Federal Register Vol. 83, No.43,

Federal Register Volume 83, Issue 43 (March 5, 2018)

Page Range9135-9418
FR Document

83_FR_43
Current View
Page and SubjectPDF
83 FR 9417 - Continuation of the National Emergency With Respect to ZimbabwePDF
83 FR 9415 - Continuation of the National Emergency With Respect to VenezuelaPDF
83 FR 9413 - Continuation of the National Emergency With Respect to UkrainePDF
83 FR 9409 - Women's History Month, 2018PDF
83 FR 9407 - Irish-American Heritage Month, 2018PDF
83 FR 9405 - American Red Cross Month, 2018PDF
83 FR 9343 - Sunshine Act Meeting NoticePDF
83 FR 9316 - Sunshine Act MeetingPDF
83 FR 9329 - Extension of the Designation of Syria for Temporary Protected StatusPDF
83 FR 9315 - Open Commission Meeting, Thursday, February 22, 2018PDF
83 FR 9207 - Innovation for Teacher Quality; Troops-to-Teachers ProgramPDF
83 FR 9301 - Notice of Orders Issued Under Section 3 of The Natural Gas Act During January 2018PDF
83 FR 9255 - Atlantic Highly Migratory Species; Shortfin Mako Shark Management MeasuresPDF
83 FR 9321 - Submission for OMB Review; Comment RequestPDF
83 FR 9339 - NASA Advisory Council; Technology, Innovation and Engineering Committee; MeetingPDF
83 FR 9341 - NASA Advisory Council; Ad Hoc Task Force on STEM Education; MeetingPDF
83 FR 9340 - NASA Advisory Council; Human Exploration and Operations Committee; MeetingPDF
83 FR 9314 - Proposed Information Collection Request; Comment Request; Exchange Network Grants Progress Reports (Renewal)PDF
83 FR 9310 - Proposed Approval of the Transuranic Waste Characterization Program at Idaho National Laboratory's Advanced Mixed Waste Treatment ProjectPDF
83 FR 9259 - Submission for OMB Review; Comment RequestPDF
83 FR 9351 - Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 7018(a)PDF
83 FR 9354 - Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify IM-5900-7 To Update the Values of, and Permit a Third-Party Provider Selected by Nasdaq to Offer, Certain Complimentary Services Provided to Certain Newly Listing Companies Pursuant to the RulePDF
83 FR 9307 - FIFRA Scientific Advisory Panel; Notice of Public Meeting and Request for Nomination of Ad Hoc Expert MembersPDF
83 FR 9176 - Special Conditions: Textron Aviation, Inc., Model C90A King Air; Installation of Electronic Engine Control SystemPDF
83 FR 9339 - Notice of Information CollectionPDF
83 FR 9222 - Ex Parte Communications in Informal Rulemaking ProceedingsPDF
83 FR 9144 - Appraisal Subcommittee; Revised ASC Policy StatementsPDF
83 FR 9299 - Army Education Advisory Subcommittee Meeting NoticePDF
83 FR 9300 - The release of the Final Environmental Impact Statement (FEIS) for the Bogue Banks Master Beach Nourishment Plan, on Bogue Banks Barrier Island, Carteret County, NCPDF
83 FR 9337 - Importer of Controlled Substances Application: PerkinElmer, Inc.PDF
83 FR 9337 - Importer of Controlled Substances Application: Stepan CompanyPDF
83 FR 9259 - In the Matters of: Trilogy International Associates, Inc., William Michael Johnson, Respondents; Final Decision and OrderPDF
83 FR 9302 - Agency Information Collection ExtensionPDF
83 FR 9274 - Countervailing Duty Investigation of Certain Aluminum Foil From the People's Republic of China: Final Affirmative DeterminationPDF
83 FR 9282 - Certain Aluminum Foil From the People's Republic of China: Final Determination of Sales at Less Than Fair ValuePDF
83 FR 9324 - Post-Marketing Pediatric-Focused Product Safety Reviews; Establishment of a Public Docket; Request for CommentsPDF
83 FR 9364 - Advisory Committee on Homeless Veterans, Notice of MeetingPDF
83 FR 9298 - Determination of Overfishing or an Overfished ConditionPDF
83 FR 9232 - Atlantic Highly Migratory Species; Atlantic Bluefin Tuna Fisheries; General Category FisheryPDF
83 FR 9336 - Agency Information Collection Activities; National Ground-Water Monitoring Network Cooperative Funding ApplicationPDF
83 FR 9279 - Initiation of Five-Year (Sunset) ReviewsPDF
83 FR 9284 - Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative ReviewPDF
83 FR 9277 - Hydrofluorocarbon Blends From the People's Republic of China: Notice of Covered Merchandise ReferralPDF
83 FR 9272 - Wooden Bedroom Furniture From the People's Republic of China: Notice of Covered Merchandise ReferralPDF
83 FR 9280 - Diamond Sawblades and Parts Thereof From the People's Republic of China: Notice of Covered Merchandise ReferralPDF
83 FR 9267 - Aluminum Extrusions From the People's Republic of China: Initiation of Anti-Circumvention InquiriesPDF
83 FR 9235 - Fisheries of the Exclusive Economic Zone Off Alaska; Reallocation of Pollock in the Bering Sea and Aleutian IslandsPDF
83 FR 9236 - Fisheries of the Exclusive Economic Zone Off Alaska; Pacific Cod by Catcher Vessels Less Than 50 Feet Length Overall Using Hook-and-Line Gear in the Central Regulatory Area of the Gulf of AlaskaPDF
83 FR 9341 - Agency Information Collection Activities: Submission for OMB Review; Comment RequestPDF
83 FR 9325 - Agency Information Collection Request; 60-Day Public Comment RequestPDF
83 FR 9323 - Proposed Information Collection Activity; Comment RequestPDF
83 FR 9338 - Draft 2017 Report to Congress on the Benefits and Costs of Federal Regulation and Agency Compliance With the Unfunded Mandates Reform ActPDF
83 FR 9322 - Submission for OMB Review; Comment RequestPDF
83 FR 9287 - Takes of Marine Mammals Incidental to Specified Activities; Taking Marine Mammals Incidental to Bravo Wharf Recapitalization Project, Year 2PDF
83 FR 9303 - Notice of Institution of Section 206 Proceeding and Refund Effective Date; Westwood Generation, LLCPDF
83 FR 9306 - Notice of Institution of Section 206 Proceeding and Refund Effective Date; RockGen Energy, LLCPDF
83 FR 9305 - Reliability Technical Conference; Notice of Technical ConferencePDF
83 FR 9305 - Combined Notice of FilingsPDF
83 FR 9304 - Combined Notice of Filings #1PDF
83 FR 9306 - Recent Postings of Broadly Applicable Alternative Test MethodsPDF
83 FR 9342 - Reporting Requirements Regarding Findings of Sexual Harassment, Other Forms of Harassment, or Sexual AssaultPDF
83 FR 9313 - Review of Existing VOC Emissions Factor for Flares at Natural Gas Production Sites and New Emissions Factors for Enclosed Ground FlaresPDF
83 FR 9361 - Notice of Determinations; Additional Culturally Significant Object Imported for Exhibition Determinations: “Like Life: Sculpture, Color, and the Body” ExhibitionPDF
83 FR 9362 - Notice of Determinations; Culturally Significant Objects Imported for Exhibition Determinations: “Visitors to Versailles, 1682-1789” ExhibitionPDF
83 FR 9357 - TriplePoint Venture Growth BDC Corp., et al.PDF
83 FR 9328 - Notice of Advisory Council on Historic Preservation Quarterly Business MeetingPDF
83 FR 9247 - Safety Zone; Xterra Swim, Intracoastal Waterway; Myrtle Beach, SCPDF
83 FR 9245 - Safety Zone; Cooper River Bridge Run, Cooper River, and Town Creek Reaches, Charleston, SCPDF
83 FR 9249 - Safety Zone; Charleston Race Week, Charleston Harbor, Charleston, SCPDF
83 FR 9205 - Safety Zone: St. Francis Yacht Club Fireworks, San Francisco, CAPDF
83 FR 9338 - Notice of Lodging of Proposed Amendment to Consent Decree Under the Clean Water ActPDF
83 FR 9297 - Endangered Species; File No. 21467PDF
83 FR 9297 - Endangered Species; File No. 21366PDF
83 FR 9363 - Request for Comments on the Renewal of a Previously Approved Information Collection: Quarterly Readiness of Strategic Seaport Facilities ReportingPDF
83 FR 9363 - Requested Administrative Waiver of the Coastwise Trade Laws: Vessel LOLAL OCEAN EXPLORER; Invitation for Public CommentsPDF
83 FR 9303 - Southwest Gas Corporation; Notice of ApplicationPDF
83 FR 9259 - Correction: Notice of Public Meeting of the Arizona Advisory CommitteePDF
83 FR 9329 - Board of Visitors for the National Fire AcademyPDF
83 FR 9257 - Fisheries of the Exclusive Economic Zone Off Alaska; Essential Fish Habitat AmendmentsPDF
83 FR 9219 - Monetary Threshold for Reporting Rail Equipment Accidents/Incidents for Calendar Year 2018PDF
83 FR 9326 - Office Of The Director, National Institutes Of Health; Notice of MeetingPDF
83 FR 9328 - National Library of Medicine; Notice of MeetingPDF
83 FR 9326 - National Library of Medicine; Notice of Closed MeetingsPDF
83 FR 9327 - National Heart, Lung, And Blood Institute; Notice of Closed MeetingPDF
83 FR 9327 - National Eye Institute; Notice of Closed MeetingPDF
83 FR 9327 - Center for Scientific Review; Notice of Closed MeetingsPDF
83 FR 9204 - Drawbridge Operation Regulation; Nanticoke River, Seaford, DEPDF
83 FR 9344 - Aluminum High Energy Arc Fault (HEAF) Particle Size CharacterizationPDF
83 FR 9347 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Wilshire Micro-Cap ETFPDF
83 FR 9345 - Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Designation of Longer Period for Commission Action on Proposed Rule Change Concerning the ICE Clear Europe Recovery PlanPDF
83 FR 9345 - Self-Regulatory Organizations; The Options Clearing Corporation; Order Approving Proposed Rule Change Related to The Options Clearing Corporation's Model Risk Management PolicyPDF
83 FR 9349 - Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 5.170 To Reflect an Update to a FINRA RulePDF
83 FR 9351 - Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Designation of Longer Period for Commission Action on Proposed Rule Change Concerning the ICE Clear Europe Wind-Down PlanPDF
83 FR 9337 - Pure Granular Magnesium From China; DeterminationPDF
83 FR 9316 - PayPal, Inc.; Analysis To Aid Public CommentPDF
83 FR 9320 - Proposed Data Collection Submitted for Public Comment and RecommendationsPDF
83 FR 9318 - Proposed Data Collection Submitted for Public Comment and RecommendationsPDF
83 FR 9243 - Proposed Amendment of Class D and E Airspace; Jacksonville, NCPDF
83 FR 9181 - Amendment of Class E Airspace; Selinsgrove, PAPDF
83 FR 9242 - Proposed Amendment of Class D Airspace and Class E Airspace; Pensacola, FL, and Proposed Establishment of Class E Airspace; Milton, FLPDF
83 FR 9362 - Bureau of International Security and Nonproliferation; Determinations Regarding Use of Chemical Weapons by North Korea Under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991PDF
83 FR 9362 - International Joint Commission To Make Recommendations on Nutrient Loading and Impacts in Lakes Champlain and MemphremagogPDF
83 FR 9213 - Approval of California Air Plan Revisions, Northern Sierra Air Quality Management DistrictPDF
83 FR 9215 - Approval of Section 112(l) Authority for Hazardous Air Pollutants; Perchloroethylene Air Emission Standards for Dry Cleaning Facilities; State of VermontPDF
83 FR 9254 - Approval of Section 112(l) Authority for Hazardous Air Pollutants; Perchloroethylene Air Emission Standards for Dry Cleaning Facilities; State of VermontPDF
83 FR 9135 - Alternatives to References to Credit Ratings With Respect to Permissible Activities for Foreign Branches of Insured State Nonmember Banks and Pledge of Assets by Insured Domestic Branches of Foreign BanksPDF
83 FR 9252 - Safety Zone; Black Warrior River, Tuscaloosa, ALPDF
83 FR 9208 - Reimbursement of Qualifying Adoption Expenses for Certain VeteransPDF
83 FR 9238 - Airworthiness Directives; The Boeing Company AirplanesPDF
83 FR 9366 - Taking and Importing Marine Mammals; Taking Marine Mammals Incidental to U.S. Navy Marine Structure Maintenance and Pile Replacement in WashingtonPDF
83 FR 9182 - North Korea Sanctions RegulationsPDF
83 FR 9178 - Airworthiness Directives; The Boeing Company AirplanesPDF
83 FR 9162 - Aviation Safety Organization ChangesPDF

Issue

83 43 Monday, March 5, 2018 Contents Agriculture Agriculture Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 9259 2018-04421 Army Army Department NOTICES Meetings: Education Advisory Subcommittee, 9299 2018-04409 Centers Disease Centers for Disease Control and Prevention NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 9318-9321 2018-04329 2018-04330 Children Children and Families Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 9321-9324 2018-04382 2018-04384 2018-04429 Civil Rights Civil Rights Commission NOTICES Meetings: Arizona Advisory Committee, 9259 2018-04353 Coast Guard Coast Guard RULES Drawbridge Operations: Nanticoke River, Seaford, DE, 9204-9205 2018-04342 Safety Zones: St. Francis Yacht Club Fireworks, San Francisco, CA, 9205-9207 2018-04363 PROPOSED RULES Safety Zones: Black Warrior River, Tuscaloosa, AL, 9252-9254 2018-04253 Charleston Race Week, Charleston Harbor, Charleston, SC, 9249-9252 2018-04366 Cooper River Bridge Run, Cooper River, and Town Creek Reaches, Charleston, SC, 9245-9247 2018-04367 Xterra Swim, Intracoastal Waterway; Myrtle Beach, SC, 9247-9249 2018-04368 Commerce Commerce Department See

Industry and Security Bureau

See

International Trade Administration

See

National Oceanic and Atmospheric Administration

Defense Department Defense Department See

Army Department

See

Engineers Corps

Drug Drug Enforcement Administration NOTICES Importers of Controlled Substances; Applications: PerkinElmer, Inc., 9337-9338 2018-04407 Stepan Co., 9337 2018-04406 Education Department Education Department RULES Innovation for Teacher Quality: Troops-to-Teachers Program, 9207-9208 2018-04437 Energy Department Energy Department See

Federal Energy Regulatory Commission

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 9302-9303 2018-04403 Orders: Puget Sound Energy, Inc.; Sierra Pacific Power Co. d/b/a; NV Energy, et al., 9301-9302 2018-04432
Engineers Engineers Corps NOTICES Environmental Impact Statements; Availability, etc.: Bogue Banks Master Beach Nourishment Plan, on Bogue Banks Barrier Island, Carteret County, NC, 9300-9301 2018-04408 Environmental Protection Environmental Protection Agency RULES Air Quality State Implementation Plans; Approvals and Promulgations: California; Northern Sierra Air Quality Management District, 9213-9215 2018-04316 National Emission Standards for Hazardous Air Pollutants: Vermont; Approval of Section 112(l) Authority; Perchloroethylene Air Emission Standards for Dry Cleaning Facilities, 9215-9219 2018-04277 PROPOSED RULES National Emission Standards for Hazardous Air Pollutants: Vermont; Approval of Section 112(l) Authority; Perchloroethylene Air Emission Standards for Dry Cleaning Facilities, 9254-9255 2018-04276 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Exchange Network Grants Progress Reports (Renewal), 9314-9315 2018-04425 Meetings: Fungicide, and Rodenticide Act Scientific Advisory Panel; Nomination of Ad Hoc Expert Members, 9307-9310 2018-04418 Recent Postings of Broadly Applicable Alternative Test Methods, 9306-9307 2018-04375 Review of Existing Volatile Organic Compounds Emissions Factor for Flares at Natural Gas Production Sites and New Emissions Factors for Enclosed Ground Flares, 9313-9314 2018-04373 Transuranic Waste Characterization Program at Idaho National Laboratorys Advanced Mixed Waste Treatment Project, 9310-9313 2018-04423 Federal Aviation Federal Aviation Administration RULES Airworthiness Directives: The Boeing Company Airplanes, 9178-9181 2018-03824 Amendment of Class E Airspace: Selinsgrove, PA, 9181-9182 2018-04325 Aviation Safety Organization Changes, 9162-9176 2018-03374 Special Conditions: Textron Aviation, Inc., Model C90A King Air; Installation of Electronic Engine Control System, 9176-9178 2018-04417 PROPOSED RULES Airworthiness Directives: The Boeing Company Airplanes, 9238-9242 2018-04228 Amendment of Class D Airspace and Class E Airspace; Establishment of Class E Airspace: Pensacola, FL, and Milton, FL, 9242-9243 2018-04324 Amendment of Class D and E Airspace: Jacksonville, NC, 9243-9245 2018-04326 Federal Communications Federal Communications Commission NOTICES Meetings: Open Commission Meeting, 9315-9316 2018-04446 Federal Deposit Federal Deposit Insurance Corporation RULES Alternatives to References to Credit Ratings with Respect to Permissible Activities for Foreign Branches of Insured State Nonmember Banks and Pledge of Assets by Insured Domestic Branches of Foreign Banks, 9135-9144 2018-04255 Federal Election Federal Election Commission NOTICES Meetings; Sunshine Act, 9316 2018-04555 Federal Emergency Federal Emergency Management Agency NOTICES Requests for Nominations; Board of Visitors for National Fire Academy, 9329 2018-04352 Federal Energy Federal Energy Regulatory Commission NOTICES Applications: Southwest Gas Corp., 9303-9304 2018-04354 Combined Filings, 9304-9306 2018-04376 2018-04377 Meetings: Reliability Technical Conference, 9305 2018-04378 Refund Effective Dates: RockGen Energy, LLC, 9306 2018-04379 Westwood Generation, LLC, 9303 2018-04380 Federal Financial Federal Financial Institutions Examination Council RULES Appraisal Subcommittee Revised Policy Statements, 9144-9162 2018-04410 Federal Railroad Federal Railroad Administration RULES Monetary Threshold for Reporting Rail Equipment Accidents/Incidents for Calendar Year 2018, 9219-9222 2018-04349 Federal Trade Federal Trade Commission NOTICES Proposed Consent Agreements: PayPal, Inc., 9316-9318 2018-04331 Food and Drug Food and Drug Administration NOTICES Requests for Comments: Post-Marketing Pediatric-Focused Product Safety Reviews, 9324-9325 2018-04400 Foreign Assets Foreign Assets Control Office RULES North Korea Sanctions Regulations, 9182-9204 2018-04113 Geological Geological Survey NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: National Ground-Water Monitoring Network Cooperative Funding Application, 9336-9337 2018-04396 Health and Human Health and Human Services Department See

Centers for Disease Control and Prevention

See

Children and Families Administration

See

Food and Drug Administration

See

National Institutes of Health

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 9325-9326 2018-04386
Historic Historic Preservation, Advisory Council NOTICES Meetings: Quarterly Business Meeting, 9328 2018-04369 Homeland Homeland Security Department See

Coast Guard

See

Federal Emergency Management Agency

See

U.S. Citizenship and Immigration Services

Industry Industry and Security Bureau NOTICES Decisions and Orders: Trilogy International Associates, Inc.; William Michael Johnson, 9259-9267 2018-04404 Interior Interior Department See

Geological Survey

International Trade Adm International Trade Administration NOTICES Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Aluminum Extrusions from the People's Republic of China, 9267-9272 2018-04390 Certain Aluminum Foil from the People's Republic of China, 9274-9277 2018-04402 Diamond Sawblades and Parts Thereof from the People's Republic of China, 9280-9281 2018-04391 Hydrofluorocarbon Blends from the People's Republic of China, 9277-9278 2018-04393 Initiation of Five-Year (Sunset) Reviews, 9279-9280 2018-04395 Opportunity to Request Administrative Review, 9284-9287 2018-04394 Wooden Bedroom Furniture from the People's Republic of China, 9272-9274 2018-04392 Determinations of Sales at Less Than Fair Value: Certain Aluminum Foil from the People's Republic of China, 9282-9284 2018-04401 International Trade Com International Trade Commission NOTICES Investigations; Determinations, Modifications, and Rulings, etc.: Pure Granular Magnesium from China, 9337 2018-04332 Justice Department Justice Department See

Drug Enforcement Administration

NOTICES Proposed Consent Decrees under the Clean Water Act, 9338 2018-04362
Management Management and Budget Office NOTICES Draft 2017 Report to Congress on the Benefits and Costs of Federal Regulation and Agency Compliance with the Unfunded Mandates Reform Act, 9338-9339 2018-04383 Maritime Maritime Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Quarterly Readiness of Strategic Seaport Facilities Reporting, 9363 2018-04356 Requests for Administrative Waivers of the Coastwise Trade Laws: Vessel LOLAL OCEAN EXPLORER, 9363-9364 2018-04355 NASA National Aeronautics and Space Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 9339-9340 2018-04412 Meetings: Ad Hoc Task Force on STEM Education, 9341 2018-04427 Human Exploration and Operations Committee, 9340-9341 2018-04426 Technology, Innovation and Engineering Committee, 9339 2018-04428 National Archives National Archives and Records Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 9341-9342 2018-04387 National Institute National Institutes of Health NOTICES Meetings: Center for Scientific Review, 9327 2018-04343 National Eye Institute, 9327-9328 2018-04344 National Heart, Lung, and Blood Institute, 9327 2018-04345 National Library of Medicine, 9326, 9328 2018-04346 2018-04347 Office of AIDS Research Advisory Council, 9326 2018-04348 National Oceanic National Oceanic and Atmospheric Administration RULES Atlantic Highly Migratory Species: Atlantic Bluefin Tuna Fisheries; General Category Fishery, 9232-9235 2018-04397 Fisheries of the Exclusive Economic Zone off Alaska: Pacific Cod by Catcher Vessels Less than 50 feet Length Overall using Hook-and-Line Gear in Central Regulatory Area of Gulf of Alaska, 9236-9237 2018-04388 Reallocation of Pollock in Bering Sea and Aleutian Islands, 9235-9236 2018-04389 PROPOSED RULES Atlantic Highly Migratory Species: Shortfin Mako Shark Management Measures, 9255-9257 2018-04430 Fisheries of the Exclusive Economic Zone off Alaska: Essential Fish Habitat Amendments, 9257-9258 2018-04351 Taking and Importing Marine Mammals Incidental to Specified Activities: U.S. Navy Marine Structure Maintenance and Pile Replacement in Washington, 9366-9401 2018-04148 NOTICES Determination of Overfishing or an Overfished Condition, 9298-9299 2018-04398 Permit Applications: Endangered Species; File No. 21366, 9297 2018-04360 Endangered Species; File No. 21467, 9297-9298 2018-04361 Takes of Marine Mammals Incidental to Specified Activities: Bravo Wharf Recapitalization Project, Year 2, 9287-9297 2018-04381 National Science National Science Foundation NOTICES Reporting Requirements Regarding Findings of Sexual Harassment, Other Forms of Harassment, or Sexual Assault, 9342-9343 2018-04374 Nuclear Regulatory Nuclear Regulatory Commission NOTICES Aluminum High Energy Arc Fault Particle Size Characterization, 9344-9345 2018-04341 Meetings; Sunshine Act, 9343-9344 2018-04561 Presidential Documents Presidential Documents PROCLAMATIONS Special Observances: American Red Cross Month (Proc. 9700), 9403-9406 2018-04620 Irish-American Heritage Month (Proc. 9701), 9407-9408 2018-04621 Women's History Month (Proc. 9702), 9409-9410 2018-04622 ADMINISTRATIVE ORDERS Ukraine; Continuation of National Emergency (Notice of March 2, 2018), 9411-9414 2018-04626 Venezuela; Continuation of National Emergency (Notice of March 2, 2018), 9415 2018-04627 Zimbabwe; Continuation of National Emergency (Notice of March 2, 2018), 9417-9418 2018-04628 Securities Securities and Exchange Commission NOTICES Applications: TriplePoint Venture Growth BDC Corp., et al., 9357-9361 2018-04370 Self-Regulatory Organizations; Proposed Rule Changes: ICE Clear Europe, Ltd., 9345, 9351 2018-04339 2018-04336 Investors Exchange, LLC, 9349-9351 2018-04337 Nasdaq Stock Market, LLC, 9351-9357 2018-04419 2018-04420 NYSE Arca, Inc., 9347-9349 2018-04340 Options Clearing Corp., 9345-9347 2018-04338 State Department State Department NOTICES Culturally Significant Objects Imported for Exhibition: Like Life: Sculpture, Color, and the Body, 9361-9362 2018-04372 Visitors to Versailles, 16821789, 9362 2018-04371 Determinations Regarding Use of Chemical Weapons by North Korea under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991, 9362-9363 2018-04320 Meetings: International Joint Commission; Nutrient Loading and Impacts in Lakes Champlain and Memphremagog, 9362 2018-04319 Surface Transportation Surface Transportation Board RULES Ex Parte Communications in Informal Rulemaking Proceedings, 9222-9232 2018-04411 Transportation Department Transportation Department See

Federal Aviation Administration

See

Federal Railroad Administration

See

Maritime Administration

Treasury Treasury Department See

Foreign Assets Control Office

U.S. Citizenship U.S. Citizenship and Immigration Services NOTICES Extension of Designation of Syria for Temporary Protected Status, 9329-9336 2018-04454 Veteran Affairs Veterans Affairs Department RULES Reimbursement of Qualifying Adoption Expenses for Certain Veterans, 9208-9213 2018-04245 NOTICES Meetings: Advisory Committee on Homeless Veterans, 9364 2018-04399 Separate Parts In This Issue Part II Commerce Department, National Oceanic and Atmospheric Administration, 9366-9401 2018-04148 Part III Presidential Documents, 9403-9410 2018-04620 2018-04621 2018-04622 Part IV Presidential Documents, 9411-9415, 9417-9418 2018-04626 2018-04627 2018-04628 Reader Aids

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

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83 43 Monday, March 5, 2018 Rules and Regulations FEDERAL DEPOSIT INSURANCE CORPORATION 12 CFR Part 347 RIN 3064-AE36 Alternatives to References to Credit Ratings With Respect to Permissible Activities for Foreign Branches of Insured State Nonmember Banks and Pledge of Assets by Insured Domestic Branches of Foreign Banks AGENCY:

Federal Deposit Insurance Corporation (FDIC).

ACTION:

Final rule.

SUMMARY:

The FDIC is adopting a final rule (final rule) to amend its international banking regulations consistent with section 939A (section 939A) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and the FDIC's authority under section 5(c) of the Federal Deposit Insurance Act (FDI Act). The final rule adopts without change the revisions and amendments that the FDIC proposed in a June 2016 notice of proposed rulemaking (NPR or proposed rule). These revisions and amendments include: Replacing references to credit ratings in the regulation's definition of investment grade with an alternative standard of creditworthiness; and making changes to the eligibility criteria for the types of assets that insured branches of foreign banks may pledge for the benefit of the FDIC.

DATES:

This rule is effective April 1, 2018.

FOR FURTHER INFORMATION CONTACT:

Eric Reither, Senior Capital Markets Specialist, Examination Support, Capital Markets Branch, Division of Risk Management Supervision, 202-898-3707, [email protected]; Galo Cevallos, Senior International Advisor, International Affairs Branch, Division of Insurance and Research, [email protected]; Catherine Topping, Counsel, [email protected]; Benjamin Klein, Counsel, [email protected], Bank Activities Unit, Supervision and Legislation Branch, Legal Division.

SUPPLEMENTARY INFORMATION:

I. Policy Objectives

The intent of the final rule is to conform Part 347 with section 939A's directive to reduce reliance on external credit ratings. By removing references to credit ratings in Part 347 and adopting an alternative standard of creditworthiness, the final rule encourages regular, in-depth analysis of the credit risks associated with specific types of securities held by foreign branches of state nonmember banks under subpart A of Part 347 (subpart A), or pledged for the benefit of the Deposit Insurance Fund (DIF) by the insured U.S. branches of foreign banks under subpart B of Part 347 (subpart B). The final rule supports these objectives by establishing an investment grade definition that is now applied in both subparts A and B.

The financial crisis in 2008 highlighted the importance of considering the liquidity of a security when assessing its overall risk. To address this concern, the revisions to the asset pledge requirement in subpart B include the application of a liquidity standard to the securities pledged to the FDIC by the insured U.S. branches of foreign banks, and applying a fair value discount to such pledged assets. These amendments support the objective of the asset pledge requirement, which is to ensure orderly asset liquidation at maximum value in the event such assets need to be liquidated to pay the insured deposits of the U.S. branch of the foreign bank.

II. Background

In the decades prior to the financial crisis in 2008, third party credit risk assessments by nationally recognized statistical ratings organizations (NRSROs) helped to provide transparency and efficiency to the securities markets. Their assessments of creditworthiness allowed originators and investors to more accurately and readily meet their risk tolerances and investment strategies. Many financial regulations used these external credit risk ratings to set limits on the activities of regulated entities in order to foster safe and sound investment practices. However, during the run-up to the crisis many regulated institutions overly relied on the credit risk assessments of NRSROs, often neglecting to conduct a thorough, independent credit risk analysis. At the same time, flaws in the NRSROs' rating methodologies and conflicts arising from their business model (including certain commercial relationships with the originators of securities and strong competition by NRSROs for market share), undermined the accuracy of the credit ratings for a number of asset classes. Consequently, many investors, including banking organizations, experienced significant losses on securities with ratings that implied credit losses would be very unlikely and minimal. This prompted Congress to enact section 939A of the Dodd-Frank Act,1 which directs each federal agency to review and modify regulations that reference credit ratings.

1 Public Law No. 111-203, section 939A, 124 Stat. 1376, 1887 (July 21, 2010).

Section 939A requires each federal agency to review its regulations that require the use of an assessment of creditworthiness of a security or money market instrument and any references to or requirements in such regulations regarding credit ratings. Each agency must modify its regulations identified in the review by removing references to, or requirements of reliance on, credit ratings and substituting appropriate standards of creditworthiness.

Subpart A of Part 347—Foreign Banking and Investment by Insured State Nonmember Banks

Subpart A of Part 347, 12 CFR 347.101 to 347.122, addresses the international banking and investment activities of state nonmember banks, including the establishment and operations of foreign branches and subsidiaries.2 In general, these regulations implement the FDIC's statutory authority under section 18(d)(2) of the FDI Act 3 regarding branches of insured state nonmember banks in foreign countries, and section 18(l) of the FDI Act 4 regarding insured state nonmember bank investments in foreign entities.

2 A state nonmember bank may establish a non-U.S. branch with the approval of the FDIC (12 U.S.C. 1828(d)(2)). National banks must gain the approval of the Board of Governors of the Federal Reserve System (“Federal Reserve”) to open a non-U.S. branch. These branches may engage in any activity that is permitted in the United States, as well as those that are usual in connection with the banking business in the foreign country where it is located. State member banks may establish foreign branches with the approval of the Federal Reserve. U.S. banking organizations may also conduct international banking activities through Edge and agreement corporations. 12 U.S.C. 611-631 (“Edge corporations”); 12 U.S.C. 601-604(a) (“agreement corporations”).

3 12 U.S.C. 1828(d)(2).

4 12 U.S.C. 1828(l).

In addition to their general banking powers, banks with foreign branches are permitted to conduct a broad range of investment activities, including investment services and underwriting of debt and equity securities.5 Under 12 CFR 347.115(b), a foreign branch of a bank may invest in, underwrite, distribute and deal, or trade foreign government obligations that have an investment grade rating, up to an aggregate limit of ten percent of the bank's Tier 1 capital, as calculated under the Basel III capital rules in 12 CFR part 324, subpart C.6 Section 347.102(o) currently defines investment grade to mean a security that is rated in one of the four highest categories by two or more NRSROs or one NRSRO if the security is rated by only one NRSRO.7

5 The limitations on international investments and the definition of permissible activities found in the FDIC's regulations in Part 347 are similar to, but not identical to, those found in Regulation K of the Federal Reserve.

6 12 CFR 324.20 through 324.22.

7 An NRSRO is an entity registered with the U.S. Securities and Exchange Commission as an NRSRO under section 15E of the Securities Exchange Act of 1934. See 15 U.S.C. 78o-7, as implemented by 17 CFR 240.17g-1.

Subpart B of Part 347—Foreign Banks

The regulations contained in subpart B of Part 347 primarily implement provisions of the FDI Act and the International Banking Act (IBA) 8 concerning insured and noninsured U.S. branches of foreign banks.9 Each foreign banking organization maintaining an insured branch must comply with specific FDIC asset maintenance 10 and asset pledge requirements under section 5(c) of the FDI Act. These requirements are separate and apart from other capital equivalency requirements of federal or state licensing authorities.11 The FDIC no longer insures the deposits accepted by branches of foreign banks, except for deposits made in branches of foreign banks that are insured by operation of the grandfathering provisions of the IBA, as amended by the Foreign Bank Supervision Enhancement Act of 1991 (FBSEA).12 The universe of these grandfathered branches is very limited. There are currently only ten insured U.S. branches of foreign banks in operation (four federal branches and six state branches). A foreign bank that has an insured branch must pledge assets for the benefit of the FDIC to protect the DIF in the event that the FDIC is obligated to pay the insured deposits of an insured branch under section 11(f) of the FDI Act.13 Section 347.209(d) provides a list of the types of assets that a foreign bank may pledge for the benefit of the FDIC. In describing certain asset types, 12 CFR 347.209(d) references credit ratings issued by a nationally recognized rating service in connection with a determination of the credit quality of the assets that a foreign bank may pledge. Specifically, in three instances in subpart B, the references are to the highest subset of rating bands within the investment grade categories established by the ratings agencies.

8 Public Law 95-369, 92 Stat. 607 (Sept. 17, 1978) (codified at 12 U.S.C. 3101 et seq.).

9 U.S. branches of foreign banks may be licensed by the Office of the Comptroller of the Currency (“OCC”) or by an individual state. The Federal Reserve is required to approve any new foreign bank branch. The Federal Reserve, among other things, is required to certify that the country from which the foreign bank is located subjects its banks, including the applicant, to comprehensive, consolidated supervision. 12 U.S.C. 3105(d).

10 The FDIC requires that an insured branch of a foreign bank maintain, on a daily basis, eligible U.S. dollar-denominated assets in an amount not less than 106% of the preceding quarter's average book value of the branch's liabilities excluding those due to other offices or wholly owned subsidiaries of the foreign bank. 12 CFR 347.210.

11 Although U.S. branches and agencies of foreign banks have no capital of their own, those that are federally licensed must deposit cash or eligible securities at approved insured banks to satisfy the “capital equivalency requirement” specified by the IBA. The amount of the deposit is required to be at least 5% of the total liabilities of the branch or agency office, or the capital that would be required if it were a freestanding national bank. 12 U.S.C. 3102(g)(2). The underlying purpose of the IBA provision is to ensure that branches and agencies of a foreign bank maintain a minimum level of unencumbered assets in the United States that would be available in a liquidation of the branch or agency. State-licensed branches and agencies also must meet capital equivalency requirements, which vary from state to state. See, e.g., N.Y. Banking Law 202-b.

12 Before FBSEA, a small number of foreign bank branches had obtained FDIC insurance under the provisions of the IBA and thus were permitted to accept retail deposits. These branches (insured branches) are “grandfathered”, i.e., they may continue to receive insured retail deposits pursuant to section 6(d)(2) of the IBA. 12 U.S.C. 3104(d)(2).

13 12 U.S.C. 1821(f).

III. Notice of Proposed Rulemaking

On June 28, 2016, the FDIC published the NPR in the Federal Register.14 The NPR proposed amending the provisions of subparts A and B of Part 347 that reference credit ratings. The NPR proposed amending subpart A, which sets forth the FDIC's requirements for insured state nonmember banks that operate foreign branches, by replacing references to credit ratings in the definition of investment grade with a standard for determining the creditworthiness of securities and other financial instruments that has been adopted in other federal regulations that conform to section 939A. The NPR proposed amending subpart B to revise the FDIC's asset pledge requirement for insured U.S. branches of foreign banks. The NPR proposed amending the eligibility criteria for the types of assets that foreign banks may pledge by replacing the references to credit ratings with the revised definition of investment grade. This investment grade standard would be applied to each type of pledgeable asset under the NPR, which also proposed a liquidity requirement for such assets, and proposed subjecting them to a fair value discount. The NPR also proposed introducing cash as a new asset type that foreign banks may pledge under subpart B, and proposed creating a separate asset category expressly for debt securities issued by government sponsored enterprises.

14 81 FR 41877 (June 28, 2016).

The FDIC sought comments on all aspects of the June 2016 NPR and received two comment letters, one from a foreign banking organization and one from a private individual. These comments were considered in developing this final rule. The comments are discussed in the relevant sections that follow.

IV. The Final Rule Part 347—International Banking Subpart A—Foreign Banking and Investment by Insured State Nonmember Banks Section 347.102 Definitions

The final rule amends the definition of investment grade in 12 CFR 347.102(o) by deleting the references to credit ratings and NRSROs. This final rule defines investment grade as a security whose issuer has adequate capacity to meet all financial commitments under the security for the projected life of the exposure. Such an entity has adequate capacity to meet financial commitments if the risk of its default is low, and the full and timely repayment of principal and interest is expected.

The FDIC sought comment on whether this proposed standard of creditworthiness addressed the FDIC's objective of applying a standard that is transparent, well defined, differentiates credit risk, and provides for the timely measurement of change to the credit profile of the investment. One commenter, while generally supportive of efforts to implement an alternative to credit ratings references, expressed concern that the standard was subjective, entity-specific and possibly arbitrary. The other commenter expressed a similar concern that the standard was general and would require subjective determinations. The commenter recommended that the FDIC provide a more straightforward and objective standard.

The FDIC believes that the revised standard provides a flexible, straightforward measure of creditworthiness that is consistent with existing policy. The revised definition achieves the dual goal of reducing reliance on credit ratings and encouraging regular, in-depth analysis of the credit risks associated with specific types of securities held by foreign branches of state nonmember banks under subpart A, or pledged for the benefit of the FDIC by the insured U.S. branches of foreign banks under subpart B. The revised definition of investment grade is also consistent with the definition of investment grade that was adopted by the FDIC, OCC, and Federal Reserve in the Basel III capital rules.15 This definition is also consistent with the non-ratings based creditworthiness standard applicable to permissible corporate debt securities investments of savings associations adopted by the FDIC in 12 CFR part 362 16 and the credit quality standards regarding permissible investments for national banks adopted by the OCC under 12 CFR parts 1, 16, and 160.17 In addition, it is consistent with the final rules adopted by the OCC that remove references to credit ratings from its regulations pertaining to foreign bank capital equivalency deposits for federal branches under 12 CFR 28.15.18 Achieving consistency with other creditworthiness standards adopted by the federal banking agencies advances section 939A's directive that agencies establish, to the extent feasible, uniform standards of creditworthiness. Based on these considerations, the FDIC is adopting as final the revisions in the proposed rule to the regulatory definition of investment grade.

15See 78 FR 62018 (Oct. 11, 2013) (Federal Reserve and OCC) (final rule); 78 FR 55340 (Sept. 10, 2013) (interim final rule) (FDIC); 79 FR 20754 (April 14, 2014) (final rule) (FDIC). In finalizing the Basel III capital rules, Federal Reserve and OCC issued a joint final rule, and the FDIC separately issued a substantively identical interim final rule, which was later made final without substantive changes.

16See Permissible Investments for Federal and State Savings Associations: Corporate Debt Securities, 77 FR 43151 (July 24, 2012).

17See Alternatives to the Use of External Credit Ratings in the Regulations of the OCC, 77 FR 35253 (June 13, 2012).

18 The OCC's regulations previously allowed for the use of certificates of deposit (“CDs”) or bankers' acceptances as part of the deposit if the issuer of the instrument was rated “investment grade” by an internationally recognized rating organization. Under the revised regulation, the issuer of the certificate of deposit or banker's acceptance must have “an adequate capacity to meet financial commitments under the security for the projected life of the asset or exposure.” See Alternatives to the Use of External Credit Ratings in the Regulations of the OCC, 77 FR 35253 (June 13, 2012).

Section 347.115 Permissible Activities for a Foreign Branch of an Insured State Nonmember Bank

Section 347.115 defines the particular activities that a foreign branch of an insured state nonmember bank may conduct. These activities are subject to safety and soundness limitations and are limited by the extent to which the activities are consistent with banking practices in the foreign country where the bank maintains a branch. The final rule, consistent with the NPR, retains the language of 12 CFR 347.115(b), but § 347.115(b) is affected by the final rule insofar as § 347.115(b) uses the adopted definition of the term investment grade in 12 CFR 347.102(o). Subject to certain limitations and restrictions, § 347.115(b) permits a state nonmember bank's foreign branches to underwrite, distribute and deal, invest in, or trade investment grade obligations of any foreign country, its political subdivisions, and certain of its agencies and instrumentalities.19 This authority is generally consistent with the provisions of the Federal Reserve's Regulation K, which governs the international operations of foreign branches of member banks.20

19 The definition of “investment grade” for obligations of governments other than the host government was adopted in 2005 when the FDIC amended its international banking regulations, Part 347. 70 FR 17550 (April 6, 2005).

20 Under the Regulation K, a foreign branch of a member bank may underwrite, distribute, buy, sell, and hold certain government debt obligations only if such obligations are rated investment grade. See 12 CFR 211.4(a)(2)(i)(C)-(D). The Federal Reserve adopted the definition of investment grade in its revisions to Regulation K in 2001. The investment grade rating requirement for obligations of governments other than the host government was considered appropriate because it limited cross-border transfer risk. 66 FR 54346 (Oct. 26, 2001).

The regulatory definition of investment grade adopted in the final rule will remove references to credit ratings consistent with section 939A but will not affect the general consistency between the Federal Reserve's Regulation K and the FDIC's Part 347 with regard to permissible activities. For purposes of the final rule, an issuer would satisfy this new standard if the state nonmember bank appropriately determines that the obligor presents low default risk and is expected to make timely payments of principal and interest. The definition addresses the safety and soundness concerns of this activity of foreign branches—namely the exposure of the foreign branch and the DIF to the entity issuing the security—without reference to a credit rating or an NRSRO. As noted above, the FDIC believes that the finalized standard will encourage state nonmember banks to conduct regular, in-depth analysis of the credit risks associated with specific types of securities held by their foreign branches.

Part 347—International Banking Subpart B—Foreign Banks Section 347.209 Pledge of Assets

12 CFR 347.209 establishes the asset pledge requirement for insured U.S. branches of foreign banks. The amount that each foreign bank must pledge is determined by the supervisory risk posed by each U.S. branch and the U.S. branch's asset maintenance level.21 The amount of assets that a U.S. branch of a foreign bank must pledge varies from two percent to eight percent of the branch's liabilities and is determined by reference to the risk-based assessment schedule provided in 12 CFR 347.209(b)(1).22

21 12 CFR 347.209(b). Generally, an insured branch must maintain a level of assets that exceeds 106 percent of its liabilities. 12 CFR 347.210.

22 The pledged assets must be placed at a depository approved by the FDIC. Generally, each insured branch of the foreign bank must meet the asset pledge requirement separately; however, a foreign bank with more than one insured branch in any state may treat all of its insured branches in the state as one entity for purposes of complying with this requirement. See 12 CFR 347.209(b)(5).

The current FDIC rules in 12 CFR 347.209(d) require that certain asset types have credit ratings within the top rating bands of an NRSRO. Under the existing rule, commercial paper may be eligible for pledging purposes if it is rated P-1 or P-2, or their equivalent, by an NRSRO.23 Municipal general obligations are eligible if they have a credit rating within the top two rating bands of a NRSRO. Notes issued by bank and thrift holding companies, banks, or savings associations must also be rated within the top two rating bands of an NRSRO in order to be eligible. These references to the highest subset of rating bands within the investment grade categories established by the ratings agencies impose a higher credit standard than investment grade. The other types of eligible assets in the existing rules include: Bank CDs with maturities of not greater than one year; Treasury bills, interest bearing bonds, notes, debentures, or other direct obligations of or fully guaranteed by the United States or any agency thereof; banker's acceptances with a maturity not greater than 180 days; and obligations of certain international development banks.24

23 P-1 and P-2 are Moody's top two rating bands for short-term obligations.

24See 12 CFR 347.209(d)(1), (2), (5), and (6).

The final rule removes the references to credit ratings issued by NRSROs in 12 CFR 347.209(d) and substitutes an investment grade standard to ensure the assets have appropriate credit quality. As proposed in the NPR, the final rule also permits only highly liquid assets to be pledged, and submits these instruments to fair value haircuts. The revised credit and liquidity standards and the comments addressing these standards are discussed below.

Credit and Liquidity Standards

Under this final rule, instruments falling within the relevant asset categories are eligible for pledging if they are investment grade. Consistent with this final rule's amendment to subpart A of Part 347, the final rule adds the same definition of investment grade to the definitions section of subpart B, 12 CFR 347.202, to define investment grade as a security issued by an entity that has adequate capacity to meet financial commitments under the security for the projected life of the exposure. To meet this standard, the insured branch of the foreign bank needs to determine that the risk of default by the obligor is low, and that full and timely repayment of principal and interest is expected. As noted earlier, this investment grade standard is consistent with other regulations amended pursuant to section 939A.

As proposed in the NPR, this final rule also provides that instruments falling within the relevant asset categories are eligible for pledging only if they are highly liquid. Highly liquid securities are those that:

• Exhibit low credit and market risk;

• are traded in an active secondary two-way market that has committed market makers and independent bona fide offers to buy and sell so that a price reasonably related to the last sales price or current bona fide competitive bid and offer quotations can be determined within one day and settled at that price within a reasonable time period conforming with trade custom; and

• are a type of asset that investors historically have purchased in periods of financial market distress during which market liquidity has been impaired.25

25 The definition of a highly liquid asset is consistent with the definition established in 12 CFR part 252, subpart O Enhanced Prudential Standards for Foreign Banking Organizations (The Federal Reserve's Regulation YY).

The final rule requires a foreign bank to demonstrate that the instrument meets the highly liquid standard.

The FDIC sought comment on whether the proposed investment grade and liquidity standards for pledged assets under subpart B of Part 347 are reasonable provisions and whether the removal of references to external credit ratings should be implemented as proposed or whether there are alternatives that would achieve a creditworthiness standard that is sufficiently risk sensitive. One commenter expressed concern that the proposed investment grade and liquidity requirements will significantly increase the operational burden on the branch. This commenter expressed concern that the new standards contained in the definitions of investment grade and highly liquid are general and will require subjective determinations. The commenter also expressed the opinion that the highly liquid standard is not required under Section 939A. The commenter further noted that the introduction of this new standard is not necessary to protect the DIF against losses. This commenter contended that the types of pledgeable assets, coupled with the investment grade requirement, would provide adequate assurance that pledged assets are sufficiently low risk and liquid.

The proposed amendments in Subpart A address the permissible international banking and investment activities of state nonmember banks. Subpart A differs in scope and purpose from subpart B, which establishes asset maintenance and pledge requirements for insured U.S. branches of foreign banks. The asset pledge requirements exist to protect the DIF by ensuring orderly asset liquidations at maximum values in the event such assets are liquidated to pay the insured deposits of the U.S. branch of the foreign bank.

Although requiring foreign banks to verify that pledged assets satisfy the proposed standards may require some initial adjustment of existing processes, the FDIC believes that it would impose minimal additional burden. The final rule adopts standards of investment grade and highly liquid assets that are already in use in other banking regulations. In addition, insured U.S. branches of foreign banks are currently expected to conduct due diligence to meet applicable standards of safety and soundness in connection with their investment activities without sole reliance on NRSRO ratings as a measure of creditworthiness. Furthermore, market data should already be accessible through an insured branch's normal data source channels, and should be used in pre-purchase and ongoing investment due diligence. Therefore, the FDIC does not believe that the final rule will significantly increase the operational burden on insured branches of foreign banks.

Existing 12 CFR 347.209(d) includes creditworthiness standards that exceed investment grade. That is, with some pledgeable asset types only the top two letter ratings (e.g., AAA, AA) within the investment grade band would be acceptable. The highly liquid standard in the final rule is necessary, in part, to ensure that the elevated quality of the pledged assets established under the current standard continues. Furthermore, complementing the investment grade requirement with the highly liquid requirement will ensure that the pledged assets can be readily converted to cash with little impact on their values.

The FDIC believes that adopting the investment grade and highly liquid criteria, in conjunction with the fair value discount, helps ensure that pledged assets continue to support orderly asset liquidation at maximum value in the event such assets need to be liquidated to pay the insured deposits of the U.S. branch of the foreign bank. Based on these considerations, the FDIC is adopting as final the revisions in the proposed rule related to the definition of investment grade and the highly liquid requirement.

Fair Value Discount

As proposed in the NPR, the final rule requires that the fair values of the investment grade and highly liquid pledged assets be discounted to reflect the credit risk and market price volatility of such assets. Under the final rule, the discounted fair value of the assets determines the pledged dollar amount. The FDIC expects that the valuations of the pledged assets be updated at least quarterly. Further, the final rule adopts a standardized haircut table, consistent with the Basel III capital rules, to promote simplicity and ease of reference.26 Under this approach, the applicable haircut is determined by reference to the asset's risk-weight and remaining maturity.27 For example, a foreign insured branch may elect to pledge investment grade commercial paper with a fair value of $100,000 and remaining maturity of less than one year. These instruments are risk-weighted at 100 percent under the Basel III capital rules. Under the reference table, the corresponding haircut is 4 percent; therefore, the amount of the $100,000 asset that counts towards the satisfaction of the asset pledge requirement is arrived at by multiplying $100,000 by 0.96 (1−0.04), which equals $96,000. Consistent with the haircut requirements in the risk-based capital rules, pledged assets that receive a zero percent risk weight do not receive a fair value haircut.28

26 In 12 CFR 324.37(c)(3), the FDIC established requirements for applying standardized haircuts for market price volatility which are scheduled on Table 1 to § 324.37—Standard Supervisory Market Price Volatility Haircuts (Table 1). A portion of Table 1 concerning haircuts for non-sovereign issuers serves as the basis for the reference table included in the proposed rule.

27See 12 CFR 324.32 for general risk weights.

28 Assets with zero percent risk weight include cash; Treasury bills, interest bearing bonds, notes, debentures, or other direct obligations of or obligations fully guaranteed as to principal and interest by the United States or any agency thereof; and obligations of the African Development Bank, Asian Development Bank, Inter-American Development Bank, and the International Bank for Reconstruction and Development.

The FDIC solicited comment on whether pledged assets should be discounted as proposed, or whether the full fair value of assets pledged under the existing risk-based assessment schedule already provide sufficient protection to the DIF. In addition, the FDIC sought comment on whether another method of discounting would advance the objective of ensuring that pledged assets be as free from risk and as liquid as possible. One commenter indicated that the fair value discount is burdensome and suggested that the full fair value be permitted to be pledged, contending that the benefit to the DIF of the discount requirement would likely be minimal. The commenter further cited operational burden concerns with implementing the quarterly valuation calculation. The commenter also contended that, based on its tentative calculations, the fair value discount requirement would require it to pledge a considerable amount of additional eligible assets, resulting in increased costs.

The FDIC believes the fair value haircut provides an appropriate methodology for discounting fair values which is consistent with the haircuts applied to financial collateral pledged to certain transactions under the Basel III capital rules as adopted by the FDIC.29 Further, the FDIC believes the expectation of quarterly updates to valuation of the pledged assets is reasonable given that quarterly valuations are currently required in the pledge agreement between each of the foreign banks and the FDIC. Moreover, the FDIC believes that applying the fair value discount results in minimal burden because the calculation of the applicable fair value discount is based on the risk weight of the applicable asset under the Basel III capital rules, which is an analysis that should already be undertaken by these institutions. Lastly, the FDIC recognized in the NPR that the haircut provision could impact foreign banks that pledge bank notes or CDs because they may need to pledge additional collateral under the proposed rule compared with the pledge requirements under the existing rule. However, the FDIC expects any additional collateral required as a result of the haircut provision to be minimal.

29 FDIC-supervised institutions may use the risk-mitigating effects of financial collateral, subject to a market price volatility haircut, in determining the exposure amount of such transactions for risk-weighting purposes. See 79 FR 20760 (April 14, 2014).

Based on these and other considerations, the FDIC is adopting as final the discount methodology in the proposed rule.

Assets That May Be Pledged

As proposed in the NPR, the final rule also amends 12 CFR 347.209(d) by adding cash as a new asset type that foreign banks may pledge under subpart B, and by creating a separate asset category expressly for debt securities issued by government sponsored enterprises (GSEs). Cash and securities issued by GSEs are included in the definition of highly liquid assets in the Federal Reserve's regulation prescribing enhanced prudential standards for foreign banking organizations.30 The FDIC also understands that some insured branches of foreign banks currently pledge GSE debt securities under 12 CFR 347.209(d)(2) because they qualify as obligations of a U.S. government instrumentality. The Basel III capital rules recognize that the risk characteristics of GSE securities differ from those guaranteed by the U.S. government. The capital rules bear this out by assigning the former a twenty percent risk weight and the latter a zero percent risk weight.31 Therefore, the final rule eliminates the reference to obligations of U.S. instrumentalities in 12 CFR 347.209(d)(2), and creates a separate category expressly for GSE securities. Creating a separate category for GSE securities is necessary because such securities are subject to a haircut under the final rule to account for their twenty percent risk weight under the Basel III capital rules, whereas securities guaranteed by the U.S. government are not subject to a haircut given their zero percent risk weight.

30 12 CFR part 252 subpart O.

31 12 CFR 324.32(a) and (c).

Pursuant to subpart B, all assets pledged, including cash, are required to be subject to the terms of a pledge agreement executed by the pledging foreign bank and the depository.32 Subpart B requires that the pledge agreement's terms include a requirement that pledged assets be placed with a depository for safekeeping.33 Subpart B also requires that the pledged assets be designated as assets subject to the pledge agreement.34 In addition, the assets must be held separately from the assets of the foreign bank or depository, and must at all times be segregated on the records of the depository and clearly identified as assets subject to the pledge agreement.35 Subpart B requires that a foreign bank obtain the FDIC's prior written approval of the depository selected.36

32 12 CFR 347.209(e)(5)(i). FDIC staff is reviewing executed pledge agreements in order to determine what revisions, if any, will be necessary in light of the final rule's revisions to Part 347.

33 12 CFR 347.209(c).

34 12 CFR 347.209(e)(5)(ii).

35Id.

36 12 CFR 347.209(c)

The FDIC solicited comment on whether the types of assets that may be pledged should be expanded to include cash as proposed. One commenter expressed support for the addition of cash as a new eligible asset type. The commenter also sought clarification as to whether an insured branch would be permitted to receive interest on any such pledged cash. While subpart B generally authorizes insured branches to retain interest earned on pledged assets,37 the operation of subpart B's segregation and safekeeping requirements as applied to pledged cash would preclude the payment of interest on such cash. Most importantly, in order for pledged cash to be deemed held for safekeeping and segregated in accordance with subpart B's requirements, such cash must be held separate from the general funds of the bank and may not be commingled with any cash or other property of the depository. Accordingly, such cash may not be loaned, invested, used in operations, or used for any other purpose by the depository. Because, generally, interest is paid for the use of cash, if the depository complies with the safekeeping and segregation requirement, it cannot use the cash and, thus, there would be no basis for the payment of interest. In the event that the FDIC is appointed receiver of the depository, cash pledged and held for the purposes of, and in accordance with, the requirements of subpart B, would not be treated as property of the depository receivership.

37 12 CFR 347.209(e)(10). A foreign bank may retain interest earned on pledged assets unless the FDIC by written notice prohibits such retention.

The FDIC views the amendments to the pledgeable asset criteria as consistent with other rulemakings, and as resulting in minimal impact on the insured U.S. branches of foreign banks.

Based on these, and other, considerations, the final rule adopts the pledgeable asset categories as proposed in the NPR. Accordingly, a foreign bank may pledge the assets listed below, provided that such assets are denominated in United States dollars, and satisfy both the investment grade and highly liquid standards. Further, such assets must be discounted at the rates set forth in the haircut table.

The revised pledgeable asset categories are as follows:

(1) Cash;

(2) Treasury bills, interest bearing bonds, notes, debentures, or other direct obligations of or obligations fully guaranteed as to principal and interest by the United States or any agency thereof;

(3) Obligations of U.S. GSEs;

(4) Negotiable CDs that are payable in the United States and that are issued by any state bank, national bank, state or federal savings association, or branch or agency of a foreign bank which has executed a valid waiver of offset agreement or similar debt instruments that are payable in the United States; provided, that the maturity of any certificate or issuance is not greater than one year; and provided further, that the issuing branch or agency of a foreign bank is not an affiliate of the pledging bank or from the same country as the pledging bank's domicile;

(5) Obligations of the African Development Bank, Asian Development Bank, Inter-American Development Bank, and the International Bank for Reconstruction and Development;

(6) Commercial paper;

(7) Notes issued by bank and savings and loan holding companies, banks, or savings associations organized under the laws of the United States or any state thereof or notes issued by branches or agencies of foreign banks, provided that the notes are payable in the United States, and provided further, that the issuing branch or agency of a foreign bank is not an affiliate of the pledging bank or from the same country as the pledging bank's domicile;

(8) Banker's acceptances that are payable in the United States and that are issued by any state bank, national bank, state or federal savings association, or branch or agency of a foreign bank; provided, that the maturity of any acceptance is not greater than 180 days; and provided further, that the branch or agency issuing the acceptance is not an affiliate of the pledging bank or from the same country as the pledging bank's domicile;

(9) General obligations of any state of the United States, or any county or municipality of any state of the United States, or any agency, instrumentality, or political subdivision of the foregoing or any obligation guaranteed by a state of the United States or any county or municipality of any state of the United States; and

(10) Any other asset determined by the FDIC to be acceptable.38

38 The FDIC also reserves the right to require the substitution of pledged assets with other assets deemed more acceptable to the FDIC, as currently provided in 12 CFR 347.209(d).

Cash, treasury bills or other direct obligations of or fully guaranteed by the United States or any agency thereof, and the obligations of the stated international development banks will categorically satisfy the investment grade and highly liquid standards discussed above.39 Therefore, foreign banks that pledge these assets will not be required to perform individual analyses to verify that the assets meet the investment grade and highly liquid standards. Pledgeable assets that receive a zero percent risk weight will generally not require a fair value haircut.

39 A direct debt obligation issued by a U.S. government-sponsored enterprise or an asset-backed security guaranteed by a U.S. GSE will categorically satisfy the investment grade standard only if the GSE is operating with capital support or another form of direct financial assistance from the U.S. government. All GSEs will categorically satisfy the liquidity standard.

Foreign banks pledging assets that do not categorically satisfy the investment grade and highly liquid standards will need to demonstrate that the assets being pledged meet the investment grade and highly liquid standards. Foreign banks can find the appropriate haircut by identifying the risk weight associated with the asset in the capital rules.

Other Technical Revisions

As proposed in the NPR, the final rule adds a definition of agency to the definitions section of subpart B, 12 CFR 347.202, which already contains a definition of branch under the existing regulation, in order to clarify that negotiable CDs, banker's acceptances, and notes issued by a branch or agency of a foreign bank located only in the United States are eligible for pledging. The definition was not previously in subpart B. The term agency is used in 12 CFR 347.209(d)(1), (d)(4), and (d)(7) to describe the types of bank CDs, banker's acceptances, and notes issued by a branch or agency of a foreign bank that are eligible for pledging by a U.S. branch of a foreign bank. The final rule incorporates the definition of agency found in section 1(b)(1) of the IBA, which defines agency to mean “any office or any place of business of a foreign bank located in any State of the United States at which credit balances are maintained incidental to or arising out of the exercise of banking powers, checks are paid, or money is lent but at which deposits may not be accepted from citizens or residents of the United States.” 40 This definition makes clear that only negotiable CDs, banker's acceptances, or notes issued by an agency of a foreign bank located in the United States are eligible pledged assets. The FDIC does not allow for the pledging of these instruments unless they are issued by an agency of a foreign bank located in the United States. It is also consistent with the definition of branch in subpart B, which means any office or place of business of a foreign bank located in any state of the United States.41 The final rule also amends 12 CFR 347.209(d)(7) by removing the reference to United States in the description of branches or agencies of foreign banks because those terms as defined in existing subpart B necessarily mean an office or place of business of a foreign bank located in the United States. Furthermore, as proposed, the final rule amends 12 CFR 347.209(d)(7) to clarify that, consistent with requirements associated with pledging CDs and banker's acceptances in paragraphs (d)(1) and (d)(4), a pledging U.S. branch of a foreign bank may not pledge a note issued by a branch or agency of a foreign bank that has the same country of domicile as the pledging bank. This requirement avoids potential same-country risks represented by the branches and agencies as direct extensions of foreign banks.

40 12 U.S.C. 3101(1). The proposed definition is also consistent with the definition of agency in the Federal Reserve's and OCC's international banking regulations. See 12 CFR 211.21(b) (Federal Reserve) and 12 CFR 28.11(g) (OCC).

41 12 CFR 347.202(b).

One commenter expressed concern with the proposal to amend 12 CFR 347.209(d)(7) to clarify that a pledging U.S. branch of a foreign bank may not pledge a note issued by a branch or agency of a foreign bank that has the same country of domicile as the pledging bank. In particular, the commenter contended that in some instances the same-country risk would be very low in certain jurisdictions and recommended the implementation of an objective standard when evaluating same-country risks given that the risk profiles of different countries can vary significantly. The FDIC believes the requirement as proposed is an important safeguard against potential same-country risks represented by issuing branches and agencies as direct extensions of foreign banks. The requirement as proposed is also consistent with the existing requirements for pledging CDs and banker's acceptances under 12 CFR 347.209(d)(1) and (d)(4). The FDIC is adopting the proposed requirement related to this and all other proposed technical revisions as final.

As proposed in the NPR, the final rule amends the list of eligible collateral to eliminate the obsolete exception for non-negotiable CDs that were pledged as collateral to the FDIC on March 18, 2005, until maturity according to the original terms of the existing deposit agreement. The maturity date for any non-negotiable CD that was grandfathered under this provision has passed. Consequently, the provision by its terms is obsolete and no longer serves a useful purpose.

V. Expected Effects a. Subpart A

The applicability of the revision to subpart A of Part 347 in the final rule is limited to state nonmember banks that operate branches in foreign countries. As of June 30, 2017, there were seven state nonmember banks operating 13 foreign branches in six countries. All but one of the state nonmember banks with foreign branches are large, multi-billion dollar financial institutions with commensurate systems and capabilities. The revision to subpart A will therefore apply to a small number of mostly larger state nonmember banks with more sophisticated operations, and the effect of the revision to the definition of investment grade is expected to impose negligible additional burden relative to the size and capabilities of these banks. The FDIC also notes that prior to the enactment of the Dodd-Frank Act and implementation of section 939A, state nonmember banks were expected to have a credit risk management framework for securities and investments that included robust pre-purchase analysis and ongoing monitoring by the banking organization. The revision to the definition of investment grade in Part 347 will encourage regular, in-depth analysis by the banking organization of credit risks of securities, which is a prudent practice already expected of banks. This will likely result in little or no additional costs associated with credit risk analysis over those currently expended. However, potential credit losses will likely decline as covered institutions are more diligent in assessing their credit risk exposure, which would provide a benefit.

b. Subpart B

The revisions to subpart B of Part 347 in the final rule will apply only to the insured U.S. branches of foreign banks. As of June 30, 2017, there were ten insured branches of foreign banks. The FDIC expects the revisions to subpart B to have the effect of ensuring that collateral pledged by these institutions is very low risk and as liquid as possible in order to provide protection to the DIF. For purposes of carrying out the section 939A review related to subpart B, the FDIC surveyed the insured U.S. branches of foreign banks to examine the composition of assets pledged. At the time of the review, treasury bills, bank notes, and CDs were the primary instruments pledged. Consequently, the haircut provision could impact foreign banks that choose to continue pledging a predominance of bank notes or CDs, as this may require pledging some measure of additional collateral under the proposed rule compared with the pledge requirements under the existing rule. Additionally, the final rule may alter to some extent the nature of the recordkeeping and reporting requirements associated with subpart B. Information developed through prudent investment practices will need to evidence satisfaction of the new standards. That information will be retained for supervisory review, but additional time should be negligible. Therefore, the FDIC views the proposed amendments to the pledgeable asset criteria as resulting in minimal impact on the insured U.S. branches of foreign banks.

VI. Alternatives Considered

Section 939A requires that agencies adopt standards of creditworthiness that, to the extent feasible, are uniform. The adoption of an alternative definition of investment grade would be inconsistent with section 939A's directive to adopt uniform standards.

In addition to adopting the definition of investment grade, the final rule, consistent with the proposed rule, amends subpart B of Part 347 to impose liquidity and discounting requirements for assets pledged by insured branches of foreign banks operating in the United States. Alternatives to the proposed definition of highly liquid would contradict the definition of highly liquid assets as adopted in other Dodd-Frank Act rulemakings, thereby creating different treatment of the same securities. Similarly, the calculation of fair value discounts for pledged assets is based on the risk weights assigned to such assets in the capital rules. The FDIC did not receive any comments with specific recommendations for alternatives.

VII. Effective Date

The Administrative Procedure Act (APA) generally requires that a final rule be published in the Federal Register no less than 30 days before its effective date.42 Section 302 of Riegle Community Development and Regulatory Improvement Act (RCDRIA) 43  generally requires that regulations prescribed by Federal banking agencies which impose additional reporting, disclosures or other new requirements on insured depository institutions take effect on the first day of a calendar quarter which begins on or after the date on which the regulations are published in final form unless an agency finds good cause that the regulations should become effective sooner. The effective date of the Rule is April 1, 2018, which is the first day of the calendar quarter which begins on or after the date on which the regulations are published in final form, as required by RCDRIA. 12 CFR 347.209(b) requires that a foreign bank with an insured branch pledge assets equal to the appropriate percentage of the insured branch's average liabilities for the last 30 days of the most recent calendar quarter. The FDIC expects foreign banks with insured branches to comply with Part 347 Subpart B's asset pledge requirements, as amended by the final rule, beginning in the calendar quarter commencing on April 1, 2018. This provides foreign banks and their insured branches with adequate time to transition to Subpart B's amended asset pledge requirements.

42 5 U.S.C. 553(d).

43 12 U.S.C. 4802.

VIII. Regulatory Analyses Paperwork Reduction Act

In accordance with the requirements of the Paperwork Reduction Act of 1995 (PRA) 44 the FDIC may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The collection of information associated with subpart A is entitled Foreign Banking and Investment by Insured State Nonmember Banks (OMB No. 3064-0125). This information collection consists of applications related to establishing and closing a foreign branch; applications related to acquiring stock of a foreign organization; and records and reports which a nonmember bank must maintain once it has established a foreign branch or foreign organization. As described above, the final rule's revision to subpart A consists of a change to the definition of investment grade and imposes no additional recordkeeping or reporting burden on insured state nonmember banks. Therefore, the FDIC expects that the PRA burden estimates of this collection will not be affected by this final rule. Accordingly, the FDIC will not be submitting any information collection request to OMB relating to the information collection associated with subpart A (OMB 3064-0125).

44 44 U.S.C. 3501 et seq.

The collection of information associated with subpart B is entitled Foreign Banks (OMB No. 3064-0114). This information collection consists of, among other things, internal recordkeeping by insured branches of foreign banks, and reporting requirements related to an insured branch's pledge of assets to the FDIC. Under the final rule, all assets pledged to the FDIC under subpart B must be investment grade, highly liquid, and subject to a fair value discount. Several types of assets pledged by banks under subpart B would be categorically investment grade and highly liquid, and subject to a zero percent discount under the final rule. Insured branches of foreign banks will be able to continue to pledge these assets without any adjustment to their reporting and recordkeeping requirements. To the extent that an insured branch of a foreign bank pledges an asset that would not be categorically investment grade, highly liquid, or that would not receive a zero percent discount, the FDIC expects minimal additional burden to accompany such a pledge of assets. Recordkeeping associated with the diligence that will be required for determining that an asset is highly liquid and investment grade is already expected of these institutions as part of their pre-purchase and ongoing investment due diligence. Similarly, the calculation of the applicable fair value discount is based on the risk weight of the applicable asset under the Basel III capital rules, which is an analysis that should already be undertaken by these institutions. Therefore, the FDIC expects that any resulting changes in burden will be so minimal that they will not alter the existing PRA burden estimates of this collection. Notwithstanding the fact that the FDIC does not expect a change in burden, the final rule may alter to some extent the nature of the recordkeeping requirements associated with subpart B. Accordingly, the FDIC will be submitting an information collection request to OMB relating to the information collection associated with subpart B (OMB 3064-0114). The existing burden estimates for the information collection associated with subpart B are as follows:

Title Times/year Respondents
  • per year
  • Hours per
  • response
  • Total
  • burden
  • hours
  • Moving a branch 1 1 8 8 Consent to operate 1 1 8 8 Conduct activities 1 1 8 8 Recordkeeping 1 10 120 1,200 Pledge of assets: documents 4 10 0.25 10 reports 4 10 2 80 Total Burden 1,314

    The FDIC has a continuing interest in the public's opinions of our existing information collections. At any time, comments are invited on:

    • Whether the collections of information are necessary for the proper performance of the Agencies' functions, including whether the information has practical utility;

    • The accuracy of the estimates of the burden of the information collections, including the validity of the methodology and assumptions used;

    • Ways to enhance the quality, utility, and clarity of the information to be collected;

    • Ways to minimize the burden of the information collections on respondents, including through the use of automated collection techniques or other forms of information technology; and

    • Estimates of capital or startup costs and costs of operation, maintenance, and purchase of services to provide information.

    All comments will become a matter of public record. A copy of the comments may also be submitted to the OMB desk officer for the FDIC by mail to U.S. Office of Management and Budget, 725 17th Street NW, #10235, Washington, DC 20503, by facsimile to 202-395-5806, or by email to [email protected], Attention, Federal Banking Agency Desk Officer.

    Regulatory Flexibility Act Analysis

    The Regulatory Flexibility Act (RFA) generally requires that, in connection with a notice of final rulemaking, an agency prepare a Final Regulatory Flexibility Act analysis describing the impact of the rule on small entities (defined in regulations promulgated by the Small Business Administration to include banking organizations with total assets of less than or equal to $550 million). A Final Regulatory Flexibility Act analysis, however, is not required if the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities, and publishes its certification and a short explanatory statement in the Federal Register together with the final rule. For the reasons provided below, the FDIC certifies that the final rule will not have a significant economic impact on a substantial number of small entities.

    The final rule makes revisions to the existing rules in subpart A of Part 347 consistent with section 939A of the Dodd-Frank Act.45 The rules in subpart A of Part 347 address issues related to the international activities and investments of insured state nonmember banks. In general, they implement the FDIC's statutory authority under section 18(d)(2) of the FDI Act regarding branches of insured state nonmember banks in foreign countries, and section 18(l) of the FDI Act regarding insured state nonmember bank investments in foreign entities. As of June 30, 2017, there were seven state nonmember banks with 13 foreign branches. Available information indicates that state nonmember banks with foreign investments or foreign branches are not small entities.

    45 Subpart J of part 303 contains the procedural rules that implement Part 347. No revisions are proposed to these rules.

    The final rule also amends subpart B of Part 347 as applied to insured U.S. branches of foreign banks. As of September 30, 2016, there were ten insured branches of foreign banks, only one of which qualifies as a small entity. Therefore, the revisions to subpart B of Part 347 will not have a significant impact on a substantial number of small entities.

    Small Business Regulatory Enforcement Fairness Act

    The OMB has determined that the final rule is not a major rule within the meaning of the relevant sections of the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).46 As required by SBREFA, the FDIC will submit the final rule and other appropriate reports to Congress and the Government Accountability Office for review.

    46 5 U.S.C. 801, et seq.

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

    The FDIC has determined that this final rule will not affect family well-being within the meaning of section 654 of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999.47

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

    Plain Language

    Section 722 of the Gramm-Leach-Bliley Act requires the FDIC to use plain language in all proposed and final rules published after January 1, 2000. The FDIC sought to present the final rule in a simple and straightforward manner. The FDIC did not receive any comment on its use of plain language.

    List of Subjects in 12 CFR Part 347

    Bank deposit insurance, Banks, Banking, Foreign banking, Investments, Insured foreign branches, Reporting and recordkeeping requirements, United States investments abroad.

    Authority and Issuance

    For the reasons stated in the preamble, the Federal Deposit Insurance Corporation amends part 347 of chapter III of Title 12, Code of Federal Regulations as follows:

    PART 347—INTERNATIONAL BANKING 1. The authority citation for part 347 is revised to read as follows: Authority:

    12 U.S.C. 1813, 1815, 1817, 1819, 1820, 1828, 3103, 3104, 3105, 3108, 3109; Pub L. No. 111-203, section 939A, 124 Stat. 1376, 1887 (July 21, 2010) (codified 15 U.S.C. 78o-7 note).

    2. In § 347.102, paragraph (o) is revised to read as follows:
    § 347.102 Definitions.

    (o) Investment grade means a security issued by an entity that has adequate capacity to meet financial commitments for the projected life of the exposure. Such an entity has adequate capacity to meet financial commitments if the risk of its default is low and the full and timely repayment of principal and interest is expected.

    3. In § 347.202, paragraphs (p) through (y) are redesignated as paragraphs (s) through (bb); paragraphs (k) through (o) are redesignated as paragraphs (m) through (q); paragraphs (b) through (j) are redesignated as paragraphs (c) through (k); and new paragraphs (b), (l), and (r) are added to read as follows:
    § 347.202 Definitions.

    (b) Agency means any office or any place of business of a foreign bank located in any State of the United States at which credit balances are maintained incidental to or arising out of the exercise of banking powers, checks are paid, or money is lent but at which deposits may not be accepted from citizens or residents of the United States.

    (l) Highly liquid means, with respect to a security, that the security has low credit and market risk; is traded in an active secondary two-way market that has committed market makers and independent bona fide offers to buy and sell so that a price reasonably related to the last sales price or current bona fide competitive bid and offer quotations can be determined within one day and settled at that price within a reasonable time period conforming with trade custom; is a type of asset that investors historically have purchased in periods of financial market distress during which market liquidity has been impaired.

    (r) Investment grade means a security issued by an entity that has adequate capacity to meet financial commitments for the projected life of the exposure. Such an entity has adequate capacity to meet financial commitments if the risk of its default is low and the full and timely repayment of principal and interest is expected.

    4. In § 347.209, paragraph (d) is revised and Table 1 is added to the end of the section to read as follows:
    § 347.209 Pledge of assets.

    (d) Assets that may be pledged. (1) This paragraph sets forth the kinds of assets that may be pledged to satisfy the requirements of this section. A foreign bank shall be deemed to have pledged any such assets for the benefit of the FDIC or its designee at such time as any such asset is placed with the depository. The FDIC reserves the right to require the substitution of pledged assets with other assets deemed acceptable to the FDIC.

    (2) A foreign bank may pledge the kinds of assets set forth in this paragraph (d)(2), provided that: Such assets are denominated in United States dollars; such assets are investment grade, as that term is defined in § 347.202(r); and such assets are highly liquid, as that term is defined in § 347.202(l). Furthermore, for the purposes of calculating the amount of assets required to be pledged under paragraph (b) of this section, the assets that are eligible for pledging under this paragraph (d)(2) must be discounted at the rates set forth in Table 1 to § 347.209.

    (i) Cash;

    (ii) Treasury bills, interest bearing bonds, notes, debentures, or other direct obligations of or obligations fully guaranteed as to principal and interest by the United States or any agency thereof;

    (iii) Obligations of United States government-sponsored enterprises;

    (iv) Negotiable certificates of deposit that are payable in the United States and that are issued by any state bank, national bank, state or federal savings association, or branch of a foreign bank which has executed a valid waiver of offset agreement or similar debt instruments that are payable in the United States and that are issued by any agency of a foreign bank which has executed a valid waiver of offset agreement; provided, that the maturity of any certificate or issuance is not greater than one year; and provided further, that the issuing branch or agency of a foreign bank is not an affiliate of the pledging bank or from the same country as the pledging bank's domicile;

    (v) Obligations of the African Development Bank, Asian Development Bank, Inter-American Development Bank, and the International Bank for Reconstruction and Development;

    (vi) Commercial paper;

    (vii) Notes issued by bank and savings and loan holding companies, banks, or savings associations organized under the laws of the United States or any state thereof or notes issued by branches or agencies of foreign banks, provided that the notes are payable in the United States, and provided further, that the issuing branch or agency of a foreign bank is not an affiliate of the pledging bank or from the same country as the pledging bank's domicile;

    (viii) Banker's acceptances that are payable in the United States and that are issued by any state bank, national bank, state or federal savings association, or branch or agency of a foreign bank; provided, that the maturity of any acceptance is not greater than 180 days; and provided further, that the branch or agency issuing the acceptance is not an affiliate of the pledging bank or from the same country as the pledging bank's domicile;

    (ix) General obligations of any state of the United States, or any county or municipality of any state of the United States, or any agency, instrumentality, or political subdivision of the foregoing or any obligation guaranteed by a state of the United States or any county or municipality of any state of the United States;

    (x) Any other asset determined by the FDIC to be acceptable.

    Table 1 to § 347.209—Supervisory Haircuts for Assets Pledged Under § 347.209(d) Remaining maturity Haircut % assigned based on maturity and risk weight Risk weight (%) by issuer as specified in part 324.32 0% 20% 50% 100% ≤to 1 Year 0 1.0 2.0 4.0 >1 Year but ≤5 Years 0 4.0 6.0 8.0 >5 years 0 8.0 12.0 16.0
    Dated at Washington, DC, on February 14, 2018.

    By order of the Board of Directors.

    Federal Deposit Insurance Corporation. Robert E. Feldman, Executive Secretary.
    [FR Doc. 2018-04255 Filed 3-2-18; 8:45 am] BILLING CODE 6714-01-P
    FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL 12 CFR Chapter XI [Docket No. AS18-02] Appraisal Subcommittee; Revised ASC Policy Statements AGENCY:

    Appraisal Subcommittee of the Federal Financial Institutions Examination Council.

    ACTION:

    Adoption of revised ASC Policy Statements.

    SUMMARY:

    The Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council is adopting revised ASC Policy Statements. The ASC Policy Statements provide guidance to ensure State appraiser certifying and licensing agencies comply with Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended, and the rules promulgated thereunder. The revised ASC Policy Statements supersede the current ASC Policy Statements.

    DATES:

    The revised ASC Policy Statements adopted February 14, 2018, are applicable March 5, 2018.

    FOR FURTHER INFORMATION CONTACT:

    James R. Park, Executive Director, at (202) 595-7575, or Alice M. Ritter, General Counsel, at (202) 595-7577, Appraisal Subcommittee, 1401 H Street NW, Suite 760, Washington, DC 20005.

    SUPPLEMENTARY INFORMATION:

    I. Background

    Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended (Title XI), established the ASC.1 The purpose of Title XI is to provide protection of Federal financial and public policy interests by upholding Title XI requirements for appraisals performed for federally related transactions.2 Pursuant to Title XI, one of the ASC's core functions is to monitor the requirements established by the States 3 for certification and licensing of appraisers qualified to perform appraisals in connection with federally related transactions. This is accomplished through periodic ASC Compliance Reviews of each State appraiser regulatory program (Appraiser Program) to determine compliance or lack thereof with Title XI, and to assess implementation of minimum requirements for credentialing of appraisers as adopted by the Appraiser Qualifications Board (The Real Property Appraiser Qualification Criteria or AQB Criteria). The revised ASC Policy Statements provide guidance to the States regarding how Appraiser Programs will be evaluated during ASC Compliance Reviews.

    1 The ASC Board is comprised of seven members. Five members are designated by the heads of the FFIEC agencies (Board of Governors of the Federal Reserve System [Board], Bureau of Consumer Financial Protection [CFPB], Federal Deposit Insurance Corporation [FDIC], Office of the Comptroller of the Currency [OCC], and National Credit Union Administration [NCUA]). The other two members are designated by the heads of the Department of Housing and Urban Development (HUD) and the Federal Housing Finance Agency (FHFA).

    2 Refers to any real estate related financial transaction which: (a) A federal financial institutions regulatory agency engages in, contracts for, or regulates; and (b) requires the services of an appraiser. (Title XI § 1121 (4), 12 U.S.C. 3350.)

    3 The 50 States, the District of Columbia, and four Territories, which are the Commonwealth of Puerto Rico, Commonwealth of the Northern Mariana Islands, Guam, and United States Virgin Islands.

    Title XI as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) 4 expanded the ASC's core functions to include monitoring of the requirements established by States that elect to register and supervise the operations and activities of appraisal management companies 5 (AMCs). States electing to register and supervise AMCs must implement minimum requirements in accordance with the AMC Rule.6 As a result, States with an AMC regulatory program (AMC Program) will be evaluated during the ASC's Compliance Review to determine compliance or lack thereof with Title XI, and to assess implementation of the minimum requirements for State registration and supervision of AMCs as established by the AMC Rule. The amendments to Title XI by the Dodd-Frank Act also allow States with an AMC Program to add information about AMCs in their State to the National Registry of AMCs (AMC Registry). The revised ASC Policy Statements include guidance to the States regarding how AMC Programs will be evaluated during ASC Compliance Reviews.

    4 Public Law 111-203, 124 Stat. 1376.

    5 Title XI § 1103 (a)(1)(B), 12 U.S.C. 3332.

    6 The Dodd-Frank Act added section 1124 to Title XI, Appraisal Management Company Minimum Requirements, which required the OCC, Board, FDIC, NCUA, CFPB, and FHFA to establish, by rule, minimum requirements for the registration and supervision of AMCs by States that elect to register and supervise AMCs pursuant to Title XI and the rules promulgated thereunder. (Title XI § 1124 (a), 12 U.S.C. 3353(a)). Those rules were finalized and published on June 9, 2015, at 80 FR 32658 with an effective date of August 10, 2015. (12 CFR 34.210-34.216; 12 CFR 225.190-225.196; 12 CFR 323.8-323.14; 12 CFR 1222.20-1222.26).

    The ASC published Proposed Revised Policy Statements on January 10, 2017. The comment period was scheduled to close on April 10, 2017. The ASC suspended the comment period in response to the White House Chief of Staff Memorandum titled Regulatory Freeze Pending Review, signed on January 20, 2017, pending review by the Office of Management and Budget (OMB). The ASC re-published Proposed Revised Policy Statements on September 20, 2017, with a 60-day comment period.7 With certain changes to the proposal, the revised ASC Policy Statements were adopted by the ASC at its February 14, 2018 Meeting substantially as proposed.

    7 82 FR 43966 (Sept. 20, 2017).

    II. Revised ASC Policy Statements

    The revised ASC Policy Statements 8 are being issued by the ASC in three parts to provide States with the necessary information to maintain their Appraiser Programs and AMC Programs in compliance with Title XI and the rules promulgated thereunder:

    8 These Policy Statements, adopted February 14, 2018, supersede all previous Policy Statements adopted by the ASC.

    ➢ Part A, Appraiser Program—Policy Statements 1 through 7 correspond with the categories that are: (a) Evaluated during the Appraiser Program Compliance Review; and (b) included in the ASC's Compliance Review Report of the Appraiser Program.

    ➢ Part B, AMC Program—Policy Statements 8 through 10 correspond with the categories that are: (a) Evaluated during the AMC Program Compliance Review; and (b) included in the ASC's Compliance Review Report of the AMC Program. Policy Statement 11 addresses the statutory implementation period.

    ➢ Part C, Interim Sanctions - Policy Statement 12 sets forth required procedures in the event that interim sanctions are imposed against a State by the ASC for non-compliance in either the Appraiser Program or the AMC Program.

    The revised ASC Policy Statements include two appendices:

    1. Appendix A provides an overview of the Compliance Review process; and

    2. Appendix B provides a glossary of terms.

    For reasons discussed in section III of this SUPPLEMENTARY INFORMATION, the revised Policy Statements are adopted substantially as proposed with modifications to Policy Statements 7 and 10 removing proposed additional requirements for complaint logs. The revised Policy Statements also contain technical, nonsubstantive changes.

    III. Revised ASC Policy Statements and Public Comments on the Proposed Policy Statements

    The following provides a section by section review of the proposed Policy Statements and a discussion of public comments received by the ASC concerning the proposal. The ASC received 29 comments, 27 of which addressed issues such as wind turbines and environmental issues, and were non-responsive to the proposal. The 2 comments that were responsive to the proposal were received from State appraiser certifying and licensing agencies.

    1. Introduction and Purpose

    The ASC proposal to expand the introduction to include the monitoring of States that elect to register and supervise the operations and activities of AMCs, and to include an explanation of the proposed Policy Statements' three parts and appendices is adopted without change in the revised ASC Policy Statements.

    2. Part A: Appraiser Program a. Policy Statement 1: Statutes, Regulations, Policies and Procedures Governing State Appraiser Programs

    The ASC proposal to modify Policy Statement 1 to include a definition of trainee appraiser to better reflect how changes to Title XI affect Appraiser Programs with trainee requirements is adopted without change in the revised ASC Policy Statement.

    b. Policy Statement 2: Temporary Practice

    The ASC proposal to modify Policy Statement 2 to clarify requirements for temporary practice, including requirements to track temporary practice permits and maintain documentation, is adopted without change in the revised ASC Policy Statements.

    c. Policy Statement 3: National Registry of Appraisers

    The ASC received one comment regarding the proposal to add language to Policy Statement 3 stating, “Only those appraisers whose registry fees have been transmitted to the ASC will be eligible to be on the Appraiser Registry for the period subsequent to payment of the fee.” The commenter expressed concern that States would not be able to upload information to the Appraiser Registry until after the monthly invoice is paid. This would not, however, be the case. There is no change in how States populate the Appraiser Registry; States are invoiced after the information is added to the Appraiser Registry. Nothing in that process would change. An appraiser on the Appraiser Registry would only be impacted if the State failed to pay the invoice amount for that appraiser timely, which has always been ASC practice and policy. The ASC proposal to modify Policy Statement 3 to clarify requirements regarding States' submission of registry fees and eligibility of appraisers for the Appraiser Registry is adopted without change in the revised ASC Policy Statements.

    d. Policy Statement 4: Application Process

    The ASC proposal to modify Policy Statement 4 to include: (1) Additional guidance to States implementing AQB Criteria regarding the background of applicants for credentials and requiring States to document applicant files with evidence supporting decisions made regarding individual appraisers; (2) additional guidance on requirements for States to validate renewal requirements for appraisers and parameters for auditing education-related affidavits; and (3) clarification on the requirement that States engage analysts who are knowledgeable about the Uniform Standards of Professional Appraisal Practice (USPAP) and document how the analysts are qualified is adopted without change in the revised ASC Policy Statements.

    e. Policy Statement 5: Reciprocity

    The ASC proposal to modify Policy Statement 5 to include a requirement that States obtain and maintain sufficient relevant documentation pertaining to an application for issuance of a credential by reciprocity is adopted without change in the revised ASC Policy Statements.

    f. Policy Statement 6: Education

    The ASC proposal to modify Policy Statement 6 to clarify that States may not continue to accept AQB approved courses after the AQB's expiration date unless the course content is reviewed and approved by the State is adopted without change in the revised ASC Policy Statements.

    g. Policy Statement 7: State Agency Enforcement

    The ASC received one comment regarding the proposal to require additional information on complaint logs. As proposed, States would be required to include terms of disposition, and, in the case of open complaints, the most recent activity and date thereof. The commenter addressed the burden imposed on States by requiring them to duplicate information that is readily available and documented elsewhere. The commenter also suggested that such additional requirements may be more appropriate in the case of a State that needs additional monitoring due to compliance issues with Title XI. The ASC agrees with the commenter's concerns and is adopting Policy Statement 7 without the proposed additional requirements for complaint logs. Policy Statement 7 is otherwise adopted as proposed.

    3. Part B: AMC Program a. Policy Statement 8: Statutes, Regulations, Policies and Procedures Governing State AMC Programs

    Policy Statement 8 reflects the statutory provision that States are not required to establish an AMC Program, and clarifies for those States that establish AMC Programs the ASC oversight during ASC Compliance Reviews. Policy Statement 8 reiterates that States with an AMC Program must: (1) Establish and maintain an AMC Program with the legal authority and mechanisms consistent with the AMC Rule; (2) impose requirements on AMCs consistent with the AMC Rule; and (3) enforce and document ownership limitations for State-registered AMCs. Policy Statement 8 informs States that while they may have a more expansive definition of an AMC in their State statute, only AMCs that meet the federal definition in Title XI may be included on the AMC Registry. The language in Policy Statement 8 has been modified to clarify that formal ASC oversight of State AMC Programs will begin at the next regularly scheduled Compliance Review of a State after a State elects to register and supervise AMCs pursuant to the AMC Rule. Policy Statement 8 is otherwise adopted as proposed.

    b. Policy Statement 9: National Registry of AMCs (AMC Registry)

    The ASC proposal for new Policy Statement 9 is adopted without change in the revised ASC Policy Statements. Policy Statement 9 clarifies requirements for States with an AMC Program to maintain the AMC Registry.

    c. Policy Statement 10: State Agency Enforcement

    Consistent with Policy Statement 7, Policy Statement 10 is adopted without the proposed additional requirements for complaint logs. Policy Statement 10 is otherwise adopted as proposed and clarifies requirements for States' AMC enforcement programs in those States with an AMC Program.

    d. Policy Statement 11: Statutory Implementation Period

    The ASC proposal for new Policy Statement 11 is adopted without change in the revised ASC Policy Statements. Policy Statement 11 clarifies the statutory implementation period and any extensions that may be granted.

    4. Part C: Interim Sanctions a. Policy Statement 12: Interim Sanctions

    The ASC proposal for new Policy Statement 12 is adopted without change in the revised ASC Policy Statements. Policy Statement 12 clarifies interim sanctions which may be imposed on State Programs when those programs fail to be effective. The procedures include due process provisions and rules of evidence, and establish timeliness for proceedings.

    5. Appendices

    The ASC proposal for Appendix A, which provides an overview of the Compliance Review process; and Appendix B, which provides a glossary of terms, is adopted without change in the revised ASC Policy Statements.

    The ASC revised Policy Statements are adopted as follows:

    Contents Introduction and Purpose Part A: Appraiser Program Policy Statement 1 Statutes, Regulations, Policies and Procedures Governing State Appraiser Programs A. State Regulatory Structure B. Funding and Staffing C. Minimum Criteria D. Federally Recognized Appraiser Classifications E. Non-federally Recognized Credentials F. Appraisal Standards G. Exemptions H. ASC Staff Attendance at State Board Meetings I. Summary of Requirements Policy Statement 2 Temporary Practice A. Requirement for Temporary Practice B. Excessive Fees or Burdensome Requirements C. Summary of Requirements Policy Statement 3 National Registry of Appraisers (Appraiser Registry) A. Requirements for the Appraiser Registry B. Registry Fee and Invoicing Policies C. Access to Appraiser Registry Data D. Information Sharing E. Summary of Requirements Policy Statement 4 Application Process A. Processing of Applications B. Qualifying Education for Initial or Upgrade Applications C. Continuing Education for Reinstatement and Renewal Applications D. Experience for Initial or Upgrade Applications E. Examination F. Summary of Requirements Policy Statement 5 Reciprocity A. Reciprocity Policy B. Application of Reciprocity Policy C. Appraiser Compliance Requirements D. Well-Documented Application Files E. Summary of Requirements Policy Statement 6 Education A. Course Approval B. Distance Education C. Summary of Requirements Policy Statement 7 State Agency Enforcement A. State Agency Regulatory Program B. Enforcement Process C. Summary of Requirements Part B: AMC Program Policy Statement 8 Statutes, Regulations, Policies and Procedures Governing State AMC Programs A. Participating States and ASC Oversight B. Relation to State Law C. Funding and Staffing D. Minimum Requirements for Registration and Supervision of AMCs as Established by the AMC Rule E. Summary of Requirements Policy Statement 9 National Registry of AMCs (AMC Registry) A. Requirements for the AMC Registry B. Registry Fee and Invoicing Policies C. Reporting Requirements D. Access to AMC Registry Data E. Summary of Requirements Policy Statement 10 State Agency Enforcement A. State Agency Regulatory Program B. Enforcement Process C. Summary of Requirements Policy Statement 11 Statutory Implementation Period Part C: Interim Sanctions Policy Statement 12 Interim Sanctions A. Authority B. Opportunity To Be Heard or Correct Conditions C. Procedures Appendices Appendix A—Compliance Review Process Appendix B—Glossary of Terms Introduction and Purpose

    Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 as amended (Title XI) established the Appraisal Subcommittee of the Federal Financial Institutions Examination Council (ASC).9 The purpose of Title XI is to provide protection of Federal financial and public policy interests by upholding Title XI requirements for appraisals performed for federally related transactions. Specifically, those appraisals shall be performed in writing, in accordance with uniform standards, by individuals whose competency has been demonstrated and whose professional conduct will be subject to effective supervision.

    9 The ASC Board is made up of seven members. Five members are designated by the heads of the FFIEC agencies (Board of Governors of the Federal Reserve System, Bureau of Consumer Financial Protection, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and National Credit Union Administration). The other two members are designated by the heads of the Department of Housing and Urban Development and the Federal Housing Finance Agency.

    Pursuant to Title XI, one of the ASC's core functions is to monitor the requirements established by the States 10 for certification and licensing of appraisers qualified to perform appraisals in connection with federally related transactions.11 Title XI as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) 12 expanded the ASC's core functions to include monitoring of the requirements established by States that elect to register and supervise the operations and activities of appraisal management companies 13 (AMCs).14

    10 See Appendix B, Glossary of Terms, for the definition of “State.”

    11 See Appendix B, Glossary of Terms, for the definition of “federally related transaction.”

    12 Public Law 111-203, 124 Stat. 1376.

    13 Title XI § 1103 (a)(1)(B), 12 U.S.C. 3332.

    14 See Appendix B, Glossary of Terms, for the definition of “appraisal management company” or AMC.

    The ASC performs periodic Compliance Reviews 15 of each State appraiser regulatory program (Appraiser Program) to determine compliance or lack thereof with Title XI, and to assess implementation of minimum requirements for credentialing of appraisers as adopted by the Appraiser Qualifications Board (The Real Property Appraiser Qualification Criteria or AQB Criteria). As a result of the Dodd-Frank Act amendments to Title XI, States with an AMC regulatory program (AMC Program) will be evaluated during the Compliance Review to determine compliance or lack thereof with Title XI, and to assess implementation of the minimum requirements for State registration and supervision of AMCs as established by the AMC Rule.16

    15 See Appendix A, Compliance Review Process.

    16 The Dodd-Frank Act required the Office of the Comptroller of the Currency; Board of Governors of the Federal Reserve System; Federal Deposit Insurance Corporation; National Credit Union Administration; Bureau of Consumer Financial Protection; and Federal Housing Finance Agency to establish, by rule, minimum requirements to be imposed by a participating State appraiser certifying and licensing agency on AMCs doing business in the State. (Title XI § 1124 (a), 12 U.S.C. 3353(a)). Those rules were finalized and published on June 9, 2015, at 80 FR 32658 with an effective date of August 10, 2015. (12 CFR 34.210-34.216; 12 CFR 225.190-225.196; 12 CFR 323.8-323.14; 12 CFR 1222.20-1222.26.)

    The ASC is issuing these revised Policy Statements 17 in three parts to provide States with the necessary information to maintain their Appraiser Programs and AMC Programs in compliance with Title XI:

    17 These Policy Statements, adopted February 14, 2018, supersede all previous Policy Statements adopted by the ASC.

    Part A, Appraiser Program—Policy Statements 1 through 7 correspond with the categories that are: (a) Evaluated during the Appraiser Program Compliance Review; and (b) included in the ASC's Compliance Review Report of the Appraiser Program.

    Part B, AMC Program—Policy Statements 8 through 10 correspond with the categories that are: (a) Evaluated during the AMC Program Compliance Review; and (b) included in the ASC's Compliance Review Report of the AMC Program.

    Part C, Interim Sanctions—Policy Statement 12 sets forth required procedures in the event that interim sanctions are imposed against a State by the ASC for non-compliance in either the Appraiser Program or the AMC Program.

    Part A: Appraiser Program Policy Statement 1 Statutes, Regulations, Policies and Procedures Governing State Appraiser Programs A. State Regulatory Structure

    Title XI requires the ASC to monitor each State appraiser certifying and licensing agency for the purpose of determining whether each such agency has in place policies, practices and procedures consistent with the requirements of Title XI.18 The ASC recognizes that each State may have legal, fiscal, regulatory or other factors that may influence the structure and organization of its Appraiser Program. Therefore, a State has flexibility to structure its Appraiser Program so long as it meets its Title XI-related responsibilities.

    18 Title XI § 1118 (a), 12 U.S.C. 3347.

    States should maintain an organizational structure for appraiser certification, licensing and supervision that avoids conflicts of interest. A State agency may be headed by a board, commission or an individual. State board 19 or commission members, or employees in policy or decision-making positions, should understand and adhere to State statutes and regulations governing performance of responsibilities consistent with the highest ethical standards for public service. In addition, Appraiser Programs using private entities or contractors should establish appropriate internal policies, procedures and safeguards to promote compliance with the State agency's responsibilities under Title XI and these Policy Statements.

    19See Appendix B, Glossary of Terms, for the definition of “State board.”

    B. Funding and Staffing

    The Dodd-Frank Act amended Title XI to require the ASC to determine whether States have sufficient funding and staffing to meet their Title XI requirements. Compliance with this provision requires that a State must provide its Appraiser Program with funding and staffing sufficient to carry out its Title XI-related duties. The ASC evaluates the sufficiency of funding and staffing as part of its review of all aspects of an Appraiser Program's effectiveness, including the adequacy of State boards, committees, or commissions responsible for carrying out Title XI-related duties.

    C. Minimum Criteria

    Title XI requires States to adopt and/or implement all relevant AQB Criteria. Requirements established by a State for certified residential or certified general appraisers, as well as requirements established for licensed appraisers, trainee appraisers and supervisory appraisers must meet or exceed applicable AQB Criteria.

    D. Federally Recognized Appraiser Classifications State Certified Appraisers

    “State certified appraisers” means those individuals who have satisfied the requirements for residential or general certification in a State whose criteria for certification meet or exceed the applicable minimum AQB Criteria. Permitted scope of practice and designation for State certified residential or certified general appraisers must be consistent with State and Federal laws, including regulations and supplementary guidance.

    State Licensed Appraisers

    “State licensed appraisers” means those individuals who have satisfied the requirements for licensing in a State whose criteria for licensing meet or exceed the applicable minimum AQB Criteria. The permitted scope of practice and designation for State licensed appraisers must be consistent with State and Federal laws, including regulations and supplementary guidance.

    Trainee Appraisers

    “Trainee appraisers” means those individuals who have satisfied the requirements for credentialing in a State whose criteria for credentialing meet or exceed the applicable minimum AQB Criteria. Any minimum qualification requirements established by a State for individuals in the position of “trainee appraiser” or “supervisory appraiser” must meet or exceed the applicable minimum AQB Criteria. ASC staff will evaluate State designations such as “registered appraiser,” “apprentice appraiser,” “provisional appraiser,” or any other similar designation to determine if, in substance, such designation is consistent with a “trainee appraiser” designation and, therefore, administered to comply with Title XI. The permitted scope of practice and designation for trainee appraisers must be consistent with State and Federal laws, including regulations and supplementary guidance.

    Any State or Federal agency may impose additional appraiser qualification requirements for trainee, State licensed, certified residential or certified general classifications, if they consider such requirements necessary to carry out their responsibilities under Federal and/or State statutes and regulations, so long as the additional qualification requirements do not preclude compliance with AQB Criteria.

    E. Non-Federally Recognized Credentials

    States using non-federally recognized credentials or designations 20 must ensure that they are easily distinguished from the federally recognized credentials.

    20See Appendix B, Glossary of Terms, for the definition of “non-federally recognized credentials or designations.”

    F. Appraisal Standards

    Title XI and the Federal financial institutions regulatory agencies' regulations mandate that all appraisals performed in connection with federally related transactions be in written form, prepared in accordance with generally accepted appraisal standards as promulgated by the Appraisal Standards Board (ASB) in the Uniform Standards of Professional Appraisal Practice (USPAP), and be subject to appropriate review for compliance with USPAP.21 States that have incorporated USPAP into State law should ensure that statutes or regulations are updated timely to adopt the current version of USPAP, or if State law allows, automatically incorporate the latest version of USPAP as it becomes effective. States should consider ASB Advisory Opinions, Frequently Asked Questions, and other written guidance issued by the ASB regarding interpretation and application of USPAP.

    21See Appendix B, Glossary of Terms for the definition of “Uniform Standards of Professional Appraisal Practice.”

    Any State or Federal agency may impose additional appraisal standards if they consider such standards necessary to carry out their responsibilities, so long as additional appraisal standards do not preclude compliance with USPAP or the Federal financial institutions regulatory agencies' appraisal regulations for work performed for federally related transactions.

    The Federal financial institutions regulatory agencies' appraisal regulations define “appraisal” and identify which real estate-related financial transactions require the services of a State certified or licensed appraiser. These regulations define “appraisal” as a “written statement independently and impartially prepared by a qualified appraiser setting forth an opinion as to the market value of an adequately described property as of a specific date(s) supported by the presentation and analysis of relevant market information.” Per these regulations, an appraiser performing an appraisal review which includes the reviewer providing his or her own opinion of value constitutes an appraisal. Under these same regulations, an appraisal review that does not include the reviewer providing his or her own opinion of value does not constitute an appraisal. Therefore, under the Federal financial institutions regulatory agencies' regulations, only those transactions that involve appraisals for federally related transactions require the services of a State certified or licensed appraiser.

    G. Exemptions

    Title XI and the Federal financial institutions regulatory agencies' regulations specifically require the use of State certified or licensed appraisers in connection with the appraisal of certain real estate-related financial transactions.22 A State may not exempt any individual or group of individuals from meeting the State's certification or licensing requirements if the individual or group member performs an appraisal when Federal statutes and regulations require the use of a certified or licensed appraiser. For example, an individual who has been exempted by the State from its appraiser certification or licensing requirements because he or she is an officer, director, employee or agent of a federally regulated financial institution would not be permitted to perform an appraisal in connection with a federally related transaction.

    22 Title XI § 1112, 12 U.S.C. 3341; Title XI § 1113, 12 U.S.C. 3342; Title XI § 1114, 12 U.S.C. 3343.

    H. ASC Staff Attendance at State Board Meetings

    The efficacy of the ASC's Compliance Review process rests on the ASC's ability to obtain reliable information about all areas of a State's Appraiser Program. ASC staff regularly attends open State board meetings as part of the on-site Compliance Review process. States are expected to make available for review by ASC staff minutes of closed meetings and executive sessions. States are encouraged to allow ASC staff to attend closed and executive sessions of State board meetings where such attendance would not violate State law or regulation or be inconsistent with other legal obligations of the State board. ASC staff is obligated to protect information obtained during the Compliance Review process concerning the privacy of individuals and any confidential matters.

    I. Summary of Requirements

    1. States must require that appraisals be performed in accordance with the latest version of USPAP.23

    23 Title XI § 1101, 12 U.S.C. 3331; Title XI § 1118 (a), 12 U.S.C. 3347; AQB Real Property Appraiser Qualification Criteria.

    2. States must, at a minimum, adopt and/or implement all relevant AQB Criteria.24

    24 Title XI §§ 1116 (a), (c) and (e), 12 U.S.C. 3345; Title XI § 1118 (a), 12 U.S.C. 3347.

    3. States must have policies, practices and procedures consistent with Title XI.25

    25 Title XI § 1118 (a), 12 U.S.C. 3347.

    4. States must have funding and staffing sufficient to carry out their Title XI-related duties.26

    26Id; Title XI § 1118 (b), 12 U.S.C. 3347.

    5. States must use proper designations and permitted scope of practice for certified residential; certified general; licensed; and trainee classifications.27

    27 Title XI §§ 1116 (a), (c) and (e), 12 U.S.C. 3345; Title XI § 1118 (a), 12 U.S.C. 3347; Title XI § 1113, 12 U.S.C. 3342; AQB Real Property Appraiser Qualification Criteria.

    6. State board members, and any persons in policy or decision-making positions, must perform their responsibilities consistent with Title XI.28

    28 Title XI § 1118 (a), 12 U.S.C. 3347.

    7. States' certification and licensing requirements must meet the minimum requirements set forth in Title XI.29

    29 Title XI §§ 1116 (a), (c) and (e), 12 U.S.C. 3345.

    8. State requirements for trainee appraisers and supervisory appraisers must meet or exceed the AQB Criteria.

    9. State agencies must be granted adequate authority by the State to maintain an effective regulatory Appraiser Program in compliance with Title XI.30

    30 Title XI § 1118 (b), 12 U.S.C. 3347.

    Policy Statement 2 Temporary Practice A. Requirement for Temporary Practice

    Title XI requires State agencies to recognize, on a temporary basis, the certification or license of an out-of-State appraiser entering the State for the purpose of completing an appraisal assignment 31 for a federally related transaction. States are not, however, required to grant temporary practice permits to trainee appraisers. The out-of-State appraiser must register with the State agency in the State of temporary practice (Host State). A State may determine the process necessary for “registration” provided such process complies with Title XI and does not impose “excessive fees or burdensome requirements,” as determined by the ASC.32 Thus, a credentialed appraiser 33 from State A has a statutory right to enter State B (the Host State) to perform an assignment concerning a federally related transaction, so long as the appraiser registers with the State agency in State B prior to performing the assignment. Though Title XI contemplates reasonably free movement of credentialed appraisers across State lines, an out-of-State appraiser must comply with the Host State's real estate appraisal statutes and regulations and is subject to the Host State's full regulatory jurisdiction. States should utilize the National Registry of Appraisers to verify credential status on applicants for temporary practice.

    31See Appendix B, Glossary of Terms, for the definition of “assignment.”

    32 Title XI § 1122 (a) (2), 12 U.S.C. 3351.

    33See Appendix B, Glossary of Terms, for the definition of “credentialed appraisers.”

    B. Excessive Fees or Burdensome Requirements

    Title XI prohibits States from imposing excessive fees or burdensome requirements, as determined by the ASC, for temporary practice.34 Adherence by State agencies to the following mandates and prohibitions will deter the imposition of excessive fees or burdensome requirements.

    34 Title XI § 1122 (a)(2), 12 U.S.C. 3351.

    Host State agencies must:

    a. issue temporary practice permits on an assignment basis;

    b. issue temporary practice permits within five business days of receipt of a completed application, or notify the applicant and document the file as to the circumstances justifying delay or other action;

    c. issue temporary practice permits designating the permit's effective date;

    d. take regulatory responsibility for a temporary practitioner's unethical, incompetent and/or fraudulent practices performed while in the State;

    e. notify the appraiser's home State agency 35 in the case of disciplinary action concerning a temporary practitioner;

    35 See Appendix B, Glossary of Terms, for the definition of “home State agency.”

    f. allow at least one temporary practice permit extension through a streamlined process;

    g. track all temporary practice permits using a permit log which includes the name of the applicant, date application received, date completed application received, date of issuance, and date of expiration, if any (States are strongly encouraged to maintain this information in an electronic, sortable format); and

    h. maintain documentation sufficient to demonstrate compliance with this Policy Statement.

    Host State agencies may not:

    a. limit the valid time period of a temporary practice permit to less than 6 months (unless the applicant requests a specific end date and the applicant is allowed an extension if required to complete the assignment, the applicant's credential is no longer in active status during that period of time);

    b. limit an appraiser to one temporary practice permit per calendar year; 36

    36 State agencies may establish by statute or regulation a policy that places reasonable limits on the number of times an out-of-State certified or licensed appraiser may exercise his or her temporary practice rights in a given year. If such a policy is not established, a State agency may choose not to honor an out-of-State certified or licensed appraiser's temporary practice rights if it has made a determination that the appraiser is abusing his or her temporary practice rights and is regularly engaging in real estate appraisal services within the State.

    c. charge a temporary practice permit fee exceeding $250, including one extension fee;

    d. impose State appraiser qualification requirements for education, experience and/or exam upon temporary practitioners;

    e. require temporary practitioners to obtain a certification or license in the State of temporary practice;

    f. require temporary practitioners to affiliate with an in-State licensed or certified appraiser;

    g. refuse to register licensed or certified appraisers seeking temporary practice in a State that does not have a licensed or certified level credential; or

    h. prohibit temporary practice.

    Home State agencies may not:

    a. delay the issuance of a written “letter of good standing” or similar document for more than five business days after receipt of a request; or

    b. fail to consider and, if appropriate, take disciplinary action when one of its certified or licensed appraisers is disciplined by another State.

    C. Summary of Requirements

    1. States must recognize, on a temporary basis, appraiser credentials issued by another State if the property to be appraised is part of a federally related transaction.37

    37 Title XI § 1122 (a)(1), 12 U.S.C. 3351.

    2. States must adhere to mandates, prohibitions and documentation requirements as set forth above in Section B above, titled Excessive Fees or Burdensome Requirements. 38

    38 Title XI § 1122 (a)(2), 12 U.S.C. 3351.

    Policy Statement 3 National Registry of Appraisers (Appraiser Registry) A. Requirements for the Appraiser Registry

    Title XI requires the ASC to maintain a National Registry of State certified and licensed appraisers who are eligible to perform appraisals in federally related transactions.39 Title XI further requires the States to transmit to the ASC: (1) A roster listing individuals who have received a State certification or license in accordance with Title XI; (2) reports on the issuance and renewal of licenses and certifications, sanctions, disciplinary actions, revocations and suspensions; and (3) the registry fee as set by the ASC 40 from individuals who have received certification or licensing. States must notify the ASC as soon as practicable if a credential holder listed on the Appraiser Registry does not qualify for the credential held.

    39 Title XI § 1103 (a)(3), 12 U.S.C. 3332.

    40 Title XI § 1109, Roster of State certified or licensed appraisers; authority to collect and transmit fees, requires the ASC to consider at least once every 5 years whether to adjust the dollar amount of the registry fees to account for inflation. (Title XI § 1109 (a), 12 U.S.C. 3338.)

    Roster and registry fee requirements apply to all individuals who receive State certifications or licenses, originally or by reciprocity, whether or not the individuals are, in fact, performing or planning to perform appraisals in federally related transactions. If an appraiser is certified or licensed in more than one State, the appraiser is required to be on each State's roster of certified or licensed appraisers, and a registry fee is due from each State in which the appraiser is certified or licensed.

    Only AQB-compliant certified and licensed appraisers in active status on the Appraiser Registry are eligible to perform appraisals in connection with federally related transactions. Only those appraisers whose registry fees have been transmitted to the ASC will be eligible to be on the Appraiser Registry for the period subsequent to payment of the fee.

    Some States may give State certified or licensed appraisers an option to not pay the registry fee. If a State certified or licensed appraiser chooses not to pay the registry fee, then the Appraiser Program must ensure that any potential user of that appraiser's services is aware that the appraiser is not eligible to perform appraisals for federally related transactions. The Appraiser Program must place a conspicuous notice directly on the face of any evidence of the appraiser's authority to appraise stating, “Not Eligible To Appraise Federally Related Transactions,” and the appraiser must not be listed in active status on the Appraiser Registry.

    The ASC extranet application allows States to update their appraiser credential information directly to the Appraiser Registry. Only Authorized Registry Officials are allowed to request access for their State personnel (see section C below). The ASC will issue a User Name and Password to the designated State personnel responsible for that State's Appraiser Registry entries. Designated State personnel are required to protect the right of access, and not share their User Name or Password with anyone. States must adopt and implement a written policy to protect the right of access, as well as the ASC issued User Name and Password. The ASC will provide detailed specifications regarding the data elements on the Appraiser Registry.

    B. Registry Fee and Invoicing Policies

    Each State must remit to the ASC the annual registry fee, as set by the ASC, for State certified or licensed appraisers within the State to be listed on the Appraiser Registry. Requests to prorate refunds or partial-year registrations will not be granted. If a State collects multiple-year fees for multiple-year certifications or licenses, the State may choose to remit to the ASC the total amount of the multiple-year registry fees or the equivalent annual fee amount. The ASC will, however, record appraisers on the Appraiser Registry only for the number of years for which the ASC has received payment. Nonpayment by a State of an appraiser's registry fee may result in the status of that appraiser being listed as “inactive.” States must reconcile and pay registry invoices in a timely manner (45 calendar days after the invoice date). When a State's failure to pay a past due invoice results in appraisers being listed as inactive, the ASC will not change those appraisers back to active status until payment is received from the State. An inactive status on the Appraiser Registry, for whatever the reason, renders an appraiser ineligible to perform appraisals in connection with federally related transactions.

    C. Access to Appraiser Registry Data

    The ASC website provides free access to the public portion of the Appraiser Registry at www.asc.gov. The public portion of the Appraiser Registry data may be downloaded using predefined queries or user-customized applications.

    Access to the full database, which includes non-public data (e.g., certain disciplinary action information), is restricted to authorized State and Federal regulatory agencies. States must designate a senior official, such as an executive director, to serve as the State's Authorized Registry Official, and provide to the ASC, in writing, information regarding the designated Authorized Registry Official. States must ensure that the authorization information provided to the ASC is updated and accurate.

    D. Information Sharing

    Information sharing (routine exchange of certain information among lenders, governmental entities, State agencies and the ASC) is essential for carrying out the purposes of Title XI. Title XI requires the ASC, any other Federal agency or instrumentality, or any federally recognized entity to report any action of a State certified or licensed appraiser that is contrary to the purposes of Title XI to the appropriate State agency for disposition. The ASC believes that full implementation of this Title XI requirement is vital to the integrity of the system of State appraiser regulation. States are encouraged to develop and maintain procedures for sharing of information among themselves.

    The Appraiser Registry's value and usefulness are largely dependent on the quality and frequency of State data submissions. Accurate and frequent data submissions from all States are necessary to maintain an up-to-date Appraiser Registry. States must submit appraiser data in a secure format to the ASC at least monthly. If there are no changes to the data, the State agency must notify the ASC of that fact in writing. States are encouraged to submit data as frequently as possible.

    States must report all disciplinary action 41 taken against an appraiser to the ASC via the extranet application within 5 business days after the disciplinary action is final, as determined by State law.42 States not reporting via the extranet application must provide, in writing to the ASC, a description of the circumstances preventing compliance with this requirement.43

    41See Appendix B, Glossary of Terms, for the definition of “disciplinary action.”

    42Id.

    43 Title XI § 1118 (a), 12 U.S.C. 3347.

    For the most serious disciplinary actions (i.e., voluntary surrenders, suspensions and revocations, or any action that interrupts a credential holder's ability to practice), the appraiser's status must be changed on the Appraiser Registry to “inactive,” thereby making the appraiser ineligible to perform appraisals for federally related transactions or other transactions requiring the use of State certified or licensed appraisers.44

    44Id.

    Title XI also contemplates the reasonably free movement of certified and licensed appraisers across State lines. This freedom of movement assumes, however, that certified and licensed appraisers are, in all cases, held accountable and responsible for their actions while performing appraisal activities.

    E. Summary of Requirements

    1. States must reconcile and pay registry invoices in a timely manner (45 calendar days after the invoice date).45

    45 Title XI § 1118 (a), 12 U.S.C. 3347; Title XI § 1109 (a), 12 U.S.C. 3338.

    2. States must report all disciplinary action taken against an appraiser to the ASC via the extranet application within 5 business days after the disciplinary action is final, as determined by State law.46

    46Id.

    3. States not reporting via the extranet application must provide, in writing to the ASC, a description of the circumstances preventing compliance with this requirement.47

    47 Title XI § 1118 (a), 12 U.S.C. 3347.

    4. For the most serious disciplinary actions (i.e., voluntary surrenders, suspensions and revocations, or any action that interrupts a credential holder's ability to practice), the appraiser's status must be changed on the Appraiser Registry to “inactive,” thereby making the appraiser ineligible to perform appraisals for federally related transactions or other transactions requiring the use of State certified or licensed appraisers.48

    48Id.

    5. States must designate a senior official, such as an executive director, who will serve as the State's Authorized Registry Official, and provide to the ASC, in writing, information regarding the selected Authorized Registry Official, and any individual(s) authorized to act on their behalf.49

    49Id.

    6. States must ensure that the authorization information provided to the ASC is updated and accurate.50

    50Id.

    7. States must adopt and implement a written policy to protect the right of access to the Appraiser Registry, as well as the ASC issued User Name and Password.51

    51Id.

    8. States must ensure the accuracy of all data submitted to the Appraiser Registry.52

    52Id.

    9. States must submit appraiser data (other than discipline) to the ASC at least monthly. If a State's data does not change during the month, the State agency must notify the ASC of that fact in writing.53

    53Id.

    10. If a State certified or licensed appraiser chooses not to pay the registry fee, the State must ensure that any potential user of that appraiser's services is aware that the appraiser's certificate or license is limited to performing appraisals only in connection with non-federally related transactions.54

    54Id.

    Policy Statement 4 Application Process

    AQB Criteria sets forth the minimum education, experience and examination requirements applicable to all States for credentialing of real property appraisers (certified, licensed, trainee and supervisory). In the application process, States must, at a minimum, employ a reliable means of validating both education and experience credit claimed by applicants for credentialing.55 Effective January 1, 2017, AQB Criteria also requires States to assess whether an applicant for a real property appraiser credential possesses a background that would not call into question public trust. The basis for such assessment shall be a matter left to the individual States, and must, at a minimum, be documented to the file.

    55 Includes applications for credentialing of trainee, licensed, certified residential or certified general classifications.

    A. Processing of Applications

    States must process applications in a consistent, equitable and well-documented manner. Applications for credentialing should be timely processed by State agencies (within 90 calendar days after receipt of a completed application). Any delay in the processing of applications must be sufficiently documented in the file to explain the delay. States must ensure appraiser credential applications submitted for processing do not contain invalid examinations as established by AQB Criteria.

    States must obtain and maintain sufficient relevant documentation pertaining to an application for issuance, upgrade and renewal of a credential so as to enable understanding of the facts and determinations in the matter and the reasons for those determinations. Documentation must include:

    1. Application receipt date;

    2. Education;

    3. Experience;

    4. Examination;

    5. Continuing education; and

    6. Any administrative or disciplinary action taken in connection with the application process, including results of any continuing education audit.

    B. Qualifying Education for Initial or Upgrade Applications

    States must verify that:

    (1) The applicant's claimed education courses are acceptable under AQB Criteria; and

    (2) the applicant has successfully completed courses consistent with AQB Criteria for the appraiser credential sought.

    States may not accept an affidavit for claimed qualifying education from applicants for any federally recognized credential.56 States must maintain adequate documentation to support verification of education claimed by applicants.

    56 If a State accepts education-related affidavits from applicants for initial licensure in any non-certified classification, upon the appraiser's application to upgrade to a certified classification, the State must require documentation to support the appraiser's educational qualification for the certified classification, not just the incremental amount of education required to move from the non-certified to the certified classification. This requirement applies to all federally recognized credentials.

    C. Continuing Education for Reinstatement and Renewal Applications 1. Reinstatement Applications

    States must verify that:

    (1) The applicant's claimed continuing education courses are acceptable under AQB Criteria; and

    (2) the applicant has successfully completed all continuing education consistent with AQB Criteria for reinstatement of the appraiser credential sought.

    States may not accept an affidavit for continuing education claimed from applicants for reinstatement. Applicants for reinstatement must submit documentation to support claimed continuing education and States must maintain adequate documentation to support verification of claimed education.

    2. Renewal Applications

    States must ensure that continuing education courses for renewal of an appraiser credential are consistent with AQB Criteria and that continuing education hours required for renewal of an appraiser credential were completed consistent with AQB Criteria. States may accept affidavits for continuing education credit claimed for credential renewal so long as the State implements a reliable validation procedure that adheres to the following objectives and requirements:

    a. Validation Objectives

    The State's validation procedures must be structured to permit acceptable projections of the sample results to the entire population of subject appraisers. Therefore, the sample must include an adequate number of affidavits selected from each federally recognized credential level to have a reasonable chance of identifying appraisers who fail to comply with AQB Criteria, and the sample must include a statistically relevant representation of the appraiser population being sampled.

    b. Minimum Standards

    (1) Validation must include a prompt post-approval audit. Each audit of an affidavit for continuing education credit claimed must be completed within 60 business days from the date the credential is scheduled for renewal (based on the credential's expiration date). To ensure the audit is a statistically relevant representation, a sampling of credentials that were renewed after the scheduled expiration date and/or beyond the date the sample was selected, must also be audited to ensure that a credential holder may not avoid being selected for a continuing education audit by renewing early or late.

    (2) States must audit the continuing education-related affidavit for each credentialed appraiser selected in the sampling procedure.

    (3) States must determine that education courses claimed conform to AQB Criteria and that the appraiser successfully completed each course.

    (4) When a State determines that an appraiser's continuing education does not meet AQB Criteria, and the appraiser has failed to complete any remedial action offered, the State must take appropriate action to suspend the appraiser's eligibility to perform appraisals in federally related transactions until such time that the requisite continuing education has been completed. The State must notify the ASC within five (5) business days after taking such action in order for the appraiser's record on the Appraiser Registry to be updated appropriately.

    (5) If a State determines that a renewal applicant knowingly falsely attested to completing the continuing education required by AQB Criteria, the State must take appropriate administrative and/or disciplinary action and report such action, if deemed to be discipline, to the ASC within five (5) business days.

    (6) If more than ten percent of the audited appraisers fail to meet the AQB Criteria, the State must take remedial action 57 to address the apparent weakness of its affidavit process. The ASC will determine on a case-by-case basis whether remedial actions are effective and acceptable.

    57 For example:

    (1) A State may conduct an additional audit using a higher percentage of audited appraisers; or

    (2) a State may publicly post action taken to sanction non-compliant appraisers to increase awareness in the appraiser community of the importance of compliance with continuing education requirements.

    (7) In the case of a renewal being processed after the credential's expiration date, but within the State's allowed grace period for a late renewal, the State must establish a reliable process to audit affidavits for continuing education (e.g., requiring documentation of all continuing education).

    c. Documentation

    States must maintain adequate documentation to support its affidavit renewal and audit procedures and actions.

    d. List of Education Courses

    To promote accountability, the ASC encourages States accepting affidavits for continuing education credit claimed for credential renewal to require that the appraiser provide a list of courses to support the affidavit.

    D. Experience for Initial or Upgrade Applications

    States must ensure that appraiser experience logs conform to AQB Criteria. States may not accept an affidavit for experience credit claimed by applicants for any federally recognized credential.58

    58See Policy Statement 1D and E for discussion of “federally recognized credential” and “non-federally recognized credential.” If prior to July 1, 2013, a State accepted experience-related affidavits from applicants for initial licensure in any non-certified classification, upon the appraiser's application to upgrade to a certified classification, the State must require experience documentation to support the appraiser's qualification for the certified classification, not just the incremental amount of experience required to move from the non-certified to the certified classification. For example, if a State accepted an experience affidavit from an appraiser to support the appraiser's initial hours to qualify for the licensed classification, and subsequently that appraiser applies to upgrade to the certified residential classification, the State must require documentation to support the full experience hours required for the certified residential classification, not just the difference in hours between the two classifications.

    1. Validation Required

    States must implement a reliable validation procedure to verify that each applicant's experience meets AQB Criteria, including but not limited to, being USPAP compliant and containing the required number of hours and months.

    2. Validation Procedures, Objectives and Requirements a. Experience Hours Validation

    States must determine the hours and time period claimed on the experience log are accurate. Appraiser Program staff or State board members must select the work product to validate the experience hours claimed; applicants may not have any role in this selection process.

    b. USPAP Compliance

    States must analyze a representative sample of the applicant's work product for compliance with USPAP. For appraisal experience to be acceptable under AQB Criteria, it must be USPAP compliant. States must exercise due diligence in determining whether submitted documentation of experience or work product demonstrates compliance with USPAP. Persons analyzing work product for USPAP compliance must be knowledgeable about appraisal practice and USPAP, and States must be able to document how such persons are so qualified.

    c. Determination of Experience Time Periods

    Experience time periods must conform to requirements set forth in the AQB Criteria for the credential sought.

    d. Supporting Documentation

    States must maintain adequate documentation to support validation methods. The applicant's file, either electronic or paper, must include the information necessary to identify each appraisal assignment selected to validate the experience hours claimed and each appraisal assignment analyzed by the State for USPAP compliance, notes, letters and/or reports prepared by the official(s) evaluating the report for USPAP compliance, and any correspondence exchanged with the applicant regarding the appraisals submitted. This supporting documentation may be discarded upon the completion of the first ASC Compliance Review performed after the credential issuance or denial for that applicant.

    E. Examination

    States must ensure that an appropriate AQB-approved qualifying examination is administered for each of the federally recognized appraiser classifications requiring an examination.

    F. Summary of Requirements Processing of Applications

    1. States must process applications in a consistent, equitable and well-documented manner.59

    59 Title XI § 1118 (a), 12 U.S.C. 3347.

    2. States must ensure appraiser credential applications submitted for processing do not contain invalid examinations as established by AQB Criteria.60

    60 Title XI § 1118 (a), 12 U.S.C. 3347; AQB Real Property Appraiser Qualification Criteria.

    3. States must obtain and maintain sufficient relevant documentation pertaining to an application for issuance, upgrade or renewal of a credential so as to enable understanding of the facts and determinations in the matter and the reasons for those determinations.61

    61 Title XI § 1118 (a), 12 U.S.C. 3347.

    Education

    1. States must verify that the applicant's claimed education courses are acceptable under AQB Criteria, whether for initial credentialing, renewal, upgrade or reinstatement.62

    62Id.

    2. States must verify that the applicant has successfully completed courses consistent with AQB Criteria for the appraiser credential sought, whether for initial credentialing, renewal, upgrade or reinstatement.63

    63Id.

    3. States must maintain adequate documentation to support verification.64

    64 Title XI § 1118 (a), 12 U.S.C. 3347.

    4. States may not accept an affidavit for education claimed from applicants for any federally recognized credential.65

    65Id.

    5. States may not accept an affidavit for continuing education claimed from applicants for reinstatement.66

    66Id.

    6. States may accept affidavits for continuing education credit claimed for credential renewal so long as the State implements a reliable validation procedure.67

    67 Title XI § 1118 (a), 12 U.S.C. 3347; AQB Real Property Appraiser Qualification Criteria.

    7. Audits of affidavits for continuing education credit claimed must be completed within sixty (60) business days from the date the credential is scheduled for renewal (based on the credential's expiration date).68

    68 Title XI § 1118 (a), 12 U.S.C. 3347.

    8. In the case of a renewal being processed after the credential's expiration date, but within the State's allowed grace period for a late renewal, the State must establish a reliable process to audit affidavits for continuing education (e.g., requiring documentation of all continuing education).69

    69Id.

    9. States are required to take remedial action when it is determined that more than ten percent of audited appraiser's affidavits for continuing education credit claimed fail to meet the minimum AQB Criteria.70

    70Id.

    10. States are required to take appropriate administrative and/or disciplinary action when it is determined that an applicant knowingly falsely attested to completing continuing education.71

    71Id.

    11. When a State determines that an appraiser's continuing education does not meet AQB Criteria, and the appraiser has failed to complete any remedial action offered, the State must take appropriate action to suspend the appraiser's eligibility to perform appraisals in federally related transactions until such time that the requisite continuing education has been completed. The State must notify the ASC within five (5) business days after taking such action in order for the appraiser's record on the Appraiser Registry to be updated appropriately.72

    72Id.

    Experience

    1. States may not accept an affidavit for experience credit claimed from applicants for any federally recognized credential.73

    73Id.

    2. States must ensure that appraiser experience logs conform to AQB Criteria.74

    74 Title XI § 1118 (a), 12 U.S.C. 3347; AQB Real Property Appraiser Qualification Criteria.

    3. States must use a reliable means of validating appraiser experience claims on all initial or upgrade applications for appraiser credentialing.75

    75 Title XI § 1118 (a), 12 U.S.C. 3347.

    4. States must select the work product to validate the experience hours claimed on all initial or upgrade applications for appraiser credentialing.76

    76 Title XI § 1118 (a), 12 U.S.C. 3347.

    5. States must analyze a representative sample of the applicant's work product for compliance with USPAP on all initial or upgrade applications for appraiser credentialing.77

    77Id.

    6. States must exercise due diligence in determining whether submitted documentation of experience or work product demonstrates compliance with USPAP on all initial or upgrade applications for appraiser credentialing.78

    78Id.

    7. Persons analyzing work product for USPAP compliance must be knowledgeable about appraisal practice and USPAP, and States must be able to document how such persons are so qualified.79

    79Id.

    8. Experience time periods must conform to requirements set forth in the AQB Criteria for the credential sought.80

    80 Title XI § 1118 (a), 12 U.S.C. 3347; AQB Real Property Appraiser Qualification Criteria.

    Examination

    1. States must ensure that an appropriate AQB-approved qualifying examination is administered for each of the federally recognized credentials requiring an examination.81

    81Id.

    Policy Statement 5 Reciprocity A. Reciprocity Policy

    Title XI contemplates the reasonably free movement of certified and licensed appraisers across State lines. The ASC monitors Appraiser Programs for compliance with the reciprocity provision of Title XI as amended by the Dodd-Frank Act.82 Title XI requires that in order for a State's appraisers to be eligible to perform appraisals for federally related transactions, the State must have a policy in place for issuing reciprocal credentials IF:

    82 Title XI § 1122 (b), 12 U.S.C. 3351.

    a. The appraiser is coming from a State (Home State) that is “in compliance” with Title XI as determined by the ASC; AND

    b. (i) the appraiser holds a valid credential from the Home State; AND

    (ii) the credentialing requirements of the Home State 83 meet or exceed those of the reciprocal credentialing State (Reciprocal State).84

    83 As they exist at the time of application for reciprocal credential.

    84Id.

    An appraiser relying on a credential from a State that does not have such a policy in place may not perform appraisals for federally related transactions. A State may be more lenient in the issuance of reciprocal credentials by implementing a more open door policy. However, States cannot impose additional impediments to obtaining reciprocal credentials.

    For purposes of implementing the reciprocity policy, States with an ASC Finding 85 of “Poor” do not satisfy the “in compliance” provision for reciprocity. Therefore, States are not required to recognize, for purposes of granting a reciprocal credential, the license or certification of an appraiser credentialed in a State with an ASC Finding of “Poor.”

    85See Appendix A, Compliance Review Process, for an explanation of ASC Findings.

    B. Application of Reciprocity Policy

    The following examples illustrate application of reciprocity in a manner that complies with Title XI. The examples refer to the reciprocity policy requiring issuance of a reciprocal credential IF:

    a. The appraiser is coming from a State that is “in compliance”; AND

    b. (i) the appraiser holds a valid credential from that State; AND

    (ii) the credentialing requirements of that State (as they currently exist) meet or exceed those of the reciprocal credentialing State (as they currently exist).

    Example 1. Additional Requirements Imposed on Applicants

    State A requires that prior to issuing a reciprocal credential the applicant must certify that disciplinary proceedings are not pending against that applicant in any jurisdiction. Under b (ii) above, if this requirement is not imposed on all of its own applicants for credentialing, STATE A cannot impose this requirement on applicants for reciprocal credentialing.

    Example 2. Credentialing Requirements

    An appraiser is seeking a reciprocal credential in STATE A. The appraiser holds a valid credential in STATE Z, even though it was issued in 2007. This satisfies b (i) above. However, in order to satisfy b (ii), STATE A would evaluate STATE Z's credentialing requirements as they currently exist to determine whether they meet or exceed STATE A's current requirements for credentialing.

    Example 3. Multiple State Credentials

    An appraiser credentialed in several States is seeking a reciprocal credential in State A. That appraiser's initial credentials were obtained through examination in the original credentialing State and through reciprocity in the additional States. State A requires the applicant to provide a “letter of good standing” from the State of original credentialing as a condition of granting a reciprocal credential. State A may not impose such a requirement since Title XI does not distinguish between credentials obtained by examination and credentials obtained by reciprocity for purposes of granting reciprocal credentials.

    C. Appraiser Compliance Requirements

    In order to maintain a credential granted by reciprocity, appraisers must comply with the credentialing State's policies, rules and statutes governing appraisers, including requirements for payment of certification and licensing fees, as well as continuing education.86

    86 A State may offer to accept continuing education (CE) for a renewal applicant who has satisfied CE requirements of a home State; however, a State may not impose this as a requirement for renewal, thereby imposing a requirement for the renewal applicant to retain a home State credential.

    D. Well-Documented Application Files

    States must obtain and maintain sufficient relevant documentation pertaining to an application for issuance of a credential by reciprocity so as to enable understanding of the facts and determinations in the matter and the reasons for those determinations.

    E. Summary of Requirements

    1. States must have a reciprocity policy in place for issuing a reciprocal credential to an appraiser from another State under the conditions specified in Title XI in order for the State's appraisers to be eligible to perform appraisals for federally related transactions.87

    87 Title XI § 1122 (b), 12 U.S.C. 3351.

    2. States may be more lenient in the issuance of reciprocal credentials by implementing a more open door policy; however, States may not impose additional impediments to issuance of reciprocal credentials.88

    88Id.

    3. States must obtain and maintain sufficient relevant documentation pertaining to an application for issuance of a credential by reciprocity so as to enable understanding of the facts and determinations in the matter and the reasons for those determinations.89

    89 Title XI § 1118 (a), 12 U.S.C. 3347.

    Policy Statement 6 Education

    AQB Criteria sets forth minimum requirements for appraiser education courses. This Policy Statement addresses proper administration of education requirements for compliance with AQB Criteria. (For requirements concerning qualifying and continuing education in the application process, see Policy Statement 4, Application Process.)

    A. Course Approval

    States must ensure that approved appraiser education courses are consistent with AQB Criteria and maintain sufficient documentation to support that approved appraiser education courses conform to AQB Criteria.

    States should ensure that course approval expiration dates assigned by the State coincide with the endorsement period assigned by the AQB's Course Approval Program or any other AQB-approved organization providing approval of course design and delivery. States may not continue to accept AQB approved courses after the AQB's expiration date unless the course content is reviewed and approved by the State.

    States should ensure that educational providers are afforded equal treatment in all respects.90

    90 For example:

    (1) consent agreements requiring additional education should not specify a particular course provider when there are other providers on the State's approved course listing offering the same course; and

    (2) courses from professional organizations should not be automatically approved and/or approved in a manner that is less burdensome than the State's normal approval process.

    States are encouraged to accept courses approved by the AQB's Course Approval Program.

    B. Distance Education

    States must ensure that distance education courses meet AQB Criteria and that the delivery mechanism for distance education courses offered by a non-academic provider, including secondary providers, has been approved by an AQB-approved organization providing approval of course design and delivery.

    States may not continue to accept courses after the AQB-approved organization's approval of course design and delivery date has expired.

    C. Summary of Requirements

    1. States must ensure that appraiser education courses are consistent with AQB Criteria.91

    91 Title XI § 1118 (a), 12 U.S.C. 3347; AQB Real Property Appraiser Qualification Criteria.

    2. States must maintain sufficient documentation to support that approved appraiser courses conform to AQB Criteria.92

    92 Title XI § 1118 (a), 12 U.S.C. 3347.

    3. States must ensure the delivery mechanism for distance education courses offered by a non-academic provider, including secondary providers, has been approved by an AQB-approved organization providing approval of course design and delivery.93

    93 Title XI § 1118 (a), 12 U.S.C. 3347; AQB Real Property Appraiser Qualification Criteria.

    Policy Statement 7 State Agency Enforcement A. State Agency Regulatory Program

    Title XI requires the ASC to monitor the States for the purpose of determining whether the State processes complaints and completes investigations in a reasonable time period, appropriately disciplines sanctioned appraisers and maintains an effective regulatory program.94

    94 Title XI § 1118(a), 12 U.S.C. 3347.

    B. Enforcement Process

    States must ensure that the system for processing and investigating complaints 95 and sanctioning appraisers is administered in a timely, effective, consistent, equitable, and well-documented manner.

    95See Appendix B, Glossary of Terms, for the definition of “complaint.”

    1. Timely Enforcement

    States must process complaints of appraiser misconduct or wrongdoing in a timely manner to ensure effective supervision of appraisers, and when appropriate, that incompetent or unethical appraisers are not allowed to continue their appraisal practice. Absent special documented circumstances, final administrative decisions regarding complaints must occur within one year (12 months) of the complaint filing date. 96 Special documented circumstances are those extenuating circumstances (fully documented) beyond the control of the State agency that delays normal processing of a complaint such as: complaints involving a criminal investigation by a law enforcement agency when the investigative agency requests that the State refrain from proceeding; final disposition that has been appealed to a higher court; documented medical condition of the respondent; ancillary civil litigation; and complex cases that involve multiple individuals and reports. Such special documented circumstances also include those periods when State rules require referral of a complaint to another State entity for review and the State agency is precluded from further processing of the complaint until it is returned. In that circumstance, the State agency should document the required referral and the time period during which the complaint was not under its control or authority.

    96 The one-year period for resolution of complaints is not intended to have the impact of a statute of limitation or statute of repose.

    2. Effective Enforcement

    Effective enforcement requires that States investigate allegations of appraiser misconduct or wrongdoing, and if allegations are proven, take appropriate disciplinary or remedial action. Dismissal of an alleged violation solely due to an “absence of harm to the public” is inconsistent with Title XI. Financial loss or the lack thereof is not an element in determining whether there is a violation. The extent of such loss, however, may be a factor in determining the appropriate level of discipline.

    Persons analyzing complaints for USPAP compliance must be knowledgeable about appraisal practice and USPAP and States must be able to document how such persons are so qualified.

    States must analyze each complaint to determine whether additional violations, especially those relating to USPAP, should be added to the complaint.

    Closure of a complaint based solely on a State's statute of limitations that results in dismissal of a complaint without the investigation of the merits of the complaint is inconsistent with the Title XI requirement that States assure effective supervision of the activities of credentialed appraisers.97

    97 Title XI § 1117, 12 U.S.C. 3346.

    3. Consistent and Equitable Enforcement

    Absent specific documented facts or considerations, substantially similar cases within a State should result in similar dispositions.

    4. Well-Documented Enforcement

    States must obtain and maintain sufficient relevant documentation pertaining to a matter so as to enable understanding of the facts and determinations in the matter and the reasons for those determinations.

    a. Complaint Files

    Complaint files must:

    • Include documentation outlining the progress of the investigation;

    • demonstrate that appraisal reports are analyzed and any USPAP violations are identified and considered, whether or not they were the subject of the complaint;

    • include rationale for the final outcome of the case (i.e., dismissal or imposition of discipline);

    • include documentation explaining any delay in processing, investigation or adjudication;

    • contain documentation that all ordered or agreed upon discipline, such as probation, fine, or completion of education is tracked and that completion of all terms is confirmed; and

    • be organized in a manner that allows understanding of the steps taken throughout the complaint, investigation, and adjudicatory process.

    b. Complaint Logs

    States must track all complaints using a complaint log. The complaint log must record all complaints, regardless of their procedural status in the investigation and/or resolution process, including complaints pending before the State board, Office of the Attorney General, other law enforcement agencies, and/or offices of administrative hearings.

    The complaint log must include the following information (States are strongly encouraged to maintain this information in an electronic, sortable format):

    1. Case number 2. Name of respondent 3. Actual date the complaint was received by the State 4. Source of complaint (e.g., consumer, lender, AMC, bank regulator, appraiser, hotline) or name of complainant 5. Current status of the complaint 6. Date the complaint was closed (e.g., final disposition by the administrative hearing agency, Office of the Attorney General, State Appraiser Regulatory Agency or Court of Appeals) 7. Method of disposition (e.g., dismissal, letter of warning, consent order, final order) C. Summary of Requirements

    1. States must maintain relevant documentation to enable understanding of the facts and determinations in the matter and the reasons for those determinations.98

    98 Title XI § 1118(a), 12 U.S.C. 3347.

    2. States must resolve all complaints filed against appraisers within one year (12 months) of the complaint filing date, except for special documented circumstances.99

    99Id.

    3. States must ensure that the system for processing and investigating complaints and sanctioning appraisers is administered in an effective, consistent, equitable, and well-documented manner.100

    100Id.

    4. States must track complaints of alleged appraiser misconduct or wrongdoing using a complaint log.101

    101Id.

    5. States must appropriately document enforcement files and include rationale.102

    102Id.

    6. States must regulate, supervise and discipline their credentialed appraisers.103

    103Id.

    7. Persons analyzing complaints for USPAP compliance must be knowledgeable about appraisal practice and USPAP, and States must be able to document how such persons are so qualified.104

    104Id.

    Part B: AMC Program Policy Statement 8 Statutes, Regulations, Policies and Procedures Governing State AMC Programs A. Participating States and ASC Oversight

    States are not required to establish an AMC registration and supervision program. For those States electing to participate in the registration and supervision of AMCs (participating States), ASC staff will informally monitor the State's progress to implement the requirements of Title XI and the AMC Rule.105 Formal ASC oversight of State AMC Programs will begin at the next regularly scheduled Compliance Review of a State after a State elects to register and supervise AMCs pursuant to the AMC Rule. Formal ASC oversight will consist of evaluating AMC Programs in participating States during the Compliance Review process to determine compliance or lack thereof with Title XI, and to assess implementation of the minimum requirements for State registration and supervision of AMCs as established by the AMC Rule. Upon expiration of the statutory implementation period (see Policy Statement 11, Statutory Implementation Period), Compliance Reviews will include ASC oversight of AMC Programs for any participating State.

    105 Title XI § 1103 (a)(1)(B), 12 U.S.C. 3332. AMC Rule means the interagency final rule on minimum requirements for State registration and supervision of AMCs (12 CFR 34.210-34.216; 12 CFR 225.190-225.196; 12 CFR 323.8 -323.14; 12 CFR 1222.20-1222.26.

    B. Relation to State Law

    Participating States may establish requirements in addition to those in the AMC Rule.

    Participating States may also have a more expansive definition of AMCs. 106 However, if a participating State has a more expansive definition of AMCs than in Title XI (thereby encompassing State regulation of AMCs that are not within the Title XI definition of AMC), the State must ensure such AMCs are identified as such in the State database, just as States currently do for non-federally recognized credentials or designations. Only those AMCs that meet the Federal definition of AMC will be eligible to be on the AMC Registry.

    106 Title XI as amended by the Dodd-Frank Act defines “appraisal management company” to mean, in part, an external third party that oversees a network or panel of more than 15 appraisers (State certified or licensed) in a State, or 25 or more appraisers nationally (two or more States) within a given year. (12 U.S.C. 3350(11)). Title XI as amended by the Dodd-Frank Act also allows States to adopt requirements in addition to those in the AMC Rule. (12 U.S.C. 3353(b)). For example, States may decide to supervise entities that provide appraisal management services, but do not meet the size thresholds of the Title XI definition of AMC. If a State has a more expansive regulatory framework that covers entities that provide appraisal management services but do not meet the Title XI definition of AMC, the State should only submit information regarding AMCs meeting the Title XI definition to the AMC Registry.

    C. Funding and Staffing

    The Dodd-Frank Act amended Title XI to require the ASC to determine whether participating States have sufficient funding and staffing to meet their Title XI requirements. Compliance with this provision requires that a State must provide its AMC Program with funding and staffing sufficient to carry out its Title XI-related duties. The ASC evaluates the sufficiency of funding and staffing as part of its review of all aspects of an AMC Program's effectiveness, including the adequacy of State boards, committees, or commissions responsible for carrying out Title XI-related duties.

    D. Minimum Requirements for Registration and Supervision of AMCs as Established by the AMC Rule 1. AMC Registration and Supervision

    If a State chooses to participate in the registration and supervision of AMCs in accordance with the AMC Rule, the State will be required to comply with the minimum requirements set forth in the AMC Rule. States should refer to the AMC Rule for compliance requirements 107 as this Policy Statement merely summarizes what the AMC Rule requires of participating States.

    107See footnote 104.

    (a) The AMC Rule includes requirements for participating States to establish and maintain within the State appraiser certifying and licensing agency an AMC Program with the legal authority and mechanisms to:

    (1) Review and approve or deny AMC initial registration applications and/or renewals for registration;

    (2) Examine records of AMCs and require AMCs to submit information;

    (3) Verify that appraisers on AMCs' panels hold valid State credentials;

    (4) Conduct investigations of AMCs to assess potential violations of appraisal-related laws, regulations, or orders;

    (5) Discipline, suspend, terminate, or deny renewal of the registration of an AMC that violates appraisal-related laws, regulations, or orders; and

    (6) Report an AMC's violation of appraisal-related laws, regulations, or orders, as well as disciplinary and enforcement actions and other relevant information about an AMC's operations, to the ASC.

    (b) The AMC Rule includes requirements for participating States to impose requirements on AMCs that are not Federally regulated AMCs 108 to:

    108 “Federally regulated AMCs,” meaning AMCs that are subsidiaries owned and controlled by an insured depository institution or an insured credit union and regulated by a Federal financial institutions regulatory agency, are not required to register with the State (Title XI § 1124 (c), 12 U.S.C. 3353(c)).

    (1) Register with and be subject to supervision by the State appraiser certifying and licensing agency;

    (2) Engage only State-certified or State-licensed appraisers for federally related transactions in conformity with any federally related transaction regulations;

    (3) Establish and comply with processes and controls reasonably designed to ensure that the AMC, in engaging an appraiser, selects an appraiser who is independent of the transaction and who has the requisite education, expertise, and experience necessary to competently complete the appraisal assignment for the particular market and property type;

    (4) Direct the appraiser to perform the assignment in accordance with USPAP; and

    (5) Establish and comply with processes and controls reasonably designed to ensure that the AMC conducts its appraisal management services in accordance with the requirements of section 129E(a) through (i) of the Truth in Lending Act, 15 U.S.C. 1639e(a) through (i), and regulations thereunder.

    2. Ownership Limitations for State-registered AMCs A. Appraiser Certification or Licensing of Owners

    An AMC subject to State registration shall not be registered by a State or included on the AMC Registry if such AMC, in whole or in part, directly or indirectly, is owned by any person who has had an appraiser license or certificate refused, denied, cancelled, surrendered in lieu of revocation, or revoked in any State for a substantive cause,109 as determined by the State appraiser certifying and licensing agency. A State's process for review could, for example, be by questionnaire, or affidavit, or background screening, or otherwise. States must document to the file the State's method of review and the result.

    109 An AMC subject to State registration is not barred from being registered by a State or included on the AMC Registry of AMCs if the license or certificate of the appraiser with an ownership interest was not revoked for a substantive cause and has been reinstated by the State or States in which the appraiser was licensed or certified. (12 CFR 34.210-34.216; 12 CFR 225.190-225.196; 12 CFR 323.8 -323.14; 12 CFR 1222.20-1222.26.

    B. Good Moral Character of Owners

    An AMC shall not be registered by a State if any person that owns more than 10 percent of the AMC—

    (1) Is determined by the State not to have good moral character; or

    (2) Fails to submit to a background investigation carried out by the State.

    A State's process for review could, for example, be by questionnaire, or affidavit, or background screening, or otherwise. The ASC would expect written documentation of the State's method of review and the result.

    3. Requirements for Federally Regulated AMCs

    Participating States are not required to identify Federally regulated AMCs 110 operating in their States, but rather the Federal financial institution regulatory agencies are responsible for requiring such AMCs to identify themselves to participating States and report required information.

    110See footnote 104.

    A Federally regulated AMC shall not be included on the AMC Registry if such AMC, in whole or in part, directly or indirectly, is owned by any person who has had an appraiser license or certificate refused, denied, cancelled, surrendered in lieu of revocation, or revoked in any State for a substantive cause, as determined by the ASC.

    E. Summary of Requirements

    1. Participating States must establish and maintain an AMC Program with the legal authority and mechanisms consistent with the AMC Rule.111

    111 12 CFR 34.210-34.216; 12 CFR 225.190-225.196; 12 CFR 323.8-323.14; 12 CFR 1222.20-1222.26.

    2. Participating States must impose requirements on AMCs consistent with the AMC Rule.112

    112Id.

    3. Participating States must enforce and document ownership limitations for State-registered AMCs.113

    113Id.

    4. Only those AMCs that meet the Federal definition of AMC will be eligible to be on the AMC Registry. Therefore, participating States that have a more expansive definition of AMCs than in the AMC Rule must ensure such non-Federally recognized AMCs are identified as such in the State database.114

    114 Title XI § 1118 (b), 12 U.S.C. 3347.

    5. States must have funding and staffing sufficient to carry out their Title XI-related duties.115

    115Id.

    Policy Statement 9 National Registry of AMCs (AMC Registry) A. Requirements for the AMC Registry

    Title XI requires the ASC to maintain the AMC Registry of AMCs that are either registered with and subject to supervision of a participating State or are operating subsidiaries of a Federally regulated financial institution.116 Title XI further requires the States to transmit to the ASC: (1) Reports on a timely basis of supervisory activities involving AMCs, including investigations resulting in disciplinary action being taken; and (2) the registry fee as set by the ASC 117 from AMCs that are either registered with a participating State or are Federally regulated AMCs.118

    116 Title XI § 1103(a)(6), 12 U.S.C. 3332.

    117 Title XI § 1109(a)(4), 12 U.S.C. 3338.

    118 Title XI § 1109(a)(3) and (4), 12 U.S.C. 3338.

    As with appraiser registry fees, Title XI, § 1109(a)(4)(b) requires the AMC registry fee to be collected by each participating State and transmitted to the ASC. Therefore, as with appraisers, an AMC will pay a registry fee in each participating State in which the AMC operates. As with appraisers, an AMC operating in multiple participating States will pay a registry fee in multiple States in order to be on the AMC Registry for each State.

    States must notify the ASC as soon as practicable if an AMC listed on the AMC Registry is no longer registered with or operating in the State. The ASC extranet application allows States to update their AMC information directly to the AMC Registry.

    B. Registry Fee and Invoicing Policies

    Each State must remit to the ASC the annual registry fee, as set by the ASC, for AMCs to be listed on the AMC Registry. Requests to prorate refunds or partial-year registrations will not be granted. If a State collects multiple-year fees for multiple-years, the State may choose to remit to the ASC the total amount of the multiple-year registry fees or the equivalent annual fee amount. The ASC will, however, record AMCs on the AMC Registry only for the number of years for which the ASC has received payment. States must reconcile and pay registry invoices in a timely manner (45 calendar days after receipt of the invoice).

    C. Reporting Requirements

    State agencies must report all disciplinary action 119 taken against an AMC to the ASC via the extranet application within 5 business days after the disciplinary action is final, as determined by State law. States not reporting via the extranet application must provide, in writing to the ASC, a description of the circumstances preventing compliance with this requirement. For the most serious disciplinary actions (e.g., any action that interrupts an AMCs ability to provide appraisal management services), the AMCs status must be changed on the AMC Registry to “inactive.” A Federally regulated AMC operating in a State must report to the State the information required to be submitted by the State to the ASC, pursuant to the ASC's policies regarding the determination of the AMC registry fee.

    119See Appendix B, Glossary of Terms, for the definition of “disciplinary action.”

    D. Access to AMC Registry Data

    The ASC website provides free access to the public portion of the AMC Registry at www.asc.gov. The public portion of the AMC Registry data may be downloaded using predefined queries or user-customized applications.

    Access to the full database, which includes non-public data (e.g., certain disciplinary action information), is restricted to authorized State and Federal regulatory agencies. States must designate a senior official, such as an executive director, to serve as the State's Authorized Registry Official, and provide to the ASC, in writing, information regarding the designated Authorized Registry Official. States must ensure that the authorization information provided to the ASC is updated and accurate. States must adopt and implement a written policy to protect the right of access, as well as the ASC issued User Name and Password.

    E. Summary of Requirements

    1. States must reconcile and pay registry invoices in a timely manner (45 calendar days after receipt of the invoice).120

    120 Title XI § 1118(a), 12 U.S.C. 3347; Title XI § 1109 (a), 12 U.S.C. 3338.

    2. State agencies must report all disciplinary action taken against an AMC to the ASC via the extranet application within 5 business days after the disciplinary action is final, as determined by State law.121

    121 Title XI § 1118(a), 12 U.S.C. 3347.

    3. States not reporting via the extranet application must provide, in writing to the ASC, a description of the circumstances preventing compliance with this requirement.122

    122Id.

    4. For the most serious disciplinary actions (e.g., any action that interrupts an AMC's ability to provide appraisal management services), the AMC's status must be changed on the AMC Registry to “inactive.”123

    123Id.

    5. States must notify the ASC as soon as practicable if an AMC listed on the AMC Registry is no longer registered with or operating in the State.

    6. States must designate a senior official, such as an executive director, who will serve as the State's Authorized Registry Official, and provide to the ASC, in writing, information regarding the selected Authorized Registry Official, and any individual(s) authorized to act on their behalf. 124

    124Id.

    7. States must adopt and implement a written policy to protect the right of access to the AMC Registry, as well as the ASC issued User Name and Password.125

    125Id.

    8. States must ensure the accuracy of all data submitted to the AMC Registry.126

    126Id.

    Policy Statement 10 State Agency Enforcement A. State Agency Regulatory Program

    Title XI requires the ASC to monitor the States for the purpose of determining whether the State processes complaints and completes investigations in a reasonable time period, appropriately disciplines sanctioned AMCs and maintains an effective regulatory program.127

    127 Title XI § 1118(a), 12 U.S.C. 3347.

    B. Enforcement Process

    States must ensure that the system for processing and investigating complaints128 and sanctioning AMCs is administered in a timely, effective, consistent, equitable, and well-documented129 manner.

    128See Appendix B, Glossary of Terms, for the definition of “complaint.”

    129See Appendix B, Glossary of Terms, for the definition of “well-documented.”

    1. Timely Enforcement

    States must process complaints against AMCs in a timely manner to ensure effective supervision of AMCs. Absent special documented circumstances, final administrative decisions regarding complaints must occur within one year (12 months) of the complaint filing date. Special documented circumstances are those extenuating circumstances (fully documented) beyond the control of the State agency that delays normal processing of a complaint such as: Complaints involving a criminal investigation by a law enforcement agency when the investigative agency requests that the State refrain from proceeding; final disposition that has been appealed to a higher court; documented medical condition of the respondent; ancillary civil litigation; and complex fraud cases that involve multiple individuals and reports. Such special documented circumstances also include those periods when State rules require referral of a complaint to another State entity for review and the State agency is precluded from further processing of the complaint until it is returned. In that circumstance, the State agency should document the required referral and the time period during which the complaint was not under its control or authority.

    2. Effective Enforcement

    Effective enforcement requires that States investigate complaints, and if allegations are proven, take appropriate disciplinary or remedial action.

    3. Consistent and Equitable Enforcement

    Absent specific documented facts or considerations, substantially similar cases within a State should result in similar dispositions.

    4. Well-Documented Enforcement

    States must obtain and maintain sufficient relevant documentation pertaining to a matter so as to enable understanding of the facts and determinations in the matter and the reasons for those determinations.

    a. Complaint Files

    Complaint files must:

    • Include documentation outlining the progress of the investigation;

    • include rationale for the final outcome of the case (i.e., dismissal or imposition of discipline);

    • include documentation explaining any delay in processing, investigation or adjudication;

    • contain documentation that all ordered or agreed upon discipline is tracked and that completion of all terms is confirmed; and

    • be organized in a manner that allows understanding of the steps taken throughout the complaint, investigation, and adjudicatory process.

    b. Complaint Logs

    States must track all complaints using a complaint log. The complaint log must record all complaints, regardless of their procedural status in the investigation and/or resolution process, including complaints pending before the State board, Office of the Attorney General, other law enforcement agencies, and/or offices of administrative hearings. The complaint log must include the following information (States are strongly encouraged to maintain this information in an electronic, sortable format):

    1. Case number 2. Name of respondent 3. Actual date the complaint was received by the State 4. Source of complaint (e.g., consumer, lender, AMC, bank regulator, appraiser, hotline) or name of complainant 5. Current status of the complaint 6. Date the complaint was closed (e.g., final disposition by the administrative hearing agency, Office of the Attorney General, State AMC Program or Court of Appeals) 7. Method of disposition (e.g., dismissal, letter of warning, consent order, final order) C. Summary of Requirements

    1. States must maintain relevant documentation to enable understanding of the facts and determinations in the matter and the reasons for those determinations.130

    130 Title XI § 1118(a), 12 U.S.C. 3347.

    2. States must resolve all complaints filed against AMCs within one year (12 months) of the complaint filing date, except for special documented circumstances.131

    131Id.

    3. States must ensure that the system for processing and investigating complaints and sanctioning AMCs is administered in an effective, consistent, equitable, and well-documented manner.132

    132Id.

    4. States must track complaints of alleged AMC misconduct or wrongdoing using a complaint log.133

    133Id.

    5. States must appropriately document enforcement files and include rationale.134

    134Id.

    Policy Statement 11 Statutory Implementation Period

    Title XI and the AMC Rule set forth the statutory implementation period.135 The AMC Rule was effective on August 10, 2015. As of 36 months from that date (August 10, 2018), an AMC may not provide appraisal management services for a federally related transaction in a non-participating State unless the AMC is a Federally regulated AMC. Appraisal management services may still be provided for federally related transactions in non-participating States by individual appraisers, by AMCs that are below the minimum statutory panel size threshold, and as noted, by Federally regulated AMCs.

    135 Title XI § 1124(f)(1), 12 U.S.C. 3353 and 12 CFR 34.210-34.216; 12 CFR 225.190-225.196; 12 CFR 323.8-323.14; 12 CFR 1222.20-1222.26.

    The ASC, with the approval of the Federal Financial Institutions Examination Council (FFIEC), may extend this statutory implementation period for an additional 12 months if the ASC makes a finding that a State has made substantial progress toward implementing a registration and supervision program for AMCs that meets the standards of Title XI.136

    136 Title XI § 1124(f)(2), 12 U.S.C. 3353.

    Part C: Interim Sanctions Policy Statement 12 Interim Sanctions A. Authority

    Title XI grants the ASC authority to impose sanctions on a State that fails to have an effective Appraiser or AMC Program.137 The ASC may remove a State credentialed appraiser or a registered AMC from the Appraiser or AMC Registry on an interim basis, not to exceed 90 days, pending State agency action on licensing, certification, registration and disciplinary proceedings as an alternative to or in advance of a non-recognition proceeding.138 In determining whether an Appraiser or AMC Program is effective, the ASC shall conduct an analysis as required by Title XI. An ASC Finding of Poor on the Compliance Review Report 139 issued to a State at the conclusion of an ASC Compliance Review may trigger an analysis by the ASC for potential interim sanction(s). The following provisions apply to the exercise by the ASC of its authority to impose interim sanction(s) on State agencies.

    137 Title XI § 1118(a), 12 U.S.C. 3347.

    138Id.

    139See Appendix A—Compliance Review Process.

    B. Opportunity To Be Heard or Correct Conditions

    The ASC shall provide the State agency with:

    1. Written notice of intention to impose an interim sanction; and

    2. opportunity to respond or to correct the conditions causing such notice to the State.

    Notice and opportunity to respond or correct the conditions shall be in accordance with section C, Procedures. C. Procedures

    This section prescribes the ASC's procedures which will be followed in arriving at a decision by the ASC to impose an interim sanction against a State agency.

    1. Notice

    The ASC shall provide a written Notice of intention to impose an interim sanction (Notice) to the State agency. The Notice shall contain the ASC's analysis as required by Title XI of the State's licensing and certification of appraisers, the registration of AMCs, the issuance of temporary licenses and certifications for appraisers, the receiving and tracking of submitted complaints against appraisers and AMCs, the investigation of complaints, and enforcement actions against appraisers and AMCs.140 The ASC shall verify the State's date of receipt, and publish both the Notice and the State's date of receipt in the Federal Register.

    140 Title XI § 1118(a), 12 U.S.C. 3347.

    2. State Agency Response

    Within 15 days of receipt of the Notice, the State may submit a response to the ASC's Executive Director. Alternatively, a State may submit a Notice Not to Contest with the ASC's Executive Director. The filing of a Notice Not to Contest shall not constitute a waiver of the right to a judicial review of the ASC's decision, findings and conclusions. Failure to file a Response within 15 days shall constitute authorization for the ASC to find the facts to be as presented in the Notice and analysis. The ASC, for good cause shown, may permit the filing of a Response after the prescribed time.

    3. Briefs, Memoranda and Statements

    Within 45 days after the date of receipt by the State agency of the Notice as published in the Federal Register, the State agency may file with the ASC's Executive Director a written brief, memorandum or other statement providing factual data and policy and legal arguments regarding the matters set out in the Notice and analysis.

    4. Oral Presentations to the ASC

    Within 45 days after the date of receipt by the State agency of the Notice as published in the Federal Register, the State may file a request with the ASC's Executive Director to make oral presentation to the ASC. If the State has filed a request for oral presentation, the matter shall be heard within 45 days. An oral presentation shall be considered as an opportunity to offer, emphasize and clarify the facts, policies and laws concerning the proceeding, and is not a Meeting 141 of the ASC. On the appropriate date and time, the State agency will make the oral presentation before the ASC. Any ASC member may ask pertinent questions relating to the content of the oral presentation. Oral presentations will not be recorded or otherwise transcribed. Summary notes will be taken by ASC staff and made part of the record on which the ASC shall decide the matter.

    141 The proceeding is more in the nature of a Briefing not subject to open meeting requirements. The presentation is an opportunity for the State to brief the ASC—to offer, emphasize and clarify the facts, policies and laws concerning the proceeding, and for the ASC members to ask questions. Additional consideration is given to the fact that this stage of the proceeding is pre-decisional.

    5. Conduct of Interim Sanction Proceedings (a) Written Submissions

    All aspects of the proceeding shall be conducted by written submissions, with the exception of oral presentations allowed under subsection 4 above.

    Disqualification

    An ASC member who deems himself or herself disqualified may at any time withdraw. Upon receipt of a timely and sufficient affidavit of personal bias or disqualification of such member, the ASC will rule on the matter as a part of the record.

    (b) Authority of ASC Chairperson

    The Chairperson of the ASC, in consultation with other members of the ASC whenever appropriate, shall have complete charge of the proceeding and shall have the duty to conduct it in a fair and impartial manner and to take all necessary action to avoid delay in the disposition of proceedings.

    (c) Rules of Evidence

    Except as is otherwise set forth in this section, relevant material and reliable evidence that is not unduly repetitive is admissible to the fullest extent authorized by the Administrative Procedure Act (5 U.S.C. 551-559) and other applicable law.

    6. Decision of the ASC and Judicial Review

    Within 90 days after the date of receipt by the State agency of the Notice as published in the Federal Register, or in the case of oral presentation having been granted, within 30 days after presentation, the ASC shall issue a final decision, findings and conclusions and shall publish the decision promptly in the Federal Register. The final decision shall be effective on issuance. The ASC's Executive Director shall ensure prompt circulation of the decision to the State agency. A final decision of the ASC is a prerequisite to seeking judicial review.

    7. Computing Time

    Time computation is based on business days. The date of the act, event or default from which the designated period of time begins to run is not included. The last day is included unless it is a Saturday, Sunday, or Federal holiday, in which case the period runs until the end of the next day which is not a Saturday, Sunday or Federal holiday.

    8. Documents and Exhibits

    Unless otherwise provided by statute, all documents, papers and exhibits filed in connection with any proceeding, other than those that may be withheld from disclosure under applicable law, shall be placed by the ASC's Executive Director in the proceeding's file and will be available for public inspection and copying.

    9. Judicial Review

    A decision of the ASC under this section shall be subject to judicial review. The form of proceeding for judicial review may include any applicable form of legal action, including actions for declaratory judgments or writs of prohibitory or mandatory injunction in a court of competent jurisdiction.142

    142 5 U.S.C. 703—Form and venue of proceeding.

    Appendices Appendix A—Compliance Review Process

    The ASC monitors State Appraiser and AMC Programs for compliance with Title XI. The monitoring of State Programs is largely accomplished through on-site visits known as a Compliance Review (Review). A Review is conducted over a two- to four-day period, and is scheduled to coincide with a meeting of the Program's decision-making body whenever possible. ASC staff reviews the Appraiser Program and the seven compliance areas addressed in Policy Statements 1 through 7. ASC staff reviews a participating State's AMC Program and the three compliance areas addressed in Policy Statements 8 through 10. Sufficient documentation demonstrating compliance must be maintained by a State and made available for inspection during the Review. ASC staff reviews a sampling of documentation in each of the compliance areas. The sampling is intended to be representative of a State Program in its entirety.

    Based on the Review, ASC staff provides the State with an ASC staff report for the Appraiser Program, and if applicable, an ASC staff report for the AMC Program, detailing preliminary findings. The State is given 60 days to respond to the ASC staff report(s). At the conclusion of the Review, a Compliance Review Report (Report) is issued to the State for the Appraiser Program, and if applicable, a Report is also issued for the AMC Program, with the ASC Finding on each Program's overall compliance, or lack thereof, with Title XI. Deficiencies resulting in non-compliance in any of the compliance areas are cited in the Report. “Areas of Concern” which potentially expose a Program to compliance issues in the future are also addressed in the Report. The ASC's final disposition is based upon the ASC staff report, the State's response and staff's recommendation.

    The following chart provides an explanation of the ASC Findings and rating criteria for each ASC Finding category. The ASC Finding places particular emphasis on whether the State is maintaining an effective regulatory Program in compliance with Title XI.

    ASC finding Rating criteria Review cycle
  • (program history or nature of deficiency may warrant a more accelerated review cycle)
  • Excellent • State meets all Title XI mandates and complies with requirements of ASC Policy Statements 2-year. • State maintains a strong regulatory Program. • Very low risk of Program failure. Good • State meets the majority of Title XI mandates and complies with the majority of ASC Policy Statement requirements 2-year. • Deficiencies are minor in nature. • State is adequately addressing deficiencies identified and correcting them in the normal course of business. • State maintains an effective regulatory Program. • Low risk of Program failure. Needs Improvement • State does not meet all Title XI mandates and does not comply with all requirements of ASC Policy Statements 2-year with additional monitoring. • Deficiencies are material but manageable and if not corrected in a timely manner pose a potential risk to the Program. • State may have a history of repeated deficiencies but is showing progress toward correcting deficiencies • State regulatory Program needs improvement. • Moderate risk of Program failure. Not Satisfactory • State does not meet all Title XI mandates and does not comply with all requirements of ASC Policy Statements 1-year. • Deficiencies present a significant risk and if not corrected in a timely manner pose a well-defined risk to the Program • State may have a history of repeated deficiencies and requires more supervision to ensure corrective actions are progressing • State regulatory Program has substantial deficiencies. • Substantial risk of Program failure. Poor • State does not meet Title XI mandates and does not comply with requirements of ASC Policy Statements Continuous monitoring. • Deficiencies are significant and severe, require immediate attention and if not corrected represent critical flaws in the Program • State may have a history of repeated deficiencies and may show a lack of willingness or ability to correct deficiencies • High risk of Program failure.

    The ASC has two primary Review Cycles: Two-year and one-year. Most States are scheduled on a two-year Review Cycle. States may be moved to a one-year Review Cycle if the ASC determines more frequent on-site Reviews are needed to ensure that the State maintains an effective Program. Generally, States are placed on a one-year Review Cycle because of non-compliance issues or serious areas of concerns that warrant more frequent on-site visits. Both two-year and one-year Review Cycles include a review of all aspects of the State's Program.

    The ASC may conduct Follow-up Reviews and additional monitoring. A Follow-up Review focuses only on specific areas identified during the previous on-site Review. Follow-up Reviews usually occur within 6-12 months of the previous Review. In addition, as a risk management tool, ASC staff identifies State Programs that may have a significant impact on the nation's appraiser regulatory system in the event of Title XI compliance issues. For States that represent a significant percentage of the credentials on the Appraiser Registry, ASC staff performs annual on-site Priority Contact visits. The primary purpose of the Priority Contact visit is to review topical issues, evaluate regulatory compliance issues, and maintain a close working relationship with the State. This is not a complete Review of the Program. The ASC will also schedule a Priority Contact visit for a State when a specific concern is identified that requires special attention. Additional monitoring may be required where a deficiency is identified and reports on required or agreed upon corrective actions are required monthly or quarterly. Additional monitoring may include on-site monitoring as well as off-site monitoring.

    Appendix B—Glossary of Terms

    Appraisal management company (AMC): Refers to, in connection with valuing properties collateralizing mortgage loans or mortgages incorporated into a securitization, any external third party authorized either by a creditor of a consumer credit transaction secured by a consumer's principal dwelling or by an underwriter of or other principal in the secondary mortgage markets, that oversees a network or panel of more than 15 certified or licensed appraisers in a State or 25 or more nationally within a given year—

    (A) To recruit, select, and retain appraisers;

    (B) to contract with licensed and certified appraisers to perform appraisal assignments;

    (C) to manage the process of having an appraisal performed, including providing administrative duties such as receiving appraisal orders and appraisal reports, submitting completed appraisal reports to creditors and underwriters, collecting fees from creditors and underwriters for services provided, and reimbursing appraisers for services performed; or

    (D) to review and verify the work of appraisers.

    AQB Criteria: Refers to the Real Property Appraiser Qualification Criteria as established by the Appraiser Qualifications Board of the Appraisal Foundation setting forth minimum education, experience and examination requirements for the licensure and certification of real property appraisers, and minimum requirements for “Trainee” and “Supervisory” appraisers.

    Assignment: As referenced herein, for purposes of temporary practice, “assignment” means one or more real estate appraisals and written appraisal report(s) covered by a single contractual agreement.

    Complaint: As referenced herein, any document filed with, received by, or serving as the basis for possible inquiry by the State agency regarding alleged violation of Title XI, Federal or State law or regulation, or USPAP by a credentialed appraiser or appraiser applicant, for allegations of unlicensed appraisal activity, or complaints involving AMCs. A complaint may be in the form of a referral, letter of inquiry, or other document alleging misconduct or wrongdoing.

    Credentialed appraisers: Refers to State licensed, certified residential or certified general appraiser classifications.

    Disciplinary action: As referenced herein, corrective or punitive action taken by or on behalf of a State agency which may be formal or informal, or may be consensual or involuntary, resulting in any of the following:

    a. Revocation of credential or registration b. suspension of credential or registration c. written consent agreements, orders or reprimands d. probation or any other restriction on the use of a credential e. fine f. voluntary surrender 143

    143 A voluntary surrender that is not deemed disciplinary by State law or regulation, or is not related to any disciplinary process need not be reported as discipline provided the individual's Appraiser Registry record is updated to show the credential is inactive.

    g. other acts as defined by State statute or regulation as disciplinary With the exception of voluntary surrender, suspension or revocation, such action may be exempt from reporting to the National Registry if defined by State statute, regulation or written policy as “non-disciplinary.”

    Federally related transaction: Refers to any real estate related financial transaction which:

    (a) A federal financial institutions regulatory agency engages in, contracts for, or regulates; and

    (b) requires the services of an appraiser. (See Title XI § 1121 (4), 12 U.S.C. 3350.)

    Federal financial institutions regulatory agencies: Refers to the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the National Credit Union Administration. (See Title XI § 1121 (6), 12 U.S.C. 3350.)

    Home State agency: As referenced herein, State agency or agencies that grant an appraiser a licensed or certified credential. Residency in the home State is not required. Appraisers may have more than one home State agency.

    Non-federally recognized credentials or designations: Refers to any State appraiser credential or designation other than trainee, State licensed, certified residential or certified general classifications as defined in Policy Statement 1, and which is not recognized by Title XI.

    Real estate related financial transaction: Any transaction involving:

    (a) The sale, lease, purchase, investment in or exchange of real property, including interests in property, or the financing thereof;

    (b) the refinancing of real property or interests in real property; and

    (c) the use of real property or interests in property as security for a loan or investment, including mortgage-backed securities. (See Title XI § 1121 (5), 12 U.S.C. 3350.)

    State: Any State, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, and the United States Virgin Islands. (American Samoa does not have a Program.)

    State board: As referenced herein, “State board” means a group of individuals (usually appraisers, AMC representatives, bankers, consumers, and/or real estate professionals) appointed by the Governor or a similarly positioned State official to assist or oversee State Programs. A State agency may be headed by a board, commission or an individual.

    Uniform Standards of Professional Appraisal Practice (USPAP): Refers to appraisal standards promulgated by the Appraisal Standards Board of the Appraisal Foundation establishing minimum requirements for development and reporting of appraisals, including real property appraisal. Title XI requires appraisals prepared by State certified and licensed appraisers to be performed in conformance with USPAP.

    Well-documented: Means that States obtain and maintain sufficient relevant documentation pertaining to a matter so as to enable understanding of the facts and determinations in the matter and the reasons for those determinations.

    Dated: February 24, 2018.

    By the Appraisal Subcommittee.

    Arthur Lindo, Chairman.
    [FR Doc. 2018-04410 Filed 3-2-18; 8:45 am] BILLING CODE P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Parts 1, 21, 25, 26, 27, 34, 43, 45, 60, 61, 63, 65, 91, 97, 107, 110, 119, 121, 125, 129, 133, 135, 137, 141, 142, 145, and 183 [Docket No.: FAA-2018-0119; Amdt Nos. 1-72, 21-101, 25-145, 26-7, 27-49, 34-6, 43-50, 45-31, 60-5, 61-141, 63-40, 65-56, 91-350, 97-1338, 107-2, 110-2, 119-19, 121-380, 125-68, 129-53, 133-16, 135-139, 137-17, 141-19, 142-10, 145-32, 183-17] RIN 2120-AL05 Aviation Safety Organization Changes AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Final rule.

    SUMMARY:

    The FAA Aircraft Certification Service (AIR) and Flight Standards Service (AFS) have reorganized to align with functional organization design concepts. The AIR reorganization included eliminating product directorates and restructuring and re-designating field offices. The AFS reorganization included eliminating geographic regions, realigning headquarters organizations, and restructuring field offices. Currently, various rules in the Code of Federal Regulations refer to specific AIR and AFS offices that are obsolete after the reorganizations. This rule replaces specific references with generic references not dependent on any particular office structure. This rule does not impose any new obligations and is only intended to eliminate any confusion about with whom regulated entities and other persons should interact when complying with these various rules in the future.

    DATES:

    Effective March 5, 2018.

    FOR FURTHER INFORMATION CONTACT:

    For questions concerning AIR offices referred to in this action, contact Suzanne Masterson, Transport Standards Branch (AIR-670), Policy and Innovation Division, Aircraft Certification Service, Federal Aviation Administration, 2200 South 216th St., Des Moines, WA 98189; telephone (206) 231-3211 or (425) 227-1855; email [email protected]

    For questions concerning AFS offices referred to in this action, contact Joseph Hemler, Commercial Operations Branch (AFS-820), Flight Standards Service, Federal Aviation Administration, 55 M Street SE, 8th floor, Washington, DC 20003-3522; telephone (202) 267-1100; email [email protected]

    SUPPLEMENTARY INFORMATION:

    Good Cause for Immediate Adoption

    Section 553(b)(3)(A) of the Administrative Procedure Act (APA) (5 U.S.C.) authorizes agencies to dispense with notice and comment procedures for rules of agency organization, procedure, or practice, except when notice or hearing is required by statute. Under this section, an agency may issue a final rule without seeking comment prior to the rulemaking.

    Additionally, section 553(b)(3)(B) of the APA authorizes agencies to dispense with notice and comment procedures for rules when the agency for “good cause” finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under this section, an agency, upon finding good cause, may issue a final rule without seeking comment prior to the rulemaking. The FAA finds that notice and public comment to this immediately adopted final rule are unnecessary because this rule meets the exception of section 553(b)(3)(A). The sole purpose of this rule is to reflect organizational changes within AIR and AFS. This rule imposes no additional requirements on the public. Therefore, the FAA has determined that notice and public comment are unnecessary.

    The FAA further finds, under 5 U.S.C. 553(d)(3), that good cause exists for making this rule effective upon publication in the Federal Register. It is unnecessary to delay the effective date of this rule because the final rule consists only of organizational amendments that have no substantive effect on the public.

    Authority for This Rulemaking

    The FAA's authority to issue rules is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator.

    This rulemaking is promulgated under the authority described in 49 U.S.C. 106(f), which establishes the authority of the Administrator to promulgate regulations and rules, including rules that carry out the functions of the agency.

    This regulation is within the scope of that authority because the rule makes non-substantive edits to agency organization, procedure, or practice that guides the public's interaction with AIR and AFS.

    I. Overview of Immediately Adopted Final Rule

    AIR and AFS have reorganized to align with a functional organization design concept. Currently, various rules in title 14 of the Code of Federal Regulations (14 CFR) parts 21, 25, 26, 27, 34, 91, 121, 125, 129, 135, and 183 refer to specific AIR offices that are obsolete after its reorganization. Additionally, various rules in 14 CFR parts 1, 43, 45, 60, 61, 63, 65, 91, 97, 107, 110, 119, 121, 125, 129, 133, 135, 137, 141, 142, 145, and 183 refer to specific AFS offices that are obsolete after its reorganization. This rule replaces specific office references with generic references not dependent on any particular office structure. This rule is intended to eliminate any confusion about with whom regulated entities and other persons should interact when complying with these various rules in the future.

    II. Background

    AIR and AFS have played a critical role in assuring that the U.S. National Airspace System operates at the highest level of safety. This level of safety has been achieved through the development of standards, policy, and guidance to assure the safe design and production of aviation products, as well as the safe and standardized certification, operation, and oversight of multiple types of FAA certificate holders.

    The aviation system is rapidly changing, placing greater demands on its participants. It is more complex, interconnected, and reliant on new technologies. Each component of the aircraft certification safety system—which extends beyond AIR and AFS to include industry's role in ensuring compliance to regulations, and the public's participation in the regulatory process—must address the challenges posed by the changing environment. The FAA's ability to meet the diverse and ever-increasing expectations of its stakeholders, including the flying public, industry, Congress, and other certification authorities, requires fundamental changes to several aspects of the aircraft, airmen, and operator certification safety system, including the organizational structure of AIR and AFS.

    The AIR and AFS management teams evaluated changing domestic and global demands on AIR and AFS and determined a need for improved organizational efficiencies in order to provide other civil aviation authorities, manufacturers, and stakeholders with consistent and predictable outputs. The management teams evaluated feasible options and selected a functional organization design concept. AIR's reorganization into functional divisions has built necessary infrastructure to enable a comprehensive approach to becoming more efficient and effective. AIR has implemented and completed its reorganization in a phased approach. Product directorates have been eliminated in 2017 and replaced with functional divisions. Field offices have been reorganized and re-designated. For further details on this reorganization, please refer to https://www.faa.gov/news/fact_sheets/news_story.cfm?newsId=21315 and https://www.faa.gov/about/office_org/headquarters_offices/avs/offices/air/transformation/.

    You can also obtain more information on the new AIR organization and the responsibilities and functions of the AIR divisions in FAA Order 8100.5C, “Aircraft Certification Service—Organizational Structure and Functions.” AIR also created a new order, FAA Order 8100.18, “Aircraft Certification Service Organizational Realignment References,” that facilitates the use of existing AIR policy and guidance after the realignment of AIR by detailing which new AIR office takes the place of which former AIR office. These orders are available online at https://www.faa.gov/regulations_policies/orders_notices/.

    The AFS reorganization into functional areas aligns its infrastructure to more efficiently and effectively meet the needs of the aviation industry and improve standardization and agility to changing world needs while providing oversight for continued operational safety. AFS has eliminated regional offices, realigned headquarters organizations, and restructured field offices. More functional alignment in field offices will take place in the future. Where legacy AFS references exist, the user can access the Flight Standards Information Management System (FSIMS) publication page (http://fsims.faa.gov/PublicationForm.aspx) and select “Future of Flight Standards (FFS) Updates” found under “Active Publication.” This link provides a listing that translates organizational codes from the legacy AFS structure to the FFS structure.

    III. Discussion of Immediately Adopted Final Rule

    Certain offices referenced in various rules under 14 CFR parts 1, 21, 25, 26, 27, 34, 43, 45, 60, 61, 63, 65, 91, 97, 107, 110, 119, 121, 125, 129, 133, 135, 137, 141, 142, 145, and 183 are obsolete due to AIR and AFS reorganization. References to non-existent offices may cause confusion for applicants, approval holders, and certificate holders in the future when interacting with AIR and AFS. The FAA is replacing specific references with generic references not dependent on any particular office structure. This rule is intended to eliminate any confusion about with whom regulated entities and other persons should interact when complying with these various rules in the future.

    The new AIR and AFS organizations will continue to maintain offices throughout the United States that—for the public—perform the same functions and provide the same services that those offices performed previously. However, the names of these offices and their internal reporting structure have changed, and may continue to change over time. The generic references to offices that the FAA used in this rule are intended to refer to the same offices as the previous specific references, but with references to regions or localities removed, along with specific office names. The generic references also include offices that have international duties. Table 1 provides the specific changes for nomenclature. Additionally, some manager and director titles have changed, but these new titles are of equivalent hierarchy within the FAA. One advantage of AIR and AFS restructuring is to allow for a more-virtual work environment with less dependence on geographic region, which accommodates resource sharing among offices performing the same functions, resulting in more efficiency.

    This rule does not change any existing processes. Processes for public interaction with AIR and AFS (such as application processes, reporting processes, and oversight processes) are documented in orders, notices, advisory circulars (ACs), and policy statements. These documents are available online at https://www.faa.gov/regulations_policies/. AIR and AFS will continue to provide the public the opportunity to comment on any proposed revisions to these documents prior to incorporation.

    Where general references to “the FAA” are introduced in specific sections, existing advisory material for the affected section specifies the AIR and AFS offices responsible for the function identified in that section. For example, in § 21.3, the FAA is replacing the words “Aircraft Certification Office in the region in which the person required to make the report is located” with the word “FAA.” AC 21-9B, “Manufacturers Reporting Failures, Malfunctions, or Defects,” provides instructions on reporting to specific offices within AIR. The existing AIR advisory material remains in effect and is not affected by the realignment of AIR, except as noted in FAA Order 8100.18. Similarly, AFS's advisory material remains in effect and is not affected by the realignment of AFS, except as noted in FAA Order 1100.1.

    Table 1—Revised Nomenclature and Affected Sections of 14 CFR Old nomenclature/ current CFR New nomenclature/ revision Affected sections of 14 CFR a Flight Standards District Office the responsible Flight Standards office § 107.63. an FAA Flight Standards District Office a Flight Standards office §§ 61.55, 61.77, and 133.15. an FAA Flight Standards District Office the responsible Flight Standards office § 141.67. an FAA Flight Standards district office the responsible Flight Standards office § 91.203. an FAA Flight Standards District Office or an International Field Office the responsible Flight Standards office § 65.93. Advanced Qualification Program Air Transportation Division §§ 121.909 and 121.923. Aircraft Certification Office (ACO), or office of the Transport Airplane Directorate, having cognizance over the type certificate for the affected airplane responsible Aircraft Certification Service office for the affected airplane Special Federal Aviation Regulation No. 88 to part 21. Aircraft Certification Office in the region in which the person required to make the report is located FAA § 21.3. appropriate aircraft certification office FAA §§ 21.47, 21.75, 21.113, 21.618, and 21.619. appropriate FAA Flight Standards District Office, Alaskan Region responsible Flight Standards office Appendix C to part 121. assigned Flight Standards Office responsible Flight Standards office §§ 121.1117 and 129.117. Certificate Holding District Office responsible Flight Standards office § 121.314. certificate holding district office responsible Flight Standards office Appendix P to part 121 and §§ 121.103, 121.121, 125.51, 145.163, 145.207, 145.209, 145.211, 145.215, and 145.217. certificate-holding district office responsible Flight Standards office §§ 119.37, 119.41, 119.47, 119.51, 119.57, 119.61, 119.65, 119.69, 121.97, 121.117, 121.291, 121.405, 121.467, 121.565, 121.585, 121.586, 121.628, 121.685, 135.91, 135.129, 135.179, 135.213, 135.273, 135.417, and 135.431. certificate holding district office (CHDO) responsible Flight Standards office Appendix G to part 135 and § 121.374. certificate-holding FAA Flight Standards District Office responsible Flight Standards office §§ 133.25, 133.31, and 135.243. CHDO responsible Flight Standards office Appendix G to part 135 and § 121.374. Director Executive Director §§ 60.5, 60.29, 91.317, 91.415, 91.1017, 91.1431, 119.41, 119.51, 121.97, 121.117, 121.417, 121.585, 125.35, 125.206, 129.11, 135.129, 135.158, and 137.17. Director of Executive Director § 183.33. district office office § 133.33. Director, Aircraft Certification Service, or the Director's designee Aircraft Certification Service § 183.11. district office that has jurisdiction over responsible Flight Standards office for § 133.15. either apply to the appropriate aircraft certification office for an STC or apply apply to the FAA either for an STC, or § 21.113. FAA aircraft certification office Aircraft Certification Service office § 21.4. FAA Aircraft Certification Office (ACO), or office of the Transport Airplane Directorate, having cognizance over responsible Aircraft Certification Service office for §§ 121.1107, 125.505, and 129.107. FAA Aircraft Certification Office (ACO), or office of the Transport Airplane Directorate, having cognizance over the type certificate responsible Aircraft Certification Service office Special Federal Aviation Regulation No. 88 to part 21. FAA (Aircraft Certification Office (ACO), or office of the Transport Airplane Directorate, having cognizance over the type certificate for the affected airplane) responsible Aircraft Certification Service office for the affected airplane Special Federal Aviation Regulation No. 88 to part 21. FAA Certificate Holding District Office responsible Flight Standards office §§ 121.368 and 135.426. FAA certificate holding district office responsible Flight Standards office § 121.99. FAA certificate-holding district office responsible Flight Standards office § 121.373. FAA certificate-holding office responsible Flight Standards office § 133.21. FAA Flight Standards District Office Flight Standards office §§ 61.55, 61.64, and 61.77. FAA Flight Standards District Office responsible Flight Standards office § 135.19. FAA Flight Standards district office responsible Flight Standards office §§ 125.21, 125.25, 125.35, 125.47, 125.71, 125.219, and 125.295. FAA Flight Standards District Office having geographic responsibility responsible Flight Standards office § 129.14. FAA Flight Standards District Office having jurisdiction over responsible Flight Standards office for §§ 133.25, 133.33, 137.17, 137.51, 141.25, 141.53, and 141.91. FAA Flight Standards District Office having jurisdiction over the area in which his home base of operations is located responsible Flight Standards office § 133.27. FAA Flight Standards district office having jurisdiction over the area in which the applicant is located responsible Flight Standards office § 91.409. FAA Flight Standards district office having jurisdiction over the area in which the operator is located responsible Flight Standards office § 91.213. FAA Flight Standards District Office having jurisdiction over the school responsible Flight Standards office § 141.37. FAA Flight Standards District Office last having jurisdiction over his operation responsible Flight Standards office § 137.77. FAA Flight Standards district office nearest the airport where the flight will originate responsible Flight Standards office § 91.23. FAA Flight Standards District Office or International Field Office responsible Flight Standards office § 65.95. FAA Flight Standards District Office responsible for the geographic area concerned responsible Flight Standards office § 119.1. FAA Flight Standards District Office that has jurisdiction over responsible Flight Standards office for § 137.15 and 142.11. FAA Flight Standards District Office with jurisdiction over the geographical area responsible Flight Standards office for the area § 91.146. FAA office responsible for administering its type certificate responsible Aircraft Certification Service office § 21.4. FAA Oversight Office responsible Aircraft Certification Service office Appendices M and N to part 25 and §§ 26.11, 26.21, 26.23, 26.33, 26.35, 26.43, 26.45, 26.47, 26.49, 91.1507, 121.1109, 121.1111, 121.1113, 121.1117, 125.507, 125.509, 129.109, 129.111, 129.113, and 129.117. FAA Regional Flight Standards Division Flight Standards office Appendix C to part 121. FAA type certificate holding office Aircraft Certification Service office § 21.4. Flight Standards District Office Flight Standards office Special Federal Aviation Regulation No. 100-2 to part 61 and §§ 61.85, 91.1015, 91.1017, 91.1053, 91.1109, 91.1415, 91.1417, 129.5, and 129.11. Flight Standards District Office responsible Flight Standards office Special Federal Aviation Regulation No. 50-2 to part 91 and §§ 45.22, 125.201, 133.25, 135.4, and 137.17. Flight Standards district office Flight Standards office § 135.243. Flight Standards District Office (FSDO) Flight Standards office § 91.1507. Flight Standards District Offices Flight Standards offices Special Federal Aviation Regulation No. 100-2 to part 61. Flight Standards District Office having jurisdiction of the area in which the applicant is located responsible Flight Standards office Appendix A to part 91. Flight Standards District Office in whose area the applicant proposes to establish or has established his or her principal base of operations responsible Flight Standards office § 119.36. Flight Standards District Office nearest responsible Flight Standards office for § 133.25. Flight Standards District Office nearest to its principal place of business responsible Flight Standards office § 91.147. Flight Standards District Office or International Field Office responsible Flight Standards office Appendix G to part 121. Flight Standards District Office that has jurisdiction over the area responsible Flight Standards office § 141.87. Flight Standards Division Manager in the region of the certificate holding district office appropriate Flight Standards division manager in the responsible Flight Standards office § 121.358. Flight Standards Division Manager or Aircraft Certification Directorate Manager of the FAA region in which the airshow is located appropriate Flight Standards Division Manager or Aircraft Certification Service Division Director responsible for the airshow location § 91.715. Flight Standards Division Manager or Aircraft Certification Directorate Manager of the FAA region in which the applicant is located or to the region within which the U.S. point of entry is located appropriate Flight Standards Division Manager, or Aircraft Certification Service Division Director § 91.715. Flight Standards International Field Office Flight Standards office §§ 129.111, 129.113, and 129.115. in writing the appropriate aircraft certification office the FAA in writing § 21.47. local Flight Standards District Office responsible Flight Standards office Appendix B to part 63. local FAA Flight Standards district office responsible Flight Standards office § 91.409. local FAA Flight Standards district office having jurisdiction over the area in which the aircraft is based responsible Flight Standards office § 91.409. Manager of the Transport Airplane Directorate, Aircraft Certification Service, Federal Aviation Administration Director of the division of the Aircraft Certification Service responsible for the airworthiness rules §§ 121.310, 121.312, and 135.170. Manager, Aircraft Certification Office, or the Manager's designee Aircraft Certification Service §§ 183.11. Manufacturing Inspection District Office in the geographic area in which the manufacturer or air carrier is located FAA § 21.215. nearest FAA Flight Standards District Office responsible Flight Standards office Special Federal Aviation Regulations No. 79 and No. 104 to part 91 and §§ 91.1603, 121.723, 135.43, and 137.1. nearest FAA Flight Standards district office responsible Flight Standards office § 91.23. nearest FAA Flight Standards District Office (FSDO) responsible Flight Standards office §§ 91.1607, 91.1611, and 91.1613. nearest Flight Standards District Office responsible Flight Standards office §§ 125.3 and 135.160. Regional Office responsible Flight Standards office Appendix B to part 63. responsible FAA aircraft certification office FAA office responsible for the design approval Appendix K to part 25. that district office the responsible Flight Standards office § 125.35.

    In addition to the above nomenclature changes, this rule makes the following conforming changes:

    • In §§ 1.2 and 110.2, removes the acronym and definition for certificate holding district office because the FAA no longer uses this nomenclature in the rules.

    • In § 21.15, removes the reference “and is submitted to the appropriate aircraft certification office” because the FAA no longer uses this nomenclature in the rules and this information is adequately addressed by existing guidance on submitting applications for type certificates.

    • In § 21.603, removes the reference “to the appropriate aircraft certification office” because the FAA no longer uses this nomenclature in the rules and this information is adequately addressed by existing guidance on submitting applications for technical standard order authorizations.

    • In §§ 26.3, 91.1501, 121.1101, 125.501, and 129.101, removes the definition of “FAA Oversight Office” because the FAA no longer uses this nomenclature in the rules.

    • In § 34.60, removes the reference to the “Aircraft Certification Office” because the FAA no longer uses this nomenclature in the rules.

    • In appendix B to part 43, removes references to office designators “AFS-750” and “AFS-751”, which are obsolete references.

    • In appendices A and C to part 60, removes the contact information for Ed Cook, Senior Advisor to the Division Manager, Air Transportation Division, because this information is obsolete and not necessary.

    • In §§ 60.5 and 60.29, removes the reference to “AFS-1”, which is an obsolete reference.

    • In § 91.1505, replaces the words “that have been approved by the FAA Aircraft Certification Office (ACO), or office of the Transport Airplane Directorate, having cognizance over the type certificate for the affected airplane are incorporated within its inspection program:” with “are incorporated within its inspection program. The repair assessment guidelines must be approved by the responsible Aircraft Certification Service office for the type certificate for the affected airplane.” This revision does not change the requirements of this section. It clarifies the wording so it is easier to understand and harmonizes the sentence structure with the other rules for repairs assessment of pressurized fuselages in §§ 121.1107, 125.505, and 129.107.

    • In appendix P to part 121, removes the reference to “AFS-200”, which is an obsolete reference.

    • In § 97.20, replaces “FAA National Aeronautical Charting Office. These charts are available for purchase from the FAA's National Aeronautical Charting Office, Distribution Division, 6303 Ivy Lane, Suite 400, Greenbelt, MD 20770” with “FAA. These charts are available from the FAA at https://www.faa.gov/air_traffic/flight_info/aeronav/digital_products/” because the FAA has ceased the sale of paper charts and now publishes charts for free on the internet.

    • In § 125.509, replaces the word “Office” with the word “office” to create a generic reference.

    In addition, this rule removes the Transport Airplane Directorate address from §§ 25.5 and 25.795 and removes the Rotorcraft Standards Staff address from § 27.685. These addresses were provided as one option to obtain documents incorporated by reference in the rule. With the movement of the Northwest Regional office and the movement to a more virtual work environment, the FAA addresses provided may change and require more flexibility. Therefore, we have removed these addresses. Per 5 CFR 51.7, documents incorporated by reference need to be “reasonably available” to regulated entities. Additional options for obtaining these documents from the National Archives and Records Administration (NARA) and other locations such as the National Institute of Justice at no cost continue to be listed in the rule. This rule also updates the website reference to NARA in these sections.

    IV. Regulatory Notices and Analyses

    Changes to Federal regulations must undergo several economic analyses. First, Executive Orders 12866 and 13563 direct that each Federal agency shall propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs. Second, the Regulatory Flexibility Act of 1980 (Pub. L. 96-354), as codified in 5 U.S.C. 603 et seq., requires agencies to analyze the economic impact of regulatory changes on small entities. Third, the Trade Agreements Act of 1979 (Pub. L. 96-39), as amended, 19 U.S.C. Chapter 13, prohibits agencies from setting standards that create unnecessary obstacles to the foreign commerce of the United States. In developing U.S. standards, the Trade Agreements Act requires agencies to consider international standards and, where appropriate, that they be the basis of U.S. standards. Fourth, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), as codified in 2 U.S.C. 1532, requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more annually (adjusted for inflation with a base year of 1995). This portion of the preamble summarizes the FAA's analysis of the economic impacts of this final rule.

    In conducting these analyses, the FAA has determined this final rule is not a “significant regulatory action,” as defined in section 3(f) of Executive Order 12866. The rule is also not “significant” as defined in the Department of Transportation's (DOT's) Regulatory Policies and Procedures. The final rule will not have a significant economic impact on a substantial number of small entities, will not create unnecessary obstacles to international trade, and will not impose an unfunded mandate on State, local, or tribal governments, or on the private sector.

    A. Regulatory Evaluation

    DOT Order 2100.5 prescribes policies and procedures for simplification, analysis, and review of regulations. If the expected cost impact is so minimal that a proposed or final rule does not warrant a full evaluation, this order permits a statement to that effect and the basis for it to be included in the preamble if a full regulatory evaluation of the costs and benefits is not prepared. Such a determination has been made for this final rule. The reasoning for this determination follows:

    AIR and AFS have reorganized to align with functional organization design concepts. The AIR reorganization included eliminating product directorates and restructuring and re-designating field offices. The AFS reorganization included eliminating geographic regions and moving to a more functionally based organization. Specific AIR and AFS office references currently in 14 CFR are obsolete post-reorganization and will be replaced by generic references not dependent on any particular office structure. This rule is intended to clarify any confusion over which offices regulated entities and other persons should interact with when complying with 14 CFR regulations. Since this rule involves non-substantial clarifying editorial changes only, the costs of the rule will be minimal.

    B. Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (Pub. L. 96-354, “RFA”) establishes “as a principle of regulatory issuance that agencies shall endeavor, consistent with the objectives of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the businesses, organizations, and governmental jurisdictions subject to regulation. To achieve this principle, agencies are required to solicit and consider flexible regulatory proposals and to explain the rationale for their actions to assure that such proposals are given serious consideration.” The RFA covers a wide-range of small entities, including small businesses, not-for-profit organizations, and small governmental jurisdictions.

    Agencies must perform a review to determine whether a rule will have a significant economic impact on a substantial number of small entities. If the agency determines that it will, the agency must prepare a regulatory flexibility analysis as described in the RFA.

    However, if an agency determines that a rule is not expected to have a significant economic impact on a substantial number of small entities, section 605(b) of the RFA provides that the head of the agency may so certify and a regulatory flexibility analysis is not required. The certification must include a statement providing the factual basis for this determination, and the reasoning should be clear.

    As discussed above, since the rule involves non-substantial editorial changes only, due to FAA reorganization, the FAA finds the costs of this rule will be minimal. Therefore, as provided in section 605(b), the head of the FAA certifies that this rulemaking will not result in a significant economic impact on a substantial number of small entities.

    C. International Trade Impact Assessment

    The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended, prohibits Federal agencies from establishing standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. Pursuant to this Act, the establishment of standards is not considered an unnecessary obstacle to the foreign commerce of the United States, so long as the standard has a legitimate domestic objective, such as the protection of safety, and does not operate in a manner that excludes imports that meet this objective. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards.

    The FAA has assessed the potential effect of this rule and has determined that the rule is in accord with the Trade Agreements Act as the rule applies equally to domestic and foreign persons engaged in aviation activities under 14 CFR.

    D. Unfunded Mandates Assessment

    Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in an expenditure of $100 million or more (in 1995 dollars) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector; such a mandate is deemed to be a “significant regulatory action.” The FAA currently uses an inflation-adjusted value of $155 million in lieu of $100 million.

    This final rule does not contain such a mandate; therefore, the requirements of Title II of the Act do not apply.

    E. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires that the FAA consider the impact of paperwork and other information collection burdens imposed on the public. The FAA has determined that there is no new requirement for information collection associated with this immediately adopted final rule.

    F. International Compatibility

    In keeping with U.S. obligations under the Convention on International Civil Aviation, it is FAA policy to conform to International Civil Aviation Organization (ICAO) Standards and Recommended Practices to the maximum extent practicable. The FAA has reviewed the corresponding ICAO Standards and Recommended Practices and has identified no differences with these proposed regulations.

    G. Environmental Analysis

    FAA Order 1050.1F identifies FAA actions that are categorically excluded from preparation of an environmental assessment or environmental impact statement under the National Environmental Policy Act in the absence of extraordinary circumstances. The FAA has determined this rulemaking action qualifies for the categorical exclusion identified in paragraph 5-6.6(d), which covers the issuance of regulatory documents covering administrative or procedural requirements and involves no extraordinary circumstances.

    V. Executive Order Determinations A. Executive Order 13132, Federalism

    The FAA has analyzed this immediately adopted final rule under the principles and criteria of Executive Order 13132, “Federalism.” The agency determined that this action will not have a substantial direct effect on the States, or the relationship between the Federal Government and the States, or on the distribution of power and responsibilities among the various levels of government, and, therefore, does not have Federalism implications.

    B. Executive Order 13211, Regulations That Significantly Affect Energy Supply, Distribution, or Use

    The FAA analyzed this immediately adopted final rule under Executive Order 13211, “Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use” (May 18, 2001). The agency has determined that it is not a “significant energy action” under the executive order and it is not likely to have a significant adverse effect on the supply, distribution, or use of energy.

    C. Executive Order 13609, International Cooperation

    Executive Order 13609, “Promoting International Regulatory Cooperation,” promotes international regulatory cooperation to meet shared challenges involving health, safety, labor, security, environmental, and other issues and to reduce, eliminate, or prevent unnecessary differences in regulatory requirements. The FAA has analyzed this action under the policies and agency responsibilities of Executive Order 13609, and has determined that this action would have no effect on international regulatory cooperation.

    D. Executive Order 13771, Reducing Regulation and Controlling Regulatory Costs

    Executive Order 13771 titled “Reducing Regulation and Controlling Regulatory Costs,” directs that, unless prohibited by law, whenever an executive department or agency publicly proposes for notice and comment or otherwise promulgates a new regulation, it shall identify at least two existing regulations to be repealed. In addition, any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs. Only those rules deemed significant under section 3(f) of Executive Order 12866, “Regulatory Planning and Review,” are subject to these requirements.

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

    VI. How To Obtain Additional Information A. Rulemaking Documents

    An electronic copy of a rulemaking document may be obtained from the internet by—

    1. Searching the Federal eRulemaking Portal (http://www.regulations.gov);

    2. Visiting the FAA's Regulations and Policies web page at http://www.faa.gov/regulations_policies/; or

    3. Accessing the Government Printing Office's web page at http://www.thefederalregister.org/fdsys/.

    Copies may also be obtained by sending a request (identified by notice, amendment, or docket number of this rulemaking) to the Federal Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence Avenue SW, Washington, DC 20591, or by calling (202) 267-9680.

    B. Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996 requires FAA to comply with small entity requests for information or advice about compliance with statutes and regulations within its jurisdiction. A small entity with questions regarding this document, may contact its local FAA official, or the person listed under the FOR FURTHER INFORMATION CONTACT heading at the beginning of the preamble. To find out more about SBREFA on the internet, visit http://www.faa.gov/regulations_policies/rulemaking/sbre_act/.

    List of Subjects 14 CFR Part 1

    Air transportation.

    14 CFR Part 21

    Aircraft, Aviation safety, Exports, Imports, Reporting and recordkeeping requirements.

    14 CFR Part 25

    Aircraft, Aviation safety, Reporting and recordkeeping requirements.

    14 CFR Part 26

    Aircraft, Aviation safety.

    14 CFR Part 27

    Aircraft, Aviation safety.

    14 CFR Part 34

    Air pollution control, Aircraft.

    14 CFR Part 43

    Aircraft, Aviation safety, Reporting and recordkeeping requirements.

    14 CFR Part 45

    Aircraft, Exports, Signs and symbols.

    14 CFR Part 60

    Airmen, Aviation safety, Reporting and recordkeeping requirements.

    14 CFR Part 61

    Aircraft, Airmen, Alcohol abuse, Aviation safety, Drug abuse, Recreation and recreation areas, Reporting and recordkeeping requirements, Security measures, Teachers.

    14 CFR Part 63

    Aircraft, Airmen, Alcohol abuse, Aviation safety, Drug abuse, Navigation (air), Reporting and recordkeeping requirements, Security measures.

    14 CFR Part 65

    Air traffic controllers, Aircraft, Airmen, Airports, Alcohol abuse, Aviation safety, Drug abuse, Reporting and recordkeeping requirements, Security measures.

    14 CFR Part 91

    Air carrier, Air taxis, Air traffic controller, Aircraft, Airmen, Airports, Alaska, Aviation safety, Canada, Charter flights, Cuba, Drug traffic control, Ethiopia, Freight, Incorporation by reference, Iraq, Mexico, Noise control, North Korea, Political candidates, Reporting and recordkeeping, Somalia, Syria, Transportation.

    14 CFR Part 97

    Air traffic control, Airports, Navigation (air), Weather.

    14 CFR Part 107

    Aircraft, Airmen, Aviation safety, Reporting and recordkeeping, Security measures, Signs and symbols.

    14 CFR Part 110

    Administrative practice and procedure, Air carriers, Aircraft, Aviation safety, Charter flights, Reporting and recordkeeping requirements.

    14 CFR Part 119

    Administrative practice and procedure, Air carriers, Aircraft, Aviation safety, Charter flights, Reporting and recordkeeping requirements.

    14 CFR Part 121

    Air carriers, Aircraft, Airmen, Alcohol abuse, Aviation safety, Charter flights, Drug abuse, Drug testing, Reporting and recordkeeping requirements, Safety, Transportation.

    14 CFR Part 125

    Aircraft, Airmen, Aviation safety, Reporting and recordkeeping.

    14 CFR Part 129

    Air carriers, Administration Aircraft, Aviation safety, Reporting and recordkeeping, Security measures, Smoking.

    14 CFR Part 133

    Aircraft, Aviation safety, Reporting and recordkeeping requirements.

    14 CFR Part 135

    Air taxis, Aircraft, Airmen, Alcohol abuse, Aviation safety, Drug abuse, Drug testing, Reporting and recordkeeping requirements.

    14 CFR Part 137

    Agriculture, Aircraft, Aviation safety, Reporting and recordkeeping requirements.

    14 CFR Part 141

    Airmen, Educational facilities, Reporting and recordkeeping requirements, Schools.

    14 CFR Part 142

    Administrative practice and procedure, Airmen, Educational facilities, Reporting and recordkeeping requirements, Schools, Teachers.

    14 CFR Part 145

    Aircraft, Aviation safety, Reporting and recordkeeping requirements.

    14 CFR Part 183

    Aircraft, Airmen, Authority delegations (Government agencies), Health professions, Reporting and recordkeeping requirements.

    The Amendment

    In consideration of the foregoing, the Federal Aviation Administration amends chapter I of title 14, Code of Federal Regulations as follows:

    PART 1—DEFINITIONS AND ABBREVIATIONS 1. The authority citation for part 1 continues to read as follows: Authority:

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

    § 1.2 [Amended]
    2. In § 1.2, remove the definition for CHDO. PART 21—CERTIFICATION PROCEDURES FOR PRODUCTS AND ARTICLES 3. The authority citation for part 21 continues to read as follows: Authority:

    42 U.S.C. 7572; 49 U.S.C. 106(f), 106(g), 40105, 40113, 44701-44702, 44704, 44707, 44709, 44711, 44713, 44715, 45303.

    Special Federal Regulation No. 88 [Amended] 4. Amend Special Federal Regulation No. 88 as follows: a. In paragraph 2(a), remove the words “FAA (Aircraft Certification Office (ACO), or office of the Transport Airplane Directorate, having cognizance over the type certificate for the affected airplane)” and add, in their place, the words “responsible Aircraft Certification Service office for the affected airplane”. b. In paragraph 2(c), remove the words “FAA Aircraft Certification Office (ACO), or office of the Transport Airplane Directorate, having cognizance over the type certificate” and add, in their place, the words “responsible Aircraft Certification Service office”. c. In paragraph 2(d), remove the words “Aircraft Certification Office (ACO), or office of the Transport Airplane Directorate, having cognizance over the type certificate for the affected airplane,” and add, in their place, the words “responsible Aircraft Certification Service office for the affected airplane”.
    § 21.3 [Amended]
    5. In § 21.3(e)(1), remove the words “Aircraft Certification Office in the region in which the person required to make the report is located” and add, in their place, the word “FAA”.
    §§ 21.3, 21.47, 21.75, 21.113, 21.618, and 21.619 [Amended]
    6. In addition to the amendment set forth above, in 14 CFR part 21, remove the words “appropriate aircraft certification office” and add, in their place, the word “FAA” in the following places: a. Section 21.3(f); b. Section 21.47(c); c. Section 21.75; d. Section 21.113(b); e. Section 21.618(b); and f. Section 21.619(a).
    § 21.4 [Amended]
    7. Amend § 21.4 as follows: a. In paragraph (a)(1) introductory text, remove the words “FAA aircraft certification office,” and add, in their place, the words “Aircraft Certification Service office,”. b. In paragraph (b)(1) introductory text, remove the words “FAA type certificate holding office” and add, in their place, the words “Aircraft Certification Service office”; and remove the words “FAA office responsible for administering its type certificate” and add, in their place, the words “responsible Aircraft Certification Service office”.
    § 21.15 [Amended]
    8. In § 21.15(a), after the words “prescribed by the FAA” and before the period, remove the words “and is submitted to the appropriate aircraft certification office”.
    § 21.47 [Amended]
    9. In § 21.47(b) and (d), remove the words “in writing the appropriate aircraft certification office” and add, in their place, the words “the FAA in writing”.
    § 21.113 [Amended]
    10. In addition to the amendments set forth above, in § 21.113(a), remove the words “either apply to the appropriate aircraft certification office for an STC or apply” and add, in their place, the words “apply to the FAA either for an STC, or”.
    § 21.215 [Amended]
    11. In § 21.215, remove the words “Manufacturing Inspection District Office in the geographic area in which the manufacturer or air carrier is located” and add, in their place, the word “FAA”.
    § 21.603 [Amended]
    12. In § 21.603(a) introductory text, remove the words “to the appropriate aircraft certification office”. PART 25—AIRWORTHINESS STANDARDS: TRANSPORT CATEGORY AIRPLANES 13. The authority citation for part 25 continues to read as follows: Authority:

    49 U.S.C. 106(f), 106(g), 40113, 44701, 44702 and 44704.

    § 25.5 [Amended]
    14. In § 25.5(a): a. Remove the words “, and at FAA, Transport Airplane Directorate, Aircraft Certification Service, 1601 Lind Avenue SW., Renton, Washington 98057-3356”; and b. Remove the text “http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html” and add, in its place, the text “http://www.archives.gov/federal-register/cfr/ibr-locations.html”. 15. Amend § 25.795 by revising paragraphs (f)(2)(i) and (ii) and removing paragraph (f)(2)(iii) to read as follows:
    § 25.795 Security considerations.

    (f) * * *

    (2) * * *

    (i) National Institute of Justice (NIJ), http://www.ojp.usdoj.gov/nij, telephone (202) 307-2942; or

    (ii) National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call (202) 741-6030, or go to http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Appendix K to Part 25 [Amended] 16. In sections K25.2.2(h)(1)(i) and (ii) and K25.3.2(e)(1)(i) and (ii) of appendix K to part 25, remove the words “responsible FAA aircraft certification office” and add, in their place, the words “FAA office responsible for the design approval”. Appendix M and Appendix N to Part 25 [Amended] 17. In part 25, remove the words “FAA Oversight Office” and add, in their place, the words “responsible Aircraft Certification Service office” in the following places: a. Section M25.5(b) and (c) of appendix M; and b. Section N25.3(e) of appendix N. PART 26—CONTINUED AIRWORTHINESS AND SAFETY IMPROVEMENTS FOR TRANSPORT CATEGORY AIRPLANES 18. The authority citation for part 26 continues to read as follows: Authority:

    49 U.S.C. 106(g), 40113, 44701, 44702 and 44704.

    § 26.3 [Removed and Reserved]
    19. Remove and reserve § 26.3.
    §§ 26.11, 26.21, 26.23, 26.33, 26.35, 26.43, 26.45, 26.47, and 26.49 [Amended]
    20. In 14 CFR part 26, remove the words “FAA Oversight Office” and add, in their place, the words “responsible Aircraft Certification Service office” in the following places: a. Section 26.11(b), (c)(1), (e) introductory text, and (e)(3); b. Section 26.21(b)(2) introductory text, (b)(2)(ii), (b)(4), (d)(3), and (e) introductory text; c. Section 26.23(b)(2) and (3); d. Section 26.33(b)(1), (d)(1) and (2), (e), (f), (g) introductory text, (h) introductory text, and (h)(3); e. Section 26.35(b)(1), (c) introductory text, (d)(1), (f) introductory text, and (f)(3); f. Section 26.43(b)(2), (c)(3), (d)(2), (e)(2), (f) introductory text, and (f)(4); g. Section 26.45(b)(3), (c)(2), (d)(3), and (e) introductory text; h. Section 26.47(b)(3), (c)(2), (d)(3), and (e) introductory text; and i. Section 26.49(a)(3) and (b) introductory text. PART 27—AIRWORTHINESS STANDARDS: NORMAL CATEGORY ROTORCRAFT 21. The authority citation for part 27 continues to read as follows: Authority:

    49 U.S.C. 106(f), 106(g), 40113, 44701-44702, 44704.

    § 27.685 [Amended]
    22. Amend § 27.685(d)(4) as follows: a. Remove the words “at the FAA, Rotorcraft Standards Staff, 4400 Blue Mount Road, Fort Worth, Texas, or”. b. Remove the text “http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html” and add, in its place, the text “http://www.archives.gov/federal-register/cfr/ibr-locations.html”. PART 34—FUEL VENTING AND EXHAUST EMISSION REQUIREMENTS FOR TURBINE ENGINE POWERED AIRPLANES 23. The authority citation for part 34 continues to read as follows: Authority:

    42 U.S.C. 4321 et seq., 7572; 49 U.S.C. 106(g), 40113, 44701-44702, 44704, 44714.

    § 34.60 [Amended]
    24. In § 34.60(e), remove the words “Aircraft Certification Office”. PART 43—MAINTENANCE, PREVENTIVE MAINTENANCE, REBUILDING, AND ALTERATION 25. The authority citation for part 43 continues to read as follows: Authority:

    42 U.S.C. 7572; 49 U.S.C. 106(f), 106(g), 40105, 40113, 44701-44702, 44704, 44707, 44709, 44711, 44713, 44715, 45303.

    Appendix B to Part 43 [Amended] 26. Amend appendix B to part 43 as follows: a. In paragraph (c)(2), remove the text “AFS-750,”. b. In paragraph (d)(3), remove the text “AFS-751,”. PART 45—IDENTIFICATION AND REGISTRATION MARKING 27. The authority citation for part 45 continues to read as follows: Authority:

    49 U.S.C. 106(f), 106(g), 40103, 40113-40114, 44101-44105, 44107-44111, 44504, 44701, 44708-44709, 44711-44713, 44725, 45302-45303, 46104, 46304, 46306, 47122.

    § 45.22 [Amended]
    28. In § 45.22(a)(3)(i), remove the words “Flight Standards District Office” and add, in their place, the words “responsible Flight Standards office”. PART 60—FLIGHT SIMULATION TRAINING DEVICE INITIAL AND CONTINUING QUALIFICATION AND USE 29. The authority citation for part 60 continues to read as follows: Authority:

    49 U.S.C. 106(f), 106(g), 40113, and 44701; Pub. L. 111-216, 124 Stat. 2348 (49 U.S.C. 44701 note).

    §§ 60.5 and 60.29 [Amended]
    30. In part 60, remove the text “AFS-1,” in the following places: a. Section 60.5(d); and b. Section 60.29(b)(2).
    §§ 60.5 and 60.29 [Amended]
    31. In addition to the amendments set forth above, in 14 CFR part 60, remove all references to “Director” and add, in their place, the words “Executive Director” in the following places: a. Section 60.5(d); and b. Section 60.29(a)(4)(ii) and (b)(2). Appendix A to Part 60 [Amended] 32a. In Attachment 6 to appendix A, under FSTD Directive 1, remove the For Further Information Contact paragraph. Appendix C to Part 60 [Amended] 32b. In Attachment 5 to appendix C, remove the For Further Information Contact paragraph. PART 61—CERTIFICATION: PILOTS, FLIGHT INSTRUCTORS, AND GROUND INSTRUCTORS 33. The authority citation for part 61 continues to read as follows: Authority:

    49 U.S.C. 106(f), 106(g), 40113, 44701-44703, 44707, 44709-44711, 44729, 44903, 45102-45103, 45301-45302; Sec. 2307 Pub. L. 114-190, 130 Stat. 615 (49 U.S.C. 44703 note).

    Special Federal Aviation Regulation No. 100-2 [Amended] 34. Amend Special Federal Aviation Regulation No. 100-2 as follows: a. In paragraph 1 introductory text, remove the words “District Offices” and add, in their place, the word “offices”; and b. In paragraph 3 introductory text, remove the words “District Office” and add, in their place, the word “office”.
    § 61.55, 61.64, and 61.77 [Amended]
    35. In 14 CFR part 61, remove all references to “FAA Flight Standards District Office” and add, in their place, “Flight Standards office” in the following places: a. Section 61.55(d)(6); b. Section 61.64(g)(4); and c. Section 61.77(b)(5).
    § 61.55 and 61.77 [Amended]
    36. In 14 CFR part 61, remove the words “an FAA Flight Standards District Office” and add, in their place, the words “a Flight Standards office” in the following places: a. Section 61.55(d)(3) and (4) and (e)(3), (4), and (6); and b. Section 61.77(b) introductory text.
    § 61.85 [Amended]
    37. In § 61.85(b), remove the words “District Office” and add, in their place, the word “office”. PART 63—CERTIFICATION: FLIGHT CREWMEMBERS OTHER THAN PILOTS 38. The authority citation for part 63 continues to read as follows: Authority:

    49 U.S.C. 106(g), 40113, 44701-44703, 44707, 44709-44711, 45102-45103, 45301-45302.

    Appendix B to Part 63 [Amended] 39. Amend appendix B to part 63 as follows: a. In paragraphs (f) introductory text, (j)(2) and (3), (k)(2), and (m), remove the words “local Flight Standards District Office” and add, in their place, the words “responsible Flight Standards office”. b. In paragraphs (j)(2) and (3), remove the words “regional office” and add, in their place, the words “responsible Flight Standards office”. PART 65—CERTIFICATION: AIRMEN OTHER THAN FLIGHT CREWMEMBERS 40. The authority citation for part 65 continues to read as follows: Authority:

    49 U.S.C. 106(f), 106(g), 40113, 44701-44703, 44707, 44709-44711, 45102-45103, 45301-45302.

    § 65.93 [Amended]
    41. In § 65.93(a) introductory text, remove the words “an FAA Flight Standards District Office or an International Field Office” and add, in their place, the words “the responsible Flight Standards office”.
    § 65.95 [Amended]
    42. In § 65.95(c), remove the words “FAA Flight Standards District Office or International Field Office” and add, in their place, the words “responsible Flight Standards office”. PART 91—GENERAL OPERATING AND FLIGHT RULES 43. The authority citation for part 91 continues to read as follows: Authority:

    49 U.S.C. 106(f), 106(g), 1155, 40101, 40103, 40105, 40113, 40120, 44101, 44111, 44701, 44704, 44709, 44711, 44712, 44715, 44716, 44717, 44722, 46306, 46315, 46316, 46504, 46506-46507, 47122, 47508, 47528-47531, 47534, Pub. L. 114-190, 130 Stat. 615 (49 U.S.C. 44703 note) articles 12 and 29 of the Convention on International Civil Aviation (61 Stat. 1180), (126 Stat. 11).

    Special Federal Aviation Regulation No. 50-2 [Amended] 44. In Special Federal Regulation No. 50-2, remove the words “Flight Standards District Office” and add, in their place, the words “responsible Flight Standards office” in the following places: a. Section 3(a)(2), (b), and (c)(2); b. Section 4 introductory text; and c. Section 5 introductory text. Special Federal Aviation Regulation No. 79 [Amended] 45. In section 4 of Special Federal Aviation Regulation No. 79, remove the words “nearest FAA Flight Standards District Office” and add, in their place, the words “responsible Flight Standards office”. Special Federal Aviation Regulation No. 104 [Amended] 46. In section 4 of Special Federal Aviation Regulation No. 104, remove the words “nearest FAA Flight Standards District Office” and add, in their place, the words “responsible Flight Standards office”.
    § 91.23 [Amended]
    47. Amend § 91.23 as follows: a. In paragraph (a)(3), remove the words “nearest FAA Flight Standards district office” and add, in their place, the words “responsible Flight Standards office”. b. In paragraph (c)(3) introductory text, remove the words “FAA Flight Standards district office nearest the airport where the flight will originate” and add, in their place, the words “responsible Flight Standards office”.
    § 91.146 [Amended]
    48. In § 91.146(e) introductory text, remove the words “FAA Flight Standards District Office with jurisdiction over the geographical area” and add, in their place, the words “responsible Flight Standards office for the area”.
    § 91.147 [Amended]
    49. In § 91.147(b), remove the words “Flight Standards District Office nearest to its principal place of business” and add, in their place, the words “responsible Flight Standards office”.
    § 91.203 [Amended]
    50. In § 91.203(a)(1), remove the words “an FAA Flight Standards district office” and add, in their place, the words “the responsible Flight Standards office”.
    § 91.213 [Amended]
    51. In § 91.213(a)(2), remove the words “FAA Flight Standards district office having jurisdiction over the area in which the operator is located,” and add, in their place, the words “responsible Flight Standards office,”.
    §§ 91.317, 91.415, 91.1017, and 91.1431 [Amended]
    52. In 14 CFR part 91, remove all references to “Director” and add, in their place, the words “Executive Director” in the following places: a. Section 91.317(c); b. Section 91.415(c); c. Section 91.1017(d)(2); and d. Section 91.1431(c).
    § 91.409 [Amended]
    53. Amend § 91.409 as follows: a. In paragraph (d) introductory text, remove the words “FAA Flight Standards district office having jurisdiction over the area in which the applicant is located” and add, in their place, the words “responsible Flight Standards office”. b. In the undesignated paragraph following paragraph (d)(4), remove the words “local FAA Flight Standards district office” and add, in their place, the words “responsible Flight Standards office”. c. In paragraph (g) introductory text, remove the words “local FAA Flight Standards district office having jurisdiction over the area in which the aircraft is based” and add, in their place, the words “responsible Flight Standards office”. 54. Amend § 91.715 by revising paragraph (a) to read as follows:
    § 91.715 Special flight authorization for foreign civil aircraft.

    (a) Foreign civil aircraft may be operated without airworthiness certificates required under § 91.203 if a special flight authorization for that operation is issued under this section. Application for a special flight authorization must be made to the appropriate Flight Standards Division Manager, or Aircraft Certification Service Division Director. However, in the case of an aircraft to be operated in the U.S. for the purpose of demonstration at an airshow, the application may be made to the appropriate Flight Standards Division Manager or Aircraft Certification Service Division Director responsible for the airshow location.

    §§ 91.1015, 91.1017, 91.1053, 91.1109, 91.1415, and 91.1417 [Amended]
    55. In addition to the amendments set forth above, in 14 CFR part 91, remove all references to “District Office” and add, in their place, the word “office” in the following places: a. Section 91.1015(d); b. Section 91.1017(b)(1) and (2), (b)(3) introductory text, (b)(4) introductory text, (b)(4)(i), (c)(2), (c)(3) introductory text, (c)(4), (d) introductory text, (d)(3), and (e); c. Section 91.1053(b); d. Section 91.1109(b) introductory text; e. Section 91.1415(d); and f. Section 91.1417 introductory text.
    § 91.1501 [Amended]
    56. Amend § 91.1501 by removing and reserving paragraph (b). 57. Amend § 91.1505 by revising paragraph (a) introductory text to read as follows:
    § 91.1505 Repairs assessment for pressurized fuselages.

    (a) No person may operate an Airbus Model A300 (excluding the -600 series), British Aerospace Model BAC 1-11, Boeing Model 707, 720, 727, 737 or 747, McDonnell Douglas Model DC-8, DC-9/MD-80 or DC-10, Fokker Model F28, or Lockheed Model L-1011 airplane beyond applicable flight cycle implementation time specified below, or May 25, 2001, whichever occurs later, unless repair assessment guidelines applicable to the fuselage pressure boundary (fuselage skin, door skin, and bulkhead webs) are incorporated within its inspection program. The repair assessment guidelines must be approved by the responsible Aircraft Certification Service office for the type certificate for the affected airplane.

    § 91.1507 [Amended]
    58. Amend § 91.1507 as follows: a. In paragraphs (b) and (d), remove the words “FAA Oversight Office” and add, in their place, the words “responsible Aircraft Certification Service office”. b. In paragraph (f), remove the words “Flight Standards District Office (FSDO)” and add, in their place, the words “Flight Standards office”.
    § 91.1603 [Amended]
    59. In § 91.1603(d), remove the words “nearest FAA Flight Standards District Office” and add, in their place, the words “responsible Flight Standards office”.
    § 91.1607, 91.1611, and 91.1613 [Amended]
    60. In part 91, remove the words “nearest FAA Flight Standards District Office (FSDO)” and add, in their place, the words “responsible Flight Standards office” in the following places: a. Section 91.1607(d); b. Section 91.1611(d); and c. Section 91.1613(d). Appendix A to Part 91 [Amended] 61. In section 1(a) introductory text of appendix A to part 91, remove the words “Flight Standards District Office having jurisdiction of the area in which the applicant is located” and add, in their place, the words “responsible Flight Standards office”. PART 97—STANDARD INSTRUMENT PROCEDURES 62. The authority citation for part 97 continues to read as follows: Authority:

    49 U.S.C. 106(f), 106(g), 40103, 40106, 40113, 40114, 40120, 44502, 44514, 44701, 44719, and 44721-44722.

    63. Amend § 97.20 by revising paragraph (c) to read as follows:
    § 97.20 General.

    (c) Standard instrument approach procedures and takeoff minimums and obstacle departure procedures (ODPs) are depicted on aeronautical charts published by the FAA. These charts are available from the FAA at https://www.faa.gov/air_traffic/flight_info/aeronav/digital_products/.

    PART 107—SMALL UNMANNED AIRCRAFT SYSTEMS 64. The authority citation for part 107 continues to read as follows: Authority:

    49 U.S.C. 106(f), 40101 note, 40103(b), 44701(a)(5); Sec. 333 of Pub. L. 112-95, 126 Stat. 75.

    § 107.63 [Amended]
    65. In § 107.63(b)(1), remove the words “a Flight Standards District Office” and add, in their place, the words “the responsible Flight Standards office”. PART 110—GENERAL REQUIREMENTS 66. The authority citation for part 110 continues to read as follows: Authority:

    49 U.S.C. 106(g), 1153, 40101, 40102, 40103, 40113, 44105, 44106, 44111, 44701-44717, 44722, 44901, 44903, 44904, 44906, 44912, 44914, 44936, 44938, 46103, 46105.

    § 110.2 [Amended]
    67. In § 110.2, remove the definition for Certificate-holding district office. PART 119—CERTIFICATION: AIR CARRIERS AND COMMERCIAL OPERATORS 68. The authority citation for part 119 continues to read as follows: Authority:

    Pub. L. 111-216, sec. 215 (August 1, 2010); 49 U.S.C. 106(f), 106(g), 1153, 40101, 40102, 40103, 40113, 44105, 44106, 44111, 44701-44717, 44722, 44901, 44903, 44904, 44906, 44912, 44914, 44936, 44938, 46103, 46105.

    § 119.1 [Amended]
    69. In § 119.1(e)(7)(iv), remove the words “FAA Flight Standards District Office responsible for the geographic area concerned” and add, in their place, the words “responsible Flight Standards office”.
    § 119.36 [Amended]
    70. In § 119.36(a), remove the words “Flight Standards District Office in whose area the applicant proposes to establish or has established his or her principal base of operations” and add, in their place, the words “responsible Flight Standards office”.
    §§ 119.37, 119.41, 119.47, 119.51, 119.57, 119.61, 119.65, and 119.69 [Amended]
    71. In 14 CFR part 119, remove all references to “certificate-holding district office” and add, in their place, the words “responsible Flight Standards office” in the following places: a. Section 119.37(e); b. Section 119.41(a)(2), (c)(1) and (2), and (d); c. Section 119.47(b); d. Section 119.51(b)(1) and (2), (b)(3) introductory text, (b)(4) introductory text, (b)(4)(i), (c)(2), (c)(3) introductory text, (c)(4), (d) introductory text, (d)(3), (e); e. Section 119.57(b)(2)(ii); f. Section 119.61(c); g. Section 119.65(e)(3); and h. Section 119.69(e)(3).
    §§ 119.41 and 119.51 [Amended]
    72. In addition to the amendments set forth above, remove the word “Director” and add, in its place, the words “Executive Director” in the following places: a. Section 119.41(d)(2); and b. Section 119.51(d)(2). PART 121—OPERATING REQUIREMENTS: DOMESTIC, FLAG, AND SUPPLEMENTAL OPERATIONS 73. The authority citation for part 121 continues to read as follows: Authority:

    49 U.S.C. 106(f), 106(g), 40103, 40113, 40119, 41706, 42301 preceding note added by Pub. L. 112-95, sec. 412, 126 Stat. 89, 44101, 44701-44702, 44705, 44709-44711, 44713, 44716-44717, 44722, 44729, 44732; 46105; Pub. L. 111-216, 124 Stat. 2348 (49 U.S.C. 44701 note); Pub. L. 112-95 126 Stat 62 (49 U.S.C. 44732 note).

    § 121.97, 121.117, 121.291, 121.405, 121.467, 121.565, 121.585, 121.586, 121.628, and 121.685 [Amended]
    74. In 14 CFR part 121, remove all references to “certificate-holding district office” and add, in their place, the words “responsible Flight Standards office” in the following places: a. Section 121.97(c); b. Section 121.117(c); c. Section 121.291(c)(2) and (4); d. Section 121.405(e); e. Section 121.467(c)(2); f. Section 121.565(d); g. Section 121.585(n)(2); h. Section 121.586(b) and (c); i. Section 121.628(a)(2); and j. Section 121.685.
    § 121.97, 121.117, 121.417, and 121.585 [Amended]
    75. In addition to the amendments set forth above, in 14 CFR part 121, remove all references to “Director” and add, in their place, the words “Executive Director” in the following places: a. Section 121.97(c); b. Section 121.117(c); c. Section 121.417(d); and d. Section 121.585(p).
    § 121.99 [Amended]
    76. In § 121.99(a), remove the words “FAA certificate holding district office” and add, in their place, the words “responsible Flight Standards office”.
    §§ 121.103 and 121.121 and Appendix P to Part 121 [Amended]
    77. In 14 CFR part 121, remove the words “certificate holding district office” and add, in their place, the words “responsible Flight Standards office” in the following places: a. Section 121.103(b)(3); b. Section 121.121(b)(3); and c. Section I(e)(1)(v) of appendix P to part 121.
    §§ 121.310 and 121.312 [Amended]
    78. In 14 CFR part 121, remove the words “Manager of the Transport Airplane Directorate, Aircraft Certification Service, Federal Aviation Administration,” and add, in their place, the words “Director of the division of the Aircraft Certification Service responsible for the airworthiness rules” in the following places: a. Section 121.310(f)(3)(iv) and (v); and b. Section 121.312(a)(4).
    § 121.314 [Amended]
    79. In § 121.314(d)(2), remove the words “Certificate Holding District Office” and add, in their place, the words “responsible Flight Standards office”.
    § 121.35 8 [Amended]
    80. In § 121.358(c)(1), remove the words “Flight Standards Division Manager in the region of the certificate holding district office” and add, in their place, the words “appropriate Flight Standards division manager in the responsible Flight Standards office”.
    § 121.368 [Amended]
    81. In § 121.368(h), remove the words “FAA Certificate Holding District Office,” and add, in their place, the words “responsible Flight Standards office,”.
    § 121.373 [Amended]
    82. In § 121.373(c), remove the words “FAA certificate-holding district office” and add, in their place, the words “responsible Flight Standards office”.
    § 121.374 [Amended]
    83. Amend § 121.374 as follows: a. In paragraph (h)(1) introductory text, remove the words “certificate holding district office (CHDO)” and add, in their place, the words “responsible Flight Standards office”. b. In paragraphs (h)(2), (i)(2), and (o), remove all references to “CHDO” and add, in its place, the words “responsible Flight Standards office”.
    § 121.723 [Amended]
    84. In § 121.723, remove the words “nearest FAA Flight Standards District Office” and add, in their place, the words “responsible Flight Standards office”.
    §§ 121.909 and 121.923 [Amended]
    85. In part 121, remove the words “Advanced Qualification Program” and add, in their place, the words “Air Transportation Division” in the following places: a. Section 121.909(a); and b. Section 121.923(a)(2).
    § 121.1101 [Amended]
    86. In § 121.1101, remove and reserve paragraph (b).
    § 121.1107 [Amended]
    87. In § 121.1107(a) introductory text: a. Remove the word “McDonnel” and add, in its place, the word “McDonnell”; and b. Remove the words “FAA Aircraft Certification Office (ACO), or office of the Transport Airplane Directorate, having cognizance over” and add, in their place, the words “responsible Aircraft Certification Service office for”.
    §§ 121.1109, 121.1111, 121.1113, and 121.1117 [Amended]
    88. In part 121, remove the words “FAA Oversight Office” and add, in their place, the words “responsible Aircraft Certification Service office” in the following places: a. Section 121.1109(c)(2); b. Section 121.1111(c) introductory text; c. Section 121.1113(b) and (d); and d. Section 121.1117(c)(2), (d)(1), and (g).
    § 121.1117 [Amended]
    89. In addition to the amendments set forth above, in § 121.1117(k)(1), remove the words “assigned Flight Standards Office” and add, in their place, the words “responsible Flight Standards office”. Appendix C to Part 121 [Amended] 90. Amend appendix C to part 121 as follows: a. In paragraph 1(a)(2), remove the words “FAA Regional Flight Standards Division” and add, in their place, the words “Flight Standards office”. b. In paragraph 1(b), remove the words “appropriate FAA Flight Standards District Office, Alaskan Region,” and add, in their place, the words “responsible Flight Standards office”. Appendix G to Part 121 [Amended] 91. In paragraph 1(a) of appendix G to part 121, remove the words “Flight Standards District Office or International Field Office” and add, in their place, the words “responsible Flight Standards office”. Appendix P to Part 121 [Amended] 92. In addition to the amendments set forth above, in section I(e)(1)(v) of appendix P to part 121, remove the words “to AFS-200”. PART 125—CERTIFICATION AND OPERATIONS: AIRPLANES HAVING A SEATING CAPACITY OF 20 OR MORE PASSENGERS OR A MAXIMUM PAYLOAD CAPACITY OF 6,000 POUNDS OR MORE; AND RULES GOVERNING PERSONS ON BOARD SUCH AIRCRAFT 93. The authority citation for part 125 continues to read as follows: Authority:

    49 U.S.C. 106(f), 106(g), 40113, 44701-44702, 44705, 44710-44711, 44713, 44716-44717, 44722.

    § 125.3 [Amended]
    94. In § 125.3(c), remove the words “nearest Flight Standards District Office” and add, in their place, the words “responsible Flight Standards office”.
    §§ 125.21, 125.25, 125.35, 125.47, 125.71, 125.219, and 125.295 [Amended]
    95. In 14 CFR part 125, remove the words “FAA Flight Standards district office” and add, in their place, the words “responsible Flight Standards office” in the following places: a. Section 125.21(a); b. Section 125.25(c); c. Section 125.35(a) introductory text, (b), and (d); d. Section 125.47; e. Section 125.71(d)(2); f. Section 125.219(e); and g. Section 125.295.
    § 125.35 [Amended]
    96. In addition to the amendments set forth above, amend § 125.35 as follows: a. In paragraphs (a)(2) and (d), remove all references to “that district office” and add, in their place, the words “the responsible Flight Standards office”. b. In paragraphs (c) and (d), remove all references to “Director” and add, in their place, the words “Executive Director”.
    § 125.51 [Amended]
    97. In § 125.51(b)(3), remove the words “certificate holding district office” and add, in their place, the words “responsible Flight Standards office”.
    § 125.201 [Amended]
    98. In § 125.201(a)(2), remove the words “Flight Standards District Office” and add, in their place, the words “responsible Flight Standards office”.
    § 125.206 [Amended]
    99. In § 125.206(b) introductory text and (b)(2), remove the word “Director” and add, in its place, the words “Executive Director”.
    § 125.501 [Amended]
    100. In § 125.501, remove and reserve paragraph (b).
    § 125.505 [Amended]
    101. In § 125.505(a) introductory text: a. Remove the word “exlcuding” and add, in its place, the word “excluding”; and b. Remove the words “FAA Aircraft Certification Office (ACO), or office of the Transport Airplane Directorate, having cognizance over” and add, in their place, the words “responsible Aircraft Certification Service office for”.
    §§ 125.507 and 125.509 [Amended]
    102. In 14 CFR part 125, remove the words “FAA Oversight Office” and add, in their place, the words “responsible Aircraft Certification Service office” in the following places: a. Section 125.507(b) and (d); and b. Section 125.509(c)(2), (d)(1), and (g).
    § 125.509 [Amended]
    103. In addition to the amendments set forth above, in § 125.509(i), remove the word “Office” and add, in its place, the word “office”. PART 129—OPERATIONS: FOREIGN AIR CARRIERS AND FOREIGN OPERATORS OF U.S.-REGISTERED AIRCRAFT ENGAGED IN COMMON CARRIAGE 104. The authority citation for part 129 continues to read as follows: Authority:

    49 U.S.C. 1372, 40113, 40119, 44101, 44701-44702, 44705, 44709-44711, 44713, 44716-44717, 44722, 44901-44904, 44906, 44912, 46105, Pub. L. 107-71 sec. 104.

    §§ 129.5 and 129.11 [Amended]
    105. In 14 CFR part 129, remove all references to “District Office” and add, in their place, the word “office” in the following places: a. Section 129.5(g); and b. Section 129.11(c)(1) and (2), (c)(3) introductory text, (c)(4) introductory text, (c)(4)(i), (d)(2), (d)(3) introductory text, (d)(4), (f) introductory text, (f)(3), and (g).
    § 129.11 [Amended]
    106. In addition to the amendments set forth above, in § 129.11(f)(2), remove the word “Director” and add, in its place, the words “Executive Director”.
    § 129.14 [Amended]
    107. In § 129.14(b)(2), remove the words “FAA Flight Standards District Office having geographic responsibility” and add, in their place, the words “responsible Flight Standards office”.
    § 129.101 [Amended]
    108. In § 129.101, remove and reserve paragraph (b).
    § 129.107 [Amended]
    109. In § 129.107(a) introductory text, remove the words “FAA Aircraft Certification Office (ACO), or office of the Transport Airplane Directorate, having cognizance over” and add, in their place, the words “responsible Aircraft Certification Service office for”.
    §§ 129.109, 129.111, 129.113, and 129.117 [Amended]
    110. In 14 CFR part 129, remove the words “FAA Oversight Office” and add, in their place, the words “responsible Aircraft Certification Service office” in the following places: a. Section 129.109(b)(2); b. Section 129.111(c) introductory text; c. Section 129.113(b) and (d); and d. Section 129.117(c)(2), (d)(1), and (g).
    §§ 129.111, 129.113, and 129.115 [Amended]
    111. In addition to the amendments set forth above, in 14 CFR part 129, remove the words “International Field Office” and add, in their place, the word “office” in the following places: a. Section 129.111(e); b. Section 129.113(f); and c. Section 129.115(e).
    § 129.117 [Amended]
    112. In addition to the amendments set forth above, in § 129.117(i) and (k)(1), remove the words “assigned Flight Standards Office” and add, in their place, the words “responsible Flight Standards office”. PART 133—ROTORCRAFT EXTERNAL-LOAD OPERATIONS 113. The authority citation for part 133 continues to read as follows: Authority:

    49 U.S.C. 106(g), 40113, 44701-44702.

    § 133.15 [Amended]
    114. In § 133.15: a. Remove the words “an FAA Flight Standards District Office” and add, in their place, the words “a Flight Standards office”; and b. Remove the words “district office that has jurisdiction over” and add, in their place, the words “responsible Flight Standards office for”.
    § 133.21 [Amended]
    115. In § 133.21(c), remove the words “FAA certificate-holding office” and add, in their place, the words “responsible Flight Standards office”.
    § 133.25 [Amended]
    116. Amend § 133.25 as follows: a. In paragraph (a): i. Remove the words “FAA Flight Standards District Office having jurisdiction over” and add, in their place, the words “responsible Flight Standards office for”; ii. Remove the words “Flight Standards District Office nearest” and add, in their place, the words “responsible Flight Standards office for”; iii. Remove the comma after “§§ 133.19” and before “and 133.49”; and iv. Remove the words “Flight Standards District Office” and add, in their place, the words “responsible Flight Standards office”. b. In paragraph (b), remove the words “certificate-holding FAA Flight Standards District Office” and add, in their place, the words “responsible Flight Standards office”.
    § 133.27 [Amended]
    117. In § 133.27(c), remove the words “FAA Flight Standards District Office having jurisdiction over the area in which his home base of operations is located” and add, in their place, the words “responsible Flight Standards office”.
    § 133.31 [Amended]
    118. In § 133.31(b), remove the words “certificate-holding FAA Flight Standards District Office” and add, in their place, the words “responsible Flight Standards office”.
    § 133.33 [Amended]
    119. In § 133.33(d)(1): a. Remove the words “FAA Flight Standards District Office having jurisdiction over” and add, in their place, the words “responsible Flight Standards office for”; and b. Remove the words “that district office” and add, in their place, the words “that office”. PART 135—OPERATING REQUIREMENTS: COMMUTER AND ON DEMAND OPERATIONS AND RULES GOVERNING PERSONS ON BOARD SUCH AIRCRAFT 120. The authority citation for part 135 continues to read as follows: Authority:

    49 U.S.C. 106(f), 106(g), 41706, 40113, 44701-44702, 44705, 44709, 44711-44713, 44715-44717, 44722, 44730, 45101-45105; Pub. L. 112-95, 126 Stat. 58 (49 U.S.C. 44730).

    § 135.4 [Amended]
    121. In § 135.4(b) introductory text, remove the words “Flight Standards District Office” and add, in their place, the words “responsible Flight Standards office”.
    § 135.19 [Amended]
    122. In § 135.19(c), remove the words “FAA Flight Standards District Office” and add, in their place, the words “responsible Flight Standards office”.
    § 135.43 [Amended]
    123. In § 135.43(b), remove the words “nearest FAA Flight Standards District Office” and add, in their place, the words “responsible Flight Standards office”.
    § 135.91, 135.129, 135.179, 135.213, 135.273, 135.417, and 135.431 [Amended]
    124. In 14 CFR part 135, remove the words “certificate-holding district office” and add, in their place, the words “responsible Flight Standards office” in the following places: a. Section 135.91(e); b. Section 135.129(n)(2); c. Section 135.179(a)(2); d. Section 135.213(b); e. Section 135.273(c)(2); f. Section 135.417 introductory text; and g. Section 135.431(c).
    §§ 135.129 and 135.158 [Amended]
    125. In addition to the amendments set forth above, in 14 CFR part 135, remove the word “Director” and add, in its place, the words “Executive Director” in the following places: a. Section 135.129(p); and b. Section 135.158(b) introductory text and (b)(2).
    § 135.160 [Amended]
    126. In § 135.160(b), remove the words “nearest Flight Standards District Office” and add, in their place, the words “responsible Flight Standards office”.
    § 135.170 [Amended]
    127. In § 135.170(b)(1)(vii), remove the words “Manager of the Transport Airplane Directorate, Aircraft Certification Service, Federal Aviation Administration,” and add, in their place, the words “Director of the division of the Aircraft Certification Service responsible for the airworthiness rules”.
    § 135.243 [Amended]
    128. Amend § 135.243 as follows: a. In paragraph (d)(3) introductory text, remove the words “district office” and add, in their place, “office”. b. In paragraph (d)(7), remove the words “certificate-holding FAA Flight Standards district office” and add, in their place, the words “responsible Flight Standards office”.
    § 135.426 [Amended]
    129. In § 135.426(h), remove the words “FAA Certificate Holding District Office” and add, in their place, the words “responsible Flight Standards office”. Appendix G to Part 135 [Amended] 130. Amend appendix G to part 135 as follows: a. In section G135.2.8(h) introductory text, remove the words “certificate holding district office (CHDO)” and add, in their place, the words “responsible Flight Standards office”. b. In section G135.2.8(i) introductory text, (i)(2), and (o), remove the words “CHDO” and add, in their place, the words “responsible Flight Standards office”. PART 137—AGRICULTURAL AIRCRAFT OPERATIONS 131. The authority citation for part 137 continues to read as follows: Authority:

    49 U.S.C. 106(g), 40103, 40113, 44701-44702.

    § 137.1 [Amended]
    132. In § 137.1(c), remove the words “nearest FAA Flight Standards District Office” and add, in their place, the words “responsible Flight Standards office”.
    § 137.15 [Amended]
    133. In § 137.15, remove the words “FAA Flight Standards District Office that has jurisdiction over” and add, in their place, the words “responsible Flight Standards office for”.
    § 137.17 [Amended]
    134. Amend § 137.17 as follows: a. In paragraph (b), remove the words “FAA Flight Standards District Office having jurisdiction over” and add, in their place, the words “responsible Flight Standards office for”. b. In paragraph (c), remove the words “Flight Standards District Office” and add, in their place, the words “responsible Flight Standards office”. c. In paragraph (d), remove the word “Director” and add, in its place, the words “Executive Director”.
    § 137.51 [Amended]
    135. In § 137.51(b)(3), remove the words “FAA Flight Standards District Office having jurisdiction over” and add, in their place, the words “responsible Flight Standards office for”.
    § 137.77 [Amended]
    136. In § 137.77, remove the words “FAA Flight Standards District Office last having jurisdiction over his operation” and add, in their place, the words “responsible Flight Standards office”. PART 141—PILOT SCHOOLS 137. The authority citation for part 141 continues to read as follows: Authority:

    49 U.S.C. 106(f), 106(g), 40113, 44701-44703, 44707, 44709, 44711, 45102-45103, 45301-45302.

    §§ 141.25, 141.53, and 141.91 [Amended]
    138. In 14 CFR part 141, remove the words “FAA Flight Standards District Office having jurisdiction over” and add, in their place, the words “responsible Flight Standards office for” in the following places: a. Section 141.25(d) introductory text; b. Section 141.53(b)(1); and c. Section 141.91(d).
    § 141.37 [Amended]
    139. In § 141.37(b)(2), remove the words “FAA Flight Standards District Office having jurisdiction over the school” and add, in their place, the words “responsible Flight Standards office”.
    § 141.67 [Amended]
    140. In § 141.67(d)(2), remove the words “an FAA Flight Standards District Office” and add, in their place, the words “the responsible Flight Standards office ”.
    § 141.87 [Amended]
    141. In § 141.87(a), remove the words “Flight Standards District Office that has jurisdiction over the area” and add, in their place, the words “responsible Flight Standards office”. PART 142—TRAINING CENTERS 142. The authority citation for part 142 continues to read as follows: Authority:

    49 U.S.C. 106(f), 106(g), 40113, 40119, 44101, 44701-44703, 44705, 44707, 44709-44711, 45102-45103, 45301-45302.

    § 142.11 [Amended]
    143. In § 142.11(a)(2), remove the words “FAA Flight Standards District Office that has jurisdiction over” and add, in their place, the words “responsible Flight Standards office for”. PART 145—REPAIRS STATIONS 144. The authority citation for part 145 continues to read as follows: Authority:

    49 U.S.C. 106(g), 40113, 44701-44702, 44704, 44709, 44717.

    § 145.163, 145.207, 145.209, 145.211, 145.215, and 145.217 [Amended]
    145. In 14 CFR part 145, remove all references to “certificate holding district office” and add, in their place, the words “responsible Flight Standards office” in the following places: a. Section 145.163(d); b. Section 145.207(d) and (e); c. Section 145.209(d)(1), (e), (h)(1) and (2), and (j); d. Section 145.211(c)(4) and (d); e. Section 145.215(d); and f. Section 145.217(a)(2) introductory text. PART 183—REPRESENTATIVES OF THE ADMINISTRATOR 146. The authority citation for part 183 continues to read as follows: Authority:

    31 U.S.C. 9701; 49 U.S.C. 106(f), 106(g), 40113, 44702, 45303.

    § 183.11 [Amended]
    147. Amend § 183.11 as follows: a. In paragraph (c)(1), remove the words “Manager, Aircraft Certification Office, or the Manager's designee,” and add, in their place, the words “Aircraft Certification Service”. b. In paragraph (c)(2), remove the words “Manager, Aircraft Certification Directorate, or the Manager's designee,” and add, in their place, the words “Aircraft Certification Service”. c. In paragraph (e), remove the words “Director, Aircraft Certification Service, or the Director's designee,” and add, in their place, the words “Aircraft Certification Service”.
    § 183.33 [Amended]
    148. In § 183.33(a), remove the words “Director of” everywhere they appear and add, in their place, the words “Executive Director,”. Issued under authority provided by 49 U.S.C. 106(f), 44701(a), and 44703 in Washington, DC, on January 24, 2018. Daniel K. Elwell, Acting Administrator.
    [FR Doc. 2018-03374 Filed 3-2-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 23 [Docket No. FAA-2018-0090; Special Conditions No. 23-286-SC] Special Conditions: Textron Aviation, Inc., Model C90A King Air; Installation of Electronic Engine Control System AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Final special conditions; request for comments.

    SUMMARY:

    These special conditions are issued for the Textron Aviation, Inc., model C90A King Air airplane. This airplane as modified by Nextant Aerospace will have a novel or unusual design feature associated with installation of an engine that includes an electronic engine control system. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.

    DATES:

    The effective date of these special conditions is March 5, 2018.

    We must receive your comments by April 4, 2018.

    ADDRESSES:

    Send comments identified by docket number FAA-2018-0090 using any of the following methods:

    Federal eRegulations Portal: Go to http://www.regulations.gov and follow the online instructions for sending your comments electronically.

    Mail: Send comments to Docket Operations, M-30, U.S. Department of Transportation (DOT), 1200 New Jersey Avenue SE, Room W12-140, West Building Ground Floor, Washington, DC 20590-0001.

    Hand Delivery of Courier: Take comments to Docket Operations in Room W12-140 of the West Building Ground Floor at 1200 New Jersey Avenue SE, Washington, DC, between 9 a.m., and 5 p.m., Monday through Friday, except Federal holidays.

    Fax: Fax comments to Docket Operations at 202-493-2251.

    Privacy: The FAA will post all comments it receives, without change, to http://regulations.gov, including any personal information the commenter provides. Using the search function of the docket website, anyone can find and read the electronic form of all comments received into any FAA docket, including the name of the individual sending the comment (or signing the comment for an association, business, labor union, etc.). DOT's complete Privacy Act Statement can be found in the Federal Register published on April 11, 2000 (65 FR 19477-19478), as well as at http://DocketsInfo.dot.gov.

    Docket: Background documents or comments received may be read at http://www.regulations.gov at any time. Follow the online instructions for accessing the docket or go to the Docket Operations in Room W12-140 of the West Building Ground Floor at 1200 New Jersey Avenue SE, Washington, DC, between 9 a.m., and 5 p.m., Monday through Friday, except Federal holidays.

    FOR FURTHER INFORMATION CONTACT:

    Jeff Pretz, Federal Aviation Administration, Aircraft Certification Service, Policy & Innovation Division, Small Airplane Standards Branch, AIR-691, 901 Locust, Room 301, Kansas City, MO 64106; telephone (816) 329-3239; facsimile (816) 329-4090.

    SUPPLEMENTARY INFORMATION:

    The FAA has determined that notice and opportunity for prior public comment hereon are impracticable because these procedures would significantly delay issuance of the approval design and thus delivery of the affected aircraft. In addition, the FAA has determined, in accordance with 5 U.S.C. 553(b)(3)(B) and 553(d)(3), that notice and opportunity for prior public comment hereon are unnecessary because the substance of these special conditions has been subject to the public comment process in several prior instances with no substantive comments received. The FAA therefore finds that good cause exists for making these special conditions effective upon issuance.

    Special
  • conditions No.
  • Company/airplane model
    23-01-05-SC 1 Eclipse Aviation Corporation/Model 500. 23-10-03-SC 2 Diamond Aircraft Industries/Model DA-40NG. 23-98-03-SC 3 Raytheon Aircraft Company/Model 3000.
    Comments Invited

    1http://rgl.faa.gov/Regulatory_and_Guidance_Library/rgSC.nsf/0/3B5A8ECF0327533486256B80006AEF68?OpenDocument&Highlight=23-01-05-sc.

    2http://rgl.faa.gov/Regulatory_and_Guidance_Library/rgSC.nsf/0/4D1C0F368222693386257904004BC13F?OpenDocument&Highlight=electronic%20engine%20control.

    3http://rgl.faa.gov/Regulatory_and_Guidance_Library/rgSC.nsf/0/FF5633DA88FBF46586256B96005F8AAF?OpenDocument&Highlight=electronic%20engine%20control.

    We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data. We ask that you send us two copies of written comments.

    We will consider all comments we receive on or before the closing date for comments. We will consider comments filed late if it is possible to do so without incurring expense or delay. We may change these special conditions based on the comments we receive.

    Background

    On January 12, 2016, Nextant Aerospace applied for a supplemental type certificate (STC) for installation of two General Electric (GE) H75-100E engines that include electronic engine and propeller controls in the model C90A King Air. The model C90A, currently approved under Type Certificate No. 3A20, is a normal category twin turbo-propeller airplane with a maximum capacity of up to 13 passengers and a maximum takeoff weight of up to 9650 lbs. or 10,100 lbs., depending on the serial number modified. The airplane includes two Pratt & Whitney Corporation (PWC) PT6A-21 engines and either Hartzell or McCauley reversing propellers.

    Nextant Aerospace originally received an STC for the model C90A for installation of two GE H75-100 engines. Nextant Aerospace has made application to amend the STC to install GE H75-100E engines, which include single channel analog supervisory electronic engine controls (EECs) in addition to the existing mechanical engine controls. The EEC does not include any software, but does provide single lever control for both the fuel metering and propeller control. The EEC also ensures the engine and propeller remain within their operating limits throughout the approved operating range, including propeller reverse operation and starting. Loss of the EEC results in the pilot control of the hydro-mechanical metering/shut-off lever.

    The Nextant Aerospace installation of GE H75-100E engines in the model C90A King Air use an electronic engine control system (a single channel supervisory control with a mechanical backup as opposed to a two-channel full authority control with no mechanical backup) instead of a traditional mechanical only control system. Although the engine control system is certificated as part of the engine, the installation of an engine with an electronic control system requires evaluation due to critical environmental effects and possible effects on or by other airplane systems. This includes indirect effects of lightning, radio interference with other airplane electronic systems, shared engine and airplane data, and power sources.

    The regulatory requirements in 14 CFR part 23 for evaluating the installation of complex systems, including electronic systems and critical environmental effects, are contained in §§ 23.1306, 23.1308, and 23.1309. However, when § 23.1309 was developed, the use of electronic control systems for engines was not envisioned. The integral nature of these systems makes it necessary to ensure the airplane functions, which may be included in the EEC, are properly evaluated and that the installation does not degrade the EEC reliability, which is approved under part 33. Sections 23.1306(a) and 23.1308(a) are applied to the EEC to ensure it remains equivalent to a mechanical only system, which is not generally susceptible to the High Intensity Radiated Fields (HIRF) and lightning environments.

    In some cases, the airplane in which the engine is installed determines a higher classification than the engine controls are certificated for, requiring the EEC systems be analyzed at a higher classification. As of November 2005, EEC special conditions mandated the § 23.1309 classification for loss of EEC control as catastrophic for any airplane. This is not to imply an engine failure is classified as catastrophic, but that the EEC must provide an equivalent reliability to mechanical engine controls. In addition, §§ 23.1141(e) and 25.901(b)(2) are applied to provide the fault tolerant design requirements of turbine engine mechanical controls to the EEC and ensure adequate inspection and maintenance interval for the EEC. As this is a supervisory EEC with a mechanical control backup, the intent of this special condition is to ensure the installation of both the EEC and mechanical backup provide an equivalent reliability to that expected of a mechanical only control.

    Part 23 did not envision the use of electronic engine controls with either full authority controls or supervisory only controls, and lacks the specific regulatory requirements necessary to provide an adequate level of safety. Therefore, special conditions are necessary.

    Type Certification Basis

    Under the provisions of Title 14, Code of Federal Regulations (CFR) 21.101, Nextant Aerospace must show that the model C90A, as changed, continues to meet the applicable provisions of the regulations incorporated by reference in Type Certificate No. 3A20 or the applicable regulations in effect on the date of application for the change. The regulations incorporated by reference in the type certificate are commonly referred to as the “original type certification basis.” The regulations incorporated by reference in 3A20 are as follows: CAR 3, effective May 15, 1956, amendments 3-1, 3-2, and 3-8; CAR 3, amendment 3-6; and CAR 3 § 3.705, amendment 3-7. In addition, the certification basis includes special conditions and some requirements from 14 CFR parts 23, 25, 36 and SFAR 27, as noted on the Type Certificate Data Sheet. If the Administrator finds that the applicable airworthiness regulations in part 23 do not contain adequate or appropriate safety standards for the model C90A because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

    In addition to the applicable airworthiness regulations and special conditions, the model C90A must comply with the fuel vent and exhaust emission requirements of 14 CFR part 34 and the noise certification requirements of 14 CFR part 36.

    The FAA issues special conditions, as defined in § 11.19, under § 11.38 and they become part of the type certification basis under § 21.101.

    Special conditions are initially applicable to the model for which they are issued. Should the applicant apply for a supplemental type certificate to modify any other model included on the same type certificate to incorporate the same novel or unusual design feature, the FAA would apply these special conditions to the other model.

    Novel or Unusual Design Features

    The model C90A King Air will incorporate the following novel or unusual design features: The installation of an Electronic Engine Control (EEC) system.

    Discussion

    As defined in the summary section, this airplane makes use of an electronic engine control system in addition to a traditional mechanical control system, which is a novel design for this type of airplane. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. Mandating a structured assessment to determine potential installation issues mitigate the concerns that the addition of an electronic engine control does not produce a failure condition not previously considered.

    Applicability

    These special conditions are applicable to the model C90A King Air when modified by Nextant Aerospace. Should Nextant Aerospace apply later for a supplemental type certificate to modify any other model included on Type Certificate No. 3A20 to incorporate the same novel or unusual design feature, the FAA would apply these special conditions to that model as well.

    Conclusion

    This action affects only certain novel or unusual design features on the model C90A airplane. It is not a rule of general applicability and affects only the applicant who applied to the FAA for approval of these features on the airplane.

    The substance of these special conditions has been subjected to the notice and comment period in several prior instances, identified above, and has been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. Therefore, notice and opportunity for prior public comment hereon are unnecessary and the FAA finds good cause, in accordance with 5 U.S. Code §§ 553(b)(3)(B) and 553(d)(3), making these special conditions effective upon issuance. The FAA is requesting comments to allow interested persons to submit views that may not have been submitted in response to the prior opportunities for comment described above.

    List of Subjects in 14 CFR Part 23

    Aircraft, Aviation safety, Signs and symbols.

    Citation

    The authority citation for these special conditions is as follows:

    Authority:

    49 U.S.C. 106(f), 106(g), 40113 and 44701; 14 CFR 21.16 and 21.101; and 14 CFR 11.38 and 11.19.

    The Special Conditions

    Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for Textron Aviation (formerly Beechcraft); model C90A King Air airplanes modified by Nextant Aerospace.

    1. Installation of Electronic Engine Control System

    a. For electronic engine control (EEC) system installations, it must be established that no single failure or malfunction or probable combinations of failures of EEC system components will have an effect on the system, as installed in the airplane, that causes the Loss of Thrust Control (LOTC) probability of the system to exceed those allowed in part 33 certification.

    b. Supervisory electronic engine control system installations must be evaluated for environmental and atmospheric conditions, including lightning. The EEC system lightning and High Intensity Radiated Fields (HIRF) effects that would result in LOTC or an unacceptable change in power or thrust must be evaluated in accordance with §§ 23.1306 and 23.1308.

    c. The components of the installation must be constructed, arranged, and installed to ensure their continued safe operation between normal inspections or overhauls.

    d. Functions incorporated into any electronic engine control that make it part of any equipment, systems or installation whose functions are beyond that of basic engine control and which may also introduce system failures and malfunctions, are not exempt from § 23.1309 and must be shown to meet part 23 levels of safety as derived from § 23.1309. Part 33 certification data, if applicable, may be used to show compliance with any part 23 requirements. If part 33 data is used to substantiate compliance with part 23 requirements, then the part 23 applicant must be able to provide this data for their showing of compliance.

    Note:

    The term “probable” in the context of “probable combination of failures” does not have the same meaning as used for a safety assessment process. The term “probable” in “probable combination of failures” means “foreseeable,” or those, failure conditions anticipated to occur one or more times during the operational life of each airplane.

    Issued in Kansas City, Missouri, on February 16, 2018. Pat Mullen, Manager, Small Airplane Standards Branch, Aircraft Certification Service.
    [FR Doc. 2018-04417 Filed 3-2-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2017-0900; Product Identifier 2017-NM-055-AD; Amendment 39-19208; AD 2018-04-12] RIN 2120-AA64 Airworthiness Directives; The Boeing Company Airplanes AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Final rule.

    SUMMARY:

    We are adopting a new airworthiness directive (AD) for all The Boeing Company Model 737-100, -200, -200C, -300, -400, -500 series airplanes. This AD was prompted by a report of wire damage on a fuel boost pump power cable, and a separate report of a fuel tank explosion on a similarly equipped airplane. This AD requires the installation of new shielded wire bundles and convoluted liners within fuel tank conduits, and revision of the maintenance or inspection program, as applicable, to incorporate certain airworthiness limitations (AWLs). We are issuing this AD to address the unsafe condition on these products.

    DATES:

    This AD is effective April 9, 2018.

    The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of April 9, 2018.

    ADDRESSES:

    For service information identified in this final rule, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; internet https://www.myboeingfleet.com. You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195. It is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2017-0900.

    Examining the AD Docket

    You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2017-0900; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this final rule, the regulatory evaluation, any comments received, and other information. The address for the Docket Office (phone: 800-647-5527) is Docket Management Facility, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590.

    FOR FURTHER INFORMATION CONTACT:

    Serj Harutunian, Aerospace Engineer, Propulsion Section, FAA, Los Angeles ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-5254; fax: 562-627-5210; email: [email protected]

    SUPPLEMENTARY INFORMATION:

    Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all The Boeing Company Model 737-100, -200, -200C, -300, -400, -500 series airplanes. The NPRM published in the Federal Register on September 26, 2017 (82 FR 44744). The NPRM was prompted by a report of wire damage on a fuel boost pump power cable, and a separate report of a fuel tank explosion on a similarly equipped airplane. The NPRM proposed to require the installation of new shielded wire bundles and convoluted liners within fuel tank conduits, and revision of the maintenance or inspection program, as applicable, to incorporate certain AWLs.

    We are issuing this AD to prevent electrical arcing between the fuel boost pump power cable wiring and the surrounding conduit, which could lead to arc-through of the conduit, consequent fire or explosion of the fuel tank, and subsequent loss of the airplane.

    This AD is further rulemaking following the interim action of AD 2007-24-02, Amendment 39-15268 (72 FR 65446, November 21, 2007) (“AD 2007-24-02”), which applies to all Boeing Model 737-100, -200, -200C, -300, -400, -500 series airplanes. AD 2007-24-02 was prompted by reports of a fuel tank explosion on a Boeing Model 727-200F airplane and chafed wires and a damaged wiring sleeve on a fuel boost pump power cable in a Boeing Model 737-300 airplane. AD 2007-24-02 requires repetitive detailed inspections for damage of the electrical wire and sleeve that run to the fuel boost pump through a conduit in the fuel tank, to address potential electrical arcing between the wiring and the surrounding conduit that could result in arc-through of the conduit, consequent fire or explosion of the fuel tank, and subsequent loss of the airplane. The preamble to AD 2007-24-02 explains that its requirements are considered “interim action” and that we might consider further rulemaking. We now have determined that further rulemaking is necessary, and this AD follows from that determination.

    Comments

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

    Support for the NPRM

    The Air Line Pilots Association, International (ALPA) and The Boeing Company concurred with the proposed AD.

    Request To Not Require Replacement or To Extend Compliance Time

    The commenter, Hannes Merrick, requested that the FAA consider not requiring wire bundle replacement if faults are not found during inspection of the affected wire bundles, or at a minimum to extend the compliance time to allow for more time to accomplish the replacement required by the proposed AD. We infer that the commenter would regard the existing repetitive inspections as adequate for maintaining an acceptable level of safety with the current wire bundle configuration. The commenter did not provide substantiating data for extending the compliance time.

    We do not agree with the commenter's requests. Our experience has shown that these specific wiring design changes are more effective than repetitive inspections in preventing unsafe conditions. The design change required by this AD adds an extra protective layer that is necessary to prevent wire chafing in specific areas of the airplane that are identified in Boeing Alert Service Bulletin 737-28A1273, Revision 1, dated March 14, 2017. We have also determined that the compliance time specified in this AD is appropriate to address the unsafe condition described in this AD. However, under the provisions of paragraph (l) of this AD, we will consider requests for approval of an extension of the compliance time if sufficient data are submitted to substantiate that the change would provide an acceptable level of safety. We have not changed this AD in this regard.

    Effects of Winglets on Accomplishment of the Proposed Actions

    Aviation Partners Boeing stated that the installation of winglets per supplemental type certificate (STC) ST01219SE does not affect the accomplishment of the manufacturer's service instructions.

    We agree with the commenter that STC ST01219SE does not affect the accomplishment of the manufacturer's service instructions. Therefore, the installation of STC ST01219SE does not affect the ability to accomplish the actions required by this AD. We have not changed this AD in this regard.

    New Service Information

    In paragraph (h) of the proposed AD we referred to Boeing 737-100/200/200C/300/400/500 Airworthiness Limitations (AWLs) and Certification Maintenance Requirements (CMRs), D6-38278-CMR, dated May 2016, as an appropriate source of service information for incorporating certain airworthiness limitations. After the NPRM was issued, we reviewed Boeing 737-100/200/200C/300/400/500 Airworthiness Limitations (AWLs) and Certification Maintenance Requirements (CMRs), D6-38278-CMR, dated November 2017, which also contains the airworthiness limitations cited in this AD. The November 2017 document includes a change to airworthiness limitation 28-AWL-29, which is not one of the airworthiness limitations cited in this AD. We have revised paragraph (h) of this AD to also refer to Boeing 737-100/200/200C/300/400/500 Airworthiness Limitations (AWLs) and Certification Maintenance Requirements (CMRs), D6-38278-CMR, dated November 2017, as an appropriate source of service information for incorporating the airworthiness limitations cited in this AD.

    Conclusion

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

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

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

    Related Service Information Under 1 CFR Part 51

    We reviewed the following service information.

    • Boeing Alert Service Bulletin 737-28A1273, Revision 1, dated March 14, 2017. This service information describes procedures for the installation of new shielded wire bundles and convoluted liners within fuel tank conduits.

    • Boeing 737-100/200/200C/300/400/500 Airworthiness Limitations (AWLs) and Certification Maintenance Requirements (CMRs), D6-38278-CMR, dated May 2016 and November 2017. This service information describes new AWLs for inspecting the fuel tank wiring and conduits. These documents are distinct since the November 2017 document includes a change to airworthiness limitation 28-AWL-29 (which is not required by this AD).

    This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

    Costs of Compliance

    We estimate that this AD affects 499 airplanes of U.S. registry. We estimate the following costs to comply with this AD:

    Estimated Costs Action Labor cost Parts cost Cost per
  • product
  • Cost on U.S. operators
    Installation 154 work-hours × $85 per hour = $13,090 $5,561 $18,651 $9,306,849 Incorporation of Airworthiness Limitations 1 work-hour × $85 per hour = $85 0 85 42,415
    Authority for This Rulemaking

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

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

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

    Regulatory Findings

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

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

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

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

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

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

    List of Subjects in 14 CFR Part 39

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

    Adoption of the Amendment

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

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

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

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): 2018-04-12 The Boeing Company: Amendment 39-19208; Docket No. FAA-2017-0900; Product Identifier 2017-NM-055-AD. (a) Effective Date

    This AD is effective April 9, 2018.

    (b) Affected ADs

    This AD affects AD 2007-24-02, Amendment 39-15268 (72 FR 65446, November 21, 2007) (“AD 2007-24-02”).

    (c) Applicability

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

    (d) Subject

    Air Transport Association (ATA) of America Code 28, Fuel.

    (e) Unsafe Condition

    This AD was prompted by reports of chafed wires and a damaged wiring sleeve on a fuel boost pump power cable, and an on-ground fuel tank explosion. We are issuing this AD to prevent electrical arcing between the fuel boost pump power cable wiring and the surrounding conduit, which could lead to arc-through of the conduit, consequent fire or explosion of the fuel tank, and subsequent loss of the airplane.

    (f) Compliance

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

    (g) Required Actions

    (1) For Group 1 and Group 2 airplanes identified in Boeing Alert Service Bulletin 737-28A1273, Revision 1, dated March 14, 2017: Except as required by paragraph (j) of this AD, at the applicable times specified in paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 737-28A1273, Revision 1, dated March 14, 2017, do all applicable actions identified as required for compliance (“RC”) in, and in accordance with, the Accomplishment Instructions of Boeing Alert Service Bulletin 737-28A1273, Revision 1, dated March 14, 2017.

    (2) For airplanes identified as Group 3 in Boeing Alert Service Bulletin 737-28A1273, Revision 1, dated March 14, 2017: Within 120 days after the effective date of this AD, inspect the airplane and do all applicable corrective actions using a method approved in accordance with the procedures specified in paragraph (l) of this AD.

    (h) Revision of Maintenance or Inspection Program

    Within 60 days after the effective date of this AD: Revise the maintenance or inspection program, as applicable, to incorporate the applicable Airworthiness Limitations (AWLs) from Boeing 737-100/200/200C/300/400/500 Airworthiness Limitations (AWLs) and Certification Maintenance Requirements (CMRs), D6-38278-CMR, dated May 2016 or November 2017, as identified in paragraphs (h)(1) and (h)(2) of this AD.

    (1) 28-AWL-18 and 28-AWL-26, “Fuel Boost Pump Wires In Conduit Installation—In Fuel Tank,” for Boeing Model 737-100, -200, -200C series airplanes.

    (2) 28-AWL-18 and 28-AWL-25, “Fuel Boost Pump Wires In Conduit Installation—In Fuel Tank,” for Boeing Model 737-300, -400, -500 series airplanes.

    (i) No Alternative Critical Design Configuration Control Limitations (CDCCLs)

    After the maintenance or inspection program, as applicable, has been revised as required by paragraph (h) of this AD, no alternative CDCCLs may be used unless the CDCCLs are approved as an alternative method of compliance (AMOC) in accordance with the procedures specified in paragraph (l) of this AD.

    (j) Exceptions to Service Information Specifications

    For purposes of determining compliance with the requirements of this AD: Where Boeing Alert Service Bulletin 737-28A1273, Revision 1, dated March 14, 2017, uses the phrase “the original issue date of this service bulletin,” this AD requires using “after the effective date of this AD.”

    (k) Terminating Action for Requirements of AD 2007-24-02

    Accomplishment of the actions required by paragraph (g) of this AD terminates all requirements of AD 2007-24-02.

    (l) Alternative Methods of Compliance (AMOCs)

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

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

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

    (4) For service information that contains steps that are labeled as Required for Compliance (RC), the provisions of paragraphs (l)(4)(i) and (l)(4)(ii) of this AD apply.

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

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

    (m) Related Information

    For more information about this AD, contact Serj Harutunian, Aerospace Engineer, Propulsion Section, FAA, Los Angeles ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-5254; fax: 562-627-5210; email: [email protected]

    (n) Material Incorporated by Reference

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

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

    (i) Boeing Alert Service Bulletin 737-28A1273, Revision 1, dated March 14, 2017.

    (ii) Boeing 737-100/200/200C/300/400/500 Airworthiness Limitations (AWLs) and Certification Maintenance Requirements (CMRs), D6-38278-CMR, dated May 2016.

    (iii) Boeing 737-100/200/200C/300/400/500 Airworthiness Limitations (AWLs) and Certification Maintenance Requirements (CMRs), D6-38278-CMR, dated November 2017.

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

    (4) You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.

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

    Issued in Renton, Washington, on February 15, 2018. Michael Kaszycki, Acting Director, System Oversight Division, Aircraft Certification Service.
    [FR Doc. 2018-03824 Filed 3-2-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2014-0839; Airspace Docket No. 14-AEA-7] Amendment of Class E Airspace; Selinsgrove, PA AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Final rule.

    SUMMARY:

    This action amends Class E airspace extending upward from 700 feet above the surface in Selinsgrove, PA. A new area navigation (RNAV) global positioning system (GPS) standard instrument approach procedure has been developed at Penn Valley Airport, requiring airspace reconfiguration at the airport. This action enhances the safety and airspace management of instrument flight rules (IFR) operations at the airport. This action also updates the geographic coordinates of the airport.

    DATES:

    Effective 0901 UTC, May 24, 2018. The Director of the Federal Register approves this incorporation by reference action under title 1, Code of Federal Regulations, part 51, subject to the annual revision of FAA Order 7400.11 and publication of conforming amendments.

    ADDRESSES:

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

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

    FOR FURTHER INFORMATION CONTACT:

    John Fornito, Operations Support Group, Eastern Service Center, Federal Aviation Administration, 1701 Columbia Avenue, College Park, GA 30337; telephone (404) 305-6364.

    SUPPLEMENTARY INFORMATION:

    Authority for This Rulemaking

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

    History

    The FAA published a notice of proposed rulemaking in the Federal Register (82 FR 55060, November 20, 2017) for Docket No. FAA-2014-0839 to amend Class E airspace extending upward from 700 feet above the surface at Penn Valley Airport, Selinsgrove, PA. 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 part 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

    Availability and Summary of Documents for Incorporation by Reference

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

    The Rule

    This amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 amends Class E airspace extending upward from 700 feet above the surface within a 9-mile radius (increased from an 8-mile radius) of Penn Valley Airport, Selinsgrove, PA, to accommodate the new RNAV (GPS) standard instrument approach procedure to Runway 35 developed for the safety and management of IFR operations at the airport.

    The action removes the segment extending northbound from the Selinsgrove VOR/DME because it is no longer required as part of the airspace redesign.

    The geographic coordinates of the airport are amended to coincide with the FAA's aeronautical database, and the name of the navigation aid is corrected from VORTAC to VOR/DME.

    Regulatory Notices and Analyses

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

    Environmental Review

    The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5a. 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.

    Lists of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (air).

    Adoption of the Amendment

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

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

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

    § 71.1 [Amended]
    2. The incorporation by reference in 14 CFR 71.1 of FAA Order 7400.11B, Airspace Designations and Reporting Points, dated August 3, 2017, effective September 15, 2017, is amended as follows: Paragraph 6005 Class E Airspace Areas Extending Upward From 700 Feet or More Above the Surface of the Earth. AEA PA E5 Selinsgrove, PA [Amended] Penn Valley Airport, PA (Lat. 40°49′16″ N, long. 76°51′551″ W) Selinsgrove VOR/DME (Lat. 40°47′27″ N, long. 76°53′03″ W)

    That airspace extending upward from 700 feet above the surface within a 9-mile radius of Penn Valley Airport, and within 5 miles southeast of the Selinsgrove VOR/DME 207° radial, extending from the 9-mile radius 10 miles southwest of the VOR/DME.

    Issued in College Park, Georgia, on February 23, 2018. Ryan W. Almasy, Manager, Operations Support Group, Eastern Service Center, Air Traffic Organization.
    [FR Doc. 2018-04325 Filed 3-2-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF THE TREASURY Office of Foreign Assets Control 31 CFR Part 510 North Korea Sanctions Regulations AGENCY:

    Office of Foreign Assets Control, Treasury.

    ACTION:

    Final rule.

    SUMMARY:

    The Department of the Treasury's Office of Foreign Assets Control (OFAC) is amending the North Korea Sanctions Regulations and reissuing them in their entirety, in order to implement three recent Executive orders and to reference the North Korea Sanctions and Policy Enhancement Act of 2016 and the Countering America's Adversaries Through Sanctions Act. OFAC is also incorporating several general licenses that have, until now, appeared only on OFAC's website on the North Korea Sanctions page, adding several new general licenses, and adding and expanding provisions to issue a more comprehensive set of regulations that will provide further guidance to the public. Finally, OFAC is updating certain regulatory provisions and making other technical and conforming changes. Due to the number of regulatory sections being updated or added, OFAC is reissuing the North Korea Sanctions Regulations in their entirety.

    DATES:

    Effective: March 5, 2018.

    FOR FURTHER INFORMATION CONTACT:

    The Department of the Treasury's Office of Foreign Assets Control: Assistant Director for Licensing, tel.: 202-622-2480, Assistant Director for Regulatory Affairs, tel: 202-622-4855, Assistant Director for Sanctions Compliance & Evaluation, tel.: 202-622-2490; or the Department of the Treasury's Office of the Chief Counsel (Foreign Assets Control), Office of the General Counsel, tel.: 202-622-2410.

    SUPPLEMENTARY INFORMATION:

    Electronic Availability

    This document and additional information concerning OFAC are available from OFAC's website (www.treasury.gov/ofac).

    Background Regulatory History and This Action

    On November 4, 2010, OFAC issued the North Korea Sanctions Regulations, 31 CFR part 510 (75 FR 67912, November 4, 2010) (the “Regulations”), to implement Executive Order 13466 of June 26, 2008 (73 FR 36787, June 27, 2008) (E.O. 13466) and Executive Order 13551 of August 30, 2010 (75 FR 53837, September 1, 2010) (E.O. 13551) pursuant to authorities delegated to the Secretary of the Treasury in those orders. The Regulations were initially issued in abbreviated form for the purpose of providing immediate guidance to the public. On June 20, 2011, OFAC amended the Regulations to implement Executive Order 13570 of April 18, 2011 (76 FR 22291, April 20, 2011) (E.O. 13570) pursuant to authorities delegated to the Secretary of the Treasury in that order (76 FR 35740, June 20, 2011).

    Today, OFAC is amending the Regulations and reissuing them in their entirety. As set forth in more detail below, OFAC is implementing three recent Executive orders: Executive Order 13687 of January 2, 2015 (“Imposing Additional Sanctions with Respect to North Korea”) (80 FR 819, January 6, 2015) (E.O. 13687), Executive Order 13722 of March 15, 2016 (“Blocking Property of the Government of North Korea and the Workers' Party of Korea, and Prohibiting Certain Transactions With Respect to North Korea”) (81 FR 14943, March 18, 2016) (E.O. 13722), and Executive Order 13810 of September 20, 2017 (“Imposing Additional Sanctions With Respect to North Korea”) (82 FR 44705, September 25, 2017) (E.O. 13810). In addition, OFAC is amending the Regulations to reference the North Korea Sanctions and Policy Enhancement Act of 2016, Public Law 114-122, 130 Stat. 93 (22 U.S.C. 9201 note) (NKSPEA), and Title III of the Countering America's Adversaries Through Sanctions Act, Public Law 115-44, Aug. 2, 2017, 131 Stat. 886 (22 U.S.C. 9401 et seq.) (CAATSA). Additionally, OFAC is incorporating into the Regulations several new general licenses that have, until now, appeared only on OFAC's website on the North Korea Sanctions page, adding several new general licenses, and adding and expanding provisions to issue a more comprehensive set of regulations that will provide further guidance to the public. Finally, OFAC is updating certain regulatory provisions and making other technical and conforming changes. Due to the number of regulatory sections being updated or added, OFAC is reissuing the North Korea Sanctions Regulations in their entirety.

    Executive and Statutory Authorities

    E.O. 13466. On June 26, 2008, the President, invoking the authority of, inter alia, the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) (IEEPA), issued E.O. 13466. In E.O. 13466, the President found that the existence and risk of the proliferation of weapons-usable fissile material on the Korean Peninsula constitute an unusual and extraordinary threat to the national security and foreign policy of the United States and declared a national emergency to deal with that threat. The President further found that it is necessary to continue certain restrictions with respect to North Korea that would otherwise be lifted pursuant to a then-forthcoming proclamation that would terminate the exercise of authorities then in place under the Trading With the Enemy Act (50 U.S.C. App. 1 et seq.) (TWEA) with respect to North Korea.

    Section 1 of E.O. 13466 blocks, with certain exceptions, all property and interests in property of North Korea or a North Korean national that, pursuant to the President's authorities under the TWEA, were blocked as of June 16, 2000, and remained blocked immediately prior to the issuance of E.O. 13466.

    Section 2 of E.O. 13466 prohibits, with certain exceptions, U.S. persons from registering a vessel in North Korea, obtaining authorization for a vessel to fly the North Korean flag, or owning, leasing, operating, or insuring any vessel flagged by North Korea.

    E.O. 13551. On August 30, 2010, the President, invoking the authority of, inter alia, IEEPA and the United Nations Participation Act (22 U.S.C. 287c) (UNPA), and in view of United Nations Security Council Resolution (UNSCR) 1718 of October 14, 2006 and UNSCR 1874 of June 12, 2009, issued E.O 13551. In E.O. 13551, the President expanded the scope of the national emergency in E.O. 13466, finding that the continued actions and policies of the Government of North Korea—manifested by its unprovoked attack that resulted in the sinking of a Republic of Korea navy ship and the deaths of those onboard; its actions in violation of UNSCRs, including the procurement of luxury goods; and its illicit and deceptive activities in international markets, including money laundering, the counterfeiting of goods and currency, bulk cash smuggling, and narcotics trafficking—destabilize the Korean peninsula and imperil U.S. armed forces, allies, and trading partners in the region, and thereby constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States.

    Section 1(a) of E.O. 13551 blocks, with certain exceptions, all property and interests in property that are in the United States, that come within the United States, or that are or come within the possession or control of any U.S. person of the persons listed in the Annex to E.O. 13551 and other persons determined by the Secretary of the Treasury, in consultation with the Secretary of State to meet certain criteria set forth in E.O. 13551.

    E.O. 13570. On April 18, 2011, the President, invoking the authority of, inter alia, IEEPA and section 5 of the UNPA, and in view of UNSCR 1718 of October 14, 2006 and UNSCR 1874 of June 12, 2009, issued E.O. 13570 to take additional steps to address the national emergency declared in E.O. 13466 and expanded in scope in E.O. 13551. Section 1 of E.O. 13570 prohibits, with certain exceptions, the importation into the United States, directly or indirectly, of any goods, services, or technology from North Korea.

    E.O. 13687. On January 2, 2015, the President, invoking the authority of, inter alia, IEEPA, issued E.O. 13687. In E.O. 13687, the President expanded the scope of the national emergency declared in E.O. 13466, as modified in scope by and relied upon for additional steps in subsequent orders, finding that the provocative, destabilizing, and repressive actions and policies of the Government of North Korea, including its destructive, coercive cyber-related actions during November and December 2014, actions in violation of UNSCRs, and commission of serious human rights abuses, constitute a continuing threat to the national security, foreign policy, and economy of the United States.

    Section 1(a) of E.O. 13687 blocks, with certain exceptions, all property and interests in property that are in the United States, that come within the United States, or that are or come within the possession or control of any U.S. person of persons determined by the Secretary of the Treasury, in consultation with the Secretary of State to be an agency, instrumentality, or controlled entity of the Government of North Korea or the Workers' Party of Korea, to be an official of the Government of North Korea or the Workers' Party of Korea, or to meet other criteria set forth in E.O. 13687.

    E.O. 13722. On March 15, 2016, the President, invoking the authority of, inter alia, IEEPA, the UNPA, and NKSPEA, and in view of UNSCR 2270 of March 2, 2016, issued E.O. 13722 to take additional steps with respect to the national emergency declared in E.O. 13466, as modified in scope by and relied upon for additional steps taken in subsequent orders.

    Section 1(a) of E.O. 13722 blocks, with certain exceptions, all property and interests in property that are in the United States, that come within the United States, or that are or come within the possession or control of any U.S. person of the Government of North Korea or the Workers' Party of Korea. The property and interests in property of the Government of North Korea or the Workers' Party of Korea may not be transferred, paid, exported, withdrawn, or otherwise dealt in.

    Section 2(a) of E.O. 13722 blocks, with certain exceptions, all property and interests in property that are in the United States, that come within the United States, or that are or come within the possession or control of any U.S. person, of other persons determined by the Secretary of the Treasury, in consultation with the Secretary of State to operate in any industry in the North Korean economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State, to be subject to section 2(a)(i) of E.O. 13722, including transportation, mining, energy, or financial services, or to meet other criteria set forth in E.O. 13722.

    Section 3(a) of E.O. 13722 prohibits, with certain exceptions: (i) The exportation or reexportation, direct or indirect, from the United States, or by a U.S. person, wherever located, of any goods, services, or technology to North Korea; (ii) new investment in North Korea by a U.S. person, wherever located; and (iii) any approval, financing, facilitation, or guarantee by a U.S. person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be prohibited by section 3(a) of E.O. 13722 if performed by a U.S. person or within the United States. The new exportation and reexportation prohibition operates in conjunction with preexisting comprehensive controls on North Korea that are maintained by the U.S. Department of Commerce under the Export Administration Regulations, 15 CFR parts 730-774 (EAR). The Department of Commerce requires a license for the export from the United States of all items subject to the EAR (other than food or medicine) that are destined for North Korea, whether by U.S. persons or non-U.S. persons. It also requires a license for the reexport to North Korea from a third country of all items subject to the EAR, whether by U.S. persons or non-U.S. persons. Section 3(a) of E.O. 13722, in effect, complements the restrictions maintained by the Department of Commerce and enhances those restrictions by adding a prohibition against the reexportation to North Korea by a U.S. person, wherever located, of items that are not subject to the EAR, including, for example, purely foreign-origin items.

    E.O. 13810. On September 20, 2017, the President, invoking the authority of, inter alia, IEEPA and the UNPA, and in view of UNSCR 2321 of November 30, 2016, UNSCR 2356 of June 2, 2017, UNSCR 2371 of August 5, 2017, and UNSCR 2375 of September 11, 2017, issued E.O. 13810 to take further steps with respect to the national emergency declared in E.O. 13466, as modified in scope by and relied upon for additional steps in subsequent orders.

    Section 1(a) of E.O. 13810 blocks, with certain exceptions, all property and interests in property that are in the United States, that come within the United States, or that are or come within the possession or control of any U.S. person of any person determined by the Secretary of the Treasury, in consultation with the Secretary of State to have engaged in at least one significant importation from or exportation to North Korea of any goods, services, or technology, or to meet other criteria set forth in E.O. 13810.

    Section 2 of E.O. 13810 prohibits, with certain limited exceptions: (a) Any aircraft in which a foreign person has an interest that has landed at a place in North Korea from landing at a place in the United States within 180 days after departure from North Korea; and (b) any vessel in which a foreign person has an interest that has called at a port in North Korea within the previous 180 days, or that has engaged in a ship-to-ship transfer with such a vessel within the previous 180 days, from calling at a port in the United States.

    Section 3(a) of E.O. 13810 blocks, with certain exceptions, all funds that are in the United States, that come within the United States, or that are or come within the possession or control of any U.S. person and that originate from, are destined for, or pass through a foreign bank account that has been determined by the Secretary of the Treasury to be owned or controlled by a North Korean person or to have been used to transfer funds in which any North Korean person has an interest. The funds described above may not be transferred, paid, exported, withdrawn, or otherwise dealt in.

    Section 4 of E.O. 13810 authorizes the Secretary of the Treasury, in consultation with the Secretary of State, to impose the sanctions described below on any foreign financial institution determined by the Secretary of the Treasury, in consultation with the Secretary of State, to have: (i) Knowingly conducted or facilitated any significant transaction on behalf of any person whose property and interests in property are blocked pursuant to E.O. 13551, E.O. 13687, E.O. 13722, or E.O. 13810, or of any person whose property and interests in property are blocked pursuant to Executive Order 13382 (70 FR 38567, July 1, 2005) (“Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters”) in connection with North Korea-related activities; or (ii) knowingly conducted or facilitated any significant transaction in connection with trade with North Korea. With respect to a foreign financial institution determined to meet the criteria above, the Secretary of the Treasury, in consultation with the Secretary of State, may: (i) Prohibit the opening and prohibit or impose strict conditions on the maintenance of correspondent accounts or payable-through accounts in the United States by such foreign financial institution; or (ii) block all property and interests in property that are in the United States, that come within the United States, or that are or come within the possession or control of any U.S. person of such foreign financial institution, and such property and interests in property may not be transferred, paid, exported, withdrawn, or otherwise dealt in.

    Other Executive Order provisions. In section 1(b) of E.O. 13551, section 2 of E.O. 13687, section 5 of E.O. 13722, and section 1(c) of E.O. 13810, the President determined that the making of donations of certain articles, such as food, clothing, and medicine, intended to be used to relieve human suffering, as specified in section 203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)), by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to those orders would seriously impair the President's ability to deal with the national emergency declared in E.O. 13466, as modified in scope by and relied upon for additional steps in the subsequent orders. The President therefore prohibited the donation of such items unless authorized by OFAC.

    Section 1(c) of E.O. 13551, section 3 of E.O. 13687, section 6 of E.O. 13722, and section 1(d) of E.O. 13810 provide that the prohibition on any transaction or dealing in blocked property or interests in property includes the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to those orders, and the receipt of any contribution or provision of funds, goods, or services from any such person.

    Section 3 of E.O. 13466, section 2 of E.O. 13551, section 2 of E.O. 13570, section 5 of E.O. 13687, section 7 of E.O. 13722, and section 6 of E.O. 13810 prohibit any transaction by a U.S. person or within the United States that evades or avoids, has the purpose of evading or avoiding, or attempts to violate any of the prohibitions set forth in those orders, as well as any conspiracy formed to violate such prohibitions. Pursuant to a 2007 amendment of IEEPA clarifying that it is illegal to cause a violation of IEEPA, section 2 of E.O. 13551, section 2 of E.O. 13570, section 5 of E.O. 13687, section 7 of E.O. 13722, and section 6 of E.O. 13810 further prohibit any transaction by a U.S. person or within the United States that causes a violation of any of those orders.

    Section 5 of E.O. 13466, section 6 of E.O. 13551, section 5 of E.O. 13570, section 8 of E.O. 13687, section 11 of E.O. 13722, and section 10 of E.O. 13810 authorize the Secretary of the Treasury, in consultation with the Secretary of State, to take such actions, including the promulgation of rules and regulations, and to employ all powers granted to the President by IEEPA, and, where relevant, the UNPA, as may be necessary to carry out the purposes of those orders. These sections also provide that the Secretary of the Treasury may redelegate any of these functions to other officers and agencies of the U.S. government.

    NKSPEA. On February 18, 2016, the President signed NKSPEA into law. Among other things, section 104(a) of NKSPEA provides that the President, with certain exceptions, shall block and prohibit all transactions in property and interests in property that are in the United States, that come within the United States, or that are or come within control or possession of a U.S. person of: The Government of North Korea, the Workers' Party of Korea, and certain other persons the President determines knowingly engage in certain North Korea-related activities.

    Section 404(a) of NKSPEA provides authority for the President to promulgate regulations as may be necessary to carry out the provisions of NKSPEA. Pursuant to Presidential Memorandum of May 18, 2016: Delegation of Certain Functions and Authorities under the North Korea Sanctions and Policy Enhancement Act of 2016, the President delegated to the Secretary of the Treasury, in consultation with the Secretary of State, the functions and authorities vested in the President by sections 104(a) and to the Secretary of State, the Secretary of the Treasury, the Secretary of Commerce, and the Director of National Intelligence the functions and authorities vested in the President by section 404(a) of NKSPEA as necessary to carry out the provisions of NKSPEA.

    CAATSA. On August 2, 2017, the President signed CAATSA into law. Title III of CAATSA, among other things, amends NKSPEA. Section 311(a) of CAATSA amends section 104(a) of NKSPEA to provide that the President shall, with certain exceptions, block and prohibit all transactions in property and interests in property that are in the United States, that come into the United States, or that are or come into the possession of U.S. persons of any person the President determines knowingly, directly or indirectly: imports, exports, or reexports to or from North Korea any defense article or defense service or engages in certain other North Korea-related activities.

    Section 333(a) of CAATSA provides that the President shall, not later than 180 days after the date of enactment, promulgate regulations as necessary for the implementation of and amendments made by title III of CAATSA. Pursuant to Presidential Memorandum of September 29, 2017: Delegation of Certain Functions and Authorities under the Countering America's Adversaries Through Sanctions Act of 2017, the Ukraine Freedom Support Act of 2014, and the Support for the Sovereignty, Integrity, Democracy, and Economic Stability of Ukraine Act of 2014, the President delegated to the Secretary of the Treasury, in consultation with the Secretary of State, the relevant functions and authorities vested in the President by section 321(b), with respect to section 302B(a) and (b) of the NKSPEA, as amended by CAATSA, and section 333 of CAATSA.

    The President, through the issuance of E.O. 13466, E.O. 13551, E.O. 13570, E.O. 13687, E.O. 13722, and E.O. 13810, has put in place prohibitions and designation criteria that encompass all of the prohibitions and designation criteria contained in the provisions of NKSPEA and CAATSA discussed above and has thereby already taken the steps necessary to implement those provisions. While it is not legally necessary to take further steps, OFAC is issuing these amended Regulations to further implement the many provisions of E.O. 13466, E.O. 13551, E.O. 13570, E.O. 13687, E.O. 13722, and E.O. 13810.

    Regulatory Structure

    Subpart A of the Regulations clarifies the relation of this part to other laws and regulations. Subpart B of the Regulations implements the prohibitions contained in the various Executive Orders. See, e.g., §§ 510.201 and 510.208. Persons identified in the Annex to E.O. 13551, designated for blocking by or under the authority of the Secretary of the Treasury pursuant to E.O. 13551, E.O. 13687, E.O. 13722, or E.O. 13810, or otherwise subject to the blocking provisions of those orders, are referred to throughout the Regulations as “persons whose property and interests in property are blocked pursuant to § 510.201(a).” The names of persons listed in or designated pursuant to these orders are published on OFAC's Specially Designated Nationals and Blocked Persons List (SDN List), which is accessible via OFAC's website. Those names also are published in the Federal Register as they are added to the SDN List.

    Section 510.201 of subpart B implements the many blocking prohibitions contained in the Executive Orders. Sections 510.202 and 510.203 of subpart B detail the effect of transfers of blocked property in violation of the Regulations and set forth the requirement to hold blocked funds, such as currency, bank deposits, or liquidated financial obligations, in interest-bearing blocked accounts. Section 510.204 of subpart B provides that all expenses incident to the maintenance of blocked physical property shall be the responsibility of the owners and operators of such property, and that such expenses shall not be met from blocked funds, unless otherwise authorized. Section 510.204 further provides that blocked property may, in OFAC's discretion, be sold or liquidated and the net proceeds placed in a blocked, interest-bearing account in the name of the owner of the property.

    Sections 510.205 through 510.209 and 510.211 set forth additional prohibitions pursuant to E.O. 13570, E.O. 13687, E.O. 13722, and E.O. 13810, including prohibitions on certain North Korea-related vessel and aircraft transactions, the importation and exportation of goods, services, or technology to or from North Korea, and new investment in North Korea.

    Section 510.210 of subpart B implements the non-blocking provisions of section 4 of E.O. 13810 regarding the opening or maintenance of correspondent accounts or payable through accounts in the United States (the blocking provisions of section 4 of E.O. 13810 are implemented in § 510.201 of subpart B). The names of foreign financial institutions that are determined by the Secretary of the Treasury, in consultation with the Secretary of State, to engage in the activities described in § 510.210, and which are determined to be subject to prohibitions or strict conditions on the opening or maintaining of correspondent or payable-through accounts in the United States, will be listed on the Correspondent Account or Payable-Through Account Sanctions (CAPTA) List, which is accessible via OFAC's website (www.treasury.gov/ofac) and published in the Federal Register. This list also will state the prohibition or strict condition(s) that applies with respect to each sanctioned foreign financial institution, and the relevant or applicable sanctions program. The names of foreign financial institutions that meet these same criteria but whose property and interests in property are instead determined to be blocked pursuant to § 510.201 will be published on the SDN List, which is also accessible via OFAC's website.

    Section 510.212 of subpart B implements the prohibitions of E.O. 13466, E.O. 13551, E.O. 13570, E.O. 13687, E.O. 13722, and E.O. 13810 on any transaction by a U.S. person or within the United States that evades or avoids, has the purpose of evading or avoiding, or attempts to violate any of the prohibitions set forth in those orders, and on any conspiracy formed to violate such prohibitions. Section 510.212 further contains the additional prohibition, included in all but the first order but available for all IEEPA-based prohibitions, on any transaction by a U.S. person or within the United States that causes a violation of any of the prohibitions in any of the orders.

    Section 510.213 of subpart B details transactions that are exempt from the prohibitions of the Regulations pursuant to section 203(b)(1), (3), and (4) of IEEPA (50 U.S.C. 1702(b)(1), (3), and (4)). These exempt transactions relate to personal communications, the importation and exportation of information or informational materials, and transactions ordinarily incident to travel. The exemptions described in this section do not apply to any transactions involving property or interests in property of certain persons whose property and interests in property are blocked pursuant to the provisions of E.O. 13551, E.O. 13722, or E.O. 13810 and that are blocked pursuant to the authority of the UNPA in addition to IEEPA.

    In subpart C of the Regulations, new definitions are being added to other key terms used in the Regulations. Because these new definitions were inserted in alphabetical order, the definitions that were in the prior abbreviated set of regulations have been renumbered. Similarly, in subpart D, which contains interpretations of the Regulations, certain provisions have been added and updated from those in the prior abbreviated set of regulations. Section 510.411 explains that the property and interests in property of an entity are blocked if the entity is directly or indirectly owned, whether individually or in the aggregate, 50 percent or more by one or more persons whose property and interests in property are blocked, whether or not the entity itself is incorporated into the SDN List. Section 510.412 provides information about facilitation, and § 510.413 describes the non-exclusive factors the Secretary of the Treasury may consider when determining whether a transaction is significant.

    Transactions otherwise prohibited by the Regulations but found to be consistent with U.S. policy may be authorized by one of the general licenses contained in subpart E of the Regulations or by a specific license issued pursuant to the procedures described in subpart E of 31 CFR part 501. Subpart E of the Regulations also contains certain statements of specific licensing policy in addition to the general licenses. General licenses and statements of licensing policy relating to this part also may be available through the North Korea sanctions page on OFAC's website: www.treasury.gov/ofac.

    With this rule, OFAC is incorporating into the Regulations, and in some cases amending, 10 general licenses that were previously posted only on OFAC's website. These general licenses have been removed from OFAC's website, because they have been replaced and superseded in their entirety by the Regulations. Nine of these general licenses were originally issued and posted on OFAC's website on March 16, 2016—General Licenses 1 through 9—and then reissued and posted on OFAC's website on March 24, 2016, to incorporate a technical change regarding the date the President signed E.O. 13722. General License 1 was replaced and superseded in its entirety by General License 1-A, which was posted on OFAC's website on December 20, 2016. General License 1-A is now located in the Regulations at § 510.510. General License 2, which authorizes the provision of certain legal services, is now located at § 510.507. General License 3, which authorized certain blocked account-related transactions, was replaced and superseded in its entirety by General License 3-A, which was posted on OFAC's website on September 21, 2017. General License 3-A is now located at § 510.505. General License 4, regarding personal remittances, is now located at § 510.511, and includes a cap on such remittances of $5,000 per year. General License 5, which authorizes certain activities of nongovernmental organizations, is now located at § 510.512. With respect to General License 5, OFAC has removed an authorization relating to educational activities; OFAC also added an authorization relating to the exportation of food and medicines to harmonize with Department of Commerce authorities. General License 6, pertaining to third-country diplomatic and consular funds transfers, is now located at § 510.515. General License 7, relating to telecommunications and mail service, is now located at § 510.516; and General License 8, regarding patents and intellectual property, is now located at § 510.517. General License 9, authorizing emergency medical services, is now located in § 510.509. On September 21, 2017, OFAC issued and posted on its website General License 10, authorizing the calling of certain vessels and landing of certain aircraft. General License 10 is now located at § 510.518.

    OFAC is also incorporating several new general licenses into the Regulations. Sections 510.506, 510.508, 510.513, and 510.514 authorize certain transactions relating to investment and reinvestment of certain funds, payments for legal services from funds originating outside the United States, the official business of the Federal government, and official activities of international organizations. Section 510.519 authorizes certain transactions for a 10-day period related to closing a correspondent account or payable-through account for a foreign financial institution whose name is added to the CAPTA List pursuant to the prohibition in § 510.211. This general license includes a reporting requirement pursuant to which a U.S. financial institution that maintained a correspondent account or a payable-through account for a foreign financial institution whose name is added to the CAPTA List must file a report with OFAC that provides full details on the closing of each such account within 30 days of the closure of the account. The report must include complete information on all transactions processed or executed in winding down and closing the account.

    Subpart F of the Regulations refers to subpart C of part 501 for recordkeeping and reporting requirements. Subpart G of the Regulations describes the civil and criminal penalties applicable to violations of the Regulations, as well as the procedures governing the potential imposition of a civil monetary penalty or issuance of a finding of violation. Subpart G also refers to appendix A of part 501 for a more complete description of these procedures.

    Subpart H of the Regulations refers to subpart E of part 501 for applicable provisions relating to administrative procedures and contains a delegation of certain authorities of the Secretary of the Treasury. Subpart I of the Regulations sets forth a Paperwork Reduction Act notice.

    Public Participation

    Because the Regulations involve a foreign affairs function, the provisions of Executive Order 12866 and the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, opportunity for public participation, and delay in effective date, as well as the provisions of Executive Order 13771, are inapplicable. Because no notice of proposed rulemaking is required for this rule, the Regulatory Flexibility Act (5 U.S.C. 601-612) does not apply.

    Paperwork Reduction Act

    The collections of information related to the Regulations are contained in 31 CFR part 501 (the “Reporting, Procedures and Penalties Regulations”). Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), those collections of information have been approved by the Office of Management and Budget under control number 1505-0164. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.

    List of Subjects in 31 CFR Part 510

    Administrative practice and procedure, Aircraft, Banking, Blocking of assets, Diplomatic missions, Foreign financial institutions, Foreign trade, Imports, Medical services, Nongovernmental organizations, North Korea, Patents, Services, Telecommunications, United Nations, Vessels, Workers' Party of Korea.

    For the reasons set forth in the preamble, the Department of the Treasury's Office of Foreign Assets Control revises 31 CFR part 510 to read as follows: PART 510—NORTH KOREA SANCTIONS REGULATIONS Subpart A—Relation of This Part to Other Laws and Regulations Sec. 510.101 Relation of this part to other laws and regulations. Subpart B—Prohibitions 510.201 Prohibited transactions involving blocked property. 510.202 Effect of transfers violating the provisions of this part. 510.203 Holding of funds in interest-bearing accounts; investment and reinvestment. 510.204 Expenses of maintaining blocked physical property; liquidation of blocked property. 510.205 Prohibited importation of goods, services, or technology from North Korea. 510.206 Prohibited exportation and reexportation of goods, services, or technology to North Korea. 510.207 Prohibited vessel transactions related to North Korean registration and flagging. 510.208 Prohibited aircraft landing or vessel calling in the United States. 510.209 Prohibited new investment in North Korea. 510.210 Prohibitions or strict conditions with respect to correspondent or payable-through accounts or blocking of certain foreign financial institutions identified by the Secretary of the Treasury. 510.211 Prohibited facilitation. 510.212 Evasions; attempts; causing violations; conspiracies. 510.213 Exempt transactions. Subpart C—General Definitions 510.300 Applicability of definitions. 510.301 Arms or related materiel. 510.302 Blocked account; blocked property. 510.303 Correspondent account. 510.304 Effective date. 510.305 Entity. 510.306 Financial, material, or technological support. 510.307 Financial services. 510.308 Financial transaction. 510.309 Foreign financial institution. 510.310 Foreign person. 510.311 Government of North Korea. 510.312 Information or informational materials. 510.313 Interest. 510.314 Knowingly. 510.315 Licenses; general and specific. 510.316 Loans or other extensions of credit. 510.317 Luxury goods. 510.318 New investment. 510.319 North Korean person. 510.320 OFAC. 510.321 Payable-through account. 510.322 Person. 510.323 Property; property interest. 510.324 Transfer. 510.325 United States. 510.326 United States person; U.S. person. 510.327 U.S. depository institution. 510.328 U.S. financial institution. 510.329 U.S.-registered money transmitter. 510.330 U.S.-registered broker or dealer in securities. Subpart D—Interpretations 510.401 Reference to amended sections. 510.402 Effect of amendment. 510.403 Termination and acquisition of an interest in blocked property. 510.404 Transactions ordinarily incident to a licensed transaction. 510.405 Exportation and reexportation of goods, services, or technology. 510.406 Offshore transactions involving blocked property. 510.407 Payments from blocked accounts to satisfy obligations prohibited. 510.408 Charitable contributions. 510.409 Credit extended and cards issued by financial institutions to a person whose property and interests in property are blocked. 510.410 Setoffs prohibited. 510.411 Entities owned by one or more persons whose property and interests in property are blocked. 510.412 Facilitation; change of policies and procedures; referral of business opportunities offshore. 510.413 Significant transaction(s). Subpart E—Licenses, Authorizations, and Statements of Licensing Policy 510.501 General and specific licensing procedures. 510.502 Effect of license or other authorization. 510.503 Exclusion from licenses. 510.504 Payments and transfers to blocked accounts in U.S. financial institutions. 510.505 Entries in certain accounts for normal service charges. 510.506 Investment and reinvestment of certain funds. 510.507 Provision of certain legal services. 510.508 Payments for legal services from funds originating outside the United States. 510.509 Emergency medical services. 510.510 North Korean mission to the United Nations and employees of the United Nations. 510.511 Noncommercial, personal remittances. 510.512 Certain services in support of nongovernmental organizations' activities. 510.513 Official business of the Federal Government. 510.514 Official activities of international organizations. 510.515 Third-country diplomatic and consular funds transfers. 510.516 Transactions related to telecommunications and mail. 510.517 Certain transactions related to patents, trademarks, copyrights, and other intellectual property. 510.518 Calling of certain vessels and landing of certain aircraft. 510.519 Transactions related to closing a correspondent or payable-through account. Subpart F—Reports 510.601 Records and reports. Subpart G—Penalties and Finding of Violation 510.701 Penalties. 510.702 Pre-Penalty Notice; settlement. 510.703 Penalty imposition. 510.704 Administrative collection; referral to United States Department of Justice. 510.705 Finding of Violation. Subpart H—Procedures 510.801 Procedures. 510.802 Delegation of certain authorities of the Secretary of the Treasury. Subpart I—Paperwork Reduction Act 510.901 Paperwork Reduction Act notice. Authority:

    3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 1701-1706; 22 U.S.C. 287c; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); Pub. L. 110-96, 121 Stat. 1011 (50 U.S.C. 1705 note); Pub. L. 114-122, 130 Stat. 93 (22 U.S.C. 9201-9255); Pub. L. 115-44, 131 Stat 886 (22 U.S.C. 9201 note); E.O. 13466, 73 FR 36787, June 27, 2008, 3 CFR, 2008 Comp., p. 195; E.O. 13551, 75 FR 53837, September 1, 2010; E.O. 13570, 76 FR 22291, April 20, 2011; E.O. 13687, 80 FR 819, January 6, 2015; E.O. 13722, 81 FR 14943, March 18, 2016; E.O. 13810, 82 FR 44705, September 25, 2017.

    Subpart A—Relation of This Part to Other Laws and Regulations
    § 510.101 Relation of this part to other laws and regulations.

    This part is separate from, and independent of, the other parts of this chapter, with the exception of part 501 of this chapter, the recordkeeping and reporting requirements and license application and other procedures of which apply to this part. Actions taken pursuant to part 501 of this chapter with respect to the prohibitions contained in this part are considered actions taken pursuant to this part. Differing foreign policy and national security circumstances may result in differing interpretations of similar language among the parts of this chapter. No license or authorization contained in or issued pursuant to those other parts authorizes any transaction prohibited by this part. No license or authorization contained in or issued pursuant to any other provision of law or regulation authorizes any transaction prohibited by this part. No license or authorization contained in or issued pursuant to this part relieves the involved parties from complying with any other applicable laws or regulations.

    Subpart B—Prohibitions
    § 510.201 Prohibited transactions involving blocked property.

    (a)(1) All property and interests in property that are in the United States, that come within the United States, or that are or come within the possession or control of any U.S. person of the Government of North Korea or the Workers' Party of Korea are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in.

    (2) All property and interests in property of North Korea or a North Korean national that were blocked pursuant to the Trading With the Enemy Act as of June 16, 2000 and remained blocked on June 26, 2008, are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in.

    (3) All property and interests in property that are in the United States, that come within the United States, or that are or come within the possession or control of any U.S. person of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in:

    (i) E.O. 13551 Annex. The persons listed in the Annex to Executive Order 13551 of August 30, 2010;

    (ii) E.O. 13551. Any person determined by the Secretary of the Treasury, in consultation with the Secretary of State:

    (A) To have, directly or indirectly, imported, exported, or reexported to, into, or from North Korea any arms or related materiel;

    (B) To have, directly or indirectly, provided training, advice, or other services or assistance, or engaged in financial transactions, related to the manufacture, maintenance, or use of any arms or related materiel to be imported, exported, or reexported to, into, or from North Korea, or following their importation, exportation, or reexportation to, into, or from North Korea;

    (C) To have, directly or indirectly, imported, exported, or reexported luxury goods to or into North Korea;

    (D) To have, directly or indirectly, engaged in money laundering, the counterfeiting of goods or currency, bulk cash smuggling, narcotics trafficking, or other illicit economic activity that involves or supports the Government of North Korea or any senior official thereof;

    (E) To have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the activities described in paragraphs (a)(3)(ii)(A) through (D) of this section or any person whose property and interests in property are blocked pursuant to paragraph (a)(3)(i) or (ii) of this section;

    (F) To be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to paragraph (a)(3)(i) or (ii) of this section; or

    (G) To have attempted to engage in any of the activities described in paragraphs (a)(3)(ii)(A) through (F) of this section;

    (iii) E.O. 13687. Any person determined by the Secretary of the Treasury, in consultation with the Secretary of State:

    (A) To be an agency, instrumentality, or controlled entity of the Government of North Korea or the Workers' Party of Korea;

    (B) To be an official of the Government of North Korea;

    (C) To be an official of the Workers' Party of Korea;

    (D) To have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the Government of North Korea or any person whose property and interests in property are blocked pursuant to paragraph (a)(3)(iii) of this section; or

    (E) To be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, the Government of North Korea or any person whose property and interests in property are blocked pursuant to paragraph (a)(3)(iii) of this section;

    (iv) E.O. 13722. Any person determined by the Secretary of the Treasury, in consultation with the Secretary of State:

    (A) To operate in any industry in the North Korean economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State, to be subject to paragraph (a)(3)(iv) of this section, such as transportation, mining, energy, or financial services;

    Note 1 to paragraph (a)(3)(iv)(A):

    Any industry in the North Korean economy that is determined by the Secretary of the Treasury, in consultation with the Secretary of State, to be subject to paragraph (a)(3)(iv) of this section will be so identified in a publication in the Federal Register.

    (B) To have sold, supplied, transferred, or purchased, directly or indirectly, to or from North Korea or any person acting for or on behalf of the Government of North Korea or the Workers' Party of Korea, metal, graphite, coal, or software, where any revenue or goods received may benefit the Government of North Korea or the Workers' Party of Korea, including North Korea's nuclear or ballistic missile programs;

    (C) To have engaged in, facilitated, or been responsible for an abuse or violation of human rights by the Government of North Korea or the Workers' Party of Korea or any person acting for or on behalf of either such entity;

    (D) To have engaged in, facilitated, or been responsible for the exportation of workers from North Korea, including exportation to generate revenue for the Government of North Korea or the Workers' Party of Korea;

    (E) To have engaged in significant activities undermining cybersecurity through the use of computer networks or systems against targets outside of North Korea on behalf of the Government of North Korea or the Workers' Party of Korea;

    (F) To have engaged in, facilitated, or been responsible for censorship by the Government of North Korea or the Workers' Party of Korea;

    (G) To have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any person whose property and interests in property are blocked pursuant to paragraph (a)(1) or (a)(3)(iv) of this section;

    (H) To be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to paragraph (a)(1) or (a)(3)(iv) of this section; or

    (I) To have attempted to engage in any of the activities described in paragraphs (a)(3)(iv)(A) through (H) of this section;

    (v) E.O. 13810 section 1. Any person determined by the Secretary of the Treasury, in consultation with the Secretary of State:

    (A) To operate in the construction, energy, financial services, fishing, information technology, manufacturing, medical, mining, textiles, or transportation industries in North Korea;

    (B) To own, control, or operate any port in North Korea, including any seaport, airport, or land port of entry;

    (C) To have engaged in at least one significant importation from or exportation to North Korea of any goods, services, or technology;

    (D) To be a North Korean person, including a North Korean person that has engaged in commercial activity that generates revenue for the Government of North Korea or the Workers' Party of Korea;

    (E) To have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any person whose property and interests in property are blocked pursuant to paragraph (a)(3)(v) of this section; or

    (F) To be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to paragraph (a)(3)(v) of this section; or

    (vi) E.O. 13810 section 4. Any person that is a foreign financial institution:

    (A) Determined by the Secretary of the Treasury, in consultation with the Secretary of State, to have, on or after September 21, 2017, knowingly conducted or facilitated any significant transaction:

    (1) On behalf of any person whose property and interests in property are blocked pursuant to Executive Order 13551, Executive Order 13687, Executive Order 13722, or Executive Order 13810, or of any person whose property and interests in property are blocked pursuant to Executive Order 13382 in connection with North Korea-related activities; or

    (2) In connection with trade with North Korea; and

    (B) With respect to which the Secretary of the Treasury, in consultation with the Secretary of State, has exercised the authority to block all property and interests in property.

    Note 2 to paragraph (a)(3)(vi):

    See § 510.210 for alternative sanctions that can be imposed on a foreign financial institution when the determination specified in paragraph (a)(3)(vi)(A) of this section is made.

    Note 3 to paragraph (a):

    The names of persons listed in or designated or identified pursuant to Executive Order 13551, Executive Order 13687, Executive Order 13722, or Executive Order 13810 and whose property and interests in property are blocked pursuant to those orders and paragraph (a) of this section are published in the Federal Register and incorporated into OFAC's Specially Designated Nationals and Blocked Persons List (SDN List) with the identifier “DPRK.” The names of persons referenced in paragraph (a)(vi)(A)(2) of this section and listed in or designated or identified pursuant to Executive Order 13382 whose property and interests in property are blocked pursuant to Executive Order 13382 in connection with North Korea-related activities are published in the Federal Register and incorporated into OFAC's SDN List with the identifier “[NPWMD]” and descriptive text “Executive Order 13810 Information: Subject to blocking in connection with North Korea-related activities. The SDN List is accessible through the following page on OFAC's website: www.treasury.gov/sdn. Additional information pertaining to the SDN List can be found in appendix A to this chapter. See § 510.411 concerning entities that may not be listed on the SDN List but whose property and interests in property are nevertheless blocked pursuant to paragraph (a) of this section. The property and interests in property of persons who meet the definition of the term Government of North Korea, as defined in § 510.311, are blocked pursuant to paragraph (a) of this section regardless of whether the names of such persons are published in the Federal Register or incorporated into the SDN List.

    Note 4 to paragraph (a):

    The International Emergency Economic Powers Act (50 U.S.C. 1701-1706), in Section 203 (50 U.S.C. 1702), authorizes the blocking of property and interests in property of a person during the pendency of an investigation. The names of persons whose property and interests in property are blocked pending investigation pursuant to paragraph (a) of this section also are published in the Federal Register and incorporated into the SDN List with the identifier “BPI-DPRK.”

    Note 5 to paragraph (a):

    Sections 501.806 and 501.807 of this chapter describe the procedures to be followed by persons seeking, respectively, the unblocking of funds that they believe were blocked due to mistaken identity, and administrative reconsideration of their status as persons whose property and interests in property are blocked pursuant to paragraph (a) of this section.

    (b) The prohibitions in paragraph (a) of this section include prohibitions on the following transactions:

    (1) The making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to paragraph (a) of this section; and

    (2) The receipt of any contribution or provision of funds, goods, or services from any person whose property and interests in property are blocked pursuant to paragraph (a) of this section.

    (c) Unless authorized by this part or by a specific license expressly referring to this part, any dealing in securities (or evidence thereof) held within the possession or control of a U.S. person and either registered or inscribed in the name of, or known to be held for the benefit of, or issued by, the Government of North Korea, the Workers' Party of Korea, or any other person whose property and interests in property are blocked pursuant to paragraph (a) of this section is prohibited. This prohibition includes the transfer (including the transfer on the books of any issuer or agent thereof), disposition, transportation, importation, exportation, or withdrawal of, or the endorsement or guaranty of signatures on, any securities on or after the effective date. This prohibition applies irrespective of the fact that at any time (whether prior to, on, or subsequent to the effective date) the registered or inscribed owner of any such securities may have or might appear to have assigned, transferred, or otherwise disposed of the securities.

    (d) All funds that are in the United States, that come within the United States, or that are or come within the possession or control of any U.S. person and that originate from, are destined for, or pass through a foreign bank account that has been determined by the Secretary of the Treasury to be owned or controlled by a North Korean person, or to have been used to transfer funds in which any North Korean person has an interest, are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in.

    (e) Funds subject to blocking or blocking pending investigation pursuant to paragraph (d) of this section may be identified via actual or constructive notice from OFAC to relevant U.S. persons believed to be holding or to soon come into possession of such funds. To the extent a foreign bank account determined to meet the criteria contained in paragraph (d) of this section is publicized, it will be published in the Federal Register.

    (f)(1) The prohibitions in paragraph (a)(1) of this section apply except to the extent provided in regulations, orders, directives, or licenses that may be issued pursuant to this part or pursuant to the export control authorities implemented by the U.S. Department of Commerce, and notwithstanding any contract entered into or any license or permit granted prior to the effective date.

    (2) The prohibitions in paragraphs (a)(2), (a)(3)(i) through (iii), and (d) of this section apply except to the extent provided by regulations, orders, directives, or licenses that may be issued pursuant to this part, and notwithstanding any contract entered into or any license or permit granted prior to the effective date.

    (3) The prohibitions in paragraphs (a)(3)(iv) through (v) of this section apply except to the extent provided by regulations, orders, directives, or licenses that may be issued pursuant to this part, and notwithstanding any contract entered into or any license or permit granted prior to the effective date. These prohibitions are in addition to the export control authorities administered by the Department of Commerce.

    § 510.202 Effect of transfers violating the provisions of this part.

    (a) Any transfer after the effective date that is in violation of any provision of this part or of any regulation, order, directive, ruling, instruction, or license issued pursuant to this part, and that involves any property or interests in property blocked pursuant to § 510.201 is null and void and shall not be the basis for the assertion or recognition of any interest in or right, remedy, power, or privilege with respect to such property or interests in property.

    (b) No transfer before the effective date shall be the basis for the assertion or recognition of any right, remedy, power, or privilege with respect to, or any interest in, any property or interests in property blocked pursuant to § 510.201 unless the person who holds or maintains such property, prior to that date, had written notice of the transfer or by any written evidence had recognized such transfer.

    (c) Unless otherwise provided, a license or other authorization issued by OFAC before, during, or after a transfer shall validate such transfer or make it enforceable to the same extent that it would be valid or enforceable but for the provisions of this part and any regulation, order, directive, ruling, instruction, or license issued pursuant to this part.

    (d) Transfers of property that otherwise would be null and void or unenforceable by virtue of the provisions of this section shall not be deemed to be null and void or unenforceable as to any person with whom such property is or was held or maintained (and as to such person only) in cases in which such person is able to establish to the satisfaction of OFAC each of the following:

    (1) Such transfer did not represent a willful violation of the provisions of this part by the person with whom such property is or was held or maintained (and as to such person only);

    (2) The person with whom such property is or was held or maintained did not have reasonable cause to know or suspect, in view of all the facts and circumstances known or available to such person, that such transfer required a license or authorization issued pursuant to this part and was not so licensed or authorized, or, if a license or authorization did purport to cover the transfer, that such license or authorization had been obtained by misrepresentation of a third party or withholding of material facts or was otherwise fraudulently obtained; and

    (3) The person with whom such property is or was held or maintained filed with OFAC a report setting forth in full the circumstances relating to such transfer promptly upon discovery that:

    (i) Such transfer was in violation of the provisions of this part or any regulation, ruling, instruction, license, or other directive or authorization issued pursuant to this part;

    (ii) Such transfer was not licensed or authorized by OFAC; or

    (iii) If a license did purport to cover the transfer, such license had been obtained by misrepresentation of a third party or withholding of material facts or was otherwise fraudulently obtained.

    Note 1 to paragraph (d):

    The filing of a report in accordance with the provisions of paragraph (d)(3) of this section shall not be deemed evidence that the terms of paragraphs (d)(1) and (2) of this section have been satisfied.

    (e) Unless licensed pursuant to this part, any attachment, judgment, decree, lien, execution, garnishment, or other judicial process is null and void with respect to any property and interests in property blocked pursuant to § 510.201.

    § 510.203 Holding of funds in interest-bearing accounts; investment and reinvestment.

    (a) Except as provided in paragraph (e) or (f) of this section, or as otherwise directed or authorized by OFAC, any U.S. person holding funds, such as currency, bank deposits, or liquidated financial obligations, subject to § 510.201, shall hold or place such funds in a blocked interest-bearing account located in the United States.

    (b)(1) For purposes of this section, the term blocked interest-bearing account means a blocked account:

    (i) In a federally-insured U.S. bank, thrift institution, or credit union, provided the funds are earning interest at rates that are commercially reasonable; or

    (ii) With a broker or dealer registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), provided the funds are invested in a money market fund or in U.S. Treasury bills.

    (2) Funds held or placed in a blocked account pursuant to paragraph (a) of this section may not be invested in instruments the maturity of which exceeds 180 days.

    (c) For purposes of this section, a rate is commercially reasonable if it is the rate currently offered to other depositors on deposits or instruments of comparable size and maturity.

    (d) For purposes of this section, if interest is credited to a separate blocked account or subaccount, the name of the account party on each account must be the same.

    (e) Blocked funds held in instruments the maturity of which exceeds 180 days at the time the funds become subject to § 510.201 may continue to be held until maturity in the original instrument, provided any interest, earnings, or other proceeds derived therefrom are paid into a blocked interest-bearing account in accordance with paragraph (a) or (f) of this section.

    (f) Blocked funds held in accounts or instruments outside the United States at the time the funds become subject to § 510.201 may continue to be held in the same type of accounts or instruments, provided the funds earn interest at rates that are commercially reasonable.

    (g) This section does not create an affirmative obligation for the holder of blocked tangible property, such as chattels or real estate, or of other blocked property, such as debt or equity securities, to sell or liquidate such property. However, OFAC may issue licenses permitting or directing such sales or liquidation in appropriate cases.

    (h) Funds subject to this section may not be held, invested, or reinvested in a manner that provides financial or economic benefit or access to the Government of North Korea, the Workers' Party of Korea, or any other person whose property and interests in property are blocked pursuant to § 510.201(a), nor may their holder cooperate in or facilitate the pledging or other attempted use as collateral of blocked funds or other assets.

    § 510.204 Expenses of maintaining blocked physical property; liquidation of blocked property.

    (a) Except as otherwise authorized, and notwithstanding the existence of any rights or obligations conferred or imposed by any international agreement or contract entered into or any license or permit granted prior to the effective date, all expenses incident to the maintenance of physical property blocked pursuant to § 510.201 shall be the responsibility of the owners or operators of such property, which expenses shall not be met from blocked funds.

    (b) Property blocked pursuant to § 510.201 may, in the discretion of OFAC, be sold or liquidated and the net proceeds placed in a blocked interest-bearing account in the name of the owner of the property.

    § 510.205 Prohibited importation of goods, services, or technology from North Korea.

    (a) The importation into the United States, directly or indirectly, of any goods, services, or technology from North Korea is prohibited.

    (b) The prohibitions in this section apply except to the extent provided by regulations, orders, directives, or licenses that may be issued pursuant to this part, and notwithstanding any contract entered into or any license or permit granted prior to the effective date.

    § 510.206 Prohibited exportation or reexportation of goods, services, or technology to North Korea.

    (a) The exportation or reexportation, directly or indirectly, from the United States, or by a U.S. person, wherever located, of any goods, services, or technology to North Korea is prohibited.

    (b) The prohibitions in this section apply except to the extent provided in regulations, orders, directives, or licenses that may be issued pursuant to this part or pursuant to the export control authorities implemented by the U.S. Department of Commerce, and notwithstanding any contract entered into or any license or permit granted prior to the effective date.

    § 510.207 Prohibited vessel transactions related to North Korean registration and flagging.

    (a) U.S. persons may not register a vessel in North Korea, obtain authorization for a vessel to fly the North Korean flag, or own, lease, operate, or insure any vessel flagged by North Korea.

    (b) The prohibitions in this section apply except to the extent provided by regulations, orders, directives, or licenses that may be issued pursuant to this part, and notwithstanding any contract entered into or any license or permit granted prior to the effective date.

    § 510.208 Prohibited aircraft landing or vessel calling in the United States.

    (a) No aircraft in which a foreign person has an interest that has landed at a place in North Korea may land at a place in the United States within 180 days after departure from North Korea.

    (b) No vessel in which a foreign person has an interest that has called at a port in North Korea within the previous 180 days, and no vessel in which a foreign person has an interest that has engaged in a ship-to-ship transfer with such a vessel within the previous 180 days, may call at a port in the United States.

    (c) The prohibitions in this section apply except to the extent provided by regulations, orders, directives, or licenses that may be issued pursuant to this part, and notwithstanding any contract entered into or any license or permit granted prior to the effective date.

    § 510.209 Prohibited new investment in North Korea.

    (a) New investment, as defined in § 510.318, in North Korea by a U.S. person, wherever located, is prohibited.

    (b) The prohibitions in this section apply except to the extent provided by regulations, orders, directives, or licenses that may be issued pursuant to this part or pursuant to the export control authorities implemented by the U.S. Department of Commerce, and notwithstanding any contract entered into or any license or permit granted prior to the effective date.

    § 510.210 Prohibitions or strict conditions with respect to correspondent or payable-through accounts or blocking of certain foreign financial institutions identified by the Secretary of the Treasury.

    (a) Prohibited activities. A U.S. financial institution shall not:

    (1) Open or maintain a correspondent account or a payable-through account in the United States for a foreign financial institution for which the opening or maintaining of such an account is prohibited pursuant to this section; or

    (2) Maintain a correspondent account or a payable-through account in the United States in a manner that is inconsistent with any strict condition imposed and in effect pursuant to this section.

    (b) Sanctionable activity by foreign financial institutions. The Secretary of the Treasury, in consultation with the Secretary of State, may determine that a foreign financial institution has, on or after September 21, 2017, knowingly conducted or facilitated any significant transaction:

    (1) On behalf of any person whose property and interests in property are blocked pursuant to Executive Order 13551, Executive Order 13687, Executive Order 13722, or Executive Order 13810, or on behalf of any person whose property and interests in property are blocked pursuant to Executive Order 13382 in connection with North Korea-related activities; or

    (2) In connection with trade with North Korea.

    Note 1 to paragraph (b):

    The names of persons listed in or designated or identified pursuant to Executive Order 13351, Executive Order 13687, Executive Order 13722, or Executive Order 13810 and whose property and interests in property are blocked pursuant to those orders are published in the Federal Register and incorporated into OFAC's List of Specially Designated Nationals and Blocked Persons (SDN List) with the identifier “DPRK.” The names of persons listed in or designated or identified pursuant to Executive Order 13382 and whose property and interests in property are blocked pursuant to that order in connection with North Korea-related activities are published in the Federal Register and incorporated into OFAC's SDN List with the identifier “[NPWMD],” and descriptive text “Executive Order 13810 information: Subject to blocking in connection with North Korea-related activities”. The SDN List is accessible through the following page on OFAC's website: www.treasury.gov/sdn. Additional information pertaining to the SDN List can be found in Appendix A to this chapter. See § 510.411 concerning entities that may not be listed on the SDN List but whose property and interests in property are nevertheless blocked pursuant to paragraph (a) of this section. The property and interests in property of persons who meet the definition of the term Government of North Korea are blocked pursuant to paragraph (a) of this section regardless of whether the names of such persons are published in the Federal Register or incorporated into the SDN List.

    (c) Imposition of sanctions on foreign financial institutions. Upon determining that a foreign financial institution has engaged in sanctionable activity described in paragraph (b) of this section, the Secretary of the Treasury, in consultation with the Secretary of State, may:

    (1) Prohibit the opening or maintaining by a U.S. financial institution of a correspondent account or a payable-through account in the United States for the foreign financial institution; or

    (2) Impose one or more strict conditions on the maintaining by a U.S. financial institution of a correspondent account or a payable-through account in the United States for the foreign financial institution. Such conditions may include the following:

    (i) Prohibiting or restricting any provision of trade finance through the correspondent account or payable-through account of the foreign financial institution;

    (ii) Restricting the transactions that may be processed through the correspondent account or payable-through account of the foreign financial institution to certain types of transactions, such as personal remittances;

    (iii) Placing monetary limits on, or limiting the volume of, the transactions that may be processed through the correspondent account or payable-through account of the foreign financial institution;

    (iv) Requiring pre-approval from the U.S. financial institution for all transactions processed through the correspondent account or payable-through account of the foreign financial institution; or

    (v) Prohibiting or restricting the processing of foreign exchange transactions through the correspondent account or payable-through account of the foreign financial institution.

    (d) Applicability of prohibitions. The prohibitions in this section apply except to the extent provided by regulations, orders, directives, or licenses that may be issued pursuant to this part, and notwithstanding any contract entered into or any license or permit granted prior to the effective date.

    Note 2 to § 510.210:

    The names of foreign financial institutions for which the opening or maintaining of a correspondent account or a payable-through account in the United States is prohibited or for which the maintenance of a correspondent account or payable-through account is subject to one or more strict conditions pursuant to this section will be added to the Correspondent Account or Payable-Through Account Sanctions (CAPTA) List on OFAC's website (www.treasury.gov/ofac), and published in the Federal Register along with the applicable prohibition or strict condition(s).

    § 510.211 Prohibited facilitation.

    (a) Except as otherwise authorized, U.S. persons, wherever located, are prohibited from approving, financing, facilitating, or guaranteeing a transaction by a foreign person where the transaction by that foreign person would be prohibited by § 510.201(d), § 510.206, or § 510.209 if performed by a U.S. person or within the United States.

    (b)(1) The prohibitions in this section with respect to § 510.201(d) apply except to the extent provided by regulations, orders, directives, or licenses that may be issued pursuant to this part, and notwithstanding any contract entered into or any license or permit granted prior to the effective date.

    (2) The prohibitions in this section with respect to §§ 510.206 and 510.209 apply except to the extent provided in regulations, orders, directives, or licenses that may be issued pursuant to this part or pursuant to the export control authorities implemented by the U.S. Department of Commerce, and notwithstanding any contract entered into or any license or permit granted prior to the effective date.

    § 510.212 Evasions; attempts; causing violations; conspiracies.

    (a) Any transaction on or after the effective date that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in this part is prohibited.

    (b) Any conspiracy formed to violate the prohibitions set forth in this part is prohibited.

    § 510.213 Exempt transactions.

    (a) United Nations Participation Act. The exemptions described in this section do not apply to transactions involving property or interests in property of persons whose property and interests in property are blocked pursuant to the authority of the United Nations Participation Act, as amended (22 U.S.C. 287c(b)) (UNPA).

    Note 1 to paragraph (a):

    Persons whose property and interests in property are blocked pursuant to the authority of the UNPA include those listed on both OFAC's Specially Designated Nationals and Blocked Persons List (SDN List) and the Consolidated United Nations Security Council Sanctions List (see https://www.un.org) as well as persons listed on the SDN List for being owned or controlled by, or acting for or on behalf of, such persons.

    (b) Personal communications. The prohibitions contained in this part do not apply to any postal, telegraphic, telephonic, or other personal communication that does not involve the transfer of anything of value.

    (c) Information or informational materials. (1) The prohibitions contained in this part do not apply to the importation from any country and the exportation to any country of any information or informational materials, as defined in § 510.312, whether commercial or otherwise, regardless of format or medium of transmission.

    (2) This section does not exempt from regulation transactions related to information or informational materials not fully created and in existence at the date of the transactions, or to the substantive or artistic alteration or enhancement of information or informational materials, or to the provision of marketing and business consulting services. Such prohibited transactions include payment of advances for information or informational materials not yet created and completed (with the exception of prepaid subscriptions for widely circulated magazines and other periodical publications); provision of services to market, produce or co-produce, create, or assist in the creation of information or informational materials; and payment of royalties with respect to income received for enhancements or alterations made by U.S. persons to such information or informational materials.

    (3) This section does not exempt transactions incident to the exportation of software subject to the Export Administration Regulations, 15 CFR parts 730 through 774, or to the exportation of goods (including software) or technology for use in the transmission of any data, or to the provision, sale, or leasing of capacity on telecommunications transmission facilities (such as satellite or terrestrial network connectivity) for use in the transmission of any data. The exportation of such items or services and the provision, sale, or leasing of such capacity or facilities to a person whose property and interests in property are blocked pursuant to § 510.201(a) are prohibited.

    (d) Travel. The prohibitions contained in this part do not apply to transactions ordinarily incident to travel to or from any country, including importation or exportation of accompanied baggage for personal use, maintenance within any country including payment of living expenses and acquisition of goods or services for personal use, and arrangement or facilitation of such travel including nonscheduled air, sea, or land voyages.

    Note 2 to paragraph (d):

    As of September 1, 2017, the U.S. Department of State has restricted the use of U.S. passports to travel into, in, or through North Korea. See 22 CFR 51.63. U.S. nationals who wish to travel to or within North Korea for the extremely limited purposes that are set forth in federal regulations must apply for a passport with a special validation from the Department of State. See travel.state.gov for additional details.

    (e) Official business. The prohibitions contained in §§ 510.201(a)(1), 510.201(a)(3)(iv) through (vi) and (d), 510.206, and 510.208 through 510.211 do not apply to transactions for the conduct of the official business of the Federal Government or the United Nations and its Specialized Agencies, Programmes, Funds, and Related Organizations by employees, grantees, or contractors thereof.

    Note 3 to paragraph (e):

    For an organizational chart listing the Specialized Agencies, Programmes, Funds, and Related Organizations of the United Nations, see the following page on the United Nations website: http://www.unsceb.org/directory.

    Subpart C—General Definitions
    § 510.300 Applicability of definitions.

    The definitions in this subpart apply throughout the entire part.

    § 510.301 Arms or related materiel.

    The term arms or related materiel means arms or related materiel of all types, including any battle tanks, armored combat vehicles, large caliber artillery systems, combat aircraft, attack helicopters, warships, missiles or missile systems, or related materiel including spare parts.

    Note 1 to § 510.301:

    For additional guidance as to items that constitute arms or related materiel, please see determinations by the United Nations Security Council or its committee created pursuant to United Nations Security Council Resolution 1718, as well as designations by the Secretary of State of defense articles and defense services pursuant to the Arms Export Control Act and listed on the United States Munitions List (USML). In addition, items on the Commerce Control List as well as certain uncontrolled items that are subject to the Export Administration Act may be considered related materiel.

    § 510.302 Blocked account; blocked property.

    For the purposes of this part, the terms blocked account and blocked property shall mean:

    (a) Any account or property subject to the prohibitions in § 510.201(a) held in the name of the Government of North Korea, the Workers' Party of Korea, or any other person whose property and interests in property are blocked pursuant to § 510.201(a), or in which such person has an interest, and with respect to which payments, transfers, exportations, withdrawals, or other dealings may not be made or effected except pursuant to a license or other authorization from OFAC expressly authorizing such action; and

    (b) Any account or property subject to the prohibitions in § 510.201(d), and with respect to which payments, transfers, exportations, withdrawals, or other dealings may not be made or effected except pursuant to a license or other authorization from OFAC expressly authorizing such action.

    Note 1 to § 510.302:

    See § 510.411 concerning the blocked status of property and interests in property of an entity that is directly or indirectly owned, whether individually or in the aggregate, 50 percent or more by one or more persons whose property and interests in property are blocked pursuant to § 510.201(a).

    § 510.303 Correspondent account.

    The term correspondent account means an account established by a U.S. financial institution for a foreign financial institution to receive deposits from, or to make payments on behalf of, the foreign financial institution, or to handle other financial transactions related to such foreign financial institution.

    § 510.304 Effective date.

    (a) The term effective date refers to the effective date of the applicable prohibitions and directives contained in this part as follows:

    (1) With respect to transfers or other dealings in blocked property and interests in property of the Government of North Korea, as defined in § 510.311, or the Workers' Party of Korea prohibited by § 510.201(a)(1), 12:01 a.m. eastern daylight time, March 16, 2016;

    (2) With respect to a person whose property and interests in property are blocked pursuant to § 510.201(a)(3)(i), 12:01 p.m. eastern daylight time, August 30, 2010;

    (3) With respect to a person whose property and interests in property are otherwise blocked pursuant to § 510.201(a), the earlier of the date of actual or constructive notice that such person's property and interests in property are blocked;

    (4) With respect to funds subject to blocking pursuant to § 510.201(d), the earlier of the date of actual or constructive notice that funds are blocked or that a foreign bank account that the funds originate from, are destined for, or pass through has been determined to meet the criteria contained in § 510.201(d).

    (5) With respect to the prohibition set forth in § 510.207, June 26, 2008;

    (6) With respect to the prohibition set forth in § 510.205, 12:01 a.m. eastern daylight time, April 19, 2011;

    (7) With respect to the prohibitions set forth in §§ 510.206 and 510.209, 12:01 a.m. eastern daylight time, March 16, 2016;

    (8) With respect to the prohibitions set forth in § 510.208, 12:01 a.m. eastern daylight time, September 21, 2017; and

    (9) With respect to the prohibition set forth in § 510.210, 12:01 a.m. eastern daylight time, September 21, 2017. The effective date of a prohibition or strict condition imposed pursuant to § 510.210 on the opening or maintaining of a correspondent account or a payable-through account in the United States by a U.S. financial institution for a particular foreign financial institution is the earlier of the date the U.S. financial institution receives actual or constructive notice of such prohibition, condition, or blocking.

    (b) For the purposes of this section, constructive notice is the date that a notice of the blocking of the relevant person's property and interests in property is published in the Federal Register.

    § 510.305 Entity.

    The term entity means a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization.

    § 510.306 Financial, material, or technological support.

    The term financial, material, or technological support, as used in § 510.201(a)(3)(ii)(E), (a)(3)(iii)(D), (a)(3)(iv)(G), and (a)(3)(v)(E), means any property, tangible or intangible, including currency, financial instruments, securities, or any other transmission of value; weapons or related materiel; chemical or biological agents; explosives; false documentation or identification; communications equipment; computers; electronic or other devices or equipment; technologies; lodging; safe houses; facilities; vehicles or other means of transportation; or goods. “Technologies” as used in this definition means specific information necessary for the development, production, or use of a product, including related technical data such as blueprints, plans, diagrams, models, formulae, tables, engineering designs and specifications, manuals, or other recorded instructions.

    § 510.307 Financial services.

    The term financial services includes loans, transfers, accounts, insurance, investments, securities, guarantees, foreign exchange, letters of credit, and commodity futures or options.

    § 510.308 Financial transaction.

    The term financial transaction means any transfer of value involving a financial institution.

    § 510.309 Foreign financial institution.

    The term foreign financial institution means any foreign entity that is engaged in the business of accepting deposits, making, granting, transferring, holding, or brokering loans or credits, or purchasing or selling foreign exchange, securities, commodity futures or options, or procuring purchasers and sellers thereof, as principal or agent. It includes depository institutions, banks, savings banks, money service businesses, trust companies, securities brokers and dealers, commodity futures and options brokers and dealers, forward contract and foreign exchange merchants, securities and commodities exchanges, clearing corporations, investment companies, employee benefit plans, dealers in precious metals, stones, or jewels, and holding companies, affiliates, or subsidiaries of any of the foregoing. The term does not include the international financial institutions identified in 22 U.S.C. 262r(c)(2), the International Fund for Agricultural Development, the North American Development Bank, or any other international financial institution so notified by OFAC.

    § 510.310 Foreign person.

    The term foreign person means any person that is not a U.S. person.

    § 510.311 Government of North Korea.

    The term Government of North Korea includes:

    (a) The state and the Government of the Democratic People's Republic of Korea, as well as any political subdivision, agency, or instrumentality thereof;

    (b) Any entity owned or controlled, directly or indirectly, by the foregoing, including any corporation, partnership, association, or other entity in which the Government of North Korea owns a 50 percent or greater interest or a controlling interest, and any entity which is otherwise controlled by that government;

    (c) Any person that is, or has been, acting or purporting to act, directly or indirectly, for or on behalf of any of the foregoing; and

    (d) Any other person determined by OFAC to be included within paragraphs (a) through (c) of this section.

    Note 1 to § 510.311:

    The names of persons that OFAC has determined fall within this definition are published in the Federal Register and incorporated into OFAC's Specially Designated Nationals and Blocked Persons List (SDN List) with the identifier “[DPRK].” The SDN List is accessible through the following page on OFAC's website: www.treasury.gov/sdn. However, the property and interests in property of persons who meet the definition of the term Government of North Korea are blocked pursuant to § 510.201(a) regardless of whether the names of such persons are published in the Federal Register or incorporated into the SDN List.

    Note 2 to § 510.311:

    Section 501.807 of this chapter describes the procedures to be followed by persons seeking administrative reconsideration of OFAC's determination that they fall within the definition of the term Government of North Korea.

    § 510.312 Information or informational materials.

    (a)(1) The term information or informational materials includes publications, films, posters, phonograph records, photographs, microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and news wire feeds.

    (2) To be considered information or informational materials, artworks must be classified under heading 9701, 9702, or 9703 of the Harmonized Tariff Schedule of the United States.

    (b) The term information or informational materials, with respect to exports, does not include items:

    (1) That were, as of April 30, 1994, or that thereafter become, controlled for export pursuant to section 5 of the Export Administration Act of 1979, 50 U.S.C. App. 2401-2420 (1979) (EAA), or section 6 of the EAA to the extent that such controls promote the nonproliferation or antiterrorism policies of the United States; or

    (2) With respect to which acts are prohibited by 18 U.S.C. chapter 37.

    § 510.313 Interest.

    Except as otherwise provided in this part, the term interest, when used with respect to property (e.g., “an interest in property”), means an interest of any nature whatsoever, direct or indirect.

    § 510.314 Knowingly.

    The term knowingly, with respect to conduct, a circumstance, or a result, means that a person has actual knowledge, or should have known, of the conduct, the circumstance, or the result.

    § 510.315 Licenses; general and specific.

    (a) Except as otherwise provided in this part, the term license means any license or authorization contained in or issued pursuant to this part.

    (b) The term general license means any license or authorization the terms of which are set forth in subpart E of this part or made available on OFAC's website: www.treasury.gov/ofac.

    (c) The term specific license means any license or authorization issued pursuant to this part, but not set forth in subpart E of this part or made available on OFAC's website: www.treasury.gov/ofac.

    Note 1 to § 510.315:

    See § 501.801 of this chapter on licensing procedures.

    § 510.316 Loans or other extensions of credit.

    The term loans or other extensions of credit means any transfer or extension of funds or credit on the basis of an obligation to repay, or any assumption or guarantee of the obligation of another to repay an extension of funds or credit, including: Overdrafts; currency swaps; purchases of securities or debt securities, including securities from or issued by the Government of North Korea; purchases of a loan made by another person; sales of financial assets subject to an agreement to repurchase; renewals or refinancings whereby funds or credits are transferred or extended to a prohibited borrower or prohibited recipient; the issuance of standby letters of credit; and drawdowns on existing lines of credit.

    § 510.317 Luxury goods.

    The term luxury goods includes those items listed in 15 CFR 746.4(b)(1) and supplement no. 1 to part 746 and similar items.

    § 510.318 New investment.

    The term new investment means a transaction after 12:01 a.m. eastern daylight March 16, 2016 that constitutes:

    (a) A commitment or contribution of funds or other assets; or

    (b) A loan or other extension of credit as defined in § 510.316.

    § 510.319 North Korean person.

    (a) The term North Korean person means any North Korean citizen, North Korean permanent resident alien, or entity organized under the laws of North Korea or any jurisdiction within North Korea (including foreign branches).

    (b) For the purposes of § 510.201(a)(3)(v), the term North Korean person shall not include any United States citizen, any permanent resident alien of the United States, any alien lawfully admitted to the United States, or any alien holding a valid United States visa.

    § 510.320 OFAC.

    The term OFAC means the Department of the Treasury's Office of Foreign Assets Control.

    § 510.321 Payable-through account.

    The term payable-through account means a correspondent account maintained by a U.S. financial institution for a foreign financial institution by means of which the foreign financial institution permits its customers to engage, either directly or through a subaccount, in banking activities usual in connection with the business of banking in the United States.

    § 510.322 Person.

    The term person means an individual or entity.

    § 510.323 Property; property interest.

    The terms property and property interest include money, checks, drafts, bullion, bank deposits, savings accounts, debts, indebtedness, obligations, notes, guarantees, debentures, stocks, bonds, coupons, any other financial instruments, bankers acceptances, mortgages, pledges, liens or other rights in the nature of security, warehouse receipts, bills of lading, trust receipts, bills of sale, any other evidences of title, ownership, or indebtedness, letters of credit and any documents relating to any rights or obligations thereunder, powers of attorney, goods, wares, merchandise, chattels, stocks on hand, ships, goods on ships, real estate mortgages, deeds of trust, vendors' sales agreements, land contracts, leaseholds, ground rents, real estate and any other interest therein, options, negotiable instruments, trade acceptances, royalties, book accounts, accounts payable, judgments, patents, trademarks or copyrights, insurance policies, safe deposit boxes and their contents, annuities, pooling agreements, services of any nature whatsoever, contracts of any nature whatsoever, and any other property, real, personal, or mixed, tangible or intangible, or interest or interests therein, present, future, or contingent.

    § 510.324 Transfer.

    The term transfer means any actual or purported act or transaction, whether or not evidenced by writing, and whether or not done or performed within the United States, the purpose, intent, or effect of which is to create, surrender, release, convey, transfer, or alter, directly or indirectly, any right, remedy, power, privilege, or interest with respect to any property. Without limitation on the foregoing, it shall include the making, execution, or delivery of any assignment, power, conveyance, check, declaration, deed, deed of trust, power of attorney, power of appointment, bill of sale, mortgage, receipt, agreement, contract, certificate, gift, sale, affidavit, or statement; the making of any payment; the setting off of any obligation or credit; the appointment of any agent, trustee, or fiduciary; the creation or transfer of any lien; the issuance, docketing, filing, or levy of or under any judgment, decree, attachment, injunction, execution, or other judicial or administrative process or order, or the service of any garnishment; the acquisition of any interest of any nature whatsoever by reason of a judgment or decree of any foreign country; the fulfillment of any condition; the exercise of any power of appointment, power of attorney, or other power; or the acquisition, disposition, transportation, importation, exportation, or withdrawal of any security.

    § 510.325 United States.

    The term United States means the United States, its territories and possessions, and all areas under the jurisdiction or authority thereof.

    § 510.326 United States person; U.S. person.

    The term United States person or U.S. person means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States.

    § 510.327 U.S. depository institution.

    The term U.S. depository institution means any entity (including its foreign branches) organized under the laws of the United States or any jurisdiction within the United States, or any agency, office, or branch located in the United States of a foreign entity, that is engaged primarily in the business of banking (for example, banks, savings banks, savings associations, credit unions, trust companies, and United States bank holding companies) and is subject to regulation by federal or state banking authorities.

    § 510.328 U.S. financial institution.

    The term U.S. financial institution means any U.S. entity (including its foreign branches) that is engaged in the business of accepting deposits, making, granting, transferring, holding, or brokering loans or other extensions of credit, or purchasing or selling foreign exchange, securities, commodity futures or options, or procuring purchasers and sellers thereof, as principal or agent. It includes depository institutions, banks, savings banks, trust companies, securities brokers and dealers, commodity futures and options brokers and dealers, forward contract and foreign exchange merchants, securities and commodities exchanges, clearing corporations, investment companies, employee benefit plans, and U.S. holding companies, U.S. affiliates, or U.S. subsidiaries of any of the foregoing. This term includes those branches, offices, and agencies of foreign financial institutions that are located in the United States, but not such institutions' foreign branches, offices, or agencies.

    § 510.329 U.S.-registered money transmitter.

    The term U.S.-registered money transmitter means any U.S. citizen, permanent resident alien, or entity organized under the laws of the United States or of any jurisdiction within the United States, including its foreign branches, or any agency, office, or branch of a foreign entity located in the United States, that is a money transmitter, as defined in 31 CFR 1010.100(ff)(5), and that is registered pursuant to 31 CFR 1022.380.

    § 510.330 U.S.-registered broker or dealer in securities.

    The term U.S.-registered broker or dealer in securities means any U.S. citizen, permanent resident alien, or entity organized under the laws of the United States or of any jurisdiction within the United States (including its foreign branches), or any agency, office, or branch of a foreign entity located in the United States, that:

    (a) Is a “broker” or “dealer” in securities within the meanings set forth in the Securities Exchange Act of 1934;

    (b) Holds or clears customer accounts; and

    (c) Is registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934.

    Subpart D—Interpretations
    § 510.401 Reference to amended sections.

    (a) Reference to any section in this part is a reference to the same as currently amended, unless the reference includes a specific date. See 44 U.S.C. 1510.

    (b) Reference to any ruling, order, instruction, direction or license issued pursuant to this part is a reference to the same as currently amended unless otherwise so specified.

    § 510.402 Effect of amendment.

    Unless otherwise specifically provided, any amendment, modification, or revocation of any provision in or appendix to this part or chapter or of any order, regulation, ruling, instruction, or license issued by OFAC does not affect any act done or omitted, or any civil or criminal proceeding commenced or pending, prior to such amendment, modification, or revocation. All penalties, forfeitures, and liabilities under any such order, regulation, ruling, instruction, or license continue and may be enforced as if such amendment, modification, or revocation had not been made.

    § 510.403 Termination and acquisition of an interest in blocked property.

    (a) Whenever a transaction licensed or authorized by or pursuant to this part results in the transfer of property (including any property interest) away from the Government of North Korea, the Workers' Party of Korea, or any other person whose property and interests in property are blocked pursuant to § 510.201(a), such property shall no longer be deemed to be property blocked pursuant to § 510.201(a), unless there exists in the property another interest that is blocked pursuant to § 510.201(a), the transfer of which has not been effected pursuant to license or other authorization.

    (b) Unless otherwise specifically provided in a license or authorization issued pursuant to this part, if property (including any property interest) is transferred or attempted to be transferred to a person whose property and interests in property are blocked pursuant to § 510.201(a), such property shall be deemed to be property in which such person has an interest and therefore blocked.

    § 510.404 Transactions ordinarily incident to a licensed transaction.

    (a) Any transaction ordinarily incident to a licensed transaction and necessary to give effect thereto is also authorized, except:

    (1) An ordinarily incident transaction, not explicitly authorized within the terms of the license, by or with the Government of North Korea, the Workers' Party of Korea, or any other person whose property and interests in property are blocked pursuant to § 510.201(a);

    (2) An ordinarily incident transaction, not explicitly authorized within the terms of the license, involving a debit to a blocked account or a transfer of blocked property; or

    (3) An ordinarily incident transaction, not explicitly authorized within the terms of the license, with a foreign financial institution that is subject to sanctions pursuant to § 510.210 when the transaction is one that is prohibited by § 510.210.

    (b) For example, a license authorizing a person to complete a securities sale involving Company A, whose property and interests in property are blocked pursuant to § 510.201(a), also authorizes other persons to engage in activities that are ordinarily incident and necessary to complete the sale, including transactions by the buyer, broker, transfer agents, and banks, provided that such other persons are not themselves persons whose property and interests in property are blocked pursuant to § 510.201(a).

    § 510.405 Exportation and reexportation of goods, services, or technology.

    (a) The prohibition on the exportation and reexportation of goods, services, or technology contained in § 510.206 applies to services performed on behalf of a person in North Korea or the Government of North Korea or where the benefit of such services is otherwise received in North Korea, if such services are performed:

    (1) In the United States; or

    (2) Outside the United States by a U.S. person, including by a foreign branch of an entity located in the United States.

    (b) The benefit of services performed anywhere in the world on behalf of the Government of North Korea is presumed to be received in North Korea.

    (c) The prohibitions contained in § 510.201 apply to services performed in the United States or by U.S. persons, wherever located, including by a foreign branch of an entity located in the United States:

    (1) On behalf of or for the benefit of the Government of North Korea, the Workers' Party of Korea, or any other person whose property and interests in property are blocked pursuant to § 510.201(a); or

    (2) With respect to property interests of the Government of North Korea, the Workers' Party of Korea, or any other person whose property and interests in property are blocked pursuant to § 510.201(a).

    (d)(1) For example, U.S. persons may not, except as authorized by or pursuant to this part, provide legal, accounting, financial, brokering, freight forwarding, transportation, public relations, or other services to any person in North Korea or to the Government of North Korea, the Workers' Party of Korea, or any other person whose property and interests in property are blocked pursuant to § 510.201(a).

    (2) For example, a U.S. person is engaged in a prohibited exportation of services to North Korea when it extends credit to a third-country firm specifically to enable that firm to manufacture goods for sale to North Korea or the Government of North Korea.

    Note 1 to § 510.405:

    See §§ 510.507 and 510.509 on licensing policy with regard to the provision of certain legal and emergency medical services.

    § 510.406 Offshore transactions involving blocked property.

    The prohibitions in § 510.201 on transactions or dealings involving blocked property (including a blocked account) apply to transactions by any U.S. person in a location outside the United States with respect to property held in the name of the Government of North Korea, the Workers' Party of Korea, or any other person whose property and interests in property are blocked pursuant to § 510.201(a) or any property blocked by § 510.201(d).

    § 510.407 Payments from blocked accounts to satisfy obligations prohibited.

    Pursuant to § 510.201, no debits may be made to a blocked account to pay obligations to U.S. persons or other persons, except as authorized by or pursuant to this part.

    Note 1 to § 510.407:

    See also § 510.502(e), which provides that no license or other authorization contained in or issued pursuant to this part authorizes transfers of or payments from blocked property or debits to blocked accounts unless the license or other authorization explicitly authorizes the transfer of or payment from blocked property or the debit to a blocked account.

    § 510.408 Charitable contributions.

    Unless specifically authorized by OFAC pursuant to this part, no charitable contribution of funds, goods, services, or technology, including contributions to relieve human suffering, such as food, clothing, or medicine, may be made by, to, or for the benefit of, or received from, the Government of North Korea, the Workers' Party of Korea, or any other person whose property and interests in property are blocked pursuant to § 510.201(a). For the purposes of this part, a contribution is made by, to, or for the benefit of, or received from, the Government of North Korea, the Workers' Party of Korea, or any other person whose property and interests in property are blocked pursuant to § 510.201(a) if made by, to, or in the name of, or received from or in the name of, such a person; if made by, to, or in the name of, or received from or in the name of, an entity or individual acting for or on behalf of, or owned or controlled by, such a person; or if made in an attempt to violate, to evade, or to avoid the bar on the provision of contributions by, to, or for the benefit of such a person, or the receipt of contributions from such a person.

    Note 1 to § 510.408:

    Separate authorization by the Department of Commerce under the Export Administration Regulations (EAR), 15 CFR part 730 through 774, may be required if the charitable contributions are subject to the EAR.

    § 510.409 Credit extended and cards issued by financial institutions to a person whose property and interests in property are blocked.

    The prohibition in § 510.201 on dealing in property subject to that section and the prohibition in § 510.206 on exporting services to North Korea prohibit U.S. financial institutions from performing under any existing credit agreements, including charge cards, debit cards, or other credit facilities issued by a financial institution to the Government of North Korea, the Workers' Party of Korea, or any other person whose property and interests in property are blocked pursuant to § 510.201(a).

    § 510.410 Setoffs prohibited.

    A setoff against blocked property (including a blocked account), whether by a U.S. bank or other U.S. person, is a prohibited transfer under § 510.201 if effected after the effective date.

    § 510.411 Entities owned by one or more persons whose property and interests in property are blocked.

    (a) Persons whose property and interests in property are blocked pursuant to § 510.201(a) have an interest in all property and interests in property of an entity in which such persons directly or indirectly own, whether individually or in the aggregate, a 50 percent or greater interest. The property and interests in property of such an entity, therefore, are blocked, and such an entity is a person whose property and interests in property are blocked pursuant to § 510.201(a), regardless of whether the name of the entity is incorporated into OFAC's Specially Designated Nationals and Blocked Persons List (SDN List).

    (b) This section, which deals with the consequences of ownership of entities, in no way limits the definition of the Government of North Korea in § 510.311, which includes within its definition other persons whose property and interests in property are blocked but who are not on the SDN List.

    § 510.412 Facilitation; change of policies and procedures; referral of business opportunities offshore.

    With respect to § 510.211, a prohibited facilitation or approval of a transaction by a foreign person occurs, among other instances, when a U.S. person:

    (a) Alters its operating policies or procedures, or those of a foreign affiliate, to permit a foreign affiliate to accept or perform a specific contract, engagement, or transaction involving North Korea or the Government of North Korea without the approval of the U.S. person, where such transaction previously required approval by the U.S. person and such transaction by the foreign affiliate would be prohibited by this part if performed directly by a U.S. person or from the United States;

    (b) Refers to a foreign person purchase orders, requests for bids, or similar business opportunities involving North Korea or the Government of North Korea to which the United States person could not directly respond as a result of the prohibitions contained in this part; or

    (c) Changes the operating policies and procedures of a particular affiliate with the specific purpose of facilitating transactions that would be prohibited by this part if performed by a U.S. person or from the United States.

    § 510.413 Significant transaction(s).

    In determining, for purposes of §§ 510.201(a)(3)(vi) and 510.210, whether a transaction(s) is significant, the Secretary of the Treasury or the Secretary's designee may consider the totality of the facts and circumstances. As a general matter, the Department of the Treasury may consider some or all of the following factors:

    (a) Size, number, and frequency. The size, number, and frequency of transaction(s) over a period of time, including whether the transaction(s) is increasing or decreasing over time and the rate of increase or decrease.

    (b) Nature. The nature of the transaction(s), including the type, complexity, and commercial purpose of the transaction(s).

    (c) Level of awareness; pattern of conduct. (1) Whether the transaction(s) is performed with the involvement or approval of management or only by clerical personnel; and

    (2) Whether the transaction(s) is part of a pattern of conduct or the result of a business development strategy.

    (d) Nexus. The proximity between the foreign financial institution engaging in the transaction(s) and North Korea or a blocked person described in § 510.201.

    (e) Impact. The impact of the transaction(s) on the objectives of Executive Order 13810 including the economic or other benefit conferred or attempted to be conferred on North Korea or a blocked person described in § 510.201.

    (f) Deceptive practices. Whether the transaction(s) involves an attempt to obscure or conceal the actual parties or true nature of the transaction(s) to evade sanctions.

    (g) Other relevant factors. Such other factors that the Department of the Treasury deems relevant on a case-by-case basis in determining the significance of a transaction(s).

    Subpart E—Licenses, Authorizations, and Statements of Licensing Policy
    § 510.501 General and specific licensing procedures.

    For provisions relating to licensing procedures, see part 501, subpart E, of this chapter. Licensing actions taken pursuant to part 501 of this chapter with respect to the prohibitions contained in this part are considered actions taken pursuant to this part. General licenses and statements of licensing policy relating to this part also may be available through the North Korea sanctions page on OFAC's website: www.treasury.gov/ofac.

    § 510.502 Effect of license or other authorization.

    (a) No license or other authorization contained in this part, or otherwise issued by OFAC, authorizes or validates any transaction effected prior to the issuance of such license or other authorization, unless specifically provided in such license or authorization.

    (b) No regulation, ruling, instruction, or license authorizes any transaction prohibited under this part unless the regulation, ruling, instruction, or license is issued by OFAC and specifically refers to this part. No regulation, ruling, instruction, or license referring to this part shall be deemed to authorize any transaction prohibited by any other part of this chapter unless the regulation, ruling, instruction, or license specifically refers to such part.

    (c) Any regulation, ruling, instruction, or license authorizing any transaction otherwise prohibited under this part has the effect of removing a prohibition contained in this part from the transaction, but only to the extent specifically stated by its terms. Unless the regulation, ruling, instruction, or license otherwise specifies, such an authorization does not create any right, duty, obligation, claim, or interest in, or with respect to, any property that would not otherwise exist under ordinary principles of law.

    (d) Nothing contained in this part shall be construed to supersede the requirements established under any other provision of law or to relieve a person from any requirement to obtain a license or other authorization from another department or agency of the U.S. Government in compliance with applicable laws and regulations subject to the jurisdiction of that department or agency. For example, exports of goods, services, or technical data that are not prohibited by this part or that do not require a license by OFAC nevertheless may require authorization by the U.S. Department of Commerce, the U.S. Department of State, or other agencies of the U.S. Government.

    (e) No license or other authorization contained in or issued pursuant to this part authorizes transfers of or payments from blocked property or debits to blocked accounts unless the license or other authorization explicitly authorizes the transfer of or payment from blocked property or the debit to a blocked account.

    (f) Any payment relating to a transaction authorized in or pursuant to this part that is routed through the U.S. financial system should reference the relevant OFAC general or specific license authorizing the payment to avoid the blocking or rejection of the transfer.

    § 510.503 Exclusion from licenses.

    OFAC reserves the right to exclude any person, property, transaction, or class thereof from the operation of any license or from the privileges conferred by any license. OFAC also reserves the right to restrict the applicability of any license to particular persons, property, transactions, or classes thereof. Such actions are binding upon actual or constructive notice of the exclusions or restrictions.

    § 510.504 Payments and transfers to blocked accounts in U.S. financial institutions.

    Any payment of funds or transfer of credit in which the Government of North Korea, the Workers' Party of Korea, or any other person whose property and interests in property are blocked pursuant to § 510.201(a) has any interest that comes within the possession or control of a U.S. financial institution, or any payment of funds or transfer of credit, subject to § 510.201(d) must be blocked in an account on the books of that financial institution. A transfer of funds or credit by a U.S. financial institution between blocked accounts in its branches or offices is authorized, provided that no transfer is made from an account within the United States to an account held outside the United States, and further provided that a transfer from a blocked account may be made only to another blocked account held in the same name.

    Note 1 to § 510.504:

    See § 501.603 of this chapter for mandatory reporting requirements regarding financial transfers. See also § 510.203 concerning the obligation to hold blocked funds in interest-bearing accounts.

    § 510.505 Entries in certain accounts for normal service charges.

    (a) A U.S. financial institution is authorized to debit any blocked account held at that financial institution in payment or reimbursement for normal service charges owed it by the owner of that blocked account.

    (b) As used in this section, the term normal service charges shall include charges in payment or reimbursement for interest due; cable, telegraph, internet, or telephone charges; postage costs; custody fees; small adjustment charges to correct bookkeeping errors; and, but not by way of limitation, minimum balance charges, notary and protest fees, and charges for reference books, photocopies, credit reports, transcripts of statements, registered mail, insurance, stationery and supplies, and other similar items.

    § 510.506 Investment and reinvestment of certain funds.

    Subject to the requirements of § 510.203, U.S. financial institutions are authorized to invest and reinvest assets blocked pursuant to § 510.201, subject to the following conditions:

    (a) The assets representing such investments and reinvestments are credited to a blocked account or subaccount that is held in the same name at the same U.S. financial institution, or within the possession or control of a U.S. person, but funds shall not be transferred outside the United States for this purpose;

    (b) The proceeds of such investments and reinvestments shall not be credited to a blocked account or subaccount under any name or designation that differs from the name or designation of the specific blocked account or subaccount in which such funds or securities were held; and

    (c) No immediate financial or economic benefit accrues (e.g., through pledging or other use) to the Government of North Korea or any other person whose property and interests in property are blocked pursuant to § 510.201(a).

    § 510.507 Provision of certain legal services.

    (a) The provision of the following legal services to or on behalf of the Government of North Korea, the Workers' Party of Korea, any other person whose property and interests in property are blocked pursuant to § 510.201(a) or any further Executive orders relating to the national emergency declared in Executive Order 13466 of June 26, 2008, or any person in North Korea, or in circumstances in which the benefit is otherwise received in North Korea, is authorized, provided that receipt of payment of professional fees and reimbursement of incurred expenses must be authorized: Pursuant to § 510.508, which authorizes certain payments for legal services from funds originating outside the United States; via specific license; or otherwise pursuant to this part:

    (1) Provision of legal advice and counseling on the requirements of and compliance with the laws of the United States or any jurisdiction within the United States, provided that such advice and counseling are not provided to facilitate transactions in violation of this part;

    (2) Representation of persons named as defendants in or otherwise made parties to legal, arbitration, or administrative proceedings before any U.S. federal, state, or local court or agency;

    (3) Initiation and conduct of legal, arbitration, or administrative proceedings before any U.S. federal, state, or local court or agency;

    (4) Representation of persons before any U.S. federal, state, or local court or agency with respect to the imposition, administration, or enforcement of U.S. sanctions against such persons or North Korea; and

    (5) Provision of legal services in any other context in which prevailing U.S. law requires access to legal counsel at public expense.

    (b) The provision of any other legal services to or on behalf of the Government of North Korea, the Workers' Party of Korea, any other person whose property and interests in property are blocked pursuant to § 510.201(a) or any further Executive orders relating to the national emergency declared in Executive Order 13466 of June 26, 2008, or any person in North Korea, or in circumstances in which the benefit is otherwise received in North Korea, not otherwise authorized in this part, requires the issuance of a specific license.

    (c) Consistent with § 510.404, U.S. persons do not need to obtain specific authorization to provide related services, such as making filings and providing other administrative services, that are ordinarily incident to the provision of services authorized by paragraph (a) of this section. Additionally, U.S. persons who provide services authorized by paragraph (a) of this section do not need to obtain specific authorization to contract for related services that are ordinarily incident to the provision of those legal services, such as those provided by private investigators or expert witnesses, or to pay for such services.

    (d) Entry into a settlement agreement or the enforcement of any lien, judgment, arbitral award, decree, or other order through execution, garnishment, or other judicial process purporting to transfer or otherwise alter or affect property or interests in property blocked pursuant to § 510.201, or any further Executive orders relating to the national emergency declared in Executive Order 13466 of June 26, 2008, is prohibited unless licensed pursuant to this part.

    Note 1 to § 510.507:

    Pursuant to part 501, subpart E, of this chapter, U.S. persons seeking administrative reconsideration or judicial review of their designation or the blocking of their property and interests in property may apply for a specific license from OFAC to authorize the release of certain blocked funds for the payment of professional fees and reimbursement of incurred expenses for the provision of such legal services where alternative funding sources are not available. For more information, see OFAC's Guidance on the Release of Limited Amounts of Blocked Funds for Payment of Legal Fees and Costs Incurred in Challenging the Blocking of U.S. Persons in Administrative or Civil Proceedings, which is available on OFAC's website at: www.treasury.gov/ofac.

    § 510.508 Payments for legal services from funds originating outside the United States.

    (a) Professional fees and incurred expenses. Receipt of payment of professional fees and reimbursement of incurred expenses for the provision of legal services authorized pursuant to § 510.507(a) to or on behalf of the Government of North Korea, the Workers' Party of Korea, any other person whose property and interests in property are blocked pursuant to § 510.201(a) or any further Executive orders relating to the national emergency declared in Executive Order 13466 of June 26, 2008, or any person in North Korea, or in circumstances in which the benefit is otherwise received in North Korea, is authorized from funds originating outside the United States, provided that the funds received by U.S. persons as payment of professional fees and reimbursement of incurred expenses for the provision of legal services authorized pursuant to § 510.507(a) do not originate from:

    (1) A source within the United States;

    (2) Any source, wherever located, within the possession or control of a U.S. person; or

    (3) Any individual or entity, other than the person on whose behalf the legal services authorized pursuant to § 510.507(a) are to be provided, whose property and interests in property are blocked pursuant to any part of this chapter or any Executive order or statute.

    Note 1 to paragraph (a):

    Nothing in this paragraph (a) authorizes payments for legal services using funds in which any other person whose property and interests in property are blocked pursuant to § 510.201(a), any other part of this chapter, or any Executive order has an interest.

    (b) Reports. (1) U.S. persons who receive payments pursuant to paragraph (a) of this section must submit annual reports no later than 30 days following the end of the calendar year during which the payments were received providing information on the funds received. Such reports shall specify:

    (i) The individual or entity from whom the funds originated and the amount of funds received; and

    (ii) If applicable:

    (A) The names of any individuals or entities providing related services to the U.S. person receiving payment in connection with authorized legal services, such as private investigators or expert witnesses;

    (B) A general description of the services provided; and

    (C) The amount of funds paid in connection with such services.

    (2) The reports, which must reference this section, are to be submitted to OFAC using one of the following methods:

    (i) Email (preferred method): [email protected]; or

    (ii) U.S. mail: OFAC Regulations Reports, Office of Foreign Assets Control, U.S. Department of the Treasury, 1500 Pennsylvania Avenue NW, Freedman's Bank Building, Washington, DC 20220.

    § 510.509 Emergency medical services.

    The provision and receipt of nonscheduled emergency medical services that are otherwise prohibited by this part or any further Executive orders relating to the national emergency declared in Executive Order 13466 of June 26, 2008 are authorized.

    § 510.510 North Korean mission to the United Nations and employees of the United Nations.

    (a) Except as provided in paragraph (c) of this section, the provision of goods or services in the United States to the official mission of the Government of North Korea to the United Nations (the mission) and payment for such goods or services are authorized, provided that:

    (1) The goods or services are for the conduct of the official business of the mission, or for personal use of the employees of the mission, their families, or persons forming part of their household, and are not for resale;

    (2) The transaction does not involve the purchase, sale, financing, or refinancing of real property;

    (3) The transaction does not involve the purchase, sale, financing, or refinancing of luxury goods;

    (4) The transaction is not otherwise prohibited by law; and

    (5) Funds transfers to or from the mission or the employees of the mission, their families, or persons forming part of their household are conducted through an account at a U.S. financial institution specifically licensed by OFAC.

    (b) Except as provided in paragraph (c) of this section, the provision of goods or services in the United States to the employees of the mission or of the United Nations, their families, or persons forming part of their household, and payment for such goods or services, are authorized, provided that:

    (1) The goods or services are for personal use of the employees of the mission or of the United Nations, their families, or persons forming part of their household, and are not for resale;

    (2) The transaction does not involve the purchase, sale, financing, or refinancing of luxury goods;

    (3) The transaction is not otherwise prohibited by law; and

    (4) Funds transfers to or from employees of the mission, their families, or persons forming part of their household are conducted through an account at a U.S. financial institution specifically licensed by OFAC.

    (c) This section does not authorize U.S. financial institutions to open and operate accounts for, or extend credit to, the mission of the Government of North Korea or to the employees of the mission, their families, or persons forming part of their household. U.S. financial institutions are required to obtain specific licenses to operate accounts for, or extend credit to, the mission or to the employees of the mission, their families, or persons forming part of their household.

    Note 1 to § 510.510:

    Nothing in this section authorizes the transfer of any property to the Government of North Korea, the Workers' Party of Korea, or any other person whose property and interests in property are blocked pursuant to § 510.201(a) other than the mission, nor does this section authorize any debit to a blocked account.

    § 510.511 Noncommercial, personal remittances.

    (a)(1) U.S. persons are authorized to send and receive and U.S. depository institutions, U.S.-registered brokers or dealers in securities, and U.S.-registered money transmitters are authorized to process transfers of funds to or from North Korea or for or on behalf of an individual ordinarily resident in North Korea, other than an individual whose property and interests in property are blocked pursuant to § 510.201(a), in cases in which the transfers involve noncommercial, personal remittances, up to a maximum of $5,000 per year.

    (2) Noncommercial, personal remittances do not include charitable donations of funds to or for the benefit of an entity or funds transfers for use in supporting or operating a business, including a family-owned business.

    (b) The transferring institutions identified in paragraph (a) of this section may rely on the originator of a funds transfer with regard to compliance with paragraph (a) of this section, provided that the transferring institution does not know or have reason to know that the funds transfer is not in compliance with paragraph (a) of this section.

    (c) An individual who is a U.S. person is authorized to carry funds as a noncommercial, personal remittance, as described in paragraph (a) of this section, to an individual in North Korea or ordinarily resident in North Korea, other than an individual whose property and interests in property are blocked pursuant to § 510.201(a), provided that the individual who is a U.S. person is carrying the funds on his or her behalf, not on behalf of another person.

    § 510.512 Certain services in support of nongovernmental organizations' activities.

    (a) Nongovernmental organizations are authorized to export or reexport services to North Korea that would otherwise be prohibited by this part in support of the following not-for-profit activities:

    (1) Activities to support humanitarian projects to meet basic human needs in North Korea, including drought, flood, and disaster relief; the distribution of food, medicine, and clothing intended to be used to relieve human suffering; the provision of shelter; the provision of clean water, sanitation, and hygiene assistance; the provision of health-related services; assistance for individuals with disabilities; and environmental programs;

    (2) Activities to support democracy building in North Korea, including rule of law, citizen participation, government accountability, universal human rights and fundamental freedoms, access to information, and civil society development projects;

    (3) Activities to support non-commercial development projects directly benefiting the North Korean people, including preventing infectious disease and promoting maternal/child health, sustainable agriculture, and clean water assistance; and

    (4) Activities to support environmental protection, including the preservation and protection of threatened or endangered species and the remediation of pollution or other environmental damage.

    (b) Nongovernmental organizations are authorized to export or reexport to North Korea from a third country food, as defined in paragraph (f)(1) of this section, and medicine, as defined in paragraph (f)(2) of this section, in support of the activities authorized in paragraph (a) of this section, provided that the food and medicine are not subject to the Export Administration Regulations (15 CFR parts 730 through 774) (EAR). For export or reexport by a U.S. person to North Korea from a third country of other items that are not subject to the EAR, a specific license from OFAC is required.

    Note 1 to paragraph (b):

    Pursuant to 15 CFR 746.4(a), a license from the Department of Commerce is required to export or reexport any item subject to the EAR to North Korea, except food and medicine designated as EAR99.

    Note 2 to paragraphs (a) and (b):

    The authorizations in paragraphs (a) and (b) of this section do not eliminate the need to comply with other applicable provisions of law, including any requirements of agencies other than the Department of the Treasury's Office of Foreign Assets Control. Such requirements include the EAR administered by the Department of Commerce and the International Traffic in Arms Regulations (22 CFR parts 120 through 130) administered by the Department of State.

    (c) U.S. depository institutions, U.S.-registered brokers or dealers in securities, and U.S.-registered money transmitters are authorized to process transfers of funds on behalf of U.S. or third-country nongovernmental organizations, including transfers of funds to or from North Korea, in support of the activities authorized by paragraphs (a) and (b) of this section.

    (d) Nongovernmental organizations are authorized to engage in transactions with the Government of North Korea that are necessary for the activities authorized by paragraphs (a) and (b) of this section, including payment of reasonable and customary taxes, fees, and import duties to, and purchase or receipt of permits, licenses, or public utility services from, the Government of North Korea.

    Note 3 to paragraph (d):

    This paragraph (d) only authorizes nongovernmental organizations to conduct limited transactions with the Government of North Korea that are necessary for the activities described in paragraphs (a) and (b) of this section, such as payment of reasonable and customary taxes and other fees. Partnerships and partnership agreements between nongovernmental organizations and the Government of North Korea or other blocked persons that are necessary for nongovernmental organizations to provide authorized services are not permitted without a specific license from OFAC.

    (e) Except as authorized in paragraph (d) of this section, this section does not authorize the exportation or reexportation of services to, charitable donations to or for the benefit of, or any other transactions involving the Government of North Korea, the Workers' Party of Korea, or any other person whose property and interests in property are blocked pursuant to § 510.201(a). Specific licenses may be issued on a case-by-case basis for these purposes.

    (f)(1) For purposes of this section, the term food means items that are consumed by and provide nutrition to humans and animals, and seeds, with the exception of castor bean seeds, that germinate into items that will be consumed by and provide nutrition to humans and animals. Examples of “food” include processed or unprocessed food items for human consumption, feed, vitamins, minerals, food additives, dietary supplements, and containers of drinking water. The term food does not include livestock, cigarettes, alcoholic beverages, gum, castor beans, castor bean seeds, certified pathogen-free eggs (unfertilized or fertilized), dried egg albumin, live animals (excluding cattle embryos), Rosary/Jequirity peas, non-food-grade gelatin powder, peptones and their derivatives, super absorbent polymers, western red cedar, and all fertilizers.

    (2) The term medicine means an item that falls within the definition of the term “drug” in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321) and that, in the case of an item subject to the EAR, is designated as EAR99 or, in the case of an item not subject to the EAR, is not listed under any multilateral export control regime.

    § 510.513 Official business of the Federal Government.

    All transactions otherwise prohibited by the provisions of this part, other than §§ 510.201(a)(1), (a)(3)(iv) through (vi), and (d), 510.206, and 510.208 through 510.211, that are for the conduct of the official business of the Federal Government by employees, grantees, or contractors thereof are authorized.

    Note 1 to § 510.513:

    Section 510.213(e) exempts transactions for the conduct of the official business of the Federal Government by employees, grantees, or contractors thereof to the extent such transactions are subject to the prohibitions contained in §§ 510.201(a)(1), (a)(3)(iv) through (vi), and (d), 510.206, and 510.208 through 510.211.

    § 510.514 Official activities of international organizations.

    All transactions and activities otherwise prohibited by the provisions of this part, other than §§ 510.201(a)(1), (a)(3)(iv) through (vi), and (d), 510.206, and 510.208 through 510.211, that are for the conduct of the official business of the United Nations and its Specialized Agencies, Programmes, Funds, and Related Organizations by employees, contractors, or grantees thereof are authorized.

    Note 1 to § 510.514:

    For an organizational chart listing the Specialized Agencies, Programmes, Funds, and Related Organizations of the United Nations, see the following page on the United Nations website: http://www.unsceb.org/directory.

    Note 2 to § 510.514:

    Section 510.213(e) exempts transactions for the conduct of the official business of the United Nations by employees, grantees, or contractors thereof to the extent such transactions are subject to the prohibitions contained in §§ 510.201(a)(1), (a)(3)(iv) through (vi), and (d), 510.206, and 510.208 through 510.211.

    Note 3 to § 510.514:

    Separate authorization from the Department of Commerce may be required for the export or reexport of items related to such transactions and activities, if the items are subject to the Export Administration Regulations, 15 CFR parts 730 through 744.

    § 510.515 Third-country diplomatic and consular funds transfers.

    (a) Except as provided in paragraph (b) of this section, U.S. depository institutions, U.S.-registered brokers or dealers in securities, and U.S.-registered money transmitters are authorized to process funds transfers necessary for the operating expenses or other official business of third-country diplomatic or consular missions in North Korea.

    (b) This section does not authorize funds transfers involving accounts blocked pursuant to § 510.201(d).

    § 510.516 Transactions related to telecommunications and mail.

    (a)(1) Except as provided in paragraph (a)(2) of this section, all transactions necessary for the receipt and transmission of telecommunications involving North Korea are authorized.

    (2) This section does not authorize:

    (i) The provision, sale, or lease of telecommunications equipment or technology; or

    (ii) The provision, sale, or lease of capacity on telecommunications transmission facilities (such as satellite or terrestrial network connectivity).

    (b) All transactions of common carriers incident to the receipt or transmission of mail and packages between the United States and North Korea are authorized provided that the importation or exportation of such mail and packages is exempt from or authorized pursuant to this part.

    § 510.517 Certain transactions related to patents, trademarks, copyrights, and other intellectual property.

    (a) All of the following transactions in connection with a patent, trademark, copyright, or other form of intellectual property protection in the United States or North Korea are authorized, including exportation of services to North Korea, payment for such services, and payment to persons in North Korea directly connected to such intellectual property protection:

    (1) The filing and prosecution of any application to obtain a patent, trademark, copyright, or other form of intellectual property protection;

    (2) The receipt of a patent, trademark, copyright, or other form of intellectual property protection;

    (3) The renewal or maintenance of a patent, trademark, copyright, or other form of intellectual property protection; and

    (4) The filing and prosecution of any opposition or infringement proceeding with respect to a patent, trademark, copyright, or other form of intellectual property protection, or the entrance of a defense to any such proceeding.

    (b) This section authorizes the payment of fees to the U.S. Government or the Government of North Korea, and of the reasonable and customary fees and charges to attorneys or representatives within the United States or North Korea, in connection with the transactions authorized in paragraph (a) of this section, except that payment effected pursuant to the terms of this paragraph (b) may not be made from a blocked account.

    § 510.518 Calling of certain vessels and landing of certain aircraft.

    (a) Vessels and aircraft in which a foreign person has an interest that have called or landed at a port or place in North Korea within the previous 180 days, and vessels in which a foreign person has an interest that have engaged in a ship-to-ship transfer with such a vessel within the previous 180 days, are authorized to call or land at a port or place in the United States in the following circumstances only:

    (1) The vessel is in distress and seeks refuge in the United States;

    (2) The vessel's call at a port in North Korea was due solely to its distress and the resulting need to seek refuge;

    (3) The aircraft is engaging in a nontraffic stop or an emergency landing in the United States; or

    (4) The aircraft's landing in North Korea was due solely to an emergency landing.

    (b) For purposes of this section, a nontraffic stop includes a stop for any purpose other than taking on or discharging cargo, passengers, or mail.

    § 510.519 Transactions related to closing a correspondent or payable-through account.

    (a) During the 10-day period beginning on the effective date of the prohibition in § 510.210 on the opening or maintaining of a correspondent account or a payable-through account for a foreign financial institution listed on the Correspondent Account or Payable-Through Account Sanctions (CAPTA) List, U.S. financial institutions that maintain correspondent accounts or payable-through accounts for the foreign financial institution are authorized to:

    (1) Process only those transactions through the account, or permit the foreign financial institution to execute only those transactions through the account, that are for the purpose of, and necessary for, closing the account; and

    (2) Transfer the funds remaining in the correspondent account or the payable-through account to an account of the foreign financial institution located outside of the United States and close the correspondent account or the payable-through account.

    (b) A report must be filed with OFAC within 30 days of the closure of an account, providing full details on the closing of each correspondent account or payable-through account maintained by a U.S. financial institution for a foreign financial institution whose name is added to the CAPTA List. Such report must include complete information on the closing of the account and on all transactions processed or executed through the account pursuant to this section, including the account outside of the United States to which funds remaining in the account were transferred. The reports, which must reference this section, are to be submitted to OFAC using one of the following methods:

    (1) Email (preferred method): [email protected]; or

    (2) U.S. mail: Attention: Office of Compliance and Enforcement, Office of Foreign Assets Control, U.S. Department of the Treasury, 1500 Pennsylvania Avenue NW, Freedman's Bank Building, Washington, DC 20220.

    (c) Specific licenses may be issued on a case-by-case basis to authorize transactions outside the scope or time period authorized in paragraph (a) of this section by a U.S. financial institution with respect to a correspondent account or a payable-through account maintained by the U.S. financial institution for a foreign financial institution whose name is added to the CAPTA List. License applications should be filed in conformance with § 501.801 of the Reporting, Procedures and Penalties Regulations, 31 CFR part 501.

    (d) Nothing in this section authorizes the opening of a correspondent account or a payable-through account for a foreign financial institution whose name appears on the CAPTA List.

    Note 1 to § 510.519:

    This section does not authorize a U.S. financial institution to unblock property or interests in property, or to engage in any transaction or dealing in property or interests in property, blocked pursuant to any other part of this chapter in the process of closing a correspondent account or a payable-through account for a foreign financial institution whose name has been added to the CAPTA List. See § 510.101.

    Subpart F—Reports
    § 510.601 Records and reports.

    For provisions relating to required records and reports, see part 501, subpart C, of this chapter. Recordkeeping and reporting requirements imposed by part 501 of this chapter with respect to the prohibitions contained in this part are considered requirements arising pursuant to this part.

    Subpart G—Penalties and Finding of Violation
    § 510.701 Penalties.

    (a) Section 206 of the International Emergency Economic Powers Act (50 U.S.C. 1705) (IEEPA) is applicable to violations of the provisions of any license, ruling, regulation, order, directive, or instruction issued by or pursuant to the direction or authorization of the Secretary of the Treasury pursuant to this part or otherwise under IEEPA.

    (1) A civil penalty not to exceed the amount set forth in section 206 of IEEPA may be imposed on any person who violates, attempts to violate, conspires to violate, or causes a violation of any license, order, regulation, or prohibition issued under IEEPA.

    Note 1 to paragraph (a)(1):

    IEEPA provides for a maximum civil penalty not to exceed the greater of $295,141 or an amount that is twice the amount of the transaction that is the basis of the violation with respect to which the penalty is imposed.

    (2) A person who willfully commits, willfully attempts to commit, willfully conspires to commit, or aids or abets in the commission of a violation of any license, order, regulation, or prohibition may, upon conviction, be fined not more than $1,000,000, or if a natural person, be imprisoned for not more than 20 years, or both.

    (b)(1) The civil penalties provided in IEEPA are subject to adjustment pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410, as amended, 28 U.S.C. 2461 note).

    (2) The criminal penalties provided in IEEPA are subject to adjustment pursuant to 18 U.S.C. 3571.

    (c) Pursuant to 18 U.S.C. 1001, whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the government of the United States, knowingly and willfully falsifies, conceals, or covers up by any trick, scheme, or device a material fact; or makes any materially false, fictitious, or fraudulent statement or representation; or makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry shall be fined under title 18, United States Code, imprisoned, or both.

    (d) Section 5 of the United Nations Participation Act, as amended (22 U.S.C. 287c(b)) (UNPA), provides that any person who willfully violates or evades or attempts to violate or evade any order, rule, or regulation issued by the President pursuant to the authority granted in that section, upon conviction, shall be fined not more than $10,000 and, if a natural person, may also be imprisoned for not more than 10 years; and the officer, director, or agent of any corporation who knowingly participates in such violation or evasion shall be punished by a like fine, imprisonment, or both and any property, funds, securities, papers, or other articles or documents, or any vessel, together with her tackle, apparel, furniture, and equipment, or vehicle, or aircraft, concerned in such violation shall be forfeited to the United States.

    (e) Violations involving transactions described at section 203(b)(1), (3), and (4) of IEEPA shall be subject only to the penalties set forth in paragraph (d) of this section.

    (f) Violations of this part may also be subject to other applicable laws.

    § 510.702 Pre-Penalty Notice; settlement.

    (a) When required. If OFAC has reason to believe that there has occurred a violation of any provision of this part or a violation of the provisions of any license, ruling, regulation, order, directive, or instruction issued by or pursuant to the direction or authorization of the Secretary of the Treasury pursuant to this part or otherwise under the International Emergency Economic Powers Act (50 U.S.C. 1705) (IEEPA) and determines that a civil monetary penalty is warranted, OFAC will issue a Pre-Penalty Notice informing the alleged violator of the agency's intent to impose a monetary penalty. A Pre-Penalty Notice shall be in writing. The Pre-Penalty Notice may be issued whether or not another agency has taken any action with respect to the matter. For a description of the contents of a Pre-Penalty Notice, see appendix A to part 501 of this chapter.

    (b) Response—(1) Right to respond. An alleged violator has the right to respond to a Pre-Penalty Notice by making a written presentation to OFAC. For a description of the information that should be included in such a response, see appendix A to part 501 of this chapter.

    (2) Deadline for response. A response to a Pre-Penalty Notice must be made within 30 days as set forth in paragraphs (b)(2)(i) and (ii) of this section. The failure to submit a response within 30 days shall be deemed to be a waiver of the right to respond.

    (i) Computation of time for response. A response to a Pre-Penalty Notice must be postmarked or date-stamped by the U.S. Postal Service (or foreign postal service, if mailed abroad) or courier service provider (if transmitted to OFAC by courier) on or before the 30th day after the postmark date on the envelope in which the Pre-Penalty Notice was mailed. If the Pre-Penalty Notice was personally delivered by a non-U.S. Postal Service agent authorized by OFAC, a response must be postmarked or date-stamped on or before the 30th day after the date of delivery.

    (ii) Extensions of time for response. If a due date falls on a federal holiday or weekend, that due date is extended to include the following business day. Any other extensions of time will be granted, at the discretion of OFAC, only upon specific request to OFAC.

    (3) Form and method of response. A response to a Pre-Penalty Notice need not be in any particular form, but it must be typewritten and signed by the alleged violator or a representative thereof, contain information sufficient to indicate that it is in response to the Pre-Penalty Notice, and include the OFAC identification number listed on the Pre-Penalty Notice. A copy of the written response may be sent by facsimile, but the original also must be sent to OFAC's Office of Compliance and Enforcement by mail or courier and must be postmarked or date-stamped in accordance with paragraph (b)(2) of this section.

    (c) Settlement. Settlement discussion may be initiated by OFAC, the alleged violator, or the alleged violator's authorized representative. For a description of practices with respect to settlement, see appendix A to part 501 of this chapter.

    (d) Guidelines. Guidelines for the imposition or settlement of civil penalties by OFAC are contained in appendix A to part 501 of this chapter.

    (e) Representation. A representative of the alleged violator may act on behalf of the alleged violator, but any oral communication with OFAC prior to a written submission regarding the specific allegations contained in the Pre-Penalty Notice must be preceded by a written letter of representation, unless the Pre-Penalty Notice was served upon the alleged violator in care of the representative.

    § 510.703 Penalty imposition.

    If, after considering any written response to the Pre-Penalty Notice and any relevant facts, OFAC determines that there was a violation by the alleged violator named in the Pre-Penalty Notice and that a civil monetary penalty is appropriate, OFAC may issue a Penalty Notice to the violator containing a determination of the violation and the imposition of the monetary penalty. For additional details concerning issuance of a Penalty Notice, see appendix A to part 501 of this chapter. The issuance of the Penalty Notice shall constitute final agency action. The violator has the right to seek judicial review of that final agency action in federal district court.

    § 510.704 Administrative collection; referral to United States Department of Justice.

    In the event that the violator does not pay the penalty imposed pursuant to this part or make payment arrangements acceptable to OFAC, the matter may be referred for administrative collection measures by the Department of the Treasury or to the United States Department of Justice for appropriate action to recover the penalty in a civil suit in a federal district court.

    § 510.705 Finding of Violation.

    (a) When issued. (1) OFAC may issue an initial Finding of Violation that identifies a violation if OFAC:

    (i) Determines that there has occurred a violation of any provision of this part, or a violation of the provisions of any license, ruling, regulation, order, directive, or instruction issued by or pursuant to the direction or authorization of the Secretary of the Treasury pursuant to this part or otherwise under the International Emergency Economic Powers Act;

    (ii) Considers it important to document the occurrence of a violation; and

    (iii) Based on the Guidelines contained in appendix A to part 501 of this chapter, concludes that an administrative response is warranted but that a civil monetary penalty is not the most appropriate response.

    (2) An initial Finding of Violation shall be in writing and may be issued whether or not another agency has taken any action with respect to the matter. For additional details concerning issuance of a Finding of Violation, see appendix A to part 501 of this chapter.

    (b) Response—(1) Right to respond. An alleged violator has the right to contest an initial Finding of Violation by providing a written response to OFAC.

    (2) Deadline for response; default determination. A response to an initial Finding of Violation must be made within 30 days as set forth in paragraphs (b)(2)(i) and (ii) of this section. The failure to submit a response within 30 days shall be deemed to be a waiver of the right to respond, and the initial Finding of Violation will become final and will constitute final agency action. The violator has the right to seek judicial review of that final agency action in federal district court.

    (i) Computation of time for response. A response to an initial Finding of Violation must be postmarked or date-stamped by the U.S. Postal Service (or foreign postal service, if mailed abroad) or courier service provider (if transmitted to OFAC by courier) on or before the 30th day after the postmark date on the envelope in which the initial Finding of Violation was served. If the initial Finding of Violation was personally delivered by a non-U.S. Postal Service agent authorized by OFAC, a response must be postmarked or date-stamped on or before the 30th day after the date of delivery.

    (ii) Extensions of time for response. If a due date falls on a federal holiday or weekend, that due date is extended to include the following business day. Any other extensions of time will be granted, at the discretion of OFAC, only upon specific request to OFAC.

    (3) Form and method of response. A response to an initial Finding of Violation need not be in any particular form, but it must be typewritten and signed by the alleged violator or a representative thereof, contain information sufficient to indicate that it is in response to the initial Finding of Violation, and include the OFAC identification number listed on the initial Finding of Violation. A copy of the written response may be sent by facsimile, but the original also must be sent to OFAC by mail or courier and must be postmarked or date-stamped in accordance with paragraph (b)(2) of this section.

    (4) Information that should be included in response. Any response should set forth in detail why the alleged violator either believes that a violation of the regulations did not occur and/or why a Finding of Violation is otherwise unwarranted under the circumstances, with reference to the General Factors Affecting Administrative Action set forth in the Guidelines contained in appendix A to part 501. The response should include all documentary or other evidence available to the alleged violator that supports the arguments set forth in the response. OFAC will consider all relevant materials submitted in the response.

    (c) Determination—(1) Determination that a Finding of Violation is warranted. If, after considering the response, OFAC determines that a final Finding of Violation should be issued, OFAC will issue a final Finding of Violation that will inform the violator of its decision. A final Finding of Violation shall constitute final agency action. The violator has the right to seek judicial review of that final agency action in federal district court.

    (2) Determination that a Finding of Violation is not warranted. If, after considering the response, OFAC determines a Finding of Violation is not warranted, then OFAC will inform the alleged violator of its decision not to issue a final Finding of Violation.

    Note 1 to paragraph (c)(2):

    A determination by OFAC that a final Finding of Violation is not warranted does not preclude OFAC from pursuing other enforcement actions consistent with the Guidelines contained in appendix A to part 501 of this chapter.

    (d) Representation. A representative of the alleged violator may act on behalf of the alleged violator, but any oral communication with OFAC prior to a written submission regarding the specific alleged violations contained in the initial Finding of Violation must be preceded by a written letter of representation, unless the initial Finding of Violation was served upon the alleged violator in care of the representative.

    Subpart H—Procedures
    § 510.801 Procedures.

    For license application procedures and procedures relating to amendments, modifications, or revocations of licenses; administrative decisions; rulemaking; and requests for documents pursuant to the Freedom of Information and Privacy Acts (5 U.S.C. 552 and 552a), see part 501, subpart E, of this chapter.

    § 510.802 Delegation of certain authorities of the Secretary of the Treasury.

    Any action that the Secretary of the Treasury is authorized to take pursuant to Executive Order 13466 of June 26, 2008, Executive Order 13551 of August 30, 2010, Executive Order 13570 of April 18, 2011, Executive Order 13687 of January 2, 2015, Executive Order 13722 of March 15, 2016, Executive Order 13810 of September 20, 2017, and any further Executive orders relating to the national emergency declared in Executive Order 13466 of June 26, 2008, and any action that the Secretary of the Treasury is authorized to take pursuant to Presidential Memorandum of May 18, 2016: Delegation of Certain Functions and Authorities under the North Korea Policy Enhancement Act of 2016 and Presidential Memorandum of September 29, 2017: Delegation of Certain Functions and Authorities under the Countering America's Adversaries Through Sanctions Act of 2017, the Ukraine Freedom Support Act of 2014, and the Support for the Sovereignty, Integrity, Democracy, and Economic Stability of Ukraine Act of 2014, may be taken by the Director of OFAC or by any other person to whom the Secretary of the Treasury has delegated authority so to act.

    Subpart I—Paperwork Reduction Act
    § 510.901 Paperwork Reduction Act notice.

    For approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) of information collections relating to recordkeeping and reporting requirements, licensing procedures, and other procedures, see § 501.901 of this chapter. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB.

    Dated: February 22, 2018. Andrea Gacki, Acting Director, Office of Foreign Assets Control. Approved: February 22, 2018. Sigal P. Mandelker, Under Secretary, Office of Terrorism and Financial Intelligence, Department of the Treasury.
    [FR Doc. 2018-04113 Filed 3-1-18; 8:45 am] BILLING CODE 4810-AL-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 117 [Docket No. USCG-2018-0147] Drawbridge Operation Regulation; Nanticoke River, Seaford, DE AGENCY:

    Coast Guard, DHS.

    ACTION:

    Notice of deviation from drawbridge regulation.

    SUMMARY:

    The Coast Guard has issued a temporary deviation from the operating schedule that governs the SR 13 (Market Street) Bridge across Nanticoke River, mile 39.6, in Seaford, DE. The deviation is necessary to facilitate placement of an emergency temporary public water line on the bridge. This deviation allows the bridge to remain in the closed-to-navigation position.

    DATES:

    This deviation is effective without actual notice from March 5, 2018 through noon on March 23, 2018. For purposes of enforcement, actual notice will be used from noon on February 9, 2018, until March 5, 2018.

    ADDRESSES:

    The docket for this deviation, [USCG-2018-0147] is available at http://www.regulations.gov. Type the docket number in the “SEARCH” box and click “SEARCH”. Click on Open Docket Folder on the line associated with this deviation.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions on this temporary deviation, call or email Mr. Hal R. Pitts, Bridge Administration Branch Fifth District, Coast Guard, telephone 757-398-6222, email [email protected]

    SUPPLEMENTARY INFORMATION:

    The Delaware Department of Transportation, who owns and operates the SR 13 (Market Street) Bridge across Nanticoke River, mile 39.6, in Seaford, DE, has requested a temporary deviation from the current operating regulation. This deviation is necessary to facilitate placement of an emergency temporary public water line on the bridge due to contamination of the town of Blades, DE water system. The bridge is a bascule bridge and has a vertical clearance in the closed-to-navigation position of 3 feet above mean high water.

    The current operating schedule is set out in 33 CFR 117.243(b). Under this temporary deviation, the bridge will remain in the closed-to-navigation position from noon on February 9, 2018, through noon on March 23, 2018. The Nanticoke River in the location of the bridge is predominantly used by small recreational vessels. The bridge has an average of one or two bridge openings per month during the time period of this temporary deviation. The Coast Guard has carefully considered the nature and volume of vessel traffic on the waterway, in relation to the emergency management purpose for maintaining the bridge in the closed-to-navigation position, in publishing this temporary deviation.

    Vessels able to pass through the bridge in the closed-to-navigation position may do so at any time. The bridge will not be able to open for an emergency and there is no immediate alternate route for vessels to pass. The Coast Guard will also inform the users of the waterway through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge so that vessel operators can arrange their transits to minimize any impact caused by the temporary deviation.

    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.

    Dated: February 22, 2018. Hal R. Pitts, Bridge Program Manager, Fifth Coast Guard District.
    [FR Doc. 2018-04342 Filed 3-2-18; 8:45 am] BILLING CODE 9110-04-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket No. USCG-2018-0119] RIN 1625-AA00 Safety Zone: St. Francis Yacht Club Fireworks, San Francisco, CA AGENCY:

    Coast Guard, DHS.

    ACTION:

    Temporary final rule.

    SUMMARY:

    The Coast Guard is establishing a temporary moving safety zone in the navigable waters of the San Francisco Bay near St. Francis Yacht Club in support of the St. Francis Yacht Club Fireworks Display on March 5, 2018. This safety zone is established to ensure the safety of participants and spectators from the dangers associated with pyrotechnics. Unauthorized persons or vessels are prohibited from entering into, transiting through, or remaining in the safety zone without permission of the Captain of the Port or their designated representative.

    DATES:

    This rule is effective from 8 a.m. to 10:30 p.m. on March 5, 2018.

    ADDRESSES:

    To view documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov, type USCG-2018-0119 in the “SEARCH” box and click “SEARCH.” Click on Open Docket Folder on the line associated with this rulemaking.

    FOR FURTHER INFORMATION CONTACT:

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

    SUPPLEMENTARY INFORMATION:

    I. Table of Acronyms APA Administrative Procedure Act COTP U.S. Coast Guard Captain on the Port DHS Department of Homeland Security FR Federal Register NOAA National Oceanic and Atmospheric Administration NPRM Notice of Proposed Rulemaking PATCOM U.S. Coast Guard Patrol Commander U.S.C. United States Code II. Background Information and Regulatory History

    The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule. Since the Coast Guard received notice of this event on February 9, 2018, notice and comment procedures would be impracticable in this instance.

    For similar reasons as those stated above, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register.

    III. Legal Authority and Need for Rule

    The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port (COTP) San Francisco has determined that potential hazards associated with the planned fireworks display on March 5, 2018, will be a safety concern for anyone within a 100-foot radius of the fireworks barge and anyone within a 560-foot radius of the fireworks firing site. This rule is needed to protect spectators, vessels, and other property from hazards associated with pyrotechnics.

    IV. Discussion of the Rule

    This rule establishes a temporary safety zone during the loading and transit of the fireworks barge, until after completion of the fireworks display. During the loading of the pyrotechnics onto the fireworks barge, scheduled to take place from 8:00 a.m. to 1:00 p.m. on March 5, 2018, at Pier 50 in San Francisco, CA, the safety zone will encompass the navigable waters around and under the fireworks barge within a radius of 100 feet.

    The fireworks barge will remain at Pier 50 until the start of its transit to the display location. Towing of the barge from Pier 50 to the display location is scheduled to take place from 6:00 p.m. to 6:30 p.m. on March 5, 2018, where it will remain until the conclusion of the fireworks display.

    At 9:10 p.m. on March 5, 2018, 30 minutes prior to the commencement of the 18-minute fireworks display, the safety zone will increase in size and encompass the navigable water around and under the fireworks barge within a radius of 560 feet in approximate position 37°48′37″ N, 122°26′49″ W (NAD 83) for the St. Francis Yacht Club Fireworks Display. The safety zone shall terminate at 10:30 p.m. on March 5, 2018.

    The effect of the temporary safety zone is to restrict navigation in the vicinity of the fireworks loading, transit, and firing site. Except for persons or vessels authorized by the COTP or the COTP's designated representative, no person or vessel may enter or remain in the restricted areas. These regulations are needed to keep spectators and vessels away from the immediate vicinity of the fireworks firing sites to ensure the safety of participants, spectators, and transiting vessels.

    V. Regulatory Analyses

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

    A. Regulatory Planning and Review

    E.O.s 12866 (“Regulatory Planning and Review”) and 13563 (“Improving Regulation and Regulatory Review”) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits 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. Executive Order 13771 (“Reducing Regulation and Controlling Regulatory Costs”), directs agencies to reduce regulation and control regulatory costs and provides that “for every one new regulation issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled through a budgeting process.”

    We expect the economic impact of this rule will not rise to the level of necessitating a full Regulatory Evaluation. This regulatory action determination is based on the size, location, duration of the safety zone. The size of the zone is the minimum necessary to provide adequate protection for the waterways users, adjoining areas, and the public. This zone is of limited duration and is the minimum necessary to provide adequate protection for the waterways users, adjoining areas, and the public. The Coast Guard will issue Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone and the rule allows vessels to seek permission to enter the zone.

    B. Impact on Small Entities

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

    While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator. Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

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

    C. Collection of Information

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

    D. Federalism and Indian Tribal Governments

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

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

    E. Unfunded Mandates Reform Act

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

    F. Environment

    We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded from further review under paragraph L60(c) of Section L of the Department of Homeland Security Instruction Manual 023-01-001-01 (series). An environmental analysis checklist supporting this determination and Record of Environmental Consideration (REC) are available in the docket where indicated under ADDRESSES. We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

    G. Protest Activities

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

    List of Subjects in 33 CFR Part 165

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

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

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

    2. Add § 165.T11-916 to read as follows:
    § 165.T11-916 Safety Zone; St. Francis Yacht Club Fireworks Display, San Francisco Bay, San Francisco, CA.

    (a) Location. The following area is a safety zone: All navigable waters of the San Francisco Bay within 100 feet of the fireworks barge during loading at Pier 50, as well as transit to and arrival at St. Francis Yacht Club. The safety zone will expand to all navigable waters around and under the fireworks barge within a radius of 560 feet in approximate position 37°48′37″ N, 122°26′49″ W (NAD 83) 30 minutes prior to the start of the 18 minute fireworks display, scheduled to begin at 9:40 p.m. on March 5.

    (b) Enforcement period. The zone described in paragraph (a) of this section will be enforced from 8 a.m. until approximately 10:30 p.m. March 5, 2018. The Captain of the Port San Francisco (COTP) will notify the maritime community of periods during which these zones will be enforced via Broadcast Notice to Mariners.

    (c) Definitions. As used in this section, “designated representative” means a Coast Guard Patrol Commander, including a Coast Guard coxswain, petty officer, or other officer on a Coast Guard vessel or a Federal, State, or local officer designated by or assisting the COTP in the enforcement of the safety zone.

    (d) Regulations. (1) Under the general regulations in 33 CFR part 165, subpart C, entry into, transiting or anchoring within this safety zone is prohibited unless authorized by the COTP or the COTP's designated representative.

    (2) The safety zone is closed to all vessel traffic, except as may be permitted by the COTP or a designated representative.

    (3) Vessel operators desiring to enter or operate within the safety zone must contact the COTP or a designated representative to obtain permission to do so. Vessel operators given permission to enter or operate in the safety zone must comply with all directions given to them by the COTP or a designated representative. Persons and vessels may request permission to enter the safety zones on VHF-23A or through the 24-hour Command Center at telephone (415) 399-3547.

    Dated: February 23, 2018. Patrick S. Nelson, Captain, U.S. Coast Guard, Alternate Captain of the Port, San Francisco.
    [FR Doc. 2018-04363 Filed 3-2-18; 8:45 am] BILLING CODE 9110-04-P
    DEPARTMENT OF EDUCATION 34 CFR Part 230 RIN 1855-AA15 Innovation for Teacher Quality; Troops-to-Teachers Program AGENCY:

    Office of Innovation and Improvement, Department of Education.

    ACTION:

    Final regulations.

    SUMMARY:

    The Department of Education (Department) is rescinding its Troops-to-Teachers (TTT) regulations because that program has been transferred to the Department of Defense (DoD) and is no longer administered or managed by the Department. Therefore, the associated regulations are outdated and unnecessary.

    DATES:

    This action is effective March 5, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Margarita L. Meléndez, U.S. Department of Education, 400 Maryland Avenue SW, Room 4W115, Washington, DC 20202. Telephone: (202) 260-3548 or by email: [email protected]

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

    SUPPLEMENTARY INFORMATION:

    The TTT program was established in 1994 to assist transitioning service members in beginning new careers as school teachers. The program provides counseling and referral services for participants to help them meet education and licensing requirements to teach and subsequently helps them secure a teaching position.

    On February 24, 2017, President Trump signed Executive Order 13777, “Enforcing the Regulatory Reform Agenda,” which established a Federal policy “to alleviate unnecessary regulatory burdens” on the American people. Section 3(a) of the Executive order directed each Federal agency to establish a Regulatory Reform Task Force, the duty of which is to evaluate existing regulations and “make recommendations to the agency head regarding their repeal, replacement, or modification.” Section 3(d)(ii) of the Executive order specifically instructs the Task Force to identify regulations that are “are outdated, unnecessary, or ineffective.” The Department is undertaking this regulatory action consistent with that objective.

    The TTT program was jointly administered by the Department of Education and the Department of Defense Activity for Non-Traditional Education Support (DANTES) until fiscal year 2013, when full responsibility and authority for the TTT program was transferred from the Secretary of Education to the Secretary of Defense by the National Defense Authorization Act of 2013 (Pub. L. 112-239). For this reason, the Troops-to-Teachers program regulations in 34 CFR part 230 are obsolete and we are proposing to rescind those regulations.

    Waiver of Proposed Rulemaking and Delayed Effective Date

    Under the Administrative Procedure Act (5 U.S.C. 553) (APA) the Department generally offers interested parties the opportunity to comment on proposed regulations. However, this regulatory action merely rescinds regulations that have become obsolete due to statutory changes, and does not involve any exercise of discretion on the part of the Department. This regulatory action adopts no new regulations and does not establish or affect substantive policy. Therefore, under 5 U.S.C. 553(b)(B), the Secretary has determined that obtaining public comment on the removal of the regulations in 34 CFR part 230 is unnecessary.

    The APA also generally requires that regulations be published at least 30 days before their effective date, unless the agency has good cause to implement its regulations sooner (5 U.S.C. 553(d)(3)). Again, because this final regulatory action merely removes outdated regulations that are unnecessary because administration of the affected program has been transferred to another agency, the Secretary is also waiving the 30-day delay in the effective date of these regulatory changes under 5 U.S.C. 553(d)(3).

    Executive Orders 12866, 13563, and 13771 Regulatory Impact Analysis

    Under Executive Order 12866, the Secretary must determine whether this regulatory action is “significant” and, therefore, subject to the requirements of the Executive order and subject to review by the Office of Management and Budget (OMB). Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action likely to result in a rule that may—

    (1) Have an annual effect on the economy of $100 million or more, or adversely affect a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or Tribal governments or communities in a material way (also referred to as an “economically significant” rule);

    (2) Create serious inconsistency or otherwise interfere with an action taken or planned by another agency;

    (3) Materially alter the budgetary impacts of entitlement 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 stated in the Executive order.

    This final regulatory action is not a significant regulatory action subject to review by OMB under section 3(f) of Executive Order 12866.

    We have also reviewed these regulations under Executive Order 13563, which supplements and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, Executive Order 13563 requires that an agency—

    (1) Propose or adopt regulations only on a reasoned determination that their benefits justify their costs (recognizing that some benefits and costs are difficult to quantify);

    (2) Tailor its regulations to impose the least burden on society, consistent with obtaining regulatory objectives and taking into account—among other things and to the extent practicable—the costs of cumulative regulations;

    (3) In choosing among alternative regulatory approaches, select those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity);

    (4) To the extent feasible, specify performance objectives, rather than the behavior or manner of compliance a regulated entity must adopt; and

    (5) Identify and assess available alternatives to direct regulation, including economic incentives—such as user fees or marketable permits—to encourage the desired behavior, or provide information that enables the public to make choices.

    Executive Order 13563 also requires an agency “to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible.” The Office of Information and Regulatory Affairs of OMB has emphasized that these techniques may include “identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes.”

    We are issuing this final regulatory action only on a reasoned determination that its benefits justify its costs. In choosing among alternative regulatory approaches, we selected those approaches that maximize net benefits. Based on the analysis that follows, the Department believes that these final regulations are consistent with the principles in Executive Order 13563.

    We also have determined that this regulatory action does not unduly interfere with State, local, and Tribal governments in the exercise of their governmental functions.

    In accordance with both Executive orders, the Department has assessed the potential costs and benefits, both quantitative and qualitative, of this regulatory action. Because the rescission of these regulations comports with statutory changes that have already taken effect, this action will not result in any additional costs or benefits.

    Under Executive Order 13771, for each new regulation that the Department proposes for notice and comment or otherwise promulgates that is a significant regulatory action under Executive Order 12866 and that imposes total costs greater than zero, it must identify two deregulatory actions. For FY 2018, any new incremental costs associated with a new regulation must be fully offset by the elimination of existing costs through deregulatory actions. Because this final rule is not a significant regulatory action, the requirement to offset new regulations in Executive Order 13771 does not apply.

    Regulatory Flexibility Act Certification

    The Secretary certifies that these regulations will not have a significant economic impact on a substantial number of small entities. As detailed above, this regulatory action merely removes outdated regulations from the Code of Federal Regulations and imposes no costs.

    Paperwork Reduction Act of 1995

    These regulations do not contain any information collection requirements.

    Intergovernmental Review

    This program is subject to Executive Order 12372 and the regulations in 34 CFR part 79. One of the objectives of the Executive order is to foster an intergovernmental partnership and a strengthened federalism. The Executive order relies on processes developed by State and local governments for coordination and review of proposed Federal financial assistance.

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

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

    List of Subjects in 34 CFR Part 230

    Armed forces, Education, Elementary and secondary education, Teachers, Vocational education.

    Dated: February 28, 2018. Margo Anderson, Acting Assistant Deputy Secretary for Innovation and Improvement. PART 230—[REMOVED] For the reasons discussed in the preamble, and under the authority of section 414 of the Department of Education Organization Act, 20 U.S.C. 3474, the Secretary removes 34 CFR part 230.
    [FR Doc. 2018-04437 Filed 3-2-18; 8:45 am] BILLING CODE 4000-01-P
    DEPARTMENT OF VETERANS AFFAIRS 38 CFR Part 17 RIN 2900-AQ01 Reimbursement of Qualifying Adoption Expenses for Certain Veterans AGENCY:

    Department of Veterans Affairs.

    ACTION:

    Interim final rule.

    SUMMARY:

    The Department of Veterans Affairs (VA) amends its regulation to provide for reimbursement of qualifying adoption expenses incurred by a veteran with a service-connected disability that results in the inability of the veteran to procreate without the use of fertility treatment. Under the Continuing Appropriations and Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2017, and Zika Response and Preparedness Act, VA may use funds appropriated or otherwise made available to VA for the “Medical Services” account to provide adoption reimbursement to these veterans. Under the law, reimbursement may be for the adoption-related expenses for an adoption that is finalized after the date of the enactment of this Act under the same terms as apply under the adoption reimbursement program of the Department of Defense (DoD), as authorized in DoD Instruction 1341.09, including the reimbursement limits and requirements set forth in such instruction. This rulemaking implements the new adoption reimbursement benefit for covered veterans.

    DATES:

    Effective date: This rule is effective on March 5, 2018.

    Comment date: Comments must be received on or before May 4, 2018.

    ADDRESSES:

    Written comments may be submitted by email through www.regulations.gov; by mail or hand-delivery to Director, Regulation Policy and Management (00REG), Department of Veterans Affairs, 810 Vermont Avenue NW, Room 1068, Washington, DC 20420; or by fax to (202) 273-9026. (This is not a toll-free number.) Comments should indicate that they are submitted in response to “RIN 2900-AQ01—reimbursement of qualifying adoption expenses for certain veterans.” Copies of comments received will be available for public inspection in the Office of Regulation Policy and Management, Room 1068, between the hours of 8 a.m. and 4:30 p.m. Monday through Friday (except holidays). Please call (202) 461-4902 for an appointment. (This is not a toll-free number.) In addition, during the comment period, comments may be viewed online through the Federal Docket Management System (FDMS) at www.regulations.gov.

    FOR FURTHER INFORMATION CONTACT:

    Patricia M. Hayes, Ph.D. Chief Consultant, Women's Health Services, Patient Care Services, Veterans Health Administration, Department of Veterans Affairs, 810 Vermont Ave. NW, Washington, DC 20420. (202) 461-0373. (This is not a toll-free number.)

    SUPPLEMENTARY INFORMATION:

    Section 260 of the Continuing Appropriations and Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2017, and Zika Response and Preparedness Act (Pub. L.114-223) allows VA to use appropriated funds available to VA for the Medical Services account to provide fertility counseling and treatment using assisted reproductive technology (ART) to a covered veteran or the spouse of a covered veteran, or adoption reimbursement to a covered veteran. On January 19, 2017, VA published an interim final rule at 82 FR 6275 addressing fertility counseling and treatment using ART, including in vitro fertilization (IVF) (which is a type of ART), for both covered veterans and spouses. We now address reimbursement of qualifying adoption expenses in this rulemaking.

    Per the statute, veterans with a service-connected disability that results in the inability of the veteran to procreate without the use of fertility treatment are authorized to receive reimbursement for certain adoption-related expenses for an adoption that is finalized after September 29, 2016, (the date the law was enacted) under the same terms as apply under the adoption reimbursement program of DoD, as authorized in DoD Instruction 1341.09, including the reimbursement limits and requirements set forth in that DoD policy. DoD Instruction 1341.09, “DoD Adoption Reimbursement Policy” (July 5, 2016) establishes policy, assigns responsibilities within DoD, and provides procedures for the reimbursement of qualifying adoption expenses incurred by members of the Military Services (including document submission requirements) pursuant to 10 U.S.C. 1052. That statute was enacted in 1991 and establishes the parameters of DoD's adoption reimbursement program. VA amends part 17 by adding new section 17.390 to provide for reimbursement of qualifying adoption expenses to covered veterans, consistent with the policies and procedures established by DoD in implementing 10 U.S.C. 1052.

    Paragraph (a) of new § 17.390 addresses general requirements for reimbursement. Except as noted, all of these requirements are terms of the adoption reimbursement program of DoD, as authorized in DoD Instruction 1341.09. A covered veteran may request reimbursement for qualifying adoption expenses incurred by the veteran in the adoption of a child under 18 years of age. To clarify the scope of adoptions that are contemplated, we state that reimbursement for qualifying adoption expenses includes expenses for an adoption by a married or single person, an infant adoption, an intercountry adoption, and an adoption of a child with special needs as defined in section 473(c) of the Social Security Act (42 U.S.C. 673(c)). A “special needs” child is generally assessed by considering whether the child has a specific factor or condition that prevents the child from being placed with adoptive parents without adoption assistance or medical assistance; or whether the child qualifies for disability supplemental security income benefits; and whether a reasonable, but unsuccessful, effort was made to place the child with adoptive parents without adoption assistance or medical assistance. Specific factors or conditions include the child's ethnic background, age, membership in a minority or sibling group, or the presence of factors such as medical conditions or physical, mental or emotional disabilities. In accordance with section 260 of Public Law 114-223, reimbursement for qualifying adoption expenses may be requested only for an adoption that became final after September 29, 2016, the date Public Law 114-223 was enacted. In addition, the application for reimbursement must be submitted no later than 2 years after the adoption is final or, in the case of adoption of a foreign child, no later than 2 years from the date a certificate of United States citizenship is issued. In the case of adoption of a foreign child, reimbursement for qualifying adoption expenses may be requested only after United States citizenship has been granted to the adopted child. VA will not provide reimbursement for qualifying adoption expenses for any expense paid to or for a covered veteran under any other adoption benefits program administered by the Federal Government or under any such program administered by a State or local government.

    In paragraph (b) of new § 17.390, based on the terms in DoD Instruction 1341.09, we address limitations on the amount of reimbursement for qualifying adoption expenses that a covered veteran, or two covered veterans who are spouses, may receive per adopted child, and the maximum amount that may be paid to such veterans in any calendar year. No more than $2,000 may be reimbursed to a covered veteran, or to two covered veterans who are spouses of each other, for expenses incurred in the adoption of a child. In the case of two married covered veterans, only one spouse may claim reimbursement for any one adoption. No more than $5,000 may be paid under this section to a covered veteran in any calendar year. In the case of two married covered veterans, the couple is limited to a maximum of $5,000 per calendar year.

    Relevant definitions are found in paragraph (c) of new § 17.390. The term “covered veteran” is defined as it is in section 260 of Public Law 114-223: A veteran with a service-connected disability that results in the inability of the veteran to procreate without the use of fertility treatment. The additional restrictions on the eligibility of covered veterans in § 17.380(a)(2) were required to implement the term “assisted reproductive technology” as defined in section 260(b)(3) of Public Law 114-223, and do not apply to the adoption reimbursement benefit.

    “Qualifying adoption expenses” is defined based on the DoD Instruction to mean reasonable and necessary expenses that are directly related to the legal adoption of a child under 18 years of age, but only if such adoption is arranged by a qualified adoption agency. This definition includes several important elements. The expense must be “reasonable and necessary.” Based on the DoD Instruction, we define “reasonable and necessary” to include public and private agency fees, including adoption fees charged by an agency in a foreign country; placement fees, including fees charged to adoptive parents for counseling; and legal fees (including court costs). The term also includes medical expenses, including hospital expenses of the biological mother and medical care of the child to be adopted, as well as temporary foster care charges when payment of such charges is required before the adoptive child's placement.

    The adoption expenses must be directly related to the legal adoption of a child under the age of 18. Certain items are not reimbursable including expenses such as clothing, bedding, toys and books; travel expenses; and expenses incurred in connection with an adoption arranged in violation of Federal, State, or local law.

    To be reimbursable as a qualifying adoption expense the adoption must be arranged by a qualified adoption agency. We define “qualified adoption agency” as it is defined in the DoD Instruction. The term is broadly defined to include: a State or local government agency which has responsibility under State or local law for child placement through adoption; a nonprofit, voluntary adoption agency which is authorized by State or local law to place children for adoption; and, any other source authorized by a State to provide adoption placement if the adoption is supervised by a court under State or local law. In addition the term “qualified adoption agency” includes a foreign government or an agency authorized by a foreign government to place children for adoption, in any case in which the adopted child is entitled to automatic citizenship under section 320 of the Immigration and Nationality Act (8 U.S.C. 1431); or a certificate of citizenship has been issued for such child under section 322 of that Act (8 U.S.C. 1433).

    Definitions in paragraph (c) are consistent with Public Law 114-223 section 260, the DoD policy referenced in that statute, and the statute authorizing DoD to operate its adoption reimbursement program (10 U.S.C. 1052).

    Paragraph (d) addresses documentation that a covered veteran must provide VA to obtain reimbursement of qualifying adoption expenses. It mirrors DoD's submission requirements found in the DoD Instruction. The request for reimbursement must be submitted on a form prescribed for such purpose by VA.

    Paragraph (e) provides that if documents submitted by a covered veteran in support of an application for reimbursement do not establish eligibility for reimbursement or justify claimed expenses, VA will retain the application and advise the covered veteran of additional documentation needed. All requested documentation must be submitted to VA within 90 calendar days of VA request. This is consistent with the DoD Instruction, and VA believes that it provides sufficient time to allow a covered veteran to obtain and submit additional documentation to support the claim for reimbursement.

    Section 260 of Public Law 114-223 provides that VA is authorized to use appropriated funds available to VA for the Medical Services account in the Public Law for reimbursement of qualifying adoption expenses. Paragraph (f) states that authority to provide reimbursement for qualifying adoption expenses incurred by a covered veteran in the adoption of a child under 18 years of age expires September 30, 2018, to reflect the limitations on the use of appropriated funds in the Medical Services account under section 260 of Public Law 114-223.

    VA believes this rulemaking will benefit covered veterans. Whether IVF or other fertility treatments using ART are or are not a viable option, the covered veteran may elect to adopt. This rulemaking decreases the financial burden of making that choice.

    VA is publishing this rulemaking as an interim final rule effective on the date of publication. We are providing a 60-day comment period to provide the public with an opportunity to submit comments and feedback.

    Administrative Procedure Act

    In accordance with 5 U.S.C. 553(b)(B) and (d)(3), the Secretary of Veterans Affairs has concluded that there is good cause to publish this rule as an interim final rule without prior opportunity for public comment and to publish this rule with an immediate effective date. The Secretary finds that it is impracticable and contrary to the public interest to delay this rule for the purpose of soliciting advance public comment or to have a delayed effective date. VA is authorized to reimburse qualified adoption expenses incurred by covered veterans only through the end of Fiscal Year 2018. Pursuing the standard administrative process of publishing a proposed rule, soliciting public comment, followed by publication of a final rule with an effective date 30 days after publication would result in a significant delay in implementation. VA believes that electing to follow that course of action would severely limit the agency's ability to utilize this authority as provided by Congress under Public Law 114-223. VA has determined that it is in the public interest to publish this rulemaking as an interim final rule effective on the date of publication to ensure that covered veterans have access to this benefit for the greatest amount of time practicable. VA believes that publishing this rule as an interim final rule without prior opportunity for public comment and to publish this rule with an immediate effective date will give effect to congressional intent that covered veterans have access to this benefit in a timely fashion. Further, we note that Public Law 114-223 section 260(b)(4) establishes strict parameters on VA's administration of this benefit, requiring us to operate under the same terms as apply under the DoD's adoption reimbursement program, as authorized in DoD Instruction 1341.09, including the reimbursement limits and requirements set forth in such instruction. Given these restrictions, there is very little room for substantive changes to the rule based on public comment. For the above reasons, the Secretary issues this rule as an interim final rule with an immediate effective date. VA will consider and address comments that are received within 60 days of the date this interim final rule is published in the Federal Register.

    Effect of Rulemaking

    Title 38 of the Code of Federal Regulations, as revised by this final rulemaking, represents VA's implementation of its legal authority on this subject. Other than future amendments to this regulation or governing statutes, no contrary guidance or procedures are authorized. All existing or subsequent VA guidance must be read to conform with this rulemaking if possible or, if not possible, such guidance is superseded by this rulemaking.

    Paperwork Reduction Act

    This interim rule includes a provision constituting a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) that requires approval by the Office of Management and Budget (OMB). VA has requested emergency clearance of information collection under this interim final rule. Accordingly, under 44 U.S.C. 3507(d), VA has submitted a copy of this rulemaking to OMB for review.

    OMB assigns control numbers to collections of information it approves. VA 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. Section 17.390 contains a collection of information under the Paperwork Reduction Act of 1995. If OMB does not approve the collection(s) of information as requested, VA will immediately remove the provision(s) containing a collection of information or take such other action as is directed by OMB.

    Comments on the collection of information contained in this rule should be submitted to the Office of Management and Budget, Attention: Desk Officer for the Department of Veterans Affairs, Office of Information and Regulatory Affairs, Washington, DC 20503, with copies sent by mail or hand delivery to the Director, Regulations Management (00REG), Department of Veterans Affairs, 810 Vermont Avenue NW, Room 1068, Washington, DC 20420; fax to (202) 273-9026 (This is not a toll free no.); or through www.Regulations.gov. Comments should indicate that they are submitted in response to “RIN 2900-AQ01 Reimbursement of qualifying adoption expenses for certain veterans.”

    OMB is required to make a decision concerning the collections of information contained in this rule between 30 and 60 days after publication of this document in the Federal Register.

    VA considers comments by the public on proposed collections of information in—

    • Evaluating whether the proposed collections of information are necessary for the proper performance of the functions of VA, including whether the information will have practical utility;

    • Evaluating the accuracy of VA's estimate of the burden of the proposed collections of information, including the validity of the methodology and assumptions used;

    • Enhancing the quality, usefulness, and clarity of the information to be collected; and

    • Minimizing the burden of the collections of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses.

    The collections of information contained in regulatory section 38 CFR 17.390 are described immediately following this paragraph, under their respective titles.

    Title: Reimbursement of qualifying adoption expenses for certain veterans.

    Summary of collection of information: To receive reimbursement for qualifying adoption expenses a covered veteran must provide various types of documentation including a copy of the final adoption decree, certificate or court order granting the adoption; proof of citizenship of the adopted child in the case of a foreign adoption; documentation that the adoption was handled by a qualified adoption agency; and documentation to substantiate reasonable and necessary expenses paid by the covered veteran. In addition, the covered veteran must submit a full English translation of any foreign language document, to include the translator's certification that he or she is competent to translate the foreign language to English and that his or her translation is complete and correct. Finally, the covered veteran may be asked to provide information to facilitate electronic transfer of funds to effectuate the reimbursement. This information collection is consistent with DoD requirements imposed on a service member seeking reimbursement of qualifying adoption expenses.

    Description of the need for information and proposed use of information: The information is needed to determine eligibility for reimbursement of qualifying adoption expenses.

    Description of likely respondents: Veterans with a service-connected disability that results in the inability of the veteran to procreate without the use of fertility treatment who incurred qualifying adoption expenses related to an adoption that became final after September 29, 2016.

    Estimated number of respondents per month/year: 80 annually.

    Estimated frequency of responses per month/year: one response total.

    Estimated average burden per response: 6 hours.

    Estimated total annual reporting and recordkeeping burden: 480 hours.

    Regulatory Flexibility Act

    The Secretary hereby certifies that this interim 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 interim final rule will directly affect only individuals and will not directly affect small entities. Therefore, pursuant to 5 U.S.C. 605(b), this rulemaking is exempt from the initial and final regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604.

    Executive Order 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and other advantages; distributive impacts; and equity). Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 12866 (Regulatory Planning and Review) defines a “significant regulatory action,” requiring review by OMB, unless OMB waives such review, as “any regulatory action that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive Order.”

    The economic, interagency, budgetary, legal, and policy implications of this regulatory action have been examined, and it has been determined not to be a significant regulatory action under Executive Order 12866. VA's impact analysis can be found as a supporting document at 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 www.va.gov/orpm/, by following the link for “VA Regulations Published From FY 2004 Through Fiscal Year to Date.”

    Unfunded Mandates

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

    Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers and titles for the programs affected by this document are 64.007, Blind Rehabilitation Centers; 64.008, Veterans Domiciliary Care; 64.009, Veterans Medical Care Benefits; 64.010, Veterans Nursing Home Care; 64.011, Veterans Dental Care; 64.012, Veterans Prescription Service; 64.013, Veterans Prosthetic Appliances; 64.014, Veterans State Domiciliary Care; 64.015, Veterans State Nursing Home Care; 64.018, Sharing Specialized Medical Resources; 64.019, Veterans Rehabilitation Alcohol and Drug Dependence; 64.022, Veterans Home Based Primary Care; and 64.024, VA Homeless Providers Grant and Per Diem Program.

    List of Subjects in 38 CFR Part 17

    Administrative practice and procedure, Alcohol abuse, Alcoholism, Claims, Day care, Dental health, Drug abuse, Government contracts, Grant programs—health, Grant programs—veterans, Health care, Health facilities, Health professions, Health records, Homeless, Medical and Dental schools, Medical devices, Medical research, Mental health programs, Nursing homes, Reporting and recordkeeping requirements, Travel and transportation expenses, Veterans.

    Signing Authority

    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 August 25, 2017, for publication.

    Dated: February 27, 2018. Jeffrey Martin, Impact Analyst, Office of Regulation Policy & Management, Office of the Secretary, Department of Veterans Affairs.

    For the reasons set out in the preamble, VA amends 38 CFR part 17 as follows:

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

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

    Section 17.38 is also issued under 38 U.S.C. 101, 501, 1701, 1705, 1710, 1710A, 1721, 1722, 1782, and 1786.

    Section 17.169 is also issued under 38 U.S.C. 1712C.

    Sections 17.380, 17.390 and 17.412 are also issued under sec. 260, Pub. L. 114-223, 130 Stat. 857.

    Section 17.410 is also issued under 38 U.S.C. 1787.

    Section 17.415 is also issued under 38 U.S.C. 7301, 7304, 7402, and 7403.

    Sections 17.640 and 17.647 are also issued under sec. 4, Pub. L. 114-2, 129 Stat. 30.

    Sections 17.641 through 17.646 are also issued under 38 U.S.C. 501(a) and sec. 4, Pub. L. 114-2, 129 Stat. 30.

    Section 17.655 also issued under 38 U.S.C. 501(a), 7304, 7405.

    2. Revise the undesignated center heading immediately preceding § 17.380 to read as follows:

    In Vitro Fertilization and Reimbursement of Adoption Expenses

    3. Add § 17.390 before the undesignated center heading “Hospital Care and Medical Services for Camp Lejune Veterans and Families” to read as follows:
    § 17. 390 Reimbursement for qualifying adoption expenses incurred by certain veterans.

    (a) General. A covered veteran may request reimbursement for qualifying adoption expenses incurred by the veteran in the adoption of a child under 18 years of age.

    (1) An adoption for which expenses may be reimbursed under this section includes an adoption by a married or single person, an infant adoption, an intercountry adoption, and an adoption of a child with special needs (as defined in section 473(c) of the Social Security Act (42 U.S.C. 673(c))).

    (2) Reimbursement for qualifying adoption expenses may be requested only for an adoption that became final after September 29, 2016, and must be requested:

    (i) No later than 2 years after the adoption is final; or,

    (ii) In the case of adoption of a foreign child, no later than 2 years from the date the certificate of United States citizenship is issued.

    (3) In the case of adoption of a foreign child, reimbursement for qualifying adoption expenses may be requested only after United States citizenship has been granted to the adopted child.

    (4) Reimbursement for qualifying adoption expenses may not be made under this section for any expense paid to or for a covered veteran under any other adoption benefits program administered by the Federal Government or under any such program administered by a State or local government.

    (b) Limitations. (1) Reimbursement per adopted child. No more than $2,000 may be reimbursed under this section to a covered veteran, or to two covered veterans who are spouses of each other, for expenses incurred in the adoption of a child. In the case of two married covered veterans, only one spouse may claim reimbursement for any one adoption.

    (2) Maximum reimbursement in any calendar year. No more than $5,000 may be paid under this section to a covered veteran in any calendar year. In the case of two married covered veterans, the couple is limited to a maximum of $5,000 per calendar year.

    (c) Definitions. For the purposes of this section:

    (1) “Covered veteran” means a veteran with a service-connected disability that results in the inability of the veteran to procreate without the use of fertility treatment.

    (2) “Qualifying adoption expenses” means reasonable and necessary expenses that are directly related to the legal adoption of a child under 18 years of age, but only if such adoption is arranged by a qualified adoption agency. Such term does not include any expense incurred:

    (i) For items such as clothing, bedding, toys and books;

    (ii) For travel; or

    (iii) In connection with an adoption arranged in violation of Federal, State, or local law.

    (3) “Reasonable and necessary expenses” include:

    (i) Public and private agency fees, including adoption fees charged by an agency in a foreign country;

    (ii) Placement fees, including fees charged to adoptive parents for counseling;

    (iii) Legal fees (including court costs) or notary expenses;

    (iv) Medical expenses, including hospital expenses of the biological mother and medical care of the child to be adopted; and

    (v) Temporary foster care charges when payment of such charges is required before the adoptive child's placement.

    (4) “Qualified adoption agency” means any of the following:

    (i) A State or local government agency which has responsibility under State or local law for child placement through adoption.

    (ii) A nonprofit, voluntary adoption agency which is authorized by State or local law to place children for adoption.

    (iii) Any other source authorized by a State to provide adoption placement if the adoption is supervised by a court under State or local law.

    (iv) A foreign government or an agency authorized by a foreign government to place children for adoption, in any case in which:

    (A) The adopted child is entitled to automatic citizenship under section 320 of the Immigration and Nationality Act (8 U.S.C. 1431); or

    (B) A certificate of citizenship has been issued for such child under section 322 of that Act (8 U.S.C. 1433).

    (d) Applying for reimbursement of qualifying adoption expenses. An application for reimbursement must be submitted on a form prescribed for such purpose by VA. Information and documentation must include:

    (1) A copy of the final adoption decree, certificate or court order granting the adoption. For U.S. adoptions, the court order must be signed by a judge unless either State law or local court rules authorize that the adoption order may be signed by a commissioner, magistrate or court referee. The covered veteran must submit a full English translation of any foreign language document, to include the translator's certification that he or she is competent to translate the foreign language to English and that his or her translation is complete and correct.

    (2) For foreign adoptions, proof of U.S. citizenship of the child, including any of the following:

    (i) A copy of Certificate of Citizenship.

    (ii) A copy of a U.S. court order that recognizes the foreign adoption, or documents the re-adopting of the child in the United States.

    (iii) A letter from the United States Citizenship and Immigration Services, which states the status of the child's adoption.

    (iv) A copy of the child's U.S. passport (page with personal information only).

    (3) For U.S. adoptions, documentation to show that the adoption was handled by a qualified adoption agency or other source authorized by a State or local law to provide adoption placement. Acceptable forms of proof that the adoption was handled by a qualified adoption agency include:

    (i) A copy of placement agreement from the adoption agency showing the agreement entered into between the member and the agency.

    (ii) A letter from the adoption agency stating that the agency arranged the adoption and that the agency is a licensed child placing agency in the United States.

    (iii) Receipts for payment to the adoption agency, as well as proof, (e.g., a copy of the agency's web page), of the agency's status as a for-profit or non-profit licensed child placing agency.

    (4) For foreign adoptions, documentation to show that the adoption was handled by a qualified adoption agency. In addition to the forms of acceptable proof that the adoption was handled by a qualified adoption agency listed in paragraph (d)(3) of this section, the documentation must also include:

    (i) A document that describes the mission of the foreign agency and its authority from the foreign government to place children for adoption; and

    (ii) A placement agreement from the adoption agency or letter from the adoption agency stating the specific services it provided for the adoption.

    (5) Documentation to substantiate reasonable and necessary expenses paid by the covered veteran. Acceptable forms of documentation include receipts, cancelled checks, or a letter from the adoption agency showing the amount paid by the member. Receipts from a foreign entity should include the U.S. currency equivalency. Reconstruction of expense records is permissible when the original records are unavailable and the covered veteran submits a notarized affidavit stating the costs.

    (6) Checking or savings account information to facilitate VA providing reimbursement to the covered veteran under this section.

    (e) Failure to establish eligibility. If documents submitted by a covered veteran in support of an application for reimbursement do not establish eligibility for reimbursement or justify claimed expenses, VA will retain the application and advise the covered veteran of additional documentation needed. All requested documentation must be submitted to VA within 90 calendar days of VA request.

    (f) Authority. Authority to provide reimbursement for qualifying adoption expenses incurred by a covered veteran in the adoption of a child under 18 years of age expires September 30, 2018.

    (Approval for information collection under this section has been requested from the Office of Management and Budget)

    [FR Doc. 2018-04245 Filed 3-2-18; 8:45 am] BILLING CODE 8320-01-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R09-OAR-2017-0404; FRL-9974-67-Region 9] Approval of California Air Plan Revisions, Northern Sierra Air Quality Management District AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Final rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is taking final action to approve a revision to the Northern Sierra Air Quality Management District (NSAQMD) portion of the California State Implementation Plan (SIP). This revision concerns emissions of particulate matter (PM) from wood burning devices. We are approving a local rule that regulates these emission sources under the Clean Air Act (CAA or the Act).

    DATES:

    This rule will be effective on April 4, 2018.

    ADDRESSES:

    The EPA has established a docket for this action under Docket ID No. EPA-R09-OAR-2017-0404. All documents in the docket are listed on the http://www.regulations.gov website. Although listed in the index, some information is not publicly available, e.g., Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the internet and will be publicly available only in hard copy form. Publicly available docket materials are available through http://www.regulations.gov, or please contact the person identified in the FOR FURTHER INFORMATION CONTACT section for additional availability information.

    FOR FURTHER INFORMATION CONTACT:

    Christine Vineyard, EPA Region IX, (415) 947-4125, [email protected]

    SUPPLEMENTARY INFORMATION:

    Throughout this document, “we,” “us” and “our” refer to the EPA.

    Table of Contents I. Proposed Action II. Public Comments and EPA Responses III. EPA Action IV. Incorporation by Reference V. Statutory and Executive Order Reviews I. Proposed Action

    On November 3, 2017 (82 FR 51178) the EPA proposed to approve the following rule into the California SIP.

    Local agency Rule No. Rule title Adopted Submitted NSAQMD, City of Portola Ordinance No. 344, Municipal Code Chapter 15.10 (except paragraphs 15.10.060(B), 15.10.090 and 15.10.100) Wood Stove and Fireplace Ordinance 06/22/16 01/24/17

    We proposed to approve this rule because we determined that it complies with the relevant CAA requirements. Our proposed action contains more information on the rule and our evaluation.

    II. Public Comments and EPA Responses

    The EPA's proposed action provided a 30-day public comment period. During this period, we received 18 comments. One commenter supported the proposed rulemaking. The remaining commenters generally raised issues that are outside of the scope of this rulemaking, including forest management, wildfire suppression, greenhouse-gas and other emissions from wildfires, the Cross-State Air Pollution Rule, and litigation fees. Commenters did not raise any specific issues germane to the approvability of the rule.

    III. EPA Action

    No comments were submitted that change our assessment of the rule as described in our proposed action. Therefore, as authorized in section 110(k)(3) of the Act, the EPA is fully approving this rule into the California SIP.

    IV. Incorporation by Reference

    In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of the City of Portola ordinance described in the amendments to 40 CFR part 52 set forth below. The EPA has made, and will continue to make, these documents available through www.regulations.gov and at the EPA Region IX Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

    V. Statutory and Executive Order Reviews

    Under CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the Act. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

    • Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

    • Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;

    • Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);

    • Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);

    • Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

    • Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

    • Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

    • Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

    • Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and

    • Does not provide the EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

    In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or pre-empt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. The EPA will submit a report containing this action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

    Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by May 4, 2018. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

    List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Particulate matter, Reporting and recordkeeping requirements.

    Dated: February 7, 2018. Alexis Strauss, Acting Regional Administrator, Region IX.

    Part 52, chapter I, title 40 of the Code of Federal Regulations is amended as follows:

    PART 52—APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS 1. The authority citation for part 52 continues to read as follows: Authority:

    42 U.S.C. 7401 et seq.

    Subpart F—California 2. Section 52.220 is amended by adding paragraph (c)(497)(i)(C) to read as follows:
    § 52.220 Identification of plan-in part.

    (c) * * *

    (497) * * *

    (i) * * *

    (C) Northern Sierra Air Quality Management District.

    (1) City of Portola.

    (i) Ordinance No. 344, Portola Municipal Code, Chapter 15.10, “Wood Stove and Fireplace Ordinance,” adopted June 22, 2016, except paragraphs 15.10.060(B) and sections 15.10.090 and 15.10.100.

    [FR Doc. 2018-04316 Filed 3-2-18; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 63 [EPA-R01-OAR-2017-0343; A-1-FRL-9972-97-Region 1] Approval of Section 112(l) Authority for Hazardous Air Pollutants; Perchloroethylene Air Emission Standards for Dry Cleaning Facilities; State of Vermont AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Direct final rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is taking direct final action to grant the Vermont Department of Environmental Conservation (VT DEC) the authority to implement and enforce, with respect to area sources only, the Vermont Perchloroethylene Dry Cleaning Rule in place of the National Emissions Standards for Hazardous Air Pollutants for Perchloroethylene Dry Cleaning Facilities (Dry Cleaning NESHAP). Pursuant to the Clean Air Act (CAA), the VT DEC submitted a request for approval to implement and enforce the Perchloroethylene Dry Cleaning Rule of the Vermont Air Pollution Control Regulations as a partial substitution for the National Emissions Standards for Hazardous Air Pollutants for Perchloroethylene Dry Cleaning Facilities (Dry Cleaning NESHAP), as it applies to area sources. EPA has reviewed this request and has determined that the Vermont Perchloroethylene Dry Cleaning Rule satisfies the requirements necessary for partial rule substitution. Thus, EPA is hereby granting VT DEC's request. This action does not affect the authority of any party to implement and enforce the Dry Cleaning NESHAP with respect to major source dry cleaners. This approval makes the Vermont Perchloroethylene Dry Cleaning Rule federally enforceable in Vermont.

    DATES:

    This direct final rule will be effective June 4, 2018, unless EPA receives adverse comments by April 4, 2018. If EPA receives adverse comment, EPA will publish a timely withdrawal of the direct final rule in the Federal Register informing the public that the rule will not take effect. The incorporation by reference of certain publications listed in the rule is approved by the Director of the Federal Register as of June 4, 2018.

    ADDRESSES:

    Submit your comments, identified by Docket ID No. EPA-R01-OAR-2017-0343 at http://www.regulations.gov, or via email to [email protected] For comments submitted at Regulations.gov, follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulations.gov. For either manner of submission, the EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (i.e., on the web, cloud, or other file sharing system). For additional submission methods, please contact the person identified in the FOR FURTHER INFORMATION CONTACT section. For the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www.epa.gov/dockets/commenting-epa-dockets.

    FOR FURTHER INFORMATION CONTACT:

    Susan Lancey, Air Permits, Toxics, and Indoor Programs Unit, U.S. Environmental Protection Agency, EPA New England Regional Office, 5 Post Office Square—Suite 100, (Mail code OEP05-2), Boston, MA 02109-3912, telephone number 617-918-1656, [email protected]

    SUPPLEMENTARY INFORMATION:

    Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA.

    Table of Contents I. General Information A. Why is the EPA using a direct final rule? B. Does this direct final rule apply to me? C. What should I consider as I prepare my comments for the EPA? II. Background III. What requirements must a State rule meet to substitute for a Section 112 rule? IV. What if any material differences exist between the Vermont Dry Cleaning Rule and the Dry Cleaning NESHAP and what is EPA's evaluation? A. What are the differences in applicability? B. How does the Vermont Dry Cleaning Rule address the control requirements? C. How do the monitoring requirements differ? D. What are the differences in reporting and recordkeeping? E. Is the State's submittal separable? F. What is EPA's action regarding the Vermont Dry Cleaning Rule? V. Final Action VI. Incorporation by Reference VII. Statutory and Executive Order Reviews VIII. Judicial Reviews I. General Information A. Why is the EPA using a direct final rule?

    The EPA is publishing this action without prior proposal because the Agency views this as a noncontroversial submittal and anticipates no adverse comments. However, in the proposed rules section of this Federal Register publication, EPA is publishing a separate document that will serve as the proposal to approve the state rule should adverse comments be filed.

    If the EPA receives such comments, then EPA will publish a notice withdrawing the direct final rule and informing the public that the rule will not take effect. All public comments received will then be addressed in a subsequent final rule based on the proposed rule. The EPA will not institute a second comment period on the proposed rule. All parties interested in commenting on the proposed rule should do so at this time. If no such comments are received, the public is advised that this rule will be effective on June 4, 2018 and no further action will be taken on the proposed rule. For further information about commenting on this rule, see the ADDRESSES section of this document.

    B. Does this direct final rule apply to me?

    Categories and entities potentially regulated by this direct final rule include:

    Category NAICS 1 code Coin Operated Laundries and Dry Cleaners 812310 Dry Cleaning and Laundry Services (except coin operated) 812320 Industrial Laundries 812332 1 North American Industry Classification System.

    This Table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this direct final rule. To determine whether your facility is affected you should examine the applicability criteria in the Vermont Air Pollution Control Regulations, Chapter 5, Air Pollution Control, section 5-253.11 Perchloroethylene Dry Cleaning. If you have questions regarding the applicability of any aspect of this action to a particular entity, please contact the person identified in the “For Further Information Contact” section.

    C. What should I consider as I prepare my comments for the EPA?

    Do not submit information containing CBI to EPA through http://www.regulations.gov or email. Clearly mark the part or all of the information that you claim to be CBI. For CBI information on a disk or CD-ROM that you mail to the EPA, mark the outside of the disk or CD-ROM as CBI and then identify electronically within the disk or CD-ROM the specific information that is claimed as CBI. In addition to one complete version of the comments that includes information claimed as CBI, a copy of the comments that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. Send or deliver information identified as CBI only to the following address: “EPA-R01-OAR-2017-0343”, Susan Lancey, U.S. Environmental Protection Agency, EPA New England Regional Office, 5 Post Office Square (mail code OEP05-2), Boston, MA 02109-3912.

    II. Background

    Under CAA section 112(l), EPA may approve state or local rules or programs to be implemented and enforced in place of certain otherwise applicable Federal rules, emissions standards, or requirements. The Federal regulations governing EPA's approval of state and local rules or programs under section 112(l) are located at 40 CFR part 63, subpart E. See 58 FR 62262 (November 26, 1993), as amended by 65 FR 55810 (September 14, 2000). Under these regulations, a state air pollution control agency has the option to request EPA's approval to substitute a state rule for the applicable Federal rule (e.g., the National Emission Standards for Hazardous Air Pollutants). Upon approval by EPA, the state agency is authorized to implement and enforce its rule in place of the Federal rule, and the state rule becomes federally enforceable in that state.

    EPA originally promulgated the Dry Cleaning NESHAP on September 22, 1993. See 58 FR 49354. The Dry Cleaning NESHAP has been amended several times and is codified at 40 CFR part 63, subpart M, “National Perchloroethylene Air Emission Standards for Dry Cleaning Facilities.” On May 26, 2017, EPA received VT DEC's request to implement and enforce Vermont Air Pollution Control Regulations (VT APCR) section 5-253.11 Perchloroethylene Dry Cleaning (Vermont Dry Cleaning Rule) in lieu of the Dry Cleaning NESHAP as applied to area sources.

    III. What requirements must a State rule meet to substitute for a Section 112 rule?

    A state must demonstrate that it has satisfied the general delegation/approval criteria contained in 40 CFR 63.91(d). The process of providing “up-front approval” assures that a state has met the delegation criteria in Section 112(l)(5) of the CAA as implemented by EPA's regulations at 40 CFR 63.91(d). These criteria require, among other things, that the state has demonstrated that its NESHAP program contains adequate authorities to assure compliance with each applicable Federal requirement, adequate resources for implementation, and an expeditious compliance schedule. Under 40 CFR 63.91(d)(3), interim or final Title V program approval under 40 CFR part 70 satisfies the criteria set forth in 40 CFR 63.91(d) for “up-front approval.” On November 29, 2001, EPA promulgated full approval of VT DEC's operating permits program with an effective date of November 30, 2001. See 66 FR 59535. Accordingly, VT DEC has satisfied the up-front approval criteria of 40 CFR 63.91(d).

    Additionally, the regulations governing approval of state requirements that substitute for a section 112 rule require EPA to evaluate the state's submittal to ensure that it meets the stringency and other requirements of 40 CFR 63.93. A rule will be approved if the state requirements contain or demonstrate: (1) Applicability criteria that are no less stringent than the corresponding Federal rule; (2) levels of control and compliance and enforcement measures that result in emission reductions from each affected source that are no less stringent than would result from the otherwise applicable Federal rule; (3) a compliance schedule that requires each affected source to be in compliance within a time frame consistent with the deadlines established in the otherwise applicable Federal rule; and (4) the additional compliance and enforcement measures as specified in 40 CFR 63.93(b)(4). See 40 CFR 63.93(b).

    A state may also seek, and EPA may approve, a partial delegation of the EPA's authorities. See CAA 112(l)(1). To obtain a partial rule substitution, the state's submittal must meet the otherwise applicable requirements in 40 CFR 63.91 and 63.93, and be separable from the portions of the program that the state is not seeking rule substitution for. See 64 FR 1889.

    Before we can approve alternative requirements in place of a part 63 emissions standard, the state must submit to us detailed information that demonstrates how the alternative requirements compare with the otherwise applicable Federal standard. A detailed discussion of how EPA will determine equivalency for state alternative NESHAP requirements is provided in the preamble to EPA's proposed Subpart E amendments on January 12, 1999. See 64 FR 1908.

    After reviewing VT DEC's partial rule substitution request and equivalency demonstration for the Dry Cleaning NESHAP as it applies to area sources, EPA has determined this request meets all the requirements necessary for approval under CAA section 112(l) and 40 CFR 63.91 and 63.93.

    IV. What if any material differences exist between the Vermont Dry Cleaning Rule and the Dry Cleaning NESHAP and what is EPA's evaluation?

    The following discussion explains the major differences between the area source requirements in the Vermont Dry Cleaning Rule and the area source requirements in the Dry Cleaning NESHAP and how EPA evaluated the Vermont Dry Cleaning Rule. A detailed side-by-side comparison of these requirements, as well as an equivalency narrative, are included in the public docket.

    A. What are the differences in applicability?

    The Dry Cleaning NESHAP applies to each dry cleaning facility that uses perchloroethylene (PCE), except for coin-operated dry cleaning machines. The Dry Cleaning NESHAP exempts existing dry cleaning machines from certain requirements if the total PCE consumption of the dry cleaning facility is less than 140 gallons per year. See 40 CFR 63.320(d). The Vermont Dry Cleaning Rule applies to all dry cleaning facilities that use PCE at area sources of HAP. The Vermont Dry Cleaning Rule has no exemption for coin-operated machines and no exemption based on PCE consumption. Under Vermont's rule, major sources of Hazardous Air Pollutants (HAP) must continue to comply with the Federal Dry Cleaning NESHAP. See VT APCR section 5-253.11(a). Consequently, EPA finds that the applicability of the Vermont Dry Cleaning Rule is no less stringent than that of the Dry Cleaning NESHAP.

    B. How does the Vermont Dry Cleaning Rule address the control requirements?

    The Dry Cleaning NESHAP requires the owner or operator of each dry cleaning system at area sources to equip each dry cleaning machine with a refrigerated condenser, except that certain existing dry cleaning systems installed between December 9, 1991, and September 22, 1993, may alternatively comply by routing the air-perchloroethylene gas-vapor stream of each dry cleaning machine through a carbon adsorber. See 40 CFR 63.322(a). The Dry Cleaning NESHAP requires new area source dry cleaning systems installed after December 21, 2005, to equip each dry cleaning machine with a refrigerated condenser and a non-vented carbon adsorber and to desorb the carbon adsorber in accordance with the manufacturer's instruction. See 40 CFR 63.322(o)(2). The Vermont Dry Cleaning rule requires all dry cleaning machines to be equipped with a refrigerated condenser without exception, and requires dry cleaning systems installed after December 21, 2005 to equip each dry cleaning machine with a refrigerated condenser and a non-vented carbon adsorber. The carbon adsorber must be desorbed in accordance with the manufacturer's instruction. The Vermont Dry Cleaning rule does not allow a primary carbon adsorber as a method of control. See VT APCR section 5-253.11(c)(2) and (4). Both the Vermont Dry Cleaning Rule and the Dry Cleaning NESHAP effectively prohibit transfer machines, prohibit dry cleaning systems installed after December 21, 2005 in a building with a residence, and prohibit any dry cleaning system in a building with a residence after December 21, 2020. See VT APCR section 5-253.11(c)(3), (5)-(6) and 40 CFR 63.322(o)(3)-(5). The Vermont Dry Cleaning Rule only allows equivalent control devices approved by the Vermont Air Pollution Control Officer and the EPA pursuant to 40 CFR 63.325. See VT APCR section 5-253.11(c)(2)(ii) and (3). Consequently, EPA finds that the Vermont Dry Cleaning control requirements are no less stringent than those of the Dry Cleaning NESHAP.

    C. How do the monitoring requirements differ?

    The Dry Cleaning NESHAP requires dry cleaning systems at area sources to be inspected weekly for perceptible leaks and requires a monthly inspection using a halogenated hydrocarbon detector or PCE gas analyzer. See 40 CFR 63.322(k) and (o)(1)(i). Instead, the Vermont Dry Cleaning Rule requires a weekly inspection for perceptible leaks and a weekly inspection using a halogenated hydrocarbon detector or PCE gas analyzer. See VT APCR section 5-253.11(e)(1). The Dry Cleaning NESHAP requires weekly temperature monitoring to determine if the temperature is equal to or less than 45 degrees Fahrenheit, or alternatively monitoring of refrigeration system high pressure and low pressure during the drying phase. See 40 CFR 63.323(a)(1). The Vermont Dry Cleaning Rule requires weekly temperature monitoring of the refrigerated condenser and requires the temperature to be maintained at less than or equal to 40 degrees Fahrenheit. The Vermont Dry Cleaning Rule does not allow refrigeration system high and low pressure monitoring as an alternative to temperature monitoring of the refrigerated condenser. See VT APCR section 5-253.11(c)(2)(i)(B) and (e)(2). Therefore, EPA finds that the Vermont Dry Cleaning Rule monitoring requirements are no less stringent than those of the Dry Cleaning NESHAP.

    D. What are the differences in reporting and recordkeeping?

    The Dry Cleaning NESHAP requires the owner or operator of any new dry cleaning facility to submit a notification of compliance status within 30 days after startup. See 40 CFR 63.324(b). The Vermont Dry Cleaning Rule also requires the owner or operator of any new dry cleaning facility to submit a notification of compliance status within 30 days of commencing operations. See VT APCR section 5-253.11(g)(2). Thus, the Vermont Dry Cleaning Rule reporting requirements are no less stringent than those of the Dry Cleaning NESHAP.

    E. Is the State's submittal separable?

    A state may also seek, and EPA may approve, a partial delegation of the EPA's authorities. See CAA 112(l)(1). To obtain a partial rule substitution, the state's submittal must meet the otherwise applicable requirements in 40 CFR 63.91 and 63.93, and be separable from the portions of the program that the state is not seeking rule substitution for. See 64 FR 1889. A separable portion of a state rule or program is a section(s) of a rule or a portion(s) of a program which can be acted upon independently without affecting the overall integrity of the rule or program as a whole.

    Here, the state's rule applies to area source dry cleaners, while the NESHAP continues to apply to major source dry cleaners. EPA finds that there exists a logical and compelling distinction between area and major dry cleaning sources. That is, the state rule may independently regulate area source dry cleaners separate from major source dry cleaners, without affecting the overall integrity of the rule or program as a whole. EPA further finds that granting partial delegation would not create an overly cumbersome or unworkable scheme. For these reasons, EPA concludes that the portion of the NESHAP delegated under this partial rule substitution is separable from the remainder of the NESHAP. Therefore, partial delegation is appropriate.

    F. What is EPA's action regarding the Vermont Dry Cleaning Rule?

    After reviewing VT DEC's request for approval of the Vermont Dry Cleaning Rule, EPA has determined that the Vermont Dry Cleaning Rule meets all of the requirements necessary for partial rule substitution under section 112(l) of the CAA and 40 CFR 63.91 and 63.93. Therefore, EPA hereby approves VT DEC's request to implement and enforce VT APCR section 5-253.11 (as effective under state law on December 15, 2016), in place of the Dry Cleaning NESHAP for area sources in Vermont. As of the effective date of this action, the Vermont Dry Cleaning Rule is enforceable by EPA and by citizens under the CAA. Although VT DEC has primary responsibility to implement and enforce the Vermont Dry Cleaning Rule, EPA retains the authority to enforce any requirement of the rule upon its approval under CAA 112. See CAA section 112(l)(7).

    V. Final Action

    EPA is approving the Vermont Air Pollution Control Regulations, Chapter 5, Air Pollution Control, section 5-253.11, Perchloroethylene Dry Cleaning (as effective under state law on December 15, 2016) as a partial rule substitution for the Dry Cleaning NESHAP for area sources in Vermont. The Federal Dry Cleaning NESHAP continues to apply to major source dry cleaners in Vermont. The applicability of the Federal NESHAP to major source dry cleaners is in no way affected by this action.

    This rule will be effective June 4, 2018 without further notice unless the Agency receives relevant adverse comments by April 4, 2018.

    VI. Incorporation by Reference

    In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of Vermont Air Pollution Control Regulations, Chapter 5, Air Pollution Control, section 5-253.11, Perchloroethylene Dry Cleaning, effective December 15, 2016. The EPA has made, and will continue to make, these documents generally available electronically through http://www.regulations.gov.

    VII. Statutory and Executive Order Reviews

    Under the CAA, the Administrator has the authority to approve section 112(l) submissions that comply with the provisions of the Act and applicable Federal regulations. In reviewing section 112(l) submissions, EPA's role is to approve state choices, provided that they meet the criteria and objectives of the CAA and of EPA's implementing regulations. Accordingly, this action merely approves the State's request as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

    • Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

    • does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);

    • is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);

    • does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

    • does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

    • is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

    • is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

    • is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and

    • does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

    In addition, this rule does not have Tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the submitted rule is not approved to apply in Indian country located in the State, and EPA notes that it will not impose substantial direct costs on Tribal governments or preempt Tribal law.

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2). This rule will be effective June 4, 2018.

    VIII. Judicial Review

    Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by May 4, 2018. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. See section 307(b)(2).

    List of Subjects in 40 CFR Part 63

    Environmental protection, Administrative practice and procedure, Air pollution control, Hazardous substances, Incorporation by reference, Intergovernmental relations, Reporting and record keeping requirements.

    Dated: February 26, 2018. Alexandra Dapolito Dunn, Regional Administrator, EPA New England.

    40 CFR part 63 is amended as follows:

    PART 63—NATIONAL EMISSION STANDARDS FOR HAZARDOUS AIR POLLUTANTS FOR SOURCE CATEGORIES 1. The authority citation for part 63 continues to read as follows: Authority:

    42 U.S.C. 7401 et seq.

    Subpart A—General Provisions 2. Section 63.14 is amended by adding paragraph (l)(13) to read as follows:
    § 63.14 Incorporations by reference.

    (l) * * *

    (13) Vermont Air Pollution Control Regulations, Chapter 5, Air Pollution Control, section 5-253.11, Perchloroethylene Dry Cleaning, effective as of December 15, 2016. Incorporation by reference approved for § 63.99(a).

    Subpart E—Approval of State Programs and Delegation of Federal Authorities 3. Section 63.99 is amended by adding paragraph (a)(46) to read as follows:
    § 63.99 Delegated Federal authorities.

    (a) * * *

    (46) Vermont. (i) Affected area sources within Vermont must comply with Vermont Regulations applicable to Hazardous Air Pollutants (incorporated by reference as specified in § 63.14) as described in paragraph (a)(46)(i)(A) of this section:

    (A) The material incorporated into the Vermont Air Pollution Regulations at Chapter 5, Air Pollution Control, section 5-253.11, Perchloroethylene Dry Cleaning (effective as of December 15, 2016) pertaining to area source dry cleaning facilities in the State of Vermont jurisdiction, and approved under the procedures in § 63.93 to be implemented and enforced in place of the requirements for area source dry cleaning facilities in the Federal NESHAP for Perchloroethylene Dry Cleaning Facilities (subpart M of this part), effective as of July 11, 2008. For purposes of this paragraph (a)(46) the term “area source dry cleaning facilities” means any source that qualifies as an area source under § 63.320(h).

    (1) Authorities not delegated. (i) Vermont is not delegated the Administrator's authority to implement and enforce Vermont Air Pollution Control Regulations, Chapter 5, Air Pollution Control, section 5-253.11, in lieu of those provisions of subpart M of this part which apply to major sources, as defined in § 63.320(g).

    (ii) [Reserved]

    (2) [Reserved]

    (B) [Reserved]

    (ii) [Reserved]

    [FR Doc. 2018-04277 Filed 3-2-18; 8:45 am] BILLING CODE 6560-50-P
    DEPARTMENT OF TRANSPORTATION Federal Railroad Administration 49 CFR Part 225 [FRA-2008-0136, Notice No. 10] RIN 2130-ZA16 Monetary Threshold for Reporting Rail Equipment Accidents/Incidents for Calendar Year 2018 AGENCY:

    Federal Railroad Administration (FRA), Department of Transportation (DOT).

    ACTION:

    Final rule.

    SUMMARY:

    FRA's accident/incident reporting regulations require railroads to report to the agency all rail equipment accidents/incidents above the monetary reporting threshold (reporting threshold) for that calendar year (CY). There is no change to the CY 2017 reporting threshold ($10,700) for CY 2018 as the overall increase in wages and equipment costs were not great enough to cause the threshold to change when rounded to the nearest $100.

    DATES:

    This final rule is effective March 5, 2018. This final rule is applicable January 1, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Kebo Chen, Staff Director, U.S. Department of Transportation, Federal Railroad Administration, Office of Safety Analysis, RRS-22, Mail Stop 25, West Building 3rd Floor, Room W33-314, 1200 New Jersey Ave. SE, Washington, DC 20590 (telephone 202-493-6079); or Senya Waas, Trial Attorney, U.S. Department of Transportation, Federal Railroad Administration, Office of Chief Counsel, RCC-10, West Building 3rd Floor, Room W31-223, 1200 New Jersey Ave. SE, Washington, DC 20590 (telephone 202-493-0665).

    SUPPLEMENTARY INFORMATION: Background

    A “rail equipment accident/incident” is a collision, derailment, fire, explosion, act of God, or other event involving the operation of railroad on-track equipment (standing or moving) that results in damages to railroad on-track equipment, signals, tracks, track structures, or roadbed, including labor costs and the costs for acquiring new equipment and material, greater than the reporting threshold for the year in which the event occurs. See 49 CFR 225.19(c). A railroad must report each rail equipment accident/incident to FRA using the Rail Equipment Accident/Incident Report (Form FRA F 6180.54). See 49 CFR 225.19(b), (c), 225.21(a). Paragraphs (c) and (e) of 49 CFR 225.19 further provide that FRA will adjust the dollar figure constituting the reporting threshold, if necessary, every year under the procedures in 49 CFR part 225 Appendix B to reflect any cost increases or decreases.

    Approximately one year has passed since FRA reviewed the reporting threshold. See 81 FR 94271, Dec. 23, 2016. Consequently, FRA has recalculated the reporting threshold under 49 CFR 225.19(c), using updated costs for labor and equipment. FRA has determined the current reporting threshold of $10,700, which applies to rail equipment accidents/incidents that occur during CY 2017, should remain the same for rail equipment accidents/incidents that occur during CY 2018. The specific inputs to the equation set forth in Appendix B (Tnew = Tprior * [1 + 0.4(WnewWprior)/Wprior + 0.6(EnewEprior)/100]) are:

    Tprior Wnew Wprior Enew Eprior $10,700 $29.77918 $29.99942 203.83333 203.33333 Where: Tnew = New threshold; Tprior = Prior threshold (with reference to the threshold, “prior” refers to the previous threshold rounded to the nearest $100, as reported in the Federal Register); Wnew = New average hourly wage rate, in dollars; Wprior = Prior average hourly wage rate, in dollars; Enew = New equipment average Producer Price Index (PPI) value; Eprior = Prior equipment average PPI value. See 49 CFR part 225 Appendix B. Using the above figures, the calculated new threshold, represented as Tnew, is $10,700.64, which is rounded to the nearest $100 for a final reporting threshold of $10,700 for CY 2018.1

    1 Wage statistics are available from the Surface Transportation Board (STB), “Quarterly Wage Form A&B,” at https://www.stb.gov/stb/industry/econ_reports.html (visited December 5, 2017). The average hourly wage rate is determined by dividing the compensation for time worked at straight time rates by the service hours worked at straight time rates (yielding dollars per hour). FRA averages the second-quarter data reported for the Group No. 300 Maintenance of Way and Structures employees, and the Group No. 400 Maintenance of Equipment and Stores employees.

    The equipment PPI is available at the Bureau of Labor Statistics (BLS), U.S. Department of Labor, “PPI Databases: Commodity Data,' at https://www.bls.gov/ppi/ (visited December 5, 2017). Select Group 14 Transportation Equipment, then Item 144 Railroad Equipment, followed by checking Not Seasonally Adjusted. The complete Series ID is WPU144, base date 1982.

    FRA intends to publish a rulemaking (RIN 2130-AC49) to reexamine its method for calculating the reporting threshold in 2018 because more accurate methodologies for calculating the threshold are available. FRA believes updating its methodology will ensure the reporting threshold reflects changes in equipment and labor costs as accurately as possible.

    Notice and Comment Procedures

    FRA is proceeding directly to a final rule as it finds public notice and comment to be unnecessary per the “good cause” exemption in 5 U.S.C. 553(b)(3)(B). FRA made this finding because it: (1) Is required under current regulations to establish the monetary reporting threshold; (2) Is utilizing a formula developed after notice and comment in a final rule published in 2005 (70 FR 75414, Dec. 20, 2005); and (3) is not exercising any discretion in calculating and applying the monetary threshold for 2018.

    Regulatory Evaluation Executive Orders 12866 and 13563 and DOT Regulatory Policies and Procedures

    FRA evaluated this final rule under existing policies and procedures, and determined it is non-significant under both Executive Orders 12866 and 13563, and DOT policies and procedures. See 44 FR 11034, Feb. 26, 1979. Furthermore, this final rule is exempt from the regulatory budgeting and two-for-one requirements of Executive Order 13771 as it has been determined to be non-significant.

    Regulatory Flexibility Act

    FRA developed this rule under Executive Order 13272, Proper Consideration of Small Entities in Agency Rulemaking, and DOT's procedures and policies to promote compliance with the Regulatory Flexibility Act (RFA) to ensure potential impacts of rules on small entities are properly considered. See E.O. 13272; 5 U.S.C. 601.

    The RFA requires an agency to review regulations to assess their impact on small entities, unless the Secretary certifies the rule will not have a significant economic impact on a substantial number of small entities. Under Section 312 of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), Federal agencies may adopt their own size standards for small entities in consultation with both the Small Business Administration and public comment. Under that authority, FRA has published a final statement of agency policy formally establishing, for FRA's regulatory purposes, that “small entities” are railroads, contractors, and hazardous materials shippers that meet the revenue requirements of a Class III railroad as set forth in 49 CFR 1201.1-1 ($20 million or less in inflation-adjusted annual revenues, and commuter railroads or small governmental jurisdictions that serve populations of 50,000 or less). See 49 CFR part 209 Appendix C. FRA used this definition for the current rulemaking.

    About 748 of the approximately 799 railroads in the United States are considered small entities by FRA. FRA certifies this final rule will have no significant economic impact on a substantial number of small entities. To the extent this rule has any impact on small entities, the impact will be neutral or insignificant. The frequency of rail equipment accidents/incidents, and therefore also the frequency of required reporting, is generally proportional to the size of the railroad. A railroad employing thousands of employees and operating trains millions of miles is exposed to greater risks than one with a substantially smaller operation. Small railroads may go for months at a time without having a reportable occurrence of any type, and even longer without having a rail equipment accident/incident. Class III reported rail equipment accidents/incidents for a five-year period are shown below.

    Rail Equipment Accident/Incidents (Train Accidents) Reported by Small Railroads Year Class III train
  • accidents
  • All railroad train accidents Percent
  • Class III train
  • accidents/all
  • railroad train
  • accidents
  • 2012 289 1,766 16 2013 307 1,853 17 2014 272 1,887 14 2015 288 1,936 15 2016 249 1,646 15 Source: FRA Safety Data website at http://safetydata.fra.dot.gov/OfficeofSafety/Default.aspx (visited December 8, 2017), Agency query.

    On average over those five calendar years, small railroads reported about 15% (ranging from 14% to 17%) of the total number of rail equipment accidents/incidents. FRA notes that these data are subject to minor changes due to additional reporting.

    The monetary reporting threshold, when rounded, did not increase for CY 2018. In general, however, absent this rulemaking (i.e., absent increasing the reporting threshold in future years), the number of reportable accidents/incidents in future years would likely increase, as keeping the same threshold in place would not allow it to keep pace with the likely increases in wages and rail equipment repair costs. (Note that the calculated monetary threshold (before rounding) for CY 2017 was $10,698 versus $10,701 for CY 2018.) Therefore, this rule will be neutral in effect (i.e., accidents/incidents reportable by railroads in CY 2017 will be reportable in CY 2018). Any recordkeeping burden will not be significant, and will affect the large railroads more than the small railroads due to the higher proportion of reportable rail equipment accidents/incidents experienced by large entities.

    Furthermore, FRA has determined the RFA does not apply to this rulemaking. As this rule updates the reporting threshold for CY 2018 using the formula developed through notice and comment rulemaking and published in Appendix B to 49 CFR part 225, FRA finds notice and public comment is unnecessary and would serve no public benefit. The Small Business Administration's A Guide for Government Agencies: How to Comply with the Regulatory Flexibility Act, p. 55 (2017) provides:

    If, under the APA or any rule of general applicability governing federal grants to state and local governments, the agency is required to publish a general notice of proposed rulemaking (NPRM), the RFA must be considered [citing 5 U.S.C. 604(a)] . . . . If an NPRM is not required, the RFA does not apply.

    As this rulemaking does not require a Notice of Proposed Rulemaking, the RFA does not apply.

    Paperwork Reduction Act

    There are no new or additional information collection requirements associated with this final rule. FRA's collection of accident/incident reporting and recordkeeping information is currently approved under OMB No. 2130-0500. Therefore, FRA is not required to provide an estimate of a public reporting burden in this document.

    Federalism Implications

    Executive Order 13132 (64 FR 43255, Aug. 10, 1999) requires FRA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” See E.O. 13132. Policies that have federalism implications are defined in Executive Order 13132 to include regulations 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.” See E.O. 13132. Under Executive Order 13132, the agency may not issue a regulation with federalism implications that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or the agency consults with State and local government officials early in the process of developing the regulation. See E.O. 13132. Where a regulation has federalism implications and preempts State law, the agency seeks to consult with State and local officials in the process of developing the regulation.

    FRA analyzed this final rule under the principles and criteria in Executive Order 13132. This rule will not have a substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and the responsibilities among the various levels of government. See Executive Order 13132. In addition, FRA determined this rule does not impose substantial direct compliance costs on State and local governments. Accordingly, FRA concluded the consultation and funding requirements of Executive Order 13132 do not apply, and preparation of a federalism assessment is not required.

    Environmental Impact

    FRA evaluated this final rule under its Procedures for Considering Environmental Impacts (FRA Procedures) (64 FR 28545, May 26, 1999) as required by the National Environmental Policy Act (42 U.S.C. 4321 et seq.), other environmental statutes, Executive Orders, and related regulatory requirements. FRA has determined this final rule is not a major FRA action requiring the preparation of an environmental impact statement or environmental assessment because it is categorically excluded from detailed environmental review under FRA Procedures Section 4(c)(20), which addresses the promulgation of railroad safety rules and policy statements that do not result in significantly increased emissions of air or water pollutants or noise or increased traffic congestion in any mode of transportation. See 64 FR 28547, May 26, 1999.

    Consistent with FRA Procedures Section 4(c)(20), FRA concluded that no extraordinary circumstances exist with respect to this regulation that might trigger the need for a more detailed environmental review. As a result, FRA finds this rule is not a major Federal action that significantly affects the quality of the human environment.

    Unfunded Mandates Reform Act of 1995

    Under Section 201 of the Unfunded Mandates Reform Act of 1995 (Reform Act) (Pub. L. 104-4, 2 U.S.C. 1531), each Federal agency shall, unless otherwise prohibited by law, assess the effects of Federal regulatory actions on State, local, and tribal governments, and the private sector (other than to the extent that such regulations incorporate requirements specifically set forth in law). See 2 U.S.C. 1531 Section 201. Section 202 of the Reform Act (2 U.S.C. 1532) further requires each agency to prepare a comprehensive written statement for any proposed or final rule that includes a Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any 1 year . . . .2

    2 See U.S. Department of Transportation, “Guidance—Threshold of Significant Regulatory Actions under the Unfunded Mandates Reform Act of 1995,” April 4, 2016, https://www.transportation.gov/office-policy/transportation-policy/threshold-significant-regulatory-actions-under-unfunded-mandat-0, as accessed December 12, 2017.

    This final rule will not result in the expenditure of more than $156,000,000 (the value equivalent of $100,000,000 in 2015 dollars) by the public sector in any one year. Thus, preparation of such a statement is not required.

    Energy Impact

    Executive Order 13211 requires Federal agencies to prepare a Statement of Energy Effects for any “significant energy action.” 66 FR 28355, May 22, 2001. Under Executive Order 13211, a “significant energy action” is defined as any action by an agency (normally published in the Federal Register) that promulgates, or is expected to lead to the promulgation of, a final rule or regulation (including a notice of inquiry, advance notice of proposed rulemaking, and notice of proposed rulemaking) that: (1)(i) Is a significant regulatory action under Executive Order 12866 or any successor order, and (ii) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (2) is designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. See E.O. 13211. FRA has evaluated this rule under Executive Order 13211. FRA has determined this rule will not have a significant adverse effect on the supply, distribution, or use of energy, and, thus, is not a “significant energy action” under Executive Order 13211.

    Privacy Act

    In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, to www.regulations.gov, as described in the system of records notice, DOT/ALL-14 FDMS, accessible through www.dot.gov/privacy. In order to facilitate comment tracking and response, FRA encourages commenters to provide their name, or the name of their organization; however, submission of names is completely optional. Whether or not commenters identify themselves, all timely comments will be fully considered. If one wishes to provide comments containing proprietary or confidential information, please contact the agency for alternate submission instructions.

    List of Subjects in 49 CFR Part 225

    Investigations, Penalties, Railroad safety, Reporting and recordkeeping requirements.

    The Rule

    In consideration of the foregoing, FRA amends part 225 of chapter II, subtitle B of title 49, Code of Federal Regulations, as follows:

    PART 225-[AMENDED] 1. The authority citation for part 225 continues to read as follows: Authority:

    49 U.S.C. 103, 322(a), 20103, 20107, 20901-02, 21301, 21302, 21311; 28 U.S.C. 2461, note; and 49 CFR 1.89.

    2. In § 225.19, revise the first sentence of paragraph (c), and paragraph (e) to read as follows:
    § 225.19 Primary groups of accidents/incidents.

    (c) Group II—Rail equipment. Rail equipment accidents/incidents are collisions, derailments, fires, explosions, acts of God, and other events involving the operation of on-track equipment (standing or moving) that result in damages higher than the current reporting threshold (i.e., $6,700 for calendar years 2002 through 2005, $7,700 for calendar year 2006, $8,200 for calendar year 2007, $8,500 for calendar year 2008, $8,900 for calendar year 2009, $9,200 for calendar year 2010, $9,400 for calendar year 2011, $9,500 for calendar year 2012, $9,900 for calendar year 2013, $10,500 for calendar year 2014, $10,500 for calendar year 2015, $10,500 for calendar year 2016, and $10,700 for calendar years 2017 and beyond, until revised) to railroad on-track equipment, signals, tracks, track structures, or roadbed, including labor costs and the costs for acquiring new equipment and material.

    (e) The reporting threshold is $6,700 for calendar years 2002 through 2005, $7,700 for calendar year 2006, $8,200 for calendar year 2007, $8,500 for calendar year 2008, $8,900 for calendar year 2009, $9,200 for calendar year 2010, $9,400 for calendar year 2011, $9,500 for calendar year 2012, $9,900 for calendar year 2013, $10,500 for calendar year 2014, $10,500 for calendar year 2015, $10,500 for calendar year 2016, and $10,700 for calendar years 2017 and beyond, until revised. The procedure for determining the reporting threshold for calendar years 2006 and beyond appears as paragraphs 1-8 of appendix B to part 225.

    Juan D. Reyes, III, Chief Counsel.
    [FR Doc. 2018-04349 Filed 3-2-18; 8:45 am] BILLING CODE 4910-06-P
    SURFACE TRANSPORTATION BOARD 49 CFR Part 1102 [Docket No. EP 739] Ex Parte Communications in Informal Rulemaking Proceedings AGENCY:

    Surface Transportation Board.

    ACTION:

    Final rule.

    SUMMARY:

    In this decision, the Surface Transportation Board (the Board) modifies its regulations to permit, subject to disclosure requirements, ex parte communications in informal rulemaking proceedings. The Board also adopts other changes to its ex parte rules that would clarify and update when and how interested persons may communicate informally with the Board regarding pending proceedings other than rulemakings. The intent of the modified regulations is to enhance the Board's ability to make informed decisions through increased stakeholder communications while ensuring that the Board's record-building process in rulemaking proceedings remains transparent and fair.

    DATES:

    This rule is effective on April 4, 2018.

    ADDRESSES:

    Requests for information or questions regarding this final rule should reference Docket No. EP 739 and be in writing addressed to: Chief, Section of Administration, Office of Proceedings, Surface Transportation Board, 395 E Street SW, Washington, DC 20423-0001.

    FOR FURTHER INFORMATION CONTACT:

    Jonathon Binet at (202) 245-0368. Assistance for the hearing impaired is available through the Federal Information Relay Service (FIRS) at (800) 877-8339.

    SUPPLEMENTARY INFORMATION:

    The Board's current regulations at 49 CFR 1102.2 generally prohibit most informal communications between the Board and interested persons concerning the merits of pending Board proceedings. These regulations require that communications with the Board or Board staff regarding the merits of an “on-the-record” Board proceeding not be made on an ex parte basis (i.e., without the knowledge or consent of the parties to the proceeding).1 See 49 CFR 1102.2(a)(3), (c). The current regulations detail the procedures required in the event an impermissible communication occurs and the potential sanctions for violations. See 49 CFR 1102.2(e), (f).

    1 “On-the-record proceeding” means “any matter described in Sections 556-557 of the Administrative Procedure Act [(APA)] (5 U.S.C. 556-557) or any matter required by the Constitution, statute, Board rule, or by decision in the particular case, that is decided solely on the record made in a Board proceeding.” 49 CFR 1102.2(a)(1).

    In 1977, the Board's predecessor agency, the Interstate Commerce Commission (ICC), determined that the general prohibition on ex parte communications in proceedings should include the informal rulemaking proceedings the Board uses to promulgate regulations.2 See Revised Rules of Practice, 358 I.C.C. 323, 345 (1977).3 At that time, several court decisions expressed the view that ex parte communications in informal rulemaking proceedings were inherently suspect.4 Accordingly, it has long been the agency's practice to prohibit meetings with individual stakeholders on issues that are the topic of pending informal rulemaking proceedings.

    2 The APA, 5 U.S.C. 551-559, governs two categories of agency rulemaking: Formal and informal. Formal rulemaking is subject to specific procedural requirements, including hearings, presiding officers, and a strict ex parte prohibition. See 5 U.S.C. 556-57. But most federal agency rulemakings, including the Board's, are informal rulemaking proceedings subject instead to the less restrictive “notice-and-comment” requirements of 5 U.S.C. 553.

    3 In Revised Rules of Practice, the ICC stated “ex parte communication during a rulemaking is just as improper as it is during any other proceeding. The Commission's decisions should be influenced only by statements that are a matter of public record.” 358 I.C.C. at 345.

    4See, e.g., Home Box Office v. Fed. Commc'ns Comm'n, 567 F.2d 9, 51-59 (D.C. Cir. 1977) (finding that ex parte communications that occurred after the notice of proposed rulemaking (NPRM) violated the due process rights of the parties who were not privy to the communications because the written administrative record would not reflect the possible “undue influence” exerted by those stakeholders who had engaged in ex parte communications); Nat'l Small Shipments Traffic Conference v. ICC, 590 F.2d 345, 351 (D.C. Cir. 1978) (finding ex parte communications “violate[d] the basic fairness of a hearing which ostensibly assures the public a right to participate in agency decision making,” foreclosing effective judicial review); Sangamon Valley Television Corp. v. United States, 269 F.2d 221, 224 (D.C. Cir. 1959) (finding that undisclosed ex parte communications between agency commissioners and a stakeholder were unlawful because the informal rulemaking involved “resolution of conflicting private claims to a valuable privilege, and that basic fairness requires such a proceeding to be carried on in the open”).

    At the same time, however, other court decisions were more tolerant of ex parte communications in informal rulemaking proceedings, so long as the proceedings were not quasi-adjudicative in nature and the process remained fair.5 In 1981, in Sierra Club v. Costle, 657 F.2d 298 (D.C. Cir. 1981), the U.S. Court of Appeals for the District of Columbia Circuit significantly clarified and liberalized treatment of this issue. In that case, the court considered the “timing, source, mode, content, and the extent of . . . disclosure” of numerous written and oral ex parte communications received after the close of the comment period to determine whether those communications violated the governing statute or due process. Id. at 391. The court held that, because the agency docketed most of the ex parte communications and none of the comments were docketed “so late as to preclude any effective public comment,” the agency satisfied its statutory requirements. Id. at 398. The court also declined to prohibit ex parte communications in informal rulemakings on constitutional due process grounds, and even held that not all ex parte communications must necessarily be docketed (implicitly concluding that whether such communications require docketing depends on case-specific circumstances). Id. at 402-04. Today, Sierra Club is considered the most recent influential decision on ex parte communications in informal rulemakings and is often cited by courts for the proposition that ex parte communications in informal agency rulemaking are generally permissible.6

    5See, e.g., Action for Children's Television v. Fed. Commc'ns Comm'n, 564 F.2d 458 (D.C. Cir. 1977) (upholding the agency's decision not to issue proposed rules and finding no APA violation for ex parte discussions where the agency provided a meaningful opportunity for public participation and the proceeding did not involve competing claims for a valuable privilege).

    6See, e.g., Tex. Office of Pub. Util. Counsel v. Fed. Commc'ns Comm'n, 265 F.3d. 313, 327 (5th Cir. 2001) (“Generally, ex parte contact is not shunned in the administrative agency arena as it is in the judicial context. In fact, agency action often demands it.”); Ammex, Inc. v. United States, 23 Ct. Int'l Trade 549, 569 n.16 (1999) (noting that the decision at issue “constitutes an exercise of `informal' rulemaking under the [APA] and, as such, is not subject to the prohibition on ex parte communications set forth in 5 U.S.C. 557(d)(1) (1994)”); Portland Audubon Soc. v. Endangered Species Comm., 984 F.2d 1534, 1545-46 (9th Cir. 1993) (“The decision in [Sierra Club] that the contacts were not impermissible was based explicitly on the fact that the proceeding involved was informal rulemaking to which the APA restrictions on ex parte communications are not applicable.”).

    More recently, in 2014, the Administrative Conference of the United States (ACUS), the body charged by Congress with recommending agency best practices, provided guidance to agencies indicating that a general prohibition on ex parte communications in informal rulemaking proceedings is neither required nor advisable. Ex Parte Commc'ns in Informal Rulemaking Proceedings (2014 ACUS Recommendation), 79 FR 35988, 35994 (June 25, 2014). ACUS concluded that ex parte communications in informal rulemaking proceedings “convey a variety of benefits to both agencies and the public,” although it acknowledged that fairness issues can arise if certain groups have, or are perceived to have, “greater access to agency personnel than others.” Id. However, in balancing these competing considerations, ACUS urged agencies to consider placing few, if any, restrictions on ex parte communications that occur before an NPRM is issued because communications at this early stage are less likely to cause harm and more likely to “help an agency gather essential information, craft better regulatory proposals, and promote consensus building among interested persons.” Id. ACUS further recommended that agencies establish clear procedures ensuring that all ex parte communications occurring after an NPRM is issued, whether planned or unplanned, be disclosed.

    Starting in 2015, the Board began to look at the possibility of conducting ex parte meetings to gain more stakeholder input in the informal rulemaking process. As a result, the Board waived the ex parte prohibition to permit Board Members or designated Board staff to participate in ex parte communications in two proceedings.7 See Reciprocal Switching, EP 711 (Sub-No. 1), slip op. at 28-29 (STB served July 27, 2016); 8 U.S. Rail Serv. Issues—Performance Data Reporting, EP 724 (Sub-No. 4), slip op. at 2-3 (STB served Nov. 9, 2015). Many stakeholders in these proceedings expressed appreciation for the opportunity to meet with Board Members or Board staff regarding the merits of the proposed rules and expressed the hope to interact with the Board informally in the future as well.9 In these meetings, parties have been able to respond directly to questions from Board Members and Board staff on the feasibility and utility of certain aspects of the Board's proposals.

    7 Greater use of ex parte meetings in Board rulemaking proceedings was also a topic of the U.S. Senate Committee on Commerce, Science, and Transportation's August 11, 2016 hearing. See Freight Rail Reform: Implementation of the STB Reauthorization Act of 2015: Field Hearing Before the S. Comm. on Commerce, Sci., & Transp., 114th Cong. 32, 35, 46, 50-52, 57, 69, 72 (2016), https://www.thefederalregister.org/fdsys/pkg/CHRG-114shrg23228/pdf/CHRG-114shrg23228.pdf.

    8 In the Board's July 27, 2016 decision, which embraced Petition for Rulemaking to Adopt Revised Competitive Switching Rules, Docket No. EP 711, the Board terminated the proceeding in Docket No. EP 711, and all meetings with Board Members are taking place under Reciprocal Switching, Docket No. EP 711 (Sub-No. 1).

    9See, e.g., Summary of Ex Parte Meeting Between Packaging Corp. of Am. & Board Member Begeman at 3, Aug. 3, 2017, Reciprocal Switching, EP 711 (Sub-No. 1); Summary of Ex Parte Meeting Between the Am. Chemistry Council & Board Member Miller at 1, Mar. 22, 2017, Reciprocal Switching, EP 711 (Sub-No. 1); Summary of Ex Parte Meeting Between CSX Transp. & STB Staff at 1, Dec. 16, 2015, U.S. Rail Serv. Issues—Performance Data Reporting, EP 724 (Sub-No. 4).

    Based on the developments in case law related to ex parte communications and the Board's own experiences waiving its ex parte prohibitions in the two recent proceedings, the Board determined that it was appropriate to revisit the agency's strict prohibition on ex parte communications in informal rulemaking proceedings. The Board also determined that certain other aspects of its ex parte regulations that apply to proceedings other than rulemakings could be clarified and updated to reflect current practices and better guide stakeholders and agency personnel. Accordingly, the Board issued an NPRM on September 28, 2017, proposing to: (1) Modify its regulations to permit, subject to disclosure requirements, ex parte communications in informal rulemaking proceedings, and (2) change its ex parte rules to clarify and update when and how interested persons may communicate informally with the Board regarding pending proceedings other than rulemakings. See Ex Parte Commc'ns in Informal Rulemaking Proceedings (NPRM), EP 739 (STB served Sept. 28, 2017). The Board received nine opening comments and three reply comments on the NPRM. 10

    10 Comments were received from the following organizations: The American Chemistry Council, the Fertilizer Institute, the National Industrial Transportation League, American Fuel and Petrochemical Manufacturers, Independent Lubricant Manufacturers Association, International Warehouse Logistics Association, American Forest & Paper Association, Alliance for Rail Competition, Private Railcar Food and Beverage Association, Glass Packaging Institute, National Association of Chemical Distributors, the Chlorine Institute, Alliance of Automobile Manufacturers, Association of Global Automakers, American Petroleum Institute, American Malting Barley Association, Corn Refiners Association, Portland Cement Association, and Plastics Industry Association (collectively the Rail Customer Coalition or RCC); the American Short Line and Regional Railroad Association (ASLRRA); the Association of American Railroads (AAR); BNSF Railway Company (BNSF); the Freight Rail Customer Alliance (FRCA); the George Mason University Antonin Scalia Law School Administrative Law Clinic (GMU); the National Grain and Feed Association (NGFA); Samuel J. Nasca on behalf of SMART/Transportation Division, New York State Legislative Board (SMART); and the Western Coal Traffic League (WCTL). On November 1, 2017, the Board also received a letter from NGFA informing the Board that the following national agricultural producer and agribusiness organizations notified NGFA that they support NGFA's opening comments: National Association of State Departments of Agriculture, National Council of Farmer Cooperatives, National Farmers Union, National Oilseed Processors Association, and North American Millers' Association.

    Below, the Board addresses the comments submitted by parties in response to the NPRM and discusses clarifications and modifications being adopted in the final rule. The text of the final rule is also below.

    Changes to Definitions. In the NPRM, the Board proposed to add two new definitions to section 1102.2(a): “informal rulemaking proceeding” and “covered proceedings.” “Informal rulemaking proceeding” would include any proceeding to issue, amend, or repeal rules pursuant to 49 CFR part 1110 and 5 U.S.C. 553. “Covered proceedings” would encompass both on-the-record proceedings and informal rulemaking proceedings following the issuance of an NPRM.11 The Board further proposed, as discussed in more detail below, that ex parte communications would be permitted in informal rulemaking proceedings (subject to disclosure requirements for those communications occurring post-NPRM), but would remain prohibited in on-the-record proceedings.

    11 Accordingly, the Board proposed to replace references to “on-the-record proceedings” with “covered proceedings,” as appropriate, throughout section 1102.2.

    Additionally, the Board proposed redefining an “ex parte communication” as “an oral or written communication that concerns the merits or substantive outcome of a pending proceeding; is made without notice to all parties and without an opportunity for all parties to be present; and could or is intended to influence anyone who participates or could reasonably be expected to participate in the decision.” This proposed new definition would alter the existing definition in two ways; first, by removing the existing concept that communications are only ex parte if made “by or on behalf of a party” and second, by removing the suggestion that an ex parte communication that is made with the “consent of any other party” could be permissible.

    The Board noted in the NPRM that these revisions would not change the generally understood concept that certain communications, by their very nature, do not concern the merits or substantive outcome of pending proceedings or are not made to Board Members or staff who are reasonably expected to participate in Board decisions. Such permissible communications include, for example, communications about purely procedural issues; public statements or speeches by Board Members or staff that merely provide general and publicly available information about a proceeding; communications that solely concern the status of a proceeding; and communications with the Board's Rail Customer and Public Assistance Program.

    ASLRRA, NGFA, and RCC support the proposed changes to the definitions. (ASLRRA Comments 3; NGFA Comments 5; RCC Comments 7.) ASLRRA argues that the proposed definitions and amendments preserve the transparency and fairness of the rulemaking process. (ASLRRA Comments 3.)

    WCTL supports the Board's proposed changes to the definition of “ex parte communication.” (WCTL Comments 23; WCTL Reply 9.) WCTL agrees with the Board that ex parte communications can be made by non-parties and that the definition of “ex parte communication” should encompass communications made by these non-parties. (WCTL Reply 9.) WCTL argues, however, that the Board should amend the definition of “on-the-record proceeding” to expressly include rate reasonableness and unreasonable practice adjudications. (WCTL Comments 19.) According to WCTL, rate reasonableness and unreasonable practice cases may not technically be formal “on-the-record” proceedings within the meaning of the APA, and adding the suggested text would remove any uncertainty. (Id. at 20.) AAR states that it does not oppose WCTL's suggestion. (AAR Reply 5.)

    The final rule will adopt the proposal as set forth in the NPRM. It is not necessary to amend the definition of “on-the-record proceeding” to specifically include rate reasonableness and unreasonable practice adjudications, as WCTL suggests. Although rate reasonableness and unreasonable practice formal complaints may not technically be covered by the APA definition of on-the-record proceedings, the definition of that term in the Board's regulations is sufficient to cover those types of proceedings, which are decided solely on the record. See 49 CFR 1102.2(a)(1).

    Communications That Are Not Prohibited. The Board also proposed in the NPRM to modify section 1102.2(b) to include additional categories of ex parte communications that are permissible and would not be subject to the disclosure requirements of proposed section 1102.2(e) and (g), discussed in more detail below. Specifically, the Board proposed adding to this category communications related to an informal rulemaking proceeding prior to the issuance of an NPRM; 12 communications related to the Board's implementation of the National Environmental Policy Act and related environmental laws; and communications concerning judicial review of a matter that has already been decided by the Board made between parties to the litigation and the Board or Board staff involved in that litigation. Additionally, the Board proposed to modify the existing regulations to remove from section 1102.2(b)(1) the language permitting any communication “to which all the parties to the proceeding agree.”

    12 For example, informal communications following a notice of intent to institute a rulemaking proceeding or an advance notice of proposed rulemaking (ANPRM) would not be prohibited. See 49 CFR 1110.3(b).

    NGFA, RCC, and WCTL support including environmental review and judicial review communications within the scope of permitted ex parte communications. (NGFA Comments 5; RCC Comments 7; WCTL Comments 2; WCTL Reply 2, 10.) ASLRRA, NGFA, and RCC also support the proposal to permit ex parte communications prior to the issuance of an NPRM. (ASLRRA Comments 3; NGFA Comments 3; RCC Comments 7.) ASLRRA argues that allowing undisclosed ex parte communications prior to the issuance of an NPRM would enable the Board to obtain helpful stakeholder input, particularly in the preliminary stages of a rulemaking proceeding, without adversely implicating due process or raising administrative concerns. (ASLRRA Comments 3.) NGFA likewise supports permitting undisclosed ex parte communications before the issuance of an NPRM. (NGFA Comments 3.) According to NGFA, the information the Board gathers prior to the issuance of an NPRM would be evident within the NPRM itself. (Id.) NGFA, however, suggests that the Board adopt the practice of including in the NPRM a list of the identities of all stakeholders who provided input, as the Board did in Expediting Rate Cases, EP 733, slip op. at 2 n.3 (STB served June 15, 2016). (Id.)

    AAR, FRCA, SMART, and WCTL object to the Board's proposal to permit undisclosed ex parte communications prior to the issuance of an NPRM. (See AAR Comments 5-6; FRCA Comments 1; SMART Comments 10; WCTL Comments 21; AAR Reply 4.) AAR argues that the Board should require the disclosure of ex parte contacts occurring after the issuance of an ANPRM. (AAR Comments 5-6.) For cases initiated by a petition for rulemaking, AAR suggests that ex parte communications should be permitted, subject to disclosure requirements, once that petition has been filed and docketed. (AAR Reply 5.) AAR argues that such a rule would be consistent with Department of Transportation (DOT) policy that recommends disclosure of ex parte communications upon issuance of an ANPRM, and Federal Aviation Administration rules that require disclosure of ex parte communications before an ANPRM or an NPRM. (AAR Comments 6.) According to AAR, permitting such ex parte communications without disclosure may discourage stakeholder participation on the record. (AAR Comments 6; AAR Reply 4-5.) 13

    13 AAR also asks the Board to clarify whether ex parte communications would be permitted in major rail merger proceedings and suggests that the Board add a new paragraph section 1102.2(b)(7) permitting, as a communication that is not prohibited, “[a]ny communication permitted by statute.” (AAR Comments 7.) WCTL objected to AAR's suggestion, arguing that it does not comply with the provisions of 49 U.S.C. 11324(f) and conflicts with the Board's 1996 determination not to exercise its statutory authority under section 11324(f) to permit ex parte communications in merger cases. (WCTL Reply 8-9 (citing Pet. of Fieldston Co. to Establish Procedures Regarding Ex Parte Commc'ns in R.R. Merger Proceedings, 1 S.T.B. 1083, 1084-85 (1996)).) The Board finds that this request, related to major merger proceedings, is outside the scope of this proceeding, which focuses primarily on informal rulemaking proceedings; however, parties are free to raise the issue of the permissibility of ex parte communications in individual major merger proceedings.

    WCTL likewise argues that the Board should apply ex parte communication disclosure rules and limitations to all publicly-docketed informal rulemaking proceedings where the Board has sought public comments (e.g., if the Board initiates a docketed proceeding using an ANPRM, the ex parte communication rules would apply starting when the ANPRM is docketed). (WCTL Comments 21; WCTL Reply 3-4.) WCTL argues that this would better advance the Board's objective of “free flowing” communications by allowing all interested members of the public to see what others are saying in ex parte meetings and to then respond to these communications. (WCTL Comments 21; WCTL Reply 4.) According to WCTL, permitting undisclosed ex parte communications prior to the issuance of an NPRM would discourage parties from filing detailed comments in response to ANPRMs and similar forms of pre-NPRM notices when those comments may be rejected based on ex parte communications that the parties were unaware of and had no opportunity to rebut. (WCTL Comments 21.) FRCA agrees with WCTL that disclosure requirements “should not become operative only after an [NPRM] is served.” (FRCA Comments 1.) Lastly, SMART argues that the 2014 ACUS Recommendation raises potential harms that would apply to ex parte communications prior to issuance of an NPRM (although the alleged potential harms are not specified by SMART). (SMART Comments 9-10 (citing 2014 ACUS Recommendation, 79 FR 35993-95).)

    Having reviewed the comments, the Board continues to believe that the benefits of not requiring disclosure for ex parte communications prior to the issuance of an NPRM outweigh the potential harms. Regarding the benefits, the Board agrees with ASLRRA that such communication would enable the Board to obtain helpful stakeholder input in crafting proposed regulations. Informal communications with stakeholders prior to issuance of an NPRM provide an opportunity for the Board to obtain useful information and input that would inform the development of the Board's proposal and help identify the issues the agency should consider. In fact, the final report to ACUS, on which the 2014 ACUS Recommendation is based, states that “pre-NPRM ex parte communications are generally beneficial and do not implicate administrative and due process principles.” Esa L. Sferra-Bonistalli, Ex Parte Commc'ns in Informal Rulemaking Final Report (Final Report), 69 (May 1, 2014) (prepared for consideration of the Admin. Conference of the U.S.), https://www.acus.gov/report/final-ex-parte-communications-report. The report continued, stating that “[r]ather than restricting [ex parte] communications, agencies should experiment with how they can capitalize on the communications' value.” Id. at 85. Thus, permitting informal communications pre-NPRM, without restrictions, such as disclosure and timing requirements, could lead to better policy-making by enabling a freer flow of communication during the preliminary, exploratory phase of a rulemaking proceeding.

    The Board believes that these benefits outweigh any potential harms. SMART's claim—that the ACUS report raises some important potential and anticipated harms that would apply to ex parte communications prior to issuance of an NPRM—is inconsistent with the conclusion of ACUS's recommendations. ACUS expressly states that “[b]efore an agency issues [an NPRM], few if any restrictions on ex parte communications are desirable.” 2014 ACUS Recommendation, 79 FR 35994. ACUS further states that pre-NPRM communications are “less likely” to pose the same harms as ex parte communications that take place later in the process, and “can help an agency gather essential information, craft better regulatory proposals, and promote consensus building among interested persons.” Id.

    In addition, the potential harm identified by both WCTL and AAR—that commenters would be less likely to file comments on the record during a proceeding—seems unlikely. In a recent case where the Board invited and/or received informal stakeholder communications prior to the initiation of a proceeding, participation in the subsequent proceeding remained at a high level. See, e.g., Expediting Rate Cases, Docket No. EP 733 (25 comments received following informal communications). The Board believes that stakeholders will continue to weigh in on proposed rules (through written comments and/or disclosed ex parte communications) even where they have had an opportunity to share general and preliminary views with the agency pre-NPRM. Additionally, as the Board noted in the NPRM, any information gathered in a pre-NPRM meeting that the Board incorporates or relies upon in its proposal will be evident in the NPRM itself. See NPRM, EP 739, slip op. at 10. The public would have an opportunity to examine and respond to that information.14 The Board believes that parties will still have the incentive to participate through written comments following informal ex parte communications to ensure that the Board has a record that reflects their views.

    14 For example, as the Board noted in the NPRM, in Docket No. EP 733, Expediting Rate Cases, where Board staff held informal meetings with stakeholders with the goal of enhancing the Board staff's perspective on strategies and pathways to expedite and streamline rate cases, parties were permitted to comment on the details of the proposal, including those stemming from feedback gathered in the informal meetings. See NPRM, EP 739, slip op. at 10 n.12; see also Expediting Rate Cases, EP 733, slip op. at 1 (STB served June 15, 2017).

    For these reasons, the final rule will adopt the proposal regarding communications that are not prohibited as set forth in the NPRM.

    Communications That Are Prohibited. In the NPRM, the Board proposed to modify section 1102.2(c)(1) by adding the introductory clause, “[e]xcept to the extent permitted by these rules” to reflect the fact that the revised rules would now govern, but not entirely prohibit, ex parte communications.

    The Board also proposed amending section 1102.2(d) to clarify when ex parte prohibitions would take effect and how long they would remain in effect. Specifically, the NPRM provided that the prohibitions against ex parte communications in on-the-record proceedings would begin when the first filing or Board decision in a proceeding is posted to the public docket or when the person responsible for a communication knows that the first filing has been filed with the Board, whichever occurs first. The Board further proposed that, in informal rulemaking proceedings, except as provided in the new section 1102.2(g), discussed in more detail below, the prohibitions on ex parte communications would begin when the Board issues an NPRM. Lastly, the Board proposed to clarify that ex parte prohibitions in covered proceedings would remain in effect until the proceeding is no longer subject to administrative reconsideration under 49 U.S.C. 1322(c) or judicial review.

    Commenters generally support this proposal. ASLRRA states that it supports the proposed changes to section 1102.2(d), which clarify when ex parte prohibitions would begin. (ASLRRA Comments 3.) Likewise, NGFA states that it supports changing the provision on when ex parte prohibitions begin to better reflect the various ways Board proceedings are initiated. (NGFA Comments 5.) NGFA and RCC also both support application of the ex parte prohibitions when the first filing or Board decision is posted to the public docket in an on-the-record proceeding. (Id.; RCC Comments 7-8.) No commenters raised specific objections to this aspect of the Board's proposal. Accordingly, the final rule will adopt the proposal as set forth in the NPRM.

    Procedures Upon Receipt of Prohibited Ex Parte Communications. The Board also proposed to revise section 1102.2(e) and (f), which entail the procedures required of Board Members and employees upon receipt of prohibited ex parte communications and sanctions, to reflect the fact that some ex parte communications would now be permissible under the revised regulation. First, the proposed rules clarified that the procedures in section 1102.2(e)(1) and (2) would apply to “[a]ny Board Member, hearing officer or Board employee” who receives an ex parte communication. Second, the proposal clarified that the procedures set forth in the existing section 1102.2(e) and (f) would apply only to communications not otherwise permitted by the regulation. Lastly, the Board proposed to amend the provision in section 1102.2(e)(1)—that currently requires the Chief of the Office of Proceedings' Section of Administration to place any written communication or a written summary of an oral communication not permitted by these regulations in the public correspondence file—to also require that such placements be made “promptly” and contain a label indicating that the prohibited ex parte communication is not part of the decisional record of the proceeding.

    The only comment in response to this aspect of the proposal was from WCTL, which states that it agrees with the Board's proposal to clarify the procedures the Board should follow if a Board Member or Board staff receives a prohibited ex parte communication. (WCTL Comments 24; WCTL Reply 10.) No commenters objected to the proposal. Accordingly, the final rule will adopt the proposal as set forth in the NPRM.

    Ex Parte Communications in Informal Rulemaking Proceedings. In the NPRM, the Board proposed to add a new section 1102.2(g) specifically governing ex parte communications in informal rulemaking proceedings that occur following the issuance of an NPRM, at which point disclosure requirements would attach. Under the proposed rule, ex parte communications with Board Members in informal rulemaking proceedings following the issuance of an NPRM would be permitted, subject to disclosure requirements, until 20 days before the deadline for reply comments to the NPRM, unless otherwise specified by the Board. The proposed rules provided that Board Members may delegate their participation in such ex parte communications to Board staff.

    Under the proposed rules, ex parte communications in informal rulemaking proceedings that occur outside of the permitted meeting period, that are made to Board staff where such participation has not been delegated by the Board, or that do not comply with the required disclosure requirements would be subject to the sanctions provided in section 1102.2(f). Further, the proposed rules provided that, to schedule an ex parte meeting, parties should contact the Board's Office of Public Assistance, Governmental Affairs, and Compliance at (202) 245-0238 or the Board Member office with whom the meeting is requested, unless otherwise specified by the Board.

    The proposed rules also required that the substance of each ex parte meeting be disclosed by the Board by posting in the docket of the proceeding a written meeting summary of the arguments, information, and data presented at each meeting and a copy of any handouts given or presented. The proposed meeting summary would also disclose basic information about the meeting, including the date and location of the ex parte communication (or means of communication in the case of telephone calls or video-conferencing) and a list of attendees/participants. The proposed rules further provided that the meeting summaries would have to be sufficiently detailed to describe the substance of the ex parte communication. Under the proposed rules, presenters could be required to resubmit summaries that are insufficiently detailed or that contain inaccuracies as to the substance of the presentation.

    The proposed rules also provided that a single meeting summary could be submitted to the Board even if multiple parties, persons, or counsel were involved in the same ex parte meeting. In such instances, it would be the responsibility of the person submitting the summary to ensure that all other parties at the meeting agree to the form and content of the summary. The proposed rules would permit parties to present confidential information during ex parte meetings. Under the proposed rules, if the presentations contain material that a party asserts is confidential under an existing protective order governing the proceeding, parties would be required to present a public version and a confidential version of ex parte summaries and any handouts. If a protective order has not been issued in the proceeding at the time the presenter seeks to file a meeting summary or handout containing confidential information, the proposed rules provided that the presenting party would have to file a request with the Board seeking such an order no later than the date it submits its meeting summary. The proposed rules also required parties to submit summaries within two business days of an ex parte presentation or meeting. Under the proposed rules, the Board would post the summaries within seven days of submission of a summary that is complete for posting.

    Comments in Support. Most commenters were supportive of the Board's proposal to permit, subject to disclosure requirements, ex parte communications in informal rulemaking proceedings. (See AAR Comments 2; ASLRRA Comments 1; BNSF Comments 1; GMU Comments 1; RCC Comments 3.) AAR and ASLRRA state that the Board should adopt the proposed rules because they will lead to better reasoned decision-making and more informed rules. (AAR Comments 3; see also ASLRRA Comments 4.) AAR argues that the relatively modest burdens that ex parte meetings might place on stakeholders participating in rulemaking proceedings would be outweighed by the benefits of improved flow of relevant information to Board decision makers. (AAR Reply 3.) According to AAR, face-to-face communications would allow the Board to ensure that its data and information have not grown stale over time, and even when communications do not provide new information, face-to-face conversations summarizing and highlighting points of emphasis can provide value to decision-makers. (AAR Comments 4.) AAR also noted that the NPRM is responsive to stakeholder requests for more interaction with Board Members and staff. (Id.) ASLRRA also supports the proposed process for ex parte communications during informal rulemaking proceedings, stating that it would ensure transparency and fairness. (ASLRRA Comments 3.) According to ASLRRA, the Board's proposal meets its goals of enhancing its ability to make informed decisions in informal proceedings while ensuring its record-building in rulemaking proceedings remains transparent and fair. (Id. at 1.)

    BNSF likewise supports the Board's proposal, stating that increased communications with the Board regarding informal rulemakings will provide value to both the Board and its stakeholders. (BNSF Comments 2.) According to BNSF, the Board's current ex parte regulations reflect the outdated and overly restrictive view of the Board's predecessor agency, the ICC, and are “out of step” with long-held doctrines of administrative law, the ex parte rules generally under the APA, and procedures of other federal agencies. (Id. at 1-2; see also AAR Comments 1 (“[T]he Board's application of its current regulations unnecessarily prohibits most informal communications with the Board and its staff in the informal rulemaking context.”).) BNSF argues that modernizing the Board's ex parte rules to permit an increased flow of information and technical expertise between the Board and its stakeholders during informal rulemaking proceedings will enable the Board to engage in more reasoned policymaking and should produce regulatory policies that are more grounded in the complex operational and market realities currently facing the rail industry. (BNSF Comments 1.)

    GMU asserts that the Board's proposed changes to the procedures for ex parte communications would promote responsible governance by facilitating promulgation of informed substantive rules while preserving transparency. (GMU Comments 1.) According to GMU, relaxing the Board's ex parte regulations would remove a procedural hurdle, making it easier for the Board to engage in informed notice-and-comment proceedings, which in turn encourages transparency. (Id. at 2.) GMU further argues that the Board has the statutory authority to change its ex parte communications regulations in the context of a notice-and-comment rulemaking, noting that both the APA notice-and-comment requirements and the statutory provisions governing the Board permit ex parte communications during informal rulemaking proceedings. (Id. at 2-3.)

    RCC agrees that ex parte communications should be permitted in informal rulemaking proceedings if appropriate safeguards to preserve fairness and transparency also are adopted. (RCC Comments 3.) RCC states that ex parte communications in informal rulemakings would ultimately produce better outcomes. (Id.) According to RCC, face-to-face dialogue facilitates a more efficient exchange of information, development of ideas, explanation of concepts, and responsiveness to questions and would allow the Board to probe more deeply into subjects based upon the comments submitted. (Id. at 3-4.) RCC further states that the Board would also benefit from clarification of concepts and proposals submitted in written comments, especially in proceedings that implicate complex technical matters. (Id. at 4.)

    As further support for the Board's proposal, a number of commenters cite their positive experiences participating in ex parte meetings in recent Board proceedings where the agency waived the ex parte prohibition. (See, e.g., BNSF Comments 2 (noting that the ex parte meetings in U.S. Rail Serv. Issues—Performance Data Reporting, Docket No. EP 724 (Sub-No. 4), better informed the Board about highly technical service reporting issues and resulted in regulations that were more efficiently tailored to the realities of railroad operations); NGFA Comments 2-3 (stating that its ex parte meeting in U.S. Rail Serv. Issues—Performance Data Reporting, Docket No. EP 724 (Sub-No. 4), was extremely beneficial because it allowed NGFA to explain the details of their railroad service needs and concerns and to answer Board staff's questions in a more effective manner); RCC Comments 1-2 (noting positive experiences with ex parte meetings in Reciprocal Switching, Docket No. EP 711 (Sub-No. 1), and U.S. Rail Serv. Issues—Performance Data Reporting, Docket No. EP 724 (Sub-No. 4), as well as the informal meetings in Expediting Rate Cases, Docket No. EP 733).)

    Comments Requesting Modifications. Several commenters, while expressing overall support for the Board's proposal, suggest modifications that they argue would improve the rule. RCC urges the Board to be mindful of informal rulemaking proceedings that are closely associated with pending adjudicatory proceedings. (RCC Comments 6.) In that regard, RCC suggests that the Board establish safeguards against parties using permissible ex parte communications in the rulemaking proceedings to circumvent the prohibition of the same in adjudicatory proceedings. (Id.; see also WCTL Comments 18; AAR Reply 5.) RCC suggests that the most effective potential modifications would be to either: (1) Not allow ex parte communications in rulemakings that are closely associated with pending cases, or (2) not apply any rules that were developed in a rulemaking that utilized ex parte communications in pending adjudications. (RCC Comments 6.)

    NGFA and RCC both suggest that the Board modify the period during which ex parte communications would be permitted. (NGFA Comments 4; RCC Comments 5-6.) Specifically, they suggest that the Board permit ex parte communications for a specified time (e.g., 30 days) after the deadline for filing reply comments—subject to the same disclosure requirement contained in the NPRM—and permit written responses confined specifically to the content of the ex parte communication within 10 days thereafter. (NGFA Comments 4; RCC Comments 5-6.) According to both commenters, under the Board's proposal, which would prohibit ex parte communications within 20 days of the deadline for written reply comments, stakeholders would not have enough time to both participate in ex parte meetings and also review and prepare responses to other parties' written comments. (NGFA Comments 4; RCC Comments 4-5.) RCC adds that, in those proceedings where the Board solicits three rounds of comments, rather than the usual two rounds, the Board could apply its 20-day rule to the third round of comments and still preserve most of the benefits from ex parte communications. (RCC Comments 6.) RCC requests that, at a minimum, the Board express its willingness to extend the 20-day deadline on a case-by-case basis when appropriate to realize the benefits of ex parte communications in informal rulemakings. (Id.) AAR concurs in a modification that would permit ex parte communications for a specific time after the submission of at least two rounds of comments, stating that this change would allow meetings held with Board Members or staff to reflect all the issues in the record and would not create any incentives for parties to hold evidence or arguments back for the reply round. (AAR Reply 4.)

    WCTL, however, opposes allowing ex parte communications following the written comment period because it claims that doing so would add unnecessary cost and delay to rulemaking proceedings. (WCTL Reply 7-8.) WCTL also notes that ex parte communications conducted after the comment period has closed are disfavored by ACUS. (Id. at 8 (citing 2014 ACUS Recommendation, 79 FR 35994).)

    Additionally, AAR states that the proposal in section 1102.2(g)(1), which authorizes the Board to delegate its participation in such ex parte communications to Board staff, implies that such a delegation would require an entire board decision, which AAR argues would be unnecessarily formalistic. (AAR Comments 7.) AAR suggests that the Board should expand the proposed rules to indicate that communications with staff during the appropriate period are permissible, subject to disclosure rules. (Id.) AAR indicates there are many instances where technical information could be best explained to staff responsible for the subject matter, like financial reporting, costing, or railroad operations. (Id.)

    Regarding the proposed disclosure requirements, NGFA states that it supports the Board's proposals concerning the preparation and disclosure of ex parte meeting summaries that are detailed sufficiently to describe the substance of the communication, but recommends that the Board shorten the period for posting the meeting summaries from seven calendar days (as the Board proposed) to two business days. (NGFA Comments 4-5.) NGFA argues that this change would align with the two-business-day requirement for meeting summaries to be submitted by the participants in the ex parte communication and would provide for more timely transparency and opportunity for review by interested parties. (Id. at 5.)

    Comments in Opposition. Some commenters object to the idea of allowing ex parte communication in informal rulemaking proceedings or suggest that, if allowed, such communications be utilized more sparingly. SMART states that railroad employees, represented by SMART, would be adversely affected by a “ `closed door' and secret [Board] tribunal.” (SMART Comments 4.) According to SMART, the Board's proposal would “abolish[ ]” the prohibition on ex parte communications in most, if not all rulemakings, since the terms “informal” and “formal” rulemakings are not in the APA. (SMART Comments 3 n.2.) SMART argues that “unrestricted” and “wide-ranging” ex parte communications would be “prejudicial to parties and counsel situated at a distance,” because the Board does not have regional offices and rarely sets hearings outside the Washington, DC area. (SMART Comments 7.) It contends that telephonic communications are “not a satisfactory alternative for face-to-face participation.” (Id.) SMART further argues that “[t]here is nothing to suggest that face-to-face communication will better promote efficiency so as to substitute for the written word in the decisionmaking process”; rather, the “real impact of ex parte communication repeal would be to limit the audience, restrict the spread of knowledge, and * * * impair the final action.” (SMART Reply 4.) SMART also argues that joint meetings conducted with other parties and agency personnel could be problematic. (SMART Comments 8.) According to SMART, the Board need not adopt the proposed rule because it may continue to waive its ex parte prohibition, as it has done in two recent proceedings. (Id. at 7.) SMART also argues that the benefit of oral communication can be achieved through oral argument. (SMART Reply 5.)

    WCTL argues that the Board's proposal would increase the cost of participating in a rulemaking proceeding, (WCTL Comments 15), and likely result in substantial administrative delay, (Id. at 16). WCTL argues that the proposal would lead parties to believe they must participate in the ex parte communication process or they will be “left out.” (Id. at 15.) WCTL also argues that shippers, unlike large railroads, frequently lack the time and financial resources to participate in ex parte meetings, which can create the perception of an unlevel playing field. (Id. at 17.) WCTL further argues that, in many proceedings, the Board may have more efficient administrative tools to address concerns with the record, such as the use of technical conferences. (Id. at 16.) According to WCTL, unless the Board requires that ex parte sessions be video-taped and then makes the tapes publicly available, the perception may continue to be that deals are being done “behind closed doors,” not in open fora. (Id. at 17.) WCTL argues that the Board should instead continue to allow ex parte communications in informal rulemaking proceedings on a case-by-case basis. (Id. at 1, 14, 18; WCTL Reply 2, 5.) WCTL asserts that a case-by-case approach would address concerns raised by other commenters in this proceeding. (WCTL Reply 6-7.)

    FRCA agrees with WCTL that the Board should determine whether to permit ex parte communications on a case-by-case basis, although FRCA also acknowledges the benefits of ex parte communications in rulemakings generally. (FRCA Comments 1.) According to FRCA, permitting ex parte communications should not be the “automatic default” until the Board has accumulated more experience with ex parte communications. (Id.)

    AAR disagrees with WCTL that ex parte communications could result in administrative delay. (AAR Reply 5.) According to AAR, WCTL's suggestion of using technical conferences instead of ex parte meetings does not have to be an “either/or” proposition, as greater use of technical conferences could supplement NPRM proposals. (Id. at 3.) AAR also disagrees with WCTL's suggestion that the Board should permit ex parte communications in informal rulemaking proceedings on a case-by-case basis. (Id. at 2.) AAR argues that stakeholders will be best equipped to fully participate in a rulemaking when the rules for such participation are known in advance. (Id.) AAR notes that pre-established rules would save the Board from expending its limited time and resources on ad hoc determinations related to ex parte communications in every rulemaking proceeding on its docket. (Id. at 2-3.) AAR further asserts that the proposed rules would allow the Board, on a case-by-case basis, to restrict communications in a particular proceeding, if the concerns cited by WCTL or others present themselves. (Id. at 3.)

    Board Determination. After considering all of the comments, the Board concludes that direct communications with stakeholders in informal rulemaking proceedings, in accordance with a transparent and fair record-building process, would enhance the Board's consideration of issues and better enable it to promulgate the most effective regulations. The Board will first address the arguments of commenters that oppose the proposed rule. Then, the Board will address the suggested modifications to the proposed rule.

    The commenters that urge the Board to withdraw the proposal in favor of continuing to prohibit ex parte communications in rulemakings have not identified a potential or likely harm that outweighs the benefits of such communications. Specifically, the Board disagrees with SMART that permitting ex parte communications in informal rulemaking proceedings would create a “secret [Board] tribunal” and with WCTL that ex parte sessions must be video-taped and made publicly available in order not to be perceived as “behind closed doors.” The final rule incorporates safeguards to ensure the rulemaking process remains fair and transparent, such as requiring the written and public disclosure of ex parte communications received after a rule is proposed and providing parties an opportunity to submit written comments in response to those summaries. The Board agrees with RCC that the safeguards the Board has proposed are sufficient to preserve fairness and transparency in informal rulemakings. As noted above, the Board has gained familiarity in recent proceedings with developing such safeguards and has used that experience to develop the proposed rules. Additionally, as several commenters noted, the final rule is consistent with the practices of other agencies and the best practices guidelines published by ACUS.15

    15 SMART's assertion that the proposed rule improperly would “abolish[]” the prohibition on ex parte communications in most, if not all, rulemakings is not relevant to this proceeding. The APA prohibits ex parte communications in formal proceedings, but not in informal rulemaking proceedings. See Sierra Club, 657 F.2d at 402 (noting that Congress declined to extend the ex parte prohibition applicable to formal rulemakings to informal rulemakings despite being urged to do so). Should the Board conduct a rulemaking that is subject to the APA restriction, the rules proposed here would not apply.

    The Board also disagrees that the proposal would disadvantage witnesses and counsel located outside the Washington, DC area, as SMART asserts. As indicated in the NPRM, EP 739, slip op. at 8, 13, parties will be permitted to participate in ex parte meetings via telephone or videoconferencing. Indeed, ex parte meetings have been conducted remotely, and the Board does not believe that there is any significant difference in the effectiveness of the interaction between face-to-face meetings and meetings occurring via telephone or videoconferencing. Additionally, in response to SMART's argument that there is no evidence that direct communication will promote more efficiency in the decision-making process than written comments, the Board notes that ex parte communications are not intended to replace written comments in a rulemaking. Rather, ex parte communications are a supplement to the written record and provide parties with yet another avenue for communicating their needs and concerns to the Board. Ex parte communications would actually enhance the usefulness of written comments, as such communications would allow Board Members to obtain clarification and seek additional information regarding arguments contained in the written opening comments.

    The Board is not persuaded that WCTL's argument that parties will believe they must participate in the ex parte communication process to avoid having less access than others warrants limiting all parties' access to this communication tool. A party's decision whether or not to engage in ex parte communications is not much different than having to decide whether to participate through more traditional means, such as submitting written comments or participating in a hearing. In fact, unlike a traditional hearing, the proposal here would allow parties to participate remotely, as the Board is permitting ex parte meetings to be conducted via telephone and videoconference, which could reduce a party's cost to participate in a proceeding. The Board is confident that parties will be able to assess the appropriate level of participation for their organization based on their particularized interest in the subject matter. The Board's intention here is to provide stakeholders with increased access to the Board while maintaining a fair and transparent record-building process, and, for the reasons discussed in this decision, the Board believes the final rule achieves that goal.

    Additionally, the Board is not persuaded that permitting ex parte communications in informal rulemaking proceedings will result in “significant administrative delay,” as WCTL claims. While WCTL is correct that permitting ex parte communications necessarily will add some time to rulemaking proceedings, the Board believes that the benefit of the additional information provided will outweigh the disadvantages of a slightly longer procedural schedule. Based on the Board's experiences, incorporating ex parte communication into the informal rulemaking process results in final rules that better reflect the needs and concerns of the Board's stakeholders. (See AAR Comments 3; ASLRRA Comments 4; BNSF Comments 2; NGFA Comments 2-3; RCC Comments 1-2, 3; AAR Reply 3); see also 2014 ACUS Recommendation, 79 FR 35994. Contrary to SMART's and WCTL's arguments, the Board does not intend ex parte communications to be a substitute for oral argument or technical conferences in informal rulemaking proceedings. Rather, ex parte communications would supplement the tools currently available in rulemaking proceedings. If the Board believes oral argument or technical conferences would be useful, it may decide to include those steps as a supplement to (or even in lieu of, if the circumstances warrant) ex parte communications.

    To the extent that SMART and WCTL argue that the Board's recent practice of waiving the ex parte prohibition in particular proceedings is superior to the proposed rules, the Board agrees with AAR that stakeholders will be better equipped to fully participate in an informal rulemaking when the rules for participation are well-established. As AAR notes, pre-established rules would save the Board from expending time and resources on ex parte determinations in every rulemaking proceeding. Additionally, as several parties note, the Board by decision could restrict communications in a particular proceeding, where appropriate. Thus, the Board will not accept WCTL's and SMART's recommendation that the Board continue to waive its ex parte regulations on a case-by-case basis, rather than adopting changes to its ex parte regulations permitting ex parte regulations in informal rulemaking proceedings.

    Several parties proposed modifications to the Board's proposed ex parte communication procedures, which the Board addresses below. With regard to the most appropriate deadline for the conclusion of ex parte meetings in an informal rulemaking proceeding, the Board continues to believe that the cutoff should be 20 days before the reply comment deadline. NGFA's, RCC's, and AAR's suggestions—that the Board permit ex parte communications for a specified time after the deadline for filing reply comments—would add an additional round of comments and result in a longer proceeding than under the Board's proposal. Indeed, as WCTL argues, post-comment period ex parte communications are disfavored by ACUS given the propensity of those communications to delay proceedings if significant information is presented to the agency late in the process. (See WCTL Reply 8; see also 2014 ACUS Recommendation, 79 FR 35994.) ACUS notes in 2014 ACUS Recommendation that “the dangers associated with agency reliance on privately-submitted information become more acute” after the comment period closes and may require an agency to reopen the comment period. Post-comment period ex parte communications are also generally discouraged at several other agencies. See Final Report at 57, 59-60, 64 (noting prohibition or discouragement of post-comment period ex parte contacts at DOT, the U.S. Coast Guard, the Department of Education and the Federal Trade Commission). In addition, RCC's suggestion that the Board could permit written responses limited to just the ex parte communication meeting summaries could lead to disputes between commenters as to whether the response is properly limited to the summaries and put the Board in the position of having to resolve such disputes, which would only add to the complexity of the rulemaking process.

    However, considering NGFA's and RCC's arguments that parties may have insufficient time during the comment period to both prepare written comments and participate in ex parte meetings, the Board will be cognizant of such constraints when establishing reply comment period deadlines in rulemaking proceedings. Also, in particular proceedings, if a party is unable to both prepare written comments and participate in ex parte meetings within this deadline, it may seek an extension. Additionally, if the Board concludes in a particular proceeding that ex parte discussions would be more beneficial following the submission of written comments (e.g., in highly technical rulemakings where post comment ex parte communication would be beneficial to ensure the Board understands the complex, technical data and arguments), the Board may modify the procedural schedule to permit such discussion. See infra App. A, section 1102.2(g)(1) (“unless otherwise specified by the Board in procedural orders governing the proceeding”).

    The Board agrees with RCC that the Board must be mindful of informal rulemaking proceedings that are closely associated with pending adjudicatory proceedings to ensure that permissible ex parte communications in the rulemaking proceedings are not used to circumvent the prohibition of the such communications in the related adjudicatory proceedings. If the Board determines that ex parte communications are not appropriate for a particular rulemaking proceeding based on this concern, it can issue an order declining to permit such meetings in that particular proceeding. And if the Board concludes that ex parte meetings can be used, the Board may provide additional guidelines in its procedural order and inform parties of its expectations at the beginning of ex parte meetings.

    AAR raises a concern that the proposed language in section 1102.2(g)(1) implies that Board staff may only participate in ex parte communications after a delegation of authority through an “entire board” decision. The Board clarifies here that, under the proposal, no delegation would be required for Board staff to attend ex parte meetings scheduled with a Board Member (at that Member's request). A delegation of authority would be required only where the ex parte meetings would occur solely with staff (i.e., no Board Member in attendance), such as the ex parte meetings that occurred in U.S. Rail Service Issues—Performance Data Reporting, Docket No. EP 724 (Sub No. 4). Thus, it is the Board's determination that ex parte meetings will be conducted under the auspices of the Board Members' offices, unless the Board determines otherwise. AAR's suggestion that the Board permit, as a default option, ex parte communications with any Board staff could render the disclosure process—which is essential to maintaining fairness and transparency—unduly complicated. Under the AAR's proposal, the number of potential stakeholder meetings could increase exponentially, and after every such meeting, each individual staff contact would be required to be summarized and disclosed in a meeting summary that would be posted to the public docket, to which other parties would then have to review and possibly file responses. The Board, however, recognizes AAR's concern that there may be instances where interaction with Board technical staff would be beneficial. The Board anticipates that individual Members will make a concerted effort to include relevant staff in ex parte meetings or delegate the meetings to Board staff, when appropriate.

    In response to NGFA's request that the Board shorten the time permitted for meeting summaries to be posted by the Board, the Board will reduce the allotted time from within seven days of submission to within five days of submission. The Board believes that fewer than five days would not provide sufficient time for the Board to confirm that a meeting summary is sufficiently detailed to describe the substance of the presentation and request resubmissions, if necessary. However, the Board will endeavor to post meeting summaries as soon as they are ready. Thus, the final rule will adopt the proposal as set forth in the NPRM with this one modification.

    Application of the Final Rule. In its comments, WCTL argues that new ex parte communication rules should not be retroactively applied to pending proceedings. (WCTL Comments 22.) WCTL is concerned generally that the retroactive application of the new rules in pending proceedings would delay Board action in those proceedings. (Id. at 23; WCTL Reply 9 n.22.) AAR states that it does not disagree with WCTL and notes that if the Board believes that further communications would be beneficial in ongoing proceedings, the Board could issue waivers in those proceedings on a going-forward basis. (AAR Reply 5.) RCC, however, requests that the Board retroactively apply its new ex parte communications rules in one pending rulemaking proceeding, Review of Commodity, Boxcar, and TOFC/COFC Exemptions, Docket No. EP 704. (RCC Comments 7.) According to RCC, permitting ex parte meetings to occur in that rulemaking proceeding would ensure that the benefits and impacts of any final Board decision are fully understood by the Board and would, given the anticipated changes to the make-up of the Board since the proceeding was first instituted, help in briefing and educating any newly confirmed Board Members in their understanding of the issues. (Id.)

    The final rule will not be applied retroactively to pending proceedings. Rather, the final rule adopted here will apply to proceedings newly initiated following the effective date of the final rule. The Board, however, may waive the prohibition on ex parte communications in pending informal rulemaking proceedings on a case-by-case basis, as it did prior to the final rule. In such instances, the Board will set out the procedures that will govern such communications in an order.

    Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, generally requires a description and analysis of new rules that would have a significant economic impact on a substantial number of small entities. In drafting a rule, an agency is required to: (1) Assess the effect that its regulation will have on small entities; (2) analyze effective alternatives that may minimize a regulation's impact; and (3) make the analysis available for public comment. Sections 601-604. In its final rule, the agency must either include a final regulatory flexibility analysis, section 604(a), or certify that the proposed rule would not have a “significant impact on a substantial number of small entities,” section 605(b). The impact must be a direct impact on small entities “whose conduct is circumscribed or mandated” by the proposed rule. White Eagle Coop. v. Conner, 553 F.3d 467, 480 (7th Cir. 2009).

    In the NPRM, the Board certified under 5 U.S.C. 605(b) that the proposed rule would not have a significant economic impact on a substantial number of small entities within the meaning of the RFA.16 The Board explained that the proposed regulations provide for participation in ex parte communications with the Board in informal rulemaking proceedings to provide stakeholders with an alternative means of communicating their interests to the Board in a transparent and fair manner. When a party chooses to engage in ex parte communications with the Board in an informal rulemaking proceeding, the requirements contained in these proposed regulations do not have a significant impact on participants, including small entities. The Board noted that, while the proposed rules would require parties to provide written summaries of the ex parte communications, based on the Board's experiences in Reciprocal Switching, Docket No. EP 711 (Sub-No. 1), and U.S. Rail Service Issues—Performance Data Reporting, Docket No. EP 724 (Sub-No. 4), the summary documentation is a minimal burden. The meeting summaries are generally only a few pages long (excluding copies of handouts from the meetings that were attached). For example, the meeting summaries the Board received in U.S. Rail Service Issues—Performance Data Reporting, Docket No. EP 724 (Sub-No. 4), ranged from two to six pages in length. Of those summaries, nearly half were just two pages long. Likewise, in Reciprocal Switching, Docket No. EP 711 (Sub-No. 1), the meeting summaries ranged from one to four pages in length, with the majority of those summaries being three or fewer pages long. Therefore, the Board certified under 5 U.S.C. 605(b) that these proposed rules, if promulgated, would not place any significant burden on a substantial number of small entities.

    16 Effective June 30, 2016, for the RFA analysis for rail carriers subject to Board jurisdiction, the Board defines a “small business” as only those rail carriers classified as Class III rail carriers under 49 CFR 1201.1-1. See Small Entity Size Standards Under the Regulatory Flexibility Act, EP 719 (STB served June 30, 2016) (with Board Member Begeman dissenting). Class III carriers have annual operating revenues of $20 million or less in 1991 dollars, or $35,809,698 or less when adjusted for inflation using 2016 data. Class II rail carriers have annual operating revenues of less than $250 million in 1991 dollars or less than $447,621,226 when adjusted for inflation using 2016 data. The Board calculates the revenue deflator factor annually and publishes the railroad revenue thresholds on its website. 49 CFR 1201.1-1.

    The final rule adopted here revises the rules proposed in the NPRM; however, the same basis for the Board's certification of the proposed rule applies to the final rule. Thus, the Board again certifies under 5 U.S.C. 605(b) that the final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the RFA. A copy of this decision will be served upon the Chief Counsel for Advocacy, Office of Advocacy, U.S. Small Business Administration, Washington, DC 20416.

    List of Subjects in 49 CFR part 1102

    Administrative practice and procedure.

    It is ordered:

    1. The Board adopts the final rule as set forth in this decision. Notice of the adopted rule will be published in the Federal Register.

    2. This decision is effective April 4, 2018.

    3. A copy of this decision will be served upon the Chief Counsel for Advocacy, Office of Advocacy, U.S. Small Business Administration.

    Decided: February 27, 2018.

    By the Board, Board Members Begeman and Miller.

    Brendetta S. Jones, Clearance Clerk.

    For the reasons set forth in the preamble, the Surface Transportation Board amends 49 CFR part 1102 as follows:

    PART 1102—COMMUNICATIONS 1. The authority citation for part 1102 is revised to read as follows: Authority:

    49 U.S.C. 1321.

    2. Amend § 1102.2 as follows: a. Revise the section heading; b. Redesignate paragraphs (a)(2) and (3) as paragraphs (a)(4) and (5) and add new paragraphs (2) and (3); c. Revise newly redesignated paragraph (a)(5); d. Revise paragraphs (b) through (e); e. In paragraph (f)(1), remove “concerning the merits of a proceeding”; f. In paragraph (f)(2), add “covered” before the word “proceeding”; g. Revise paragraph (f)(3); and h. Add paragraph (g).

    The revisions and additions read as follows:

    § 1102.2 Procedures governing ex parte communications.

    (a) * * *

    (2) “Informal rulemaking proceeding” means a proceeding to issue, amend, or repeal rules pursuant to 5 U.S.C. 553 and part 1110 of this chapter.

    (3) “Covered proceedings” means on-the-record proceedings and informal rulemaking proceedings following the issuance of a notice of proposed rulemaking.

    (5) “Ex parte communication” means an oral or written communication that concerns the merits or substantive outcome of a pending proceeding; is made without notice to all parties and without an opportunity for all parties to be present; and could or is intended to influence anyone who participates or could reasonably be expected to participate in the decision.

    (b) Ex parte communications that are not prohibited and need not be disclosed. (1) Any communication that the Board formally rules may be made on an ex parte basis;

    (2) Any communication occurring in informal rulemaking proceedings prior to the issuance of a notice of proposed rulemaking;

    (3) Any communication of facts or contention which has general significance for a regulated industry if the communicator cannot reasonably be expected to have known that the facts or contentions are material to a substantive issue in a pending covered proceeding in which it is interested;

    (4) Any communication by means of the news media that in the ordinary course of business of the publisher is intended to inform the general public, members of the organization involved, or subscribers to such publication with respect to pending covered proceedings;

    (5) Any communications related solely to the preparation of documents necessary for the Board's implementation of the National Environmental Policy Act and related environmental laws, pursuant to part 1105 of this chapter;

    (6) Any communication concerning judicial review of a matter that has already been decided by the Board made between parties to the litigation and the Board or Board staff who are involved in that litigation.

    (c) General prohibitions. (1) Except to the extent permitted by the rules in this section, no party, counsel, agent of a party, or person who intercedes in any covered proceeding shall engage in any ex parte communication with any Board Member, hearing officer, or Board employee who participates, or who may reasonably be expected to participate, in the decision in the proceeding.

    (2) No Board Member, hearing officer, or Board employee who participates, or is reasonably expected to participate, in the decision in a covered proceeding shall invite or knowingly entertain any ex parte communication or engage in any such communication to any party, counsel, agent of a party, or person reasonably expected to transmit the communication to a party or party's agent.

    (d) When prohibitions take effect. In on-the-record proceedings, the prohibitions against ex parte communications apply from the date on which the first filing or Board decision in a proceeding is posted to the public docket by the Board, or when the person responsible for the communication has knowledge that such a filing has been filed, or at any time the Board, by rule or decision, specifies, whichever occurs first. In informal rulemaking proceedings, except as provided in paragraph (g) of this section, the prohibitions against ex parte communications apply following the issuance of a notice of proposed rulemaking. The prohibitions in covered proceedings continue until the proceeding is no longer subject to administrative reconsideration under 49 U.S.C. 1322(c) or judicial review.

    (e) Procedure required of Board Members and Board staff upon receipt of prohibited ex parte communications. (1) Any Board Member, hearing officer, or Board employee who receives an ex parte communication not permitted by these regulations must promptly transmit either the written communication, or a written summary of the oral communication with an outline of the surrounding circumstances to the Chief, Section of Administration, Office of Proceedings, Surface Transportation Board. The Section Chief shall promptly place the written material or summary in the correspondence section of the public docket of the proceeding with a designation indicating that it is a prohibited ex parte communication that is not part of the decisional record.

    (2) Any Board Member, hearing officer, or Board employee who is the recipient of such ex parte communication may request a ruling from the Board's Designated Agency Ethics Official as to whether the communication is a prohibited ex parte communication. The Designated Agency Ethics Official shall promptly reply to such requests. The Chief, Section of Administration, Office of Proceedings, shall promptly notify the Chairman of the Board of such ex parte communications sent to the Section Chief. The Designated Agency Ethics Official shall promptly notify the Chairman of all requests for rulings sent to the Designated Agency Ethics Official. The Chairman may require that any communication be placed in the correspondence section of the docket when fairness requires that it be made public, even if it is not a prohibited communication. The Chairman may direct the taking of such other action as may be appropriate under the circumstances.

    (f) * * *

    (3) The Board may censure, suspend, dismiss, or institute proceedings to suspend or dismiss any Board employee who knowingly and willfully violates the rules in this section.

    (g) Ex parte communications in informal rulemaking proceedings; disclosure requirements. (1) Notwithstanding paragraph (c) of this section, ex parte communications with Board Members in informal rulemaking proceedings are permitted after the issuance of a notice of proposed rulemaking and until 20 days before the deadline for reply comments set forth in the notice of proposed rulemaking, unless otherwise specified by the Board in procedural orders governing the proceeding. The Board may delegate its participation in such ex parte communications to Board staff. All such ex parte communications must be disclosed in accordance with paragraph (g)(4) of this section. Any person who engages in such ex parte communications must comply with any schedule and additional instructions provided by the Board in the proceeding. Communications that do not comply with this section or with the schedule and instructions established in the proceeding are not permitted and are subject to the procedures and sanctions in paragraphs (e) and (f) of this section.

    (2) To schedule ex parte meetings permitted under paragraph (g)(1) of this section, parties should contact the Board's Office of Public Assistance, Governmental Affairs, and Compliance or the Board Member office with whom the meeting is requested, unless otherwise specified by the Board.

    (3) Parties seeking to present confidential information during an ex parte communication must inform the Board of the confidentiality of the information at the time of the presentation and must comply with the disclosure requirements in paragraph (g)(4)(iv) of this section.

    (4) The following disclosure requirements apply to ex parte communications permitted under paragraph (g)(1) of this section:

    (i) Any person who engages in ex parte communications in an informal rulemaking proceeding shall submit to the Board Member office or delegated Board staff with whom the meeting was held a memorandum that states the date and location of the communication; lists the names and titles of all persons who attended (including via phone or video) or otherwise participated in the meeting during which the ex parte communication occurred; and summarizes the data and arguments presented during the ex parte communication. Any written or electronic material shown or given to Board Members or Board staff during the meeting must be attached to the memorandum.

    (ii) Memoranda must be sufficiently detailed to describe the substance of the presentation. Board Members or Board staff may ask presenters to resubmit memoranda that are not sufficiently detailed.

    (iii) If a single meeting includes presentations from multiple parties, counsel, or persons, a single summary may be submitted so long as all presenters agree to the form and content of the summary.

    (iv) If a memorandum, including any attachments, contains information that the presenter asserts is confidential, the presenter must submit a public version and a confidential version of the memorandum. If there is no existing protective order governing the proceeding, the presenter must, at the same time the presenter submits its public and redacted memoranda, file a request with the Board seeking such an order pursuant to § 1104.14 of this chapter.

    (v) Memoranda must be submitted to the Board in the manner prescribed no later than two business days after the ex parte communication.

    (vi) Ex parte memoranda submitted under this section will be posted on the Board's website in the docket for the informal rulemaking proceeding within five days of submission. If a presenter has requested confidential treatment for all or part of a memorandum, only the public version will appear on the Board's website. Persons seeking access to the confidential version must do so pursuant to the protective order governing the proceeding.

    [FR Doc. 2018-04411 Filed 3-2-18; 8:45 am] BILLING CODE 4915-01-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 635 [Docket No. 150121066-5717-02] RIN 0648-XG061 Atlantic Highly Migratory Species; Atlantic Bluefin Tuna Fisheries; General Category Fishery AGENCY:

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

    ACTION:

    Temporary rule; General category January fishery for 2018; inseason bluefin tuna quota transfer and closure.

    SUMMARY:

    NMFS transfers 10 metric tons (mt) of Atlantic bluefin tuna (BFT) quota from the Reserve category to the January 2018 subquota period (from January 1 through March 31, 2018, or until the available subquota for this period is reached, whichever comes first) and closes the General category fishery for large medium and giant BFT until the General category reopens on June 1, 2018. The quota transfer is based on consideration of the regulatory determination criteria regarding inseason adjustments and applies to Atlantic tunas General category (commercial) permitted vessels and Highly Migratory Species (HMS) Charter/Headboat category permitted vessels with a commercial sale endorsement when fishing commercially for BFT. The intent of the closure is to prevent overharvest of the available General category January 2018 BFT subquota as adjusted in this action.

    DATES:

    The quota transfer is effective February 28, 2018, through March 2, 2018. The closure is effective 11:30 p.m., local time, March 2, 2018, through May 31, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Sarah McLaughlin or Brad McHale, 978-281-9260.

    SUPPLEMENTARY INFORMATION:

    Regulations implemented under the authority of the Atlantic Tunas Convention Act (ATCA; 16 U.S.C. 971 et seq.) and the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act; 16 U.S.C. 1801 et seq.) governing the harvest of BFT by persons and vessels subject to U.S. jurisdiction are found at 50 CFR 635. Section 635.27 subdivides the U.S. BFT quota recommended by the International Commission for the Conservation of Atlantic Tunas (ICCAT) and as implemented by the United States among the various domestic fishing categories, per the allocations established in the 2006 Consolidated Highly Migratory Species Fishery Management Plan (2006 Consolidated HMS FMP) (71 FR 58058, October 2, 2006), as amended by Amendment 7 to the 2006 Consolidated HMS FMP (Amendment 7) (79 FR 71510, December 2, 2014). NMFS is required under ATCA and the Magnuson-Stevens Act to provide U.S. fishing vessels with a reasonable opportunity to harvest the ICCAT-recommended quota.

    NMFS is required, under regulations at § 635.28(a)(1), to file a closure notice for publication with the Office of the Federal Register when a BFT quota is reached or is projected to be reached. On and after the effective date and time of such notification, for the remainder of the fishing year or for a specified period as indicated in the notification, retaining, possessing, or landing BFT under that quota category is prohibited until the opening of the subsequent quota period or until such date as specified in the notice.

    The base quota for the General category is 466.7 mt. See § 635.27(a). Each of the General category time periods (January, June through August, September, October through November, and December) is allocated a “subquota” or portion of the annual General category quota. Although it is called the “January” subquota, the regulations allow the General category fishery under this quota to continue until the subquota is reached or March 31, whichever comes first. The subquotas for each time period are as follows: 24.7 mt for January; 233.3 mt for June through August; 123.7 mt for September; 60.7 mt for October through November; and 24.3 mt for December. Any unused General category quota rolls forward within the fishing year, which coincides with the calendar year, from one time period to the next, and is available for use in subsequent time periods. Effective January 1, 2017, NMFS transferred 14.3 mt of the 24.3-mt General category quota allocated for the December 2018 period to the January 2018 period, resulting in an adjusted subquota of 39 mt for the January period and a subquota of 10 mt for the December 2017 period (82 FR 60680, December 22, 2017).

    Although the 2017 ICCAT recommendation regarding western BFT management would result in an increase to the baseline U.S. BFT quota (i.e., from 1,058.79 mt to 1,247.86 mt) and subquotas for 2018 (including an expected increase in General category quota from 466.7 mt to 555.7 mt, consistent with the annual BFT quota calculation process established in Amendment 7), domestic implementation of that recommendation will take place in a separate rulemaking, likely to be finalized in mid-2018.

    Transfer of 10 mt From the Reserve Category to the General Category

    Under § 635.27(a)(9), NMFS has the authority to transfer quota among fishing categories or subcategories, after considering regulatory determination criteria provided under § 635.27(a)(8). NMFS has considered all of the relevant determination criteria and their applicability to this inseason quota. These considerations include, but are not limited to, the following:

    Regarding the usefulness of information obtained from catches in the particular category for biological sampling and monitoring of the status of the stock (§ 635.27(a)(8)(i)), biological samples collected from BFT landed by General category fishermen and provided to researchers by tuna dealers give NMFS valuable parts and data for ongoing scientific studies of BFT age and growth, migration, and reproductive status.

    NMFS also considered the catches of the General category quota to date (including during the winter fishery in the last several years), and the likelihood of closure of that segment of the fishery if no adjustment is made (§ 635.27(a)(8)(ii)). As of February 26, 2018, the General category landed 31.3 mt (80 percent) of its adjusted January 2018 subquota of 39 mt. Although this Notice also closes the fishery, without a quota transfer, closure may have been necessary sooner or the subquota category could have exceeded its available quota, while some quota is available in the Reserve category and while commercial-sized bluefin tuna may remain available in the areas where General category permitted vessels operate at this time of year. Transferring 10 mt of quota from the Reserve category would result in 49 mt being available for the January fishery, thus providing limited additional opportunities to harvest the U.S. bluefin tuna quota while avoiding exceeding it.

    Regarding the projected ability of the vessels fishing under the particular category quota (here, the General category) to harvest the additional amount of BFT before the end of the fishing year (§ 635.27(a)(8)(iii)), NMFS anticipates that all of the 10 mt of qutoa will be used by March 2, based on current figures and the relatively small amount of quota being transferred. In the unlikely event that any of this quota is unused, by March 31, such quota will roll forward to the next subperiod within the calendar year (i.e., the June-August time period), and NMFS anticipates that it would be used before the end of the fishing year.

    NMFS also considered the estimated amounts by which quotas for other gear categories of the fishery might be exceeded (§ 635.27(a)(8)(iv)) and the ability to account for all 2018 landings and dead discards. In the last several years, total U.S. BFT landings have been below the available U.S. quota such that the United States has carried forward the maximum amount of underharvest allowed by ICCAT from one year to the next. In 2016 and 2017, the General category exceeded its adjusted quota (discussed below) but sufficient quota was available to cover the exceedance without affecting the other categories. NMFS will need to account for 2018 landings and dead discards within the adjusted U.S. quota, consistent with ICCAT recommendations, and anticipates having sufficient quota to do that, even with the 10 mt transfer to the General category for the January fishery.

    This transfer would be consistent with the current quotas, which were established and analyzed in the 2015 BFT quota final rule (80 FR 52198, August 28, 2015), and with objectives of the 2006 Consolidated HMS FMP and amendments. (§ 635.27(a)(8)(v) and (vi)). At this time, there is a relatively small amount of quota in the Reserve category available to transfer to other categories or use for scientific research and for prudent responsive management. In the past, we have conducted the annual reallocation of unused Purse Seine category quota to the Reserve category earlier in the year, which resulted in more Reserve category quota available at this time of year. Even if more quota were available, however, we likely would limit the amount of transferred quota, given considerations related to prudent longer-term management for all categories of the fishery this year. Another principal consideration is the objective of providing opportunities to harvest the full annual U.S. BFT quota without exceeding it based on the goals of the 2006 Consolidated HMS FMP and Amendment 7, including to achieve optimum yield on a continuing basis and to optimize the ability of all permit categories to harvest their full BFT quota allocations (related to § 635.27(a)(8)(x)).

    NMFS also anticipates that some underharvest of the 2017 adjusted U.S. BFT quota will be carried forward to 2018 and placed in the Reserve category, in accordance with the regulations, later this year. This, in addition to the fact that any unused General category quota will roll forward to the next subperiod within the calendar year, as well as the anticipated increase in the U.S. quota and subquotas for 2018 as a result of ICCAT recommendations and NMFS' plan to actively manage the subquotas to avoid any exceedances, makes it likely that General category quota will remain available through the end of 2018 for December fishery participants, after the fishery re-opens later this year. NMFS also may choose to transfer unused quota from the Reserve or other categories, inseason, based on consideration of the determination criteria, as NMFS did for late 2017 (i.e., transferred 156.4 mt from the Reserve category, effective October 1, 2017 (82 FR 46000, October 3, 2017)), and later transferred another 25.6 mt from the Harpoon category, effective December 1 (82 FR 55520, November 22, 2017). NMFS anticipates that General category participants in all areas and time periods will have opportunities to harvest the General category quota in 2018, through active inseason management such as retention limit adjustments and/or the timing of quota transfers, as practicable. Thus, this quota transfer would allow fishermen to take advantage of the availability of fish on the fishing grounds to the extent consistent with the available amount transferrable quota and other management objectives, while avoiding quota exceedance.

    Based on the considerations above, NMFS is transferring 10 mt of the 24.8-mt Reserve category quota to the General category for the January 2018 fishery, resulting in a subquota of 49 mt for the January 2018 fishery and 14.8 mt in the Reserve category.

    Closure of the January 2018 General Category Fishery

    Based on the best available bluefin tuna General category landings information (i.e., 31.3 mt landed as of February 26, 2018) as well as average catch rates and anticipated fishing conditions, NMFS projects that the General category January subquota of 49 mt, as adjusted in this action, will be reached by March 2, 2018, and that the fishery should be closed to avoid exceedance of the enhanced quota. Through this action, we are closing the General category bluefin tuna fishery effective 11:30 p.m., March 2, 2018, through May 31, 2018. The fishery will reopen on June 1, 2018, with a quota of 233.3 mt available for the June through August time period. Therefore, retaining, possessing, or landing large medium or giant BFT by persons aboard vessels permitted in the Atlantic tunas General and HMS Charter/Headboat categories must cease at 11:30 p.m. local time on March 2, 2018. The General category will reopen automatically on June 1, 2018, for the June through August 2018 subquota period. This action applies to Atlantic tunas General category (commercial) permitted vessels and Highly Migratory Species (HMS) Charter/Headboat category permitted vessels when fishing commercially for BFT, and is taken consistent with the regulations at § 635.28(a)(1). The intent of this closure is to prevent overharvest of the available General category January BFT subquota.

    Fishermen may catch and release (or tag and release) BFT of all sizes, subject to the requirements of the catch-and-release and tag-and-release programs at § 635.26. All BFT that are released must be handled in a manner that will maximize their survival, and without removing the fish from the water, consistent with requirements at § 635.21(a)(1). For additional information on safe handling, see the “Careful Catch and Release” brochure available at www.nmfs.noaa.gov/sfa/hms/.

    Monitoring and Reporting

    NMFS will continue to monitor the BFT fishery closely. Dealers are required to submit landing reports within 24 hours of a dealer receiving BFT. Late reporting by dealers compromises NMFS' ability to timely implement actions such as quota and retention limit adjustment, as well as closures, and may result in enforcement actions. Additionally, and separate from the dealer reporting requirement, General and HMS Charter/Headboat category vessel owners are required to report the catch of all BFT retained or discarded dead within 24 hours of the landing(s) or end of each trip, by accessing hmspermits.noaa.gov or by using the HMS Catch Reporting App.

    Depending on the level of fishing effort and catch rates of BFT, NMFS may determine that additional action (e.g., quota adjustment, daily retention limit adjustment, or closure) is necessary to ensure available subquotas are not exceeded or to enhance scientific data collection from, and fishing opportunities in, all geographic areas. If needed, subsequent adjustments will be published in the Federal Register. In addition, fishermen may call the Atlantic Tunas Information Line at (978) 281-9260, or access hmspermits.noaa.gov, for updates on quota monitoring and inseason adjustments.

    Classification

    The Assistant Administrator for NMFS (AA) finds that it is impracticable and contrary to the public interest to provide prior notice of, and an opportunity for public comment on, this action for the following reasons:

    The regulations implementing the 2006 Consolidated HMS FMP and amendments provide for inseason quota transfers and fishery closures to respond to the unpredictable nature of BFT availability on the fishing grounds, the migratory nature of this species, and the regional variations in the BFT fishery. These fisheries are currently underway and the currently available quota for the subcategory is projected to be reached shortly. Affording prior notice and opportunity for public comment to implement the quota transfer is impracticable and contrary to the public interest as such a delay would likely result in exceedance of the General category January fishery subquota or earlier closure of the fishery while fish are available on the fishing grounds. Subquota exceedance may result in the need to reduce quota for the General category later in the year and thus could affect later fishing opportunities. Therefore, the AA finds good cause under 5 U.S.C. 553(b)(B) to waive prior notice and the opportunity for public comment. For all of the above reasons, there also is good cause under 5 U.S.C. 553(d) to waive the 30-day delay in effectiveness.

    This action is being taken under §§ 635.27(a)(9) and 635.28(a)(1), and is exempt from review under Executive Order 12866.

    Authority:

    16 U.S.C. 971 et seq. and 1801 et seq.

    Dated: February 28, 2018. Jennifer M. Wallace, Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service.
    [FR Doc. 2018-04397 Filed 2-28-18; 4:15 pm] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 679 [Docket No. 170817779-8161-02] RIN 0648-XG048 Fisheries of the Exclusive Economic Zone Off Alaska; Reallocation of Pollock in the Bering Sea and Aleutian Islands AGENCY:

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

    ACTION:

    Temporary rule.

    SUMMARY:

    NMFS is reallocating the projected unused amounts of the Aleut Corporation's and the Community Development Quota pollock directed fishing allowances from the Aleutian Islands subarea to the Bering Sea subarea directed fisheries. These actions are necessary to provide opportunity for harvest of the 2018 total allowable catch of pollock, consistent with the goals and objectives of the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area.

    DATES:

    Effective 1200 hrs, Alaska local time (A.l.t.), February 28, 2018, until 2400 hrs, A.l.t., December 31, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Steve Whitney, 907-586-7228.

    SUPPLEMENTARY INFORMATION:

    NMFS manages the groundfish fishery in the BSAI exclusive economic zone according to the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area (FMP) prepared by the North Pacific Fishery Management Council (Council) under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

    In the Aleutian Islands subarea, the portion of the 2018 pollock total allowable catch (TAC) allocated to the Aleut Corporation's directed fishing allowance (DFA) is 14,700 metric tons (mt) and the Community Development Quota (CDQ) DFA is 1,900 mt as established by the final 2018 and 2019 harvest specifications for groundfish in the BSAI (83 FR 8369, February 27, 2018) .

    As of February 27, 2018, the Administrator, Alaska Region, NMFS, (Regional Administrator) has determined that 12,200 mt of Aleut Corporation's DFA and 1,900 mt of pollock CDQ DFA in the Aleutian Islands subarea will not be harvested. Therefore, in accordance with § 679.20(a)(5)(iii)(B)(4), NMFS reallocates 12,200 mt of Aleut Corporation's DFA and 1,900 mt of pollock CDQ DFA from the Aleutian Islands subarea to the 2018 Bering Sea subarea allocations. The 1,900 mt of pollock CDQ DFA is added to the 2018 Bering Sea CDQ DFA. The remaining 12,200 mt of pollock is apportioned to the AFA Inshore sector (50 percent), AFA catcher/processor sector (40 percent), and the AFA mothership sector (10 percent). The 2018 Bering Sea subarea pollock incidental catch allowance remains at 47,888 mt. As a result, the 2018 harvest specifications for pollock in the Aleutian Islands subarea included in the final 2018 and 2019 harvest specifications for groundfish in the BSAI (83 FR 8369, February 27, 2018) are revised as follows: 2,500 mt to Aleut Corporation's DFA and 0 mt to CDQ DFA. Furthermore, pursuant to § 679.20(a)(5), Table 4 of the final 2018 and 2019 harvest specifications for groundfish in the BSAI (83 FR 8369, February 27, 2018) is revised to make 2018 pollock allocations consistent with this reallocation. This reallocation results in adjustments to the 2018 Aleut Corporation and CDQ pollock allocations established at § 679.20(a)(5).

    Table 4—Final 2018 Allocations of Pollock TACS to The Directed Pollock Fisheries and to the CDQ Directed Fishing Allowances (DFA) 1 [Amounts are in metric tons] Area and sector 2018 Allocations 2018 A season 1 A season DFA SCA harvest limit 2 2018 B season 1 B season DFA Bering Sea subarea TAC 1 1,378,441 n/a n/a n/a CDQ DFA 138,334 62,250 38,734 76,084 ICA 1 47,888 n/a n/a n/a Total Bering Sea non-CDQ DFA 1,192,219 536,499 333,821 655,720 AFA Inshore 596,109 268,249 166,911 327,860 AFA Catcher/Processors 3 476,888 214,599 133,529 262,288 Catch by C/Ps 436,352 196,358 n/a 239,994 Catch by CVs 3 40,535 18,241 n/a 22,294 Unlisted C/P Limit 4 2,384 1,073 n/a 1,311 AFA Motherships 119,222 53,650 33,382 65,572 Excessive Harvesting Limit 5 208,638 n/a n/a n/a Excessive Processing Limit 6 357,666 n/a n/a n/a Aleutian Islands subarea ABC 40,788 n/a n/a n/a Aleutian Islands subarea TAC 1 4,900 n/a n/a n/a CDQ DFA 0 0 n/a 0 ICA 2,400 1,200 n/a 1,200 Aleut Corporation 2,500 2,500 n/a 0 Area harvest limit 7 n/a n/a n/a n/a 541 12,236 n/a n/a n/a 542 6,118 n/a n/a n/a 543 2,039 n/a n/a n/a Bogoslof District ICA 8 450 n/a n/a n/a 1 Pursuant to § 679.20(a)(5)(i)(A), the Bering Sea subarea pollock, after subtracting the CDQ DFA (10 percent) and the ICA (3.9 percent), is allocated as a DFA as follows: Inshore sector—50 percent, catcher/processor sector (C/P)—40 percent, and mothership sector—10 percent. In the Bering Sea subarea, 45 percent of the DFA is allocated to the A season (January 20-June 10) and 55 percent of the DFA is allocated to the B season (June 10-November 1). Pursuant to § 679.20(a)(5)(iii)(B)(2)(i) through (iii), the annual Aleutian Islands pollock TAC, after subtracting first for the CDQ DFA (10 percent) and second for the ICA (2,400 mt), is allocated to the Aleut Corporation for a pollock directed fishery. In the Aleutian Islands subarea, the A season is allocated up to 40 percent of the ABC, and the B season is allocated the remainder of the pollock directed fishery. 2 In the Bering Sea subarea, pursuant to § 679.20(a)(5)(i)(C), no more than 28 percent of each sector's annual DFA may be taken from the SCA before noon, April 1. 3 Pursuant to § 679.20(a)(5)(i)(A)(4), 8.5 percent of the DFA allocated to listed catcher/processors shall be available for harvest only by AFA catcher vessels with catcher/processor sector endorsements delivering to listed catcher/processors, unless there is a C/P sector cooperative contract for the year. 4 Pursuant to § 679.20(a)(5)(i)(A)(4)(iii), the AFA unlisted catcher/processors are limited to harvesting not more than 0.5 percent of the catcher/processors sector's allocation of pollock. 5 Pursuant to § 679.20(a)(5)(i)(A)(6), NMFS establishes an excessive harvesting share limit equal to 17.5 percent of the sum of the non-CDQ pollock DFAs. 6 Pursuant to § 679.20(a)(5)(i)(A)(7), NMFS establishes an excessive processing share limit equal to 30.0 percent of the sum of the non-CDQ pollock DFAs. 7 Pursuant to § 679.20(a)(5)(iii)(B)(6), NMFS establishes harvest limits for pollock in the A season in Area 541 of no more than 30 percent, in Area 542 of no more than 15 percent, and in Area 543 of no more than 5 percent of the Aleutian Islands pollock ABC. 8 Pursuant to § 679.22(a)(7)(i)(B), the Bogoslof District is closed to directed fishing for pollock. The amounts specified are for ICA only and are not apportioned by season or sector. Note: Seasonal or sector apportionments may not total precisely due to rounding. Classification

    This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the reallocation of AI pollock. Since the pollock fishery opened January 20, 2018, it is important to immediately inform the industry as to the final Bering Sea subarea pollock allocations. Immediate notification is necessary to allow for the orderly conduct and efficient operation of this fishery; allow the industry to plan for the fishing season and avoid potential disruption to the fishing fleet as well as processors; and provide opportunity to harvest increased seasonal pollock allocations while value is optimum. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of February 25, 2018.

    The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.

    This action is required by § 679.20 and is exempt from review under Executive Order 12866.

    Authority:

    16 U.S.C. 1801 et seq.

    Dated: February 28, 2018. Jennifer M. Wallace, Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service.
    [FR Doc. 2018-04389 Filed 2-28-18; 4:15 pm] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 679 [Docket No. 160920866-7167-02] RIN 0648-XF892 Fisheries of the Exclusive Economic Zone Off Alaska; Pacific Cod by Catcher Vessels Less Than 50 Feet Length Overall Using Hook-and-Line Gear in the Central Regulatory Area of the Gulf of Alaska AGENCY:

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

    ACTION:

    Temporary rule; closure.

    SUMMARY:

    NMFS is prohibiting directed fishing for Pacific cod by catcher vessels less than 50 feet length overall (LOA) using hook-and-line gear in the Central Regulatory Area of the Gulf of Alaska (GOA). This action is necessary to prevent exceeding the A season allowance of the 2018 Pacific cod total allowable catch apportioned to catcher vessels less than 50 feet LOA using hook-and-line gear in the Central Regulatory Area of the GOA.

    DATES:

    Effective 1200 hours, Alaska local time (A.l.t.), March 2, 2018, through 1200 hours, A.l.t., June 10, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Josh Keaton, 907-586-7228.

    SUPPLEMENTARY INFORMATION:

    NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679. Regulations governing sideboard protections for GOA groundfish fisheries appear at subpart B of 50 CFR part 680.

    The A season allowance of the 2018 Pacific cod total allowable catch (TAC) apportioned to catcher vessels less than 50 feet LOA using hook-and-line gear in the Central Regulatory Area of the GOA is 562 metric tons (mt), as established by the final 2017 and 2018 harvest specifications for groundfish of the GOA (82 FR 12032, February 27, 2017) and inseason adjustment (82 FR 60327, December 20, 2017).

    In accordance with § 679.20(d)(1)(i), the Administrator, Alaska Region, NMFS (Regional Administrator) has determined that the A season allowance of the 2018 Pacific cod TAC apportioned to catcher vessels less than 50 feet LOA using hook-and-line gear in the Central Regulatory Area of the GOA will soon be reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 487 mt and is setting aside the remaining 75 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for Pacific cod by catcher vessels less than 50 feet LOA using hook-and-line gear in the Central Regulatory Area of the GOA. After the effective date of this closure the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.

    Classification

    This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the directed fishing closure of Pacific cod by catcher vessels less than 50 feet LOA using hook-and-line gear in the Central Regulatory Area of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of February 27, 2018.

    The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.

    This action is required by § 679.20 and is exempt from review under Executive Order 12866.

    Authority:

    16 U.S.C. 1801 et seq.

    Dated: February 28, 2018. Jennifer M. Wallace, Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service.
    [FR Doc. 2018-04388 Filed 2-28-18; 4:15 pm] BILLING CODE 3510-22-P
    83 43 Monday, March 5, 2018 Proposed Rules DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0162; Product Identifier 2017-NM-116-AD] RIN 2120-AA64 Airworthiness Directives; The Boeing Company Airplanes AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    We propose to supersede Airworthiness Directive (AD) 2016-18-01, which applies to certain The Boeing Company Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes. AD 2016-18-01 requires repetitive lubrication of the forward and aft trunnion pin assemblies of the right and left main landing gears (MLGs); repetitive inspection of these assemblies for corrosion and chrome damage, and related investigative and corrective actions, if necessary; and installation of new or modified trunnion pin assembly components, which terminates the repetitive lubrication and repetitive inspections. Since we issued AD 2016-18-01, we have determined that rotable parts were not addressed in that AD and that all airplanes of the affected models, excluding those with a certain configuration, should be inspected to determine if affected MLG trunnion pin assemblies are installed. This proposed AD would therefore add airplanes to the applicability. We are proposing this AD to address the unsafe condition on these products.

    DATES:

    We must receive comments on this proposed AD by April 19, 2018.

    ADDRESSES:

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

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

    Fax: 202-493-2251.

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

    Hand Delivery: Deliver to Mail address above between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    For service information identified in this NPRM, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; internet https://www.myboeingfleet.com. You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195. It is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0162.

    Examining the AD Docket

    You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0162; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (phone: 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

    FOR FURTHER INFORMATION CONTACT:

    Alan Pohl, Aerospace Engineer, Airframe Section, FAA, Seattle ACO Branch, 2200 South 216th St., Des Moines, WA 98198; telephone and fax: 206-231-3527; email: [email protected]

    SUPPLEMENTARY INFORMATION: Comments Invited

    We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2018-0162; Product Identifier 2017-NM-116-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. We will consider all comments received by the closing date and may amend this NPRM because of those comments.

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

    Discussion

    We issued AD 2016-18-01, Amendment 39-18631 (81 FR 59830, August 31, 2016) (“AD 2016-18-01”), for certain The Boeing Company Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes. AD 2016-18-01 requires repetitive lubrication of the forward and aft trunnion pin assemblies of the right and left MLGs; repetitive inspection of these assemblies for corrosion and chrome damage, and related investigative and corrective actions, if necessary; and installation of new or modified trunnion pin assembly components, which terminates the repetitive lubrication and repetitive inspections. AD 2016-18-01 resulted from reports of heavy corrosion and chrome damage on the forward and aft trunnion pin assemblies of the right and left MLGs. We issued AD 2016-18-01 to detect and correct heavy corrosion and chrome damage on the forward and aft trunnion pin assemblies of the right and left MLGs, which could result in cracking of these assemblies and collapse of the MLGs.

    Actions Since AD 2016-18-01 Was Issued

    To support operations, many operators have put processes in place that, given certain conditions, allow them to rotate or transfer parts or equipment within their fleets to different aircraft than what is defined in the manufacturer's type design. We have determined that the parts or equipment subject to the unsafe condition addressed by this proposed AD may have been rotated or transferred in this manner, due to similarity with parts or equipment not subject to the unsafe condition addressed by this proposed AD. Therefore, AD 2016-18-01 is being superseded to include all Model 737-600, -700, -700C, -800, -900, and -900ER airplanes.

    Related Service Information Under 1 CFR Part 51

    We reviewed Boeing Special Attention Service Bulletin 737-32-1448, Revision 2, dated August 2, 2017 (“BSASB 737-32-1448, R2”). This service information describes procedures for determining the part numbers of the forward and aft trunnion pin assemblies installed on the right and left MLGs, inspections for corrosion or damage on the forward and aft trunnion pin assemblies and related investigative and corrective actions, repetitive lubrication of these assemblies, and installation of new or modified trunnion pin assembly components. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

    FAA's Determination

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

    Proposed AD Requirements

    This proposed AD would retain all requirements of AD 2016-18-01. This proposed AD would add airplanes to the applicability. This proposed AD would also prohibit the installation of a MLG or MLG trunnion pin assembly on any airplane identified in paragraph (c) of the proposed AD unless certain actions are accomplished. In addition, this proposed AD would require accomplishing the actions specified in the service information described previously, except as discussed under “Differences Between this Proposed AD and the Service Information.” For information on the procedures and compliance times, see this service information at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0162.

    The phrase “related investigative actions” is used in this proposed AD. Related investigative actions are follow-on actions that (1) are related to the primary action, and (2) further investigate the nature of any condition found. Related investigative actions in an AD could include, for example, inspections.

    The phrase “corrective actions” is used in this proposed AD. Corrective actions correct or address any condition found. Corrective actions in an AD could include, for example, repairs.

    Differences Between This Proposed AD and the Service Information

    The effectivity specified in BSASB 737-32-1448, R2 consists of Model 737-600, -700, -700C, -800, -900, and -900ER airplanes identified as line numbers 1 through 6510 inclusive. Expanding the applicability of this proposed AD to all Model 737-600, -700, -700C, -800, -900, and -900ER airplanes addresses the rotability of the MLG trunnion pin assembly.

    In this proposed AD, operators would need to accomplish the actions required by paragraphs (g), (h), (i), (j) and (k) of this proposed AD, and comply with the parts installation prohibition in paragraph (m) of this proposed AD, on any Model 737-600, -700, -700C, -800, -900, and -900ER airplanes with an original Certificate of Airworthiness or an original Export Certificate of Airworthiness dated on or before the effective date of the final rule. We have confirmed with Boeing that the accomplishment instructions in BSASB 737-32-1448, R2 are applicable to these expanded groups of airplanes.

    For Model 737-600, -700, -700C, -800, -900, and -900ER airplanes with an original Certificate of Airworthiness or an original Export Certificate of Airworthiness dated after the effective date of the final rule, operators would not be required to comply with the requirements of paragraphs (g), (h), (i), (j), and (k) of this proposed AD, but would be required to comply with the parts installation prohibition in paragraph (m) of this proposed AD.

    Costs of Compliance

    We estimate that this proposed AD affects up to 1,814 airplanes of U.S. registry. We estimate the following costs to comply with this proposed AD:

    Estimated Costs Action Labor cost Parts cost Cost per product Cost on U.S.
  • operators
  • Lubrication (retained actions from AD 2016-18-01) 2 work-hours × $85 per hour = $170 per lubrication cycle 0 $170 per lubrication cycle $173,910, per lubrication cycle (1,023 airplanes). Inspection (Groups 1 and 2, Configuration 1 airplanes; retained actions from AD 2016-18-01) 51 work-hours × $85 per hour = $4,335 per inspection cycle 0 $4,335 per inspection cycle $4,282,980 per inspection cycle (988 airplanes). Inspection (Group 3 airplanes; retained actions from AD 2016-18-01) 93 work-hours × $85 per hour = $7,905 per inspection cycle 0 $7,905 per inspection cycle $276,675 per inspection cycle (35 airplanes). Replacement/overhaul (Groups 1 and 2 airplanes; retained actions from AD 2016-18-01) 84 work-hours × $85 per hour = $7,140 0 $7,140 $7,054,320 (988 airplanes). Replacement/overhaul (Group 3 airplanes retained actions from AD 2016-18-01) 86 work-hours × $85 per hour = $7,310 0 $7,310 $255,850 (35 airplanes). Lubrication pin assemblies (new proposed action, Work Packages 1 and 2) 2 work-hours × $85 per hour = $170 per lubrication cycle 0 $170 per lubrication cycle $308,380, per lubrication cycle (up to 1,814 airplanes). Inspection (new proposed action; Groups 1, 2, 4, and 5, Configuration 1 airplanes; Work Package 2) 51 work-hours × $85 per hour = $4,335 per inspection cycle 0 $4,335 per inspection cycle $7,594,920 per inspection cycle (1,752 airplanes). Inspection (new proposed action; Groups 3 and 6 airplanes; Work Package 2) 93 work-hours × $85 per hour = $7,905 per inspection cycle 0 $7,905 per inspection cycle $490,110 per inspection cycle (62 airplanes). Replacement/overhaul trunnion pin assembly (Groups 1, 2, 4, and 5 airplanes; new proposed action; Work Package 2) 84 work-hours × $85 per hour = $7,140 0 $7,140 $12,509,280 (up to 1,752 airplanes). Replacement/overhaul trunnion pin assembly (Groups 3 and 6 airplanes; new proposed action; Work Package 2) 86 work-hours × $85 per hour = $7,310 0 $7,310 $453,220 (62 airplanes).

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

    Authority for This Rulemaking

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

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

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

    Regulatory Findings

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

    For the reasons discussed above, I certify that the proposed regulation:

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

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

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

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

    List of Subjects in 14 CFR Part 39

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

    The Proposed Amendment

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

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

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

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by removing Airworthiness Directive (AD) 2016-18-01, Amendment 39-18631 (81 FR 59830, August 31, 2016), and adding the following new AD: The Boeing Company: Docket No. FAA-2018-0162; Product Identifier 2017-NM-116-AD. (a) Comments Due Date

    The FAA must receive comments on this AD action by April 19, 2018.

    (b) Affected ADs

    This AD replaces AD 2016-18-01, Amendment 39-18631 (81 FR 59830, August 31, 2016) (“AD 2016-18-01”).

    (c) Applicability

    This AD applies to all The Boeing Company Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes, certificated in any category, as specified in paragraphs (c)(1) through (c)(7) of this AD

    (1) Airplanes in Groups 1 and 2, Configuration 1, as identified in Boeing Special Attention Service Bulletin 737-32-1448, Revision 2, dated August 2, 2017 (“BSASB 737-32-1448, R2”).

    (2) Airplanes in Groups 1 and 2, Configuration 2, as identified in BSASB 737-32-1448, R2.

    (3) Airplanes in Group 3, as identified in BSASB 737-32-1448, R2.

    (4) Airplanes in Groups 4 and 5, Configuration 1, as identified in BSASB 737-32-1448, R2, except where this service bulletin specifies the groups as line numbers 3527 through 6510 inclusive, this AD specifies those groups as line number 3527 through any line number of an airplane with an original Certificate of Airworthiness or an original Export Certificate of Airworthiness dated on or before the effective date of this AD.

    (5) Airplanes in Groups 4 and 5, Configuration 2, as identified in BSASB 737-32-1448, R2, except where this service bulletin specifies the groups as line numbers 3527 through 6510 inclusive, this AD specifies those groups as line number 3527 through any line number of an airplane with an original Certificate of Airworthiness or an original Export Certificate of Airworthiness dated on or before the effective date of this AD.

    (6) Airplanes in Groups 6 as identified in BSASB 737-32-1448, R2, except where this service bulletin specifies the groups as line numbers 3527 through 6510 inclusive, this AD specifies those groups as line number 3527 through any line number of an airplane with an original Certificate of Airworthiness or an original Export Certificate of Airworthiness dated on or before the effective date of this AD.

    (7) All Model 737-600, -700, -700C, -800, -900 and -900ER series airplanes with an original Certificate of Airworthiness or an original Export Certificate of Airworthiness dated after the effective date of this AD.

    (d) Subject

    Air Transport Association (ATA) of America Code 32, Landing Gear.

    (e) Unsafe Condition

    This AD was prompted by reports of heavy corrosion and chrome damage on the forward and aft trunnion pin assemblies of the right and left main landing gears (MLGs). We are issuing this AD to detect and correct heavy corrosion and chrome damage on the forward and aft trunnion pin assemblies of the right and left MLGs, which could result in cracking of these assemblies and collapse of the MLGs.

    (f) Compliance

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

    (g) Inspection To Determine Part Number of MLG Trunnion Pin Assembly

    For airplanes identified in paragraphs (c)(1), (c)(3), (c)(4), and (c)(6) of this AD: Except as required by paragraph (l) of this AD, at the applicable time specified in Table 1, Table 2, Table 4, or Table 5, of paragraph 1.E., “Compliance,” of BSASB 737-32-1448, R2, do an inspection to determine if any of the MLG trunnion pin assembly part numbers identified in paragraph 2.C.3., “Parts Modified and Reidentified,” of BSASB 737-32-1448, R2, are installed. A review of airplane maintenance records is acceptable in lieu of this inspection if the part number of each MLG trunnion pin assembly can be conclusively determined from that review.

    (h) Repetitive Lubrication of MLG Trunnion Pin Assemblies

    For airplanes identified in paragraphs (c)(1), (c)(3), (c)(4), or (c)(6) of this AD, having any part number identified in paragraph 2.C.3., “Parts Modified and Reidentified,” of BSASB 737-32-1448, R2, installed: Except as required by paragraph (l) of this AD, at the applicable time specified in Table 1, Table 2, Table 4, or Table 5, of paragraph 1.E., “Compliance,” of BSASB 737-32-1448, R2, lubricate the applicable forward and aft trunnion pin assemblies of the right and left MLGs, in accordance with Work Package 1 of the Accomplishment Instructions of BSASB 737-32-1448, R2. Repeat the lubrication thereafter at intervals not to exceed those specified in Table 1, Table 2, Table 4, or Table 5, of paragraph 1.E., “Compliance,” of BSASB 737-32-1448, R2. Accomplishment of the actions specified in paragraph (j) of this AD terminates the repetitive lubrication required by this paragraph.

    (i) Repetitive Inspections, Corrective Actions, and Lubrication

    For airplanes identified in paragraphs (c)(1), (c)(3), (c)(4), or (c)(6) of this AD, having any part number identified in paragraph 2.C.3., “Parts Modified and Reidentified,” BSASB 737-32-1448, R2, installed: Except as required by paragraph (l) of this AD, at the applicable time specified in Table 1, Table 2, Table 4, or Table 5, of paragraph 1.E., “Compliance,” of BSASB 737-32-1448, R2, do a general visual inspection of the left and right MLGs at the forward and aft trunnion pin locations and the visible surfaces of the forward and aft trunnion pin assemblies for discrepancies including signs of corrosion or chrome plating damage, and lubricate the forward and aft trunnion pin assemblies as applicable, in accordance with Work Package 2 of the Accomplishment Instructions of BSASB 737-32-1448, R2. Repeat the general visual inspection thereafter at intervals not to exceed those specified in paragraph 1.E., “Compliance,” of BSASB 737-32-1448, R2. If any discrepancy is found during any inspection required by this paragraph, before further flight, do all applicable related investigative and corrective actions in accordance with Work Package 2 of the Accomplishment Instructions of BSASB 737-32-1448, R2. Accomplishment of the actions required by paragraph (j) of this AD terminates the repetitive inspections required by this paragraph.

    (j) Modification of MLG Trunnion Pin Assemblies

    For airplanes identified in paragraphs (c)(1), (c)(3), (c)(4), or (c)(6) of this AD, having any part number identified in paragraph 2.C.3., “Parts Modified and Reidentified,” BSASB 737-32-1448, R2 installed: Except as required by paragraph (l) of this AD, at the time specified in Table 1, Table 2, Table 4, or Table 5, as applicable, of paragraph 1.E., “Compliance,” of BSASB 737-32-1448, R2, modify the left and right MLG trunnion pin assemblies, including all applicable related investigative and corrective actions, in accordance with Work Package 3 of the Accomplishment Instructions of BSASB 737-32-1448, R2. All applicable related investigative and corrective actions must be done at the time specified in paragraph 1.E., “Compliance,” of BSASB 737-32-1448, R2. Accomplishment of the actions in Work Package 3 of the Accomplishment Instructions of BSASB 737-32-1448, R2 terminates the repetitive lubrication required by paragraph (h) of this AD and the repetitive inspections required by paragraph (i) of this AD.

    (k) Replacement of MLG Forward Trunnion Pin Housing Assembly, Seal, and Retainer

    For airplanes identified in paragraphs (c)(2) and (c)(5) of this AD: Except as required by paragraph (l) of this AD, at the time specified in Table 3 or Table 6, as applicable, of paragraph 1.E., “Compliance,” of BSASB 737-32-1448, R2, replace the seal, retainer, and support ring assembly with a new seal and retainer configuration; install the forward trunnion pin assembly into the housing assembly; and lubricate the forward and aft trunnion pin assemblies for the left and right MLGs; in accordance with Work Package 4 of the Accomplishment Instructions of BSASB 737-32-1448, R2.

    (l) Exception to Service Information Specification

    Where paragraph 1.E., “Compliance,” of BSASB 737-32-1448, R2 specifies a compliance time “after the Revision 2 date of this service bulletin,” this AD requires compliance within the specified compliance time after the effective date of this AD.

    (m) Parts Installation Limitation

    As of the effective date of this AD, no person may install a MLG or MLG trunnion pin assembly on any airplane identified in paragraphs (c)(1) through (c)(7) of this AD unless the actions required by paragraphs (j) or (k), as applicable, of this AD have been accomplished on the MLG or MLG trunnion pin assembly.

    (n) Credit for Previous Actions

    (1) This paragraph provides credit for the requirements of paragraph (h) of this AD, if those actions were performed before the effective date of this AD using Boeing Special Attention Service Bulletin 737-32-1448, dated May 19, 2011; or Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015.

    (2) This paragraph provides credit for the requirements of paragraphs (i), (j), and (k) of this AD, if those actions were performed before the effective date of this AD using Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015.

    (o) Alternative Methods of Compliance (AMOCs)

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

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

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

    (4) AMOCs approved previously for AD 2016-18-01 are approved as AMOCs for the corresponding provisions of this AD.

    (p) Related Information

    (1) For more information about this AD, contact Alan Pohl, Aerospace Engineer, Airframe Section, FAA, Seattle ACO Branch, 2200 South 216th St., Des Moines, WA 98198; telephone and fax: 206-231-3527; email: [email protected]

    (2) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; internet https://www.myboeingfleet.com. You may view this referenced service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.

    Issued in Renton, Washington, on February 20, 2018. Michael Kaszycki, Acting Director, System Oversight Division, Aircraft Certification Service.
    [FR Doc. 2018-04228 Filed 3-2-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2018-0062; Airspace Docket No. 18-ASO-3] Proposed Amendment of Class D Airspace and Class E Airspace; Pensacola, FL, and Proposed Establishment of Class E Airspace; Milton, FL AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    This action proposes to amend Class D airspace and Class E airspace extending upward from 700 feet above the surface at Choctaw Naval Outlying Field (NOLF), Milton, FL, by changing the city associated with the airport name in the above airspace classes and adjusting the geographic coordinates of the airport and the Santa Rosa TACAN navigation aid to match the FAA's aeronautical database. Additionally, Class E surface airspace would be established at Choctaw NOLF for the safety of aircraft landing and departing the airport when the air traffic control tower is closed. Also, an editorial change would be made to the Class D airspace legal description replacing “Airport/Facility Directory” with the term “Chart Supplement”. This action would enhance the safety and management of instrument flight rules (IFR) operations at the airport.

    DATES:

    Comments must be received on or before April 19, 2018.

    ADDRESSES:

    Send comments on this proposal to: U.S. Department of Transportation, Docket Operations, 1200 New Jersey Avenue SE, West Bldg. Ground Floor Rm W12-140, Washington, DC 20590; Telephone: 1 (800) 647-5527, or (202) 366-9826. You must identify the Docket No. FAA-2018-0062; Airspace Docket No. 18-ASO-3, at the beginning of your comments. You may also submit and review received comments through the internet at http://www.regulations.gov. You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal holidays.

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

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

    FOR FURTHER INFORMATION CONTACT:

    John Fornito, Operations Support Group, Eastern Service Center, Federal Aviation Administration, 1701 Columbia Avenue, College Park, Georgia 30337; telephone (404) 305-6364.

    SUPPLEMENTARY INFORMATION: Authority for This Rulemaking

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

    Comments Invited

    Interested persons are invited to comment on this rule by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal.

    Communications should identify both docket numbers and be submitted in triplicate to the address listed above. You may also submit comments through the internet at http://www.regulations.gov.

    Persons wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2017-0062; Airspace Docket No. 18-ASO-3.” The postcard will be date/time stamped and returned to the commenter.

    All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

    Availability of NPRMs

    An electronic copy of this document may be downloaded through the internet at http://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's web page at http://www.faa.gov/air_traffic/publications/airspace_amendments/.

    You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the ADDRESSES section for address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal holidays. An informal docket may also be examined between 8:00 a.m. and 4:30 p.m., Monday through Friday, except federal holidays at the office of the Eastern Service Center, Federal Aviation Administration, Room 350, 1701 Columbia Avenue, College Park, GA 30337.

    Availability and Summary of Documents for Incorporation by Reference

    This document proposes to amend 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 Proposal

    The FAA is considering an amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 by:

    Amending Class D airspace at Choctaw NOLF, Milton, FL, by adjusting the geographic coordinates of the airport and the Santa Rosa TACAN navigation aid to be in concert with the FAA's aeronautical database. This proposal also would make an editorial change replacing the city associated with the airport name in the airspace designation from Pensacola, to Milton, to comply with a recent change to FAA Order 7400.2L, Procedures for Handling Airspace Matters, dated October 12, 2017. Also, this action would replace the outdated term “Airport/Facility Directory” with the term “Chart Supplement” in the airspace legal description;

    Establishing Class E surface area airspace at Choctaw NOLF, Milton, FL, for the safety of aircraft landing and departing the airport after the air traffic control tower closes; and

    Amending Class E airspace extending upward from 700 feet above the surface at Choctaw NOLF, Milton, FL, by adjusting the geographic coordinates of the airport to be in concert with the FAA's aeronautical database. This proposal also would make an editorial change in the airspace designation from Choctaw Outlying Field, FL, to Milton, FL.

    Class D and E airspace designations are published in Paragraphs 5000, 6002, and 6005, respectively of FAA Order 7400.11B, dated August 3, 2017, and effective September 15, 2017, which is incorporated by reference in 14 CFR 71.1. The Class D and Class E airspace designations listed in this document will be published subsequently in the Order.

    Regulatory Notices and Analyses

    The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. 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 will only affect air traffic procedures and air navigation, it is certified that this proposed 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.

    Environmental Review

    This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

    Lists of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (air).

    The Proposed Amendment

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

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

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

    § 71.1 [Amended]
    2. The incorporation by reference in 14 CFR 71.1 of Federal Aviation Administration Order 7400.11B, Airspace Designations and Reporting Points, dated August 3, 2017, and effective September 15, 2017, is amended as follows: Paragraph 5000 Class D Airspace. ASO FL D Milton, FL [Amended] Choctaw NOLF, FL (Lat. 30°30′25″ N, long. 86°57′35″ W) Santa Rosa TACAN (Lat. 30°36′55″ N, long. 86°56′15″ W)

    That airspace extending upward from the surface to and including 2,600 feet MSL within a 2.5-mile radius of Choctaw NOLF and within 1.5 miles each side of the Santa Rosa TACAN 188° radial, extending from the 2.5-mile radius to 10.5 miles south of the TACAN; excluding that airspace within Restricted Area R-2915A. This Class D airspace area is effective during the specific dates and times established by a Notice to Airmen. The effective date and time will thereafter be continuously published in the Chart Supplement.

    Paragraph 6002 Class E Surface Area Airspace. ASO FL E2 Milton, FL [New] Choctaw NOLF, FL (Lat. 30°30′25″ N, long. 86°57′35″ W) Santa Rosa TACAN (Lat. 30°36′55″ N, long. 86°56′15″ W)

    That airspace extending upward from the surface within a 2.5-mile radius of Choctaw NOLF and within 1.5 miles each side of the Santa Rosa TACAN 188° radial, extending from the 2.5-mile radius to 10.5 miles south of the TACAN; excluding that airspace within Restricted Area R-2915A. This Class E airspace area is effective during the specific dates and times established by a Notice to Airmen. The effective date and time will thereafter be continuously published in the Chart Supplement.

    Paragraph 6005 Class E Airspace Areas Extending Upward From 700 Feet or More Above the Surface of the Earth. ASO FL E5 Milton, FL [Amended] Choctaw NOLF, FL (Lat. 30°30′25″ N, long. 86°57′35″ W)

    That airspace extending upward from 700 feet above the surface within a 6.7-mile radius of Choctaw NOLF.

    Issued in College Park, Georgia, on February 23, 2018. Ryan W. Almasy, Manager, Operations Support Group, Eastern Service Center, Air Traffic Organization.
    [FR Doc. 2018-04324 Filed 3-2-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2017-1159; Airspace Docket No. 17-ASO-23] Proposed Amendment of Class D and E Airspace; Jacksonville, NC AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    This action proposes to amend Class D airspace associated with New River Marine Corps Air Station (MCAS), at Jacksonville, NC, by establishing controlled airspace at Albert J. Ellis Airport. This proposal would provide the controlled airspace required for the new air traffic control tower at Albert J. Ellis Airport for the safety and management of instrument flight rules (IFR) operations. This action also would update the geographic coordinates of New River MCAS in Class D and E airspace, replace the outdated term “Airport/Facility Directory” with the term “Chart Supplement”, and make an editorial change to the airspace designation.

    DATES:

    Comments must be received on or before April 19, 2018.

    ADDRESSES:

    Send comments on this rule to: U.S. Department of Transportation, Docket Operations, 1200 New Jersey Avenue SE, West Bldg, Ground Floor, Rm. W12-140, Washington, DC 20590; Telephone: (202) 366-9826. You must identify the Docket Number FAA-2017-1159; Airspace Docket No. 17-ASO-23, at the beginning of your comments. You may also submit and review received comments through the internet at http://www.regulations.gov.

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

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

    FOR FURTHER INFORMATION CONTACT:

    John Fornito, Operations Support Group, Eastern Service Center, Federal Aviation Administration, P.O. Box 20636, Atlanta, Georgia 30320; telephone (404) 305-6364.

    SUPPLEMENTARY INFORMATION: Authority for This Rulemaking

    The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This proposed 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 would establish Class D airspace at Albert J. Ellis Airport, Jacksonville, NC, to support the new air traffic control tower at the airport.

    Comments Invited

    Interested persons are invited to comment on this rule by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal.

    Communications should identify both docket numbers and be submitted in triplicate to DOT Docket Operations (see ADDRESSES section for the address and phone number.) You may also submit comments through the internet at http://www.regulations.gov.

    Persons wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2017-1159; Airspace Docket No. 17-ASO-23.” The postcard will be date/time stamped and returned to the commenter.

    All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. All comments submitted will be available for examination in the public docket both before and after the comment closing date. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

    Availability of NPRMs

    An electronic copy of this document may be downloaded from and comments submitted through http://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's web page at http://www.faa.gov/air_traffic/publications/airspace_amendments/.

    You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the ADDRESSES section for address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except Federal Holidays. An informal docket may also be examined between 8:00 a.m. and 4:30 p.m., Monday through Friday, except Federal Holidays at the office of the Eastern Service Center, Federal Aviation Administration, Room 350, 1701 Columbia Avenue, College Park, Georgia 30337.

    Availability and Summary of Documents for Incorporation by Reference

    This document proposes to amend 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 Proposal

    The FAA is considering an amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 to amend Class D airspace associated with New River MCAS, Jacksonville, NC. This proposal would establish Class D airspace up to and including 2,600 feet MSL within a 4.2-mile radius of Albert J. Ellis Airport, Jacksonville, NC, providing the controlled airspace required for IFR operations supporting the new air traffic control tower.

    The geographic coordinates of New River MCAS also would be adjusted to coincide with the FAA's aeronautical database.

    Additionally, an editorial change would be made, removing the city associated with New River MCAS, in the airspace designation for Class D airspace and Class E airspace designated as an extension, to comply with a recent change to FAA Order 7400.2L, Procedures for Handling Airspace Matters, dated October 12, 2017.

    Finally, this action would make an editorial change in the legal description for the classes above replacing “Airport/Facility Directory” with “Chart Supplement”.

    Class D and E airspace designations are published in Paragraphs 5000 and 6004, respectively, of FAA Order 7400.11B, dated August 3, 2017, and effective September 15, 2017, which is incorporated by reference in 14 CFR 71.1. The Class D airspace designation listed in this document will be published subsequently in the Order.

    Regulatory Notices and Analyses

    The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. 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 will only affect air traffic procedures and air navigation, it is certified that this proposed 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.

    Environmental Review

    This proposal would be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

    Lists of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (air).

    The Proposed Amendment

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

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

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

    § 71.1 [Amended]
    2. The incorporation by reference in 14 CFR 71.1 of Federal Aviation Administration Order 7400.11B, Airspace Designations and Reporting Points, dated August 3, 2017, and effective September 15, 2017, is amended as follows: Paragraph 5000 Class D Airspace. ASO NC D Jacksonville, NC [Amended] New River MCAS, NC (Lat. 34°42′30″ N, long. 77°26′23″ W) Albert J. Ellis Airport, NC (Lat. 34°49′45″ N, long. 77°36′44″ W)

    That airspace extending upward from the surface to and including 2,500 feet MSL within a 5-mile radius of New River MCAS, and that airspace extending upward from the surface to and including 2,600 feet MSL within a 4.2-mile radius of Albert J. Ellis Airport. This Class D airspace area is effective during the specific days and times established in advance by a Notice to Airmen. The effective days and times will thereafter be continuously published in the Chart Supplement.

    Paragraph 6004 Class E Airspace Designated as an Extension to a Class D Surface Area. ASO NC E4 Jacksonville, NC [Amended] New River MCAS, NC (Lat. 34°42′30″ N, long. 77°26′23″ W) New River TACAN (Lat. 34°42′26″ N, long. 77°26′25″ W)

    That airspace extending upward from the surface within 3.2 miles each side of New River TACAN 239° radial, extending from the 5-mile radius of New River MCAS to 7 miles southwest of the TACAN. This Class E airspace area is effective during the specific days and times established in advance by a Notice to Airmen. The effective days and times will thereafter be continuously published in the Chart Supplement.

    Issued in College Park, Georgia, on February 23, 2018. Ryan W. Almasy, Manager, Operations Support Group, Eastern Service Center, Air Traffic Organization.
    [FR Doc. 2018-04326 Filed 3-2-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket Number USCG-2018-0032] RIN 1625-AA00 Safety Zone; Cooper River Bridge Run, Cooper River, and Town Creek Reaches, Charleston, SC AGENCY:

    Coast Guard, DHS.

    ACTION:

    Notice of proposed rulemaking.

    SUMMARY:

    The Coast Guard proposes to establish a safety zone on the waters of Cooper River and Town Creek Reaches in Charleston, South Carolina during the Cooper River Bridge Run. The Cooper River Bridge Run is a 10-K run across the Arthur Ravenel Bridge. The safety zone is necessary for the safety of the runners and the general public during this event. This proposed rulemaking would prohibit persons and vessels from entering, transiting through, anchoring in, or remaining within the safety zone unless authorized by the Captain of the Port Charleston or a designated representative. We invite your comments on this proposed rulemaking.

    DATES:

    Comments and related material must be received by the Coast Guard on or before March 20, 2018.

    ADDRESSES:

    You may submit comments identified by docket number USCG-2018-0032 using the Federal eRulemaking Portal at http://www.regulations.gov. See the “Public Participation and Request for Comments” portion of the SUPPLEMENTARY INFORMATION section for further instructions on submitting comments.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions about this proposed rulemaking, call or email Lieutenant Justin Heck, Sector Charleston Office of Waterways Management, Coast Guard; telephone (843) 740-3184, email [email protected]

    SUPPLEMENTARY INFORMATION:

    I. Table of Abbreviations CFR Code of Federal Regulations DHS Department of Homeland Security E.O. Executive order FR Federal Register NPRM Notice of proposed rulemaking Pub. L. Public Law § Section U.S.C. United States Code COTP Captain of the Port II. Background, Purpose, and Legal Basis

    On January 11, 2018, the Coast Guard was notified by the City of Charleston about the Cooper River Bridge 10-K Run, which will be held on April 7, 2018, and will impact waters of the Cooper River and Town Creek Reaches in Charleston, South Carolina. The purpose of this proposed rule is to ensure the safety of the runners, the general public, and vessels on the navigable waters during the scheduled event.

    The Coast Guard is requesting that interested parties provide comments within a shortened comment period of 15 days instead of a standard 30 days for this notice of proposed rulemaking.

    The Coast Guard believes a shortened comment period is necessary and reasonable because the safety zone is necessary to ensure the safety of event participants, the general public, vessels and these navigable waters during the race. Any delay in making this final rule effective by allowing comments for more than 15 days would not be in the best interest of public safety.

    The Coast Guard proposes this rulemaking under authority in 33 U.S.C. 1231.

    III. Discussion of Proposed Rule

    The Coast Guard proposes to establish a safety zone on the waters of the Cooper River and Town Creek Reaches in Charleston, South Carolina from 7:30 a.m. to 10:30 a.m. on April 7, 2018, during the Cooper River Bridge Run. The duration of the zone is intended to ensure the safety of event participants, the general public, vessels and these navigable waters during the race scheduled from 7:30 a.m. to 10:30 a.m. Approximately 40,000 runners are anticipated to participate in the race. No vessel or person would be permitted to enter the safety zone without obtaining permission from the Captain of the Port Charleston or a designated representative. The regulatory text we are proposing appears at the end of this document.

    IV. Regulatory Analyses

    We developed this proposed rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and executive orders.

    A. Regulatory Planning and Review

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

    This regulatory action determination is based on: (1) The safety zone will only be enforced for a total of three hours; (2) although persons and vessels may not enter, transit through, anchor in, or remain within the safety zone without authorization from the Captain of the Port Charleston or a designated representative, they may operate in the surrounding area during the enforcement period; and (3) the Coast Guard will provide advance notification of the safety zone to the local maritime community by Local Notice to Mariners and Broadcast Notice to Mariners.

    B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980, (5 U.S.C. 601-612), as amended requires Federal agencies to consider the potential impact of regulations on “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities. We have considered the impact of this proposed rule on small entities. This rule may affect the following entities, some of which may be small entities: the owner or operators of vessels intending to enter, transit through, anchor in, or remain within the regulated area during the enforcement period. For the reasons discussed in Regulatory Planning and Review section above, this rule will not have a significant economic impact on a substantial number of small entities.

    If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

    Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section. The Coast Guard will not retaliate against small entities that question or complain about this proposed rule or any policy or action of the Coast Guard.

    C. Collection of Information

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

    D. Federalism and Indian Tribal Governments

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

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

    E. Unfunded Mandates Reform Act

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

    F. Environment

    We have analyzed this proposed rule under Department of Homeland Security Directive 023-01, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves a safety zone prohibiting vessel traffic from a limited area surrounding the Cooper River Bridge on the waters of the Cooper River and Town Creek Reaches for a 3 hour period. Normally such actions are categorically excluded from further review under paragraph L60 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A preliminary Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

    G. Protest Activities

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

    V. Public Participation and Request for Comments

    We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.

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

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

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

    List of Subjects in 33 CFR Part 165

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

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

    PART 165—SAFETY OF LIFE ON NAVIGABLE WATERS 1. The authority citation for part 165 continues to read as follows: Authority:

    33 U.S.C. 1231; 50 U.S.C. 191, 33 CFR 1.05-1, 6.04-1, 6.04-6, 160.5; and Department of Homeland Security Delegation No. 0170.

    2. Add a temporary § 165.35T07-0032 to read as follows:
    § 165.T07-0032 Safety Zone; Cooper River Bridge Run, Charleston SC.

    (a) Location. All waters of the Cooper River, and Town Creek Reaches encompassed within the following points: beginning at 32°48′32″ N, 079°56′08″ W, thence east to 32°48′20″ N, 079°54′20″ W, thence south to 32°47′20″ N, 079°54′29″ W, thence west to 32°47′20″ N, 079°55′28″ W, thence north to origin. All coordinates are North American Datum 1983.

    (b) Definition. The term “designated representative” means Coast Guard Patrol Commanders, including Coast Guard coxswains, petty officers, and other officers operating Coast Guard vessels, and Federal, state, and local officers designated by or assisting the Captain of the Port Charleston in the enforcement of the regulated areas.

    (c) Regulations.

    (1) All persons and vessels are prohibited from entering, transiting through, anchoring in, or remaining within the regulated area unless authorized by the Captain of the Port Charleston or a designated representative.

    (2) Persons and vessels desiring to enter, transit through, or remain within the regulated area may contact the Captain of the Port Charleston by telephone at 843-740-7050, or a designated representative via VHF radio on channel 16, to request authorization. If authorization to enter, transit through, or remain within the regulated area is granted by the Captain of the Port Charleston or a designated representative, all persons and vessels receiving such authorization must comply with the instructions of the Captain of the Port Charleston or a designated representative.

    (3) The Coast Guard will provide notice of the regulated area by Local Notice to Mariners, Broadcast Notice to Mariners, and on-scene designated representatives.

    (d) Enforcement Period. This proposed rule will be enforced from 7:30 a.m. until 10:30 a.m. on April 7, 2018.

    Dated: February 27, 2018. John W. Reed, Captain, U.S. Coast Guard, Captain of the Port Charleston.
    [FR Doc. 2018-04367 Filed 3-2-18; 8:45 am] BILLING CODE 9110-04-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket Number USCG-2018-0081] RIN 1625-AA00 Safety Zone; Xterra Swim, Intracoastal Waterway; Myrtle Beach, SC AGENCY:

    Coast Guard, DHS.

    ACTION:

    Notice of proposed rulemaking.

    SUMMARY:

    The Coast Guard proposes to establish a temporary safety zone on certain waters of the Atlantic Intracoastal Waterway in Myrtle Beach, South Carolina. This proposed safety zone is necessary to provide for the safety of the swimmers, participant vessels, spectators, and the general public during the swim portion of the Xterra Triathlon. This rule is intended to prohibit non-participant vessels and persons from entering, transiting through, anchoring in, or remaining within the safety zone unless authorized by the Captain of the Port Charleston or a designated representative. We invite your comments on this proposed rulemaking.

    DATES:

    Comments and related material must be received by the Coast Guard on or before April 4, 2018.

    ADDRESSES:

    You may submit comments identified by docket number USCG-2018-0081 using the Federal eRulemaking Portal at http://www.regulations.gov. See the “Public Participation and Request for Comments” portion of the SUPPLEMENTARY INFORMATION section for further instructions on submitting comments.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions about this proposed rulemaking, call or email Lieutenant Justin Heck, Sector Charleston Office of Waterways Management, Coast Guard; telephone (843) 740-3184, email [email protected]

    SUPPLEMENTARY INFORMATION:

    I. Table of Abbreviations CFR Code of Federal Regulations DHS Department of Homeland Security E.O. Executive Order FR Federal Register NPRM Notice of Proposed Rulemaking Pub. L. Public Law § Section U.S.C. United States Code COTP Captain of the Port II. Background, Purpose, and Legal Basis

    On January 22, 2018, Go Race Productions notified the Coast Guard that it would be sponsoring the Xterra Myrtle Beach Triathlon from 8 a.m. to 9 a.m. on April 22, 2018. Approximately 75 swimmers are anticipated to participate in the swim portion of the event, which is located on certain waters of the Atlantic Intracoastal Waterway in Myrtle Beach, South Carolina. The Captain of the Port Charleston (COTP) has determined that the potential hazards associated with the swim portion of the Triathlon constitute a safety concern for anyone within the proposed safety zone. The purpose of this rulemaking is to ensure safety of life on the navigable water of the United States during the event. The Coast Guard proposes this rulemaking under authority in 33 U.S.C. 1231.

    III. Discussion of Proposed Rule

    The Coast Guard proposes to establish a temporary safety zone on the Atlantic Intracoastal Waterway in Myrtle Beach, South Carolina during the Xterra Myrtle Beach Triathlon, on April 22, 2018. The duration of the safety zone is intended to ensure the safety of life on the navigable waters of the Intracoastal before, during, and after the scheduled 8 a.m. to 9 a.m. swim portion of the Triathlon. Approximately 75 participants are expected to participate in the swim portion of the race. No vessel or person would be permitted to enter, transit through, anchor in, or remain within the safety zone without obtaining permission from the COTP or a designated representative. The Coast Guard will provide notice of the safety zone by Local Notice to Mariners, Broadcast Notice to Mariners, and on-scene designated representatives. The proposed regulatory text appears at the end of this document.

    IV. Regulatory Analyses

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

    A. Regulatory Planning and Review

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

    The economic impact of this rule is not significant for the following reasons: (1) The safety zone will only be enforced for one hour; (2) although persons and vessels may not enter, transit through, anchor in, or remain within the safety zone without authorization from the Captain of the Port Charleston or a designated representative, they may operate in the surrounding area during the enforcement period; and (3) the Coast Guard will provide advance notification of the safety zone to the local maritime community by Local Notice to Mariners and Broadcast Notice to Mariners.

    B. Impact on Small Entities

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

    We have considered the impact of this proposed rule on small entities. This rule may affect the following entities, some of which may be small entities: The owner or operators of vessels intending to enter, transit through, anchor in, or remain within the regulated area during the enforcement period. For the reasons stated in section IV.A. above, this proposed rule would not have a significant economic impact on a substantial number of small entities.

    If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

    Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section. The Coast Guard will not retaliate against small entities that question or complain about this proposed rule or any policy or action of the Coast Guard.

    C. Collection of Information

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

    D. Federalism and Indian Tribal Governments

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

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

    E. Unfunded Mandates Reform Act

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

    F. Environment

    We have analyzed this proposed rule under Department of Homeland Security Management Directive 023-01, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves a temporary safety zone with a two-hour enforcement period that would prohibit entry to certain waters of the Atlantic Intracoastal Waterway during the swim portion of a Triathlon. Normally such actions are categorically excluded from further review under paragraph L 60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A preliminary Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

    G. Protest Activities

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

    V. Public Participation and Request for Comments

    We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.

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

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

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

    List of Subjects in 33 CFR Part 165

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

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

    PART 165—SAFETY OF LIFE ON NAVIGABLE WATERS 1. The authority citation for part 165 continues to read as follows: Authority:

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

    2. Add a temporary § 165. T07-0081 to read as follows:
    § 165.T07-0081 Safety Zone; Xterra Swim, Myrtle Beach SC

    (a) Location. The following is a safety zone: Certain waters of the Atlantic Intracoastal Waterway within the following two points of position and the North shore: 33°45′03″ N, 78°50′47″ W to 33°45′18″ N, 78°50′14″ W, located in Myrtle Beach, South Carolina. All coordinates are North American Datum 1983.

    (b) Definition. The term “designated representative” means Coast Guard Patrol Commanders, including Coast Guard coxswains, petty officers, and other officers operating Coast Guard vessels, and Federal, state, and local officers designated by or assisting the Captain of the Port Charleston in the enforcement of the regulated areas.

    (c) Regulations.

    (1) All persons and vessels are prohibited from entering, transiting through, anchoring in, or remaining within the regulated area unless authorized by the Captain of the Port Charleston or a designated representative.

    (2) Persons and vessels desiring to enter, transit through, anchor in, or remain within the regulated area may contact the Captain of the Port Charleston by telephone at 843-740-7050, or a designated representative via VHF radio on channel 16, to request authorization. If authorization to enter, transit through, anchor in, or remain within the regulated area is granted by the Captain of the Port Charleston or a designated representative, all persons and vessels receiving such authorization must comply with the instructions of the Captain of the Port Charleston or a designated representative.

    (3) The Coast Guard will provide notice of the regulated area by Local Notice to Mariners, Broadcast Notice to Mariners, and on-scene designated representatives.

    (d) Enforcement Period. This rule will be enforced on from 7:30 a.m. until 9:30 a.m. on April 22, 2018.

    Dated: February 20, 2018. John W. Reed, Captain, U.S. Coast Guard, Captain of the Port Charleston.
    [FR Doc. 2018-04368 Filed 3-2-18; 8:45 am] BILLING CODE 9110-04-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket Number USCG-2018-0056] RIN 1625-AA00 Safety Zone; Charleston Race Week, Charleston Harbor, Charleston, SC AGENCY:

    Coast Guard, DHS.

    ACTION:

    Notice of proposed rulemaking.

    SUMMARY:

    The Coast Guard proposes to establish a temporary safety zone on the waters of the Charleston Harbor in Charleston, South Carolina during Charleston Race Week. Charleston Race Week is a series of sail boat races throughout Charleston Harbor. The safety zone is necessary to ensure the safety of participants, spectators, and the general public during the event. This regulation prohibits persons and vessels from entering, transiting through, anchoring in, or remaining within the safety zones unless authorized by the Captain of the Port Charleston or a designated representative.

    DATES:

    Comments and related material must be received by the Coast Guard on or before March 20, 2018.

    ADDRESSES:

    You may submit comments identified by docket number USCG-2018-0056 using the Federal eRulemaking Portal at http://www.regulations.gov. See the “Public Participation and Request for Comments” portion of the SUPPLEMENTARY INFORMATION section for further instructions on submitting comments.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions about this proposed rulemaking, call or email Lieutenant Justin Heck, Sector Charleston Office of Waterways Management, Coast Guard; telephone (843) 740-3184, email [email protected]

    SUPPLEMENTARY INFORMATION: I. Table of Abbreviations CFR Code of Federal Regulations DHS Department of Homeland Security E.O. Executive Order FR Federal Register NPRM Notice of Proposed Rulemaking Pub. L. Public Law § Section U.S.C. United States Code COTP Captain of the Port II. Background, Purpose, and Legal Basis

    On January 14, 2018, the Charleston Ocean Racing Association notified the Coast Guard that it will be sponsoring a series of sailboat races from 9 a.m. until 5 p.m., on April 12, 2018 through April 15, 2018. The purpose of the rule is to ensure the safety of the event participants, the general public, vessels and the navigable waters during Charleston Race Week.

    The Coast Guard is requesting that interested parties provide comments within a shortened comment period of 15 days instead of a standard 30 days for this notice of proposed rulemaking. The Coast Guard believes a shortened comment period is necessary and reasonable because the safety zone is necessary to ensure the safety of event participants, the general public, vessels and these navigable waters during the race. Any delay in making this final rule effective by allowing comments for more than 15 days would not be in the best interest of public safety.

    The legal basis for the proposed rule is the Coast Guard's authority to establish regulated safety zones and other limited access areas is 33 U.S.C. 1231.

    III. Discussion of Proposed Rule

    The Coast Guard proposes to establish a safety zone on the waters of the Charleston Harbor in Charleston, South Carolina during Charleston Race Week. The races are scheduled to take place from 9 a.m. to 5 p.m., on April 12, 2018, through April 15, 2018. Approximately 250 sailboats are anticipated to participate in the races, and approximately 30 spectator vessels are expected to attend the event. Persons and vessels desiring to enter, transit through, anchor in, or remain within the safety zone may contact the Captain of the Port Charleston by telephone at (843) 740-7050, or a designated representative via VHF radio on channel 16 to request authorization. If authorization to enter, transit through, anchor in, or remain within the safety zone is granted by the Captain of the Port Charleston or a designated representative, all persons and vessels receiving such authorization must comply with the instructions of the Captain of the Port Charleston or a designated representative. The Coast Guard will provide notice of the safety zone by Local Notice to Mariners, Broadcast Notice to Mariners, and on-scene designated representatives.

    IV. Regulatory Analyses

    We developed this proposed rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and executive orders.

    A. Regulatory Planning and Review

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

    This regulatory action determination is based on: (1) Although persons and vessels may not enter, transit through, anchor in, or remain within the safety zone without authorization from the Captain of the Port Charleston or a designated representative, they may operate in the surrounding area during the enforcement period; and (2) the Coast Guard will provide advance notification of the safety zone to the local maritime community by Local Notice to Mariners and Broadcast Notice to Mariners

    B. Impact on Small Entities

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

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

    If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

    Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section. The Coast Guard will not retaliate against small entities that question or complain about this proposed rule or any policy or action of the Coast Guard.

    C. Collection of Information

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

    D. Federalism and Indian Tribal Governments

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

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

    E. Unfunded Mandates Reform Act

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

    F. Environment

    We have analyzed this proposed rule under Department of Homeland Security Directive 023-01, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves a safety zone that will prohibit persons and vessels from entering, transiting through, anchoring in, or remaining within a limited area on the waters of the Charleston Harbor. Normally such actions are categorically excluded from further review under paragraph L60 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A preliminary Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

    G. Protest Activities

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

    V. Public Participation and Request for Comments

    We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.

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

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

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

    List of Subjects in 33 CFR Part 165

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

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

    PART 165—SAFETY OF LIFE ON NAVIGABLE WATERS 1. The authority citation for part 165 continues to read as follows: Authority:

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

    2. Add a temporary § 165.T07-0056 to read as follows:
    § 165.T07-0056 Safety Zone; Charleston Race Week, Charleston Harbor, Charleston, SC.

    (a) Location. The rule consists of the following four race areas.

    (1) Race Area #1. All waters of the Charleston Harbor encompassed within a 700 yard radius of position 32°46′10″ N, 079°55′15″ W.

    (2) Race Area #2. All waters of the Charleston Harbor encompassed within a 700 yard radius of position 32°46′02″ N, 079°54′15″ W.

    (3) Race Area #3. All waters of the Charleston Harbor encompassed within a 700 yard radius of position 32°45′55″ N, 079°53′39″ W.

    (4) Race Area #4. All waters of the Charleston Harbor encompassed within a 600 yard radius of position 32°47′40″ N, 079°55′10″ W.

    (5) Race Area #5. All waters of the Charleston Harbor and Entrance Channel encompassed within a 500 yard radius of position 32°45′34″ N, 79°52′09″ W continuing to Charleston Entrance Channel Buoys Green 11 (LLN 2395.5) and Red 12 (LLN 2400).

    (b) Definition. The term “designated representative” means Coast Guard Patrol Commanders, including Coast Guard coxswains, petty officers, and other officers operating Coast Guard vessels, and Federal, state, and local officers designated by or assisting the Captain of the Port Charleston in the enforcement of the regulated areas.

    (c) Regulations. (1) All persons and vessels are prohibited from entering, transiting through, anchoring in, or remaining within the regulated area unless authorized by the Captain of the Port Charleston or a designated representative.

    (2) Persons and vessels desiring to enter, transit through, or remain within the regulated area may contact the Captain of the Port Charleston by telephone at 843-740-7050, or a designated representative via VHF radio on channel 16, to request authorization. If authorization to enter, transit through, or remain within the regulated area is granted by the Captain of the Port Charleston or a designated representative, all persons and vessels receiving such authorization must comply with the instructions of the Captain of the Port Charleston or a designated representative.

    (3) The Coast Guard will provide notice of the regulated area by Local Notice to Mariners, Broadcast Notice to Mariners, and on-scene designated representatives.

    (d) Enforcement period. This rule will be enforced from 9 a.m. until 5 p.m., on April 12, 2018, through April 15, 2018.

    Dated: February 27, 2018. J.W. Reed, Captain, U.S. Coast Guard, Captain of the Port Charleston.
    [FR Doc. 2018-04366 Filed 3-2-18; 8:45 am] BILLING CODE 9110-04-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket Number USCG-2018-0015] RIN 1625-AA08 Safety Zone; Black Warrior River, Tuscaloosa, AL AGENCY:

    Coast Guard, DHS.

    ACTION:

    Notice of proposed rulemaking.

    SUMMARY:

    The Coast Guard proposes to establish a temporary safety zone for all navigable waters of the Black Warrior River, extending the entire width of the river between Mile Marker (MM) 335.0 and MM 337.0 in Tuscaloosa, AL. The proposed rulemaking is necessary to provide for the safety of life and property on these navigable waters during the Tuscaloosa Air Show. This proposed rulemaking would prohibit persons and vessels from entering the safety zone unless specifically authorized by the Captain of the Port Sector Mobile (COTP) or a designated representative. We invite your comments on this proposed rulemaking.

    DATES:

    Comments and related material must be received by the Coast Guard on or before April 4, 2018.

    ADDRESSES:

    You may submit comments identified by docket number USCG-2018-0015 using the Federal eRulemaking Portal at http://www.regulations.gov. See the “Public Participation and Request for Comments” portion of the SUPPLEMENTARY INFORMATION section for further instructions on submitting comments.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions about this proposed rulemaking, call or email LT Kyle D. Berry, Sector Mobile, Waterways Management Division, U.S. Coast Guard; telephone 251-441-5940, email [email protected]

    SUPPLEMENTARY INFORMATION: I. Table of Abbreviations CFR Code of Federal Regulations COTP Captain of the Port Sector Mobile DHS Department of Homeland Security FR Federal Register MM Mile Marker NPRM Notice of Proposed Rulemaking PATCOM Patrol Commander § Section U.S.C. United States Code II. Background, Purpose, and Legal Basis

    On November 30, 2017, the sponsor for the Tuscaloosa Air Show submitted an application for a marine event permit for the Tuscaloosa Air Show that will take place every day from 10 a.m. through 5 p.m. from April 12, 2018 through April 15, 2018. The air show will consist of various flight demonstrations over the Black Warrior River between Mile Marker (MM) 335.0 and MM 337.0 in Tuscaloosa, AL. Over the years, there have been unfortunate instances of aircraft mishaps that involve crashing during performances at various air shows around the world. Occasionally, these incidents result in a wide area of scattered debris in the water that can damage property or cause significant injury or death to the public observing the air shows. The Captain of the Port Sector Mobile (COTP) has determined a safety zone is necessary to protect the general public from hazards associated with aerial flight demonstrations.

    The purpose of this proposed rulemaking is to ensure the safety of vessels and persons during the air show on the navigable waters of the Black Warrior River between MM 335.0 and 337.0 in Tuscaloosa, AL. The Coast Guard proposes this rulemaking under authority in 33 U.S.C. 1231.

    III. Discussion of Proposed Rule

    The Coast Guard proposes to establish a temporary safety zone on the Black Warrior River, extending the entire width of the river between MM 335.0 and 337.5 in Tuscaloosa, AL every day from 10 a.m. through 5 p.m. from April 12, 2018 through April 15, 2018. The proposed rulemaking is needed to provide for the safety of life and property on these navigable waters during the Tuscaloosa Air Show. This proposed rulemaking restricts transit into, through, and within the zone unless specifically authorized by the COTP. No vessel or person would be permitted to enter the zone without obtaining permission from the COTP or a designated representative. A designated representative may be a Patrol Commander (PATCOM). The PATCOM would be aboard either a Coast Guard or Coast Guard Auxiliary vessel. The PATCOM may be contacted on Channel 16 VHF-FM (156.8 MHz) by the call sign “PATCOM”. All persons and vessels not registered with the sponsor as participants or official patrol vessels are considered spectators. The “official patrol vessels” consist of any Coast Guard, state, or local law enforcement and sponsor provided vessels assigned or approved by the COTP to patrol the zone.

    Spectator vessels desiring to transit the zone may do so only with prior approval of the PATCOM and when so directed by that officer would be operated at a minimum safe navigation speed in a manner which will not endanger any other vessels. No spectator vessel shall anchor, block, loiter, or impede the through transit of official patrol vessels in the zone during the effective dates and times, unless cleared for entry by or through an official patrol vessel. Any spectator vessel may anchor outside the zone, but may not anchor in, block, or loiter in a navigable channel. Spectator vessels may be moored to a waterfront facility within the zone in such a way that they shall not interfere with the progress of the air show. Such mooring must be complete at least 30 minutes prior to the establishment of the zone and remain moored through the duration of the air show.

    The COTP or a designated representative may forbid and control the movement of all vessels in the zone. When hailed or signaled by an official patrol vessel, a vessel shall come to an immediate stop and comply with the directions given. Failure to do so may result in expulsion from the zone, citation for failure to comply, or both.

    The COTP or a designated representative may terminate the operation of any vessel at any time it is deemed necessary for the protection of life or property. The COTP or a designated representative would terminate enforcement of the safety zone at the conclusion of the air show.

    The regulatory text we are proposing appears at the end of this document.

    IV. Regulatory Analyses

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

    A. Regulatory Planning and Review

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

    This regulatory action determination is based on size, location, and duration of the proposed rulemaking. The proposed safety zone would take place on a two mile stretch of the on the Black Warrior River between MMs 335.0 and 337.0, during a short duration of only seven hours, lasting for only four days from April 12, 2018 through April 15, 2018, which is a time of year of lower than normal traffic. Additionally, the Coast Guard would issue Broadcast Notices to Mariners via VHF-FM marine channel 16 about the safety zone so that waterway users may plan accordingly for transits during this restriction. The proposed rule also allows vessels to seek permission from the COTP or a designated representative to enter the zone.

    B. Impact on Small Entities

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

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

    If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this proposed rule would have a significant economic impact on it, please submit a comment (see ADDRESSES) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

    Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section. The Coast Guard will not retaliate against small entities that question or complain about this proposed rule or any policy or action of the Coast Guard.

    C. Collection of Information

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

    D. Federalism and Indian Tribal Governments

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

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

    E. Unfunded Mandates Reform Act

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

    F. Environment

    We have analyzed this rule under Department of Homeland Security Directive 023-01, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone on the Black Warrior River, extending the entire width of the river, between MMs 335.0 and 337.0. It is categorically excluded from further review under paragraph L60 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A Record of Environmental Consideration (REC) supporting this determination is available in the docket where indicated under ADDRESSES.

    We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

    G. Protest Activities

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

    V. Public Participation and Request for Comments

    We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.

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

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

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

    List of Subjects in 33 CFR Part 165

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

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

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

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

    2. Add§ 165.T08-0015 to read as follows:
    § 165.T08-0015 Safety Zone; Black Warrior River, Tuscaloosa, AL.

    (a) Location. The following area is a proposed safety zone: All navigable waters of the Black Warrior River, extending the entire width of the river, between mile marker (MM) 335.0 and MM 337.5 in Tuscaloosa, AL.

    (b) Enforcement period. This section is effective from 10 a.m. on April 12, 2018 through 5 p.m. on April 15, 2018.

    (c) Regulations.

    (1) In accordance with the general regulations in § 165.23 of this part, entry into, transiting through, or exiting from this area is prohibited unless authorized by the Captain of the Port Sector Mobile (COTP) or a designated representative. A designated representative may be a Patrol Commander (PATCOM). The PATCOM will be aboard either a Coast Guard or Coast Guard Auxiliary vessel. The PATCOM may be contacted on Channel 16 VHF-FM (156.8 MHz) by the call sign “PATCOM”.

    (2) All persons and vessels not registered with the event sponsor as participants or official patrol vessels are considered spectators. The “official patrol vessels” consist of any Coast Guard, state, or local law enforcement and sponsor provided vessels assigned or approved by the COTP to patrol the regulated area.

    (3) Spectator vessels desiring to transit the regulated area may do so only with prior approval of the PATCOM and when so directed by that officer will be operated at a minimum safe navigation speed in a manner that will not endanger participants in the zone or any other vessels.

    (4) No spectator vessel shall anchor, block, loiter, or impede the through transit of participants or official patrol vessels in the regulated area during the effective dates and times, unless cleared for entry by or through an official patrol vessel.

    (5) Any spectator vessel may anchor outside the regulated area, but may not anchor in, block, or loiter in a navigable channel. Spectator vessels may be moored to a waterfront facility within the regulated area in such a way that they shall not interfere with the progress of the event. Such mooring must be complete at least 30 minutes prior to the establishment of the regulated area and remain moored through the duration of the event.

    (6) The Patrol Commander may forbid and control the movement of all vessels in the regulated area. When hailed or signaled by an official patrol vessel, a vessel shall come to an immediate stop and comply with the directions given. Failure to do so may result in expulsion from the area, citation for failure to comply, or both.

    (7) The Patrol Commander may terminate the event or the operation of any vessel at any time it is deemed necessary for the protection of life or property.

    (8) The Patrol Commander will terminate enforcement of the safety zone at the conclusion of the event.

    (9) Entry into this zone is prohibited unless authorized by the Captain of the Port Sector Mobile (COTP) or a designated representative.

    (10) Persons or vessels seeking to enter into or transit through the zone must request permission from the COTP or a designated representative. They may be contacted on VHF-FM channels 16 or by telephone at 251-441-5976.

    (11) If permission is granted, all persons and vessels must comply with the instructions of the COTP or designated representative.

    (d) Informational broadcasts. The COTP or a designated representative will inform the public through Broadcast Notices to Mariners of the enforcement period for the temporary safety zone as well as any changes in the planned schedule.

    Dated: February 2, 2018. M.R. Mclellan, Captain, U.S. Coast Guard, Captain of the Port Sector Mobile.
    [FR Doc. 2018-04253 Filed 3-2-18; 8:45 am] BILLING CODE 9110-04-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 63 [EPA-R01-OAR-2017-0343; A-1-FRL-9974-77-Region 1] Approval of Section 112(l) Authority for Hazardous Air Pollutants; Perchloroethylene Air Emission Standards for Dry Cleaning Facilities; State of Vermont AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Proposed rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is proposing to grant the Vermont Department of Environmental Conservation (VT DEC) the authority to implement and enforce, with respect to area sources only, the Vermont Perchloroethylene Dry Cleaning Rule in place of the National Emissions Standards for Hazardous Air Pollutants for Perchloroethylene Dry Cleaning Facilities (Dry Cleaning NESHAP). Pursuant to the Clean Air Act (CAA), the VT DEC submitted a request for approval to implement and enforce Vermont's Perchloroethylene Dry Cleaning Rule of the Vermont Air Pollution Control Regulations as a partial substitution for the National Emissions Standards for Hazardous Air Pollutants for Perchloroethylene Dry Cleaning Facilities (Dry Cleaning NESHAP), as it applies to area sources. EPA has reviewed this request and is proposing to determine that the Vermont Perchloroethylene Dry Cleaning Rule satisfies the requirements necessary for partial rule substitution. Thus, EPA is hereby proposing to grant VT DEC's request. This action would not affect the authority of any party to implement and enforce the Dry Cleaning NESHAP with respect to major source dry cleaners. This approval would make the Vermont Perchloroethylene Dry Cleaning Rule federally enforceable in Vermont.

    DATES:

    Written comments must be received on or before April 4, 2018.

    ADDRESSES:

    Submit your comments, identified by Docket ID No. EPA-R01-OAR-2017-0343 at http://www.regulations.gov, or via email to [email protected] For comments submitted at Regulations.gov, follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulations.gov. For either manner of submission, the EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (i.e. on the web, cloud, or other file sharing system). For additional submission methods, please contact the person identified in the For Further Information Contact section. For the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www.epa.gov/dockets/commenting-epa-dockets.

    FOR FURTHER INFORMATION CONTACT:

    Susan Lancey, Air Permits, Toxics, and Indoor Programs Unit, U.S. Environmental Protection Agency, EPA New England Regional Office, 5 Post Office Square—Suite 100, (Mail code OEP05-2), Boston, MA 02109-3912, telephone number 617-918-1656, [email protected]

    SUPPLEMENTARY INFORMATION:

    In the Final Rules Section of this Federal Register, EPA is approving the Vermont Perchloroethylene Dry Cleaning Rule in place of the Dry Cleaning NESHAP for area sources as a direct final rule without prior proposal because the Agency views this as a noncontroversial submittal and anticipates no adverse comments. A detailed rationale for the approval is set forth in the direct final rule. If no adverse comments are received in response to this rule, no further activity is contemplated. If EPA receives adverse comments, the direct final rule will be withdrawn and all public comments received will be addressed in a subsequent final rule based on this proposed rule. EPA will not institute a second comment period. Any parties interested in commenting on this action should do so at this time.

    For additional information, see the direct final rule which is located in the Rules Section of this Federal Register.

    Dated: February 26, 2018. Alexandra Dapolito Dunn, Regional Administrator, EPA New England.
    [FR Doc. 2018-04276 Filed 3-2-18; 8:45 am] BILLING CODE 6560-50-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 635 RIN 0648-XF947 Atlantic Highly Migratory Species; Shortfin Mako Shark Management Measures AGENCY:

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

    ACTION:

    Notice of Intent (NOI) to prepare an Environmental Impact Statement (EIS); request for comments.

    SUMMARY:

    NMFS announces the availability of an Issues and Options document and its intent to prepare an EIS under the National Environmental Policy Act (NEPA) analyzing impacts of potential new management measures for shortfin mako sharks. Such measures would be implemented through rulemaking to address overfishing and to implement, as necessary and appropriate, measures adopted by the International Commission for the Conservation of Atlantic Tunas (ICCAT) (ICCAT Recommendation 17-08) in response to the 2017 shortfin mako shark stock assessment. Based on that assessment, NMFS determined that North Atlantic shortfin mako sharks were overfished and experiencing overfishing in December 2017. Management alternatives considered would be to meet NMFS's obligations related to ending overfishing and establishing a foundation for rebuilding the shortfin mako shark stock consistent with the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) and the Atlantic Tunas Convention Act (ATCA). Scoping is underway for this action, and NMFS requests comments on a preliminary Issues and Options document that presents range of commercial and recreational management measures, in both directed and incidental fisheries, including, but not limited to, commercial and recreational retention limits, quota levels, minimum size limits, gear modifications, and electronic reporting.

    DATES:

    Four scoping meetings and a conference call will be held from March through May 2018. See SUPPLEMENTARY INFORMATION for meeting and call dates and locations. Scoping comments must be received no later than 5 p.m., local time, on May 7, 2018.

    ADDRESSES:

    You may submit comments on the Issues and Options document, identified by NOAA-NMFS-2018-0011, by any of the following methods:

    Electronic Submission: Submit all electronic public comments via the Federal e-Rulemaking Portal. Go to www.regulations.gov/#!docketDetail;D=NOAA-NMFS-2018-0011, click the “Comment Now!” icon, complete the required fields, and enter or attach your comments.

    Mail: Submit written comments to Randy Blankinship, NMFS/SF1, 1315 East-West Highway, National Marine Fisheries Service, SSMC3, Silver Spring, MD 20910.

    Instructions: Comments sent by any other method, to any other address or individual, or received after the end of the comment period, may not be considered by NMFS. All comments received are a part of the public record and generally will be posted for public viewing on www.regulations.gov without change. All personal identifying information (e.g., name, address, etc.), confidential business information, or otherwise sensitive information submitted voluntarily by the sender will be publicly accessible. NMFS will accept anonymous comments (enter “N/A” in the required fields if you wish to remain anonymous).

    Copies of the 2018 shortfin mako shark Issues and Options document and supporting documents are available from the HMS Management Division website at https://www.fisheries.noaa.gov/topic/atlantic-highly-migratory-species or constituents can contact Guý DuBeck by phone at 301-427-8503 for hard copies. Copies of the 2017 ICCAT Standing Committee on Research and Statistics (SCRS) shortfin mako shark benchmark stock assessment can be found online at http://iccat.int/Documents/Meetings/Docs/2017_SCRS_REP_ENG.pdf.

    FOR FURTHER INFORMATION CONTACT:

    Guý DuBeck or Karyl Brewster-Geisz at 301-427-8503.

    SUPPLEMENTARY INFORMATION:

    Background

    NMFS manages the Atlantic shark fisheries through the 2006 Consolidated Atlantic HMS Fishery Management Plan and its amendments as required under the Magnuson-Stevens Act. ICCAT manages sharks caught in association with ICCAT species (tuna and tuna-like species) throughout the Atlantic and the adjacent seas, and NMFS implements ICCAT measures as necessary and appropriate under ATCA.

    The North Atlantic shortfin mako shark (Isurus oxyrinchus) is a highly migratory species that ranges across the entire North Atlantic Ocean and is caught by numerous countries. These sharks are a small but valued component of U.S. recreational and commercial shark fisheries. In recent years, U.S. catch has represented only approximately 11 percent of the total catch of the species in the North Atlantic by all reporting countries. International measures are, therefore, critical to the species' effective conservation and management.

    In August 2017, ICCAT's SCRS conducted a new benchmark stock assessment on the North Atlantic shortfin mako stock. At its November 2017 annual meeting, ICCAT accepted this stock assessment and determined the stock to be overfished with overfishing occurring. On December 13, 2017, based on this assessment, NMFS issued a status determination finding the stock to be overfished and experiencing overfishing using domestic criteria. The assessment specifically indicated that biomass (B2015) is substantially less than the biomass at maximum sustainable yield (BMSY) for eight of the nine models used for the assessment (B2015/BMSY = 0.57-0.85). In the ninth model, spawning stock fecundity (SSF) was less than SSFMSY (SSF2015/SSFMSY = 0.95). Additionally, the assessment indicated that fishing mortality (F2015) was greater than FMSY (1.93-4.38), with a combined 90-percent probability from all models that the population is overfished with overfishing occurring.

    The 2017 assessment estimated that total North Atlantic shortfin mako catches across all ICCAT parties are currently between 3,600 and 4,750 mt per year, and that total catches would have to be at 1,000 mt or below (72-79 percent reductions) to prevent further population declines and that catches of 500 t or less currently are expected to stop overfishing and begin to rebuild the stock. The projections indicate that a total allowable catch of 0 mt would produce a greater than 50 percent probability of rebuilding the stock by the year 2040, which is approximately equal to one mean generation time. Research indicates that post-release survival rates of Atlantic shortfin mako sharks are high (70 percent); however, the assessment could not determine if requiring live releases alone would reduce landings sufficiently to end overfishing and rebuild the stock.

    ICCAT Recommendation 17-08

    Based on the stock assessment information, ICCAT adopted new management measures for Atlantic shortfin mako (Recommendation 17-08) at its annual meeting in November 2017. The United States must implement those measures as necessary and appropriate under ATCA. These measures largely focus on maximizing live releases of Atlantic shortfin mako sharks, allowing retention only in certain limited circumstances, increasing minimum size limits, and improving data collection in ICCAT fisheries. In November 2018, ICCAT will review the catches from the first six months of 2018 and decide whether these measures should be modified. In 2019, the SCRS will evaluate the effectiveness of these measures in ending overfishing and beginning to rebuild the stock. SCRS will also provide rebuilding information that reflects rebuilding timeframes of at least two mean generation times. Also in 2019, ICCAT will establish a rebuilding program that will have a high probability of avoiding overfishing and rebuilding the stock to BMSY within a timeframe that takes into account the biology of the stock.

    2018 Shortfin Mako Shark Interim Final Rule

    Consistent with these requirements, NMFS published an interim final rule using emergency Magnuson-Stevens Act authority to temporarily and immediately implement the following measures: (1) Commercial fishermen on vessels deploying pelagic longline gear must release all live shortfin mako sharks and can only retain a shortfin mako shark if it is dead at haulback, (2) commercial fishermen using gear other than pelagic longline commercial gear (e.g., bottom longline, gillnet, handgear, etc.) must release all shortfin mako sharks, whether they are dead or alive, and (3) recreational fishermen must release any shortfin mako sharks smaller than the minimum size of 83 inches fork length (FL). The interim final rule expires on August 29, 2018, and may be extended for an additional 186 days under the Magnuson-Stevens Act provisions.

    Request for Comments

    Both commercial and recreational fishing activities interact with and as allowable have retained shortfin mako sharks. Under the interim final rule, commercial fishermen with a limited access commercial shark permit may retain shortfin mako sharks caught on pelagic longline gear provided the shark was dead at haulback. Shortfin mako sharks caught on any other commercial gear type may not be retained. Similarly, under the interim final rule, vessels with an HMS Angling or Charter/Headboat permit may retain one shortfin mako shark greater than the minimum size of 83 inches FL per vessel.

    NMFS anticipates changes to shark management as a result of the 2017 shortfin mako shark stock assessment through the rulemaking process and requests comments on potential future management options for this action. NMFS prepared an Issues and Options paper detailing potential management measures to meet its ATCA and Magnuson-Stevens Act obligations and to address overfishing of and begin rebuilding shortfin mako sharks. The Issues and Options paper is available online at the HMS website: https://www.fisheries.noaa.gov/topic/atlantic-highly-migratory-species. Potential management measures in the Issues and Options paper include commercial and recreational fishing requirements. Four scoping meetings and a conference call will be held (see Table 2 for meeting times and locations) to provide the opportunity for public comment on potential shortfin mako shark management measures. These comments will be used to assist in the development of the upcoming amendment to the 2006 Consolidated Atlantic HMS FMP.

    Table 1—Time and Locations of the Four Scoping Meetings and Conference Call Date Time Meeting location Meeting address March 15, 2018 4-8 p.m Panama City, FL National Marine Fisheries Service,
  • Southeast Fisheries Science Center,
  • 3500 Delwood Beach Road,
  • Panama City, FL 32408.
  • March 21, 2018 4-8 p.m Manteo, NC Commissioners Meeting Room,
  • Dare County Administration Building,
  • 954 Marshall C. Collins Dr.,
  • Manteo, NC 27954.
  • April 4, 2018 2-4 p.m Conference Call To participate in the conference call, please call: (800) 779-3136. Passcode: 9421185.
  • To participate in the webinar, RSVP at: https://noaaevents2.webex.com/noaaevents2/onstage/g.php?MTID=e0e45a6863a2dec162452b2b6240ef3e3, A confirmation email with webinar log-in information will be sent after RSVP is registered.
  • April 12, 2018 4-8 p.m Manahawkin, NJ Stafford Branch Public Library,
  • 129 North Main St.,
  • Manahawkin, NJ 08050.
  • April 19, 2018 5-8 p.m Gloucester, MA National Marine Fisheries Service,
  • Greater Atlantic Regional Office,
  • 55 Great Republic Dr.,
  • Gloucester, MA 01930.
  • The public is reminded that NMFS expects participants at public scoping meetings and on conference calls to conduct themselves appropriately. At the beginning of the scoping meetings and conference call, a representative of NMFS will explain the ground rules (e.g., all comments are to be directed to the Agency; attendees will be called to give their comments in the order in which they registered to speak; each attendee will have an equal amount of time to speak; and attendees should not interrupt one another). The meeting locations will be physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Guý DuBeck at 301-427-8503, at least 7 days prior to the meeting. A NMFS representative will attempt to structure the meeting so that all attending members of the public will be able to comment if they so choose, regardless of the controversial nature of the subject matter. If attendees do not respect the ground rules they will be asked to leave the scoping meeting or conference call.

    Because the rulemakings overlap for some gear types, the public scoping meetings being held in Panama City, FL, Manteo, NC, and Manahawkin, NJ will be held in conjunction with public scoping meetings for pelagic longline bluefin tuna area-based and weak hook management. The shortfin mako shark management measure presentation will likely be given first unless polling of the audience indicates another approach is appropriate. After each presentation, public comment for that issue will be received. Meeting attendees interested in this issue are encouraged to show up at the beginning of the meeting to help determine the order of the presentations. The second presentation will not start any later than 6 p.m.

    In addition to the four scoping meetings and conference call, NMFS has requested to present the issues and options document to the five Atlantic Regional Fishery Management Councils (the New England, Mid-Atlantic, South Atlantic, and Gulf of Mexico Fishery Management Councils) and the Atlantic and Gulf States Marine Fisheries Commissions during the public comment period. Please see the Councils' and Commissions' spring meeting notices for times and locations.

    Based on the 2017 shortfin mako shark stock assessment, implementation of new management measures via an amendment to the 2006 Consolidated HMS FMP is necessary to address overfishing and rebuild the stock. NMFS anticipates completing this amendment and any related documents in early 2019.

    Dated: February 28, 2018. Jennifer M. Wallace, Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service.
    [FR Doc. 2018-04430 Filed 3-1-18; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 679 RIN 0648-XF559 Fisheries of the Exclusive Economic Zone Off Alaska; Essential Fish Habitat Amendments AGENCY:

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

    ACTION:

    Notification of availability of fishery management plan amendments; request for comments.

    SUMMARY:

    The North Pacific Fishery Management Council (Council) submitted Amendment 115 to the Fishery Management Plan (FMP) for Groundfish of the Bering Sea and Aleutian Islands Management Area, Amendment 105 to the FMP for Groundfish of the Gulf of Alaska, Amendment 49 to the FMP for Bering Sea/Aleutian Islands King and Tanner Crabs, Amendment 13 to the FMP for the Salmon Fisheries in the EEZ Off Alaska, and Amendment 2 to the FMP for Fish Resources of the Arctic Management Area, (collectively Amendments) to the Secretary of Commerce for review. If approved, these Amendments would revise the FMPs by updating the description and identification of essential fish habitat (EFH), and updating information on adverse impacts to EFH based on the best scientific information available. This action is intended to promote the goals and objectives of the Magnuson-Stevens Fishery Conservation and Management Act, the FMPs, and other applicable laws.

    DATES:

    Comments on the amendments must be submitted on or before May 4, 2018.

    ADDRESSES:

    You may submit your comments, identified by NOAA-NMFS-2017-0087, by any of the following methods:

    Electronic Submission: Submit all electronic public comments via the Federal eRulemaking Portal. Go to www.regulations.gov/#!docketDetail;D=NOAA-NMFS-2017-0087, click the “Comment Now!” icon, complete the required fields, and enter or attach your comments.

    Mail: Submit written comments to Glenn Merrill, Assistant Regional Administrator, Sustainable Fisheries Division, Alaska Region NMFS, Attn: Ellen Sebastian. Mail comments to P.O. Box 21668, Juneau, AK 99802-1668.

    Instructions: NMFS may not consider comments if they are sent by any other method, to any other address or individual, or received after the comment period ends. All comments received are a part of the public record, and NMFS will post the comments for public viewing on www.regulations.gov without change. All personal identifying information (e.g., name, address), confidential business information, or otherwise sensitive information submitted voluntarily by the sender will be publicly accessible. NMFS will accept anonymous comments (enter “N/A” in the required fields if you wish to remain anonymous).

    Electronic copies of the Amendments, maps of the EFH areas, the Environmental Assessment (the analysis), and the Final EFH five-year Summary Report prepared for this action may be obtained from www.regulations.gov.

    FOR FURTHER INFORMATION CONTACT:

    Megan Mackey, 907-586-7228.

    SUPPLEMENTARY INFORMATION:

    The Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) requires that each regional fishery management council submit any FMP amendment it prepares to NMFS for review and approval, disapproval, or partial approval by the Secretary of Commerce. The Magnuson-Stevens Act also requires that NMFS, upon receiving a FMP amendment, immediately publish a notice in the Federal Register announcing that the amendment is available for public review and comment. This notice announces that Amendment 115 to the FMP for Groundfish of the Bering Sea and Aleutian Islands Management Area (BSAI Groundfish FMP); Amendment 105 to the FMP for Groundfish of the Gulf of Alaska (GOA Groundfish FMP); Amendment 49 to the FMP for Bering Sea/Aleutian Islands King and Tanner Crabs (Crab FMP); Amendment 13 to the FMP for the Salmon Fisheries in the EEZ Off Alaska (Salmon FMP); and Amendment 2 to the FMP for Fish Resources of the Arctic Management Area (Arctic FMP) are available for public review and comment.

    The Council prepared the FMPs under the authority of the Magnuson-Stevens Act, 16 U.S.C. 1801 et seq. Regulations governing U.S. fisheries and implementing the FMPs appear at 50 CFR parts 600, 679, and 680. Section 303(a)(7) of the Magnuson-Stevens Act requires that each FMP describe and identify EFH, minimize to the extent practicable the adverse effects of fishing on EFH, and identify other measures to promote the conservation and enhancement of EFH. The Magnuson-Stevens Act defines EFH as those waters and substrate necessary to fish for spawning, breeding, feeding, or growth to maturity. Implementing regulations at § 600.815 list the EFH contents required in each fishery management plan and direct councils to conduct a complete review of all EFH information at least once every five years (referred to here as “the 5-year review”).

    The Council developed the Amendments as a result of a new information available through the 5-year review that began in 2014 (2015 5-year review) and adopted the Amendments in April 2017. The 2015 5-year review is the Council's third review of EFH in the FMPs. Prior 5-year reviews were conducted in 2005 and 2010. The Council recommended amendments to the description and identification of EFH in the FMPs with new information and improved mapping as described in the Final EFH 5-year Summary Report for the 2015 5-year review (Summary Report, see ADDRESSES). The Council also recommended updates to EFH information based on the best available information in the Summary Report (see ADDRESSES). The Council recommended updates to EFH for all FMPs except for the Scallop FMP because no new information is available to update EFH descriptions for scallops.

    The Amendments would make the following changes to the FMPs:

    • Amendment 115 to the BSAI Groundfish FMP and Amendment 105 to the GOA Groundfish FMP (Amendments 115/105) would update the EFH descriptions for all managed species and update the identification of EFH for those managed species for which new population density or habitat suitability information is available. Sections 4.2.1 and 5.2.1 of the Environmental Assessment (see ADDRESSES) describe which EFH updates would be made for each species and life stage. Amendments 115/105 would also update information in Appendix F on adverse impacts to EFH based on the best scientific information available in the Summary Report (see ADDRESSES).

    • Amendment 49 to the Crab FMP would update the EFH descriptions for all managed species and update the identification of EFH for those managed species for which new population density or habitat suitability information is available. Section 6.2.1 of the Environmental Assessment (See ADDRESSES) describes which EFH updates would be made for each species and life stage. Amendment 49 would also update information in Appendix F on adverse impacts to EFH based on the best scientific information available in the Summary Report (see ADDRESSES).

    • Amendment 13 to the Salmon FMP would replace Appendix A, “Essential Fish Habitat (EFH) and Habitat Areas of Particular Concern (HAPC),” with a new Appendix A based on the best available information in the Summary Report (see ADDRESSES). Amendment 13 to the Salmon FMP would update the marine EFH descriptions for all salmon species and update the identification of marine EFH for each species and life stage for which new population density or habitat suitability information is available. Section 7.2.1 of the Environmental Assessment (see ADDRESSES) describes which EFH updates would be made for each species and life stage. Amendment 13 would also update information in Appendix A on adverse impacts to EFH based on the best scientific information available in the Summary Report (see ADDRESSES).

    • Amendment 2 to the Arctic FMP would update the EFH descriptions for all managed species for which new information is available, and update the identification of EFH for snow crab. Section 8.2.1 of the Environmental Assessment (See ADDRESSES) describes which EFH updates would be made for each species and life stage. Amendment 2 would also update information in Appendix C on adverse impacts to EFH based on the best scientific information available in the Summary Report (see ADDRESSES).

    NMFS is soliciting public comments on the Amendments through the end of the comment period (see DATES). All relevant written comments received by the end of the applicable comment period will be considered by NMFS in the approval/disapproval decision for the Amendments and addressed in the response to comments in the final decision. Comments received after end of the applicable comment period will not be considered in the approval/disapproval decision on the Amendments. To be considered, comments must be received, not just postmarked or otherwise transmitted, by the last day of the comment period (see DATES).

    Authority:

    16 U.S.C. 1801 et seq.

    Dated: February 27, 2018. Samuel D. Rauch, III, Deputy Assistant Administrator for Regulatory Programs, National Marine Fisheries Service.
    [FR Doc. 2018-04351 Filed 3-2-18; 8:45 am] BILLING CODE 3510-22-P
    83 43 Monday, March 5, 2018 Notices DEPARTMENT OF AGRICULTURE Submission for OMB Review; Comment Request February 28, 2018.

    The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding (1) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.

    Comments regarding this information collection received by April 4, 2018 will be considered. Written comments should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), New Executive Office Building, 725 17th Street NW, Washington, DC 20502. Commenters are encouraged to submit their comments to OMB via email to: [email protected] or fax (202) 395-5806 and to Departmental Clearance Office, USDA, OCIO, Mail Stop 7602, Washington, DC 20250-7602. Copies of the submission(s) may be obtained by calling (202) 720-8958.

    An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.

    Animal and Plant Health Inspection Service

    Title: Foot-and-Mouth Disease; Prohibition on Importation of Farm Equipment.

    OMB Control Number: 0579-0195.

    Summary of Collection: The Animal Health Protection Act of 2002 is the primary Federal law governing the protection of animal health. Regulations contained in 9 CFR chapter 1, subchapter D, parts 91 through 99 prohibits the importation of used farm equipment into the United States from regions in which foot-and-mouth (FMD) disease or rinderpest exist, unless the equipment is accompanied by an original certificate signed by an unauthorized official of the national animal health service of the exporting region that states that the equipment was steam-cleaned prior to export to the United States so that it is free of exposed dirt and other particulate matter. Disease prevention is the most effective method for maintaining a healthy animal population and enhancing the Animal and Plant Health Inspection Service (APHIS) ability to compete in exporting animals and animal products.

    Need and Use of the Information: APHIS will collect information through the use of a certification statement completed by the farm equipment exporter and signed by an authorized official of the national animal health service of the region of origin, stating that the steam-cleaning of the equipment was done prior to export to the United States. This is necessary to help prevent the introduction of FMD into the United States. If the information were not collected APHIS would be forced to discontinue the importation of any used farm equipment from FMD affected regions; a development that could have a damaging financial impact on exporters and importers of the equipment.

    Description of Respondents: Business or other for-profit; Federal Government.

    Number of Respondents: 71.

    Frequency of Responses: Reporting: On occasion.

    Total Burden Hours: 1,492.

    Ruth Brown, Departmental Information Collection Clearance Officer.
    [FR Doc. 2018-04421 Filed 3-2-18; 8:45 am] BILLING CODE 3410-34-P
    COMMISSION ON CIVIL RIGHTS Correction: Notice of Public Meeting of the Arizona Advisory Committee AGENCY:

    U.S. Commission on Civil Rights.

    ACTION:

    Correction: Announcement of meeting.

    SUMMARY:

    The Commission on Civil Rights published a document February 23, 2018, announcing an upcoming Arizona Advisory Committee. The document contained incorrect public access to the meeting.

    FOR FURTHER INFORMATION CONTACT:

    Ana Victoria Fortes, DFO, at [email protected], 213-894-3437.

    Correction: In the Federal Register of February 23, 2018, in FR Doc. 2018-03705, on page 8046, in the first, second and third columns, correct the Dates caption by deleting the Public Call Information. The meeting will be in person only.

    Dated: February 27, 2018. David Mussatt, Supervisory Chief, Regional Programs Unit.
    [FR Doc. 2018-04353 Filed 3-2-18; 8:45 am] BILLING CODE P
    DEPARTMENT OF COMMERCE Bureau of Industry and Security [Docket Number 15-BIS-0005 (consolidated)] In the Matters of: Trilogy International Associates, Inc., William Michael Johnson, Respondents; Final Decision and Order

    This matter is before me upon a Recommended Decision and Order (“RDO”) of an Administrative Law Judge (“ALJ”), as further described below.1

    1 I received the certified record from the ALJ, including the original copy of the RDO, for my review on January 25, 2018. The RDO is dated January 24, 2018. BIS submitted a timely response to the RDO, while Respondent has not filed a response to the RDO.

    I. Background

    On October 2, 2015, the Bureau of Industry and Security (“BIS”) issued a Charging Letter to Respondent Trilogy International Associates, Inc. (“Trilogy International” or “Trilogy”), alleging that Trilogy committed three violations of Section 764.2(a) of the Export Administration Regulations (“EAR” or “Regulations”),2 by exporting national-security-controlled items to Russia without the required BIS licenses. On the same date, BIS also issued a Charging Letter to William Michael Johnson (“Johnson”), Trilogy's President and General Manager, alleging that Johnson committed three violations of Section 764.2(b) of the Regulations by causing, aiding, and/or abetting Trilogy's unlawful exports.

    2 The Regulations are codified at 15 CFR parts 730-774 (2017). The violations charged occurred in 2010. The Regulations governing the violations at issue are found in the 2010 version of the Code of Federal Regulations. The 2017 Regulations govern the procedural aspects of this case.

    The Regulations issued pursuant to the Export Administration Act of 1979, as amended, 50 U.S.C. 4601-4623 (Supp. III 2015) (available at http://uscode.house.gov) (the “Act” or “EAA”). Since August 21, 2001, the Act has been in lapse and the President, through Executive Order 13,222 of August 17, 2001 (3 CFR, 2001 Comp. 783 (2002)), which has been extended by successive Presidential Notices, the most recent being that of August 15, 2017 (82 FR 39,005 (Aug. 16, 2017)), has continued the Regulations in effect under the International Emergency Economic Powers Act (50 U.S.C. 1701, et seq. (2012)).

    The Charging Letter issued against Trilogy (“Trilogy Charging Letter”) included the following specific allegations:

    Charges 1-3 15 CFR 764.2(a)—Engaging in Prohibited Conduct

    1. On or about January 23, 2010, April 6, 2010, and May 14, 2010, respectively, Trilogy International engaged in conduct prohibited by the Regulations by exporting items subject to the Regulations and controlled on national security grounds to Russia without the required BIS export licenses.

    2. The items involved were an explosives detector and a total of 115 analog-to-digital converters. The items were classified under Export Control Classification Numbers 1A004 and 3A001, respectively, controlled as indicated above on national security grounds, and valued in total at approximately $76,035.

    3. Each of the items required a license for export to Russia pursuant to Section 742.4 of the Regulations.

    4. Trilogy International exported the items to TAIR R&D Co. Ltd. (“TAIR R&D Co.”), a Russian company. TAIR R&D Co. employed Alexander Volkov, who had previously formed Trilogy International along with William Michael Johnson (“Johnson”). At all times pertinent hereto, Johnson was President and General Manager of Trilogy International, directed or controlled its operations, and participated in the export transactions at issue.

    5. After receiving requests for the items from TAIR R&D Co., Trilogy International procured the items from suppliers in the U.S. and abroad. Once in possession of the items, Trilogy International issued invoices, signed by Johnson and dated January 20, March 4, and April 15, 2010, respectively, to TAIR R&D Co. for the sale and export of the items from the United States to Russia.

    6. Trilogy then exported the items from the United States to TAIR R&D Co. in Russia on or about January 23, 2010, April 6, 2010, and May 14, 2010, respectively.

    7. As alleged above, each of the national-security-controlled items at issue required a license for export to Russia pursuant to Section 742.4 of the Regulations. However, no license was sought or obtained by Trilogy International in connection with any of the exports at issue.

    8. By exporting these items without the required BIS export licenses, Trilogy International committed three violations of Section 764.2(a) of the Regulations.

    Trilogy Charging Letter at 1-2.3

    3 The Trilogy Charging Letter also includes a Schedule of Violations that provides additional detail concerning the underlying transactions. The Charging Letter, including the Schedule of Violations, will be posted on BIS's “eFOIA” webpage along with a copy of this Order (and a copy of the RDO).

    The Charging Letter against Johnson (“Johnson Charging Letter”) included the following specific allegations:

    Charges 1-3 15 CFR 764.2(b)—Causing, Aiding, or Abetting a Violation

    1. Between on or about January 20, 2010, and May 14, 2010, Johnson caused, aided, and/or abetted three violations of the Regulations, specifically, three exports from the United States to Russia of items subject to the Regulations without the required BIS export licenses.

    2. The items involved were an explosives detector and a total of 115 analog-to-digital converters, classified under Export Control Classification Numbers 1A004 and 3A001, respectively, controlled on national security grounds, and valued in total at approximately $76,035.

    3. Each of the items at issue required a BIS license for export to Russia pursuant to Section 742.4 of the Regulations.

    4. At all times pertinent hereto, Johnson was President and General Manager of Trilogy International Associates Inc. (“Trilogy International'”), of Modesto, California, and directed or controlled Trilogy International's operations.

    5. Johnson also participated in and facilitated the transactions at issue, including, inter alia, procuring the items from suppliers after receiving requests from TAIR R&D Co. Ltd. (“TAIR R&D Co.”), a Russian company that employed Alexander Volkov, with whom Johnson had previously formed Trilogy International.

    6. Johnson placed orders with U.S. suppliers for the analog-to-digital converters at issue and was listed as the purchaser of those items on supplier invoices dated January 21, 2010, and May 12, 2010, respectively.

    7. Johnson also signed Trilogy International invoices dated January 20, March 4, and April 15, 2010, respectively, in connection with the sales and exports to TAIR R&D Co. at issue, and provided these invoices along with the items to a freight forwarder.

    8. The items were then shipped on behalf of Trilogy International to TAIR R&D Co. in Russia on or about January 23, 2010, April 6, 2010, and May 14, 2010, respectively.

    9. As alleged above, each of the national-security-controlled items at issue required a license for export to Russia pursuant to Section 742.4 of the Regulations. However, no license was sought or obtained by Johnson or Trilogy International in connection with any of the exports at issue.

    10. By causing, aiding, and/or abetting the export of these items without the required BIS export licenses, Johnson committed three violations of Section 764.2(b) of the Regulations.

    Johnson Charging Letter at 1-2.4

    4 The Johnson Charging Letter, like the Trilogy Charging Letter, also includes a Schedule of Violations that provides additional detail concerning the underlying transactions and that will be included as part of the Charging Letter posted on BIS's eFOIA webpage. See note 3, supra.

    On June 17, 2016, Respondent Trilogy and Respondent Johnson (collectively, “Respondents”) filed a joint answer to the Charging Letters, and the proceedings against Trilogy and Johnson were subsequently consolidated.

    Following discovery, BIS filed its Motion for Summary Decision pursuant to Section 766.8 of the Regulations on January 13, 2017, as to all charges against Trilogy and all charges against Johnson. On the same date, Respondents filed their Motion for Summary Dismissal as to all charges against them, relying upon the argument that a third party, the freight forwarder, bore responsibility for the unlicensed exports.

    On February 8, 2017, the ALJ issued an “Initial Decision” denying Respondents' Motion for Summary Dismissal and granting summary decision for BIS on the three Section 764.2(a) unlicensed export charges against Trilogy. However, the ALJ denied summary decision for BIS with respect to the three Section 764.2(b) causing, aiding, or abetting charges against Johnson. The ALJ treated Trilogy and Johnson as a single, collective party and as a result concluded that the Section 764.2(b) charges were “multiplicious” of the underlying Section 764.2(a) unlicensed export charges.

    Following opportunity for briefing on sanctions issues, the ALJ issued an “Initial Decision Imposing Sanctions” on April 24, 2017, in which the ALJ also treated Respondents as a single, collective entity or individual, and indicated that a civil penalty of $100,000 and a seven-year denial of export privileges would be imposed. On April 28, 2017, a “Notice of Errata” issued, signed by a paralegal specialist that was designed to correct the title of the ALJ's April 24, 2017 decision from “Initial Decision Imposing Sanctions,” to “Recommended Decision Imposing Sanctions,” and to