Federal Register Vol. 83, No.35,

This final rule, pursuant to 5 U.S.C. 553, amends regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This final rule is issued under Marketing Agreement and Order No. 986, (7 CFR part 986), regulating the handling of pecans grown in the states of Alabama, Arkansas, Arizona, California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, North Carolina, New Mexico, Oklahoma, South Carolina, and Texas. Part 986 (referred to as “the order”) is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

The Department of Agriculture (USDA) is issuing this rule in conformance with Executive Orders 13563 and 13175. This action falls within a category of regulatory actions that the Office of Management and Budget (OMB) has exempted from Executive Order 12866 review. Additionally, because this rule does not meet the definition of a significant regulatory action it does not trigger the requirements contained in Executive Order 13771. See OMB's Memorandum titled “Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017 titled `Reducing Regulation and Controlling Regulatory Costs' ” (February 2, 2017).

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the Order now in effect, pecan handlers are subject to assessments. Funds to administer the Order are derived from these assessments. The reporting requirements established herein will be applicable to all assessable pecans beginning October 1, 2017.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an Order may file with USDA a petition stating that the Order, any provision of the Order, or any obligation imposed in connection with the Order is not in accordance with law and request a modification of the Order or to be exempted therefrom. A handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

This final rule establishes reporting requirements under the Order. This action will require all pecan handlers to submit to the Council reports on pecans received, shipped, held in inventory, exported for sale or shelling, and purchased from outside the United States. This information will be used by the Council to provide statistical reports to the industry, meet requirements under the Order, and help guide future marketing efforts. This action was unanimously recommended by the Council at its April 17, 2017, meeting.

Section 2(4) of the Act specifies that one of its stated policies is to establish and maintain orderly marketing conditions for certain agricultural commodities that will provide, in the interests of producers and consumers, an orderly flow of the supply of such commodities to market to avoid unreasonable fluctuations in supply and prices. Section 8(d)(1) of the Act specifies that the Secretary may require all handlers subject to a marketing order to provide USDA with such information as is necessary for it to ascertain and determine the degree to which the agreement has been carried out or effectuated the declared policy of the Act.

Sections 986.75, 986.76, and 986.77 of the Order provide authority to the Council to require handlers to submit reports of inventory, merchantable pecans handled, and pecans received by handlers, respectively, on such dates as the Council may prescribe. Section 986.78 further provides, with the approval of the Secretary, authority for the Council to collect other reports and information from handlers needed to perform its duties. This rule uses these authorities to establish new §§ 986.177 and 986.178 under the administrative provisions of the Order. These new sections will require handlers of pecans to report to the Council on a monthly basis: Pecans received, shipped, held in inventory, exported for sale or shelling, and purchased from outside the United States, using five specific Council forms.

At its November 16, 2016, meeting, the first meeting following the promulgation of the Order, the Council discussed its initial budget, assessment rates, and necessary reporting requirements to establish a program that is efficient and responsive to industry needs. During these discussions, the Council appointed a Statistics and Reporting Committee (Committee) to develop reporting requirements.

Members of the Committee discussed the reporting needs of the industry, reviewed examples of reporting forms from other marketing orders, and met and worked with the staff of another marketing order in developing the proposed reporting requirements. The Committee also worked with USDA to ensure the recommended information collection would provide the information necessary to facilitate the administration of the Order.

At its February 23, 2017, meeting, the Council reviewed drafts of seven reporting forms as developed and recommended by the Committee. The Council expressed its interest in having as much electronic reporting as possible, but recognized that many handlers may prefer a paper submission. The Council also considered the timing of when forms would be due and submission dates that would work for all parts of the industry. After a thorough review and some modifications, seven forms were approved by the Council.

At a meeting on April 17, 2017, the Council revisited the recommended reporting requirements and the accompanying forms. Acknowledging that the industry was more than halfway through the fiscal year at that time, the Council recommended dividing the reporting requirements into the five forms needed beginning with the 2017-2018 fiscal year and the two forms needed beginning with the 2016-2017 fiscal year. The two forms required for the 2016-2017 fiscal year were established in a separate rulemaking action.

This final rule adds five new reporting requirements and five new forms to the administrative provisions under the Order by adding §§ 986.177 and 986.178. During the formal rulemaking hearing to promulgate the Order, it was stated that the data collection component was one of the most important aspects of the Order. Concerns were also expressed regarding the accuracy and availability of industry data, and the impact those have on making good business decisions.

Currently, most available reports on domestic pecan production are issued annually and often long after the marketing year has been completed. The reporting of this information is currently voluntary, so not all handlers are reporting, which impacts the accuracy of the available information. Some aggregate import and export data are available, but this information is usually available on an annual basis, or reported several months after the shipments have been made. Additionally, some domestic production is shipped outside of the country for shelling and then returned to the United States for sale or further processing. There is concern this volume is not being properly accounted for, and is negatively impacting the accuracy of the industry information currently available.

The Council agreed these reporting requirements would be necessary to develop accurate reports for the industry regarding pecans being produced and handled in the United States, and recognized the value to the industry of such reports. Having accurate and timely information on the total supply of pecans moving into and out of the country will also assist the industry in managing available supply and in making marketing decisions. Further, collecting this information monthly will allow the Council to provide key data regarding total supply and inventory to the industry in a more timely fashion throughout the season.

The Council also recognized that § 986.65 of the Order requires the Council to provide a report and recommendation to the Secretary on the Council's proposed marketing policy for the next fiscal year. The report is required to include, in part, an estimate of production; improved, native, and substandard pecans; handler inventory; and trade supply, taking into consideration imported pecans. In addition to providing important information for industry reports, the reporting requirements covered in this action would provide the information needed to develop the marketing policy.

Two specific monthly reporting requirements will be added to the administrative provisions under the Order in a new § 986.177, a summary report of domestic pecans received, and a report of pecans purchased outside the United States. The summary report of domestic pecans received includes information on the handler submitting the form, the month covered by the report, the total weight and type of inshell pecans received, and the weight by variety of improved pecans received. In addition, the form also includes information regarding total assessments owed and total pounds reported to date.

The information on this form will provide the Council with the volume of pecans received by handlers each month throughout the season. This information will be used to track the available supply of pecans each month, and the overall crop as it is delivered to handlers. The Council will then be able to use the information to develop its own reports that would provide the industry with an overview of market information for the predominant varieties, including volume by variety, which will assist in the development of marketing strategies.

The Council also intends to use this form to facilitate the collection of assessments on a monthly basis throughout the season. Using the form, handlers will be able to calculate their assessments due each month based on the pecans received as listed on the report. Handlers will be required to pay to the Council the assessments owed on the pecans received by the due date of the summary report.

In its discussion of the report of pecans purchased outside the United States, the Council agreed it would be important to have information regarding the volume of pecans being imported by production area. The monthly report of pecans purchased outside the United States includes the name of the handler importing pecans, the month covered by the report, the date imported, country of origin, volume, and variety of pecans imported.

As production of pecans abroad has increased, there has been an increase in pecans imported into the United States. One Council member stated that the domestic industry is currently shelling and processing as much as 70 to 75 percent of Mexican-grown pecans, and that Mexican pecans now account for nearly 50 percent of sales in the United States. Consequently, having information regarding the volume of imported pecans is essential when calculating available supply. Collecting this information will greatly improve the accuracy of reports to the industry as it includes information regarding both domestic and imported pecans.

One of the Council's main goals in developing these reporting requirements is to deliver to the industry accurate reports regarding the marketplace and supply of pecans to assist the industry in making its marketing decisions throughout the year. The Council believes having accurate information regarding imported pecans is an essential part of reaching this goal. Further, collecting this information will provide the industry with valuable data regarding the timing and volume of pecans imported into the United States. Members also agreed having this information will assist the Council in developing its marketing policy as required under the Order.

Three additional reporting requirements will be added to the administrative provisions in a new § 986.178: Reports of shipments and inventory, exports by country of destination, and inshell pecans exported to Mexico for shelling. The report of shipments and inventory will include information on the handler submitting the form, the month covered by the report, shipments of shelled and inshell pecans, current inventory, and pecans in inventory already committed for shipment.

The Council believes this form will provide beneficial information regarding shipments completed and volume in inventory. While there is currently some limited information available regarding pecans in cold storage, this information does not delineate between available inventory and inventory that is already committed for shipment. By collecting this information from handlers, this report, in conjunction with the data regarding pecans received, will allow the Council to provide the industry with inventory reports that are more accurate, and that provide a clearer picture of available supply. This data on the available volume of pecans will provide the industry with the information needed to make better marketing decisions.

When discussing a reporting requirement for exported pecans, the Council expressed the industry's need for more information concerning international trade markets and export trends. The report of exports by country of destination includes information on the handler submitting the report, the month of the report, and the weight of all shipments of pecans, inshell or shelled, by classification, and by country of destination.

The Council estimated that prior to 2005, around 10 percent of domestic production was being exported. Since then, exports have grown considerably and now account for between 40 and 50 percent of production. The recommended form will be used to generate reports throughout the season providing industry members with information on where product is being sold and in what volume. Further, the Council could use this information to determine the effectiveness of any international promotional efforts and to consider opportunities for promotion and market expansion.

Some of the pecans shipped outside the United States are exported just for shelling and then returned to the United States for further use. The Council recommended an additional reporting form to capture this information. Specifically, the Council recommended collecting information on pecans exported to Mexico for shelling and then returned to the United States. The Council decided to limit the reporting to Mexico since the vast majority of pecans exported for this purpose are being sent to Mexico because of its proximity and cost efficiencies. The report of inshell pecans exported to Mexico for shelling includes information on the handler submitting the report, the month covered by the report, dates of shipments, the total weight of inshell pecans shipped for shelling, and the weight of shelled pecans returned to the United States.

In discussing this reporting requirement, the Council recognized that in addition to shelling some pecans from the production area, Mexico also exports pecans to the United States. This makes it difficult to determine how much of the import volume reported from Mexico is represented by domestic product after shelling. It was expressed that without this report, the accuracy of data regarding both reported exported and imported product could be compromised. Pecans exported for shelling could be counted as exports, and then counted again as imports when returned to the United States. This reporting requirement will help reduce the possibility of double counting of these pecans, and will help improve the accuracy of the overall information on supply.

The Council selected the tenth day of the month following the month of the activity as the due date for all five reports. Should the tenth day of the month fall on a weekend or holiday, reports will be due by the first business day following the tenth day of the month. The five monthly reports will be used during the 2017-2018 and subsequent seasons.

This action requires pecan handlers to provide the Council with monthly reports on pecans received, shipped, held in inventory, exported for sale or shelling, and purchased from outside the United States. By establishing these reporting requirements, the Council will be able to gather and disseminate this information in accurate market reports. Further, this information will be used to create a marketing policy each year as required under the Order.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) has considered the economic impact of this action on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.

There are approximately 2,500 growers of pecans in the production area and approximately 250 handlers subject to regulation under the pecan marketing Order. Small agricultural growers are defined by the Small Business Administration as those having annual receipts less than $750,000, and small agricultural service firms are defined as those whose annual receipts are less than $7,500,000 (13 CFR 121.201).

According to information from the National Agricultural Statistics Service (NASS), the average grower price for pecans during the 2015-2016 season was $2.20 per pound and 254 million pounds were utilized. The value for pecans that year totaled $558.8 million ($2.20 per pound multiplied by 254 million pounds). Taking the total value of production for pecans and dividing it by the total number of pecan growers provides an average return per grower of $223,520. Using the average price and utilization information, and assuming a normal bell-curve distribution of receipts among growers, the majority of growers receive less than $750,000 annually.

Evidence presented at the formal rulemaking hearing indicates an average handler margin of $0.58 per pound. Adding this margin to the average grower price of $2.20 per pound of inshell pecans results in an estimated handler price of $2.78 per pound. With a total 2015 production of 254 million pounds, ($2.78 per pound multiplied by 254 million pounds) the total value of production in 2015 was $706.12 million. Taking the total value of production for pecans and dividing it by the total number of pecan handlers provides an average return per handler of $2,824,480. Using this estimated price, the utilization volume, number of handlers, and assuming a normal bell-curve distribution of receipts among handlers, the majority of handlers have annual receipts of less than $7,500,000. Thus, the majority (a substantial number) of growers and handlers of pecans grown in the states of Alabama, Arkansas, Arizona, California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, North Carolina, New Mexico, Oklahoma, South Carolina, and Texas may be classified as small entities.

This final rule establishes reporting requirements under the Order. This action requires pecan handlers to provide the Council with reports of pecans received, shipped, held in inventory, exported for sale or shelling, and purchased from outside the United States. The Council will use this information to provide important statistical reports to the industry, to meet requirements under the Order, and to help guide future marketing efforts. This rule establishes new §§ 986.177 and 986.178 under the administrative provisions of the Order. The authority for this action is provided for in Section 8(d)(1) of the Act and §§ 986.75, 986.76, 986.77, and 986.78 of the Order.

Requiring monthly reports of pecans received, shipped, held in inventory, exported for sale or shelling, and purchased from outside the United States will impose an increase in the reporting burden on all pecan handlers. However, this data is already recorded and maintained by handlers as a part of their daily business. Handlers, regardless of size, should be able to readily access and submit this information. Consequently, any additional costs associated with this change would be minimal (not significant) and apply equally to all handlers.

This action should also help the entire industry by providing comprehensive data on pecans received, shipped, held in inventory, exported for sale or shelling, and purchased from outside the United States. Collection of this data was one of the industry's goals in promulgating the Order as there is no other source for this type of data. This information should provide accurate information regarding available inventory, help with marketing and planning for the industry, provide important information for the collection of assessments, and assist with preparing the annual marketing policy required by the Order. The benefits of this action are expected to be equally available to all pecan growers and handlers, regardless of their size.

The Council discussed other alternatives to this action. The Council considered listing additional varieties on the summary report of pecans received. However, after discussion the Council determined a simpler version with the major commercial varieties and room for handlers to enter additional varieties as needed would be less burdensome. The Council also considered different due dates for these monthly reports, including a due date of the first, the third and the fifth day after the month of the activity. However, after some discussion, it was determined some handlers may have difficulty meeting these time frames. The 15th day of the month was also suggested, but Council members thought this would delay the issuance of reports, and negatively impact their value. Consequently, the Council agreed to set the due date for all five forms at the tenth of the month. The Council also considered the value and importance of each of the forms, and if all should be recommended. However, the Council agreed each of the recommended forms provides important information for the industry and for administering the Order. Therefore, the alternatives were rejected.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), this collection has been submitted to OMB with the reference number 0581—NEW. Upon approval, the collection will be merged with OMB No. 0581-0291, “Federal Marketing Order for Pecans.” This final rule establishes the use of five new Council forms, which impose a total annual burden increase of 2,234.4 hours. The forms, “Summary Report U.S. Pecans Received for Your Own Account,” “Pecans Purchased Outside the United States,” “Report of Shipments and Inventory on Hand,” “Exports by Country of Destination,” and “Inshell Pecans Exported to Mexico for Shelling and Returned to the United States as Shelled Meats,” require the minimum information necessary to effectively carry out the requirements of the Order. The information would enable the Council to provide statistical reports to the industry, meet requirements under the Order, and help guide future marketing efforts.

As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

As noted in the initial regulatory flexibility analysis, USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule. Further, the public comments received concerning the proposal did not address the initial regulatory flexibility analysis.

AMS is committed to complying with the E-Government Act, to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

Further, the Council's meetings were widely publicized throughout the pecan industry and all interested persons were invited to attend the meetings and participate in Council deliberations on all issues. Additionally, the Council's Committee meetings held February 23, 2017, and April 17, 2017, were also public meetings and all entities, both large and small, were able to express views on this issue.

A proposed rule concerning this action was published in the Federal Register on December 4, 2017 (82 FR 57166). Copies of the rule were sent via email to Council members and known pecan handlers. Finally, the rule was made available through the internet by USDA and the Office of the Federal Register. A 60-day comment period ending February 2, 2018, was provided to allow interested persons to respond to the proposal. Two comments were received in support of the proposed information collection. One commenter stated that, while he worried about the cost of pecans going up, he would consider the cost worthwhile if the information made the pecan industry more transparent. The other commenter stated she appreciates that the regulation could help improve the production and transportation of pecans.

Accordingly, no changes will be made to the rule as proposed, based on the comments received.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any questions about the compliance guide should be sent to Richard Lower at the previously-mentioned address in the FOR FURTHER INFORMATION CONTACT section.

After consideration of all relevant matter presented, including the information and recommendation of the Council and other available information, it is hereby found that this rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act.

On November 2, 2015, the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 Inflation Adjustment Improvements Act), Public Law 114-74, 129 Stat. 584, was enacted. This act amended the Federal Civil Penalties Inflation Adjustment Act of 1990, Public Law 101-410, 104 Stat 890 (the 1990 Inflation Adjustment Act), to improve the effectiveness of civil monetary penalties and to maintain their deterrent effect. The 2015 Inflation Adjustment Improvements Act required agencies to issue an interim final rule by August 1, 2016, to adjust the level of civil monetary penalties with an initial “catch-up” adjustment, and to annually adjust these monetary penalties for inflation by January 15 of each subsequent year. The act authorizes agencies to implement the annual adjustments without regard to the requirements for public notice and comment or delayed effective date under the Administrative Procedures Act (the APA), 5 U.S.C. 553(b)(3)(B) and (d)(3), respectively.

In addition, based on the definition of a “civil monetary penalty” in the 1990 Inflation Adjustment Act, agencies are to make adjustments only to the civil penalties that (i) are for a specific monetary amount as provided by Federal law or have a maximum amount provided for by Federal law; (ii) are assessed or enforced by an agency; and (iii) are enforced or assessed in an administrative proceeding or a civil action in the Federal courts. Therefore, penalties that are stated as a percentage of an indeterminate amount or as a function of a violation (penalties that encompass actual damages incurred) are not to be adjusted.

On May 19, 2016, SBA published an interim final rule with its initial adjustments to the civil monetary penalties, including an initial “catch-up” adjustment. 81 FR 31489. These adjusted penalties became effective on August 1, 2016. SBA published its first annual adjustments to the monetary penalties in the Federal Register on February 9, 2017 (82 FR 9967), with an immediate effective date. This rule will establish the adjusted penalty amounts for 2018.

According to the 2015 Inflation Adjustment Improvements Act and the Office of Management and Budget implementing guidance in M-18-03, Implementation of Penalty Inflation Adjustments for 2018, Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, (December 15, 2017), the formula for calculating the annual adjustments is based on the Consumer Price Index for all Urban Consumers (CPI-U) for the month of October preceding the adjustment, and specifically on the change between the October CPI-U preceding the date of adjustment and the prior year's CPI-U. Based on this methodology, the 2018 civil monetary penalty adjustment is 1.02041 (October 2017 CPI-U (246.663)/October 2016 CPI-U (241.729) = 1.02041). The annual adjustments identified in this rule were obtained by applying this multiplier to the most recently adjusted penalty amounts that were published on February 9, 2017 (82 FR 9967).

This rule makes adjustments to civil monetary penalties authorized by the Small Business Act, the Small Business Investment Act of 1958 (SBIAct), the Program Fraud Civil Remedies Act, and the Byrd Amendment to the Federal Regulation of Lobbying Act. These penalties and the implementing regulations are discussed below.

SBA licenses, regulates and provides financial assistance to financial entities called small business investment companies (SBICs). Pursuant to section 315 of the SBIAct, 15 U.S.C. 687g, SBA may impose a penalty on any SBIC for each day that it fails to comply with SBA's regulations or directives governing the filing of regular or special reports. The penalty for non-compliance is incorporated in § 107.665 of the SBIC program regulations.

This rule amends § 107.665 to adjust the current civil penalty from $254 to $259 for each day an SBIC fails to file a required report. The current civil penalty amount of $254 was multiplied by the multiplier of 1.02041 to reach a product of $259, rounded to the nearest dollar.

According to the regulations at § 120.465, any SBA Supervised Lender, as defined in 13 CFR 120.10, that violates a regulation or written directive issued by the SBA Administrator regarding the filing of any regular or special report is subject to the civil penalty amount stated in § 120.465(b) for each day the company fails to file the report, unless the SBA Supervised Lender can show that there is reasonable cause for its failure to file. This penalty is authorized by section 23(j)(1) of the Small Business Act, 15 U.S.C. 650(j)(1).

This rule amends § 120.465 to adjust the current civil penalty to $6,460 per day for failure to file. The current civil penalty of $6,331 was multiplied by the multiplier of 1.02041 to reach a product of $6,460, rounded to the nearest dollar.

SBA has promulgated regulations at 13 CFR part 142 to implement the civil penalties authorized by the Program Fraud Civil Remedies Act of 1986 (PFCRA), 31 U.S.C. 3801-3812. The current electronic Code of Federal Regulations (eCFR) at § 142.1(b) states that a person who submits, or causes to be submitted, a false claim or a false statement to SBA is subject to a civil penalty of not more than $10,781, for each statement or claim. However, this amount reflected in the eCFR is incorrect. Rather, the correct adjusted amount for 2017, as published in the February 9, 2017 rule, was $10,957 (the product of $10,781 and the multiplier of 1.10636). Therefore, this final rule makes the required adjustment for 2018 based on the correct published amount of $10,957. Accordingly, the rule amends § 142.1(b) to adjust the current civil penalty to $11,181 per statement or claim. The adjusted civil penalty amount was calculated by multiplying the civil penalty amount of $10,957 by the multiplier of 1.02041 to reach a product of $11,181, rounded to the nearest dollar.

SBA's regulations at 13 CFR part 146 govern lobbying activities by recipients of federal financial assistance. These regulations implement the authority in 31 U.S.C. 1352, which was established in 1989, and impose penalties on any recipient that fails to comply with certain requirements in the part. Specifically, under § 146.400(a) and (b), penalties may be imposed on those who make prohibited expenditures or fail to file the required disclosure forms or to amend such forms, if necessary.

This rule amends § 146.400(a) and (b), to adjust the current civil penalty amounts to “not less than $19,639 and not more than $196,387.” The current civil penalty amounts of $19,246 and $192,459 were multiplied by the multiplier of 1.02041 to reach a product of $19,639 and $196,387, respectively, rounded to the nearest dollar.

This rule also amends § 146.400(e) to adjust the civil penalty that may be imposed for a first time violation of § 146.400(a) and (b) to a maximum of $19,639 and to adjust the civil penalty that may be imposed for second and subsequent offenses to “not less than $19,639 and not more than $196,387.” The current civil penalty amounts of $19,246 and $192,459 were multiplied by the multiplier of 1.02041 to reach a product of $19,639 and $196,387, respectively, rounded to the nearest dollar.

The Inflation Adjustment Act provides that agencies shall annually adjust civil monetary penalties for inflation notwithstanding Section 553 of the APA. Additionally, the Inflation Adjustment Act provides a nondiscretionary cost-of-living formula for annual adjustment of the civil monetary penalties. For these reasons, the requirements in sections 553(b), (c), and (d) of the APA, relating to notice and comment and requiring that a rule be effective 30 days after publication in the Federal Register, are inapplicable.

Section 553(d) requires agencies to publish their rules at least 30 days before their effective dates, except if the agency finds for good cause that the delay is impracticable, unnecessary, or contrary to the public interest. By expressly exempting this rule from section 553, the 2015 Inflation Adjustment Improvements Act has provided SBA with the good cause justification for this rule to become effective on the date it is published in the Federal Register.

The Office of Management and Budget has determined that this final rule is not a significant regulatory action under Executive Order 12866. This is also not a major rule under the Congressional Review Act, 5 U.S.C. 800.

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

For the purpose of Executive Order 13132, SBA has determined that the rule 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. Therefore, this final rule has no federalism implications warranting preparation of a federalism assessment.

This rule is not an Executive Order 13771 regulatory action because this rule is not significant under Executive Order 12866.

SBA has determined that this rule does not impose additional reporting or recordkeeping requirements.

The RFA requires agencies to consider the effect of their regulatory actions on small entities, including small non-profit businesses, and small local governments. Pursuant to the RFA, when an agency issues a rule the agency must prepare an analysis that describes whether the impact of the rule will have a significant economic impact on a substantial number of such small entities. However, the RFA requires such analysis only where notice and comment rulemaking is required. As stated above, SBA has express statutory authority to issue this rule without regard to the notice and comment requirement of the Administrative Procedure Act. Since notice and comment is not required before this rule is issued, SBA is not required to prepare a regulatory analysis.

For the reasons set forth in the preamble, SBA amends 13 CFR parts 107, 120, 142, and 146 as follows:

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends Class E airspace at Hanford Municipal Airport, Hanford, CA, to support instrument flight rules (IFR) operations at the airport.

The FAA published a notice of proposed rulemaking (NPRM) in the Federal Register for Docket No. FAA-2017-0856 (82 FR 50594; November 1, 2017) proposing to amend Class E airspace extending upward from 700 feet above the surface at Hanford Municipal Airport, Hanford, CA. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

The FAA inadvertently omitted in the NPRM that the geographic coordinates of the airport are adjusted and makes the notation in the rule. Except for this notation, this rule is the same as published in the NPRM.

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

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

The FAA is amending title 14 Code of Federal Regulations (14 CFR) part 71 by amending Class E airspace extending upward from 700 feet above the surface at Hanford Municipal Airport, Hanford, CA, to accommodate area navigation (RNAV) procedures at the airport. The Class E airspace area is modified to within 1.8 miles southwest and 3.2 miles northeast of the 332° bearing from the airport extending to 6.2 miles northwest of the airport (from within a 2.6-mile radius), and within 1.8 miles southwest and 3.2 miles northeast (from within 1.5 miles each side) of the 152° bearing from the airport extending to 6.2 miles southeast of the airport (from 5 miles southeast), and within 1.3 miles each side of the 067° bearing from the airport (from 1.8 miles north and 2.3 miles south of the Visalia VOR/DME) extending to 7.7 miles northeast of the airport.

Also, this action amends the geographic coordinates for the airport, removes the reference to the Visalia VOR/DME in the legal description as the FAA transitions from ground-based to satellite-based navigation; and removes Blair Airport from the legal description as the airport no longer exists.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

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

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

Authority for This Rulemaking

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

The FAA published a notice of proposed rulemaking in the Federal Register (82 FR 57554; December 6, 2017) for Docket No. FAA-2017-0972 to establish Class E airspace extending upward from 700 feet above the surface at Rangely Airport, Rangely, CO. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

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

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

The FAA is amending Title 14 Code of Federal Regulations (14 CFR) part 71 by establishing Class E airspace extending upward from 700 feet above the surface at Rangely Airport, Rangely, CO, within an area approximately 10 miles wide, from north to south, and extending to approximately 10 miles east and 12 miles west of the airport.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

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

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

Executive Summary Purpose of the Final Rule

Through this rule, FDA is updating the standards for FDA acceptance of data from clinical investigations conducted outside the United States to help ensure the quality and integrity of data obtained from these investigations and the protection of human subjects. In this rule, FDA is amending the regulations for PMA applications, HDE applications, IDE applications, and premarket notification submissions. As part of this rule, FDA also is amending the IDE regulations and the premarket notification regulations to address the requirements for FDA acceptance of data from clinical investigations conducted inside the United States. The amendments are intended to provide consistency in FDA requirements for acceptance of clinical data, whatever the application or submission type.

FDA is issuing this rule under the authority of the provisions of the Federal Food, Drug, and Cosmetic Act (FD&C Act) that apply to medical devices (21 U.S.C. 301 et seq.), including section 520(g) regarding IDEs (21 U.S.C. 306j(g)), section 515(c)(1)(A) and (d)(2) regarding PMAs (21 U.S.C. 360e(c)(1)(A) and (d)(2)), sections 510(k) and 513(i) regarding premarket notifications and determinations of substantial equivalence (21 U.S.C. 360(k) and 360c(i), respectively), section 520(m) regarding HDEs, section 513(f)(2) regarding De Novo classifications, section 569B regarding acceptance of data from clinical investigations conducted outside the United States (21 U.S.C. 360bbb-8b), and section 701(a) regarding regulations for the efficient enforcement of the FD&C Act (21 U.S.C. 371(a)).

This rule requires that sponsors and applicants of submissions and applications that include clinical investigations conducted outside the United States and submitted to support an IDE or device marketing application or submission provide statements and information regarding how the investigations conform with GCP. FDA defines GCP as a standard for the design, conduct, performance, monitoring, auditing, recording, analysis, and reporting of clinical investigations in a way that provides assurance that the data and results are credible and accurate and that the rights, safety, and well-being of subjects are protected. GCP includes review and approval by an IEC before initiating an investigation, continuing IEC review of ongoing investigations, and obtaining and documenting the freely given informed consent of subjects. FDA also is including requirements for the acceptance of data from clinical investigations conducted in the United States submitted to support an IDE application, an HDE application, or a premarket notification submission. The changes require a statement regarding compliance with FDA regulations for human subject protection, institutional review boards, and IDEs when the investigations are conducted in the United States. With the above described changes, the rule is intended to update the standards for FDA acceptance of data from clinical investigations and to help ensure the quality and integrity of data obtained from these investigations and the protection of human subjects.

The total estimated annualized costs of complying with these requirements, over 10 years, range from $0.8 million to $22.1 million with a 7 percent discount rate and range from $0.7 million to $22.0 million with a 3 percent discount rate. We lack data to quantify benefits, but expect the final rule will provide greater assurance of clinical data quality and integrity and human subject protection.

In the Federal Register of February 25, 2013 (78 FR 12664), FDA issued a proposed rule to revise the regulations in parts 807, 812, and 814 (21 CFR parts 807, 812, and 814) on the conditions under which FDA will accept data from clinical studies as support for an IDE application, a 510(k) submission, a PMA application, a PDP application, or an HDE application. The proposed rule addressed revisions to update the criteria for acceptance of data from clinical studies to help ensure the quality and integrity of data obtained from those studies and the protection of human subjects. In particular, the proposed rule addressed revisions to part 814 to update the criteria for acceptance of data from clinical studies conducted outside the United States. The proposed rule also addressed revisions to parts 807, 812, and 814, subpart H, to identify criteria for acceptance of data from clinical studies conducted both inside and outside the United States. The proposed rule identified similar criteria for acceptance of clinical data for all application and submission types for medical devices.

FDA received comments on the proposed rule from 13 entities: 7 medical device manufacturers, 2 academia, 2 associations, 1 drug manufacturer, and 1 consumer. The comments were supportive of GCP for medical devices as a mechanism to help ensure the quality and integrity of the data obtained from clinical investigations and human subject protection. Comments generally supported FDA's efforts to clarify the criteria for acceptance of clinical data submitted to FDA to support an IDE or a device marketing application or submission. Many comments, however, raised concerns about the proposed rule and some believed the rule was premature.

FDA considered all comments received on the proposed rule and we have made several important changes, primarily for clarity and accuracy, to reduce burden, and to provide flexibility in meeting regulatory requirements. The main changes from the proposed rule include:

• Deleting proposed § 812.2(e) because comments received indicated confusion regarding the scope of the rule. Proposed § 812.2(e) described the principles of good clinical practice applicable to studies conducted outside the United States that will be submitted to FDA in support of an IDE or device marketing application or submission. Including this information within the applicability section of the IDE regulations led some to believe that FDA intended for part 812 to apply to all clinical investigations conducted outside the United States. We have deleted proposed § 812.2(e) and included the supporting information requirements for clinical investigations conducted outside the United States in new § 812.28(a)(2).

• Clarifying that the rule applies to clinical data from “investigations” as defined in § 812.3(h) rather than using other terms, such as “clinical study” and “clinical trial,” in an interchangeable manner.

• Clarifying that the rule applies to the acceptance of data from clinical investigations conducted outside the United States when submitted to support an IDE or a device marketing application or submission rather than to all clinical data contained in such applications or submissions.

• Adding new § 812.28(a)(2), which identifies different supporting information requirements based on whether the investigation is for a significant risk device or a non-significant risk device, or meets the exemption criteria in § 812.2(c). Also, for investigations meeting the exemption criteria in § 812.2(c), the specified supporting information is required to be maintained and be made available for Agency review upon request by FDA.

• Adding a requirement in new § 812.28(a)(2) that the sponsor's or applicant's rationale for considering an investigation to be of a non-significant risk device or to meet the exemption criteria in § 812.2(c) be made available upon request by FDA. We also clarify in the preamble that we do not expect foreign IECs to provide oversight of the significant risk versus non-significant risk device determination and that sponsors and applicants may proceed based upon their own determination or based on a determination by FDA.

• Changing the requirements related to supporting information on incentives provided to subjects to require that the information be maintained for all clinical investigations but only require submission for significant risk device investigations. For investigations of non-significant risk devices and investigations meeting the exemption criteria in § 812.2(c), the final rule requires that information on incentives be made available upon FDA's request. We made this change because of concerns that incentives can affect data integrity for all investigations. We do not believe this requirement will be overly burdensome. Informed consent documents usually describe incentives and the IEC reviews this information. Therefore, providing the description of incentives to FDA should not be a burden. FDA will allow some flexibility in how sponsors or applicants comply with this provision. If the informed consent form includes an explanation of any incentives provided to subjects, a sponsor or applicant could submit a model consent form to meet the requirement. Alternatively, a sponsor or applicant could also satisfy the requirement by submitting a description of any incentives provided to subjects to participate in the investigation.

• Adding a waiver provision in new § 812.28(c) to allow sponsors and applicants to request a waiver of any applicable requirements under § 812.28(a)(1) and (b) if adequate justification can be provided. Although we believe the rule is flexible enough to address concerns about compliance with the laws and regulations of other countries and in situations when the sponsor or applicant did not initiate or conduct the clinical investigations, this revision will allow sponsors and applicants to request a waiver if they can provide adequate justification. Although the proposed rule included provisions that would allow a sponsor or applicant to explain why a clinical investigation was not conducted in accordance with GCP when submitted in support of an IDE or a device marketing application or submission, addition of the waiver provision would allow sponsors and applicants to request a waiver prior to submitting an application or submission supported by clinical data from investigations conducted outside the United States. A waiver may be requested prior to initiation of an investigation. The waiver provision requires a sponsor or applicant to justify a waiver request and allows FDA to decide whether to grant or deny a waiver on a case-by-case basis, taking into account all appropriate circumstances, based on whether or not the waiver would be in the interest of public health.

• Adding a provision in new § 812.28(e) to clarify that, for clinical investigations conducted outside the United States that do not meet the conditions under § 812.28(a), FDA may accept the information from such clinical investigations to support an IDE or a device marketing application or submission if FDA believes that the data and results from such clinical investigations are credible and accurate and that the rights, safety, and well-being of subjects have been adequately protected. Although this was implied in the provisions of the proposed rule allowing a sponsor or applicant to explain why a clinical investigation was not conducted in accordance with GCP, new § 812.28(e) makes this clear.

• Modifying the definition of an IEC in § 812.3(t) by changing the reference to the definition of an institutional review board (IRB). In the proposed rule, we referenced § 56.102(g) (21 CFR 56.102(g)). In the final rule, we reference § 812.3(f), which incorporates § 56.102(g), because § 812.3(f) is specific to devices. While these definitions vary slightly, we interpret the definitions as having the same meaning. We have elected to reference the definition in § 812.3(f) in order to reference definitions in part 812 whenever possible.

• Changing the requirement in proposed § 812.28(a)(2), now § 812.28(a)(3), that a statement is provided assuring the availability of the data from the study to FDA for validation through an onsite inspection to a requirement that FDA is able to validate the data from the investigation through an onsite inspection if the Agency deems it necessary.

• Amending §§ 812.28 and 812.140(d) to clarify that these provisions apply to requests for De Novo classifications, which are a type of device marketing submission. FDA intended for §§ 812.28 and 812.140(d) to encompass all device marketing applications and submissions. As stated in the proposed rule, “FDA believes that the requirements for FDA's acceptance of data from clinical studies should be consistent regardless of the type of submission or application in which the data are submitted to FDA” (78 FR 12664 at 12665). This amendment will provide for consistency by ensuring that FDA requirements for acceptance of data from clinical investigations conducted outside the United States are the same for all device marketing applications and submissions, and will help to provide greater assurance of the quality and integrity of the data from such investigations submitted in support of this type of device marketing submission.

In response to comments, and after consideration of the intent and purpose of the new requirements, we have determined that the effective date will be 1 year after the publication of this final rule in the Federal Register. This final rule will apply to all clinical investigations that enroll the first subject on or after the effective date of this rule and that support an IDE or a device marketing application or submission to FDA. For the purposes of this rule, a subject is considered enrolled when the subject, or the subject's legally authorized representative, agrees to participate in a clinical investigation as indicated by signing of the informed consent document(s), or participates in an investigation meeting the requirements of § 50.24 (21 CFR 50.24).

If an investigation conducted outside the United States enrolled the first subject prior to the rule's effective date, then the requirements in § 814.15 (21 CFR 814.15) prior to the rule's effective date would apply. Specifically, if data from clinical investigations conducted outside the United States that enrolled the first subject prior to the effective date of this rule are submitted in support of a PMA application, FDA will accept the data if the data are valid and the investigator has conducted the studies in conformance with the “Declaration of Helsinki” or the laws and regulations of the country in which the research is conducted, whichever accords greater protection to the human subjects. If the standards of the country are used, the applicant shall state in detail any differences between those standards and the “Declaration of Helsinki” and explain why they offer greater protection to the human subjects. (See § 814.15(b).)

In section IV.K of this document, we discuss the effective date further in our response to the comments concerning the implementation of the rule.

A summary of the comments submitted to the docket and our responses follow. To make it easier to identify comments and our responses, the word “Comment,” in parentheses, will appear before each comment; and the word “Response,” in parentheses, will appear before each response. We have numbered the comments to make it easier to distinguish between comments. The numbers are for organizational purposes only and do not reflect the order in which we received the comments or any value associated with them. We have combined similar comments under one numbered comment.

Section 812.28(a) of the proposed rule would identify criteria for FDA acceptance of data from clinical studies conducted outside the United States and submitted in support of an IDE or a device marketing application or submission. Those criteria would require that such studies be conducted in accordance with GCP. This requirement would replace the requirement in the PMA regulations that studies be conducted in conformance with the Declaration of Helsinki or the laws and regulations of the country in which the research is conducted, whichever accord greater protection to human subjects. The requirement would be new for IDE applications and other device marketing applications and submissions that previously did not address acceptance of data from clinical studies conducted outside the United States.

(Comment 1) Several comments raised concerns that FDA was not seeking a harmonized global approach to the regulation of medical devices. Comments raised concerns with various aspects of the proposed rule, such as a harmonized GCP standard, definitions of various terms, and expectations for requirements.

(Response) FDA disagrees. The rule only addresses the criteria for FDA acceptance of clinical data submitted to FDA that support an IDE or a device marketing application or submission. The rule does not address other aspects of medical device regulations, such as when an application or submission must be supported by clinical data, the type of clinical data needed, etc.

FDA has and will continue to promote global harmonization in many aspects of medical device development and regulation. With respect to medical device good clinical practice, FDA's international activities include harmonizing regulatory requirements with our foreign counterparts, industry, and other international stakeholders. For example, FDA plays a key role in forums such as the International Medical Device Regulators Forum (IMDRF) where global medical device good clinical practice was discussed during the IMDRF meeting in Florianopolis, Brazil, in September 2016. Additionally, FDA continues to be directly involved in good clinical practice standard development, including those of the International Organization for Standardization (ISO) and the International Conference on Harmonisation (ICH).

(Comment 2) Several comments raised concerns that an internationally accepted GCP standard for medical devices does not exist and the rule should not be finalized until harmonized international GCP guidelines for medical devices have been established. They note that the ICH E6 GCP guidelines for pharmaceuticals were developed through a collaborative approach involving international regulators and drug and biological product manufacturers with all stakeholders having an equal voice. They state that such guidelines do not exist for medical devices and that FDA should first seek a collaborative global approach and establishment of a harmonized guidance through the IMDRF organization, or similar group, with industry participation.

(Response) FDA disagrees that there has not been global collaboration in the development of a GCP standard for medical devices. The “Clinical Investigation of Medical Devices for Human Subjects-Good Clinical Practice” standard, ISO 14155:2011, represents an international GCP standard for medical devices that FDA has recognized (March 16, 2012, 77 FR 15765). FDA acknowledges that the standard development processes are different between ICH and ISO, but notes that several countries participated in the development of ISO 14155:2011, including Australia, Belgium, Brazil, Canada, China, France, Ireland, Italy, Japan, Spain, the United Kingdom, and the United States. Several medical device companies also participated in the standard development process. Additionally, ISO 14155:2011 is recognized by most of the members of the IMDRF (Australia, Brazil, Canada, European Union, Japan, and the United States) as well as other countries, including Indonesia, Malaysia, Singapore, Thailand, and Taiwan.

FDA's rule does not identify a specific GCP standard for sponsors and applicants to follow. Instead, the rule includes a definition of GCP in § 812.28(a)(1), which is consistent with the definition in § 312.120 (21 CFR 312.120), that embodies well recognized GCP principles and has been generally accepted. This allows sponsors of clinical investigations conducted outside the United States to determine an appropriate GCP standard to use for clinical investigations that will produce data to support an IDE or a device marketing application or submission to FDA. The rule helps to ensure that the data and results from such investigations are credible and accurate and that the rights, safety, and well-being of human subjects are adequately protected, while also being sufficiently flexible to accommodate differences in how countries regulate the conduct of clinical investigations.

(Comment 3) One comment suggested that once a harmonized GCP guideline is adopted, many of the requirements should be waived for countries that adopt the harmonized GCP guideline.

(Response) FDA disagrees with this suggestion. For FDA acceptance of data from clinical investigations conducted outside the United States to support an IDE or a device marketing application or submission, the rule requires, among other things, that sponsors and applicants provide a statement that the investigation was conducted in accordance with GCP and provide supporting information. If these requirements were waived, a submission or application would not contain information regarding the sponsor's or applicant's conformity with GCP. The fact that the country where the investigation is conducted had adopted a GCP guideline would only identify the GCP guideline that should be followed but would not provide information regarding conformity of the clinical investigation with the GCP guideline.

(Comment 4) Two comments raised a concern that the rule may run into resistance from foreign regulators and clinical communities who may interpret the rule as FDA unilaterally imposing FDA GCP standards on them. Two other comments were concerned that the rule may conflict with the rules and regulations of other countries. A fifth comment stated that FDA does not have the authority to regulate the conduct of studies conducted outside the United States.

(Response) FDA does not intend to regulate clinical investigations conducted outside the United States. The rule only identifies the criteria for FDA acceptance of clinical data submitted to FDA to support an IDE or a device marketing application or submission. We have modified the rule by removing proposed § 812.2(e) to clarify that the rule does not apply part 812 to investigations conducted outside the United States but rather addresses the conditions for FDA acceptance of clinical data when submitted to support an IDE or device marketing application or submission. FDA expects that foreign clinical investigations will be conducted in accordance with local laws and regulations. The application of a GCP standard would be in addition to the local laws and regulations to the extent that the local laws and regulations do not incorporate such a standard.

FDA's rule does not identify a specific GCP standard for sponsors and applicants to follow. Instead, the rule includes a definition of GCP in § 812.28(a)(1), which is consistent with the definition in § 312.120, that embodies well recognized GCP principles and has been generally accepted. Although the rule does not identify a specific GCP standard, we note that ISO 14155:2011, a GCP standard for medical devices that FDA has recognized, includes provisions for meeting local requirements. FDA believes that sponsors and applicants who follow ISO 14155:2011 in the conduct of clinical investigations will be able to meet the requirement in § 812.28(a)(1) of this rule as well as the local laws and regulations of the countries where the investigations are conducted.

FDA believes the requirements outlined in the rule allow the flexibility needed to accommodate the laws and regulations of other countries. We also believe that conducting a clinical investigation according to a standard that meets the definition of GCP as provided in the rule will help to ensure the integrity and quality of the data and the protection of subjects. If needed, the rule allows sponsors and applicants to explain why GCP was not followed and to describe the steps taken to ensure that the data and results are credible and accurate and that the rights, safety, and well-being of human subjects have been adequately protected. Additionally, we have added a waiver provision to allow sponsors and applicants to request a waiver from any applicable requirement in § 812.28(a)(1) and (b) of the rule (see new § 812.28(c)). If a country's clinical investigation requirements are not congruent with the GCP definition in this rule or with a GCP standard and the sponsor or applicant cannot meet GCP for the investigation, they may provide an explanation of the departure from GCP or request a waiver. FDA will take this information into account when considering the extent to which the Agency can rely on the data from these clinical investigations on a case-by-case basis.

(Comment 5) Several comments raised concerns that the rule may be interpreted as expanding the types of studies required to be included in applications and submissions and requiring GCP for all studies. Some comments requested clarification of the use of the terms “clinical investigation,” “clinical study,” and “clinical trial” in a seemingly interchangeable manner. The comments noted that the terms “clinical study” and “clinical trial” are not defined but the term “investigation” is defined in § 812.3(h).

(Response) While FDA intended that “clinical study” and “clinical trial” have the same meaning as “clinical investigation,” to avoid any confusion, FDA has revised the rule to use the term “clinical investigation” with the meaning as defined in § 812.3(h) (“Investigation means a clinical investigation or research involving one or more subjects to determine the safety or effectiveness of a device.”). We have also revised the rule to clarify that it applies when data from clinical investigations are provided to support an IDE or a device marketing application or submission; for example, when clinical data are submitted in: (1) A 510(k) submission to demonstrate substantial equivalence, (2) a PMA application to demonstrate a reasonable assurance of safety and effectiveness, or (3) an HDE application to demonstrate reasonable assurance of safety and probable benefit. When clinical data from investigations are included in applications and submissions as supplementary information and not as support, demonstration of conformity with GCP is not required.

(Comment 6) One comment noted that the proposed rule identified different requirements for acceptability of results from clinical investigations depending on the location of the study, that is, inside or outside the United States. The comment indicated applying this differential regimen would be difficult when a multicenter clinical investigation has sites both inside and outside the United States. The comment recommended that the requirements should not apply to clinical investigations per se but to clinical data. This would allow data originating from within the United States to be subject to existing GCP regulations (for example, parts 50, 56, and 812 (21 CFR parts 50, 56, and 812)) and data originating from outside the United States to be subject to the new GCP provisions even if the data were part of the same clinical investigation.

(Response) FDA notes that for a multicenter investigation with sites both inside and outside the United States, each site would need to comply with the local requirements. Clinical investigations conducted in the United States to determine the safety or effectiveness of a device are subject to parts 50, 56, and 812. The rule does not govern investigational sites located outside the United States, but rather specifies the criteria for FDA acceptance of data from investigations conducted outside the United States to support an IDE or device marketing application or submission. When a multicenter investigation includes sites both inside and outside the United States, the sponsor or applicant may provide a statement regarding the international nature of the investigation, the compliance of sites with their applicable local requirements, and a statement regarding conformance with GCP along with the required supporting information.

(Comment 7) Two comments noted that § 812.2(e) identifies requirements for non-significant risk device investigations but IECs from other countries may not be familiar with this terminology and classification and may be unable to provide oversight of the sponsor's determination as in the United States. One comment recommended that sponsors use their own determinations.

(Response) FDA agrees with these comments and notes that the significant risk versus non-significant risk determination in the rule relates only to the supporting information required to be submitted and maintained by sponsors and applicants while the requirement to follow GCP applies to all investigations submitted to FDA in support of device applications and submissions. As discussed previously, we have removed proposed § 812.2(e) but we have maintained the provisions for different supporting information requirements in new § 812.28(a)(2).

FDA does not intend that foreign IECs provide oversight of the significant risk versus non-significant risk determination. FDA recognizes that IECs outside the United States may not be familiar with FDA's terminology related to significant risk and non-significant risk device investigations. Under the IDE regulations, sponsors may make an initial determination. Similarly, sponsors and applicants may make an initial determination for investigations conducted outside the United States. If the sponsor or applicant proceeds based on their own determination, they should maintain documentation of the rationale for their determination because FDA may request it, as stipulated at § 812.28(a)(2).

For multinational investigations that include sites in the United States, the determination of the IRBs overseeing the sites in the United States should be used. In addition, sponsors and applicants may request a determination from FDA, just as they may for investigations conducted in the United States.

Note that any determination made by FDA, whether requested or not, will supersede any determination made by the sponsor or applicant (or IRB, if the sponsor or applicant relied on an IRB's determination). If FDA determines that an investigation is of a significant risk device that was submitted as an investigation of a non-significant risk device or exempt investigation, FDA may request the additional supporting information required for significant risk device investigations. Likewise, if FDA determines that an investigation is of a non-significant risk device that was submitted as an exempt investigation, FDA may request the additional supporting information required for non-significant risk device investigations.

(Comment 8) One comment recommended that the same requirements for IDE exempt studies apply regardless of where the study sites are located. The comment stated that studies exempt under § 812.2(c) are not required to meet any requirements of part 812 except § 812.119 when conducted in the United States, while the proposed rule levies a long list of requirements for these same studies when conducted outside the United States.

(Response) FDA agrees in principle with the comment. We acknowledge that the supporting information to be submitted in an application or submission could be viewed as greater when data from clinical investigations conducted outside the United States are provided to support an IDE or device marketing application or submission than when data from clinical investigations conducted inside the United States that meet the exemption criteria in § 812.2(c) are provided to support an IDE or device marketing application or submission. While we have deleted proposed § 812.2(e), new § 812.28(a)(2) includes a paragraph that addresses the supporting information requirements for device investigations that would meet the exemption criteria in § 812.2(c), as well as paragraphs addressing the supporting information to be provided for significant risk and non-significant risk device investigations. The supporting information requirements for investigations that meet the exemption criteria now only require that this information be made available upon request. That is, the information is not required to be included in an IDE or device marketing application or submission unless FDA requests the information.

In § 812.28(a), we require that clinical investigations conducted outside the United States and submitted to support an IDE or device marketing application or submission be conducted in accordance with GCP as defined in § 812.28(a)(1). GCP includes review and approval (or provision of a favorable opinion) by an IEC and obtaining and documenting the freely given informed consent of the subject (or the subject's legally authorized representative if the subject is unable to provide informed consent). Similarly, FDA notes that investigations conducted in the United States that are exempt under § 812.2(c) are still required to comply with parts 50 and 56, regarding informed consent and IRB review, when the data support applications or submissions to FDA.

(Comment 9) One comment questioned the need for a statement in IDE applications and 510(k) submissions regarding compliance of clinical studies conducted in the United States with parts 50, 56, and 812. The comment stated that FDA must approve IDE applications, so it is not clear why data from a study that is run according to an approved IDE would not be acceptable for clinical studies conducted inside the United States.

(Response) FDA disagrees with the comment. Not all clinical investigations of medical devices in the United States require an IDE application to be submitted to FDA. Investigations conducted under the abbreviated IDE requirements in § 812.2(b) or under the exemptions in § 812.2(c) do not require submission of an IDE application to FDA. Therefore, a clinical investigation could be conducted in the United States without FDA's review and approval of an IDE application. The statement required in §§ 807.87(j)(1) and 812.27(b)(4)(i) mirrors the statement required in § 814.20(b)(6)(ii) for PMA applications supported by clinical data from investigations conducted in the United States. Requiring this statement also provides consistency with the new requirements that apply when data from clinical investigations conducted outside the United States are provided to support an IDE or device marketing application or submission by providing assurance that the investigations conducted inside the United States were conducted in compliance with FDA's GCP regulations. These statements will aid FDA in assessing the quality and integrity of the clinical data and the protection of human subjects.

(Comment 10) A comment noted that compliance with the IDE, IRB, and informed consent regulations are not always required for all clinical studies but if a study should have complied and did not, this is a compliance matter and FDA's determination on an application or submission should not be held up.

(Response) FDA disagrees that a clinical investigation that was not conducted in compliance with regulatory requirements is solely a compliance matter. As a result of noncompliance there may be serious concerns related to data quality or integrity, the safety of subjects, or with the device itself that would prevent FDA's review of the application from moving forward. FDA does not intend to withhold a determination on an application or submission when it is possible to render a determination irrespective of an outstanding compliance issue. However, data from a clinical investigation that was not conducted in a manner that ensures that the data and results are credible and accurate and that the rights, safety, and well-being of human subjects have been adequately protected can impact FDA's ability to render a determination. The information required by the rule will assist FDA in determining whether the clinical data are unreliable and may not be used to support an application or submission.

(Comment 11) Several comments indicated that FDA should not exclude from consideration data from studies that were not conducted in accordance with GCP. These comments identified a number of reasons why a study may not comply with GCP or the sponsor or applicant may not have information on how the study was conducted. Many comments did not object to providing information describing the extent to which the principles of GCP were followed and suggested alternative language for the rule.

(Response) FDA agrees, in general, that data from clinical investigations that were not conducted in conformity with GCP may still provide useful information and could be relied upon to make regulatory decisions. The intent of the rule is not to disallow the use of data from certain investigations but rather to ensure FDA's decisions are based on scientifically valid and ethically derived data. Conformance with GCP is one way to help ensure clinical data are credible, accurate, and ethically procured.

The rule includes provisions that allow a sponsor or applicant to provide an explanation if the investigation was not conducted in accordance with GCP. These provisions are in §§ 807.87(j), 812.27(b)(4), and 814.20(b)(6)(ii). If an investigation was not conducted in accordance with GCP, these provisions allow a sponsor or applicant to provide a brief statement of the reason for not conducting the investigation in accordance with GCP and to describe the steps taken to ensure that the data and results are credible and accurate and that the rights, safety, and well-being of human subjects have been adequately protected.

FDA has also added a waiver provision as an alternative option that allows sponsors and applicants to request a waiver from any applicable requirement under § 812.28(a)(1) and (b). (See § 812.28(c).) The request must provide an explanation of why the sponsor's or applicant's compliance with the requirement is unnecessary or cannot be achieved; a description of an alternative submission or course of action that satisfies the purpose of the requirement; or other information justifying a waiver.

Through these mechanisms, sponsors and applicants can provide information for FDA's consideration in deciding whether to accept, on a case-by-case basis, data from a clinical investigation that is not conducted in accordance with GCP or for which the sponsor or applicant does not have information on how the investigation was conducted.

(Comment 12) Two comments noted that sponsors and applicants may not be able to conduct all studies according to GCP due to requirements in the country where the study is conducted. The comments noted that in at least one country, ethics committees will not review post-market on-label studies because their scope is limited to investigational studies even though such studies may be submitted in support of applications and submissions to FDA.

(Response) FDA agrees that there may be situations where full conformity with GCP may be difficult or not feasible. FDA believes that conducting a clinical investigation in accordance with GCP will help to ensure that the data and results are credible and accurate and that the rights, safety, and well-being of human subjects are adequately protected. If the sponsor or applicant cannot meet GCP for the investigation, the sponsor or applicant may provide an explanation of the departure from GCP or request a waiver, as noted previously. FDA will take this information into account when considering the extent to which the Agency can rely on the data from these investigations on a case-by-case basis.

(Comment 13) Several comments recommended that FDA exempt from the informed consent provisions IVD studies conducted with de-identified samples consistent with FDA's “Guidance on Informed Consent for In Vitro Diagnostic Device Studies Using Leftover Human Specimens that are Not Individually Identifiable.” The comments state that application of GCP in this context would provide no additional protection and could deter innovation. One comment suggested that the concepts in the guidance be codified in the final rule.

(Response) The “Guidance on Informed Consent for In Vitro Diagnostic Device Studies Using Leftover Human Specimens that are Not Individually Identifiable” does not exempt any clinical investigations from the informed consent requirements. In that guidance, FDA stated that we intend to exercise enforcement discretion with regard to the requirement for informed consent under the circumstances described in section 4 of the guidance. FDA issued the guidance to address concerns about obstacles to the development of IVDs and to facilitate development in a manner consistent with the principles of good clinical practice, including human subject protection. In addition to sponsors being able to apply the guidance to certain IVD investigations conducted in the United States, FDA does not intend to object if sponsors and applicants follow this guidance for similar IVD investigations conducted outside the United States provided there is no conflict with local laws and regulations.

The 21st Century Cures Act (Cures Act) (Pub. L. 114-255) was enacted on December 13, 2016. Title III, section 3023 of the Cures Act requires the Secretary of Health and Human Services (HHS), to the extent practicable and consistent with other statutory provisions, to harmonize the differences between the HHS human subject regulations and FDA's human subject regulations. FDA will be working with others at HHS in carrying out this statutory directive, including with respect to de-identified human specimens.

(Comment 14) Three comments indicated that the rule should not apply to technical and analytical (or bench) studies that support IVD devices, especially when de-identified leftover specimens are used. Two comments indicated that these studies are subject to Good Laboratory Practices regulations and are conducted with IRB oversight and informed consent except under the circumstances described in the FDA's “Guidance on Informed Consent for In Vitro Diagnostic Device Studies Using Leftover Human Specimens that are Not Individually Identifiable.” These comments stated that application of GCP would provide no additional protection and would slow or deter innovation.

(Response) FDA disagrees with these comments. FDA considers investigations that use human specimens, including leftover specimens that are de-identified, to be clinical investigations. The definition of subject in § 812.3(p) includes individuals on whose specimens an investigational device is used. Data from investigations using human specimens are subject to the GCP rule when submitted to FDA in support of an IDE or a device marketing application or submission. FDA disagrees that the application of GCP would provide no additional protection. The application of GCP helps to ensure the quality and integrity of data from investigations using human specimens. We agree that these investigations should be conducted with IEC oversight and informed consent. However, as stated previously, in addition to sponsors being able to apply the “Guidance on Informed Consent for In Vitro Diagnostic Device Studies Using Leftover Human Specimens that are Not Individually Identifiable” to certain IVD investigations conducted in the United States, FDA does not intend to object to sponsors and applicants following the guidance for similar IVD investigations conducted outside the United States, provided that there is no conflict with local laws and regulations.

As noted above, investigations using human specimens are considered clinical investigations. The Good Laboratory Practices regulation (part 58 (21 CFR part 58)) does not apply to clinical investigations, including investigations using human specimens. Further explanation of the applicability of part 58 is provided in FDA's “Guidance for Industry and FDA Staff: In Vitro Diagnostic (IVD) Device Studies—Frequently Asked Questions.”

(Comment 15) One comment noted that there is no harmonized, international IVD GCP guideline.

(Response) FDA recognizes that the ISO 14155:2011 standard states that it does not apply to IVD medical devices. FDA, however, considers conformity with the principles of GCP important for all clinical investigations, including those of IVD devices, to help ensure that the data and results from clinical investigations are credible and accurate and that the rights, safety, and well-being of human subjects are adequately protected. As stated above, FDA does not intend to object to sponsors and applicants following the “Guidance on Informed Consent for In Vitro Diagnostic Device Studies Using Leftover Human Specimens that are Not Individually Identifiable,” provided that there is no conflict with local laws and regulations.

(Comment 16) One comment noted that the United States classifies IVDs as medical devices but other countries, for example, countries within the European Union, have separate directives governing medical devices and IVDs. Additionally, the Global Harmonization Task Force guidance documents on Clinical Evidence for IVD Medical Devices differentiate IVDs from other medical devices and the proposed regulations do not reflect these differences.

(Response) FDA agrees that there are differences in how other countries regulate medical devices and IVDs. The rule, however, does not address when evidence obtained from using human specimens is needed or what clinical evidence is required for a medical device, including an IVD. Instead, the rule only addresses the conditions for FDA acceptance of data from clinical investigations to support an IDE or a device marketing application or submission to FDA, including data from clinical investigations conducted outside the United States. Conformity with GCP helps to ensure that the data and results are credible and accurate and that the rights, safety, and well-being of human subjects are adequately protected. This is equally important for investigations of IVDs as it is for other medical devices. FDA believes the rule allows for the flexibility needed to accommodate the rules and regulations of other countries.

Proposed § 812.3(t) would add a definition for IEC. We proposed to define IEC to mean a review panel that is responsible for ensuring the protection of the rights, safety, and well-being of human subjects involved in a clinical investigation and is adequately constituted to provide assurance of that protection.

(Comment 17) Three comments were concerned with the use of the term “adequately constituted” in the definition of IEC because the term is not defined. One comment noted that a global, harmonized definition of “adequately constituted” does not exist, nor is there agreement on the makeup of an IEC. Another comment recommended that existing definitions of IEC, such as in ICH E6 and ISO 14155:2011, be used.

(Response) FDA disagrees with the comments. The proposed definition of IEC is at a level of specificity and detail appropriate for regulation. We recognize that the organization and membership of IECs may differ among countries because of the local needs of the host country. We believe that such variation should not affect an IEC's ability to perform its functions of protecting the rights, safety, and well-being of human subjects involved in the clinical investigation. Further, we intended for the rule to be sufficiently flexible to accommodate differences in how countries regulate the conduct of clinical research, including the composition of an IEC. Therefore, we have not specifically defined IEC membership requirements in the regulations.

Although we have not identified specific requirements for the membership of an IEC in the rule, we note that the definition of an IEC references an IRB subject to the requirements of part 56 as one type of IEC. Another example would be the description provided in ICH E6.

Proposed § 812.28(a) would identify requirements for the acceptance of information from clinical investigations conducted outside the United States as support for an IDE or a device marketing application or submission, including a requirement that a statement be provided that the investigation was conducted in accordance with GCP, which we defined in § 812.28(a)(1).

(Comment 18) One comment questioned whether there are data to support concern with data integrity and human subject protection from studies of medical devices conducted outside the United States, similar to the Office of Inspector General (OIG) June 2010 report, “Challenges to FDA's Ability to Monitor and Inspect Foreign Clinical Trials,” for drug and biological product marketing applications (see https://oig.hhs.gov/oei/reports/oei-01-08-00510.pdf).

(Response) FDA notes that there is no similar OIG report for devices, but FDA does have experience with investigations conducted outside the United States through the foreign sites we have inspected. From this experience, we are aware of instances of misconduct of clinical investigations that could compromise data integrity and human subject protection. For more information, please see our Bioresearch Monitoring (BIMO) Metrics available at https://www.fda.gov/ScienceResearch/SpecialTopics/RunningClinicalTrials/ucm261409.htm.

(Comment 19) One comment noted that proposed § 812.28(a)(1) defines GCP to include “obtaining and documenting the freely given informed consent of the subject . . . before initiating a study” and suggested we change the sentence to “obtaining and documenting the freely given informed consent of the subject before that subject participates in the study” because subjects will enroll in a clinical study throughout the enrollment phase of a study, so stating that informed consent will be obtained from a subject before initiating a study is not realistic.

(Response) FDA declines to make this change to the definition of GCP in § 812.28(a)(1) because the definition is consistent with the definition in § 312.120(a)(1)(i). The intention of the sentence is that informed consent is obtained before initiating the subject's participation in the study.

(Comment 20) One comment suggested adding to the end of proposed 812.28(a)(1): “For the purpose of definition, device GCP does not include a requirement for sponsor collection and analysis of (i) adverse events beyond those specified in the protocol and those that would meet the definition of a UADE, (ii) concomitant medications and concomitant therapies beyond those specified in the protocol, (iii) any other data not specifically required of clinical investigations conducted under an IDE or not specified in the protocol.” The change is intended to clarify that the requirements for a drug clinical study are not being systematically required for medical device studies conducted outside the United States.

(Response) FDA disagrees with the suggested change. FDA has written the rule to be flexible to accommodate the laws and regulations of the countries where investigations are conducted. FDA expects that clinical investigations will be conducted in compliance with the local laws and regulations of the countries where the investigations take place and such laws and regulations may address collection and analysis of adverse events, concomitant medications and therapies, and other data. FDA considers the suggested language too restrictive because, during the course of an investigation, additional data may be collected that would be important to establishing the safety and effectiveness of a medical device or to subject safety. Moreover, the suggested language relies on FDA's investigational device exemptions regulations by using a term (unanticipated adverse device effect or UADE) used in FDA's regulations and limits “collection and analysis” by not requiring “any other data not specifically required of clinical investigations conducted under an IDE or not specified in the protocol.” These changes would modify the definition of GCP based on FDA's regulations and it may appear that FDA is imposing its own GCP regulations on other countries. Additionally, the revisions could raise problems for investigations of combination products.

Adverse event reporting is an important aspect of GCP. The requirements related to collection and analysis of adverse events would be those identified in the GCP standard the sponsor uses. For example, ISO 14155:2011 includes discussion of adverse event documentation, reporting, and analysis in several sections, including sections 6.4, 8.2.4, 8.2.5, and 9.8. A sponsor could request a waiver from any applicable requirement if the sponsor can justify why it is unnecessary, cannot be achieved, or can be satisfied through an alternative course of action.

(Comment 21) One comment noted that the text in proposed § 812.28(a) uses the term “data are valid” but stated this term is vague and recommends changing it to “relevant and credible.”

(Response) FDA agrees that the language in proposed § 812.28(a) regarding “data are valid” should be revised but disagrees with the suggested revision. The term “data are valid” was used in previous § 814.15(b) to indicate the data must represent valid scientific evidence, which is appropriate for PMA applications. Section 812.28, however, addresses data supporting other applications and submissions, including clinical data supporting an IDE application. Therefore, we have revised § 812.28(a) to read “FDA will accept information on clinical investigations conducted outside the United States to support an IDE or a device marketing application or submission if the investigations are well-designed and well-conducted . . .” consistent with § 312.120, which similarly applies to investigational applications in addition to marketing applications for drugs and biological products.

(Comment 22) One comment stated that phrases like “compliance with good clinical practice” might lead the reader to interpret FDA as expecting compliance with ICH E6 versus the phrase “compliance with the principles of good clinical practice,” which more readily relates to the concepts described in ISO 14155:2011.

(Response) FDA disagrees with this comment. Both ICH E6 and ISO 14155:2011 use the term “principles of good clinical practice.” FDA did use the term “principles of good clinical practice” in proposed § 812.2(e); however, we have removed this proposed section from the final rule to eliminate potential misinterpretation that part 812 applies to clinical investigations conducted outside the United States. Section 812.28(a)(1) uses the phrase “conducted in accordance with good clinical practice.” This section defines GCP and requires a sponsor or applicant to provide a statement regarding the conduct of the investigation submitted. The sponsor or applicant would indicate conformity with a specific GCP standard but the rule does not specify the GCP standard to use. Therefore, FDA believes the language in the rule is appropriate in the context in which it is used.

(Comment 23) One comment asked whether the Agency looked at the differences between ICH E6 and ISO 14155:2011, related to device stakeholders' requirements, to identify if there are any differences and considered the potential burden to adopt both standards.

(Response) FDA has not identified a specific GCP standard that sponsors must follow. Instead, FDA is allowing sponsors of device clinical investigations conducted outside the United States to follow a GCP standard of their choice, provided it meets the definition provided in § 812.28(a)(1). Although FDA believes that ICH E6 and ISO 14155:2011 represent similar approaches to GCP, we note that ICH E6 addresses drug and biological products, while ISO 14155:2011 addresses medical devices. We believe the differences are appropriate to the different products addressed.

Proposed § 812.28(a)(2), as a condition for acceptance of data from a clinical investigation submitted under this section, would require a statement assuring the availability of the data from the clinical investigation to FDA for validation through an onsite inspection if the Agency deems it necessary or through other appropriate means.

(Comment 24) One comment stated that FDA has no authority to inspect foreign clinical study institutions and recommended that proposed § 812.28(a)(2) be struck. Another comment indicated that providing a statement as required by proposed § 812.28(a)(2) would be problematic because of foreign privacy laws.

(Response) FDA disagrees with striking proposed § 812.28(a)(2), now § 812.28(a)(3), because, in some cases (for example, to resolve any uncertainties about whether the investigation was conducted in accordance with GCP), to accept the data from a clinical investigation conducted outside the United States, FDA may need to validate the data through an onsite inspection. Historically, when needed to validate data from clinical investigations conducted outside the United States, FDA has been able to inspect the records of these investigations. When conducting foreign inspections, FDA obtains the consent of foreign governments.

FDA understands that a sponsor cannot disclose foreign records that are prohibited from disclosure by foreign law. If the Agency believes that access to records is necessary to verify certain data or to validate the investigation, and such records are not available because of foreign law, the sponsor and FDA will need to agree upon an alternative means for validation if the Agency is to rely on the data. Such alternative means for validation might entail FDA partnering with other regulatory authorities or other mutually agreed upon means for validation.

(Comment 25) One comment recommended keeping the language the same as in § 312.120(a)(1)(ii): That is, “FDA is able to validate the data from the study through an onsite inspection if the agency deems it necessary.” Another comment recommended modifying the language to “authorized by local law” and deleting “or through other appropriate means” unless FDA can clarify what it means and what types of activities would satisfy this requirement.

(Response) FDA partially agrees and has modified the language in proposed § 812.28(a)(2), now § 812.28(a)(3), to more closely follow the language in § 312.120. We have modified the requirement that a statement be provided assuring the availability of the data from the study to FDA for validation through an onsite inspection to a requirement that FDA is able to validate the data from the investigation through an onsite inspection. We have also determined that the phrase “if otherwise authorized by law” is unnecessary because FDA obtains the consent of foreign governments to do inspections. Therefore, the phrase has been deleted.

We are keeping the phrase “or through other appropriate means.” Essentially the same phrase is used in current § 814.15(d)(3) regarding validation of foreign clinical data. This language recognizes that foreign data present unique challenges not usually associated with domestic data. One such challenge may be that FDA is unable to conduct an onsite inspection. If the Agency believes that validation is necessary but is unable to conduct an onsite inspection, the sponsor and FDA will need to agree upon an alternative means for validation if the Agency is to rely on the data. Such alternative means for validation might entail FDA partnering with other regulatory authorities or other mutually agreed upon means for validation. If an agreement cannot be reached that satisfies FDA's need for validation, then the data might not be accepted to support the application or submission.

(Comment 26) One comment noted that the preamble of the proposed rule identified documents that articulate GCP principles but that these documents have broad differences in the scope, level of detail, and formulation of actual requirements and that no individual document was identified as the authoritative set of enforceable requirements. The comment stated that, if GCP compliance will be subject to FDA inspection, the rule must clearly identify not only the applicable requirements in terms of general principles but also provide a sufficient level of detail to allow an objective basis for a uniform assessment of compliance by the sponsor as well as the Agency.

(Response) FDA disagrees with this comment. Similar to § 312.120, the rule does not identify a specific GCP standard that sponsors must follow. Instead, the rule includes a definition of GCP in § 812.28(a)(1), which is consistent with the definition in § 312.120, and embodies well recognized GCP principles. FDA is allowing sponsors of clinical investigations conducted outside the United States to follow a GCP standard of their choice, provided it meets the definition provided in § 812.28(a)(1). One example of a GCP standard that meets the definition provided in § 812.28(a)(1) is ISO 14155:2011, “Clinical Investigation of Medical Devices for Human Subjects—Good Clinical Practice.” FDA has recognized this standard (77 FR 15765). In addition to following a GCP standard, sponsors would need to comply with the local requirements where the investigational sites are located.

Proposed § 812.28(b) would require a sponsor or applicant submitting data from clinical investigations conducted outside the United States in support of an IDE or device marketing application or submission to submit, in addition to information required elsewhere in parts 807, 812, and 814, supporting information that describes the actions taken to ensure that the research conformed to GCP.

(Comment 27) One comment stated that the list of supporting information in § 812.28(b) should reflect the approval standard for devices, which is a reasonable assurance of safety and effectiveness.

(Response) FDA disagrees with the comment. The supporting information is not used to establish a reasonable assurance of safety and effectiveness. Instead, the supporting information is used to assess whether the investigation conformed to GCP, which helps to ensure that the data and results submitted are credible and accurate and that the rights, safety, and well-being of human subjects are adequately protected. Data from clinical investigations conducted in accordance with GCP may be used to establish a reasonable assurance of safety and effectiveness for purposes of a PMA application, but may also be used to support other device applications and submissions, including an IDE. Section 812.28(a)(2) of the rule identifies different supporting information requirements based on the level of risk of the clinical investigation, with significant risk device investigations requiring more supporting information and device investigations presenting less risk, as well as those that meet the exemption criteria in § 812.2(c), requiring less supporting information.

(Comment 28) One comment noted that the preamble to the proposed rule states that many of the requirements in § 812.28(b) parallel the requirements in § 312.120(b) for drug applications but the list, in many cases, is more restrictive than the requirements for drug studies, and identified the request for certified copies in § 812.28(b)(4) as an example.

(Response) FDA, in general, disagrees with the comment. Although the comment indicates that the list of supporting information in § 812.28(b) is more restrictive in many cases than in § 312.120(b), only one example is provided, the request for “certified copies” in § 812.28(b)(4). Based on concerns raised by this and other similar comments, we have removed the term “certified copies” from § 812.28(b)(4), as further discussed in response to comment 33 below.

There are only a few other differences between §§ 812.28(b) and 312.120(b). In § 312.120(b)(1) and (2), the investigator's qualifications and a description of the research facilities are required, respectively. In § 812.28(b)(1), we require the names of investigators and the names and addresses of research facilities and sites where records relating to the investigation are maintained, separate from the requirement for the investigators' qualifications in § 812.28(b)(2) and the description of the research facilities in § 812.28(b)(3). We believe this difference is appropriate because the information on names of investigators and names and addresses of research facilities and sites where records relating to the investigation are maintained is needed for all clinical investigations of medical devices. However, the information on investigators' qualifications and the description of the research facilities is needed for significant risk device investigations but not for exempt and non-significant risk device investigations. These items are discussed further in comments 29 and 30 below.

The required information in § 812.28(b)(5), describing the device used in the investigation, is also different from § 312.120(b)(4), describing the drug substance and drug product. The difference is appropriate because it relates to the differences in information needed to adequately describe devices and drugs.

The difference between §§ 812.28(b)(6) and 312.120(b)(5) is related to different regulatory requirements for FDA decisions on device applications, as described in § 860.7 (21 CFR 860.7), and drug applications, as described in § 314.126. Therefore, FDA believes this difference is appropriate.

The last difference concerns the information required for the IEC that reviewed the investigation. In § 812.28(b)(7), we do not specify that records of the IEC members' names be maintained as required in § 312.120(b)(6). We decided not to require that records of the IEC members' names be maintained because drug sponsors and applicants reported occasional problems fulfilling this requirement due to foreign laws.

Therefore, FDA considers the supporting information identified in § 812.28(b) to be similar to the supporting information required for drug applications in § 312.120(b), with the few differences being appropriate and not more restrictive.

Proposed § 812.28(b)(1) would require the names and addresses of the investigators and research facilities; proposed § 812.28(b)(2) would require the qualifications of investigators; and proposed § 812.28(b)(3) would require a description of the research facilities.

(Comment 29) One comment disagreed with providing investigators' addresses and noted that personal details like this are not usually obtained and could be subject to more stringent foreign regulations. A second comment stated that the European Union Privacy Directive would protect from transfer to the United States the names and addresses of foreign investigators and that investigators would have to agree to this information sharing in advance or at the time of submission to FDA. The comment further stated that difficulties currently exist with obtaining investigators' names from certain foreign sites, even when the data collection is part of an IDE.

(Response) FDA believes that some clarification is needed but disagrees that investigators' names should not be required. We did not intend to imply that investigators' personal addresses would be required. We have reworded this element to require “names of investigators and names and addresses of research facilities and sites where records relating to the investigation are maintained.” This change clarifies that the investigators' personal addresses are not required, but that the names and addresses of all facilities that took part in the investigation are required, such as the investigational sites, laboratories, and specimen collection sites. Additionally, if study records are maintained at other locations, such as an investigator's office, the names and addresses of those locations must also be provided.

We also note that the European Commission has recognized ISO 14155:2011, which includes providing names and addresses of investigators to regulatory authorities. ISO 14155:2011, Annex A, describes the clinical investigation plan (CIP) and includes, in section A.1.4, the name, addresses, and professional position of principal investigator(s). The CIP is included in the clinical investigation report as described in section D.13 of Annex D. The clinical investigation report includes “the list of principal investigators and their affiliated investigation sites, including a summary of their qualifications or a copy of their CVs” (see Annex D.13 c). This report is provided to regulatory authorities per section 7.3f.

(Comment 30) One comment stated that the items in § 812.28(b)(2) and (3) are vague and sponsors or applicants will have difficulty knowing how to comply with the requirements.

(Response) In general, the information provided on investigator qualifications should be adequate to show that the investigator is qualified to serve as an investigator based on his or her training and experience specifically related to the clinical investigation (for example, such information could include a curriculum vitae (CV) or summary of training and experience). The description of the research facilities should include enough information to enable FDA to determine the adequacy of the facilities to execute the investigation and meet its requirements (for example, whether the site is appropriately staffed and equipped to conduct the investigation and is able to provide the appropriate emergent or specialized care, if required). Additionally, the GCP standard the sponsor or applicant follows may address information to maintain on investigator and research facility selection. For example, ISO 14155:2011 addresses verification and documentation of the qualifications of the principal investigator(s) and the adequacy of the research facility and the rationale for selecting the facility in sections 5.8, 9.2, and 9.3.

The investigator's qualifications and the description of the research facilities will also help us to assess the need for an onsite inspection.

Proposed § 812.28(b)(4) would require submission of a detailed summary of the protocol and results of the investigation. In addition, the sponsor or applicant would be required to submit certified copies of case records maintained by the investigator or additional background data, such as hospital records or other institutional records, if requested by FDA.

(Comment 31) Several comments stated that stricter privacy laws outside the United States may partially or completely restrict the ability of sponsors and applicants to provide copies of patient records to FDA. The comments noted that investigational sites typically archive the originals of completed case records and these records would generally not be available to sponsors. Two comments noted that the records may be available through an inspection at the investigational site. One comment noted that providing redacted patient information to a regulatory authority may be possible but would require changes to clinical trial agreements and informed consent documents and would impose significant burden and costs. Comments recommended modifying or deleting the requirement for providing records.

(Response) FDA acknowledges that in some instances there may be difficulties providing records should FDA request them but disagrees with deleting the requirement. FDA understands that a sponsor cannot disclose foreign records that are prohibited from disclosure by foreign law. If FDA requests case records or other records but these documents cannot be provided as required by § 812.28(b)(4) because disclosure is prohibited by governing law, the sponsor or applicant should document this disclosure prohibition by the foreign entity. For example, the sponsor or applicant should document the countries that prohibit such disclosure, the nature of the prohibitions, and the extent to which these prohibitions may impede sponsors or applicants in carrying out other obligations regarding record access. The sponsor or applicant can then submit such information in a waiver request to FDA. For FDA to rely on the affected data, the sponsor or applicant and FDA would need to agree on an alternative means for validation. Such alternative means for validation might entail FDA partnering with other regulatory authorities or other mutually agreed upon means for validation.

Additionally, in the informed consent documents, it may be helpful to notify subjects that regulatory authorities will have direct access to the subject's medical records for verification of clinical investigation procedures and data, which is consistent with ISO 14155:2011, section 4.7.4(d)3.

If FDA needs source documents such as hospital records to verify certain data or to validate the investigation and such records are not available because of foreign law, and an alternative means for validation is not available, FDA might not accept the data from the clinical investigation as support for an IDE or device marketing application or submission.

(Comment 32) Two comments requested clarification of the term “case record.”

(Response) FDA clarifies that the term “case record” as used in § 812.28(b)(4) is used to indicate records investigational sites commonly maintain in relation to clinical investigations. The term includes records as described in § 812.140(a)(3).

(Comment 33) Two comments requested that the term “certified copies” be defined.

(Response) FDA has reevaluated the provision related to “certified copies.” We acknowledge that the term has different meanings in other countries and have determined that this term is not needed. We have amended the rule accordingly.

(Comment 34) One comment recommended modifying § 812.28(b)(4) to require that the clinical investigation report, as described in ISO 14155:2011 Annex D, be included in the supporting information because it provides the relevant information from the protocol as well as the results of the clinical investigation.

(Response) FDA disagrees with modifying the requirement to specify providing the clinical investigation report as described in ISO 14155:2011. We believe that the supporting information required by the rule is sufficient for its purpose. Additionally, the rule does not require following ISO 14155:2011; however, if a sponsor or applicant chooses, FDA would accept the full clinical investigation report as described in Annex D of ISO 14155:2011 as a detailed summary of the protocol and results of the investigation.

(Comment 35) One comment asked about FDA's procedure and methods for review, retention, and destruction of the detailed summaries and records identified in § 812.28(b)(4) and the reasons why records would be needed and the intent of review.

(Response) FDA may request records to help understand the conduct of the investigation, to verify certain data, and to validate the investigation and the results obtained. When records from investigations conducted outside the United States are submitted, FDA will review and handle those records in the same manner as records from investigations conducted in the United States.

Proposed § 812.28(b)(6) would require a discussion demonstrating that the data and information, when intended to support the safety and effectiveness of a device, constitute valid scientific evidence.

(Comment 36) One comment stated that § 812.28(b)(6) is redundant and should be struck. A study complying with the principles of GCP is a well-controlled study conducted by qualified experts.

(Response) FDA disagrees that § 812.28(b)(6) is redundant. Section 812.28(b)(6) requires that the sponsor or applicant provide a discussion demonstrating that the data and information constitute valid scientific evidence within the meaning of § 860.7. FDA relies upon only valid scientific evidence to determine whether there is reasonable assurance that the device is safe and effective (see § 860.7). Although there may be some overlap, the principles addressing valid scientific evidence more readily relate to the types of evidence that may support the safety and effectiveness of a device, while the principles of GCP relate more to the conduct of the investigation.

Proposed § 812.28(b)(7) would require the name and address of the IEC that reviewed the study and a statement that the IEC meets the definition in § 812.3(t). The sponsor or applicant would be required to maintain records supporting such statement, including records describing the qualifications of IEC members, and would be required to make these records available for Agency review upon request.

(Comment 37) Two comments opposed the requirement that a statement be provided that the IEC meets the definition in § 812.3(t). One comment indicated that sponsors may not know whether an IEC meets a given definition. Another comment recommended requiring a statement obtained from the IEC that it meets the definition in § 812.3(t) and is organized and operates according to applicable laws and regulations.

(Response) FDA agrees that a statement from the IEC would also be acceptable. To satisfy this requirement, FDA will accept a statement from the IEC indicating it meets the definition of an IEC in the rule. We also added a waiver provision (see new § 812.28(c)) to the rule that sponsors and applicants may consider using when they are unable to meet the requirements in § 812.28(a)(1) and (b) of the rule. For example, a waiver may be requested when the sponsor cannot submit a statement that the IEC meets the definition in § 812.3(t). A waiver request could identify, as an alternative to the statement that the IEC meets the definition in § 812.3(t), a statement that the IEC is organized and operates according to the applicable laws and regulations of the country where it operates and provide a description of the laws and regulations under which the IEC is organized and operates. FDA will decide whether to grant or deny a waiver on a case-by-case basis, taking into account all appropriate circumstances.

(Comment 38) Three comments stated that the proposed rule requires sponsors to qualify IECs but there is no parallel requirement for a sponsor to qualify an IRB for a study in the United States. One comment noted that no rationale was provided for requiring greater regulation outside the United States than is required in the United States. Another comment indicated the requirement is likely because FDA recognized it does not have the authority to verify and document the adequacy of a foreign IEC but failed to recognize that sponsors do not have such authority and would face legal challenges to meet this requirement.

(Response) FDA acknowledges that the sponsor of an investigation under an IDE is not required to qualify and submit information on the adequacy of the reviewing IRBs. FDA routinely obtains information about IRBs in the United States through onsite inspections of the IRBs. To obtain information on the adequacy of the reviewing IEC for foreign investigations, given that inspections of foreign IECs are usually not feasible, FDA believes it is appropriate to ask the sponsor to document the adequacy of the reviewing IEC because the sponsor already interacts with the IEC, either directly or through the investigators, to obtain IEC review.

FDA believes that the oversight of a clinical investigation by an adequately constituted IEC is an essential component of human subject protection. Information about the adequacy of an IEC is important in assessing the competence of the committee to protect the rights, safety, and well-being of human subjects. To satisfy this requirement, FDA will accept a statement from the IEC indicating it meets the definition of an IEC in the rule. We also added a waiver provision to the rule that sponsors and applicants may consider using when they are unable to meet the requirements in § 812.28(a)(1) and (b) of the rule. For example, a waiver may be requested when the sponsor cannot submit a statement that the IEC meets the definition in § 812.3(t).

(Comment 39) Several comments indicated sponsors may have difficulty obtaining and documenting the qualifications of IEC members and making the records available to the Agency upon request. One comment noted that the term “qualification” is open to interpretation. Another comment indicated it may not be feasible to obtain the names of IEC members. A third comment noted that the European Union Privacy Directive may protect from transfer to the United States the information sought for the IEC.

(Response) FDA believes that oversight of a clinical investigation by an adequately constituted IEC is an essential component of human subject protection. Information about the adequacy of an IEC is important in assessing the competence of the committee to protect the rights, safety, and well-being of human subjects. Recognizing that privacy laws in some countries may not allow the release of personal information, FDA is requiring that sponsors or applicants maintain records describing the qualifications of IEC members and not their names. Qualifications would include, for example, information on occupation, training, and experience.

Additionally, we have added a waiver provision to the rule that sponsors and applicants may consider using when they are unable to meet the requirements in § 812.28(a)(1) and (b) of the rule. If sponsors or applicants cannot obtain IEC member qualifications as required by § 812.28(b)(7), FDA recommends that the sponsor or applicant clearly document attempts made to obtain the qualifications of IEC members along with an explanation as to why the qualifications cannot be obtained. Such information can be submitted to FDA in a waiver request.

(Comment 40) One comment questioned how FDA would review information on the qualifications of IEC members stating that, without a harmonized, globally accepted definition of “qualification,” there will be variability in interpretation of acceptable qualification based on reviewer interpretation or bias and may place FDA in the position of accepting or rejecting qualifications of IEC members from foreign nations.

(Response) FDA disagrees with the comment. We recognize that the membership of IECs may differ among countries because of local needs of the host country. Such variation is acceptable as long as the IEC can ensure the protection of the rights, safety, and well-being of human subjects involved in the clinical investigation. As we do for IRBs located in the United States, in its review FDA will be looking to see that, collectively, the IEC members have the qualifications needed to review and evaluate the science, medical aspects, and ethics of the proposed clinical investigation.

Proposed § 812.28(b)(8) would require submission of a summary of the IEC's decision to approve or modify and approve the study, or to provide a favorable opinion.

(Comment 41) One comment recommended changing proposed § 812.28(b)(8) to require the correspondence relating to the IEC's decision to approve the investigation because the approval letter would be clearer and less ambiguous than a summary, which could be interpreted differently by different people.

(Response) FDA disagrees with the comment; however, FDA believes that providing the approval letter(s) from the IEC(s) would be one way to provide a summary of the IEC's decision to approve or provide a favorable opinion. We note that these letters are usually issued in the local language of the country in which the investigation is conducted and official translations may need to be provided.

Proposed § 812.28(b)(9) would require submission of a description of how informed consent was obtained.

(Comment 42) One comment recommended that § 812.28(b)(9) require that the blank informed consent document approved by the IEC or IRB be submitted instead of a “description of how” consent was obtained.

(Response) FDA disagrees that the blank informed consent document approved by each IEC or IRB should be submitted instead of a description of how consent was obtained. Providing information about how informed consent is obtained is important in ensuring transparency and accountability for the ethical conduct of the investigation. The description should address such concerns as who obtained informed consent (ensuring that the person obtaining informed consent was knowledgeable about the investigation and capable of answering all questions), when was consent obtained (ensuring that consent was obtained prior to a subject's participation in the investigation, for example, prior to any research procedures), and the conditions under which consent was obtained (ensuring that consent was obtained under conditions that minimized coercion or undue influence).

(Comment 43) One comment recommended revising § 812.28(b)(9) to state “a description of how informed consent was obtained, and that this method was approved by the IEC.”

(Response) FDA disagrees with the comment. FDA defines GCP to include the review and approval (or provision of a favorable opinion) by an IEC that is responsible for ensuring the protection of the rights, safety, and well-being of human subjects involved in a clinical investigation. Ensuring the protection of human subjects would include review and approval of how informed consent is obtained. An applicant's statement that an investigation was conducted in accordance with GCP would indicate that an IEC had approved (or provided a favorable opinion) of how informed consent was obtained. Therefore, FDA believes the proposed revision is unnecessary.

Proposed § 812.28(b)(10) would require submission of a description of what incentives, if any, were provided to subjects to participate in the study.

(Comment 44) One comment recommended deleting § 812.28(b)(10) because this is a new requirement, not required for investigations in the United States, and may lead to unnecessary burden of review for FDA. The comment stated that the information is reviewed by the IRB or IEC as part of consent and is held by the sponsor as part of their records and subject to audit by the Agency.

(Response) FDA disagrees with the comment and does not believe this requirement will be overly burdensome. Informed consent documents usually describe incentives and the IEC reviews this information. Therefore, providing the description of incentives to FDA should not be a burden. FDA will allow some flexibility in how sponsors or applicants comply with § 812.28(b)(10). If the informed consent form includes a description of any incentives provided to subjects, a sponsor or applicant could submit a model consent form to meet the requirement. Alternatively, a sponsor or applicant could also satisfy the requirement by submitting a description of any incentives provided to subjects to participate in the investigation, or if such a description was included elsewhere, such as in the detailed summary of the protocol required under § 812.28(b)(4), the sponsor or applicant could reference where the description may be found to meet the requirement under § 812.28(b)(10).

FDA is requiring this information because incentives can affect data integrity. In the proposed rule, FDA only required the submission of information about incentives for significant risk device investigations. In the final rule, FDA is requiring that information about incentives be made available upon request for non-significant risk and exempt device investigations. FDA has made this change because incentives could affect the integrity of all investigations.

(Comment 45) One comment recommended revising § 812.28(b)(10) to state, “a description of what incentives, if any, were provided to subjects to participate in the study, and that these incentives, if any, were approved by the IEC.”

(Response) FDA disagrees with the comment. FDA defines GCP to include the review and approval (or provision of a favorable opinion) by an IEC that is responsible for ensuring the protection of the rights, safety, and well-being of human subjects involved in a clinical investigation. Ensuring the protection of human subjects would include review and approval of the incentives to be provided to subjects. An applicant's statement that an investigation was conducted in accordance with GCP would indicate that an IEC had approved (or provided a favorable opinion) of the incentives provided to subjects. Therefore, FDA believes the proposed revision is unnecessary.

Proposed § 812.28(b)(11) would require submission of a description of how the sponsor monitored the study and ensured that the study was carried out consistently with the study protocol.

(Comment 46) One comment recommended including a statement supporting a sponsor's performance of a risk assessment to determine the approach to monitoring for sites outside the United States, as they would for sites in the United States, because standardization may cause more burdens (for example, resources, time, and cost) related to the requirement to increase monitoring.

(Response) FDA has not identified a specific GCP standard that sponsors and applicants must follow. Instead, the rule defines GCP and allows sponsors and applicants to determine an appropriate GCP standard for their investigations that produce data to support device research and marketing applications and submissions to FDA. Sponsors and applicants may use a risk-based approach to monitoring, as described in FDA's guidance document entitled “Oversight of Clinical Investigations—A Risk-Based Approach to Monitoring,” provided it is consistent with the laws and regulations of the countries where the investigation takes place.

Proposed § 812.28(b)(12) would require submission of a description of how investigators were trained to comply with GCP and to conduct the study in accordance with the study protocol, and a statement on whether written commitments by investigators to comply with GCP and the protocol were obtained.

(Comment 47) One comment recommended that § 812.28(b)(12) only require that the investigator agree to comply with the protocol and with institutional and legal requirements. The principles of GCP do not require the sponsor to train investigators in GCP compliance.

(Response) FDA disagrees. Simply obtaining the investigator's agreement to comply with the protocol and institutional and legal requirements may not be adequate. Protocols may be complex and additional steps may be needed to prepare investigators and to standardize performance of the investigation. A description of the steps taken to ensure consistent conduct of the investigation and recording of data among investigators is needed. Such a description may identify investigator meetings or other steps that the sponsor took to ensure compliance with GCP and the protocol.

Proposed § 812.28(c), now § 812.28(d) in the final rule, would require a sponsor or applicant to maintain records for a clinical investigation conducted outside the United States. If the investigation supported an IDE, the records would be retained for 2 years after the termination or completion of the IDE. If the investigation supported a device marketing application or submission, the records would be retained for 2 years after an Agency decision on that submission or application.

The proposed rule would amend § 812.140(d) to include humanitarian device exemption applications and premarket notification submissions as types of applications and submissions that would require the maintenance of IDE records.

(Comment 48) One comment indicated that FDA should clarify in § 812.28(c)(2) (now § 812.28(d)(2)) that the requirement only applies to studies sponsored by the sponsor or applicant of the submission or application in which the data were submitted.

(Response) FDA disagrees with the comment. The requirement to maintain appropriate records is to ensure that FDA will be able to validate an investigation through an onsite inspection, if necessary. Therefore, the record retention requirement must apply to all investigations from which clinical data are submitted to FDA in support of an application or submission, whether or not the investigation was sponsored by the sponsor or applicant. If a sponsor or applicant submits data from a clinical investigation they did not sponsor, they should obtain the commitment of the sponsor and investigators to retain the records. If FDA needs access to the records and the records are not available, FDA may not accept the data in support of an IDE or device marketing application or submission.

(Comment 49) One comment recommended that proposed § 812.140(d) be changed to read similarly to proposed § 812.28(c), namely, “The date on which the investigation is terminated or completed or for 2 years after an agency decision on that submission or application.”

(Response) FDA disagrees with the proposed change. As noted in the preamble to the proposed rule, we are revising § 812.140(d) to indicate that retention requirements for IDE records apply to those records used to support HDE applications and 510(k) submissions, as well as the application types already listed. In the final rule, we also clarify that the retention requirements apply to records used to support requests for De Novo classifications. We do not intend to further change the record retention requirements for IDEs.

Proposed §§ 814.45(a)(5) and 814.46(a)(4) would allow FDA to deny or withdraw, respectively, approval of a PMA if any clinical investigation subject to GCP referenced in § 814.15(a) and described in § 812.28(a) was not conducted in compliance with those regulations such that the rights or safety of human subjects were not adequately protected or the supporting data were determined to be otherwise unreliable.

(Comment 50) Several comments stated that the proposed rule should allow denial or withdrawal of a PMA based only on those investigations relied on for a determination of safety and effectiveness. One comment noted that, for PMAs, reporting of all prior studies is required despite not relying on all studies for a determination of safety and effectiveness. Two comments indicated that denial and withdrawal of approval should not be extended to other applications and submissions such as IDEs and 510(k)s.

(Response) FDA agrees that the rule should allow denial or withdrawal of a PMA for noncompliance with GCP referenced in § 814.15(a) and described in § 812.28(a) with respect to those clinical investigations conducted outside the United States that were relied upon for a determination of the safety and effectiveness of the device. FDA notes that the PMA regulations (see § 814.20(b)(8)) require the applicant to provide, among other things, an identification, discussion, and analysis of any other data, information, or report relevant to an evaluation of the safety and effectiveness of the device, known to or that should reasonably be known to the applicant from any source, foreign or domestic, including information derived from investigations other than those proposed in the application and from commercial marketing experience. While this information is required to be submitted, the applicant or sponsor may not have been involved in the conduct of the investigation and may not know the conditions under which the investigation was conducted (for example, a previous developer or competitor may have been involved in the conduct of the investigation).

As explained elsewhere in this document, § 812.28(a) requires demonstration of conformity with GCP when data from clinical investigations conducted outside the United States are provided to support an IDE or a device marketing application or submission; for example, when clinical data are submitted in a PMA application to demonstrate a reasonable assurance of safety and effectiveness. When clinical data from investigations are included in applications and submissions as supplementary information and not as support, demonstration of conformity with GCP is not required.

FDA also notes that the rule only addresses denial and withdrawal of approval related to PMAs and does not address denial or withdrawal of authorization for other types of applications and submissions. However, if FDA determines that any clinical investigation conducted outside the United States and submitted in support of an IDE or a device marketing application or submission was represented to have been conducted in conformity with GCP but was not, FDA may take appropriate action under the FD&C Act and FDA regulations.

(Comment 51) Two comments noted data collected outside the United States but not in compliance with the principles of GCP may nevertheless be relevant data for determining the safety and effectiveness of a device. One comment noted that, elsewhere in the proposed rule, the use of non-GCP compliant studies is allowed where appropriate justification is provided.

(Response) As discussed in section IV.C, FDA agrees that clinical data from investigations conducted outside the United States that were not conducted in conformity with GCP may be relevant. FDA believes, however, that clinical data that are submitted to support a PMA should be credible, accurate, and ethically derived and that conducting a clinical investigation in accordance with GCP will help to ensure the integrity and quality of the data and the protection of subjects. If a country's laws require less than GCP and the applicant does not or cannot meet GCP for the investigation, the applicant may provide an explanation of the departure from GCP or request a waiver. FDA will take this information into account when considering the extent to which it will rely on the data from these investigations in support of a premarket submission or application on a case-by-case basis, depending on whether the clinical data are credible, accurate, and ethically derived. In such situations, when an applicant requests a waiver and FDA grants the waiver and accepts for support of a PMA clinical data from an investigation that was not conducted in conformity with GCP, FDA generally will not deny or withdraw approval of the PMA under § 814.45(a)(5) or § 814.46(a)(4).

(Comment 52) One comment stated that the sections on denial and withdrawal of a PMA use the term “unreliable” without clarifying this term and could make a determination of “unreliable” potentially arbitrary, variable, and inconsistent.

(Response) FDA disagrees with this comment. FDA has used the term “unreliable” in regulations such as in §§ 812.119 and 312.70 regarding investigator disqualification. FDA uses the term according to its common meaning and may consider data unreliable, for example, if the data are fraudulent or if there was a lack of rigor in the conduct of the investigation, such as not following the protocol.

(Comment 53) Several comments raised concerns with the implementation of the rule and recommended that the rule not be applied retrospectively to investigations begun prior to the effective date. Two comments recommended that the effective date be established as 18 months after publication. The comments noted that adequate time will be needed to allow for preparation for implementation, such as to revise internal operating procedures, for training, for study planning, and for negotiating and contracting with the necessary parties for future studies conducted outside the United States that are intended to support an application or submission to FDA. One comment recommended that FDA allow requests for waivers of certain requirements for investigations conducted prior to the effective date that are technically out of compliance but did not compromise public health or patient safety.

(Response) FDA agrees that the rule should not be applied to clinical investigations begun prior to the effective date. FDA is implementing the rule for clinical investigations that enroll the first subject on or after the effective date of the rule. FDA also agrees that sponsors may need additional time to prepare to meet the new requirements. Therefore, the effective date is established as 1 year after the publication of the rule in the Federal Register to provide additional time for sponsors and applicants to make any changes necessary, for example, to their internal operating procedures, study planning, etc., to incorporate the principles of GCP and compliance with the requirements of the rule for investigations that will support an IDE or device marketing application or submission. We believe that this will provide adequate time for sponsors and applicants to implement changes in their processes to accommodate the new requirements.

In addition, FDA has added a waiver provision to § 812.28. Under this provision, a sponsor or applicant may submit waiver requests and FDA will decide whether to grant or deny waivers on a case-by-case basis, taking into account all appropriate circumstances.

For the purposes of this rule, we will consider a subject enrolled when the subject agrees to participate in a clinical investigation as indicated by the subject (or a subject's legally authorized representative, if the subject is unable to provide informed consent) signing the informed consent document(s) or participating in a clinical investigation meeting the requirements of § 50.24.

If an investigation conducted outside the United States enrolled the first subject prior to the rule's effective date, then the requirements in § 814.15 prior to the rule's effective date would apply. Specifically, if data from clinical investigations conducted outside the United States that enrolled the first subject prior to the effective date of this rule are submitted in support a PMA application, FDA will accept the data if the data are valid and the investigator has conducted the studies in conformance with the “Declaration of Helsinki” or the laws and regulations of the country in which the research is conducted, whichever accords greater protection to the human subjects. If the standards of the country are used, the applicant shall state in detail any differences between those standards and the “Declaration of Helsinki” and explain why they offer greater protection to the human subjects. (See § 814.15(b).)

(Comment 54) Two comments recommended that FDA develop guidance and training on GCP and compliance with the requirements. One comment recommended that FDA develop a guidance document similar to the one available for investigational new drug applications (INDs), “Guidance for Industry and FDA Staff: Acceptance of Foreign Clinical Studies Not Conducted Under an IND, Frequently Asked Questions,” to provide clarification and definitions to the regulations. Another comment suggested that FDA develop guidance documents and training programs, or sanction third-party training of physicians, sponsors, and IRBs on GCP as it relates to medical devices. The training programs should provide opportunities to eliminate misinterpretations while raising the standard for GCPs.

(Response) FDA agrees with some of these comments and believes our responses to comments on the proposed rule provide clarification on many issues. FDA intends to issue guidance that explains the requirements of the rule in plain language and how sponsors and applicants can comply with the requirements.

On its website, FDA has provided materials related to GCP training opportunities, including information about the annual GCP training course that FDA has conducted.1 All of these training materials focus on the regulations governing FDA-regulated clinical investigations. In addition, FDA has been participating, through the Clinical Trials Transformation Initiative, in the development of recommendations identifying principles for GCP training for investigators.2

We are issuing this rule under the authority of the provisions of the FD&C Act that apply to medical devices (21 U.S.C. 301 et seq.).

To permit devices to be shipped for investigational use, section 520(g) of the FD&C Act authorizes the exemption of investigational devices from otherwise applicable provisions of the FD&C Act relating to misbranding, registration, premarket notification, performance standards, premarket approval, banned devices, records and reporting requirements, good manufacturing practice requirements, and requirements relating to the use of color additives in devices. Under section 520(g) of the FD&C Act, the procedures and conditions that FDA 3 is authorized to prescribe for granting an IDE include the requirement that an application be submitted to FDA, in such form and manner as the Agency shall specify, and other requirements necessary for the protection of the public health and safety. Section 520(g) also requires that the information submitted in support of an IDE application be “adequate to justify the proposed clinical testing.” In investigations involving human subjects, the person applying for the exemption (the sponsor) must comply with a number of requirements to ensure that the rights and safety of subjects are adequately protected. To provide for flexibility in regulatory requirements, section 520(g) of the FD&C Act permits variations in the procedures and conditions governing IDEs, depending on the nature, scope, duration, and purpose of the clinical investigation.

Section 515(c)(1)(A) of the FD&C Act requires that PMA applications contain, among other information, full reports of all information, published or known to or which should reasonably be known to the PMA applicant, concerning investigations bearing on the safety or effectiveness of the device for which premarket approval is sought. Section 515(d)(2) of the FD&C Act states that FDA shall deny approval of a PMA application if the Agency finds that “there is a lack of a showing of reasonable assurance that such device is safe under the conditions of use prescribed, recommended, or suggested in the proposed labeling thereof” or “there is a lack of a showing of reasonable assurance that the device is effective under the conditions of use prescribed, recommended, or suggested in the proposed labeling thereof,” among other reasons. Whether data from an investigation involving human subjects support the safety or effectiveness of a device depends, in part, on whether the investigation was conducted in accordance with ethical and other principles that provide assurance of the quality and integrity of clinical data and adequate protection of human subjects. Even if the data derive from improperly conducted clinical investigations, the data must be submitted in a PMA application under section 515(c)(1)(A) of the FD&C Act.

Under section 510(k) of the FD&C Act, device manufacturers are required to submit a premarket notification to FDA before introducing or delivering for introduction into interstate commerce for commercial distribution a device, unless the device is exempt from premarket notification. FDA reviews a premarket notification submission to determine whether the device is substantially equivalent to a legally marketed (predicate) device. Under section 513(i) of the FD&C Act, determinations of substantial equivalence include some inquiry into the comparable safety and effectiveness of the device, where appropriate. For devices that have the same intended use as the predicate device but different technological characteristics, information submitted to demonstrate substantial equivalence must include “appropriate clinical or scientific data[,] if deemed necessary” by FDA, showing that “the device is as safe and effective as a legally marketed device” and “does not raise different questions of safety and effectiveness than the predicate device.” As described in this document, whether data from a clinical investigation support the safety or effectiveness of a device—or, in the context of some premarket notifications, the comparable safety and effectiveness of a device as part of a substantial equivalence demonstration—depends in part on whether the investigation was conducted in accordance with ethical and other principles that provide assurance of the quality and integrity of clinical data and adequate protection of human subjects.

Under section 520(m) of the FD&C Act, as amended by the Cures Act in 2016, FDA may grant an HDE if FDA finds that the device: (1) Is designed to treat or diagnose a disease or condition that affects not more than 8,000 individuals in the United States; (2) would not be available to a person with such disease or condition unless FDA grants the exemption and there is no comparable device, other than under this exemption, available to treat or diagnose such disease or condition; and (3) will not expose patients to an unreasonable or significant risk of illness or injury and the probable benefit to health from the use of the device outweighs the risk of injury or illness from its use, taking into account the probable risks and benefits of currently available devices or alternative forms of treatment. Again, whether data from clinical investigations submitted in an HDE application support that the probable benefits of the device outweigh its risks depends, in part, on whether the investigation was conducted in accordance with ethical and other principles that provide assurance of the quality and integrity of clinical data and adequate protection of human subjects.

Section 513(f)(2) of the FD&C Act authorizes the submission of a request for De Novo classification for a device for which there is no legally marketed device upon which to base a substantial equivalence determination, and authorizes FDA to classify the device subject to the request under the criteria set forth in section 513(a)(1) of the FD&C Act. Whether data from clinical investigations submitted in a request for De Novo classification support the recommended classification depends, in part, on whether the investigation was conducted in accordance with ethical and other principles that provide assurance of the quality and integrity of clinical data and adequate protection of human subjects.

Section 569B of the FD&C Act, which was added by the Food and Drug Administration Safety and Innovation Act (Pub. L. 112-144) in 2012, requires FDA to accept data from clinical investigations conducted outside the United States, if the applicant demonstrates that such data are adequate under FDA's applicable standards to support clearance or approval of the device.

Section 701(a) of the FD&C Act authorizes the Agency to issue regulations for the efficient enforcement of the FD&C Act.

These statutory provisions authorize us to issue regulations describing when we may consider data from clinical investigations, whether conducted inside or outside the United States, as reliable evidence supporting an IDE, PMA, 510(k), PDP, request for De Novo classification, or HDE application or submission.

The Agency has determined under 21 CFR 25.30(h) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

We have examined the impacts of the final rule under Executive Order 12866, Executive Order 13563, Executive Order 13771, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Orders 12866 and 13563 direct us to assess all 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, and other advantages; distributive impacts; and equity). Executive Order 13771 requires that the costs associated with significant new regulations “shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least two prior regulations.” We believe that this final rule is not a significant regulatory action as defined by Executive Order 12866. This final rule is not considered an Executive Order 13771 regulatory action.

The Regulatory Flexibility Act requires us to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because small entities are not likely to incur more than one percent of their revenue in costs to comply with the final rule, we certify that the final rule will not have a significant economic impact on a substantial number of small entities.

The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires us to prepare a written statement, which includes an assessment of anticipated costs and benefits, before issuing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $148 million, using the most current (2016) Implicit Price Deflator for the Gross Domestic Product. This final rule would not result in an expenditure in any year that meets or exceeds this amount.

We have developed a comprehensive Economic Analysis of Impacts that assesses the impacts of the final rule. The full analysis of economic impacts is available in the docket for this final rule (Ref. 1, Docket No. FDA-2013-N-0080) and at https://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses/default.htm.

The final rule will require that data submitted by sponsors and applicants from clinical investigations conducted outside the United States to support an IDE application, a 510(k) submission, a request for De Novo classification, a PMA application, a PDP application, or an HDE application be from investigations conducted in accordance with GCP. We define GCP as a standard for the design, conduct, performance, monitoring, auditing, recording, analysis, and reporting of clinical investigations in a way that provides assurance that the data and results are credible and accurate and that the rights, safety, and well-being of subjects are protected. GCP includes the review and approval by an IEC before initiating an investigation, continuing IEC review of ongoing investigations, and obtaining and documenting the freely given informed consent of subjects. The changes require a statement regarding compliance with our regulations for human subject protection, IRBs, and IDEs when the investigations are conducted in the United States. With the above described changes, the rule is intended to update our standards of acceptance of data from clinical investigations and to help ensure the quality and integrity of data obtained from these investigations and the protection of human subjects.

We have not quantified the benefits of the final rule that would come from the greater assurance of clinical data quality and integrity and human subject protection, particularly as it pertains to clinical investigations conducted outside the United States. One-time costs would arise to learn the requirements of the rule, and annually recurring costs would arise from increased labor associated with obtaining, documenting, and maintaining records to meet the rule's requirements for those that did not already meet the requirements. Total estimated annualized costs of complying with these requirements, over 10 years, range from $0.8 million to $22.1 million with a 7 percent discount rate and range from $0.7 million to $22.0 million with a 3 percent discount rate.

Table 1 summarizes our estimate of the annualized costs and the annualized benefits of the final rule.

Table 2 presents a summary of the Executive Order 13771 impacts of the final rule over an infinite time horizon.

This final rule contains information collection provisions that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520). The title, description, and respondent description of the information collection provisions are shown in the following paragraphs with an estimate of the annual reporting and recordkeeping burden. Included in the estimate is the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing each collection of information.

Title: Human Subject Protection; Data Requirements for Medical Device Related Clinical Investigations (OMB control number 0910-0741)

Description: In this document is a discussion of the regulatory provisions we believe are subject to the PRA and the probable information collection burden associated with these provisions.

Description of Respondents: The reporting and recordkeeping requirements referenced in this document are imposed on a medical device sponsor or applicant.

Section 807.87 is being amended to address requirements for 510(k) submissions supported by clinical data. For clinical investigations conducted in the United States, submitters will be required to submit a statement as described in § 807.87(j)(1). For clinical investigations conducted outside the United States, submitters will be required to submit the information as described in § 807.87(j)(2).

Section 812.27 is being amended to address requirements for IDE applications supported by clinical data. For clinical investigations conducted in the United States, sponsors will be required to submit a statement as described in § 812.27(b)(4)(i). For clinical investigations conducted outside the United States, sponsors will be required to submit the information as described in § 812.27(b)(4)(ii).

Section 812.28 is being added to address the requirements for acceptance of foreign clinical data to support an IDE or a device marketing application or submission. The sponsor or applicant will be required to submit a statement as described in § 812.28(a)(1); provide a description of the actions the sponsor or applicant took to ensure that the research conformed to GCP that includes the information in § 812.28(b)(1) through (12) or a cross-reference to another section of the application or submission where the information is located; submit requests for waivers as described in § 812.28(c); and retain the records as described in § 812.28(d).

Section 812.140 is being amended to address record retention requirements for investigators and sponsors. An investigator or sponsor will be required to maintain records as described in § 812.140(d).

Section 814.20 is being amended to address requirements for a PMA application supported by data from clinical investigations conducted outside the United States. The applicant will be required to submit the information as described in § 814.20(b)(6)(ii)(C).

Section 814.104 is being amended to address submission of data from clinical investigations in an HDE application. To the extent the applicant includes data from clinical investigations, the applicant will be required to include the information and statements as described in § 814.104(b)(4)(i).

The total estimated burden imposed by these information collection requirements is 17,780 annual hours. The estimated burden is based on the most recent empirical data in the relevant collections with the numbers updated to reflect the current burden of these requirements.

It should be noted that while the information collection requirements referenced in this document are revisions to current approved information collections, these collection requirements are being submitted to OMB as a new information collection (OMB control number 0910-0741), with the expectation the currently approved requirements will be amended. As such the following collections of information will be amended and submitted to OMB for approval as revisions to currently approved information collections once the rule is finalized and the collections are due for renewal. The collections to be amended include: Investigational Device Exemptions Reports and Records—21 CFR part 812, OMB control number 0910-0078; Premarket Notification—21 CFR part 807, subpart E, OMB control number 0910-0120; Premarket Approval of Medical Devices—21 CFR part 814, subparts A through E, OMB control number 0910-0231; and Medical Devices: Humanitarian Use Devices—21 CFR part 814, subpart H, OMB control number 0910-0332.

The information collection provisions in this final rule have been submitted to OMB for review as required by section 3507(d) of the PRA.

Before the effective date of this final rule, FDA will publish a notice in the Federal Register announcing OMB's decision to approve, modify, or disapprove the information collection provisions in this final rule. 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.

FDA has analyzed this final rule in accordance with the principles set forth in Executive Order 13132. FDA has determined that the rule does not contain policies that 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. Accordingly, the Agency has concluded that the rule does not contain policies that have federalism implications as defined in the Executive order and, consequently, a federalism summary impact statement is not required.

The following reference is on display in the Dockets Management Staff (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852, and is available for viewing by interested persons between 9 a.m. and 4 p.m., Monday through Friday; it is also available electronically at https://www.regulations.gov.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR parts 807, 812, and 814 are amended as follows:

I. Background

In July 1967, HUD issued regulations at 24 CFR part 15 containing the policies and procedures governing public access to HUD records under the Freedom of Information Act (FOIA) (5 U.S.C. 552) (Pub. L. 89-487, approved July 4, 1966). The Inspector General Act of 1978 (5 U.S.C. App. 3) was enacted to “create independent and objective units” to perform investigative and monitoring functions within Executive agencies of the Federal Government, including HUD. HUD's regulations regarding public access to HUD records under the FOIA are at 24 CFR part 15. To further its independence, OIG officials, as opposed to HUD officials, make determinations concerning the release of OIG records. In 1984, the HUD OIG published 24 CFR part 2002, which explains the procedures for requesting information from the OIG under the FOIA. Part 2002 cross referenced several of HUD's regulations at 24 CFR part 15. The OIG last amended its FOIA regulations in July 2002 (67 FR 47216). Subsequently, HUD made several changes to its FOIA regulation, which has affected some of the regulations referenced in part 2002 (80 FR 49140).

On June 30, 2016, the President signed into law the FOIA Improvement Act of 2016 (2016 Act) (Pub. L. 114-185). The 2016 Act addresses a range of procedural issues, including requirements that agencies establish a minimum of 90 days for requesters to file an administrative appeal and that agencies provide dispute resolution services at various times throughout the FOIA process. The 2016 Act also codifies a “foreseeable harm” standard, amends a FOIA disclosure exemption, creates a new Chief FOIA Officer Council within the Executive Branch, and adds two new elements to agency Annual FOIA Reports. The amendments apply to any request made after the date of enactment. The 2016 Act also requires agencies to review and issue updated regulations on procedures for the disclosure of records under FOIA, in accordance with the amendments made by the 2016 Act. On January 12, 2017, HUD issued a direct final rule amending its FOIA regulation to reflect the 2016 Act amendments (82 FR 3619).

In this final rule, the HUD OIG seeks to amend its FOIA regulations to address the 2016 Act changes, conform its regulations with HUD's, and simplify its regulations to make the process clearer to the requesting public. The following is an overview of nontechnical changes made in this final rule:

The OIG adds the title and contact information for the FOIA Public Liaison that is available to answer questions for FOIA requesters, as required by the 2016 Act.

This section is updated to provide for requests to be made in writing, which aligns with HUD's FOIA regulations, and provides that such requests may be made using the OIG public website. The regulations also reflect the requirement that the requestor, when requesting records on themselves, may be required to identify themselves when making a request or such a request may be found insufficient and closed. Lastly, the OIG also clarifies that for purposes of reasonably describing a record, a more specific FOIA request will likely result in the OIG locating the records requested. The OIG notes that a request for “any and all” records over an extended period of time may be rejected for not reasonably describing the record.

This rule provides the tracking process for requests that qualify as unusual circumstance under the definition at 5 U.S.C. 552(a)(6)(B)(iii). In adding the definition, the OIG adds an example of audit work papers under the definition of “unusual circumstances” to clarify that requests for audit work papers usually qualify as unusual circumstances and take longer than 20 working days to process because work papers related to an audit, if it is accepted for processing as a proper request, generally take weeks or months to process.

The 2016 Act requires agencies to “make available for public inspection in an electronic format” records that, because of their subject matter, the agency determines “have become or are likely to become the subject of subsequent requests for substantially the same records,” or that have been requested 3 or more times. The 2016 Act also adds new reporting requirements for agencies by requiring that agencies submit an Annual FOIA Report, which covers the preceding fiscal year, to be submitted to the Director of the Office of Government Information Services.1 The raw statistical data used in each report must be made available without charge, license, or registration requirement; in an aggregated, searchable format, and in a format that may be downloaded in bulk. Both the report and the raw statistical data used in the report must be made available for public inspection in an electronic format. In response, the OIG is amending § 2002.9 to comply with these requirements.

This rule amends § 2002.13 to adopt HUD's fee schedule and policies in their entirety through cross-reference to HUD's FOIA regulation at § 15.106. Incorporated in HUD's regulations are the 2016 Act new provisions regarding agencies' ability to assess search and duplication fees. First, the 2016 Act provides that an agency shall not assess any search fees, or in some cases, duplication fees, if the agency has failed to comply with any time limit described at 5 U.S.C. 552(a)(6), which are set out in OIG's FOIA regulations at § 2002.15, with limited exceptions. Second, if an agency determines that unusual circumstances apply to the processing of a FOIA request, and the agency has provided timely written notice to the requester, then a delayed response time is excused for an additional 10 days; however, if the agency fails to comply with the extended time limit, it may not charge search fees, or, in some cases, duplication fees, with limited exceptions. Third, the 2016 Act provides an exception allowing agencies to charge search fees, or in some cases, duplication fees, if unusual circumstances apply, more than 5,000 pages are necessary to respond to the request, timely written notice has been made to the requester, and the agency has discussed with the requester via written mail, electronic mail, or telephone (or made not less than three good-faith attempts to do so) how the requester could effectively limit the scope of the request. Fourth, the 2016 Act maintains that if a court determines that “exceptional circumstances” exist, as defined in 5 U.S.C. 552(a)(6)(C), the agency's failure to comply with a time limit “shall be excused for the length of time provided by the court order.”

As for the definition of “commercial requesters” adopted from HUD's regulation, the OIG clarifies that as a policy, it will treat owners of websites that contain advertisements, or that charge fees in any way, to be “commercial requesters,” if they do not use editorial skills to turn the posted materials into a distinct work, or provide significant editorial comments. Owners of websites that do not contain advertisements, but that post requested documents without altering such documents or providing editorial comments, will be considered “other requesters,” unless the websites are used to advertise or publicize the skills or expertise of the owners.

This rule also removes OIG's existing FOIA regulations at § 2002.13 because the collecting of interest charges on any unpaid bills is consistent with HUD's FOIA regulations at § 15.106(g).

When a FOIA request involves “unusual circumstances,” agencies have long been required to provide written notice to the requester, and in those instances where an extension of time of more than 10 working days is specified, agencies have been required to provide the requester with an opportunity to limit the scope of the request so that it can be processed more quickly or to arrange an alternative time to respond. The 2016 Act adds an additional requirement that when unusual circumstances exist and an agency extends the time limits by more than 10 additional working days, in the written notice to the requester they must notify the requester of their right to seek dispute resolution services from the FOIA Public Liaison of the agency or the Office of Government Information Services. To address this requirement, the OIG is revising § 2002.15 to incorporate the change enacted by the 2016 Act.

The OIG is also using this final rule to update several specific provisions of § 2002.15 to more accurately reflect the statutory language in 5 U.S.C. 552(a)(6)(A)(i). First, the OIG is amending § 2002.15(a) to state that OIG will generally “make a determination whether to comply with a FOIA request within 20 working days.” Second, the OIG is amending the provision that addresses when OIG may extend the time periods for processing a FOIA request, to remove the sentence that limits extensions to 10 working days. The OIG is removing this language as inconsistent with the plain reading of the statute, the logic of the rest of the language in § 2002.15, and Department of Justice guidance.2 Finally, in accordance with 5 U.S.C. 552(a)(6)(B)(ii), the OIG is updating § 2002.15 to include the provision that the OIG shall make available its FOIA Public Liaison, who shall assist in the resolution of any disputes between the requester and the OIG.

When an agency makes a determination regarding whether to comply with a FOIA request, the 2016 Act provides that the agency is required to immediately notify the requester of such determination and the reasons therefore, and notify the requester that they have a right to seek assistance from the agency's FOIA Public Liaison. For adverse determinations, the 2016 Act requires that agencies afford the requester no less than 90 days from the date of the adverse determination on the request to file an appeal. In addition, the 2016 Act requires that agencies notify the requester that they may seek dispute resolution services from the FOIA Public Liaison or from the Office of Government Information Services. Consistent with this requirement, the OIG has revised § 2002.15 to provide that, once OIG makes a determination regarding compliance, the OIG will immediately notify the requester of such determination, the reasons therefore, and their right to seek assistance from the FOIA Public Liaison.

The 2016 Act requires that agencies withhold information under FOIA “only if the agency reasonably foresees that disclosure would harm an interest protected by an exemption” or if disclosure is prohibited by law. The 2016 Act further directs agencies to consider whether partial disclosure of information is possible whenever the agency determines that a full disclosure of a requested record is not possible, and to take reasonable steps necessary to segregate and release nonexempt information. The 2016 Act does not require disclosure of information that is otherwise prohibited from disclosure by law or otherwise exempted from disclosure under Exemption 3.

Consistent with these changes, the OIG is amending § 2002.19 to provide that the OIG shall withhold information only if it is reasonably foreseeable that disclosure would harm an interest protected by an exemption, or if disclosure is prohibited by law. The OIG will also consider whether partial disclosure of information is possible if it determines that a full disclosure of a requested record is not possible and will take reasonable steps necessary to segregate and release nonexempt information.

In addition, the 2016 Act amends Exemption 5 of FOIA to provide that the deliberative process privilege does not apply to records created 25 years or more before the date on which the records were requested. In accordance with the 2016 Act, the OIG is revising § 2002.19 to state that the deliberative process privilege “shall not apply to records created 25 years or more before the date on which the records were requested.”

For adverse determinations, the OIG is amending § 2002.19 to provide that the OIG will notify the requester of their right to file an appeal no less than 90 days after the date of receiving the adverse determination. Finally, the OIG is amending § 2002.19 to provide that the OIG will notify the requester of their right to seek dispute resolution services from the FOIA Public Liaison or from the Office of Government Information Services.

The OIG amends § 2002.23, consistent with the 2016 Act to provide that the OIG will notify requesters of dispute resolution services in its FOIA appeal determination response letter and that they have 90 days to seek an appeal. The OIG is also amending § 2002.23 to clarify that appeals may be submitted electronically and lists the items that a requestor should include in an appeal, such as a copy of the original request and the written denial.

In general, OIG publishes a rule for public comment before issuing a rule for effect, in accordance with OIG's regulations on rulemaking at 24 CFR part 10. Section 10.1, however, provides an exception from that general rule where OIG finds good cause to omit advance notice and public participation. The good cause requirement is satisfied when the prior public procedure is “impracticable, unnecessary or contrary to the public interest.”

The OIG finds that good cause exists to publish this rule for effect without first soliciting public comment because prior public comment is unnecessary. This final rule follows the statutory directive in section 3 of the 2016 Act, which requires agencies to review and issue updated regulations on procedures for the disclosure of records under FOIA, in accordance with the amendments made by the 2016 Act. The 2016 Act codifies a number of transparency and openness principles and enacts a number of procedural requirements, including requiring that agencies establish a minimum of 90 days for requesters to file an administrative appeal and that they provide dispute resolution services at various times throughout FOIA process. This final rule reflects the changes required by the 2016 Act. Additionally, this final rule makes technical amendments to align the OIG's FOIA regulation with HUD's FOIA regulation at 24 CFR part 15 and clarifies current OIG FOIA procedures to streamline and simplify the process of filing FOIA requests.

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if the regulation is necessary, to select the regulatory approach that maximizes net benefits. This final rule incorporates changes enacted by the 2016 Act and makes other minor procedural changes that align this OIG regulation to HUD's FOIA regulation at 24 CFR part 15. As a result, this rule was determined to not be a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and therefore was not reviewed by OMB.

This final rule is categorically excluded from environmental review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321). The revision of the FOIA-related provisions of 24 CFR part 2002 falls within the exclusion provided by 24 CFR 50.19(c)(1), in that it does not direct, provide for assistance or loan and mortgage insurance for, or otherwise govern or regulate real property acquisition, disposition, leasing, rehabilitation, alteration, demolition, or new construction; or establish, revise, or provide for standards for construction or construction materials, manufactured housing, or occupancy.

The Secretary, in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this final rule before publication and by approving it certifies that this rule does not have a significant economic impact on a substantial number of small entities. This final rule contains no anti-competitive discriminatory aspects with regard to small entities nor are there any unusual procedures that would need to be complied with by small entities.

Executive Order 13132 (entitled “Federalism”) prohibits an agency, to the extent practicable and permitted by law, from promulgating a regulation that has federalism implications and either imposes substantial direct compliance costs on State and local governments and is not required by statute, or preempts State law, unless the agency meets the relevant requirements of section 6 of the Executive Order. This final rule does not have federalism implications and does not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of the Executive order.

Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. This final rule does not impose any Federal mandates on any State, local, or tribal governments or the private sector within the meaning of the Unfunded Mandates Reform Act of 1995.

The owner of the bridge, the Connecticut Department of Transportation (CT DOT), requested a temporary deviation to conduct superstructure repair and timber ties replacement. The Metro-North Bridge across the Mianus River, mile 1.0, at Greenwich Connecticut has a vertical clearance in the closed position of 20 feet at mean high water and 27 feet at mean low water. The existing bridge operating regulations are found at 33 CFR 117.209.

This temporary deviation allows the bridge to operate from 8 a.m. April 10, 2018 to 8 a.m. on Monday, May 14, 2018 as follows: From 8 a.m. Monday through 4 p.m. Friday, the draw is authorized to remain closed to navigation; from 4:01 p.m. Friday to 7:59 a.m. Monday, the draw shall open with 24 hours advance notice.

The deviation will have negligible effect on vessel navigation. The waterway is transited primarily by seasonal recreational vessels and small commercial fishing vessels. In 2016 there were six openings and in 2017 there were 19 openings between the effective dates. CT DOT has notified waterway users, the harbormaster, and town officials of the requested deviation. No objections to the proposed closure were received. Vessels that can pass through the bridge in the closed position may continue to do so. The bridge will not be able to open for emergencies and there is no immediate alternate route for vessels to pass. CT DOT will issue a press release announcing the closure. The Coast Guard will inform waterway users of the closure through Local and Broadcast Notices to Mariners.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.

This is a summary of the Commission's Report and Order (Order) in WT Docket No. 16-240, FCC 17-167, released on December 18, 2017. The complete text of the Order, including all Appendices, is available for inspection and copying during normal business hours in the FCC Reference Center, 445 12th Street SW, Room CY-A157, Washington, DC 20554, or by downloading the text from the Commission's website at http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db1218/FCC-17-167A1.pdf.

Alternative formats are available for people with disabilities (Braille, large print, electronic files, audio format), by sending an email to [email protected] or calling the Consumer and Government Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

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

1. The Commission adopted §§ 20.7 and 20.9 in 1994 as part of its implementation of Sections 3(n) and 332 of the Communications Act, which Congress amended in the Omnibus Budget Reconciliation Act of 1993 (OBRA). Congress, seeking to bring mobile services that were similar in nature under a consistent regulatory framework, created the statutory classifications of “commercial mobile services” and “private mobile services” (referred to in Commission rules as commercial mobile radio service and private mobile radio service, respectively). The Communications Act defines commercial mobile service as “any mobile service . . . that is provided for profit and makes interconnected service available (A) to the public or (B) to such classes of eligible users as to be effectively available to a substantial portion of the public[.]” “Private mobile service” is defined in the negative as “any mobile service . . . that is not a commercial mobile service or the functional equivalent of a commercial mobile service[.]” In the 1994 CMRS Second Report and Order (GN Docket No. 93-252) (59 FR 18493), the Commission mirrored these definitions in § 20.3 of its rules. Thus, § 20.3 defines “commercial mobile radio service” as a for-profit, interconnected mobile service that is available to the public; or to such classes of eligible users as to be effectively available to a substantial portion of the public; or the functional equivalent of such a for-profit, interconnected mobile service. “Private mobile radio service” is defined as a mobile service that is neither a commercial mobile radio service nor the functional equivalent of a commercial mobile radio service. Similarly, the Commission largely mirrored the statutory definition of “mobile services” in its definition in the rules.

2. The Commission, in adopting §§ 20.7 and 20.9, conducted an extensive review of the 1993 OBRA, its legislative history, and developments in the regulation of wireless services. The Commission noted that Congress “replaced the common carrier and private radio definitions that evolved under the prior version of section 332 of the Act with two newly defined categories of mobile services: Commercial mobile radio service (CMRS) and private mobile radio service (PMRS),” and “replaced traditional regulation of mobile services with an approach that brings all mobile service providers under a comprehensive, consistent regulatory framework and gives the Commission flexibility to establish appropriate levels of regulation for mobile radio service providers.” Two Congressional objectives appeared to drive these statutory changes: (1) Ensuring that “similar [mobile] services would be subject to consistent regulatory classification[,]” and (2) establishing and administering for CMRS providers “an appropriate level of regulation.”

3. Applying the purpose of the legislation to include all existing mobile services within the ambit of section 332 and in view of the goal of achieving regulatory symmetry, the Commission stated that all existing mobile services will be included within the ambit of section 332 as well as all auxiliary services and ancillary fixed communications offered by such service providers. In addition, the Commission stated that “unlicensed PCS and part 15 devices will not be included under the definition of mobile services,” but other unlicensed services meeting the definition of CMRS, such as the resale of CMRS, are mobile services within the meaning of sections 3(n) and 332 of the Communications Act. Section 20.7 memorialized these and listed the existing mobile services.

4. In addition, applying the statutory criteria to the existing common carrier mobile services at the time, the Commission identified in § 20.9(a) thirteen specific mobile service bands (or subsets thereof) that met the definition of CMRS and would be treated as common carrier services. At the time, in the wake of the 1993 OBRA, the list served as a clear, easily applied tool for implementing the new CMRS classification and creating certainty about which regulatory regime would apply to a given license band. The primary reason this approach worked well was because many of the service-specific wireless rule parts drew clear lines between commercial and private operation in terms of service rules, obligations, and usage, and the licensed operations within a given service were often limited by rule either to common or private carriage. If a licensee of a service band identified in § 20.9(a) wished to provide service on a private basis, it would have needed to seek a waiver of § 20.9(a). Section 20.9(b) identifies three services that are specifically presumed to be CMRS (rather than deemed to be regulated as CMRS in § 20.9(a)) and prescribes a certification process for overcoming that presumption in cases where the provider intends to operate on a PMRS basis.

5. In crafting the § 20.9(a) approach, the Commission also noted that Congress was concerned with the “disparate regulatory treatment” that had evolved across services, and it observed that Congress's intent for the Commission to establish consistent regulations was reflected in the statutory requirement that any service that amounted to the “functional equivalent” of CMRS be treated as such, even if it did not meet the strict definition. At the same time, the Commission “anticipat[ed] that very few mobile services that do not meet the definition of CMRS will be a close substitute for a [CMRS].” Because the Commission expected that the functional equivalency test would be applied only rarely, it decided to create another presumption—i.e., to “presume that a mobile service that does not meet the definition of CMRS is a [PMRS].” To rebut that presumption, a challenger to a PMRS claim could file a petition for declaratory ruling attempting to show that the service at issue met the definition of CMRS or was the functional equivalent of CMRS. Section 20.9(a)(14) memorializes this presumption and the process for overcoming the presumption.

6. For the services listed in § 20.9(b), the rules state that service may be provided on a PMRS basis only if the licensee or applicant overcomes the presumption that those services are CMRS through a specific certification process. Specifically, § 20.9(b) requires licensees of, or applicants for, Personal Communications Service (PCS), VHF Public Coast Stations, and Automated Maritime Telecommunications Systems (AMTS) that want to operate on a PMRS basis to include a certification as part of an authorization, modification, transaction, or spectrum leasing application demonstrating that the proposed service does not fall within the definition of CMRS. The application is placed on public notice for 30 days, during which interested parties may file petitions to deny.

7. While § 20.9's regulatory treatment of certain service bands may well have been a reasonable tool when it was adopted, it was based on assumptions that no longer apply—namely that a licensee would offer a service restricted either to CMRS or PMRS use rather than seek to have the flexibility to operate as both. In recent years, the Commission's spectrum regulation has turned toward a flexible use model that no longer supports this particular treatment embedded in the Commission's rules. Section 20.9 was adopted at a time when there were far fewer wireless licensees and services than exist today. Dramatic changes have occurred in the wireless industry since then. Notably, licensees of spectrum bands not identified in § 20.9 are governed by service-specific rules that afford entities greater flexibility in how operations can be provided and that do not presume them to be CMRS or PMRS. Applicants and licensees in these newer services can select whether they will be providing common carrier service, non-common carrier service, and/or private, internal communications on FCC Form 601 or in other applications. Moreover, the continuing demand for PMRS use of spectrum—including spectrum that providers, in the past, had primarily sought for CMRS use—has altered another of the underlying assumptions of § 20.9(a), i.e., that the demand to operate services referenced in § 20.9 is primarily a demand to offer such services on a CMRS basis.

8. In light of the broadened interest in and need for spectrum covered by § 20.9 by an increased diversity of licensees, the Commission has sought to provide greater flexibility to applicants, licensees, and spectrum lessees 1 subject to § 20.9, but these efforts have nonetheless left some entities with burdens that their counterparts in other spectrum bands do not face. In 2005, for example, the Commission eliminated the restriction that entities must operate as common carriers in order to hold a part 22 license. Despite this change, part 22 applicants, licensees, and spectrum lessees are still required to seek a waiver of § 20.9(a) if they plan to operate on a non-CMRS basis. In recent years, applicants, licensees, and spectrum lessees in many services presumed to be CMRS have requested waiver of § 20.9(a) as part of an initial authorization, modification, transaction, or spectrum leasing application, and the inclusion of the waiver request often increases the time it takes the Commission to process the application. For example, a paging assignment application in which the assignee includes a waiver request must go on public notice for a minimum of 14 days. Absent the waiver request, the application otherwise might be subject to overnight grant under the Commission's processing rules. Similarly, the § 20.9(b) process for PCS, VHS Public Coast station services, and AMTS licensees to certify that their proposed operations are not commercial is cumbersome and time-consuming. Applications that include a § 20.9(b) certification often could be granted on an overnight basis absent § 20.9(b)'s public notice requirement.

9. To address these inefficiencies, the Commission in July 2016 released a Notice of Proposed Rulemaking (WT Docket No. 16-240) (NPRM) (81 FR 55161) recognizing that § 20.9's approach to the regulatory status of certain bands was not the only way to administer the CMRS/PMRS statutory framework, and seeking comment on whether to eliminate this approach by removing § 20.9 from its rules. The Commission tentatively concluded that doing so would streamline application processing and promote comparable treatment of wireless applicants and licensees operating in different spectrum bands. The Commission anticipated that this revision of its rules would shorten the processing time for a number of applications and eliminate the obligation of licensees and applicants in the specified § 20.9 bands to make a showing—even if brief—regarding their intent to operate on a PMRS-basis. It tentatively concluded that this, in turn, would lead to more efficient and timely use of spectrum, without imposing more regulatory burdens than necessary for the Commission to oversee spectrum usage. The Commission sought comment on its tentative conclusions and on the costs and benefits of its proposed rule elimination. Five parties filed comments and two parties filed reply comments in response to the NPRM, all of which generally support elimination of § 20.9.

10. The Commission also sought comment in the NPRM on eliminating § 20.7's list of certain services that meet the statutory definition of “mobile service” as used in sections 3(n) and 332 of the Act. This list is under-inclusive—it does not include all the services that are, in fact, “mobile services” under the statutory language and the § 20.3 definition. The Commission tentatively concluded that § 20.7 no longer serves a useful purpose and stressed that eliminating § 20.7 would not change the definition of “mobile service” contained in § 20.3 of the rules.

11. Elimination of § 20.9. The Commission removes § 20.9 from its rules, eliminating that section's approach for determining whether services provided in the specified frequency bands are CMRS. There is unanimous support for this rule change, with every commenter addressing this issue supportive of the Commission removing § 20.9 in its entirety. This action is also consistent with the Commission's recent steps in the WRS Second Report and Order and Further Notice of Proposed Rulemaking, released on August 3, 2017 (WT Docket No. 10-112) (82 FR 41580), to harmonize renewal and other regulatory requirements across services and to simplify regulatory processes. Going forward, licensees and applicants whose services were subject to § 20.9 can rely on the relevant definitions in the Communications Act and the Commission's rules—which articulate with sufficient clarity what constitutes CMRS and PMRS—to identify the nature of their services in relevant Commission applications. Akin to their counterparts operating in other frequency bands that already accommodate flexible use, these entities may provide any service that is consistent with the technical rules of the band in which they operate. Licensees will no longer need to seek waivers or submit certifications to the Commission before they can provide non-commercial services; they need only look to the definitions of CMRS and PMRS to determine their regulatory status and proceed accordingly.

12. Eliminating § 20.9 is consistent with the Commission's ongoing efforts to facilitate flexible use of spectrum, and will allow licensees to respond more quickly to consumer demand and competitive forces. Moreover, removing § 20.9 will help eliminate uneven and disparate regulation of wireless applicants and licensees in different spectrum bands. The Commission finds that the public interest is best served by treating similarly situated entities on a more equal, comparable basis. As previously discussed, Congress's intent in creating the CMRS and PMRS umbrella service definitions was to ensure that similarly situated service providers were operating on the same regulatory footing, and the Commission aimed to effectuate this intent by adopting § 20.9. But as a result of the changes that have occurred in the preceding two decades, entities operating in frequency bands subject to § 20.9 are not treated the same as their competitors in other bands. Rather, if they wish to use the spectrum for non-commercial services, this subset of licensees and applicants must file requests for waivers of § 20.9(a) or certifications that operations are not CMRS under § 20.9(b), and they must endure delays associated with the required public notice periods, even though the requests and certifications are usually granted on a routine basis. Several commenters highlight how elimination of § 20.9 will reduce burdens for such entities, enabling them to put their spectrum to efficient use more quickly.

13. The Commission also expects that removing § 20.9 will enable service providers to more easily meet the continuing demand for PMRS and other non-traditional CMRS operations that serve the public interest. The Commission concludes that elimination of § 20.9 will help bring beneficial services to businesses, state and local governments, and the public safety community, while reducing the administrative burdens and processing delays that certain providers of these services currently face.

14. A few commenters caution the Commission that any rule changes should not substantively alter CMRS and PMRS licensees' respective regulatory obligations or expectations regarding their licenses. Nothing here is intended to substantively change the definitions of CMRS and PMRS in § 20.3 of the Commission's rules, which generally track the statutory definitions and which provide sufficiently clear guidance to enable providers to continue to determine the nature of their services accurately. Nor does the Commission take any action in this Order to change the regulatory obligations that attach to CMRS operations 2 or to PMRS operations. Entities may continue to provide both CMRS and PMRS under the same license, to the extent allowed by, and subject to, the statutes, rules, and requirements that otherwise apply to the particular service at issue.

15. As the Commission proposed in the NPRM, applicants and licensees that were subject to § 20.9 and that utilize ULS can inform Commission staff in initial, modification, transaction, or spectrum leasing applications whether they seek authorization to provide or use their service for any of the applicable service offerings—“common carrier,” “non-common carrier,” and/or “private, internal communications”—without any additional showing, as applicants and licensees already do in spectrum bands that already accommodate flexible use. In other words, they can select “non-common carrier” and/or “private, internal communications,” as applicable, without needing to include a waiver request or certification to prove that their service is not CMRS. There is no opposition to this approach from commenters. Importantly, this will not place any additional burdens on applicants and licensees. The Commission's rules already permit entities to self-identify their regulatory status but, because of § 20.9, entities using spectrum in identified frequency bands had to go through the additional administrative processes discussed above. Based on the forgoing, the Commission eliminates the need for them to do so.

16. PMRS Presumption and Rebuttal Process. As discussed above, § 20.9(a)(14) sets forth a rebuttable presumption that “[a] mobile service that does not meet the definition of commercial mobile radio service is presumed to be a private mobile radio service,” 3 and it sets out the process for rebutting such a presumption. This only acts as a presumption, however, with respect to an “interested party's” challenge to a provider's claim that its service is PMRS, in light of the implicit factual assertion that the service does not meet the definition of CMRS. If the challenger cannot overcome the presumption of the validity of the provider's claim that its service does not, as a factual matter, meet the § 20.3 definition of CMRS,4 then the PMRS status of the operation at issue has been established as a definitional matter under the rule and statute, and this challenge will fail.5

17. In the NPRM, the Commission observed that the rules do not need to identify service bands that will be treated as CMRS in order to establish a framework within which a provider can claim PMRS status (presumptively or otherwise). There are other approaches for identifying whether a licensee's proposed or existing operations should be classified one way or another, such as allowing the licensee, in the first instance, to make that determination with respect to its individualized operations, based on the existing definitions of PMRS and CMRS. The Commission suggested that changes to its approach of using a rebuttable PMRS presumption “may now be warranted based on the development of CMRS and PMRS services and [the Commission's] experience with the application of the presumption, such as how parties have used it, how often and how successfully it has been challenged, and whether it tends to streamline the licensing processes or encumber them.” The Commission observed that § 20.3 of the rules defines CMRS to include mobile services that are the “functional equivalent” of CMRS, and therefore—in combination with other Commission rules and processes—ensures that any service that amounts to the “functional equivalent” of CMRS is treated as such.

18. The Commission recognized, however, that elimination of § 20.9 in its entirety would also include deletion of § 20.9(a)(14)(ii), which enumerates several factors that the Commission may consider in determining whether a mobile service is the “functional equivalent” of CMRS in cases where an interested party challenges a claim that operations are presumptively classified as PMRS. The Commission sought comment on whether retaining § 20.9(a)(14) or any of its subsections would be useful “as a practical and procedural set of guidelines” for both mobile service providers and the Commission when applying the definitions of CMRS and PMRS, and whether it should move this language to § 20.3 or another section in part 20. Only two commenters addressed the issue. One argued for the removal of the PMRS presumption while the other requested that the Commission maintain sufficient clarity in the definition of, and requirements for, PMRS and CMRS classifications.

19. The Commission retains the key aspects of the PMRS presumption by revising its definition of Private Mobile Radio Service in § 20.3 to provide a party with a presumption that it meets that definition (as against a challenge that the service is CMRS), if the service in question does not meet the three specific elements for qualifying as a CMRS under paragraph (a) of the § 20.3 CMRS definition. In such case, a challenger would bear the burden of proving that the service meets paragraph (b) of the CMRS definition (i.e., that it is the functional equivalent of a service that satisfies the paragraph (a) elements) and therefore does not qualify as PMRS. While the rules thus continue to recognize that a service not meeting the specific paragraph (a) elements of the CMRS definition is presumptively PMRS, the Commission declines otherwise to carve out the rebuttal process from its elimination of section 20.9. The Commission anticipates that the CMRS and PMRS definitions in § 20.3 as revised in this Order will provide sufficient clarity to enable the Commission, licensees and spectrum lessees, and members of the public to differentiate between CMRS and PMRS and, relatedly, to assess whether a licensee is offering a service that is the “functional equivalent” of CMRS. At the same time, The Commission has identified various benefits of eliminating the use of the scheme embodied in § 20.9, which has discouraged the flexible use of spectrum in the identified frequency bands and created unnecessary hurdles for a subset of mobile service providers.

20. In sum, the Commission sees no need to retain any of the § 20.9 provisions about whether service being provided in a particular frequency band is commercial or private, or to retain rebuttal procedures crafted as part of the § 20.9 approach. Even without § 20.9(a)(14), interested parties will continue to have avenues available to challenge whether an entity's operation is “non-common carrier” or “private, internal communications.” Elimination of the § 20.9(a)(14) process thus neither materially affects the opportunity for interested parties to challenge an entity's claim of private status, nor alters the distribution of the burden of proof in adjudicating such a challenge (i.e., a party challenging a licensee's claim of private status bears the burden of presenting sufficient allegations of fact to overcome the presumptive validity of that claim). Similarly, the exemplary factors for determining whether a service is the “functional equivalent” of CMRS, discussed in the CMRS Second Report and Order, remain probative in potential challenges, even if they are no longer memorialized in the Commission's rules. Nonetheless, given concerns raised by commenters, and for ease of future reference for parties seeking to rely on them as illustrative examples, the Commission moves the “functional equivalent” exemplary factors to the definition of CMRS in § 20.3 and slightly revise the rule to indicate that reliance on these examples is permissible but not required. Finally, nothing in this action alters the Commission's authority, independent of § 20.9, to take enforcement action against a licensee that tries to avoid CMRS regulation by misrepresenting that its service is or will be operated on a “non-common carrier” or “private, internal communications” basis.

21. Elimination of § 20.7. Most commenters do not address the Commission's proposal to remove § 20.7, which lists certain services in various Commission rules parts that meet the statutory definition of “mobile services.” T-Mobile is the only party that raises a concern with removal of a specific subpart of the rule, § 20.7(h). Section 20.7(h) includes within the list of mobile services “[u]nlicensed services meeting the definition of [CMRS] in § 20.3, such as the resale of [CMRS], but excluding unlicensed radio frequency devices under part 15 of this chapter (including unlicensed personal communications service devices).” T-Mobile argues that this language represents an intentional decision by the Commission to exclude part 15 unlicensed services from the definition of “mobile service” in § 20.7. T-Mobile asks the Commission to either preserve § 20.7(h) or incorporate its wording into § 20.3.

22. The Commission eliminates § 20.7, which provides an outdated and incomplete list of some, but not all, services that meet the definition of “mobile service” as used in the Act. This approach is consistent with the Commission's elimination of § 20.9, in favor of relying instead on the definition of CMRS in § 20.3. As is the case with respect to the definition of CMRS, § 20.3 clearly articulates the definition of “mobile service,” consistent with the statutory definition. Elimination of § 20.7 will thus not affect the Commission's understanding or application of the term “mobile service” in the Act or under the Commission's rules.

23. Regarding the concern raised by T-Mobile about the regulatory categorization of part 15 unlicensed devices, the Commission found, in the CMRS Second Report and Order, that the definition of “mobile service” in the 1993 OBRA includes “service for which a license is required in a personal communications service,” and therefore concluded that “mobile service” does not include unlicensed PCS and part 15 devices. This action should in no way be construed as affecting the Commission's findings in the CMRS Second Report and Order. Nonetheless, to ensure that there is no confusion on this issue, the Commission revises § 20.3 to make clear that the term “mobile service” explicitly excludes unlicensed radio frequency devices under part 15 of the Commission's rules.

24. Edits to parts 1, 4, and 9 of the Rules. Consistent with the Commission's proposal in the NPRM and its efforts to streamline its rules, the Commission makes corrective edits to rule parts that errantly cross-reference § 20.9 for the definition of CMRS, rather than cross-referencing the definition in § 20.3, the definitions section for part 20. Specifically, § 4.3(f) of the rules, which defines “wireless service providers” that are subject to outage reporting requirements, cross-references section 20.9 for a definition of CMRS. Section 9.3, related to the provision of interconnected VoIP services, similarly defines CMRS as “Commercial Mobile Radio Service, as defined in § 20.9 of this chapter.” The Commission amends both sections to remove the reference to § 20.9 and refer instead to the definition of CMRS in § 20.3.

25. CTIA requested changes to § 1.907's definitions of Private Wireless Services and Wireless Telecommunications Services to remove cross-references to other CFR rule parts that appear in those definitions. The CMRS proceeding has focused on the treatment of services defined and regulated as PMRS and CMRS under part 20 of the Commission's rules and cross-referenced in several other related rules. While the definitions for which CTIA seeks modification are not coextensive with the definitions of PMRS and CMRS, the Commission sought broad comment in the CMRS proceeding on whether to eliminate the itemized, service-by-service approach to classifying wireless services that the Commission had superimposed over the statutory definitions, in favor of an approach that enabled applicants and licensees themselves to classify—under straightforward statutory definitions—what type of permitted flexible operations they had chosen to provide (rather than forcing them to proceed under a categorical framework that requires parties to seek an exception from the Commission when their choice of flexible operations will not line up with the correct statutorily-defined wireless classification that the rules are forcing them into). CTIA's proposal for eliminating the categorical list of services classified as Wireless Telecommunications Services under the § 1.907 definitions is virtually indistinguishable in these regards from the proposal the Commission made for CMRS, as the elimination of these categories from the Wireless Telecommunications Service definition will remove the needless inefficiency and reduce the rigidity of such a categorical approach, while leaving intact in the rule the critical classification benchmark—i.e., the definition of “telecommunications service” in section 3 of the Act—on which applicants and licensees can rely in choosing to provide Wireless Telecommunications Service. In contrast, the Commission does not, in the CMRS proceeding, modify the § 1.907 definition of Private Wireless Service because this aspect of CTIA's proposals addresses a definition in the rules that does not expressly invoke a statutory definition to provide a ready benchmark that can replace the categories of service that are listed categorically as comprising (and defining) the Private Wireless Services. Accordingly, CTIA's proposal for this definition, whatever the merits, is not part of the regulatory changes that the Commission envisioned in this proceeding, and the Commission therefore denies this aspect of CTIA's request without prejudice.

26. Regulatory Status on FCC Forms. In the NPRM, the Commission requested comment on whether it would need to make changes to any of its forms if it were to eliminate § 20.9. For example, it noted that Form 603 (used for assignments and transfers of control) does not include an option for an assignee/transferee to indicate a different regulatory status for a license at issue in the proposed transaction, and suggested that, if the Commission eliminated § 20.9, it would need to revise Form 603 to permit such a designation. The Commission also sought comment on whether the regulatory status options provided on Form 601 and other forms—“common carrier,” “non-common-carrier,” and “private, internal communications”—were confusing, and asked whether they should be replaced with or altered to include the CMRS/PMRS terminology.

27. Only one party addresses the NPRM questions about forms, recommending that the Commission retain the three regulatory status categories currently used on Form 601 and other forms—“common carrier,” “non-common carrier,” and “private/internal communications.” The Commission decides not to replace the current form designations of “common carrier,” “non-common carrier,” and “private, internal communications” with the alternatives of CMRS or PMRS. The Commission concludes that the change would create a less detailed description of regulatory status for certain licensees. Further, the current designations, in combination with a filer's responses to form questions regarding the type of radio service being provided, are used by the Commission to determine, among other things, regulatory fees and which filings may need to go on an accepted for filing public notice. The Commission also declines to revise Form 601 or other forms to add an additional question asking an entity to distinguish whether it is providing, or plans to provide, “CMRS” and/or “PMRS.” Adding this to the Commission's forms and to ULS would be costly, without providing the Commission with additional useful information beyond what it already obtains from the combination of questions about regulatory status and type of radio service being provided.

28. The current ULS Form 601 permits an applicant to select the status of its radio service operation as “common carrier,” “non-common carrier,” or “private, internal communications,” or some combination, to the extent applicable. This status must be selected when an applicant first files for an authorization. Under this action, applicants in services previously covered by § 20.9 will have the same flexibility as other licensees that utilize ULS to select the appropriate status or statuses, without additional regulatory requirements. A licensee also can use Form 601 to modify its regulatory status to add an additional status or change the status under which it was originally licensed. Applications on Form 601 to modify regulatory status are processed as a minor modification to the subject authorization.

29. The current Form 603 does not permit a proposed assignee or transferee to make any selection regarding regulatory status. Rather, the proposed assignee or transferee receives the license with the regulatory status as designated by the assignor or the pre-transfer licensee. Because a change to Form 603 would require corresponding changes to ULS, including costly reprogramming and additional time to implement, the Commission directs staff to explore an interim process for permitting a proposed assignee or transferee to modify the regulatory status for a license as part of the assignment or transfer of control application, perhaps by permitting the applicants to provide in an exhibit a request for change. In the interim and as can be done under the Commission's current processes, assignees or transferees will be able to file a modification on Form 601 to change the regulatory status of a license obtained pursuant to a transaction after the transaction is consummated.

30. The current Form 608, Item 9, permits a proposed spectrum lessee to indicate at the time of filing an initial spectrum leasing application what regulatory status or statuses are applicable to its planned operations on the leased spectrum. Once a spectrum leasing arrangement is granted or accepted, as applicable, the spectrum lessee may file a lease modification on Form 608 to indicate a change in the regulatory status as application to its operations under the spectrum leasing arrangement.

31. Other Issues. Several commenters raise issues that were not discussed in the NPRM. For example, MSI and NPPD highlight several part 22 rules that they argue are ripe for reform, and ask the Commission to initiate a separate rulemaking to review these and other part 22 rules. Those issues are beyond the scope of the CMRS proceeding and the Commission does not address them here.

32. This document does not contain new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, therefore, it does not contain any new or modified information collection burden for small business concerns with fewer than 25 employees, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).

33. The Commission will send a copy of the Order to Congress and the Government Accountability Office pursuant to the Congressional Review Act.

34. The Regulatory Flexibility Act of 1980, as amended (RFA), requires that an agency prepare a regulatory flexibility analysis for notice and comment rulemakings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” The Final Regulatory Flexibility Certification of the possible economic impact of the rule changes contained in the Report and Order was attached as Appendix B of the Order.

35. For further information regarding the Order, contact Kathy Harris at (202) 418-0609, [email protected], or Thomas Reed at (202) 418-0531, [email protected].

36. Accordingly, it is ordered, pursuant to sections 1, 2, 4(i), 4(j), 7, 301, 303, 307, 308, 309, and 332 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 154(j), 157, 301, 303, 307, 308, 309, and 332, that this report and order in WT Docket No. 16-240 is adopted.

37. It is further ordered that the report and order shall be effective 30 days after publication of a summary of the report and order in the Federal Register.

38. It is further ordered that part 1 of the Commission's rules, 47 CFR part 1, part 4 of the Commission's rules, 47 CFR part 4, part 9 of the Commission's rules, 47 CFR part 9, and part 20 of the Commission's rules, 47 CFR part 20, are amended as specified in Appendix A of the Order, effective 30 days after publication in the Federal Register.

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

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

41. It is further ordered that, if no petitions for reconsideration or applications for review are timely filed, this proceeding shall be terminated and the docket closed.

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR parts 1, 4, 9, and 20 as follows:

This document adopts as a final rule without change a proposed rule amending the VA Acquisition Regulation (VAAR). On March 13, 2017, VA published a proposed rule in the Federal Register (82 FR 13418) which announced VA`s intent to amend regulations for parts 816 and 828. On April 4, 2017, VA published in the Federal Register a correction to the proposed rule at 82 FR 16332.

We provided a 60 day comment period for interested parties to submit comments to VA on or before May 12, 2017. Five respondents submitted comments to the proposed rule. A discussion of the comments is provided below.

One commenter asserted that the restrictions imposed on VA regarding 38 U.S.C. 8127 can often impact the efficiency of using the combined synopsis/solicitation method. The commenter recommends: “Creating a policy and procedure for COs to utilize the commercial combo and still comply with the “purpose” of 38 U.S.C. 8127 but COs will need guidance and limitations.”

The parts in this final rule do not address acquisition of commercial items or simplified acquisition procedures set forth in the Federal Acquisition Regulation (FAR) parts 12 and 13 or VAAR parts 812 and 813. However, in response to the comment, VA does not concur. In order to satisfy the requirements of 38 U.S.C. 8127, VA must ensure that preference is given for awards to service-disabled veteran-owned small businesses and veteran-owned small businesses, even for acquisition of commercial items under FAR part 13. Accordingly, VA has revised its market research process to facilitate the identification of verified and qualified veteran-owned firms for contract awards. VA's contracting officers will be able to perform the required market research and identify veteran-owned firms more quickly and efficiently as the learning curve diminishes. VA is committed to complying with 38 U.S.C. 8127, ensuring the mission is not compromised, and that contracting officers are making awards in a timely fashion. Additionally, implementation of 38 U.S.C. 8127, the Veterans Benefits, Healthcare, and Information Technology Act of 2006, does not prohibit the use of the combined synopsis/solicitation method set forth in FAR part 12.

One commenter expressed general support for veterans programs and complimented the revisions made in the rule. VA appreciates the commenter's support of veterans.

One commenter noted that the proposed rule does not require formal rulemaking. VA removed the term “formal” in the description of its rulemaking process. However, in accordance with 41 U.S.C. 1707 (the Office of Federal Procurement Policy Act), a procurement policy, regulation, procedure, or form (including an amendment or modification thereto) may not take effect until 60 days after it is published for public comment in the Federal Register. During this process where VA is examining its VA Acquisition Regulation, proposed rules will be published for public comment in accordance with the Federal rulemaking process.

One commenter stated that this rule could benefit from further explanation as currently in VA there is confusion regarding how consignment agreements are entered into. The first sentence of section 816.770 has been changed from “A consignment agreement is not a contract” to “Consignment agreements shall only be established under a contract and by a contracting officer.”

The final rule informs the public that consignment agreements are permitted to be used at VA. As stated in the proposed rule: “This Proposed Rule will streamline the VAAR to implement and supplement the FAR only when required, and remove internal agency guidance as noted above in keeping with the FAR principles concerning agency acquisition regulations.” Internal agency guidance and procedures relating to consignment agreements are included in M816, the corresponding VA Acquisition Manual (VAAM) part that will be issued within VA when the revised VAAR part 816 is published. The information included in the VAAM will address the concerns raised by the commenter.

One commenter recommends that VA consider the use of cascading set-asides in FAR part 16 related acquisitions. The commenter also takes issue with VA's implementation of 38 U.S.C. 8127 in that it doesn't explicitly allow cascading set-asides and believes that this slows the procurement process. We are making no change to VAAR Part 816 at this time based on this comment.

This comment was beyond the scope of the proposed rule. Guidance on cascading set-asides would more appropriately be placed in VAAR Part 819. VA will consider including guidance on cascading when VA proposes revisions to VAAR Part 819. VA is committed to complying with 38 U.S.C. 8127, ensuring the mission is not compromised, and that contracting officers are making awards in a timely fashion.

This final rule removes the citation of 38 U.S.C. 501 from parts 828 and 852, 41 U.S.C 1121 and 41 U.S.C. 1702 to the authority of parts 816, 828, and 852 which address overall direction of procurement policy, acquisition planning and management responsibilities.

This final rule revises subsection 816.203-4(f) to remove “or under a VA provider agreement.” This clarifies that the prescribed clause applies to VA contracts and should not be utilized for VA provider agreements that are not made under a contract. Clause 852.216-72, “Proportional Economic Price Adjustment of Contract Price(s) Based on a Price Index,” included in a footnote the sentence, “Selection of the wrong index may result in a claim and reformation of a contract.” This sentence has been removed. The deleted text represents internal VA guidance for VA contracting personnel and is not appropriate for inclusion in a regulation.

This final rule revises section 828.306(b) by replacing “VA Manual MP-1, Part II, Chapter 3” with “VA Policy” in reference to the policy document for emergency or sporadic ambulance services. This change was made to avoid the need to amend the regulation should VA place this policy in a different document in the future.

This final rule revises section 852.216-73(a) by including “by a contracting officer” at the end of the paragraph. This is to clarify that contract modifications must be performed by a contracting officer. Sections 852.216-73(a) and 852.216-74 are revised to remove the terms “ALT #1” and “ALT #2” from the titles of the clauses as well as from their prescriptions at section 816.203-4(e)(3) and (4).

Based on the rationale set forth in the proposed rule and in this document, VA is adopting the provisions of the proposed rule as a final rule with the changes discussed above.

Although this action contains provisions constituting collections of information at 48 CFR 828.306 and 852.228-71, under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521), no new or proposed revised collections of information are associated with this final rule. The information collection requirements for 48 CFR 828.306 and 852.228-71 are currently approved by the Office of Management and Budget (OMB) and have been assigned OMB control number 2900-0590.

This final rule will 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. This final rule will generally be small business neutral. The overall impact of the final rule will be of benefit to small businesses owned by veterans or service-disabled veterans as the VAAR is being updated to remove extraneous procedural information that applies only to VA's internal operating procedures. VA estimates no cost impact to individual business resulting from these rule updates. On this basis, the adoption of this final rule will 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, under 5 U.S.C. 605(b), this final rule is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604.

Executive Orders (E.O.) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits of reducing costs, of harmonizing rules, and of promoting flexibility. E.O. 12866, Regulatory Planning and Review defines “significant regulatory action” to mean 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.”

VA has examined the economic, interagency, budgetary, legal, and policy implications of this regulatory action, and it has been determined to be a significant regulatory action under E.O. 12866, because it raises novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive order. 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 from FY 2004 Through Fiscal Year to Date. This rule is not expected to be subject to the requirements of E.O. 13771, Reducing Regulation and Controlling Regulatory Costs, because this rule is expected to result in no more than de minimis costs.

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 final rule will have no such effect on State, local, and tribal Governments or on the private sector.

The Secretary of Veterans Affairs, or designee, 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. Gina S. Farrisee, Deputy Chief of Staff, Department of Veterans Affairs, approved this document on December 15, 2017, for publication.

For the reasons set out in the preamble, VA amends 48 CFR, chapter 8, parts 816, 828, and 852 as follows: