Funds in the same year, FHFA does not anticipate this becoming a significant problem for the Banks and project sponsors due to the limited scope of Targeted Funds, and the time involved in completing multiple applications. The specific requirements in the final rule for establishing and administering Targeted Funds are discussed under § 1291.20(b)(1) in Section IV., below.

    C. Proposed Increase in the Maximum Permissible Annual Funding Allocation for Homeownership Set-Aside Programs

    Final rule. In a change from the proposed rule, the final rule retains the current maximum permissible annual funding allocation of 35 percent for Homeownership Set-Aside Programs. The final rule also retains the current alternate maximum permissible annual funding allocation of $4.5 million for such Programs.

    Current regulation. The current regulation authorizes each Bank, in its discretion, to allocate annually up to the greater of $4.5 million or 35 percent of the Bank's annual required AHP contribution for Homeownership Set-Aside Programs.

    Proposed rule. The proposed rule would have increased the current maximum permissible annual funding allocation for Homeownership Set-Aside Programs from 35 to 40 percent, and would have retained the current alternate maximum permissible annual funding allocation of $4.5 million. The NPRM noted that the current regulation allows the Banks to establish more than one Homeownership Set-Aside Program to address the homeownership needs of different populations, such as military veterans or disaster victims. FHFA stated that the increase in the maximum percentage allocation amount would enhance the ability of the Banks and their members to meet the demand for set-aside funds and provide more assistance to low- or moderate-income homebuyers and homeowners, including first-time homebuyers. FHFA also noted that the increase would assist Bank members by enhancing their ability to access a wider customer base, originate new mortgages for low- and moderate-income households, and fulfill their obligations under the federal Community Reinvestment Act.

    FHFA acknowledged that the increase could result in a smaller amount of funds allocated by the Banks to their competitive application programs, which could result in reduced funding for rental projects. However, FHFA considered the proposal to be reasonable given the significant demand for set-aside funds and stakeholder requests that the Agency provide the Banks additional flexibility to target specific housing needs in their districts.

    Comments. The commenters were divided over the proposal. The Banks, Bank Advisory Councils, several nonprofit organizations, and trade associations supported the proposal. Some nonprofit organizations and trade associations expressed support for the proposed amendments that would expand and enhance the reach of the Homeownership Set-Aside Programs. One trade association supported the proposed increase, expressing the hope that it would help increase the supply of entry-level homes, as well as improve the affordability of the homes. A nonprofit organization stated that the proposal would increase the number of low- and moderate-income homebuyers or homeowners that would be able to purchase or rehabilitate their homes. A trade association suggested that FHFA index the dollar cap for the $4.5 million alternate maximum allocation to address further erosion of the funds' purchasing power as mortgage rates and home prices rise.

    Numerous nonprofit organizations opposed the proposed increase on the basis that it would effectively reduce AHP funding for rental housing. Commenters noted the important role the AHP plays in supporting the preservation and expansion of rental properties for very low-income and extremely low-income households. A nonprofit organization cited data derived from the American Community Survey describing the Nation's significant shortage of affordable rental housing, including for extremely low-income households (incomes of less than 30 percent of AMI or less than the federal poverty line). Another nonprofit organization acknowledged the importance of promoting homeownership for lower income households, but opposed the proposed increase without an offsetting increase in funding for affordable rental projects, to help address the significant need for such housing nationwide. Several nonprofit organizations that advocate for the development of multifamily housing also opposed the proposal on the basis that a reduction in the amount the Banks must allocate to their General Funds would run counter to the promotion, development, and preservation of rental housing. One of the nonprofit organizations urged FHFA to maintain the existing funding allocation cap of 35 percent because it ensures that a minimum 65 percent of each Bank's total annual AHP contribution is available to fund rental projects. The commenter also implied that funding for the General Fund should have priority over funding for Homeownership Set-Aside Programs because rental housing projects must address the accessibility needs of future residents, while single-family homeownership programs do not.

    Decision in the final rule. In response to the commenters' concerns and the continued need for affordable rental housing, FHFA has decided to retain the existing maximum permissible funding allocation of 35 percent of a Bank's required annual AHP contribution for Homeownership Set-Aside Programs. The final rule also retains the alternate $4.5 million threshold.

    The continued need for affordable rental housing is supported by the Joint Center for Housing Studies of Harvard University in its annual overview of the housing conditions in the United States. The organization's report, The State of the Nation's Housing 2018, examined and assessed the Nation's progress in producing decent and affordable homes for all households.7 The report found that more than 38 million households in the U.S. have housing cost burdens that leave little income to pay for food, healthcare, and other basic necessities. The report determined that more than 11 million renters are severely cost burdened because they pay more than half their incomes for housing. The report also found that for every 100 extremely low-income renters, only 35 rental units were affordable and available in 2016—a nationwide shortfall of more than 7.2 million units. Very low-income renter households also faced a shortfall of 56 affordable and available rental units per 100 households. The report concluded that conditions at the low end of the affordable housing rental market would probably remain exceptionally tight over the long term in the face of strong demand and diminishing supply.8

    7See Joint Center for Housing Studies of Harvard University, State of the Nation's Housing 2018 (2018), available at http://www.jchs.harvard.edu/sites/default/files/Harvard_JCHS_State_of_the_Nations_Housing_2018.pdf (last accessed 11/15/2018).

    8Id.

    In addition, under the new authority for the Banks to establish Targeted Funds for homeownership or rental projects, the Banks may increase their focus on homeownership needs by establishing Targeted Funds for homeownership. This mitigates the need to increase the maximum permissible annual funding allocation for Homeownership Set-Aside Programs.

    The final rule does not adopt the commenter's recommendation to index the alternate $4.5 million maximum threshold. FHFA has analyzed whether revisions to the $4.5 million limit would be necessary and concluded that the Banks' need for, or use of, the $4.5 million maximum is unlikely to change.

    The specific requirements for establishing, funding, and administering Homeownership Set-Aside Programs are discussed below in §§ 1291.12 and 1291.40 through 1291.44 of Section IV.

    D. Proposed Elimination of the Requirement for Owner-Occupied Retention Agreements

    Final rule. In a change from the proposed rule, the final rule eliminates the current requirement for owner-occupied retention agreements where households use the AHP subsidy solely for rehabilitation of a unit, but retains it in other circumstances.

    Current regulation. The current regulation requires owner-occupied retention agreements where a household uses the AHP subsidy for purchase, for purchase in conjunction with rehabilitation, or solely for rehabilitation of a unit. Members must ensure that the AHP-assisted owner-occupied unit is subject to a five-year deed restriction or other legally enforceable retention agreement or mechanism requiring that, in the case of a sale or refinancing of the unit prior to the end of the retention period, the household repays the Bank an amount equal to a pro rata share of the AHP subsidy that financed the purchase, construction, or rehabilitation of the unit, reduced for every year the household owned the unit, from any net gain realized upon the sale or refinancing, unless either the unit is purchased by a very low-, or low- or moderate-income household or, following a refinancing, the unit remains subject to a retention agreement or other appropriate mechanism as described in the regulation.

    Proposed rule. The proposed rule would have eliminated the retention agreement requirement for all owner-occupied units, regardless of how the subsidy was used by the household. The NPRM did not specifically address or request comment on whether the elimination of owner-occupied retention agreements should apply only where the AHP subsidy is used for rehabilitation without an accompanying purchase of the unit.

    FHFA noted in the NPRM that the purpose of retention agreements is to deter flipping of homes, and also discussed the moral hazard risk that may be associated with the use of subsidy intended to provide housing to low- or moderate-income households to flip properties. However, as also noted in the NPRM, homes purchased by AHP-assisted households are not typically located in neighborhoods with rapidly appreciating house prices that would encourage flipping, and most AHP-assisted households do not sell their homes during the five-year retention period. Moreover, the NPRM indicated that the underlying policy of the AHP is to enable low- and moderate-income households to receive the benefits of homeownership, including appreciation in the value of their homes, which would weigh in favor of a reduction in the amount of subsidy repaid by the household when selling or refinancing the unit.

    Comments. The NPRM specifically requested comments on the advantages and disadvantages of the AHP owner-occupied retention agreement, whether eliminating it would impact FHFA's ability to ensure that AHP funds are being used for the statutorily intended purposes, whether there are ways to deter flipping other than a retention agreement, and whether the proposed increase in the maximum permissible grant to households from $15,000 to $22,000 under the Homeownership Set-Aside Program should impact the decision on whether to eliminate retention agreements.

    The majority of commenters who addressed the proposal to eliminate the requirement for owner-occupied retention agreements generally opposed it. A number of nonprofit advocacy organizations asserted that elimination of owner-occupied retention agreements would, by increasing homeowner equity, expose subsidy recipients to greater risks of fraud and abuse by predatory lenders and unscrupulous investors. These commenters also stated that the use of owner-occupied retention agreements has played an important role in preventing waste and abuse of AHP subsidies for homeownership.

    Several nonprofit organizations asserted that retention agreements play an important role in deterring property flipping. These commenters noted that organizations that provide access for homeownership opportunities to lower-income families frequently employ retention agreements, often in the form of subordinate liens. They stated that this strategy has proven extremely effective in protecting homeowners from predatory lenders and preventing the loss of homeowner equity and subsidies through flipping. They suggested that FHFA provide the Banks with discretion on whether to use retention agreements as the Banks deem appropriate, to ensure protection of homeowner equity and AHP subsidies. A state housing agency emphasized the benefits of having owner-occupied retention agreements when recipients receive substantial amounts of grant funds. Although one of the Banks discounted property flipping as a substantial risk, the Bank stated that predatory lending does pose risks for AHP-assisted households.

    A nonprofit organization commented that while flipping in the AHP may be rare, it is rare precisely because of the retention agreement and not because homes purchased by AHP-assisted households are not typically located in neighborhoods with rapidly appreciating housing prices, as FHFA indicated in the NPRM. The commenter stated that it has seen evidence of flipping and other forms of fraud (specifically, the use of “straw buyers”), and that these material risks are largely unrecognized because of the effectiveness of retention agreements like those in the AHP.

    Several commenters, including all of the Banks and a number of nonprofit organizations, recommended that FHFA authorize the Banks to use retention agreements in their discretion, based on criteria determined by each Bank, which would enable the Banks to address the different housing markets both across and within their districts, differences in eligible uses of AHP grants (e.g., down payment, closing costs, rehabilitation), and grant amounts among the Banks' General Funds and Homeownership Set-Aside Programs. The Banks stated that their Bank Advisory Councils and boards of directors have the necessary experience, knowledge, and familiarity with local real estate markets to determine whether the need for retention agreements exists in each market. Several of the Banks indicated that, if given the discretion, they would choose not to use retention agreements.

    One Bank and a commercial lender specifically opposed requiring retention agreements where AHP subsidies are used for rehabilitation of units for elderly households and special needs households, such as persons with disabilities. The Bank noted that changes in circumstances related to households' ages or health could affect their need to sell their homes, and retention agreements requiring repayment of AHP subsidy upon sale would unduly burden these households.

    Decision in the final rule. In a significant change from the proposed rule, the final rule retains the current requirement for owner-occupied retention agreements where a household uses the AHP subsidy for purchase, or for purchase in conjunction with rehabilitation, of a unit, but eliminates the requirement for an owner-occupied retention agreement where a household uses the AHP subsidy for rehabilitation without an accompanying purchase.

    Many of the commenters tied their strong support for owner-occupied retention agreements to their view that the agreements help deter flipping or other types of fraud, although neither supporting data nor studies were provided to support those views. Due to the volume of comments FHFA received, particularly from organizations with extensive experience with the AHP and similar programs that offer comparable homeownership assistance, FHFA is persuaded that retention agreements may play a relevant role in deterring abuse and flipping, as well as protecting homeowners from predatory schemes. The use of retention agreements in connection with AHP subsidies provided for home purchase, and rehabilitation with an accompanying purchase, aligns with approaches of other down payment assistance providers that require retention agreements for purchase of homes, including the U.S. Department of Housing and Urban Development's (HUD) HOME Investment Partnerships Program (HOME), certain private lenders, and state and local agencies. However, as further discussed below under § 1291.15(a)(7) in Section IV., the final rule adopts several requirements for owner-occupied retention agreements that are intended to ease the operational burdens on the Banks and members, and reduce the financial burden on AHP-assisted households, by minimizing the frequency and amount of AHP subsidy repayments by such households.

    In contrast, where the AHP subsidy is used solely for rehabilitation of homes, with no accompanying purchase, flipping of the homes is unlikely. Many of the recipients of AHP subsidy for rehabilitation are long-term homeowners, typically elderly households or persons with disabilities. These homeowners often need AHP funds for rehabilitation of their homes, such as installing a wheelchair ramp or repairing a leaky roof, to enable them to remain in their homes and, therefore, are less likely to move from their homes within a five-year period. In addition, the requirement to repay AHP subsidy may impose a financial burden on such households in the event that they are required to sell their homes to pay expenses associated with a change in life circumstances, such as the need to move to an assisted living facility or nursing home.

    E. Clarification of the “Cure-First” Requirement for Project Noncompliance

    Final rule. The final rule adopts the sequence of remedial steps in the event of project noncompliance set forth in the proposed rule, with clarification of the “cure-first” step to indicate that a project sponsor or owner must make a reasonable effort to cure the noncompliance, and if the noncompliance cannot be cured within a reasonable period of time, the Bank must proceed to the next step of evaluating the project for a modification.

    Current regulation. The current regulation specifies three types of remedial actions to address AHP project noncompliance resulting from the actions or omissions of a project sponsor or project owner, but does not specify the order in which a Bank must pursue these remedies. The remedial actions are: (1) Cure by the project sponsor or owner of the noncompliance within a reasonable period of time; (2) modification of the terms of the approved AHP application; or (3) recovery of the AHP subsidy or settlement for less than the full amount of subsidy due. FHFA may require the Bank to reimburse its AHP Fund in the amount of the shortfall, unless: (1) The Bank has sufficient documentation showing that the sum agreed to be repaid under the settlement is reasonably justified, based on the facts and circumstances of the noncompliance; or (2) the Bank obtains a determination from FHFA that the sum agreed to be repaid under the settlement is reasonably justified, based on the facts and circumstances of the noncompliance.

    Proposed rule. The proposed rule would require the following sequence of remedial steps in the event of project noncompliance: (1) The project sponsor or owner must cure the noncompliance within a reasonable period of time; (2) if the project sponsor or owner cannot cure the noncompliance within a reasonable period of time, the Bank must determine whether the circumstances of the noncompliance can be eliminated through a modification of the terms of the approved application under proposed § 1291.27; and (3) if the circumstances of the noncompliance cannot be eliminated through a cure or modification, the Bank (or member if so delegated) shall make a demand on the project sponsor or owner for repayment of the full amount of the AHP not used in compliance with the AHP application commitments, and if that demand is unsuccessful, the member, in consultation with the Bank, shall make reasonable efforts to collect the AHP subsidy from the project sponsor or owner, which may include settlement for less than the full amount due. The NPRM emphasized the importance of first requiring the project sponsor or owner to cure project noncompliance within a reasonable timeframe, stating that the objective of the AHP is to provide affordable housing for eligible households for the duration of the AHP retention period, so recovery of AHP subsidy should be the last resort. Cure of noncompliance is preferable to modification of the commitments in the AHP application or recovery of AHP subsidy as it holds the project sponsor to its AHP application commitments, which result in greater benefits to eligible households than if the commitments are reduced through modification or eliminated by recovery of the subsidy.

    The proposed rule also would have added a new section addressing remedial actions that FHFA could take if a Bank failed to comply with the proposed outcome requirements and FHFA determined that compliance was feasible. The proposed remedial authority would have included: Requiring the Bank to develop and implement a housing plan approved by FHFA; describing the specific actions the Bank will take to comply with the outcome requirements for the next calendar year; or requiring the Bank to reimburse its AHP Fund for the difference in the amount of AHP funds required to meet the outcome requirements and the amount the Bank actually awarded.

    Comments. The Agency received numerous comments expressing concern about the proposed “cure-first” requirement for addressing project noncompliance. Commenters asserted that the Banks can address compliance issues more effectively and efficiently through modification of the project's application commitments. The Banks and a nonprofit homeless services agency stated that the “cure-first” requirement might increase costs and delay disbursement of funds, and the nonprofit organization indicated that it could result in termination of a project in a tight housing market like Boston. Other commenters expressed concern that a “cure-first” requirement would force developers to make “feigned attempts” to cure unresolvable issues. A nonprofit developer asserted that the proposal for subsidy repayment would not take into account the cause of the failure of a project, including fires or earthquakes. The Bank Advisory Councils commented that some projects naturally meet the “good cause” requirement for modification because the project sponsors, owners, or members have no control over the noncompliance.

    A trade association stated that a “cure-first” requirement could cause problems for members that provide equity for projects or that have committed construction or permanent financing. A nonprofit organization commented that focusing on curing noncompliance first might result in displacement of residents from the project.

    Decision in the final rule. Modification of a project's AHP application commitments should not be the first option for a Bank to address project noncompliance. Inherent in a competitive application program is an award recipient's responsibility to fulfill the commitments in its application. A Bank should expect and require project sponsors or owners to make a reasonable effort to comply with their AHP application commitments before agreeing to modify a project. It is also preferable that recovery of AHP subsidy be the last option for curing noncompliance because the objective of the AHP is to provide affordable housing for eligible households for the duration of the AHP retention period. If subsidy is repaid for noncompliant units for the remainder of the AHP retention period, those units would no longer be subject to AHP income targeting and rent restrictions.

    Commenters described, and FHFA acknowledges, that there are cases where sound reasons exist for why a project sponsor or owner may be unable to meet its AHP application commitments. Further, there may be cases where project sponsors or owners cannot cure noncompliance because it is beyond their control to cure. However, commenters appeared to misread the language of the proposed “cure-first” provision to require project sponsors or owners to cure noncompliance regardless of the causes of the noncompliance, including noncompliance beyond their control to cure, thereby preventing the Banks from moving to modifications as a remedy for the noncompliance. This was not the intent of the proposed “cure-first” provision, as indicated by the language in the following paragraph of the proposed rule stating that “[i]f the project sponsor or project owner cannot cure the noncompliance within a reasonable period of time, the Bank shall determine whether the circumstances of the noncompliance can be eliminated through a modification . . . .” If cure of the noncompliance is beyond the control of the project sponsor or owner, they may be unable to cure the noncompliance within a reasonable period of time. The project sponsor or owner does not have to try to cure noncompliance that is incurable; it would simply provide a reasonable written justification to the Bank indicating why it could not cure the noncompliance. If the justification is reasonable, the Bank would then evaluate whether it could approve a modification under the rule's modification requirements.

    In view of the apparent misunderstanding of the “cure-first” provision, FHFA has clarified the language in §§ 1291.29(a)(1) and 1291.60(b)(1) of the final rule by adding that project sponsors or owners must “make a reasonable effort” to cure the noncompliance, and adding a statement immediately following that one that if the noncompliance cannot be cured within a reasonable period of time, the requirements for a modification in the next paragraph shall apply.

    Because the final rule does not adopt the proposed outcome-based scoring framework, the proposed remedial actions for failure to meet the outcome requirements are moot and, thus, not adopted in the final rule. Other remedies provisions related to AHP noncompliance are discussed below under §§ 1291.60 through 1291.65 in Section IV.

    F. Responsibility of Full Board of Directors for Strategic AHP Decisions

    Final rule. In a change from the proposed rule, the final rule retains the current authority for a Bank's board of directors to delegate to a board committee the responsibility to meet quarterly with the Bank Advisory Council, and to approve or disapprove applications for AHP subsidies and alternates. Consistent with the proposed rule, the final rule adopts the proposed prohibition on a Bank's board delegating to a board committee the responsibility to approve General Fund, Targeted Fund, and Homeownership Set-Aside Program policies, the AHP Implementation Plan, and the TCLP.

    Current regulation. The current regulation provides that a Bank's Advisory Council shall meet with representatives of the Bank's board of directors at least quarterly to provide advice on ways in which the Bank can better carry out its housing finance and community lending mission, and permits that responsibility to be delegated to a committee of the board but not to Bank officers or other Bank employees. The requirement for board representatives to meet quarterly with the Bank Advisory Council is a Bank Act requirement.9 The current regulation also permits the board to delegate to a committee of the board, but not to Bank officers or other Bank employees, the responsibility to appoint the Bank Advisory Council members. In addition, the current regulation permits the board to delegate the responsibility for approving or disapproving AHP applications and alternates, and for adopting its AHP Implementation Plan, Homeownership Set-Aside Program, and conflict of interest policies, to a committee of the board, but not to Bank officers or other Bank employees.

    9See 12 U.S.C. 1430(j)(11).

    Proposed rule. The proposed rule would have extended the existing prohibition on the board delegating certain AHP responsibilities to Bank officers and other Bank employees to include a prohibition on delegating such responsibilities to board committees. Specifically, the full board, instead of a board committee, would have been required to meet quarterly with the Bank Advisory Council, to approve General Fund, Targeted Fund, and Homeownership Set-Aside Program policies, to approve and amend the AHP Implementation Plan and the TCLP, and to approve or disapprove applications for AHP subsidies and alternates. As stated in the NPRM, the goal of the proposed non-delegation provisions was to engage the full board in developing and adopting strategic decisions for the AHP, as part of the overall strategic planning of the Bank. FHFA noted that while it anticipated that the AHP responsibilities currently assigned to the board committees would remain largely unchanged in response to the proposal, the full board would have more engagement with board committee recommendations and decisions.

    Comments. A number of commenters disagreed with the Agency's rationale for encouraging full board engagement in AHP strategic responsibilities. They stated that involving more board members in the intricacies of AHP organizational planning and reporting would dilute the influence and housing expertise of the board committees tasked with AHP responsibilities. They stated that the proposal would create inefficiencies and could result in less integration of the board committees' contributions into the board's decisions on Bank housing activities than the existing practices employed by the Banks. One Bank stated that a board's ability to use board committees effectively, including the ability to delegate AHP responsibilities to a board committee, is a fundamental component of board governance best practices, and the proposal would be an unnecessary encroachment on the boards' ability to oversee Bank operations.

    Several Banks and their Bank Advisory Councils described the Banks' board committee structures and corporate governance principles to demonstrate that their full boards are fully engaged and aware of all AHP responsibilities and initiatives. A number of commenters stated that the Banks' AHP governance structures and processes work effectively, with the board housing committees providing reports to the full board. A Bank cited FHFA's regulation at 12 CFR 1239.3, which authorizes the Banks to model their corporate governance and indemnification practices on the Revised Model Business Corporation Act (RMBCA), as support for maintaining the existing AHP regulatory requirements concerning board delegations. The Bank also referred to FHFA's regulation at 12 CFR 1239.5, which permits the boards to appoint board committees to carry out much of the board's responsibilities. The Bank stated that under the RMBCA, the full board must consider only those activities that “so substantially affect the rights of the shareholders or are so fundamental to the governance of the corporation.” The Bank further stated that delegation is a fundamental concept of efficient and competent corporate governance.

    Numerous commenters opposed requiring a Bank's full board, rather than a committee of the board, to meet with the Bank's Advisory Council each quarter. The Banks focused on the challenges and inconveniences of requiring quarterly meetings of the full boards and Bank Advisory Councils. Some commenters stated that quarterly meetings with the full boards would be inefficient and unnecessarily costly, requiring Bank Advisory Council members to spend additional time away from their primary jobs in affordable housing and economic development.

    Commenters also expressed concern that the proposal would reduce the influence and expertise of the Bank Advisory Councils. They pointed out that the board members who are not on the board housing committees possess different areas of expertise and, as a result, may not have the backgrounds necessary to engage fully in housing policy discussions with the Bank Advisory Councils. Commenters noted that some Banks hold annual meetings of the full board and Bank Advisory Council members, and their board housing committees meet quarterly with the Bank Advisory Councils and provide reports on the meetings to the full board. Commenters also stated that the proposed approach would be more restrictive than the governing statutory provision, which requires each Bank's Advisory Council to meet quarterly with “representatives of” the board of directors.

    Decisions in the final rule. After considering the comments, FHFA has decided to retain in the final rule the current authority for the Bank's board to delegate to a board committee the responsibility to meet quarterly with the Bank's Advisory Council. FHFA is persuaded by the comments about the costs, inconveniences, and inefficiencies of holding the quarterly meetings with the full board, the value of quarterly off-site meetings with board committees, and the language in the statute referencing “representatives of” the board. The final rule also retains the authority for the Bank's board to delegate to a board committee the responsibility to approve or disapprove applications for AHP subsidies and alternates. Approval or disapproval of AHP applications is based on scoring rankings under the Bank's scoring system and not on strategic policy decisions.

    However, the Banks' full boards should be responsible for approving all strategic AHP policy decisions. Consistent with 12 CFR 1239.5, the board may rely on reports from board committees, but under the final rule, the authority to approve strategic policy decisions resides with the full board. As noted by commenters, the board committees, whose members have special housing expertise, perform an important role in the AHP strategic policymaking process by evaluating and developing policy recommendations, and FHFA expects their involvement in this process to continue. However, instead of the board committees approving strategic policy decisions on behalf of the full board, the board committees will need to report their policy recommendations to the full board for its approval or disapproval. The specific AHP strategic policy decisions that will need to be approved by the full board are approval of General Fund, Targeted Fund and Homeownership Set-Aside Program policies, and approval and amendment of the AHP Implementation Plan and the TCLP.

    IV. Section-by-Section Analysis Community Support Requirements Regulation

    This section discusses the final rule's changes to the current Community Support Requirements regulation.

    § 1290.6 Bank Community Support Programs

    Final rule. The final rule requires the Banks to identify in their TCLPs the housing needs the Banks plan to address in their AHPs, including the particular housing needs they plan to address through any Targeted Funds. The Banks must publish their TCLPs at least 90 days before the initial date for submission of applications for the application funding round for the specific Targeted Fund. Targeted Funds addressing federal- or state-declared disasters are exempt from the 90-day requirement.

    Current regulation. FHFA's current Community Support Requirements regulation requires the Banks to adopt annual TCLPs in conjunction with their responsibility to establish and maintain community support programs.10 The Banks' TCLPs must describe how each Bank plans to address identified credit needs and market opportunities in its district. The Banks are required to consult with their Bank Advisory Councils, members, housing associates, and public and private economic development organizations when developing and implementing their TCLPs. Although the Banks are required to provide an annual notice to their members about their community support programs, they are not required to make their TCLPs available to their members or to the public.

    10 12 CFR 1290.6(b).

    Proposed rule. The proposed rule would amend § 1290.6(a)(5) to enhance the function and usefulness of the TCLPs, as well as improve the TCLPs' connection to the Banks' strategies for implementing their AHPs. The proposal would require the Banks to identify and assess in their TCLPs the significant affordable housing needs in their districts, reflecting market research and supported by empirical data, and would have required the Banks to specify, from among those housing needs, the specific housing needs the Banks would address through their funding allocations and scoring criteria under their General Funds and any Targeted Funds and Homeownership Set-Aside Programs, as set forth in their AHP Implementation Plans. The Banks would continue to be required to develop their TCLPs in conjunction with the stakeholders referenced above. The Banks would also be required to publish their TCLPs on their public websites within 30 days of approval by the Bank's board of directors, and at least six months before the beginning of the Plan year. Proposed § 1291.20(b)(1) would have prohibited a Bank from establishing or administering a Targeted Fund unless at least 12 months had passed since publication of its TCLP. The purpose of the 12-month notice requirement was to provide potential project sponsor applicants with ample notice of the Banks' plans to target AHP awards to a narrower pool of potential applicants so that the project sponsors could prepare applications for submission to the Targeted Fund, with the goal being to generate sufficient numbers of applications for the Bank to be able to conduct a robust competitive scoring process for the Targeted Fund. The proposed rule would also prohibit a Bank's board of directors from delegating the responsibility for adopting or amending the TCLP to a committee of the board.

    Comments. FHFA specifically requested comments on the benefits of the proposed expansion of the contents of the TCLPs and their linkage to the AHP Implementation Plans. FHFA also requested comments on whether the proposed expansion would impede the Banks' ability to respond to disasters through the AHP. The commenters who responded to the proposal generally opposed it, stating that the proposed requirements would be overly prescriptive and burdensome. The Banks, a state government entity, and a nonprofit developer particularly criticized the seeming disconnect between the timing requirements for the TCLP and those of other sources of funding, such as housing finance agencies. Several commenters advised that the proposed 12-month and 6-month notice periods would conflict with the Banks' need for flexibility in responding to disasters. One Bank calculated that it would take approximately one to two years of advance work to meet the required lead time in the proposed rule when factoring in time for conducting research, obtaining the necessary internal Bank approvals, and publishing the TCLP.

    The Banks commented that FHFA's proposed outcomes requirements for project selection would effectively establish each Bank's housing needs priorities, obviating any need to conduct market research, obtain empirical data, and expand the content of the TCLPs. Several Banks and a Bank Advisory Council expressed concern that the proposal could diminish the role of the Bank Advisory Councils, but indicated that it may add value to the process if FHFA abandoned the proposed outcomes requirements for project selection. The Banks and the Bank Advisory Councils also expressed concerns about the proposed requirement to obtain empirical data about the housing needs in the districts, which they viewed as diminishing the Bank Advisory Councils role in advising the Banks' boards of directors. Two Banks opposed the proposed notification requirement to obtain empirical data because gathering and assessing the data would prevent the Bank from responding quickly to use the AHP for disaster relief. A nonprofit affordable housing intermediary opposed the proposed requirement to obtain empirical data on the grounds that the requirement would add a burden to the Banks and would not prove useful in making decisions about how to direct AHP funding because of the extent of housing needs throughout districts. A national affordable housing policy and advocacy organization recommended that the Banks be required to consult with state housing finance agencies in developing their TCLPs.

    Decisions in the final rule. FHFA has considered the comments and remains of the opinion that the Banks's TCLPs should identify and assess the significant affordable housing needs in their districts. The changes to the current requirements for developing the TCLPs will help to ensure that the Banks identify such housing needs and guide the Banks in deciding how to design their AHPs.

    The final rule requires the Banks to identify, from among the affordable housing needs addressed in their TCLPs, the housing needs they plan to address through the Banks' AHP, and including the specific needs to be addressed by any Targeted Funds. This differs from the proposed rule, which would have required each Bank to identify in its TCLP the specific housing needs it planned to address through the Bank's funding allocations and scoring criteria under its General Fund and any Targeted Funds and Homeownership Set-Aside Programs in its AHP Implementation Plan. FHFA had proposed that the Banks expand the scope and specificity of their TCLPs in conjunction with the outcome-based approach for project selection. Because the final rule does not adopt the outcome-based approach, there is no longer a need to require the Banks to include detailed information about their General Funds and Homeownership Set-Aside Programs in their TCLPs.

    In addition, the final rule removes the proposed requirement that the Banks support the identification and assessment of significant affordable housing needs with empirical data, in response to commenters' concerns that this would be burdensome for Banks to implement. Many of the Banks were concerned that the word “empirical” implied that the Banks would be required to commission third-party studies to determine district affordable housing needs. However, the final rule continues to require that the Banks assess market research they conduct or obtain in order to identify significant affordable housing needs in their districts. Banks can also obtain information from their Advisory Councils to support their market research.

    The final rule continues to require the Banks to consult with their Bank Advisory Councils, members, housing associates, and public and private economic development organizations in developing their TCLPs, which should ensure a robust process for obtaining input on the TCLPs. In response to the comment that the Banks should also consult with state housing finance agencies in developing their TCLPs, those entities likely are housing associates, as defined under FHFA's General Definitions regulation,11 so the final rule makes no change to this language in the Community Support Requirements regulation. A Bank may also choose to consult with other parties not referenced in the regulation as appropriate.

    11 12 CFR part 1201.

    However, FHFA agrees with commenters' concerns about the proposed six-month requirement for publishing the TCLPs. The commenters stated that the proposed six-month requirement would inhibit the Banks' abilities to respond to district affordable housing needs, including disasters, in a timely manner. The six-month requirement was proposed in conjunction with the Agency's proposal for an outcome-based framework for project selection. Under the proposed outcome-based approach, a Bank would have been required to identify in its TCLP the specific housing needs the Bank intended to address through its funding allocations and scoring criteria under its General Fund and any Targeted Funds and Homeownership Set-Aside Programs, as set forth in its AHP Implementation Plan. FHFA presumed that the Banks and other stakeholders would need additional time between the publication of the TCLPs and the beginning of the AHP application funding round to develop or revise AHP policies and procedures for inclusion in their AHP Implementation Plans, and conduct outreach to educate members, potential project sponsor applicants, and other AHP stakeholders about the Bank's revised scoring system. However, as discussed under Section III.A. above, the final rule does not adopt the proposed outcome-based approach. Therefore, there is no need to require the Banks to publish their TCLPs 12 months before the beginning of the TCLP year. Instead, the final rule requires the Banks to publish their TCLPs no later than the publication date of their AHP Implementation Plans. This should provide the Banks sufficient time to develop and publish their TCLPs, while underscoring the linkage between the TCLPs and the AHP Implementation Plans.

    As noted above, the proposed rule would have required a Bank planning to establish a Targeted Fund to publish its TCLP at least 12 months before establishing and administering the Targeted Fund. FHFA finds commenters' concerns persuasive that this proposed timeframe would impede the Banks' ability to address pressing affordable housing needs, including natural disasters. Accordingly, the final rule sets the time period for publishing a TCLP that addresses the use of Targeted Funds as 90 days before the opening of the AHP application funding round, with an exemption for Targeted Funds addressing federal- or state-declared disasters, as they require expedited assistance. Because most Banks' TCLP years typically begin on January 1, the final rule does not tie the 90-day timeframe to January 1, which would result in the Banks having to publish their TCLPs by September 30 each year. Instead, the final rule ties the 90-day timeframe to the first day AHP applications can be submitted for the funding rounds for the Targeted Funds, which may be different dates throughout the year and be open for different lengths of time. This will provide the Banks more flexibility in administering their Targeted Funds. While significantly shorter than 12 months, the 90-day timeframe should still provide potential applicants with sufficient notice of the Banks' plans for their Targeted Funds so that applicants can prepare applications for submission to the Targeted Funds, with the goal being to produce sufficient numbers of applications for the Banks to be able to conduct robust competitive scoring processes for their Targeted Funds.

    As discussed under Section III.F. above, the final rule adopts the proposal prohibiting a Bank's board of directors from delegating the responsibility for adopting or amending the TCLP to a committee of the board.

    § 1290.8 Compliance Dates

    The dates by which the Banks must comply with these revised provisions are discussed above in Section I.

    Affordable Housing Program Regulation Reorganization of the Current AHP Regulation

    The final rule adopts the proposed reorganization of the current AHP regulation, with some modifications to take into account certain changes from provisions in the proposed rule. The reorganization is intended to provide greater clarity for users of the AHP regulation. Current and new regulatory sections are grouped under new Subpart headings according to similar subject matter, resulting in renumbering of most sections of the current regulation. The numbering of the sections is not consecutive from Subpart to Subpart in order to reserve room within Subparts for the addition of new sections in the future, as necessary. FHFA received no comments on the proposed reorganization of the regulation.

    The following discusses each section of the final rule amending the current AHP regulation in the order the sections appear in the final rule.

    Subpart A—General § 1291.1 Definitions

    As proposed, the final rule retains most of the definitions currently in § 1291.1. The final rule revises some of the current definitions and adds definitions, which are discussed below in the context of the related regulatory amendments.

    In addition, as proposed, the final rule makes the following technical changes to certain definitions, which did not receive any comments:

    • A definition of “AHP” is added, which means the Affordable Housing Program required to be established by the Banks pursuant to 12 U.S.C. 1430(j) and this part 1291.

    • The definition of “Homeownership Set-Aside Program” indicates that establishment of such a program is in the Bank's discretion and is a noncompetitive program.

    • The definition of “net earnings of a Bank” is revised by removing the requirement to deduct the Bank's annual contribution to the Resolution Funding Corporation, as the Banks are no longer required to make annual contributions to the Resolution Funding Corporation.

    • In the definition of “rental project,” the term “manufactured housing” is changed to “manufactured housing communities,” which more accurately describes this type of housing in the context of rental projects.

    • References to the “competitive application program” are changed to the General Fund and any Targeted Funds. References to “homeownership set-aside programs” are capitalized.

    The final rule also makes the following technical revisions and an addition to the definitions for greater clarity, which were not included in the proposed rule:

    • Changes “funding period” to “funding round” to reflect the terminology commonly used by the Banks and AHP stakeholders. Adds a definition of “LIHTC” to mean Low-Income Housing Tax Credits under section 42 of the Internal Revenue Code (26 U.S.C. 42).

    • In the definition of “visitable,” the reference to “2 feet, 10 inches” is changed to the equivalent “34 inches,” consistent with the use of “inches” later in the definition.

    § 1291.2 Compliance Dates

    The dates by which the Banks must comply with the revised AHP regulatory provisions are discussed above in Section I.

    Subpart B—Program Administration and Governance § 1291.10 Required Annual AHP Contribution

    Consistent with the proposed rule, the final rule relocates current § 1291.2(a) to § 1291.10. Section 1291.10 contains the Bank Act requirement stating that each Bank shall contribute annually to its AHP 10 percent of its net income for the preceding year, subject to a minimum annual combined contribution by all of the Banks of $100 million.12

    12See 12 U.S.C. 1430(j)(5)(C).

    § 1291.11 Temporary Suspension of AHP Contributions

    Consistent with the proposed rule, the final rule retains current § 1291.11 on the temporary suspension of AHP contributions without change. FHFA did not receive any comments on this provision.

    § 1291.12 Allocation of Required Annual AHP Contribution

    Allocation of AHP funds. Consistent with the proposed rule, § 1291.12(a) of the final rule requires each Bank to allocate annually at least 50 percent of its required annual AHP contribution to its General Fund, and § 1291.12(c) permits each Bank to allocate up to 40 percent, in the aggregate, of its required annual AHP contribution to up to three Targeted Funds. The current regulation requires that at least 65 percent of each Bank's required annual AHP contribution be allocated to its Competitive Application Program. As noted in Section III.B. above, the current regulation does not authorize the establishment of Targeted Funds.

    For the reasons identified above in Section III.C., § 1291.12(b) of the final rule retains the current limit that a Bank may allocate to its Homeownership Set-Aside Programs up to the greater of $4.5 million or 35 percent of its annual required AHP contribution. The proposed rule would have increased the 35 percent limit to 40 percent.

    As discussed in the NPRM, the proposed rule would reduce the current annual required allocation to a Bank's General Fund (i.e., Competitive Application Program) from 65 percent to 50 percent, but noted that the 50 percent threshold would still ensure that the Banks make at least half of their AHP funds available to address a broad spectrum of affordable housing needs within their districts through their General Funds. FHFA also stated in the NPRM that it is extremely important that a substantial portion of AHP funds continue to assist in the development of rental housing for lower income households given the need for more affordable rental housing throughout the Nation. The vast majority of awards under the Competitive Application Program serve rental housing. In 2017, the Banks awarded 90 percent of competitive funds to rental housing. The proposal would enable the Banks to target simultaneously additional specific affordable housing needs in their districts through the allocation of the remaining total AHP funds to Targeted Funds, as well as the optional Homeownership Set-Aside Programs.

    Two nonprofit organizations that advocate for the development of affordable multifamily housing opposed any reduction in the minimum funding allocation to the General Fund because it would result in less funding for affordable rental projects. One of those commenters supported this position by referencing the NPRM discussion about the Banks' requests for additional funding allocation authority for Homeownership Set-Aside Programs, which the Banks find easier to administer than the General Funds.

    After considering the comments, FHFA has decided to adopt the proposed minimum 50 percent funding allocation requirement for the General Fund in the final rule. FHFA's decision not to increase the maximum percentage allocation for the optional Homeownership Set-Aside Programs from 35 to 40 percent will continue to ensure that each Bank generally allocates a minimum of 65 percent of its total AHP funds to competitive application programs via the mandatory General Fund and any optional Targeted Funds.13 Overall, FHFA intends the final rule to provide the Banks greater flexibility to allocate their total annual AHP funds to address the affordable rental and homeownership needs within their districts.

    13 When a Bank allocates the alternate maximum amount of $4.5 million to its Homeownership Set-Aside Programs, the Bank may allocate, in the aggregate, less than 65 percent of its total AHP funds to its General Fund and any Targeted Funds.

    Homeownership Set-Aside Programs

    One-third funding allocation requirement for first-time homebuyers or owner-occupied rehabilitation, or a combination of both.

    Consistent with the proposed rule, § 1291.12(b) of the final rule requires that at least one-third of a Bank's aggregate annual funding allocation to its Homeownership Set-Aside Programs be allocated to assist first-time homebuyers or households for owner-occupied rehabilitation, or a combination of both. The current regulation applies the one-third funding allocation requirement only to first-time homebuyers. In support of the proposal, FHFA noted in the NPRM that a substantial need for owner-occupied rehabilitation funds exists in many Bank districts, and the demand for such funds is likely to increase as the country's population ages.14 FHFA reasoned that expanding the scope of the one-third funding allocation requirement to include owner-occupied rehabilitation could facilitate additional funding for home repairs and accessibility modifications for households including the elderly, persons with disabilities, and military veterans.

    14 83 FR at 11348, citing Harvard Joint Center for Housing Studies, Housing America's Older Adults (Sept. 2, 2014), available at http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/jchs-housing_americas_older_adults_2014-ch4.pdf (last accessed on 11/15/2018).

    The Banks, Bank Advisory Councils, and an advocacy organization supported the proposal, stating that it would encourage the use of more Homeownership Set-Aside Program funds for owner-occupied rehabilitation at a time when the Banks have identified a substantial need for these funds.

    Two nonprofit organizations opposed the proposal, emphasizing the scarcity of resources for low- and moderate-income first-time homebuyers and noting that alternatives to AHP funding exist for rehabilitation. One of these commenters recommended that FHFA establish a separate funding allocation requirement for owner-occupied rehabilitation to ensure that a portion of Homeownership Set-Aside Program funds are provided for this purpose, while allowing the Banks to continue to fulfill the one-third allocation requirement by providing set-aside funds to first-time homebuyers.

    Assisting first-time homebuyers is an important priority for the AHP, and the Banks' support for such homebuyers has greatly exceeded the required one-third funding allocation requirement. Since the inception of Homeownership Set-Aside Programs in 1995, over 80 percent of set-aside households have been first-time homebuyers. At the same time, a substantial need for owner-occupied rehabilitation funds exists in many Bank districts and the demand will likely increase over time. Expanding the scope of the one-third funding allocation requirement in the final rule to permit owner-occupied rehabilitation may help address this need by encouraging the Banks to increase their set-aside funding allocations for this purpose, while continuing to support the needs of first-time homebuyers. FHFA is not adopting the commenter's recommendation to establish a separate funding allocation requirement for owner-occupied rehabilitation, as this could limit the Banks' flexibility to determine how best to use their set-aside funds to meet the first-time homebuyer and owner-occupied rehabilitation needs within their districts.

    The final rule also adopts a proposed technical revision to clarify that the one-third funding allocation requirement applies to the amount of set-aside funds “allocated” by the Bank to such households, not to the amount of set-aside funds actually used by them, because the Bank cannot control whether sufficient numbers of such households ultimately request set-aside funds in a given year. If an insufficient number of such households request set-aside subsidies, any unused funds would be provided to non-first-time homebuyers, and a Bank will not be considered in violation of the funding allocation requirement as long as it allocated the required amount. FHFA received no comments on this proposed technical change.

    Phase-in funding allocation requirements for Targeted Funds. As proposed, § 1291.12(c) of the final rule adopts a phase-in process for the allocation of funds to Targeted Funds in order to address the risks of Targeted Funds given their targeted nature. A Bank initially will be permitted to allocate up to 20 percent of its required annual AHP contribution to one Targeted Fund. This percentage limit increases to 30 and 40 percent in subsequent years, depending on the number of additional Targeted Funds established, up to a maximum of three Targeted Funds. The final rule makes a technical change to the references to the Targeted Funds being administered concurrently to refer to their administration in the same year instead. This change recognizes that the Banks may choose to administer their Targeted Funds at different times during the year. FHFA did not receive any comments on the proposed phase-in requirements for funding Targeted Funds. The phase-in requirements governing the number of Targeted Funds that a Bank may establish in any given year are discussed below under § 1291.20.

    Transfer of uncommitted Targeted Funds amounts. Proposed § 1291.12(c)(2) would have required a Bank to transfer any uncommitted Targeted Fund amounts to its General Fund for awards to alternates in the same calendar year. Section 1291.28(b) of the final rule makes approval of alternates under the General Fund and any Targeted Funds optional for a Bank pursuant to adoption of a Bank policy on approving alternates, and requires funding of the alternates if the Bank has such a policy and sufficient previously committed AHP subsidies become available within one year of application approval. Section 1291.70(b) of the final rule provides flexibility for the Banks to determine how to commit any uncommitted Targeted Fund amounts where the Bank does not have a policy to approve alternates under its General Fund or Targeted Funds.

    Acceleration of funding. Consistent with the proposed rule, the final rule relocates current § 1291.2(b)(3), which contains the discretionary authority for a Bank to accelerate future required annual AHP contributions to its current year's Program, to § 1291.12(d), with certain clarifying technical edits. FHFA did not receive any comments on the technical revisions.

    No delegation. As discussed in Section III.F. above and consistent with the proposed rule, § 1291.12(e) of the final rule prohibits a Bank's board of directors from delegating to a committee of the board, Bank officers, or other Bank employees the responsibility for adopting the policies for its General Fund and any Targeted Funds and Homeownership Set-Aside Programs. The prohibition on delegating to a committee of the board is an expansion of the current prohibition on delegating to Bank officers or other Bank employees.

    § 1291.13 Targeted Community Lending Plan; AHP Implementation Plan

    Targeted Community Lending Plan. As discussed in § 1290.6 above and as proposed, the final rule amends § 1290.6(a)(5) of the current Community Support Requirements regulation to require each Bank to identify and assess in its annual TCLP the significant affordable housing needs in its district that it plans to address through its AHP, as well as any specific affordable housing needs it plans to address through any Targeted Funds. In a change from the proposed rule, §§ 1290.6(c) and 1291.13(a)(2) of the final rule require that if a Bank plans to establish a Targeted Fund, it must publish its TCLP at least 90 days prior to the opening of the application funding round for the Targeted Fund, unless the Targeted Fund addresses federal- or state-declared disasters. The final rule also provides that a Bank's TCLP must be published on or before the date of publication of its annual AHP Implementation Plan. A Bank is required to notify FHFA of any amendments to its TCLP within 30 days after their adoption by the Bank's board.

    AHP Implementation Plan. As proposed, the final rule relocates current § 1291.3, which contains the requirements for the Banks' AHP Implementation Plans, to § 1291.13(b), with changes to reflect the inclusion of new policies required under the final rule. The prohibition on delegating certain strategic responsibilities to a committee of the board is discussed below, as are certain requirements for the Plan meriting particular discussion.

    No delegation. As discussed in Section III.F. above and consistent with the proposed rule, § 1291.13(b) of the final rule prohibits a Bank's board of directors from delegating to a committee of the board, Bank officers, or other Bank employees, the responsibility to adopt, and make any amendments to, its AHP Implementation Plan. This is an expansion of the current prohibition on delegating such strategic responsibilities to Bank officers or other Bank employees.

    Requirements for each Fund (§ 1291.13(b)(2), (b)(3), (b)(5)). In the current regulation, each Bank must include in its AHP Implementation Plan its requirements for its Competitive Application Program, including its scoring guidelines, and any Homeownership Set-Aside Programs. Consistent with the proposed rule, the final rule requires a Bank to include those requirements in its AHP Implementation Plan for its General Fund and any Targeted Funds and Homeownership Set-Aside Programs. The final rule also requires a Bank to include in its AHP Implementation Plan, the Bank's application scoring tie-breaker policy, and any policies adopted by the Bank, in its discretion, for approving AHP application alternates for funding under its General Fund and any Targeted Funds.

    For any Targeted Funds, a Bank is required to include specific parameters that ensure that the Targeted Fund is designed to receive sufficient numbers of applicants for the amount of AHP funds allocated to the Fund to facilitate a robust competitive scoring process, as required in § 1291.20(b)(2)(i). In a change from the proposed rule, the final rule does not require a Bank to include in its AHP Implementation Plan the specific funding allocation amounts for its General Fund and any Targeted Funds and Homeownership Set-Aside Programs, including how the Bank will apportion the one-third funding allocation under its Homeownership Set-Aside Programs. This will accommodate any potential timing issues a Bank may encounter that could delay its ability to identify the specific amounts of its funding allocations.

    Applications to multiple Funds (§ 1291.13(b)(4)). Consistent with the proposed rule, the final rule requires a Bank to include in its AHP Implementation Plan the Bank's policy on how it will determine under which Fund to approve a project that applies to more than one Fund and scores high enough to be approved under each of the Funds.

    Retention agreements (§ 1291.13(b)(6)). The final rule retains the current requirement that a Bank include its rental retention agreement requirements in its AHP Implementation Plan, and requires inclusion of the Bank's owner-occupied retention agreement requirements for households who use the AHP subsidy for purchase, or for purchase in conjunction with rehabilitation. Because the final rule eliminates the requirement for an owner-occupied retention agreement where the household uses the AHP subsidy solely for rehabilitation, nothing is required to be included in the AHP Implementation Plan regarding such agreements. This is a change from the proposed rule, which would have eliminated all owner-occupied retention agreements and, therefore, the requirement to address the agreements in the AHP Implementation Plan.

    Relocation plans for current occupants of rental projects (§ 1291.13(b)(7)). The final rule includes a requirement that a Bank include in its AHP Implementation Plan the Bank's standards for approving a relocation plan for current occupants of rental projects pursuant to § 1291.23(a)(2)(ii)(B).

    Optional Bank district eligibility requirements (§ 1291.13(b)(8)). Consistent with the current requirement in § 1291.5(c)(15) and the proposed rule, the final rule requires a Bank to include in its AHP Implementation Plan any optional Bank district eligibility requirements adopted by the Bank pursuant to § 1291.24(c).

    Re-use of repaid AHP direct subsidy in same project (§ 1291.13(b)(12)). In a change from the proposed rule, the final rule retains current § 1291.3(a)(7), which requires a Bank to include its requirements for re-use of repaid AHP direct subsidy in its AHP Implementation Plan, if the requirements are adopted by the Bank pursuant to current § 1291.8(f)(2), which is now § 1291.64(b). The proposed rule would have deleted § 1291.3(a)(7) because the requirements for owner-occupied retention agreements would have been eliminated in all cases, meaning there would be no repayments of AHP subsidy by households that could then be re-used under § 1291.8(f)(2). The final rule retains the current requirement for owner-occupied retention agreements where the household uses the AHP subsidy for purchase, or purchase in conjunction with rehabilitation, but not where the household uses the subsidy solely for rehabilitation. A household that uses the subsidy for purchase, or purchase in conjunction with rehabilitation, may be required to repay subsidy if the household sells or refinances the home within the AHP five-year retention period and none of the regulatory exceptions to subsidy repayment applies. Since the possibility of such subsidy repayments remains under the final rule, a Bank could adopt a subsidy re-use program under § 1291.64(b). Accordingly, the Bank's requirements for re-use of repaid AHP subsidy under any Bank subsidy re-use program adopted pursuant to § 1291.64(b) must be included in its AHP Implementation Plan.

    § 1291.14 Advisory Councils

    Consistent with the proposed rule, the final rule relocates current § 1291.4, which addresses the membership requirements and duties of the Banks' Advisory Councils, to § 1291.14, with the clarifications and change discussed below.

    Representatives of for-profit organizations. The Bank Act requires that each Bank appoint a Bank Advisory Council of persons drawn from “community and not-for-profit organizations” actively involved in providing or promoting low- and moderate-income housing in its district.15 As proposed, § 1291.14(a)(1) of the final rule clarifies that “community organizations” include for-profit organizations, which is consistent with existing Agency guidance.

    15See 12 U.S.C. 1430(j)(11).

    An organization that advocates on behalf of multifamily housing providers strongly endorsed including representatives of for-profit organizations on the Bank Advisory Councils, noting that such representation adds the voices of developers and owners with experience in affordable multifamily housing and increases the pool of applicants for the AHP.

    In contrast, several nonprofit organizations expressed concern that for-profit organization representation on the Bank Advisory Councils could dilute the representation and importance of nonprofit or mission-driven organizations on the Bank Advisory Councils. The commenters urged FHFA to ensure that the Bank Advisory Councils are populated predominantly by nonprofit and public sector representatives, who have mission-driven commitments to serving the community.

    FHFA acknowledges the important role that nonprofit organizations play in addressing the housing needs of low- and moderate-income households throughout the country. Nonprofit, as well as for-profit and public sector, organizations all bring important affordable housing perspectives to the Bank Advisory Councils. In 2018, 56 percent of the total membership of all eleven Bank Advisory Councils represented nonprofit organizations, and 15 percent represented for-profit organizations. The rest of the membership represented consulting firms and government entities. For-profit organization representation is consistent with § 1291.14(a)(3) of the final rule, which retains the current requirement in § 1291.4(a)(3) for a diverse range of membership on the Bank Advisory Council such that representatives of no one group constitute an undue proportion of the membership, giving consideration to the size of the Bank's district and the diversity of low- and moderate-income housing and community lending needs and activities within the district.

    Recommendations on Bank Targeted Community Lending Plans. FHFA's Community Support Requirements regulation16 requires the Banks to consult with their Bank Advisory Councils and other groups in developing and implementing their TCLPs. As proposed, § 1291.14(d)(1)(ii)(A) of the final rule includes the parallel requirement for the Bank Advisory Councils to provide recommendations to the Banks on their TCLPs, and any amendments thereto.

    16 12 CFR 1290.6(a)(5)(iii).

    No delegation. For the reasons discussed in Section III.F. above, the final rule does not adopt the proposed amendment requiring a Bank's full board of directors to meet quarterly with its Bank Advisory Council.

    § 1291.15 Agreements

    As proposed, the final rule relocates current § 1291.9, which governs the AHP contractual agreements that must be in place between the Banks and members, and between the members and project sponsors or owners, to § 1291.15. The final rule makes a number of changes and clarifications to the provisions in this section from those in the proposed rule, as discussed below.

    Notice to Bank of LIHTC project noncompliance (§ 1291.15(a)(5)(ii)). Consistent with the proposed rule, § 1291.15(a)(5)(ii) of the final rule adds a monitoring agreement requirement for notices of LIHTC project noncompliance that is not contained in the current regulation. The Banks' AHP agreements with their members must require the members' monitoring agreements with project owners to include a provision requiring the latter to agree to provide prompt written notice to the Bank if an LIHTC project is in noncompliance with the LIHTC income targeting or rent requirements during the AHP 15-year retention period. However, in a change from the proposed rule, the final rule only requires that such notice be provided where the LIHTC noncompliance is material and unresolved, which may trigger a tax benefit recapture event and repayment of some of the AHP subsidy. If tax benefits are recaptured from a project, it may impact the project's financial viability. A corresponding monitoring requirement that the Banks review the LIHTC noncompliance notices received from project owners during the AHP retention period is included in § 1291.50(c)(1)(ii) of the final rule, as proposed.

    Consistent with the current regulation and proposed rule, the final rule does not require the Banks to conduct long-term monitoring of AHP projects that received LIHTCs during the AHP 15-year retention period. Noncompliance with LIHTC income-targeting and rent requirements has been the same as or substantially equivalent to noncompliance with AHP income-targeting and rent requirements. Although LIHTC project noncompliance is rare, instances of noncompliance with LIHTC income targeting or rent requirements can occur during the AHP retention period, which would mean that the projects' incomes or rents likely are also in noncompliance with similar AHP requirements. However, the noncompliance generally would not come to the attention of a Bank during the AHP retention period because the Banks do not monitor LIHTC projects.

    FHFA specifically requested comments on the practicality of the proposed notice requirement, and whether it should also be required in the event of noncompliance by projects with the income-targeting or rent requirements of the government housing programs discussed under § 1291.50(c)(1)(ii) below.

    Several nonprofit intermediaries and an advocacy organization supported the proposed notice requirement as reasonable. A number of other commenters, including developers, a nonprofit affordable rental housing trade association, and an affordable housing developer, recommended that notice to the Banks only be required where the noncompliance is “unresolved.” The commenters noted that the Internal Revenue Service (IRS) requirements for notification of noncompliance result in the issuance of many notices for small, easily resolved operating issues, and only a small fraction of those notices remain unresolved for a substantial period of time. The notices that remain unresolved may involve projects with material noncompliance issues that could have an impact on the projects' financial viability. Commenters stated that the Banks should only be made aware of such material and unresolved problems.

    In contrast, the Banks opposed the proposal. One Bank stated that implementation of the proposal would be impracticable because the Banks must defer to the state housing finance agency or the IRS in cases of noncompliance. A trade association and a developer of housing with supportive services suggested that the proposal would have limited effect because LIHTC projects rarely become noncompliant due to the nature of the private equity investments. Another Bank and a nonprofit developer stated that project owners may not remember their obligation to report LIHTC noncompliance to the Bank under their AHP monitoring agreements. Finally, several commenters stated that the proposal would place an additional 15-year regulatory burden to monitor the projects on members and the original project sponsors even if they had transferred ownership of the project after project development.

    FHFA finds the comments about the infrequent instances of LIHTC project noncompliance and the minor nature of some of the noncompliance persuasive. The Banks do not need to receive notices of LIHTC noncompliance that will be easily resolved because these types of noncompliance will be cured within a reasonable period of time and do not jeopardize the long-term financial viability of the project. However, the Banks should be notified in the event of any material and unresolved noncompliance during the AHP 15-year retention period, which may trigger a tax benefit recapture event, so that the Bank can monitor the project's status and take remedial action as required by the AHP regulation. As noted above, the Banks likely would not become aware of material and unresolved noncompliance without notification because they do not monitor LIHTC projects during the retention period.

    Concerning the comments asserting that the proposal would impose an additional 15-year regulatory monitoring burden on members, FHFA notes that only project owners would be required to report noncompliance to the Bank.

    The final rule does not include a requirement that project sponsors or owners send notices to the Banks of noncompliance by projects with the requirements of the other specified government housing programs because a separate monitoring provision in the final rule addresses such noncompliance. Specifically, § 1291.50(c)(1)(i) and (ii) requires the Banks to obtain information annually from project sponsors or owners on their projects' compliance with other government funding sources, as well as the projects' on-going financial viability, as part of “enhanced certifications” to the Banks.

    Owner-occupied retention agreements for purchase, or for purchase in conjunction with rehabilitation (§ 1291.15(a)(7)). For the reasons discussed in Section III.D. above, § 1291.15(a)(7) of the final rule retains the current requirement for an owner-occupied retention agreement where the household uses the AHP subsidy for purchase of a home, or for purchase of a home in conjunction with its rehabilitation, but eliminates the current requirement for an owner-occupied retention agreement where the household uses the AHP subsidy solely for rehabilitation of a home. The final rule makes accompanying conforming changes to various references to owner-occupied retention agreements throughout the final rule.

    Notice to Bank or Bank designee. Section 1291.15(a)(7)(i) of the final rule provides that the Bank, and in its discretion any designee of the Bank, shall be given notice of any sale, transfer, assignment of title or deed, or refinancing of an AHP-assisted unit during the AHP five-year retention period. This is a change from the current regulation, which requires notice to the Bank or its designee.

    FHFA requested comments in the proposed rule on whether owner-occupied retention agreements, if retained in the final rule, should require that such notice be provided to both the Bank and its designee (typically the member), rather than to one or the other. FHFA indicated that such a requirement would facilitate Program operations by giving the Bank simultaneous notice with the Bank's designee (if the Bank has one), and could facilitate repayment of AHP subsidy to the Bank in cases where a member subsequently fails and is subject to receivership actions by other federal agencies.

    One Bank favored requiring notice to both parties, noting that it includes this requirement in its standard retention agreements as it is beneficial to the Bank to know that a sale or refinancing of the property has occurred. A nonprofit organization also favored requiring notice to both parties, stating that the minimal cost of the extra notice is worth the additional layer of oversight. Another Bank indicated that it includes a requirement for notice to the Bank in its retention agreements, but opposed requiring notice to a Bank designee, stating that this requirement might cause confusion as to who is responsible for calculating and providing a payoff in the event of a sale of the property.

    As the comments indicate, requiring notice to the Bank is sound practice to ensure that the Bank is aware of events that might trigger an obligation to recover AHP subsidy. Therefore, the final rule requires that the Banks receive such notice. However, FHFA is persuaded by the comments that requiring notice to both the Bank and a Bank designee could be disruptive to the Bank's established processes. Each Bank should have the discretion to determine whether to require notice to a designee as may be appropriate for that Bank's operations. Accordingly, the final rule allows a Bank to determine, in its discretion, whether to require notice to a designee of the Bank.

    Sale, transfer, or assignment. The final rule provides that the retention agreement applies not only to a sale of an owner-occupied unit, but also to a transfer or assignment of title or deed, during the retention period, as these forms of conveyance are the functional equivalent of sales.

    Calculation of AHP subsidy repayment based on net proceeds and household's investment. Consistent with § 1291.9(a)(7) of the current regulation, § 1291.15(a)(7) of the final rule requires an AHP-assisted household to repay a pro rata portion of the AHP subsidy if the unit is sold or refinanced during the five-year retention period, subject to certain exceptions. However, the final rule prescribes a “net proceeds” calculation for determining the amount of subsidy subject to recovery. This is a change from the current regulation, which requires repayment of a portion of AHP subsidy from any net gain realized upon sale or refinancing. The subsidy repayment calculation in the final rule also prioritizes return of the AHP-assisted household's investment in the home to the household. The pro rata subsidy amount subject to repayment cannot exceed what is available from the net proceeds of the sale or refinancing.

    Although the current regulation does not define “net gain,” as FHFA noted in the proposed rule, a majority of the Banks calculate the net gain as the sales price minus the original purchase price, purchaser and seller paid closing costs, and capital improvement costs, and then apply the pro rata repayment requirement. Some of these Banks have also deducted the AHP subsidy amount from the original purchase price. Other Banks have calculated the subsidy repayment amount using net proceeds identified on the Closing Disclosure, by deducting the senior mortgage debt from the sales price and, depending on the Bank, crediting or not crediting the household with its investments in the home. Some of these Banks have also added the AHP subsidy amount to the total proceeds.

    Because the proposed rule would have eliminated the requirement for owner-occupied retention agreements in all cases, it did not propose a specific method in the rule text for calculating the repayment of AHP subsidy. However, the NPRM noted that FHFA reviewed the subsidy repayment requirements of other government housing programs, and in particular, HUD's HOME Program. The NPRM discussed the Owner Investment Returned First approach under the HOME Program which, if applicable to the AHP, would calculate net proceeds available for recapture as the sales price minus outstanding superior debt and seller paid costs, with the seller recovering its entire investment first from the net proceeds, the Bank then recovering the AHP subsidy on a pro rata basis, and any remaining net proceeds returned to the seller. FHFA requested comments on the merits and disadvantages of this approach and the net gain approach from the standpoint of the AHP-assisted households and the Banks, and whether there are other subsidy repayment approaches FHFA should consider if a retention agreement requirement were retained in the final rule.

    FHFA received a number of comments on whether it should require a net gain or net proceeds calculation for determining the AHP subsidy repayment amount. One Bank supported the use of the net gain calculation discussed in the NPRM as the appropriate basis for calculating a pro rata repayment. In support of this recommendation, however, the Bank cited the benefits of coordinating the AHP calculation methodology with those in other government programs, such as those used by HUD, without specifying these HUD programs. Because the NPRM specifically described only one HUD program—the HOME Program—in the context of the owner-occupied retention agreement repayment calculation, and the version of the HOME Program calculation described in the NPRM is more similar to the net proceeds approach than the net gain approach, this commenter appears to have mistaken the net proceeds and net gain calculations. Another Bank stated that the net gain calculation has been effective for AHP-assisted home sales, but noted that the calculation does not work effectively for AHP rehabilitation grants because the AHP-assisted homeowners are frequently elderly or disabled, have lived in their houses for decades, and generally are unable to recall or do not have documentation of the original purchase price of their homes, a necessary component of the net gain calculation. Several Banks indicated support for an approach that would minimize the need to obtain information from the AHP-assisted households or third parties, noting that they have experienced frequent difficulty obtaining original purchase prices of the homes.

    A nonprofit organization expressed support for using the net proceeds recapture approaches as prescribed under the HOME Program. The commenter characterized the HOME Program approach as fair, and emphasized the value of promoting alignment between multiple government subsidy sources often used together in projects. A nonprofit economic research organization supported using a net proceeds approach, with AHP-assisted households able to recover their capital improvement costs, noting that this could help incentivize such households to maintain their properties. A Bank similarly commented that a repayment calculation that allows for recovery by households of their capital improvement costs would incentivize households in distressed areas to invest in such improvements.

    The final rule eliminates the requirement for retention agreements for AHP subsidies used solely for rehabilitation. This change will eliminate the administrative burden on Banks and members of attempting to obtain subsidy repayments from households and also relieve a financial burden on those households. For owner-occupied retention agreements where the household used the AHP subsidy for purchase, or for purchase in conjunction with rehabilitation, the final rule establishes a net proceeds calculation that addresses the above-described concerns with the net gain approach.

    The subsidy repayment calculation in the final rule also prioritizes return of the AHP-assisted household's investment in the home to the household. Specifically, § 1291.15(a)(7)(v) provides that the household shall repay the Bank the lesser of: (i) The AHP subsidy, reduced on a pro rata basis per month until the unit is sold, transferred, or its title or deed transferred, or is refinanced, during the AHP five-year retention period; or (ii) any net proceeds from the sale, transfer, or assignment of title or deed of the unit, or the refinancing, as applicable, minus the AHP-assisted household's investment. Section 1291.1 of the final rule defines “net proceeds” as the sales price minus reasonable and customary costs paid by the household and outstanding superior debt, or, in the case of a refinancing, the principal amount of the new mortgage minus reasonable and customary costs paid by the household and the principal amount of the refinanced mortgage. This calculation uses only information that is available from the settlement documents. The calculation also does not incorporate the subsidy originally provided to the AHP-assisted household, i.e., the subsidy is not added to the net proceeds or subtracted from any of the components of the net proceeds calculation. No AHP subsidy may be recovered by the Bank unless the net proceeds exceed the AHP-assisted household's investment.

    FHFA is persuaded by the commenters that the subsidy recovery calculation should account for the AHP-assisted household's investment in the home. Households invest resources in their homes in the form of down payments, transaction costs (such as broker's commission and title search fees), capital improvement costs, and repayment of senior mortgage principal. The household's investment should be retained and prioritized in light of the purpose of AHP subsidies to provide households with the benefits of homeownership. The “household's investment” is defined in § 1291.1 to mean reasonable and customary transaction costs paid in connection with the purchase of the unit, down payment, cost of capital improvements made, and any mortgage principal repaid since the purchase of the unit until the time of sale or refinancing during the AHP five-year retention period where the household documents these costs to the Bank or its designee. For example, a household could produce documentation of its expenditures associated with the installation of a new roof.

    Consistent with § 1291.9(a)(7)(ii) of the current regulation, the final rule requires that the AHP subsidy be reduced on a pro rata basis for the time that the household owned the unit until its sale or refinancing. However, whereas the current regulation provides generally for this reduction each year, the final rule requires a reduction each month, consistent with current Bank practice, as provided below:

    ER28NO18.000

    The final rule provides that the Bank shall recover the lesser of: (i) The pro rata subsidy amount; or (ii) the net proceeds minus the household's investment.

    Exception where the subsequent purchaser is low- or moderate-income. Consistent with § 1291.9(a)(7)(ii) of the current regulation, § 1291.15(a)(7)(ii)(B) of the final rule provides an exception to the AHP subsidy repayment requirement if the AHP-assisted unit is sold to a low- or moderate-income household. However, in contrast to the current regulation, the final rule provides methods of evaluating the subsequent purchaser's income in the absence of actual documentation. In such cases, the Bank or its designee shall determine the subsequent purchaser's income using one or more proxies that are reliable indicators of the subsequent purchaser's income, which may be selected by the Bank pursuant to guidance that FHFA will issue on proxies and which must be included in the Bank's AHP Implementation Plan. The requirement will become effective upon issuance of the guidance.

    Neither the Bank nor its designee is required to request or obtain the subsequent purchaser's income, but must evaluate any income documentation if made available. As noted in the proposed rule, the subsequent purchaser of an AHP-assisted unit is under no obligation to provide income documentation to the Bank or member. This has made it difficult for the Banks and their members to determine subsequent purchasers' incomes in order to determine whether the subsidy repayment exception applies. The current regulation is silent on the use of proxies in evaluating a subsequent purchaser's income. At least one Bank, however, has applied a proxy, under limited circumstances, to evaluate subsequent purchasers' incomes, in light of these operational constraints.

    FHFA requested comments on what approaches should be specified in the retention agreement, if retained in the final rule, that would provide a reasonable basis to assume that the subsequent purchaser of an AHP-assisted unit is likely to be low- or moderate-income, including proxies that could serve this purpose such as the following: Certification from the subsequent purchaser or a third party that the subsequent purchaser's income is at or below the low- or moderate-income limit; evidence that the subsequent purchaser is receiving direct homebuyer assistance from another government program with household income targeting requirements substantially equivalent to those of the AHP; purchase price of the AHP-assisted unit is less than the median home price in the area; the AHP-assisted unit is located in a census tract or block group where at least 51 percent of the households are low- or moderate-income; or Federal Housing Administration (FHA) or other underwriting standards indicate that the income required to purchase the AHP-assisted unit at the purchase price is low- or moderate-income.

    Commenters generally offered mixed opinions on the use of proxies, providing a variety of responses addressing which proxies would serve as acceptable methods for likely determining the income of the subsequent purchaser. A Bank supported the use of two proxies: Third-party certifications; and evidence that the subsequent purchaser was receiving direct homebuyer assistance from another government program. The Bank noted that using median home price and census tract income data may not be reasonable approaches as these data points would not adequately recognize or track areas affected by gentrification. The Bank asserted that gentrification occurs gradually and that median sales price and census tract data would not reflect investor purchases and sales to new or higher-income populations.

    Another Bank supported the use of third-party certifications, evidence that the subsequent purchaser was receiving direct homebuyer assistance from another government program, and FHA or other underwriting standards. A nonprofit organization supported use of the latter two proxies.

    The nonprofit organization objected to the use of geographically-based proxies, such as the purchase price of the AHP-assisted unit relative to area median home price, or location of the unit in a census tract or block group where at least 51 percent of the households are low- or moderate-income, because higher income homebuyers could purchase homes in low-income neighborhoods or census tracts. Another nonprofit organization stated that certain portions of distressed neighborhoods may be more upscale than nearby sections due to the presence of certain amenities, such as water features and golf courses. The commenter also opposed the use of third-party certifications, stating that it had witnessed significant unintended consequences of certification requirements in the context of FHA insurance and the foreclosure process.

    A nonprofit organization encouraged the use of person-based proxies, such as evidence that the homebuyer received down payment assistance or participated in first-time homebuyer programs or family self-sufficiency programs, rather than geographically-based proxies, stating that geographically-based proxies fail to account for gentrification. The commenter stated, however, that self-certification or certain types of third-party certification (by the loan originator, for example) would be adequate.

    One Bank expressed concern generally about the exception to the subsidy repayment requirement for sale to a low- or moderate-income purchaser, noting that the subsequent purchaser's income is not correlated to the AHP-assisted household's income. The Bank asserted that the subsidy repayment exception results in different treatment of similarly situated AHP-assisted households based on the subsequent purchaser's income. Another Bank objected to any requirement for a Bank or member to obtain sensitive income information from a subsequent purchaser with which neither institution has a contractual relationship.

    FHFA has considered the comments regarding the use of proxies in the AHP and determined that the use of certain proxies will help ensure that Banks and members are not requiring repayment of subsidy by AHP-assisted households in cases where the subsequent purchaser is low- or moderate-income. Therefore, FHFA will require that Banks use one or more proxies that are reasonable indicators that the subsequent purchaser is likely a low- or moderate-income household, pursuant to Agency guidance. FHFA acknowledges commenters' discussions of the limitations of the proxies included in the NPRM. The Agency notes that as approximations, no proxy will be able to definitively determine the income of the subsequent purchaser.

    AHP subsidy repayment exception for de minimis subsidy amount. Section 1291.15(a)(7)(ii)(C) of the final rule provides for an exception to the AHP subsidy repayment requirement for AHP-assisted households where the amount of AHP subsidy subject to repayment pursuant to the calculation in § 1291.15(a)(7)(v) is $2,500 or less. Under that provision, if the pro rata subsidy amount is $2,500 or less, calculation of net proceeds is unnecessary. The current regulation does not provide for an exception to the AHP subsidy repayment requirement for “de minimis” amounts of AHP subsidy subject to repayment.

    FHFA requested comments in the proposed rule on whether, if the owner-occupied retention agreement requirement were retained in the final rule, there should be an exception to AHP subsidy repayment where the amount of subsidy subject to repayment, after calculating the net proceeds or net gain, is $1,000 or less. A number of commenters specifically supported a $1,000 de minimis threshold. For example, a state government housing authority, an individual commenter, and a Bank stated that at a net gain of $1,000, the administrative cost of ensuring repayment generally exceeds the value of any recaptured AHP subsidy. A national nonprofit intermediary recommended a de minimis threshold of greater than $2,000, stating that this amount constitutes a reasonable balance between the need for sound Program stewardship and asset building for low- or moderate-income families. An affordable housing policy organization and a national trade organization recommended a de minimis threshold of at least $5,000. A nonprofit consumer organization supported FHFA establishing the de minimis threshold amount for the Banks, and suggested that it be adjusted using an inflator based on the Agency's house price index so that it remains reasonable as home prices escalate.

    The affordable housing policy organization stated that if the original AHP subsidy amount was $5,000 or less, there should be no subsidy repayment requirement, as such a small amount of subsidy would be unlikely to trigger flipping, and the transaction costs would nullify the value of the AHP subsidy. A community-based affordable housing financing organization and a community bank made a similar recommendation where the original AHP subsidy was $7,500 or less, or $10,000 or less, respectively, on the basis that the administrative expense was likely to exceed the value of the investment, and households should be entitled at a minimum to recover their required investment at the time of sale, net of AHP repayment so as not to impose financial injury.

    The Banks supported a “de minimis” threshold exception to the AHP subsidy repayment requirement, but recommended that the amount of the threshold be determined by each Bank based on the specific facts and circumstances of its district, rather than set by FHFA in the regulation. One Bank stated that the Banks should be authorized to adjust the de minimis threshold over time to account for housing market fluctuations and inflation. Another Bank suggested that the Banks be permitted to establish a de minimis amount based on a percentage of the original AHP subsidy amount, rather than a fixed dollar amount, because of the variations in the size of AHP subsidy amounts provided by the different Banks. A nonprofit organization recommended requiring each Bank to establish a de minimis threshold based on the Bank's and its members' actual administrative costs for assigning a lien on a property and calculating repayments of subsidy. The commenter stated that applying a de minimis threshold would avoid economic waste, but that support of a prescribed amount was impossible without further data.

    FHFA has considered the comments and has decided to establish a de minimis threshold of $2,500 in the final rule. As discussed in the NPRM and underscored by the comments, establishing a de minimis threshold of $2,500 may deter flipping of AHP-assisted units, while at the same time minimize the financial burden on low- or moderate-income households of having to repay AHP subsidy if they sell their homes during the AHP retention period. The underlying policy of the AHP has always been that the purpose of the AHP subsidy is to enable low- or moderate-income households to receive the benefits of homeownership including appreciation in the value of their homes and, thus, to minimize any AHP subsidy repayments. A $2,500 threshold will also reduce the administrative obligations of the Banks and members associated with recovering AHP subsidies.

    In response to the comments to adopt a de minimis threshold greater than $1,000, FHFA analyzed Bank data for set-aside grants awarded to households in 2012 and subsequently repaid during the five-year retention period ending in 2017. The data indicate that 1,080 grants of a total 10,203 set-aside grants awarded in 2012 were repaid during that time period. FHFA queried the data to determine how many of those grants would have been subject to de minimis thresholds of $2,000 or $2,500. The Agency's analysis revealed that at a $2,000 de minimis threshold, 683 of the 1,080 repaid grants, which is approximately 2 out of every 3 repaid grants, or 65 percent, would have been exempted from repayment. At a $2,500 de minimis threshold, 783 of the 1,080 repaid grants, which is approximately 3 out of every 4 repaid grants, or approximately 73 percent, would have been exempted from repayment.

    Based on this data, FHFA has decided to set the de minimis threshold exception for AHP subsidy repayment at $2,500. This will result in fewer households subject to subsidy recapture, thereby enabling households to benefit more from appreciation in the value of their homes, and reduce the Banks' operational expenses associated with the subsidy repayment process. FHFA set the de minimis threshold at a fixed dollar amount, rather than a percentage that varies based upon the grant amount, for ease of implementation by the Banks, members, and households. FHFA considered requiring each Bank to establish a de minimis threshold based on the actual administrative costs incurred by the Bank and its members for assigning liens on properties and calculating subsidy repayments, but did not receive any comments or other information quantifying the actual administrative costs that FHFA could evaluate. FHFA also opted not to index the de minimis threshold to an inflator based upon the Agency's house price index, in order to provide a definitive de minimis threshold for AHP stakeholders. However, FHFA may consider adjusting the de minimis threshold in the future to account for house price fluctuations and Bank use of the new authority to establish higher set-aside grant amounts per household.

    Other exceptions to subsidy repayment. Consistent with § 1291.9(a)(7)(ii) of the current regulation, § 1291.9(a)(7)(ii) of the final rule provides that the obligation to repay a pro rata portion of the AHP subsidy amount upon sale or refinancing does not apply if the unit was assisted with a permanent mortgage loan funded by an AHP subsidized advance. Also consistent with the current regulation, the final rule provides an exception to repayment obligation if, following a refinancing, the unit continues to be subject to a deed restriction or other legally enforceable retention agreement or mechanism.

    Termination of AHP subsidy repayment obligation. Section 1291.15(a)(7)(iv) of the final rule clarifies that the obligation to repay AHP subsidy to a Bank terminates not only after any event of foreclosure, but also after transfer by deed in lieu of foreclosure, assignment of an FHA mortgage to HUD, or death of the owner(s) of the unit. This is consistent with guidance FHFA has provided to the Banks clarifying that transfer by deed in lieu of foreclosure is the functional equivalent of foreclosure, facilitating coordination of the AHP with FHA requirements, and clarifying that the heirs of the AHP-assisted homeowner are not subject to any AHP subsidy repayment obligation upon the death of such homeowner.

    The proposed rule requested comments on whether this clarification should be made in the final rule if FHFA retained the current requirement for owner-occupied retention agreements in the final rule. The Banks and a trade organization favored including the clarifying language in the final rule. One Bank stated that the clarification would be useful for members and project sponsors using the AHP Bank in that it would help the Banks resolve ongoing issues with homebuyers using FHA loans as the underwriters flag the loans if this language is missing from the AHP retention agreements. The Bank also indicated that elderly owners are sometimes reluctant to sign the AHP retention agreement for fear that the potential AHP subsidy repayment obligation will fall on their beneficiaries upon their death(s).

    Retention agreements for rental projects. The final rule retains § 1291.9(a)(8) of the current regulation, which contains the requirement for AHP 15-year retention agreements for rental projects, with several changes that are discussed below. Current § 1291.9(a)(8) provides that if a rental project is sold or refinanced during the 15-year retention period, the full amount of the AHP subsidy must be repaid to the Bank, unless certain exceptions apply.

    Notice to the Bank or Bank designee. In a change from the current regulation and proposed rule, the final rule provides that the retention agreement for rental projects shall include a requirement that notice of a sale or refinancing of the rental project during the AHP 15-year retention period be provided to the Bank and, in its discretion, to a designee of the Bank. This is consistent with the change made for owner-occupied retention agreements discussed above. The current regulation requires that such notice be provided to the Bank or its designee. The proposed rule would have provided that the notice be provided to both the Bank and its designee. The NPRM stated that requiring notice to both the Bank and its designee (typically a member) would facilitate Program operations by giving the Bank simultaneous notice with the Bank's designee (if the Bank has one), and could facilitate repayment of AHP subsidy to the Bank in cases where a member subsequently fails and is subject to receivership actions by other federal agencies.

    A Bank and a nonprofit intermediary supported the proposal. The Bank stated that owners of multifamily properties often do not have other incentives to provide the Bank or its member with notice, and without notice to the Bank, the Bank might find it difficult to know the identity of the acquiring owner in the case of a sale, or whether the subsidy should remain with the property or the Bank should request repayment. A nonprofit lender recommended providing the Banks discretion regarding whether to require that project owners provide the notice to the Banks or designees. Two Banks opposed any change in the notice requirement because they address issues directly with the project sponsor. One Bank also stated that providing notice to the member may be viewed as imposing additional obligations on the member, which could discourage members' use of the AHP.

    For the same reasons discussed above under the owner-occupied retention agreements, the final rule requires that notice be provided to the Bank and, in its discretion, to a designee of the Bank.

    Sale, transfer, or assignment. Consistent with proposed § 1291.15(a)(7), § 1291.15(a)(8) of the final rule clarifies that the retention agreement applies not only to a sale of the rental project, but also to a transfer or assignment of title or deed, during the AHP 15-year retention period, as these forms of conveyance are the functional equivalent of sales. FHFA received no comments on this provision.

    Project sponsor qualifications. The final rule relocates current § 1291.5(c)(10) on project sponsor qualifications to § 1291.15(b)(2), and makes a number of changes from the proposed rule. Specifically, the final rule requires the Banks to evaluate the qualifications of, and any covered misconduct by, the project sponsor at AHP application, and prior to each AHP subsidy disbursement. The Bank's AHP subsidy application form and AHP subsidy disbursement form (or other related documents) must include a requirement for the project sponsor to certify to this effect. The Banks will not be required to evaluate the qualifications and any misconduct of the project sponsor's affiliates and team members, including general contractors, as proposed. The final rule does not include the proposed rule's references to the project sponsor's affiliates and team members, including general contractors, in the sponsor qualifications and Agreements sections, as proposed, because the definition of “sponsor” is not being expanded to include such parties.

    Section 1291.1 of the current regulation defines the “sponsor” of a project as a nonprofit, for-profit, or public entity meeting one of four specific criteria. Section 1291.5(c)(10) provides that for a project to be eligible to receive AHP subsidy, the project sponsor must be qualified and able to perform its responsibilities as committed to in its AHP application. Paragraphs (b)(4) and (g)(3) of § 1291.5 require a Bank to verify that the project meets its AHP application commitments at AHP application, and prior to each disbursement of AHP subsidy to the project, respectively.

    The proposed rule would retain the definition of “sponsor” in current § 1291.1, but would have revised § 1291.5(c)(10) by extending the qualifications requirement to the project sponsor's affiliates and team members, including the general contractor. Thus, at AHP application, and prior to each AHP subsidy disbursement to a project, a Bank would have been required to determine whether the project sponsor, as well as all of its affiliates and team members, are qualified to perform the AHP project application commitments. The proposed rule would have added a requirement in the Agreements section of the regulation that, at AHP application, and prior to each disbursement of AHP subsidy to the project, the project sponsor must certify, or respond to specific questions about, whether it and its affiliates and team members have engaged in any misconduct as defined in FHFA's Suspended Counterparty Program regulation or by the Bank. The Bank's AHP subsidy application form and subsidy disbursement forms, or other related forms, would have been be required to include the qualifications criteria and certification or questions about any misconduct to be completed by the project sponsor.

    Commenters who responded to this issue overwhelmingly opposed the proposal. A nonprofit intermediary commented that evaluating the qualifications of the general contractor and its team members at AHP application would be problematic because the project sponsor has yet to identify them at the AHP application stage. The nonprofit intermediary and a wide diversity of other commenters noted that project sponsors often select the general contractors after all funding sources are committed to the project and the project is ready to move forward to loan closings and construction. The nonprofit intermediary also stated that other financing sources frequently require that project sponsors conduct rigorous bidding processes in selecting general contractors, making a parallel evaluation by the Banks of the general contractors' qualifications unnecessary and overly burdensome.

    The Bank Advisory Councils urged FHFA to maintain the current regulatory requirement for project sponsor qualifications and require that project sponsors certify compliance with the FHFA's Suspended Counterparty Program regulation only prior to AHP subsidy disbursement. The Bank Advisory Councils stated their preference for the Banks to be able to rely on the due diligence and capacity review by other funders of project sponsors and their affiliates and team members. The Bank Advisory Councils noted that the Banks currently have processes in place to monitor project progress and the project sponsor's performance.

    The Banks asserted that requiring that the Banks' assessment of project sponsor capacity include compliance with FHFA's Suspended Counterparty Program regulation by all parties is unnecessary. They stated that the Banks lack privity of contract with general contractors and other parties and, therefore, cannot compel them to disclose such information. The Banks emphasized this point in particular with respect to owner-occupied rehabilitation grants that involve multiple contractors. They also commented that other funding sources perform due diligence reviews of the general contractor.

    A Bank pointed out that while the term “sponsor” is defined in the current regulation and proposed rule as a nonprofit, for-profit, or public entity meeting one of four specified criteria, the proposal states in § 1291.15(b)(2) that “a project sponsor includes all affiliates and team members such as the general contractor.” The Bank stated that if the term “sponsor” is intended to include affiliates and team members, the Bank would need to consider whether its AHP subsidy collection efforts and settlements in the event of project noncompliance could extend beyond the assets of the project sponsor to include those of the project sponsor's affiliates and team members. A nonprofit intermediary noted that the proposed rule did not provide guidance on the definitions of “affiliate” and “team member.”

    A nonprofit developer commented that the proposal would “cut out” team members that have yet to establish a track record in the industry from AHP participation. Likewise, a housing authority stated that the proposal has the potential to unreasonably exclude, or discriminate against, AHP applicants with new or less tested team members, but who possess sufficient overall strength as a team to be successful.

    FHFA's intent for the proposal was to ensure that, in addition to the project sponsor, the project sponsor's affiliates and team members have the necessary qualifications to perform the AHP application commitments. The proposal was also intended to enable a Bank to identify any misconduct by the project sponsor and any affiliates or team members so that the Bank could determine whether it should accept the project sponsor's AHP application or approve requests from the project sponsor for AHP subsidy disbursement. Banks would have the latitude to define “misconduct” to include types of misconduct beyond those specifically addressed by FHFA in the Suspended Counterparty Program regulation. Therefore, if a Bank subsequently determined that a project sponsor's certification was false and that the project sponsor or its affiliates and team members were not qualified to perform the AHP application commitments, the Bank would have a contractual basis to cancel the project sponsor's AHP application and deny its requests for disbursement of AHP subsidy. The Bank would also have a basis to reject future AHP applications from the project sponsor, or to reject AHP applications that include the project sponsor's affiliates or team members, on the basis that the project sponsor is not qualified to carry out its AHP responsibilities.

    As noted by the commenters, however, project sponsors generally have not selected their general contractors at the time of AHP application. Thus, it would be impossible for project sponsors to evaluate and certify as to the qualifications and any misconduct of their general contractors and the general contractors' subcontractors at the time of AHP application. Concerning the comments on the Banks' lack of privity with the general contractors and that an evaluation by the Banks of the general contractors' qualifications parallel to that of other funders is unnecessary, FHFA notes that it did not propose that the Banks evaluate or underwrite directly the general contractors' qualifications, but rather that the Banks obtain certifications from the project sponsors on their general contractors' qualifications. The Agency's decision not to adopt the proposed requirement for evaluation of the general contractor's qualifications should alleviate commenters' concerns that projects with less experienced team members would be excluded where the project team as a whole possesses the capacity to successfully develop the project.

    Accordingly, the final rule requires the Banks to obtain a certification from the project sponsor of only its own qualifications and lack of misconduct at the time of AHP application and at AHP subsidy disbursement.

    The final rule makes two clarifications to the proposed rule language. First, it changes the reference to “misconduct” to “covered misconduct” to reflect the terminology in the Suspended Counterparty Program regulation. Second, it states that if a Bank adopts its own definition of “covered misconduct,” that definition must incorporate the definition of “covered misconduct” in the Suspended Counterparty Program regulation at a minimum.

    Application to existing AHP agreements. The final rule relocates § 1291.9(c) of the current regulation to § 1291.15(c), and revises the provision to make it applicable only to existing AHP agreements where the Bank is a party. The provisions of the AHP regulation, as amended from time to time, are deemed incorporated into all such agreements. This amendment recognizes that FHFA regulates the Banks and not third parties. FHFA will provide guidance, as necessary, for specific situations where a Bank is not a party to existing AHP agreements and questions arise as to applicability of AHP amendments to those agreements.

    § 1291.16 Conflicts of Interest

    Consistent with the proposed rule, the final rule relocates current § 1291.10, which addresses conflicts of interest regarding financial interests of Bank directors, Bank employees, Bank Advisory Council members, and their family members, unchanged to § 1291.16. FHFA did not propose any changes to this section.

    A Bank commented that the terms “financial interest” and “family member” were overly broad and should be defined in accordance with comparable terms in FHFA's regulation governing conflict of interest policies for Bank directors.17 The Bank identified several ordinary course financial transactions that it said should not be considered “financial interests” for AHP conflict of interest purposes because they would not be expected to motivate Bank directors, Bank employees, or Bank Advisory Council members to influence decisions by the Bank regarding the evaluation, approval, funding, monitoring, or any remedial process for an AHP project. Examples cited included the purchase of an insurance product, an investment in a 401(k) account, and a retirement pension plan. FHFA notes that the scope of the AHP conflict of interest policy provision in § 1291.16 is limited to financial interests “in projects” that are the subject of a pending or approved AHP application and, thus, does not apply to the types of routine transactions cited by the Bank.

    17 12 CFR 1261.11(f)(1), (2).

    Subpart C—General Fund and Targeted Funds § 1291.20 Establishment of Programs

    General Fund. Consistent with the proposed rule, § 1291.20(a)(1) of the final rule replaces current § 1291.5(a) by requiring each Bank to establish a General Fund pursuant to the requirements of this part. “General Fund” is the new term for the current “Competitive Application Program.”

    Eligibility requirements. Consistent with the current regulation, § 1291.20(a)(2) of the final rule provides that a Bank may not adopt eligibility requirements for its General Fund except as specifically authorized in the regulation.

    FHFA did not receive comments on these provisions.

    Targeted Funds. As proposed, § 1291.20(b)(1) of the final rule provides that a Bank may establish, in its discretion, a maximum of three Targeted Funds, on a phased-in basis, to address specified affordable housing needs in its district. Targeted Funds are further discussed above under Section III.B. and § 1291.12(c)(1) (phase-in of funding allocations).

    Proposed § 1291.20(b) would have prohibited a Bank from establishing a Targeted Fund unless at least 12 months had passed since the publication of the Bank's TCLP. The final rule addresses the timing of the establishment of Targeted Funds in § 1291.13(d) and (e), and in § 1290.6(c) of the Community Support Requirements regulation. Comments received on the proposed timing requirements are addressed under § 1290.6 above.

    The final rule establishes the phase-in requirements for a Bank's establishment of Targeted Funds. A Bank may establish one Targeted Fund in the first year that it establishes a Targeted Fund. If a Bank has previously administered at least one Targeted Fund in any preceding year, a Bank may establish two Targeted Funds. If a Bank has previously administered two Targeted Funds in any preceding year, it may establish three Targeted Funds. The phase-in requirements help ensure that a Bank has demonstrated its ability to manage the risks associated with administering more than one competitive program in a year.

    Eligibility requirements. As discussed above under Section III.B., § 1291.20(b)(2) of the final rule adopts the proposed requirement that the Banks adopt and implement parameters (referred to as “controls” in the proposed rule), as specified in their AHP Implementation Plans, for ensuring that each Targeted Fund is designed to receive sufficient numbers of applicants for the amount of AHP funds allocated to the Targeted Fund to facilitate a robust (referred to as “genuinely” in the proposed rule) competitive scoring process. In addition, as with General Funds, the final rule provides that the Banks may not adopt eligibility requirements for their Targeted Funds except as specifically authorized in the regulation.

    The Banks questioned whether this proposed requirement was designed to measure sufficiency in terms of a Bank's approach in soliciting applications, or based on the number of applications actually received. Two of those Banks suggested that the measurement be based on the structure of the Targeted Fund and not on the actual number of applications received. FHFA notes that the language stating that the Targeted Fund is “designed to receive sufficient number of applicants” indicates that the requirement pertains to the scope and scoring methodology of the Targeted Fund, and is not a guarantee of the actual number of applications received. Therefore, no change to this language is made in the final rule.

    § 1291.21 Eligible Applicants

    Member applicants. As proposed, the final rule relocates the eligibility requirement for member applicants in § 1291.5(b)(2) of the current regulation to § 1291.21(a), without changes except that the reference to the “competitive application program” is replaced with references to the General Fund and any Targeted Funds established by the Bank. FHFA did not receive any comments on this provision.

    Project sponsor qualifications. As proposed, the final rule relocates the eligibility requirements in § 1291.5(c)(10) of the current regulation for project sponsors applying for AHP funds in conjunction with members to § 1291.21(b). The final rule retains the current requirement that a project sponsor must be qualified and able to perform its responsibilities. As further discussed under § 1291.15(b)(2) above, the final rule does not include the proposal to extend the qualifications requirement to include the project sponsor's affiliates and team members, including general contractors.

    § 1291.22 Funding Rounds; Application Process

    As proposed, the final rule relocates the funding round and application process requirements in § 1291.5(b)(1), (b)(3), and (b)(4) of the current regulation to § 1291.22. The final rule substitutes the term “rounds” for “periods” to reflect common usage among the Banks and AHP stakeholders. FHFA did not receive any comments on this section.

    § 1291.23 Eligible Projects

    Eligibility requirements. Consistent with the proposed rule, new § 1291.23 of the final rule sets forth the eligibility requirements for AHP projects, and comprises a number of provisions related to what constitutes an eligible project in § 1291.5(c) of the current regulation. This section includes the eligibility requirements for owner-occupied and rental housing projects, projects that are or are not occupied, project feasibility, timing of AHP subsidy use, retention agreements for owner-occupied and rental projects, and compliance with fair housing laws. In a change from the proposed rule, the current eligibility requirement for a five-year retention agreement for owner-occupied projects in § 1291.5(c)(9)(i) where the AHP subsidy is used for purchase, or purchase in conjunction with rehabilitation, is retained in § 1291.23(d)(1) of the final rule, as discussed in Section III.D. above.

    Tenant income qualification in rental projects. Section 1291.23(a)(2)(ii) of the final rule provides that, in order for an occupied rental project to satisfy the income targeting commitments in the AHP application at initial occupancy after completion of the purchase or rehabilitation, the project must have a relocation plan for current occupants that is approved by one of the project's federal, state, or local government funders, or a reasonable relocation plan that is otherwise approved by the Bank according to standards included in its AHP Implementation Plan. The proposed rule would have required a relocation plan approved by one of the project's primary funders.

    Under the current regulation, for rental projects that are not occupied at the time of application and are approved for AHP subsidy, the households must have incomes meeting the income targeting commitments in the approved AHP application upon initial occupancy of the rental units. For projects involving the purchase or rehabilitation of rental housing that are occupied at the time of AHP application, the households must have incomes meeting the income targeting commitments in the approved AHP application at the time of the AHP application. The purpose of qualifying current occupants' incomes at the time of AHP application is to discourage displacement of occupants whose incomes are higher than the income commitments in the approved AHP application.

    FHFA specifically requested comments on how to encourage preservation of rental projects through the AHP while discouraging displacement of current occupants with incomes higher than those targeted in the AHP application, including whether the proposed requirement for a relocation plan approved by the primary funder of the project is reasonable. A state agency and a bank supported the proposed requirement for submission of a relocation plan, stating that it would provide adequate protection of tenants from displacement. A trade organization recommended that the Banks have discretion to either establish such a policy or to defer to policies established for other subsidy programs assisting the project.

    Several other commenters and a Bank noted that there may be cases where review by the Bank may be necessary to determine whether a relocation plan provides adequate tenant protections and assistance. A nonprofit intermediary recommended that the Banks have discretion to evaluate the appropriateness of tenant protections in the context of the local market. Another Bank, a CDFI, and a nonprofit developer stated that for multifamily preservation projects that have no relocation plans because they lack government funding or their primary funders are commercial banks, the Bank should have authority to approve a relocation plan. The Bank reported that in 15 percent of its rental rehabilitation projects, AHP funds and the projects' replacement reserves were the only sources of funds and, thus, the projects were not subject to relocation plans approved under a government program.

    The majority of commenters that addressed this issue, including nonprofit intermediaries, trade associations, a lender, and nonprofit developers, recommended that FHFA require the Banks to apply either a “next tenant” policy or a “grandfather” policy to existing tenants who exceed the AHP income commitments in order to avoid displacement of those tenants from the project. Under a “next tenant” policy, the project's current tenant income mix would not be evaluated at the time of AHP application, but the project owner would be required to rent the unit, when it becomes vacant, of a tenant not meeting the AHP income commitments to a tenant who meets those commitments. In contrast, a “grandfather” policy would deem tenants in previously or currently-income restricted units who were income-eligible at the time they moved in but whose incomes subsequently exceed the income-eligibility thresholds, as income-eligible under the AHP. Two commenters stated that a “grandfather” policy would be consistent with HUD requirements, which prohibit the permanent relocation of existing residents in many preservation transactions, as well as with proposed legislative changes to LIHTC policy and the California Tax Credit Allocation Committee's regulations. One commenter stated that without use of a “grandfather” policy, preservation projects financed through HUD Sections 202 and 236, and the Rental Assistance Demonstration program, would be disadvantaged in the AHP application process. Another commenter recommended that the relocation requirement for currently assisted properties be consistent with other federal program requirements.

    After considering the comments, FHFA is adopting in the final rule the proposal to allow income qualification of current occupants at initial occupancy after completion of the purchase or rehabilitation, at the Bank's discretion provided there is a relocation plan for current occupants that is approved by one of the project's federal, state, or local government funders, or a reasonable relocation plan for current occupants that is otherwise approved by the Bank. By requiring that the relocation plan be government-approved, or otherwise approved by the Bank subject to a reasonableness standard, as opposed to any relocation plan approved by one of the project's primary funders, the final rule helps ensure that the relocation plan meets standards for adequate relocation protections and assistance to tenants. Allowing a Bank to approve a reasonable relocation plan also responds to the commenters' concerns about projects where there is no government-approved relocation plan, or where the Bank has determined that some types of relocation plans typically approved in its district may not provide adequate tenant relocation protections.

    FHFA acknowledges the value in the commenters' recommendations that the Banks be allowed to “grandfather” existing tenants based on their incomes when they moved into the project. However, FHFA has not included this recommendation in the final rule because the income targeting requirements for other federal and state programs could differ substantially from the AHP income targeting requirements (e.g., targeting units at 60 percent, 65 percent, or 80 percent AMI, as opposed to the AHP income targeting requirement of 50 percent AMI for at least 20 percent of the units in the rental project).

    FHFA is also not adopting commenters' recommendations for a “next-tenant” policy in the final rule. While the approach would avoid displacement of current tenants not meeting the AHP income targeting commitments, it could be a number of years before these tenants move out of the building and AHP income-eligible tenants replace them, meaning the project would not be serving AHP-income eligible households for some period of time. In addition, the practice could increase the income-targeting monitoring burden on the Banks and project sponsors.

    § 1291.24 Eligible Uses

    Eligible uses of AHP subsidy. Consistent with the proposed rule, § 1291.24(a) of the final rule groups together a number of provisions in § 1291.5(c) of the current regulation related to eligible uses of AHP subsidy. These include: use of the AHP subsidy for purchase, construction, or rehabilitation of owner-occupied or rental housing; determinations of the need for the AHP subsidy, including sponsor-provided permanent financing; reasonable project costs determinations; reasonable financing costs determinations; eligible counseling costs; eligible refinancing; optional Bank district eligibility requirements; and calculation of the AHP subsidy. The provisions and any changes are discussed below.

    Need for AHP subsidy. The final rule relocates the need for AHP subsidy eligibility requirement in § 1291.5(c)(2) of the current regulation to § 1291.24(a)(3), but does not adopt the proposed changes. FHFA plans instead to separately address the need for subsidy determination.

    The current regulation requires that rental projects establish their eligibility for AHP subsidy by demonstrating: (1) A need for the AHP subsidy; (2) developmental and operational feasibility; and (3) project cost reasonableness. The regulation states that the estimated sources of funds for a project must equal its estimated uses of funds, as reflected in the project's development budget. Where the project's uses of funds exceed its sources of funds (excluding the AHP subsidy), the difference is the project's need for AHP subsidy, which is the maximum amount the project may receive.

    As discussed in the NPRM, Banks and various stakeholders have asserted that the current regulatory language, as well as preamble language from an earlier AHP rulemaking, indicate that, for rental projects, the Banks are only required to review the project's development budget and not its operating pro forma in determining its need for AHP subsidy. The NPRM noted that FHFA's long-standing policy has been that the Banks review both the project development budget and the operating pro forma in making this determination.

    In an effort to address any misunderstandings or differences in views about the process and requirements for determining a rental project's need for AHP subsidy, the proposed rule would have required the Banks to review the project's operating pro forma, in addition to the development budget, consistent with FHFA's long-standing policy. As discussed in the NPRM, a Bank must review a rental project's development budget to determine whether a funding gap exists between the sources and uses of funds. Review of the project's operating pro forma enables the Bank to assess the reasonableness of the project's projected cash flow, which could have an impact on the Bank's assessment of the need for AHP subsidy. For example, a debt coverage ratio or cash flow amount that exceeds the Bank's feasibility standards could indicate that the project does not need the full amount of AHP subsidy requested because it will have sufficient funds from ongoing operations to repay the debt associated with developing the rental project. If so, the project may be able to supplant part, or all, of the AHP subsidy through other means.

    The NPRM included proposed guidance for evaluating that a project's cash flow and costs are reasonable, and how the Banks should perform the need for subsidy analysis in cases where: (1) Capitalized reserves exceed the Bank's project cost guidelines; (2) the project provides supportive services; and (3) the cash flow or debt coverage ratio exceeds the Bank's project cost guidelines.

    Numerous commenters, including the Banks, nonprofit advocacy organizations and intermediaries, trade associations, and nonprofit and for-profit developers, expressed views about the proposed regulatory change and guidance for determining the need for subsidy. A majority of the commenters opposed requiring the Banks to review a project's operating pro forma in addition to its development budget. A common concern raised was that the proposal could lead to cancellation of AHP subsidy awards due to a lack of need for the subsidy, negatively impacting individual projects and the overall Program. The commenters acknowledged the value of the operating pro forma in assessing the financial viability of a rental project, but not in determining the project's need for subsidy. The commenters emphasized that having a strong cash flow at some point during a project's lifecycle does not indicate that the project can borrow more funds or attract additional grant funding. One nonprofit affordable housing intermediary stressed that because AHP funds play a subordinate role in the production and financing of affordable housing, FHFA should not require the Banks to assess independently the reasonableness of a rental project's cash flow. The commenter stated that the Banks should be permitted to rely on cash flow and debt service parameters established by first position lenders and equity sources. The commenter and a nonprofit housing developer recommended that FHFA issue guidance encouraging the Banks to leverage the underwriting processes of other funding sources when making a need for subsidy determinations at application or at initial monitoring. One of the commenters also suggested that FHFA allow the Banks to rely on certifications by the project owner that the AHP funds were needed, or to structure AHP awards as loans or repayable grants that the project could repay from cash flow if funds remained.

    For rental projects providing supportive services, the proposed guidance in the NPRM recognized the challenges associated with the analysis of these projects since, under the Bank Act and the AHP regulation, AHP subsidy may not be used to fund supportive services expenses. The NPRM stated that the Banks should require a separate supportive services budget that captures income and expenses for all supportive services activities to ensure that the project can reasonably offer them. The NPRM indicated that for projects where a government entity provides operating subsidies that fund both housing operating costs and supportive services and the operating subsidies cannot be readily bifurcated, the operating pro forma should capture the supportive services income and expenses. The Banks and many other commenters stated that requiring creation of an operating pro forma for housing and a separate one for supportive services could result in an inaccurate accounting of costs. They recommended that supportive services expenses be treated as standard operating expenses and, therefore, included in the operating pro forma.

    The comments received in response to the proposed regulatory change and guidance reflect significant differences between the commenters' understanding of, and experience implementing, the requirement for determining need for subsidy and the Agency's rationale for addressing and clarifying the requirement. In light of these differences, the final rule does not adopt the proposed regulatory requirement for the Banks to review the operating pro forma in determining the need for AHP subsidy, and the proposed guidance is not included in the final rule preamble. Instead, FHFA plans to separately address the need for subsidy determination.

    Sponsor-provided permanent financing to homeowners. As proposed, the final rule relocates the requirements in § 1291.5(c)(2)(ii) of the current regulation for sponsor-provided permanent financing to § 1291.24(a)(3)(ii) with no changes from the current regulation. FHFA expects to initiate a rulemaking on this subject in the near future.

    The current regulation provides that when a Bank determines the need for AHP subsidy in homeownership projects where the sponsor extends permanent financing to the homebuyer, the sponsor's cash contribution (which is included in the project's cash sources of funds) shall include the present value of any payments the sponsor is to receive from the buyer, including any cash down payment from the buyer, plus the present value of any purchase note the sponsor holds on the unit. If the note carries a market interest rate commensurate with the credit quality of the buyer, the present value of the note equals the face value of the note. If the note carries an interest rate below the market rate, the present value of the note shall be determined using the market rate to discount the cash flows.

    Prior to the issuance of the proposed rule, some Banks and AHP stakeholders requested that FHFA eliminate this provision, citing the complexity of the calculation. Others suggested that the regulation should treat sponsors like revolving loan funds, on the basis that their financing model operates essentially as a revolving loan fund. FHFA specifically requested comments in the proposed rule on whether the current AHP requirements for sponsor-provided permanent financing are reasonable, including whether the sponsors have a need for AHP subsidy in light of their particular financing model, and whether the current method in the regulation for determining their need for AHP subsidy understates or overstates the amount of AHP subsidy needed. FHFA also requested comments on whether the regulation should consider sponsors using this financing model to be revolving loan funds and, if so, whether they should be subject to current or different AHP revolving loan fund requirements.

    A national intermediary and a number of its affiliates opposed the current AHP regulatory requirements for sponsor-provided permanent financing. They stated that the AHP regulation does not require any other lender to disclose how it obtains funds to lend to a homebuyer and that this is an unfair burden placed solely on sponsor-provided permanent mortgage lenders. Commenters stated that, from a practical and examination standpoint, the AHP subsidy must be disclosed on the Closing Disclosure, which shows the face value of the mortgage loan and demonstrates the pass through of the AHP grant to the homebuyer. The national intermediary further stated that the regulatory requirement was intended to show that due to lending money at a below market interest rate, the AHP subsidy is needed as a source for the discounted loan (present value of the loan). The commenter asserted, however, that since the “present value loan amount” is not on the Closing Disclosure, this creates an additional document for these organizations to create that is burdensome and provides no additional value to the Banks in evaluating the need for AHP subsidy.

    In view of the comments and the value of receiving further input on these issues, FHFA has not adopted any changes to these requirements in the final rule and intends to conduct rulemaking in the near future on sponsor-provided permanent financing.

    Prohibited uses of AHP subsidy. As in the proposed rule, § 1291.24(b) of the final rule includes the prohibited uses of AHP subsidy set forth in § 1291.5(c)(16) of the current regulation. These prohibited uses are: certain prepayment fees imposed by a Bank; fees imposed by a Bank for cancellation of a subsidized advance commitment; and processing fees charged by members for providing AHP direct subsidies to a project.

    As proposed, § 1291.24(b)(4) of the final rule adds that, consistent with current practice, capitalized reserves, periodic deposits to reserve accounts, operating expenses, and supportive services expenses are not eligible uses of AHP subsidy. The Banks concurred that supportive services expenses are not an eligible use of AHP subsidy. No comments were received on the other prohibited uses of AHP subsidy.

    Optional Bank district eligibility requirements—maximum subsidy limits. As proposed, § 1291.24(c) of the final rule retains § 1291.5(c)(15) of the current regulation, which authorizes a Bank to establish limits on the maximum amount of AHP subsidy available per member, per project, or per project unit in a single AHP funding round, and adds that a Bank may establish a maximum subsidy limit per project sponsor. This change and other changes are discussed below.

    Maximum subsidy limit per member each year. As proposed, the final rule removes the reference in the current regulation to “per member each year” as unnecessary because it can be factored into the subsidy limit per member in a single AHP funding round, especially as no Bank currently conducts more than one AHP funding round per year.

    Maximum subsidy limit per project sponsor. As proposed, the final rule revises the current regulation to allow a Bank to adopt a maximum subsidy limit per project sponsor in a single AHP funding round. A Bank might choose to establish such a limit in order to provide opportunities for smaller or less experienced project sponsors to compete successfully for AHP subsidies. On the other hand, a project sponsor limit could prevent worthy projects developed by larger, more experienced project sponsors from receiving AHP subsidy. FHFA specifically requested comments in the NPRM on the potential advantages and disadvantages of allowing the Banks to impose a maximum subsidy limit per project sponsor.

    One Bank supported the proposal on the basis that it would reduce the concentration of AHP awards in a small number of project sponsors. Several other commenters provided mixed or qualified views on the proposal. A Bank stated that a project sponsor subsidy limit could provide an opportunity for other types of project sponsors to participate, but it could also restrict project sponsors with otherwise competitive applications from receiving AHP awards. A trade association stated that a project sponsor subsidy limit could limit Bank exposure to risk associated with a single project sponsor and encourage diversification of project sponsors, but because project sponsors differ substantially in size, scale, geographic scope, capacity, and internal controls, individual AHP applications should be evaluated based on their merits without an arbitrary project sponsor subsidy limit. The commenter recommended that the Banks establish any project sponsor subsidy limit as a percentage of total AHP awards, so that it is high enough to allow a project sponsor to receive multiple awards in a single AHP funding round. A nonprofit affordable housing intermediary likewise supported awarding AHP subsidy based on the merits of individual applications, but acknowledged that having a project sponsor subsidy limit would make the AHP subsidy available to more project sponsors.

    Other commenters opposed providing the Banks discretion to adopt project sponsor subsidy limits. A nonprofit affordable housing intermediary commented that the Banks can have a much greater impact if they award AHP subsidy based on the merits of individual applications rather than setting an arbitrary maximum subsidy limit per project sponsor. Two nonprofit developers stated that the proposed project sponsor subsidy limit would penalize project sponsors that have multiple projects that score well and are eligible for subsidy awards. A trade organization stated that the proposed project sponsor subsidy limit would allow less qualified projects and project sponsors to benefit at the expense of better qualified projects and project sponsors whose applications exceed the subsidy limit, thereby eroding the transparency of the application approval process.

    After consideration of the comments, FHFA has decided to adopt the proposal in the final rule. Each Bank should have discretion to determine whether the benefits of establishing a project sponsor subsidy limit in its district outweigh its potential disadvantages, based on factors such as the characteristics of their project sponsor applicant pools, the record of accomplishment of experienced and less experienced project sponsors in receiving AHP subsidy awards, and the housing needs of the district.

    Number of maximum subsidy limits per Fund. Consistent with Agency guidance for the current Competitive Application Program and with the proposed rule, the final rule provides that a Bank may establish only one maximum AHP subsidy limit per member, per project, or per project unit for the General Fund and for each Targeted Fund, which shall apply to all applicants to the specific Fund. This requirement also applies to the newly authorized maximum subsidy limit per project sponsor. The purpose of this requirement is to ensure consistency, clarity, and a level playing field for all applicants to a specific Fund, and avoid administrative burdens for the Banks if they were permitted to determine different subsidy limits for different regions or types of projects.

    As proposed, the final rule further provides that the maximum AHP subsidy limit per project or per project unit may differ for each Fund. FHFA's intent in providing this flexibility is to allow the Banks to establish maximum subsidy limits for each Fund that addresses the specific characteristics of project applicants for that Fund. For instance, a Bank may want to establish a higher maximum subsidy limit per project for a Targeted Fund focused on certain geographies or development types in light of differences in housing development costs, such as high-cost areas or projects where most units contain three or more bedrooms to accommodate larger households. FHFA did not receive any comments on this proposal.

    Applications to multiple Funds—subsidy amount. Consistent with the proposed rule, § 1291.24(d) of the final rule provides that if an AHP application for a project is submitted to more than one Fund at the same time, the application for each Fund must be for the same amount of AHP subsidy. This will ensure that the project demonstrates the same need for AHP subsidy in each application. If a project sponsor applies for a different amount of AHP subsidy in each application, the Bank would communicate with the sponsor to determine which subsidy amount the Bank should evaluate for both applications. Otherwise, it would raise questions about whether the project would be over-subsidized if awarded the higher amount of subsidy. FHFA did not receive any comments on this proposal.

    § 1291.25 Scoring Methodologies

    As discussed in Section III.A. above, the final rule does not adopt the proposed outcome-based framework and instead revises the scoring-based project selection framework in the current regulation for the General Fund. New § 1291.25 addresses scoring methodologies for evaluating applications under the General Fund and Targeted Funds. Section 1291.25 retains much of the content in current § 1291.5(d)(1) through (4), with certain modifications discussed below. The requirements for the scoring criteria for the General Fund and Targeted Funds are included in new §§ 1291.26 and 1291.27, respectively.

    Written scoring methodologies. Section 1291.25(a)(1) of the final rule establishes requirements for the Banks' scoring methodologies that are generally comparable to current § 1291.5(d)(1) with changes to reflect the Banks' new authority to administer Targeted Funds. Consistent with the current regulation, a Bank's scoring methodologies must be written, and a Bank may not adopt additional scoring criteria or scoring points allocations except as specifically authorized by the regulation. Consistent with proposed § 1291.25(a), the final rule provides that the scoring methodology for each Fund may be different.

    Scoring points allocations. Section 1291.25(a)(2)(i) of the final rule establishes scoring points allocation requirements for the General Fund. Consistent with current § 1291.5(d)(2) and proposed § 1291.25(b), the final rule requires that a Bank allocate 100 points among the relevant scoring criteria. However, as discussed in Section III.A. above, the final rule revises the current minimum scoring points allocation requirements. Specifically, while the income targeting scoring criterion must still be allocated at least 20 points, and the remaining scoring criteria must still be allocated at least 5 points each, if a Bank adopts a scoring criterion for home purchase by low- or moderate-income households as an optional scoring criterion, the Bank may allocate fewer than the full 5 points to it, with the remainder of such points allocated to one or a combination of the other scoring criteria other than to the Bank district priorities scoring criterion. The scoring points allocation requirements are further discussed in connection with specific scoring criteria under § 1291.26 below.

    In addition, as proposed, the final rule provides that if a Bank adopts a scoring criterion under its Bank district priority for housing located in the Bank's district, the Bank may not allocate points to the scoring criterion in a way that excludes all out-of-district projects from its General Fund. This provision strengthens the statement in the preamble to the 2006 AHP final rule that a Bank should not use the scoring criterion in this way by explicitly prohibiting the allocation of points in such way. FHFA did not receive comments on this provision.

    For Targeted Funds, as proposed, § 1291.25(a)(2)(ii) of the final rule requires a Bank to allocate 100 points among all of the scoring criteria adopted by the Bank for the Targeted Fund. The final rule adds a requirement that a Bank may not allocate more than 50 points to any one scoring criterion for a Targeted Fund in order to ensure that applications are evaluated in a competitive process, taking all of the scoring criteria into account.

    Scoring tied applications. Section 1291.25(c) of the final rule adopts, as proposed, a requirement that each Bank establish and implement, as necessary, a scoring tie-breaker policy to address the case of two or more applications to its General Fund or any Targeted Fund receiving identical scores in the same AHP funding round and there is insufficient AHP subsidy to approve all of the tied applications but sufficient subsidy to approve at least one of them. The specific requirements in the final rule for the scoring tie-breaker policy are consistent with guidance FHFA has provided to the Banks and with the proposed rule, except that the final rule provides that the approval of tied applications as alternates is only applicable if the Bank has adopted a written policy to approve alternates for funding under the applicable Fund. Approval of alternates is discussed further under § 1291.28(b) below. FHFA did not receive comments on this provision.

    § 1291.26 Scoring Criteria for the General Fund

    Final rule. In a significant change from the proposed rule, and as discussed in Section III.A. above, the final rule does not adopt the proposed outcome-based framework for project selection, and instead revises the scoring-based project selection framework in the current regulation. The scoring-based framework in the final rule incorporates housing needs priorities from the current regulation and the proposed rule, and provides the Banks with additional discretion in the selection of Bank district housing needs than is provided in the current regulation.

    Current regulation. The current regulation prescribes a scoring-based project selection system based on a 100-point scale. Under the current system, each Bank must allocate at least five points to each of two scoring criteria reflecting priorities in the Bank Act—use of donated or conveyed government-owned or other properties, and sponsorship by a nonprofit organization or government entity. Each Bank must allocate at least 40 points collectively to five scoring criteria reflecting FHFA regulatory priorities—20 points to income targeting, and five points each to housing for homeless households, promotion of empowerment, AHP subsidy per unit, and community stability. Of the remaining 50 points, a minimum of 5 points must be allocated to each of two Bank district priority categories: The first Bank district priority, for which a Bank selects one or more housing needs from 12 eligible housing needs specified in the regulation; and the second Bank district priority addressing one or more housing needs in the Bank's district, as defined by the Bank, with the Bank permitted to select an eligible housing need from the first Bank district priority provided it is different from the housing needs selected by the Bank under the second Bank district priority. The current regulation, thus, establishes a 50-50 distribution of points that must be allocated to: (i) The combination of statutory and regulatory priorities; and (ii) the combination of first and second Bank district priorities.

    ER28NO18.001

    Proposed rule. As discussed in in Section III.A. above, the proposed rule would have replaced the current scoring-based framework with an outcome-based approach which would have included four regulatory priorities for: (1) Very low-income targeting for rental units; (2) underserved communities and populations; (3) creating economic opportunity; and (4) affordable housing preservation, with examples of eligible housing needs specified under the latter three regulatory priorities.

    Comments. The Banks jointly submitted an alternative proposal for project selection that retains the current scoring-based system, with certain changes to the regulatory priorities and required minimum scoring allocations, as described below.

    ER28NO18.002

    Statutory priorities. The Banks' proposal retains the following statutory priorities as mandatory scoring priorities, consistent with the current regulation and proposed rule: (1) Projects sponsored by a government or nonprofit entity; and (2) projects using donated or conveyed government property. The Banks' proposal adds a scoring criterion for the Bank Act priority for the purchase of homes by low- or moderate-income households,18 which a Bank would be required to implement if it does not allocate at least 10 percent of its total annual required AHP contribution to Homeownership Set-Aside Programs. Each of the statutory priorities is allocated a minimum of 5 points.

    18 12 U.S.C. 1430(j)(3)(A).

    Regulatory priorities. The Banks' proposal also includes five regulatory priorities, each of which must be allocated a minimum of 5 points, except that income targeting must be allocated at least 15 points, resulting in a combined minimum allocation of 35 points. These priorities generally include the four regulatory priorities in the proposed rule, but with some modifications to the specific eligible housing needs included under those regulatory priorities. The fifth regulatory priority is community stability, which the Banks' proposal retains, with limited revisions, from the current regulation. The Banks' proposal does not retain the current scoring criterion for AHP subsidy per unit. The Banks' proposed minimum allocation of 35 points for the regulatory priorities is a reduction from the 40 points the current regulation requires the Banks to allocate to the regulatory priorities therein. In FHFA's view, this proposed five-point reduction in the number of points allocated to regulatory priorities would not significantly impact whether FHFA has met its statutory requirement to establish priorities for the use of the AHP subsidies.19 The Banks' proposal further supports this conclusion because it maintains the current 50-50 point allocation between statutory/regulatory priorities and Bank district priorities, as further discussed below.

    19See 12 U.S.C. 1430(j)(9)(B).

    In addition, the Banks' proposal retains certain standards in the current scoring criteria. The proposal retains the current 60 percent maximum scoring standard for targeting very low-income households as part of the income targeting priority. The Bank's proposal also retains the current minimum threshold of 20 percent for the number of units in a project that must target homeless or special needs households in order to receive points, and includes a minimum 20 percent threshold for projects serving other targeted populations, in contrast to the 50 percent minimum threshold for these populations in the proposed rule. In addition, the Banks' proposal makes slight changes to the types of populations included under the special needs and other targeted populations categories, discussed further below. Finally, the Banks' proposal provides for the Banks to define the terms “rural area” and “affordable housing preservation,” as currently allowed, and to define “residential economic diversity,” rather than use the current regulatory definition. The proposed rule would have required the Banks to use FHFA's Duty to Serve definitions of those terms.

    Bank district priorities. The Banks' proposal permits the Banks to allocate the remaining maximum of 50 points to priorities that address affordable housing needs in the Bank's district that the Bank has not otherwise adopted in its scoring framework.

    Additional comments received from the Banks and other commenters on specific scoring criteria proposed by FHFA are discussed below.

    Decision in final rule. FHFA finds the Banks' proposal to be a reasonable approach for project selection, subject to certain changes in response to various comments received and to achieve specific policy objectives. Accordingly, the final rule adopts a scoring-based framework based on the current regulation that incorporates many features from the Banks' proposal—significantly, the statutory priorities in the current regulation, an additional statutory priority for home purchases by low- or moderate-income households, the proposed regulatory priorities for income targeting, underserved communities and populations, creating economic opportunity, and affordable housing preservation (in conjunction with community stability), and a Bank district priority as in the current regulation. The regulatory priorities incorporate the regulatory priorities in the current regulation but are broader in scope. The statutory and regulatory priorities, and related comments received, are discussed further below.

    ER28NO18.003

    Statutory priorities for government properties and project sponsorship (§ 1291.26(a), (b)). The scoring framework in the final rule retains the statutory priorities for the use of donated or conveyed government properties and for projects sponsored by a nonprofit organization or government entity. A for-profit developer commented that retention of these scoring criteria would greatly limit participation in the program by affordable housing providers. A CDFI opposed land donation as a scoring criterion, questioning its utility in the current affordable housing environment. A nonprofit developer stated that donated land is available to it on very few occasions. A Bank Advisory Council stated that at the time Congress enacted the Bank Act amendments authorizing the AHP, there were significant government-held, real estate-owned inventories and proposed military base closures, but that government properties are now rarely a factor in the funding of affordable housing projects, illustrating the need for regulatory flexibility. Several CDFIs commented that revolving loan fund programs typically do not score well under this criterion.

    FHFA acknowledges, as it did in the NPRM, that in the Program's experience, a relatively limited number of projects have satisfied the government properties priority, and the Agency expects that to continue. However, because the use of government-owned properties is a priority specified in the Bank Act, FHFA is retaining it as a scoring criterion in the project selection framework in the final rule.

    Similarly, sponsorship of a project by a nonprofit organization or government entity is a priority specified in the Bank Act and, therefore, is also retained as a scoring criterion in the project selection framework in the final rule. The Banks award a majority of AHP awards through their Competitive Application Programs to projects with nonprofit or government entity sponsors. Continued support of these types of project sponsors is important because they have a long record of using AHP subsidies to support affordable housing.

    Statutory priority for purchase of homes by low- or moderate-income households (§ 1291.26(c)). The project selection framework in the final rule adds a statutory priority for the purchase of homes by low- or moderate-income households that a Bank must adopt if it does not allocate at least 10 percent of its total required annual AHP contribution to Homeownership Set-Aside Programs. This requirement is consistent with the Banks' proposal for project selection.

    Proposed § 1291.48(b) would have required that, each year, each Bank award at least 10 percent of its annual required AHP contribution to low- or moderate-income households, or to projects targeting such households, for the purchase by such households of homes under any or some combination of the Bank's General Fund, any Targeted Funds, and any Homeownership Set-Aside Programs. As discussed in the NPRM, this priority is consistent with the priority in the Bank Act for the purchase of homes by low- or moderate-income families. FHFA specifically requested comments on whether 10 percent of a Bank's total annual required AHP contribution constitutes sufficient prioritization for this home purchase priority, or whether the percentage should be higher or lower. A number of commenters expressed differing views over the proposed 10 percent figure. A Bank stated that it would establish an appropriate prioritization, while the Banks opposed it as overly prescriptive and difficult to meet in high cost areas.

    The scoring criterion in the final rule responds to commenters' concerns that the proposed 10 percent allocation to a Bank's Homeownership Set-Aside Programs would be too restrictive. In areas of Bank districts where the cost of homeownership is very high, comparatively fewer low- or moderate- income households would be able to afford to purchase homes, even if funds for down payment and closing costs were available to them from a Homeownership Set-Aside Program. A Bank with such high cost areas in its district, thus, may prefer not to allocate funds to Homeownership Set-Aside Programs and to support instead the development of rental units as the most impactful use of its AHP subsidies. The final rule enables the Banks to address such situations by providing them the option to adopt the scoring criterion for home purchase by low- or moderate-income households in lieu of allocating at least 10 percent of their AHP funds to Homeownership Set-Aside Programs. FHFA expects that such a scoring criterion will have an impact, even in the absence of a set-aside program.

    Regulatory priority for income targeting (§ 1291.26(d)). The scoring framework in the final rule retains the current regulatory priority for targeting very low- and low- or moderate-income households, including the specific scoring methodology for targeting these households. The final rule continues the current required allocation of at least 20 points for this priority, in contrast to the Banks' proposal to reduce the minimum point allocation to 15 points.

    Proposed § 1291.48(c) would have established an outcome requirement for a regulatory priority for very low-income targeting for rental units. Each Bank would have been required to ensure that each year, at least 55 percent of all rental units in rental projects receiving AHP awards under the Bank's General Fund and any Targeted Funds are reserved for very low-income households (households with incomes at or below 50 percent AMI). FHFA specifically requested comments on this proposed requirement, including whether the proposed 55 percent threshold, the applicability solely to rental units, and income-targeting at 50 percent AMI were appropriate.

    Commenters generally opposed the proposal. The Banks, a Bank Advisory Council, and two trade and policy organizations expressed concern that this requirement would fail to recognize the benefits of mixed-income occupancy projects, which allow developers to cross-subsidize units. A nonprofit intermediary stated that the income targeting standards should align with LIHTC income targeting standards. The Banks' project selection proposal retains the standard for targeting very low- and low- or moderate-income households set forth in the current regulation, which, for rental projects, requires the Banks to award the maximum income targeting score to projects that reserve 60 percent of the units for households with incomes at or below 50 percent AMI.

    As discussed under Section III.A. above, the final rule does not adopt the proposed outcome-based scoring framework, including this proposed very low-income targeting regulatory priority. Instead, consistent with the Banks' project selection proposal, the final rule retains the current scoring criterion for income targeting in order to continue the AHP's important role in addressing the housing needs of very low- as well as low- or moderate-income households. Retaining the existing 20-point minimum allocation for income targeting also emphasizes the AHP's role in this regard. At the same time, the final rule retains the current 60 percent of units standard, which is intended to encourage the awarding of more points to mixed-income housing. The income targeting standards in the regulation cannot be changed to align completely with the LIHTC income targeting standards because the Bank Act's standards are different.

    Regulatory priorities for underserved communities and populations, creating economic opportunities, and community stability including affordable housing preservation.

    The final rule adopts three regulatory priorities, each of which comprises a number of specified eligible housing needs, some of which are scoring criteria in the current regulation. The specified eligible housing needs are examples of the kinds of housing needs a Bank may choose to adopt under each regulatory priority and are not exclusionary. A Bank may choose to adopt other housing needs under the regulatory priority that are similar in nature to those specified under the regulatory priority. FHFA may also specify additional eligible housing needs under the regulatory priorities by separate guidance, as new housing needs arise. A Bank must adopt at least one housing need as a scoring criterion under each of the three regulatory priorities.

    FHFA's research to develop the housing priorities in the proposed rule leads it to believe that these three regulatory priorities represent the most pressing housing needs currently facing the Nation, while providing the Banks sufficient flexibility to meet future housing needs. The three regulatory priorities and examples of their eligible housing needs are discussed below.

    Regulatory Priority for Underserved Communities and Populations (§ 1291.26(e))

    Consistent with the proposed rule, the final rule adopts a regulatory priority for underserved communities and populations, including the following eligible housing needs described in further detail below: Housing for homeless households; housing for special needs populations; housing for other targeted populations; housing in rural areas; and rental housing for extremely low-income households. FHFA may also identify other specific housing needs as eligible under this regulatory priority by separate guidance, as new housing needs arise.

    Housing for homeless households (§ 1291.26(e)(1)). As proposed, the final rule includes housing for homeless households as an eligible housing need under the underserved communities and populations regulatory priority. In contrast to the current regulation, the final rule makes adoption of a housing for homeless households scoring criterion optional rather than mandatory. In a change from the proposed rule, the final rule retains the current minimum threshold for the number of units that must be reserved for homeless households at 20 percent in order for a project to receive points. The proposed rule would have increased the minimum threshold to 50 percent to encourage projects dedicated to serving the needs of those households. FHFA specifically requested comments on whether this proposed increase would be appropriate.

    Commenters overwhelmingly opposed the proposed increase in the minimum threshold. A number of commenters raised project development concerns with the proposal, such as difficulties in securing a project site or project financing. A Bank Advisory Council stated that a minimum 50 percent threshold would be very challenging for project sponsors to meet given the lack of operating subsidies available for homeless housing and special needs housing. A Bank and its Bank Advisory Council emphasized that a minimum 50 percent threshold would not align with current housing models or the requirements of other funders that also fund AHP projects, especially since many housing finance agencies require that a maximum of 25 or 30 percent of the units in a project target homeless households. A number of representatives of a nonprofit developer stated that a specific project would not have been able to overcome community opposition if it had been required to reserve 50 percent of its units for homeless households. A number of nonprofit housing developers asserted that many homeownership projects, even those serving specified populations, would find it difficult to meet a 50 percent threshold as these populations often find it difficult to qualify for homeownership opportunities.

    FHFA is persuaded by the commenters that increasing the current minimum 20 percent threshold for homeless households to 50 percent could create difficulties for the financing of such projects, particularly in states or localities with limited designated funding sources for such households. The Agency also recognizes that the development of such projects at a 50 percent threshold level may face community opposition. Therefore, the final rule retains the current minimum threshold of 20 percent for homeless households.

    Housing for special needs (§ 1291.26(e)(2)). As proposed, the final rule includes housing for special needs populations as an eligible housing need under the underserved communities and populations regulatory priority. The current regulation includes housing for special needs populations as an optional eligible housing need under the first Bank district priority. As in the current regulation and proposed rule, the final rule includes the following as eligible special needs populations under this scoring criterion: The elderly; persons recovering from physical abuse or alcohol or drug abuse; persons with HIV/AIDS; persons with disabilities; and housing that is visitable by persons with physical disabilities who are not occupants of such housing. In addition, as proposed, the final rule expands the eligible special needs populations from those in the current regulation to include: Formerly incarcerated persons; victims of domestic violence, dating violence, sexual assault or stalking; and unaccompanied youth.

    However, in a change from the proposed rule, the final rule retains the current minimum threshold of 20 percent for the number of units that must be reserved for special needs populations in order for a project to receive scoring points. FHFA specifically requested comments on whether this proposed increase, which was intended to encourage projects dedicated to serving special needs populations, would be appropriate. In addition, in contrast to the proposed rule, which would have required projects with units serving special needs populations to provide supportive services or access to supportive services for the specific special needs population served, the final rule does not require projects to provide such services or access to such services in order to receive points under this scoring criterion.

    One commenter supported the proposed increase in the minimum threshold from 20 to 50 percent, stating that significant evidence documents that people with disabilities prefer to live in housing designed to address their specific needs, rather than being dispersed through a mixed-occupancy project. Commenters otherwise overwhelmingly opposed the proposed increase in the minimum threshold. A Bank Advisory Council stated that a minimum 50 percent threshold would be very challenging for project sponsors to meet given the lack of operating subsidies available for special needs. A Bank and its Advisory Council emphasized that a minimum 50 percent threshold would not align with current housing models or the requirements of other funders that also fund AHP projects, especially since, according to these commenters, many housing finance agencies require that a maximum of 25 or 30 percent of the units in a project target special needs. Numerous commenters also questioned whether the proposed increase in the threshold would be consistent with other applicable federal law governing the housing integration of persons with disabilities.20 A nonprofit intermediary indicated that, since 2015, one-third of its AHP-funded supportive housing projects targeted less than 50 percent of their units to supportive housing. The commenter indicated that this portion of its portfolio provided needed housing units for households who benefited from the provision of supportive housing units. The commenter stated that increasing the threshold to 50 percent could diminish the flexibility developers need, impeding supportive housing development in some communities. A number of nonprofit housing developers asserted that many homeownership projects, even those serving specified populations, would find it difficult to meet a 50 percent threshold as special populations often find it difficult to qualify for homeownership opportunities. An advocacy organization that focuses on the housing needs of people with disabilities opposed the proposed 50 percent threshold for housing for people with disabilities, stating that it would result in isolation of such individuals from other populations. The commenter recommended that FHFA consider adopting a maximum limit of 25 percent of the number of units within a project that could be reserved for occupancy by the applicable targeted population, citing HUD's Section 811 Project Rental Assistance program as a federal program reflecting this approach.

    20See 28 CFR 35.130(d).

    For the same reasons discussed under the homeless households scoring criterion above, the final rule retains the current minimum threshold of 20 percent for special needs households. The final rule does not adopt the commenter's recommendation to establish a maximum 25 percent limit on the number of units in a project that could be reserved for occupancy by persons with disabilities because it would unnecessarily constrain Banks in districts that can accommodate projects with a higher threshold.

    Several commenters objected to the proposed requirement that projects provide supportive services, or access to supportive services, for special needs populations in order to receive points under this scoring criterion. As discussed in the NPRM, this requirement was proposed because these populations have special needs associated with their particular life circumstances that could be addressed by targeted supportive services. An advocacy organization focused on addressing the needs of persons with disabilities urged that the final rule provide project sponsors with discretion to offer supportive services and provide residents with disabilities individual choice in how and from whom they access services. The Banks' project selection proposal does not require provision of, or access to, supportive services for special needs populations. One Bank, in support of the Banks' project selection proposal, stated that many housing providers do not provide on-site supportive services, and another Bank stated that, among those providers who do provide supportive services, many may not continue to do so in the future. Several Banks recommended that the final rule leave the decision on whether supportive services are appropriate for particular projects to the discretion of affordable housing developers.

    FHFA notes that the proposed rule would not have required the provision of supportive services but merely “access to” those services. Nevertheless, FHFA finds the comments on supportive services persuasive and has not included a supportive services requirement in the final rule. The final rule, instead, authorizes the Banks, in their discretion, to adopt a supportive services requirement for specific special needs populations identified by the Bank.

    Other commenters provided input on the specific special needs populations proposed for inclusion under this scoring criterion. An advocacy organization that focuses on addressing the needs of people with disabilities supported including people with disabilities as an underserved population under the special needs scoring criterion. An intermediary that focuses on supportive housing supported the inclusion of: Formerly incarcerated persons; victims of domestic violence, dating violence, sexual assault, or stalking; and unaccompanied youth. No commenter objected to the inclusion of any of the populations specified in the proposed rule.

    Accordingly, the final rule includes the eligible special needs populations specified in the proposed rule. As discussed in the NPRM, the reference to “persons with AIDS” in the current regulation is updated to “persons with HIV/AIDS” to more closely align it with common nomenclature and in recognition of the fact that persons with HIV experience comparable housing needs to persons with AIDS. The term “mentally or physically disabled persons” in the current regulation similarly is updated to “persons with disabilities” to reflect more commonly acceptable terminology. As discussed in the NPRM, persons with disabilities are included under this scoring criterion because they benefit from housing features such as wheelchair-accessibility or enhancements for visual or hearing impairments.

    Housing for other targeted populations (§ 1291.26(e)(3)). As proposed, the final rule includes housing for other targeted populations as an eligible housing need under the underserved communities and populations regulatory priority. Generally consistent with the proposed rule, the final rule includes the following as eligible “other targeted populations:” Agricultural workers; military veterans; Native Americans; households requiring large units; and kinship care households, because of the significant housing needs these populations face, as discussed in the NPRM. In a technical change from the proposed rule, as discussed further below, the final rule replaces the term “multigenerational households” with “kinship care households,” and removes the category of persons with disabilities, which are covered under the special needs scoring criterion. In addition, for the same reasons discussed under the homeless households and special needs scoring criteria above, the final rule does not adopt the proposed increase in the number of units reserved for occupancy by the relevant targeted population from 20 to 50 percent. FHFA specifically requested comments on whether this proposed increase, which was intended to encourage projects dedicated to serving other targeted populations, would be appropriate. The final rule also does not include the qualifying phrase “not necessarily with supportive services” that was in the proposed rule because, as discussed under the special needs scoring criterion above, the final rule does not adopt a supportive services requirement for that scoring criterion.

    FHFA received several comments on this proposed scoring category, including comments on the types of targeted populations that should be included. A nonprofit affordable housing intermediary strongly supported the inclusion of the specified other targeted populations as a regulatory priority, noting that many of the specified populations reside in rural communities. The commenter also recommended that FHFA narrow the targeting of housing for Native Americans to housing for Native Americans on or near federally recognized tribal lands, stating that this is where housing needs are most acute for this population. The Banks' proposal for project selection replaces the term “Native Americans” with “Native Peoples,” to ensure that the category includes Native Alaskan and Hawaiian populations. The Banks' proposal eliminates the multigenerational household category. Multiple Banks characterized the term “multigenerational” as ambiguous, expressing concern that the proposed rule would prioritize housing that accommodates only parents and children.

    As proposed, the final rule includes Native Americans as a specific eligible targeted population under this scoring category, in view of their significant housing needs, as discussed in the NPRM. The final rule continues to use the term “Native Americans” because it is commonly used in other programs. Under this scoring category, a Bank may also include Native Alaskan and Native Hawaiian populations, at its discretion. The Agency acknowledges the acute housing needs of Native Americans on or near federally recognized tribal lands, but also recognizes that Bank districts vary in the degree to which they contain federally recognized tribal lands. The broader definition in the final rule gives the Banks discretion to best target AHP subsidies to meet the housing needs of Native American populations in their districts.

    Regarding multigenerational households, such as grandparents raising grandchildren, the NPRM explained that such households may have a need for special housing that includes, for example, features of elderly projects (e.g., handrails in bathrooms and hallways), as well as features of family housing (e.g., outdoor play spaces). To better describe the intended population in response to the comments, the final rule replaces the term “multigenerational household” with the term “kinship care.” Kinship care households are defined as households in which children are in the care of cohabitating relatives, such as grandparents, aunts, or uncles, or cohabitating close family friends.

    Housing in rural areas (§ 1291.26(e)(4)). Consistent with the proposed rule, the final rule includes housing in rural areas as an eligible housing need under the underserved communities and populations regulatory priority, in light of the significant and particularized housing needs experienced by rural households, as discussed in the NPRM. However, unlike the proposed rule, which would have defined “rural area” according to the definition in FHFA's Duty to Serve regulation, the final rule follows the approach of the current regulation and allows each Bank to adopt its own definition of “rural area.” That definition, like the Bank's Program in general, would have to be reasonable, and would be subject to FHFA examination.

    A trade association and two nonprofit affordable housing intermediaries specifically supported the proposed inclusion of rural housing as a specified need in the Program. One of the intermediaries commented that its partners, largely comprising rural community-based housing providers, found that their applications for AHP funds are less competitive than in the past. The commenter suggested that rural applicants do not score as well as urban or suburban applicants, whose projects are of a larger scale and whose borrowers may have higher incomes and greater access to financial services. Several commenters provided input on the proposed definition of “rural area.” The nonprofit intermediary stated that, though it regards local government entities and communities as best equipped to define rural areas, it supported the proposed definition as a comprehensive and structured classification for rural areas under the AHP. It characterized the proposed definition as an enhancement that relies on a more accurate definition of rural territory and that minimizes misclassification of projects in suburban or exurban areas.

    In contrast, a Bank and its Bank Advisory Council asserted that the proposed definition is overly restrictive within metropolitan areas because it excludes small towns that are truly rural in character. These commenters also stated that the AHP would not be able to maximally coordinate with USDA programs, as there are areas eligible for USDA assistance under USDA's definition of “rural area” that would be excluded under the proposed definition. In their proposal for project selection, the Banks recommended that each Bank have the authority to define “rural area.” One Bank commented that the proposed definition would be overly complicated for purposes of the AHP. The Bank indicated that the Banks designed their project selection proposal to provide each Bank with flexibility to adopt its own definition so that each Bank could align its standards with those used by other state and local affordable housing financing sources that fund AHP projects.

    FHFA is persuaded by commenters' concerns about the definition of “rural area” in the proposed rule. The Agency's aim of aligning, where appropriate, AHP definitions with those in other FHFA programs such as the Duty to Serve Program was not intended to constrain each Bank's flexibility to coordinate with other funding sources in responding to housing needs within its district. Continuing to give the Banks discretion to define “rural area” will allow them to align their Programs with other local and state funding programs for affordable housing. Accordingly, and consistent with the current regulation, the final rule authorizes each Bank to establish its own definition of “rural area.”

    Rental housing for extremely low-income households (§ 1291.26(e)(5)). As proposed, the final rule includes housing for extremely low-income households as an eligible housing need under the underserved communities and populations regulatory priority, in light of the severe affordable housing challenges faced by such households, as discussed in the NPRM. Consistent with the proposed rule, the final rule adds a definition of “extremely low-income household” in § 1291.1 to mean a household with an income at or below 30 percent AMI. In a change from the proposed rule, the final rule authorizes each Bank to define its own minimum threshold for the percentage of units reserved for extremely low-income households that a project must meet in order to qualify for points under this scoring criterion. The proposed rule would have set this minimum threshold at 20 percent. FHFA specifically requested comments on whether the proposed 20 percent minimum threshold is appropriate.

    Several housing policy organizations, a CDFI, and two nonprofit developers generally supported this proposed scoring criterion. A nonprofit developer supported the scoring criterion but encouraged FHFA to allow AHP-funded projects targeting extremely low-income occupants to adjust their income targeting and rent restrictions in the event the project sponsor, through no fault of its own, loses its project-based operating subsidy. One of the housing policy organizations acknowledged the benefits of targeting extremely low-income households, but asserted that a minimum 20 percent threshold could be difficult to meet in states that do not have local or state rental housing development resources and access to federal project-based rental assistance programs. The commenter suggested use of a sliding points scale to encourage projects that target more units to extremely low-income people, up to a maximum of 20 or 25 percent of the units in a project, rather than establishing a minimum of 20 percent of the units. A nonprofit intermediary recommended a sliding points scale of up to 100 percent of the units in a project.

    Other commenters opposed the proposed minimum 20 percent threshold. A Bank commented that it may render smaller projects financially infeasible. A CDFI trade organization stated that while targeting units for extremely low-income households is important, a minimum 20 percent threshold would create incentives for concentrations of populations of extremely low-income households, which would decrease residential economic diversity. A CDFI opposed a minimum 20 percent threshold on the grounds that projects that overestimate the number of extremely low-income units they can support may face financial instability. A trade organization supported the goal of targeting extremely low-income households, but stated that a minimum 20 percent threshold would not be feasible because the amount of AHP subsidy would generally be insufficient to offset the reduction in rents required to serve such households. The Banks stated that some projects may not be able to secure rent subsidies to support a minimum 20 percent threshold, making the projects financially infeasible.

    The Banks' proposal on project selection does not include a scoring priority for housing for extremely low-income households. One Bank stated that the Banks could address this housing need under their Bank district priority scoring criterion, and that including a scoring criterion for housing for extremely low-income households would overlap with the scoring criterion for housing for other targeted populations. Another Bank stated that a scoring criterion for housing for extremely low-income households would be redundant with the income targeting scoring criterion. Multiple Banks expressed doubt that a project meeting a 20 percent threshold for extremely low-income households could demonstrate financial feasibility.

    In summary, most commenters acknowledged the importance of targeting extremely low-income households, but objected to the proposed minimum 20 percent threshold. After consideration of the comments on the proposed threshold, including the recommendation for a sliding scale that would allow projects with some extremely low-income units but less than 20 percent to receive points, FHFA is persuaded that a 20 percent threshold may be too high in most circumstances. FHFA notes that the differing comments on the proposed threshold may stem from the differences in the financial viability of projects with extremely low-income units in different local housing markets. Therefore, in order to encourage targeting of extremely low-income households while providing adequate discretion to the Banks to take into account differences in housing markets among the Banks, the final rule includes a scoring criterion for projects targeting such households but also authorizes the Banks to establish their own minimum thresholds for the number of units a project is required to reserve for such households in order for the project to receive scoring points.

    FHFA notes that most Banks have not allocated scoring points for projects specifically targeting extremely low-income households, which suggests that including this housing need under the underserved communities and populations regulatory priority would not be redundant. FHFA also notes that housing for extremely low-income households is an optional scoring category in the final rule, which Banks may choose to adopt in addition to the mandatory regulatory priority for income targeting for very low-income households.

    Regulatory Priority for Creating Economic Opportunity (§ 1291.26(f))

    As proposed, the final rule adopts a regulatory priority for creating economic opportunity, including the following eligible housing needs as scoring criteria: promotion of empowerment and residential economic diversity. FHFA may also identify other specific housing needs that facilitate economic opportunity as eligible under this regulatory priority by separate guidance, as new housing needs arise. The eligible housing needs are discussed further below.

    Promotion of empowerment (§ 1291.26(f)(1)). Consistent with the proposed rule, the final rule includes promotion of empowerment as an eligible housing need under the creating economic opportunity regulatory priority. In contrast to the current regulation, promotion of empowerment would be an optional rather than a mandatory scoring criterion. As proposed, the final rule retains the eligible empowerment services included in § 1291.5(d)(5)(v) of the current regulation. For the reasons discussed in the NPRM and comments discussed below, the final rule adds the following empowerment services not included in the current regulation: Childcare; adult daycare services; afterschool care; tutoring; health services, including mental health and behavioral health services; and workforce preparation and integration.

    A nonprofit intermediary that focuses on supportive housing strongly supported the addition of health services as an eligible empowerment activity. The commenter urged that the final rule include an explicit reference to mental and behavioral health services, which are mentioned in the case study cited in the NPRM. FHFA concurs in the importance of mental and behavioral health services and has added a reference to these services in connection with health services in the final rule. Consistent with the proposed rule, the reference to “welfare to work” in the current regulation is updated to “workforce preparation and integration” to broaden the scope beyond households receiving public assistance to include initiatives providing skills to those entering or re-entering the workforce. FHFA received no comments addressing any of the other proposed additions to the promotion of empowerment scoring criterion.

    Residential economic diversity (§ 1291.26(f)(2)). As proposed, the final rule includes residential economic diversity as an eligible housing need under the regulatory priority for creating economic opportunity. The current regulation includes residential economic diversity as an optional scoring criterion under the first Bank district priority. The proposed rule would have revised the current definition of residential economic diversity to reflect the definition in FHFA's Duty to Serve regulation. The final rule adopts a modified version of the Duty to Serve definition that provides discretion to the Banks in defining certain component terms thereof, as further discussed below.

    The proposed rule would have defined “residential economic diversity” as the financing of either affordable housing in a high opportunity area, or mixed-income housing in an area of concentrated poverty, with those terms defined in accordance with the Duty to Serve regulation and Evaluation Guidance. FHFA received a number of comments opposing adoption of the Duty to Serve definition. Two Banks and a Bank Advisory Council preferred to have discretion to adopt their own definitions in order to be able to align their Programs with the economic characteristics of their districts. One Bank recommended that FHFA expand the definition to explicitly include the development of mixed-income housing in middle- and high-income neighborhoods, in addition to low- and moderate-income neighborhoods, in order to provide the Banks flexibility to respond to the best evidence on the impact of living in high opportunity areas for low-income families. The Banks' proposal on project selection allows each Bank to define “high opportunity area,” and allows mixed-income housing in any area that the Bank designates. The Banks indicated that they prefer flexibility to align the residential economic diversity standards with those of state and local funders.

    FHFA agrees with the comments that requiring use of the Duty to Serve definition for residential economic diversity under the AHP, especially the component definition of “high opportunity area,” could limit the extent to which the Bank are able to align their Programs, where appropriate, with residential economic diversity standards of state and local funders. The final rule, therefore, allows each Bank to define “high opportunity area.” In addition, FHFA is persuaded that mixed-income housing may, in certain Bank districts and under some circumstances, be beneficial in middle- and high-income neighborhoods. Accordingly, the final rule does not adopt the proposed requirement that the mixed-income housing be located in an area of concentrated poverty, and instead provides discretion to the Banks to designate the areas in which the mixed-income housing must be located.

    Regulatory Priority for Community Stability Including Affordable Housing Preservation (§ 1291.26(g))

    In a change from the proposed rule, the final rule adopts community stability, including affordable housing preservation, as a regulatory priority. Community stability is a mandatory scoring criterion in the current regulation, but was not included as a regulatory priority in the proposed rule. Section 1291.5(d)(5)(ix) of the current regulation provides that a project may receive points under this scoring criterion if it promotes community stability, such as by rehabilitating vacant or abandoned properties, being an integral part of a neighborhood stabilization plan approved by a unit of state or local government, and not displacing low- or moderate-income households, or if such displacement will occur, assuring that such households will be assisted to minimize the impact of such displacement. The final rule adds, as an example of the types of projects that promote community stability, projects that preserve affordable housing. The final rule further modifies the current community stability scoring criterion by replacing the term “neighborhood stabilization plan” with “community development or economic development strategy,” and providing that such a strategy may be approved by an instrumentality of government. The final rule also retains the above-described non-displacement provision from the current regulation. In a change from the proposed rule, the final rule does not provide examples illustrating the types of projects that may be considered affordable housing preservation.

    The proposed rule would have specified two eligible housing needs under the proposed affordable housing preservation regulatory priority: Affordable rental housing preservation and affordable homeownership preservation. Affordable rental housing preservation would have included housing needs such as: Existing affordable housing in need of rehabilitation as indicated by deteriorating physical condition, high vacancy rates, or poor financial performance; affordable rental housing with energy or water efficiency improvements (meeting the requirements in the Duty to Serve regulation); projects that received funding from certain government affordable rental housing programs specified under the Duty to Serve regulation, i.e., HUD Section 8, Section 236, Section 221(d)(4), Section 202, and Section 811 programs; McKinney-Vento Homeless Assistance; USDA Section 515; LIHTC; or other state or local affordable housing programs comparable to the foregoing housing programs. Affordable homeownership preservation would have included owner-occupied rehabilitation, shared equity programs, owner-occupied housing with energy or water efficiency improvements (meeting the requirements in the Duty to Serve regulation), or other housing finance strategies to preserve homeownership. A Bank has discretion under the final rule to include any of these types of housing needs under its community stability scoring criterion.

    In addition, the final rule provides that FHFA may also identify other mechanisms for affordable rental housing preservation or affordable homeownership preservation as eligible under this regulatory priority by separate guidance, as new housing needs arise.

    A Bank commented that including affordable housing preservation as a regulatory priority would provide substantial encouragement to address this pressing need effectively. Other commenters indicated that the proposed affordable housing preservation definition is too narrow. A number of nonprofit developers stated that the proposed regulatory priority would apply only in very limited circumstances to affordable homeownership projects such as those where the AHP sponsor is engaged in owner-occupied rehabilitation or permanent affordability strategies. The commenters asserted that, although the types of affordable homeownership preservation identified in the proposed rule are viable and important strategies in many areas of the country, they may not be the most impactful or appropriate for many communities in each of the Banks' districts. The Bank Advisory Councils and a Bank noted that the proposed affordable housing preservation regulatory priority would not include projects that repurpose or adapt non-housing properties, such as former schools, industrial properties, or commercial properties, which would be covered under the current community stability scoring criterion. The Banks' proposal for project selection includes separate regulatory priorities for affordable housing preservation and community stability.

    FHFA notes that the proposed regulatory priority for affordable housing preservation would have allowed the Banks to adopt other types of affordable housing preservation needs similar to those specified in the regulatory priority. However, FHFA acknowledges that replacing the current community stability scoring criterion with affordable housing preservation would have omitted strategies outside of affordable housing preservation that are important for addressing community stability, such as adaptive re-use and the development of infill housing that are included under the current community stability scoring criterion. Because affordable housing preservation is an important strategy for achieving community stability, the final rule adopts a regulatory priority for community stability that specifically includes affordable housing preservation. FHFA is not retaining the proposed definition of affordable housing preservation, which referenced specific programs and strategies included in the Duty to Serve regulation, in order to provide the Banks flexibility to include those or other housing needs under affordable housing preservation to meet the specific housing needs of their districts.

    Current Regulatory Priority for Subsidy per Unit

    As proposed, the final rule eliminates the current mandatory scoring criterion for AHP subsidy per unit. This criterion favors more highly leveraged projects, such as LITHC projects and other large rental projects, where the AHP award is a smaller percentage of the total project development budget. A Bank may want to encourage AHP awards to projects that may not be able to leverage as much funding from other sources and, therefore, need deeper subsidy from the AHP. Eliminating this scoring criterion provides the Banks with more discretion to target the types of projects that best meet the housing needs in their districts. The Banks' proposal for project selection also eliminates this scoring criterion. Under the final rule, a Bank, in its discretion, could choose to include AHP subsidy per unit as a scoring criterion under its Bank district priorities category.

    Bank District Priorities (§ 1291.26(h))

    The final rule adopts a cumulative minimum points allocation of 50 points for the statutory and regulatory priorities, consistent with the cumulative minimum points allocation required for the statutory and regulatory priorities in the current regulation. The final rule permits the Banks to allocate the remaining maximum 50 points to affordable housing needs in the Banks' districts selected by the Banks. This is a modified version of the current regulation, which has two scoring categories of Bank district priorities. Under the first Bank district priority, a Bank must choose one or more housing needs from 12 specified eligible housing needs. Under the second Bank district priority, a Bank adopts one or more housing needs in the Bank's district identified by the Bank, which must be different from those chosen by the Bank under its first Bank district priority. The final rule essentially combines the current first and second Bank district priorities into one category under which a Bank may adopt specific district housing needs, for a maximum of 50 points. This will provide the Banks with additional flexibility to tailor their General Funds to meet specific housing needs in their districts.

    § 1291.27 Scoring Criteria for Targeted Funds

    Section 1291.27 of the final rule sets forth general requirements for scoring criteria for Targeted Funds. For each Targeted Fund established by a Bank, the Bank must include a minimum of three different scoring criteria, as established by the Bank, that allow the Bank to select applications that meet the specific affordable housing need or needs being addressed by the Targeted Fund. This requirement for at least three scoring criteria is consistent with the Banks' comment on the scoring criteria for Targeted Funds and is a change from the proposed rule, which did not include this requirement. As discussed under § 1291.25 above, the maximum points allocation for a single scoring criterion under a Targeted Fund is 50 points. These requirements should promote a robust competitive scoring process under the Targeted Fund.

    § 1291.28 Approval of AHP Applications Under the General Fund and Targeted Funds

    AHP application approvals generally. Consistent with the application approval requirements in the current regulation, the final rule provides generally that a Bank's board of directors shall approve (i.e., award) applications for AHP subsidy under the General Fund and any Targeted Funds that meet all of the applicable AHP eligibility requirements in descending order, starting with the highest scoring application until the total funding amount for the particular AHP funding round, except for any amount insufficient to fund the next highest scoring application, has been approved. Exceptions to this process, as proposed, are discussed below.

    AHP application alternates. Section 1291.28(b) of the final rule provides the Banks with discretion to approve a specified number, as determined by the Bank in its discretion, of the next highest scoring applications as alternates eligible for funding, and may approve any tied applications as alternates eligible for funding pursuant to § 1291.28(c)(2), when any previously committed AHP subsidies become available, pursuant to a written policy established by the Bank. If a Bank has established such a policy for approving alternates for funding and sufficient previously committed AHP subsidies become available within one year of application approval, the Bank is required to approve the designated alternates for funding within that one-year period. This is a change from the current regulation, which requires a Bank to approve at least the next four highest scoring applications in the General Fund as alternates, but gives the Bank the option whether to approve the designated alternates for funding if previously committed AHP subsidies become available within one year of application approval. The final rule is consistent with the proposed requirement that the Banks fund the General Fund alternates within one year of approval if any previously committed AHP subsidies become available, but requires this only where the Bank has adopted a policy to approve alternates for funding. The final rule also links approval of tied applications as alternates, pursuant to § 1291.28(c)(2), to establishment by a Bank of a written policy for approval of alternates for funding. In addition, the final rule applies the above requirements applicable to the approval of General Fund alternates to the approval of Targeted Fund alternates. The proposed rule would have given the Banks discretion regarding the approval and funding of Targeted Fund alternates.

    The purpose of FHFA's proposal to require funding of alternates under the General Fund within one year of approval if previously committed AHP funds become available was to ensure that the Banks award the AHP funds to alternates in the General Fund rather than selecting General Fund alternates but transferring AHP funds from the General Fund to the Bank's Homeownership Set-Aside Programs or Targeted Funds instead. The Banks and a trade association opposed the proposal, noting that projects approved as alternates typically seek additional funding sources or change the scope of the development if approved as alternates, which may significantly change the structure of the projects. They pointed out that a mandatory funding requirement for such projects would require the Banks to first re-underwrite the projects to determine their satisfaction with the AHP eligibility requirements, including the need for AHP subsidy, which would increase the burden and costs to the Banks and the project sponsors. The Banks further stated that the proposal could require the Banks to fund alternates that do not serve the housing needs prioritized in the Banks' TCLPs or the proposed outcome requirements. The Banks and their Bank Advisory Councils urged FHFA to continue allowing the Banks the discretion to approve alternates for the General Fund, and to provide similar discretion to approve alternates for any Targeted Funds established by the Banks.

    FHFA finds relevant the comments that previously committed AHP subsidies often do not become available until well after the conclusion of the AHP funding round, by which time alternates' applications may no longer reflect the current structure of the projects or their funding needs. Projects may also have received funding from other sources in the meantime to substitute for the AHP funding requested. The projects, thus, may no longer meet the AHP eligibility requirements, including the need for AHP subsidy, or may need to be re-scored due to the changes in the projects' structures and funding. Requiring re-underwriting, as well as possible re-scoring, of these projects may be unnecessary and burdensome in such circumstances. In addition, the Banks should not have to select alternates if they do not intend to fund these projects. Accordingly, the final rule revises the current regulation to make the approval of alternates discretionary rather than mandatory for the Banks, pursuant to a written policy established by the Bank, and to require the Bank to approve such alternates for funding within one year of approval if any previously committed AHP subsidies become available but only if the Bank has a policy to approve alternates for funding.

    Where a Bank does not adopt a policy to approve alternates for its General Fund or any Targeted Funds, the Bank may use previously committed AHP subsidies that become available under the applicable Fund to address other district affordable housing needs through the Banks' Homeownership Set-Aside Programs or project modifications, as currently permitted, or through any Bank Targeted Funds. This may benefit Banks, for example, that wish to establish a Targeted Fund to address a federal- or state-declared disaster. It may also benefit Banks receiving requests for subsidy to assist households under their Homeownership Set-Aside Programs that exceed the current maximum annual allowable funding allocation of 35 percent, which is retained in the final rule.

    Tied applications. As discussed above under the scoring tie-breaker policies in §§ 1291.25(c) and 1291.28(c)(2) of the final rule, where there is insufficient AHP subsidy to approve all tied applications for the General Fund or a Targeted Fund, and the Bank has a written policy to approve alternates for funding under the applicable Fund, the Bank must approve a tied application as an alternate if it does not prevail under the Bank's scoring tie-breaker methodology, or is tied with another application but requested more subsidy than the amount of AHP funds that remain to be awarded under the Fund. This is consistent with current FHFA guidance to the Banks for their General Funds except that it is only required, under the final rule, where the Bank has a written policy to approve alternates.

    Applications to multiple Funds—approval under one Fund. Section 1291.28(d) of the final rule provides that if an application for the same project is submitted to more than one Fund at a Bank in a calendar year and the application scores high enough to be approved under each Fund, the Bank shall approve the application under only one of the Funds pursuant to the Bank's policy established in its AHP Implementation Plan. For example, a Bank's policy could provide that any project that is competitive under multiple Funds will be approved under the General Fund. The proposed rule referred to submission of an application for the same project in an AHP funding round. The final rule changes this to a calendar year to take into account that Banks may hold separate funding rounds for their General Fund and Targeted Funds at different times in a calendar year. No comments were received on this proposal.

    No re-ranking of scored applications and alternates. As discussed in Section III.A. above, the final rule does not adopt the proposal to allow the Banks, in their discretion, to re-rank scored applications and alternates, in light of FHFA's determination not to adopt the proposed outcomes framework in the final rule.

    No delegation. The final rule retains the provision in the current regulation prohibiting a Bank's board of directors from delegating to Bank officers or other Bank employees the responsibility to approve or disapprove the AHP subsidy applications, as well as alternates. Since the final rule provides that the Banks are no longer required to approve alternates, the final rule states that the delegation prohibition is applicable to the approval of alternates only if a Bank has a written policy to approve alternates for funding under its General Fund or any Targeted Fund. The final rule does not adopt the proposed prohibition on delegation by the Bank's board to a committee of the board because the approval of AHP applications is not a strategic policy decision. Comments received on delegation are covered in the previous discussion of comments on the other proposed prohibited delegations in Section III.F. above.

    § 1291.29 Modifications of Approved AHP Applications

    The final rule relocates the provisions on modifications of approved AHP applications from current § 1291.5(f) to § 1291.29, with a number of clarifying and other changes.

    Approval of modifications. Consistent with the proposed rule, the final rule provides that if the requirements for a modification are satisfied, the Bank must approve the modification request, unless the request is for an increase in AHP subsidy, which a Bank may approve in its discretion. The final rule is a change from the current regulation, which allows for Bank discretion in approving all modification requests. If a project re-scores successfully in its original funding round and all of the other modification requirements are satisfied, there should be no reason for the Bank not to approve the modification. FHFA did not receive any comments on removing discretionary approvals.

    Cure of noncompliance. The final rule provides that before a Bank may approve a modification request, it must first request that the project sponsor or owner make a reasonable effort to cure any AHP noncompliance within a reasonable period of time. This provision includes clarifying language in response to comments on the proposed language, and is consistent with similar clarifying language made in the “waterfall” provisions for remedying project noncompliance discussed under § 1291.60 below. Comments on the cure of noncompliance language are discussed under § 1291.60 below.

    Re-scoring of application. Consistent with the current regulation, § 1291.29(a)(3) of the final rule provides that in order to be approved for a modification, the application, as reflective of the changes requested, must continue to score high enough to have been approved in the AHP funding round in which it was originally scored and approved by the Bank. In response to questions that have arisen as to what it means to score high enough where a Bank also approved applications as alternates during the original AHP funding round, the proposed rule would have clarified that the application must continue to score as high as the lowest ranking alternate that was not simply designated as an alternate but approved for funding by the Bank in the application's original AHP funding round. Because the final rule allows a Bank to approve alternates for funding in its discretion pursuant to a written policy adopted by the Bank, the final rule states that the lowest ranking alternate approved for funding by the Bank is the applicable standard where the Bank has a written policy to approve alternates for funding. FHFA did not receive any comments on this proposed standard.

    Good cause. Consistent with the current regulation and proposed rule, the final rule continues to require that there be good cause for a modification, with the Bank's analysis and justification for the modification documented in writing. As proposed, the final rule clarifies that remediation of project noncompliance is not, in and of itself, good cause for a modification. As discussed below under § 1291.60 (Remedial Actions for Project Noncompliance), the final rule adds that the written analysis and justification for good cause must include why a cure of noncompliance was not successful or attempted.

    A Bank provided comments on the good cause determination for modifying a project. The Bank noted that it considered remediation of project noncompliance, by itself, to be good cause for modification. The Bank stressed that a project that remains eligible for an award in its original AHP funding round after the modification should be eligible for a modification without having to cure noncompliance first, notwithstanding the changes made after application approval. The Bank emphasized the need to preserve the AHP's ability to accept and adapt to a project's needs. The Bank cited potential changes to green initiatives or the number of units reserved for homeless households that may or may not impact the project's budget or financing commitments, as examples of the types of changes justifying good cause for a modification. The Bank contended that a cure-first requirement would add unnecessary administrative costs for the Banks, the project sponsors, and the members when the projects are eligible for project modifications in any case based on their scoring, feasibility, and need for subsidy.

    FHFA is not persuaded by the Bank's comments. Remediation of project noncompliance is not, in and of itself, good cause for a modification. There must be other reasonable justification for the modification, such as a change in market conditions, loss of committed funding to subsidize project rents, or loss of a major employer in the community that makes it difficult to find households at the incomes committed to in the project's AHP application to occupy the targeted units in the project. Otherwise, there would be less of an incentive to cure noncompliance if project sponsors knew they could simply request a modification of the project terms to no longer be in noncompliance. The final rule adds that the written analysis and justification for good cause must include why a cure of noncompliance was not successful or attempted.

    Consistent with the proposed rule, the final rule also makes technical changes to the language in § 1291.29(b)(1) to clarify any ambiguity about the requirement that requests for subsidy increase modifications must also meet the requirements for approval applicable to other modifications in § 1291.29(a).

    § 1291.30 Procedures for Funding

    Consistent with the proposed rule, the final rule relocates the procedures for AHP funding from § 1291.5(g) of the current regulation to § 1291.30, with several changes.

    Cancellation of AHP application approvals. The final rule clarifies in § 1291.30(b) and (c) that if a Bank cancels any AHP application approvals due to lack of progress towards draw-down and use of the AHP subsidies or noncompliance with AHP eligibility requirements, the requirement to make the AHP subsidies available to other AHP-eligible projects also includes the option to make the subsidies available to other AHP-eligible households.

    Compliance upon disbursement of AHP subsidies. The final rule removes the reference to a change in the need for AHP subsidy in § 1291.30(c). This language is superfluous because as the rule states, at each disbursement of AHP subsidy, a project must meet all eligibility requirements, which include the need for AHP subsidy.

    Notification under subsidy re-use programs. As discussed under §§ 1291.13 above and 1291.64(b) below, in a change from the proposed rule, the final rule retains the current regulatory provision enabling a Bank to adopt, in its discretion, a program allowing re-use of AHP subsidy repayments in the same project. Accordingly, § 1291.30(f) of the final rule also retains current § 1291.5(g)(6), which requires project sponsor notification to the Bank and the member of the re-use of repaid AHP direct subsidy where the Bank has authorized such re-use.

    Bank board duties and delegation. As proposed, the final rule eliminates current § 1291.5(h), which addresses Bank board duties and delegations, as these duties and delegations are addressed elsewhere in the final rule.

    § 1291.31 Lending and Re-Lending of AHP Direct Subsidy by Revolving Loan Funds

    The final rule relocates § 1291.5(c)(13) of the current regulation, which addresses the requirements for lending and re-lending of AHP direct subsidies by revolving loan funds to § 1291.31, without change except as related to the elimination of the requirement for a retention agreement for owner-occupied rehabilitation in the final rule. The revolving loan fund provisions were designed for lending and re-lending of the AHP subsidy by distinct projects in specific locations, or for pipelines of expected projects meeting specific criteria that the revolving loan fund anticipates funding and that would be specified in its AHP application. Under the regulation, the revolving loan fund may be scored on the specific criteria it establishes in its AHP application for its pipeline of projects, without having to actually identify specific projects in the AHP application.

    To assist in anticipated future rulemaking on revolving loan funds under the AHP, FHFA specifically requested comments in the NPRM on why certain AHP scoring criteria have been difficult to meet, how the AHP retention periods could be satisfied, how AHP subsidy would be repaid in the event of project noncompliance, how the revolving loan fund can demonstrate a need for AHP subsidy, and the potential positive or negative impacts of eliminating the owner-occupied retention agreement requirement for revolving loan funds.

    A nonprofit affordable housing intermediary expressed general support for increased use of AHP funds by revolving loan funds. A trade association for CDFIs stated that it would be particularly interested in working with FHFA and the Banks on expanding the use and impact of revolving loan funds. A Bank indicated that revolving loan funds can help meet the rehabilitation needs of owner-occupied units.

    Several CDFIs and Banks commented that identifying specific project locations or addresses in AHP applications is problematic for revolving loan funds. One of the Banks stated that revolving loan fund applications cannot score sufficient points in categories tied to geography, inclusion of donated properties, economic diversity, or income targeting because the revolving loan funds cannot commit with certainty to the characteristics of a project or household as specific addresses or households are often unknown by the revolving loan fund at the time of AHP application.

    A CDFI and a Bank suggested that applications for revolving loan funds should describe a pipeline of potential projects rather than discrete projects. Another CDFI suggested developing a scoring system based on a commitment to impact and homebuyer benefit, rather than on specific property addresses. The commenter also recommended establishing separate scoring criteria within the AHP scoring framework for revolving loan funds.

    Two Banks reported not having received revolving loan fund applications for the AHP and encouraged FHFA to engage in a separate rulemaking for revolving loan funds. One of the Banks indicated that it was not aware of any revolving loan funds in the market that meet the current AHP regulatory requirements, and that it did not know how to make the AHP more amenable to revolving loan funds. The other Bank stated that the proposed outcome requirements would not necessarily facilitate the use of revolving loan funds.

    In response to FHFA's request for comment, FHFA received several comments on whether organizations using sponsor-provided permanent financing models should be considered to be revolving loan funds. A national nonprofit opposed this, stating that it uses this model and would likely be excluded from competitive AHP Funds if it were treated exclusively as a revolving loan fund under any future AHP regulation. A Bank stated that, by definition, there are similarities between revolving loan funds and sponsor-provided permanent financing models since the funds of each are recycled on an ongoing basis. The Bank stated, however, that unlike a revolving loan fund, sponsor-provided permanent financing models are project specific and have readily available information that can be vetted during the application process.

    FHFA is unclear on how to interpret the comments on identifying specific property locations in AHP applications. As discussed in the NPRM and above, the current regulation allows a Bank to score a revolving loan fund based on the specific criteria it establishes in its AHP application for its pipeline of projects, without having to actually identify specific projects in the AHP application. FHFA will consider the comments received on this issue, as well as comments received in response to its anticipated future rulemaking, in determining the treatment of revolving loan funds under the AHP regulation.

    § 1291.32 Use of AHP Subsidy in Loan Pools

    The final rule relocates § 1291.5(c)(14) of the current regulation, which addresses the requirements for use of AHP subsidies in loan pools, to § 1291.32, with a change to remove the requirement for retention agreements for owner-occupied rehabilitation in current § 1291.5(c)(14)(iii).

    The current regulation establishes specific conditions under which a Bank may provide AHP subsidies under its Competitive Application Program for the origination of first mortgage loans or rehabilitation loans with subsidized interest rates to AHP-eligible household through a purchase commitment by an entity that will purchase and pool the loans. As stated in the NPRM, FHFA is not aware that any loan pools meeting these conditions have applied for AHP subsidy since adding the regulatory authority in 2006. FHFA is also not aware of any loan pools of this type currently existing in the housing market. FHFA specifically requested comments in the NPRM on whether there are loan pools currently operating in the market that meet the conditions in the regulation, how the loan pools are addressing current housing market needs, and the potential positive or negative impacts of eliminating the owner-occupied retention agreement requirement for loan pools. FHFA received only one comment on this section, from a Bank, which stated that it had no experience with loan pools meeting the AHP requirements.

    FHFA anticipates engaging in a future rulemaking on loan pools with respect to the AHP, and will consider comments received in response to such rulemaking in determining the treatment of loan pools under the AHP regulation.

    Subpart D—Homeownership Set-Aside Programs § 1291.40 Establishment of Programs

    The final rule relocates § 1291.6(a) of the current regulation on the Bank establishment of Homeownership Set-Aside Programs to § 1291.40. As proposed, the final rule states that these programs are optional by adding that a Bank may establish such programs “in its discretion.” The final rule does not include the proposed requirement that a Bank's analyses for establishing such programs be included in its TCLP, as previously discussed under § 1290.6 (Bank Community Support Programs).

    § 1291.41 Eligible Applicants

    The final rule relocates § 1291.6(b) of the current regulation on eligible member applicants to § 1291.41, without change. No comments were received on this provision.

    § 1291.42 Eligibility Requirements

    The final rule relocates § 1291.6(c) of the current regulation on the eligibility requirements for Homeownership Set-Aside Programs to § 1291.42, with several changes, as proposed.

    Adoption of additional eligibility requirements. Consistent with informal guidance provided by FHFA to the Banks and the proposed rule, the final rule clarifies that the Banks may not adopt eligibility requirements under their Homeownership Set-Aside Programs beyond those set forth in this section, except those related to household eligibility pursuant to § 1291.42(b)(3). No comments were received on this proposed clarification.

    One-third funding allocation requirement--first-time homebuyers or owner-occupied rehabilitation—conforming change. As discussed above under § 1291.12(b) (funding allocation for Homeownership Set-Aside Programs), the final rule requires that at least one-third of a Bank's annual Homeownership Set-Aside Program funding allocation be for first-time homebuyers or households receiving set-aside funds for owner-occupied rehabilitation, or a combination of both. The final rule adds conforming language in § 1291.42(b)(3) for households receiving set-aside funds for owner-occupied rehabilitation.

    Maximum grant limit. Consistent with the proposed rule, the final rule authorizes the Banks to provide, through their members, set-aside grants of up to $22,000 per household, subject to annual upward adjustment in accordance with FHFA's House Price Index (HPI). This is a change from the current regulation, which authorizes set-aside grants of up to $15,000 per household and does not provide for annual HPI adjustments. The purpose of the increase in the subsidy limit is to respond to increases in the costs associated with buying or rehabilitating homes in high cost areas, as well as the high costs of certain types of rehabilitation. It will also bring the subsidy limit in line with changes in the HPI since 2002, when the regulation established the $15,000 subsidy limit. The HPI upward adjustments will account for future house price increases, negating any need for periodic revisions of the subsidy limit by regulation. FHFA will notify the Banks annually of the maximum subsidy amount based on the HPI.

    A number of commenters generally supported raising the subsidy limit per household from $15,000 to $22,000. Some of the commenters provided reasons for their support that were cited by FHFA in the NPRM, specifically, that the proposed increase would provide additional flexibility, benefit homeowners in high-cost areas, and support owner-occupied rehabilitation and aging in place. The Banks, nonprofit organizations, and a CDFI supported the proposed annual upward HPI adjustments. The Banks stated that because the adjustment would measure average price fluctuations in the single-family housing market, it would provide insight to the Banks about whether they should increase their individual subsidy limit in housing markets that are becoming less affordable.

    A state agency cautioned that the proposed increase in the subsidy limit could augment purchasers' ability to buy bigger houses, resulting in fewer grant recipients overall. A trade association stated that raising the raising the subsidy limit while also removing the requirement for owner-occupied retention agreements, as proposed, could increase the likelihood of the AHP subsidy being misused.

    As discussed in the NPRM and above, the purpose of the increase in the subsidy limit is to respond to increases in the costs associated with buying or rehabilitating homes in high cost areas, as well as the high costs of certain types of rehabilitation generally. The increase also brings the subsidy limit in line with changes in the HPI since 2002. The HPI shows that $15,000 in January 2002 has approximately the same buying power as $21,500 today. FHFA acknowledges commenters' concern that Bank adoption of the proposed higher subsidy limit could result in fewer households receiving set-aside subsidies. However, because most Banks have established subsidy limits below the current $15,000 limit, FHFA believes that an increase in the subsidy limit to $22,000 is not likely to result in a significant overall reduction in the number of households assisted by the Banks under their set-aside programs.

    Owner-occupied retention agreements. As discussed under Section III.D. above, the proposed rule would have eliminated the requirement for all owner-occupied retention agreements. The owner-occupied retention agreement requirement for households assisted with set-aside funds in current § 1291.6(c)(5), thus, would have been eliminated. Because the final rule retains the requirement for owner-occupied retention agreements where the AHP subsidy is used for purchase, or for purchase in conjunction with rehabilitation, the retention agreement requirement for such uses of AHP subsidy is retained in § 1291.42(e) of the final rule.

    § 1291.43 Approval of AHP Applications

    The final rule relocates § 1291.6(d) of the current regulation, which addresses the approval of set-aside applications in accordance with the Banks' criteria governing the allocation of funds, to § 1291.43, without substantive change.

    § 1291.44 Procedures for Funding

    The final rule relocates § 1291.6(e) of the current regulation, which addresses the procedures for set-aside funding, to § 1291.44, without substantive change.

    Subpart E—Outcome Requirements for Statutory and Regulatory Priorities

    FHFA proposed a number of benchmarks for demonstrating compliance with the proposed outcome-based approach for project selections. As discussed in Section III.A. above, FHFA has decided not to adopt the proposed outcome-based approach t project selection in the final rule. Accordingly, the provisions in proposed Subpart E are not adopted in the final rule.

    Subpart E—Monitoring § 1291.50 Monitoring Under the General Fund and Targeted Funds

    Initial monitoring of AHP projects receiving LIHTC. Consistent with the proposed rule, § 1291.50(a)(3)(i) of the final rule streamlines the initial monitoring requirements for LIHTC projects that also receive AHP subsidy. The final rule retains the current initial monitoring requirement that the Banks review certifications from LIHTC project sponsors that the residents' incomes and the rents comply with the income-targeting and rent commitments in the approved AHP application. It also includes a requirement, consistent with Bank practice, that the Banks review the LIHTC project's rent rolls, which include each household's income and rent. However, the final rule removes the current requirement that the Banks review other back-up documentation on household incomes and rents at initial monitoring for LIHTC projects. The final rule also streamlines the language of the LIHTC monitoring provisions as proposed.

    The proposed rule requested comments on whether this proposed streamlining of the Banks' initial monitoring requirements for LIHTC projects is reasonable, taking into consideration the risks of noncompliance and the costs of project monitoring. Commenters who commented on this proposal overwhelmingly supported it. A nonprofit affordable housing intermediary, a trade group, and the Banks stated generally that the proposal is reasonable and would not add any operational risks.

    In 2017, 51 percent of AHP projects received LIHTC, similar to the percentage of AHP projects that received LIHTC in the previous several years. Thus, any amendments to the LIHTC monitoring requirements will impact the Banks and many project sponsors and members that participate in the AHP. As discussed further in the NPRM, it is reasonable to allow the Banks to rely on the monitoring by the state-designated tax credit allocation agencies of AHP-assisted LIHTC projects because the LIHTC income, rent, and long-term retention period requirements have been substantially equivalent to those of the AHP, the tax credit allocation agencies monitor the projects, and LIHTC projects rarely go out of compliance with the income and rent requirements. Further, multiple parties retain a strong incentive to monitor LIHTC projects for income and rent compliance. LIHTC project owners bear responsibility for ensuring that their projects comply with the program's income, rent, and retention period requirements. The owners face severe consequences for noncompliance, which serve as a substantial deterrent to noncompliance. Because LIHTC investors cannot receive the benefits of the tax credits for units that are not in compliance, LIHTC project owners guarantee to their investors that their projects will remain in compliance, or the project owners must repay investors the amount of tax credits lost plus any penalties or interest levied by the IRS.

    The Banks currently are permitted to review LIHTC back-up documentation at initial monitoring on a risk basis. Given the low risks of noncompliance by LIHTC projects, the Banks can establish review schedules for the back-up documentation that are not especially burdensome. Although the administrative burdens on the project sponsors to provide, and the Banks to review, LIHTC back-up documentation (other than rent rolls) at initial monitoring may not be significant, eliminating this requirement will benefit the Banks and project sponsors by reducing their administrative costs.

    Initial and long-term monitoring of AHP projects funded by certain other government programs specified in FHFA guidance. As proposed, § 1291.50(a)(3)(i) of the final rule provides that, for AHP projects funded by certain other government programs specified in separate FHFA guidance, the Banks will only be required to review project sponsor certifications and rent rolls, and not any other back-up documentation, at initial monitoring. For long-term monitoring, § 1291.50(c)(1)(ii) of the final rule provides that the Banks will only be required to review annual project sponsor certifications on incomes and rents for such projects, and will not be required to review any back-up documentation for incomes and rents, including rent rolls. FHFA guidance will include government programs that have the same or substantially equivalent rent, income, and retention period requirements as the AHP, very low occurrences of noncompliance with those requirements, and monitoring entities that have demonstrated and continue to demonstrate their ability to monitor the programs. FHFA will update the guidance as appropriate to remain current with federal program developments.

    The FHFA guidance initially will specify the following federal government programs, which meet the standards outlined above, as eligible for the streamlined monitoring:

    ○ HUD Section 202 Program for the Elderly;

    ○ HUD Section 811 Program for Housing the Disabled;

    ○ USDA Section 515 Rural Multifamily Program; and

    ○ USDA Section 514 Farmworker Multifamily Program.

    In 2017, approximately two-thirds of AHP projects received funding from other federal programs. As further discussed in the NPRM, FHFA reviewed the extent to which AHP projects also receive subsidies from HUD and USDA programs to assess the extent to which the Banks could reasonably rely on HUD and USDA monitoring for these projects. In 2017, 24 percent of AHP projects received HOME Program financing, 8 percent received Community Development Block Grant (CDBG) funds, and 9 percent received other federal financing, including from USDA. FHFA then analyzed the HUD and USDA programs to determine which programs have substantially equivalent rent, income, and retention requirements to the AHP, very low noncompliance rates, and where the monitoring entity has demonstrated and continues to demonstrate effective monitoring of a respective program. The Agency determined that the four programs noted above meet these standards. FHFA has not identified other programs that meet these standards at this time. The proposed rule requested comments on whether this proposed reduction of the Banks' initial and long-term monitoring requirements for AHP projects funded by certain other government programs is reasonable, taking into consideration the risks of noncompliance and the costs of project monitoring. Many commenters, including trade groups, intermediaries, and nonprofit developers supported reliance on the monitoring of other federal funders of AHP projects. The Banks similarly supported the proposed changes to the initial and long-term monitoring requirements that would align them with the monitoring requirements of other federal programs, stating that they present very little risk. An intermediary supported reduced monitoring for projects involving USDA Section 514 and Section 515 properties because it would decrease regulatory and reporting burden. A CDFI supported reduced monitoring because it decreases the final burden on project sponsors, members, and the Banks.

    A nonprofit organization opposed reduction to the monitoring requirements for income and rental validation at initial monitoring. The commenter stated that projects are most likely to go out of compliance during the initial lease-up phase, and that Bank review at initial monitoring would likely ensure that the project remained compliant in the long term. The commenter did not identify any specific information to justify its position. Two policy organizations encouraged FHFA to continue to evaluate other federal programs such as HOME, CDBG, Rental Assistance Demonstration, and Section 8 Project-Based Rental Assistance, to determine whether the programs could be included in the guidance.

    It is reasonable to allow the Banks to conduct less monitoring of AHP projects funded by any of the four programs to be included in the FHFA guidance, given the low noncompliance risk to the AHP due to the overlap of the AHP monitoring requirements with USDA and HUD's monitoring practices, the substantially equivalent income, rent and retention requirements, and the programs' very low noncompliance rates. Eliminating the requirement to provide and review back-up documentation (other than rent rolls) for such projects at initial monitoring, and eliminating the requirement to provide and review any back-up documentation (including rent rolls) for such projects during long-term monitoring, will also benefit project sponsors and the Banks by reducing their administrative costs, albeit modestly for the Banks.21 In addition, aligning the AHP monitoring requirements for such projects with USDA's monitoring may encourage more USDA-funded projects to apply for AHP funds, thus increasing the proportion of rural families served by the AHP.

    21 The Banks have an average of 260 AHP rental projects per Bank in long-term monitoring, where monitoring reasonably be reduced through a risk-based monitoring plan.

    FHFA will continue to assess the programs recommended by the commenters, as well as other possible programs, and may add programs in the guidance as appropriate. Programs will be removed from the guidance when they no longer meet the standards for inclusion in the guidance.

    Enhanced long-term monitoring certifications. Consistent with the proposed rule, § 1291.50(c)(1)(i) of the final rule codifies existing Bank best practices that require submission by project sponsors of annual project certifications during the AHP 15-year retention period to include not only the household income and rent information, but also information addressing the on-going financial viability of the project, such as whether the project is current on property taxes and loan payments, its vacancy rate, and whether it is in compliance with its commitments to other funding sources.

    As discussed in the NPRM, during long-term monitoring, the Banks are required to monitor projects for compliance with the household income targeting and rent commitments in their AHP applications. This information may not reveal operational and viability challenges the projects are experiencing. By obtaining additional information from project sponsors about the project, the Banks may be able to work with other funders to address project concerns and any noncompliance, including attempting remediation through workout strategies or recovery of AHP subsidies for noncompliance. The requirement for enhanced certifications modestly increases the reporting requirements for project sponsors and Banks that are not currently requiring such enhanced certifications. FHFA did not receive any comments on the proposed enhanced certifications.

    Notice requirement for LIHTC project noncompliance during AHP long-term retention period. As discussed under § 1291.15(a)(5)(ii) above, the final rule requires the Banks to include in their AHP monitoring agreements with members, and for members to include in their agreements with project owners, a requirement that project owners provide prompt written notice to the Bank if an AHP-assisted LIHTC project is in material and unresolved noncompliance with LIHTC household income targeting or rent requirements at any time during the AHP 15-year retention period. Section 1291.50(c)(1)(ii) of the final rule includes a corresponding monitoring requirement that the Banks must review LIHTC noncompliance notices received from project owners during the 15-year retention period, which will make the Banks aware of any material and unresolved noncompliance so that they can take remedial or other actions regarding the project as appropriate.

    Risk factors and other monitoring. Consistent with the current regulation and proposed rule, § 1291.50(c)(2)(i) of the final rule requires that a Bank's written monitoring policies take risk factors into account. The final rule adds project sponsor performance as one of the risk factors that Banks may take into account because previous compliance history may be a useful criterion for Banks to consider in developing their monitoring policies.

    § 1291.51 Monitoring Under Homeownership Set-Aside Programs

    The final rule relocates the monitoring provisions for the Homeownership Set-Aside Program from current § 1291.7(b) to § 1291.51. The proposed rule would have removed the requirement in current § 1291.7(b)(ii) for verifying that AHP-assisted owner-occupied units are subject to retention agreements because it would have eliminated the requirement for owner-occupied retention agreements. However, as discussed in Section III.D. above, the final rule eliminates the requirement for owner-occupied retention agreements only where the household uses the AHP subsidy solely for owner-occupied rehabilitation. Accordingly, the final rule retains the current verification requirement for owner-occupied retention agreements where the households uses the AHP subsidy for purchase of the unit, or for purchase of the unit in conjunction with rehabilitation.

    Subpart F—Remedial Actions for Noncompliance

    The final rule relocates the provisions on remedial actions for AHP noncompliance from § 1291.8 of the current regulation to Subpart F. As proposed, the final rule addresses each type of noncompliance—project sponsor or owner, member, or Bank—in a separate section so that the responsibilities and potential liabilities of each party are clear. As proposed, the final rule also makes substantive changes to the order in which certain remedial actions must be taken, with certain clarifications to the provision on curing noncompliance. The changes are further discussed below.

    § 1291.60 Remedial Actions for Project Noncompliance

    Consistent with the proposed rule, § 1291.60 of the final rule addresses remedial actions for AHP project noncompliance. The language is revised and streamlined to provide greater clarity on the scope of the section and the responsibilities of the parties. As discussed extensively in Section III.E. above, the final rule adopts certain substantive changes by establishing a sequence of remedial steps for a Bank to follow before recovering AHP subsidy. The final rule also clarifies factors for Bank consideration in determining whether to accept less than the full amount of AHP subsidy due. Because the final rule is not adopting the proposed outcome-based requirements, the final rule does not adopt proposed § 1291.65, which would have provided for a number of remedial actions that FHFA could take to address Bank noncompliance with the outcome requirements, including housing plans and reimbursement of the AHP Fund.

    The changes in the final rule that are not discussed in Section III.E. above, are discussed below.

    Scope. Consistent with the proposed rule, § 1291.60 of the final rule sets forth the requirements applicable to the Banks in the event of noncompliance by an AHP-assisted project with its AHP application commitments and the requirements of the AHP regulation, including any use of AHP subsidy by the project sponsor or owner for purposes other than those committed to in the AHP application. As proposed, the final rule clarifies that this section does not apply to individual AHP-assisted households, or to the sale or refinancing by such households of their homes, as there is no ongoing Bank monitoring of households once they purchase their homes, and sale or refinancing during the AHP five-year retention period is not considered noncompliance.

    Elimination of project noncompliance. Section 1291.60(b) of the final rule establishes a sequence of remedial steps for a Bank to follow before recovering AHP subsidy, as discussed below.

    Cure of noncompliance (§ 1291.60(b)(1)). To address concerns that the proposed cure-first requirement might compel project sponsors or owners to continue to attempt curative efforts when project noncompliance cannot be cured, the final rule includes clarifying language applying a reasonableness standard for the level of these efforts. This clarification in the final rule codifies practices Banks generally follow now.

    Project modification (§ 1291.60(b)(2)). As proposed, the final rule further provides that if the project noncompliance cannot be cured within a reasonable period of time, the Bank shall determine whether the circumstances of the noncompliance can be eliminated through a project modification under § 1291.29, and if so, the Bank must approve the modification request (except for modifications requests for AHP subsidy increases, whose approval remains discretionary for the Banks).

    Reasonable collection efforts, including settlement (§ 1291.60(c)). Consistent with the proposed rule, § 1291.60(c)(1) of the final rule provides that if the circumstances of a project's noncompliance cannot be eliminated through a cure or modification, the Bank, or the member if delegated the responsibility, must first make a demand on the project sponsor or owner for repayment of the full amount of the AHP subsidy not used in compliance with the commitments in the AHP application or the AHP regulation. This is intended to ensure that the Banks attempt to recover all of the subsidy due before considering settlements. This provision also clarifies that if the noncompliance is occupancy by over-income households, the amount of AHP subsidy due is calculated based on the number of units in noncompliance, the length of the noncompliance, and the portion of the AHP subsidy attributable to the noncompliant units.

    Section 1291.60(c)(2) of the final rule specifies that if the demand for repayment of the full amount of subsidy due is unsuccessful, then the Bank, or the member if delegated the responsibility and in consultation with the Bank, is required to make reasonable efforts to collect the subsidy from the project sponsor or owner, which may include settlement for less than the full amount of subsidy due. As proposed, the final rule clarifies that members would carry out these efforts in consultation with the Bank, consistent with current practice.

    The final rule also retains the proposal to clarify that the facts and circumstances to consider in determining whether to settle include not only the degree of culpability of the noncomplying parties and the extent of the Bank's or member's collection efforts, as provided in the current regulation, but also the financial capacity of the project sponsor or owner, assets securing the AHP subsidy, and other assets of the project sponsor or owner. FHFA specifically requested comments on whether the facts and circumstances included in the proposed rule are appropriate for consideration during reasonable collection efforts, and whether there are other factors that should be considered.

    The Banks, a Bank Advisory Council, a trade association, and a nonprofit organization opposed the proposal on several different bases. The Banks stated that the facts and circumstances in the proposed rule were worthy but represented just a few of the considerations used in the subsidy recapture process. The Banks requested, therefore, that FHFA not codify the factors in the regulation, but rather allow each Bank to evaluate the fact-specific scenarios of a subsidy recapture and settlement process based on its own guidelines.

    A Bank Advisory Council and a nonprofit organization stated that expanding the requirements of reasonable collection efforts to include the Bank's review of the financial capacity and assets of both the project sponsor and project owner would increase the Bank's administrative burden. The commenters stated that the proposal could decrease the number of project sponsors, project owners, and members willing to submit applications for AHP subsidy. Several commenters warned that the proposed requirements regarding the repayment of AHP subsidy would require project sponsors to act as guarantors, responsible for repaying all or a portion of the AHP subsidy due to noncompliance. A Bank and a trade association opposed the proposal, stating that it would effectively make AHP funds recourse obligations of the project sponsor and project owner, although affordable rental housing financing, particularly for LIHTC projects, is normally nonrecourse, and was not appropriate.

    Settlement represents the last resort in a series of steps that a Bank initiates to remedy a project's noncompliance, in cases where the noncompliance cannot be eliminated through a cure or modification and the demand for full repayment of the AHP subsidy is unsuccessful. It is reasonable, in these rare instances, for a Bank to take into account the financial capacity and assets of both the project sponsor and owner to determine whether they have the ability to repay a portion of the AHP subsidy. The Bank would not require repayment of subsidy if they do not have resources to do so. The requirement for the project sponsor or owner to repay all or a portion of the AHP subsidy in the case of noncompliance that cannot be resolved through a cure or modification is a longstanding requirement of the AHP and, therefore, is unlikely to decrease the number of applications for AHP subsidy. For these reasons, the final rule retains the proposed clarifications described above.

    As proposed, the final rule also eliminates current § 1291.8(d)(2), which provided the Banks the option of seeking FHFA's prior approval for a proposed subsidy settlement. As discussed in the NPRM, only one Bank has used this option and it was for two similar cases. The Banks may enter into subsidy settlements, in their discretion, provided the settlements are supported by reasonable justifications. The Banks have made these types of business decisions for many years without seeking prior FHFA approval. Moreover, the final rule further clarifies the factors the Banks should consider in deciding whether to settle with a project sponsor or project owner. FHFA did not receive any comments on this provision.

    § 1291.61 Recovery of Subsidy for Member Noncompliance

    Section 1291.61 of the final rule addresses member noncompliance, which is addressed in § 1291.8(b)(1) of the current regulation. The final rule clarifies the language to focus on noncompliance with a member's AHP application or the AHP regulation as a result of the member's actions or omissions, consistent with similar language applicable to the Banks and project sponsors in the current regulation and Subpart F, rather than on impermissible use of the subsidy by the member. FHFA did not receive any comments on this section.

    § 1291.62 Bank Reimbursement of AHP Fund

    As proposed, the final rule relocates § 1291.8(e) of the current regulation, which addresses circumstances where a Bank is required to reimburse its AHP fund, to § 1291.62, with no substantive changes. FHFA did not receive any comments on this section.

    § 1291.63 Suspension and Debarment

    Consistent with the proposed rule, the final rule relocates § 1291.8(g) of the current regulation, which addresses suspension or debarment of members, project sponsors, or project owners, to § 1291.63, without change. FHFA did not receive any comments on this section.

    § 1291.64 Use of Repaid AHP Subsidies

    Use of repaid AHP subsidies for other AHP-eligible projects or households. Consistent with the proposed rule, § 1291.64 of the final rule includes § 1291.8(f)(1) of the current regulation, which provides that AHP subsidy repaid to a Bank under the AHP regulation must be made available by the Bank for other AHP-eligible projects. As proposed, the final rule also clarifies that the repaid subsidy may also be made available by the Bank for AHP-eligible households.

    Re-use of repaid AHP direct subsidies in the same project. The final rule retains § 1291.8(f)(2) of the current regulation, which provides for re-use of repaid AHP direct subsidies in the same project, in the Bank's discretion. The proposed rule would have eliminated the requirement for owner-occupied retention agreements in all cases, meaning no AHP subsidy would be repaid by households if they sold their homes during the five-year AHP retention period, rendering the ability to re-use repaid subsidy in the project moot. The final rule retains the owner-occupied retention agreement requirement where the household uses the subsidy for purchase of the unit, or purchase of the unit in conjunction with rehabilitation, but not where the household uses the subsidy solely for rehabilitation. Thus, there remains the possibility for repayments of subsidy by households if they sell their homes during the five-year retention period and none of the regulatory exceptions to subsidy repayment applies. FHFA did not receive any comments on this re-use of repaid subsidies provision.

    § 1291.65 Transfer of Program Administration

    The final rule relocates § 1291.8(h) of the current regulation, which addresses transfer of a Bank's Program to another Bank in the event of mismanagement of its Program, to § 1291.65, with no changes. The proposed rule did not propose any changes to this provision, and no comments were received on it.

    Removal of Obsolete Provision

    As proposed, the final rule rescinds current § 1291.8(i) because the provision refers to a now-repealed Finance Board regulatory provision that was intended to establish a formal process for review by the Board of Directors of the Finance Board of certain types of supervisory decisions, which FHFA opted not to adopt.22 Though it is not directly comparable to the repealed Finance Board provision, FHFA's Ombudsman regulation provides an avenue for the Banks to present complaints and appeals to the Agency about their regulation or supervision.23 FHFA did not receive any comments on this proposed rescission.

    22 12 CFR 907.9.

    23See 12 CFR part 1213.

    Subpart G—Affordable Housing Reserve Fund § 1291.70 Affordable Housing Reserve Fund

    Consistent with the proposed rule, the final rule relocates § 1291.12 of the current regulation, which addresses the requirements for an Affordable Housing Reserve Fund, to § 1291.70. The final rule revises the current provision by requiring that amounts remaining unused or uncommitted at year-end are deemed to be used or committed if, in combination with AHP funds that have been returned to the Bank or de-committed from canceled projects, they are insufficient to fund: (1) AHP application alternates in the Bank's final funding round of the year for its General Fund or any Targeted Funds, if the Bank has a policy to approve alternates for funding under such Funds; (2) pending applications for funds under any Bank Homeownership Set-Aside Programs; and (3) project modifications for AHP subsidy increases approved by the Bank. The proposed rule would have prioritized the General Fund and then any Targeted Funds. The final rule does not adopt this proposed change in order to provide the Banks with flexibility on how to use such funds. FHFA did not receive any comments on this proposed revision. FHFA notes that in the history of the Program, there has never been a need to establish an Affordable Housing Reserve Fund.

    V. Consideration of Differences Between the Banks and the Enterprises

    Section 1313(f) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 requires the Director of FHFA, when promulgating regulations relating to the Banks, to consider the differences between the Banks and the Enterprises (Fannie Mae and Freddie Mac) as they relate to the Banks' cooperative ownership structure, mission of providing liquidity to members, affordable housing and community development mission, capital structure, and joint and several liability. The final rule applies only to the Banks. It amends the current AHP regulation to revise the scoring criteria governing the selection of AHP award recipients; provide additional authority to the Banks regarding certain Program operations, streamline project monitoring requirements, clarify various parties' responsibilities regarding AHP noncompliance, eliminate the requirement for retention agreements for AHP subsidy used to rehabilitate owner-occupied units without an accompanying purchase, and clarify certain operational requirements. In preparing this final rule, the Director considered the differences between the Banks and the Enterprises as they relate to the above factors, and determined that the amendments in the final rule are positive for the affordable housing mission of the Banks and neutral regarding the other statutory factors. FHFA requested comments in the NPRM regarding whether differences related to those factors should result in any revisions to the proposed rule. No significant relevant comments were received.

    VI. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (PRA) 24 requires that Federal agencies, including FHFA, consider the impact of paperwork and other information collection burdens imposed on the public. Under the PRA and the implementing regulations of the Office of Management and Budget (OMB), no agency may conduct or sponsor, and no person is required to respond to, an information collection unless it displays a currently valid OMB control number. Part 1291 contains six information collections (ICs) relating to the Banks' AHPs, which have been approved by OMB under the PRA and assigned control number 2590-0007 (entitled “Affordable Housing Program”; expires Mar. 31, 2020). The final rule modifies some of the information collection requirements in part 1291 and makes other changes to the regulation that affect the reporting and recordkeeping burdens imposed by the regulation. FHFA has submitted the proposed and final rules and an analysis of the revised ICs to OMB for review and has requested approval of a three-year extension of control number 2590-0007.

    24 44 U.S.C. 3501 et seq.

    A. Background

    As revised by the final rule, part 1291 contains six ICs: (1) Competitive applications for AHP subsidy under General Funds and Targeted Funds; (2) compliance submissions for approved General Fund and Targeted Fund projects at AHP subsidy disbursement; (3) modification requests for approved General Fund and Targeted Fund projects; (4) initial monitoring submissions for approved General Fund and Targeted Fund projects; (5) long-term monitoring submissions for approved General Fund and Targeted Fund projects; and (6) Homeownership Set-Aside Program applications and certifications. These ICs are substantially the same as the six currently-approved ICs in existing part 1291, although ICs #1 through #5 have been re-titled to refer to the Banks' “General Fund and Targeted Fund projects” instead of their “Competitive Application Program projects.” Under the final rule (as under the proposed rule), projects funded under the Banks' General Funds and Targeted Funds will be subject to a competitive application process and to requirements regarding subsidy disbursements, modification requests, and initial and long-term monitoring that are similar to those that apply to the Banks' Competitive Application Programs.

    As required by 5 CFR 1320.8(d)(3), the SUPPLEMENTARY INFORMATION to the proposed rule included a PRA statement setting forth FHFA's burden estimates for the six ICs, as revised by the proposed rule, and requested public comments on those estimates and on the reporting and recordkeeping burdens that would be imposed by the rule.25 The PRA statement also detailed, for each IC, how FHFA arrived at its burden estimate, the effect of the proposed rule on the scope of the IC and the burden estimate, and how the collected information would be used.

    25See 83 FR at 11370-74.

    In compliance with 5 CFR 1320.11(b), FHFA submitted the proposed rule and an analysis of the revised ICs to OMB for review simultaneously with the publication of the proposed rule. On June 6, 2018, OMB issued a Notice of Action (NOA) to FHFA, pursuant to 5 CFR 1320.11(c), stating that OMB had not yet approved the revised ICs and that the terms of the prior renewal of the control number remained in effect. The NOA instructed FHFA to address all comments received in response to the proposed rule's PRA statement. Under 5 CFR 1320.11(f), FHFA must explain how any IC contained in the final rule responds to any comments received from OMB or the public and must identify and explain any modifications made in the final rule, or explain why it rejected the comments. Aside from the NOA filed by OMB, FHFA received no comments in response to the PRA statement in the proposed rule.

    Although not generated by PRA comments or concerns, there are a number of substantive differences between the proposed and final rules, as detailed above. While some of these differences touch upon information collection requirements, FHFA has concluded that the only difference that will have a material effect on the paperwork burden imposed by the final rule is the decision not to adopt the proposed increase, from 35 to 40 percent, in the maximum percentage of AHP funds Banks may allocate to their Homeownership Set-Aside programs. In estimating the paperwork burden that IC #6 would have imposed under the proposed rule, FHFA anticipated that the increase in the maximum allocation percentage, in combination with generally higher Bank incomes, would lead the average annual number of Homeownership Set-Aside Program applications and certifications to increase significantly, to 15,000 from the 13,000 that FHFA had estimated in connection with the prior renewal of the control number. This led FHFA to estimate that the average annual burden imposed by IC #6 would increase from 65,000 to 75,000 hours under the proposed rule. Because the final rule does not implement the proposed maximum allocation percentage increase, however, FHFA now anticipates that the Banks will receive an average of only 13,260 Homeownership Set-Aside Program applications and certifications annually. This figure represents a two percent increase from the most recent estimate of 13,000, to reflect a slightly higher level of Homeownership Set-Aside Program activity arising from anticipated higher Bank incomes over the next three years. As a result of this change, FHFA has modified its burden estimate for revised IC #6 downward to 66,300 hours from the 75,000 hours reflected in the proposed rule's PRA statement (a decrease of 8,700 hours).

    Aside from the modification of the burden estimate for IC #6 discussed above, the burden estimates for, and material details regarding, each revised IC remain as described in the PRA statement for the proposed rule. The final burden estimates for revised part 1291 appear below.

    B. Burden Estimates for Respondents

    FHFA estimates that the average total burden that will be imposed upon Bank members and AHP project sponsors and owners annually over the next three years by the six ICs in revised part 1291 will be 118,905 hours. This represents an increase of 3,155 total hours over the estimate of 115,750 hours made in connection with the most recent renewal of the OMB control number. The burden estimate for each IC and the manner in which the estimate was calculated are set forth below.

    1. Competitive Applications for AHP Subsidy Under General Funds and Targeted Funds

    FHFA estimates that Banks will receive an annual average of 1,485 competitive applications for subsidy from Bank members on behalf of project sponsors and owners under their General Funds and Targeted Funds over the next three years and that it will take an average of 24 hours to prepare and submit each application, resulting in an estimated annual average burden of 35,640 hours for IC #1.

    2. Compliance Submissions for Approved General Fund and Targeted Fund Projects at AHP Subsidy Disbursement

    FHFA estimates that the Banks will receive an annual average of 715 submissions over the next three years from Bank members and project sponsors verifying that projects approved under the Banks' General Funds and Targeted Funds continue to comply with the regulatory eligibility requirements and all commitments made in the approved AHP applications at the time of subsidy disbursement and that it will take an average of one hour to prepare each submission, resulting in an estimated annual average burden of 715 hours for IC #2.

    3. Modification Requests for Approved General Fund and Targeted Fund Projects

    FHFA estimates that Banks will receive an annual average of 290 requests from Bank members and project sponsors for modifications to projects that have been approved under the Banks' AHP competitive application programs over the next three years and that it will take an average of 2.5 hours to prepare each request, resulting in an estimated annual average burden of 725 hours for IC #3.

    4. Initial Monitoring Submissions for Approved General Fund and Targeted Fund Projects

    FHFA estimates that Banks will receive an annual average of 510 submissions from Bank members and project sponsors of documentation required by the Banks as part of their initial monitoring of in-progress and recently completed projects approved under their General Funds and Targeted Funds over the next three years and that it will take an average of 4.5 hours to prepare each submission, resulting in an estimated annual average burden of 2,295 hours for IC #4.

    5. Long-Term Monitoring Submissions for Approved General Fund and Targeted Fund Projects

    FHFA estimates that Banks will receive an annual average of 4,900 submissions from Bank members and project sponsors of documentation required by the Banks as part of their long-term monitoring of completed projects approved under their General Funds and Targeted Funds over the next three years and that it will take an average of 2.7 hours to prepare each submission, resulting in an estimated annual average burden of 13,230 hours for IC #5.

    6. Homeownership Set-Aside Program Applications and Certifications

    FHFA estimates that Banks will receive from Bank members an annual average of 13,260 applications and required certifications for AHP direct subsidies under their Homeownership Set-Aside Programs and that it will take an average of 5 hours to prepare each submission, resulting in an estimated annual average burden of 66,300 hours for IC #6.

    VII. Regulatory Flexibility Act

    The Regulatory Flexibility Act 26 requires that a regulation that has a significant economic impact on a substantial number of small entities, small businesses, or small organizations must include an initial regulatory flexibility analysis describing the regulation's impact on small entities. Such an analysis need not be undertaken if the agency has certified that the regulation will not have a significant economic impact on a substantial number of small entities.27 FHFA has considered the impact of the final rule under the Regulatory Flexibility Act. The General Counsel of FHFA certifies that the final rule is not likely to have a significant economic impact on a substantial number of small entities because the regulation applies to the Banks, which are not small entities for purposes of the Regulatory Flexibility Act.

    26 5 U.S.C. 601 et seq.

    27 5 U.S.C. 605(b).

    VIII. Congressional Review Act

    In accordance with the Congressional Review Act,28 FHFA has determined that this final rule is not a major rule and has verified this determination with the Office of Information and Regulatory Affairs of the Office of Management and Budget (OMB).

    28See 5 U.S.C. 804(2).

    List of Subjects 12 CFR Part 1290

    Banks and banking, Credit, Federal home loan banks, Housing, Mortgages, Reporting and recordkeeping requirements.

    12 CFR Part 1291

    Community development, Credit, Federal home loan banks, Housing, Low- and moderate-income housing, Mortgages, Reporting and recordkeeping requirements.

    For the reasons stated in the Preamble, FHFA amends parts 1290 and 1291 of Title 12 of the Code of Federal Regulations as follows:

    PART 1290—COMMUNITY SUPPORT REQUIREMENTS 1. The authority citation for part 1290 continues to read as follows: Authority:

    12 U.S.C. 1430(g).

    2. Amend § 1290.6 by revising paragraph (a)(5) and adding paragraph (c) to read as follows:
    § 1290.6 Bank community support programs.

    (a) * * *

    (5) Include an annual Targeted Community Lending Plan approved by the Bank's board of directors and subject to modification. The Bank's board of directors shall not delegate to a committee of the board, Bank officers, or other Bank employees the responsibility to adopt or amend the Targeted Community Lending Plan. The Targeted Community Lending Plan shall:

    (i) Reflect market research conducted in the Bank's district;

    (ii) Describe how the Bank will address identified credit needs and market opportunities in the Bank's district for targeted community lending;

    (iii) Be developed in consultation with (and may only be amended after consultation with) its Advisory Council and with members, housing associates, and public and private economic development organizations in the Bank's district;

    (iv) Establish quantitative targeted community lending performance goals;

    (v) Identify and assess significant affordable housing needs in its district that will be addressed through its Affordable Housing Program under 12 CFR part 1291, reflecting market research conducted or obtained by the Bank; and

    (vi) For any Targeted Funds established by the Bank under its Affordable Housing Program, specify, from among the identified affordable housing needs, the particular affordable housing needs the Bank plans to address through such Targeted Funds.

    (c) Public access. A Bank shall publish its current Targeted Community Lending Plan on its publicly available website, and shall publish any amendments to its Targeted Community Lending Plan on the website within 30 days after the date of their adoption by the Bank's board of directors. If a Bank plans to establish any Targeted Funds under its Affordable Housing Program, the Bank must publish its Targeted Community Lending Plan (as amended) on the website on or before the date of publication of its annual Affordable Housing Program Implementation Plan, and at least 90 days before the first day that applications may be submitted to the Targeted Fund, unless the Targeted Fund is specifically targeted to address a federal- or state-declared disaster.

    3. Add § 1290.8 to read as follows:
    § 1290.8 Compliance dates.

    From December 28, 2018 to December 31, 2020, a Bank shall comply with either prior part 1290 (in 12 CFR part 1290 (January 1, 2018 edition)) or this part 1290. On and after January 1, 2021, a Bank shall comply with this part 1290.

    PART 1291—FEDERAL HOME LOAN BANKS' AFFORDABLE HOUSING PROGRAM 4. Revise part 1291 to read as follows: PART 1291—FEDERAL HOME LOAN BANKS' AFFORDABLE HOUSING PROGRAM Subpart A—General Sec. 1291.1 Definitions. 1291.2 Compliance dates. Subpart B—Program Administration and Governance 1291.10 Required annual AHP contribution. 1291.11 Temporary suspension of AHP contributions. 1291.12 Allocation of required annual AHP contribution. 1291.13 Targeted Community Lending Plan; AHP Implementation Plan. 1291.14 Advisory Councils. 1291.15 Agreements. 1291.16 Conflicts of interest. Subpart C—General Fund and Targeted Funds 1291.20 Establishment of programs. 1291.21 Eligible applicants. 1291.22 Funding rounds; application process. 1291.23 Eligible projects. 1291.24 Eligible uses. 1291.25 Scoring methodologies. 1291.26 Scoring criteria for the General Fund. 1291.27 Scoring criteria for Targeted Funds. 1291.28 Approval of AHP applications under the General Fund and Targeted Funds. 1291.29 Modifications of approved AHP applications. 1291.30 Procedures for funding. 1291.31 Lending and re-lending of AHP direct subsidy by revolving loan funds. 1291.32 Use of AHP subsidy in loan pools. Subpart D—Homeownership Set-Aside Programs 1291.40 Establishment of programs. 1291.41 Eligible applicants. 1291.42 Eligibility requirements. 1291.43 Approval of AHP applications. 1291.44 Procedures for funding. Subpart E—Monitoring 1291.50 Monitoring under General Fund and Targeted Funds. 1291.51 Monitoring under Homeownership Set-Aside Programs. Subpart F—Remedial Actions for Noncompliance 1291.60 Remedial actions for project noncompliance. 1291.61 Recovery of subsidy for member noncompliance. 1291.62 Bank reimbursement of AHP fund. 1291.63 Suspension and debarment. 1291.64 Use of repaid AHP subsidies. 1291.65 Transfer of Program administration. Subpart G—Affordable Housing Reserve Fund 1291.70 Affordable Housing Reserve Fund. Authority:

    12 U.S.C. 1430(j).

    Subpart A—General
    § 1291.1 Definitions.

    As used in this part:

    Affordable means that:

    (1) The rent charged to a household for a unit that is to be reserved for occupancy by a household with an income at or below 80 percent of the median income for the area, does not exceed 30 percent of the income of a household of the maximum income and size expected, under the commitment made in the AHP application, to occupy the unit (assuming occupancy of 1.5 persons per bedroom or 1.0 persons per unit without a separate bedroom); or

    (2) The rent charged to a household, for rental units subsidized with Section 8 assistance under 42 U.S.C. 1437f or subsidized under another assistance program where the rents are charged in the same way as under the Section 8 program, if the rent complied with this definition at the time of the household's initial occupancy and the household continues to be assisted through the Section 8 or another assistance program, respectively.

    AHP means the Affordable Housing Program required to be established by the Banks pursuant to 12 U.S.C. 1430(j) and this part.

    AHP project means a single-family or multifamily housing project for owner-occupied or rental housing that has been awarded or has received AHP subsidy under a Bank's General Fund and any Targeted Funds.

    Cost of funds means, for purposes of a subsidized advance, the estimated cost of issuing Bank System consolidated obligations with maturities comparable to that of the subsidized advance.

    Direct subsidy means an AHP subsidy in the form of a direct cash payment.

    Eligible household means a household that meets the income limits and other requirements specified by a Bank for its General Fund and any Targeted Funds and Homeownership Set-Aside Programs, provided that:

    (1) In the case of owner-occupied housing, the household's income may not exceed 80 percent of the median income for the area; and

    (2) In the case of rental housing, the household's income in at least 20 percent of the units may not exceed 50 percent of the median income for the area.

    Eligible project means a project eligible to receive AHP subsidy pursuant to the requirements of this part.

    Extremely low-income household means a household that has an income at or below 30 percent of the median income for the area, with the income limit adjusted for household size in accordance with the methodology of the applicable median income standard selected from those enumerated in the definition of “median income for the area,” unless such median income standard has no household size adjustment methodology.

    Family member means any individual related to a person by blood, marriage, or adoption.

    Funding round means a time period, as determined by a Bank, during which the Bank accepts AHP applications for subsidy under its General Fund and any Targeted Funds.

    General Fund means a program that each Bank is required to establish and under which the Bank approves (i.e., awards) applications for AHP subsidy through a competitive application scoring process and disburses the subsidy, pursuant to the requirements of this part.

    Homeownership Set-Aside Program means a program established by a Bank, in its discretion, under which the Bank approves (i.e., awards) applications for AHP direct subsidy through a noncompetitive process developed by the Bank and disburses the subsidy, pursuant to the requirements of this part.

    Household's investment means the following, to the extent paid by the household and documented (in the Closing Disclosure or other settlement statement, if applicable, or elsewhere) to the Bank or its designee:

    (1) Reasonable and customary costs paid by the household in connection with the purchase of the unit (including real estate broker's commission, attorney's fees, and title search fees);

    (2) Any down payment paid in connection with the household's purchase of the unit;

    (3) The cost of any capital improvements made after the household's purchase of the unit until the time of the subsequent sale, transfer, assignment of title or deed, or refinancing; and

    (4) The amount of principal on any mortgage senior to the AHP subsidy lien or other legally enforceable AHP subsidy repayment obligation repaid by the household.

    LIHTC means Low-Income Housing Tax Credits under section 42 of the Internal Revenue Code (26 U.S.C. 42).

    Loan pool means a group of mortgage or other loans meeting the requirements of this part that are purchased, pooled, and held in trust.

    Low- or moderate-income household means a household that has an income of 80 percent or less of the median income for the area, with the income limit adjusted for household size in accordance with the methodology of the applicable median income standard selected from those enumerated in the definition of “median income for the area,” unless such median income standard has no household size adjustment methodology.

    Median income for the area means one or more of the following median income standards as determined by a Bank, after consultation with its Advisory Council, in its AHP Implementation Plan:

    (1) The median income for the area, as published annually by HUD;

    (2) The median income for the area obtained from the Federal Financial Institutions Examination Council;

    (3) The applicable median family income, as determined under 26 U.S.C. 143(f) (Mortgage Revenue Bonds) and published by a state agency or instrumentality;

    (4) The median income for the area, as published by the United States Department of Agriculture; or

    (5) The median income for an applicable definable geographic area, as published by a federal, state, or local government entity, and approved by FHFA, at the request of a Bank, for use under the AHP.

    Multifamily building means a structure with five or more dwelling units.

    Net earnings of a Bank means the net earnings of a Bank for a calendar year before declaring or paying any dividend under section 16 of the Bank Act (12 U.S.C. 1436). For purposes of this part, “dividend” includes any dividends on capital stock subject to a redemption request even if under GAAP those dividends are treated as an “interest expense.”

    Net proceeds means:

    (1) In the case of a sale, transfer, or assignment of title or deed of an AHP-assisted unit by a household during the AHP five-year retention period, the sales price minus reasonable and customary costs paid by the household in connection with the transaction (including real estate broker's commission, attorney's fees, and title search fees) and outstanding debt superior to the AHP subsidy lien or other legally enforceable AHP subsidy repayment obligation;

    (2) In the case of a refinancing of an AHP-assisted unit by a household during the AHP five-year retention period, the principal amount of the new mortgage minus reasonable and customary costs paid by the household in connection with the transaction (including attorney's fees and title search fees) and the principal amount of the refinanced mortgage.

    Owner-occupied project means, for purposes of a Bank's General Fund and any Targeted Funds, one or more owner-occupied units in a single-family or multifamily building, including condominiums, cooperative housing, and manufactured housing.

    Owner-occupied unit means a dwelling unit occupied by the owner of the unit. Housing with two to four dwelling units consisting of one owner-occupied unit and one or more rental units is considered a single owner-occupied unit.

    Program means the Affordable Housing Program established pursuant to this part.

    Rental project means, for purposes of a Bank's General Fund and any Targeted Funds, one or more dwelling units for occupancy by households that are not owner-occupants, including overnight and emergency shelters, transitional housing for homeless households, mutual housing, single-room occupancy housing, and manufactured housing communities.

    Retention period means:

    (1) Five years from closing for an AHP-assisted owner-occupied unit where the AHP subsidy is used for purchase of the unit or for purchase in conjunction with rehabilitation of the unit; and

    (2) Fifteen years from the date of completion for a rental project.

    Revolving loan fund means a capital fund established to make mortgage or other loans whereby loan principal is repaid into the fund and re-lent to other borrowers.

    Single-family building means a structure with one to four dwelling units.

    Sponsor means a not-for-profit or for-profit organization or public entity that:

    (1) Has an ownership interest (including any partnership interest), as defined by the Bank in its AHP Implementation Plan, in a rental project;

    (2) Is integrally involved, as defined by the Bank in its AHP Implementation Plan, in an owner-occupied project, such as by exercising control over the planning, development, or management of the project, or by qualifying borrowers and providing or arranging financing for the owners of the units;

    (3) Operates a loan pool; or

    (4) Is a revolving loan fund.

    Subsidized advance means an advance to a member at an interest rate reduced below the Bank's cost of funds by use of a subsidy.

    Subsidy means:

    (1) A direct subsidy, provided that if a direct subsidy is used to write down the interest rate on a loan extended by a member, sponsor, or other party to a project, the subsidy must equal the net present value of the interest foregone from making the loan below the lender's market interest rate; or

    (2) The net present value of the interest revenue foregone from making a subsidized advance at a rate below the Bank's cost of funds.

    Targeted Fund means a program established by a Bank, in its discretion, to address specific affordable housing needs within its district that are unmet, have proven difficult to address through its General Fund, or align with objectives identified in its strategic plan, under which the Bank approves (i.e., awards) applications for AHP subsidy through a competitive application scoring process developed by the Bank and disburses the subsidy, pursuant to the requirements of this part.

    Very low-income household means a household that has an income at or below 50 percent of the median income for the area, with the income limit adjusted for household size in accordance with the methodology of the applicable median income standard selected from those enumerated in the definition of “median income for the area,” unless such median income standard has no household size adjustment methodology.

    Visitable means, in either owner-occupied or rental housing, at least one entrance is at-grade (no steps) and approached by an accessible route such as a sidewalk, and the entrance door and all interior passage doors are at least 34 inches wide, offering 32 inches of clear passage space.

    § 1291.2 Compliance dates.

    (a) General January 1, 2021 compliance date. Except as provided in paragraph (b) of this section, from December 28, 2018 to December 31, 2020, a Bank shall comply with either prior part 1291 (in 12 CFR part 1291 (January 1, 2018 edition)) or this part 1291, and on and after January 1, 2021, a Bank shall comply with this part 1291.

    (b) January 1, 2020 compliance date for owner-occupied retention agreements; exception for adoption of proxies. From December 28, 2018 to December 31, 2019, a Bank shall comply with either prior § 1291.9(a)(7) (in 12 CFR part 1291 (January 1, 2018 edition)) or § 1291.15(a)(7), and on and after January 1, 2020, a Bank shall comply with § 1291.15(a)(7), except that a Bank shall comply with § 1291.15(a)(7)(ii)(B) on the date set forth in the FHFA guidance on proxies referenced therein.

    Subpart B—Program Administration and Governance
    § 1291.10 Required annual AHP contribution.

    Each Bank shall contribute annually to its Program the greater of:

    (a) 10 percent of the Bank's net earnings for the previous year; or

    (b) That Bank's pro rata share of an aggregate of $100 million to be contributed in total by the Banks, such proration being made on the basis of the net earnings of the Banks for the previous year, except that the required annual AHP contribution for a Bank shall not exceed its net earnings in the previous year.

    § 1291.11 Temporary suspension of AHP contributions.

    (a) Request to FHFA. If a Bank finds that the contributions required pursuant to § 1291.10 are contributing to the financial instability of the Bank, the Bank may apply in writing to FHFA for a temporary suspension of such contributions.

    (b) Director review—(1) Financial instability. In determining the financial instability of a Bank, the Director shall consider such factors as:

    (i) Severely depressed Bank earnings;

    (ii) A substantial decline in Bank membership capital; and

    (iii) A substantial reduction in Bank advances outstanding.

    (2) Limitations on grounds for suspension. The Director shall not suspend a Bank's annual AHP contributions if it determines that the Bank's reduction in earnings is due to:

    (i) A change in the terms of advances to members that is not justified by market conditions;

    (ii) Inordinate operating and administrative expenses; or

    (iii) Mismanagement.

    § 1291.12 Allocation of required annual AHP contribution.

    Each Bank, after consultation with its Advisory Council and pursuant to written policies adopted by the Bank's board of directors, shall meet the following requirements for allocation of its required annual AHP contribution.

    (a) General Fund. Each Bank shall allocate annually at least 50 percent of its required annual AHP contribution to provide funds to members through a General Fund established and administered by the Bank pursuant to the requirements of this part.

    (b) Homeownership Set-Aside Programs. A Bank may, in its discretion, allocate annually, in the aggregate, up to the greater of $4.5 million or 35 percent of its required annual AHP contribution to provide funds to members participating in Homeownership Set-Aside Programs established and administered by the Bank pursuant to the requirements of this part, provided that at least one-third of the Bank's aggregate annual set-aside allocation to such programs is allocated to assist first-time homebuyers or households for owner-occupied rehabilitation, or a combination of both.

    (c) Targeted Funds—phase-in requirements for funding allocations. Unless otherwise directed by FHFA and subject to the phase-in requirements for the number of Targeted Funds in § 1291.20(b), a Bank may, in its discretion, allocate annually, up to:

    (1) 20 percent, in the aggregate, of its required annual AHP contribution to any Targeted Funds;

    (2) 30 percent, in the aggregate, of its required annual AHP contribution to any Targeted Funds, provided that it allocated at least 20 percent, in the aggregate, of its required annual AHP contribution to one or more Targeted Funds in any preceding year; or

    (3) 40 percent, in the aggregate, of its required annual AHP contribution to any Targeted Funds, provided that it allocated at least 30 percent, in the aggregate, of its required annual AHP contribution to one or more Targeted Funds in any preceding year.

    (d) Acceleration of funding. A Bank may, in its discretion, accelerate to its current year's Program from future required annual AHP contributions an amount up to the greater of $5 million or 20 percent of its required annual AHP contribution for the current year. The Bank may credit the amount of the accelerated contribution against required AHP contributions under this part 1291 over one or more of the subsequent five years.

    (e) No delegation. A Bank's board of directors shall not delegate to a committee of the board, Bank officers, or other Bank employees the responsibility for adopting the Bank's policies for its General Fund and any Targeted Funds and Homeownership Set-Aside Programs.

    § 1291.13 Targeted Community Lending Plan; AHP Implementation Plan.

    (a) Targeted Community Lending Plan—(1) Identification of housing needs. Pursuant to the requirements of 12 CFR 1290.6(a)(5)(v) and (vi), a Bank's annual Targeted Community Lending Plan adopted under its community support program shall, among other things, identify the significant affordable housing needs in its district that will be addressed through its AHP, as well as any specific affordable housing needs it plans to address through any Targeted Funds as set forth in its AHP Implementation Plan.

    (2) Public access. A Bank shall publish its current Targeted Community Lending Plan on its publicly available website, and shall publish any amendments to its Targeted Community Lending Plan on the website within 30 days after the date of their adoption by the Bank's board of directors. If a Bank plans to establish any Targeted Funds under its AHP, the Bank must publish its Targeted Community Lending Plan (as amended) on the website on or before the date of publication of its annual AHP Implementation Plan, and at least 90 days before the first day that applications may be submitted to the Targeted Fund, unless the Targeted Fund is specifically targeted to address a federal- or state-declared disaster.

    (3) Notification of Plan amendments to FHFA. A Bank shall notify FHFA of any amendments to its Targeted Community Lending Plan within 30 days after the date of their adoption by the Bank's board of directors.

    (b) AHP Implementation Plan. Each Bank's board of directors, after consultation with its Advisory Council, shall adopt a written AHP Implementation Plan, and shall not amend the AHP Implementation Plan without first consulting its Advisory Council. The Bank's board of directors shall not delegate to Bank officers or other Bank employees the responsibility for such prior consultations with the Advisory Council, and shall not delegate to a committee of the board, Bank officers, or other Bank employees the responsibility for adopting or amending the AHP Implementation Plan. The AHP Implementation Plan shall set forth, at a minimum:

    (1) The applicable median income standard or standards adopted by the Bank consistent with the definition of “median income for the area” in § 1291.1.

    (2) For the General Fund established by the Bank pursuant to § 1291.20(a), the Bank's requirements for the General Fund, including the Bank's scoring methodology, including its scoring tie-breaker policy adopted pursuant to §§ 1291.25(c) and 1291.28(c), and any policy on approving AHP application alternates for funding pursuant to §§ 1291.25(c)(6) and 1291.28(b).

    (3) For each Targeted Fund established by the Bank, if any, pursuant to § 1291.20(b), the Bank's requirements for the Targeted Fund, including the Bank's scoring methodology for each Fund, including its scoring tie-breaker policy adopted pursuant to §§ 1291.25(c) and 1291.28(c), and any policy on approving AHP application alternates for funding pursuant to §§ 1291.25(c)(6) and 1291.28(b), and the parameters adopted pursuant to § 1291.20(b)(2).

    (4) The Bank's policy on how it will determine under which Fund to approve an application for the same project that is submitted to more than one Fund at a Bank in a calendar year and scores high enough to be approved under each Fund, pursuant to § 1291.28(d).

    (5) For each Homeownership Set-Aside Program established by the Bank, if any, pursuant to § 1291.40, the Bank's requirements for the program, including the Bank's application and subsidy disbursement methodology.

    (6) The Bank's retention agreement requirements for projects and households under its General Fund, any Targeted Funds, and any Homeownership Set-Aside Programs, pursuant to § 1291.15(a)(7) and (8), including the proxy or proxies selected by the Bank for determining a subsequent purchaser's income pursuant to FHFA guidance under § 1291.15(a)(7)(ii)(B).

    (7) The Bank's standards for approving a relocation plan for current occupants of rental projects pursuant to § 1291.23(a)(2)(ii)(B).

    (8) Any optional Bank district eligibility requirements adopted by the Bank pursuant to § 1291.24(c).

    (9) The Bank's requirements for funding revolving loan funds, if adopted by the Bank pursuant to § 1291.31;

    (10) The Bank's requirements for funding loan pools, if adopted by the Bank pursuant to § 1291.32;

    (11) The Bank's requirements for monitoring under its General Fund and any Targeted Funds and Homeownership Set-Aside Programs pursuant to §§ 1291.50 and 1291.51.

    (12) The Bank's requirements, including time limits, for re-use of repaid AHP direct subsidy in the same project, if adopted by the Bank pursuant to § 1291.64(b).

    (c) Advisory Council review. Prior to the amendment of a Bank's AHP Implementation Plan, the Bank shall provide its Advisory Council an opportunity to review the document, and the Advisory Council shall provide its recommendations to the Bank's board of directors for its consideration.

    (d) Notification of Plan amendments to FHFA. A Bank shall notify FHFA of any amendments made to its AHP Implementation Plan within 30 days after the date of their adoption by the Bank's board of directors.

    (e) Public access. A Bank shall publish its current AHP Implementation Plan on its publicly available website, and shall publish any amendments to the AHP Implementation Plan on the website within 30 days after the date of their adoption by the Bank's board of directors.

    § 1291.14 Advisory Councils.

    (a) Appointment. (1) Each Bank's board of directors shall appoint an Advisory Council of 7 to 15 persons who reside in the Bank's district and are drawn from community and not-for-profit organizations that are actively involved in providing or promoting low- and moderate-income housing, and community and not-for-profit organizations that are actively involved in providing or promoting community lending, in the district. Community organizations include for-profit organizations.

    (2) Each Bank shall solicit nominations for membership on the Advisory Council from community and not-for-profit organizations pursuant to a nomination process that is as broad and as participatory as possible, allowing sufficient time for responses.

    (3) The Bank's board of directors shall appoint Advisory Council members from a diverse range of organizations so that representatives of no one group constitute an undue proportion of the membership of the Advisory Council, giving consideration to the size of the Bank's district and the diversity of low- and moderate-income housing and community lending needs and activities within the district.

    (b) Terms of Advisory Council members. Pursuant to policies adopted by the Bank's board of directors, Advisory Council members shall be appointed by the Bank's board of directors to serve for terms of three years, which shall be staggered to provide continuity in experience and service to the Advisory Council, except that Advisory Council members may be appointed to serve for terms of one or two years solely for purposes of reconfiguring the staggering of the three-year terms. No Advisory Council member may be appointed to serve for more than three full consecutive terms. An Advisory Council member appointed to fill a vacancy shall be appointed for the unexpired term of his or her predecessor in office.

    (c) Election of officers. Each Advisory Council shall elect from among its members a chairperson, a vice chairperson, and any other officers the Advisory Council deems appropriate.

    (d) Duties—(1) Meetings with the Banks. (i) The Advisory Council shall meet with representatives of the Bank's board of directors at least quarterly to provide advice on ways in which the Bank can better carry out its housing finance and community lending mission, including, but not limited to, advice on the low- and moderate-income housing and community lending programs and needs in the Bank's district, and on the use of AHP subsidies, Bank advances, and other Bank credit products for these purposes.

    (ii) The Advisory Council's advice shall include recommendations on:

    (A) The Bank's Targeted Community Lending Plan, and any amendments thereto, pursuant to 12 CFR 1290.6(a)(5)(iii);

    (B) The amount of AHP funds to be allocated to the Bank's General Fund and any Targeted Funds and Homeownership Set-Aside Programs, including how the set-aside funds should be apportioned under the one-third funding allocation requirement in § 1291.12(b);

    (C) The AHP Implementation Plan and any subsequent amendments thereto;

    (D) The Bank's scoring methodologies, related definitions, and any additional optional district eligibility requirements for the General Fund and any Targeted Funds; and

    (E) The eligibility requirements and any priority criteria for any Homeownership Set-Aside Programs.

    (2) Summary of AHP applications. The Bank shall comply with requests from the Advisory Council for summary information regarding AHP applications from prior funding rounds.

    (3) Annual analysis; public access. (i) Each Advisory Council annually shall submit to FHFA by May 1 its analysis of the low- and moderate-income housing and community lending activity of the Bank by which it is appointed.

    (ii) Within 30 days after the date the Advisory Council's annual analysis is submitted to FHFA, the Bank shall publish the analysis on its publicly available website.

    (e) Expenses. The Bank shall pay Advisory Council members' travel expenses, including transportation and subsistence, for each day devoted to attending meetings with representatives of the board of directors of the Bank and meetings requested by FHFA.

    (f) No delegation. A Bank's board of directors shall not delegate to Bank officers or other Bank employees the responsibility to appoint persons as members of the Advisory Council or to meet with the Advisory Council at the quarterly meetings required by the Bank Act (12 U.S.C. 1430(j)(11)).

    § 1291.15 Agreements.

    (a) Agreements between Banks and members. A Bank shall have in place with each member receiving an AHP subsidized advance or AHP direct subsidy an agreement or agreements containing, at a minimum, the following provisions, where applicable:

    (1) Notification of member. The member has been notified of the requirements of this part as they may be amended from time to time, and all Bank policies relevant to the member's approved application for AHP subsidy.

    (2) AHP subsidy pass-through. The member shall pass on the full amount of the AHP subsidy to the project or household, as applicable, for which the subsidy was approved.

    (3) Use of AHP subsidy—(i) Use of AHP subsidy by the member. The member shall use the AHP subsidy in accordance with the terms of the member's approved application for the subsidy and the requirements of this part.

    (ii) Use of AHP subsidy by the project sponsor or owner. The member shall have in place an agreement with each project sponsor or owner in which the project sponsor or owner agrees to use the AHP subsidy in accordance with the terms of the member's approved application for the subsidy and the requirements of this part.

    (4) Repayment of AHP subsidies in case of noncompliance—(i) Noncompliance by the member. The member shall repay AHP subsidies to the Bank in accordance with the requirements of § 1291.61.

    (ii) Noncompliance by a project sponsor or owner—(A) Agreement. The member shall have in place an agreement with each project sponsor or owner in which the project sponsor or owner agrees to repay AHP subsidies to the member or the Bank in accordance with the requirements of § 1291.60.

    (B) Recovery of AHP subsidies. The member shall recover from the project sponsor or owner and repay to the Bank AHP subsidies in accordance with the requirements of § 1291.60 (if applicable).

    (5) Project monitoring—(i) Monitoring by the member. The member shall comply with the monitoring requirements applicable to it, as established by the Bank in its monitoring policies pursuant to §§ 1291.50 and 1291.51.

    (ii) Agreement; LIHTC noncompliance notice. The member shall have in place an agreement with each project sponsor and owner, in which the project sponsor and owner agree to comply with the monitoring requirements applicable to such parties, as established by the Bank in its monitoring policies pursuant to § 1291.50. The member's agreement shall also include an agreement by the project owner to provide prompt written notice to the Bank if the project also received LIHTC and the project is in material and unresolved noncompliance with the LIHTC income targeting or rent requirements at any time during the AHP 15-year retention period.

    (6) Transfer of AHP obligations—(i) To another member. The member shall make best efforts to transfer its obligations under the approved application for AHP subsidy to another member in the event of its loss of membership in the Bank prior to the Bank's final disbursement of AHP subsidies.

    (ii) To a nonmember. If, after final disbursement of AHP subsidies to the member, the member undergoes an acquisition or a consolidation resulting in a successor organization that is not a member of the Bank, the nonmember successor organization assumes the member's obligations under its approved application for AHP subsidy, and where the member received an AHP subsidized advance, the nonmember assumes such obligations until prepayment or orderly liquidation by the nonmember of the subsidized advance.

    (7) Owner-occupied units—required provisions for retention agreements. The member shall ensure that where a household receives AHP subsidy for purchase, or purchase in conjunction with rehabilitation, of an owner-occupied unit, the unit is subject to a deed restriction or other legally enforceable retention agreement or mechanism requiring that:

    (i) Notice. The Bank, and in its discretion any designee of the Bank, shall be given notice of any sale, transfer, assignment of title or deed, or refinancing of the unit by the household occurring during the AHP five-year retention period;

    (ii) Repayment of subsidy; exceptions. In the case of a sale, transfer, assignment of title or deed, or refinancing of the unit by the household during the retention period, the amount of AHP subsidy calculated in accordance with paragraph (a)(7)(v) of this section shall be repaid to the Bank, unless one of the following exceptions applies:

    (A) The unit was assisted with a permanent mortgage loan funded by an AHP subsidized advance;

    (B) The subsequent purchaser, transferee, or assignee is a low- or moderate-income household, as determined by the Bank. For any sale, transfer, or assignment that occurs after the date established by FHFA in guidance on the use of proxies, the Bank or its designee shall determine the household's income using one or more proxies that are reliable indicators of the subsequent purchaser's income, which may be selected by the Bank pursuant to the FHFA guidance and shall be included in the Bank's AHP Implementation Plan, unless documentation demonstrating that household's actual income is available. The Bank or its designee is not required to request or obtain such documentation, but must use it in lieu of a proxy if available;

    (C) The amount of the AHP subsidy that would be required to be repaid in accordance with the calculation in paragraph (a)(7)(v) of this section is $2,500 or less; or

    (D) Following a refinancing, the unit continues to be subject to a deed restriction or other legally enforceable retention agreement or mechanism described in this paragraph (a)(7);

    (iii) Subsidy repayments to Bank, member, or project sponsor. In the case of a direct subsidy, such repayment of AHP subsidy shall be made:

    (A) To the Bank. If the Bank has not authorized re-use of the repaid AHP subsidy or has authorized re-use of the repaid subsidy but not retention of such repaid subsidy by the member or project sponsor pursuant to § 1291.64(b) of this part, or has authorized retention and re-use of such repaid subsidy by the member or project sponsor pursuant to such section and the repaid subsidy is not re-used in accordance with the requirements of the Bank and such section; or

    (B) To the member or project sponsor. To the member or project sponsor for re-use by such member or project sponsor, if the Bank has authorized retention and re-use of such subsidy by the member or project sponsor pursuant to § 1291.64(b);

    (iv) Termination of subsidy repayment obligation. The obligation to repay AHP subsidy to the Bank shall terminate after any event of foreclosure, transfer by deed-in-lieu of foreclosure, an assignment of a Federal Housing Administration first mortgage to HUD, or death of the AHP-assisted homeowner; and

    (v) Calculation of AHP subsidy repayment based on net proceeds and household's investment. The Bank shall be repaid the lesser of:

    (A) The AHP subsidy, reduced on a pro rata basis per month until the unit is sold, transferred, or its title or deed transferred, or is refinanced, during the AHP five-year retention period; or

    (B) Any net proceeds from the sale, transfer, or assignment of title or deed of the unit, or the refinancing, as applicable, minus the AHP-assisted household's investment.

    (8) Rental projects—required provisions for retention agreements. The member shall ensure that an AHP-assisted rental project is subject to a deed restriction or other legally enforceable retention agreement or mechanism requiring that:

    (i) Income and rent commitments. The project's rental units, or applicable portion thereof, must remain occupied by and affordable for households with incomes at or below the levels committed to be served in the approved AHP application for the duration of the AHP 15-year retention period;

    (ii) Notice. The Bank, and in its discretion any designee of the Bank, shall be given notice of any sale, transfer, assignment of title or deed, or refinancing of the project by the project owner occurring during the retention period;

    (iii) Repayment of subsidy; exceptions. In the case of a sale, transfer, assignment of title or deed, or refinancing of the project by the project owner during the retention period, the full amount of the AHP subsidy received by the project owner shall be repaid to the Bank, unless one of the following exceptions applies:

    (A) The project continues to be subject to a deed restriction or other legally enforceable retention agreement or mechanism incorporating the income-eligibility and affordability restrictions committed to in the approved AHP application for the duration of the AHP 15-year retention period; or

    (B) If authorized by the Bank, in its discretion, the households are relocated, due to the exercise of eminent domain, or for expansion of housing or services, to another property that is made subject to a deed restriction or other legally enforceable retention agreement or mechanism incorporating the income-eligibility and affordability restrictions committed to in the approved AHP application for the remainder of the AHP 15-year retention period; and

    (iv) Termination of income and rent restrictions. The income-eligibility and affordability restrictions applicable to the project shall terminate after any foreclosure.

    (9) Lending of AHP direct subsidies. If a member or a project sponsor lends AHP direct subsidy to a project, any repayments of principal and payments of interest received by the member or the project sponsor must be paid forthwith to the Bank, unless the direct subsidy is being both lent and re-lent by a revolving loan fund pursuant to § 1291.31(d).

    (10) Special provisions where members obtain AHP subsidized advances—(i) Repayment schedule. The term of an AHP subsidized advance shall be no longer than the term of the member's loan to the project funded by the advance, and at least once in every 12-month period, the member shall be scheduled to make a principal repayment to the Bank equal to the amount scheduled to be repaid to the member on its loan to the project in that period.

    (ii) Prepayment fees. Upon a prepayment of an AHP subsidized advance, the Bank shall charge a prepayment fee only to the extent the Bank suffers an economic loss from the prepayment.

    (iii) Treatment of loan prepayment by project. If all or a portion of the loan or loans financed by an AHP subsidized advance are prepaid by the project to the member, the member may, at its option, either:

    (A) Repay to the Bank that portion of the advance used to make the loan or loans to the project, and be subject to a fee imposed by the Bank sufficient to compensate the Bank for any economic loss the Bank experiences in reinvesting the repaid amount at a rate of return below the cost of funds originally used by the Bank to calculate the interest rate subsidy incorporated in the advance; or

    (B) Continue to maintain the advance outstanding, subject to the Bank resetting the interest rate on that portion of the advance used to make the loan or loans to the project to a rate equal to the cost of funds originally used by the Bank to calculate the interest rate subsidy incorporated in the advance.

    (b) Agreements between Banks and project sponsors or owners—(1) Repayment of subsidies. A Bank may have in place an agreement with each project sponsor or owner, in which the project sponsor or owner agrees to repay AHP subsidies directly to the Bank in accordance with the requirements of § 1291.60.

    (2) Project sponsor qualifications. A Bank's AHP subsidy application form and AHP subsidy disbursement form for each subsidy disbursement (or other related documents) must include a requirement for the project sponsor to provide a certification that it meets the project sponsor qualifications criteria established by the Bank and that it has not engaged in, and is not engaging in, covered misconduct as defined in FHFA's Suspended Counterparty Program regulation (12 CFR part 1227), or as defined by the Bank, provided the Bank's definition incorporates the definition in 12 CFR part 1227 at a minimum.

    (c) Application to existing AHP agreements. The requirements of section 10(j) of the Bank Act (12 U.S.C. 1430(j)) and the provisions of this part, as amended, are incorporated into all AHP agreements between a Bank and any member, project sponsor, or project owner receiving AHP subsidies under the General Fund and any Targeted Funds, and between a Bank and any member or unit owner under any Homeownership Set-Aside Programs. To the extent the requirements of this part are amended from time to time, such agreements are deemed to incorporate the amendments to conform to any new requirements of this part. No amendment to this part shall affect the legality of actions taken prior to the effective date of such amendment.

    § 1291.16 Conflicts of interest.

    (a) Bank directors and employees. (1) Each Bank's board of directors shall adopt a written policy providing that if a Bank director or employee, or such person's family member, has a financial interest in, or is a director, officer, or employee of an organization involved in, a project that is the subject of a pending or approved AHP application, the Bank director or employee shall not participate in or attempt to influence decisions by the Bank regarding the evaluation, approval, funding, monitoring, or any remedial process for such project.

    (2) If a Bank director or employee, or such person's family member, has a financial interest in, or is a director, officer, or employee of an organization involved in, an AHP project such that he or she is subject to the requirements in paragraph (a)(1) of this section, such person shall not participate in or attempt to influence decisions by the Bank regarding the evaluation, approval, funding, monitoring, or any remedial process for such project.

    (b) Advisory Council members. (1) Each Bank's board of directors shall adopt a written policy providing that if an Advisory Council member, or such person's family member, has a financial interest in, or is a director, officer, or employee of an organization involved in, a project that is the subject of a pending or approved AHP application, the Advisory Council member shall not participate in or attempt to influence decisions by the Bank regarding the approval for such project.

    (2) If an Advisory Council member, or such person's family member, has a financial interest in, or is a director, officer, or employee of an organization involved in, an AHP project such that he or she is subject to the requirements in paragraph (b)(1) of this section, such person shall not participate in or attempt to influence decisions by the Bank regarding the approval for such project.

    (c) No delegation. A Bank's board of directors shall not delegate to Bank officers or other Bank employees the responsibility to adopt the conflict of interest policies required by this section.

    Subpart C—General Fund and Targeted Funds
    § 1291.20 Establishment of programs.

    (a) General Fund—(1) Establishment. A Bank shall establish a General Fund pursuant to the requirements of this part.

    (2) Eligibility requirements. A Bank may not adopt eligibility requirements for its General Fund except as specifically authorized in this part.

    (b) Targeted Funds—(1) Establishment; number of Targeted Funds and funding allocation amounts. A Bank may establish, in its discretion, up to three Targeted Funds to address specified affordable housing needs in its district pursuant to the phase-in funding allocation requirements in § 1291.12(c)(1), the following phase-in requirements for the number of Targeted Funds unless otherwise directed by FHFA, and any other applicable requirements of this part:

    (i) One Targeted Fund;

    (ii) Two Targeted Funds to be administered in the same calendar year, provided that the Bank administered at least one Targeted Fund in any preceding year; or

    (iii) Three Targeted Funds to be administered in the same calendar year, provided that the Bank administered at least two Targeted Funds in any preceding year.

    (2) Eligibility requirements. (i) A Bank shall adopt and implement parameters, which shall be included in its AHP Implementation Plan, for ensuring that each Targeted Fund is designed to receive sufficient numbers of applicants for the amount of AHP funds allocated to the Targeted Fund to enable the Bank to facilitate a robust competitive scoring process.

    (ii) A Bank may not adopt eligibility requirements for its Targeted Funds except as specifically authorized in this part.

    § 1291.21 Eligible applicants.

    (a) Member applicants. A Bank shall accept applications for AHP subsidy under its General Fund and any Targeted Funds only from institutions that are members of the Bank at the time the application is submitted to the Bank.

    (b) Project sponsor qualifications—(1) In general. A project sponsor must be qualified and able to perform its responsibilities as committed to in the application for AHP subsidy funding the project.

    (2) Revolving loan fund. Pursuant to written policies adopted by a Bank's board of directors, a revolving loan fund sponsor that intends to use AHP direct subsidy in accordance with § 1291.31 shall:

    (i) Provide audited financial statements that its operations are consistent with sound business practices; and

    (ii) Demonstrate the ability to re-lend AHP subsidy repayments on a timely basis and track the use of the AHP subsidy.

    (3) Loan pool. Pursuant to written policies adopted by a Bank's board of directors, a loan pool sponsor that intends to use AHP subsidy in accordance with § 1291.32 shall:

    (i) Provide evidence of sound asset/liability management practices;

    (ii) Provide audited financial statements that its operations are consistent with sound business practices; and

    (iii) Demonstrate the ability to track the use of the AHP subsidy.

    § 1291.22 Funding rounds; application process.

    (a) Funding rounds. A Bank may accept applications from proposed projects for AHP subsidy under its General Fund and any Targeted Funds during a specified number of funding rounds each year, as determined by the Bank.

    (b) Submission of applications. Except as provided in § 1291.29(a), a Bank shall require applications for AHP subsidy to contain information sufficient for the Bank to:

    (1) Determine that the proposed AHP project meets the eligibility requirements of this part; and

    (2) Evaluate the application pursuant to the scoring methodology adopted by the Bank pursuant to §§ 1291.25, 1291.26, and 1291.27, as applicable.

    (c) Review of applications submitted. Except as provided in § 1291.29(b), a Bank shall review the applications for AHP subsidy to determine that the proposed AHP project meets the eligibility requirements of this part, and shall evaluate the applications pursuant to the Bank's scoring methodology adopted pursuant to §§ 1291.25, 1291.26, and 1291.27, as applicable.

    § 1291.23 Eligible projects.

    Projects receiving AHP subsidies pursuant to a Bank's General Fund and any Targeted Funds must meet the following eligibility requirements:

    (a) Owner-occupied or rental housing. The AHP subsidy shall be used exclusively for:

    (1) Owner-occupied housing. The purchase, construction, or rehabilitation of an owner-occupied project for very low-income or low- or moderate-income households, where the housing is to be used as the household's primary residence. A household must have an income meeting the income targeting commitments in the approved AHP application at the time it is qualified by the project sponsor for participation in the project;

    (2) Rental housing. The purchase, construction, or rehabilitation of a rental project, where at least 20 percent of the units in the project are occupied by and affordable for very low-income households.

    (i) Projects that are not occupied. For a rental project that is not occupied at the time the AHP application is submitted to the Bank for approval, a household must have an income meeting the income targeting commitments in the approved AHP application upon initial occupancy of the rental unit.

    (ii) Projects that are occupied. (A) Except as provided in paragraph (a)(2)(ii)(B) of this section, for a rental project involving purchase or rehabilitation that is occupied at the time the AHP application is submitted to the Bank for approval, a household must have an income meeting the income targeting commitments in the approved AHP application at the time of such submission.

    (B) If the project has a relocation plan for current occupants that is approved by one of its federal, state, or local government funders, or a reasonable relocation plan for current occupants that is otherwise approved by the Bank according to standards included in the Bank's AHP Implementation Plan, a household may have an income meeting the income targeting commitments upon initial occupancy of the rental unit after completion of the purchase or rehabilitation.

    (b) Project feasibility—(1) Developmental feasibility. The project must be likely to be completed and occupied, based on relevant factors contained in the Bank's project feasibility guidelines, including, but not limited to, the development budget, market analysis, and project sponsor's experience in providing the requested assistance to households.

    (2) Operational feasibility of rental projects. A rental project must be able to operate in a financially sound manner, in accordance with the Bank's project feasibility guidelines, as projected in the project's operating pro forma.

    (c) Timing of AHP subsidy use. Some or all of the AHP subsidy must be likely to be drawn down by the project or used by the project to procure other financing commitments within 12 months of the date of approval of the application for AHP subsidy funding the project.

    (d) Retention agreements—(1) Owner-occupied projects. Each AHP-assisted unit in an owner-occupied project for which the AHP subsidy was used for purchase, or for purchase in conjunction with rehabilitation, of the unit by the AHP-assisted household, is, or is committed to be, subject to a five-year retention agreement described in § 1291.15(a)(7).

    (2) Rental projects. AHP-assisted rental projects are, or are committed to be, subject to a 15-year retention agreement as described in § 1291.15(a)(8).

    (e) Fair housing. The project, as proposed, must comply with applicable federal and state laws on fair housing and housing accessibility, including, but not limited to, the Fair Housing Act, the Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990, and the Architectural Barriers Act of 1969, and must demonstrate how the project will be affirmatively marketed.

    § 1291.24 Eligible uses.

    (a) Eligible uses of AHP subsidy. AHP subsidies shall be used only for:

    (1) Owner-occupied housing. The purchase, construction, or rehabilitation of owner-occupied housing.

    (2) Rental housing. The purchase, construction, or rehabilitation of rental housing.

    (3) Need for AHP subsidy—(i) Review of project development budget. The project's estimated sources of funds shall equal its estimated uses of funds, as reflected in the project's development budget. The difference between the project's sources of funds (excluding AHP subsidy) and uses of funds is the project's need for AHP subsidy, which is the maximum amount of AHP subsidy the project may receive. A Bank, in its discretion, may permit a project's sources of funds to include or exclude the estimated market value of in-kind donations and voluntary professional labor or services (excluding the value of sweat equity), provided that the project's uses of funds also include or exclude, respectively, the value of such estimates.

    (ii) Cash sources of funds. A project's cash sources of funds shall include any cash contributions by the sponsor, any cash from sources other than the sponsor, and estimates of funds the project sponsor intends to obtain from other sources but which have not yet been committed to the project. In the case of homeownership projects where the sponsor extends permanent financing to the homebuyer, the sponsor's cash contribution shall include the present value of any payments the sponsor is to receive from the buyer, which shall include any cash down payment from the buyer, plus the present value of any purchase note the sponsor holds on the unit. If the note carries a market interest rate commensurate with the credit quality of the buyer, the present value of the note equals the face value of the note. If the note carries an interest rate below the market rate, the present value of the note shall be determined using the market rate to discount the cash flows.

    (iii) Cash uses. A project's cash uses are the actual outlay of cash needed to pay for materials, labor, and acquisition or other costs of completing the project. Cash costs do not include in-kind donations, voluntary professional labor or services, or sweat equity.

    (4) Project costs—(i) In general. (A) Taking into consideration the geographic location of the project, development conditions, and other non-financial household or project characteristics, a Bank shall determine that a project's costs, as reflected in the project's development budget, are reasonable, in accordance with the Bank's project cost guidelines.

    (B) For purposes of determining the reasonableness of a developer's fee for a project as a percentage of total development costs, a Bank may, in its discretion, include estimates of the market value of in-kind donations and volunteer professional labor or services (excluding the value of sweat equity) committed to the project as part of the total development costs.

    (ii) Cost of property and services provided by a member. The purchase price of property or services, as reflected in the project's development budget, sold to the project by a member providing AHP subsidy to the project, or, in the case of property, upon which such member holds a mortgage or lien, may not exceed the market value of such property or services as of the date the purchase price was agreed upon. In the case of real estate owned property sold to a project by a member providing AHP subsidy to the project, or property sold to the project upon which the member holds a mortgage or lien, the market value of such property is deemed to be the “as-is” or “as-rehabilitated” value of the property, whichever is appropriate. That value shall be reflected in an independent appraisal of the property performed by a state certified or licensed appraiser, as defined in 12 CFR 564.2(j) and (k), within 6 months prior to the date the Bank disburses AHP subsidy to the project.

    (5) Financing costs. The rate of interest, points, fees, and any other charges for all loans that are made for the project in conjunction with the AHP subsidy shall not exceed a reasonable market rate of interest, points, fees, and other charges for loans of similar maturity, terms, and risk.

    (6) Counseling costs. Counseling costs, provided:

    (i) Such costs are incurred in connection with counseling of homebuyers who actually purchase an AHP-assisted unit; and

    (ii) The cost of the counseling has not been covered by another funding source, including the member.

    (7) Refinancing. Refinancing of an existing single-family or multifamily mortgage loan, provided that the refinancing produces equity proceeds and such equity proceeds up to the amount of the AHP subsidy in the project shall be used only for the purchase, construction, or rehabilitation of housing units meeting the eligibility requirements of this part.

    (8) Calculation of AHP subsidy. (i) Where an AHP direct subsidy is provided to a project to write down the interest rate on a loan extended by a member, sponsor, or other party to a project, the net present value of the interest foregone from making the loan below the lender's market interest rate shall be calculated as of the date the application for AHP subsidy is submitted to the Bank, and subject to adjustment under § 1291.30(d).

    (ii) Where an AHP subsidized advance is provided to a project, the net present value of the interest revenue foregone from making a subsidized advance at a rate below the Bank's cost of funds shall be determined as of the earlier of the date of disbursement of the subsidized advance or the date prior to disbursement on which the Bank first manages the funding to support the subsidized advance through its asset/liability management system, or otherwise.

    (b) Prohibited uses of AHP subsidy. AHP subsidy may not be used to pay for:

    (1) Certain prepayment fees. Prepayment fees imposed by a Bank on a member for a subsidized advance that is prepaid, unless:

    (i) The project is in financial distress that cannot be remedied through a project modification pursuant to § 1291.29;

    (ii) The prepayment of the subsidized advance is necessary to retain the project's affordability and income targeting commitments;

    (iii) Subsequent to such prepayment, the project will continue to comply with the terms of the approved AHP application and the requirements of this part for the duration of the original retention period;

    (iv) Any unused AHP subsidy is returned to the Bank and made available for other AHP projects or households; and

    (v) The amount of AHP subsidy used for the prepayment fee may not exceed the amount of the member's prepayment fee to the Bank;

    (2) Cancellation fees. Cancellation fees and penalties imposed by a Bank on a member for a subsidized advance commitment that is canceled;

    (3) Processing fees. Processing fees charged by members for providing AHP direct subsidies to a project; or

    (4) Reserves and certain expenses. Capitalized reserves, periodic deposits to reserve accounts, operating expenses, or supportive services expenses.

    (c) Optional Bank district eligibility requirements. A Bank may require a project receiving AHP subsidies to meet one or more of the following additional eligibility requirements adopted by the Bank's board of directors and included in its AHP Implementation Plan after consultation with its Advisory Council:

    (1) AHP subsidy limits. A requirement that the amount of AHP subsidy requested for the project does not exceed limits established by the Bank as to the maximum amount of AHP subsidy available per member, per project sponsor, per project, or per project unit in a single AHP funding round. A Bank may establish only one maximum subsidy limit per member, per sponsor, per project, or per project unit for the General Fund and for each Targeted Fund, which shall apply to all applicants to the specific Fund, but the maximum subsidy limit per project or per project unit may differ among the Funds; or

    (2) Homebuyer or homeowner counseling. A requirement that a household must complete a homebuyer or homeowner counseling program provided by, or based on one provided by, an organization recognized as experienced in homebuyer or homeowner counseling, respectively.

    (d) Applications to multiple Funds—subsidy amount. If an application for a project is submitted to more than one Fund at the same time, the application for each Fund must be for the same amount of AHP subsidy.

    § 1291.25 Scoring methodologies.

    (a)(1) Written scoring methodologies. A Bank shall establish a written scoring methodology for its General Fund and for any Targeted Fund setting forth the Bank's scoring point allocations as required in paragraph (a)(2) of this section, scoring criteria adopted pursuant to the requirements of §§ 1291.26 and 1291.27, as applicable, and related definitions. The scoring methodology for each Fund may be different. A Bank shall not adopt scoring points allocations or scoring criteria for its General Fund and any Targeted Funds except as specifically authorized under this paragraph (a)(1) and §§ 1291.26 and 1291.27, respectively.

    (2) Scoring points allocations—(i) General Fund. A Bank shall allocate 100 points among all of the scoring criteria adopted by the Bank for its General Fund pursuant to § 1291.26. The scoring criterion for targeting in § 1291.26(d) shall be allocated at least 20 points. The remaining scoring criteria shall be allocated at least 5 points each, except that if a Bank adopts the scoring criterion for home purchase by low- or moderate-income households in § 1291.26(c) as an optional scoring criterion, the Bank may allocate fewer than the full 5 points to it, with the remainder of such points allocated to one or a combination of the other scoring criteria in § 1291.26 other than to the scoring criterion for Bank district priorities in § 1291.26(h). If a Bank adopts a scoring criterion under its Bank district priorities for housing located in the Bank's district, the Bank may not allocate points to the scoring criterion in a way that excludes all out-of-district projects from its General Fund.

    (ii) Targeted Funds. A Bank shall allocate 100 points among all of the scoring criteria adopted by the Bank for each Targeted Fund pursuant to § 1291.27. A Bank may not allocate more than 50 points to any one scoring criterion for a Targeted Fund.

    (3) Fixed-point and variable-point scoring criteria. A Bank shall designate each scoring criterion as either a fixed-point or a variable-point criterion, defined as follows:

    (i) Fixed-point scoring criteria are those that cannot be satisfied in varying degrees and are either satisfied or not, with the total number of points allocated to the criterion awarded by the Bank to an application meeting the criterion; and

    (ii) Variable-point criteria are those where there are varying degrees to which an application can satisfy the criteria, with the number of points that may be awarded to an application for meeting the criterion varying, depending on the extent to which the application satisfies the criterion, based on a fixed scale or on a scale relative to the other applications being scored. A Bank shall designate the targeting scoring criterion in § 1291.26(d) as a variable-point criterion.

    (b) Satisfaction of scoring criteria. A Bank shall award scoring points to applications to a particular Fund based on satisfaction of the scoring criteria in the Bank's scoring methodology for that Fund.

    (c) Scoring tied applications. A Bank shall establish and implement, as necessary, a scoring tie-breaker policy to address the case of two or more applications to its General Fund or any Targeted Fund receiving identical scores in the same AHP funding round and there is insufficient AHP subsidy to approve all of the tied applications but sufficient subsidy to approve one of them. A Bank shall meet the following requirements in establishing its scoring tie-breaker policy:

    (1) The Bank shall consult with its Advisory Council prior to adoption of its policy;

    (2) The Bank shall adopt the policy in advance of an AHP funding round and include it in its AHP Implementation Plan;

    (3) The policy shall include the methodology used to break a scoring tie, which may differ for each Fund, and which shall be drawn from the particular Fund's scoring criteria adopted in the Bank's AHP Implementation Plan;

    (4) The scoring tie-breaker methodology shall be reasonable, transparent, verifiable, and impartial;

    (5) The scoring tie-breaker methodology shall be used solely to break a scoring tie and may not affect the eligibility of the applications, including financial feasibility, or their scores and resultant rankings;

    (6) The Bank shall approve a tied application as an alternate pursuant to § 1291.28(b) if the application does not prevail under the scoring tie-breaker methodology, or if the application is tied with another application but requested more subsidy than the amount of AHP funds that remain to be awarded, if the Bank has a written policy to approve alternates for funding under the applicable Fund; and

    (7) The Bank shall document in writing its analysis and results for each use of the scoring tie-breaker methodology.

    § 1291.26 Scoring criteria for the General Fund.

    A Bank shall adopt in its scoring methodology for its General Fund all of the following categories of scoring criteria, including at least one housing need under each of paragraphs (e), (f), and (g) of this section, except that a Bank is not required to adopt the scoring criterion for homeownership by low- or moderate-income households in paragraph (c) of this section if the Bank allocates at least 10 percent of its required annual AHP contribution to any Homeownership Set-Aside Programs, and a Bank is not required to adopt the scoring criterion for Bank district priorities in paragraph (h) of this section:

    (a) Use of donated or conveyed government-owned or other properties. The financing of housing using a significant proportion, as defined by the Bank in its AHP Implementation Plan, of:

    (1) Land or units donated or conveyed by the federal government or any agency or instrumentality thereof; or

    (2) Land or units donated or conveyed by any other party for an amount significantly below the fair market value of the property, as defined by the Bank in its AHP Implementation Plan.

    (b) Sponsorship by a not-for-profit organization or government entity. Project sponsorship by a not-for-profit organization, a state or political subdivision of a state, a state housing agency, a local housing authority, a Native American Tribe, an Alaskan Native Village, or the government entity for Native Hawaiian Home Lands.

    (c) Home purchase by low- or moderate-income households. The financing of home purchases by low- or moderate-income households.

    (d) Income targeting. The extent to which a project provides housing for very low- and low- or moderate-income households, as follows:

    (1) Rental projects. An application for a rental project shall be awarded the maximum number of points available under this scoring criterion if 60 percent or more of the units in the project are reserved for occupancy by households with incomes at or below 50 percent of the median income for the area. Applications for projects with less than 60 percent of the units reserved for occupancy by households with incomes at or below 50 percent of the median income for the area shall be awarded points on a declining scale based on the percentage of units in a project that are reserved for households with incomes at or below 50 percent of the median income for the area, and on the percentage of the remaining units reserved for households with incomes at or below 80 percent of the median income for the area.

    (2) Owner-occupied projects. Applications for owner-occupied projects shall be awarded points based on a declining scale to be determined by the Bank in its AHP Implementation Plan, taking into consideration percentages of units and targeted income levels.

    (3) Separate scoring. For purposes of this scoring criterion, applications for owner-occupied projects and rental projects may be scored separately.

    (e) Underserved communities and populations. The financing of housing for underserved communities or populations, by addressing one or more of the following specific housing needs:

    (1) Housing for homeless households. The financing of rental housing, excluding overnight shelters, reserving at least 20 percent of the units for homeless households, the creation of transitional housing for homeless households permitting a minimum of 6 months occupancy, or the creation of permanent owner-occupied housing reserving at least 20 percent of the units for homeless households, with the term “homeless households” defined by the Bank in its AHP Implementation Plan.

    (2) Housing for special needs populations. The financing of housing in which at least 20 percent of the units are reserved for households with specific special needs, such as: The elderly; persons with disabilities; formerly incarcerated persons; persons recovering from physical abuse or alcohol or drug abuse; victims of domestic violence, dating violence, sexual assault or stalking; persons with HIV/AIDS; or unaccompanied youth; or the financing of housing that is visitable by persons with physical disabilities who are not occupants of such housing. A Bank may, in its discretion, adopt a requirement that projects provide supportive services, or access to supportive services, for specific special needs populations identified by the Bank in order for the project to receive scoring points under this paragraph (e)(2).

    (3) Housing for other targeted populations. The financing of housing in which at least 20 percent of the units are reserved for households specifically in need of housing, such as agricultural workers, military veterans, Native Americans, households requiring large units, or kinship care households in which children are in the care of cohabitating relatives, such as grandparents, aunts or uncles, or cohabitating close family friends.

    (4) Housing in rural areas. The financing of housing located in a rural area, as defined by the Bank in its AHP Implementation Plan.

    (5) Rental housing for extremely low-income households. The financing of rental housing in which a minimum percentage of the units, as defined by the Bank in its AHP Implementation Plan, are reserved for extremely low-income households. Points awarded under this criterion shall be awarded in addition to any points awarded for income targeting under paragraph (d)(1) of this section, such that the points awarded to a project under this criterion and the income targeting criterion, combined, may exceed the maximum number of possible points awarded under the income targeting criterion.

    (6) Other. The financing of other housing addressing specific housing needs of underserved communities or populations as FHFA may provide by guidance.

    (f) Creating economic opportunity. The financing of housing that facilitates economic opportunity for the residents by addressing one or more of the following specific housing needs:

    (1) Promotion of empowerment. The provision of housing in combination with a program offering services that assist residents in attaining life skills or moving toward better economic opportunities, such as: Employment; education; training; homebuyer, homeownership or tenant counseling; child care; adult daycare services; afterschool care; tutoring; health services, including mental health and behavioral health services; resident involvement in decision making affecting the creation or operation of the project; or workforce preparation and integration.

    (2) Residential economic diversity. The financing of either affordable housing in a high opportunity area, or mixed-income housing in an area designated by the Bank, with those terms defined and area designated by the Bank in its AHP Implementation Plan.

    (3) Other. The financing of other housing that facilitates economic opportunity as FHFA may provide by guidance.

    (g) Community stability, including affordable housing preservation. The promotion of community stability, such as by preserving affordable housing, rehabilitating vacant or abandoned properties, or being an integral part of a community revitalization or economic development strategy approved by a unit of state or local government or instrumentality thereof, and not displacing low- or moderate-income households, or if such displacement will occur, assuring that such households will be assisted to minimize the impact of such displacement.

    (h) Bank district priorities. The satisfaction of one or more housing needs in the Bank's district, as defined by the Bank in its AHP Implementation Plan, that the Bank has not otherwise adopted under this section.

    § 1291.27 Scoring criteria for Targeted Funds.

    A Bank shall adopt in its scoring methodology for each Targeted Fund established by the Bank at least three different scoring criteria, as determined by the Bank in its discretion, that allow the Bank to select applications that meet the specific affordable housing need or needs being addressed by the Targeted Fund.

    § 1291.28 Approval of AHP applications under the General Fund and Targeted Funds.

    (a) Approval of AHP applications. Subject to the requirements in paragraphs (c) and (d) of this section, a Bank shall approve applications for AHP subsidy under its General Fund and any Targeted Funds that meet all of the applicable AHP eligibility requirements in this part in descending order, starting with the highest scoring application until the total funding amount for the particular AHP funding round, except for any amount insufficient to fund the next highest scoring application, has been approved.

    (b) AHP application alternates. For the General Fund and any Targeted Funds, the Bank also may, in its discretion, approve a specified number, as determined by the Bank, of the next highest scoring applications as alternates eligible for funding, and may approve any tied applications as alternates eligible for funding pursuant to paragraph (c)(2) of this section, if any previously committed AHP subsidies become available, pursuant to a written policy on approving alternates for funding established by the Bank and included in the Bank's AHP Implementation Plan. If a Bank has established such a policy for approving alternates for funding and sufficient previously committed AHP subsidies become available within one year of application approval, the Bank shall approve the designated alternates for funding within that one-year period.

    (c) Tied applications. (1) Where two or more applications to a General Fund or Targeted Fund have identical scores in the same AHP funding round and there is insufficient AHP subsidy to approve all of the tied applications but sufficient subsidy to approve one of them, a Bank shall approve the tied application that prevails under the Bank's scoring tie-breaker methodology in its policy adopted pursuant to § 1291.25(c).

    (2) A tied application that does not prevail under the Bank's scoring tie-breaker methodology, or is tied with another application but requested more subsidy than the amount of AHP funds that remain to be awarded under the Fund, shall be approved as an alternate for funding if the Bank has a written policy to approve alternates for funding under the Fund.

    (d) Applications to multiple Funds—approval under one Fund. If an application for the same project is submitted to more than one Fund at a Bank in a calendar year and the application scores high enough to be approved under each Fund, the Bank shall approve the application under only one of the Funds pursuant to the Bank's policy established in its AHP Implementation Plan.

    (e) No delegation. A Bank's board of directors may not delegate to Bank officers or other Bank employees the responsibility to approve or disapprove the AHP subsidy applications, as well as any alternates under the Bank's General Fund and any Targeted Fund if the Bank has a written policy to approve alternates for funding under such Fund.

    § 1291.29 Modifications of approved AHP applications.

    (a) Modification procedure. If, prior to or after final disbursement of funds to a project from all funding sources, in order to remedy noncompliance or receive additional subsidy, there is or will be a change in the project that would change the score that the project application received in the AHP funding round in which it was originally scored and approved, had the changed facts been operative at that time, a Bank shall approve in writing a request for a modification to the terms of the approved application, provided that:

    (1) The Bank first requests that the project sponsor or owner make a reasonable effort to cure any noncompliance within a reasonable period of time, and the noncompliance could not be cured within a reasonable period of time;

    (2) The project, incorporating any such changes, would meet the eligibility requirements of this part;

    (3) The application, as reflective of such changes, continues to score high enough to have been approved in the AHP funding round in which the application was originally scored and approved by the Bank, which is as high as the lowest ranking alternate approved for funding by the Bank if the Bank has a written policy to approve alternates for funding; and

    (4) There is good cause for the modification, which may not be solely remediation of noncompliance, and the analysis and justification for the modification, including why a cure of noncompliance was not successful or attempted, are documented by the Bank in writing.

    (b) AHP subsidy increases; no delegation—(1) AHP subsidy increases. A Bank's board of directors may, in its discretion, approve or disapprove requests for modifications involving an increase in AHP subsidy in accordance with the requirements of paragraph (a) of this section.

    (2) No delegation. The authority to approve or disapprove requests for modifications involving an increase in AHP subsidy shall not be delegated by the Bank's board of directors to Bank officers or other Bank employees.

    § 1291.30 Procedures for funding.

    (a) Disbursement of AHP subsidies to members. (1) A Bank may disburse AHP subsidies only to institutions that are members of the Bank at the time they request a draw-down of the subsidies.

    (2) If an institution with an approved application for AHP subsidy loses its membership in a Bank, the Bank may disburse AHP subsidies to a member of such Bank to which the institution has transferred its obligations under the approved AHP application, or the Bank may disburse AHP subsidies through another Bank to a member of that Bank that has assumed the institution's obligations under the approved AHP application.

    (b) Progress towards use of AHP subsidy. A Bank shall establish and implement policies, including time limits, for determining whether progress is being made towards draw-down and use of AHP subsidies by approved projects, and whether to cancel AHP application approvals for lack of such progress. If a Bank cancels any AHP application approvals due to lack of such progress, the Bank shall make the AHP subsidies available for other AHP-eligible projects or households.

    (c) Compliance upon disbursement of AHP subsidies. A Bank shall establish and implement policies for determining, prior to its initial disbursement of AHP subsidy for an approved project, and prior to each subsequent disbursement, that the project meets the eligibility requirements of this part and all obligations committed to in the approved AHP application. If a Bank cancels any AHP application approvals due to noncompliance with eligibility requirements of this part, the Bank shall make the AHP subsidies available for other AHP-eligible projects or households.

    (d) Changes in approved AHP subsidy amount where a direct subsidy is used to write down prior to closing the principal amount or interest rate on a loan. If a member is approved to receive AHP direct subsidy to write down prior to closing the principal amount or the interest rate on a loan to a project, and the amount of AHP subsidy required to maintain the debt service cost for the loan decreases from the amount of AHP subsidy initially approved by the Bank due to a decrease in market interest rates between the time of approval and the time the lender commits to the interest rate to finance the project, the Bank shall reduce the AHP subsidy amount accordingly. If market interest rates rise between the time of approval and the time the lender commits to the interest rate to finance the project, the Bank, in its discretion, may increase the AHP subsidy amount accordingly.

    (e) AHP outlay adjustment. If a Bank reduces the amount of AHP subsidy approved for a project, the amount of such reduction shall be returned to the Bank's AHP fund. If a Bank increases the amount of AHP subsidy approved for a project, the amount of such increase shall be drawn first from any currently uncommitted or repaid AHP subsidies and then from the Bank's required AHP contribution for the next year.

    (f) Project sponsor notification of re-use of repaid AHP direct subsidy. Prior to disbursement by a project sponsor of AHP direct subsidy repaid to and retained by such project sponsor pursuant to a subsidy re-use program authorized by the Bank under § 1291.64(b), the project sponsor shall provide written notice to the member and the Bank of its intent to disburse the repaid AHP subsidy to a household satisfying the requirements of this part and the commitments made in the approved AHP application.

    § 1291.31 Lending and re-lending of AHP direct subsidy by revolving loan funds.

    Pursuant to written policies established by a Bank's board of directors after consultation with its Advisory Council, a Bank, in its discretion, may provide AHP direct subsidy under its General Fund or any Targeted Funds for eligible projects and households involving both the lending of the subsidy and subsequent lending of subsidy principal and interest repayments by a revolving loan fund, provided the following requirements are met:

    (a) Submission of application. (1) An application for AHP subsidy under this section shall include the revolving loan fund's criteria for the initial lending of the subsidy, identification of and information on a specific proposed AHP project if required in the Bank's discretion, the revolving loan fund's criteria for subsequent lending of subsidy principal and interest repayments, and any other information required by the Bank.

    (2) The information in the application shall be sufficient for the Bank to:

    (i) Determine that the criteria for the initial lending of the subsidy, the specific proposed project if applicable, and the criteria for subsequent lending of subsidy principal and interest repayments, meet the eligibility requirements of § 1291.23; and

    (ii) Evaluate the criteria for the initial lending of the subsidy, and the specific proposed project if applicable, pursuant to the scoring methodology established by the Bank pursuant to §§ 1291.25, 1291.26, and 1291.27, as applicable.

    (b) Review of application. A Bank shall review the application for AHP subsidy to determine that the criteria for the initial lending of the subsidy, the specific proposed project if applicable, and the criteria for subsequent lending of subsidy principal and interest repayments, meet the eligibility requirements of § 1291.23, and shall evaluate the criteria for the initial lending of the subsidy and the specific proposed project, if applicable, pursuant to the scoring methodology established by the Bank pursuant to §§ 1291.25, 1291.26, and 1291.27, as applicable.

    (c) Initial lending of subsidy. (1) The revolving loan fund's initial lending of the AHP subsidy shall meet the eligibility requirements of paragraph (a) of this section, shall be to projects or households meeting the commitments in the approved application for AHP subsidy, and shall be subject to the requirements in §§ 1291.15 and 1291.50, respectively.

    (2) If an owner-occupied unit or project funded under this paragraph (c) is in noncompliance with the commitments in the approved AHP application, or is sold or refinanced prior to the end of the applicable AHP retention period, the required amount of AHP subsidy shall be repaid to the revolving loan fund in accordance with §§ 1291.15(a)(7), 1291.15(a)(8), and 1291.60, and the revolving loan fund shall re-lend such repaid subsidy, excluding the amounts of AHP subsidy principal already repaid to the revolving loan fund, to another owner-occupied unit or project meeting the initial lending requirements of this paragraph (c) for the remainder of the retention period.

    (d) Subsequent lending of AHP subsidy principal and interest repayments. (1) AHP subsidy principal and interest repayments received by the revolving loan fund from the initial lending of the AHP direct subsidy shall be re-lent by the revolving loan fund in accordance with the requirements of this paragraph (d), except that the revolving loan fund, in its discretion, may provide part or all of such repayments as nonrepayable grants to eligible projects in accordance with the requirements of this paragraph (d).

    (2) The revolving loan fund's subsequent lending of AHP subsidy principal and interest repayments shall be for the purchase, construction, or rehabilitation of owner-occupied projects for households with incomes at or below 80 percent of the median income for the area, or of rental projects where at least 20 percent of the units are occupied by and affordable for households with incomes at or below 50 percent of the median income for the area, and shall meet all other eligibility requirements of this paragraph (d).

    (3) A Bank may, in its discretion, require the revolving loan fund's subsequent lending of subsidy principal and interest repayments to be subject to retention period, monitoring, and recapture requirements, as defined by the Bank in its AHP Implementation Plan.

    (e) Return of unused AHP subsidy. The revolving loan fund shall return to the Bank any AHP subsidy that will not be used according to the requirements in this section.

    § 1291.32 Use of AHP subsidy in loan pools.

    Pursuant to written policies established by a Bank's board of directors after consultation with its Advisory Council, a Bank, in its discretion, may provide AHP subsidy under its General Fund or any Targeted Funds for the origination of first mortgage or rehabilitation loans with subsidized interest rates to AHP-eligible households through a purchase commitment by an entity that will purchase and pool the loans, provided the following requirements are met:

    (a) Eligibility requirements. The loan pool sponsor's use of the AHP subsidies shall meet the requirements under this section, and shall not be used for the purpose of providing liquidity to the originator or holder of the loans, or paying the loan pool's operating or secondary market transaction costs.

    (b) Forward commitment. (1) The loan pool sponsor shall purchase the loans pursuant to a forward commitment that identifies the loans to be originated with interest-rate reductions as specified in the approved application for AHP subsidy to households with incomes at or below 80 percent of the median income for the area. Both initial purchases of loans for the AHP loan pool and subsequent purchases of loans to substitute for repaid loans in the pool shall be made pursuant to the terms of such forward commitment and subject to time limits on the use of the AHP subsidy as specified by the Bank in its AHP Implementation Plan and the Bank's agreement with the loan pool sponsor, which shall not exceed one year from the date of approval of the AHP application.

    (2) As an alternative to using a forward commitment, the loan pool sponsor may purchase an initial round of loans that were not originated pursuant to an AHP-specific forward commitment, provided that the entities from which the loans were purchased are required to use the proceeds from the initial loan purchases within time limits on the use of the AHP subsidy as specified by the Bank in its AHP Implementation Plan and the Bank's agreement with the loan pool sponsor, which shall not exceed one year from the date of approval of the AHP application. The proceeds shall be used by such entities to assist households that are income-eligible under the approved AHP application during subsequent rounds of lending, and such assistance shall be provided in the form of a below-market AHP-subsidized interest rate as specified in the approved AHP application.

    (c) Each AHP-assisted owner-occupied unit and rental project receiving AHP direct subsidy or a subsidized advance shall be subject to the requirements of §§ 1291.15, 1291.50, and 1291.60, respectively.

    (d) Where AHP direct subsidy is being used to buy down the interest rate of a loan or loans from a member or other party, the loan pool sponsor shall use the full amount of the AHP direct subsidy to buy down the interest rate on a permanent basis at the time of closing on such loan or loans.

    Subpart D—Homeownership Set-Aside Programs
    § 1291.40 Establishment of programs.

    A Bank may establish, in its discretion, one or more Homeownership Set-Aside Programs pursuant to the requirements of this part.

    § 1291.41 Eligible applicants.

    A Bank shall accept applications for AHP direct subsidy under its Homeownership Set-Aside Programs only from institutions that are members of the Bank at the time the application is submitted to the Bank.

    § 1291.42 Eligibility requirements.

    A Bank's Homeownership Set-Aside Programs shall meet the eligibility requirements set forth in this section. A Bank may not adopt additional eligibility requirements for its Homeownership Set-Aside Programs except for eligible households pursuant to paragraph (b) of this section.

    (a) Member allocation criteria. AHP direct subsidies shall be provided to members pursuant to allocation criteria established by the Bank in its AHP Implementation Plan.

    (b) Eligible households. Members shall provide AHP direct subsidies only to households that:

    (1) Have incomes at or below 80 percent of the median income for the area at the time the household is accepted for enrollment by the member in the Bank's Homeownership Set-Aside Programs, with such time of enrollment by the member defined by the Bank in its AHP Implementation Plan;

    (2) Complete a homebuyer or homeowner counseling program provided by, or based on one provided by, an organization experienced in homebuyer or homeowner counseling, in the case of households that are first-time homebuyers; and

    (3) Are first-time homebuyers or households receiving AHP subsidy for owner-occupied rehabilitation, in the case of households receiving subsidy pursuant to the one-third set-aside funding allocation requirement in § 1291.12(b), and meet such other eligibility criteria that may be established by the Bank in its AHP Implementation Plan, such as a matching funds requirement, homebuyer or homeowner counseling requirement for households that are not first-time homebuyers, or criteria that give priority for the purchase or rehabilitation of housing in particular areas or as part of a disaster relief effort.

    (c) Maximum grant limit. Members shall provide AHP direct subsidies to households as a grant, in an amount up to a maximum established by the Bank, not to exceed $22,000 per household, which limit shall adjust upward on an annual basis in accordance with increases in FHFA's House Price Index (HPI). In the event of a decrease in the HPI, the subsidy limit shall remain at its then-current amount until the HPI increases above the subsidy limit, at which point the subsidy limit shall adjust to that higher amount. FHFA will notify the Banks annually of the maximum subsidy limit, based on the HPI. A Bank may establis