Federal Register Vol. 83, No.80,

Federal Register Volume 83, Issue 80 (April 25, 2018)

Page Range17899-18194
FR Document

83_FR_80
Current View
Page and SubjectPDF
83 FR 18191 - Delegation of Authority To Approve Certain Military DecorationsPDF
83 FR 17899 - National Park Week, 2018PDF
83 FR 18086 - Government in the Sunshine Act Meeting NoticePDF
83 FR 18085 - Government in the Sunshine Act Meeting NoticePDF
83 FR 18007 - Pacific Fishery Management Council; Public MeetingPDF
83 FR 18008 - North Pacific Fishery Management Council; Public MeetingPDF
83 FR 18015 - Notice Announcing Availability of Funds and Application Deadlines; Hurricane Education RecoveryPDF
83 FR 18129 - Multiemployer Pension Plan Application To Reduce BenefitsPDF
83 FR 18130 - Multiemployer Pension Plan Application To Reduce BenefitsPDF
83 FR 18018 - Agency Information Collection ExtensionPDF
83 FR 17925 - Chlormequat Chloride; Pesticide TolerancesPDF
83 FR 18051 - Proposed Information Collection Request; Comment Request; Contractor Cumulative Claim and Reconciliation (Renewal)PDF
83 FR 18051 - 2018 Safer Choice Partner of the Year Awards ProgramPDF
83 FR 18058 - Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding CompanyPDF
83 FR 18057 - Formations of, Acquisitions by, and Mergers of Bank Holding CompaniesPDF
83 FR 17934 - Connect America Fund; Universal Service Reform-Mobility FundPDF
83 FR 18087 - Aerospace Safety Advisory Panel; MeetingPDF
83 FR 17921 - International Mail Manual; Incorporation by ReferencePDF
83 FR 17922 - Domestic Mail Manual; Incorporation by ReferencePDF
83 FR 18052 - Agency Information Collection Activities: Proposed Collection; Submission for OMB ReviewPDF
83 FR 18112 - Title: Bureau of Political-Military Affairs; Statutory Debarment Under the Arms Export Control Act and the International Traffic in Arms RegulationsPDF
83 FR 18116 - 30-Day Notice of Proposed Information Collection: Foreign Service Officer Test Registration FormPDF
83 FR 18084 - Agency Information Collection Activities; Efficacy of Oak Savanna Restoration History Information RequestPDF
83 FR 17942 - Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; Snapper-Grouper Resources of the South Atlantic; 2018 Commercial Trip Limit ReductionPDF
83 FR 18000 - Quarterly Update to Annual Listing of Foreign Government Subsidies on Articles of Cheese Subject to an In-Quota Rate of DutyPDF
83 FR 18083 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Phragmites Adaptive Management FrameworkPDF
83 FR 18009 - Request for Input on LabCFTC Prize CompetitionsPDF
83 FR 18018 - Notice of Commissioner and Staff Attendance at North American Electric Reliability Corporation MeetingsPDF
83 FR 18018 - Spire STL Pipeline, LLC; Notice Granting Late InterventionsPDF
83 FR 18019 - Commission Information Collection Activities (FERC-725x); Comment RequestPDF
83 FR 18072 - Mortgagee Review Board: Administrative ActionsPDF
83 FR 18054 - Notice of Public Meeting To Discuss the Proposed Draft Staff Implementation Guidance 6.1: Guidance for Implementation of SFFAS 6, Accounting for Property, Plant, and Equipment, as amendedPDF
83 FR 18118 - Petition for Exemption; Summary of Petition Received; Croman CorporationPDF
83 FR 18119 - Petition for Exemption; Summary of Petition Received; Minnesota Department of Natural ResourcesPDF
83 FR 18002 - Glycine From India, the People's Republic of China, and Thailand: Initiation of Countervailing Duty InvestigationsPDF
83 FR 17995 - Glycine From India, Japan, and Thailand: Initiation of Less-Than-Fair-Value InvestigationsPDF
83 FR 17921 - DoD Freedom of Information Act (FOIA) ProgramPDF
83 FR 17964 - Approval and Promulgation of Implementation Plans; Texas; Reasonable Further Progress Plan for the Houston-Galveston-Brazoria Ozone Nonattainment AreaPDF
83 FR 18020 - Certification of New Interstate Natural Gas FacilitiesPDF
83 FR 18001 - Circular Welded Carbon Steel Pipes and Tubes From Thailand: Amended Final Results of Antidumping Duty Administrative Review; 2015-2016PDF
83 FR 17995 - Silicomanganese From the People's Republic of China: Notice of Correction to the Final Results of the Expedited Fourth Sunset Review of the Antidumping Duty OrderPDF
83 FR 18119 - Agency Information Collection Activities: Request for Comments for the Renewal of a Previously Approved Information CollectionPDF
83 FR 18117 - Projects Rescinded for Consumptive Uses of WaterPDF
83 FR 18117 - Projects Approved for Consumptive Uses of WaterPDF
83 FR 18118 - Projects Approved for Minor ModificationsPDF
83 FR 17944 - Energy Conservation Program: Test Procedures for Cooking Products, Notification of Petition for RulemakingPDF
83 FR 18115 - Notice of Determinations; Culturally Significant Objects Imported for Exhibition Determinations: “The Chiaroscuro Woodcut in Renaissance Italy” ExhibitionPDF
83 FR 18116 - Notice of Determinations; Culturally Significant Object Imported for Exhibition Determinations: “Picture in Focus: Hugo van der Goes or a Member of His Circle's Virgin and Child With Saint Thomas, John the Baptist, Jerome, and Louis” ExhibitionPDF
83 FR 18117 - Notice of Determinations; Culturally Significant Objects Imported for Exhibition Determinations: “Art of Iron: Objects From the Musée Le Secq des Tournelles, Rouen, Normandy” ExhibitionPDF
83 FR 18120 - FY 2018 Competitive Funding Opportunity: Low or No Emission Grant ProgramPDF
83 FR 18007 - Proposed Information Collection; Comment Request; Papahanaumokuakea Marine National Monument Mokupapapa Discovery Center Exhibit EvaluationPDF
83 FR 18013 - Denali Commission Fiscal Year 2019 Draft Work PlanPDF
83 FR 18118 - Charter Renewal of the Regional Resource Stewardship CouncilPDF
83 FR 18075 - Endangered and Threatened Wildlife and Plants; Initiation of 5-Year Status Reviews of Five Listed Animal SpeciesPDF
83 FR 18092 - New Postal ProductPDF
83 FR 18058 - Privacy Act of 1974; System of RecordsPDF
83 FR 18060 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; ExtensionPDF
83 FR 17962 - Safety Zone; Officer Lehner Memorial Vintage Regatta; Buffalo Outer Harbor, Buffalo, NYPDF
83 FR 17921 - Drawbridge Operation Regulation; Upper Mississippi River, Rock Island, ILPDF
83 FR 17923 - Approval and Promulgation of State Plans for Designated Facilities and Pollutants; North Dakota; Control of Emissions From Existing Commercial and Industrial Solid Waste Incineration UnitsPDF
83 FR 18106 - Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Filing of Proposed Rule Change, Security-Based Swap Submission or Advance Notice Relating to Amendments to the ICE Clear Europe CDS End-of-Day Pricing PolicyPDF
83 FR 18108 - Self-Regulatory Organizations; ICE Clear Credit LLC; Order Approving Proposed Rule Change Relating to Amendments to the ICC Operational Risk Management FrameworkPDF
83 FR 18099 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Rule 6.8-O, Commentary .06 To Expand Position Limits for Options on Certain Exchange-Traded FundsPDF
83 FR 18093 - Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Rule 904, Commentary .07 To Expand Position Limits for Options on Certain Exchange-Traded FundsPDF
83 FR 18110 - Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Clarify the Requirements for Delivery of a Contrary Exercise AdvicePDF
83 FR 18019 - Atmos Pipeline-Texas; Notice of Technical ConferencePDF
83 FR 18033 - Combined Notice of FilingsPDF
83 FR 18033 - Combined Notice of Filings #1PDF
83 FR 17913 - Revised Critical Infrastructure Protection Reliability Standard CIP-003-7-Cyber Security-Security Management ControlsPDF
83 FR 18134 - Uplift Cost Allocation and Transparency in Markets Operated by Regional Transmission Organizations and Independent System OperatorsPDF
83 FR 18132 - Agency Information Collection Activity: Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion (Documents and Information Required for Specially Adapted Housing Assistive Technology Grant) and Scoring Criteria for SAH Assistive Technology GrantsPDF
83 FR 18131 - Agency Information Collection Activity: Application for Fee or Roster Personnel DesignationPDF
83 FR 18056 - Filing Dates for the Mississippi Senate Special ElectionPDF
83 FR 17961 - The Declaration of Added Sugars on Honey, Maple Syrup, and Certain Cranberry Products: Draft Guidance for Industry; Extension of Comment PeriodPDF
83 FR 18089 - Mitigation Strategies for Beyond-Design-Basis External EventsPDF
83 FR 18061 - Uber Technologies, Inc.; Analysis To Aid Public CommentPDF
83 FR 18085 - Notice of Temporary Concession Contract for Fuel Sales, Convenience Retail Merchandise, RV and Campground Services in the Hite Area of Glen Canyon National Recreation Area, ArizonaPDF
83 FR 18086 - Applied Research Laboratories of South Florida, LLC: Grant of Recognition as a Nationally Recognized Testing LaboratoryPDF
83 FR 18088 - Notice of Open Meeting.PDF
83 FR 17994 - Notice of Public Meeting of the Virginia Advisory CommitteePDF
83 FR 17993 - Notice of Public Meeting of the West Virginia Advisory CommitteePDF
83 FR 18091 - Florida Power & Light Company; Turkey Point Units 6 and 7PDF
83 FR 18090 - Florida Power & Light Company; Turkey Point Units 6 and 7PDF
83 FR 17930 - Final Flood Elevation DeterminationsPDF
83 FR 18066 - Final Flood Hazard DeterminationsPDF
83 FR 18070 - Proposed Flood Hazard DeterminationsPDF
83 FR 17994 - Notice of Public Meeting of the Minnesota Advisory CommitteePDF
83 FR 17993 - Notice of Public Meeting of the Michigan Advisory CommitteePDF
83 FR 18126 - Hazardous Materials: Public Meeting Notice for the Research and Development ForumPDF
83 FR 18093 - Product Change-Priority Mail Negotiated Service AgreementPDF
83 FR 18068 - Proposed Flood Hazard DeterminationsPDF
83 FR 18071 - 30-Day Notice of Proposed Information Collection: Evaluation of the Office of Public and Indian Housing's (PIH) Energy Performance Contracting (EPC) ProgramPDF
83 FR 18126 - Agency Information Collection Activities: Information Collection Renewal; Submission for OMB Review; Credit Risk RetentionPDF
83 FR 18112 - Presidential Declaration of a Major Disaster for Public Assistance Only for the State of KENTUCKYPDF
83 FR 18034 - Notice of Requests for Approval of Alternative Means of Emission LimitationPDF
83 FR 18042 - National Emission Standards for Hazardous Air Pollutants for Asbestos: Request for Approval of an Alternative Work Practice for Asbestos Cement Pipe ReplacementPDF
83 FR 18112 - Presidential Declaration of a Major Disaster for Public Assistance Only for the State of West VirginiaPDF
83 FR 18054 - Information Collection Being Reviewed by the Federal Communications CommissionPDF
83 FR 18055 - Information Collection Being Reviewed by the Federal Communications CommissionPDF
83 FR 17931 - Reporting Requirements for U.S. Providers of International Services; 2016 Biennial Review of Telecommunications RegulationsPDF
83 FR 17968 - Connect America Fund, ETC Annual Reports and Certifications, Establishing Just and Reasonable Rates for Local Exchange Carriers, Developing a Unified Intercarrier Compensation RegimePDF
83 FR 17933 - Implementation of the NET 911 Improvement ACT of 2008: Location Information From Owners and Controllers of 911 and E911 CapabilitiesPDF
83 FR 18065 - National Institute of Allergy and Infectious Diseases; Notice of Closed MeetingPDF
83 FR 18065 - National Institute of Biomedical Imaging and Bioengineering Notice of MeetingPDF
83 FR 18064 - National Institute of Diabetes and Digestive and Kidney Diseases; Notice of Closed MeetingsPDF
83 FR 18065 - National Institute of General Medical Sciences; Notice of Closed MeetingPDF
83 FR 18111 - Presidential Declaration of a Major Disaster for Public Assistance Only for the State of OHIOPDF
83 FR 18065 - Center for Scientific Review Notice of Closed MeetingsPDF
83 FR 18002 - Environmental Technologies Trade Advisory Committee (ETTAC) Public MeetingPDF
83 FR 18077 - Marine Mammals; Incidental Take During Specified Activities; Proposed Incidental Harassment AuthorizationPDF
83 FR 17901 - Capital Planning and Supervisory Stress TestingPDF
83 FR 17910 - Accuracy of Advertising and Notice of Insured StatusPDF
83 FR 18088 - Submission for OMB Review; Comment RequestPDF
83 FR 17987 - Migratory Bird Permits; Regulations for Managing Resident Canada Goose PopulationsPDF
83 FR 18160 - Amendments to the Regulatory Capital, Capital Plan, and Stress Test RulesPDF
83 FR 17979 - Revise and Streamline VA Acquisition RegulationPDF

Issue

83 80 Wednesday, April 25, 2018 Contents Civil Rights Civil Rights Commission NOTICES Meetings: Michigan Advisory Committee, 17993-17994 2018-08587 Minnesota Advisory Committee, 17994-17995 2018-08588 Virginia Advisory Committee, 17994 2018-08596 West Virginia Advisory Committee, 17993 2018-08595 Coast Guard Coast Guard RULES Drawbridge Operations: Upper Mississippi River, Rock Island, IL, 17921 2018-08625 PROPOSED RULES Safety Zones: Officer Lehner Memorial Vintage Regatta, Buffalo Outer Harbor, Buffalo, NY, 17962-17964 2018-08626 Commerce Commerce Department See

International Trade Administration

See

National Oceanic and Atmospheric Administration

Commodity Futures Commodity Futures Trading Commission NOTICES Requests for Comments: LabCFTC Prize Competitions, 18009-18013 2018-08673 Comptroller Comptroller of the Currency NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Credit Risk Retention, 18126-18129 2018-08577 Defense Department Defense Department RULES Freedom of Information Act Program, 17921 2018-08663 Denali Denali Commission NOTICES Fiscal Year 2019 Draft Work Plan, 18013-18015 2018-08632 Education Department Education Department NOTICES Funding Availability: Hurricane Education Recovery, 18015-18018 2018-08700 Energy Department Energy Department See

Federal Energy Regulatory Commission

PROPOSED RULES Energy Conservation Program: Test Procedures for Cooking Products, Notification of Petition for Rulemaking, 17944-17961 2018-08641 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 18018 2018-08696
Environmental Protection Environmental Protection Agency RULES Approval and Promulgation of State Plans for Designated Facilities and Pollutants: North Dakota; Control of Emissions from Existing Commercial and Industrial Solid Waste Incineration Units, 17923-17925 2018-08621 Pesticide Tolerances: Chlormequat Chloride, 17925-17930 2018-08695 PROPOSED RULES Air Quality State Implementation Plans; Approvals and Promulgations: Texas; Reasonable Further Progress Plan for Houston-Galveston-Brazoria Ozone Nonattainment Area, 17964-17968 2018-08660 NOTICES 2018 Safer Choice Partner of the Year Awards Program, 18051 2018-08693 Agency Information Collection Activities; Proposals, Submissions, and Approvals: Contractor Cumulative Claim and Reconciliation, 18051-18052 2018-08694 National Emission Standards for Hazardous Air Pollutants for Asbestos: Request for Approval of Alternative Work Practice for Asbestos Cement Pipe Replacement, 18042-18051 2018-08574 Requests for Approval of Alternative Means of Emission Limitation, 18034-18042 2018-08575 Equal Equal Employment Opportunity Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 18052-18054 2018-08685 Federal Accounting Federal Accounting Standards Advisory Board NOTICES Meetings: Proposed Draft Staff Implementation Guidance 6.1: Guidance for Implementation of SFFAS 6, Accounting for Property, Plant, and Equipment, as Amended, 18054 2018-08668 Federal Aviation Federal Aviation Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 18119-18120 2018-08651 Petitions for Exemptions; Summaries: Croman Corp., 18118-18119 2018-08667 Minnesota Department of Natural Resources, 18119 2018-08666 Federal Communications Federal Communications Commission RULES Connect America Fund Universal Service Reform—Mobility Fund, 17934-17942 2018-08689 Implementation of NET 911 Improvement ACT of 2008: Location Information from Owners and Controllers of 911 and E911 Capabilities, 17933-17934 2018-08568 Reporting Requirements for U.S. Providers of International Services; 2016 Biennial Review of Telecommunications Regulations, 17931-17933 2018-08570 PROPOSED RULES Connect America Fund: ETC Annual Reports and Certifications, Establishing Just and Reasonable Rates for Local Exchange Carriers, Developing Unified Intercarrier Compensation Regime, 17968-17979 2018-08569 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 18054-18056 2018-08571 2018-08572 Federal Election Federal Election Commission NOTICES Filing Dates: Mississippi Senate Special Election, 18056-18057 2018-08605 Federal Emergency Federal Emergency Management Agency RULES Flood Elevation Determinations, 17930-17931 2018-08592 NOTICES Flood Hazard Determinations, 18066-18068 2018-08591 Flood Hazard Determinations; Proposals, 18068-18071 2018-08580 2018-08589 Federal Energy Federal Energy Regulatory Commission RULES Revised Critical Infrastructure Protection Reliability Standard CIP-003-7—Cyber Security—Security Management Controls, 17913-17921 2018-08610 Uplift Cost Allocation and Transparency in Markets Operated by Regional Transmission Organizations and Independent System Operators, 18134-18157 2018-08609 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 18019-18020 2018-08670 Applications: Spire STL Pipeline, LLC; Late Intervensions, 18018-18019 2018-08671 Certification of New Interstate Natural Gas Facilities, 18020-18032 2018-08658 Combined Filings, 18033-18034 2018-08611 2018-08612 Meetings: Technical Conference; Atmos Pipeline-Texas, 18019 2018-08613 Staff Attendances, 18018 2018-08672 Federal Reserve Federal Reserve System PROPOSED RULES Regulatory Capital, Capital Plan, and Stress Test Rules, 18160-18188 2018-08006 NOTICES Changes in Bank Control: Acquisitions of Shares of a Bank or Bank Holding Company, 18058 2018-08691 Formations of, Acquisitions by, and Mergers of Bank Holding Companies, 18057 2018-08690 Federal Trade Federal Trade Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 18060-18061 2018-08627 Privacy Act; Systems of Records, 18058-18060 2018-08628 Proposed Consent Agreements: Uber Technologies, Inc., 18061-18064 2018-08600 Federal Transit Federal Transit Administration NOTICES Funding Opportunities: Low or No Emission Grant Program, 18120-18126 2018-08636 Fish Fish and Wildlife Service PROPOSED RULES Migratory Bird Permits: Managing Resident Canada Goose Populations, 17987-17992 2018-08500 NOTICES Endangered and Threatened Species: Initiation of 5-Year Status Reviews of Five Listed Animal Species, 18075-18077 2018-08630 Marine Mammals; Incidental Take During Specified Activities: Proposed Incidental Harassment Authorization, 18077-18083 2018-08559 Food and Drug Food and Drug Administration PROPOSED RULES Declaration of Added Sugars on Honey, Maple Syrup, and Certain Cranberry Products, 17961-17962 2018-08603 Geological Geological Survey NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Efficacy of Oak Savanna Restoration History Information Request, 18084-18085 2018-08678 Phragmites Adaptive Management Framework, 18083-18084 2018-08674 Health and Human Health and Human Services Department See

Food and Drug Administration

See

National Institutes of Health

Homeland Homeland Security Department See

Coast Guard

See

Federal Emergency Management Agency

Housing Housing and Urban Development Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Office of Public and Indian Housing's Energy Performance Contracting Program; Evaluation, 18071-18072 2018-08579 Mortgagee Review Board: Administrative Actions, 18072-18075 2018-08669 Interior Interior Department See

Fish and Wildlife Service

See

Geological Survey

See

National Park Service

International Trade Adm International Trade Administration NOTICES Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Circular Welded Carbon Steel Pipes and Tubes from Thailand, 18001-18002 2018-08657 Glycine from India, the People's Republic of China, and Thailand, 18002-18006 2018-08665 Silicomanganese from the People's Republic of China, 17995 2018-08655 Determinations of Sale at Less than Fair Value: Glycine from India, Japan, and Thailand, 17995-18000 2018-08664 Meetings: Environmental Technologies Trade Advisory Committee, 18002 2018-08560 Quarterly Update to Annual Listing of Foreign Government Subsidies on Articles of Cheese Subject to In-Quota Rate of Duty, 18000-18001 2018-08675 International Trade Com International Trade Commission NOTICES Meetings; Sunshine Act, 18085-18086 2018-08809 2018-08810 Labor Department Labor Department See

Occupational Safety and Health Administration

NASA National Aeronautics and Space Administration NOTICES Meetings: Aerospace Safety Advisory Panel, 18087-18088 2018-08688 National Archives National Archives and Records Administration See

Office of Government Information Services

National Credit National Credit Union Administration RULES Accuracy of Advertising and Notice of Insured Status, 17910-17913 2018-08557 Capital Planning and Supervisory Stress Testing, 17901-17910 2018-08558 National Foundation National Foundation on the Arts and the Humanities NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 18088-18089 2018-08541 National Institute National Institutes of Health NOTICES Meetings: Center for Scientific Review, 18065 2018-08562 National Institute of Allergy and Infectious Diseases, 18065 2018-08567 National Institute of Biomedical Imaging and Bioengineering, 18065 2018-08566 National Institute of Diabetes and Digestive and Kidney Diseases, 18064-18065 2018-08565 National Institute of General Medical Sciences, 18065-18066 2018-08564 National Oceanic National Oceanic and Atmospheric Administration RULES Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic: Snapper-Grouper Resources of South Atlantic; 2018 Commercial Trip Limit Reduction, 17942-17943 2018-08677 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Papahanaumokuakea Marine National Monument Mokupapapa Discovery Center Exhibit Evaluation, 18007 2018-08633 Meetings: North Pacific Fishery Management Council, 18008 2018-08701 2018-08702 Pacific Fishery Management Council, 18007-18008 2018-08703 National Park National Park Service NOTICES Concession Contracts: Fuel Sales, Convenience Retail Merchandise, RV and Campground Services in Hite Area of Glen Canyon National Recreation Area, AZ, 18085 2018-08599 Nuclear Regulatory Nuclear Regulatory Commission NOTICES Combined Licenses: Florida Power and Light Co., Turkey Point Units 6 and 7, 18091-18092 2018-08594 Guidance: Mitigation Strategies for Beyond-Design-Basis External Events, 18089-18090 2018-08601 Indemnity Agreements: Florida Power and Light Co., Turkey Point Units 6 and 7, 18090-18091 2018-08593 Occupational Safety Health Adm Occupational Safety and Health Administration NOTICES Nationally Recognized Testing Laboratories: Applied Research Laboratories of South Florida, LLC, 18086-18087 2018-08598 OGIS Office of Government Information Services NOTICES Meetings: Annual Open, 18088 2018-08597 Pipeline Pipeline and Hazardous Materials Safety Administration NOTICES Meetings: Hazardous Materials: Research and Development Forum, 18126 2018-08586 Postal Regulatory Postal Regulatory Commission NOTICES New Postal Products, 18092-18093 2018-08629 Postal Service Postal Service RULES Domestic Mail Manual; Incorporation by Reference, 17922-17923 2018-08686 International Mail Manual; Incorporation by Reference, 17921-17922 2018-08687 NOTICES Product Changes: Priority Mail Negotiated Service Agreement, 18093 2018-08581 Presidential Documents Presidential Documents PROCLAMATIONS Special Observances: National Park Week (Proc. 9728), 17899-17900 2018-08822 EXECUTIVE ORDERS Military Decorations; Delegation of Authority To Approve (EO 13830), 18189-18194 2018-08883 Securities Securities and Exchange Commission NOTICES Self-Regulatory Organizations; Proposed Rule Changes: ICE Clear Credit, LLC, 18108-18110 2018-08617 ICE Clear Europe, Ltd., 18106-18108 2018-08618 Nasdaq BX, Inc., 18110-18111 2018-08614 NYSE American, LLC, 18093-18099 2018-08615 NYSE Arca, Inc., 18099-18106 2018-08616 Small Business Small Business Administration NOTICES Disaster Declarations: Kentucky, 18112 2018-08576 Ohio, 18111 2018-08563 West Virginia, 18112 2018-08573 State Department State Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Foreign Service Officer Test Registration Form, 18116 2018-08680 Arms Export Control Act and International Traffic in Arms Regulations: Statutory Debarment, 18112-18115 2018-08684 Culturally Significant Objects Imported for Exhibition: Art of Iron: Objects from Musee Le Secq des Tournelles, Rouen, Normandy Exhibition, 18117 2018-08637 Chiaroscuro Woodcut in Renaissance Italy, 18115-18116 2018-08639 Picture in Focus: Hugo van der Goes or Member of His Circle's Virgin and Child with Saint Thomas, John the Baptist, Jerome, and Louis, 18116 2018-08638 Susquehanna Susquehanna River Basin Commission NOTICES Consumptive Uses of Water: Project Modifications, 18118 2018-08643 Projects Approved, 18117-18118 2018-08644 Rescinded Projects, 18117 2018-08645 Tennessee Tennessee Valley Authority NOTICES Charter Renewals: Regional Resource Stewardship Council, 18118 2018-08631 Transportation Department Transportation Department See

Federal Aviation Administration

See

Federal Transit Administration

See

Pipeline and Hazardous Materials Safety Administration

Treasury Treasury Department See

Comptroller of the Currency

NOTICES Multiemployer Pension Plan Application to Reduce Benefits, 18129-18131 2018-08652 2018-08698 2018-08699
Veteran Affairs Veterans Affairs Department PROPOSED RULES VA Acquisition Regulations: Revising and Streamlining, 17979-17987 2018-07130 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Application for Fee or Roster Personnel Designation, 18131 2018-08606 Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion (Documents and Information Required for Specially Adapted Housing Assistive Technology Grant) and Scoring Criteria for SAH Assistive Technology Grants, 18132 2018-08607 Separate Parts In This Issue Part II Energy Department, Federal Energy Regulatory Commission, 18134-18157 2018-08609 Part III Federal Reserve System, 18160-18188 2018-08006 Part IV Presidential Documents, 18189-18194 2018-08883 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 80 Wednesday, April 25, 2018 Rules and Regulations NATIONAL CREDIT UNION ADMINISTRATION 12 CFR Part 702 RIN 3133-AE80 Capital Planning and Supervisory Stress Testing AGENCY:

National Credit Union Administration (NCUA).

ACTION:

Final rule.

SUMMARY:

The NCUA Board (Board) is issuing this final rule to amend its regulations regarding capital planning and stress testing for federally insured credit unions with $10 billion or more in assets (covered credit unions). The final rule reduces regulatory burden by removing some of the capital planning and stress testing requirements currently applicable to certain covered credit unions. The final rule also makes the NCUA's requirements more efficient by, among other things, authorizing covered credit unions to conduct their own stress tests in accordance with the NCUA's requirements and permitting covered credit unions to incorporate the stress test results into their capital plans.

DATES:

This final rule is effectiveJune 1, 2018.

FOR FURTHER INFORMATION CONTACT:

Technical information: Dale Klein, Senior Financial Analyst—CPST, Office of National Examinations and Supervision, at the above address or telephone (703) 518-6629; or legal information: John H. Brolin, Senior Staff Attorney; or Rachel Ackmann, Staff Attorney, Office of General Counsel, at the above address or telephone (703) 518-6540.

SUPPLEMENTARY INFORMATION:

I. Background

At its October 19, 2017 meeting, the Board proposed amending its regulations regarding capital planning and stress testing for covered credit unions.1 As noted, the proposal was designed to reduce regulatory burden and to make the NCUA's capital planning and stress testing requirements more efficient. The NCUA is now issuing the proposed rule as final with certain revisions and clarifications based on comments received on the proposed rule.

1 82 FR 50094 (Oct. 30, 2017).

The NCUA is issuing this final rule pursuant to its authority under the Federal Credit Union Act (FCUA).2 Section 120(a) of the FCUA authorizes the Board to “prescribe rules and regulations for the administration of” the FCUA.3 Section 204 of the FCUA authorizes the Board, through its examiners, “to examine any [federally] insured credit union . . . to determine the condition of any such credit union for insurance purposes.” 4 Section 206(e) of the FCUA authorizes the Board to take certain actions against a federally insured credit union, if, in the opinion of the Board, the credit union “is engaging or has engaged, or the Board has reasonable cause to believe that the credit union or any institution affiliated party is about to engage, in any unsafe or unsound practice in conducting the business of such credit union.” 5

2 12 U.S.C. 1751 et seq.

3 12 U.S.C. 1766(a).

4 12 U.S.C. 1784(a).

5 12 U.S.C. 1786(e).

II. Summary of Comments

The NCUA received a total of 17 comment letters from federally insured credit unions, credit union leagues, and credit union trade organizations. All of the commenters generally supported giving covered credit unions regulatory relief from the current capital planning and stress testing requirements. All also recommended, however, that the NCUA provide even more regulatory relief. The comments are discussed in more detail below.

A. Capital Planning and Stress Testing Tiers

Under the proposal, covered credit unions would be subject to tiered regulatory requirements that would further ensure their capital plans and stress testing requirements are tailored to reflect their size, complexity, and financial condition. The proposal would divide covered credit unions into three tiers, with each tier subject to different regulatory requirements. The proposal defined: (1) A tier I credit union as a covered credit union that has completed fewer than three capital planning cycles and has less than $20 billion in total assets; (2) a tier II credit union as a covered credit union that has completed three or more capital planning cycles and has less than $20 billion in total assets, or is otherwise designated as a tier II credit union by the NCUA; and (3) a tier III credit union as a covered credit union that has $20 billion or more in total assets, or is otherwise designated as a tier III credit union by the NCUA. Nearly all of the commenters recommended changing the threshold levels for tier I, II, and III covered credit unions by increasing the size threshold levels for each tier. Several commenters suggested incorporating prudential factors into the threshold levels.

A majority of commenters encouraged the NCUA to increase the asset thresholds to be more consistent with the thresholds for banks. To achieve parity with banks, commenters generally recommended two different approaches to establishing size thresholds. A number of commenters recommended that the NCUA take the size thresholds established for banks and reduce that threshold to reflect the proportionately smaller size of the National Credit Union Share Insurance Fund (NCUSIF). The commenters explained that the NCUSIF is approximately one-seventh the size of the Deposit Insurance Fund (DIF), therefore, the appropriate threshold for credit unions would be about $36.5 billion (one-seventh of the proposed $250 billion threshold for banks).6 Such comments are based on the premise that the DIF and NCUSIF are equivalent, but the DIF and NCUSIF are not structured similarly. For example, the NCUSIF has an equity deposit base which can lead to an undesirable pro-cyclical impact for all credit unions if a large loss were to occur. In addition, the NCUSIF has an operating equity ratio of 1.39 percent, whereas the DIF has a target reserve ratio of 2.0 percent. Therefore, the NCUA does not consider the size of the DIF as an appropriate benchmark for determining the asset thresholds for covered credit unions to conduct stress tests and capital planning exercises. The second approach suggested by commenters to ensure parity between banks and covered credit unions was to emulate the asset thresholds adopted by the banking agencies. The size threshold, however, for most banks is currently set at $10 billion. Additionally, as discussed above, the NCUA does not consider the risks that banks pose to the DIF as analogous to the risks that covered credit unions pose to the NCUSIF, and therefore, does not believe that at this time the size thresholds for banks are appropriate for covered credit unions.

6 The $250 billion cited by commenters is only a proposal and is not currently the size threshold for annual stress tests in the banking industry. Currently, the Dodd-Frank Wall-Street Reform and Consumer Protection Act requires that banks with total consolidated assets of more than $10 billion conduct annual stress tests. 12 U.S.C. 5365(i)(2). The Federal Reserve's annual Comprehensive Capital Analysis and Review applies to top-tier bank holding companies with average total consolidated assets of $50 billion or more and certain intermediate holding companies of foreign banking organizations.

While commenters consistently recommended increasing the size threshold levels, there were mixed opinions on the appropriate size thresholds that the NCUA should establish for each tier. Commenters that suggested using $36.5 billion or $50 billion as the appropriate size threshold may have differed on whether that threshold was appropriate for a tier I, II, or III covered credit union. For example, in the case of tier I covered credit unions, recommended size thresholds varied from $10 billion to $50 billion.

As compared to the proposed rule, the Board in the final rule has partially revised the thresholds for tier I and II covered credit unions. In the final rule, a tier I credit union is a covered credit union that has less than $15 billion in total assets and a tier II credit union is a covered credit union that has $15 billion or more in total assets, but less than $20 billion in total assets (or is otherwise designated as a tier II credit union by the NCUA). Therefore, in the final rule, a covered credit union that remains under $15 billion will not conduct annual stress tests, even if it has been subject to capital planning requirements for over three years. For such covered credit unions, the final rule provides additional regulatory relief from supervisory stress testing. However, a tier I credit union that crosses the $15 billion threshold in less than three years after becoming a covered credit union, will have to conduct stress tests earlier under the final rule than as proposed. The NCUA has determined to remove the three year phase-in period in favor of a strict asset-size threshold because the NCUA believes that size is one of the primary indicators of systemic risk to the NCUSIF. Specifically, the NCUA believes that a $15 billion threshold balances the goal of providing regulatory relief with the additional risk that larger, more systemically significant credit unions pose to the NCUSIF. Therefore, the NCUA believes that at $15 billion in total assets a covered credit union represents sufficient risk to the NCUSIF that supervisory stress tests are warranted. The designation for a tier III credit union remains the same as proposed and includes a covered credit union that has $20 billion or more in total assets (or is otherwise designated as a tier III credit union by the NCUA).

Several commenters recommended that the NCUA define the tier I, II, and III thresholds to include factors other than a credit union's size and number of completed capital planning cycles. A common theme among such commenters was that the NCUA should explicitly consider a covered credit union's financial health and risk profile in defining the thresholds. These commenters urged the NCUA to provide additional regulatory relief and flexibility to covered credit unions that pose less risk to the NCUSIF. Factors mentioned by commenters that the NCUA could consider in granting additional regulatory relief include prompt corrective action capital levels, CAMEL ratings (specifically composite, capital, and management ratings), levels of interest rate risk, earnings, rates of growth, and concentration risk.

Capital plan review and supervisory stress testing, however, are forward-looking assessments of a covered credit union's financial condition. In contrast, capital ratings, earnings, rates of growth, and concentration risk are important supervisory tools that are based on a covered credit union's current financial condition. Additionally, capital planning and supervisory stress testing contribute to a covered credit union's CAMEL ratings and overall risk assessments. Therefore, the NCUA believes that including CAMEL ratings as criteria for supervisory thresholds would create inappropriate circularity and has not incorporated prudential conditions into the thresholds for capital planning and stress testing requirements.

Several commenters recommended that the NCUA incorporate an additional grace period between the time when a covered credit union becomes a tier I credit union and when it becomes a tier II credit union. Commenters stated that such additional time would allow tier I covered credit unions to focus on building strong capital planning and capital adequacy assessment processes before having to incorporate supervisory stress testing programs. The NCUA agrees with commenters that it is important for tier I covered credit unions to focus on building strong capital planning and capital adequacy assessment processes before incorporating supervisory stress testing programs. Therefore, as discussed above, in the final rule, a tier I credit union will not be automatically subject to stress testing requirements after a three-year phase in period. Instead, a tier I credit union will only be subject to stress testing requirements after its total assets exceed $15 billion. The NCUA believes that the $15 billion threshold provides credit unions additional control over their timeline for beginning supervisory stress testing. In recent years, covered credit unions have grown an average of 10 percent per year. At this rate of growth, a covered credit union would have about four years to focus on their capital planning processes before becoming a tier II credit union and incorporating supervisory stress testing programs. The NCUA believes that modifying the thresholds by removing the three year phase-in period in favor of a strict asset-size threshold provides additional regulatory relief and that credit unions that grow in a safe and sound manner will have sufficient time to build upon their capital planning procedures before implementing stress testing requirements. The NCUA notes that a credit union with an exceptional rate of growth such that it must begin supervisory stress testing requirements less than three years after becoming a tier I credit union may raise supervisory concerns.

A few commenters recommended removing the proposed language allowing the NCUA the discretion to designate a credit union as a tier II or tier III credit union. Alternatively, the commenters suggested setting clear criteria, along with examples, to delineate the situations when this could happen. The NCUA recognizes that size alone does not provide a complete view of risk at a credit union. Each credit union is unique and matters of complexity and financial condition are nuanced. To maintain flexibility, to avoid creating a “one size fits all” rule, and to incorporate the unique attributes of individual credit unions, the Board is retaining in the final rule the ability to elevate a credit union's tier designations. Thus, in the final rule, asset size establishes the baseline for determining the credit union's tier designation, but a credit union's financial condition, complexity, and other environmental matters may be considered by the Board to elevate its tier designation. In addition, the NCUA does not believe that codifying a strict set of conditions to delineate when this discretion is to be exercised is prudent given the highly fact specific nature of the determination.

B. Capital Planning Requirements

Under the proposed rule, a covered credit union would continue to annually develop and submit to the NCUA a capital plan. For tier I and II covered credit unions, however, review of their capital plans would be incorporated into their supervisory oversight. For tier III covered credit unions, review of their capital plans would continue to be subject to the current requirement that the NCUA formally approve or reject them. A few commenters specifically expressed support for the proposed changes to the capital planning requirements. Several other commenters, however, recommended specific changes to further reduce the burden of capital planning requirements.

Specifically, several commenters stated that the NCUA should reduce the frequency of capital planning requirements. For example, a commenter recommended that the NCUA eliminate the requirement that covered credit unions provide annual capital plans. Instead, the commenter recommended that the NCUA use the supervisory process to evaluate capital. Other commenters suggested that for certain covered credit unions, capital plans should only be required every two to three years. The NCUA believes that capital adequacy considerations and capital actions should be regular and ongoing activities at covered credit unions and viewed alongside the credit union's strategic and financial plans. Annual revisions and more frequent reviews of capital plans are appropriate so that the credit union has a current view of threats to capital and can take timely mitigating action. The NCUA does not consider annual capital plan preparation, even with incorporated supervisory stress tests, to be an excessive burden, and therefore, the final rule continues to require annual development of capital plans for all covered credit unions.

Additionally, a few commenters recommended tailoring capital planning requirements to complement the stress testing changes by providing tiered expectations for capital planning requirements. The NCUA notes that it will review tier I and tier II credit union capital plans through the supervisory process and those plans are not subject to formal approval by the NCUA. Commenters also had different opinions on whether the NCUA should formally approve or reject any covered credit union's capital plan. For example, a commenter recommended that the NCUA review all capital plans through the supervisory process, while another commenter supported the proposal to retain the requirement that the NCUA approve or reject a tier III credit union's capital plan. The final rule's tiered approach enables the NCUA to tailor capital plan expectations to the individual credit union, reserving the highest expectations and most critical assessment for the tier III credit unions. For tier III credit unions, which pose the most systemic risk to the NCUSIF, it is prudent to establish formal triggers requiring action to mitigate NCUSIF risk exposure. Therefore, in the final rule, capital plans for tier III credit unions will continue to be subject to formal approval requirements.

C. Stress Testing Requirements

Under the proposal, the NCUA would no longer conduct the annual supervisory stress tests on applicable covered credit unions. Rather, the covered credit unions themselves would conduct the stress tests according to the NCUA's instructions, which ensures that the stress tests performed by credit unions are conducted in a consistent and comparable manner. Covered credit unions also would be subject to tiered stress testing requirements. Tier I credit unions would no longer be subject to stress testing requirements, and tier II and III credit unions would conduct annual stress tests. Additionally, unlike their larger counterparts in tier III, tier II credit unions would not be subject to a 5 percent minimum stress test capital threshold. Commenters had mixed opinions on whether the proposed changes to stress testing requirements provided meaningful regulatory relief. Commenters also had varied opinions on whether the NCUA or covered credit unions should conduct the required stress tests. Several commenters specifically stated their support for allowing covered credit unions to conduct their own stress tests. Other commenters, however, stated that such a change would increase operational burden and expense for credit unions. Another commenter recommended retaining the current opt-in approach to conducting stress tests. The NCUA believes that credit unions are better informed of risk when they perform their own capital adequacy assessments. Having covered credit unions conduct their own supervisory stress tests further informs their capital analysis. Also, it eliminates any negative consequences that could result from the NCUA conducting the tests, namely that a covered credit union might abdicate its responsibility to perform rigorous capital analyses to the NCUA. Furthermore, the NCUA views the production and reporting of supervisory stress test results as incidental given the expectation that credit unions have sound capital adequacy assessment processes. Therefore, the NCUA is not changing the proposed requirement to have tier II and III covered credit unions conduct their own supervisory stress tests.

Many commenters encouraged the NCUA to consider providing more substantial regulatory relief, including reducing or eliminating stress testing requirements. Several commenters recommended eliminating the stress testing requirements altogether. Others suggested reducing the frequency of testing or waiving certain requirements based on the credit union's risk profile. The primary objective of stress testing is for the NCUA and the covered credit union to have an understanding of the credit union's ability to absorb the impact of significant economic stresses and to determine with a high degree of confidence when a covered credit union does not have sufficient capital to protect the NCUSIF from losses. Annual supervisory stress testing is an important prudential tool that provides the NCUA an aggregate view of the covered credit union's financial condition and capital resiliency. Therefore, in the final rule, tier II and III credit unions will continue to be required to conduct annual stress tests.

Commenters also had specific recommendations for the stress testing process. For example, a few commenters objected to the proposed timeline for conducting stress tests and completing capital plans. The commenters believed that the May 31st submission date provides insufficient time to complete the stress tests and incorporate results into the capital planning process. Instead, commenters suggested submission dates of July 31st or August 31st. As recently as 2015, the NCUA considered the timing of capital planning and stress test elements. In July 2015, the NCUA adopted a revised capital planning and stress testing schedule, which included consideration of the potential for credit union run stress testing.7 In that final rule, the NCUA amended the capital planning and stress testing rule to establish a due date of May 31st for covered credit unions to submit their capital plans. This change provided covered credit unions with five months from the as-of date (and three months from the scenario release date) to prepare their capital plans, as commenters requested. The NCUA continues to believe that the release date of supervisory stress test scenarios and the due date for credit union capital plans provide ample time for a credit union to produce and report credible stress test results. Therefore, the final rule retains the May 31st submission date for annual stress tests. A number of commenters also encouraged the NCUA to provide stress testing instructions earlier in the capital planning process. The NCUA agrees with the commenters. The NCUA intends to post instructions on its website that will generally remain the same each year. If any modifications are necessary to the instructions due to a particular year's scenarios, such modifications will be released at the same time as the scenarios.

7 80 FR 48010 (Aug. 11, 2015).

A minority of commenters discussed the scenarios required for stress testing. For example, a commenter recommended that tier II covered credit unions be exempt from the baseline and adverse stress test scenarios. The NCUA believes that each scenario is necessary for the NCUA and a credit union to have a complete understanding of the credit union's risks and that each scenario serves a distinct purpose in the stress test exercise. Specifically, the baseline scenario, conducted under the NCUA's instructions, serves as a benchmark to evaluate results under the stress scenarios. The stress scenarios are used to stress different aspects of a credit union's positions under unfavorable conditions and may be designed to focus on different risk characteristics of a credit union's portfolio. The spectrum of scenarios is necessary to have a complete understanding of a credit union's capital position in different economic conditions. Therefore, the NCUA believes that all stress tests should include all scenarios. Furthermore, consistent testing parameters ensure that credit union results are comparable to each other. Another commenter recommended that the NCUA continue utilizing the Federal Reserve Board's stress test assumption scenarios rather than designing its own unique tests. The commenter believed that standardization across the financial services industry is preferable. The NCUA agrees with this commenter. Consistent with past practice, the NCUA intends to publish scenarios that are consistent with the scenarios published by the banking agencies. However, the NCUA reserves the right to modify scenarios or produce unique scenarios to ensure risk at covered credit unions is sufficiently captured in the exercise.

D. Data Submission

Covered credit unions are currently required to submit data to the NCUA as part of the stress testing process, and the proposal did not include any changes to these requirements. Several commenters, nevertheless, encouraged the NCUA to eliminate or substantially reduce the data submissions. Commenters, however, generally did not offer specific data items that they considered unnecessary or burdensome. Data collection is part of the NCUA's strategic initiative to enhance supervision and is used to inform qualitative and quantitative assessments and ratings of covered credit unions. The data currently collected for the NCUA to conduct supervisory stress tests will continue to be used by the agency to assess a covered credit union's capital adequacy through review of its capital plan and supervisory stress tests results. Also, the collected data can drive supervisory efficiencies that reduce regulatory burden for covered credit unions. For example, the data may lead to more targeted supervisory work resulting in less time on-site at covered credit unions. Therefore, the final rule retains the current data collection requirements.

E. Other Comments

A few commenters recommended amending the definition of “covered credit union” so that a credit union with total assets over $10 billion does not becomes a “covered credit union” until its most recent four-quarter average of consolidated total assets exceeds $10 billion. Based on our experience implementing the capital planning and stress testing rules, the NCUA has not found that many credit unions decrease under $10 billion after becoming covered credit unions. Therefore, the NCUA does not believe the added complexity required by determining a four-quarter average is warranted and is not making any such changes to the final rule.

A few commenters also stated that given the enterprise-wide nature of the capital planning and supervisory stress testing regime, the NCUA should consider whether certain generally applicable requirements that must be met for a credit union to be eligible for insurance coverage are unnecessarily redundant when applied to covered credit unions. The commenters specifically noted liquidity and risk-based capital standards. Capital planning and stress testing are distinctive supervisory tools that the NCUA uses in the supervision of risk at covered credit unions. They complement, but do not replace, other regulatory and supervisory tools used by the agency.

III. Final Rule

After carefully considering the public comments, the NCUA has made several changes to the final rule. The final rule reflects the NCUA's experiences in implementing the current rule's requirements, while also considering the systemic risk that covered credit unions pose to the NCUSIF. As explained in more detail below, the final rule is intended to reduce regulatory burden by removing some of the more onerous capital planning and stress testing requirements currently applicable to covered credit unions. The changes to the NCUA's capital planning and stress testing requirements will more closely align the agency's regulatory requirements with its current supervisory expectations for covered credit unions.

In the final rule, covered credit unions are subject to new tiered regulatory requirements that further ensure their capital plans and stress testing requirements are tailored to reflect their size, complexity, and financial condition. For example, under the final rule, tier I and II covered credit unions will continue to develop annual capital plans, but the capital plans will no longer be formally submitted to the NCUA by May 31st each year. In contrast, tier III covered credit unions will continue to submit capital plans to the NCUA by May 31st that must be formally accepted or rejected by the NCUA. Additionally, stress testing requirements under the final rule are also tiered. Under the final rule, tier I credit unions are not subject to any stress testing requirements. In contrast, tier II and III covered credit unions are required to conduct stress testing, although tier II covered credit unions are not subject to a 5 percent minimum stress test capital threshold. Further, under the final rule, the NCUA will no longer be required to conduct the annual supervisory stress tests on applicable covered credit unions. Rather, the covered credit unions will conduct the stress tests.

While the NCUA recognizes that all covered credit unions are of systemic importance to the NCUSIF, the NCUA believes it is appropriate to differentiate the capital planning and stress testing requirements applicable to such institutions based on their individual characteristics. Specifically, size is deemed to be the most significant determinant regarding each covered credit union's systemic risk to the NCUSIF. The Board's ability to recategorize a covered credit union into a higher tier, however, recognizes that the complexity and financial condition of the credit union are other important considerations for determining whether a credit union should be subject to additional capital planning and stress testing requirements. The final rule seeks to balance the higher risk that covered credit unions may pose to the NCUSIF, with the time and resources these institutions need to prepare themselves to meet capital planning and supervisory stress testing expectations. The NCUA also has sought to tailor the capital planning and stress testing requirements in such a manner as to reduce the regulatory burden imposed on those smaller covered credit unions that pose less risk to the NCUSIF. The final rule is discussed in greater detail below.

Tiers of Covered Credit Unions

The final rule retains the proposed use of tiers to differentiate the capital planning and stress testing requirements applicable to covered credit unions. The final rule identifies three tiers of covered credit unions and imposes varying levels of regulatory requirements based on those tiers. In brief, the tier comprised of the smallest covered credit unions is subject to the least regulatory requirements, with a concomitant increase in requirements for each tier as the size and complexity of those covered credit unions increases. In response to commenters, the final rule has partially revised the thresholds for tier I, II, and III covered credit unions as compared to the proposed rule. Under the final rule, the three tiers are as follows:

• A tier I credit union is a covered credit union that has less than$15 billion in total assets;

• A tier II credit union is a covered credit union that has $15 billion or more in total assets, but less than $20 billion in total assets, or is otherwise designated as a tier II credit union by the NCUA; and

• A tier III credit union is a covered credit union that has $20 billion or more in total assets, or is otherwise designated as a tier III credit union by the NCUA.

Amendments to the Capital Planning Requirements

In the final rule, the level of the capital planning requirements for tier I and II credit unions generally decreases from the current regulatory requirements, but generally remains the same for tier III credit unions. This approach reduces regulatory burdens on tier I and II credit unions while allowing them to focus on establishing sound capital planning and capital adequacy assessment processes. Tier III credit unions, on the other hand, which pose the greatest systemic risk to the NCUSIF and which are most capable of complying with the current requirements, remain subject to most of the current requirements.

In the final rule, tier I and II covered credit unions are required to develop and maintain an annual capital plan, but they are no longer required to formally submit their capital plans to the NCUA for approval by May 31st of each year. The removal of the requirement for tier I and II credit unions to formally submit capital plans to the NCUA is a change from the proposed rule. The NCUA believes this provides smaller covered credit unions with additional flexibility to incorporate their annual capital plan into their planning processes, such as development of their strategic plans.

Additionally, under the final rule, tier I and II credit unions are no longer required to have their capital plans formally approved by the NCUA. Instead, capital plan reviews for tier I and II credit unions will be conducted as part of the NCUA's supervisory process. This approach provides the NCUA greater latitude when reviewing capital plan submissions and provides the NCUA with additional flexibility to use the supervisory process to address plan deficiencies, especially for credit unions newly covered by the capital planning requirements. The NCUA believes that any increased risk to the NCUSIF that may occur as a result of providing regulatory relief can be addressed through the supervisory process.

For tier III credit unions, the final rule retains the current requirement that all such credit unions submit capital plans to the NCUA no later than May 31st of each year. In addition, for tier III credit unions, the NCUA will formally approve or reject its capital plan. Because the failure of a tier III credit union poses the most significant risk to the NCUSIF, the NCUA believes it is prudent to retain the current, more formal requirements for those credit unions. The NCUA's formal rejection of a capital plan is subject to the Supervisory Review Committee process.

Table 1—Capital Plan Requirements Tier Description Required Financials “as of” date Submission and due date NCUA review I A credit union with $10 billion or more in total assets, but less than $15 billion in total assets Yes Based on financial data within two quarters of plan completion Capital plan is not submitted to the NCUA, but is required to be done annually Review of the capital plan is part of the NCUA's supervisory oversight. II A credit union with $15 billion or more in total assets, but less than $20 billion in total assets Yes Based on financial data within two quarters of plan completion Capital plan is not submitted to the NCUA, but is required to be done annually Review of the capital plan is part of the NCUA's supervisory oversight. III A credit union with $20 billion or more in total assets Yes December 31st of the previous calendar year Capital plans are submitted to the NCUA by May 31st each year The NCUA accepts or rejects credit union capital plans—qualitative and quantitative assessment. NCUA's Supervisory Stress Testing Requirements

Credit Union-Conducted Stress Tests. Under the current rule, the NCUA is required to conduct supervisory stress tests for all covered credit unions. When the NCUA approved the current regulation in 2014, it believed that the NCUA should initially conduct all stress tests to ensure that the NCUA had an independent assessment of risk for covered credit unions. The preamble to the 2014 final rule acknowledged, however, that it might be appropriate in the future for certain covered credit unions to conduct their own supervisory stress tests, and the NCUA adopted a provision in the 2014 final rule to allow for that.8 In particular, current § 702.506(c) provides that after the NCUA has completed three consecutive supervisory stress tests of a covered credit union, the covered credit union may, with the NCUA's approval, conduct the tests described in subpart E of part 702 on its own. Having now completed three annual stress testing cycles, the NCUA believes that changing its regulation to have covered credit unions conduct their own supervisory stress tests, without needing to obtain approval from the NCUA, is appropriate. Accordingly, in this final rule, the requirement that the NCUA conduct supervisory stress tests is eliminated. Additionally, the NCUA retains the provision in the current rule that reserves the NCUA's right to conduct the stress tests on any covered credit union at any time, and to request qualitative and quantitative information from the covered credit unions that pertains to supervisory stress testing.

8 79 FR 24311 (Apr. 30, 2014).

Incremental Approach. Running a supervisory stress test requires internal controls that enable the credit union to effectively challenge all material aspects of its capital planning and analysis. For a covered credit union to develop the ability to obtain, cleanse, and manage internal and external data, and perform adequate capital analyses, it must possess a level of experience and operational scale that is unlikely to be in place or quickly developed by a credit union when it first reaches the $10 billion threshold. Accordingly, the NCUA is adopting an incremental regulatory approach to supervisory stress testing that gradually increases regulatory requirements on a covered credit union as it increases in asset size without making the requirements too burdensome too soon.

Table 2—Stress Test Incremental Approach Tier Description Required Minimum stress-test ratio Financials “as of” date Due date I A credit union with $10 billion or more in total assets, but less than $15 billion in total assets No N/A N/A N/A. II A credit union with $15 billion or more in total assets, but less than $20 billion in total assets Yes N/A December 31st May 31st. III A credit union with $20 billion or more in total assets Yes 5% December 31st May 31st.

Tier I. In the final rule, a tier I credit union is not subject to any supervisory stress testing requirements, nor is it required to incorporate the NCUA's stress test scenarios in its capital plan. This approach allows a tier I credit union time after it reaches the $10 billion threshold to obtain the policies and processes necessary to develop sound capital plans and analyses prior to incorporating supervisory stress testing. Once a covered credit union has $15 billion in total assets, it is required to meet all tier II requirements described below.

Tier II. In the final rule, a tier II credit union is subject to supervisory stress testing requirements. In addition, a tier II credit union must incorporate the NCUA's annual stress test scenarios into its capital plan, even though the capital plan is not required to be submitted to the NCUA on May 31st. The NCUA does not believe this particular requirement imposes additional regulatory burden on a tier II credit union because, as the NCUA has observed over the last three years of implementing the stress testing regulations, covered credit unions already incorporate the NCUA's supervisory stress test scenarios into their capital plans even though they are not required to do so under the current rule.

Tier III. In the final rule, a tier III credit union is subject to supervisory stress testing requirements and must meet a minimum stress-test ratio of 5 percent. The final rule also requires a tier III credit union to incorporate the NCUA's stress test scenarios into its capital plan submission. Because a tier III credit union poses the greatest level of systemic risk to the NCUSIF, it must also submit a plan to build capital or mitigate the risk if the credit union shows that its stress test capital ratio would fall below the 5 percent minimum stress test capital threshold. This is consistent with the supervisory stress testing requirements in current § 702.506(g).

The final rule applies the asset thresholds as of the March 31st measurement date of each year.9 If a credit union crosses any of the tier I, II, or III asset thresholds by March 31st, then the credit union's new classification is effective at the beginning of the next year. Therefore, if a credit union has over $10 billion in total assets as of March 31, 2018, it must complete a capital plan in calendar year 2019. And, if a covered credit union has $15 billion in assets on March 31, 2018, it must also conduct a stress test in calendar year 2019.

9 See the definition of “covered credit union.” 12 CFR 702.502.

Website Instructions. The NCUA will publish on its website instructions for tier II and III credit unions on how to administer their own supervisory stress tests. The NCUA believes that a covered credit union's ability to maintain independence and flexibility is essential to the overall success of the NCUA's supervisory stress testing program. Accordingly, tier II and III credit unions are required to conduct their own stress tests in accordance with the instructions provided by the NCUA.

Conforming and Clarifying Amendments. The final rule also makes some minor conforming and clarifying amendments to the current rule. These conforming and clarifying amendments include removing, changing, and adding certain definitions.

The changes outlined above are discussed in more detail in the Section-by-Section Analysis below.

IV. Section-by-Section Analysis Section 702.502 Definitions

The final rule retains most of the definitions included in the proposed rule except that the proposed definition of capital planning cycle has been removed. The definition was necessary to distinguish between tier I and II credit unions in the proposed rule, but is not necessary in the final rule as the number of capital planning cycles completed is no longer a distinguishing factor between the tier I and II threshold classifications. The final rule also retains most of the definitions from current § 702.502, without change, with the following exceptions.

Adverse Scenario

The final rule removes the definition of “adverse scenario” from § 702.502 and replaces this term throughout subpart E with terms more commonly used in the financial services industry. This change is intended to reduce confusion for covered credit unions. No substantive changes to the requirements of subpart E are intended by this change and covered credit unions will continue to be subject to the baseline and one or more stressed scenarios.

Covered Credit Union

The final rule makes conforming amendments to the current definition of “covered credit union” in § 702.502. The amended definition provides that “covered credit union” means a federally insured credit union whose assets are $10 billion or more. The definition provides further that a credit union that crosses that asset threshold as of March 31st of a given calendar year is subject to the applicable requirements of subpart E in the following calendar year.

Scenarios

The revised definition provides that “scenarios” are those sets of conditions that affect the U.S. economy or the financial condition of a covered credit union that serve as the basis for stress testing, including, but not limited to, NCUA-established baseline scenarios, and stress scenarios. It is the NCUA's intention to continue to base the NCUA-established scenarios on the scenarios developed by the Federal Reserve Board. As currently is the practice, the NCUA may modify such scenarios to ensure they are appropriate for domestic banking operations.

Severely Adverse Scenario

The final rule deletes the definition of “severely adverse scenario” from § 702.502 and replaces this term throughout subpart E with terms more commonly used in the financial services industry. This change is intended to reduce confusion for covered credit unions. No substantive changes to the requirements of subpart E are intended by this change and covered credit unions will continue to be subject to the baseline and one or more stressed scenarios.

Stress Scenario

The final rule adds the definition “stress scenario” to § 702.502. The definition provides that “stress scenario” means a scenario that is more adverse than that associated with the baseline scenario.

Tier I Credit Union

The final rule adds the definition of “tier I credit union” to § 702.502. The definition provides that “tier I credit union” means a covered credit union that has less than $15 billion in total assets. The definition of a tier I credit union provides regulatory relief for qualifying covered credit unions. This definition allows the NCUA to better align regulatory expectations based on the size, complexity, and financial condition of each covered credit union.

Tier II Credit Union

The final rule adds the definition of “tier II credit union” to § 702.502. The definition provides that “tier II credit union” means a covered credit union that has $15 billion or more in total assets but less than $20 billion in total assets, or is otherwise designated as a tier II credit union by NCUA. This definition recognizes the iterative nature of the NCUA's capital planning and stress testing processes, and acknowledges that covered credit unions get better at developing and implementing their capital plans over time and through repetition. The NCUA believes these changes provide regulatory relief for tier II credit unions.

Tier III Credit Union

The final rule adds the definition of “tier III credit union” to § 702.502. The definition provides that “tier III credit union” means a covered credit union that has $20 billion or more in total assets, or is otherwise designated as a tier III credit union by NCUA. The final rule identifies credit unions with total assets of $20 billion or more as posing the highest degree of risk to the NCUSIF. While the NCUA considers qualitative and quantitative capital plan supervision and credit union-run stress test review to be appropriate for covered credit unions with less than $20 billion in total assets, it does not for larger covered credit unions. For covered credit unions with total assets of $20 billion or more, the NCUA believes it is prudent, given the size of the NCUSIF and the potential loss associated with the failure of a credit union that large, to establish formal triggers requiring the NCUA and credit union actions to further mitigate NCUSIF risk exposure.

The Board retains the authority to designate a covered credit union as a tier II credit union or tier III credit union.

Section 702.504 Capital Planning

The final rule retains most of current § 702.504 without change, with the following exceptions.

(a) Annual Capital Planning (a)(1)

Section 702.504(a)(1) continues to provide that all covered credit unions must develop and maintain a capital plan. Under the final rule, however, only tier III credit unions are required to submit their capital plan and capital policy to the NCUA. Therefore, the final rule amends § 702.504(a)(1) to state that a tier I and II credit union must complete a capital plan by December 31st each year, but are not required to submit a plan to the NCUA. Additionally, the final rule has been amended to state that the capital plan must be based on financial data from either of the two preceding calendar quarters. For example, if a tier I or II credit union's board approves its capital plan in the fourth quarter, the plan financial data must be as of either September 30th or June 30th. Section 702.504(a)(1) is also amended to explicitly state that a tier III credit union must submit its plan and capital policy to the NCUA by May 31st each year, or such later date as directed by the NCUA. The final rule also continues to provide that for tier III covered credit unions, the plan must be based on the covered credit union's financial data as of December 31st of the preceding calendar year, or such other date as directed by the NCUA. Finally, § 702.504(a)(1) will no longer include the last sentence in current § 702.504(a)(1), which provides that the NCUA will assess whether the capital planning and analysis process is sufficiently robust in determining whether to accept a credit union's capital plan. Given the other changes in this final rule, this sentence is no longer necessary.

(a)(2)

The current rule states that a covered credit union's board of directors (or a designated committee of the board) must at least annually, and prior to the submission of the capital plan, review and approve the credit union's capital plan. The final rule clarifies that this requirement applies to all covered credit unions, even if the credit union is not required to submit the plan to the NCUA.

(b) Mandatory Elements (b)(4)

The final rule deletes current § 702.504(b)(4) from the regulation. Current § 702.504(b)(4) provides that if a credit union conducts its own stress test under § 702.506(c), its capital plan must include a discussion of how the credit union will maintain a stress test capital ratio of 5 percent or more under baseline, adverse, and severely adverse conditions in each quarter of the 9-quarter horizon. This sentence is no longer necessary because it is fully addressed in § 702.506(f).

Section 702.505 NCUA Action on Capital Plans (a) Timing

The final rule amends current § 702.505(a) by dividing paragraph (a) into two subparts. Under this final rule, § 702.505(a)(1) provides that the NCUA will address any deficiencies in the capital plans submitted by tier I and tier II credit unions through the supervisory process. The intent of this change is to provide regulatory relief to tier I and tier II credit unions by removing the regulatory review and regulatory “accept or reject” assessment of their capital plans. It also provides the NCUA with additional flexibility in addressing plan deficiencies.

Under this final rule, § 702.505(a)(2) continues to require that the NCUA accept or reject tier III credit unions' capital plans. The NCUA is not removing this requirement for tier III credit unions at this time for the reasons discussed above. Accordingly, § 702.505(a)(2) provides that the NCUA will notify tier III credit unions of the acceptance or rejection of their capital plans by August 31 of the year in which their plan is submitted.

The final rule also makes additional conforming changes throughout § 702.505 to clarify that only tier III credit unions are required to operate under a capital plan formally accepted by the NCUA. No substantive changes, other than those discussed above, are intended.

Section 702.506 Annual Supervisory Stress Testing

Much of the substance of current § 702.506 remains unchanged in the final rule. Each of the substantive amendments are discussed in detail below. The final rule also makes some non-substantive conforming amendments to address certain changes in terminology.

(a) General Requirements

The final rule amends current § 702.506(a) by adding a new clarifying sentence to the beginning of paragraph (a). The new sentence provides that only tier II and tier III credit unions are required to conduct supervisory stress tests. The NCUA believes that exempting tier I credit unions from supervisory stress testing provides prudent regulatory relief and enables tier I credit unions time to develop their own capital adequacy assessments. The NCUA considers the supervisory stress testing exemption for tier I credit unions, which allow credit unions to grow from $10 billion in total assets to $15 billion in total assets, to be sufficient time to develop internal capabilities to perform credit union-run supervisory stress tests.

NCUA-Run Tests

The final rule deletes current § 702.506(b) regarding NCUA conducted stress tests, which, because of the other changes being implemented to part 702, is overridden. The NCUA reserves, in amended § 702.506(b)(3), the right to conduct stress tests on covered credit unions if it deems such action necessary.

(b) Credit Union-Run Supervisory Stress Tests

The final rule makes significant revisions to current § 702.506(c) (which has been renumbered to § 702.506(b) in the final rule) to require tier II and tier III credit unions to conduct their own stress tests instead of first having to get approval from the NCUA. In the final rule, renumbered § 702.506(b) is split into three new subparagraphs, each of which is described in more detail below.

(b)(1) General

Section 702.506(b)(1) of the final rule provides that all supervisory stress tests must be conducted according to the NCUA's instructions. The NCUA is adding this requirement to ensure that supervisory stress tests performed by tier II and tier III credit unions are conducted in a manner that promotes consistency and comparability. Credit union-run stress tests must adhere to these principles in order for the NCUA to assess inherent risk in the portfolios of covered credit unions and establish supervisory benchmarks. The NCUA will publish credit union-run supervisory stress test instructions on its website.

(b)(2) Tier III Credit Unions

Section 702.506(b)(2) of the final rule provides that when conducting its stress test, a tier III credit union must apply the minimum stress test capital ratio to all time periods in the planning horizon. The NCUA believes that only tier III credit unions should be subject to a minimum stress test capital requirement. Therefore, tier II credit unions do not have to apply a minimum stress test capital ratio to each time period in the planning horizon.

(b)(3) NCUA Tests

Section 702.506(b)(3) of the final rule retains the last two sentences in current § 702.506(c), without change. Section 702.506(b)(3) of the final rule provides that the NCUA reserves the right to conduct the stress tests described in this section on any covered credit union at any time. Paragraph (b)(3) provides further that where both the NCUA and a covered credit union have conducted the tests, the results of the NCUA's tests will determine whether the covered credit union has met the requirements of part 702. The final rule includes no substantive changes to these two sentences as compared to the current rule.

(e) Stress Test Results

The final rule states that all stress test results are due to the NCUA by May 31st each year. The May 31st stress testing due date applies to both tier II and III credit unions, even though tier II covered credit unions are not required to submit a capital plan on May 31st.

(f) Supervisory Actions

The final rule retains much of the language in current § 702.506(g), but inserts some additional language. The section also is broken into three subsections, each of which is discussed in more detail below.

(f)(1)

Section 702.506(f)(1) of the final rule provides that if a credit union-run stress test shows a tier III credit union does not have the ability to maintain a stress test capital ratio of 5 percent or more under expected and stressed conditions in each quarter of the planning horizon, the credit union must incorporate into its capital plan a stress test capital enhancement plan showing how it will meet that target.

(f)(2)

Section 702.506(f)(2) provides that if an NCUA-run stress test shows that a tier III credit union does not have the ability to maintain a stress test capital ratio of 5 percent or more under expected and stressed conditions in each quarter of the planning horizon, the credit union must provide the NCUA, by November 30 of the calendar year in which the NCUA conducted the tests, a stress test capital enhancement plan showing how it will meet that target. As explained above, the NCUSIF risk exposure to a tier I and tier II credit union is sufficiently mitigated through qualitative and quantitative supervision of the credit union's capital planning and capital adequacy analysis. Accordingly, the final rule offers regulatory relief as tier I and tier II credit unions are no longer subject to the minimum stress test capital ratio.

(f)(3)

Section 702.506(f)(3) of the final rule provides that a tier III credit union operating without an NCUA-approved stress test capital enhancement plan required under this section may be subject to supervisory action. A tier III credit union operating without an accepted capital plan or an approved stress test capital enhancement plan will be considered poorly managed and/or operating with insufficient capital to support the credit union's risk profile. The NCUA believes it is prudent to subject a tier III credit union to heightened regulatory scrutiny under such circumstances.

V. Stress Testing and Capital Plan Requirements for 2018

The final rule is effective June 1, 2018, after the May 31, 2018 submission date for capital plans. Therefore, the current rule remains effective for covered credit unions' 2018 capital plans and all covered credit unions must complete their capital plans by May 31, 2018. Tier I and II credit unions, however, do not need to submit their capital plans to the NCUA by May 31, 2018, and the NCUA will review their capital plans through the supervisory process. With respect to stress testing, the NCUA will conduct stress tests in calendar year 2018 for supervisory purposes.

VI. Regulatory Procedures 1. Regulatory Flexibility Act

The Regulatory Flexibility Act requires the NCUA to prepare an analysis of any significant economic impact any regulation may have on a substantial number of small entities (primarily those under $100 million in assets).10 The final rule and its requirements apply to only the largest credit unions, those with $10 billion or more in total assets. Accordingly, the Board certifies that it will not have a significant economic impact on a substantial number of small entities.

10 5 U.S.C. 603(a); 12 U.S.C. 1787(c)(1).

2. Paperwork Reduction Act

The Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.) requires that the Office of Management and Budget (OMB) approve all collections of information by a Federal agency from the public before they can be implemented. Respondents are not required to respond to any collection of information unless it displays a current, valid OMB control number.

In accordance with the PRA, the information collection requirements included in this final rule has been submitted to OMB for approval under control number 3133-0199, and includes the following program changes:

Section 702.504 requires FICUs with assets of at least $10 billion (covered credit unions) to develop and maintain capital plans; but only tier III to submit NCUA. The removal of the requirement for tier I and II credit unions to formally submit capital plans to NCUA is a change from the proposed rule and reflects a reduction of 30 burden hours annually. Also, an increase of 240 burden hours is due to an adjustment in the number of respondents from 3 to 4 falling under the recordkeeping requirements of § 702.504.

Section 702.506 requires tier II and III credit unions to conduct their own supervisory stress tests in a manner prescribed by NCUA, which had previously been conducted by NCUA. It is estimated this new information collection requirement impacts five credit unions for a total increase of 500 burden hours.

Estimated number of respondents: FICUs with assets of at least $10 billion.

Frequency: Annually.

Total Annual Burden Hours Requested: 2,960 under OMB control number 3133-0199; a total increase of 710 burden hours.

3. Executive Order 13132

Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. The NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order to adhere to fundamental federalism principles. The final rule does not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. The Board has, therefore, determined that this final rule does not constitute a policy that has federalism implications for purposes of the executive order.

4. Assessment of Federal Regulations and Policies on Families

The Board has determined that this final rule will not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, 1999, Public Law 105-277, 112 Stat. 2681 (1998).

5. Small Business Regulatory Enforcement Fairness Act

The Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) provides generally for congressional review of agency rules. A reporting requirement is triggered in instances where NCUA issues a final rule as defined by Section 551 of the Administrative Procedure Act. NCUA does not believe this final rule is a “major rule” within the meaning of the relevant sections of SBREFA. NCUA has submitted the rule to the Office of Management and Budget for its determination in that regard.

List of Subjects in 12 CFR Part 702

Credit unions, Reporting and recordkeeping requirements.

By the National Credit Union Administration Board, on April 19, 2018. Gerard Poliquin, Secretary of the Board.

For the reasons discussed above, the National Credit Union Administration amends 12 CFR part 702 as follows:

PART 702—CAPITAL ADEQUACY 1. Revise the authority citation for part 704 to read as follows: Authority:

12 U.S.C. 1766(a), 1784(a), 1786(e), 1790d.

Subpart E—Capital Planning and Stress Testing 2. Amend § 702.502 as follows: a. Remove the definition of “adverse scenario”. b. Remove from the definition of “covered credit union” the words “capital planning and stress testing” and add in their place the word “applicable”. c. Remove from the definition of “scenarios” the words “adverse, and severely adverse” and add in their place the words “scenarios and stress”. d. Remove the definition of “severely adverse scenario”. e. Add in alphabetical order the definitions of “stress scenario”, “tier I credit union”, “tier II credit union”, and “tier III credit union” to read as follows:
§ 702.502 Definitions.

Stress scenario means a scenario that is more adverse than that associated with the baseline scenario.

Tier I credit union means a covered credit union that has less than $15 billion in total assets.

Tier II credit union means a covered credit union that has $15 billion or more in total assets but less than $20 billion in total assets, or is otherwise designated as a tier II credit union by NCUA.

Tier III credit union means a covered credit union that has $20 billion or more in total assets, or is otherwise designated as a tier III credit union by NCUA.

3. Amend § 702.504 as follows: a. Revise paragraph (a)(1). b. In paragraph (a)(2) introductory text, add the words “for tier III credit unions,” before the words “prior to the submission of the capital plan”. c. Remove paragraph (b)(4). d. Redesignate paragraphs (b)(5) and (b)(6) as paragraphs (b)(4) and (b)(5).

The revision reads as follows:

§ 702.504 Capital planning.

(a) * * * (1) A covered credit union must develop and maintain a capital plan. Tier I and tier II credit unions must complete this plan and their capital policy by December 31 each year, but are not required to submit this plan to the NCUA. For tier I and tier II credit unions, the plan must be based on the credit union's financial data from either of the two calendar quarters preceding the quarter in which the plan is approved by the credit union's board of directors (or a designated committee of the board). A tier III credit union must submit this plan and its capital policy to NCUA by May 31 each year, or such later date as directed by NCUA. For tier III credit unions, the plan must be based on the credit union's financial data as of December 31 of the preceding calendar year, or such other date as directed by NCUA.

4. Amend § 702.505 as follows: a. Revise paragraph (a). b. Add to the introductory text of paragraph (d) the words “tier III” before the words “credit union's capital plan”. c. In paragraph (e), remove the word “covered” and add in its place the words “tier III”.

The revision reads as follows:

§ 702.505 NCUA action on capital plans.

(a) Timing. (1) Tier I & tier II credit unions. NCUA will address any deficiencies in the capital plans submitted by tier I and tier II credit unions through the supervisory process.

(2) Tier III credit unions. NCUA will notify tier III credit unions of the acceptance or rejection of their capital plans by August 31 of the year in which their plan is submitted.

5. Section 702.506 is revised to read as follows:
§ 702.506 Annual supervisory stress testing.

(a) General requirements. Only tier II and tier III credit unions are required to conduct supervisory stress tests. The supervisory stress tests consist of a baseline scenario, and stress scenarios, which NCUA will provide by February 28 of each year. The tests will be based on the credit union's financial data as of December 31 of the preceding calendar year, or such other date as directed by NCUA. The tests will take into account all relevant exposures and activities of the credit union to evaluate its ability to absorb losses in specified scenarios over a planning horizon.

(b) Credit union-run supervisory stress tests—(1) General. All supervisory stress tests must be conducted according to NCUA's instructions.

(2) Tier III credit unions. When conducting its stress test, a tier III credit union must apply the minimum stress test capital ratio to all time periods in the planning horizon. The minimum stress test capital ratio is 5 percent.

(3) NCUA tests. NCUA reserves the right to conduct the tests described in this section on any covered credit union at any time. Where both NCUA and a covered credit union have conducted the tests, the results of NCUA's tests will determine whether the covered credit union has met the requirements of this subpart.

(c) Potential impact on capital. In conducting stress tests under this subpart, the credit union, or the NCUA if it elects to conduct the stress test under paragraph (b)(3) of this section, will estimate the following for each scenario during each quarter of the planning horizon:

(1) Losses, pre-provision net revenues, loan and lease loss provisions, and net income; and

(2) The potential impact on the stress test capital ratio, incorporating the effects of any capital action over the planning horizon and maintenance of an allowance for loan losses appropriate for credit exposures throughout the horizon. The credit union, or the NCUA if it elects to conduct the stress test under paragraph (b)(3) of this section, will conduct the stress tests without assuming any risk mitigation actions on the part of the credit union, except those existing and identified as part of the credit union's balance sheet, or off-balance sheet positions, such as derivative positions, on the date of the stress test.

(d) Information collection. Upon request, the credit union must provide NCUA with any relevant qualitative or quantitative information requested by NCUA pertinent to the stress tests under this subpart.

(e) Stress test results. A credit union required to conduct stress tests under this section must incorporate the results of its tests in its capital plan. A credit union required to conduct stress tests must submit its stress test results to NCUA by May 31 of each year.

(f) Supervisory actions. (1) If a credit union-run stress test shows a tier III credit union does not have the ability to maintain a stress test capital ratio of 5 percent or more under expected and stressed conditions in each quarter of the planning horizon, the credit union must incorporate, into its capital plan, a stress test capital enhancement plan that shows how it will meet that target.

(2) If an NCUA-run stress test shows that a tier III credit union does not have the ability to maintain a stress test capital ratio of 5 percent or more under expected and stressed conditions in each quarter of the planning horizon, the credit union must provide NCUA, by November 30 of the calendar year in which NCUA conducted the tests, a stress test capital enhancement plan showing how it will meet that target.

(3) A tier III credit union operating without an NCUA approved stress test capital enhancement plan required under this section may be subject to supervisory actions.

(g) Consultation on proposed action. Before taking any action under this section against a federally insured, state-chartered credit union, NCUA will consult and work cooperatively with the appropriate State official.

[FR Doc. 2018-08558 Filed 4-24-18; 8:45 am] BILLING CODE 7535-01-P
NATIONAL CREDIT UNION ADMINISTRATION 12 CFR Part 740 RIN 3133-AE78 Accuracy of Advertising and Notice of Insured Status AGENCY:

National Credit Union Administration (NCUA).

ACTION:

Final rule.

SUMMARY:

The NCUA Board (Board) is revising provisions of the NCUA's advertising rule to provide regulatory relief to federally insured credit unions (FICUs). The advertising rule requires FICUs to use the NCUA's official advertisement statement when advertising, and it currently permits three versions of that statement. Under this final rule, the Board is allowing FICUs the option of using a fourth version: “Insured by NCUA.” To provide additional regulatory relief, the Board is: Expanding a current exemption from the advertising statement requirement regarding radio and television advertisements; and eliminating the requirement to include the official advertising statement on statements of condition required to be published by law.

DATES:

This final rule becomes effective May 25, 2018.

FOR FURTHER INFORMATION CONTACT:

Marvin Shaw, Staff Attorney, Office of General Counsel, telephone (703) 518-6553.

SUPPLEMENTARY INFORMATION:

I. Background

The Federal Credit Union Act (Act) requires each FICU to display NCUA's “official sign” regarding National Credit Union Share Insurance Fund insurance of the FICU's share accounts. The sign includes language that the coverage is backed by the full faith and credit of the United States Government.1 Part 740 of the NCUA's regulations implements this statutory requirement and includes requirements relating to the NCUA's official advertising statement, each as discussed in more detail below.2

1 12 U.S.C. 1785.

2 12 CFR part 740.

A. Part 740 Requirements

Part 740 prohibits any FICU from using advertising 3 or making any representation which is inaccurate or deceptive or which misrepresents its services, contracts, financial condition, or the Truth in Savings requirements. It also prescribes requirements for both the NCUA's official advertisement statement that FICUs must make when advertising and the NCUA's official sign that FICUs must display.

3 This includes print, electronic and broadcast media, displays, signs, and stationary and other promotional material.

Currently, there are two versions of the NCUA's official advertising statement: (1) The longer version, which reads “This credit union is federally insured by the National Credit Union Administration”; and (2) the shorter version, which reads “Federally insured by NCUA.” In accordance with part 740, a FICU may, as a third option, display the official sign in advertisements in lieu of making the official advertising statement. With certain exemptions discussed below, a FICU must use the official advertising statement in all of its advertisements, although it is at the FICU's discretion to choose among the three options noted.

Section 740.5(c) of the NCUA's regulations enumerates several kinds of advertisements that, for practical reasons, are exempted from the general rule requiring the use of the official advertising statement.4 With respect to these exempted advertisements, the Board is focusing on the exemptions relating to radio and television advertisements of a certain duration.5

4 The following advertisements need not include the official advertising statement under the current rule: (1) Credit union supplies such as stationery (except when used for circular letters), envelopes, deposit slips, checks, drafts, signature cards, account passbooks, and noninsurable certificates; (2) Signs or plates in the credit union office or attached to the building or buildings in which the offices are located; (3) Listings in directories; (4) Advertisements not setting forth the name of the insured credit union; (5) Display advertisements in credit union directories, provided the name of the credit union is listed on any page in the directory with a symbol or other descriptive matter indicating it is insured; (6) Joint or group advertisements of credit union services where the names of insured credit unions and noninsured credit unions are listed and form a part of such advertisement; (7) Advertisements by radio that are less than fifteen (15) seconds in time; (8) Advertisements by television, other than display advertisements, that are less than fifteen (15) seconds in time; (9) Advertisements that because of their type or character would be impractical to include the official advertising statement, including but not limited to, promotional items such as calendars, matchbooks, pens, pencils, and key chains; (10) Advertisements that contain a statement to the effect that the credit union is insured by the National Credit Union Administration, or that its accounts and shares or members are insured by the Administration to the maximum insurance amount for each member or shareholder; (11) Advertisements that do not relate to member accounts, including but not limited to advertisements relating to loans by the credit union, safekeeping box business or services, traveler's checks on which the credit union is not primarily liable, and credit life or disability insurance.

5 12 CFR 740.5(c)(7) and (8).

B. Regulatory History

For many years, the NCUA's advertising and official sign regulations were essentially the same as those of the Federal Deposit Insurance Corporation (FDIC).6 In 2011, however, the Board amended part 740 by making the NCUA's advertising rules more stringent than FDIC's rules. Specifically, in 2011, while banks needed only to include the FDIC's official advertising statement in radio and television advertisements that exceeded 30 seconds, the NCUA's regulatory amendments required FICUs to include the NCUA's official advertising statement in all radio and television advertisements except those that were less than 15 seconds.7 This additional requirement, which the Board now believes is unnecessary, affected more FICU advertisements and disrupted the parity between bank and FICU regulatory burden. According to some FICUs, the 2011 amendments made it more difficult for FICUs to produce effective advertisements.

6 12 CFR part 328.

7 76 FR 30521 (May 26, 2011). Prior to the 2011 amendments, the FDIC and the NCUA expressed the 30 second time frame in the same manner. Specifically, both agencies applied the exemption to radio and television advertisements that do not “exceed” thirty seconds. With the 2011 amendments, the NCUA lowered the exemption duration from 30 seconds to 15 seconds and changed the do not “exceed” language to advertisements that are “less than” the stated duration, both of which the Board now believes disadvantage FICUs compared to banks. For technical clarification, the purpose of this final rule and the 2017 proposal is to eliminate the unnecessary disadvantages imposed by the 2011 amendments.

The NCUA's 2011 amendments also required FICUs to include the advertising statement on statements of condition required to be published by law, a requirement not imposed on banks.

C. October 2017 Proposal

On October 4, 2017 (2017 NPRM),8 the Board published a proposal to: (1) expand the radio and television advertisements exemption from 15 seconds to 30 seconds; and (2) eliminate the requirement to include the official advertising statement on statements of condition required to be published by law. This proposal effectively reversed the 2011 amendments and returned parity between banks and FICUs in this context. To provide additional regulatory relief, the Board also proposed to permit FICUs to use a fourth version of the official advertising statement, namely “Insured by NCUA.” The Board believes that these changes will provide FICUs with more flexibility without diminishing the purpose of part 740. In the 2017 NPRM, the Board sought comment on the proposed amendments and specifically requested comment about whether part 740 should be modified to address advertising on social media and mobile banking.

8 82 FR 46173 (Oct. 4, 2017).

II. Summary of Comments on 2017 NPRM

The NCUA received 36 comments from federal and state credit unions, trade associations, credit union leagues, credit union employees, and an individual. These commenters generally supported the proposed rule, although a few commenters opposed discreet aspects of the proposal.

In supporting the proposal, several commenters called the changes modest yet important. A few commenters emphasized that part 740's primary goal is to inform the public about share insurance.

Commenters stated that the proposed rule would: (1) Provide regulatory relief and flexibility, particularly allowing more efficient communications to members and potential members; (2) provide parity with banks regulated and insured by the FDIC; (3) allow credit unions to highlight more of their products and services; (4) decrease costs and obstacles; and (5) reduce burden and streamline advertising disclosures. Several commenters noted that the cumulative effect of the “myriad federal and state regulations” require credit unions to allocate significant resources to legal and compliance departments. They favored the proposal, even though they stated that the existing requirements are not overly burdensome.

Each proposed amendment and the corresponding public comments recommending alternatives or modifications are discussed in more detail below.

III. Final Rule A. Adding a Fourth Alternative Version of the Official Advertising Statement

As noted, part 740 currently provides three options for the NCUA's official advertising statement: (1) “This credit union is federally insured by the National Credit Union Administration”; (2) “Federally insured by NCUA”; and (3) the official sign may be displayed in advertisements in lieu of the advertising statement.

Virtually all commenters supported the proposal to add an additional version of the official advertising statement. Commenters expressed appreciation for this proposed alternative, stating that it provides regulatory relief. One commenter noted that the proposed version consists of 13 characters as opposed to 22 or 71 characters. Commenters stated that the change is especially meaningful for new social media platforms because it enhances flexibility while still conveying the important message regarding federal share insurance. They further posited that providing a shorter alternative makes advertising more cost effective because print and electronic advertising prices are often based on length and duration.

One commenter recommended allowing an even shorter ten character message—“NCUA Insured” or twelve character message “Member NCUSIF.” This commenter stated that this would provide parity with the FDIC advertising statement—“Member FDIC,” thus enhancing flexibility.

The Board agrees the proposed alternative will add flexibility without any adverse effect on potential members. However, it does not believe it necessary to adopt the suggested “NCUA Insured” or “Member NCUSIF.” Therefore, the Board adopts this aspect of the proposal as proposed.

B. Expand Exemption for Radio and Television Advertisements

As noted above, the current advertising rule exempts from the requirements of part 740 radio and television advertisements that are less than 15 seconds in duration. In the 2017 NPRM, the Board proposed to expand the radio and television advertisements exemption from 15 seconds to 30 seconds. Virtually all commenters supported this aspect of the proposal. The commenters supported the Board's goal of restoring parity between FICUs and banks and noted this change would enhance a FICU's ability to communicate to members. The commenters stated that the previous reduction of the exemption in 2011 from 30 seconds to 15 seconds was unnecessary and increased regulatory burden.

The Board agrees and adopts this aspect of the proposal as proposed.

C. Eliminate Requirement Regarding Statements of Condition

The 2011 amendments, for the first time, required FICUs to include the advertising statement on statements of condition required to be published by law. In the 2017 NPRM, the Board proposed to relieve FICUs of this burden. Of the commenters who addressed this aspect of the proposal, all agreed with it. They stated that the requirement is unnecessary and that relief from it restores parity with banks.

The Board agrees with the commenters and adopts this aspect of the proposal as proposed.

D. Social Media, Mobile Banking, and Other Digital Communication

Current part 740 focuses primarily on traditional forms of advertising such as print, radio, and television. In the 2017 NPRM, the Board requested comment on whether to modify the regulations to more precisely address advertising on social media, mobile banking, text messaging, and other digital communication platforms, such as Twitter and Instagram. The Board requested specific recommendations that would balance the goal of informing the public regarding federal share insurance coverage with the practical constraints inherent in social media advertising.

Twelve commenters addressed this topic, noting that digital media typically are designed as extremely short forms of communication. Several commenters favored making no changes to part 740, stating that the proposal to permit the fourth version of the official advertising statement was sufficient to accommodate new forms of advertising. Other commenters recommended adding new exemptions to part 740 for various forms of digital advertisements provided the official advertising statement appears elsewhere in the FICU's advertisement. Others recommended modifying certain provisions of part 740 short of adding new exemptions. For example, one commenter recommended that, for text-based messaging, the regulations should allow the official advertising statement to be expressed by a hashtag for Twitter, e.g., “#NCUAInsured” or “InsNCUA.” Another commenter suggested allowing the use of an emoji that would indicate insured status that could be included in tweets or text messages.

The Board has determined that, given the rapidly changing technological landscape, it is appropriate to delay taking action to amend part 740 regarding social media at this time. The Board believes that part 740 provides a sufficient framework to inform potential and current credit union members regarding federal share insurance coverage for advertisements made in traditional ways and on social media. Additionally, the NCUA's Office of General Counsel is authorized to provide guidance to any FICU with questions regarding part 740 in the context of advertising on social media.

Regulatory Procedures Regulatory Flexibility Act

The Regulatory Flexibility Act requires the NCUA to prepare an analysis to describe any significant economic impact a regulation may have on a substantial number of small entities.9 For purposes of this analysis, the NCUA considers small credit unions to be those having under $100 million in assets. The amendments provide regulatory relief without any costs to FICUs. Accordingly, the NCUA has determined and certifies that the final rule will not have a significant economic impact on a substantial number of small credit unions within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601-612.

9 5 U.S.C. 603(a).

Paperwork Reduction Act

The Paperwork Reduction Act of 1995 (“PRA”) applies to rulemakings in which an agency by rule creates a new paperwork burden on regulated entities or modifies an existing burden.10 For purposes of the PRA, a paperwork burden may take the form of either a reporting or a recordkeeping requirement, both referred to as information collections. This rule does not constitute a “collection of information” within the meaning of section 3502(3) and would not increase paperwork requirements under the PRA or regulations of the Office of Management and Budget (OMB).

10 44 U.S.C. 3507(d); 5 CFR part 1320.

Executive Order 13132

Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. In adherence to fundamental federalism principles, the NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order. The rule will not have substantial direct effect on the states, on the connection between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. The NCUA has determined that this rule does not constitute a policy with federalism implications for purposes of the executive order.

Small Business Regulatory Enforcement Fairness Act

The Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121) (SBREFA) provides generally for congressional review of agency rules. A reporting requirement is triggered in instances where the NCUA issues a final rule as defined in Section 551 of the Administrative Procedure Act. The NCUA does not believe this final rule is a “major rule” within the meaning of the relevant sections of SBREFA. As required by SBREFA, the NCUA has filed the appropriate documentation with OMB for review.

The Treasury and General Government Appropriations Act of 1999—Assessment of Federal Regulations and Policies on Families

The NCUA has determined that this rule will not affect family well-being within the meaning of Section 654 of the Treasury and General Government Appropriations Act, 1999.11

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

List of Subjects in 12 CFR Part 740

Advertisements, Credit unions, Share insurance, Signs and symbols.

By the National Credit Union Administration Board on April 19, 2018. Gerard S. Poliquin, Secretary of the Board.

For the reasons discussed above, the NCUA Board amends 12 CFR part 740 as follows:

PART 740—ACCURACY OF ADVERTISING AND NOTICE OF INSURED STATUS 1. The authority citation for part 740 continues to read as follows: Authority:

12 U.S.C. 1766, 1781, 1785, and 1789.

2. Amend § 740.5 by revising paragraphs (a), (b), (c)(7) and (c)(8) to read as follows:
§ 740.5 Requirements for the official advertising statement.

(a) Each insured credit union must include the official advertising statement, prescribed in paragraph (b) of this section, in all of its advertisements, including on its main internet page, except as provided in paragraph (c) of this section.

(b)(1) The official advertising statement is in substance one of the following:

(i) This credit union is federally insured by the National Credit Union Administration;

(ii) Federally insured by NCUA;

(iii) Insured by NCUA; or

(iv) A reproduction of the official sign as described in § 740.4(b) may be used in lieu of the other statements included in this section. If the official sign is used as the official advertising statement, an insured credit union may alter the font size to ensure its legibility as provided in § 740.4(b)(2).

(2) The official advertising statement must be in a size and print that is clearly legible and may be no smaller than the smallest font size used in other portions of the advertisement intended to convey information to the consumer.

(c) * * *

(7) Advertisements by radio which do not exceed thirty (30) seconds in time;

(8) Advertisements by television, other than display advertisements, which do not exceed thirty (30) seconds in time;

[FR Doc. 2018-08557 Filed 4-24-18; 8:45 am] BILLING CODE 7535-01-P
DEPARTMENT OF ENERGY Federal Energy Regulatory Commission 18 CFR Part 40 [Docket No. RM17-11-000; Order No. 843] Revised Critical Infrastructure Protection Reliability Standard CIP-003-7—Cyber Security—Security Management Controls AGENCY:

Federal Energy Regulatory Commission.

ACTION:

Final rule.

SUMMARY:

The Federal Energy Regulatory Commission (Commission) approves Critical Infrastructure Protection (CIP) Reliability Standard CIP-003-7 (Cyber Security—Security Management Controls), submitted by the North American Electric Reliability Corporation (NERC). Reliability Standard CIP-003-7 clarifies the obligations pertaining to electronic access control for low impact BES Cyber Systems; requires mandatory security controls for transient electronic devices (e.g., thumb drives, laptop computers, and other portable devices frequently connected to and disconnected from systems) used at low impact BES Cyber Systems; and requires responsible entities to have a policy for declaring and responding to CIP Exceptional Circumstances related to low impact BES Cyber Systems. In addition, the Commission directs NERC to develop modifications to the CIP Reliability Standards to mitigate the risk of malicious code that could result from third-party transient electronic devices.

DATES:

This rule will become effective June 25, 2018.

FOR FURTHER INFORMATION CONTACT:

Matthew Dale (Technical Information), Office of Electric Reliability, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, (202) 502-6826, [email protected] Kevin Ryan (Legal Information), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, (202) 502-6840 [email protected] SUPPLEMENTARY INFORMATION:

Before Commissioners: Kevin J. McIntyre, Chairman; Cheryl A. LaFleur, Neil Chatterjee, Robert F. Powelson, and Richard Glick.

1. Pursuant to section 215 of the Federal Power Act (FPA),1 the Commission approves Reliability Standard CIP-003-7 as just, reasonable, not unduly discriminatory or preferential, and in the public interest. Reliability Standard CIP-003-7 addresses the Commission's directives from Order No. 822 and is an improvement over the current Commission-approved CIP Reliability Standards.2 Specifically, Reliability Standard CIP-003-7 improves upon the existing Reliability Standards by: (1) Clarifying the obligations pertaining to electronic access control for low impact BES Cyber Systems; 3 (2) adopting mandatory security controls for transient electronic devices (e.g., thumb drives, laptop computers, and other portable devices frequently connected to and disconnected from systems) used at low impact BES Cyber Systems; and (3) requiring responsible entities to have a policy for declaring and responding to CIP Exceptional Circumstances related to low impact BES Cyber Systems. We also approve NERC's proposed implementation plan and violation risk factor and violation severity level assignments. Finally, we approve NERC's proposed revised definitions for inclusion in the NERC Glossary.

1 16 U.S.C. 824o (2012).

2Revised Critical Infrastructure Protection Reliability Standards, Order No. 822, 154 FERC ¶ 61,037, reh'g denied, Order No. 822-A, 156 FERC ¶ 61,052 (2016).

3 BES Cyber System is defined by NERC as “[o]ne or more BES Cyber Assets logically grouped by a responsible entity to perform one or more reliability tasks for a functional entity.” Glossary of Terms Used in NERC Reliability Standards (NERC Glossary). The acronym BES refers to the bulk electric system. Reliability Standard CIP-002-5.1a (Cyber Security System Categorization) provides a “tiered” approach to cybersecurity requirements, based on classifications of high, medium and low impact BES Cyber Systems.

2. In the NOPR, the Commission proposed to direct that NERC modify Reliability Standard CIP-003-7 to: (1) Provide clear, objective criteria for electronic access controls for low impact BES Cyber Systems; and (2) address the need to mitigate the risk of malicious code that could result from third-party transient electronic devices.4 The Commission adopts the NOPR proposal regarding third-party transient electronic devices but does not adopt the proposal regarding criteria for electronic access controls for low impact BES Cyber Systems.

4Revised Critical Infrastructure Protection Reliability Standard CIP-003-7—Cyber Security—Security Management Controls, Notice of Proposed Rulemaking, 82 FR 49541 (Oct. 26, 2017), 161 FERC ¶ 61,047 (2017) (NOPR).

3. As discussed below, in view of the comments from NERC and others, we are persuaded that Reliability Standard CIP-003-7 provides a clear security objective that establishes compliance expectations. Accordingly, we do not adopt the proposed directive relating to electronic access controls for low impact BES Cyber Systems. Instead, as suggested in the comments, we direct NERC to conduct a study to assess the implementation of Reliability Standard CIP-003-7 to determine whether the electronic access controls adopted by responsible entities provide adequate security. NERC must submit the directed study within eighteen months of the effective date of Reliability Standard CIP-003-7.

4. With regard to the second issue discussed in the NOPR, we remain concerned that the proposed Reliability Standard lacks a clear requirement to mitigate the risk of malicious code that could result from third-party transient electronic devices. Accordingly, we direct NERC to develop a modification to the Reliability Standard to provide the needed clarity. Such modification will better ensure that registered entities clearly understand their mitigation obligations and, thus, improve individual entity mitigation plans and collectively improve the cybersecurity posture of the electric grid.

I. Background A. Section 215 and Mandatory Reliability Standards

5. Section 215 of the FPA requires a Commission-certified Electric Reliability Organization (ERO) to develop mandatory and enforceable Reliability Standards, subject to Commission review and approval. Reliability Standards may be enforced by the ERO, subject to Commission oversight, or by the Commission independently.5 Pursuant to section 215 of the FPA, the Commission established a process to select and certify an ERO,6 and subsequently certified NERC.7

5 16 U.S.C. 824o(e).

6Rules Concerning Certification of the Electric Reliability Organization; and Procedures for the Establishment, Approval, and Enforcement of Electric Reliability Standards, Order No. 672, FERC Stats. & Regs. ¶ 31,204, order on reh'g, Order No. 672-A, FERC Stats. & Regs. ¶ 31,212 (2006).

7North American Electric Reliability Corp., 116 FERC ¶ 61,062, order on reh'g and compliance, 117 FERC ¶ 61,126 (2006), aff'd sub nom. Alcoa, Inc. v. FERC, 564 F.3d 1342 (DC Cir. 2009).

B. Order No. 822

6. The Commission approved the “Version 1” CIP Reliability Standards in January 2008, and subsequently acted on revised versions of the CIP Reliability Standards.8 On January 21, 2016, in Order No. 822, the Commission approved seven CIP Reliability Standards: CIP-003-6 (Security Management Controls), CIP-004-6 (Personnel and Training), CIP-006-6 (Physical Security of BES Cyber Systems), CIP-007-6 (Systems Security Management), CIP-009-6 (Recovery Plans for BES Cyber Systems), CIP-010-2 (Configuration Change Management and Vulnerability Assessments), and CIP-011-2 (Information Protection). The Commission determined that the Reliability Standards under consideration at that time were an improvement over the prior iteration of the CIP Reliability Standards and addressed the directives in Order No. 791 by, among other things, addressing in an equally effective and efficient manner the need for a NERC Glossary definition for the term “communication networks” and providing controls to address the risks posed by transient electronic devices (e.g., thumb drives, laptop computers, and other portable devices frequently connected to and disconnected from systems) used at high and medium impact BES Cyber Systems.9

8Mandatory Reliability Standards for Critical Infrastructure Protection, Order No. 706, 122 FERC ¶ 61,040, order on reh'g, Order No. 706-A, 123 FERC ¶ 61,174 (2008), order on clarification, Order No. 706-B, 126 FERC ¶ 61,229 (2009), order on clarification, Order No. 706-C, 127 FERC ¶ 61,273 (2009); Version 5 Critical Infrastructure Protection Reliability Standards, Order No. 791, 145 FERC ¶ 61,160 (2013), order on clarification and reh'g, Order No. 791-A, 146 FERC ¶ 61,188 (2014).

9 Order No. 822, 154 FERC ¶ 61,037 at P 17.

7. In addition, in Order No. 822, pursuant to section 215(d)(5) of the FPA, the Commission directed NERC, inter alia, to: (1) Develop modifications to the Low Impact External Routable Connectivity (LERC) definition to eliminate ambiguity surrounding the term “direct” as it is used in the LERC definition; and (2) develop modifications to the CIP Reliability Standards to provide mandatory protection for transient electronic devices used at low impact BES Cyber Systems.10

10Id. P 18.

C. NERC Petition

8. On March 3, 2017, NERC submitted a petition seeking approval of Reliability Standard CIP-003-7 and the associated violation risk factors and violation severity levels, implementation plan and effective date. NERC states that Reliability Standard CIP-003-7 satisfies the criteria set forth in Order No. 672 that the Commission applies when reviewing a proposed Reliability Standard.11 NERC also sought approval of revisions to NERC Glossary definitions for the terms Removable Media and Transient Cyber Asset, as well as the retirement of the NERC Glossary definitions of LERC and Low Impact BES Cyber System Access Point (LEAP). In addition, NERC proposed the retirement of Commission-approved Reliability Standard CIP-003-6.12

11See NERC Petition at 2 (citing Order No. 672, FERC Stats. & Regs. ¶ 31,204 at PP 262, 321-337); id., Exhibit D (Order No. 672 Criteria).

12 Reliability Standard CIP-003-7 is not attached to this Final Rule. The Reliability Standard is available on the Commission's eLibrary document retrieval system in Docket No. RM17-11-000 and is posted on the NERC website, http://www.nerc.com.

9. NERC states that Reliability Standard CIP-003-7 improves upon the existing protections that apply to low impact BES Cyber Systems. NERC avers that the proposed modifications address the Commission's directives from Order No. 822 by: (1) Clarifying electronic access control requirements applicable to low impact BES Cyber Systems; and (2) adding requirements for the protection of transient electronic devices used for low impact BES Cyber Systems. In addition, while not required by Order No. 822, NERC proposes a CIP Exceptional Circumstances policy for low impact BES Cyber Systems.

10. In response to the Commission's directive to develop modifications to eliminate ambiguity surrounding the term “direct” as it is used in the LERC definition, NERC proposes to: (1) Retire the terms LERC and LEAP from the NERC Glossary; and (2) modify Section 3 of Attachment 1 to Reliability Standard CIP-003-7 “to more clearly delineate the circumstances under which Responsible Entities must establish access controls for low impact BES Cyber Systems.” 13 NERC states that the proposed revisions are designed to simplify the electronic access control requirements associated with low impact BES Cyber Systems to avoid ambiguities associated with the term “direct.” NERC explains that it recognized the “added layer of unnecessary complexity” introduced by distinguishing between “direct” and “indirect” access within the LERC definition and asserts that the proposed revisions will “help ensure that Responsible Entities implement the required security controls effectively.” 14

13 NERC Petition at 16.

14Id. at 16.

11. With regard to the Commission's directive that NERC develop modifications to the CIP Reliability Standards to provide mandatory protection for transient electronic devices used at low impact BES Cyber Systems, NERC proposes to add a new section to Attachment 1 of Reliability Standard CIP-003-7 that requires responsible entities to include controls in their cyber security plans to mitigate the risk of the introduction of malicious code to low impact BES Cyber Systems that could result from the use of “Transient Cyber Assets or Removable Media.” Specifically, proposed Section 5 of Attachment 1 lists controls to be applied to Transient Cyber Assets and Removable Media that NERC contends “will provide enhanced protections against the propagation of malware from transient devices.” 15

15Id. at 26-27.

12. NERC also proposes a modification that was not directed by the Commission in Order No. 822. Namely, NERC proposes revisions in Requirement R1 of Reliability Standard CIP-003-7 to require responsible entities to have a policy for declaring and responding to CIP Exceptional Circumstances related to low impact BES Cyber Systems.16 NERC states that a number of requirements in the existing CIP Reliability Standards specify that responsible entities do not have to implement or continue implementing these requirements to avoid hindering the entities' ability to timely and effectively respond to the CIP Exceptional Circumstance. NERC proposes to add a requirement for responsible entities to have a CIP Exceptional Circumstances policy that applies to low impact BES Cyber Systems since the proposed requirements relating to transient electronic devices used at low impact BES Cyber Systems include an exception for CIP Exceptional Circumstances.17

16 A CIP Exceptional Circumstance is defined in the NERC Glossary as a situation that involves or threatens to involve one or more of the following, or similar, conditions that impact safety or bulk electric system reliability: A risk of injury or death; a natural disaster; civil unrest; an imminent or existing hardware, software, or equipment failure; A Cyber Security Incident requiring emergency assistance; a response by emergency services; the enactment of a mutual assistance agreement; or an impediment of large scale workforce availability.

17 NERC Petition at 31-32.

13. NERC requests that Reliability Standard CIP-003-7 and the revised definitions of Transient Cyber Asset and Removable Media become effective the first day of the first calendar quarter that is eighteen months after the effective date of the Commission's order approving the Reliability Standard.

D. Notice of Proposed Rulemaking

14. On October 19, 2017, the Commission issued a NOPR that proposed to approve Reliability Standard CIP-003-7. The NOPR proposed to determine that Reliability Standard CIP-003-7 is just, reasonable, not unduly discriminatory or preferential, and in the public interest and addresses the directives in Order No. 822 by: (1) Clarifying the obligations pertaining to electronic access control for low impact BES Cyber Systems; and (2) adopting mandatory security controls for transient electronic devices used at low impact BES Cyber Systems. In addition, the NOPR observed that, by requiring responsible entities to have a policy for declaring and responding to CIP Exceptional Circumstances for low impact BES Cyber Systems, Reliability Standard CIP-003-7 would align the treatment of low impact BES Cyber Systems with that of high and medium impact BES Cyber Systems, which currently include a requirement for declaring and responding to CIP Exceptional Circumstances. Therefore, the Commission proposed to approve Reliability Standard CIP-003-7 because the proposed modifications improve the base-line cybersecurity posture of responsible entities compared to the current Commission-approved CIP Reliability Standards.

15. In addition, the Commission proposed to direct that NERC develop modifications to Reliability Standard CIP-003-7 to addressed two issues: (1) Provide clear, objective criteria for electronic access controls for low impact BES Cyber Systems; and (2) address the need to mitigate the risk of malicious code that could result from third-party transient electronic devices. The Commission explained that modifications directed at these two concerns will address potential gaps and improve the cyber security posture of responsible entities that must comply with the CIP Reliability Standards.

16. The Commission received comments in response to the NOPR from Jonathan Appelbaum (Appelbaum), Electric Consumers Resource Council (ELCON), North American Electric Reliability Corporation (NERC), Transmission Access Policy Study Group (TAPS), and Trade Associations.18 We address below the issues raised in the NOPR and comments.

18 Trade Associations represent American Public Power Association, Edison Electric Institute, and National Rural Electric Cooperative Association.

II. Discussion

17. Pursuant to section 215(d)(2) of the FPA, we approve Reliability Standard CIP-003-7 as just, reasonable, not unduly discriminatory or preferential, and in the public interest. Reliability Standard CIP-003-7 addresses the directives in Order No. 822 and is an improvement over the currently-effective, Commission-approved CIP Reliability Standards. Specifically, Reliability Standard CIP-003-7 improves upon the existing CIP Reliability Standards by: (1) Clarifying the obligations pertaining to electronic access control for low impact BES Cyber Systems; (2) adopting mandatory security controls for transient electronic devices (e.g., thumb drives, laptop computers, and other portable devices frequently connected to and disconnected from systems) used at low impact BES Cyber Systems; and (3) requiring responsible entities to have a policy for declaring and responding to CIP Exceptional Circumstances related to low impact BES Cyber Systems. We also approve NERC's proposed implementation plan and violation risk factor and violation severity level assignments. Finally, we approve NERC's proposed revised definitions for inclusion in the NERC Glossary.

18. In addition, as discussed below, pursuant to section 215(d)(5) of the FPA, we adopt the NOPR proposal and direct NERC to develop modifications to the CIP Reliability Standards to mitigate the risk of malicious code that could result from third-party transient electronic devices. However, for the reasons discussed below, we determine not to adopt the NOPR proposal to direct NERC to develop criteria for electronic access controls for low impact BES Cyber Systems at this time.

19. Below, we discuss the following matters: (A) Criteria for electronic access controls for low impact BES Cyber Systems; (B) mitigation of the risk of malicious code associated with third-party transient electronic devices; and (C) implementation plan and effective date.

A. Criteria for Electronic Access Controls for Low Impact BES Cyber Systems 1. NOPR

20. In the NOPR, the Commission proposed to direct NERC to develop modifications to Section 3 of Attachment 1 to Reliability Standard CIP-003-7 to provide clear, objective criteria for electronic access controls for low impact BES Cyber Systems.19 Specifically, the proposed directive addressed the concern that Reliability Standard CIP-003-7 may not provide adequate electronic access controls for low impact BES Cyber Systems because Reliability Standard CIP-003-7 does not provide clear, objective criteria or measures to assess compliance by independently confirming that the access control strategy adopted by a responsible entity would reasonably meet the security objective of permitting only “necessary inbound and outbound electronic access” to its low impact BES Cyber Systems.20 The Commission stated that, in order to ensure an objective and consistently-applied requirement, the electronic access control plan required in Attachment 1 should require the responsible entity to articulate its access control strategy for a particular set of low impact BES Cyber Systems and provide a technical rationale rooted in security principles explaining how that strategy will reasonably restrict electronic access. In addition, the Commission stated that Attachment 1 should outline basic security principles in order to provide clear, objective criteria or measures to assist in assessing compliance.21

19 NOPR, 161 FERC ¶ 61,047 at P 32.

20Id. P 28.

21Id. P 29.

21. The Commission observed that without clear, objective criteria or measures, auditors will not necessarily have adequate information to assess the reasonableness of the responsible entity's decision with respect to how the responsible entity identified necessary communications or restricted electronic access to specific low impact BES Cyber Systems. The Commission posited that absent such information, it is possible that an auditor could assess a violation where an entity adequately protected its low impact BES Cyber Systems or fail to recognize a situation where additional protections are necessary to meet the security objective of the Reliability Standard.22

22Id.

2. Comments

22. NERC acknowledges the NOPR concerns but comments that a directive “may not be necessary.” 23 Specifically, NERC asserts that “Responsible Entities must provide auditors sufficient information to allow the auditors to properly assess compliance with section 3.1” of Reliability Standard CIP-003-7.24 NERC contends that Section 3.1 “articulates a clear security objective: permit only necessary inbound and outbound access to low impact BES Cyber Systems.” 25 NERC explains that Section 3.1 is not prescriptive due to the wide array of low impact BES Cyber Systems and their lower risk to bulk electric system reliability, but, while Section 3.1 grants responsible entities flexibility, “a Responsible Entity must demonstrate that its electronic access permissions and controls are consistent with the security objective.” 26 Specifically, NERC maintains that a responsible entity “must document the necessity of its inbound and outbound electronic access permissions and provide justification of the need for such access.” 27 NERC states further that “[i]f a Responsible Entity fails to articulate a reasonable business or operational need for the electronic access permission, the ERO Enterprise would find that the Responsible Entity did not comply with Section 3.1.” 28 NERC continues that “[c]onsistent with the intent of the Commission's proposed directive, the Responsible Entity would have to articulate its access control strategy for the low impact BES Cyber System and provide a technical rationale rooted in security principles, explaining how that strategy will reasonably restrict electronic access.” 29 NERC states that if a responsible entity “fails to demonstrate that its chosen electronic access controls are properly designed and implemented to meet the security objective, the ERO Enterprise would find that the Responsible Entity did not comply with Section 3.1” of Reliability Standard CIP-003-7.30

23 NERC Comments at 3.

24Id. (citing NERC Petition at 21-24).

25Id.

26Id. at 3-4.

27Id. at 4 (citing NERC Petition at 22).

28Id.

29Id.

30Id.

23. NERC concludes that while the Commission's proposed directive may not be necessary and could potentially be an inefficient use of NERC and industry resources, “[a]rticulating objective criteria for electronic access controls for low impact BES Cyber Systems may improve clarity and auditability, and help ensure that entities implement effective electronic access controls.” 31

31Id. at 5.

24. Trade Associations, TAPS and ELCON do not support the proposed directive, claiming that the proposal would impose additional burdens on registered entities without a corresponding reliability benefit. Trade Associations and TAPS contend that Section 3 of Attachment 1 to Reliability Standard CIP-003-7 gives responsible entities needed flexibility to develop and implement effective electronic access controls for low impact BES Cyber Systems. TAPS adds that Reliability Standard CIP-003-7 reflects what NERC, through the standard development process, “determined was a technically appropriate tailoring of electronic access controls requirements to low impact BES cyber systems.” 32 Trade Associations recommend, as an alternative to the proposed directive, that the Commission approve the proposed Reliability Standard without modification and monitor its concerns, for example, by directing NERC to conduct a study to assess the implementation by responsible entities of Reliability Standard CIP-003-7 electronic access controls to determine whether there are in fact inadequate controls. According to Trade Associations, a fact-driven assessment would help to inform and demonstrate a reliability and security need for future Commission actions related to the CIP Reliability Standards.33

32 TAPS Comments at 7 (citing 16 U.S.C. 824o(d)).

33 Trade Associations Comments at 9.

25. Further, Trade Associations assert that a risk-based approach is essential to allow responsible entities to focus their resources on assets that have a higher impact on bulk electric system reliability. ELCON adds that while it “appreciates the value establishing more tangible criteria for adequate Low-Impact BES Cyber System controls, . . . the additional requirements that the Commission proposes would do nothing to harden a Low-Impact facility against the rapid evolution in cyber warfare.” 34

34 ELCON Comments at 4.

26. Appelbaum supports the proposed directive regarding Section 3 of Attachment 1 to Reliability Standard CIP-003-7. Appelbaum notes that Reliability Standard CIP-003-7 “leaves the choice of controls to the [responsible entity] and leaves an Auditor with no requirement basis to perform an audit.” 35 Appelbaum states that under “NERC's proposal that each entity establishes their own security plan and only needs to demonstrate compliance and adherence to its plan then . . . the implementation of security controls will be implemented to various levels of security and differentiated . . . across the NERC Regions.” 36 Appelbaum states further that Reliability Standard CIP-003-7 “will result in different auditor conclusions for similarly situated entities implementing similar protections.” 37 Appelbaum concludes that “[c]lear requirements are needed to establish a common understanding of the necessary security to be achieved.” 38

35 Applebaum Comments at 5.

36Id. at 6.

37Id. at 7.

38Id.

3. Commission Determination

27. We do not to adopt the proposed directive, but rather adopt the Trade Associations' recommendation for a study and report to be filed with the Commission. We are satisfied with the explanation of NERC and other commenters that Section 3 of Attachment 1 to Reliability Standard CIP-003-7 provides a clear security objective that establishes compliance expectations. Specifically, we are persuaded by commenters that Section 3 of Attachment 1 requires responsible entities to adopt security controls to permit only necessary inbound and outbound electronic access to Cyber Assets connected using a routable protocol to low impact BES Cyber Systems.

28. The concern raised in the NOPR focused on the lack of clear, objective criteria or measures to assess compliance with Reliability Standard CIP-003-7. As noted above, however, NERC states in its comments that responsible entities will be required to demonstrate that electronic access permissions and controls associated with low impact BES Cyber Systems are consistent with the stated security objective. NERC also clarifies that responsible entities will be required to “document the [business or operational] necessity of its inbound and outbound electronic access permissions and provide justification of the need for such access.” 39 Given NERC's statements, we believe that there will be adequate measures to assess compliance with Reliability Standard CIP-003-7. We expect responsible entities to be able to provide a technically sound explanation as to how their electronic access controls meet the security objective.

39 NERC Comments at 4.

29. In response to Appelbaum's comment that auditors will not have a common understanding on which to judge compliance across the ERO enterprise, in view of NERC's comments, we believe that NERC and the Regional Entities will have the ability to assess the effectiveness of a responsible entity's electronic access control plan as well as a responsible entity's adherence to its electronic access control plan.

30. Moreover, to ensure that the security controls are implemented and that Section 3 accomplishes its intended purpose, we adopt Trade Associations' proposal and direct NERC to conduct a study to assess the implementation of Reliability Standard CIP-003-7.40 The study should address what electronic access controls entities choose to implement and under what circumstances, and whether the electronic access controls adopted by responsible entities provide adequate security, as well as other relevant information found by NERC as a result of the study. NERC must file the study within eighteen months of the effective date of Reliability Standard CIP-003-7. We may revisit the need for modifications to Section 3 of Attachment 1 to Reliability Standard CIP-003-7 if warranted by the study determination, or the results of audits or other compliance procedures.

40 Trade Associations Comments at 9.

B. Mitigation of the Risk of Malicious Code Associated With Third-Party Transient Electronic Devices 1. NOPR

31. In the NOPR, the Commission proposed to direct NERC to develop modifications to proposed Section 5 of Attachment 1 to Reliability Standard CIP-003-7 to mitigate the risk of malicious code that could result from third-party transient electronic devices.41 Specifically, the Commission raised a concern that Reliability Standard CIP-003-7 does not explicitly require mitigation of the introduction of malicious code from third-party managed transient electronic devices, even if the responsible entity determines that the third-party's policies and procedures are inadequate. The Commission noted NERC's statement in its petition that a responsible entity's failure to mitigate this risk “may not constitute compliance.” 42 The Commission stated that NERC's explanation suggests that, with regard to low impact BES Cyber Systems, the requirement lacks an obligation for a responsible entity to correct any deficiencies that are discovered during a review of third-party transient electronic device management practices.

41Id. P 41.

42Id. P 39 (citing NERC Petition at 30).

32. The Commission expressed concern that Reliability Standard CIP-003-7 may contain a reliability gap where a responsible entity contracts with a third-party but fails to mitigate potential deficiencies discovered in the third-party's malicious code detection and prevention practices prior to a transient electronic device being connected to a low impact BES Cyber System. The Commission explained that the reliability gap would result from the fact that Reliability Standard CIP-003-7 does not contain: (1) A requirement for the responsible entity to mitigate any malicious code found during the third-party review(s); or (2) a requirement that the responsible entity take reasonable steps to mitigate the risks of third party malicious code on its systems, if an arrangement cannot be made for the third-party to do so. The Commission observed that without such obligations responsible entities could, without compliance consequences, simply accept the risk of deficient third-party transient electronic device management practices.43

43Id. P 40 (citing Order No. 706, 122 FERC ¶ 61,040 at P 150 (rejecting the concept of acceptance of risk in the CIP Reliability Standards)).

33. Therefore, pursuant to section 215(d)(5) of the FPA, the Commission proposed to direct NERC to modify Reliability Standard CIP-003-7 to require responsible entities to implement controls to address the need to mitigate the risk of malicious code that could result from third-party transient electronic devices.

2. Comments

34. NERC states that it “agrees with the Commission that, should a Responsible Entity find that a third party's processes and practices for protecting its transient electronic devices inadequate, the Responsible Entity must be required to take mitigating action prior to connecting third-party transient electronic devices to a low impact BES Cyber System.” 44 According to NERC, “failure to take mitigating action in this circumstance[ ] could result in a finding of noncompliance with Section 5 of Attachment 1.” 45 NERC, therefore, asserts that “the proposed directive may not be necessary and may be an inefficient use of NERC and industry resources.” 46 NERC observes, however, that “[m]odifying proposed Section 5 to explicitly include a mitigation requirement for third-part[y] devices may remove any doubt about compliance expectations.” 47

44 NERC Comments at 6 (citing NERC Petition at 29).

45Id.

46Id.

47Id.

35. Trade Associations and ELCON do not support the proposed directive. Trade Associations contend that “[a]lthough Section 5.2 [of Attachment 1 to CIP-003-7] does not explicitly require the responsible entity to mitigate the introduction of malicious code, risk mitigation is an explicit obligation under Section 5.” 48 Trade Associations state that if a responsible entity's plan does not “achieve the objective of mitigating the risk of the introduction of malicious code to low impact BES Cyber Systems through the use of Transient Cyber Assets . . . then the plan will not comply with Section 5.” 49 Trade Associations maintains that the “intent of the requirement is made clear in the Supplemental Material for Section 5 and 5.2, which both require the responsible entities to document how they will mitigate the introduction of malicious code.” 50 Trade Associations note in a footnote that:

48 Trade Associations Comments at 10.

49Id. at 11.

50Id.

Although the Supplemental Material does not create binding obligations on responsible entities, the text of the Supplemental Material in the Proposed Standard further clarifies and reinforces that the binding requirements found in CIP-003-7, Attachment 1, Section 5 include the obligation to take additional steps if a third-party's practices do not meet the security objective.51

51Id.

Trade Associations conclude that the Commission should approve Reliability Standard CIP-003-7 without modification.

36. ELCON states that “the requirement for a Low-Impact BES Cyber System owner or operator to actively mitigate deficiencies in third party's anti-virus security programs does exist in [Section 5 of Attachment 1 to Reliability Standard CIP-003-7].” 52 ELCON states that the opening paragraph of Section 5, which requires responsible entities to implement one or more plans to “achieve the objective of mitigating the risk of the introduction of malicious code to low impact BES Cyber Systems through the use of Transient Cyber Assets or Removable Media,” establishes an obligation to mitigate any identified deficiencies. ELCON contends that the objective of mitigating the risk “cannot be reached if the Responsible Entity allows a third party to connect an insufficiently evaluated [Transient Cyber Asset] to a Low-Impact BES Cyber System.” 53 ELCON argues that the “positioning of the requirement in the opening paragraph of Section 5 assures that mitigating actions must be taken to address deficiencies detected” with responsible entity-owned Transient Cyber Assets, vendor-owned Transient Cyber Assets, and Removable Media.54

52 ELCON Comments at 4 (emphasis in original).

53Id. at 4-5.

54Id. at 5.

3. Commission Determination

37. We adopt the NOPR proposal and, pursuant to section 215(d)(5) of the FPA, direct that NERC develop modifications to Reliability Standard CIP-003-7 to address our concern and ensure that responsible entities implement controls to mitigate the risk of malicious code that could result from third-party transient electronic devices. NERC could satisfactorily address the identified concern, for example, by modifying Section 5 of Attachment 1 to CIP-003-7 to clarify that responsible entities must implement controls to mitigate the risk of malicious code that could result from the use of third-party transient electronic devices.

38. The directed modification will improve the security posture of responsible entities by clarifying compliance expectations. While commenters claim that the provision is sufficiently clear and ask the Commission not to adopt the proposal, all commenters agree that there is not an explicit requirement to mitigate the threat of malicious code that could result from third-party transient electronic devices. While Trade Associations state that Section 5.2 of Attachment 1 does not explicitly require the mitigation of malicious code, Trade Associations and ELCON suggest that Section 5 generally requires risk mitigation. While commenters agree that, at least implicitly, the mitigation of malicious code is an obligation, the lack of a clear requirement could lead to confusion in both the development of a compliance plan and in the implementation of a compliance plan. In addition, although NERC contends that the proposed directive may not be necessary, NERC agrees that modifying Reliability Standard CIP-003-7 to address the mitigation of malicious code explicitly could clarify compliance obligations.

39. Therefore, pursuant to FPA section 215(d)(5), we direct NERC to develop and submit modifications to Reliability Standard CIP-003-7 to include an explicit requirement that responsible entities implement controls to mitigate the risk of malicious code that could result from third-party transient electronic devices.

C. Implementation Plan and Effective Date NERC Petition

40. In its petition, NERC requests an effective date for Reliability Standard CIP-003-7 and the revised definitions of Transient Cyber Asset and Removable Media on the first day of the first calendar quarter that is eighteen months after the effective date of the Commission's order approving the Reliability Standard. NERC explains that the implementation plan does not alter the previously-approved compliance dates for Reliability Standard CIP-003-6 other than the compliance date for Reliability Standard CIP-003-6, Requirement R2, Attachment 1, Sections 2 and 3, which would be replaced with the effective date for Reliability Standard CIP-003-7. NERC also proposes that the retirement of Reliability Standard CIP-003-6 and the associated definitions become effective on the effective date of Reliability Standard CIP-003-7.55

55Id., Exhibit C (Implementation Plan).

41. The NOPR proposed to approve NERC's implementation plan and effective date for Reliability Standard CIP-003-7. The Commission did not receive any comments regarding this aspect of the NOPR. Accordingly, we approve NERC's proposed implementation plan and effective date.

III. Information Collection Statement

42. The FERC-725B information collection requirements contained in this Final Rule are subject to review by the Office of Management and Budget (OMB) under section 3507(d) of the Paperwork Reduction Act of 1995.56 OMB's regulations require approval of certain information collection requirements imposed by agency rules.57 Upon approval of a collection of information, OMB will assign an OMB control number and expiration date. Respondents subject to the filing requirements of this rule will not be penalized for failing to respond to these collections of information unless the collections of information display a valid OMB control number. The Commission solicits comments on the Commission's need for this information, whether the information will have practical utility, the accuracy of the burden estimates, ways to enhance the quality, utility, and clarity of the information to be collected or retained, and any suggested methods for minimizing respondents' burden, including the use of automated information techniques.

56 44 U.S.C. 3507(d) (2012).

57 5 CFR 1320.11 (2017).

43. The Commission bases its paperwork burden estimates on the changes in paperwork burden presented by the proposed revision to CIP Reliability Standard CIP-003-7 as compared to the current Commission-approved Reliability Standard CIP-003-6. The Commission has already addressed the burden of implementing Reliability Standard CIP-003-6.58 As discussed above, the immediate rulemaking addresses three areas of modification to the CIP Reliability Standards: (1) Clarifying the obligations pertaining to electronic access control for low impact BES Cyber Systems; (2) adopting mandatory security controls for transient electronic devices (e.g., thumb drives, laptop computers, and other portable devices frequently connected to and disconnected from systems) used at low impact BES Cyber Systems; and (3) requiring responsible entities to have a policy for declaring and responding to CIP Exceptional Circumstances related to low impact BES Cyber Systems.

58See Order No. 822, 154 FERC ¶ 61,037 at PP 84-88.

44. The NERC Compliance Registry, as of September 2017, identifies approximately 1,320 U.S. entities that are subject to mandatory compliance with Reliability Standards. Of this total, we estimate that 1,100 entities will face an increased paperwork burden under Reliability Standard CIP-003-7, estimating that a majority of these entities will have one or more low impact BES Cyber Systems. Based on these assumptions, we estimate the following reporting burden:

RM17-11-000 Final Rule [Mandatory Reliability Standards for critical infrastructure protection Reliability Standards] Number of
  • respondents
  • Annual
  • number of
  • responses per
  • respondent
  • Total number
  • of responses
  • Average burden
  • and cost per
  • response 59
  • Total annual burden
  • hours and total
  • annual cost
  • Cost per
  • respondent
  • ($)
  • (1) (2) (1) * (2) = (3) (4) (3) * (4) = (5) (5) ÷ (1) Create low impact TCA assets plan (one-time). 60 1,100 1 1,100 20 hrs.; $1,680 6,875 hrs.; $1,848,000 $1,680 Updates and reviews of low impact TCA assets (ongoing). 61 1,100 62 300 330,000 63 1.5 hrs.; $126 495,000 hrs.; $41,580,000 37,800 Update/modify documentation to remove LERC and LEAP (one-time). 60 1,100 1 1,100 20 hrs.; $1,680 6,875 hrs.; $1,848,000 1,680 Update paperwork for access control implementation in Section 2 64 and Section 3 65 (ongoing). 61 1,100 1 1,100 20 hrs.; $1,680 6,875 hrs.; $1,848,000 1,680 Total (one-time) 60 2,200 13,750 hrs.; $3,696,000 Total (ongoing) 61 331,100 501,875 hrs.; $43,428,000

    45. The following shows the annual cost burden for each group, based on the burden hours in the table above:

    59 The loaded hourly wage figure (includes benefits) is based on the average of three occupational categories for 2016 found on the Bureau of Labor Statistics website (http://www.bls.gov/oes/current/naics2_22.htm):

    Legal (Occupation Code: 23-0000): $143.68

    Electrical Engineer (Occupation Code: 17-2071): $68.12

    Office and Administrative Support (Occupation Code: 43-0000): $40.89

    ($143.68 + $68.12 + $40.89) ÷ 3 = $84.23. The figure is rounded to $84.00 for use in calculating wage figures in this NOPR.

    60 This one-time burden applies in Year One only.

    61 This ongoing burden applies in Year 2 and beyond.

    62 We estimate that each entity will perform 25 updates per month. 25 updates *12 months = 300 updates (i.e. responses) per year.

    63 The 1.5 hours of burden per response is comprised of three sub-categories:

    Updates to managed low TCA assets: 15 minutes (0.25 hours) per response

    Updates to unmanaged low TCA assets: 60 minutes (1 hour) per response

    Reviews of low TCA applicable controls: 15 minutes (0.25 hours) per response.

    64 Physical Security Controls.

    65 Electronic Access Controls.

    Year 1: $3,696,000.

    Years 2 and 3: $43,428,000.

    • The paperwork burden estimate includes costs associated with the initial development of a policy to address requirements relating to: (1) Clarifying the obligations pertaining to electronic access control for low impact BES Cyber Systems; (2) adopting mandatory security controls for transient electronic devices (e.g., thumb drives, laptop computers, and other portable devices frequently connected to and disconnected from systems) used at low impact BES Cyber Systems; and (3) requiring responsible entities to have a policy for declaring and responding to CIP Exceptional Circumstances related to low impact BES Cyber Systems. Further, the estimate reflects the assumption that costs incurred in year 1 will pertain to policy development, while costs in years 2 and 3 will reflect the burden associated with maintaining logs and other records to demonstrate ongoing compliance.

    46. Title: Mandatory Reliability Standards, Revised Critical Infrastructure Protection Reliability Standards.

    Action: Revision to FERC-725B information collection.

    OMB Control No.: 1902-0248.

    Respondents: Businesses or other for-profit institutions; not-for-profit institutions.

    Frequency of Responses: On Occasion.

    Necessity of the Information: This Final Rule approves the requested modifications to Reliability Standards pertaining to critical infrastructure protection. As discussed above, the Commission approves NERC's revised CIP Reliability Standard CIP-003-7 pursuant to section 215(d)(2) of the FPA because it improves upon the currently-effective suite of cyber security CIP Reliability Standards.

    Internal Review: The Commission has reviewed the Reliability Standard and made a determination that its action is necessary to implement section 215 of the FPA.

    47. Interested persons may obtain information on the reporting requirements by contacting the following: Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426 [Attention: Ellen Brown, Office of the Executive Director, email: [email protected], phone: (202) 502-8663, fax: (202) 273-0873].

    48. For submitting comments concerning the collection(s) of information and the associated burden estimate(s), please send your comments to the Commission, and to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street NW, Washington, DC 20503 [Attention: Desk Officer for the Federal Energy Regulatory Commission, phone: (202) 395-4638, fax: (202) 395-7285]. For security reasons, comments to OMB should be submitted by email to: [email protected] Comments submitted to OMB should include Docket Number RM17-11-000 and OMB Control Number 1902-0248.

    IV. Regulatory Flexibility Act Analysis

    49. The Regulatory Flexibility Act of 1980 (RFA) generally requires a description and analysis of Final Rules that will have significant economic impact on a substantial number of small entities.66 The Small Business Administration's (SBA) Office of Size Standards develops the numerical definition of a small business.67 The SBA revised its size standard for electric utilities (effective January 22, 2014) to a standard based on the number of employees, including affiliates (from the prior standard based on megawatt hour sales).68 Reliability Standard CIP-003-7 is expected to impose an additional burden on 1,100 entities 69 (reliability coordinators, generator operators, generator owners, interchange coordinators or authorities, transmission operators, balancing authorities, transmission owners, and certain distribution providers).

    66 5 U.S.C. 601-12 (2012).

    67 13 CFR 121.101 (2017).

    68 SBA Final Rule on “Small Business Size Standards: Utilities,” 78 FR 77343 (Dec. 23, 2013).

    69 Public utilities may fall under one of several different categories, each with a size threshold based on the company's number of employees, including affiliates, the parent company, and subsidiaries. For the analysis in this Final Rule, we are using a 500 employee threshold due to each affected entity falling within the role of Electric Bulk Power Transmission and Control (NAISC Code: 221121).

    50. Of the 1,100 affected entities discussed above, we estimate that approximately 857 or 78 percent 70 of the affected entities are small. As discussed above, Reliability Standard CIP-003-7 enhances reliability by providing criteria against which NERC and the Commission can evaluate the sufficiency of an entity's electronic access controls for low impact BES Cyber systems, as well as improved security controls for transient electronic devices (e.g., thumb drives, laptop computers, and other portable devices frequently connected to and disconnected from systems). We estimate that each of the 857 small entities to whom the modifications to Reliability Standard CIP-003-7 applies will incur one-time costs of approximately $3,360 per entity to implement this standard, as well as the ongoing paperwork burden reflected in the Information Collection Statement (approximately $39,480 per year per entity). We do not consider the estimated costs for these 857 small entities to be a significant economic impact.

    70 77.95 percent.

    51. Based on the above analysis, we certify that the approved Reliability Standard will not have a significant economic impact on a substantial number of small entities.

    V. Environmental Analysis

    52. The Commission is required to prepare an Environmental Assessment or an Environmental Impact Statement for any action that may have a significant adverse effect on the human environment.71 The Commission has categorically excluded certain actions from this requirement as not having a significant effect on the human environment. Included in the exclusion are rules that are clarifying, corrective, or procedural or that do not substantially change the effect of the regulations being amended.72 The actions proposed herein fall within this categorical exclusion in the Commission's regulations.

    71Regulations Implementing the National Environmental Policy Act of 1969, Order No. 486, FERC Stats. & Regs. ¶ 30,783 (1987).

    72 18 CFR 380.4(a)(2)(ii) (2017).

    VI. Document Availability

    53. In addition to publishing the full text of this document in the Federal Register, the Commission provides all interested persons an opportunity to view and/or print the contents of this document via the internet through the Commission's Home Page (http://www.ferc.gov) and in the Commission's Public Reference Room during normal business hours (8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE, Room 2A, Washington, DC 20426.

    54. From the Commission's Home Page on the internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number of this document, excluding the last three digits, in the docket number field. User assistance is available for eLibrary and the Commission's website during normal business hours from the Commission's Online Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at [email protected], or the Public Reference Room at (202) 502-8371, TTY (202) 502-8659. Email the Public Reference Room at [email protected]

    VII. Effective Date and Congressional Notification

    55. The Final Rule is effective June 25, 2018. The Commission has determined, with the concurrence of the Administrator of the Office of Information and Regulatory Affairs of OMB, that this rule is not a “major rule” as defined in section 351 of the Small Business Regulatory Enforcement Fairness Act of 1996. This Final Rule is being submitted to the Senate, House, and Government Accountability Office.

    By the Commission.

    Issued: April 19, 2018. Nathaniel J. Davis, Sr., Deputy Secretary.
    [FR Doc. 2018-08610 Filed 4-24-18; 8:45 am] BILLING CODE 6717-01-P
    DEPARTMENT OF DEFENSE Office of the Secretary 32 CFR Part 285 [Docket ID: DOD-2017-OS-0028] RIN 0790-AI51 DoD Freedom of Information Act (FOIA) Program AGENCY:

    Office of the Secretary, DoD.

    ACTION:

    Final rule.

    SUMMARY:

    This final rule removes one of the Department's two DoD-level regulations concerning the implementation of and assignment of responsibilities for the DoD Freedom of Information Act (FOIA) program. Any content required to be in an agency's FOIA rule from this part was incorporated into the Department's other DoD-level regulation concerning the DoD FOIA program, which was recently revised and for which a final rule published on February 6, 2018. Therefore, this part can now be removed from the CFR.

    Additionally, the revised DoD-level FOIA rule now includes DoD component FOIA program information, which eliminated the requirement for component supplementary rules. Accordingly, all of the department's necessary FOIA public guidance has been incorporated into a single part.

    DATES:

    This rule is effective on April 25, 2018.

    FOR FURTHER INFORMATION CONTACT:

    James Hogan at 571-372-0462.

    SUPPLEMENTARY INFORMATION:

    It has been determined that publication of this CFR part removal for public comment is impracticable, unnecessary, and contrary to public interest because any public-facing guidance from this part was incorporated into another CFR part for which public comment has already been taken. Any internal guidance from this part will continue to be published in DoD Directive 5400.07 available at http://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodd/540007p.pdf.

    With the finalization of the DoD-level FOIA rule at 32 CFR part 286, the Department is eliminating the need for this separate DoD-level FOIA rule and reducing costs to the public as explained in the preamble of the revised DoD-level FOIA rule at 32 CFR part 286 published at 83 FR 5196-5197.

    This rule is not significant under Executive Order (E.O.) 12866, “Regulatory Planning and Review,” therefore, E.O. 13771, “Reducing Regulation and Controlling Regulatory Costs” does not apply.

    List of Subjects in 32 CFR Part 285

    Freedom of information.

    PART 285—[REMOVED] Accordingly, by the authority of 5 U.S.C. 301, 32 CFR part 285 is removed. Dated: April 20, 2018. Aaron T. Siegel, Alternate OSD Federal Register Liaison Officer, Department of Defense.
    [FR Doc. 2018-08663 Filed 4-24-18; 8:45 am] BILLING CODE 5001-06-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 117 [Docket No. USCG-2018-0325] Drawbridge Operation Regulation; Upper Mississippi River, Rock Island, IL 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 Rock Island Railroad and Highway Drawbridge across the Upper Mississippi River, mile 482.9, at Rock Island, Illinois. The deviation is necessary to facilitate the Quad City Heart Walk. This deviation allows the bridge to remain in the closed-to-navigation position for approximately two and a half (2.5) hours on one day until the race is completed.

    DATES:

    This deviation is effective from 8:30 a.m. through 11 a.m. on May 19, 2018.

    ADDRESSES:

    The docket for this deviation, [USCG-2018-0325] 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. Eric A. Washburn, Bridge Administrator, Western Rivers, Coast Guard; telephone 314-269-2378, email [email protected].

    SUPPLEMENTARY INFORMATION:

    The U.S. Army Rock Island Arsenal, owner and operator of the Rock Island Railroad and Highway Drawbridge, across the Upper Mississippi River, mile 482.9, at Rock Island, Illinois, requested a temporary deviation from the current operating schedule to accommodate the Quad City Heart Walk. The bridge has a vertical clearance of 23.8 feet above normal pool in the closed-to-navigation position. This bridge is governed by 33 CFR 117.5.

    This deviation allows the bridge to remain in the closed-to-navigation position from 8:30 a.m. through 11 a.m. on May 19, 2018. Navigation on the waterway consists primarily of commercial tows and recreational watercraft. This temporary deviation has been coordinated with waterway users. No objections were received.

    Vessels able to pass through the bridge in the closed position may do so at any time. The bridge will not be able to open for emergencies and there are no alternate routes for vessels transiting this section of the Upper Mississippi River. The Coast Guard will inform users of the waterways through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge so the vessel operators can arrange their transits to minimize any impact caused by this 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: April 19, 2018. Eric A. Washburn, Bridge Administrator, Western Rivers.
    [FR Doc. 2018-08625 Filed 4-24-18; 8:45 am] BILLING CODE 9110-04-P
    POSTAL SERVICE 39 CFR Part 20 International Mail Manual; Incorporation by Reference AGENCY:

    Postal ServiceTM.

    ACTION:

    Final rule.

    SUMMARY:

    The Postal Service announces the issuance of the Mailing Standards of the United States Postal Service, International Mail Manual (IMM®) dated March 5, 2018, and its incorporation by reference in the Code of Federal Regulations.

    DATES:

    This final rule is effective on April 25, 2018. The incorporation by reference of the IMM is approved by the Director of the Federal Register as of April 25, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Lizbeth Dobbins, (202) 268-3789.

    SUPPLEMENTARY INFORMATION:

    The International Mail Manual was issued on March 5, 2018, and was updated with Postal Bulletin revisions through February 2, 2018. It replaced all previous editions. The IMM continues to enable the Postal Service to fulfill its long-standing mission of providing affordable, universal mail service. It continues to: (1) Increase the user's ability to find information; (2) increase the user's confidence that they have found the information they need; and (3) reduce the need to consult multiple sources to locate necessary information. The provisions throughout this issue support the standards and mail preparation changes implemented since the version of January 22, 2017. The International Mail Manual is available to the public on the Postal Explorer® internet site at http://pe.usps.com.

    List of Subjects in 39 CFR Part 20

    Foreign relations, Incorporation by reference.

    In view of the considerations discussed above, the Postal Service hereby amends 39 CFR part 20 as follows:

    PART 20—INTERNATIONAL POSTAL SERVICE 1. The authority citation for part 20 continues to read as follows: Authority:

    5 U.S.C. 552(a); 13 U.S.C. 301-307; 18 U.S.C. 1692-1737; 39 U.S.C. 101, 401, 403, 404, 407, 414, 416, 3001-3011, 3201-3219, 3403-3406, 3621, 3622, 3626, 3632, 3633, and 5001.

    2. Amend § 20.1 by revising paragraph (a), and adding a new entry at the end of table 1 to paragraph (b), to read as follows:
    § 20.1 International Mail Manual; incorporation by reference.

    (a) Section 552(a) of title 5, U.S.C., relating to the public information requirements of the Administrative Procedure Act, provides in pertinent part that matter reasonably available to the class of persons affected thereby is deemed published in the Federal Register when incorporated by reference therein with the approval of the Director of the Federal Register. In conformity with that provision and 39 U.S.C. 410(b)(1), and as provided in this part, the Postal Service hereby incorporates by reference its International Mail Manual (IMM), issued March 5, 2018. The Director of the Federal Register approves this incorporation by reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51.

    (b) * * *

    Table 1 to Paragraph (b) International mail
  • manual
  • Date of
  • issuance
  • *    *    *    *    * IMM March 5, 2018.
    3. Revise § 20.2 to read as follows:
    § 20.2 Effective date of the International Mail Manual.

    The provisions of the International Mail Manual issued March 5, 2018, are applicable with respect to the international mail services of the Postal Service.

    Ruth Stevenson, Attorney, Federal Compliance.
    [FR Doc. 2018-08687 Filed 4-24-18; 8:45 am] BILLING CODE 7710-12-P
    POSTAL SERVICE 39 CFR Part 111 Domestic Mail Manual; Incorporation by Reference AGENCY:

    Postal ServiceTM.

    ACTION:

    Final rule.

    SUMMARY:

    The Postal Service announces the issuance of the Mailing Standards of the United States Postal Service, Domestic Mail Manual (DMM®) dated March 5, 2018, and its incorporation by reference in the Code of Federal Regulations.

    DATES:

    This final rule is effective on April 25, 2018.

    The incorporation by reference of the DMM dated March 5, 2018, is approved by the Director of the Federal Register as of April 25, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Lizbeth Dobbins (202) 268-3789.

    SUPPLEMENTARY INFORMATION:

    The most recent issue of the Domestic Mail Manual (DMM) is dated March 5, 2018. This issue of the DMM contains all Postal Service domestic mailing standards, and continues to: (1) Increase the user's ability to find information; (2) increase confidence that users have found all the information they need; and (3) reduce the need to consult multiple chapters of the Manual to locate necessary information. The issue dated March 5, 2018, sets forth specific changes, including new standards throughout the DMM to support the standards and mail preparation changes implemented since the version issued on January 22, 2017.

    Changes to mailing standards will continue to be published through Federal Register notices and the Postal Bulletin, and will appear in the next online version available via the Postal Explorer® website at: http://pe.usps.com.

    List of Subjects in 39 CFR Part 111

    Administrative practice and procedure, Incorporation by reference.

    In view of the considerations discussed above, the Postal Service hereby amends 39 CFR part 111 as follows:

    PART 111—GENERAL INFORMATION ON POSTAL SERVICE 1. The authority citation for 39 CFR part 111 continues to read as follows: Authority:

    5 U.S.C. 552(a); 13 U.S.C. 301-307; 18 U.S.C. 1692-1737; 39 U.S.C. 101, 401, 403, 404, 414, 416, 3001-3011, 3201-3219, 3403-3406, 3621, 3622, 3626, 3632, 3633, and 5001.

    2. In § 111.3 amend paragraph (f) by adding a new entry at the end of the table to read as follows:
    § 111.3 Amendment to the Mailing Standards of the United States Postal Service, Domestic Mail Manual.

    (f) * * *

    Transmittal letter for issue Dated Federal Register publication *         *         *         *         *         *         * DMM March 5, 2018 [Insert Federal Register Citation for this Rule].
    § 111.4 [Amended]
    3. Amend § 111.4 by removing “June 23, 2017” and adding “April 25, 2018” in its place. Ruth Stevenson, Attorney, Federal Compliance.
    [FR Doc. 2018-08686 Filed 4-24-18; 8:45 am] BILLING CODE 7710-12-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 62 [EPA-R08-OAR-2017-0698; FRL-9976-58-Region 8] Approval and Promulgation of State Plans for Designated Facilities and Pollutants; North Dakota; Control of Emissions From Existing Commercial and Industrial Solid Waste Incineration Units AGENCY:

    Environmental Protection Agency (EPA)

    ACTION:

    Final rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is approving a revised state plan (the “plan”) submitted by the North Dakota Department of Health (the “Department”) for the regulation of existing commercial and industrial solid waste incineration (CISWI) units within the jurisdiction of the State of North Dakota. The Department submitted the plan to the EPA for approval following the promulgation of federal new source performance standards (NSPS) and emission guidelines (EG) for CISWI units on March 21, 2011, and the subsequent, limited revisions to that final rule published on February 7, 2013, and June 23, 2016. This plan approval final rulemaking action is being taken in accordance with sections 111(d) and 129 of the Clean Air Act (CAA, or the “Act”).

    DATES:

    This final rule is effective on May 25, 2018.

    ADDRESSES:

    The EPA has established a docket for this action under Docket ID No. EPA-R08-OAR-2017-0698. 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., 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:

    Gregory Lohrke, Air Program, U.S. Environmental Protection Agency (EPA), Region 8, Mail Code 8P-AR, 1595 Wynkoop Street, Denver, Colorado 80202-1129, (303) 312-6396, [email protected]

    SUPPLEMENTARY INFORMATION:

    I. Background Information

    Sections 111 and 129 of the CAA outline the EPA's statutory authority for regulating new and existing solid waste incineration units. Section 111(b) directs the EPA Administrator (the “Administrator”) to publish and periodically revise a list of source categories which significantly cause or contribute to air pollution. This subsection also directs the Administrator to establish federal standards of performance for new sources within these categories. Section 111(d) grants the EPA statutory authority to require states to submit to the agency implementation plans for establishing performance standards applicable to existing sources belonging to those categories established in section 111(b). Section 129 of the CAA specifically addresses solid waste combustion and requires that the EPA regulate new and existing waste incineration units pursuant to section 111 of the Act, including the requirement that a state in which existing designated facilities operate, submit for approval, a state plan for each category of regulated waste incineration units. Section 129(b)(3) requires the EPA to promulgate a federal plan for existing waste incineration units of any designated category located in any state which has not submitted an approvable 111(d)/129 state plan for said category of waste incineration units. Such federal plans remain in effect until the state in question submits a new or revised state plan and subsequently receives approval and promulgation of the plan under 40 CFR part 62.

    State plan submittals under CAA sections 111(d) and 129 must be consistent with the relevant new or revised EG. Section 129(a)(1)(D) of the Act requires the EPA to develop and periodically revise operating standards for new and existing CISWI units. The original NSPS and EG for CISWI units were promulgated on December 1, 2000, at 40 CFR part 60, subparts CCCC and DDDD, respectively. Revisions to the CISWI NSPS and EG were subsequently promulgated by the EPA on March 21, 2011 (76 FR 15704), with final actions on reconsideration of the rule published on February 7, 2013 (78 FR 9112), and June 23, 2016 (81 FR 40956). State plan requirements specific to CISWI units, along with a model rule to ease adoption of the EG, are found in subpart DDDD, while more general state plan requirements are found in 40 CFR part 60, subpart B, and part 62, subpart A. The guidelines found in subpart DDDD require that states impose emission limits on designated facilities for those pollutants regulated under section 129, including: dioxins/furans, carbon monoxide, metals (cadmium, lead and mercury), hydrogen chloride, sulfur dioxide, oxides of nitrogen, opacity and particulate matter. The EG also requires that state plans include essential elements pursuant to section 129 requirements, including monitoring, operator training and facility permitting requirements.

    On June 12, 2014, the Department submitted to the EPA a revised section 111(d)/129 state plan for existing CISWI units in the State of North Dakota. The current state plan received final approval and was promulgated on September 17, 2003 (68 FR 54374), at 40 CFR part 62, subpart JJ. Pursuant to each state's obligations following the revision of the CISWI rule, the State of North Dakota has revised their state rulemaking, and has submitted a revised state plan document as well as a demonstration of legal and enforcement authority to comply with CAA section 111/129 requirements.

    II. Summary of North Dakota's Revised Section 111(d)/129 Plan for Existing CISWI Units

    The EPA has completed a review of the revised North Dakota section 111(d)/129 state plan for existing CISWI units. The EPA has determined that the plan submittal meets the requirements found in 40 CFR part 60, subparts B and DDDD, and those of part 62, subpart A of that title. Accordingly, the EPA is approving the submitted revised plan as proposed. See 83 FR 3656 (January 26, 2018). The EPA's final approval action is limited to the revised North Dakota CISWI state plan document, submitted to the EPA on June 12, 2014, and the subpart DDDD “Model Rule” as it was incorporated by the State in the North Dakota Administrative Code (NDAC) at Chapter 33-15-12-02, subpart DDDD. A detailed summary of the submittal's compliance with the EG and other federal regulatory requirements is available in the technical support document (TSD) associated with this rulemaking action. The TSD is available in the docket for this rulemaking action and may be found at the http://www.regulations.gov website.

    III. Response to Public Comments

    This rule will be finalized as proposed without revisions. The EPA received five anonymous public comments on the proposed approval of the revised North Dakota CISWI state plan. After reviewing the comments, the EPA has determined that the comments are outside the scope of our proposed action or fail to identify any material issue necessitating a response. All public comments received on this rulemaking action are available for review by the public and may be viewed by following the instructions for access to docket materials as outlined in the ADDRESSES section of the preamble.

    IV. Final Action

    The EPA is approving North Dakota's amended section 111(d)/129 state plan for existing CISWI units. The North Dakota state plan requirements being approved today are at least as stringent as the requirements for existing CISWI units found in 40 CFR part 60, subpart DDDD. Therefore, the EPA is amending 40 CFR part 62, subpart JJ to reflect the approved revisions to North Dakota's previously approved, current CISWI state plan. The EPA is limiting the scope of the plan approval to the provisions of 40 CFR parts 60 and 62 for existing CISWI units, as found in the EG at 40 CFR part 60, subpart DDDD. The Administrator retains the authorities as listed under 40 CFR 60.2542 and 60.2030(c).

    V. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a section 111(d)/129 plan submission that complies with the provisions of the Act and applicable federal regulations. Thus, in reviewing section 111(d)/129 plan submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the CAA and are not specifically disapproved. Accordingly, this action merely finalizes approval of 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 expected to be an Executive Order 13771 regulatory action because this action is not significant 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 CAA; and,

    • Is not subject to Executive Order 12898 (59 FR 7629, February 16, 1994) because it does not establish an environmental health or safety standard.

    In addition, this final rule 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 preempt 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 June 25, 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 CAA section 307(b)(2).)

    List of Subjects in 40 CFR Part 62

    Environmental protection, Air pollution control, Commercial and industrial solid waste incineration, Intergovernmental relations, Reporting and recordkeeping requirements.

    Dated: April 13, 2018. Douglas Benevento, Regional Administrator, Region 8.

    For the reasons stated in the preamble, the EPA amends 40 CFR part 62 as set forth below:

    PART 62—APPROVAL AND PROMULGATION OF STATE PLANS FOR DESIGNATED FACILITIES AND POLLUTANTS 1. The authority citation for part 62 continues to read as follows: Authority:

    42 U.S.C. 7401 et seq.

    Subpart JJ—North Dakota 2. Subpart JJ is amended by revising §§ 62.8630, 62.8631 and 62.8632 to read as follows:
    § 62.8630 Identification of plan.

    North Dakota “Amended Section 111(d)/129 Plan for Commercial and Industrial Solid Waste Incineration Units,” and the associated State regulation as it is incorporated in the North Dakota Administrative Code under the State's Standards of Performance for New Stationary Sources, Chapter 33-15-12-02, subpart DDDD. The plan and associated regulation were submitted by the State on June 12, 2014.

    § 62.8631 Identification of sources.

    The amended plan applies to each existing commercial and industrial solid waste incinerator unit and air curtain incinerator in the State of North Dakota that commenced construction on or before June 4, 2010, or commenced modification or reconstruction after June 4, 2010, but no later than August 7, 2013, as such incinerator units are defined in § 60.2875 of 40 CFR part 60. The plan applies only to units not exempt under the conditions of § 60.2555 of that part.

    § 62.8632 Effective date.

    The federally enforceable effective date of the amended section 111(d)/129 plan for commercial and industrial solid waste incineration units is May 25, 2018.

    [FR Doc. 2018-08621 Filed 4-24-18; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 180 [EPA-HQ-OPP-2016-0661; FRL-9974-42] Chlormequat Chloride; Pesticide Tolerances AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Final rule.

    SUMMARY:

    This regulation establishes tolerances for residues of chlormequat chloride in or on multiple commodities which are identified and discussed later in this document. Taminco US LLC, a subsidiary of Eastman Chemical Company requested these tolerances under the Federal Food, Drug, and Cosmetic Act (FFDCA).

    DATES:

    This regulation is effective April 25, 2018. Objections and requests for hearings must be received on or before June 25, 2018, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION).

    ADDRESSES:

    The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2016-0661, is available at http://www.regulations.gov or at the Office of Pesticide Programs Regulatory Public Docket (OPP Docket) in the Environmental Protection Agency Docket Center (EPA/DC), West William Jefferson Clinton Bldg., Rm. 3334, 1301 Constitution Ave. NW, Washington, DC 20460-0001. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the OPP Docket is (703) 305-5805. Please review the visitor instructions and additional information about the docket available at http://www.epa.gov/dockets.

    FOR FURTHER INFORMATION CONTACT:

    Michael Goodis, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001; main telephone number: (703) 305-7090; email address: [email protected]

    SUPPLEMENTARY INFORMATION:

    I. General Information A. Does this action apply to me?

    You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

    • Crop production (NAICS code 111).

    • Animal production (NAICS code 112).

    • Food manufacturing (NAICS code 311).

    • Pesticide manufacturing (NAICS code 32532).

    B. How can I get electronic access to other related information?

    You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Printing Office's e-CFR site at http://www.ecfr.gov/cgi-bin/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

    C. How can I file an objection or hearing request?

    Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2016-0661 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before June 25, 2018. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

    In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2016-0661, by one of the following methods:

    Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments. Do not submit electronically any information you consider to be CBI or other information whose disclosure is restricted by statute.

    Mail: OPP Docket, Environmental Protection Agency Docket Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001.

    Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at http://www.epa.gov/dockets/contacts.html.

    Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at http://www.epa.gov/dockets.

    II. Summary of Petitioned-For Tolerance

    In the Federal Register of February 7, 2017 (82 FR 9555) (FRL-9956-86), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 6E8495) by Taminco US LLC, a subsidiary of Eastman Chemical Company, Two Windsor Plaza, Suite 400, 7540 Windsor Dr., Allentown, PA 18195. The petition requested that 40 CFR part 180 be amended by establishing tolerances for residues of the plant regulator chlormequat chloride in or on barley grain at 3 parts per million (ppm); bovine, sheep, goat-fat at 0.06 ppm; bovine, sheep, goat-kidney at 0.5 ppm; bovine, sheep, goat-liver at 0.15 ppm; bovine, sheep, goat-muscle at 0.2 ppm; cattle-milk at 0.5 ppm; eggs at 0.1 ppm; oat grain at 15 ppm; poultry-fat at 0.03 ppm; poultry-liver at 0.1 ppm; poultry-muscle at 0.04 ppm; swine-fat at 0.02 ppm; swine-kidney at 0.5 ppm; swine-liver at 0.15 ppm; swine-muscle at 0.2 ppm; and wheat grain at 4 ppm. That document referenced a summary of the petition prepared by Taminco US LLC, the registrant, which is available in the docket, http://www.regulations.gov. Comments were received on the notice of filing. EPA's response to these comments is discussed in Unit IV.C.

    Based upon review of the data supporting the petition, EPA has modified the levels at which some of the tolerances are being established as well as the commodities for which tolerances are being established. The reasons for these changes are explained in Unit IV.D.

    III. Aggregate Risk Assessment and Determination of Safety

    Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”

    Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for chlormequat chloride including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with chlormequat chloride follows.

    A. Toxicological Profile

    EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.

    Decreases in body weight and signs of neurotoxicity (e.g. ataxia, salivation, decreased body temperature) were consistently observed in the available oral repeat dosing studies in rats, mice, and dogs. Dogs appear to be the most sensitive species with clinical signs of toxicity (salivation, vomiting, and diarrhea) at 10 mg/kg/day in the chronic dog study. Decreased body weights and/or decreased food consumption were the only effects observed in the 90-day dietary rat study (190 mg/kg/day), and in the chronic toxicity and carcinogenicity studies in rats (125 mg/kg/day) and mice (363 mg/kg/day). The prenatal developmental rat study (gavage), however, produced clinical signs such as salivation and chromorhinorrhea, as well as decreased food consumption at 90 mg/kg/day. One or more of these clinical signs were observed in the dams typically within one hour after the single oral dose on gestational day six (GD6). In the prenatal developmental toxicity study in rabbits, there were no adverse effects noted up to the highest dose tested (12 mg/kg/day). In the rat two-generation reproduction study, reproductive and offspring effects occurred at doses higher than those causing parental toxicity.

    There was no quantitative or qualitative susceptibility observed in the offspring compared to the adult animals in the rat and rabbit developmental studies and the rat two-generation reproduction study.

    No systemic toxicity was observed in the 21-day dermal study in rabbits when tested up to the limit dose. Dermal irritation and histopathological lesions of the treated skin (acanthosis, subacute inflammation and edema) was observed at 345 mg/kg/day in female rabbits only. No immunotoxicity study was available; however, no evidence of immunotoxicity was observed in the chlormequat chloride database.

    Carcinogenicity studies in mice and rats did not demonstrate potential signs of carcinogenicity and chlormequat chloride was non-mutagenic in four genotoxicity studies. Therefore, chlormequat chloride is classified as “Not Likely to be a Carcinogen to Human” based on the lack of evidence of carcinogenicity.

    Specific information on the studies received and the nature of the adverse effects caused by chlormequat chloride as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in the document titled “Chlormequat Chloride. Human-Health Risk Assessment to Support Establishment of a Tolerance Without U.S. Registration on Wheat, Barley, and Oats” on pages 20-22 in docket ID number EPA-HQ-OPP-2016-0661.

    B. Toxicological Points of Departure/Levels of Concern

    Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/assessing-human-health-risk-pesticides.

    A summary of the toxicological endpoints for chlormequat chloride used for human risk assessment is shown in Table 1 of this unit.

    Table 1—Summary of Toxicological Doses and Endpoints for Chlormequat Chloride for Use in Human Health Risk Assessment Exposure/scenario Point of departure and uncertainty/
  • safety factors
  • RfD, PAD, LOC for risk assessment Study and toxicological effects
    Acute dietary (all populations) NOAEL = 100 mg/kg/day UFA = 10x
  • UFH = 10x
  • FQPA SF = 1x
  • Acute RfD = 1 mg/kg/day
  • aPAD = 1 mg/kg/day
  • Prenatal Developmental-Rat and acute neurotoxicity-rat.
  • 1-Day oral LOAEL 180 mg/kg/day, based on overt toxicity signs (tremors, ataxia) within an hour after a single oral dose in dams (GD 6).
  • Chronic dietary (All populations) NOAEL= 5 mg/kg/day UFA = 10x
  • UFH = 10x
  • FQPA SF = 1x
  • Chronic RfD = 0.05 mg/kg/day
  • cPAD = 0.05 mg/kg/day
  • Chronic Toxicity—Dog.
  • LOAEL (mg/kg/day): 10 mg/kg/day, based on salivation (1-week post-dosing, both sexes), vomiting (females), diarrhea (males), and decreased body weight gain (males).
  • Cancer (Oral, dermal, inhalation) Classification: “Not Likely to be Carcinogenic to Humans” based on the lack of carcinogenic potential in the available studies. FQPA SF = Food Quality Protection Act Safety Factor. LOAEL = lowest-observed-adverse-effect-level. NOAEL = no-observed-adverse-effect-level. PAD = population adjusted dose (a = acute, c = chronic). RfD = reference dose. UF = uncertainty factor. UFA = extrapolation from animal to human (interspecies). UFH = potential variation in sensitivity among members of the human population (intraspecies).
    C. Exposure Assessment

    1. Dietary exposure from food and feed uses. In evaluating dietary exposure to chlormequat chloride, EPA considered exposure under the petitioned-for tolerances. EPA assessed dietary exposures from chlormequat chloride in food as follows:

    i. Acute exposure. Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure.

    Such effects were identified for chlormequat chloride. In estimating acute dietary exposure, EPA used food consumption information from the U.S. Department of Agriculture's National Health and Nutrition Examination Survey, What We Eat in America, (NHANES/WWEIA). As to residue levels in food, EPA assumed tolerance-level residues and 100 percent crop treated (PCT).

    ii. Chronic exposure. In conducting the chronic dietary exposure assessment EPA used the food consumption data from the USDA's NHANES/WWEIA. As to residue levels in food, EPA assumed tolerance-level residues and 100 PCT.

    iii. Cancer. Based on the data summarized in Unit III.A., EPA has concluded that chlormequat chloride does not pose a cancer risk to humans. Therefore, a dietary exposure assessment for the purpose of assessing cancer risk is unnecessary.

    iv. Anticipated residue and percent crop treated (PCT) information. EPA did not use anticipated residue or PCT information in the dietary assessment for chlormequat chloride. Tolerance-level residues and 100 PCT were assumed for all food commodities.

    2. Dietary exposure from drinking water. The Agency used screening-level water exposure models in the dietary exposure analysis and risk assessment for chlormequat chloride in drinking water. These simulation models take into account data on the physical, chemical, and fate/transport characteristics of chlormequat chloride. A total toxic residue approach that assumes all uncharacterized extractable residues are of equal toxicity to chlormequat chloride was used to estimate exposure. Further information regarding EPA drinking water models used in pesticide exposure assessment can be found at http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/about-water-exposure-models-used-pesticide.

    Based on the First Index Reservoir Screening Tool (FIRST) and Screening Concentration in Ground Water (SCI-GROW) models, the estimated drinking water concentrations (EDWCs) of chlormequat chloride for acute exposures are estimated to be 2574 parts per billion (ppb) for surface water and 24 ppb for ground water and for chronic exposures are estimated to be 91 ppb for surface water and 24 ppb for ground water.

    Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. For the acute dietary risk assessment, the water concentration value of 2574 ppb was used to assess the contribution to drinking water. For the chronic dietary risk assessment, the water concentration of value 91 ppb was used to assess the contribution to drinking water.

    3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets).

    Chlormequat chloride is not registered for any specific use patterns that would result in residential exposure.

    4. Cumulative effects from substances with a common mechanism of toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

    EPA has not found chlormequat chloride to share a common mechanism of toxicity with any other substances, and chlormequat chloride does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that chlormequat chloride does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's website at http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/cumulative-assessment-risk-pesticides.

    D. Safety Factor for Infants and Children

    1. In general. Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the Food Quality Protection Act Safety Factor (FQPA SF). In applying this provision, EPA either retains the default value of 10X, or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor.

    2. Prenatal and postnatal sensitivity. There was no quantitative or qualitative susceptibility observed in the offspring compared to the adult animals in the rat and rabbit developmental studies and the rat two-generation reproduction study.

    3. Conclusion. EPA has determined that reliable data show the safety of infants and children would be adequately protected if the FQPA SF were reduced to 1x. That decision is based on the following findings:

    i. The toxicity database for chlormequat chloride is complete.

    ii. Although a subchronic neurotoxicity study is not available, evidence of neurotoxicity was observed in the acute neurotoxicity, developmental rat, two-generation reproduction and chronic dog studies. However, there is a low degree of concern for the potential neurotoxic effects of chlormequat chloride because clear no observed adverse effect levels (NOAELs) were identified for the neurotoxic effects, and the endpoints chosen for risk assessment are protective of any potential neurotoxicity.

    iii. There is no evidence that chlormequat chloride results in increased susceptibility in in utero rats or rabbits in the prenatal developmental studies or in young rats in the 2-generation reproduction study.

    iv. There are no residual uncertainties identified in the exposure databases. The dietary food exposure assessments were performed based on 100 PCT and tolerance-level residues. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to chlormequat chloride in drinking water. These assessments will not underestimate the exposure and risks posed by chlormequat chloride.

    E. Aggregate Risks and Determination of Safety

    EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.

    1. Acute risk. Using the exposure assumptions discussed in this unit for acute exposure, the acute dietary exposure from food and water to chlormequat chloride will occupy 49% of the aPAD for all infants less than 1-year-old, the population group receiving the greatest exposure.

    2. Chronic risk. Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that chronic exposure to chlormequat chloride from food and water will utilize 86% of the cPAD for children 1-2 years old, the population group receiving the greatest exposure. There are no residential uses for chlormequat chloride.

    3. Short- and intermediate-term risk. Short- and intermediate-term aggregate exposure takes into account short- and intermediate-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

    Short- and intermediate-term adverse effects were identified; however, chlormequat chloride is not registered for any use patterns that would result in either short- or intermediate-term residential exposure. Short- and intermediate-term risk is assessed based on short- and intermediate-term residential exposure plus chronic dietary exposure. Because there is no short- or intermediate-term residential exposure and chronic dietary exposure has already been assessed under the appropriately protective cPAD (which is at least as protective as the POD used to assess short-term risk), no further assessment of short- or intermediate-term risk is necessary, and EPA relies on the chronic dietary risk assessment for evaluating short- and intermediate-term risk for chlormequat chloride.

    4. Aggregate cancer risk for U.S. population. Based on the lack of evidence of carcinogenicity in two adequate rodent carcinogenicity studies, chlormequat chloride is not expected to pose a cancer risk to humans.

    5. Determination of safety. Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children from aggregate exposure to chlormequat chloride residues.

    IV. Other Considerations A. Analytical Enforcement Methodology

    Plant: An adequate high performance liquid chromatography method with tandem mass spectrometry detection (HPLC/MS/MS), BASF Method No.530/0, is available for the determination of residues of chlormequat chloride in/on plant commodities. The HPLC/MS/MS method determines residues as the chlormequat cation. The limit of quantitation (LOQ) is 0.05 ppm for plant commodities other than straw and 0.1 ppm for straw.

    Animal: An adequate LC/MS/MS method, BASF Method No. 397/0 is available for the determination of residues of chlormequat chloride in livestock commodities for enforcement purposes. The LOQ is 0.01 ppm for meat, kidney, fat, milk, and egg, and 0.05 ppm for liver. A method description, method validation data, and an independent laboratory validation have been submitted to support the proposed enforcement method.

    The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; email address: [email protected]

    B. International Residue Limits

    In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.

    The Codex has established MRLs for chlormequat chloride in or on the commodities referenced in this document at the same levels as the tolerances established for chlormequat chloride in this rule.

    C. Response to Comments

    Two comments were received in response to the notice of filing. One noted that “these are of a highly technical nature and should be written in a format that the layperson can understand.” The other comment stated that “there should not be ANY residue of chlormequat chloride on ANY commodity, ever.”

    The first comment does not materially impact this establishment of these tolerances. Concerning the second comment, although the Agency recognizes that some individuals believe that pesticides should be banned on agricultural crops, the existing legal framework provided by section 408 of the Federal Food, Drug and Cosmetic Act (FFDCA) authorizes EPA to establish tolerances when it determines that the tolerance is safe. Upon consideration of the validity, completeness, and reliability of the available data as well as other factors the FFDCA requires EPA to consider, EPA has determined that these chlormequat chloride tolerances are safe. The commenter has provided no information supporting a contrary conclusion.

    D. Revisions to Petitioned-For Tolerances

    The petitioner requested tolerances for several animal commodities in addition to the barley, oat, and wheat grain tolerances. The Agency has determined that tolerances are only needed on meat and meat byproducts to cover the liver and kidney tissues. In addition, based on residue data and using the Organisation for Economic Cooperation and Development calculator, the Agency is establishing tolerances for the barley, oat, and wheat grain commodities at levels that harmonize with Codex MRLs. In addition, EPA is revising the commodity terminology used by the petitioner to be consistent with the commodity vocabulary EPA uses for establishing tolerances.

    V. Conclusion

    Therefore, tolerances are established for residues of chlormequat chloride, in or on barley, grain at 2.0 ppm; cattle, meat byproduct at 0.50 ppm; cattle, meat at 0.20 ppm; egg at 0.10 ppm; goat, meat byproduct at 0.50 ppm; goat, meat at 0.20 ppm; hog, meat byproduct at 0.50 ppm; hog, meat at 0.20 ppm; milk at 0.50 ppm; oat, grain at 10 ppm; poultry, meat byproduct at 0.10 ppm; poultry, meat at 0.04 ppm; sheep, meat byproduct at 0.50 ppm; sheep, meat at 0.20 ppm; and wheat, grain at 3.0 ppm.

    VI. Statutory and Executive Order Reviews

    This action establishes tolerances under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), nor is it considered a regulatory action under Executive Order 13771, entitled “Reducing Regulations and Controlling Regulatory Costs” (82 FR 9339, February 3, 2017). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq.), nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

    Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.), do not apply.

    This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501 et seq.).

    This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).

    VII. Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 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. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

    List of Subjects in 40 CFR Part 180

    Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.

    Dated: April 6, 2018, Michael L. Goodis, Director, Registration Division, Office of Pesticide Programs.

    Therefore, 40 CFR chapter I is amended as follows:

    PART 180—[AMENDED] 1. The authority citation for part 180 continues to read as follows: Authority:

    21 U.S.C. 321(q), 346a and 371.

    2. Add § 180.698 to subpart C to read as follows:
    §  180.698 Chlormequat chloride; tolerances for residues.

    (a) General. Tolerances are established for the residues of the plant regulator chlormequat chloride, including its metabolites and degradates in or on food commodities in the table below. Compliance with the tolerance levels specified below is to be determined by measuring only chlormequat chloride [(2-chloroethyl) trimethylammonium chloride in or on the following commodities:

    Commodity Parts per
  • million
  • Barley, grain 1 2.0 Cattle, meat byproduct 1 0.50 Cattle, meat 1 0.20 Egg 1 0.10 Goat, meat byproduct 1 0.50 Goat, meat 1 0.20 Hog, meat byproduct 1 0.50 Hog, meat 1 0.20 Milk 1 0.50 Oat, grain 1 10 Poultry, meat byproduct 1 0.10 Poultry, meat 1 0.04 Sheep, meat byproduct 1 0.50 Sheep, meat 1 0.20 Wheat, grain 1 3.0 1 There are no U.S. registrations for this commodity as of April 25, 2018.

    (b) Section 18 emergency exemptions. [Reserved]

    (c) Tolerances with regional registrations. [Reserved]

    (d) Indirect or inadvertent residues. [Reserved]

    [FR Doc. 2018-08695 Filed 4-24-18; 8:45 am] BILLING CODE 6560-50-P
    DEPARTMENT OF HOMELAND SECURITY Federal Emergency Management Agency 44 CFR Part 67 [Docket ID FEMA-2018-0002] Final Flood Elevation Determinations AGENCY:

    Federal Emergency Management Agency, DHS.

    ACTION:

    Final rule.

    SUMMARY:

    Base (1% annual-chance) Flood Elevations (BFEs) and modified BFEs are made final for the communities listed below. The BFEs and modified BFEs are the basis for the floodplain management measures that each community is required either to adopt or to show evidence of being already in effect in order to qualify or remain qualified for participation in the National Flood Insurance Program (NFIP).

    DATES:

    The date of issuance of the Flood Insurance Rate Map (FIRM) showing BFEs and modified BFEs for each community. This date may be obtained by contacting the office where the maps are available for inspection as indicated in the table below.

    ADDRESSES:

    The final BFEs for each community are available for inspection at the office of the Chief Executive Officer of each community. The respective addresses are listed in the table below.

    FOR FURTHER INFORMATION CONTACT:

    Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email) [email protected]; or visit the FEMA Map Information eXchange (FMIX) online at https://www.floodmaps.fema.gov/fhm/fmx_main.html.

    SUPPLEMENTARY INFORMATION:

    The Federal Emergency Management Agency (FEMA) makes the final determinations listed below for the modified BFEs for each community listed. These modified elevations have been published in newspapers of local circulation and ninety (90) days have elapsed since that publication. The Deputy Associate Administrator for Mitigation has resolved any appeals resulting from this notification.

    This final rule is issued in accordance with section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR part 67. FEMA has developed criteria for floodplain management in floodprone areas in accordance with 44 CFR part 60.

    Interested lessees and owners of real property are encouraged to review the proof Flood Insurance Study and FIRM available at the address cited below for each community. The BFEs and modified BFEs are made final in the communities listed below. Elevations at selected locations in each community are shown.

    National Environmental Policy Act. This final rule is categorically excluded from the requirements of 44 CFR part 10, Environmental Consideration. An environmental impact assessment has not been prepared.

    Regulatory Flexibility Act. As flood elevation determinations are not within the scope of the Regulatory Flexibility Act, 5 U.S.C. 601-612, a regulatory flexibility analysis is not required.

    Regulatory Classification. This final rule is not a significant regulatory action under the criteria of section 3(f) of Executive Order 12866 of September 30, 1993, Regulatory Planning and Review, 58 FR 51735.

    Executive Order 13132, Federalism. This final rule involves no policies that have federalism implications under Executive Order 13132.

    Executive Order 12988, Civil Justice Reform. This final rule meets the applicable standards of Executive Order 12988.

    List of Subjects in 44 CFR Part 67

    Administrative practice and procedure, Flood insurance, Reporting and recordkeeping requirements.

    Dated: April 3, 2018. Roy E. Wright, Deputy Associate Administrator for Insurance and Mitigation, Department of Homeland Security, Federal Emergency Management Agency.

    Accordingly, 44 CFR part 67 is amended as follows:

    PART 67—[AMENDED] 1. The authority citation for part 67 continues to read as follows: Authority:

    42 U.S.C. 4001 et seq.; Reorganization Plan No. 3 of 1978, 3 CFR, 1978 Comp., p. 329; E.O. 12127, 44 FR 19367, 3 CFR, 1979 Comp., p. 376.

    § 67.11 [Amended]
    2. The tables published under the authority of § 67.11 are amended as follows: Flooding source(s) Location of referenced elevation * Elevation in
  • feet (NGVD)
  • + Elevation in
  • feet
  • (NAVD)# Depth in feet
  • above ground
  • ^ Elevation in
  • meters (MSL)
  • Modified
  • Communities affected
    Leelanau County, Michigan (All Jurisdictions) Docket Nos.: FEMA-B-1210 Lake Leelanau Entire shoreline within community +590 Township of Bingham, Township of Centerville, Township of Leland, Township of Solon, Township of Suttons Bay. Lake Michigan Entire shoreline within community +584 Township of Bingham, Township of Centerville, Township of Cleveland, Township of Empire, Township of Glen Arbor, Township of Leelanau, Township of Leland, Township of Suttons Bay, Village of Empire. Lake Michigan Entire shoreline within community +584 Village of Suttons Bay. * National Geodetic Vertical Datum. + North American Vertical Datum. # Depth in feet above ground. ^ Mean Sea Level, rounded to the nearest 0.1 meter. ADDRESSES Township of Bingham Maps are available for inspection at 7171 South Center Highway, Traverse City, MI 49684. Township of Centerville Maps are available for inspection at 5419 South French Road, Cedar, MI 49621. Township of Cleveland Maps are available for inspection at 955 West Harbor Highway, Cedar, MI 49621. Township of Empire Maps are available for inspection at 10098 West Front Street, Empire, MI 49630. Township of Glen Arbor Maps are available for inspection at 6394 West Western Avenue, Glen Arbor, MI 49636. Township of Leelanau Maps are available for inspection at 119 East Nagonaba Street, Northport, MI 49670. Township of Leland Maps are available for inspection at 201 East Oak Street, Leland, MI 49654. Township of Solon Maps are available for inspection at 2305 19 Mile Road Northeast, Cedar Springs, MI 49319. Township of Suttons Bay Maps are available for inspection at 321 Saint Joseph Street, Suite C, Suttons Bay, MI 49682. Village of Empire Maps are available for inspection at 11518 South LaCore Street, Empire, MI 49630. Village of Suttons Bay Maps are available for inspection at 420 Front Street, Suttons Bay, MI 49682.
    [FR Doc. 2018-08592 Filed 4-24-18; 8:45 am] BILLING CODE 9110-12-P
    FEDERAL COMMUNICATIONS COMMISSION 47 CFR Parts 0, 1, 43, and 63 [IB Docket Nos. 17-56; 16-131, FCC 17-136] Reporting Requirements for U.S. Providers of International Services; 2016 Biennial Review of Telecommunications Regulations AGENCY:

    Federal Communications Commission.

    ACTION:

    Announcement of effective date.

    SUMMARY:

    In this document, the Federal Communications Commission (Commission) announces that the Office of Management and Budget (OMB) has approved the information collection requirements associated with the Commission's Report and Order, Reporting Requirements for U.S. Providers of International Services; 2016 Biennial Review of Telecommunications Regulations, FCC 17-136. This document is consistent with the Report and Order, which stated that the Commission would publish a document in the Federal Register announcing OMB approval and the effective date of changes of the rules.

    DATES:

    Sections 0.457(d)(1)(xi), 1.767(g)(13) through (16), 43.62, 43.82, 63.10(c)(2), 63.21(d), and 63.22(e), (h), and (i), published at 82 FR 55323, November 21, 2017, are effective on April 25, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Cathy Williams by email at [email protected] and telephone at (202) 418-2918.

    SUPPLEMENTARY INFORMATION:

    This document announces that on March 28, 2018 and April 3, 2018, OMB approved the information collection requirements contained in the Commission's Report and Order, FCC 17-136, published at 82 FR 55323. The OMB Control Numbers are 3060-0686 and 3060-1156. The Commission publishes this document as an announcement of the effective date of those information collection requirements.

    Synopsis: As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), the FCC is notifying the public that it received OMB approval on March 28, 2018 and April 3, 2018, for the information collection requirements contained in 47 CFR 43.62, 43.82 and 63.22(h), as amended, in the Commission's Report and Order, FCC 17-136. (The effective date for the amendments to 47 CFR 0.457(d)(1)(xi), 1.767(g)(13) through (16), 63.10(c)(2), 63.21(d), 63.22(e) and (i), are the same as the amendments to 47 CFR 43.62, 43.82 and 63.22(h), because those amendments are directly related to each other.) Under 5 CFR part 1320, an agency may not conduct or sponsor a collection of information unless it displays a current, valid OMB Control Number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the Paperwork Reduction Act that does not display a current, valid OMB Control Number. The OMB Control Numbers are 3060-0686 and 3060-1156.

    The foregoing notice is required by the Paperwork Reduction Act of 1995, Public Law 104-13, October 1, 1995, and 44 U.S.C. 3507.

    The total annual reporting burdens and costs for the respondents are as follows:

    OMB Control Number: 3060-0686.

    OMB Approval Date: March 28, 2018.

    OMB Expiration Date: March 31, 2021.

    Title: International Section 214 Process and Tariff Requirements—47 CFR 63.10, 63.11, 63.13, 63.18, 63.19, 63.21, 63.22, 63.24, 63.25 and 1.1311.

    Form No.: International Section 214—New Authorization; International Section 214 Authorization—Transfer of Control/Assignment; International Section 214—Special Temporary Authority and International Section 214—Foreign Carrier Affiliation Notification.

    Type of Review: Revision of a currently approved information collection.

    Respondents: Business or other for-profit.

    Number of Respondents: 528 respondents; 792 responses.

    Estimated Time per Response: 1-20 hours.

    Frequency of Response: On occasion reporting requirement, Quarterly reporting requirement, Recordkeeping requirement and third party disclosure requirement.

    Obligation to Respond: Required to obtain or retain benefits. The Commission's statutory authority for this information collection under sections 1, 4(i), 4(j), 10, 11, 201-205, 208, 211, 214, 218, 219, 220, 303(r), 309, 310, 403 and 571 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 154(j), 154(j), 160, 161, 201-205, 208, 211, 214, 218, 219, 220, 303(r), 309, 310, 403 and 571.

    Total Annual Burden: 3,152 hours.

    Annual Cost Burden: $752,400.

    Privacy Act Impact Assessment: No impact(s).

    Nature and Extent of Confidentiality: The Commission has not granted assurances of confidentiality to those parties submitting the information, except for the list or routes required under 47 CFR 63.22(h) which the Commission will treat as not routinely available for public inspection. In all the other cases where a respondent believes information requires confidentiality, the respondent can request confidential treatment under Section 0.459 of the Commission's rules, 47 CFR 0.459.

    Needs and Uses: The information will be used by the Commission staff in carrying out its duties under the Communications Act. The information collections pertaining to part 63 are necessary largely to determine the qualifications of applicants to provide common carrier international telecommunications service under section 214 of the Communications Act, 47 U.S.C. 214, including applicants that are, or are affiliated with, foreign carriers, and to determine whether and under what conditions the authorizations are in the public interest, convenience, and necessity. The information collections are also necessary to maintain effective oversight of U.S. international carriers generally.

    The frequency of filing applications pursuant to Sections 214 will be determined largely by the applicant seeking to provide U.S. international common carrier service under section 214 of the Communications Act, 47 U.S.C. 214. Carriers will also determine largely the frequency of filing under the other rules included in this collection, with the exception of the quarterly reports required of certain carriers under 47 CFR 63.10(c) and the list of routes for which a facilities-based international service provider must make a one-time filing and update as necessary under 47 CFR 63.22(h). If the collections are not conducted or are conducted less frequently, applicants will not obtain the authorizations necessary to provide telecommunications services, and the Commission will be unable to carry out its mandate under the Communications Act of 1934. In addition, without the information collections, the United States would jeopardize its ability to fulfill the U.S. obligations as negotiated under the World Telecommunications Organization (WTO) Basic Telecom Agreement because these collections are imperative to detecting and deterring anticompetitive conduct. They are also necessary to preserve the Executive Branch agencies' and the Commission's ability to review foreign investments for national security, law enforcement, foreign policy, and trade concerns. Regarding 47 CFR 63.11, carriers determine largely when to notify the Commission of planned investments by or in foreign carriers. If the information is not collected by the Commission, we will not be able to prevent carriers that control bottleneck facilities in foreign countries from using those bottlenecks to discriminate against unaffiliated U.S. carriers.

    OMB Control No.: 3060-1156.

    OMB Approval Date: April 3, 2018.

    OMB Expiration Date: April 30, 2021.

    Title: 47 CFR 43.82, Annual International Circuit Capacity Reports.

    Form No.: N/A.

    Type of Review: Revision of a currently approved information collection.

    Respondents: Business or other for profit.

    Number of Respondents: 65 respondents; 185 responses.

    Estimated Time per Response: 1-14 hours.

    Frequency of Response: Annual reporting requirement.

    Obligation to Respond: Required to obtain or retain benefits. The Commission's statutory authority for this information collection under Sections 1, 4(i), 4(j), 11, 201-205, 214, 219-220, 303(r), 309, and 403 of the Communications Act as amended, 47 U.S.C. 151, 154(i), 154(j), 161, 201-205, 214, 219-220, 303(r), 309, and 403, the Cable Landing License Act of 1921, 47 U.S.C. 34-39, and 3 U.S.C. 301.

    Total Annual Burden: 1,085 hours.

    Annual Cost Burden: $2,400.

    Privacy Act Impact Assessment: No impact(s).

    Nature and Extent of Confidentiality: In general, there is no need for confidentiality with this collection of information. The Commission, however, will allow filing entities to seek confidential treatment of their data.

    Needs and Uses: The uses to which the Commission puts the information from the annual circuit capacity report, and the Registration Form are as follows:

    (a) Annual Circuit Capacity Reports [Section 43.82(a)]

    The circuit capacity reports are comprised of two parts. First, licensees of a submarine cable extending between the United States and a foreign point as of December 31 of the reporting period report the available capacity and planned capacity of the cable—the cable operators report. Second, each cable landing licensee and common carrier that holds capacity on the U.S. end of a submarine cable extending between the United States and a foreign point as of December 31 of the reporting period (“capacity holders”) reports its available capacity on the U.S. end of every submarine cable between the United States and any foreign point on which it holds capacity as of that date—the capacity holders report. A holding of capacity is an interest in the U.S. end of an international submarine cable through cable ownership, an indefeasible right of use (IRU), or an inter-carrier lease (ICL).

    The Commission uses the circuit capacity data for such purposes as analyzing international transport markets in merger reviews. More importantly, these data are essential for our national security and public safety responsibilities in regulating communications, an important linchpin of the Commission's statutory authority. Submarine cables are critical infrastructure and the circuit capacity data are important for the Commission's contributions to the national security and defense of the United States. The Commission uses the data, for example, to have a complete understanding of the ownership and use of submarine cable capacity and to assist in the protection, restoration, and resiliency of the infrastructure during national security or public safety emergencies, such as hurricanes. The Department of Homeland Security (DHS) filed comments stating that it also finds this information to be critical to its national and homeland security functions, and states that this information, when combined with other data sources, is used to protect and preserve national security and for its emergency response purposes.

    There are no alternative reliable third party commercial sources for the reported data. Although some sources collect general capacity information from cable owners, neither the FCC nor DHS has found any alternative sources for capacity holder data. Commercial source data may include capacity information, but the data are not verified by company officials and do not include capacity holder data. Although the Commission obtains the ownership and location of individual cables through the licensing process, distribution of a cable's capacity among providers is not required to be reported under our current submarine cable licensing rules and is provided only annually through the Circuit Capacity Reports. Further, the Commission's licensing rules do not require an applicant to include the entities that have acquired capacity on the cable through an IRU or ICL.

    (b) Registration Form [Section 43.82(b)]

    The Registration Form provides basic information about the filing and about the entity itself—such as address, phone number, email address, and the international Section 214 authorizations and cable landing licenses held by the filer. This information will assist in keeping track of who holds international circuit capacity and how to contact them. The Registration Form also includes a certification by the filing entity to certify the accuracy and completeness of its report. The Registration Form provides the means by which the filing entity may request confidential treatment of the data filed in the report.

    (c) Filing Manual [Section 43.82(c)]

    The Filing Manual sets forth instructions on how to file the reports.

    Federal Communications Commission. Marlene Dortch, Secretary.
    [FR Doc. 2018-08570 Filed 4-24-18; 8:45 am] BILLING CODE 6712-01-P
    FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 9 [WC Docket No. 08-171, FCC 08-249] Implementation of the NET 911 Improvement ACT of 2008: Location Information From Owners and Controllers of 911 and E911 Capabilities AGENCY:

    Federal Communications Commission.

    ACTION:

    Final rule; announcement of effective date.

    SUMMARY:

    In this document, the Commission announces that the Office of Management and Budget (OMB) has approved, for a period of three years, an information collection requirement associated with the Implementation of the NET 911 Improvement Act of 2008: Location Information from Owners and Controllers of 911 and E911 Capabilities Report and Order (NET 911 Improvement Act of 2008 Report and Order), FCC 08-249. This document is consistent with the NET 911 Improvement Act of 2008 Report and Order, which stated that the Commission would publish a document in the Federal Register announcing the effective date of the rule.

    DATES:

    47 CFR 9.7(a), published at 74 FR 31860, July 6, 2009, is effective April 25, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Brenda Boykin, Policy and Licensing Division, Public Safety and Homeland Security Bureau at (202) 418-2062 or [email protected]. For additional information concerning the Paperwork Reduction Act information collection requirements, contact Nicole Ongele at (202) 418-2991 or [email protected].

    SUPPLEMENTARY INFORMATION:

    A summary of the NET 911 Improvement Act of 2008 Report and Order was published in the Federal Register on July 6, 2009, 74 FR 31860. The summary stated that with the exception of Section 9.7(a), which required OMB approval, the rules adopted in the Report and Order would become effective on October 5, 2009. With regard to Section 9.7(a), the Commission stated that it will publish a document in the Federal Register announcing the effective date of the rule. The information collection requirement in Section 9.7(a) was approved by OMB under OMB Control No. 3060-1131. Most recently, OMB renewed its approval of the information collection on June 17, 2016. With publication of the instant document in the Federal Register, the rule at 47 CFR 9.7(a) is now effective. If you have any comments on the burden estimates listed below, or how the Commission can improve the collections and reduce any burdens caused thereby, please contact Nicole Ongele, Federal Communications Commission, Room1-A620, 445 12th Street SW, Washington, DC 20554. Please include the OMB Control No. 3060-1131 in your correspondence. The Commission will also accept your comments via email at [email protected]. To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format) send an email to [email protected] or call the Consumer and Governmental Affairs Bureau (202) 418-0530 (voice), (202) 418-0432 (TTY).

    Synopsis

    As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), the FCC is notifying the public that it received final OMB approval on December 3, 2009, for the information collection requirement contained in the Commission's rule at 47 CFR 9.7(a).

    Under 5 CFR part 1320, an agency may not conduct or sponsor a collection of information unless it displays a current, valid OMB Control Number.

    No person shall be subject to any penalty for failing to comply with a collection of information subject to the Paperwork Reduction Act that does not display a current, valid OMB Control Number. The OMB Control Number is 3060-1131.

    The foregoing notice is required by the Paperwork Reduction Act of 1995, Public Law 104-13, October 1, 1995, and 44 U.S.C. 3507.

    The total annual reporting burdens and costs for the respondents are as follows:

    OMB Control Number: 3060-1131.

    OMB Approval Date: December 3, 2009.

    OMB Expiration Date: December 31, 2012.

    Title: Implementation of the NET 911 Improvement ACT of 2008: Location Information from Owners and Controllers of 911 and E911 Capabilities.

    Form Number: N/A.

    Respondents: Business or other for-profit.

    Number of Respondents and Responses: 60 respondents; 60 responses.

    Estimated Time per Response: 0.0833 hours (5 minutes).

    Frequency of Response: On occasion reporting requirements and third party disclosure requirement.

    Obligation to Respond: Required to obtain or retain benefits. Statutory authority for this information collection is contained in the New and Emerging Technologies 911 Improvement Act of 2008 (NET 911 Act), Public Law 110-283, Stat. 2620 (2008) (to be codified at 47 CFR Section 615a-1), and section 222 of the Communications Act of 1934, as amended.

    Total Annual Burden: 5 hours.

    Total Annual Cost: No Cost.

    Nature and Extent of Confidentiality: To implement section 222 of the Communications Act of 1934, as amended, the Commission's rules impose a general duty on carriers to protect the privacy of customer proprietary network information and carrier proprietary information from unauthorized disclosure. See 47 CFR 64.2001 et seq. In the Order, the Commission additionally has clarified that the Commission's rules contemplate that incumbent LECs and other owners or controllers of 911 or E911 infrastructure will acquire information regarding interconnected VoIP providers and their customers for use in the provision of emergency services. The Commission fully expects that these entities will use the information only for the provision of E911 services. No entity may use customer information obtained as a result of the provision of 911 or E911 services for marketing purposes.

    Privacy Act: No impact(s).

    Needs and Uses: On October 21, 2008, the Commission released a Report and Order, FCC 08-249, WC Docket No. 08-171, that implements certain provisions of the NET 911 Act, New and Emerging Technologies 911 Improvement Act of 2008, Public Law 110-283, 122 Stat. 2620 (2008). The Report and Order requires an owner or controller of a capability that can be used for 911 or E911 service to make that capability available to a requesting interconnected Voice over internet Protocol (VoIP) provider under certain circumstances. In particular, an owner or controller of such capability must make it available to a requesting interconnected VoIP provider if that owner or controller either offers that capability to any commercial mobile radio service (CMRS) provider or if that capability is necessary to enable the interconnected VoIP provider to provide 911 or E911 service in compliance with the Commission's rules. 47 CFR 9.7(a). This requirement, in turn, involves the collection and disclosure to emergency services personnel of customers' location information.

    Federal Communications Commission. Marlene Dortch, Secretary, Office of the Secretary.
    [FR Doc. 2018-08568 Filed 4-24-18; 8:45 am] BILLING CODE 6712-01-P
    FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 54 [WC Docket No. 10-90, WT Docket No. 10-208; FCC 18-19] Connect America Fund; Universal Service Reform—Mobility Fund AGENCY:

    Federal Communications Commission.

    ACTION:

    Final rule; petition for reconsideration.

    SUMMARY:

    In this document, the Federal Communications Commission (Commission) resolves the remaining petitions for reconsideration regarding the requirements for Mobility Fund Phase II (MF-II). The Commission revises the language of its rule for collocation, and reduces the value of the letter of credit that a Mobility Fund Phase II support recipient is required to hold after the Universal Service Administration Company (USAC), together with the Commission, has verified that the MF-II support recipient has achieved significant progress toward completing their buildout and service provision requirements. The Commission affirms its Mobility Fund Phase II rules in all other respects.

    DATES:

    Effective May 25, 2018, except for the amendment to § 54.1016 (a)(1)(ii), which contains information collection requirements that have not been approved by OMB. The Commission will publish a document in the Federal Register announcing the effective date.

    FOR FURTHER INFORMATION CONTACT:

    Wireless Telecommunications Bureau, Auction and Spectrum Access Division, Audra Hale-Maddox, at (202) 418-0660. For further information concerning the Paperwork Reduction Act information collection requirements contained in this document, contact Cathy Williams at (202) 418-2918 or via the internet at [email protected]

    SUPPLEMENTARY INFORMATION:

    This is a summary of the Commission's Second Order on Reconsideration (MF-II Second Order on Reconsideration), WC Docket No. 10-90, WT Docket No. 10-208; FCC 18-19, adopted on February 22, 2018 and released on February 27, 2018. The complete text of this document is available for public inspection and copying from 8:00 a.m. to 4:30 p.m. Eastern Time (ET) Monday through Thursday or from 8 a.m. to 11:30 a.m. ET on Fridays in the FCC Reference Information Center, 445 12th Street SW, Room CY-A257, Washington, DC 20554. The complete text is also available on the Commission's website at http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db0804/FCC-17-102A1.pdf. Alternative formats are available to persons with disabilities by sending an email to [email protected] or by calling the Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

    Regulatory Flexibility Analysis

    As required by the Regulatory Flexibility Act of 1980, the Commission has prepared a Supplemental Final Regulatory Flexibility Analysis (FRFA) of the possible significant economic impact on small entities of the policies and rules adopted in this document. The Supplemental FRFA is set forth in an appendix to the MF-II Second Order on Reconsideration, and is summarized below. The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, will send a copy of this MF-II Second Order on Reconsideration, including the Supplemental FRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA).

    Paperwork Reduction Act

    The MF-II Second Order on Reconsideration contains new and modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It will be submitted to the Office of Management and Budget (OMB) for review under section 3507(d) of the PRA. OMB, the general public, and other Federal agencies will be invited to comment on the new and modified information collection requirements contained in this proceeding.

    Congressional Review Act

    The Commission will send a copy of this MF-II Second Order on Reconsideration in a report to Congress and the Government Accountability Office pursuant to the Congressional Review Act (CRA), see 5 U.S.C. 801(a)(1)(A).

    I. Introduction

    1. In the MF-II Second Order on Reconsideration, the Commission addresses the remaining issues raised in petitions for reconsideration filed in response to the MF-II Report & Order, 82 FR 15422, March 28, 2017. Resolving these petitions is a significant step toward holding an auction in which service providers will compete for Mobility Fund Phase II (MF-II) support to offer 4G Long Term Evolution (LTE) service in primarily rural areas that lack qualified unsubsidized 4G LTE service.

    II. Background

    2. In February 2017, the Commission adopted rules to move forward expeditiously to an MF-II auction. The Commission established a budget of $4.53 billion to be disbursed monthly over a term of ten years to provide ongoing support for the provision of service in areas that lack adequate mobile voice and broadband coverage absent subsidies. The Commission further decided that geographic areas lacking unsubsidized, qualified 4G LTE service would be deemed “eligible areas” for MF-II support, and that it would use a competitive bidding process (specifically, a reverse auction) to distribute funding to providers to serve those areas. The Commission also decided that, prior to an MF-II auction, it would compile a list of areas that were presumptively eligible for MF-II support and it would provide a limited timeframe for challenges to areas that were found to be ineligible for support during the pre-auction process.

    3. Seven petitions were filed seeking reconsideration of the MF-II Report & Order, and petitions for reconsideration of issues related to the MF-II challenge process were addressed in the MF-II Challenge Process Order on Reconsideration and Second Report and Order (MF-II Challenge Process Order or MF-II Order on Reconsideration), adopted on August 3, 2017, released on August 4, 2017, 82 FR 42473, September 8, 2017. The Commission deferred addressing the petitions, or portions thereof, requesting reconsideration of aspects of the MF-II Report & Order outside of the challenge process.

    III. Second Order on Reconsideration

    4. We now resolve the remaining issues raised by petitioners. We grant the requests of petitioners, insofar as we amend the rules to apply the collocation requirement for MF-II recipients to “all newly constructed” towers. We affirm our decision to require that MF-II recipients obtain a letter of credit (LOC), but grant the petitions insofar as we modify the LOC requirements to align our MF-II rules with recent changes made in the Connect America Fund Phase II (CAF-II) proceeding. These modifications should provide MF-II support recipients with some additional relief from the costs of maintaining an LOC and alleviate some of the concerns raised by petitioners and commenters. Additionally, for the reasons explained below, we deny the petitions seeking reconsideration of the Commission's decisions to: (i) Establish an MF-II budget of $4.53 billion over a term of ten years; (ii) disburse annual support on a monthly basis; (iii) adopt performance metrics for supported networks requiring a median data speed of 10/1 megabits per second (Mbps) and data latency of 100 milliseconds (ms) round trip; (iv) not adopt bidding credits for the auction; and (v) not prevent MF-II support recipients from entering into equipment exclusivity arrangements. We also decline to clarify or limit the role of the Universal Service Administrative Company (USAC) in testing winning bidders' compliance with MF-II performance metrics, public interest obligations, or other program requirements.

    A. Tower Collocation

    5. First, we clarify that the MF-II collocation rule, 47 CFR 54.1015(f), should require a recipient of MF-II funds to allow for reasonable collocation by other providers of services that meet the technological requirements of MF-II on all towers that the MF-II recipient owns or manages that it “newly constructed” to satisfy MF-II performance obligations in the areas for which it receives support. The Commission stated its intent to adopt the same collocation and voice and data roaming obligations for MF-II winning bidders as it had adopted for MF-I. However, the rule in MF-I required reasonable collocation by other providers of services that met the technological requirements of MF-I on “all newly constructed towers that the recipient owns or manages in the area for which it receives support,” while the language of the rule adopted in the MF-II Report & Order applies to “all towers.” We make this clarification in order to promote our goal of ensuring that publicly funded investments can be leveraged by other service providers. Accordingly, we amend the language of section 54.1015(f) to provide that the MF-II collocation requirement applies to “all newly constructed” towers that the MF-II recipient owns or manages in the areas for which it receives support.

    B. Letters of Credit

    6. We affirm the Commission's decision to require an MF-II recipient to obtain an LOC before it begins receiving support disbursements, but we modify the Commission's rules to provide some additional relief from the burden associated with maintaining an LOC. Specifically, we will permit an MF-II recipient to reduce the value of an LOC to 60 percent of the total support already disbursed plus the amount of support that will be disbursed in the coming year once it has been verified that the MF-II recipient has met the 80 percent service milestone for the area(s) covered by the LOC. This modification should alleviate some of the concerns raised by petitioners and commenters and aligns our MF-II requirements with recent changes made to the CAF-II requirements. We also clarify, consistent with the Commission's stated intent in the MF-II Report & Order, that an MF-II recipient may further reduce its costs by canceling the LOC as soon as USAC, in coordination with the Commission, verifies that the recipient has met the final performance milestone (i.e., we do not require that the LOC be maintained after its purpose is no longer served). We deny the petitions for reconsideration to the extent they seek other changes to our LOC requirements.

    7. In the MF-II Report & Order, the Commission adopted an LOC requirement for all winning bidders. Specifically, before a winning bidder can be authorized to receive MF-II support, it must obtain an irrevocable stand-by LOC(s) from an eligible bank that covers the first year of support for all of the winning bids in the state. Before a recipient can receive its MF-II support for the coming year, the recipient must modify, renew, or obtain a new LOC to ensure that it is valued at a minimum at the total amount of support that has already been disbursed plus the amount of support that is going to be provided in the next year. Once the MF-II recipient has met its 60 percent service milestone, its LOC may be valued at 90 percent of the total support amount already disbursed plus the amount that will be disbursed in the coming year. Once the MF-II recipient has met its 80 percent service milestone, it may reduce the value of the LOC to 80 percent of the total support amount already disbursed plus the amount that will be disbursed in the coming year. The LOC must remain open until USAC, in coordination with the Commission, has verified that the MF-II recipient has met its final benchmark: Deployment to a minimum of 85 percent of the required coverage area by state and at least 75 percent by each census block group or census tract in a state. If an MF-II recipient fails to meet a required service milestone after it begins receiving support, then fails to cure within the requisite time period, and is unable to repay the support that USAC seeks to recover, either the Wireline Competition Bureau or the Wireless Telecommunications Bureau will issue a letter evidencing the failure and declaring a default. USAC will then draw on the LOC(s) to recover 100% of the support that has been disbursed to the ETC for that state. The MF-II Report & Order provides that if service ceases after the final deployment milestone has been reached and the LOC has been terminated, the Commission will cease payment of ongoing support until service resumes. At the time these MF-II rules were adopted, they were consistent with the requirements for CAF-II recipients.

    8. We are convinced by claims of petitioners and commenters that the Commission's existing MF-II LOC requirements may warrant additional relief on reconsideration. We continue to conclude that MF-II bidders will take into account the costs associated with program requirements, including an LOC, as they formulate their bids, and that many bidders can do so without the consequences alleged by some petitioners and commenters. We nonetheless recognize that the costs associated with maintaining an LOC may pose a greater financial burden on those bidders that lack the resources of larger, more established companies. Such bidders may have to factor relatively higher LOC-related costs into their bids. One purpose of using competitive bidding to select support recipients is that it promotes providing support to those parties that can accomplish the MF-II program goals in the most cost-effective manner. However, we recognize that the exact cost of any requirement, including obtaining and maintaining an LOC, will affect each prospective bidder in the MF-II auction differently. A bidder's LOC-related costs will likely vary based on the amount of support that it is authorized to receive, and the impact of those costs on the bidder will also vary based on its size and creditworthiness. Thus, we cannot reasonably predict the costs of our LOC requirements for each potential winning bidder and weigh them relative to the benefit to the public of protecting the funds from default. The fees associated with maintaining an LOC can range by several percentage points and, when applied to the sizable amounts of support that may be awarded to bidders here, the costs may become substantial over time, particularly for winning bidders that are small businesses and new entrants.

    9. Accordingly, consistent with the rule modifications we recently adopted in the Connect America Fund Phase II Auction Order on Reconsideration, WC Docket No. 10-90 et al., FCC 18-5, we modify our LOC requirements to permit an MF-II recipient to reduce the value of an LOC to 60 percent of the total support already disbursed plus the amount of support that will be disbursed in the coming year once it has been verified that the MF-II recipient has met the 80 percent service milestone for the area(s) covered by the LOC. In the MF-II Report & Order, the Commission indicated that it would require MF-II recipients to demonstrate compliance with our coverage requirements by submitting data consistent with the evidence we determined to be necessary in the MF-II challenge process. Once USAC is able to verify that a recipient's 80 percent service milestone has been met, the recipient will be able to reduce the value of its LOC.

    10. By increasing the amount by which an LOC may be reduced after verification that an MF-II recipient has met a significant portion of its performance obligations, we can provide MF-II recipients with a measure of relief from the costs of maintaining an LOC without posing undue risks to the Universal Service Fund. As the Commission stated in the MF-II Report & Order, we expect that the risk of default will decrease as an MF-II recipient meets its deployment milestones. We therefore conclude that the benefits of providing additional relief from some of the costs associated with maintaining an LOC outweigh the risk that we will not be able to recover an additional portion of the support if the recipient is unable to repay the Commission in the event of a default. Moreover, as we discuss below, an MF-II recipient that is affected by high LOC-related costs may also choose to build out its network more quickly so that its LOC can be terminated sooner. We therefore find it reasonable to grant the petitions for reconsideration, in part, to reduce the burden associated with maintaining an LOC until the final performance benchmark has been met and verified by USAC.

    11. We are not, however, persuaded by arguments that we should eliminate the requirement for an MF-II recipient to obtain an LOC because they are unnecessary to protect the public interest. Our obligation to safeguard the disbursement of universal service support justifies requiring an LOC and outweighs the limited burden incurred by winning bidders. For this same reason, we are not convinced by the contentions that an MF-II LOC requirement is unnecessary for rural telephone companies based on their history of providing service and using universal service support without default. Our responsibility to protect universal service funds does not diminish based on a support recipient's past performance, the nature of its business, or its size. We are equally unpersuaded by a petitioner's suggestion that because the Commission has not yet had to draw on any LOC in MF-I, it is unnecessary for us to require one for MF-II. To the contrary, we find that premise supports our conclusion that an LOC requirement deters defaults and fulfills its intended purpose of protecting the public funds.

    12. Similarly, we disagree with the assertion that the Commission should eliminate the LOC requirement and instead ensure the security of program funds by imposing a monetary forfeiture on the defaulting MF-II recipient or using the threat of revocation or non-renewal of its licenses as leverage to demand repayment of the funds. The exercise of our forfeiture, revocation, and licensing authority requires additional procedures and standards that are not well suited to the prompt action required in enforcing our milestones because, among other reasons, such authority does not effectively address the regulatory purpose behind our adoption of the LOC—making the Universal Service Fund whole if a support recipient failed to fulfill its MF-II performance requirements. Without an LOC, the Commission has no security to protect itself against the risks of default. Accordingly, we affirm the Commission's prior conclusion that the LOC requirement is necessary to ensure the recovery of a significant amount of MF-II support should such a need arise, and we find that, on balance, our commitment to fiscal responsibility supports the limited burden faced by support recipients.

    13. We also decline to grant requests in the petitions for reconsideration to take further steps to modify our LOC requirements. In the MF-II Report & Order, the Commission already took a number of steps to help lessen LOC costs, including expanding the number and types of banks eligible to issue LOCs so that winning bidders can obtain LOCs from banks with which they have existing relationships. Although some entities may still find that participating in the MF-II auction is cost-prohibitive or that they are less likely to place winning bids, we are not convinced that we should jeopardize our ability to recover a significant amount of support if such entities were to participate and later become unable to meet the MF-II performance milestone obligations and to repay the Commission for their compliance gap. While we have not implemented any of the specific proposals of these petitioners, we conclude that, on balance, the relief provided above should adequately address the nature of the concerns they raise. The approaches suggested by petitioners would add greater complexity and testing expenses for support recipients and would impose increased verification burdens on USAC without the corresponding benefit of significantly speeding the completion of MF-II performance requirements. Finally, we decline to adopt the request by a mobile provider to accelerate the service milestones, eliminate the LOC requirement, and pay a recipient only after compliance with a milestone has been verified. Such an approach, like the other suggestions we reject above, would require us to disburse universal service funds without being able to recoup support from a recipient if the recipient subsequently defaulted on its remaining performance requirements.

    14. In reviewing arguments regarding the costs of maintaining an LOC, we also emphasize that the Commission's LOC requirements already include an incentive for a recipient to meet its final performance milestone as soon as possible, because once it has been verified that a support recipient has met its final performance milestone, the recipient can further reduce costs by no longer maintaining that LOC. In this regard, we note that the Commission provided in the MF-II Report & Order that the LOC must remain in place until it has been verified that an MF-II participant has met its minimum coverage and service requirements at the end of the six-year milestone. We interpret this language to allow the MF-II recipient to further reduce its costs by no longer maintaining the LOC as soon as USAC, in coordination with the Commission, verifies that the recipient has met the final performance milestone (i.e., we do not require that the LOC be maintained after its purpose is no longer served). We anticipate that this clarification, together with the rule modification we adopt above, should provide MF-II recipients with additional relief from the burden of maintaining an LOC.

    C. Mobility Fund Phase II Budget

    15. We affirm the MF-II total budget amount of $4.53 billion that the Commission adopted in the MF-II Report & Order, and we deny the petition seeking to increase it. Petitioners addressing the budget contend that this amount is insufficient to achieve ubiquitous availability of mobile services and reasonable comparability of service between urban and rural areas. They also argue that the budget was not supported by actual carrier cost data related to coverage needs. The Commission established the amount of the MF-II budget by starting with the $483 million of current annual legacy high-cost support received by wireless providers, excluding Alaska. It multiplied that amount over the ten-year term of MF-II and then subtracted $300 million, representing the estimated amount needed for the phase-down of competitive eligible telecommunications carrier (CETC) support in areas already fully covered with unsubsidized 4G LTE, for a total budget of $4.53 billion over ten years. The Commission reasoned that basing its budget upon this amount best balanced its goal of preserving and advancing mobile broadband service with its obligation to be fiscally responsible with limited universal service funds.

    16. We are not persuaded that we should reconsider that decision and base the MF-II budget on carriers' projected costs for deployment as some parties advocate. Phase II of the Mobility Fund is a considerable departure from the prior method of distributing CETC funding, and we anticipate that a $4.53 billion budget, distributed in a more efficient and targeted manner, will lead to significant expansion and improvement in the provision of mobile voice and broadband services to areas that would otherwise be underserved or unserved without support. After the Commission has the opportunity to evaluate the impact of the MF-II auction, it can determine whether additional funding (and if so, how much) is needed. Furthermore, while we believe that the total budget of $4.53 billion will be sufficient to address a more targeted set of eligible areas, we reiterate thatMF-II is only one component of our broader universal service reform efforts, and we need not wait until the end of the MF-II support term to determine if additional funding is necessary.

    17. Moreover, the proposal to base the MF-II budget on carriers' projected costs for providing service to all census blocks throughout the U.S. unserved by 4G LTE fails to address the Commission's long-standing commitment to fiscal responsibility and would be inconsistent with extensive 4G LTE deployment through private investment in recent years. As a responsible steward of the Universal Service Fund, the Commission adopted a budget that reflected its priorities in allocating finite funds to areas of greatest need to maintain and expand critical mobile voice and broadband services. To increase the size of theMF-II budget significantly above the amount of legacy support currently provided to mobile CETCs would improperly ignore the burden on those paying for the fund, thereby abandoning one of the main concerns the Commission sought to address through universal service reform. Indeed, if the Commission were to adopt this proposal, consumers and businesses would shoulder the burden of potentially increasing the MF-II budget by tens of billions of dollars. This increase would not be consistent with the Commission's stated intention to limit universal service expenditures in light of extensive 4G LTE deployment in recent years.

    18. Recognizing that the Universal Service Fund is limited, the Commission has consistently determined the amount of the MF-II budget by starting with the amount of existing CETC support, subtracting the support going to areas where support is not needed, and redirecting that amount to the areas in need. By weighing the need to distribute support to areas that would otherwise be unserved against the burden that consumers and businesses must bear by contributing to the Universal Service Fund, the Commission has demonstrated a commitment to fiscal responsibility while acknowledging that its efforts are needed to supplement private investment. Taking this type of balanced approach has been previously upheld by the Tenth Circuit Court of Appeals, which noted that, in challenging the sufficiency of the MF-II budget, the petitioners in In re FCC 11-161, 753 F.3d 1015, 1098-100 (10th Cir. 2014), had failed to discredit (i) the Commission's reliance on its finding that then-current CETC funding was being misallocated or (ii) the Commission's predictive judgment that redirecting those funds would be sufficient to sustain and expand mobile broadband service. In the MF-II Report & Order, the Commission similarly relied on staff analysis of data that continued to reveal that current mobile CETC funds remain misallocated, and it again exercised its predictive judgment in determining that an MF-II budget of $4.53 billion, when distributed cost effectively, should make meaningful progress in eliminating lingering coverage gaps. The petitioners have failed to convince us that this decision to apply a balanced approach in setting the MF-II budget is in error. We continue to maintain that using the current level of mobile CETC support, minus the phase-down amount needed for areas where support is not needed, and redirecting funding to areas unserved by qualified 4G LTE will provide a significant improvement in mobile coverage while not increasing the burden on those contributing to universal service funding.

    19. For similar reasons, we further conclude that the claim that the amount of the MF-II budget is not supported by data related to coverage needs is equally flawed. While it is true that, for the reasons explained above, the Commission did not base the amount of its MF-II budget upon carrier cost deployment data, it did use data regarding the provision of service to eligible areas when establishing the budget. Specifically, the Commission relied on a 2016 analysis by the Wireless Telecommunications Bureau (Wireless Bureau) of mobile broadband providers, which revealed that, conservatively, three quarters of support currently distributed to mobile providers is being directed to areas where it is not needed. Moreover, the Wireless Bureau's analysis showed that, as of 2016, 1.4 million people in the U.S. have no LTE coverage and another 1.7 million live in areas where LTE coverage is provided only on a subsidized basis, so that 3.1 million people (or approximately 1 percent of the U.S. population) live in areas with no LTE or only subsidized LTE. Thus, staff analysis of data regarding the provision of service revealed that, despite extensive private investment spurring 4G LTE deployment generally, certain areas remain unserved without government subsidies, which the Commission took into consideration when it chose to reallocate current CETC support and derive greater coverage from the limited amount of funding.

    20. In addition, to ensure that the MF-II support is directed specifically to areas that lack unsubsidized qualifying 4G LTE coverage, we have adopted a challenge process that is administratively efficient and fiscally responsible, and will enable us to resolve eligible area disputes quickly and expeditiously, so that limited funds are focused on the areas that need it the most. As part of the challenge process, we have also undertaken a new, one-time collection of standardized, up-to-date 4G LTE coverage data from mobile wireless providers. These actions, taken together with the use of competitive bidding to distribute support, will focus MF-II funds on areas that lack unsubsidized qualified 4G LTE service, thereby providing additional funds for those targeted areas that warrant such funding. These actions also will ensure the budget is used to minimize service disparities between rural and urban areas, while continuing our obligation to be a fiscally responsible steward of universal service funding. Therefore, we decline to revise the MF-II budget at this time.

    D. Monthly Disbursement Schedule

    21. We decline to alter the Commission's monthly disbursement schedule for MF-II. The Commission, in deciding to provide support in monthly disbursements as it had adopted for the CAF program, including CAF-II, reasoned that such an approach would provide MF-II recipients with reliable and predictable support payments that conform to a variety of business cycles. We are not persuaded that, instead of monthly disbursements of MF-II support to winning bidders, the program should provide larger installment payments early in the construction process that are more closely matched to some providers' expected outlays. Although the Commission recognized that some MF-II support recipients might incur higher up-front project costs, it also observed that the timing of project expenses varies. Thus, it is administratively burdensome, if not impossible, for the Commission, USAC, and the winning bidders to try to match payments to expenses in a manner that would synchronize precisely with the budgetary needs of all bidders. Further, the Commission observed that, in Mobility Fund Phase I (MF-I), even with support payments based on deployment milestones, disbursements were not tied to the timing of expenditures, as petitioners request. A shift to a front-loaded disbursement mechanism or a cost reimbursement process, as requested by petitioners, would place undue strains on the universal service budget, and would thereby undermine the ability of the Commission to ensure continued program compliance over the entire10-year term. We note that the Commission also purposefully aligned its disbursement schedule with the schedule adopted for CAF-II, which established regular and predictable monthly payments that would not exceed the budget in any one year of the term. We believe that this approach best balances the burdens on the Commission and USAC with the budgetary needs of recipients.

    E. Minimum Baseline Performance Requirements for Data Speeds and Latency

    22. We also decline to reconsider the minimum baseline performance requirements for recipients of MF-II funding. In the MF-II Report & Order, the Commission decided that a recipient of MF-II support must provide a minimum level of service with a median data speed of 10 Mbps download speed or greater and 1 Mbps upload speed or greater, with at least 90 percent of the required download speed measurements being not less than a certain threshold speed to be specified as part of the pre-auction process. In addition, an MF-II support recipient must provide reports of speed and latency demonstrating that at least 90 percent of the required measurements have a data latency of 100 milliseconds (ms) or less round trip. The Commission determined that recipients of MF-II support must provide service that meets the minimum baseline performance requirements of 4G LTE or better, and concluded that these requirements will ensure that finite universal service funds are used efficiently to provide rural consumers access to robust mobile broadband service at speeds reasonably comparable to the 4G LTE service being offered in urban areas.

    23. We are not persuaded that the minimum baseline performance requirement for median data speeds should be reduced to 5/1 Mbps, as one provider urges. The Commission seeks to ensure that the performance of broadband service in rural and high-cost areas is reasonably comparable to that in urban areas, and the Commission's own analysis at the time the MF-II Report & Order was adopted indicated that customers of nationwide carriers were receiving data at median speeds of around 10/1 Mbps or faster. Furthermore, in our more recent MF-II Order on Reconsideration, we explained that, in contrast to the 5 Mbps eligibility benchmark in the challenge process, which serves to target support where it is currently needed most, the 10 Mbps minimum baseline performance requirement makes sure that service in eligible areas is reasonably comparable to future urban offerings.” This forward-looking approach is consistent with past Commission decisions in the universal service context and recognizes that consumer demand for faster mobile wireless services is growing. Moreover, MF-II funding provides on-going, long-term support over a 10-year period, and reducing the performance requirement to a 5 Mbps download speed increases the risk of directing funds to areas that are already receiving download speeds just below the 5 Mbps eligibility threshold because such areas could require very little investment to meet the lowered performance requirement and would, accordingly, be more competitive at auction. Awarding funds to such areas increases the risk of only marginally benefiting consumers in those areas by not significantly improving the status quo download speeds for a decade. Further, a lowered performance requirement would reduce the final performance milestone for median data speeds in all areas, thereby increasing the likelihood that those areas will not receive service that is reasonably comparable to urban areas by the end of the support term, despite the distribution of potentially significant MF-II support. We therefore conclude that reducing the performance benchmark to a median data speed of only 5/1 Mbps would risk relegating rural areas with the greatest need to a lower standard of service that is not comparable to urban 4G LTE service.

    24. Similarly, with respect to latency, the Commission has noted that latency is important for a variety of real-time, interactive applications, including Voice over internet Protocol (VoIP), video calling, and distance learning, which “may be effectively unusable over high latency connections, regardless of the download/upload speeds being offered.” Contrary to petitioner's assertion that the Commission failed to account for the inherent differences between wireless and wireline technologies in adopting the 100 ms latency standard, the Commission established the performance metrics, including latency, to ensure reasonably comparable service. According to petitioner's own data analysis, the majority (approximately 75 percent) of existing networks already meet the 100 ms standard with 90 percent probability in Metropolitan Statistical Areas (MSAs). Further, technological improvements, including newly available 600 MHz spectrum, will likely enable more carriers to exceed this performance requirement in the near future. Thus, reducing the performance benchmark for data latency to 220 ms would risk relegating rural areas to a lower standard of service that is not comparable to urban 4G LTE service, which includes support for advanced mobile applications. Accordingly, in light of the statutory mandate with respect to reasonably comparable service, we affirm that the minimum baseline performance requirement for data latency is that at least 90 percent of all required measurements must be at or below 100 ms round trip.

    F. Bidding Credits

    25. We decline to reconsider the Commission's decision not to adopt bidding preferences for the MF-II auction. In the MF-II Report & Order, the Commission rejected the notion that small and rural carriers needed targeted assistance to secure MF-II support based, in part, on its observation that numerous smaller carriers had placed winning bids in the Mobility Fund Phase I (MF-I) auction without the aid of bidding credits. Contrary to petitioners' assertions, the Commission specifically noted that commenters had advocated for bidding preferences for other entities, including rural carriers, for the MF-II auction. The Commission also reasoned that small business bidding credits would potentially decrease the reach of MF-II funding, and thereby decrease additional coverage expansion or preservation. This rationale is equally applicable to any type of bidding preference, including those for rural service providers.

    26. We reject petitioners' claims that the Commission has a statutory obligation under section 309(j) of the Act to promote small business and rural carrier participation in the universal service context. The Commission's authority to award universal service support through competitive bidding is not derived from section 309(j), which authorizes the use of competitive bidding for granting spectrum licenses or construction permits, not for reverse auctions to award universal service funding. Moreover, even in spectrum auctions, where section 309(j) does apply, the Commission does not always provide bidding credits, and courts have held that the statutorily prescribed objectives in section 309(j)(3) are not mandatory. Additionally, the Commission's primary goal in using competitive bidding in MF-II is to maximize the impact of the funding to increase and preserve mobile coverage. Since bidding preferences for any entities (be they small businesses or rural service providers) would hamper that goal by effectively decreasing the number of eligible areas covered by the finite level of funding, the Commission chose not to award bidding preferences in lieu of greater coverage. Accordingly, we are not persuaded that section 309(j) obligates us to overlook this concern and adopt bidding preferences for the MF-II auction.

    27. Likewise, we reject petitioner's assertion that the Commission should not have factored into its decision for MF-II the fact that numerous small and rural carriers participated successfully in the MF-I auction without bidding credits. We find it reasonable, and certainly useful, to consider past auction participation in formulating our policy concerning bidding preferences in future auctions. Moreover, even if we were to accept petitioner's claim that MF-II is fundamentally different from MF-I because it involves ongoing support provided for more significant projects, the petitioner has failed to demonstrate that small and rural carriers would be less inclined, or able, to compete effectively in the auction absent bidding preferences. In the absence of such a demonstration, and in light of our concerns about the most efficient use of limited universal service funds, we affirm the decision in theMF-II Report & Order not to provide bidding credits in the MF-II auction.

    G. Equipment Exclusivity Arrangements

    28. We dismiss a provider's request to impose a new certification requirement on all MF-II support recipients that they do not and will not participate in equipment exclusivity arrangements. The petition relies on comments that the provider filed in this proceeding in 2014; however, those 2014 comments make no reference to exclusivity arrangements. Thus, to the extent that the provider raises this argument for the first time in its Petition, we dismiss it as untimely. Further, in its 2012 Fourth Order on Reconsideration in the MF-I proceeding, adopted and released July 18, 2012, 77 FR 48453, August 14, 2012, the Commission previously considered and rejected this provider's request for adoption of a bar on equipment exclusivity arrangements. In the MF-II Report & Order, the Commission again rejected proposals to restrict participation in an MF-II auction through additional eligibility requirements and confirmed its intention to encourage participation by the widest range of applicants. Petitioner has identified no substantive basis upon which to reconsider the Commission's prior decisions not to restrict participation in the Mobility Fund by adopting additional requirements, including a bar on equipment exclusivity arrangements.

    H. USAC's Role in Testing Winning Bidder Buildout Performance

    29. We decline to limit USAC's role in testing winning bidders' compliance with MF-II performance metrics, public interest obligations, or other program requirements as requested by a provider. We find no merit in contentions that we should limit USAC's responsibility for conducting compliance reviews in order to ensure a cost-efficient process.

    30. In the MF-II Report & Order, the Commission determined that it would require MF-II support recipients to submit data sufficient to demonstrate compliance with the MF-II coverage requirements. Specifically, section 54.1015 of our rules requires an MF-II support recipient to provide the data necessary to support its certifications, and that the submitted data must be in compliance with the standards set forth in the applicable public notice. In our role as a responsible steward of public funds, we are obligated to ensure that the funds disbursed through universal service programs are used for the purposes for which they were intended and that the recipients of support have met the terms and conditions under which the funds were awarded. Accordingly, in the USF/ICC Transformation Order or FNPRM, adopted October 27, 2011, released November 18, 2011, 76 FR 78384, December 16, 2011, the Commission directed USAC to test the accuracy of certifications made pursuant to the new reporting requirements, noting that any oversight program to assess compliance should be designed to ensure that support recipients are reporting accurately to the Commission. The Commission specifically stated that such oversight should be designed to test some of the underlying data that form the basis for a recipient's certification of compliance with various requirements.

    31. In the case of MF-I, USAC's compliance reviews did not entail duplication of a recipient's drive tests as the petitioner contends, but rather verification of data transmission rates and transmission latency for a statistically valid random sample of a small portion of the total road miles for which a recipient claimed it was entitled to a support payment. Although the petitioner argues that USAC's role was redundant because USAC's drive tests ultimately validated the data the provider had already submitted forMF-I, we are not persuaded by the petitioner's claim that the benefits of USAC compliance review testing in the context of MF-I were outweighed by the time and expense spent conducting such testing. We decline to draw a conclusion about the overall value of USAC's compliance testing based only on the experience of one MF-I participant. Further, we find it lacking in logic to argue that it serves no purpose to attempt to verify, even by sampling, recipients' compliance with program requirements, merely because some recipients have been found, through such testing, to be in compliance. Compliance reviews, like audits, are an essential tool for the Commission and USAC to ensure program integrity and to detect and deter waste, fraud, and abuse. Therefore, we will not limit USAC's role in verifying the data that recipients submit to demonstrate compliance with our MF-II coverage requirements.

    IV. Procedural Matters A. Paperwork Reduction Act Analysis

    32. This Second Order on Reconsideration contains new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It will be submitted to the Office of Management and Budget (OMB) for review under section 3507(d) of the PRA. OMB, the general public, and other Federal agencies will be invited to comment on the new or modified information collection requirements contained in this proceeding. In addition, the Commission notes that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, we previously sought specific comment on how the Commission might further reduce the information collection burden for small business concerns with fewer than 25 employees.

    33. In this present document, we have assessed the effects of the modifications that the Commission is making to the letter of credit rule and the collocation rule adopted by the Commission in the MF-II Report & Order regarding the information collection burdens on small business concerns. The Commission describes impacts that might affect small businesses, which include most businesses with fewer than 25 employees, in the Supplemental Final Regulatory Flexibility Analysis (FRFA) in Appendix B of the Second Order on Reconsideration.

    B. Congressional Review Act

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

    C. Supplemental Final Regulatory Flexibility Analysis

    35. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission prepared Initial Regulatory Flexibility Analyses (IRFAs) in connection with the USF/ICC Transformation FNPRM, the CAF Further Notice, adopted April 23, 2014, released June 10, 2014, 79 FR 39195, July 9, 2014, and the MF-II FNPRM (collectively, MF-II FNPRMs). The Commission sought written public comment on the proposals in the MF-II FNPRMs including comments on the IRFAs and Supplemental IRFA. The Commission included Final Regulatory Flexibility Analyses (FRFAs) in connection with the CAF Report & Order, adopted April 23, 2014, released June 10, 2014, 79 FR 39163, July 9, 2014, the MF-II Report & Order, and the MF-II Challenge Process Order (collectively, the MF-II Orders). This Supplemental Final Regulatory Flexibility Analysis (Supplemental FRFA) supplements the FRFAs in the MF-II Orders to reflect the actions taken in the Second Order on Reconsideration and conforms to the RFA.

    1. Need for, and Objectives of, the Second Order on Reconsideration

    36. The Second Order on Reconsideration addresses the remaining issues raised by parties in petitions for reconsideration of the Commission's MF-II Report & Order that adopted the framework for the Mobility Fund Phase II (MF-II) and the Tribal Mobility Fund Phase II. These universal service funding mechanisms will provide on-going high-cost support to extend mobile voice and broadband coverage to unserved and underserved areas. In the Second Order on Reconsideration, the Commission amends the collocation rules adopted in the MF-II Report & Order to apply the collocation requirement for MF-II recipients to “all newly constructed” towers and modifies the letter of credit (LOC) requirements to align our MF-II rules with recent changes made in the CAF-II Order on Reconsideration. These LOC modifications should provide MF-II support recipients with some additional relief from the costs of maintaining an LOC. Moreover, by resolving these petitions, the Commission takes another significant step toward holding an MF-II auction in which service providers will compete for support to offer service meeting the minimum baseline performance requirements of 4G LTE or better in primarily rural areas of the country that lack qualified unsubsidized 4G LTE service.

    2. Summary of Significant Issues Raised by Public Comments in Response to the IRFAs

    37. There were no comments filed that specifically addressed the IRFAs that are relevant to the issues discussed here.

    3. Response to Comments by the Chief Counsel for Advocacy of the Small Business Administration

    38. Pursuant to the Small Business Jobs Act of 2010, which amended the RFA, the Commission is required to respond to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration (SBA), and to provide a detailed statement of any change made to the proposed rules as a result of those comments.

    39. The Chief Counsel did not file any comments in response to the proposed rules in this proceeding.

    4. Description and Estimate of the Number of Small Entities to Which the Procedures Will Apply

    40. The RFA directs agencies to provide a description of and, where feasible, an estimate of the number of small entities that may be affected by the rules adopted herein. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act.” A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.

    41. As noted above, FRFAs were incorporated into the MF-II Orders. In those analyses, we described in detail the small entities that might be significantly affected. Accordingly, in this Supplemental FRFA we hereby incorporate by reference the descriptions and estimates of the number of small entities from the previous FRFAs in the MF-II Orders.

    5. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements for Small Entities

    42. We expect the amended rules in the Second Order on Reconsideration will not impose any new or additional reporting or recordkeeping or other compliance obligations on small entities and, as described below, will reduce their costs.

    6. Steps Taken To Minimize the Significant Economic Impact on Small Entities, and Significant Alternatives Considered

    43. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): “(1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) and exemption from coverage of the rule, or any part thereof, for small entities.”

    44. The Commission has taken steps which will minimize the economic impact on small entity MF-II recipients because we recognize that the costs associated with maintaining an LOC may pose a greater financial burden on those bidders that lack the resources of larger, more established companies. Such bidders may have to factor relatively higher LOC-related costs into their bids. One purpose of using competitive bidding to select support recipients however is that it promotes providing support to those parties that can accomplish the MF-II program goals in the most cost-effective manner. Therefore, in the Second Order on Reconsideration we have made a modest reduction in the required value of the letter of credit for MF-II recipients that have met the 80 percent service milestone for the area(s) covered by the LOC. Moreover, we clarify that small entity and other MF-II recipients may further reduce their costs by no longer maintaining the LOC as soon as USAC, in coordination with the Commission, verifies that the recipient has met the final performance milestone (i.e., we do not require that the LOC be maintained after its purpose is no longer served). These steps should alleviate some of the economic impact for small entity MF-II recipients and aligns our MF-II requirements with recent changes made to the CAF-II requirements.

    7. Report to Congress

    45. The Commission will send a copy of the Second Order on Reconsideration, including this Supplemental FRFA, in a report to Congress pursuant to the Congressional Review Act. In addition, the Commission will send a copy of the Second Order on Reconsideration, including this Supplemental FRFA, to the Chief Counsel for Advocacy of the SBA.

    VI. Ordering Clauses

    46. Accordingly, it is ordered, pursuant to the authority contained in sections 1, 2, 4(i), 5, 10, 201-206, 214, 218-220, 251, 252, 254, 256, 303(r), 332, 403, 405, and 503 of the Communications Act of 1934, as amended, and section 706 of the Telecommunications Act of 1996, 47 U.S.C. 151, 152, 154(i), 155, 160, 201-206, 214, 218-220, 251, 252, 254, 256, 303(r), 332, 403, 405, 503, 1302, and §§ 1.1, 1.427, and 1.429 of the Commission's rules, 47 CFR 1.1, 1.427, and 1.429, that the Second Order on Reconsideration is adopted.

    • The parameters set forth in the Second Order on Reconsideration, along with all associated requirements also set forth therein, go into effect May 25, 2018, except for the new or modified information collection requirements that require approval by the Office of Management and Budget (OMB). The Commission will publish a document in the Federal Register announcing the approval of those information collection requirements and the date they will become operative.

    • The Petition for Reconsideration and/or Clarification filed by Rural Wireless Association, Inc. on April 12, 2017, is granted in part and denied in part to the extent described herein.

    • The Petition for Reconsideration filed by Blooston Rural Carriers on April 27, 2017, is granted in part and denied in part to the extent described herein.

    • The Petition for Reconsideration filed by Rural Wireless Carriers on April 27, 2017, is granted in part and denied in part to the extent described herein.

    • The Petition for Reconsideration filed by T-Mobile USA, Inc. on April 27, 2017, is denied to the extent described herein.

    • The Petition for Reconsideration filed by Buffalo-Lake Erie Wireless Systems L.L.C. dba Blue Wireless on April 27, 2017, is granted in part and denied in part to the extent described herein.

    • The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of the Second Order on Reconsideration, including the Supplemental Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

    List of Subjects in 47 CFR Part 54

    Communications common carriers, internet, Reporting and recordkeeping requirements, Telecommunications.

    Federal Communications Commission. Marlene Dortch, Secretary. Final Rules

    For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 54 as follows:

    PART 54—UNIVERSAL SERVICE 1. The authority citation for part 54 continues to read as follows: Authority:

    47 U.S.C. 151, 154(i), 155, 201, 205, 214, 219, 220, 254, 303(r), 403, and 1302 unless otherwise noted.

    2. Amend § 54.1015 by revising paragraph (f) to read as follows:
    § 54.1015 Public interest obligations.

    (f) Collocation obligations. During the period when a recipient shall file annual reports pursuant to § 54.1019, the recipient shall allow for reasonable collocation by other providers of services that would meet the technological requirements of Mobility Fund Phase II on all newly constructed towers it owns or manages in the area for which it receives support. In addition, during this period, the recipient may not enter into facilities access arrangements that restrict any party to the arrangement from allowing others to collocate on the facilities.

    3. Amend § 54.1016 by revising paragraph (a)(1)(ii) to read as follows:
    § 54.1016 Letter of credit.

    (a) * * *

    (1) * * *

    (ii) Once the recipient has met its 80 percent service milestone as described in § 54.1015(c) of this chapter, it may, subject to the consent of the Universal Service Administrative Company, obtain a new letter of credit or renew its existing letter of credit so that it is valued at a minimum at 60 percent of the total support amount already disbursed plus the amount that will be disbursed in the coming year.

    [FR Doc. 2018-08689 Filed 4-24-18; 8:45 am] BILLING CODE 6712-01-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 622 [Docket No. 130312235-3658-02] RIN 0648-XG173 Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; Snapper-Grouper Resources of the South Atlantic; 2018 Commercial Trip Limit Reduction AGENCY:

    National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Temporary rule; commercial trip limit reduction.

    SUMMARY:

    NMFS issues this temporary rule to reduce the commercial trip limit for vermilion snapper in or from the exclusive economic zone (EEZ) of the South Atlantic to 500 lb (227 kg), gutted weight, 555 lb (252 kg), round weight. This trip limit reduction is necessary to protect the South Atlantic vermilion snapper resource.

    DATES:

    This rule is effective 12:01 a.m., local time, April 26, 2018, until 12:01 a.m., local time, July 1, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Mary Vara, NMFS Southeast Regional Office, telephone: 727-824-5305, email: [email protected]

    SUPPLEMENTARY INFORMATION:

    The snapper-grouper fishery in the South Atlantic includes vermilion snapper and is managed under the Fishery Management Plan for the Snapper-Grouper Fishery of the South Atlantic Region (FMP). The South Atlantic Fishery Management Council prepared the FMP. The FMP is implemented by NMFS under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) by regulations at 50 CFR part 622.

    The commercial ACL (commercial quota) for vermilion snapper in the South Atlantic is divided among two 6-month fishing seasons, January through June and July through December. For the January 1 through June 30, 2018, fishing season, the commercial quota is 388,703 lb (176,313 kg), gutted weight, 431,460 lb (195,707 kg), round weight (50 CFR 622.190(a)(4)(i)(D)).

    Under 50 CFR 622.191(a)(6)(ii), NMFS is required to reduce the commercial trip limit for vermilion snapper from 1,000 lb (454 kg), gutted weight, 1,110 lb (503 kg), round weight, to 500 lb (227 kg), gutted weight, 555 lb (252 kg), round weight, when 75 percent of the applicable commercial quota is reached or projected to be reached, by filing a notification to that effect with the Office of the Federal Register, as established by Regulatory Amendment 18 to the FMP (78 FR 47574; August 6, 2013). Based on current information, NMFS has determined that 75 percent of the available commercial quota for the January 1 through June 30, 2018, fishing season for vermilion snapper will be reached by April 26, 2018. Accordingly, NMFS is reducing the commercial trip limit for vermilion snapper to 500 lb (227 kg), gutted weight, 555 lb (252 kg), round weight, in or from the South Atlantic EEZ at 12:01 a.m., local time, on April 26, 2018. This reduced commercial trip limit will remain in effect until the start of the next fishing season on July 1, 2018, or until the applicable commercial quota is reached and the commercial sector closes, whichever occurs first.

    Classification

    The Regional Administrator, Southeast Region, NMFS, has determined this temporary rule is necessary for the conservation and management of South Atlantic vermilion snapper and is consistent with the Magnuson-Stevens Act and other applicable laws.

    This action is taken under 50 CFR 622.191(a)(6)(ii) and is exempt from review under Executive Order 12866.

    These measures are exempt from the procedures of the Regulatory Flexibility Act because the temporary rule is issued without opportunity for prior notice and comment.

    This action responds to the best scientific information available. The Assistant Administrator for Fisheries, NOAA (AA), finds that the need to immediately implement this commercial trip limit reduction constitutes good cause to waive the requirements to provide prior notice and opportunity for public comment pursuant to the authority set forth in 5 U.S.C. 553(b)(B), because prior notice and opportunity for public comment on this temporary rule is unnecessary and contrary to the public interest. Such procedures are unnecessary because the rule establishing and providing for a reduction in the commercial trip limit has already been subject to notice and comment, and all that remains is to notify the public of the commercial trip limit reduction. Providing prior notice and opportunity for public comment is contrary to the public interest because any delay in reducing the commercial trip limit could result in the commercial quota being exceeded. There is a need to immediately implement this action to protect the vermilion snapper resource, since the capacity of the fishing fleet allows for rapid harvest of the commercial quota. Providing prior notice and opportunity for public comment on this action would require time and increase the likelihood that the commercial sector could exceed its quota.

    For the aforementioned reasons, the AA also finds good cause to waive the 30-day delay in the effectiveness of this action under 5 U.S.C. 553(d)(3).

    Authority:

    16 U.S.C. 1801 et seq.

    Dated: April 20, 2018. Jennifer M. Wallace, Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service.
    [FR Doc. 2018-08677 Filed 4-20-18; 4:15 pm] BILLING CODE 3510-22-P
    83 80 Wednesday, April 25, 2018 Proposed Rules DEPARTMENT OF ENERGY 10 CFR Parts 429 and 430 Energy Conservation Program: Test Procedures for Cooking Products, Notification of Petition for Rulemaking AGENCY:

    Office of Energy Efficiency and Renewable Energy, Department of Energy.

    ACTION:

    Notification of petition for rulemaking; request for comment.

    SUMMARY:

    On March 26, 2018, the Department of Energy (DOE) received a petition from the Association of Home Appliance Manufacturers (AHAM) to withdraw, and immediately stay the effectiveness of, the conventional cooking top test procedure. Through this notification, DOE seeks comment on the petition, as well as any data or information that could be used in DOE's determination whether to proceed with the petition.

    DATES:

    Written comments and information are requested on or before June 25, 2018.

    ADDRESSES:

    Interested persons are encouraged to submit comments, identified by “Test Procedure Cooking Products Petition,” by any of the following methods:

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

    Email: [email protected] Include the docket number and/or RIN in the subject line of the message.

    Mail: Appliance and Equipment Standards Program, U.S. Department of Energy, Building Technologies Office, Mailstop EE-5B, 1000 Independence Avenue SW, Washington, DC 20585-0121. If possible, please submit all items on a compact disc (CD), in which case it is not necessary to include printed copies.

    Hand Delivery/Courier: Appliance and Equipment Standards Program, U.S. Department of Energy, Building Technologies Office, 950 L'Enfant Plaza SW, Suite 600, Washington, DC 20024. Telephone: (202) 586-6636. If possible, please submit all items on a CD, in which case it is not necessary to include printed copies.

    Docket: For access to the docket to read background documents, or comments received, go to the Federal eRulemaking Portal at http://www.regulations.gov.

    FOR FURTHER INFORMATION CONTACT:

    Celia Sher, U.S. Department of Energy, Office of the General Counsel, 1000 Independence Avenue SW, Washington, DC 20585. E-mail: [email protected]; (202) 287-6122.

    SUPPLEMENTARY INFORMATION:

    The Administrative Procedure Act (APA), 5 U.S.C. 551 et seq., provides among other things, that “[e]ach agency shall give an interested person the right to petition for the issuance, amendment, or repeal of a rule.” (5 U.S.C. 553(e)) DOE received a petition from AHAM, as described in this document and set forth verbatim below,1 requesting that DOE reconsider its final rule on Test Procedures for Cooking Products, Docket No. EERE-2012-BT-TP-0013, RIN 1904-AC71, 81 FR 91418 (Dec. 16, 2016) (Final Rule). In promulgating this petition for public comment, DOE is seeking views on whether it should grant the petition and undertake a rulemaking to consider the proposal contained in the petition. By seeking comment on whether to grant this petition, DOE takes no position at this time regarding the merits of the suggested rulemaking or the assertions in AHAM's petition.

    1 Attachments and data submitted by AHAM with its petition for rulemaking are available in the docket at http://www.regulations.gov/docket?D=EERE-2018-BT-TP-0004.

    In its petition, AHAM requests that DOE undertake rulemaking to withdraw the cooking top test procedure, while maintaining the repeal of the oven test procedure that was part of the Final Rule. And, in the interim, AHAM seeks an immediate stay of the effectiveness of the Final Rule, including the requirement that manufacturers use the final test procedure to make energy related claims. Should DOE continue to pursue a revised cooking top test procedure, AHAM asserts that DOE should address repeatability and reproducibility and demonstrate, through round robin testing, that the test is repeatable and reproducible and, for gas cooking tops, accurate. AHAM claims that its analyses show that the test procedure is not representative for gas cooking tops and, for gas and electric cooking tops, has such a high level of variation it will not produce accurate results for certification or enforcement purposes and will not assist consumers in making purchasing decisions based on energy efficiency.

    Although DOE welcomes comments on any aspect of the petition for reconsideration, DOE is particularly interested in receiving comments and views of interested parties concerning the following issues:

    (1) The repeatability and reproducibility of the test procedure for conventional electric and gas cooking tops. DOE previously presented results from round robin testing completed by the Department and by IEC in the docket of the test procedure rulemaking. DOE seeks comments on that data as well as the new data AHAM has supplied supporting its petition;

    (2) The accuracy of determining the simmer setting and turndown temperature;

    (3) The impact of heating element cycling during the initial heat-up phase of testing on the overall measured energy consumption of electric cooking tops, and the prevalence of such cycling in units available on the market.

    (4) The extent of any warpage which may have been observed at the bottom surface of test vessels during cooking top testing;

    (5) The impact of varying gas burner and grate systems on the representativeness of the water-heating test method for gas cooking tops;

    (6) The type of control system, heating element, and other product redesigns necessitated by changes in safety standards for electric cooking tops, and the impact of these new product designs on the repeatability, reproducibility, and representativeness of the electric cooking product test procedure;

    (7) Characteristics of a representative test sample for electric and gas cooking tops for use in any additional round robin testing to evaluate the applicability of the test procedure to the conventional cooking top market as a whole;

    (8) Information on how consumers cook differently on gas cooktops versus electric cooktops;

    (9) Information on how consumers use the simmer setting on a gas cooktop; and,

    (10) The test burden associated with the test procedure for conventional electric and gas cooking tops, including the ability of testing laboratories to meet the required ambient test conditions.

    Submission of Comments

    DOE invites all interested parties to submit in writing by June 25, 2018 comments and information regarding this petition.

    Submitting comments via http://www.regulations.gov. The http://www.regulations.gov web page will require you to provide your name and contact information prior to submitting comments. Your contact information will be viewable to DOE Building Technologies staff only. Your contact information will not be publicly viewable except for your first and last names, organization name (if any), and submitter representative name (if any). If your comment is not processed properly because of technical difficulties, DOE will use this information to contact you. If DOE cannot read your comment due to technical difficulties and cannot contact you for clarification, DOE may not be able to consider your comment.

    However, your contact information will be publicly viewable if you include it in the comment or in any documents attached to your comment. Any information that you do not want to be publicly viewable should not be included in your comment, nor in any document attached to your comment. Persons viewing comments will see only first and last names, organization names, correspondence containing comments, and any documents submitted with the comments.

    Do not submit to http://www.regulations.gov information for which disclosure is restricted by statute, such as trade secrets and commercial or financial information (hereinafter referred to as Confidential Business Information (CBI)). Comments submitted through http://www.regulations.gov cannot be claimed as CBI. Comments received through the website will waive any CBI claims for the information submitted. For information on submitting CBI, see the Confidential Business Information section.

    DOE processes submissions made through http://www.regulations.gov before posting. Normally, comments will be posted within a few days of being submitted. However, if large volumes of comments are being processed simultaneously, your comment may not be viewable for up to several weeks. Please keep the comment tracking number that http://www.regulations.gov provides after you have successfully uploaded your comment.

    Submitting comments via hand delivery, or mail. Comments and documents via hand delivery or mail will also be posted to http://www.regulations.gov. If you do not want your personal contact information to be publicly viewable, do not include it in your comment or any accompanying documents. Instead, provide your contact information on a cover letter. Include your first and last names, email address, telephone number, and optional mailing address. The cover letter will not be publicly viewable as long as it does not include any comments.

    Include contact information in your cover letter each time you submit comments, data, documents, and other information to DOE. If you submit via mail or hand delivery, please provide all items on a CD, if feasible. It is not necessary to submit printed copies. No facsimiles (faxes) will be accepted.

    Comments, data, and other information submitted electronically should be provided in PDF (preferred), Microsoft Word or Excel, WordPerfect, or text (ASCII) file format. Provide documents that are not secured, written in English and free of any defects or viruses. Documents should not include any special characters or any form of encryption and, if possible, they should carry the electronic signature of the author.

    Campaign form letters. Please submit campaign form letters by the originating organization in batches of between 50 to 500 form letters per PDF or as one form letter with a list of supporters' names compiled into one or more PDFs. This reduces comment processing and posting time.

    Confidential Business Information. According to 10 CFR 1004.11, any person submitting information that he or she believes to be confidential and exempt by law from public disclosure should submit via email, postal mail, or hand delivery two well-marked copies: One copy of the document marked confidential including all the information believed to be confidential, and one copy of the document marked non-confidential with the information believed to be confidential deleted. Submit these documents via email or on a CD, if feasible. DOE will make its own determination about the confidential status of the information and treat it according to its determination.

    Factors of interest to DOE when evaluating requests to treat submitted information as confidential include (1) a description of the items, (2) whether and why such items are customarily treated as confidential within the industry, (3) whether the information is generally known by or available from other sources, (4) whether the information has previously been made available to others without obligation concerning its confidentiality, (5) an explanation of the competitive injury to the submitting person which would result from public disclosure, (6) when such information might lost its confidential character due to the passage of time, and (7) why disclosure of the information would be contrary to the public interest.

    It is DOE's policy that all comments may be included in the public docket, without change and as received, including any personal information provided in the comments (except information deemed to be exempt from public disclosure).

    DOE considers public participation to be a very important part of its process for considering rulemaking petitions. DOE actively encourages the participation and interaction of the public during the comment period. Interactions with and between members of the public provide a balanced discussion of the issues and assist DOE in determining how to proceed with a petition. Anyone who wishes to be added to DOE mailing list to receive future notifications and information about this petition should contact Appliance and Equipment Standards Program staff at (202) 586-6636 or via email at [email protected]

    Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this notification of petition for rulemaking.

    Signed in Washington, DC, on April 18, 2018. Daniel Simmons, Principal Deputy Assistant Secretary, Energy Efficiency and Renewable Energy. Before the UNITED STATES DEPARTMENT OF ENERGY Office of Energy Efficiency and Renewable Energy

    In the Matter of: Energy Conservation Program: Test Procedures for Cooking Products

    Docket No. EERE-2012-BT-TP-0013 RIN 1904-AC71
    PETITION FOR RECONSIDERATION

    The Association of Home Appliance Manufacturers (AHAM) respectfully petitions the Department of Energy (DOE) for reconsideration of its final rule on Test Procedures for Cooking Products, Docket No. EERE-2012-BT-TP-0013 RIN 1904-AC71, 81 Fed. Reg. 91418 (Dec. 16, 2016) (Final Rule).

    AHAM believes that, overall, the adoption of a water-boil test procedure for cooking products is the appropriate procedure. And we thank DOE for making changes to its earlier proposed test procedure which would have used a hybrid block after AHAM demonstrated the practical difficulties associated with that test. But DOE adopted a final cooktop test procedure too hastily, especially in light of comments AHAM submitted that demonstrated the test's lack of repeatability and reproducibility and questioned the use of a test procedure meant for electric cooktops for gas cooktops. AHAM has evaluated the Final Rule and conducted additional testing on gas cooktops. Our analyses show that the test procedure is not representative for gas cooktops and, for gas and electric cooktops, has such a high level of variation it will not produce accurate results for certification or enforcement purposes and will not assist consumers in making purchasing decisions based on energy efficiency.

    AHAM thus requests that DOE withdraw the cooktop test procedure. And, in the interim, we seek an immediate stay of the effectiveness, including the requirement that manufacturers use the final test procedure to make energy related claims, of the cooktop test procedure. Should DOE continue to pursue an improved cooktop test procedure, DOE should address repeatability and reproducibility and demonstrate, through round robin testing, that the test is repeatable and reproducible and, for gas cooktops, representative.

    FACTS

    DOE began revisions to the cooktop test procedure with a notice of proposed rulemaking on January 30, 2013 (January 2013 NOPR) in which DOE proposed amendments to Appendix I to subpart B of 10 C.F.R. part 430 (Appendix I) that would allow for the measuring of active mode energy consumption of induction cooking products. Specifically, DOE proposed to require the use of test equipment—hybrid test blocks comprised of an aluminum body and a stainless steel base—compatible with induction technology.

    AHAM objected to DOE's proposed amendments to the test procedure because the amendments did not enhance the accuracy and/or representativeness of the test procedure. See AHAM Comments on DOE's Notice of Proposed Rulemaking on Test Procedures for Conventional Cooking Products With Induction Heating Technology (April 15, 2013). AHAM commented that any test procedure DOE adopts to measure induction heating technology must be both repeatable and reproducible. Id. AHAM cautioned that significant further study was necessary before DOE could adopt a test procedure that accurately measures induction cooktop energy efficiency. Id. More specifically, AHAM opposed the proposed test procedure because the proposal had a number of technical problems and ambiguities (e.g., ambiguous construction of hybrid test block); DOE's data did not clearly identify one method (test block versus water heating) as being preferable to the other for induction units; and the proposed procedure would treat induction technology differently than other technologies, thereby penalizing it. Id. AHAM also questioned whether the test block method in general was representative of actual consumer use. Id.

    In response to stakeholder comments, DOE published a supplemental notice of proposed rulemaking modifying its proposal. 79 Fed. Reg. 71894 (Dec. 3, 2014) (December 2014 SNOPR). DOE's modified proposal maintained a hybrid test block approach despite AHAM's comments. DOE proposed to add a layer of thermal grease between the stainless steel base and aluminum body of the hybrid test block to facilitate heat transfer between the two pieces, and DOE proposed additional test equipment for electric surface units with large diameters and gas cooking top burners with high input rates.

    AHAM's comments on the December 2014 SNOPR raised serious concerns about the hybrid test blocks and the thermal grease. See AHAM Comments on DOE's Supplemental Notice of Proposed Rulemaking on Test Procedures for Conventional Cooking Products (Feb. 2, 2015). AHAM also raised questions about the testing of flexible cooking zone areas, testing units with flexible concentric burner sizes, and the use of the smallest dimension of a noncircular electric surface unit to determine block size. Id.

    Based on comments it received in response to the December 2014 SNOPR and a series of manufacturer interviews DOE conducted in February and March 2015, DOE subsequently withdrew its proposal for testing conventional cooktops with a hybrid test block in yet another supplemental notice of proposed rulemaking. 81 Fed. Reg. 57374 (Aug. 22, 2016) (August 2016 SNOPR). In the August 2016 SNOPR, DOE instead proposed to modify its procedure to incorporate by reference the relevant sections of EN 60350-2:2013 “Household electric cooking appliances Part 2: Hobs—Methods for measuring performance,” which uses a water-heating test method to measure energy consumption of electric cooktops. Despite the fact that the EN test procedure DOE cited applies only to electric cooktops, DOE also proposed to extend that method to gas cooktops.

    AHAM generally agreed and continues to agree with DOE that the best test method for cooktops is a water boil test and supported DOE's abandoning of the hybrid test block method. See AHAM Comments on DOE's SNOPR on Test Procedures for Cooking Products (Sept. 21, 2016). Nevertheless, AHAM commented extensively on potential sources of variation with DOE's proposed procedure that needed to be resolved before DOE finalized a cooktop test procedure. Id.

    Prior to DOE proposing a water-heating test, AHAM conducted a round robin based on the Second Edition of IEC 60350-2 (2015), Household Electric Cooking Appliances—Part 2: Hobs—Methods for Measuring Performance. Id. The AHAM round robin consisted of four units encompassing a different combination of controls and heating elements. Id. AHAM assessed radiant, coil, and induction heating elements as well as infinite and step controls. Participating labs performed at least three full tests on the three electric technologies. The results demonstrated that the procedure was not reproducible from lab to lab. AHAM data demonstrated significant variation in the proposed test procedure—coefficients of variation of 9.2 percent for electric radiant cooktops, 7.1 percent for electric coil cooktops, and 8.4 percent for induction cooktops. Id.

    Based on that testing, AHAM commented that a significant amount of work remained to be done to finalize a test and to demonstrate that the final test is repeatable and reproducible. Id. Specifically, AHAM listed a number of items that needed to be resolved, including several potential sources of test procedure variation, before DOE could finalize the test procedure, and requested that DOE issue a notice of data availability or supplemental notice of proposed rulemaking to provide stakeholders with an opportunity to comment:

    • Lack of a tolerance on staying “as close as possible” to 90° C;

    • Variability in energy consumption during the simmering phase;

    • Variability in determining the turn down temperature;

    • Variability in determining the turn down setting;

    • Unit cycling;

    • Specifying a temperature sensor for measuring the water temperature;

    • A proposal to use a moving average for calculating the final result;

    • Limited suppliers of test pots;

    • No tool or tolerance specified for cooktop diameter measurement;

    • Test pots do not accommodate all grate designs;

    • Difficulty with placement of pots on gas cooktops;

    • Impact of gas burner system, geometry, spacing, and grates on repeatability and reproducibility;

    • Impact of using the electric test pots on gas cooktops; and

    • Overshoot temperature of the water can reach beyond 90° C for some gas cooktops. Id.

    AHAM also requested that DOE indicate how the changes to the test procedure would impact the proposed standards and allow stakeholders additional time to comment on those proposed standards based on the test procedure changes. Id.

    In response to AHAM's comments, DOE sent AHAM a request for data on September 27, 2016. That data request was voluminous and overlapped with the comment period on the proposed standards for cooking products—which ended on November 2, 2016—and DOE proposed in parallel with the August 2016 SNOPR. See Energy Conservation Program: Energy Conservation Standards for Residential Conventional Cooking Products, Supplemental Notice of Proposed Rulemaking; 81 Fed Reg. 60784 (Sept. 2, 2016). Nevertheless, AHAM worked to answer DOE's questions and, on November 23, 2016, filed a detailed response, including a significant amount of raw data DOE requested which AHAM submitted to Navigant Consulting under a confidentiality agreement. See AHAM Comments on DOE's SNOPR on Test Procedures for Cooking Products (dated Nov. 22, 2016).1 AHAM informed DOE in advance that it would be submitting the response. Despite having asked for that data and having been informed AHAM would be providing it, DOE issued a final test procedure on that same day, November 23, 2016, which it published on December 16, 2016.

    1 We hereby incorporate into this petition by reference all data AHAM submitted to DOE and Navigant as part of the test procedure rulemaking.

    The Final Rule adopted DOE's proposed test procedure with some changes DOE believed would improve repeatability and reproducibility. In support of the final test procedure, DOE conducted additional testing. DOE conducted testing of five electric cooktops incorporating different heating technologies and control types. For each unit, DOE conducted testing on surface units capturing a range of heating element sizes. DOE conducted two to three tests per surface unit. For each individual test, DOE performed the full surface unit test method, including the preliminary test required to determine the turndown temperature and simmering setting for a given surface unit. DOE varied test operators for surface unit tests, but did not conduct testing in different laboratories. In addition, DOE included test results from previous tests of these units conducted in support of the August 2016 SNOPR. DOE relied on that minimal data to determine that the final test procedure, finalized only two months after DOE received voluminous comments from AHAM concerning a lack of repeatability and reproducibility as demonstrated through 27 tests on three units at three different laboratories.

    ARGUMENT

    The Energy Policy and Conservation Act of 1975, as amended (EPCA) requires that test procedures be reasonably designed to produce test results which measure energy efficiency, energy use, or estimated annual operating cost of a covered product during a representative average use cycle and shall not be unduly burdensome to conduct. 42 U.S.C. § 6293(b)(3). This requirement is meaningless if the test procedure is not repeatable and reproducible—only a repeatable and reproducible test procedure can produce accurate results that DOE can rely on for certification and verification purposes and that consumers can rely on to compare energy use or efficiency across products.

    AHAM appreciates that DOE made changes from the August 2016 SNOPR to the Final Rule in an attempt to address AHAM's September 21, 2016 comments. AHAM also appreciates that DOE conducted additional testing to further assess the proposed and final test procedure. But DOE did not take the time or do the work necessary to finalize a test procedure that fully or satisfactorily addresses the significant issues AHAM raised in its comments or the data AHAM provided in response to DOE's request. This is further demonstrated based on additional testing and analysis AHAM conducted after the Final Rule was published.

    DOE did not support the Final Rule with sufficient data to demonstrate that it is accurate, repeatable, and reproducible. More specifically, as discussed more fully below:

    □ DOE has not demonstrated that the test procedure is representative for gas products. DOE did not demonstrate that its deviation from the international approach—testing gas cooktops using a different procedure than is used for testing electric cooktops—was warranted or would produce accurate, representative results. And DOE tested only a small sample that cannot be representative of the many different types of gas models on the market and the result is that the test may not adequately address the different systems available to consumers. Thus, DOE has not demonstrated that the test procedure is representative or accurate for gas products.

    □ DOE's testing of electric and gas cooktops was insufficient to evaluate repeatability and reproducibility and, thus, DOE's conclusions are based on results with a low confidence level which is highlighted by AHAM's conflicting results. Accordingly, DOE did not produce sufficient evidence to demonstrate that its test procedure is supported by data.

    □ Although DOE tried to address variation by requiring recording of the simmering setting selection, AHAM's testing demonstrates that that requirement does not in fact reduce variation.

    □ Although DOE attempted to clarify when the simmering period starts, DOE's clarification does not adequately reduce variation.

    □ DOE improperly dismissed unit cycling's contribution to variation.

    □ DOE did not account for the fact that electric coil cooktops are currently undergoing significant redesign to comply with voluntary safety standards. It is possible that the new products will not respond the same way to the test.

    □ DOE did not investigate the impact of pan warpage on test results. Initial data from a study done for AHAM shows pan warpage will contribute to variation.

    □ Based on data from a round robin AHAM conducted with gas cooktops, the test procedure is not repeatable or reproducible for gas cooktops. Within unit and between unit variation also contributes to the total variation and DOE has not accounted for it.

    In addition, the test procedure is unduly burdensome to conduct. Based on AHAM's experience to date, it takes on average 20 hours to conduct a single test on a four burner cooktop and requires the testing of every single burner or element individually. And, because the test requires the technician to determine the turn-down temperature before every test and the ambient conditions are quite tight, several runs are often required before a valid run can be achieved. Our testing, which is described more fully below, found that some tests took upward of five days for a single cooktop. Moreover, the test cost is much higher than DOE concluded in its Final Rule on both an up-front and ongoing basis.

    Because the final test procedure may not be representative for gas products and is not repeatable or reproducible for either gas or electric cooktops, it does not accurately measure cooktop energy efficiency and will not allow consumers to compare products on that basis. Thus, because the test is also unduly burdensome to conduct, the cooktop test procedure as a whole does not meet EPCA's statutory requirement that test procedures be reasonably designed to produce representative results and are not unduly burdensome to conduct. Moreover, because DOE did not support the conclusions in the Final Rule with sufficient data, DOE's Final Rule could be determined to be arbitrary and capricious. Accordingly, AHAM respectfully requests that DOE withdraw the Final Rule amending the cooktop test procedure. And, in the interim, we seek an immediate stay of the effectiveness, including the requirement that manufacturers use the final test procedure to make energy related claims, of the Final Rule. To be clear, AHAM is not seeking reconsideration regarding DOE's decision to repeal the oven test procedure.

    I. DOE Has Not Demonstrated That The Test Procedure Is Representative for Gas Cooktops.

    In the August 2016 SNOPR, DOE proposed to extend the electric test procedure in EN 60350-2:2013 “Household electric cooking appliances Part 2: Hobs—Methods for measuring performance” to gas cooktops. AHAM commented in its September 21, 2016 comments that there is no consumer data on the consumer representativeness of that method for gas cooktops. AHAM noted that DOE's proposal, and now Final Rule, is not harmonized with the European approach, which uses a different test procedure and different test pots to test gas cooktops. DOE's methodology is also different than ASTM F152, “Standard Test Methods for Performance of Range Tops,” which DOE reviewed during the test procedure rulemaking and is used by the commercial range industry. DOE dismissed ASTM F1521 because of the BTU range for commercial range tops, and AHAM is not arguing that it is the appropriate procedure for residential products. But the science behind the test setup in ASTM is similar to the EN gas test procedure which demonstrates that the basic methodology for testing gas products is well established.

    Accordingly, no manufacturer or third party test laboratory—in the U.S., Europe, or elsewhere in the world—had experience with DOE's proposed test procedure for gas cooktops other than DOE's minimal testing in one laboratory prior to the publishing of the Final Rule. Thus, neither DOE nor manufacturers have knowledge of whether this test will be representative for gas products. Accordingly, DOE does not have the necessary data to justify the use of this method on gas cooktops in the United States, especially in light of the fact that Europe uses a different approach.

    In fact, AHAM believes that the evidence supports the opposite conclusion—i.e., that the cooktop test procedure is not representative for gas cooktops. The EN and ASTM standards use a different test procedure for gas cooktops and do so for good reason. Unlike electric cooktops, gas cooktops utilize a system approach—every component and design choice is connected to other components and design choices and they work together. The cooking heat out to the pot depends on the design of the burner, flow of gas, mass of the grate, and height of the grate from the burner.

    Gas testing is a science, and DOE did not do sufficient study to determine whether the electric test procedure it adopted would measure representative results for gas cooktops:

    1. First, the purpose behind EN 60350-2:2013 was to establish a test to determine minimum energy for electric cooktops. The reason that the working group that developed the test decided to assess simmer for electric cooktops was to show the distinction in energy use between the different electric technologies, i.e. induction, radiant. For electric cooktops, technology has an impact on how much energy is used to get to boil and also how much energy it uses to keep a simmer temperature. Thus, some technologies may appear to be more or less efficient if just a time to boil was assessed. For electric, the simmer portion of the test is needed to accurately show the cooktop's energy use and to allow comparison across the product types. Figure 1 below shows how the test distinguishes between electric technologies.2

    2 CECED, 2012.

    EP25AP18.006

    2. In an attempt to keep one test method, DOE extended this electric method to gas cooktops. AHAM appreciates the attempt to reduce the number of test methods. But, in this case, there is no reason to use one type of test. There are not different types of gas technologies and so a simmer period is not needed to differentiate between technologies as it is in electric. The significant added burden of including the simmer setting (and the variation it introduces) is not likely balanced by a benefit in terms of energy savings.

    In addition, most consumers likely replace their cooktops with the same fuel that is already in their home. Based on a 2010 study conducted for AHAM, the vast majority of consumers surveyed replaced their cooktops and ranges with a similar unit. According to the study, nearly nine in ten households that bought a freestanding single oven range did a direct replacement. Homeowners were even more likely to do a direct replacement of this type of appliance, at 94 percent.3 So, it is unlikely that consumers are comparing gas and electric products.

    3 Bellomy Research for AHAM, 2010 Major Appliance Consumer Research Survey, Cooking Appliances (2010).

    3. The best comparison for comparing gas cooktops to other gas cooktops would be based on a simple bring to boil test, which is what Europe and the ASTM methods both use. DOE is the first to reinvent the wheel and require gas and electric cooktops to be tested in the same way.

    4. On a gas unit, there is very little overshoot which means there is no retained heat. Electric cooktops, on the other hand, often have a significant amount of retained heat. A gas cooktop's ability to maintain simmer in the absence of retained heat is largely a function of grate to burner relationships, burner design, valve design, and pan position. This relationship is not accounted for in the electric cooktop test because it does not need to be. But it does need to be addressed in a test applicable to gas cooktops.

    5. More so than electric elements, gas burners are designed for a specific cooking purpose. For example:

    a. Small or semi-rapid burners are typically used for simmering. This simmering performance is developed for melting chocolate and fine sauces, not keeping water simmering.

    b. Ultra rapid or rapid burners are designed to reduce time to boil, or for frying. Often flame stability suffers at low rates, making simmering results poor.

    c. Other high input burners are designed for rapid cooking (i.e. Wok) and are not designed for simmering.

    Each of these burner types have been optimized in design to serve a particular cooking function for consumers. Thus, it may not make sense to apply a water boil test to all of them. For example, a consumer would not likely boil water on the small/semi-rapid burner that is meant to be used for melting chocolate or cooking fine sauces—the time to boil on such a burner would be extremely long, perhaps 40 minutes. In addition to not being representative, the test will drive significant variation in the assessment because DOE did not address this in the test procedure. DOE did, however, address this issue for electric cooktops—the test procedure removes certain burners from assessment.

    6. Additionally, because DOE extended a test meant for electric cooktops to gas cooktops, the test does not require preheating of the gas burner. A gas system will change rates and how it performs as it warms. The European test for gas products has a 10 minute preheat because the working group that developed that test found that preheating improved the representativeness of the test results as well as repeatability and reproducibility. The ASTM test has a 30 minute stabilization period at 50 percent heat for the same reason. Thus, DOE's failure to include preheating in the gas test ignores the wisdom generated by other groups' extensive testing and experience and likely contributes to the high degree of variation we describe below.

    7. The pots specified by the European electric test are different than the pots used in the European gas cooktop test. The gas pots are Aluminum test pans having a matt base and polished walls—that material is of the highest level of conduction. The electric test pans are a very thick stainless steel plate (6 mm) with thin stainless walls (1 mm) that are joined by a heat resistant glue. The pan construction is significantly different which will have an impact on heat transfer from the burner to the pan. The pot spacing of the large flat corner pans designed for electric cooktops will perform differently with the gas burners compared to the EN specified Aluminum pots and will not drive representative results. A gas flame heats a pot differently and this should be accounted for in the test.

    DOE did not assess a sufficient variety of gas cooktop designs to conclude that the test procedure it adopted is representative for gas products, especially in light of Europe's use of a different procedure for residential gas products. As highlighted above, the residual heat loss of a gas burner on simmer is significantly different than simmer on electric unit where the electric unit retains heat from the cooktop. DOE also has specified stainless steel pans whereas the European procedure for gas cooktops uses Aluminum, which has a higher level of conduction. The pan construction is also different which will have an impact on heat transfer from the burner to the pan.

    AHAM has not been the only commenter to question the representativeness of extending the European electric test procedure to gas cooktops. During the test procedure rulemaking, Southern California Gas Company, San Diego Gas and Electric, and Southern California Edison (collectively, the Southern California investor-owned utilities (SoCal IOUs)) commented that DOE should conduct a sensitivity analysis of the impact of ambient temperature and pressure conditions on the test results for gas and electric cooking products in order to ensure consistent test results across various regions, climates, and altitudes. In addition, the SoCal IOUs commented that validating the ambient condition requirements would address the impact of the proposed correction to the gas heating value to standard temperature and pressure conditions. DOE responded only that it incorporated the ambient air pressure and temperature conditions specified in EN 60350-2:2013 and thus believed that the results “should not” be impacted by tests being conducted in different locations.4 But DOE did not do any additional testing to determine if that is in fact the case and, as discussed below in Section II, AHAM's testing demonstrates reproducibility issues which could be attributed, in part, to these differences. Moreover, efficiency for a gas cooktop depends heavily on the external environment, much more so than for electric products. Simmering is, thus, not the right parameter to measure the ability to keep the control in this technology. That is yet another reason why the European gas test does not include the simmer setting—it will be variable and inaccurate.

    4 See Final Rule, 81 Fed. Reg. 91418, 91434 (Dec. 16, 2016).

    In addition, the U.S. market consists of a wide array of grate and burner offerings to consumers and DOE did not sufficiently assess those offerings in developing the test procedure. DOE itself acknowledged 283 gas configurations.5 Yet DOE tested only five units. The varying designs available to consumers, most of which DOE did not assess, have offerings of a sealed/unsealed burner, stacked burner, different burner shapes, a range of grate weight and shape, and different grate materials. DOE has not shown that the test procedure is repeatable and reproducible for the different designs on the marketplace. For DOE to conclude these issues do not exist simply because it did not observe them in its small test sample is illogical. DOE made assumptions that are not supported by sufficient data and are in direct conflict with the technical support for the European gas test and ASTM standard which drove those procedures to have a pre-heat requirement, to exclude a simmer assessment, and to use specifically constructed Aluminum pans. Until and unless DOE can demonstrate that data show the cooktop test procedure is representative of actual U.S. consumer use of gas cooktops and will deliver accurate results, DOE should withdraw the test procedure. Keeping it in place will very likely result in inaccurate information to consumers and is contrary to EPCA's and the Administrative Procedure Act's requirements.

    5 Id. At 91438 (“DOE surveyed 335 electric cooking tops and 283 gas cooking tops available on the market in the United States.”).

    II. DOE Has Not Demonstrated That The Test Procedure Is Repeatable or Reproducible For Gas Cooktops. A. Lab to Lab Variation

    Because of the short comment period on the August 2016 SNOPR, AHAM was not able to conduct a round robin to assess the repeatability and reproducibility of the test procedure for gas products. And DOE had no data regarding repeatability or reproducibility upon which to rely. DOE instead relied on a European Committee of Domestic Equipment Manufacturers (CECED) round robin conducted five years ago on electric cooktops. But, that round robin is irrelevant. As discussed above, Europe does not extend its electric cooktop test procedure to gas cooktops for good reason. DOE would be the first to do that. Thus, there is no historical data for that test procedure. Therefore, AHAM commented that DOE should evaluate its proposed procedure even more carefully and in more detail than the electric cooktop test procedure. Repeatability and reproducibility cannot be established based only on DOE's limited within lab testing and complete lack of lab to lab testing.

    In order to address AHAM's concerns, DOE conducted investigative testing on gas cooktops in support of the Final Rule. DOE conducted testing on five gas cooking tops that covered a range of burner input rates, installation widths (two 30 inch and three 36 inch), burner quantities (two four burner, three six burner), and grate weights. To evaluate variation in the test, DOE conducted two to three tests on each burner. For each individual test, DOE performed the full test method, including the preliminary test required to determine the turndown temperature and simmering setting for a given burner. DOE also included test results from previous testing conducted in support of the August 2016 SNOPR. The coefficient of variation DOE observed for the measured AEC for its test sample was, on average 1.0 percent. DOE also noted that the average per-cycle energy consumption coefficient of variation for each burner was 1.7 percent.

    DOE based its Final Rule conclusions regarding total variation of the entire plethora of cooktops in the marketplace on only this meager five unit sample and a simulated round robin. DOE's testing did not truly test reproducibility from lab to lab because DOE simply used different technicians for some of its tests. DOE did not conduct testing on the same units in different labs. It makes sense that under those conditions—using the same laboratory equipment and test technicians trained in the same laboratory—variation would be lower. Moreover, this assessment looks at within lab variation and not total variation. As discussed below regarding DOE's electric cooktop testing, DOE's testing is insufficient to support a conclusion that the test procedure for gas cooktops is repeatable and reproducible and, thus, is insufficient to support the final test procedure.

    Moreover, because DOE tested such a small sample the confidence level of its results is low (the same is true for electric cooktops). For a sample size of five, trying to represent the millions of units that will be produced and the tens of different labs that will be doing testing this inherently has a large margin of error as shown in Figure 2.6

    6See, e.g., www.surveysystem.com.

    EP25AP18.007

    Based on this sample size, results can vary plus or minus 26 percent. We fully understand that a larger sample size is a function of cost and that there are limitations on the amount of further testing that can be done. Nevertheless, it is important not to lose sight of the fact that DOE's sample size results in as much as 50 percent in variation on the expected results. Thus, it is no surprise that AHAM's testing has shown significant variation that DOE's did not. This large confidence interval, which the difference between DOE's and AHAM's test results bear out, further supports AHAM's request that DOE withdraw the cooktop test procedure. A test procedure that could be required to demonstrate compliance with possible energy conservation standards should not be finalized with such a high confidence interval, particularly when conflicting data has been provided to highlight this high confidence interval. At a minimum, this demonstrates that DOE's data alone and when added together with AHAM's data raises significant questions about whether the test is repeatable and reproducible. Thus, DOE's Final Rule is not supported by adequate data and could be considered arbitrary and capricious.

    Moreover, as with electric cooktops and discussed more fully below, DOE did not engage stakeholders—either manufacturer labs or third party labs—in its assessment of the Final Rule. Thus, based on DOE's testing, neither DOE nor stakeholders have any idea what the actual test procedure total variation is.

    In order to assess whether the final test procedure for gas cooktops is repeatable and reproducible, after DOE issued the final test procedure rule, AHAM conducted a round robin on gas cooktops. It is likely that even more testing would be helpful in better understanding both the test procedure and its variation, but these results are enough to demonstrate that there is sufficient doubt regarding the gas cooktop test procedure's accuracy such that DOE should withdraw it.

    AHAM's gas cooktop round robin included four units (two cooktops and two ranges), with a range of product types.7 Four labs tested the burners with the highest and lowest burner input rates (i.e., one high capacity and one low capacity burner was tested for each unit).8 Each burner was tested three times each using the procedure specified in the DOE Final Rule. Labs recorded the simmering setting selection for the energy test cycle and the first laboratory marked the turn down temperature. AHAM's test plan is attached in Exhibit B and AHAM provided Navigant with raw data under a confidentiality agreement.

    7 A summary of the test unit characteristics is attached at Exhibit B and data in Exhibit C.

    8 Unit A was tested by five labs.

    We note that some of the tests could not meet the specified ambient temperature requirements. Specifically, some of the laboratories were not able to hold the ambient temperature as required during the duration of the test. Manufacturers ran the tests in the tightest environments that are currently available at +/−5 °F in their laboratories. The Final Rule requires new equipment to maintain +/−2 °F, which is difficult or, in some cases, impossible to do in existing laboratories. Section IV below further discusses this point. The labs that ran the tests have been approved by the safety certification bodies and Canadian Energy Verification organization. We removed the most errant runs and included the test data to show the variation that was noticeable during our tests as it is representative of the current lab capability. Importantly, improving the ability to maintain ambient temperature will involve significant upgrades to laboratories, which will add cost and burden for manufacturers.

    As mentioned above, AHAM's test plan called for running the test differently than the DOE test by having the first laboratory mark the turn down temperature it used. AHAM understands that this is not fully consistent with DOE's test procedure. But, because the test procedure is unduly burdensome to conduct, as discussed below, this method was necessary to reduce the test burden—reducing the number of possible settings for the cooktop was seen as a worthwhile experiment. Importantly, it was not always possible for laboratories to use the marked temperature and so, in several instances, laboratories followed DOE's test procedure to the letter. In the end, only half of the labs were able to follow AHAM's test plan. The other half ran the test according to the DOE test procedure as written. Our data below differentiates these methods by referring to the tests that used the marked turndown temperature as the “truncated test” or “preset.”

    The DOE test procedure tried to address some of the variation that is not controllable in the methodology of its burdensome test procedure—e.g., heating values, different ambient temperatures, equipment, and technicians. AHAM's methodology was an effort to determine if the extra burden aimed at reducing that variation reduced it enough to justify the extra time, labor, and cost. Our conclusion: it is not. Although neither method showed results with an acceptable level of variation, the runs that used the truncated test resulted in less variation. Regardless, the results cast significant doubt on DOE's small amount of supporting data for the Final Rule and support AHAM's request that DOE withdraw it.

    Good lab practice is that within lab variation should clearly be less than two percent. For current data acceptance programs within the appliance industry, it is common practice that data between labs should be no more than three percent variation. DOE's data within its own lab fell within the target zone for variation for four of the five units DOE tested. DOE did not test at different labs, so the Final Rule is not based on any accurate lab-to-lab data showing an acceptable range of lab-to-lab variation.

    AHAM's round robin shows similar results to DOE's in terms of within lab variation. Significantly, however, as shown in Table 1, lab-to-lab variation considerably exceeds the three percent maximum lab-to-lab variation target regardless of whether the full DOE test was run or the truncated test was run.

    Table 1—AHAM Gas Round Robin Summary Results Cooking unit Width Number of
  • burners
  • Minimum input
  • rate
  • (Btu/hr)
  • Maximum input
  • rate
  • (Btu/hr)
  • Average
  • annual energy
  • consumption
  • (kBtu/yr)
  • Coefficient of
  • variation
  • —1 lab
  • (repeatability)
  • (%)
  • Coefficient of
  • variation across
  • multiple labs
  • (reproducibility)
  • (%)
  • AHAM A—set 36 5 8,000 18,000 936.3 0.89 3.60 AHAM A—Preset 918.7 0.68 2.30 AHAM B 30 4 5,000 15,000 1,034.1 9.20 17.10 AHAM B—Preset 870.1 1.70 13.50 AHAM C 30 4 5,000 15,000 843.1 2.70 12.50 AHAM C—Preset 827.9 1.80 7.00 AHAM D 30 5 5,500 18,000 1,077.2 0.78 12.00 AHAM D—Preset 1,123 1.59 12.00

    This highlights the significant gap in the data DOE used to justify the rule. DOE assumed that low variation in one lab means repeatability and reproducibility across labs. But AHAM's round robin demonstrates that this is not the case. Our round robin shows reproducibility is not present in the current procedure as demonstrated by only one of the three units, Unit A, having an acceptable coefficient of variation across labs. Notably, the low input rate on that burner is 8,000 BTU. AHAM units B, C, and D all have low capacity burner rates of or about 5,000 BTU. DOE only tested one of its five units with a low capacity burner at 5,000 BTU. DOE's coefficient of variation for that model was 1.40 percent. Some of the best AHAM single lab coefficients of variation for models at that rate are 0.78, 1.59, 1.70, and 1.80 percent. The AHAM data would appear to agree that one lab can repeat the same results, but that is not the full story.

    Focusing on the units with low simmer rates and digging deeper into the data, AHAM's data show the following:

    EP25AP18.008

    • On all units except one, Unit B, the repeatability on the high capacity burner within the lab had acceptable variation but the reproducibility across labs did not. Overall, on the high capacity burner, the variation was higher using the DOE test procedure than it was using the truncated test and none of the variation was within an acceptable range from lab-to-lab.

    • On all units, the repeatability on the low capacity burner was marginal—25 percent of the time the variation was greater than the two percent maximum target. There is a distinct difference in the low capacity variation and the three units that had simmer at or near 5,000 BTU had significant repeatability and reproducibility issues. In some cases, using the truncated test actually improved lab-to-lab variation. This demonstrates that the burden associated with determining the turn down temperature in DOE's full test procedure is not always justified—it does not categorically improve repeatability and reproducibility. Thus, not only is DOE's final test procedure rule unsupported by sufficient data to demonstrate its reproducibility, but it is also unduly burdensome to conduct. In addition, this highlights the weakness in the DOE test procedure which conducts a water boil and simmer test on small burners that are not meant for either purpose. As discussed above in Section I, those burners are designed to provide a simmer only cooking function for melting chocolate and cooking sauces, not for boiling or simmering water.

    B. Within Unit And Between Unit Variation

    DOE did not evaluate or account for variation within units. There are issues inherent in testing gas cooktops and ranges that contribute significantly to within unit variation. For example, heating value, gas pressure, and atmospheric pressures all have an impact. More specifically, as atmospheric pressure changes due to weather, test results will vary even on the same unit from day to day. Also, gas pressure and atmospheric pressure can vary from run to run, and that can have an impact on how the gas is mixing within the burner port which then impacts burner combustion and energy creation. Moreover, heating values vary within a lab on a daily basis and likely vary greatly between labs. Thus, the same unit tested on different days in the same lab or in different labs will not perform the same unless the heating value of the gas is the same. That is statistically unlikely because values vary every day. It is not likely that the heating value is 1075, so there is a conversion from what it actually was to 1075 and this artificial adjustment induces variation. Each of these factors, among others, individually and collectively contribute to variation from test to test and DOE has made no effort to understand the impact of these factors.

    This inherent variation in gas cooking product testing has been known for decades and is the reason the safety test, ANSI Z21.1, requires certified technicians to drill testing orifices. The drilling of orifices achieves precise rates for nominal, high, and low values. Experience shows that certified gas technicians can dial in the precise values for assessment by using number sized drills but there are also factors the technician must manage in this process such as burrs from the drilling. AHAM is not suggesting that DOE require testing orifices be drilled for purposes of energy testing—the burden is significant to say the least and would make the test unduly burdensome to conduct. Although such burden is justified for purposes of ensuring the safety of cooking products, which carry inherent safety risks, it is not justified for purposes of energy testing. And, because safety testing is not similar to energy testing (for example, cooktops are tested on high for hours and products are over-stressed in abnormal conditions), it is not possible to re-use the units tested for safety purposes for energy testing.

    In addition, neither DOE nor AHAM have evaluated or accounted for the additional variation inherent in producing gas products, i.e., between unit variation. This is significant because it will add further variation on top of the within lab variation, lab to lab variation, and within unit variation. In order to ensure compliance with any future energy conservation standard, manufacturers will have to take this total variation into account. The result will likely be that it becomes difficult or impossible to meet standards because the buffer needed to ensure accurate ratings will require levels of efficiency that are not economically justified or technologically feasible. AHAM explored this concept in more detail in its comments on DOE's proposed standards, which we hereby incorporate by reference.9

    9 AHAM Comments on DOE's SNOPR for Energy Conservation Standards for Residential Conventional Cooking Products; Docket No. EERE-2014-BT-STD-0005; RIN 1904-AD15 (Nov. 2, 2016).

    One of the test requirements that will vary within the unit is the simmer setting on gas products. Subsequent to AHAM's round robin, Lab Three conducted some additional investigative testing to determine whether using the same simmering setting improves repeatability. The lab used two different operators to test a unit and provided both with the same instructions, which are identified in Exhibit A. The test plan was as follows:

    1. Operator F conducted the test and found the simmer setting and gas flow;

    2. Operator M conducted the test independently and found a simmer setting and gas flow;

    3. Operator M repeated the test using the Operator F simmer setting; and

    4. Operator F repeated the test using the Operator M simmer setting.

    The results show that technicians are likely to be able to work to achieve passing results on their own efforts to determine a simmering setting. But when given the target setting, the results show that it is likely that different technicians cannot recreate a first technician's passing result about half of the time.

    The data also highlight that there are more issues with finding the right simmer setting on low capacity burners—the Lab Three technicians each failed the first time they tried to set the low capacity burner. Also, see in Exhibit A where an additional experiment was run with one of Lab Four's technicians developing the simmer setting without using the previously provided information. This resulted in different energy average and lower variation values between the two Lab 4 technicians.

    According to these results, relying on a given setting actually increased variation and retests due to failing performance. Thus, though recording the turn down temperature as required by the Final Rule may help understand differences in results between labs, it does not reduce variation. And it does not seem that simply following the test procedure to the letter, as DOE suggested in response to AHAM's comments and discussed in Section II below, reduces variation. AHAM's test results demonstrate that additional efforts to reduce variation on turndown settings were unsuccessful—even standardizing the simmering setting does not drive sufficient variation reduction. (Moreover, for gas products, it will not be possible to specify turndown settings for gas products due to orifice variation, which is discussed in more detail below). Accordingly, because DOE's final test procedure does not sufficiently reduce total variation, DOE should withdraw the cooktop test procedure.

    C. Full Population and Total Variation

    As stated previously, DOE's small sample size could not address the full population or total variation. Table 2 below lists the units have been tested to the final test procedure as specified from both DOE's sample and AHAM's sample and Figure 3 shows the samples and their results graphically.

    Table 2—DOE and AHAM Test Samples Combined Cooking unit Width Number of
  • burners
  • Minimum input
  • rate
  • (Btu/hr)
  • Maximum input
  • rate
  • (Btu/hr)
  • Burner
  • configuration
  • Grate type Grate weight
  • per burner
  • lbs)
  • Average
  • annual energy
  • consumption
  • (kBtu/yr)
  • Coefficient
  • of variation
  • —1 lab
  • (repeatability) (%)
  • Coeffiecient of
  • variation across
  • multiple labs
  • (reproducibility) (%)
  • DOE 1 30 4 9,000 9,000 open Steel-wire 0.5 640.4 2.40 N/A DOE 2 30 4 5,000 15,000 Sealed Cast Iron 3.7 854.4 1.40 N/A DOE 3 36 6 18,000 18,000 Sealed—stacked Cast Iron 4.4 974.8 0.40 N/A DOE 4 36 6 9,200 15,000 Sealed—stacked Cast iron—Continuous 5.8 963.5 0.30 N/A DOE 5 36 6 15,000 18,500 Sealed Cast iron—Continuous 7 893.1 0.30 N/A AHAM A 36 5 8,000 18,000 Sealed—stacked? Cast iron—Continuous ? 936.3 0.89 3.60 AHAM B 30 4 5,000 15,000 Sealed Cast Iron ? 1,034.1 9.20 17.10 AHAM C 30 4 5,000 15,000 Sealed Cast Iron ? 843.1 2.70 12. 5 AHAM D 30 5 5,500 18,000 Sealed Cast Iron ? 1,077.2 0.78 12.00
    EP25AP18.009

    Figure 3 shows the units tested and what their AAEC number is versus their lowest burner capacity rating. It highlights how skewed the DOE sampling was, especially as compared to AHAM's. As discussed above in Section I, DOE identified that nearly half of the models in the market had a 5,000 BTU burner. Yet, DOE selected only one unit with a burner of that capacity. Aside from the fact that DOE's sample inadequately represents the market, this demonstrates that DOE's test procedure will produce inaccurate results for most of the gas products on the market. The test has a high degree of variation for those products, as shown above, and, thus, the test will not allow consumers to compare across products.

    Neither DOE nor AHAM have evaluated or accounted for the all of the variation inherent in producing gas products, i.e., total variation across the population. It is a large task and assuming the small amount of work applies to the total picture is not acceptable and further supports the withdrawal of the test procedure.

    III. DOE Has Not Demonstrated That The Test Procedure Is Repeatable Or Reproducible For Electric Cooktops.

    As discussed above, in response to the August 2016 SNOPR, based on round-robin testing, AHAM identified several sources of potential variation that needed to be resolved prior to DOE finalizing a cooktop test procedure. DOE conducted additional testing in order to evaluate AHAM's concerns and made clarifications to attempt to address many of them. Unfortunately, DOE's testing was not sufficient to demonstrate that the final test procedure significantly reduced the high degree of total variation AHAM identified in its comments. AHAM does not agree that the final test procedure is sufficiently repeatable and reproducible. Accordingly, AHAM respectfully requests that DOE withdraw the cooktop test procedure.

    A. DOE's Testing

    DOE did not do enough testing to verify that its clarifications resulted in a final test procedure that is repeatable and reproducible and, so, the Final Rule is not supported by sufficient data. DOE conducted testing of five electric cooktops incorporating different heating technologies (one coil element cooktop, two radiant element cooktops, and two induction cooktops) and control types (four with step controls and one with infinite). For each unit, DOE conducted testing on surface units capturing a range of heating element sizes. DOE conducted two to three tests per surface unit. For each individual test, DOE performed the full surface unit test method, including the preliminary test required to determine the turndown temperature and simmering setting for a given surface unit. DOE varied test operators for surface unit tests, but did not test at different laboratories. DOE also included test results from previous tests of these units conducted in support of the August 2016 SNOPR.

    AHAM appreciates that DOE conducted this testing. But it is not enough to justify finalizing the test procedure. DOE did not complete full tests—it tested only two to three burners. Although that is helpful in assessing potential variation, AHAM is concerned that DOE would finalize a rule based on the results of only partial tests.

    DOE's testing demonstrates a low average coefficient of variation of 1.2 percent. It is uncertain whether those results are accurate given that DOE did assess the full IAEC for an entire cooktop. But, assuming that the partial tests do give a reasonable understanding of repeatability and reproducibility, DOE has not identified why DOE's coefficient of variation was so much lower than AHAM's.

    One potential reason is that DOE's testing did not truly test reproducibility from lab to lab—DOE simply used different technicians for some of its tests. DOE did not conduct testing on the same units in different labs. It makes sense that under those conditions—using the same laboratory equipment and test technicians trained in the same laboratory—variation would be lower. DOE's test parameters did not accurately simulate reproducibility. The simulation run by DOE only changed the test technician. It is unclear from DOE's analysis if those technicians had previous knowledge of the procedure or were allowed to imprint their interpretation on the execution of the test. DOE did not simulate running the test with different equipment and a different environment, as would be run in a true round robin.

    Conversely, AHAM's tests were conducted on the same units in three (now four) different laboratories. Those laboratories have different technicians with different training, different equipment, and, potentially, different interpretations of the test procedure. These true round robin conditions are far more likely to reveal ambiguity in the test and sensitivities that cause variation. They also replicate a real scenario—one lab attempting to verify the results of a different lab. As discussed above in Section II, the testing conducted to date, necessarily, has a low confidence level and the differences between AHAM's and DOE's results demonstrate that. AHAM's testing resulted in significantly higher variation than DOE's and the large confidence interval that results supports AHAM's request for DOE to withdraw the cooktop test procedure.

    Moreover, DOE did not engage stakeholders—either manufacturer labs or third party labs—in its assessment of the Final Rule. Thus, based on DOE's testing, neither DOE nor stakeholders have any idea what the actual total test procedure variation is. The test laboratory DOE used to run the tests in support of the proposed and final rules will not be a lab that regularly runs the test procedure when reporting and/or compliance with standards is potentially required. (The labs that participated in AHAM's round robin, will, of course, be conducting testing to demonstrate compliance with any potential future standards). Thus, because DOE's reproducibility testing is essentially theoretical and only simulates a round robin test, DOE's testing is helpful, but not enough to determine the repeatability and reproducibility of the test.

    B. Determining the Simmering Setting

    AHAM commented that there is variability in determining the simmering setting for the simmering phase of the test and noted that the simmering setting plays an important role in the overshoot temperature and the ability to maintain a temperature as close as possible to 90 °C during the simmering phase of the test.

    DOE responded that it expects that correctly following the methodology—starting with the lowest simmering setting and repeating the test as necessary with the next highest setting until the setting that maintains the water temperature above, but as close as possible to 90 °C, is identified—will result in only a single appropriate simmering setting for a given surface unit.

    DOE agreed with AHAM that the selection of the simmering setting has a significant impact on the overall energy consumption of a surface unit and amended Appendix I to require that the simmering setting selection for the energy test cycle of each cooking area/zone be recorded. AHAM appreciates that DOE required recording the simmering setting selection—it will help in enforcement/verification actions to understand differences in test results. Unfortunately, recording the setting will do nothing to decrease variation or prevent false findings of potential noncompliance.

    AHAM acknowledges that in its initial round robin, laboratories did not start at the lowest simmering setting—laboratories started at the lowest setting they believed would be able to maintain a water temperature above and as close as possible to 90 °C. AHAM is a proponent of conducting the test that way in order to reduce test burden which, as discussed further below, is already significant.

    Nevertheless, in order to understand if variation would decrease by following the letter of the test procedure as DOE suggested in the Final Rule, AHAM, in conducting a round robin on gas cooktops, required participating laboratories to (a) follow the DOE test procedure for selection of the simmering setting; (b) record their simmering setting; and (c) for the first lab, mark the turn down temperature on the unit itself.10 Our data, which are discussed above in Section II, show that following the letter of the test procedure does not sufficiently reduce variation. In particular, lab-to-lab variation remains high for gas cooktops and AHAM's round robin testing for electric cooktops provided data to support a conclusion that it is likely also high for electric cooktops. DOE did not adequately address AHAM's concern in its Final Rule and AHAM's gas testing casts further doubt on this question.

    10 Results of the AHAM gas round robin are discussed in Section II.

    AHAM incorporates by reference the data we submitted to DOE during the rulemaking regarding our electric round robin, which is summarized in the below tables. These data highlight that the simmer setting is a significant source of variation. Because DOE has not yet adequately addressed it, and, thus has not sufficiently demonstrated that its test procedure is valid, DOE should withdraw the cooktop test procedure.

    EP25AP18.012 C. Spiking Temperatures When Reaching 90 °C

    AHAM commented that our round robin demonstrated difficulty in determining when the water temperature first reaches 90 °C to start the 20-minute simmering phase of the test because, when the temperature first reaches that temperature, it may oscillate slightly above or below it. DOE's testing showed similar fluctuations. Thus, DOE amended Appendix I to clarify that the 20-minute simmering period starts when the water temperature first reaches 90 °C and does not drop below 90 °C for more than 20 seconds after initially reaching 90 °C.

    AHAM thanks DOE for making this clarification which seems like it could reduce variation. DOE's testing—completed in a single lab and with technicians trained in the same lab—does not, however, adequately demonstrate that this clarification sufficiently reduces variation and improves reproducibility. AHAM's members were not able to dedicate resources to re-performing a round robin to verify DOE's findings on a single unit. Without knowing whether total variation has, in fact, been reduced, DOE should not have finalized the test procedure and DOE cannot rely on assumptions that this change will reduce total variation—to do so could be considered arbitrary and capricious. Total variation is made up of within lab and between lab variations AND within and between units variations. DOE only addressed some of the within lab variation causes, meaning that other causes of variation are unaddressed. DOE does not have sufficient data to demonstrate that the test procedure is reproducible and should withdraw the test.

    D. Heating Element Cycling

    AHAM commented that cycling of power to the heating element is unpredictable and causes variation in test results. It is unknown if the surface unit will cycle the heating element off during a critical phase of the test—i.e., at the start of the simmering phase or when determining the simmering setting. In response to DOE's September 27, 2016 data request, AHAM provided further data on how this was observed during our testing. DOE could not have reviewed or considered that data in drafting the Final Rule given that the Final Rule was issued the same day AHAM provided the data. AHAM incorporates the data we submitted on November 23, 2016, in this petition by reference.

    DOE did, however, examine its own data. DOE indicated that it observed only one electric smooth-radiant cooktop in its sample for which the heater cycled on and off during the heat-up phase of the test. That particular unit cycled back on within a few seconds of cycling off and, as a result, the water temperature continued to rise at a “fairly steady state.” Thus, DOE concluded that it was infrequent for heating elements to cycle during the heat-up phase and, so, it was unlikely that other electric smooth-radiant cooktops would require any substantive amount of heating element cycling to protect the glass surface. DOE indicated that it did not expect any measurable impacts of heating element cycling on the total measured per-cycle energy consumption.

    DOE based its conclusions on the single unit in its sample and is guessing that because only one unit in its small sample did not cycle on and off during the heat-up phase, it must not occur frequently and/or if it does, it will not have a measurable impact on the total per-cycle energy consumption. But AHAM also observed element cycling during its testing. Thus, in only the small amount of testing conducted in the U.S. to date, unit cycling during the heat-up phase has been observed twice. That is not insignificant. Almost 20 percent of units in the combined AHAM and DOE tested sample experienced unit cycling.

    Moreover, AHAM submitted additional data to DOE regarding the unit cycling it observed. As mentioned in that data submission, AHAM tested two eight-inch coil elements on different cooktops with the same model number to evaluate unit to unit variation. One cooktop cycled during the T70 turndown test and the other did not. The unit that cycled resulted in a higher turn down temperature when compared to the test that did not cycle. The unit did not cycle on either test run during the final T90 simmer test. The high Tc value caused one test run to have a higher overshoot and allowed for a lower turn down during the simmer phase driving unit to unit variation. This resulted in 36 watts less power on the unit with the lower turn down. This is six percent of the normalized power level. Six percent is not insignificant and demonstrates the potential difference between the energy measured on two units of the same construction. DOE should withdraw the Final Rule for cooktops and review and consider the data AHAM submitted. This issue must be addressed in order to reduce total variation.

    Furthermore, DOE did not address the arguments AHAM made about the uncertainty regarding how unit cycling will impact test results and test burden—this is a significant concern and could drive redesign of products. Heating element cycling is key to cooking performance for electric ranges because the algorithm that governs heating element cycling controls the temperature of the food being cooked. If the temperature is not properly maintained, the consistency of the food can change. Moreover, for smooth top electric ranges, heating element cycling also serves a safety function. Such cooktops are equipped with a glass break sensor to monitor temperature. That sensor will dictate when a unit needs to cycle down to avoid glass breakage. AHAM is concerned that the test procedure, as finalized by DOE, could drive changes to the algorithm for heating element cycling design. Any such changes will result in significant product development efforts which have not been accounted for in DOE's test procedure rulemaking. A test procedure change should not dictate this sort of design change simply to manage uncertainty and variation.11

    11 It is possible, for example, consumers often jump from one side (rolling boil) to the other side (boil action lost) a couple of times before they understand where to set the dial to maintain their desired simmering temperature. If manufacturers make the dials more precise in order to reduce variation in the energy test, that could result in more settings and consumers could change back and forth more times because they see less impact in adjusting the knob. This could actually drive consumers to use more energy in the field. Accordingly, DOE should examine potential unintended consequences of addressing this uncertainty.

    For these reasons, DOE should withdraw the cooktop test procedure due to total variation that is not fully understood and, from available data, appears to be at an unacceptable level.

    E. Upcoming New Cooktop Designs

    As AHAM has commented to DOE many times, Underwriters Laboratory (UL) Standard 858 will soon require a new test for electric coil element cooktops. The change to the voluntary safety standard, which AHAM developed and proposed to UL with the support of the Consumer Product Safety Commission, will require electric coil element cooktops and ranges to monitor and limit pan bottom temperature and is aimed at reducing the incidences of unattended cooking fires. It represents a major redesign for all electric coil cooktops by every manufacturer. The change will be required to show compliance on coil cooktops with the updated voluntary safety standard as of June 15, 2018.

    Given the date of this requirement, it is certain that any cooktop standard DOE may promulgate (and AHAM opposes any change to the existing standards for conventional cooking products) would apply to these newly designed products. But, because these products are still in development, DOE has not done testing on products using these controls and neither have manufacturers. Because company designs to comply with the UL 858 requirements may involve cycling of the element, it is quite possible that heating element cycling will be different than it is for existing products. Thus, DOE's data, even as supplemented by AHAM's data, on heating element cycling may be irrelevant because it does not represent products that will be on the market if the test is required to demonstrate compliance with possible energy conservation standards.

    As shown in Figure 4, initial data, based on testing conducted by Primaria LLC to develop UL 858's new requirements, show that though time to boil water may not increase significantly using temperature limiting controls on coil cooktops, the difference could be enough to further impact the current assumptions on variation. And, the control cycling could be somewhat different as well. DOE should understand how the energy test will respond to these new technologies.

    EP25AP18.010 F. Pan Warpage

    Although DOE sought feedback on the degree to which the heating element or cookware may deform and impact the heat transfer between the two surfaces in its rulemaking on energy conservation standards for cooktops, DOE did not investigate the impact of pan warpage on the repeatability and reproducibility of the test procedure.

    The UL 858 test for coil cooktops initially required use of an aluminum pan. But, based on manufacturer experience doing significant testing, AHAM proposed a cast iron alternative to aluminum pans for the test. UL published this update in August of 2017. The shift is to account for warping and the variation and lack of repeatability it is driving in the safety assessment. There is no reason to believe this variation will not also extend to energy testing.

    The data from the UL 858 work with Primaira show that any variation in pans of the same type will drive variation that the energy testing has not yet shown because the pans have yet to warp substantially. Significantly, using a warped stainless steel pan on a ceramic cooktop did increase the boil time with the cooktop fire mitigation control active (that control cycles the element on and off per an algorithm). And, warpage on stainless steel pans style will cause a difference in energy use on units without a limiting control as shown in Figure 5. DOE's failure to further investigate this issue means that its test procedure is not adequately supported.

    EP25AP18.011 IV. The Cooktop Test Procedure Is Unduly Burdensome To Conduct.

    The discussion in the sections above highlights several significant burdens associated with conducting DOE's cooktop test procedure that AHAM believes make it unduly burdensome to conduct. Specifically:

    • The test procedure takes about 20 hours for an average four burner cooktop and requires the testing of every single burner or element individually. And, because the test requires the technician to determine the turn-down temperature before every test and the ambient conditions are quite tight, several runs are often required before a valid run can be achieved. Our testing found that some tests took upward of five days for a single cooktop.

    • As indicated by AHAM's truncated gas test plan, it is burdensome to determine the turn down temperature for each individual test and burner. And doing so does not serve any purpose as it appears that it does not decrease variation.

    • The ambient temperature requirements are incredibly tight and it is difficult or impossible for some laboratories to meet them without investing in lab improvements. Some companies had difficulty maintaining the ambient conditions and AHAM could not use their data in its round robin results.

    • Test pots will warp during testing and will need to either be repaired or replaced frequently.

    • The test procedure variation means that manufacturers will need to add a larger than usual “buffer” to any eventual energy conservation standards ratings, which will effectively increase the stringency of any future standard, probably by a large amount.

    In addition to the test burden itself, there is also substantial cost associated with the test procedure. DOE determined that the test procedure would cost $700 per test for labor, with a one-time investment of $2,000 for new test equipment, which was split between test pots and other instrumentation. AHAM collected data from its members on the cost of the test procedure, both ongoing and initial investments. This data is based on company experience with the test through AHAM's round robins and in testing in Europe, on the number of models each company has, and on the potential need for third party testing. AHAM's data show that DOE significantly underestimated the cost associated with running the cooktop test procedure.

    Table 3 below shows the difference between DOE's estimates in the Final Rule and AHAM's data.

    Table 3—Per Test Costs (DOE Estimate v. AHAM Data) Cooktop full product line Per test costs (per manufacturer) One time (initial year) DOE AHAM On-going (annual) DOE AHAM Labor Costs $700 $970 $970 Instrumentation (equipment for testing) 15 1,432 1 38 Test pots (vessels) 152 113 2 209 Testing structures 8 159 3 43 Transducer (for ambient air temp.) 2 N/A 0 Total 876 2,673 700 1,260 Note: On average, 543 tests will be required to certify companies' full product lines. 1 This includes equipment maintenance (new/existing and calibrations for testing equipment). 2 Manufacturers will require ongoing replacement of test pots due to warping. 3 This includes increased/new annual costs from third party labs and/or UL and ISO (re) certification.

    One of the significant differences between DOE's estimate and AHAM's data is the total number of tests required and the number of models to be tested. It is difficult for manufacturers to determine at this stage how many basic models they would have. DOE's proposed energy conservation standards for cooktops, which AHAM strongly opposes, would be the first time manufacturers would need to certify compliance with standards and determine basic models. To do that may require testing of all models in order to determine likely model families, particularly because cooking products are complex. It will be difficult to determine which models can be grouped together in a basic model. That said, AHAM understands that not each individual model will need to be tested. Thus, it is likely that something between DOE's estimate and AHAM's data would be the actual average total number of models tested.

    Nevertheless, the difference in the number of tests and number of models to be tested is shown below in Table 4. DOE cost estimations (particularly for labor) are on a per-test basis. As described above, it is difficult to determine the total number of tests to be performed in the initial year. Comparing the DOE estimation of number of tests to AHAM member data shows a signficant difference or wide range. As a result, total costs are substantially higher when considering the average number of tests required according to AHAM member data.

    Table 4—Average Number of Tests and Models To Be Tested Tests/models comparison DOE AHAM Estimated total cost DOE AHAM Average total number of tests required 66 543 $46,000 $1,100,000 Average total number of models tested 21 166 58,000 1,450,000

    Another important difference is that DOE did not address upfront investments made in order for manufacturers to be able to perform the test procedure. But those costs should not be ignored. Manufacturers identified significant investments in specialized equipment to perform the test procedure successfully. For example, all respondants to AHAM's survey expressed frustration in obtaining the necessary test pots because the supplier is overseas. Acquiring even one set is difficult, as AHAM has discussed in previous comments, and the cost is about $9,500 excluding shipping and handling. Manufacturers indicated they would require between three and 24 sets to do certification testing.

    DOE concluded that it would cost about $500 to fabricate existing testing structures. But manufacturers identified significantly higher costs. AHAM's members consistently cited investments to redesign entire lab stations and expand facility space. These changes would be needed to control for ambient temperature at the tight levels DOE's test requires, cool test units, add new equipment, and account for much higher volumes of testing. AHAM also believes that third party testing (for certification only) could cost over $2,500 per model. Table 5 details the comprehensive costs.

    Table 5—Comprehensive Costs Cooktop full product line Overall per company costs AHAM Labor costs (annual total salaries) 1 $272,186 Instrumentation (equipment for testing) 2 376,635 Test pots (vessels) 3 84,200 Testing structures 4 368,100 Transducer (for ambient air temp.) N/A Total 1,101,121 Note: Overall costs may not align with per-test costs due to reporting measures and averaging. 1 Annual salary for full-time technicians across multiple labs (1 to 5, up to 13 stations/chambers). 2 Specialized equipment (designed/purchased) to complete test procedure. 3 Companies require on average 3 sets of test pots to be replaced over multiple years. 4 Combination of costs from third party labs, certifications (UL/CSA/ISO), retrofitting existing facilities.

    The test and cost burden associated with the cooktop test procedure is not likely justified by any balancing benefit to consumers or the environment. In 2009, DOE determined that none of the trial standards levels that included efficiency standards instead of just prescriptive design standards had benefits that were outweighed by the economic burden that would be placed on consumers. DOE found that the potential economic savings realized by average consumers were outweighed by the risk that certain consumers would not realize the savings and the adverse loss of industry net present value, among other things. Thus, DOE prescribed standards consisting of prescriptive design standards, not energy performance standards. As we have commented previously, AHAM does not believe anything has changed since 2009 to justify amended standards.12 The available technology options have not changed. The energy savings opportunities remain small. Thus, the cooktop test procedure is not necessary and its burden is not balanced by any benefit to consumers.

    12See AHAM Comments on DOE's Energy Conservation Standards for Residential Cooking Products, Request for Information; Docket No. EERE-2014-BT-STD-0005; RIN 1904-AD15 (Apr. 14, 2014) (AHAM does not, however, believe that energy conservation standards different from those currently in place for conventional cooking products are technologically feasible or economically justified. There have been no significant changes since the existing standards for gas cooking tops and “no standard” standard for other conventional cooking products were promulgated that would result in justified standards. The available technology options have not changed, the energy savings opportunity remains small, and consumer cooking behavior still plays a significant role in the energy use of cooking products. In addition, AHAM believes that the introduction of new standards for cooking products could have a significant impact on the utility of cooking products . . .”).

    Given the extraordinary regulatory burden the cooktop test procedure will place on manufacturers, the procedure is an ideal candidate for repeal consistent with Executive Order 13771, Reducing Regulation and Controlling Regulatory Costs, which requires agencies to repeal two regulations for every new one issued and offset the costs. Because, as AHAM has demonstrated above, DOE's cooktop test procedure may be considered arbitrary and capricious because it is not supported by sufficient data and likely has a high degree of total variation, the test procedure does not benefit consumers. It serves only to burden manufacturers who must comply with a test procedure that does not adequately represent products and, due to variation, will require manufacturers to make conservative claims.

    CONCLUSION

    Because AHAM's testing shows that DOE did not sufficiently demonstrate that the cooktop test procedure is repeatable or reproducible for gas and electric cooktops, because DOE has yet to demonstrate—as EPCA requires it to do—that the final test procedure is representative for gas cooktops, and because the test procedure is unduly burdensome to conduct, we respectfully request that DOE withdraw the final cooktop test procedure while maintaining the repeal of the oven test procedure that was part of this same Final Rule. Even absent an energy conservation standard for cooktops that requires use of the test procedure, manufacturers are required to report energy use via a test procedure DOE has not demonstrated is representative of consumer use for all product types and AHAM has demonstrated is not reproducible. This means that reported energy values for some products could be inaccurate and, for all products, will not be directly comparable to each other across manufacturers. Thus, consumers could be misled when evaluating and comparing energy claims. Accordingly, we also seek an immediate stay of the effectiveness of the cooktop test procedure, including the requirement that manufacturers use the final test procedure to make energy related claims.

    Respectfully submitted, Association of Home Appliance Manufacturers By: Jennifer Cleary, Senior Director, Regulatory Affairs, 1111 19th St. NW, Suite 402, Washington, DC 20036, 202-872-5955 x314.
    [FR Doc. 2018-08641 Filed 4-24-18; 8:45 am] BILLING CODE 6450-01-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Part 101 [Docket No. FDA-2018-D-0075] The Declaration of Added Sugars on Honey, Maple Syrup, and Certain Cranberry Products: Draft Guidance for Industry; Extension of Comment Period AGENCY:

    Food and Drug Administration, HHS.

    ACTION:

    Notification of availability; extension of comment period.

    SUMMARY:

    The Food and Drug Administration (FDA or we) is extending the comment period for the notification of availability of a draft guidance for industry entitled “The Declaration of Added Sugars on Honey, Maple Syrup, and Certain Cranberry Products: Guidance for Industry” that appeared in the Federal Register of March 2, 2018. The draft guidance, when finalized, will advise food manufacturers of our intent to exercise enforcement discretion related to the use in the Nutrition Facts label of a symbol “†” immediately after the added sugars percent Daily Value information on certain foods. The symbol would lead the reader to truthful and non-misleading statements outside the Nutrition Facts label to provide additional information regarding the added sugars present in particular foods. We are taking this action in response to requests for an extension to allow interested persons additional time to submit comments.

    DATES:

    We are extending the comment period on the document that published in the Federal Register of March 2, 2018 (83 FR 8953). Submit either electronic or written comments by June 15, 2018.

    ADDRESSES:

    You may submit comments as follows:

    Electronic Submissions

    Submit electronic comments in the following way:

    Federal eRulemaking Portal: https://www.regulations.gov. Follow the instructions for submitting comments. Comments submitted electronically, including attachments, to https://www.regulations.gov will be posted to the docket unchanged. Because your comment will be made public, you are solely responsible for ensuring that your comment does not include any confidential information that you or a third party may not wish to be posted, such as medical information, your or anyone else's Social Security number, or confidential business information, such as a manufacturing process. Please note that if you include your name, contact information, or other information that identifies you in the body of your comments, that information will be posted on https://www.regulations.gov.

    • If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).

    Written/Paper Submissions

    Submit written/paper submissions as follows:

    Mail/Hand delivery/Courier (for written/paper submissions): Dockets Management Staff (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    • For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”

    Instructions: All submissions received must include the Docket No. FDA-2018-D-0075 for “The Declaration of Added Sugars on Honey, Maple Syrup, and Certain Cranberry Products: Guidance for Industry.” Received comments will be placed in the docket and, except for those submitted as “Confidential Submissions,” publicly viewable at https://www.regulations.gov or at the Dockets Management Staff between 9 a.m. and 4 p.m., Monday through Friday.

    • Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on https://www.regulations.gov. Submit both copies to the Dockets Management Staff. If you do not wish your name and contact information to be made publicly available, you can provide this information on the cover sheet and not in the body of your comments and you must identify this information as “confidential.” Any information marked as “confidential” will not be disclosed except in accordance with 21 CFR 10.20 and other applicable disclosure law. For more information about FDA's posting of comments to public dockets, see 80 FR 56469, September 18, 2015, or access the information at: https://www.thefederalregister.org/fdsys/pkg/FR-2015-09-18/pdf/2015-23389.pdf.

    Docket: For access to the docket to read background documents or the electronic and written/paper comments received, go to https://www.regulations.gov and insert the docket number, found in brackets in the heading of this document, into the “Search” box and follow the prompts and/or go to the Dockets Management Staff, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    FOR FURTHER INFORMATION CONTACT:

    Blakely Fitzpatrick, Center for Food Safety and Applied Nutrition, Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740, 240-402-1450.

    SUPPLEMENTARY INFORMATION: I. Background

    In the Federal Register of March 2, 2018 (83 FR 8953), we published a document announcing the availability of a draft guidance for industry entitled “The Declaration of Added Sugars on Honey, Maple Syrup, and Certain Cranberry Products: Guidance for Industry.” The draft guidance is intended to advise food manufacturers of our intent to exercise enforcement discretion related to the use in the Nutrition Facts label of a symbol “†” immediately after the added sugars percent Daily Value information on certain foods. The symbol would lead the reader to truthful and non-misleading statements outside the Nutrition Facts label to provide additional information regarding the added sugars present in particular foods. The draft guidance explains that we intend to consider exercising enforcement discretion for the use of this symbol on single ingredient packages and/or containers of pure honey or pure maple syrup, and certain dried cranberry and cranberry juice products that are sweetened with added sugars, and that contain total sugars at levels no greater than comparable products with endogenous (inherent) sugars, but no added sugars. We provided a 60-day comment period that was scheduled to close on May 1, 2018.

    We have received requests to extend the comment period for the draft guidance (Refs. 1 and 2). The requests conveyed concern that the current 60-day comment period does not allow sufficient time to develop meaningful or thoughtful comments to the draft guidance.

    We have considered the requests and are extending the comment period for the draft guidance for 45 additional days, until June 15, 2018. We believe that this extension allows adequate time for interested persons to submit comments without significantly delaying finalizing the guidance.

    II. References

    The following references are on display at the Dockets Management Staff (see ADDRESSES) and are available for viewing by interested persons between 9 a.m. and 4 p.m., Monday through Friday; they are also available electronically at https://www.regulations.gov.

    1. Letter from Margaret Lombard, Chief Executive Officer, National Honey Board, to FDA Dockets Management Staff (April 3, 2018). 2. Letter from Ray Bonenberg, President, International Maple Syrup Institute, to Dr. Scott Gottlieb, Commissioner of Food and Drugs, FDA (April 4, 2018). Dated: April 19, 2018. Leslie Kux, Associate Commissioner for Policy.
    [FR Doc. 2018-08603 Filed 4-24-18; 8:45 am] BILLING CODE 4164-01-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket Number USCG-2018-0078] RIN 1625-AA00 Safety Zone; Officer Lehner Memorial Vintage Regatta; Buffalo Outer Harbor, Buffalo, NY AGENCY:

    Coast Guard, DHS.

    ACTION:

    Notice of proposed rulemaking.

    SUMMARY:

    The Coast Guard proposes to establish a temporary safety zone for certain waters of the Buffalo Outer Harbor during the Officer Lehner Memorial Vintage Regatta. This proposed rulemaking would prohibit persons and vessels from being in the safety zone unless authorized by the Captain of the Port Buffalo 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 May 25, 2018.

    ADDRESSES:

    You may submit comments identified by docket number USCG-2018-0078 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 Michael Collet, Chief of Waterways Management, U.S. Coast Guard Sector Buffalo; telephone 716-843-9322, email [email protected]

    SUPPLEMENTARY INFORMATION:

    I. Table of Abbreviations CFR Code of Federal Regulations DHS Department of Homeland Security FR Federal Register NPRM Notice of proposed rulemaking §  Section U.S.C. United States Code II. Background, Purpose, and Legal Basis

    On December 27, 2017, the Buffalo Vintage Boat Racing Association and BR Guest Inc., notified the Coast Guard that it will be conducting a boat race from 10:00 a.m. to 4:00 p.m. on July 1, 2018, on the Buffalo Outer Harbor. Hazards from the boat regatta include high speed vessels. The Captain of the Port Buffalo (COTP) has determined that potential hazards associated with the Officer Lehner Memorial Vintage Regatta would be a safety concern for anyone within the designated course encompassed by all waters inside of the Outer Harbor, Buffalo, NY starting at position 42° 52′04″ N, 078° 53′03″ W then South to 42° 51′07″ N, 078° 52′09″ W (NAD 83). The course will extend a minimum of 100 yards from the shore and the breakwall.

    The purpose of this rulemaking is to ensure the safety of vessels and the navigable waters within the above stated points before, during, and after the scheduled event. The Coast Guard proposes this rulemaking under authority in 33 U.S.C. 1231.

    III. Discussion of Proposed Rule

    The COTP proposes to establish a temporary safety zone, enforced intermittently, from 9:45 a.m. to 4:15 p.m. on July 1, 2018. The safety zone will encompass all waters inside of the Outer Harbor, Buffalo, NY starting at position 42° 52′04″ N, 078° 53′03″ W then South to 42° 51′07″ N, 078° 52′09″ W (NAD 83). The course will extend a minimum of 100 yards from the shore and the breakwall. The duration of the zone is intended to ensure the safety of vessels and these navigable waters before, during, and after the scheduled 10:00 a.m. to 4:00 p.m. boat races. No vessel or person would be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative. The regulatory text we are proposing appears at the end of this document.

    IV. Regulatory Analyses

    We developed this proposed rule after considering numerous statutes and Executive Orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive Orders and we discuss First Amendment rights of protestors.

    A. Regulatory Planning and Review

    Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This NPRM has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, the NPRM has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.

    This regulatory action determination is based on the size, location, duration, and time-of-day of the safety zone. Vessel traffic would be able to safely transit around this safety zone, which would impact a small designated area of the Buffalo Outer Harbor, by transiting a short distance in Lake Erie. The safety zone would also have built in times where vessels will be able to transit through between race heats. Moreover, the Coast Guard would issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone, and the rule would allow vessels to seek permission to enter the zone.

    B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities.

    While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section IV. A. above, this proposed rule would not have a significant economic impact on any vessel owner or operator.

    If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

    Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 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 an intermittently enforced safety zone lasting 6.5 hours that would prohibit entry into all waters inside of the Outer Harbor, Buffalo, NY starting at position 42° 52′04″ N, 078° 53′03″ W then South to 42° 51′07″ N, 078° 52′09″ W (NAD 83). The course will extend a minimum of 100 yards from the shore and the breakwall. Normally such actions are categorically excluded from further review under paragraph L[61] 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 record keeping requirements, Security measures, Waterways.

    For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 165 as follows:

    PART 165—REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS 1. The authority citation for part 165 continues to read as follows: Authority:

    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.T09-0078 to read as follows:
    § 165.T09-0078 Safety Zone; Officer Lehner Memorial Vintage Regatta; Buffalo Outer Harbor, Buffalo, NY.

    (a) Location. The safety zone will encompass all waters inside of the Outer Harbor, Buffalo, NY, starting at position 42° 52′04″ N, 078° 53′03″ W then South to 42° 51′07″ N, 078° 52′09″ W (NAD 83). The course will extend a minimum of 100 yards from the shore and the breakwall.

    (b) Enforcement Period. This rule is effective from 9:45 a.m. until 4:15 p.m. on July 1, 2018.

    (c) Regulations.

    (1) In accordance with the general regulations in § 165.23 of this part, entry into, transiting, or anchoring within this safety zone is prohibited unless authorized by the Captain of the Port Buffalo or his designated on-scene representative.

    (2) This safety zone is closed to all vessel traffic, except as may be permitted by the Captain of the Port Buffalo or his designated on-scene representative.

    (3) The “on-scene representative” of the Captain of the Port Buffalo is any Coast Guard commissioned, warrant or petty officer who has been designated by the Captain of the Port Buffalo to act on his behalf.

    (4) Vessel operators desiring to enter or operate within the safety zone must contact the Captain of the Port Buffalo or his on-scene representative to obtain permission to do so. The Captain of the Port Buffalo or his on-scene representative may be contacted via VHF Channel 16. Vessel operators given permission to enter or operate in the safety zone must comply with all directions given to them by the Captain of the Port Buffalo, or his on-scene representative.

    Dated: March 21, 2018. J.S. DuFresne, Captain, U.S. Coast Guard, Captain of the Port Buffalo.
    [FR Doc. 2018-08626 Filed 4-24-18; 8:45 am] BILLING CODE 9110-04-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R06-OAR-2017-0056; FRL-9976-75-Region 6] Approval and Promulgation of Implementation Plans; Texas; Reasonable Further Progress Plan for the Houston-Galveston-Brazoria Ozone Nonattainment Area AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Proposed rule.

    SUMMARY:

    Pursuant to the Federal Clean Air Act (CAA or the Act), the Environmental Protection Agency (EPA) is proposing to approve a revision to the Texas State Implementation Plan (SIP) to meet the Reasonable Further Progress (RFP) requirements for the Houston-Galveston-Brazoria (HGB) moderate 2008 8-hour ozone nonattainment area (HGB area). Specifically, EPA is proposing to approve the RFP demonstration, contingency measures, motor vehicle emissions budgets (MVEBs) and an updated 2011 base year emissions inventory.

    DATES:

    Written comments must be received on or before May 25, 2018.

    ADDRESSES:

    Submit your comments, identified by Docket No. EPA-R06-OAR-2017-0056, at http://www.regulations.gov or via email to [email protected] Follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulations.gov. 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 Ms. Wendy Jacques, (214) 665-7395, [email protected] For the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

    Docket: The index to the docket for this action is available electronically at www.regulations.gov and in hard copy at the EPA Region 6, 1445 Ross Avenue, Suite 700, Dallas, Texas. While all documents in the docket are listed in the index, some information may be publicly available only at the hard copy location (e.g., copyrighted material), and some may not be publicly available at either location (e.g., CBI).

    FOR FURTHER INFORMATION CONTACT:

    Ms. Wendy Jacques, 214-665-7395, [email protected] To inspect the hard copy materials, please schedule an appointment with Ms. Wendy Jacques or Mr. Bill Deese at 214-665-7253.

    SUPPLEMENTARY INFORMATION:

    Throughout this document wherever “we,” “us,” or “our” is used, we mean the EPA.

    I. Background

    In 2008, we revised the 8-hour ozone primary and secondary national ambient air quality standards (NAAQS) to a level of 0.075 parts per million (ppm) to provide increased protection of public health and the environment (73 FR 16436, March 27, 2008). The HGB area was classified as a marginal ozone nonattainment area for the 2008 8-hour ozone NAAQS and initially given an attainment date of no later than December 31, 2015 (77 FR 30088 and 77 FR 30160, May 21, 2012). The HGB area consists of Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery and Waller counties.

    On December 23, 2014, the DC Circuit Court issued a decision rejecting, among other things, our attainment deadlines for the 2008 ozone nonattainment areas, finding that we did not have statutory authority under the CAA to extend those deadlines to the end of the calendar year. NRDC v. EPA, 777 F.3d 456, 464-69 (DC Cir. 2014). Consistent with the court's decision we modified the attainment deadlines for all nonattainment areas for the 2008 ozone NAAQS, and set the attainment deadline for all 2008 ozone marginal nonattainment areas, including the HGB area as July 20, 2015 (80 FR 12264, March 6, 2015). The HGB area qualified for a 1-year extension of the attainment deadline and we revised the attainment deadline to July 20, 2016 (81 FR 26697, May 4, 2016). As the HGB area did not meet the revised attainment deadline of July 20, 2016, we reclassified the area to moderate and set a due date for a revised SIP of January 1, 2017 (81 FR 90207, December 14, 2016). One moderate classification SIP requirement is reasonable further progress (RFP) reductions in volatile organic compound (VOC) and nitrogen oxide (NOX) emissions (CAA sections 172(c)(2) and 182(b)(1) and 40 CFR 51.1110). VOCs and NOX are ozone precursors.

    RFP plans must include contingency measures that will take effect without further action by the state or EPA, which includes additional controls that would be implemented if the area fails to reach the RFP milestones (CAA 172(c)(9)). While the CAA does not specify the type of measures or quantity of emissions reductions required, EPA provided guidance interpreting the CAA that implementation of these contingency measures would provide additional emissions reductions of up to 3% of the adjusted base year inventory (or a lesser percentage that will make up the identified shortfall) in the year following the RFP milestone year. For more information on contingency measures, please, see the April 16, 1992 General Preamble (57 FR 13498, 13510) and the November 29, 2005 Phase 2 8-hour ozone standard implementation rule (70 FR 71612, 71650). RFP plans must also include MVEBs, which are the allowable on-road mobile emissions an area can produce and continue to demonstrate RFP (40 CFR 93.101 and 93.118(b)(1)(i)).

    On December 29, 2016, Texas submitted a RFP SIP revision for the HGB moderate area. The SIP revision (1) updates the 2011 base year emissions inventory that was approved by EPA (80 FR 9204, February 20, 2015), (2) demonstrates a 15% emissions reduction in ozone precursors from the 2011 base year through the 2017 attainment year, (3) demonstrates a 3% emissions reduction for contingency in 2018 if the reductions for 2017 are missed and (4) sets the NOX and VOC MVEBs for transportation conformity purposes, for a 2017 attainment year.

    II. The EPA's Evaluation

    We reviewed the Texas SIP submittal for consistency with the requirements of the CAA, EPA regulations, and EPA guidance. A summary of our analysis and findings are provided below. For a more detailed discussion of our evaluation, please see our Technical Support Document (TSD) found in regulations.gov (docket EPA-R06-OAR-2017-0056).

    A. Update to the 2011 Base Year Emissions Inventory

    An emissions inventory is a comprehensive, accurate, and current inventory of actual emission from all sources. CAA sections 172(c)(3) and 182(b)(1) require that ozone nonattainment SIP revisions include an inventory of NOX and VOC emissions from all sources in the nonattainment area. As noted above we previously approved the 2011 base year. Since that submittal, Texas further refined the inventory to more accurately reflect actual 2011 emissions. We determined that the revised inventory was developed in accordance with EPA guidance and regulations and propose to approve the update. Table 1 summarizes the update to the inventory. For more information, please see the TSD and the Texas SIP submittal.

    Table 1—HGB RFP Previous and Updated 2011 Base Year EIs (tpd) Source type Previous NOX Updated NOX Previous VOC Updated VOC Point 108.44 108.33 94.83 95.99 Area 21.14 21.15 308.73 304.90 Non-road Mobile 121.11 142.44 49.93 49.78 On-road Mobile 196.21 188.02 82.62 80.73 Total 446.90 459.94 536.12 531.40 B. Reasonable Further Progress Demonstration

    Texas developed emissions projections for 2017 to demonstrate that NOX and VOC emissions would be reduced by 15%. Table 2 shows the calculations and reductions required to achieve RFP. For more information, please see the TSD and the Texas SIP submittal.

    Table 2—Calculation of NOX and VOC Reductions through 2017 (tpd) Description NOX VOC a. 2011 Emissions Inventory (from Table 1 above) 459.94 531.40 b. Percent of NOX and VOC to meet 15% reduction 14.5% 0.5% c. 15% NOX and VOC reduction, 2011-2017 (row a multiplied by row b) 66.69 2.66 d. 2017 Target Level of Emissions (a-c) 393.25 528.74

    Texas has provided sufficient control measures in their RFP plan to offset growth in emissions by estimating the amount of growth that will occur between 2011 and 2017. The control measures used to achieve the necessary emission reductions to meet the RFP requirements are listed in Table 3.

    Table 3—NOX and VOC Control Measures and Expected Emission Reductions (tpd) for the HGB Area, 2011-2017 Control Strategy Description NOX VOC Locomotive engine certification standards and fuel programs 18.41 0.65 Commercial marine vessel (CMV) engine certification standards and fuel programs 9.39 0.06 Small non-road Spark Ignition (SI engines) (Phase 1) 1 −3.10 24.29 Heavy duty non-road engines 21.54 11.26 Tiers 2 and 3 non-road diesel engines 27.33 3.95 Small non-road SI engines (Phase 2) 2.17 22.48 Large non-road SI & recreational marine 33.49 13.71 Non-road Texas Low Emission Diesel (TxLED) 1.74 0.00 Non-road Reformulated Gasoline (RFG) 0.03 0.08 Tier 4 non-road diesel engines 11.41 0.59 Diesel recreational marine 0.00 0.01 Small SI (Phase 3) 1.91 13.14 Drilling rig Tier2, 3 and 4 non-road diesel engines 0.68 0.15 Drilling rig low emission diesel 0.04 0.01 RFG with Tier 3 sulfur standard and federal ultralow sulfur diesel 85.13 16.87 Federal Motor Vehicle Control Program (FMVCP) 464.25 198.54 Inspection and Maintenance (I/M) 6.89 7.94 On-road TxLED 2 2.81 0.00 Total Reductions Projected 684.12 313.73 1 The increase in emissions is due to engine modifications to meet the standards for VOC and carbon monoxide. 2 The TxLED fuel rules apply to highway (on-road) and non-road vehicles and were approved into the Texas SIP on November 14, 2001 (66 FR 57196). Subsequent revisions were approved April 6, 2005 (70 FR 17321), October 6, 2005 (70 FR 58325), October 24, 2008 (73 FR 63378), and May 6, 2013 (78 FR 26255).

    The projections of growth are labeled as the “Uncontrolled Emissions” for 2017 under (a) in the table below. The State followed our standard guidelines in estimating the growth in emissions and are described in greater detail in the TSD.

    Table 4—Summary of RFP Demonstration for HGB Through 2017 (tpd) Description NOX VOC 2017 Uncontrolled Emissions 1018.21 829.50. Projected Emission Reductions between 2011 and 2017 (from Table 3 above) 684.12 313.73. Projected Emissions after Reductions 334.09 515.77. 2017 RFP Targets (from Table 2 above) 393.25 528.74. Surplus or (shortfall) 59.16 12.97. RFP Met? yes Yes. C. Contingency Measure Demonstration

    As noted earlier in this action, RFP plans for moderate and above nonattainment areas must include contingency measures to be implemented in the event an RFP milestone is missed.

    The Texas 3% attainment year RFP contingency measure demonstration is based on a 2% reduction in NOx and a 1% reduction in VOC, to be achieved between 2017 and 2018. Controlled emissions reductions not previously used in the 2017 RFP demonstration may also be used to satisfy contingency requirements, so the excess emissions reductions from the 2017 RFP demonstration are included in the contingency measure demonstration. The 2018 reductions from the federal motor vehicle control program, inspection and maintenance program, and the fuel requirements program were also used in the RFP contingency demonstration.

    Texas demonstrated that federal and State measures being implemented are sufficient to reduce emissions by more than 3% and meet the contingency measure requirement for the RFP SIP. We determined that Texas used acceptable methodology to demonstrate that the required emissions reductions are in excess of those needed for RFP and propose to approve the RFP demonstration. Table 4 summarizes the demonstration. For more information, please see the TSD and the Texas SIP submittal.

    Table 5—HGB Area RFP Contingency Measure Demonstration (tpd) Description NOX VOC A. 2011 Base Year EI (Table 2, line a) 459.94 531.40. B. Percent of NOX and VOC to meet 3% contingency 2% 1%. C. Required reduction to provide contingency (A × B) 9.20 5.31. D. Excess reduction to meet RFP in 2017 (Table 4) 59.16 12.97. E. Subtract 2017 RFP demonstration MVEB safety margin from excess reductions from 2018 RFP −23.66 −11.67. F. 2018 On-road FMVCP, I/M, and RFG reductions (23.84-0.94 + 1.45 = 24.35) and (9.01-0.51 + 0.28 = 8.78) 24.35 8.78. G. Total RFP demonstration contingency reductions (D + E + F) (59.16-23.66 + 24.35 = 59.85) and (12.97-11.67 + 8.78 = 10.08) 59.85 10.08. Total surplus or shortfall Subtract line G from C for surplus (59.85-9.20 = 50.65) and (10.08-5.31 = 4.77) 50.65 4.77. Is the contingency measure requirement met? Yes Yes. D. Motor Vehicle Emission Budgets

    An RFP plan must establish MVEBs for transportation conformity purposes (40 CFR 93.118(b)(1)(i)). The MVEB is the mechanism to ensure that future transportation activities will not produce new air quality violations, worsen existing violations, delay reaching RFP milestones, or delay timely attainment of the NAAQS. A MVEB establishes the maximum amount of emissions allowed in the SIP for on-road motor vehicles. The MVEBs for 2017 provided by Texas in the SIP revision can be found in Table 6.

    Table 6—RFP Motor Vehicle Emission Budgets for HGB [Tons/Day] Year NOX VOC 2017 121.81 68.04

    For the budgets to be approvable, they must meet, at a minimum, EPA's adequacy criteria (40 CFR 93.118(e)(4)). The availability of these budgets was posted on our website on January 18, 2017, for the purpose of soliciting public comments on their adequacy. The comment period closed on February 17, 2017, and we received no comments. On March 6, 2017, we published the Notice of Adequacy Determination for these MVEBs (88 FR 26091). As a result of such adequacy determination, these MVEBs must be used by state and Federal agencies in determining whether proposed transportation projects conform to the SIP as required by section 176(c) of the CAA. The adequacy determination represents a preliminary finding by EPA of the acceptability of the MVEBs. We are proposing to finalize our finding that these MVEBs are fully consistent with RFP. As the MVEBs sets the allowable on-road mobile emissions the HGB area can produce and continue to demonstrate RFP, we are proposing to approve the MVEBs for the HGB area.

    III. Proposed Action

    We are proposing to approve the HGB RFP SIP revision submitted on December 29, 2016. Specifically, we are proposing to approve the RFP demonstration, contingency measures, MVEBs and an updated 2011 base year emissions inventory.

    IV. Statutory and Executive Order Reviews

    Under the 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 CAA. Accordingly, this action merely proposes to approve 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 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, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the proposed rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

    List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by reference, Nitrogen dioxide, Ozone, Volatile organic compounds.

    Authority:

    42 U.S.C. 7401 et seq.

    Dated: April 19, 2018. Anne Idsal, Regional Administrator, Region 6.
    [FR Doc. 2018-08660 Filed 4-24-18; 8:45 am] BILLING CODE 6560-50-P
    FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 54 [WC Docket Nos. 10-90, 14-58, 07-135, CC Docket No. 01-92; FCC 18-29] Connect America Fund, ETC Annual Reports and Certifications, Establishing Just and Reasonable Rates for Local Exchange Carriers, Developing a Unified Intercarrier Compensation Regime AGENCY:

    Federal Communications Commission.

    ACTION:

    Proposed rule.

    SUMMARY:

    In this document, the Federal Communications Commission (Commission) considers further reform to establish a budget that will allow for robust broadband deployment in rate-of-return areas while minimizing the burden that contributions to the Universal Service Fund (the Fund) place on ratepayers and to bring greater certainty and stability to rate-of-return high-cost funding, both in the near term and in the future. The Commission also seeks comment on additional reforms to increase broadband deployment, while promoting the efficient use of limited resources.

    DATES:

    Comments are due on or before May 25, 2018 and reply comments are due on or before June 25, 2018. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this document, you should advise the contact listed below as soon as possible.

    ADDRESSES:

    You may submit comments, identified by WC Docket Nos. 10-90, 14-58, 07-135, CC Docket No. 01-92, by any of the following methods:

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

    Federal Communications Commission's Website: http://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting comments.

    People With Disabilities: Contact the FCC to request reasonable accommodations (accessible format documents, sign language interpreters, CART, etc.) by email: [email protected] or phone: (202) 418-0530 or TTY: (202) 418-0432.

    For detailed instructions for submitting comments and additional information on the rulemaking process, see the SUPPLEMENTARY INFORMATION section of this document.

    FOR FURTHER INFORMATION CONTACT:

    Suzanne Yelen, Wireline Competition Bureau, (202) 418-7400 or TTY: (202) 418-0484.

    SUPPLEMENTARY INFORMATION:

    This is a summary of the Commission's Notice of Proposed Rulemaking (NPRM) in WC Docket Nos. 10-90, 14-58, 07-135, CC Docket No. 01-92; FCC 18-29, adopted on March 14, 2018 and released on March 23, 2018. The full text of this document is available for public inspection during regular business hours in the FCC Reference Center, Room CY-A257, 445 12th Street SW, Washington, DC 20554 or at the following internet address: https://transition.fcc.gov/Daily_Releases/Daily_Business/2018/db0323/FCC-18-29A1.pdf. The Report and Order and Third Order on Reconsideration that was adopted concurrently with the NPRM is published elsewhere in this issue of the Federal Register.

    I. Introduction

    1. Universal service can—and must—play a critical role in helping to bridge the digital divide to ensure that rural America is not left behind as broadband services are deployed. The directive articulated by the Commission in 2011 remains as true today as it did then: “The universal service challenge of our time is to ensure that all Americans are served by networks that support high-speed internet access.” Though the Commission has made progress for rural Americans living in areas served by our nation's largest telecommunications companies, the rules governing smaller, community-based providers—rate-of-return carriers—appear to make it more difficult for these providers to serve rural America. As a result, approximately 11 percent of the housing units in areas served by rate-of-return carriers lack access to 10 Mbps downstream/1 Mbps upstream (10/1 Mbps) terrestrial fixed broadband service while 34 percent lack access to 25 Mbps downstream/3 Mbps upstream (25/3 Mbps). It is time to close this gap and ensure that all of those living in rural America have the high-speed broadband they need to participate fully in the digital economy.

    2. By improving access to modern communications services, the Commission can help provide individuals living in rural America with the same opportunities that those in urban areas enjoy. Broadband access fosters employment and educational opportunities, stimulates innovations in health care and telemedicine and promotes connectivity among family and communities. And as important as these benefits are in America's cities, they can be even more important in America's more remote small towns, rural, and insular areas. Rural Americans deserve to reap the benefits of the internet and participate in the 21st century society—not run the risk of falling yet further behind.

    3. Today, the Commission takes the next step in closing the digital divide through proposals designed to stimulate broadband deployment in rural areas. To reach its objective, the Commission must continue to reform its existing high-cost universal support programs. Building on earlier efforts to modernize high-cost universal service support, the Commission seeks to offer greater certainty and predictability to rate-of-return carriers and create incentives to bring broadband to the areas that need it most.

    4. In the NPRM, the Commission considers further reforms to establish a budget that will allow for robust broadband deployment in rate-of-return areas while minimizing the burden that contributions to the Fund place on ratepayers and to bring greater certainty and stability to rate-of-return high-cost funding, both in the near term and in the future. The Commission also seeks comment on additional reforms to increase broadband deployment, while promoting the efficient use of limited resources. For example, the Commission seeks comment on whether to fully fund existing A-CAM support recipients, afford a new opportunity for legacy providers to elect model-based support, and establish a minimum threshold of support for legacy providers that would not be subject to a budget cap. Lastly, the Commission seeks comment on other reforms, including, for example, exploring the need for caps on capital and operating expenses, using an auction process to address substantial competitive overlaps, and other options for simplifying the legacy rate-of-return mechanism.

    II. Notice of Proposed Rulemaking

    5. Discussion. The Commission seeks comment on revising the budget for rate-of-return carriers within the high-cost program. The Commission has not revised the budget since 2011, and as a result, has not accounted for the effects of inflation on the budget. Had the Commission accounted for inflation, the rate-of-return budget would have increased from $2 billion in the 2012 budget year to $2.193 billion in the 2018 budget year.

    6. Moreover, since 2011 consumers' expectations and the Commission's requirements regarding broadband speed have continued to increase. The Commission's initial speed benchmark for Connect America Fund (CAF) recipients was 4 Mbps downstream and 1 Mbps upstream, later revised to 10 Mbps downstream and 1 Mbps upstream, and certain CAF recipients are now required to offer 25 Mbps downstream and 3 Mbps upstream. Consumer demand for higher speeds is also evident. Among residential users, the percentage of fixed broadband connections with a “downstream speed of at least 25 Mbps has grown from 24% (or 23 million connections) in June 2013 to 57% (or 59 million connections) in June 2016,” and “slower downstream speeds of less than 3 Mbps has decreased from 18% (or 17 million connections) in June 2013 to 5% (or 5 million connections) in June 2016.” A budget designed to speed the deployment of 4 Mbps/1 Mbps broadband to rural America may be insufficient to encourage the deployment of the high-speed broadband networks that residents of rural America need.

    7. In initiating the budget review, the Commission seeks comment on the appropriate level of support—and the Commission notes that the Communications Act of 1934, as amended (Act) requires such support to be “predictable and sufficient . . . to preserve and advance universal service.” Should the Commission establish a separate budget dedicated to High-cost Loop Support (HCLS) and Connect America Fund Broadband Loop Support (CAF BLS)? If so, should the Commission set that budget at $1.23 billion (the current amount available for HCLS and CAF BLS), at $1.35 billion (that amount adjusted by the inflationary ratio that reflects inflation since 2011), or at some other amount? Commenters should submit evidence that labor costs or other costs, such as fiber or electronics, have increased since 2011 due to inflation. Commenters should also submit evidence that those increased costs, if any, have not been offset by savings related to increased labor productivity or the lower cost of network equipment.

    8. Alternatively, should the amount of support available for HCLS and CAF BLS continue to be calculated by subtracting Alternative Connect America Cost Model (A-CAM), Alaska Plan, and Connect America Fund Intercarrier Compensation (CAF ICC) support from a single rate-of-return budget? If so, should the Commission increase that rate-of-return budget for the 2018 budget year to $2.193 billion (the inflation-adjusted figure) or adopt some other figure? If the Commission retains a single budget, how should the Commission account for other changes and proposals it makes today? For example, in the concurrently adopted Report and Order, the Commission offers existing A-CAM carriers revised support up to a per-location cap of $146.10 and here seeks comment on making a second A-CAM offer to legacy carriers—should that additional funding come from within a single, combined budget? The Commission notes that any increase in the budget attributable to those carriers now receiving A-CAM could help fully fund the original offer at the $200 per-location cap or incent more legacy carriers to elect a new model offer. Should the Commission adopt a budget that would fully fund a new model offer and fully fund the original A-CAM offer for all existingA-CAM providers? The Commission also proposes to offer model-based support to glide path carriers, which would decline over the 10-year term as transition payments phase down to the model amount. Should that support then be available to carriers continuing to receive HCLS and CAF BLS?

    9. In revisiting the budget, how should the Commission take into account the reforms it adopted in the Rate-of-Return Reform Order, 81 FR 24282, April 25, 2016, as well as proposals the Commission makes in this NPRM—reforms and proposals that will bring more predictability to rate-of-return carrier support, while spurring deployment and mitigating regulatory inefficiencies? And how should the Commission account for the fact that recipients of CAF BLS and HCLS are uniquely situated because each recipient effectively determines its own support claims through its behavior (its expenses and capital investments) and each recipient's behavior has a collective effect on all recipients of these funds due to the budget cap. In other words, how should the Commission account for the fact that spending by one legacy carrier could reduce support available to other providers once adjustments are made to ensure that total spending falls below the cap?

    10. The Commission is mindful of its obligation to ensure that scarce public resources are spent judiciously. As courts have recognized, too much subsidization could affect the affordability of telecommunications services for those that pay for universal service support, in violation of section 254(b). The Commission also notes that when the Tenth Circuit upheld the budget adopted in 2011, it stated that “the FCC quite clearly rejected any notion that budgetary `sufficiency' is equivalent to `complete' or `full' funding for carrying out the broadband and other obligations imposed upon carriers who are voluntary recipients of USF funds.” The Commission therefore asks commenters to discuss whether the benefits of any budget increase would outweigh the burden on ratepayers from an increase in the contribution factor. The Commission notes that the proposed contribution factor for the second quarter of 2018 is 18.4 percent. The Commission takes seriously its obligations as steward of the Fund and is committed to fiscal responsibility. The Commission also recognizes that increases in the contribution factor raise the costs, directly and indirectly, of service to businesses and consumers. The Commission thus asks that commenters consider its commitment to fiscal responsibility when advocating an appropriate high-cost budget.

    11. With any proposed budget, the Commission urges commenters to provide a detailed economic analysis. The Commission would find most helpful comments providing evidence on the amount of support legacy carriers would need to meet mandatory buildout requirements while offering at least one plan at the comparative benchmark rate, and why/if current support levels are insufficient. The Commission also asks that comments quantify how much additional broadband deployment could occur with any budget increase.

    12. After the Commission has set a new initial budget, it proposes to increase that budget for inflation going forward and seek comment on this proposal. The Commission believes that adjusting the budget for inflation would account for any increases in the costs of network inputs and allow carriers an opportunity to recover those increased costs. The Commission seeks comment on inflation's impact on the costs of deploying and maintaining a network.

    13. For an inflationary factor, the Commission proposes using Gross Domestic Product—Chain Price Index (GDP-CPI), the same factor used for the Rural Growth Factor (RGF). Using the same inflationary factor the Commission uses for the RGF would be administratively efficient. In addition, the Commission has been using the GDP-CPI in other contexts since 1996, and of the two versions used to index federal programs, the GDP-CPI is more accurate in estimating cost of living changes from month to month. Furthermore, in the document, the Commission modifies the operating expense limitation to add GDP-CPI as the inflationary factor, which the industry had requested. Nonetheless, the Commission seeks comment on whether another inflationary factor be more appropriate and, if so, why?

    14. The Commission also seeks comment on when it should next revisit the budget. Should the Commission revisit the budget again in six years, as set forth in the USF/ICC Transformation Order, 76 FR 73830, November 29, 2011? Given that current A-CAM funding continues until 2026, would it be more appropriate to revisit the budget in 2026? The Commission asks that commenters consider that any time frame should take into account carriers' needs for a sufficient and predictable funding stream, while providing the flexibility to make adjustments as marketplace circumstances warrant.

    15. A-CAM Offer. In the A-CAM Revised Offer Order, 82 FR 4275, January 13, 2017, the Commission recognized that glide path carriers—those carriers electing A-CAM despite an “offer of model-based support . . . less than the legacy support that they received”—leave more funding available in the A-CAM rate-of-return budget to the benefit of consumers and other rate-of-return carriers that elected model support. Here, the Commission proposes to extend a new model offer to carriers willing to accept lower support amounts in exchange for increased certainty of funding—which in turn could create additional headroom for legacy rate-of-return carriers over time. The Commission seeks comment on this proposal.

    16. In proposing this new model offer, the Commission first seeks comment on limited adjustments to the cost model that may make participation more favorable to carriers that declined the A-CAM, including the addition of a Tribal Broadband Factor. The Commission next seeks comment on which carriers should be eligible to participate. The Commission then seeks comment on the support amounts available for electing carriers, as well as their accompanying obligations. Finally, the Commission seeks comment on the process used for elections.

    17. Revising Model Parameters. The Commission generally proposes to use the A-CAM and the parameters it adopted in the Rate-of-Return Reform Order to provide its new model offers, but the Commission seeks comment on several proposed revisions.

    18. First, the Commission proposes to adjust the model to reflect the unique challenges of deploying high-speed broadband to rural, Tribal communities by incorporating a Tribal Broadband Factor into the model. Specifically, the A-CAM incorporates assumptions about take rates and potential average revenues per subscriber that may be unrealistic given the “high concentration of low-income individuals [and] few business subscribers” in many rural, Tribal areas. By reducing the funding threshold by 25 percent for locations in Indian country—in other words, by setting a high-cost funding benchmark of $39.38 on Tribal lands—the Commission believes the revised model will better reflect the business case of deploying high-speed broadband in rural, Tribal areas and therefore spur further broadband deployment there. Because A-CAM support is calculated at the census block level, the Tribal Broadband Factor would efficiently target support to carriers that serve significant Tribal lands, as well as those carriers that serve only a minimal amount of Tribal lands or a small number of housing units on Tribal lands in their study area. The Commission proposes to use the definition of “Tribal lands” that was used in the USF/ICC Transformation Order and later modified in the 2015 Lifeline Reform Order, 80 FR 40923, July 14, 2015. The Commission seeks comment on this proposal.

    19. Second, the Commission proposes to include census blocks where an incumbent or its affiliate is providing 10 Mbps/1 Mbps or better broadband using either fiber to the premises (FTTP) or cable technologies. In the Rate-of-Return Reform Order, the Commission excluded these census blocks to focus its limited budget on those carriers most likely to build new networks with new funding. Because the Commission proposes to limit this new offer to glide path carriers, providing model support to maintain and upgrade existing networks is financially feasible and may create an additional incentive for legacy providers to consider shifting to model-based support.

    20. Third, consistent with the $146.10 per-location funding cap the Commission is implementing for the original A-CAM electors, it proposes to cap the total amount of support available for the second offer at $146.10 per location instead of $200. The Commission also proposes a $13.12 higher per-location cap on rural, Tribal lands to reflect the high-cost threshold created by applying the Tribal Broadband Factor. The Commission seeks comment on this proposal. The Commission also seeks comment on alternatives. For example, because the Commission proposes to limit eligibility to carriers for whom A-CAM support would be less than legacy support, should the Commission anticipate that the available budget could potentially fund a higher per-location funding cap of $200? If so, should the Commission establish a per-location cap up to that amount? Alternatively, the Commission notes that a single per-location funding cap may unnecessarily exclude some carriers from participating in the new model offer. For example, a carrier might be willing to accept a small loss of support but not a larger loss—meaning a $146.10 per-location funding cap may be, for that carrier, too low to induce participation. In contrast, a carrier might be willing to accept a small loss of support but is not given the chance—because a $146.10 per-location funding cap may result in an increase to that carrier's legacy support. Should the Commission adjust the per-location funding cap for each carrier so that every legacy carrier has an opportunity to accept the new model with only a small loss (5 to 15 percent) of support? If so, should the Commission nonetheless retain a per-location funding cap maximum of $200 or $146.10?

    21. Fourth, the Commission proposes to update the broadband coverage data with the most recent publicly available FCC Form 477 data prior to any additional offer of support. The Commission proposes to rely on the certified FCC Form 477 data rather than conducting a time-consuming and administratively burdensome challenge process. In this regard, the Commission notes that in the challenge process for the first A-CAM offer, the Bureau granted only 61 challenges of the more than 250 requests received to change A-CAM coverage. Even with the challenges granted, the coverage data may not have changed to “unserved” in particular census blocks if there were other unsubsidized providers that were not challenged reporting service in those census blocks. The Commission seeks comment on updating the broadband coverage data.

    22. Eligibility Requirements. First, the Commission proposes to limit this new model offer to legacy carriers eligible to receive HCLS and CAF BLS, i.e., those rate-of-return carriers that are not recipients of A-CAM support and that are not participants in the Alaska Plan.

    23. Second, the Commission proposes to limit this new model offer to carriers that would be glide path carriers, i.e., those for whom the new offer of model support will be below their legacy support. The Commission seeks comment on how to set the baseline level of legacy support for these purposes. Should the Commission use the same baseline it did in authorizing the A-CAM? Should the Commission set the baseline as total support received in calendar year 2017 or budget year 2017? In setting the baseline, should the Commission ignore the parent trap rule where applicable? For instance, if a carrier's legacy support would have been $500,000, but because of the parent trap rule, support is $300,000, which amount should the Commission use?

    24. Third, the Commission seeks comment on whether to exclude from this new model offer carriers whose deployment obligations would include no fully funded locations. That is, should the Commission exclude from the new model offer those carriers that would only be obligated to deploy 4/1 Mbps to a certain number of locations, and to provide broadband only upon reasonable request to the remaining locations?

    25. In the Rate-of-Return Order, the Commission excluded from the initial A-CAM offer any carrier that had deployed 10/1 Mbps broadband to 90 percent or more of its eligible locations in a state in order to maximize its limited funding toward those areas with less deployment. Because the Commission proposes to limit this new offer to glide path carriers, it declines to propose such a limit because offering model support to such carriers is financially feasible and may create an opportunity for legacy providers to consider shifting to model-based support and increasing their deployment of even higher-speed service. The Commission also seeks comment on any other eligibility criteria that it should consider.

    26. Support. The Commission proposes aligning the term of support for this new model offer with the10-year term of the first A-CAM offer. Current A-CAM support recipients began receiving support as of January 1, 2017. If support is authorized pursuant to a second A-CAM offer in 2018, the Commission seeks comment on providing a nine-year term of support that will expire at the end of 2026, with support beginning January 1, 2018. If additional A-CAM recipients are not authorized until late 2018, in 2019, or later, should the Commission offer a shorter term of support or take other measures to align the A-CAM support terms? In addressing an appropriate term of support, commenters are invited to address the Commission's competing goals of providing the certainty needed to stimulate investment with its interest in promoting administrative efficiency and accounting for marketplace developments over time.

    27. As adopted by the Commission for current A-CAM recipients, it proposes a three-tiered process to transition electing carriers from the legacy support mechanism to the model. The Commission proposes to base the transition payments on the difference between model support and legacy support, and phase down transition payments over longer periods of time where that difference is greater. If the Commission aligns the term of support for the new model offer with the 10-year term of the original A-CAM offer, the Commission proposes to adjust the percentage reductions also to align with the shorter support term. The Commission seeks comment on this proposal. In the alternative, the Commission seeks comment on modifying the transition payments so that a greater portion of the available budget will be directed to increased broadband deployment obligations. Commenters are also invited to address whether the Commission should modify deployment obligations if a carrier forgoes transition payments or accepts faster transitions.

    28. The Commission notes that given that it proposes to extend a new model offer only to those carriers for whom the offer is less than their legacy support, support claims alone will cover theA-CAM support plus transition payments regardless of any per-location cap adopted by the Commission. The Commission therefore proposes to base the budget for a new model offer on the 2017 claims amount contributed by electing carriers.

    29. Obligations. The Commission proposes to require the same performance and deployment obligations as the Commission requires for existing A-CAM recipients. Specifically, the Commission proposes to require rate-of-return carriers electing model support to maintain voice and existing broadband service and to offer at least 10/1 Mbps to the number of locations “fully funded” by the model, and at least 25/3 Mbps to a certain percentage of those locations, by the end of the support term. The Commission continues to believe that this approach strikes the appropriate balance in allowing carriers to conduct network planning, while accounting for evolving standards in the future.

    30. The Commission proposes to vary the deployment obligations by density, as it did for the previous A-CAM offers. Carriers with a density in the state of more than 10 housing units per square mile would be required to offer 25/3 Mbps to at least 75 percent of the fully funded locations; carriers with 10 or fewer, but more than five, housing units per square mile would be required to offer 25/3 Mbps to at least 50 percent of the fully funded locations; and carriers with five or fewer housing units per square mile would be required to offer 25/3 Mbps to at least 25 percent of the fully funded locations.

    31. The Commission also proposes requiring carriers electing model support to offer at least 4/1 Mbps to a defined number of locations that are not fully funded (i.e. with a calculated average cost above the funding cap) by the end of the support term. The Commission proposes that carriers with a density of more than 10 housing units per square mile be required to offer at least 4/1 Mbps to 50 percent of all capped locations; and carriers with a density of 10 or fewer housing units per square mile be required to offer at least 4/1 Mbps to 25 percent of all capped locations. The remaining capped locations would be subject to the reasonable request standard. The Commission seeks comment on these proposed obligations. The Commission also seeks comment on whether it should modify the broadband speed obligations in any way, such as by requiring additional 25/3 Mbps deployment in census blocks that would have been excluded from the original A-CAM offer because of reported cable or fiber deployment.

    32. Consistent with CAF requirements for funding recipients, the Commission proposes to require carriers electing the new model offer to offer a minimum usage allowance of the higher of 170 GB per month or one that reflects the average usage of a majority of consumers, using Measuring Broadband America data or a similar data source. In addition, the Commission proposes to require carriers electing to receive model support to certify that 95 percent or more of all peak period measurements of round-trip latency are at or below 100 milliseconds. Because there may be a need for relaxed standards in areas where carriers may use alternative technologies to meet their public interest obligations, the Commission proposes that this latency standard would apply to locations served by terrestrial technologies. The Commission seeks comment on whether to use the high latency metric adopted in the CAF II auction proceeding for any capped locations served by a non-terrestrial technology. Under the high-latency standard, carriers would be required to certify that 95 percent or more of all peak period measurements of round-trip latency are at or below 750 milliseconds, and with respect to voice performance, a score of four or higher using the Mean Opinion Score (MOS). The Commission seeks comment on these proposals.

    33. The Commission proposes to require carriers electing a new model offer to meet the same deployment milestones as the Commission requires for existing A-CAM recipients, adjusted for the proposed nine-year term of support or as appropriate. Assuming a nine-year term, the Commission would eliminate the 40 percent benchmark in 2020, and propose to require new A-CAM support recipients to offer at least 10/1 Mbps service to 50 percent of the requisite number of funded locations by the end of 2021, an additional 10 percent each year thereafter, and 100 percent by 2026. In addition, by the end of 2026, the Commission proposes to require these carriers to offer at least 25/3 Mbps and 4/1 Mbps to the requisite percentage of locations, depending on density. The Commission also proposes to provide the same flexibility afforded other A-CAM recipients to deploy to only 95 percent of the required number of fully funded 10/1 Mbps locations by the end of the term of support. The Commission seeks comment on these proposed deployment milestones.

    34. Consistent with existing obligations, the Commission proposes to require carriers to report geocoded location information for all newly deployed locations that are capable of delivering broadband meeting or exceeding the speed tiers. The Commission also proposes to adopt defined deployment milestones, so that the same previously adopted non-compliance measures would apply.

    35. Election Process. The Commission proposes a single-step process whereby electing carriers make an irrevocable acceptance of the offered amount because no support adjustments will need to be made to address budget targets.

    36. Continuing Uniform Collections. The Commission seeks comment on whether it should extend its direction to the Universal Administrative Company (USAC) to forecast total high-cost demand as no less than one quarter of the annual high-cost budget, regardless of actual quarterly demand in order to minimize volatility in contributions. If the Commission maintains an overall cap on the legacy portion of the rate-of-return budget, are there any reasons why demand might shift dramatically, causing unexpected increases to the contribution factor? Are uniform collections with a reserve fund a prudent budgetary practice or an unnecessary change to the Commission's traditional framework?

    37. Fully Fund Existing A-CAM. In the concurrently adopted Report and Order, the Commission offers additional support to authorized A-CAM recipients based on a $146.10 per-location cap. Here, the Commission seeks comment on whether to offer A-CAM support to those carriers using a $200 per-location funding cap, and what additional deployment commitments may be appropriate. The Commission also provides information on the amount by which the acceptances for the model exceeded the available funding. The Commission notes that carriers who elected A-CAM offers that were below then-current support levels have already received full funding. To stay within the budget, however, the Bureau revised the offer for all other electing carriers by reducing the funding cap to $146.10 per location, and then further reducing carrier-specific offers by varying amounts based on the percentage of locations lacking 10/1 Mbps.

    38. The Commission now seeks comment on using additional headroom in the budget to offer the carriers that accepted the revised offer of A-CAM support in 2017 the fully funded amount, using a per-location funding cap of $200 per location. Providing full funding for the original A-CAM recipients would accelerate broadband deployment in those rural areas for which rate-of-return carriers accepted the first A-CAM offer. If all eligible carriers accept this offer, it anticipates that it would result in approximately $66.6 million more support per year for the 10-year A-CAM term. If the Commission were to move forward with this additional offer, the Bureau would release a public notice announcing the offer and provide carriers 30 days to accept the offer and carriers accepting the fully funded offer be subject to the original deployment obligations. The Commission seeks comment on this option, including any timing considerations that it should bear in mind.

    39. An A-CAM Offer for All Legacy Carriers. Encouraged by the response to the first A-CAM offer, the Commission seeks comment on whether to open a new window for all legacy carriers—not just those for whom the offer of model-based support is less than the legacy support they received—to elect to receive specific and predictable model-based support on a state-level basis in exchange for extending broadband service to a pre-determined number of locations in eligible census blocks. Expanding the number of carriers receiving A-CAM support will advance the Commission's longstanding objective to provide high-cost support based on forward-looking, efficient costs to help spur additional broadband deployment in rural areas. If the Commission initiates a broader new model offer, generally propose to use the same process, obligations, and criteria described in this document. Accordingly, when reviewing the proposals and questions the Commission asks in this document, commenters should also consider them in light of a second offer to all legacy carriers. In the following, the Commission discusses and seeks comment on aspects of a new model offer that are not discussed in this document, i.e. those aspects that are applicable only if the Commission makes a new model offer to legacy carriers who might receive more funding than they had received previously.

    40. Budget. If the Commission extends a second offer to all legacy rate-of-return carriers, it proposes to direct the Bureau to use a multi-step process for non-glide path carriers, similar to the one used in the first offer, to determine support amounts if the available budget is insufficient to maintain the initial per-location funding cap of $146.10 (or some other amount). The Bureau would first total the amount of model-based support for electing carriers and determine the extent to which, in the aggregate, their model-based support exceeds the total legacy support they received in 2017. The Commission seeks comment on whether it should collect additional contributions to fully fund all electors at this point, rather than calculating a second offer for electors. The Commission seeks comment on this approach.

    41. Alternatively, if the Commission does not decide to collect sufficient contributions to fully fund all electors, should it direct the Bureau to reduce the funding cap and/or prioritize support amounts to those areas that have the lowest deployment of broadband? Should the Bureau first reduce the per-location funding cap? If the new model support amounts using this lower funding cap still exceeded the budget, should the Bureau further reduce support offers by varying percentages based on the percentage of locations lacking 10/1 Mbps? Is there a different way to allocate the budget amongst new model electors that would maximize broadband deployment?

    42. Election Process. If the Commission extends a new model offer to non-glide path carriers, it proposes to use the same two-step election process the Commission used for the first A-CAM offer. The Bureau would first release a public notice showing the offer of model-based support for each carrier in a state and associated deployment obligations, including the number of fully funded and capped locations. The Commission seeks comment on providing carriers 30 days or 60 days to indicate on a state-by-state basis whether they elect to receive model-based support. The Commission proposes that the elections would be irrevocable if no adjustment to the support amounts would be required either because the support amounts are within the available budget or because the Commission has concluded to collect sufficient amounts to fully fund the offers. If the budget is insufficient, the Commission proposes that it adopts a methodology similar to that used to revise the first A-CAM offers. The Bureau would approve fully funded amounts for glide path carriers. The Bureau would also release a public notice showing the revised offers for all other carriers. Carriers would have 30 days to accept the revised offer. The Commission seeks comment on this option.

    43. Threshold Level of Support. In funding support claims affected by the budget control mechanism from July 2017 to June 2018 in the concurrently adopted Report and Order, the Commission provides an opportunity to consider the effects of the budget control mechanism on rate comparability in conjunction with its overall review of the rate-of-return budget. The Commission also acknowledges carriers' claims that unpredictability may make capital planning difficult, potentially resulting in reduced broadband deployment that, in turn, could harm consumers. With each successive annual calculation of the budget control mechanism, the budget adjustment factor has increased and legacy carriers have faced increasing reductions in their support relative to their support claims. Moreover, the Commission notes that reductions can vary from year-to-year and even quarter-to-quarter, given that each carrier's reduction in support is affected by the spending of other carriers.

    44. Here, the Commission seeks to address this concern and provide greater long-term stability and predictability for legacy carriers to facilitate planning and help spur deployment. At the same time, the Commission wants to better motivate legacy carriers to operate efficiently. To achieve this result, the Commission proposes two changes to the budget control mechanism.

    45. First, the Commission proposes to modify the budget control mechanism to use only a pro rata reduction applied as necessary to achieve the target amount and no longer include a per-line reduction. The Commission's experience thus far with per-line reductions has led to larger and more unpredictable swings in support than might otherwise be expected; accordingly, using only a pro rata reduction may be a more predictable and equitable way to reduce support amounts because all carriers' support is reduced by the same percentage. It is also a less complex mechanism to administer. Accordingly, the Commission proposes that the budget control mechanism would operate in the same manner as the current one, but without the per-line reduction aspect. The Commission seeks comment on this proposal.

    46. Second, the Commission proposes to provide legacy providers a threshold level of annual support that would not be subject to a budget cap. Establishing a level of uncapped support may give legacy carriers more predictability, allowing them to make longer term plans while knowing that certain expenses could push them above the uncapped amount and therefore would be less likely to be fully recoverable.

    47. The Commission seeks comment on alternatives for establishing a level of high-cost support that would not be subject to the budget control mechanism. One option would be to set the uncapped amount of annual support at 80 percent of the amount a legacy carrier would have received had they elected the new model offer (based on a funding cap of $146.10 per location). In evaluating this option, the Commission seeks comment on whether basing a carrier's uncapped level of support using 80 percent of the revised model is appropriate, as opposed to a different percentage.

    48. Another option would be to use the five-year CAF BLS forecast developed by the National Exchange Carrier Association (NECA) for the carrier-specific deployment obligation as the uncapped threshold, but subject any amounts greater than that to a budget control mechanism. A third option could set the uncapped threshold at a specified fraction of each carrier's unconstrained 2016 or 2017 claims amount. If the Commission adopts this approach, would a 70 percent fraction be appropriate? Should it be lower or higher? And should this amount be adjusted to reflect line loss, so that a carrier is not guaranteed a fixed amount to serve a decreasing number of lines? Finally, a fourth option if the Commission does retain the per-line reductions would be to limit any reductions in support due to the budget control mechanism to no more than twice the “budget adjustment factor.” For example, if total demand, prior to the application of the budget control mechanism, was $1.4 billion and the overall legacy rate-of-return budget remains at $1.23 billion, then a 12.1 percent reduction would be applied to CAF BLS and HCLS to stay within the budget. Under this alternative, no carrier would have a reduction in support greater than 24.2 percent.

    49. The Commission seeks comment on these alternatives, and any others that parties may propose. What are the benefits and costs of each proposal? Would they result in a threshold level of support that is sufficient or excessive? Should any of these options be adopted as an additional layer to one of the methods of limiting support losses described above? In evaluating the various options, the Commission requests that commenters discuss what factors and goals it should consider. For instance, is the best option the one where the average decrease in support from current levels is the least or is it better to base the guaranteed amount on those carriers the cost model indicates can use it most efficiently? To what extent should the Commission weigh the certainty and predictability of support associated with each option? The Commission also seeks comment on how each option helps to mitigate the inefficiencies of the legacy rate-of-return system, such as the incentive for rate-of-return companies to over-invest capital to increase profits, the Averch-Johnson effect. In addition, the Commission seeks comment on any other mechanisms for calculating an amount of support not subject to a budget control that balances the Commission's objective of providing specific, predictable, and sufficient support, with its goals of spurring rural broadband deployment, all while fairly allocating a finite budget among legacy carriers.

    50. The Commission seeks comment on revising deployment obligations should it decide to provide carriers a threshold level of support that is not subject to the budget control mechanism or a cap on overall support, based on the A-CAM model. The deployment obligations adopted in the Rate-of-Return Reform Order were based on each legacy carrier targeting a defined percentage of its five-year forecasted CAF BLS support to the deployment of broadband where the carrier has not already deployed. Deployment obligations were determined by dividing the dollar amount of targeted CAF BLS by a cost-per-location amount. In forecasting the amount of CAF BLS that a carrier would receive, NECA incorporated the impact of the budget control mechanism.

    51. Consistent with the Commission's proposal in this document, it seeks comment on revising the deployment obligations to reflect any guaranteed level of support that is not subject to the budget control mechanism. Specifically, the Commission seeks comment on whether each carrier should have a minimum deployment obligation that is based on the number of locations that would be served under the revised A-CAM model at an 80 percent funding level. For example, if the revised A-CAM, at the 80 percent funding level, indicated that a carrier should serve 1,000 locations with broadband service, and it currently serves 900, then it would be required to build out to an additional 100 locations. Each carrier would have further deployment obligations based on any additional support it is forecasted to receive in excess of its uncapped threshold level of support. The forecasted amount and the further obligations could be developed using the same methodology as was initially used after the adoption of the Rate-of-Return Reform Order (i.e., by dividing the amount of targeted CAF BLS in excess of the threshold level by a cost-per-location amount).

    52. The Commission seeks comment on this option. Would this buildout requirement better serve the public interest and promote deployment than the current buildout obligations? Does setting deployment obligations consistent with the threshold level of support improve certainty for carriers? Are there any additional benefits or possible concerns regarding setting deployment obligations in this manner? Should deployment obligations be modified to align with the expiration of the A-CAM support mechanism? Are there other ways to improve the determination of deployment obligations?

    53. Monthly Per-Line Limit. The Commission seeks comment on lowering the $250 per-line monthly limit on support to $225 or $200. The Commission adopted the monthly limit on support in the USF/ICC Transformation Order, finding that amounts higher than $250 per loop per month (not including CAF ICC) should not be provided to carriers without further justification. In adopting that limit, the Commission noted that only 18 incumbent rate-of-return carriers received more than $250 per loop each month and estimated that only 12 would be subject to the limit after other reforms adopted in the USF/ICC Transformation Order were applied.

    54. The Commission's experience suggests that a lower limit may be justified. Currently, approximately 13 study areas are affected by the monthly per-line limit. However, carriers serving only 10 of those study areas have petitioned the Commission to justify higher support amounts, and some withdrew their requests. To date, the Commission has awarded relief in only three instances. This history suggests that the $250 per-line monthly limit has been neither too restrictive nor likely to have a negative impact on the ability of carriers to provide service. Moreover, the Commission notes that a reduction to $200 would currently affect approximately 25 study areas that are not already subject to the $250 per-line monthly limit, and the same waiver process would be available to all affected study areas. Lowering the per-line monthly limit would also free up additional support within the legacy budget for other carriers. The Commission invites comment on whether to adopt a lower per-line monthly limit and, in particular, what amount may be appropriate.

    55. 100 Percent Overlap Process. The Commission seeks comment on whether to replace the 100 percent overlap process by which it eliminates support for legacy rate-of-return study areas that are fully served by unsubsidized carriers with a different mechanism. In the USF/ICC Transformation Order, the Commission adopted a rule to eliminate high-cost universal service support in incumbent LEC study areas where an unsubsidized competitor or a combination of unsubsidized competitors offers voice and broadband services that meet the Commission's service obligations throughout the study area. High-cost universal service support for the study areas found to be 100 percent overlapped is frozen at the amount disbursed in the prior calendar year, and support is phased down over three years. The Bureau conducted this biennial review in 2015 and 2017 and found only one study area to be 100 percent overlapped by unsubsidized competitors.

    56. The Commission seeks comment on the effectiveness of the 100 percent overlap process. The Commission notes that to date there has been little participation by unsubsidized competitors. This lack of participation likely reflects the absence of incentives to participate. In competitively served rate-of-return areas, a study area is often not completely overlapped by one competitor, but rather multiple competitors covering different parts of the study area. An unsubsidized competitor that only partially overlaps an incumbent may not participate in the current process because there is a cost to doing so (e.g., cost of compiling the information and filing) but other competitor(s) similarly may not participate such that the incumbent's support will not be phased out. In addition, the current process requires Commission staff to weigh the certifications and evidence presented to determine whether all locations are in fact served by voice and broadband, which can be challenging. Does the benefit of eliminating support from study areas 100 percent served by competitors outweigh the cost of conducting this process?

    57. In lieu of the current process to determine whether a study area is 100 percent overlapped, the Commission seeks comment on using an auction mechanism to award support to either the incumbent LEC or the competitor(s) in areas where there is significant competitive overlap. Competitive bidding can result in more efficient levels of support. Competitors will have an incentive to bid less than the amount the incumbent currently receives, and incumbents will have an incentive to increase efficiencies by bidding less than the competitor(s). In addition, the Commission anticipates that the competitive overlap process adopted by the Commission in the 2016 Rate-of-Return Reform Order will require substantial Commission resources because it will require the Commission to review evidence regarding each census block that is competitively served individually. An auction procedure is likely to be quicker and more efficient.

    58. If the Commission were to conduct auctions, should it focus only on study areas that are 100 percent overlapped according to FCC Form 477 data, or should the Commission focus on some lesser percentage, such as 90 percent overlapped or greater? If a lesser percentage, should the Commission adopt an auction to replace the competitive overlap process adopted by the Commission in the Rate-of-Return Reform Order? Using an auction at the study area level rather than the current process would give competitors an incentive to participate—the opportunity to win support to serve these areas. In the current 100 percent overlap process, the Commission uses the 10/1 Mbps standard to determine whether an area is served by unsubsidized competitors. If a study area is determined to be 100 percent overlapped, then the incumbent's support is phased out, perhaps trapping the area at 10/1 Mbps for the foreseeable future. An auction for support in these areas could increase speeds to the Commission's current standard of 25/3 Mbps, or indeed even higher. If one of the goals of this auction process is to increase speeds in these areas, should the Commission only auction those areas that are overlapped at the 10/1 Mbps level, or any speed less than25/3 Mbps?

    59. Other Reforms to Legacy Support Mechanisms. The current legacy support mechanisms are complicated and remain mired in the complexities and disadvantages of rate-of-return regulation. The Commission therefore seeks comment on broader measures that would simplify its legacy support mechanisms while providing flexibility and certainty to carriers. For example, the Commission could rely on its prior HCLS and Interstate Common Line Support (ICLS) mechanisms but treat all lines similarly, regardless of what services customers purchase. Under this scenario, carriers would include certain costs associated with standalone broadband service when calculating HCLS and ICLS and all voice and standalone broadband lines would be counted as working loops when calculating support. Thus, HCLS and ICLS would continue as they had prior to the adoption of the Rate-of-Return Reform Order but would now include standalone broadband costs and lines in the calculations. The Commission seeks comment on whether this approach would be less complex than the CAF BLS program adopted by the Commission in 2016. Alternatively, is there a way to treat voice and broadband lines similarly that could be incorporated into the CAF BLS program? If so, would this approach minimize the effect of the budget control mechanism? Because carriers have long experience with HCLS and ICLS, would using HCLS and ICLS for standalone broadband line support provide more certainty and predictability to support flows?

    60. The Commission also seeks comment on whether combining its high-cost support programs into one support stream would be simpler to administer and provide carriers with more flexibility. HCLS and CAF BLS rely on mechanisms originally designed to support voice services. Carriers receiving A-CAM support receive one monthly payment in exchange for meeting specific buildout obligations. Would a single support mechanism that combines current HCLS and CAF BLS resources and focuses on broadband deployment rather than voice services reduce regulatory burdens and provide more certainty and predictability to carriers receiving legacy support? Could such a mechanism be structured to provide incentives for carriers to operate efficiently and minimize the disadvantages of rate-of-return regulation? The Commission seeks comment on how a single high-cost support mechanism could reduce the need for complex cost regulation while encouraging broadband deployment.

    61. The Commission seeks comment on whether there are other alternatives it should consider to further enhance the efficiency of the legacy high-cost program and target support to where it is most needed. For example, should the Commission target support not only to high-cost areas but low-income areas as well? Should the Commission adopt means-testing within the high-cost program? Either approach could target support where it is needed most by focusing only on areas or consumers with lower household income. Should the Commission award support for high-cost areas through a portable consumer subsidy or voucher? Would a voucher system increase the choices available to consumers? Should the Commission target support to States with less ability to fund the deployment of broadband in rural areas? How should the Commission identify States that are most in need of support, and how can the Commission do so while avoiding perverse incentives? Are there other alternatives the Commission should consider? Commenters should address considerations of timeliness, ease of administration, and cost effectiveness for each alternative.

    62. Modifying Limitations on Capital and Operating Expenditures. The Commission seeks comment on the opex limitation and capital investment allowance. Through this proceeding, the Commission seeks to adopt further reforms to legacy support mechanisms that will simplify administrative processes and provide carriers with greater flexibility to deploy efficient broadband networks. Accordingly, the Commission seeks comment on whether the current limitations on capital and operating expenditures—currently untethered from the budget control mechanism—are successfully curbing unnecessary expenditures and incentivizing prudent investments or instead creating unnecessary burdens or deterring efficient investments. The Commission notes that for NECA to calculate the capital investment allowance, legacy carriers must track every capital expenditure and the number of locations affected by that expenditure. Is that additional administrative work yielding results for ratepayers? Also, given the trade-off many carriers must make between capital and operating expenditures, the Commission seeks comment on whether these limitations might actually lead to greater inefficiencies in overall business operations than would be the case without the constraints.

    63. The Commission also seeks comment on the extent to which the limitations on capital and operating expenditures have been effective in promoting efficient spending. Do the company-specific limitations reflect reasonable upper limits on the amount of operating and capital expenses that a carrier need incur? For example, the Commission notes that that the National Tribal Telecommunications Association recently argued that carriers serving Tribal lands incur costs that other rural carriers do not face, resulting in significantly higher operating expenses to serve very sparsely populated service areas. Are there other specific examples that the Commission should take into account? For instance, are there modifications to the process or amounts that would improve operation of these limitations? Alternatively, should the Commission eliminate the opex limitation or the capital investment allowance entirely?

    64. Conforming Changes to Information Collection. The Commission seeks comment on proposed changes related to the collection of line count data for rate-of-return carriers. Currently, carriers that receive CAF BLS must use FCC Form 507 to file, on July 31 of each year, their voice and broadband-only line counts as of the prior December 31. Carriers may file, also using FCC Form 507, optional updates on September 30, December 31, and March 31, reporting line counts as of six months prior to the filing. These data are used to apply the monthly $250 per-line cap and to administer the budget control mechanism. In addition, these data are extremely useful in monitoring and analyzing the benefits and efficiency of high-cost universal service.

    65. First, the Commission proposes to change the date for mandatory line count filings for CAF BLS to March 31 of each year but to continue to require line counts as of December 31 (i.e., reduce the lag until filing to 3 months). This would ensure that recent line counts are used to apply the monthly cap and administer the budget control mechanism. Currently, when USAC performs the necessary calculations in April of each year, it typically must rely on the carrier's FCC Form 507 from the prior July, which in turn reports line counts as of the prior December 31. In other words, these calculations are based on line counts that are more than 15 months old. Revising the line count reporting process as proposed would mean that USAC would be able to use line count data that is only three months old. The Commission seeks comment on this proposal.

    66. The Commission notes that the FCC Form 507 filing deadlines mirror the line count filing deadlines used for HCLS. Would changing the FCC Form 507 deadlines so that they no longer coincided with the HCLS deadlines create significant administrative burdens? Would it be feasible also to revise the HCLS line count deadlines to be consistent with the proposed FCC Form 507 deadlines? If the Commission modifies the filing schedule as proposed, do the optional filings serve any benefit, or could they be eliminated?

    67. The Commission also seeks comment regarding whether FCC Form 507 should be mandatory for rate-of-return carriers that do not receive CAF BLS (i.e., carriers that have electedA-CAM) or whether there are alternative sources of this data that would be less burdensome for carriers. Line count data is extremely useful for monitoring and analyzing high-cost universal service programs. Carriers that elected A-CAM were required to file line count data on FCC Form 507 prior to the implementation of A-CAM because they received ICLS, but no longer do so. Requiring the A-CAM carriers to continue to provide line count information would allow the Commission to maintain a frequently used data set for assessing whether the Commission's rules are achieving its universal service goals, while being a minimal burden to A-CAM recipients. The Commission seeks comment on this proposal. The Commission currently estimates that it takes approximately six hours to complete and file FCC Form 507. Is this an accurate estimate of the burden associated with completing this form? Are there alternate sources of these data that the Commission could rely on instead? Would the public benefit of maintaining these data for the purpose of monitoring and analyzing high-cost universal service exceed the burden?

    68. In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases, which is codified as Accounting Standards Codification (ASC) Topic 842 (ASC 842). The new standard affects both capital and operating leases. Under this new standard, capital leases are referred to as financing leases and the procedures for expensing amounts recorded for financing leases are the same procedures previously used for capital leases.

    69. ASC 842 adopts new requirements for operating leases. For example, ASC 842 requires that operating leases longer than one year be carried on a company's balance sheet along with a corresponding liability to reflect the net present value of future lease commitments. The new standard provides procedures for expensing amounts recorded in the operating lease asset account. A carrier would recognize a lease expense from the operating lease on a straight-line basis over the lease term. Thus, for an operating lease with an escalation clause, ASC 842 would require the recorded operating expense to be higher in the first year than the amount paid in cash. This is different than the current Part 32 treatment of operating leases, which classifies leases as expenses associated with the executory agreements that are recorded as expenses at the time lease payments are made. Pursuant to the current Part 32 treatment, a company would continue to disclose future lease commitments through a footnote to the financial statements. Additional recordkeeping would be necessary if Part 32 were not to adopt the ASC 842 guidelines.

    70. The Commission seeks comment on whether to incorporate the ASC 842 guidelines into the Uniform System of Accounts (USOA) contained in Part 32. The differences in the two approaches raise questions regarding how the asset and liability should be recorded and the ability of, and the additional burden on, a carrier to maintain records to support the two approaches. The Commission seeks comment on these questions in general, as well as in connection with the specific issues raised below. The Commission is particularly interested in the additional record-keeping burden that maintaining both the Part 32 and ASC 842 lease accounts would place on carriers if the Commission were not to adopt ASC 842 for Part 32 purposes. A party asserting a burden should address the level of that burden in the context of any ratemaking effects that would occur.

    71. If the Commission were to incorporate ASC 842 into Part 32, it proposes to create an asset and a liability account to reflect operating leases. The Commission seeks comment on this proposal. The Commission also invites comment on whether other balance sheet or income statement-related accounts are necessary to account for leasing activities, either financing or operating. If so, parties should specify the additional accounts that are needed. The Commission proposes to adopt new or revised instructions for accounting for leases. Commenters supporting the adoption of ASC 842 are encouraged to provide language for the instructions and other rule revisions needed to implement ACS 842 in Part 32, taking into account the issues raised below.

    72. The creation of a new asset account and a new liability account for operating leases raises questions about the treatment of these amounts in the ratemaking context. The operating lease asset would record the discounted value of payments due under operating leases longer than one year. Because there is no current outlay of funding for the operating leases, the Commission proposes that such amounts be excluded from the carrier's rate base. Similarly, because the liability is based on the value in the operating lease account, the Commission proposes that such liability should not be used in calculating the cost of capital. The Commission seeks comment on these two proposals, including whether the proposed treatment is warranted and what effect such treatment would have on a carrier's revenue requirement. Commenters are encouraged to identify and provide specific language to effectuate the changes to Part 65, or other affected provisions in the Commission's rules, that would be needed to implement this proposal.

    73. Adopting ASC 842 would also modify the way operating lease expenses are currently calculated pursuant to the Commission's Part 32 rules. As noted earlier, ASC 842 would spread lease payments on a straight-line basis over the term of the operating lease. The Commission seeks comment on any recognition or timing issues between the Part 32 treatment and the treatment under ASC 842. In particular, the Commission seeks comment on how any entries reflecting interest associated with the use of the net present value approach to recording operating leases should be treated for purposes of calculating lease expense. If the Commission adopts ASC 842, it proposes to assign operating lease costs to the expense accounts currently being used to record such amounts. Would any revisions to the separations rules contained in Part 36 would be required under this proposal, and if so, which sections would need to be revised and what specific language should be used?

    74. The Commission also seeks comment on the impact any ratemaking changes resulting from this proposed accounting modification would have on the levels or distribution of CAF BLS or other universal service support mechanisms. Commenters should identify any recognition and/or timing issues raised by any change and should, to the extent possible, quantify any difference.

    75. ASC 842 becomes effective for fiscal years beginning after December 15, 2018 for public business entities and certain other businesses. For all other entities, it becomes effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. The Commission seeks comment on when any changes the Commission adopts should become effective and whether there are any other implementation issues the Commission should address.

    III. Procedural Matters A. Paperwork Reduction Act

    76. The NPRM adopted herein contains new, proposed new or modified information collection requirements. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and the Office of Management and Budget (OMB) to comment on the information collection requirements contained in this document, as required by the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, the Commission seeks specific comment on how it might further reduce the information collection burden for small business concerns with fewer than 25 employees.

    77. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission has prepared this Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on a substantial number of small entities from the policies and rules proposed in the NPRM. The Commission requests written public comment on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments on the NPRM. The Commission will send a copy of the NPRM, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). In addition, the NPRM and IRFA (or summaries thereof) will be published in the Federal Register.

    78. The proposals in this NPRM seek to build on efforts to modernize high-cost universal service support by offering greater certainty, predictability, and stability to rate-of-return carriers and creating incentives for efficient spending and bringing broadband to the areas that need it most.

    79. The Commission reviews the amount of support available to rate-of-return carriers by initiating review of the high-cost universal service support budget, proposing to increase the budget based on inflation, and proposing an offer of model-based support for carriers whose model-based support would be lower than the support they received in 2016. By examining the budget and the support available for rate-of-return carriers, the Commission is looking to bring stability to the program and fulfill its commitment to reexamine the budget. To address some of the shortcomings and inefficiencies in the Commission's existing support programs, it also seeks comment on whether to fully-fund carriers that have elected to receive model-based support, subject to additional build-out obligations, and on providing another opportunity for all legacy rate-of-return carriers still receiving legacy support to elect a voluntary path to model support. For those carriers that choose to remain on legacy support, the Commission proposes to adopt a mechanism whereby legacy carriers would be guaranteed a threshold level of annual support, and the Commission seeks comment on an implementing an individual cap for each legacy carriers. This would alleviate the unpredictability created by the budget control mechanism. The Commission also seeks comment on eliminating limitations on capital, operational, and corporate expenses to minimize the burden these mechanisms put on carriers. Finally, the Commission seeks comment on modifying various rules, including legacy buildout obligations, the methodology for applying the budget constraint, the $250 per-loop, per-month cap, and looking at other reforms to the rate-of-return mechanisms. The Commission also seeks comment on proposals to modify line count data reporting requirements and accounting rules for capital and operating leases.

    80. The legal basis for any action that may be taken pursuant to the NPRM is contained in sections 1-4, 5, 201-206, 214, 218-220, 251, 252, 254, 256, 303(r), 332, 403, and 405 of the Communications Act of 1934, as amended, and section 706 of the Telecommunications Act of 1996, 47 U.S.C. 151-155, 201-206, 214, 218-220, 251, 256, 254, 256, 303(r), 403 and 405.

    81. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small-business concern” under the Small Business Act. A “small-business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA).

    82. Small Businesses, Small Organizations, Small Governmental Jurisdictions. The Commission's actions, over time, may affect small entities that are not easily categorized at present. The Commission therefore describes here, at the outset, three broad groups of small entities that could be directly affected herein. First, while there are industry specific size standards for small businesses that are used in the regulatory flexibility analysis, according to data from the SBA's Office of Advocacy, in general a small business is an independent business having fewer than 500 employees. These types of small businesses represent 99.9% of all businesses in the United States which translates to 28.8 million businesses.

    83. Next, the type of small entity described as a “small organization” is generally “any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.” Nationwide, as of Aug 2016, there were approximately 356,494 small organizations based on registration and tax data filed by nonprofits with the Internal Revenue Service (IRS).

    84. Finally, the small entity described as a “small governmental jurisdiction” is defined generally as “governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand.” U.S. Census Bureau data from the 2012 Census of Governments indicates that there were 90,056 local governmental jurisdictions consisting of general purpose governments and special purpose governments in the United States. Of this number there were 37, 132 General purpose governments (county, municipal and town or township) with populations of less than 50,000 and 12,184 Special purpose governments (independent school districts and special districts) with populations of less than 50,000. The 2012 U.S. Census Bureau data for most types of governments in the local government category shows that the majority of these governments have populations of less than 50,000. Based on this data the Commission estimates that at least 49,316 local government jurisdictions fall in the category of “small governmental jurisdictions.”

    85. Line Count Data. In the NPRM, the Commission seeks comment on proposed changes related to the collection line count data for rate-of-return carriers. Currently, carriers that receive CAF BLS must use FCC Form 507 to file, on July 31st of each year, their voice and broadband-only line counts as of the prior December 31st. Carriers may also file quarterly updates. First, the Commission proposes to change the date for mandatory line count filings for CAF BLS to March 31st of each year, but to continue to require line counts as of December 31st (i.e., reduce the lag until filing to 3 months). Second, the Commission seeks comment regarding whether the FCC Form 507 should be mandatory for rate-of-return carriers that do not receive CAF BLS (i.e., carriers that have elected A-CAM).

    86. Accounting for Capital and Operation Leases. In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases, which are codified as Accounting Standards Codification (ASC) Topic 842 (ASC 842). The new standard affects both capital and operating leases. Under this new standard, capital leases are referred to as financing leases and the procedures for expensing amounts recorded for financing leases are the same procedures previously used for capital leases. ASC 842 adopts new requirements for operating leases. The Commission seeks comment on whether to incorporate the ASC 842 guidelines into the Uniform System of Accounts (USOA) contained in Part 32. The changes the Commission proposes would lead to carrier being required to modify certain accounting practices. The Commission is interested in the burden this change would create for carriers.

    87. Deployment Obligations. In the NPRM, the Commission seeks comment on whether the number of locations legacy carriers are required to deploy to should change and how based on the new support mechanism proposed.

    88. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its proposed approach, which may include (among others) the following four alternatives: (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities. The Commission expects to consider all of these factors when it has received substantive comment from the public and potentially affected entities.

    89. Largely, the proposals in the NPRM if adopted would have no impact on or would reduce the economic impact of current regulations on small entities. Certain proposals in this NPRM could have a positive economic impact on small entities; for instance, the Commission seeks comment on fully funding the original A-CAM offer and increasing the budget for rate-of-return carriers based on an inflationary factor.

    90. In this NPRM, the Commission seeks comment on making a second offer of A-CAM support. The offer will be voluntary and carriers are not required to accept it or take any action. Therefore, the Commission's proposal for a second A-CAM will not have a significant impact on small entities.

    91. The Commission also seeks comment on mechanisms to provide legacy carriers a guaranteed threshold of annual support and a carrier specific cap, which would reduce the unpredictability of the current budget control mechanism. The Commission proposes several alternatives for carriers to evaluate. In addition, because legacy carriers' support amounts could change due to the Commission's proposals, to minimize significant economic impact, the Commission seeks comment on whether or how deployment obligations should change.

    92. The Commission also seeks comment on whether it should retain the operating expense limitation, the corporate operations limit, and the capital investment allowance. If the Commission were to eliminate these limitations on expenses and investment, it would be further minimizing the economic impacts on small entities of the Commission's current regulations. In addition, the Commission seeks comment on ways to simplify legacy support mechanisms by making changes to how HCLS and CAF BLS are calculated.

    93. The Commission proposes to change the date for mandatory line count filings for CAF BLS to March 31st of each year, but to continue to require line counts as of December 31st (i.e., reduce the lag until filing to 3 months). The Commission also seeks comment regarding whether FCC Form 507 should be mandatory for rate-of-return carriers that do not receive CAF BLS (i.e., carriers that have elected A-CAM). Finally, the Commission seeks comment on whether to incorporate the ASC 842 guidelines into the Uniform System of Accounts (USOA) contained in Part 32. These changes would require carriers to modify certain accounting practices and for certain carriers add a reporting requirement. In the NPRM, the Commission seeks comment on the burden this change would create for carriers and will factor that into its decision.

    94. More generally, the Commission expects to consider the economic impact on small entities, as identified in comments filed in response to the NPRM and this IRFA, in reaching its final conclusions and taking action in this proceeding. The proposals and questions laid out in the NPRM were designed to ensure the Commission has a complete understanding of the benefits and potential burdens associated with the different actions and methods.

    95. Permit-But-Disclose. The proceeding this NPRM initiates shall be treated as a “permit-but-disclose” proceeding in accordance with the Commission's ex parte rules. Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must (1) list all persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and (2) summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter's written comments, memoranda, or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with rule 1.1206(b). In proceedings governed by rule 1.49(f) or for which the Commission has made available a method of electronic filing, written ex parte presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment filing system available for that proceeding, and must be filed in their native format (e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission's ex parte rules.

    96. People With Disabilities. To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to [email protected] or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).

    97. Comments and reply comments must include a short and concise summary of the substantive arguments raised in the pleading. Comments and reply comments must also comply with section 1.49 and all other applicable sections of the Commission's rules. The Commission directs all interested parties to include the name of the filing party and the date of the filing on each page of their comments and reply comments. All parties are encouraged to utilize a table of contents, regardless of the length of their submission. The Commission also strongly encourages parties to track the organization set forth in the NPRM in order to facilitate its internal review process.

    IV. Ordering Clauses

    98. Accordingly, it is ordered that, pursuant to the authority contained in sections 1-4, 5, 201-206, 214, 218-220, 251, 252, 254, 256, 303(r), 332, 403, and 405 of the Communications Act of 1934, as amended, and section 706 of the Telecommunications Act of 1996, 47 U.S.C. 151-155, 201-206, 214, 218-220, 251, 256, 254, 256, 303(r), 403 and 405, this Notice of Proposed Rulemaking IS ADOPTED, effective thirty (30) days after publication of the text or summary thereof in the Federal Register.

    99. It is further ordered, Pursuant to Section 220(i) of the Communications Act, 47 U.S.C. 220(i), that notice be given to each state commission of the above rulemaking proceeding, and that the Secretary shall serve a copy of this Notice on each state commission.

    100. It is further ordered that, pursuant to the authority contained in sections 1, 2, 4(i), 5, 201-206, 214, 218-220, 251, 252, 254, 256, 303(r), 332, and 403 of the Communications Act of 1934, as amended, and section 706 of the Telecommunications Act of 1996, 47 U.S.C. 151, 152, 154(i), 155, 201-206, 214, 218-220, 251, 252, 254, 256, 303(r), 332, 403, 1302, notice is hereby given of the proposals and tentative conclusions described in this Notice of Proposed Rulemaking.

    Federal Communications Commission. Marlene Dortch, Secretary.
    [FR Doc. 2018-08569 Filed 4-24-18; 8:45 am] BILLING CODE 6712-01-P
    DEPARTMENT OF VETERANS AFFAIRS 48 CFR Parts 829, 846, 847, 852, and 870 RIN 2900-AQ04 Revise and Streamline VA Acquisition Regulation AGENCY:

    Department of Veterans Affairs.

    ACTION:

    Proposed rule.

    SUMMARY:

    The Department of Veterans Affairs (VA) is proposing to amend and update its VA Acquisition Regulation (VAAR) in phased increments to revise or remove any policy superseded by changes in the Federal Acquisition Regulation (FAR), to remove procedural guidance internal to VA into the VA Acquisition Manual (VAAM), and to incorporate any new agency specific regulations or policies. These changes seek to streamline and align the VAAR with the FAR and remove outdated and duplicative requirements and reduce burden on contractors. The VAAM incorporates portions of the removed VAAR as well as other internal agency acquisition policy. VA will rewrite certain parts of the VAAR and VAAM, and as VAAR parts are rewritten, we will publish them in the Federal Register. VA will combine related topics, as appropriate. In particular, this rulemaking revises VAAR Parts 829—Taxes, 846—Quality Assurance, and 847—Transportation, as well as affected Parts 852—Solicitation Provisions and Contract Clauses and 870—Special Procurement Controls.

    DATES:

    Comments must be received on or before June 25, 2018 to be considered in the formulation of the final rule.

    ADDRESSES:

    Written comments may be submitted 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 1063B, 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-AQ04—Revise and Streamline VA Acquisition Regulation—Parts 829, 846, 847.” Copies of comments received will be available for public inspection in the Office of Regulation Policy and Management, Room 1063B, between the hours of 8:00 a.m. and 4:30 p.m., Monday through Friday (except holidays). Please call (202) 461-4902 for an appointment. (This is not a toll-free number.) In addition, during the comment period, comments may be viewed online through the Federal Docket Management System (FDMS) at www.Regulations.gov.

    FOR FURTHER INFORMATION CONTACT:

    Mr. Rafael N. Taylor, Senior Procurement Analyst, Procurement Policy and Warrant Management Services, 003A2A, 425 I Street NW, Washington, DC 20001, (202) 382-2787. (This is not a toll-free number.)

    SUPPLEMENTARY INFORMATION: Background

    This rulemaking is issued under the authority of the Office of Federal Procurement Policy (OFPP) Act, which provides the authority for an agency head to issue agency acquisition regulations that implement or supplement the FAR.

    VA is proposing to revise the VAAR to add new policy or regulatory requirements and to remove any redundant guidance and guidance that is applicable only to VA's internal operating processes or procedures. Codified acquisition regulations may be amended and revised only through rulemaking. All amendments, revisions, and removals have been reviewed and concurred with by VA's Integrated Product Team of agency stakeholders.

    The VAAR uses the regulatory structure and arrangement of the FAR and headings and subject areas are broken up consistent with the FAR content. The VAAR is divided into subchapters, parts (each of which covers a separate aspect of acquisition), subparts, sections, and sections.

    The Office of Federal Procurement Policy Act, as codified in 41 U.S.C. 1707, provides the authority for the Federal Acquisition Regulation and for the issuance of agency acquisition regulations consistent with the FAR.

    When Federal agencies acquire supplies and services using appropriated funds, the purchase is governed by the FAR, set forth at Title 48 Code of Federal Regulations (CFR), chapter 1, parts 1 through 53, and the agency regulations that implement and supplement the FAR. The VAAR is set forth at Title 48 CFR, chapter 8, parts 801 to 873.

    Discussion and Analysis

    VA proposes to make the following changes to the VAAR in this phase of its revision and streamlining initiative. For procedural guidance cited below that is proposed to be deleted from the VAAR, each section cited for removal has been considered for inclusion in VA's internal agency operating procedures in accordance with FAR 1.301(a)(2). Similarly, delegations of authority that are removed from the VAAR will be included in the VA Acquisition Manual (VAAM) as internal agency guidance.

    VAAR Part 829—Taxes

    We propose to revise the part 829 authorities to include the applicable U.S. code citations where the Secretary of the Treasury has exempted spirits and alcohol purchases by the Federal government, pursuant to 26 U.S.C. 5214(a)(2), 26 U.S.C. 5271, and 26 U.S.C. 7510. We also propose to include an updated positive law codification of Title 41 authority—41 U.S.C.1303(a)(2), to reflect additional authority of VA as an executive agency to issue regulations that are essential to implement Government-wide policies and procedures, as well as to issue additional policies and procedures required to satisfy VA's specific needs.

    In subpart 829.2, Federal Excise Taxes, we propose to redesignate 829.202-70, Tax exemptions for alcohol products, as 829.203-70, Tax exemptions for alcohol products. We propose to revise paragraphs (a), (b) and (c) to reflect updated legislative and regulatory citations, to include 26 U.S.C. 5214(a)(2), 26 U.S.C. 5271, and 27 CFR parts 1-39. We also propose to remove paragraph (d) since there is no free of tax provision for beer in the Department of the Treasury regulation. This revised structure would conform more closely to the FAR structure of part 29, and moves to the VAAM the internal procedural instructions to the contracting officer regarding obtaining new permits. We also propose to remove the number and title of 829.202, General exemptions, since its sole section is proposed for removal.

    We propose to remove 829.302, Application of State and local taxes to the Government, and move it to the VAAM as internal procedural guidance to the contracting officer.

    We propose to remove 829.302-70, Purchases made from patients' funds, which prescribes 852.229-70, Sales or Use Taxes, as obsolete and redundant of FAR 52.212-4, Contract Terms and Conditions—Commercial Items clause, paragraph (k), which requires contractors to include “all applicable Federal, State, and local taxes and duties.” While VA uses the personal funds of patients to maintain fiscal controls and accountability, such controls are administrative in nature and unrelated to contracting.

    We propose to add 829.303, Application of State and local taxes to Government contractors and subcontractors, to delegate to the Head of the Contracting Activity (HCA), without power of redelegation, the authority to make the determination prescribed in FAR 29.303(a).

    VAAR Part 846—Quality Assurance

    In new subpart 846.1, General, we propose to add 846.101, Definition, to explain the term “rejected goods” since that term is the subject of a revised clause at 852.246-71, Rejected goods.

    We propose to revise subpart 846.3, Contract Clauses, to remove 846.302-70, Guarantee clause, which prescribes 852.246-70, Guarantee, because there are sufficient FAR warranty clauses that could be used, such as FAR clause 52.246-19, Warranty of Systems and Equipment under Performance Specifications or Design Criteria.

    We propose to remove 846.302, Fixed-price supply contracts, and add 846.370, Clauses for supplies, equipment or perishable goods, as the current VAAR numbering convention for subpart 846.3, Contract Clauses, does not align with the FAR subpart 46.3, Contract Clauses.

    We propose to revise 846.312, Construction contracts, to remove a duplicate contract clause number.

    We propose to add 846.370, Clauses for supplies, equipment or perishable goods. The analysis of the current VAAR revealed that the present VAAR numbering convention for subpart 846.3, Contract Clauses, does not align with FAR subpart 46.3, Contract clauses. For example, FAR 46.302 deals solely with fixed-price supply contracts and the current sections which prescribe these clauses (e.g., 846.302-70, Guarantee clause; 846.302-71, Inspection; 846.302-72, Frozen processed foods; and 846.302-73. Noncompliance with packaging, packing and/or marking requirements) could include both cost and fixed price types of contracts. Therefore, it became necessary to remove these sections and move them to the proposed new section, 846.370, which supplements the FAR coverage at subpart 46.3. Accordingly, we propose to add the following sections prescribing clauses for cost and fixed-price type contracts:

    846.370-1, Rejected goods, (formerly 846.302-71, Inspection), which would prescribe the clause 852.246-71, Rejected Goods, and clarify a contractor's obligations to remove goods rejected by the Government.

    846.370-2, Frozen processed foods (formerly 846.302-72), which would prescribe clause 852.246-72, Frozen Processed Foods, and describe the requirements for safe handling of frozen foods.

    846.370-3, Noncompliance with packaging, packing and/or marking requirements (formerly 846.302-73), which would prescribe clause 852.246-73, Noncompliance with Packaging, Packing and/or Marking Requirements, describing corrective steps for compensating the Government in the case of non-compliance.

    We propose to add 846.370-4, Purchase of Shellfish, formerly 870.111-3, to conform to the FAR requirement to place clauses and their prescriptions in the appropriate parts, and would prescribe clause 852.246-76, Purchase of Shellfish, and describe the requirements for safe handling of shellfish.

    We propose to revise subpart 846.4, Government Contract Quality Assurance.

    In section 846.408, Single-agency assignments of Government contract quality assurance (no text), we propose to remove the single title as it is unnecessary.

    We propose to amend 846.408-70, Inspection of subsistence, to remove paragraph (a) since FAR 46.408 identifies the Food and Drug Administration, the Department of Agriculture and the National Maritime Fisheries Service of the Department of Commerce as the entities to perform inspection. We also propose to remove paragraph (c) since it contains procedural guidance that is internal to VA and will be updated and moved to the VAAM, and to simplify the requirements in paragraph (d) that are the contractor's responsibilities, eliminating parts of paragraph (3) and all of (4). Paragraphs throughout the section will be appropriately renumbered.

    We propose to remove 846.408-71, Waiver of USDA inspection and specifications, since no other agencies, including the Department of Agriculture, still require this type of inspection for subsistence.

    We propose to remove the existing text of 846.471, Determination authority, since the authority it grants is provided to the contracting officer in 846.470. We propose to revise the title of 846.471, to now read, “Food service equipment,” formerly at 870.115. This conforms to the FAR requirement to place clauses and their prescriptions in the appropriate parts, and to require all dietetic food service equipment to meet National Sanitation Foundation (NSF) standards.

    We propose to remove 846.472, Inspection of repairs for properties under the Loan Guaranty Program and Direct Loan Programs, and its two sections, 846.472-1, Repairs of $1,000 or less, and 846.472-2, Repairs in excess of $1,000. Such sections are unnecessary given that a private contractor performs such inspection and repair functions on VA's behalf. The contractor's authority to perform these functions is established by other provisions of law.

    In subpart 846.7, Warranties, we propose to remove 846.710, Contract clauses, since it redundantly prescribes a clause in FAR. We also propose to delete the two sections: 846.710-70, Special warranties, as repetitive of FAR clause coverage, and 846.710-71, Warranty for construction—guarantee period services, which has been replaced by 846.702-70, Guarantee period services and specifications.

    We propose to add 846.702-70, Guarantee period services and specifications, to state VA's policy regarding guarantee period services, and to prescribe a clause, 852.246-75, Warranty of Construction—Guarantee Period Services, in all solicitations and contracts for construction that include the FAR clause 52.246-21, Warranty of Construction.

    VAAR Part 847—Transportation

    We propose to amend the authority citation for part 847 to add 41 CFR part 102-117. This CFR reference pertains to “Transportation Management” and it has relevance to part 847.

    We propose to add subpart 847.2, Contracts for Transportation or for Transportation-Related Services. This new subpart would be comprised of new section 847.207, Solicitation provisions, contract clauses, and special requirements, and the following sections:

    847.207-8, Government responsibilities, which would provide guidance to contracting officers for VA transportation contracts and subsequent payments on those contracts, and 847.207-70, VA solicitation provisions, contract clauses, and special requirements, which would provide guidance on contractual requirements for insurance provisions and contractor personnel performing on VA transportation contracts.

    We propose to revise subpart 847.3, Transportation in Supply Contracts, by adding 847.302, Place of delivery—F.o.b. point. This section would specify delivery locations, in addition to referencing a new corresponding clause, to be inserted in supply contracts when it is necessary to specify delivery locations. This new section would help eliminate confusion by specifying exact delivery locations, so there would be a better representation of delivery scheduling and pricing.

    Under subpart 847.3, we propose to remove the following sections as they include internal guidance and will be considered for revision and placement in the VAAM:

    847.303, Standard delivery terms and contract clauses.

    847.303-1, F.o.b. origin.

    847.303-70, F.o.b. origin, freight prepaid, transportation charges to be included on the invoice.

    Under 847.305, Solicitation provisions, contract clauses, and transportation factors, we propose to add 847.305-10, Packing, marking, and consignment instructions. This new section would specify consignment instructions, and would prescribe new clauses to be included in VAAR Part 852. It would cover those areas of shipping and marking that may not otherwise be covered, and are not covered in the FAR. We propose to add new section 847.305-70, Potential destinations known but quantities unknown, which prescribes clause 852.247-70, Determining Transportation Costs for Evaluation of Offers, when the contracting officer contracts with multiple bidders to provide items directly to VA field installations, on an F.o.b. origin basis.

    We propose to add new section 847.305-71, VA contract clauses. This section references new clauses to the VAAR that are used for both free on board (F.o.b.) origin and F.o.b. destination, ensuring proper receipt and documentation of shipments.

    We propose to remove 847.306-70, Transportation payment and audit, and replace it with 847.306-70, Records of claims. This new section recommends that the contracting officer use an offeror's record of claims involving loss or damage as an evaluation factor or subfactor for VA transportation contracts.

    VAAR Part 852—Solicitation Provisions and Contract Clauses

    In subpart 852.2, Texts of Provisions and Clauses, we propose to remove clause 852.229-70, Sales or Use Taxes, as obsolete and redundant of FAR clause 52.212-4, Contract Terms and Conditions—Commercial Items, paragraph (k), which would require contractors to include all applicable Federal, State, and local taxes and duties.

    We propose to remove 852.246-70, Guarantee, as redundant of the coverage of warranties by several clauses in FAR sections 52.246-17 through 52.246-21, and to reserve the section number.

    We propose to revise 852.246-71, Inspection, to retitle it as “Rejected Goods” to more accurately reflect the content; to revise the citation where it is prescribed; and to make other minor edits for clarity.

    We propose to revise 852.246-72, Frozen Processed Foods, to revise the prescription citation.

    We propose to revise 852.246-73, Noncompliance with Packaging, Packing, and/or Marking Requirements, to revise the prescription citation, and to make one minor edit.

    We propose to remove 852.246-74, Special Warranties, as redundant of the coverage of warranties by several clauses in FAR sections 52.246-17 through 52.246-21, and to reserve the section number.

    We propose to amend 852.246-75, Warranty of Construction—Guarantee Period Services, to revise the prescription citation, and to make one minor edit for clarity.

    We propose to add 852.246-76, Purchase of Shellfish, formerly 852.270-3, to conform to the FAR requirement to place clauses and their prescriptions in the appropriate parts, and to make one minor edit for clarity.

    We propose to amend 852.247-70 to revise its title to “Determining Transportation Costs for Evaluation of Offers” which would make it applicable to negotiated as well as sealed bid contracts.

    We propose to add 852.247-71, Delivery Location. This new clause would ensure that the proper delivery locations are included in the contract, for accountability, tracking, and delivery.

    We propose to add 852.247-72, Marking Deliverables. This new clause would ensure that packages are properly marked for tracking, delivery, and acceptance purposes.

    We propose to add 852.247-73, Packing for Domestic Shipment. This new clause would ensure acceptance by common carriers and safe delivery at destination.

    We propose to add 852.247-74, Advance Notice of Shipment. This new clause would be used when the F.o.b. point is destination, and special Government assistance is required in the delivery or receipt of the items.

    We propose to add 852.247-75, Bills of Lading, which would define when a commercial or Government bill of lading is to be used when shipments of deliverable items under this contract are F.o.b. origin.

    We propose to delete 852.270-2, Bread and Bakery Products—Quantities, as unnecessary since variations in quantities is adequately covered in FAR subpart 11.7, Variation in Quantity, and in its related clauses.

    We propose to delete 852.270-3, Purchase of Shellfish, and move it to 852.246-76 to conform to the FAR requirement to place clauses and their prescriptions in the appropriate parts.

    VAAR Part 870—Special Procurement Controls

    We propose to delete 870.111-3, Contract clauses, since paragraph (a) prescribes the clause 852.270-2, Bread and Bakery Products—Quantities, which is unnecessary since variations in quantities is adequately covered in FAR subpart 11.7 and in its related clauses, and paragraph (b), which prescribes the clause 852.270-3, Purchase of Shellfish, and which is proposed to be moved to new section 852.246-76 to conform to the FAR requirement to place clauses and their prescriptions in the appropriate parts.

    We propose to remove 870.111-5, Frozen processed food products, which is proposed to be moved to 846.370-2.

    We propose to remove 870.115, Food service equipment, which is proposed to be moved to 846.471.

    We propose to reserve part 870 since all sections and sections have either been proposed for deletion or removal to other parts of the VAAR.

    Effect of Rulemaking

    Title 48, Federal Acquisition Regulations System, Chapter 8, Department of Veterans Affairs, of the Code of Federal Regulations, as proposed to be revised by this rulemaking, would represent VA's implementation of its legal authority and publication of the VAAR for the cited applicable parts. Other than future amendments to this rule or governing statutes for the cited applicable parts, or as otherwise authorized by approved deviations or waivers in accordance with FAR subpart 1.4, Deviations from the FAR, and as implemented by VAAR subpart 801.4, Deviations from the FAR or VAAR, no contrary guidance or procedures would be authorized. All existing or subsequent VA guidance would be read to conform with the rulemaking if possible or, if not possible, such guidance would be superseded by this rulemaking as pertains to the cited applicable VAAR parts.

    Executive Orders 12866, 13563 and 13771

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits of reducing costs, of harmonizing rules, and of promoting flexibility. E.O. 12866, Regulatory Planning and Review, defines “significant regulatory action” to mean any regulatory action that is likely to result in a rule that may: “(1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive order.”

    VA has examined the economic, interagency, budgetary, legal, and policy implications of this regulatory action, and it has been determined to be a significant regulatory action under E.O. 12866, because it raises novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive Order. VA's impact analysis can be found as a supporting document at http://www.regulations.gov, usually within 48 hours after the rulemaking document is published. Additionally, a copy of the rulemaking and its impact analysis are available on VA's website at http://www.va.gov/orpm by following the link for VA Regulations Published from FY 2004 Through Fiscal Year to Date. This proposed rule is not expected to be subject to the requirements of E.O. 13771 because this proposed rule is expected to result in no more than de minimis costs.

    Paperwork Reduction Act

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

    Regulatory Flexibility Act

    This proposed rule would not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. The overall impact of the proposed rule would be of benefit to small businesses owned by Veterans or service-disabled Veterans as the VAAR is being updated to remove extraneous procedural information that applies only to VA's internal operating procedures. VA is merely adding existing and current regulatory requirements to the VAAR and removing any guidance that is applicable only to VA's internal operation processes or procedures. VA estimates no cost impact to individual business would result from these rule updates. This rulemaking does not change VA's policy regarding small businesses, does not have an economic impact to individual businesses, and there are no increased or decreased costs to small business entities. On this basis, the proposed rule would not have an economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. Therefore, under 5 U.S.C. 605(b), this regulatory action is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604.

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

    List of Subjects 48 CFR Part 829

    Government procurement, Taxes.

    48 CFR Part 846

    Government procurement.

    48 CFR Part 847

    Government procurement, Transportation.

    48 CFR Part 852

    Government procurement, Reporting and recordkeeping requirements.

    48 CFR Part 870

    Asbestos, Frozen foods, Government procurement, Telecommunications.

    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 September 1, 2017, for publication.

    Dated: April 3, 2018. Consuela Benjamin, Regulations Development Coordinator, Office of Regulation Policy & Management, Office of the Secretary, Department of Veterans Affairs.

    For the reasons set out in the preamble, VA proposes to amend 48 CFR, chapter 8, parts 829, 846, 847, 852, and 870 as follows:

    PART 829—TAXES 1. The authority citation for part 829 is revised to read as follows: Authority:

    26 U.S.C. 5214(a), 5271, 7510; 40 U.S.C. 121(c); 41 U.S.C. 1303(a)(2) and 48 CFR 1.301-1.304.

    2. Subpart 829.2 is revised to read as follows: Subpart 829.2—Federal Excise Taxes
    829.203 Other Federal tax exemptions.
    829.203-70 Tax exemptions for alcohol products.

    (a) General. (1) Pursuant to 26 U.S.C. 5214(a)(2) and 26 U.S.C. 5271, VA may purchase spirits using a tax exemption as provided by Department of the Treasury, Alcohol and Tobacco Tax and Trade Bureau (TTB) regulations (see 27 CFR parts 1-39). As stated in 27 CFR 19.426, agencies of the United States Government that wish to obtain either specially denatured spirits or spirits free of tax for nonbeverage purposes must apply for and receive a permit on form TTB F 5150.33 or must have a previously issued permit on ATF Form 1444.

    (2) When purchasing spirits under a tax exemption, the contracting officer shall indicate in the contract document the basis for the exemption and make a copy of the permit available to the contractor. Upon receipt of the spirits, the contractor shall return the permit to the contracting officer unless future orders are anticipated or as directed by the contracting officer.

    (3) Department of Veterans Affairs activities that require spirits free of tax for beverage purposes under 26 U.S.C. 7510 must provide a proper purchase order signed by the head of the agency or an authorized designee.

    (b) Specially denatured spirits or spirits free of tax for nonbeverage purposes. Contracting officers may make purchases of excise tax-free spirits, including denatured alcohol and specially denatured alcohol only from qualified distillery plants or bonded dealers.

    (1) Permits previously issued on Alcohol, Tobacco, and Firearms (ATF) Form 1444, Tax-Free Spirits for Use of United States, remain valid until surrendered or cancelled.

    (2) A copy of the current ATF Form 1444 or TTB Form 5150.33 shall be made available to the supplier with the initial order. The permit number only needs to be referenced on any future orders with the same supplier.

    (c) Wine. No tax exemption form or ATF/TTB permit is required for the tax-free procurement of wine from bonded wine premises. The purchase order must show the kind, quantity, and alcohol content of the wine and must state the purpose for which wine is to be used (see 27 CFR 24.293). An extra copy of a properly executed purchase order may be furnished to the bonded wine premises from which wine is purchased to facilitate record keeping. The order must be signed by the Head of Contracting Activity or designee.

    3. Subpart 829.3 is revised to read as follows: Subpart 829.3—State and Local Taxes
    829.303 Application of State and local taxes to Government contractors and subcontractors.

    (a) The authority to make the determination prescribed in FAR 29.303(a) is delegated, without power of redelegation, to the Head of the Contracting Activity (HCA).

    PART 846—QUALITY ASSURANCE 4. The authority citation for part 846 is revised to read as follows: Authority:

    40 U.S.C. 121(c); 41 U.S.C. 1303; 41 U.S.C. 1702; and 48 CFR 1.301-1.304.

    5. Subpart 846.1 is added to read as follows: Subpart 846.1—General
    846.101 Definition.

    As used in this part—

    Rejected goods means supplies and/or equipment failing to meet contractual terms and conditions and/or generally accepted quality standards that may be returned by the Government at the contractor's risk and expense.

    6. Subpart 846.3 is revised to read as follows: Subpart 846.3—Contract Clauses Sec. 846.312 Construction contracts. 846.370 Clauses for supplies, equipment or perishable goods. 846.370-1 Rejected goods. 846.370-2 Frozen processed foods. 846.370-3 Noncompliance with packaging, packing and/or marking requirements. 846.370-4 Purchase of shellfish. Subpart 846.3—Contract Clauses
    846.312 Construction contracts.

    The contracting officer shall insert the clause at 852.236-74, Inspection of Construction, in solicitations and contracts for construction that include the FAR clause at 52.246-12, Inspection of Construction.

    846.370 Clauses for supplies, equipment or perishable goods.
    846.370-1 Rejected goods.

    The contracting officer shall insert the clause at 852.246-71, Rejected Goods, in solicitations and contracts for the acquisition of supplies, equipment or perishable goods. Perishable goods include such items as packing house and dairy products, bread and bakery products, fresh and frozen fruits, and vegetables.

    846.370-2 Frozen processed foods.

    (a) The contracting officer shall insert the clause at 852.246-72, Frozen Processed Foods, in solicitations and contracts for frozen processed foods.

    (b) The following frozen processed food products must contain a label that complies with the Federal Food, Drug and Cosmetic Act (21 U.S.C. 301), which requires all ingredients be listed in accordance with their predominance order:

    (1) Frozen processed food products that contain meat, poultry, or a significant proportion of eggs.

    (2) Frozen processed food products that contain fish or fish products.

    (3) Frozen bakery products.

    (c) All procured frozen processed food products that contain meat, poultry or a significant proportion of eggs must meet the following requirements:

    (1) The products must be processed or prepared in plants operating under the supervision of the Department of Agriculture (USDA).

    (2) The product must be inspected and approved in accordance with USDA regulations governing meat, poultry, or egg inspection. A label or seal that indicates compliance with USDA regulations, affixed to the container, will be accepted as evidence of compliance.

    (d) All procured frozen processed food products that contain fish or fish products must meet the following requirements:

    (1) The product must be processed or prepared in plants operated under the supervision of the Department of Commerce (DOC). The products listed in DOC's publication “Approved List of Sanitarily Inspected Fish Establishments” are processed in plants under Federal inspection of the National Marine Fisheries Service, National Oceanic and Atmospheric Administration, DOC. The inspected products packed under various labels bearing the brand names are produced in accordance with current U.S. Grade Standards or official product specifications, packed under optimum hygienic conditions, and must meet Federal, State, and city sanitation and health regulations. Such brand label or DOC seal indicating compliance with DOC regulations, affixed to a container, will be accepted as evidence of compliance.

    (2) If the condition in paragraph (d)(1) of this section was not met (e.g., no seal), the shipment may be lot-inspected by the DOC and containers stamped to indicate acceptance or a Certification of Inspection issued to accompany the shipment.

    (e) Producers of frozen bakery products that ship products in interstate commerce are required to comply with the Federal Food, Drug and Cosmetic Act. Therefore, the product must be verified as shipped interstate or that the producer ships products to other purchasers interstate.

    846.370-3 Noncompliance with packaging, packing and/or marking requirements.

    The contracting officer shall insert the clause at 852.246-73, Noncompliance with Packaging, Packing, and/or Marking Requirements, in non-commercial item solicitations and contracts for supplies or equipment where there are special packaging, packing and/or marking requirements. The clause may be used in commercial item acquisitions if a waiver is approved in accordance with FAR 12.302(c).

    846.370-4 Purchase of shellfish.

    (a) The U.S. Food and Drug Administration (FDA) at http://www.fda.gov provides quality assurance seafood safety guidelines.

    (b) The contracting officer shall insert the clause at 852.246-76, Purchase of Shellfish, in solicitations and contracts for shellfish.

    7. Subpart 846.4 is revised to read as follows: Subpart 846.4—Government Contract Quality Assurance Sec. 846.408-70 Inspection of subsistence. 846.470 Use of commercial organizations for inspections and grading services. 846.471 Food service equipment. Subpart 846.4—Government Contract Quality Assurance
    846.408-70 Inspection of subsistence.

    (a) The contracting officer shall indicate the time and place of inspection in the solicitation.

    (b) The contracting office shall also provide in the solicitation that the contractor is responsible for all of the following:

    (1) Arranging and paying for inspection services.

    (2) Obtaining from the inspectors a certificate indicating that the product complies with specifications.

    (3) Assuring that the certificate, or copy, accompanies the shipment.

    (4) Furnishing samples for inspection at the contractor's expense.

    (5) Indicating the address where inspection will occur.

    (c) The contracting officer must furnish a copy of the purchase document to the inspecting activity.

    846.470m Use of commercial organizations for inspections and grading services.

    The contracting officer may use a commercial organization for inspection and grading services when the contracting officer determines that all of the following exist:

    (a) The results of a technical inspection or grading are dependent upon the application of scientific principles or specialized techniques.

    (b) VA is unable to employ the personnel qualified to properly perform the services and is unable to locate another Federal agency capable of providing the service.

    (c) The inspection or grading results issued by a private organization are essential to verify the acceptance or rejection of a special commodity.

    (d) The services may be performed without direct Government supervision.

    846.471 Food service equipment.

    (a) All new food service equipment purchased for Dietetic Service through other than the Defense General Supply Center sources must meet requirements set forth by National Sanitation Foundation (NSF) at http://www.nsf.org.

    (b) The contracting officer will ensure that the following language is placed in the solicitation to assert that the equipment meets NSF standards:

    The Government will accept an affixed NSF label and/or documentation of the NSF Certification from the contractor as evidence that the subject equipment meets NSF Sanitation standards.

    8. Subpart 846.7 is revised to read as follows: Subpart 846.7—Warranties
    846.702-70 Guarantee period services and specifications.

    (a) Guarantee period of services are associated with preserving and protecting a specified piece of contractor-installed equipment that is guaranteed under a construction contract. Specifications for certain high-dollar or traditionally troublesome equipment are designed to allow for the original installer of the equipment to service the equipment throughout the guaranty period.

    (b) Guarantee period services are not the same as the 1-year general construction guaranty clause found at FAR clause 52.246-21, Warranty of Construction.

    (c) The contracting officer may determine, when in the best interest of VA that guarantee period services, not to exceed a period of 5 years, are appropriate to protect the integrity of the installed equipment and ensure that the equipment performs as guaranteed.

    (d) When the determination is made under paragraph (c), the contracting officer shall include the guarantee period of services as a separately priced contract line item number (CLIN) in solicitations and contracts.

    (e) The contracting officer shall insert the clause at 852.246-75, Warranty of Construction—Guarantee Period Services, in solicitations and contracts for construction that include the FAR clause 52.246-21, Warranty of Construction, and that also include guarantee period services.

    (f) In accordance with the approved VA specifications, the following types of equipment contain the guarantee period services specifications. The following represents a sampling of these specifications.

    (1) Division 14—Conveying Equipment:

    (i) Electric Dumbwaiters Geared Traction and Winding Drum (VA 14 12 11)

    (ii) Electric Traction Elevators (VA 14 21 00)

    (iii) Traction Cartlift (VA 14 21 11)

    (iv) Hydraulic Elevators (VA 14 24 00)

    (v) Hydraulic Cartlift (VA 14 24 11)

    (vi) Public Address and Mass Notification Systems (VA 27 51 16)

    (2) Division 27—Communications:

    Intercommunication and Program Systems (VA 27 51 23)

    (g) The construction contractor shall require the original installer of the equipment, which is normally a subcontractor to provide the guarantee period services.

    PART 847—TRANSPORTATION 9. The authority citation for part 847 is amended to read as follows: Authority:

    38 U.S.C. 513; 40 U.S.C. 121(c); 31 U.S.C. 1303; 41 U.S.C. 1702; 41 CFR part 102-117; and 48 CFR 1.301-1.304.

    10. Subpart 847.2 is added to read as follows: Subpart 847.2—Contracts for Transportation or for Transportation-Related Services Sec. 847.207 Solicitation provisions, contract clauses, and special requirements. 847.207-8 Government responsibilities. 847.207-70 VA solicitation provisions, contract clauses, and special requirements. Subpart 847.2—Contracts for Transportation or for Transportation-Related Services
    847.207 Solicitation provisions, contract clauses, and special requirements.
    847.207-8 Government responsibilities.

    Transportation payments are audited by the Traffic Manager, to ensure that payment and payment mechanisms for agency transportation are uniform and appropriate in accordance with 41 CFR part 102-117.

    847.207-70 VA solicitation provisions, contract clauses, and special requirements.

    (a) Insurance under patient transportation contracts. The contracting officer shall ensure that all the proper certificates of insurance are submitted to perform on the contract, as outlined in the solicitation, and subsequently included in the contract file. In accordance with 828.306, the contracting officer shall insert the provision at 852.228-71, Indemnification and Insurance, in solicitations when utilizing term contracts or contracts of a continuing nature for ambulance, automobile and aircraft service. When contracting for these services, consider using requirements language such as the following:

    (1) Written proof of Insurance coverage as required and outlined in the solicitation is required prior to award of any contract. Coverage must be maintained continually through the life of the contract.

    (2) Within 10 days of notification of acceptance and pending award of contract, the contractor shall furnish to the contracting officer a certificate of insurance which shall contain an endorsement to the effect that cancellation of, or any material change in, the policies which adversely affect the interests of the Government in such insurance shall not be effective unless a 30-day advance written notice of cancellation or change is furnished to the contracting officer.

    (3) Within 10 days of notification of acceptance and pending award of contract, and prior to award of a contract, the contractor shall furnish to the contracting officer a copy of the contractor's current and valid Worker's Compensation certificate.

    (b) Contractor personnel. The contracting officer shall ensure that the contractor personnel have the appropriate level of training, experience, licensure, and pertinent qualifications to ensure patient safety. When contracting for these services, consider using requirements language such as the following:

    (1) All contractor personnel performing contract services shall meet the qualifications as specified in the contract, as well as any qualifications required by Federal, State, county, and local government entities from the place in which they operate. Contractor personnel shall meet these qualifications at all times while performing contract services.

    (2) During the contract period of performance, if the contractor proposes to add-on, or replace personnel to perform contract services, the contractor shall submit required evidence of training, certifications, licensing, background, and security clearances, and any other applicable qualifications to the designated COR. At no time shall the contractor utilize add-on or replacement personnel to perform contract services who do not meet the qualifications under the terms and conditions of the contract.

    (3) Records of contractor personnel qualifications and eligibility to perform on the contract must be maintained current throughout the life of the contract, and be made available for inspection upon request. The contractor shall forward to the contracting officer, on an annual basis, a list of contractor employees listing the employees name, position(s), and licenses and/or certifications and their current certification number. This annual statement of driver competency must include any advanced certifications, such as Advanced Cardiac Life Support or specialized training to assist and secure patients by stretcher or wheelchair, as applicable.

    (4) Within seven (7) days after receipt of award notification, the contractor shall provide evidence of required training, certifications, licensing and any other qualifications of any personnel who will be performing services under the contract. The initial documentation shall be provided to the contracting officer and COR.

    (c) Contracts must include requirements to report vehicle accidents and incidents to the Contracting Officer with a formal accident report.

    (d) Contracts for ambulance services must require that the contractor meet the current specifications of Federal Specification KKK-A-1822E, “Star of Life Ambulance” standard.

    (e) Contracts must include requirements to ensure patient safety is maintained through the consistent practice of securing patient care equipment, other cargo, and vehicles, and ensure that security of patients in vehicles is established and observed when transportation needs are either primary or secondary in the actual performance of the contract. When contracting for these services, consider using requirements language to ensure that patient transportation meets industry standards for transporting patients based on the patient's condition/needs (e.g., wheelchair, ambulatory, on stretcher, etc.).

    11. Subpart 847.3 is revised to read as follows: Subpart 847.3—Transportation in Supply Contracts 847.302 Place of delivery—F.o.b. point. 847.305 Solicitation provisions, contract clauses, and transportation factors. 847.305-10 Packing, marking, and consignment instructions. 847.305-70 Potential destinations known but quantities unknown. 847.305-71 VA contract clauses. 847.306 Transportation factors in the evaluation of offers. 847.306-70 Records of claims. Subpart 847.3—Transportation in Supply Contracts
    847.302 Place of delivery—F.o.b. point.

    The contracting officer shall insert clause 852.247-71, Delivery Location, or a clause substantially the same as the clause at 852.247-71, Delivery Location, in supply contracts when it is necessary to specify delivery locations. If appropriate, the clause may reference an attachment which lists various delivery locations and other delivery details (e.g., quantities to be delivered to each location, etc.).

    847.305-10 Packing, marking, and consignment instructions.

    (a) The contracting officer shall insert clause 852.247-72, Marking Deliverables, or a clause substantially the same as 852.247-72 in solicitations and contracts if special marking on deliverables are required.

    (b) The contracting officer shall insert the clause at 852.247-73, Packing for Domestic Shipment, in contracts when item(s) will be delivered for immediate use to a destination in the continental United States; when the material specification or purchase description does not provide preservation, packaging, packing, and/or marking requirements; and/or when the requiring activity has not cited a specific specification for packaging.

    847.305-70 Potential destinations known but quantities unknown.

    When the contracting officer contracts with multiple bidders to provide items directly to VA field installations, on an f.o.b. origin basis, the evaluation of bids must follow specific procedures. In these instances, the contracting officer shall insert clause 852.247-70, Determining Transportation Costs for Evaluation of Offers, or a clause substantially the same as clause 852.247-70. By inserting this clause, each bid is placed on an equal basis, even though specific quantities required by each facility cannot be predetermined. The contracting officer must use an anticipated demand factor in proportion to the number of hospital beds or patient workload.

    847.305-71 VA contract clauses.

    (a) The contracting officer shall insert clause 852.247-74, Advance Notice of Shipment, or a clause substantially as 852.247-74, in solicitations and contracts when the F.o.b. point is destination, and special Government assistance is required in the delivery or receipt of the items.

    (b) The contracting officer shall insert clause 852.247-75, Bills of Lading, or a clause substantially the same as clause at 852.247-75, in F.o.b. origin solicitations and contracts.

    847.306-70 Records of claims.

    When contracting for transportation, and consistent with FAR 15.304, contracting officers should consider using the following as an evaluation factor or subfactor: Record of claims involving loss or damage.

    PART 852—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 12. The authority citation for part 852 continues to read as follows: Authority:

    38 U.S.C. 8127-8128, and 8151-8153; 40 U.S.C. 121(c); 41 U.S.C. 1121(c)(3); 41 U.S.C. 1303; 41 U.S.C 1702;.and 48 CFR 1.301-1.304.

    852.229-70 [Removed and reserved].
    13. Section 852.229-70 is removed and reserved.
    852.246-70 [Removed and reserved].
    14. Section 852.246-70 is removed and reserved. 15. Section 852.246-71 is revised to read as follows:
    852.246-71 Rejected Goods.

    As prescribed in 846.370-1, insert the following clause:

    Rejected Goods (Date)

    (a) Supplies and equipment. Rejected goods will be held subject to Contractor's order for not more than 15 days, after which the rejected merchandise will be returned to the Contractor's address at the Contractor's risk and expense. Expenses incident to the examination and testing of materials or supplies that have been rejected will be charged to the Contractor.

    (b) Perishable supplies. The contractor shall remove rejected perishable supplies within 48 hours after notice of rejection. Supplies determined to be unfit for human consumption will not be removed without permission of the local health authorities. Supplies not removed within the allowed time may be destroyed. The Department of Veterans Affairs will not be responsible for, nor pay for, products rejected. The contractor will be liable for costs incident to examination of rejected products.

    (End of clause)
    16. Section 852.246-72 is revised to read as follows:
    852.246-72 Frozen Processed Foods.

    As prescribed in 846.370-2, insert the following clause:

    Frozen Processed Foods (Date)

    The products delivered under this contract shall be in excellent condition, shall not show evidence of defrosting, refreezing, or freezer burn and shall be transported and delivered to the consignee at a temperature of 0 degrees Fahrenheit or lower.

    (End of clause)
    17. Section 852.246-73 is revised to read as follows:
    852.246-73 Noncompliance with Packaging, Packing, and/or Marking Requirements.

    As prescribed in 846.370-3, insert the following clause:

    Noncompliance With Packaging, Packing and/or Marking Requirements (Date)

    Failure to comply with the packaging, packing and/or marking requirements indicated herein, or incorporated herein by reference, may result in rejection of the merchandise and request for replacement or repackaging, repacking, and/or marking. The Government reserves the right, without obtaining authority from the Contractor, to perform the required repackaging, repacking, and/or marking services and charge the Contractor at the actual cost to the Government for the same or have the required repackaging, repacking, and/or marking services performed commercially under Government order and charge the Contractor at the invoice rate. In connection with any discount offered, time will be computed from the date of completion of such repackaging, repacking and/or marking services.

    (End of clause)
    852.246-74 [Removed and reserved].
    18. Section 852.246-74 is removed and reserved. 19. Section 852.246-75 is revised to read as follows:
    852.246-75 Warranty of Construction—Guarantee Period Services.

    As prescribed in 846.702-70(e), insert the following clause:

    Warranty of Construction—Guarantee Period Services (Date)

    The clause 52.246-21, Warranty of Construction, is supplemented as follows:

    Should the Contractor fail to complete the work or fail to proceed promptly to provide guarantee period services after notification by the Contracting Officer, the Government may, subject to the default clause contained at FAR 52.249-10, Default (Fixed-Price Construction), and after allowing the Contractor 10 days to correct and comply with the contract, terminate the right to proceed with the work (or the separable part of the work) that has been delayed or unsatisfactorily performed. In this event, the Government may take over the work and complete it by contract or otherwise, and may take possession of and use any materials, appliances, and plant on the work site necessary for completing the work. The Contractor and its sureties shall be liable for any damages to the Government resulting from the Contractor's refusal or failure to complete the work within this specified time, whether or not the Contractor's right to proceed with the work is terminated. This liability includes any increased costs incurred by the Government in completing the work.

    (End of clause)
    20. Section 852.246-76 is added to read as follows:
    852.246-76 Purchase of Shellfish.

    As prescribed in 846.370-4 insert the following clause:

    Purchase of Shellfish (Date)

    The supplier certifies that oysters, clams, and mussels will be furnished only from plants approved by and operated under the supervision of shellfish authorities of States whose certifications are endorsed currently by the U.S. Public Health Service, and the names and certificate numbers of those shellfish dealers must appear on current lists published by the U.S. Public Health Service. These items shall be packed and delivered in approved containers, sealed in such manner that tampering is easily discernible, and marked with packer's certificate number impressed or embossed on the side of such containers and preceded by the State abbreviation. Containers shall be tagged or labeled to show the name and address of the approved producer or shipper, the name of the State of origin, and the certificate number of the approved producer or shipper.

    (End of clause)
    21. Section 852.247-70 is revised to read as follows:
    852.247-70 Determining Transportation Costs for Evaluation of Offers.

    As prescribed in 847.305-70, insert the following provision:

    Determining Transportation Costs for Evaluation of Offers (Date)

    For the purpose of evaluating bids and for no other purpose, the delivered price per unit will be determined by adding the nationwide average transportation charge to the F.o.b. origin bid prices. The nationwide average transportation charge will be determined by applying the following formula: Multiply the guaranteed shipping weight by the freight, parcel post, or express rate, whichever is proper, to each destination shown below and then multiply the resulting transportation charges by the anticipated demand factor shown for each destination. Total the resulting weighted transportation charges for all destinations and divide the total by 20 to give the nationwide average transportation charge.

    Anticipated Demand Area destination Factor Oakland, California 3 Dallas, Texas 2 Omaha, Nebraska 3 Fort Wayne, Indiana 4 Atlanta, Georgia 3 New York, New York 5 Total of factors 20 (End of provision)
    22. Section 852.247-71 is added to read as follows:
    852.247-71 Delivery Location.

    As prescribed in 847.302, insert a clause substantially as follows:

    Delivery Location (Date)

    Shipment of deliverable items, other than reports, shall be to: __* Contracting Officer shall insert appropriate identifying data.

    (End of clause)
    23. Section 852.247-72 is added to read as follows:
    852.247-72 Marking Deliverables.

    As prescribed in 847.305-10(a) insert a clause substantially the same as:

    Marking Deliverables (Date)

    (a) The contract number shall be placed on or adjacent to all exterior mailing or shipping labels of deliverable items called for by the contract.

    (b) Mark deliverables, except reports, for:________*.

    * Contracting Officer shall insert appropriate identifying data.

    (End of clause)
    24. Section 852.247-73 is added to read as follows:
    852.247-73 Packing for Domestic Shipment.

    As prescribed in 847.305-10(b), insert the following clause:

    Packing for Domestic Shipment (Date)

    Material shall be packed for shipment in such a manner that will insure acceptance by common carriers and safe delivery at destination. Containers and closures shall comply with regulations of carriers as applicable to the mode of transportation.

    (End of clause)
    25. Section 852.247-74 is added to read as follows:
    852.247-74 Advance Notice of Shipment.

    As prescribed in 847.305-71(a), insert the following clause:

    Advance Notice of Shipment (Date)

    [Insert number of work days] work days prior to shipping item(s)

    [Insert items to be shipped], the Contractor shall furnish the anticipated shipment date, bill of lading number (if applicable), and carrier identity to [Insert individual(s) to receive notification] and to the Contracting Officer.

    (End of clause)
    26. Section 852.247-75 is added to read as follows:
    852.247-75 Bills of Lading.

    As prescribed in 847.305-71(b), insert the following clause:

    Bills of Lading (Date)

    The purpose of this clause is to define when a commercial bill of lading or a government bill of lading is to be used when shipments of deliverable items under this contract are F.o.b. origin.

    (a) Commercial Bills of Lading. All domestic shipments shall be made via commercial bills of lading (CBLs). The Contractor shall prepay domestic transportation charges. The Government shall reimburse the Contractor for these charges if they are added to the invoice as a separate line item supported by the paid freight receipts. If paid receipts in support of the invoice are not obtainable, a statement as described below must be completed, signed by an authorized company representative, and attached to the invoice.

    “I certify that the shipments identified below have been made, transportation charges have been paid by (company name), and paid freight or comparable receipts are not obtainable.

    Contract or Order Number: ________

    Destination: ________.”

    (b) Government Bills of Lading.

    (1) International (export) and domestic overseas shipments of items deliverable under this contract shall be made by Government bills of lading (GBLs). As used in this clause, “domestic overseas” means non-continental United States, i.e., Hawaii, Commonwealth of Puerto Rico, and possessions of the United States.

    (2) At least 15 days before shipment, the Contractor shall request in writing GBLs from: ________ [Insert name, title, and mailing address of designated transportation officer or other official delegated responsibility for GBLs]. If time is limited, requests may be by telephone: ________ [Insert appropriate telephone number]. Requests for GBLs shall include the following information.

    (i) Item identification/description.

    (ii) Origin and destination.

    (iii) Individual and total weights.

    (iv) Dimensional weight.

    (v) Dimensions and total cubic footage.

    (vi) Total number of pieces.

    (vii) Total dollar value.

    (viii) Other pertinent data.

    (End of clause)
    852.270-2 [Removed].
    27. Section 852.270-2 is removed.
    852.270-3 [Removed].
    28. Section 852.270-3 is removed. PART 870—SPECIAL PROCUREMENT CONTROLS
    870 [Removed and reserved].
    29. Part 870 is removed and reserved.
    [FR Doc. 2018-07130 Filed 4-24-18; 8:45 am] BILLING CODE 8320-01-P
    DEPARTMENT OF THE INTERIOR Fish and Wildlife Service 50 CFR Parts 20 and 21 [Docket No. FWS-HQ-MB-2018-0012; FF09M21200-178-FXMB1232099BPP0L2] RIN 1018-BC72 Migratory Bird Permits; Regulations for Managing Resident Canada Goose Populations AGENCY:

    Fish and Wildlife Service, Interior.

    ACTION:

    Proposed rule.

    SUMMARY:

    In 2005, the U.S. Fish and Wildlife Service (Service or “we”) published a final environmental impact statement on management of resident Canada geese (Branta canadensis) that documented resident Canada goose population levels “that are increasingly coming into conflict with people and causing personal and public property damage.” Subsequently, the Service implemented several actions intended to reduce, manage, and control resident Canada goose populations in the continental United States and to reduce related damages; those actions included depredation and control orders that allow destruction of Canada goose nests and eggs by authorized personnel between March 1 and June 30. However, some resident Canada geese currently initiate nests in February, particularly in the southern United States, and it seems likely that in the future nest initiation dates will begin earlier and hatching of eggs will perhaps end later than dates currently experienced. Thus, the Service proposes to amend the depredation and control orders to allow destruction of resident Canada goose nests and eggs at any time of year.

    DATES:

    Comments on this proposed rule must be received by May 25, 2018.

    ADDRESSES:

    Document availability: You may obtain copies of the related environmental assessment at http://www.regulations.gov in Docket No. FWS-HQ-MB-2018-0012.

    Comment submission: You may submit comments by either one of the following methods. Please do not submit comments by both.

    Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments to Docket No. FWS-HQ-MB-2018-0012.

    U.S. mail or hand-delivery: Public Comments Processing, Attn: FWS-HQ-MB-2018-0012; Division of Policy, Performance, and Management Programs; U.S. Fish and Wildlife Service; MS: BPHC; 5275 Leesburg Pike; Falls Church, VA 22041-3803.

    We will not accept email or faxes. We will post all comments on http://www.regulations.gov, including any personal information you provide. See Public Comments, below, for more information.

    FOR FURTHER INFORMATION CONTACT:

    Paul I. Padding, Atlantic Flyway Representative, Division of Migratory Bird Management, U.S. Fish and Wildlife Service, 11510 American Holly Drive, Laurel, MD 20708; (301) 497-5851 or email [email protected]

    SUPPLEMENTARY INFORMATION:

    Authority and Responsibility

    Migratory birds are protected under four bilateral migratory bird treaties the United States entered into with Great Britain (for Canada in 1916 as amended in 1999), the United Mexican States (1936 as amended in 1972 and 1999), Japan (1972 as amended in 1974), and the Soviet Union (1978). Regulations allowing the take of migratory birds are authorized by the Migratory Bird Treaty Act (Act; 16 U.S.C. 703-712), which implements the above-mentioned treaties. The Act provides that, subject to and to carry out the purposes of the treaties, the Secretary of the Interior is authorized and directed to determine when, to what extent, and by what means allowing hunting, killing, and other forms of taking of migratory birds, their nests, and eggs is compatible with the conventions. The Act requires the Secretary to implement a determination by adopting regulations permitting and governing those activities.

    Canada geese are federally protected by the Act because they are listed as migratory birds in all four treaties. Because Canada geese are covered by all four treaties, regulations must meet the requirements of the most restrictive of the four. For Canada geese, this is the treaty with Canada. All regulations concerning resident Canada geese are compatible with its terms, with particular reference to Articles II, V, and VII.

    Each treaty not only permits sport hunting, but permits the take of migratory birds for other reasons, including scientific, educational, propagative, or other specific purposes consistent with the conservation principles of the various Conventions. More specifically, Article VII, Article II (paragraph 3), and Article V of “The Protocol Between the Government of the United States of America and the Government of Canada Amending the 1916 Convention between the United Kingdom and the United States of America for the Protection of Migratory Birds in Canada and the United States” provides specific limitations on allowing the take of migratory birds for reasons other than sport hunting. Article VII authorizes permitting the take, kill, etc., of migratory birds that, under extraordinary conditions, become seriously injurious to agricultural or other interests. Article V relates to the taking of nests and eggs, and Article II, paragraph 3, states that, in order to ensure the long-term conservation of migratory birds, migratory bird populations shall be managed in accord with listed conservation principles.

    The other treaties are less restrictive. The treaties with both Japan (Article III, paragraph 1, subparagraph (b)) and the Soviet Union (Article II, paragraph 1, subparagraph (d)) provide specific exceptions to migratory bird take prohibitions for the purpose of protecting persons and property. The treaty with Mexico requires, with regard to migratory game birds, only that there be a “closed season” on hunting and that hunting be limited to 4 months in each year.

    Regulations governing the issuance of permits to take, capture, kill, possess, and transport migratory birds are promulgated at title 50, Code of Federal Regulations (CFR), parts 13, 21 and 22, and issued by the Service. The Service annually promulgates regulations governing the take, possession, and transportation of migratory game birds under sport hunting seasons at 50 CFR part 20. Regulations regarding all other take of migratory birds (except for eagles) are published at 50 CFR part 21, and typically are not changed annually.

    Background

    In November 2005, the U.S. Fish and Wildlife Service (Service or “we”) published a final environmental impact statement on management of resident Canada geese that documented resident Canada goose population levels “that are increasingly coming into conflict with people and causing personal and public property damage.” On August 10, 2006, we published in the Federal Register (71 FR 45964) a final rule establishing regulations at 50 CFR parts 20 and 21 authorizing State wildlife agencies, private landowners, and airports to conduct (or allow) indirect and/or direct population control management activities to reduce, manage, and control resident Canada goose populations in the continental United States and to reduce related damages. Those activities include depredation and control orders that allow destruction of resident Canada goose nests and eggs by authorized personnel between March 1 and June 30, because that timeframe encompassed the period when resident Canada geese typically nested.

    In recent years, some resident Canada geese have initiated nests in February, particularly in the southern United States, and it seems likely that in the future nest initiation dates will begin earlier and hatching of eggs will perhaps end later than dates currently experienced. This proposed rule would amend the special permit and depredation and control orders to allow destruction of resident Canada goose nests and eggs at any time of year, thereby affording State agencies, private landowners, and airports greater flexibility to use these methods of controlling local abundances of resident Canada geese.

    Definition of Resident Canada Geese

    The current definition of resident Canada geese contained in 50 CFR 20.11 and 21.3 states that “Canada geese that nest within the lower 48 States and the District of Columbia in the months of March, April, May, or June, or reside within the lower 48 States and the District of Columbia in the months of April, May, June, July, or August” are considered resident Canada geese. We are proposing to amend this definition by deleting the phrase, “in the months of March, April, May, or June,” (following the word “Columbia”) to clarify that any Canada geese that nest within lower 48 States and the District of Columbia are resident Canada geese.

    Removal of Date Restrictions on Nest and Egg Destruction

    In title 50 of the CFR, destruction of resident Canada goose nests and eggs is currently authorized under special Canada goose permits (§ 21.26), a control order for airports and military airfields (§ 21.49), a depredation order specific to nests and eggs (§ 21.50), a depredation order for agricultural facilities (§ 21.51), and a public health control order (§ 21.52). Each of these regulations prescribes the dates during which nests and eggs of resident Canada goose may be destroyed. We propose to remove those date restrictions and allow destruction of Canada goose nests and eggs, as otherwise authorized under these regulations, at any time of year.

    Our proposal is based on several factors. First, nest and egg destruction has been an effective tool in reducing local conflicts and damages caused by resident Canada geese. Second, resident Canada geese are identified as such based on where, not when, they nest. Lastly, some Canada geese are already nesting in February in southern States, and it seems likely that nest initiation dates will also advance into February in mid-latitude and perhaps northern States in the future, and hatching of nests may occur later than June 30.

    Eliminating Date Restrictions for Lethal Control Activities in California, Oregon, and Washington

    On June 17, 1999, we published in the Federal Register (64 FR 32766) a final rule establishing 50 CFR 21.26, the special Canada goose permit. Special Canada goose permits may be issued to State wildlife agencies authorizing them to conduct certain resident Canada goose management and control activities that are normally prohibited. At that time, we indicated that States may conduct those control activities between March 11 and August 31, but that they should make a concerted effort to limit the take of adult birds to June, July, and August in order to minimize the potential impact on migrant populations. We imposed a date restriction of May 1 through August 31 in some areas in California, Oregon, and Washington inhabited by the threatened Aleutian Canada goose (Branta canadensis leucopareia) pursuant to the Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531 et seq.). The Aleutian Canada goose was listed as endangered in 1967 (32 FR 4001; March 11, 1967) and reclassified to threatened status in 1990 (55 FR 51106; December 12, 1990). Aleutian geese occur in a small numbers within these States, primarily San Joaquin Valley and Sacramento River Delta areas in central California, Humboldt Bay and Crescent City areas on the northern California coast, and Langlois and Pacific City areas on the Oregon coast. We indicated that if this subspecies is delisted, we would review this provision.

    On March 20, 2001, we published in the Federal Register (66 FR 15643) a final rule to remove the Aleutian Canada goose from the Federal List of Endangered and Threatened Wildlife, due to recovery. Abundance of this population increased from 790 birds in 1975, to an estimated 156,030 in the winter of 2016. The Pacific Flyway Council's objective for this population is 60,000 geese. Currently, there is no special habitat or other threat that may reduce this population back to levels that may need protection under the ESA. Considering the current status of the Aleutian Canada goose, we propose to remove the May 1 restriction so that management and control activities may be conducted during the same period (March 11 through August 31) throughout all States.

    Environmental Assessment

    We prepared an environmental assessment (EA) that analyzed two alternative courses of action to address these earlier nesting and later hatching dates and decrease local abundances of Canada geese that nest in the lower 48 States and the District of Columbia:

    (1) Maintain the current date restrictions specified in regulations at 50 CFR 21.26, 21.49, 21.50, 21.51, and 21.52 on destruction of resident Canada goose nests and eggs, and no change in the definition of resident Canada geese at 50 CFR 20.11 and 21.3 (No action); and

    (2) Revise the definition of resident Canada geese at 50 CFR 20.11 and 21.3, and allow destruction of resident Canada goose nests and eggs at any time of year under 50 CFR 21.26, 21.49, 21.50, 21.51, and 21.52 (Proposed action).

    The full EA can be found on our website at http://www.fws.gov/birds or at http://www.regulations.gov at Docket No. FWS-HQ-MB-2018-0012.

    We note that the proposed amendment to § 21.26 in regard to accounting for the current status of the Aleutian Canada goose was not addressed in the EA, but is a categorically excluded action (43 CFR 46.210) addressed in an environmental action statement (EAS). The EAS can be found on our website at http://www.fws.gov/birds or at http://www.regulations.gov at Docket No. FWS-HQ-MB-2018-0012.

    Public Comments

    You may submit your comments and supporting materials by one of the methods listed in ADDRESSES. We will not consider comments sent by email or fax, or written comments sent to an address other than the one listed in ADDRESSES. Comments and materials we receive, as well as supporting documentation we used in preparing this proposed rule, are available for public inspection at http://www.regulations.gov.

    We will post your entire comment—including your personal identifying information—on http://www.regulations.gov. You may request at the top of your document that we withhold personal information such as your street address, phone number, or email address from public review; however, we cannot guarantee that we will be able to do so.

    Required Determinations Regulatory Planning and Review (Executive Orders 12866 and 13563)

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

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

    Regulatory Flexibility Act

    Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq., as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996 (Pub. L. 104-121)), whenever an agency is required to publish a notice of rulemaking for any proposed or final rule, it must prepare and make available for public comment a regulatory flexibility analysis that describes the effects of the rule on small businesses, small organizations, and small government jurisdictions. However, no regulatory flexibility analysis is required if the head of an agency certifies the rule would not have a significant economic impact on a substantial number of small entities.

    SBREFA amended the Regulatory Flexibility Act to require Federal agencies to provide a statement of the factual basis for certifying that a rule would not have a significant economic impact on a substantial number of small entities. Thus, for a regulatory flexibility analysis to be required, impacts must exceed a threshold for “significant impact” and a threshold for a “substantial number of small entities.” See 5 U.S.C. 605(b).

    The economic impacts of this proposed rule would primarily affect State and local governments and the U.S. Department of Agriculture's Wildlife Services because of the structure of wildlife damage management. Data are not available to estimate the exact number of local governments that would be affected, but it is unlikely to be a substantial number nationally. Therefore, we certify that, if adopted, this rule would not have a significant economic impact on a substantial number of small entities.

    Small Business Regulatory Enforcement Fairness Act

    This proposed rule is not a major rule under SBREFA (5 U.S.C. 804(2)). It would not have a significant impact on a substantial number of small entities.

    This rule would not have an annual effect on the economy of $100 million or more. This rule would not cause a major increase in costs or prices for consumers; individual industries; Federal, State, or local government agencies; or geographic regions.

    Finally, this rule would not have significant adverse effects on competition, employment, investment, productivity, innovation, or the abilities of U.S.-based enterprises to compete with foreign-based enterprises.

    Executive Order 13771—Reducing Regulation and Controlling Regulatory Costs

    This proposed rule is expected to be an Executive Order (E.O.) 13771 (82 FR 9339, February 3, 2017) deregulatory action because it would relieve a restriction in 50 CFR parts 20 and 21.

    Unfunded Mandates Reform Act

    In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq.), we have determined the following:

    a. This proposed rule would not “significantly or uniquely” affect small government activities. A small government agency plan is not required.

    b. This proposed rule would not produce a Federal mandate on local or State government or private entities. Therefore, this action is not a “significant regulatory action” under the Unfunded Mandates Reform Act.

    Takings

    In accordance with E.O. 12630, this proposed rule does not contain a provision for taking of private property, and would not have significant takings implications. A takings implication assessment is not required.

    Federalism

    This proposed rule would not interfere with the States' abilities to manage themselves or their funds. We do not expect any economic impacts to result from this regulations change. This rule would not have sufficient Federalism effects to warrant preparation of a federalism summary impact statement under E.O. 13132.

    Civil Justice Reform

    In accordance with E.O. 12988, the Office of the Solicitor has determined that the proposed rule will not unduly burden the judicial system and meets the requirements of sections 3(a) and 3(b)(2) of the Order.

    Paperwork Reduction Act

    This proposed rule does not contain new collections of information that require approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). OMB has approved the information collection requirements associated with the control and management of resident Canada geese at 50 CFR part 20 and 50 CFR part 21, and assigned OMB Control Number 1018-0133 (expires December 31, 2018).

    An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

    National Environmental Policy Act

    We have analyzed this proposed rule in accordance with the National Environmental Policy Act (NEPA; 42 U.S.C. 4321 et seq.) and U.S. Department of the Interior regulations at 43 CFR part 46. We have completed an environmental assessment of the proposed amendment of the depredation and control orders that would allow destruction of resident Canada goose nests and eggs at any time of year; that environmental assessment is included in the docket for this proposed rule. We conclude that our proposed action would have the impacts listed below under Environmental Consequences of the Action. The proposed amendment to § 21.26 in regard to accounting for the current status of the Aleutian Canada goose was not addressed in the EA, but is a NEPA categorically excluded action (43 CFR 46.210) addressed in an environmental action statement (EAS), which is also included in the docket for this proposed rule. The docket for this proposed rule is available at http://www.regulations.gov (Docket No. FWS-HQ-MB-2018-0012).

    Environmental Consequences of the Action

    Migrant Canada geese do not nest in the lower 48 States or the District of Columbia; thus, this proposed action (amendments related only to depredation and control orders) is not expected to have any significant impacts on migrant Canada geese. All resident Canada goose population abundances are well above population objectives. Assuming that the number of resident Canada geese that initiate nests in January or February does not exceed the current number that initiate nests in March, we expect that this proposed action would result in destruction of a maximum of 2,749 additional nests in January and February. We expect it is more likely that the proposed action would shift some portion of the current resident Canada goose nest and egg destruction activities occurring in March to either January or February. All populations of resident Canada geese are expected to remain at or above population objective levels.

    Socioeconomic. This proposed action is expected to have positive impacts on the socioeconomic environment in localized urban and suburban areas where resident Canada geese are subjected to continued (annual) nest and egg destruction actions that gradually reduce goose numbers and resulting conflicts. It is also expected to reduce crop depredation at some localized agricultural sites where nest destruction can encourage geese to leave the site.

    Endangered and threatened species. The proposed rule will not affect endangered or threatened species or critical habitats.

    Compliance With Endangered Species Act Requirements

    Section 7 of the Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531 et seq.), requires that “The Secretary [of the Interior] shall review other programs administered by him and utilize such programs in furtherance of the purposes of this Act” (16 U.S.C. 1536(a)(1)). It further states that “[e]ach Federal agency shall, in consultation with and with the assistance of the Secretary, insure that any action authorized, funded, or carried out by such agency * * * is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of [critical] habitat” (16 U.S.C. 1536(a)(2)). The proposed rule would not affect endangered or threatened species or critical habitats.

    Government-to-Government Relationship With Tribes

    In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951), E.O. 13175, and 512 DM 2, we have evaluated potential effects on federally recognized Indian tribes and have determined that there are no potential effects. This proposed rule would not interfere with the tribes' abilities to manage themselves or their funds or to regulate migratory bird activities on tribal lands.

    Clarity of This Proposed Rule

    We are required by Executive Orders 12866 and 12988 and by the Presidential Memorandum of June 1, 1998, to write all rules in plain language. This means that each rule we publish must:

    (a) Be logically organized;

    (b) Use the active voice to address readers directly;

    (c) Use clear language rather than jargon;

    (d) Be divided into short sections and sentences; and

    (e) Use lists and tables wherever possible.

    If you feel that we have not met these requirements, send us comments by one of the methods listed in ADDRESSES. To better help us revise the rule, your comments should be as specific as possible. For example, you should tell us the numbers of the sections or paragraphs that are unclearly written, which sections or sentences are too long, the sections where you feel lists or tables would be useful, etc.

    Energy Supply, Distribution, or Use (E.O. 13211)

    E.O. 13211 requires agencies to prepare Statements of Energy Effects when undertaking certain actions. This proposed rule is not a significant regulatory action under E.O. 13211, and would not significantly affect energy supplies, distribution, or use. Therefore, this action is not a significant energy action. No Statement of Energy Effects is required.

    List of Subjects in 50 CFR Parts 20 and 21

    Exports, Hunting, Imports, Reporting and recordkeeping requirements, Transportation, Wildlife.

    Proposed Regulation Promulgation

    For the reasons stated in the preamble, we hereby propose to amend parts 20 and 21, of subchapter B, chapter I, title 50 of the Code of Federal Regulations, as set forth below:

    PART 20—MIGRATORY BIRD HUNTING 1. The authority citation for part 20 continues to read as follows: Authority:

    16 U.S.C. 703 et seq, and 16 U.S.C. 742a-j.

    2. Amend § 20.11 by revising paragraph (n) to read as follows:
    § 20.11 What terms do I need to understand?

    (n) Resident Canada geese means Canada geese that nest within the lower 48 States and the District of Columbia or that reside within the lower 48 States and the District of Columbia in the months of April, May, June, July, or August.

    PART 21—MIGRATORY BIRD PERMITS 3. The authority citation for part 21 is revised to read as follows: Authority:

    16 U.S.C. 703-712.

    4. Amend § 21.3 by revising the definition for “Resident Canada geese” to read as follows:
    § 21.3 Definitions.

    Resident Canada geese means Canada geese that nest within the lower 48 States and the District of Columbia or that reside within the lower 48 States and the District of Columbia in the months of April, May, June, July, or August.

    5. Amend § 21.26 by revising paragraph (d)(2) to read as follows:
    § 21.26 Special Canada goose permit.

    (d) * * *

    (2) When may a State conduct management and control activities? States and their employees and agents may conduct egg and nest manipulation activities at any time of year. Other management and control activities, including the take of resident Canada geese, under this section may only be conducted between March 11 and August 31.

    6. Amend § 21.49 by revising paragraph (d)(3) to read as follows:
    § 21.49 Control order for resident Canada geese at airports and military airfields.

    (d) * * *

    (3) Airports and military airfields may conduct management and control activities, involving the take of resident Canada geese, under this section between April 1 and September 15. The destruction of resident Canada goose nests and eggs may take place at any time of year.

    7. Amend § 21.50 by revising paragraph (d)(4) to read as follows:
    § 21.50 Depredation order for resident Canada geese nests and eggs.

    (d) * * *

    (4) Registrants may conduct resident Canada goose nest and egg destruction activities at any time of year. Homeowners' associations and local governments or their agents must obtain landowner consent prior to destroying nests and eggs on private property within the homeowners' association or local government's jurisdiction and be in compliance with all State and local laws and regulations.

    8. Amend § 21.51 by revising paragraph (d)(4) to read as follows:
    § 21.51 Depredation order for resident Canada geese at agricultural facilities.

    (d) * * *

    (4) Authorized agricultural producers and their employees and agents may conduct management and control activities, involving the take of resident Canada geese, under this section between May 1 and August 31. The destruction of resident Canada goose nests and eggs may take place at any time of year.

    9. Amend § 21.52 by revising paragraph (e)(3) to read as follows:
    § 21.52 Public health control order for resident Canada geese.

    (e) * * *

    (3) Authorized State and Tribal wildlife agencies and their employees and agents may conduct management and control activities, involving the take of resident Canada geese, under this section between April 1 and August 31. The destruction of resident Canada goose nests and eggs may take place at any time of year.

    Dated: April 10, 2018. Susan Combs, Senior Advisor to the Secretary, Exercising the Authority of the Assistant Secretary for Fish and Wildlife and Parks.
    [FR Doc. 2018-08500 Filed 4-24-18; 8:45 am] BILLING CODE 4333-15-P
    83 80 Wednesday, April 25, 2018 Notices COMMISSION ON CIVIL RIGHTS Notice of Public Meeting of the West Virginia Advisory Committee AGENCY:

    Commission on Civil Rights.

    ACTION:

    Announcement of meeting.

    SUMMARY:

    Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission), and the Federal Advisory Committee Act (FACA) that a meeting of the West Virginia Advisory Committee to the Commission will convene by conference call at 12:00 p.m. (EST) on Friday, May 4, 2018. The purpose of the meeting is to hear presentations from a panel of experts who will provide a national perspective on the impact a felony conviction/record has on a person's access to employment, housing, occupational licenses and public benefits.

    DATES:

    Friday, May 4, 2018, at 12:00 p.m. EST.

    PUBLIC CALL-IN INFORMATION:

    Conference call-in number: 1-800-474-8920 and conference call ID 8310490.

    FOR FURTHER INFORMATION CONTACT:

    Ivy Davis at [email protected] or by phone at 202-376-7533.

    SUPPLEMENTARY INFORMATION:

    Interested members of the public may listen to the discussion by calling the following toll-free conference call-in number: 1-800-474-8920 and conference call 8310490. Please be advised that before placing them into the conference call, the conference call operator will ask callers to provide their names, their organizational affiliations (if any), and email addresses (so that callers may be notified of future meetings). Callers can expect to incur charges for calls they initiate over wireless lines, and the Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free conference call-in number.

    Persons with hearing impairments may also follow the discussion by first calling the Federal Relay Service at 1-800-877-8339 and providing the operator with the toll-free conference call-in number: 1-800-474-8920 and conference call ID 8310490.

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

    Records and documents discussed during the meeting will be available for public viewing as they become available at https://database.faca.gov/committee/meetings.aspx?cid=279, click the “Meeting Details” and “Documents” links. Records generated from this meeting may also be inspected and reproduced at the Eastern Regional Office, as they become available, both before and after the meetings. Persons interested in the work of this advisory committee are advised to go to the Commission's website, www.usccr.gov, or to contact the Eastern Regional Office at the above phone numbers, email or street address.

    Agenda Friday, May 4, 2018 I. Rollcall II. Welcome and Introductions III. Panel Presentations IV. Adjourn Dated: April 19, 2018. David Mussatt, Supervisory Chief, Regional Programs Unit.
    [FR Doc. 2018-08595 Filed 4-24-18; 8:45 am] BILLING CODE 6335-01-P
    COMMISSION ON CIVIL RIGHTS Notice of Public Meeting of the Michigan Advisory Committee AGENCY:

    U.S. Commission on Civil Rights.

    ACTION:

    Announcement of meeting.

    SUMMARY:

    Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission) and the Federal Advisory Committee Act that the Michigan Advisory Committee (Committee) will hold a meeting on Wednesday May 23, 2018, at 11am EDT for the purpose discussing civil rights concerns in the state.

    DATES:

    The meeting will be held on Wednesday May 23, 2018, at 11 a.m. EDT.

    FOR FURTHER INFORMATION CONTACT:

    Melissa Wojnaroski, DFO, at [email protected] or 312-353-8311.

    SUPPLEMENTARY INFORMATION:

    Public Call Information: Dial: 888-312-3048, Conference ID: 1416163.

    Members of the public can listen to the discussion. This meeting is available to the public through the above toll-free call-in number. Any interested member of the public may call this number and listen to the meeting. An open comment period will be provided to allow members of the public to make a statement as time allows. The conference call operator will ask callers to identify themselves, the organization they are affiliated with (if any), and an email address prior to placing callers into the conference room. Callers can expect to incur regular charges for calls they initiate over wireless lines, according to their wireless plan. The Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free telephone number. Persons with hearing impairments may also follow the proceedings by first calling the Federal Relay Service at 1-800-877-8339 and providing the Service with the conference call number and conference ID number.

    Members of the public are also entitled to submit written comments; the comments must be received in the regional office within 30 days following the meeting. Written comments may be mailed to the Midwestern Regional Office, U.S. Commission on Civil Rights, 230 S. Dearborn St., Suite 2120, Chicago, IL 60604. They may also be faxed to the Commission at (312) 353-8324, or emailed to Carolyn Allen at [email protected] Persons who desire additional information may contact the Midwestern Regional Office at (312) 353-8311.

    Records generated from this meeting may be inspected and reproduced at the Midwestern Regional Office, as they become available, both before and after the meeting. Records of the meeting will be available via www.facadatabase.gov under the Commission on Civil Rights, Michigan Advisory Committee link (http://www.facadatabase.gov/committee/meetings.aspx?cid=255). Persons interested in the work of this Committee are directed to the Commission's website, http://www.usccr.gov, or may contact the Midwestern Regional Office at the above email or street address.

    Agenda Welcome and Introductions Discussion: Civil Rights in Michigan Public Comment Future Plans and Actions Adjournment Dated: April 19, 2018. David Mussatt, Supervisory Chief, Regional Programs Unit.
    [FR Doc. 2018-08587 Filed 4-24-18; 8:45 am] BILLING CODE P
    COMMISSION ON CIVIL RIGHTS Notice of Public Meeting of the Virginia Advisory Committee AGENCY:

    Commission on Civil Rights.

    ACTION:

    Announcement of meeting.

    SUMMARY:

    Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission), and the Federal Advisory Committee Act (FACA) that a meeting of the Virginia Advisory Committee to the Commission will convene by conference call at 12:00 p.m. (EST) on Wednesday, May 16, 2018. The purpose of the meeting is to hear presentations from a panel of experts who will provide a national perspective on the Committee's civil rights project, titled Hate Crimes in VA—Incidences and Responses.

    DATES:

    Wednesday, May 16, 2018, at 12:00 p.m. EST.

    ADDRESSES:

    Public call-in information: Conference call-in number: 1-800-474-8920 and conference call ID number: 8310490.

    FOR FURTHER INFORMATION CONTACT:

    Ivy Davis at [email protected] or by phone at 202-376-7533.

    SUPPLEMENTARY INFORMATION:

    Interested members of the public may listen to the discussion by calling the following toll-free conference call-in number: 1-800-474-8920 and conference call ID number: 8310490. Please be advised that before placing them into the conference call, the conference call operator will ask callers to provide their names, their organizational affiliations (if any), and email addresses (so that callers may be notified of future meetings). Callers can expect to incur charges for calls they initiate over wireless lines, and the Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free conference call-in number.

    Persons with hearing impairments may also follow the discussion by first calling the Federal Relay Service at 1-800-877-8339 and providing the operator with the toll-free conference call-in number: 1-800-474-8920 and conference call ID number: 8310490.

    Members of the public are invited to submit written comments. Comments must be received in the regional office approximately 30 days after each scheduled meeting. They may be mailed to the Eastern Regional Office, U.S. Commission on Civil Rights, 1331 Pennsylvania Avenue, Suite 1150, Washington, DC 20425, or emailed to Corrine Sanders at [email protected] Persons who desire additional information may contact the Eastern Regional Office at (202) 376-7533.

    Records and documents discussed during the meeting will be available for public viewing as they become available at https://database.faca.gov/committee/meetings.aspx?cid=279, click the “Meeting Details” and “Documents” links. Records generated from this meeting may also be inspected and reproduced at the Eastern Regional Office, as they become available, both before and after the meetings. Persons interested in the work of this advisory committee are advised to go to the Commission's website, www.usccr.gov, or to contact the Eastern Regional Office at the above phone numbers, email or street address.

    Agenda: Wednesday, May 16, 2018 I. Rollcall II. Welcome and Introductions III. Panel Presentation IV. Adjourn Dated: April 19, 2018. David Mussatt, Supervisory Chief, Regional Programs Unit.
    [FR Doc. 2018-08596 Filed 4-24-18; 8:45 am] BILLING CODE P
    COMMISSION ON CIVIL RIGHTS Notice of Public Meeting of the Minnesota Advisory Committee AGENCY:

    U.S. Commission on Civil Rights.

    ACTION:

    Announcement of meeting.

    SUMMARY:

    Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission) and the Federal Advisory Committee Act (FACA) that a meeting of the Minnesota Advisory Committee (Committee) to the Commission will be held from 2:00-3:00 p.m. CDT Wednesday June 6, 2018 to discuss civil rights concerns in the State.

    DATES:

    The meeting will be held on Wednesday June 6, 2018, from 2:00-3:00 p.m. CDT.

    FOR FURTHER INFORMATION CONTACT:

    Carolyn Allen at [email protected] or (312) 353-8311.

    SUPPLEMENTARY INFORMATION:

    Public Call Information: Dial: 800-839-7875; Conference ID: 4932013.

    This meeting is available to the public through the above toll-free call-in number. Any interested member of the public may call this number and listen to the meeting. Callers can expect to incur charges for calls they initiate over wireless lines, and the Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free telephone number. Persons with hearing impairments may also follow the proceedings by first calling the Federal Relay Service at 1-800-877-8339 and providing the Service with the conference call number and conference ID number.

    Members of the public are entitled to make comments during the open period at the end of the meeting. Members of the public may also submit written comments; the comments must be received in the Regional Programs Unit within 30 days following the meeting. Written comments may be mailed to the U.S. Commission on Civil Rights, Regional Programs Unit, 230 S. Dearborn, Suite 2120, Chicago, IL 60604. They may be faxed to the Commission at (312) 353-8324, or emailed Carolyn Allen at [email protected] Persons who desire additional information may contact the Regional Programs Unit at (312) 353-8311.

    Records and documents discussed during the meeting will be available for public viewing prior to and after the meeting at https://facadatabase.gov/committee/meetings.aspx?cid=256.

    Please click on the “Meeting Details” and “Documents” links to download. Records generated from this meeting may also be inspected and reproduced at the Regional Programs Unit, as they become available, both before and after the meeting. Persons interested in the work of this Committee are directed to the Commission's website, http://www.usccr.gov, or may contact the Regional Programs Unit at the above email or street address.

    Agenda I. Welcome II. Approval of Minutes III. Discussion a. Report Publication: “Responses to 21st Century Policing in Minnesota” b. Other Civil Rights Concerns in Minnesota IV. Public Comment V. Next Steps VI. Adjournment Dated: April 19, 2018. David Mussatt, Supervisory Chief, Regional Programs Unit.
    [FR Doc. 2018-08588 Filed 4-24-18; 8:45 am] BILLING CODE P
    DEPARTMENT OF COMMERCE International Trade Administration [A-570-828] Silicomanganese From the People's Republic of China: Notice of Correction to the Final Results of the Expedited Fourth Sunset Review of the Antidumping Duty Order AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    FOR FURTHER INFORMATION CONTACT:

    Joseph Degreenia, AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 432-6430

    SUPPLEMENTARY INFORMATION:

    Correction

    On February 8, 2018, the Department of Commerce (Commerce) published the final results of the expedited fourth sunset review of the antidumping duty order on silicomanganese from the People's Republic of China (China).1 The Final Results Federal Register notice inadvertently identified an incorrect case number associated with the antidumping duty (AD) order on silicomanganese from China (i.e., incorrect case number A-570-864). The correct case number associated with the AD order on silicomanganese from China is A-570-828. This notice serves as a correction notice.

    1See Silicomanganese from the People's Republic of China and Ukraine: Final Results of Expedited Fourth Sunset Reviews of the Antidumping Duty Orders, 83 FR 5609 (February 8, 2018) (Final Results).

    This correction is published in accordance with sections 751(c), 752(c) and 777(i) of the Tariff Act of 1930, as amended.

    Dated: March 22, 2018. Gary Taverman, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, performing the non-exclusive functions and duties of the Assistant Secretary for Enforcement and Compliance.
    [FR Doc. 2018-08655 Filed 4-24-18; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE International Trade Administration [A-533-883, A-588-878, and A-549-837] Glycine From India, Japan, and Thailand: Initiation of Less-Than-Fair-Value Investigations AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    DATES:

    Applicable April 17, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Edythe Artman at (202) 482-3931 or Kent Boydston at (202) 482-5649 (India); Madeline Heeren at (202) 482-9179 or John McGowan at (202) 482-3019 (Japan); and Brian Smith at (202) 482-1766 or Jesus Saenz at (202) 482-8184 (Thailand); AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230.

    SUPPLEMENTARY INFORMATION:

    The Petitions

    On March 28, 2018, the U.S. Department of Commerce (Commerce) received antidumping duty (AD) Petitions concerning imports of glycine from India, Japan, and Thailand, and countervailing duty (CVD) Petitions concerning imports of glycine from the People's Republic of China, India, and Thailand filed in proper form on behalf of GEO Specialty Chemicals, Inc., and Chattem Chemicals, Inc. (the petitioners).1 The petitioners are domestic producers of glycine.2

    1See the petitioners' letter, “Glycine from the People's Republic of China, India, Japan and Thailand: Petitions for Imposition of Antidumping and Countervailing Duties,” dated March 28, 2018 (the Petitions). For the purposes of the instant notice, all references to `the Petitions,' herein, refer specifically to the AD Petitions.

    2See Volume I of the Petitions, at 4-5.

    On April 2, 6, and 10, 2018, Commerce requested supplemental information pertaining to certain areas of the Petitions.3 The petitioners filed responses to these requests on April 4, 5, 9, 10, and 11, 2018.4 On April 10, 2018, the petitioners submitted certain revisions to the scope.5 On April 16, 2018, the petitioners submitted a revised publicly summarized affidavit and attachment to the Second AD Thailand Supplement in response to Commerce's request.6

    3See Commerce's letters, “Petition for the Imposition of Antidumping and Countervailing Duties on Imports of Glycine from the People's Republic of China, India, Japan, and Thailand: Supplemental Questions” (General Issues Supplemental Questionnaire); “Petition for the Imposition of Antidumping Duties on Imports of Glycine from India: Supplemental Questions” (India AD Supplemental Questionnaire); “Petition for the Imposition of Antidumping Duties on Imports of Glycine from Japan: Supplemental Questions” (Japan AD Supplemental Questionnaire); and “Petition for the Imposition of Antidumping Duties on Imports of Glycine from Thailand: Supplemental Questions” (Thailand AD Supplemental Questionnaire). All four of these documents are dated April 2, 2018. See also “Petition for the Imposition of Antidumping Duties on Imports of Glycine from India: Supplemental Questions;” “Petition for the Imposition of Antidumping Duties on Imports of Glycine from Thailand: Additional Supplemental Questions;” and Commerce's memorandum, “Petition for the Imposition of Antidumping Duties on Glycine from Thailand: Phone Call with Counsel to the Petitioners.” All four of these documents are dated April 6, 2018. See also Commerce's memoranda, “Petitions for the Imposition of Antidumping and Countervailing Duties on Imports of Glycine from the People's Republic of China, India, Japan, and Thailand,” dated April 10, 2018; and “Petition for the Imposition of Antidumping Duties on Imports of Glycine from Japan,” dated April 11, 2018.

    4See the petitioners' separate letters regarding General Issues, India, Japan and Thailand, each entitled, “Petitions for the Imposition of Antidumping Duties on Imports of Glycine from India, Japan and Thailand, and Countervailing Duties on Imports from the People's Republic of China, India and Thailand: Responses to Supplemental Questions” (General Issues Supplement), dated April 4, 2018; “Glycine from India: Responses to Supplemental Questions” (India AD Supplement), dated April 5, 2018; “Glycine from Japan: Responses to Supplemental Questions” (Japan AD Supplement), dated April 5, 2018; and “Glycine from Thailand: Responses to Supplemental Questions” (Thai AD Supplement), dated April 5, 2018. See also the petitioners' separate letters regarding “Glycine from Thailand: Submission of Missing Declaration,” and “Glycine from Japan: Additional Responses to Supplemental Questions.” These two documents are dated April 5, 2018. See also the petitioners' separate letters regarding “Glycine from India: Response to Second Supplemental Questionnaire” (Second India AD Supplement); and “Glycine from Thailand: Response to Second Supplemental Questionnaire” (Second Thailand AD Supplement). These two documents are dated April 9, 2018. See also the petitioners' separate letters regarding “Petitions for the Imposition of Antidumping Duties on Imports of Glycine from India, Japan and Thailand, and Countervailing Duties on Imports from the People's Republic of China, India and Thailand: Revised Scope” (Revised Scope Submission), dated April 10, 2018; and “Glycine from Japan: Additional Calculations” (Second Japan AD Supplement), dated April 11, 2018.

    5See Memorandum, “Phone Call with Counsel to the Petitioners,” dated April 10, 2018; see also Petitioners' Letter, “Petitions for the Imposition of Antidumping Duties on Imports of Glycine from India, Japan and Thailand, and Countervailing Duties on Imports from the People's Republic of China, India and Thailand: Revised Scope,” dated April 10, 2018 (Revised Scope Submission), at 1-2.

    6See Memorandum, “Phone Call with Counsel to the Petitioners,” dated April 13, 2018; and the petitioners' letter, “Glycine from Thailand: Revised Bracketing,” dated April 16, 2018.

    In accordance with section 732(b) of the Tariff Act of 1930, as amended (the Act), the petitioners allege that imports of glycine from India, Japan, and Thailand are being, or are likely to be, sold in the United States at less than fair value within the meaning of section 731 of the Act, and that such imports are materially injuring, or threatening material injury to, the domestic industry producing glycine in the United States. Consistent with section 732(b)(1) of the Act, the Petitions are accompanied by information reasonably available to the petitioners supporting their allegations.

    Commerce finds that the petitioners filed the Petitions on behalf of the domestic industry because the petitioners are interested parties as defined in section 771(9)(C) of the Act. Commerce also finds that the petitioners demonstrated sufficient industry support with respect to the initiation of the AD investigations that the petitioners are requesting.7

    7See the “Determination of Industry Support for the Petitions” section, infra.

    Period of Investigation

    Because the Petitions were filed on March 28, 2018, the period of investigation (POI) for each of the investigations is January 1, 2017, through December 31, 2017.8

    8See 19 CFR 351.204(b)(1).

    Scope of the Investigations

    The product covered by these investigations is glycine from India, Japan, and Thailand. For a full description of the scope of these investigations, see the Appendix to this notice.

    Comments on Scope of the Investigations

    During our review of the Petitions, Commerce issued questions to, and received responses from, the petitioners pertaining to the proposed scope to ensure that the scope language in the Petitions is an accurate reflection of the product for which the domestic industry is seeking relief.9 As a result of these exchanges, the scope of the Petitions was modified to clarify the description of merchandise covered by the Petitions. The description of the merchandise covered by this initiation, as described in the Appendix to this notice, reflects these clarifications.

    9See General Issues Supplemental Questionnaire, at 3-5 and General Issues Supplement at 3-8; see also Revised Scope Submission.

    As discussed in the Preamble to Commerce's regulations, we are setting aside a period for interested parties to raise issues regarding product coverage (scope).10 Commerce will consider all comments received from interested parties and, if necessary, will consult with interested parties prior to the issuance of the preliminary determinations. If scope comments include factual information,11 all such factual information should be limited to public information. To facilitate preparation of its questionnaires, Commerce requests that all interested parties submit such comments by 5:00 p.m. Eastern Time (ET) on May 7, 2018, which is 20 calendar days from the signature date of this notice. Any rebuttal comments, which may include factual information, must be filed by 5:00 p.m. ET on May 17, 2018, which is 10 calendar days from the initial comments deadline.12

    10See Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997).

    11See 19 CFR 351.102(b)(21) (defining “factual information”).

    12See 19 CFR 351.303(b).

    Commerce requests that any factual information the parties consider relevant to the scope of the investigations be submitted during this time period. However, if a party subsequently finds that additional factual information pertaining to the scope of the investigations may be relevant, the party may contact Commerce and request permission to submit the additional information. All such comments must be filed on the records of each of the concurrent AD and CVD investigations, in accordance with the filing requirements, discussed immediately below.

    Filing Requirements

    All submissions to Commerce must be filed electronically using Enforcement and Compliance's Antidumping Duty and Countervailing Duty Centralized Electronic Service System (ACCESS).13 An electronically filed document must be received successfully in its entirety by the time and date it is due. Documents exempted from the electronic submission requirements must be filed manually (i.e., in paper form) with Enforcement and Compliance's APO/Dockets Unit, Room 18022, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230, and stamped with the date and time of receipt by the applicable deadlines.

    13See Antidumping and Countervailing Duty Proceedings: Electronic Filing Procedures; Administrative Protective Order Procedures, 76 FR 39263 (July 6, 2011); see also Enforcement and Compliance; Change of Electronic Filing System Name, 79 FR 69046 (November 20, 2014) for details of Commerce's electronic filing requirements, effective August 5, 2011. Information on help using ACCESS can be found at https://access.trade.gov/help.aspx and a handbook can be found at https://access.trade.gov/help/Handbook%20on%20Electronic%20Filling%20Procedures.pdf.

    Comments on Product Characteristics for AD Questionnaires

    Commerce requests comments from interested parties regarding the appropriate physical characteristics of glycine to be reported in response to Commerce's AD questionnaires. This information will be used to identify the key physical characteristics of the merchandise under consideration in order to report the relevant costs of production accurately as well as to develop appropriate product-comparison criteria.

    Interested parties may provide any information or comments that they feel are relevant to the development of an accurate list of physical characteristics. Specifically, they may provide comments as to which characteristics are appropriate to use as: (1) General product characteristics, and (2) product-comparison criteria. We note that it is not always appropriate to use all product characteristics as product-comparison criteria. We base product-comparison criteria on meaningful commercial differences among products. In other words, although there may be some physical product characteristics utilized by manufacturers to describe glycine, it may be that only a select few product characteristics take into account commercially meaningful physical characteristics. In addition, interested parties may comment on the order in which the physical characteristics should be used in matching products. Generally, Commerce attempts to list the most important physical characteristics first and the least important characteristics last.

    In order to consider the suggestions of interested parties in developing and issuing the AD questionnaires, all product characteristics comments must be filed by 5:00 p.m. ET on May 7, 2018. Any rebuttal comments must be filed by 5:00 p.m. ET on May 14, 2018. All comments and submissions to Commerce must be filed electronically using ACCESS, as explained above, on the records of the India, Japan, and Thailand less-than-fair-value investigations.

    Determination of Industry Support for the Petitions

    Section 732(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 732(c)(4)(A) of the Act provides that a petition meets this requirement if the domestic producers or workers who support the petition account for: (i) At least 25 percent of the total production of the domestic like product; and (ii) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the petition. Moreover, section 732(c)(4)(D) of the Act provides that, if the petition does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, Commerce shall: (i) Poll the industry or rely on other information in order to determine if there is support for the petition, as required by subparagraph (A); or (ii) determine industry support using a statistically valid sampling method to poll the “industry.”

    Section 771(4)(A) of the Act defines the “industry” as the producers, as a whole, of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs Commerce to look to producers and workers who produce the domestic like product. The International Trade Commission (ITC), which is responsible for determining whether “the domestic industry” has been injured, must also determine what constitutes a domestic like product in order to define the industry. While both Commerce and the ITC must apply the same statutory definition regarding the domestic like product,14 they do so for different purposes and pursuant to a separate and distinct authority. In addition, Commerce's determination is subject to limitations of time and information. Although this may result in different definitions of the like product, such differences do not render the decision of either agency contrary to law.15

    14See section 771(10) of the Act.

    15See USEC, Inc. v. United States, 132 F. Supp. 2d 1, 8 (CIT 2001) (citing Algoma Steel Corp., Ltd. v. United States, 688 F. Supp. 639, 644 (CIT 1988), aff'd 865 F.2d 240 (Fed. Cir. 1989)).

    Section 771(10) of the Act defines the domestic like product as “a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this title.” Thus, the reference point from which the domestic like product analysis begins is “the article subject to an investigation” (i.e., the class or kind of merchandise to be investigated, which normally will be the scope as defined in the petition).

    With regard to the domestic like product, the petitioners do not offer a definition of the domestic like product distinct from the scope of the investigations.16 Based on our analysis of the information submitted on the record, we have determined that glycine, as defined in the scope, constitutes a single domestic like product, and we have analyzed industry support in terms of that domestic like product.17

    16See Volume I of the Petitions, at 7.

    17 For a discussion of the domestic like product analysis as applied to these cases and information regarding industry support, see Antidumping Duty Investigation Initiation Checklist: Glycine from India (India AD Initiation Checklist), at Attachment II, Analysis of Industry Support for the Antidumping and Countervailing Duty Petitions Covering Glycine from the People's Republic of China, India, Japan, and Thailand (Attachment II); Antidumping Duty Investigation Initiation Checklist: Glycine from Japan (Japan AD Initiation Checklist), at Attachment II; and Antidumping Duty Investigation Initiation Checklist: Glycine from Thailand (Thailand AD Initiation Checklist), at Attachment II. These checklists are dated concurrently with this notice and on file electronically via ACCESS. Access to documents filed via ACCESS is also available in the Central Records Unit, Room B8024 of the main Department of Commerce building.

    In determining whether the petitioners have standing under section 732(c)(4)(A) of the Act, we considered the industry support data contained in the Petitions with reference to the domestic like product as defined in the “Scope of the Investigations,” in the Appendix to this notice. To establish industry support, the petitioners provided their own production of the domestic like product in 2017.18 The petitioners state that there are no other known producers of glycine in the United States; therefore, the Petitions are supported by 100 percent of the U.S. industry.19

    18See Volume I of the Petitions, at 2.

    19Id., at 6; see also General Issues Supplement, at 8 and Exhibit GEN-S4. For further discussion, see India AD Initiation Checklist, Japan AD Initiation Checklist, and Thailand AD Initiation Checklist, at Attachment II.

    Our review of the data provided in the Petitions, the General Issues Supplement, and other information readily available to Commerce indicates that the petitioners have established industry support for the Petitions.20 First, the Petitions established support from domestic producers (or workers) accounting for more than 50 percent of the total production of the domestic like product and, as such, Commerce is not required to take further action in order to evaluate industry support (e.g., polling).21 Second, the domestic producers (or workers) have met the statutory criteria for industry support under section 732(c)(4)(A)(i) of the Act because the domestic producers (or workers) who support the Petitions account for at least 25 percent of the total production of the domestic like product.22 Finally, the domestic producers (or workers) have met the statutory criteria for industry support under section 732(c)(4)(A)(ii) of the Act because the domestic producers (or workers) who support the Petitions account for more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the Petitions.23 Accordingly, Commerce determines that the Petitions were filed on behalf of the domestic industry within the meaning of section 732(b)(1) of the Act.

    20Id.

    21Id.; see also section 732(c)(4)(D) of the Act.

    22See India AD Initiation Checklist, Japan AD Initiation Checklist, and Thailand AD Initiation Checklist, at Attachment II.

    23Id.

    Commerce finds that the petitioners filed the Petitions on behalf of the domestic industry because they are interested parties as defined in section 771(9)(C) of the Act, and they have demonstrated sufficient industry support with respect to the AD investigations that they are requesting that Commerce initiate.24

    24Id.

    Allegations and Evidence of Material Injury and Causation

    The petitioners allege that the U.S. industry producing the domestic like product is being materially injured, or is threatened with material injury, by reason of the imports of the subject merchandise sold at less than normal value (NV). In addition, the petitioners allege that subject imports exceed the negligibility threshold provided for under section 771(24)(A) of the Act.25

    25See Volume I of the Petitions, at 38-39; see also General Issues Supplement, at 8 and Exhibit GEN-S5.

    The petitioners contend that the industry's injured condition is illustrated by a significant and increasing volume of subject imports, reduced market share, underselling and price depression or suppression, decline in the domestic industry's shipments, production, and capacity utilization, decline in the domestic industry's financial performance, and lost sales and revenues.26 We have assessed the allegations and supporting evidence regarding material injury, threat of material injury, causation, as well as cumulation, and we have determined that these allegations are properly supported by adequate evidence, and meet the statutory requirements for initiation.27

    26Id., at 1-3, 33-49 and Exhibits GEN-2 and GEN-4 through GEN-6; see also General Issues Supplement, at 1, 8-9 and Exhibits GEN-S1 and GEN-S5.

    27See India AD Initiation Checklist, at Attachment III, Analysis of Allegations and Evidence of Material Injury and Causation for the Antidumping and Countervailing Duty Petitions Covering Glycine from the People's Republic of China, India, Japan, and Thailand (Attachment III); see also Japan AD Initiation Checklist, at Attachment III; see also Thailand AD Initiation Checklist, at Attachment III.

    Allegations of Sales at Less Than Fair Value

    The following is a description of the allegations of sales at less than fair value upon which Commerce based its decision to initiate AD investigations of imports of glycine from India, Japan, and Thailand. The sources of data for the deductions and adjustments relating to U.S. price and NV are discussed in greater detail in the country-specific initiation checklists.

    Export Price

    For India, Japan, and Thailand, the petitioners based export price (EP) on pricing information for glycine produced in, and exported from, those countries and sold or offered for sale in the United States.28 For Thailand, the petitioners also based EP on the average unit value of publicly available import data.29

    28See India AD Initiation Checklist, Japan AD Initiation Checklist, and Thailand AD Initiation Checklist.

    29See Thailand AD Initiation Checklist.

    Where appropriate, the petitioners made deductions from U.S. price consistent with the terms of sale, as applicable.30

    30See India AD Initiation Checklist, Japan AD Initiation Checklist, and Thailand AD Initiation Checklist.

    Normal Value

    For India, Japan and Thailand, the petitioners obtained home market prices but demonstrated that these prices were below the cost of production (COP) during the proposed POI. Therefore, the petitioners calculated NV based on constructed value (CV) pursuant to section 773(a)(4) of the Act. See the section “Normal Value Based on Constructed Value” below.31

    31 In accordance with section 505(a) of the Trade Preferences Extension Act of 2015, amending section 773(b)(2) of the Act, for these investigations, Commerce will request information necessary to calculate the CV and COP to determine whether there are reasonable grounds to believe or suspect that sales of the foreign like product have been made at prices that represent less than the COP of the product. Commerce no longer requires a COP allegation to conduct this analysis.

    Normal Value Based on Constructed Value

    As noted above, for India, Japan, and Thailand, the petitioners were able to obtain home market prices but demonstrated that these prices were below the COP during the POI; therefore, the petitioners based NV on CV pursuant to section 773(a)(4) of the Act. Pursuant to section 773(b)(3) of the Act, CV consists of the cost of manufacturing (COM); selling, general and administrative (SG&A) expenses; financial expenses; profit; and packing expenses.

    For India, the petitioners calculated the COM based on a domestic producer's own input factors of production and usage rates for raw materials, energy, and packing.32 The input factors of production were valued using publicly available data on costs specific to India, during the proposed POI.33 Specifically, the prices for raw material and packing inputs were based on publicly available import data for India.34 Labor and energy costs were valued using publicly available sources for India.35 The petitioners calculated factory overhead, SG&A (including financial expenses) and profit based on the experience of an Indian producer of glycine.36

    32See India AD Initiation Checklist.

    33Id.

    34Id.

    35Id.

    36Id.

    For Japan, the petitioners calculated the COM based on a domestic producer's own input factors of production and usage rates for raw materials, energy, and packing.37 The input factors of production were valued using publicly available data on costs specific to Japan, during the proposed POI.38 Specifically, the prices for raw material and packing inputs were based on publicly available import or export data for Japan.39 Labor and energy costs were valued using publicly available sources from Japan.40 The petitioners calculated factory overhead, SG&A (including financial expenses) and profit based on the experience of a Japanese producer of glycine.41

    37See Japan AD Initiation Checklist.

    38Id.

    39Id.

    40Id.

    41Id.

    For Thailand, the petitioners calculated the COM based on a domestic producer's own input factors of production and usage rates for raw materials, labor, energy, and packing.42 The input factors of production were valued using publicly available data on costs specific to Thailand, during the proposed POI.43 Specifically, the prices for raw material and packing inputs were based on publicly available import data for Thailand.44 Labor and energy costs were valued using publicly available sources for Thailand.45 The petitioners calculated factory overhead, SG&A (including financial expenses), and profit for Thailand based the experience of a Thai producer of glycine.46

    42See Thailand AD Initiation Checklist.

    43Id.

    44Id.

    45Id.

    46Id.

    Fair Value Comparisons

    Based on the data provided by the petitioners, there is reason to believe that imports of glycine from India, Japan, and Thailand are being, or are likely to be, sold in the United States at less than fair value. Based on comparisons of EP to NV in accordance with sections 772 and 773 of the Act, the estimated dumping margins for glycine for each of the countries covered by this initiation are as follows: (1) India—80.49 percent; 47 (2) Japan—86.22 percent; 48 and (3) Thailand—176.00 to 227.17 percent.49

    47See India AD Initiation Checklist.

    48See Japan AD Initiation Checklist.

    49See Thailand AD Initiation Checklist.

    Initiation of Less-Than-Fair-Value Investigations

    Based upon the examination of the Petitions, we find that the Petitions meet the requirements of section 732 of the Act. Therefore, we are initiating AD investigations to determine whether imports of glycine from India, Japan, and Thailand are being, or are likely to be, sold in the United States at less than fair value. In accordance with section 733(b)(1)(A) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determinations no later than 140 days after the date of this initiation.

    Respondent Selection

    In the Petitions, the petitioners named ten companies in India, nine companies in Japan, and one company in Thailand, as producers/exporters of glycine.50 With regard to India and Japan, following standard practice in AD investigations involving market economy countries, in the event Commerce determines that the number of companies is large and it cannot individually examine each company based upon Commerce's resources, where appropriate, Commerce intends to select respondents based on U.S. Customs and Border Protection (CBP) data for U.S. imports of glycine from India and Japan during the POI under the appropriate Harmonized Tariff Schedule of the United States numbers listed in the “Scope of the Investigations,” in the Appendix.

    50See Volume I of the Petitions, at 23-28.

    We also intend to release the CBP data under Administrative Protective Order (APO) to all parties with access to information protected by APO on the record within five business days of publication of this Federal Register notice. Comments regarding the CBP data and respondent selection should be submitted seven calendar days after the placement of the CBP data on the record of these investigations. Parties wishing to submit rebuttal comments should submit those comments five calendar days after the deadline for the initial comments. Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305(b). Instructions for filing such applications may be found on the Commerce's website at http://enforcement.trade.gov/apo.

    Although Commerce normally relies on import data from CBP to determine whether to select a limited number of producers/exporters for individual examination in AD investigations involving market economy countries, the petitioners identified only one company as a producer/exporter of glycine in Thailand, Newtrend Food Ingredient (Thailand) Co., Ltd., and the petitioners provided information from independent sources as support.51 Furthermore, we currently know of no additional producers/exporters of subject merchandise from Thailand. Accordingly, Commerce intends to examine all known producers/exporters in the Thailand AD investigation (i.e., Newtrend Food Ingredient (Thailand) Co., Ltd.). We invite interested parties to comment on this issue. Parties wishing to comment on respondent selection for Thailand must do so within three business days of the publication of this notice.

    51See Volume I of the Petitions, at Exhibit GEN-6; see also General Issues Supplement, at 2 and Exhibit GEN-S2.

    All respondent selection comments must be filed electronically using ACCESS. An electronically-filed document must be received successfully, in its entirety, by Commerce's electronic records system, ACCESS, no later than 5:00 p.m. ET on the dates noted above. We intend to make our decisions regarding respondent selection within 20 days of publication of this notice.

    Distribution of Copies of the Petitions

    In accordance with section 732(b)(3)(A)(i) of the Act and 19 CFR 351.202(f), copies of the public version of the Petitions have been provided to the governments of India, Japan, and Thailand via ACCESS. To the extent practicable, we will attempt to provide a copy of the public version of the Petitions to each exporter named in the Petitions, as provided under 19 CFR 351.203(c)(2).

    ITC Notification

    We will notify the ITC of our initiation, as required by section 732(d) of the Act.

    Preliminary Determinations by the ITC

    The ITC will preliminarily determine, within 45 days after the date on which the Petitions were filed, whether there is a reasonable indication that imports of glycine from India, Japan, and/or Thailand are materially injuring, or threatening material injury to, a U.S. industry.52 A negative ITC determination for any country will result in the investigation being terminated with respect to that country.53 Otherwise, the investigations will proceed according to statutory and regulatory time limits.

    52See section 733(a) of the Act.

    53Id.

    Submission of Factual Information

    Factual information is defined in 19 CFR 351.102(b)(21) as: (i) Evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by Commerce; and (v) evidence other than factual information described in (i)-(iv). Any party, when submitting factual information, must specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted 54 and, if the information is submitted to rebut, clarify, or correct factual information already on the record, to provide an explanation identifying the information already on the record that the factual information seeks to rebut, clarify, or correct.55 Time limits for the submission of factual information are addressed in 19 CFR 351.301, which provides specific time limits based on the type of factual information being submitted. Interested parties should review the regulations prior to submitting factual information in these investigations.

    54See 19 CFR 351.301(b).

    55See 19 CFR 351.301(b)(2).

    Extensions of Time Limits

    Parties may request an extension of time limits before the expiration of a time limit established under 19 CFR 351.301, or as otherwise specified by the Secretary. In general, an extension request will be considered untimely if it is filed after the expiration of the time limit established under 19 CFR 351.301. For submissions that are due from multiple parties simultaneously, an extension request will be considered untimely if it is filed after 10:00 a.m. ET on the due date. Under certain circumstances, we may elect to specify a different time limit by which extension requests will be considered untimely for submissions which are due from multiple parties simultaneously. In such a case, we will inform parties in the letter or memorandum setting forth the deadline (including a specified time) by which extension requests must be filed to be considered timely. An extension request must be made in a separate, stand-alone submission; under limited circumstances we will grant untimely-filed requests for the extension of time limits. Parties should review Extension of Time Limits; Final Rule, 78 FR 57790 (September 20, 2013), available at http://www.thefederalregister.org/fdsys/pkg/FR-2013-09-20/html/2013-22853.htm, prior to submitting factual information in these investigations.

    Certification Requirements

    Any party submitting factual information in an AD or CVD proceeding must certify to the accuracy and completeness of that information.56 Parties must use the certification formats provided in 19 CFR 351.303(g).57 Commerce intends to reject factual submissions if the submitting party does not comply with the applicable certification requirements.

    56See section 782(b) of the Act.

    57See also Certification of Factual Information to Import Administration During Antidumping and Countervailing Duty Proceedings, 78 FR 42678 (July 17, 2013) (Final Rule). Answers to frequently asked questions regarding the Final Rule are available at http://enforcement.trade.gov/tlei/notices/factual_info_final_rule_FAQ_07172013.pdf.

    Notification to Interested Parties

    Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305. On January 22, 2008, Commerce published Antidumping and Countervailing Duty Proceedings: Documents Submission Procedures; APO Procedures, 73 FR 3634 (January 22, 2008). Parties wishing to participate in these investigations should ensure that they meet the requirements of these procedures (e.g., the filing of letters of appearance as discussed at 19 CFR 351.103(d)).

    This notice is issued and published pursuant to sections 732(c)(2) and 777(i) of the Act, and 19 CFR 351.203(c).

    Dated: April 17, 2018. Gary Taverman, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, performing the non-exclusive functions and duties of the Assistant Secretary for Enforcement and Compliance. Appendix Scope of the Investigations

    The merchandise covered by these investigations is glycine at any purity level or grade. This includes glycine of all purity levels, which covers all forms of crude or technical glycine including, but not limited to, sodium glycinate, glycine slurry and any other forms of amino acetic acid or glycine. Subject merchandise also includes glycine and precursors of dried crystalline glycine that are processed in a third country, including, but not limited to, refining or any other processing that would not otherwise remove the merchandise from the scope of these investigations if performed in the country of manufacture of the in-scope glycine or precursors of dried crystalline glycine. Glycine has the Chemical Abstracts Service (CAS) registry number of 56-40-6. Glycine and glycine slurry are classified under Harmonized Tariff Schedule of the United States (HTSUS) subheading 2922.49.43.00. Sodium glycinate is classified in the HTSUS under 2922.49.80.00. While the HTSUS subheadings and CAS registry number are provided for convenience and customs purposes, the written description of the scope of these investigations is dispositive.

    [FR Doc. 2018-08664 Filed 4-24-18; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE International Trade Administration Quarterly Update to Annual Listing of Foreign Government Subsidies on Articles of Cheese Subject to an In-Quota Rate of Duty AGENCY:

    Enforcement and Compliance, International Trade Administration Department of Commerce.

    DATES:

    Applicable April 25, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Stephanie Moore, AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Ave. NW, Washington, DC 20230, telephone: (202) 482-3692.

    SUPPLEMENTARY INFORMATION:

    Section 702 of the Trade Agreements Act of 1979 (as amended) (the Act) requires the Department of Commerce (Commerce) to determine, in consultation with the Secretary of Agriculture, whether any foreign government is providing a subsidy with respect to any article of cheese subject to an in-quota rate of duty, as defined in section 702(h) of the Act, and to publish quarterly updates to the type and amount of those subsidies. We hereby provide Commerce's quarterly update of subsidies on articles of cheese that were imported during the periods October 1, 2017, through December 31, 2017.

    Commerce has developed, in consultation with the Secretary of Agriculture, information on subsidies, as defined in section 702(h) of the Act, being provided either directly or indirectly by foreign governments on articles of cheese subject to an in-quota rate of duty. The appendix to this notice lists the country, the subsidy program or programs, and the gross and net amounts of each subsidy for which information is currently available. Commerce will incorporate additional programs which are found to constitute subsidies, and additional information on the subsidy programs listed, as the information is developed.

    Commerce encourages any person having information on foreign government subsidy programs which benefit articles of cheese subject to an in-quota rate of duty to submit such information in writing to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce, 1401 Constitution Ave., NW, Washington, DC 20230.

    This determination and notice are in accordance with section 702(a) of the Act.

    Dated: April 19, 2018. Christian Marsh, Deputy Assistant Secretary for Enforcement and Compliance. Appendix Subsidy Programs on Cheese Subject to an In-Quota Rate of Duty Country Program(s) Gross 1
  • Subsidy
  • ($/lb)
  • Net 2 Subsidy
  • ($/lb)
  • 28 European Union Member States 3 European Union Restitution Payments $ 0.00 $0.00 Canada Export Assistance on Certain Types of Cheese 0.44 0.44 Norway Indirect (Milk) Subsidy
  • Consumer Subsidy
  • Total
  • 0.00
  • 0.00
  • 0.00
  • 0.00
  • 0.00
  • 0.00
  • Switzerland Deficiency Payments 0.00 0.00 1 Defined in 19 U.S.C. 1677(5). 2 Defined in 19 U.S.C. 1677(6). 3 The 28 member states of the European Union are: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.
    [FR Doc. 2018-08675 Filed 4-24-18; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE International Trade Administration [A-549-502] Circular Welded Carbon Steel Pipes and Tubes From Thailand: Amended Final Results of Antidumping Duty Administrative Review; 2015-2016 AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    SUMMARY:

    The Department of Commerce (Commerce) is amending its final results of the administrative review of the antidumping duty order on circular welded carbon steel pipes and tubes (pipes and tubes) from Thailand. The period of review (POR) is March 1, 2015, through February 29, 2016. The amended final weighted-average dumping margin is listed below in the section entitled, “Amended Final Results.”

    DATES:

    Applicable April 25, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Toni Page, AD/CVD Operations, Office VII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-1398.

    SUPPLEMENTARY INFORMATION:

    Background

    On October 10, 2017, Commerce published the Final Results of the 2015-2016 administrative review in the Federal Register.1 Wheatland Tube LLC (petitioner) and respondent Saha Thai Steel Pipe Public Co., Ltd. (Saha Thai) timely filed ministerial error allegations concerning the Final Results and requested, pursuant to 19 CFR 351.224, that Commerce correct the alleged ministerial errors.2

    1See Circular Welded Carbon Steel Pipes and Tubes from Thailand: Final Results of Antidumping Duty Administrative Review and Final Determination of No Shipments; 2015-2016, 82 FR 46961 (October 10, 2017) (Final Results), and accompanying Memorandum, “Circular Welded Carbon Steel Pipes and Tubes from Thailand: Decision Memorandum for the Final Results of Antidumping Duty Administrative Review; 2015-2016,” (Issues and Decision Memorandum).

    2See Saha Thai Steel Pipe Public Co., Ltd.'s October 6, 2017 Ministerial Error Correction Request; and Petitioner's October 10, 2017 Ministerial Error Allegation.

    Scope of the Order

    The products covered by the antidumping order are certain circular welded carbon steel pipes and tubes from Thailand. The subject merchandise has an outside diameter of 0.375 inches or more, but not exceeding 16 inches.3

    3 A full written description of the scope of the order is contained in the Issues and Decision Memorandum.

    Commerce is not making any changes to the scope of the order for these amended final results.

    Ministerial Errors

    Section 751(h) of the Tariff Act of 1930, as amended (the Act), defines “ministerial errors” as including “errors in addition, subtraction, or other arithmetic function, clerical errors resulting from inaccurate copying, duplication, or the like, and any other type of unintentional error which the administering authority considers ministerial.” 4 After analyzing the parties' comments, we have determined, in accordance with section 751(h) of the Act and 19 CFR 351.224(f), that ministerial errors were made in our calculation of Saha Thai's margin for the Final Results. For a detailed discussion of these ministerial errors, as well as Commerce's analysis of these errors, see the Ministerial Error Memorandum.5

    4See also 19 CFR 351.224(f).

    5See Memorandum, “2015-2016 Administrative Review of the Antidumping Duty Order on Circular Welded Steel Pipes and Tubes from Thailand: Ministerial Error Memorandum,” (April 18, 2018) (Ministerial Error Memorandum).

    In accordance with section 751(h) of the Act and 19 CFR 351.224(e), we are amending the Final Results. 6 The revised weighted-average dumping margin is detailed below.

    6Id.

    Amended Final Results

    As a result of correcting for these ministerial errors, we determine the following margin exists for the period March 1, 2015, through February 29, 2016:

    Exporter or producer Weighted-
  • average dumping
  • margin
  • (percent)
  • Saha Thai Steel Pipe Public Co., Ltd 0.69
    Disclosure

    Commerce intends to disclose the calculations performed for these amended final results of review within five days of the date of publication of this notice in the Federal Register, in accordance with 19 CFR 351.224(b).

    Assessment Rates

    Pursuant to section 751(a)(2)(C) of the Act and 19 CFR 351.212(b), Commerce shall determine, and CBP shall assess, antidumping duties on all appropriate entries of subject merchandise covered by this review. Commerce intends to issue assessment instructions to CBP 15 days after the date of publication of these amended final results in the Federal Register. For Saha Thai, we will base the assessment rate for the corresponding entries on the margin listed above.

    Cash Deposit Requirements

    The following cash deposit requirements will be effective retroactively for all shipments of subject merchandise entered, or withdrawn from warehouse, for consumption on or after the October 10, 2017, the date of publication of the Final Results of this administrative review, as provided for by section 751(a)(2)(C) of the Act: (1) The cash deposit rate for Saha Thai Steel Pipe Public Co., Ltd. will be equal to the weighted-average dumping margin established in these amended final results of review; (2) for previously reviewed or investigated companies, including those for which Commerce may have determined they had no shipments during the POR, the cash deposit rate will continue to be the company-specific rate published for the most recently completed segment of this proceeding; (3) if the exporter is not a firm covered in this review or another completed segment of this proceeding, but the manufacturer is, then the cash deposit rate will be the rate established for the most recently completed segment of this proceeding for the manufacturer of the merchandise; and (4) if neither the exporter nor the manufacturer is a firm covered in this or any previously completed segment of this proceeding, then the cash deposit rate will be the “all-others” rate of 15.67 percent established in the less-than-fair-value investigation.7 These deposit requirements, when imposed, shall remain in effect until further notice.

    7See Antidumping Duty Order; Circular Welded Carbon Steel Pipes and Tubes from Thailand, 51 FR 8341 (March 11, 1986).

    Notification to Importers

    This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this POR. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.

    Administrative Protective Orders

    This notice also serves as the only reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.

    These amended final results and notice are issued and published in accordance with sections 751(h) and 777(i) of the Act and 19 CFR 351.224(e).

    Dated: April 18, 2018. Gary Taverman, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, performing the non-exclusive functions and duties of the Assistant Secretary for Enforcement and Compliance.
    [FR Doc. 2018-08657 Filed 4-24-18; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE International Trade Administration Environmental Technologies Trade Advisory Committee (ETTAC) Public Meeting AGENCY:

    International Trade Administration, DOC.

    ACTION:

    Notice of an Open Meeting of a Federal Advisory Committee.

    SUMMARY:

    This notice sets forth the schedule and proposed agenda of a meeting of the Environmental Technologies Trade Advisory Committee (ETTAC).

    DATES:

    The meeting is scheduled for Tuesday, May 15, 2018 from 8:30 a.m.—3:30 p.m. Eastern Daylight Time (EDT). The deadline for members of the public to register or to submit written comments for dissemination prior to the meeting is 5:00 p.m. EDT on Monday, May 7, 2018. The deadline for members of the public to request auxiliary aids is 5:00 p.m. EDT on Monday, May 7, 2018.

    ADDRESSES:

    The meeting will take place at the U.S. Department of Commerce, 1401 Constitution Avenue, NW, Washington, DC 20230, Room 6057-59. The address to register and obtain call-in information; submit comments; or request auxiliary aids is: Ms. Tracy Gerstle, Office of Energy & Environmental Industries (OEEI), International Trade Administration, Room 28018, 1401 Constitution Avenue NW, Washington, DC 20230 or email: [email protected]

    FOR FURTHER INFORMATION CONTACT:

    Ms. Tracy Gerstle, Office of Energy & Environmental Industries (OEEI), International Trade Administration, Room 28018, 1401 Constitution Avenue NW, Washington, DC 20230 (Phone: 202-482-0810; Fax: 202-482-5665; email: [email protected]).

    SUPPLEMENTARY INFORMATION:

    The meeting will take place on May 15 from 8:30 a.m. to 3:30 p.m. EDT. The general meeting is open to the public and time will be permitted for public comment from 3:00—3:30 p.m. EDT. Members of the public seeking to attend the meeting are required to register in advance. Those interested in attending must provide notification by Monday, May 7, 2018 at 5:00 p.m. EDT, via the contact information provided above. This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to OEEI at (202) 482-0810 no less than one week prior to the meeting. Requests received after this date will be accepted, but it may not be possible to accommodate them.

    Written comments concerning ETTAC affairs are welcome any time before or after the meeting. To be considered during the meeting, written comments must be received by Monday, May 7, 2018 at 5:00 p.m. EDT to ensure transmission to the members before the meeting. Minutes will be available within 30 days of this meeting.

    Topic to be considered: During the May 15, 2018 meeting, the ETTAC will present to the Secretary of Commerce its final recommendations for this charter period as deliberated and adopted at its April 30, 2018 teleconference meeting, Topics to be deliberated at the April 30, 2018 meeting include optimizing the U.S. Government's trade promotion programs, identifying market access barriers, pros and cons of existing trade agreements, and discussing foreign procurement policy, including issues with financing mechanisms, localization requirements and non-tariff barriers. The ETTAC's subcommittees will present the recommendations to the Secretary. The subcommittees are: Trade Promotion and Export Market Development, Professional Services and Infrastructure Advancement, and Trade Policy and American Competitiveness. The Office of Energy & Environmental Industries will post the final agenda on its Office website https://www.trade.gov/td/energy/ at least one week prior to the meeting.

    Background: The ETTAC is mandated by Section 2313(c) of the Export Enhancement Act of 1988, as amended, 15 U.S.C. 4728(c), to advise the Environmental Trade Working Group of the Trade Promotion Coordinating Committee, through the Secretary of Commerce, on the development and administration of programs to expand U.S. exports of environmental technologies, goods, services, and products. The ETTAC was originally chartered in May of 1994. It was most recently re-chartered until August 2018.

    Dated: April 16, 2018. Man Cho, Deputy Director, Office of Energy and Environmental Industries.
    [FR Doc. 2018-08560 Filed 4-24-18; 8:45 am] BILLING CODE 3510-DR-P
    DEPARTMENT OF COMMERCE International Trade Administration [C-533-884, C-570-081, C-549-838] Glycine From India, the People's Republic of China, and Thailand: Initiation of Countervailing Duty Investigations AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    DATES:

    Applicable April 17, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Tyler Weinhold at (202) 482-1121 (the People's Republic of China (China)), Chelsey Simonovich at (202) 482-1979 (India), and George Ayache at (202) 482-2623 (Thailand), AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230.

    SUPPLEMENTARY INFORMATION:

    The Petitions

    On March 28, 2018, the U.S. Department of Commerce (Commerce) received countervailing duty (CVD) Petitions concerning imports of glycine from China, India, and Thailand, and antidumping duty (AD) Petitions concerning imports of glycine from India, Japan, and Thailand filed in proper form on behalf of GEO Specialty Chemicals, Inc. and Chattem Chemicals, Inc. (the petitioners).1 The petitioners are domestic producers of glycine.2

    1See Petitioners' letter, “Glycine from the People's Republic of China, India, Japan and Thailand: Petitions for the Imposition of Antidumping and Countervailing Duties,” dated March 28, 2018 (the Petitions). For the purposes of the instant notice, all references to `the Petitions,' herein, refer specifically to the CVD Petitions.

    2See Volume I of the Petitions, at 4-5.

    On April 2, 2018, Commerce requested supplemental information pertaining to certain areas of the Petitions.3 The petitioners filed responses to these requests on April 4 and 5, 2018.4 On April 10, 2018, the petitioners submitted certain revisions to the scope.5

    3See Commerce's letters, “Petitions for the Imposition of Antidumping Duties on Imports of Glycine from India, Japan, and Thailand, and Countervailing Duties on Imports from the People's Republic of China, India, and Thailand: Supplemental Questions” (General Issues Supplemental Questionnaire); “Petition for the Imposition of Countervailing Duties on Imports of Glycine from the People's Republic of China: Supplemental Questions;” “Petition for the Imposition of Countervailing Duties on Imports of Glycine from India: Supplemental Questions;” and “Petition for the Imposition of Countervailing Duties on Imports of Glycine from Thailand: Supplemental Questions.” All of these documents are dated April 2, 2018.

    4See Petitioners' Letters, “Petitions for the Imposition of Antidumping Duties on Imports of Glycine from India, Japan and Thailand, and Countervailing Duties on Imports from the People's Republic of China, India and Thailand: Responses to Supplemental Questions,” dated April 4, 2018 (General Issues Supplement); “Glycine from the People's Republic of China: Response to Supplemental Questions,” dated April 5, 2018 (China CVD Supplement); ” Glycine from India: Responses to Supplemental Questions,” dated April 5, 2018 (India CVD Supplement); and “Glycine from Thailand: Response to Supplemental Questions,” dated April 4, 2018 (Thailand CVD Supplement).

    5See Memorandum, “Phone Call with Counsel to the Petitioners,” dated April 10, 2018; see also Petitioners' Letter, “Petitions for the Imposition of Antidumping Duties on Imports of Glycine from India, Japan and Thailand, and Countervailing Duties on Imports from the People's Republic of China, India and Thailand: Revised Scope,” dated April 10, 2018 (Revised Scope Submission), at 1-2.

    In accordance with section 702(b)(1) of the Tariff Act of 1930, as amended (the Act), the petitioners allege that the Government of China (GOC), the Government of India (GOI), and the Royal Thai Government (RTG) are providing countervailable subsidies, within the meaning of sections 701 and 771(5) of the Act, to producers of glycine in China, India, and Thailand, respectively, and imports of such products are materially injuring, or threatening material injury to, the domestic glycine industry in the United States. Consistent with section 702(b)(1) of the Act and 19 CFR 351.202(b), for those alleged programs on which we are initiating a CVD investigation, the Petitions are accompanied by information reasonably available to the petitioners supporting their allegations.

    Commerce finds that the petitioners filed the Petitions on behalf of the domestic industry because the petitioners are interested parties as defined in section 771(9)(C) of the Act. Commerce also finds that the petitioners demonstrated sufficient industry support with respect to the initiation of the CVD investigations that the petitioners are requesting.6

    6See “Determination of Industry Support for the Petitions” section, infra.

    Period of Investigation

    Because the Petitions were filed on March 28, 2018, the period of investigation for each of the investigations is January 1, 2017, through December 31, 2017.7

    7See 19 CFR 351.204(b)(2).

    Scope of the Investigations

    The product covered by these investigations is glycine from China, India, and Thailand. For a full description of the scope of these investigations, see the Appendix to this notice.

    Comments on Scope of the Investigations

    During our review of the Petitions, Commerce issued questions to, and received responses from, the petitioners pertaining to the proposed scope to ensure that the scope language in the Petitions is an accurate reflection of the product for which the domestic industry is seeking relief.8 As a result of these exchanges, the scope of the Petitions was modified to clarify the description of merchandise covered by the Petitions. The description of the merchandise covered by this initiation, as described in the Appendix to this notice, reflects these clarifications.

    8See General Issues Supplemental Questionnaire, at 3-5 and General Issues Supplement, at 3-8; see also Revised Scope Submission.

    As discussed in the Preamble to Commerce's regulations, we are setting aside a period for interested parties to raise issues regarding product coverage (scope).9 Commerce will consider all comments received from interested parties and, if necessary, will consult with interested parties prior to the issuance of the preliminary determinations. If scope comments include factual information,10 all such factual information should be limited to public information. To facilitate preparation of its questionnaires, Commerce requests that all interested parties submit such comments by 5:00 p.m. Eastern Time (ET) on May 7, 2018, which is 20 calendar days from the signature date of this notice. Any rebuttal comments, which may include factual information, must be filed by 5:00 p.m. ET on May 17, 2018, which is 10 calendar days from the initial comments deadline.11

    9See Antidumping Duties; Countervailing Duties, Final Rule, 62 FR 27296, 27323 (May 19, 1997) (Preamble).

    10See 19 CFR 351.102(b)(21) (defining “factual information”).

    11See 19 CFR 351.303(b).

    Commerce requests that any factual information the parties consider relevant to the scope of the investigations be submitted during this time period. However, if a party subsequently finds that additional factual information pertaining to the scope of the investigations may be relevant, the party may contact Commerce and request permission to submit the additional information. All such comments must be filed on the records of each of the concurrent AD and CVD investigations, in accordance with the filing requirements, discussed immediately below.

    Filing Requirements

    All submissions to Commerce must be filed electronically using Enforcement and Compliance's Antidumping Duty and Countervailing Duty Centralized Electronic Service System (ACCESS).12 An electronically filed document must be received successfully in its entirety by the time and date it is due. Documents exempted from the electronic submission requirements must be filed manually (i.e., in paper form) with Enforcement and Compliance's APO/Dockets Unit, Room 18022, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230, and stamped with the date and time of receipt by the applicable deadlines.

    12See Antidumping and Countervailing Duty Proceedings: Electronic Filing Procedures; Administrative Protective Order Procedures, 76 FR 39263 (July 6, 2011). See also Enforcement and Compliance: Change of Electronic Filing System Name, 79 FR 69046 (November 20, 2014) for details of Commerce's electronic filing requirements, effective August 5, 2011. Information on help using ACCESS can be found at https://access.trade.gov/help.aspx, and a handbook can be found at https://access.trade.gov/help/Handbook%20on%20Electronic%20Filling%20Procedures.pdf.

    Consultations

    Pursuant to sections 702(b)(4)(A)(i) and (ii) of the Act, Commerce notified representatives of the Governments of China, India and Thailand of the receipt of the Petitions, and provided them the opportunity for consultations with respect to the CVD Petitions.13 Commerce held consultations with the Governments of Thailand and India on April 5, 2018,14 and April 12, 2018, respectively.15 As the Government of China did not request consultations prior to the initiation of this investigation, none were held.

    13See Letter from Kathleen Marksberry, Program Manager, Office VIII, to the Embassy of China, “Countervailing Duty Petition on Glycine from the People's Republic of China: Invitation for Consultations,” dated March 28, 2018; Letter from Erin Kearney, Program Manager, Office VI, to the Embassy of India, “Countervailing Duty Petition on Glycine from India: Invitation for Consultations to Discuss the Countervailing Duty Petition,” dated March 29, 2018; and Letter from Kathleen Marksberry, Program Manager, Office VIII, to the Royal Thai Embassy, “Countervailing Duty Petition on Glycine from Thailand: Invitation for Consultations,” dated March 28, 2018.

    14See Memorandum, “Countervailing Duty Petition on Glycine from Thailand: Consultations with Officials from the Royal Thai Government,” dated April 5, 2018.

    15See Memorandum, “Countervailing Duty Petition on Glycine from India: Consultations with Officials from the Government of India,” dated April 13, 2018.

    Determination of Industry Support for the Petitions

    Section 702(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 702(c)(4)(A) of the Act provides that a petition meets this requirement if the domestic producers or workers who support the petition account for: (i) At least 25 percent of the total production of the domestic like product; and (ii) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the petition. Moreover, section 702(c)(4)(D) of the Act provides that, if the petition does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, Commerce shall: (i) Poll the industry or rely on other information in order to determine if there is support for the petition, as required by subparagraph (A); or (ii) determine industry support using a statistically valid sampling method to poll the “industry.”

    Section 771(4)(A) of the Act defines the “industry” as the producers, as a whole, of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs Commerce to look to producers and workers who produce the domestic like product. The International Trade Commission (ITC), which is responsible for determining whether “the domestic industry” has been injured, must also determine what constitutes a domestic like product in order to define the industry. While both Commerce and the ITC must apply the same statutory definition regarding the domestic like product,16 they do so for different purposes and pursuant to a separate and distinct authority. In addition, Commerce's determination is subject to limitations of time and information. Although this may result in different definitions of the like product, such differences do not render the decision of either agency contrary to law.17

    16See section 771(10) of the Act.

    17See USEC, Inc. v. United States, 132 F. Supp. 2d 1, 8 (CIT 2001) (citing Algoma Steel Corp., Ltd. v. United States, 688 F. Supp. 639, 644 (CIT 1988), aff'd 865 F.2d 240 (Fed. Cir. 1989)).

    Section 771(10) of the Act defines the domestic like product as “a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this title.” Thus, the reference point from which the domestic like product analysis begins is “the article subject to an investigation” (i.e., the class or kind of merchandise to be investigated, which normally will be the scope as defined in the petition).

    With regard to the domestic like product, the petitioners do not offer a definition of the domestic like product distinct from the scope of the investigations.18 Based on our analysis of the information submitted on the record, we have determined that glycine, as defined in the scope, constitutes a single domestic like product, and we have analyzed industry support in terms of that domestic like product.19

    18See Volume I of the Petitions, at 7.

    19 For a discussion of the domestic like product analysis as applied to these cases and information regarding industry support, see Countervailing Duty Investigation Initiation Checklist: Glycine from the People's Republic of China (China CVD Initiation Checklist), at Attachment II, Analysis of Industry Support for the Antidumping and Countervailing Duty Petition Covering Glycine from the People's Republic of China, India, Japan, and Thailand (Attachment II); see also Countervailing Duty Investigation Initiation Checklist: Glycine from India (India CVD Initiation Checklist), at Attachment II; see also Countervailing Duty Investigation Initiation Checklist: Glycine from Thailand (Thailand CVD Initiation Checklist), at Attachment II. These checklists are dated concurrently with this notice and on file electronically via ACCESS. Access to documents filed via ACCESS is also available in the Central Records Unit, Room B8024 of the main Department of Commerce building.

    In determining whether the petitioners have standing under section 702(c)(4)(A) of the Act, we considered the industry support data contained in the Petitions with reference to the domestic like product as defined in the “Scope of the Investigations,” in the Appendix to this notice. To establish industry support, the petitioners provided their own production of the domestic like product in 2017.20 The petitioners state that there are no other known producers of glycine in the United States; therefore, the Petitions are supported by 100 percent of the U.S. industry.21

    20See Volume I of the Petitions, at 2.

    21Id., at 6; see also General Issues Supplement, at 8 and Exhibit GEN-S4. For further discussion, see China CVD Initiation Checklist, at Attachment II; India CVD Initiation Checklist, at Attachment II; and Thailand CVD Initiation Checklist, at Attachment II.

    Our review of the data provided in the Petitions, the General Issues Supplement, and other information readily available to Commerce indicates that the petitioners have established industry support for the Petitions.22 First, the Petitions established support from domestic producers (or workers) accounting for more than 50 percent of the total production of the domestic like product and, as such, Commerce is not required to take further action in order to evaluate industry support (e.g., polling).23 Second, the domestic producers (or workers) have met the statutory criteria for industry support under section 702(c)(4)(A)(i) of the Act because the domestic producers (or workers) who support the Petitions account for at least 25 percent of the total production of the domestic like product.24 Finally, the domestic producers (or workers) have met the statutory criteria for industry support under section 702(c)(4)(A)(ii) of the Act because the domestic producers (or workers) who support the Petitions account for more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the Petitions.25 Accordingly, Commerce determines that the Petitions were filed on behalf of the domestic industry within the meaning of section 702(b)(1) of the Act.

    22Id.

    23Id.; see also section 702(c)(4)(D) of the Act.

    24See China CVD Initiation Checklist, at Attachment II; India CVD Initiation Checklist, at Attachment II; and Thailand CVD Initiation Checklist, at Attachment II.

    25Id.

    Commerce finds that the petitioners filed the Petitions on behalf of the domestic industry because they are interested parties as defined in section 771(9)(C) of the Act, and they have demonstrated sufficient industry support with respect to the CVD investigations that they are requesting that Commerce initiate.26

    26Id.

    Injury Test

    Because China, India, and Thailand are “Subsidies Agreement Countries” within the meaning of section 701(b) of the Act, section 701(a)(2) of the Act applies to these investigations. Accordingly, the ITC must determine whether imports of the subject merchandise from China, India, and Thailand materially injure, or threaten material injury to, a U.S. industry.

    Allegations and Evidence of Material Injury and Causation

    The petitioners allege that imports of the subject merchandise are benefitting from countervailable subsidies and that such imports are causing, or threaten to cause, material injury to the U.S. industry producing the domestic like product. In addition, the petitioners allege that subject imports exceed the negligibility threshold provided for under section 771(24)(A) of the Act.27 In CVD petitions, section 771(24)(B) of the Act provides that imports of subject merchandise from developing and least developed countries must exceed the negligibility threshold of four percent. The petitioners also demonstrate that subject imports from India and Thailand, which have been designated as least developed and developing countries under sections 771(36)(A) and 771(36)(B) of the Act, respectively, exceed the negligibility threshold of four percent.28

    27See Volume I of the Petitions, at 38-39; see also General Issues Supplement, at 8 and Exhibit GEN-S5.

    28Id.

    The petitioners contend that the industry's injured condition is illustrated by a significant and increasing volume of subject imports, reduced market share, underselling and price depression or suppression, decline in the domestic industry's shipments, production, and capacity utilization, decline in the domestic industry's financial performance, and lost sales and revenues.29 We have assessed the allegations and supporting evidence regarding material injury, threat of material injury, causation, as well as cumulation, and we have determined that these allegations are properly supported by adequate evidence, and meet the statutory requirements for initiation.30

    29Id. at 1-3, 33-49 and Exhibits GEN-2 and GEN-4 through GEN-6; see also General Issues Supplement, at 1, 8-9 and Exhibits GEN-S1 and GEN-S5.

    30See China CVD Initiation Checklist, at Attachment III, Analysis of Allegations and Evidence of Material Injury and Causation for the Antidumping and Countervailing Duty Petition Covering Glycine from the People's Republic of China, India, Japan, and Thailand (Attachment III); see also India CVD Initiation Checklist, at Attachment III; see also Thailand CVD Initiation, at Attachment III.

    Initiation of CVD Investigations

    Based on the examination of the Petitions, we find that the Petitions meet the requirements of section 702 of the Act. Therefore, we are initiating CVD investigations to determine whether imports of glycine from China, India, and Thailand benefit from countervailable subsidies conferred by the GOC, GOI, and RTG, respectively. In accordance with section 703(b)(1) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determinations no later than 65 days after the date of this initiation.

    China

    Based on our review of the Petition, we find that there is sufficient information to initiate a CVD investigation on 21 of the 22 alleged subsidy programs. For a full discussion of the basis for our decision to initiate on each program, see China CVD Initiation Checklist. A public version of the initiation checklist for this investigation is available on ACCESS.

    India

    Based on our review of the Petition, we find that there is sufficient information to initiate a CVD investigation on 38 of the 40 alleged subsidy programs.31 For a full discussion of the basis for our decision to initiate on each program, see India CVD Initiation Checklist. A public version of the initiation checklist for this investigation is available on ACCESS.

    31See India CVD Initiation Checklist for details on initiated sub-programs.

    Thailand

    Based on our review of the Petition, we find that there is sufficient information to initiate a CVD investigation on all ten alleged subsidy programs. For a full discussion of the basis for our decision to initiate on each program, see Thailand CVD Initiation Checklist. A public version of the initiation checklist for this investigation is available on ACCESS.

    Respondent Selection

    In the Petitions, the petitioners named 29 companies in China,32 ten companies in India,33 and one company in Thailand,34 as producers/exporters of glycine. Commerce intends to follow its standard practice in CVD investigations and calculate company-specific subsidy rates in these investigations. With respect to China and India, in the event Commerce determines that the number of companies is large and it cannot individually examine each company based upon Commerce's resources, where appropriate, Commerce intends to select mandatory respondents based on U.S. Customs and Border Protection (CBP) data for U.S. imports of glycine from China and India during the POI under the appropriate Harmonized Tariff Schedule of the United States numbers listed in the “Scope of the Investigations,” in the Appendix.

    32See Volume II of the Petitions, at Exhibit CC1; see also China CVD Supplement, at 18-19.

    33See Volume I of the Petitions, at 24-26.

    34Id. at 28.

    On April 9 and 10, 2018, Commerce released CBP data from China and India, respectively, under Administrative Protective Order (APO) to all parties with access to information protected by APO and indicated that interested parties wishing to comment regarding the CBP data and respondent selection must do so within three business days of the publication date of the notice of initiation of these CVD investigations.35 Commerce will not accept rebuttal comments regarding the CBP data or respondent selection. Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305(b). Instructions for filing such applications may be found on the Commerce's website at http://enforcement.trade.gov/apo.

    35See Memorandum, “Glycine from the People's Republic of China Countervailing Duty Petition: Release of Customs Data from U.S. Customs and Border Protection,” dated April 9, 2018; and Memorandum, “Glycine from India Countervailing Duty Petition: Release of Customs Data from U.S. Customs and Border Protection,” dated April 10, 2018.

    Although Commerce normally relies on import data from CBP to determine whether to select a limited number of producers/exporters for individual examination in CVD investigations, the petitioners identified only one company as a producer/exporter of glycine in Thailand, Newtrend Food Ingredient (Thailand) Co., Ltd., and the petitioners provided information from independent sources as support.36 Furthermore, we currently know of no additional producers/exporters of subject merchandise from Thailand. Accordingly, Commerce intends to examine all known producers/exporters in the Thailand CVD investigation (i.e., Newtrend Food Ingredient (Thailand) Co., Ltd.). We invite interested parties to comment on this issue. Parties wishing to comment on respondent selection for Thailand must do so within three business days of the publication of this notice.

    36See Volume I of the Petitions, at Exhibit GEN-6; see also General Issues Supplement, at 2 and Exhibit GEN-S2.

    All respondent selection comments must be filed electronically using ACCESS. An electronically filed document must be received successfully, in its entirety, by Commerce's electronic records system, ACCESS, no later than 5:00 p.m. ET on the date noted above. We intend to make our decisions regarding respondent selection within 20 days of publication of this notice.

    Distribution of Copies of the Petitions

    In accordance with section 702(b)(4)(A)(i) of the Act and 19 CFR 351.202(f), copies of the public versions of the Petitions have been provided to the GOC, GOI, and RTG via ACCESS. To the extent practicable, we will attempt to provide a copy of the public version of the Petitions to each exporter named in the Petitions, as provided under 19 CFR 351.203(c)(2).

    ITC Notification

    We will notify the ITC of our initiation, as required by section 702(d) of the Act.

    Preliminary Determinations by the ITC

    The ITC will preliminarily determine, within 45 days after the date on which the Petitions were filed, whether there is a reasonable indication that imports of glycine from China, India, and Thailand are materially injuring, or threatening material injury to, a U.S. industry.37 A negative ITC determination for any country will result in the investigation being terminated with respect to that country.38 Otherwise, the investigations will proceed according to statutory and regulatory time limits.

    37See section 703(a)(2) of the Act.

    38See section 703(a)(1) of the Act.

    Submission of Factual Information

    Factual information is defined in 19 CFR 351.102(b)(21) as: (i) Evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by Commerce; and (v) evidence other than factual information described in (i)-(iv). Any party, when submitting factual information, must specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted 39 and, if the information is submitted to rebut, clarify, or correct factual information already on the record, to provide an explanation identifying the information already on the record that the factual information seeks to rebut, clarify, or correct.40 Time limits for the submission of factual information are addressed in 19 CFR 351.301, which provides specific time limits based on the type of factual information being submitted. Interested parties should review the regulations prior to submitting factual information in these investigations.

    39See 19 CFR 351.301(b).

    40See 19 CFR 351.301(b)(2).

    Extensions of Time Limits

    Parties may request an extension of time limits before the expiration of a time limit established under 19 CFR 351.301, or as otherwise specified by the Secretary. In general, an extension request will be considered untimely if it is filed after the expiration of the time limit established under 19 CFR 351.301. For submissions that are due from multiple parties simultaneously, an extension request will be considered untimely if it is filed after 10:00 a.m. ET on the due date. Under certain circumstances, we may elect to specify a different time limit by which extension requests will be considered untimely for submissions which are due from multiple parties simultaneously. In such a case, we will inform parties in the letter or memorandum setting forth the deadline (including a specified time) by which extension requests must be filed to be considered timely. An extension request must be made in a separate, stand-alone submission; under limited circumstances we will grant untimely-filed requests for the extension of time limits. Parties should review Extension of Time Limits; Final Rule, 78 FR 57790 (September 20, 2013), available at http://www.thefederalregister.org/fdsys/pkg/FR-2013-09-20/html/2013-22853.htm, prior to submitting factual information in these investigations.

    Certification Requirements

    Any party submitting factual information in an AD or CVD proceeding must certify to the accuracy and completeness of that information.41 Parties must use the certification formats provided in 19 CFR 351.303(g).42 Commerce intends to reject factual submissions if the submitting party does not comply with the applicable certification requirements.

    41See section 782(b) of the Act.

    42See also Certification of Factual Information to Import Administration During Antidumping and Countervailing Duty Proceedings, 78 FR 42678 (July 17, 2013) (Final Rule). Answers to frequently asked questions regarding the Final Rule are available at http://enforcement.trade.gov/tlei/notices/factual_info_final_rule_FAQ_07172013.pdf.

    Notification to Interested Parties

    Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305. On January 22, 2008, Commerce published Antidumping and Countervailing Duty Proceedings: Documents Submission Procedures; APO Procedures, 73 FR 3634 (January 22, 2008). Parties wishing to participate in these investigations should ensure that they meet the requirements of these procedures (e.g., the filing of letters of appearance as discussed at 19 CFR 351.103(d)).

    This notice is issued and published pursuant to sections 702 and 777(i) of the Act and 19 CFR 351.203(c).

    Dated: April 17, 2018. Gary Taverman, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, performing the non-exclusive functions and duties of the Assistant Secretary for Enforcement and Compliance. Appendix Scope of the Investigations

    The merchandise covered by these investigations is glycine at any purity level or grade. This includes glycine of all purity levels, which covers all forms of crude or technical glycine including, but not limited to, sodium glycinate, glycine slurry and any other forms of amino acetic acid or glycine. Subject merchandise also includes glycine and precursors of dried crystalline glycine that are processed in a third country, including, but not limited to, refining or any other processing that would not otherwise remove the merchandise from the scope of the investigations if performed in the country of manufacture of the in-scope glycine or precursors of dried crystalline glycine. Glycine has the Chemical Abstracts Service (CAS) registry number of 56-40-6. Glycine and glycine slurry are classified under Harmonized Tariff Schedule of the United States (HTSUS) subheading 2922.49.4300. Sodium glycinate is classified in the HTSUS under 2922.49.8000. While the HTSUS subheadings and CAS registry number are provided for convenience and customs purposes, the written description of the scope of these investigations is dispositive.

    [FR Doc. 2018-08665 Filed 4-24-18; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration Proposed Information Collection; Comment Request; Papahanaumokuakea Marine National Monument Mokupapapa Discovery Center Exhibit Evaluation AGENCY:

    National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Notice.

    SUMMARY:

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

    DATES:

    Written comments must be submitted on or before June 25, 2018.

    ADDRESSES:

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

    FOR FURTHER INFORMATION CONTACT:

    Requests for additional information or copies of the information collection instrument and instructions should be directed to Andy Collins, at (808) 933-8181 or [email protected]

    SUPPLEMENTARY INFORMATION:

    I. Abstract

    This request is for extension of a currently approved information collection. Mokupapapa Discovery Center (Center) is an outreach arm of Papahanaumokuakea Marine National Monument that reaches 65,000 people each year in Hilo, Hawai`i. The Center was opened fifteen years ago to help raise support for the creation of a National Marine Sanctuary in the Northwestern Hawaiian Islands. Since that time, the area has been proclaimed a Marine National Monument and the main messages we are trying to share with the public have changed to better reflect the new monument status, UNESCO World Heritage status and the joint management by the three co-trustees of the Monument. We therefore are seeking to find out if people visiting our Center are receiving our new messages by conducting an optional exit survey.

    II. Method of Collection

    Surveys will be conducted by in-person interview as people exit the Center. Interviewers will record responses on paper, and later transfer them to an electronic database.

    III. Data

    OMB Control Number: 0648-0582.

    Form Number: None.

    Type of Review: Regular submission (extension of a currently approved collection).

    Affected Public: Individuals or households.

    Estimated Number of Respondents: 250.

    Estimated Time Per Response: 7 minutes.

    Estimated Total Annual Burden Hours: 29.

    Estimated Total Annual Cost to Public: $0 in recordkeeping/reporting costs.

    IV. Request for Comments

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

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

    Dated: April 20, 2018. Sarah Brabson, NOAA PRA Clearance Officer.
    [FR Doc. 2018-08633 Filed 4-24-18; 8:45 am] BILLING CODE 3510-NK-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration RIN 0648-XG143 Pacific Fishery Management Council; Public Meeting AGENCY:

    National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Notice of public meeting (webinar).

    SUMMARY:

    The Pacific Fishery Management Council's (Pacific Council) Ad Hoc Ecosystem Workgroup (EWG) will hold a meeting via webinar, which is open to the public.

    DATES:

    The webinar meeting will be held on Tuesday, May 22, 2018, starting at 9:30 a.m. and lasting approximately three hours.

    ADDRESSES:

    The meeting will be held via webinar. A public listening station is available at the Pacific Council office (address below). To attend the webinar (1) join by visiting this link http://www.gotomeeting.com/online/webinar/join-webinar, (2) enter the Webinar ID: 393-004-851, and (3) enter your name and email address (required). After logging in to the webinar, please (1) dial this TOLL number +1 (213) 929-4232 (not a toll-free number), (2) enter the attendee phone audio access code 654-274-790, and (3) then enter your audio phone pin (shown after joining the webinar). Note: We have disabled Mic/Speakers as an option and require all participants to use a telephone or cell phone to participate. Technical Information and system requirements: PC-based attendees are required to use Windows® 7, Vista, or XP; Mac®-based attendees are required to use Mac OS® X 10.5 or newer; Mobile attendees are required to use iPhone®, iPad®, AndroidTM phone or Android tablet (See https://www.gotomeeting.com/webinar/ipad-iphone-android-webinar-apps). You may send an email to Mr. Kris Kleinschmidt at [email protected] or contact him at (503) 820-2280, extension 411 for technical assistance.

    Council address: Pacific Fishery Management Council, 7700 NE Ambassador Place, Suite 101, Portland, OR 97220.

    FOR FURTHER INFORMATION CONTACT:

    Dr. Kit Dahl, Pacific Council; telephone: (503) 820-2422.

    SUPPLEMENTARY INFORMATION:

    Two primary topics will be discussed by the EWG during this webinar. First, the EWG will discuss and finalize comments on the Pacific Council's draft 2018 Research and Data Needs document. This report communicates the Pacific Council's research and data needs through 2023, fulfilling the Council's responsibilities under section 302(h)(7) of the Magnuson-Stevens Fishery Conservation and Management Act. The Pacific Council will review the draft document and consider comments from its advisory bodies and the public at its June 8-13, 2018 meeting. Second, the EWG will discuss the Fishery Ecosystem Plan Climate and Communities Initiative. The EWG may also review and discuss items on the June 7-13, 2018, Council meeting agenda and other ecosystem-related topics on future Council meeting agendas.

    Although non-emergency issues not contained in the meeting agenda may be discussed, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically listed in this document and any issues arising after publication of this document that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency.

    Special Accommodations

    This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Mr. Kris Kleinschmidt (503) 820-2411 at least 10 business days prior to the meeting date.

    Dated: April 20, 2018. Rey Israel Marquez, Acting Deputy Director, Office of Sustainable Fisheries, National Marine Fisheries Service.
    [FR Doc. 2018-08703 Filed 4-24-18; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration RIN 0648-XG184 North Pacific Fishery Management Council; Public Meeting AGENCY:

    National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Notice of telephonic meeting.

    SUMMARY:

    The North Pacific Fishery Management Council (Council) Observer Advisory Committee Subgroup will meet May 11, 2018.

    DATES:

    The meeting will be held on Friday, May 11, 2018, from 9 a.m. to 12 p.m.

    ADDRESSES:

    The meeting will be held telephonically. Teleconference line: (907) 271-2896.

    Council address: North Pacific Fishery Management Council, 605 W 4th Ave., Suite 306, Anchorage, AK 99501-2252; telephone: (907) 271-2809.

    FOR FURTHER INFORMATION CONTACT:

    Elizabeth Figus, Council staff; telephone: (907)-271-2809.

    SUPPLEMENTARY INFORMATION:

    Agenda Friday, May 11, 2018

    The agenda will include: A discussion of the Observer Program Fee Analysis draft, including an outline, alternatives, and discussion of monitoring objectives.

    The Agenda is subject to change, and the latest version will be posted at http://www.npfmc.org/observer-program/.

    Public Comment

    Public comment letters will be accepted and should be submitted either electronically to Elizabeth Figus, Council staff: [email protected] or through the mail: North Pacific Fishery Management Council, 605 W 4th Ave., Suite 306, Anchorage, AK 99501-2252. In-person oral public testimony will be accepted at the discretion of the chair.

    Special Accommodations

    The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Shannon Gleason at (907) 271-2809 at least 7 working days prior to the meeting date.

    Dated: April 20, 2018. Rey Israel Marquez, Acting Deputy Director, Office of Sustainable Fisheries, National Marine Fisheries Service.
    [FR Doc. 2018-08702 Filed 4-24-18; 8:45 am] BILLING CODE 3510-22-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration RIN 0648-XG186 North Pacific Fishery Management Council; Public Meeting AGENCY:

    National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Notice of public meeting.

    SUMMARY:

    The North Pacific Fishery Management Council (Council) Observer Advisory Committee (OAC) will meet May 16 through May 17, 2018.

    DATES:

    The meeting will be held on Wednesday, May 16, 2018, from 8:15 a.m. to 5:30 p.m. and on Thursday, May 17, 2018, from 8:15 a.m. to 5:30 p.m.

    ADDRESSES:

    The meeting will be held in the Traynor Room, Building 4 at the Alaska Fisheries Science Center, 7700 Sand Point Way NE, Seattle, WA 98115. Teleconference available upon request.

    Council address: North Pacific Fishery Management Council, 605 W 4th Ave, Suite 306, Anchorage, AK 99501-2252; telephone: (907) 271-2809.

    FOR FURTHER INFORMATION CONTACT:

    Elizabeth Figus, Council staff; telephone: (907) 271-2801.

    SUPPLEMENTARY INFORMATION: Agenda Wednesday, May 16 and Thursday, May 17, 2018

    The agenda will include: (a) An update on the EM Workgroup status and Council priorities; (b) review of the NMFS Cost Allocation Policy Directive document; (c) discussion of Observer Program Review Documents; (d) discussion of the Fee Analysis outline and objectives; (e) a review of the Observer Analytical Task status document; (f) a briefing on the observer safety report; and, (g) discussion of scheduling and other issues. The Agenda is subject to change, and the latest version will be posted at http://www.npfmc.org/observer-program/.

    Public Comment

    Public comment letters will be accepted and should be submitted either electronically to Elizabeth Figus, Council staff: [email protected] or through the mail: North Pacific Fishery Management Council, 605 W 4th Ave, Suite 306, Anchorage, AK 99501-2252. In-person oral public testimony will be accepted at the discretion of the chair.

    Special Accommodations

    These meetings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Shannon Gleason at (907) 271-2809 at least 7 working days prior to the meeting date.

    Dated: April 20, 2018. Rey Israel Marquez, Acting Deputy Director, Office of Sustainable Fisheries, National Marine Fisheries Service.
    [FR Doc. 2018-08701 Filed 4-24-18; 8:45 am] BILLING CODE 3510-22-P
    COMMODITY FUTURES TRADING COMMISSION Request for Input on LabCFTC Prize Competitions AGENCY:

    Commodity Futures Trading Commission.

    ACTION:

    Request for input.

    SUMMARY:

    In May 2017, the Commodity Futures Trading Commission (“Commission” or “CFTC”) launched a new initiative, LabCFTC, to spearhead the CFTC's effort to facilitate the development and implementation of market-enhancing financial technologies (“FinTech”). As part of that effort, CFTC staff are exploring opportunities to play a constructive role to stimulate innovation and leverage FinTech solutions that can enhance our regulated markets and help make the Commission more effective and efficient in satisfying its mission. The Science Prize Competition Act (“SPCA”) authorizes the CFTC to invest federal funds in science and early-stage technology research and development as well as in science, technology, engineering, and mathematics education. Under this authority, the CFTC may implement a competition and award prizes to stimulate innovation designed to advance the CFTC's mission. Accordingly, the Science Prize Competition Act may offer a useful mechanism to further the goals of LabCFTC and the CFTC's mission. This Request for Input solicits feedback on focus areas for potential prize competitions, and how competitions could best be structured and administered. The Commission welcomes all public comments.

    DATES:

    Comments must be received on or before July 24, 2018.

    ADDRESSES:

    You may submit comments, identified by the title, “LabCFTC Prize RFI,” by any of the following methods:

    CFTC Website: https://comments.cftc.gov. Follow the instructions to Submit Comments through the website.

    Mail: Send to Christopher Kirkpatrick, Secretary of the Commission, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street NW, Washington, DC 20581.

    Hand Delivery/Courier: Same as Mail, above.

    Please submit comments by only one of these methods.

    All comments should be submitted in English or accompanied by an English translation. Comments will be posted as received to www.cftc.gov. You should submit only information that you wish to make available publicly. If you wish the Commission to consider information that may be exempt from disclosure under the Freedom of Information Act (“FOIA”), a petition for confidential treatment of the exempt information may be submitted according to the procedures established in the Commission's regulations at 17 CFR 145.9.1 The Commission reserves the right, but shall have no obligation, to review, prescreen, filter, redact, refuse, or remove any or all of your submission from www.cftc.gov that it may deem to be inappropriate for publication, such as obscene language. All submissions that have been redacted or removed that contain comments on the merits of the Request for Information will be retained in the public comment file and will be considered as required under the Administrative Procedure Act and other applicable laws, and may be accessible under the FOIA.

    1 17 CFR 145.9. All Commission regulations cited herein are set forth in chapter I of Title 17 of the Code of Federal Regulations.

    FOR FURTHER INFORMATION CONTACT:

    Daniel Gorfine, Director of LabCFTC and Chief Innovation Officer, (202) 418-5625; Brian Trackman, Counsel on FinTech and Innovation, Office of General Counsel, (202) 418-5163; Jorge Herrada, Senior Technical Data Specialist, Office of Data and Technology, (202) 418-5346; or [email protected]

    SUPPLEMENTARY INFORMATION: I. Background A. LabCFTC

    In May 2017, the CFTC launched the LabCFTC initiative to further the CFTC's goal of evolving as a 21st century regulator and keeping pace with technological innovation. LabCFTC is dedicated to understanding and facilitating market-enhancing financial technology (“FinTech”) innovation, promoting fair market competition, and ensuring proactive regulatory excellence. LabCFTC is designed to make the CFTC more accessible to FinTech and regulatory technology (“RegTech”) innovators, and to inform the Commission's understanding of emerging technologies and their regulatory implications.

    Further to that effort, LabCFTC seeks to spur innovation and innovative applications of FinTech through prize competitions as described further below. By focusing attention on aspects of CFTC operations or regulated markets that could benefit from FinTech and actively encouraging development of innovative solutions, LabCFTC can act as a catalyst to drive progress.

    B. FinTech and RegTech Opportunity

    Technology-driven innovation is rapidly transforming the markets CFTC oversees, and the way market participants operate and interact. Examples include automated trading, which now constitutes up to 70 percent of trading on regulated futures markets,2 “big data” capability to enable more sophisticated data analysis and interpretation,3 machine learning and artificial intelligence to guide highly dynamic trade execution,4 “smart” contracts that value themselves and calculate payments in real-time,5 behavioral biometrics that can detect and combat online fraud,6 and blockchain and distributed ledger technologies.7 Shared ledger systems, which hold promise in increasing operational efficiencies (e.g., identity confirmation, KYC/AML compliance, and trade lifecycle management), may also help facilitate real-time, standardized, and lower-cost regulatory reporting, which benefits both market stakeholders and CFTC. Application of self-executing machine logic, often called “smart contracts” could result in the potential decrease of execution risks, more efficient use of trade-related margin and collateral, and the incorporation of automated regulatory compliance provisions into the contract code.

    2 J. Christopher Giancarlo, Chairman, Commodity Futures Trading Commission “Remarks at the Singapore FinTech Festival,” November 15, 2017 (citing a March 2015 report of the CFTC's Office of the Chief Economist “Automated Trading in Futures Markets” that reviewed over 1.5 billion transactions across over 800 products on the Chicago Mercantile Exchange over a two-year period, available at http://www.cftc.gov/idc/groups/public/@economicanalysis/documents/file/oce_automatedtrading.pdf). See also McKinsey & Company and Greenwich Associates study reprinted in Bank for International Settlements, Markets Committee, Electronic Trading in Fixed Income Markets, January 2016, http://www.bis.org/publ/mktc07.pdf.

    3 Trevir Nath, “How Big Data Has Changed Finance,” Investopedia, April 9, 2015, http://www.investopedia.com/articles/active-trading/040915/how-big-data-has-changed-finance.asp; Central Banking Focus Report, Big Data in Central Banks, Central Banking Journal, November 13 2017, https://www.centralbanking.com/content-hub/big-data-in-central-banks-focus-report-2017-3315066; Ciara O'Brien, Irish Firm Siren raises 3m in funding for data investigation technology, The Irish Times, February 8 2018, https://www.irishtimes.com/business/technology/irish-firm-siren-raises-3m-in-funding-for-data-investigation-technology-1.3383335; Andrew Zolli, “After Big Data: The Coming Age of `Big Indicators'”; Stanford Social Innovation Review, January 22, 2018, https://ssir.org/articles/entry/after_big_data_the_coming_age_of_big_indicators.

    4 Tom Upchurch, “Technology: AI and the Spectre of Automation,” Euromoney, August 2016, http://www.euromoney.com/Article/3575461/Technology-AI-and-the-spectre-of-automation.html.

    5 Nigel Farmer, “Making Contracts Smarter,” TabbForum, May 3, 2016, http://tabbforum.com/opinions/making-contracts-smarter?print_preview=true&single=true&ticket=ST-14742885819637-OxE2RQ6CSK3LXd6HsvaWwJ8v3ewjlyh208guDvuC; Jay Cassano, What Are Smart Contracts? Cryptocurrency's Killer App, Fast Company, September 17, 2014, https://www.fastcompany.com/3035723/app-economy/smart-contracts-could-be-cryptocurrencys-killer-app.

    6 Anna Irrera, Experian enlists behavioral biometrics startup to combat fraudsters, Reuters, April 7, 2017, http://www.reuters.com/article/us-experian-fraud-idUSKBN1792XT.

    7 Oscar Williams-Grut, WEF: Blockchain Will Become the `Beating Heart' of Finance, Business Insider, August 12, 2016, http://www.businessinsider.com/world-economic-forum-potential-of-blockchain-in-financial-services-2016-8; see generally William Mougayar, The Business Blockchain: Promise, Practice, and Application of the Next internet Technology (Wiley 2016).

    For market participants, new technologies can improve operational efficiencies, create better workflows, increase transparency, and strengthen compliance. Indeed, emerging financial technologies ranging from blockchain to machine learning to predictive data analytics are already changing the way financial markets operate. And, importantly, for regulators too, including the CFTC, RegTech can help drive more effective and efficient internal operations, as well as surveillance and oversight of regulated markets.8

    8 Remarks of J. Christopher Giancarlo at the Singapore FinTech Festival, May 17, 2017, http://www.cftc.gov/PressRoom/SpeechesTestimony/opagiancarlo32.

    C. Science Prize Competition Act 9

    9 Section 401 of the American Innovation and Competitiveness Act, Public Law 114-329 updated previous authority to sponsor prize competitions under the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3719), subsequently known as the America Competes Act, and renamed the law to be “Science Prize Competition Act.”

    The SPCA authorizes the Chairman of the CFTC to carry out a program to award prizes competitively to stimulate innovation that has the potential to advance the mission of the agency.10 Generally, the subject of the prize competition, eligibility rules to participate, registration process, conduct of the competition, prize, and winner selection criteria must be published in advance.11 Notice must be given on a publicly available Government website such as challenge.gov.12 The head of an agency is required to advertise a prize competition widely to encourage broad participation.13

    10See 15 U.S.C. 3719(b).

    11See 15 U.S.C. 3719(f).

    12See id.

    13See 15 U.S.C. 3719(e).

    A competition may have a cash prize purse or a non-cash prize award.14 To win a cash award, an individual or entity must comply with the competition requirements and be U.S.-based.15 Individuals must be U.S. citizens or a permanent resident of the U.S.16 Private entities must be incorporated in and maintain a primary place of business in the U.S.17 While eligibility to win cash awards is limited to individuals and entities that are U.S. based, as described above, there is no limitation on participation in a competition or eligibility to win a non-cash prize award.

    14See 15 U.S.C. 3719(f)(4). To the extent a competition includes a cash prize, the competition may not commence until the funds to pay out the amount have been appropriated or committed in writing. See 15 U.S.C. 3719(m)(3)(A). The amount of a cash prize purse, if offered, is up to the sponsoring agency; there is no specific amount required.

    15See 15 U.S.C. 3719(g).

    16See 15 U.S.C. 3719(g)(3).

    17See id. Awards may not be won by federal entities or employees acting within the scope of their employment. See 15 U.S.C. 3719(g)(4).

    The SPCA includes guidelines concerning liability and insurance,18 intellectual property rights,19 prize competition judges,20 administering the competition,21 and funding.22 Competitions under the SPCA are not intended to be a substitute for the standard procurement process. Rather, they are aimed at developing solutions to challenges where the solution is not yet well-defined or developed.

    18See 15 U.S.C. 3719(i).

    19See 15 U.S.C. 3719(j).

    20See 15 U.S.C. 3719(k). Judges may come from within or outside the federal government, including the private sector. 15 U.S.C. 3719(k)(1). A judge may not have personal or financial interests in, or be an employee, officer, director, or agent of any entity that is a registered participant in a competition, or have a familial or financial relationship with an individual who is a registered participant. 15 U.S.C. 3719(k)(2). Also, any committee, board, commission, panel, task force, or similar entity, created solely for the purpose of judging prize competitions is exempted from the Federal Advisory Committee Act (5 U.S.C. App.) under 15 U.S.C. 3719(k)(4).

    21See 15 U.S.C. 3719(l).

    22See 15 U.S.C. 3719(m).

    Beyond the basic requirements specified in the SPCA, the Commission has a great deal of flexibility in defining and structuring a competition.23 For example, the competition could be scheduled for a day or two, or instead extend over several weeks. The competition may have one single prize, or interim stages of selection. The competition need not be run in the CFTC's IT environment. Participants could create their submissions in their own environments. Participant submissions in prize competitions could be designated fully public or kept confidential, in whole or part. And the Commission is free to determine the prize, whether to offer a cash prize purse or non-cash prize award. In that regard, the Commission notes that it does not, at this time, anticipate offering a cash purse prize.

    23 The Commission notes that it does not currently anticipate that a competition would involve the use or release of any confidential regulatory or market oversight data. To the extent such types of data might be relevant to a competition, the participants would likely use either alternate, publicly available data sets, fully anonymized, aggregated data, or substitute data.

    II. Request for Input

    The Commission believes that science prize competitions offer an exciting opportunity to encourage and spotlight innovation that can benefit the quality, transparency, and integrity of our markets, the market participants who depend on them, the operations and activities of the CFTC, and broader American public. The Commission has begun considering potential competition topics and potential ways to structure competitions under the auspices of its LabCFTC initiative. The SPCA encourages broad consultation in and outside of government when selecting topics.24 Accordingly, to develop its ideas further and help ensure that competitions achieve their objective of facilitating market-enhancing innovation, the Commission is issuing this Request for Input to gather feedback on potential competition topics as well as on the structure and administration of its prize competitions, i.e., what approach would be most effective. The Commission welcomes any comments, including potential competition topics not discussed here or any other element that a commenter believes should be considered.

    24See 15 U.S.C. 3719(d) (“In selecting topics for prize competitions, the head of an agency shall consult widely both within and outside the Federal Government, and may empanel advisory committees.”).

    A. Potential Prize Competition Topics

    FinTech is rapidly evolving, and there are many areas where innovation and technology have the potential for significant impact. Accordingly, because the scope of FinTech is so broad, the range of potential FinTech prize competitions is expansive. The Commission would like to identify specific challenges and use cases where a prize competition is especially suited to spur the creation and demonstration of innovative solutions. Ideally, a prize competition would both highlight how new technology can benefit the CFTC as well as the derivatives markets we oversee, and also lead to actionable next steps, which could include further use case development, additional research or investment, proofs of concept, and implementation.

    The Commission has given some preliminary consideration to several topics, described below, that may satisfy its stated objectives. These examples are just that: examples. There are many other potential areas where a prize competition or series of competitions under the SPCA might advance the development of beneficial solutions, which could improve market participants' ability to serve the needs of clients, enable the CFTC to better fulfill its mission, or enhance the overall quality and integrity of our markets. Therefore, in addition to feedback on any of the potential competition topics described below, the Commission would appreciate suggestions for additional competition topics.

    The Commission emphasizes that, as noted, this Request for Input is meant to stimulate thinking about potential prize competitions. The Commission is not endorsing any particular topic, nor is the Commission committing to pursue a prize competition or engage in follow-on procurement to implement specific solutions.

    (1) Transaction, Position, and Margin Data and Analysis

    Several potential topics relate to challenges around market data: transaction reporting by market participants, data dissemination by the CFTC, data management and analysis, and data cleansing and harmonization. In each case, innovation driven by new technology has the potential greatly to improve current processes and “output,” enabling both market participants and regulators to engage with data more effectively.

    For example, standardization of forms and processes, simplified reporting mechanisms, shared, comprehensive data ontologies, and new modes of reporting all offer the potential to greatly enhance the accessibility, quality, and utility of market data that is reported to, and disseminated by, the CFTC. Disseminating data reports in machine readable format, new techniques in data visualization or new ways of combining data streams could help make sense of market activity, educate the public on the role of derivatives markets in the broader economy, identify opportunity and risks, and improve the overall quality of our markets. Likewise with respect to data management,25 cleansing,26 and analysis, new technology could help the agency and stakeholders make good use of available market data to gain insight about market interactions, risk flows, and aggregate exposures. A prize competition in any of these areas could thus be useful.

    25 Data management is a broad discipline that defines and governs how an organization makes use of data. It includes such areas as data governance, data architecture, data security management, data quality, reference and master data, meta data, and data transformation.

    26 Data cleansing is vital to making use of data resources. It refers to the process of preparing data for analysis. The CFTC handles numerous data sets that range in complexity. In many cases, the utility of the dataset is reduced because the quality of the data is imperfect. Entries in fields may not be consistent in form or format. Data requirements may be interpreted differently by different respondents (or even within different divisions of the same firm), resulting in different types of entries. Data elements may be entered improperly or inadvertently omitted. Manual data cleansing, however, cannot scale.

    (2) Enhancing Market Transparency and Oversight

    FinTech innovation may enhance market transparency and oversight in a number of ways. Already, the Internet of Things (IoT) is making new kinds of information available that may be relevant to pricing derivatives and assessing market risks. A prize competition could address, for example, how FinTech can be deployed in the derivatives markets to detect behavior or information that may assist the Commission in detecting fraud or abuse.

    A more ambitious competition topic could address leveraging FinTech innovation to enhance the availability of accurate, timely transactional data, including trade prices. Commentators have noted that new technologies have the potential to improve market transparency and oversight at a lower cost.27

    27See, e.g., Dong He et al. IMF Staff Discussion Note, Fintech and Financial Services: Initial Considerations (June 2017), http://www.imf.org/~/media/files/publications/sdn/2017/sdn1705.ashx; “Capital Markets: innovation and the FinTech landscape,” Report of Innovate Finance and EY (2016), http://www.ey.com/Publication/vwLUAssets/EY-capital-markets-innovation-and-the-finTech-landscape/$FILE/EY-capital-markets-innovation-and-the-fintech-landscape.pdf; Jo Ann Barefoot, “Reglabs: Time for a major regulatory experiment?” July 13, 2017, http://www.bankingexchange.com/blogs-3/unconventional-wisdom/item/6940-reglabs-time-for-a-major-regulatory-experiment (“Today's technology is creating a possibility that has never before existed—the opportunity to improve the public policy results of financial regulation, and reduce the costs of achieving them, at the same time.”).

    (3) Systemic Risk Analysis

    The Commission believes it is critical to its core function to successfully monitor and prevent the build-up of systematic risk.28 New technologies can help the Commission discharge this vital responsibility by providing new ways to track and assess risk. Using distributed ledgers, Cloud-based storage, machine learning, and other new technologies could enable new methods for conducting stress tests, for example, and gauging the impact(s) of unforeseen events on the financial system as a whole.

    28 Excessive systemic risk is understood to have been a significant contributing factor to the financial crisis. See, e.g., Ian Goldin and Chris Kutarna, “Risk and Complexity,” Finance and Development September 2017, http://www.imf.org/external/pubs/ft/fandd/2017/09/pdf/goldin.pdf; Chairman Ben S. Bernanke, “Causes of the Recent Financial and Economic Crisis,” Testimony Before the Financial Crisis Inquiry Commission, Washington DC, September 2, 2010, https://www.federalreserve.gov/newsevents/testimony/bernanke20100902a.htm.

    (4) Improving the Accessibility of CFTC Regulations

    A longstanding critique of regulatory frameworks is their complexity. Over time, as regulations continue to evolve, rulesets tend to become more intricate. Updates may be difficult to track and engender unintended consequences. For regulated entities this presents a tremendous compliance challenge. Each entity must know which rules apply to it, understand what those rules require, structure an appropriate compliance program, and keep the program up to date. These challenges may be even more significant for relatively young or lean entities looking to scale their activities in an increasingly fast-moving market. For other market participants, regulators, and the public more broadly, complex regulations can obscure straightforward regulatory goals and impede meaningful review of the overall regulatory framework.

    The Commission believes that technology may offer meaningful opportunities to make the regulatory framework more accessible, reduce burdens and enhance overall compliance.29 There are a variety of potential approaches, including:

    29 Other regulatory authorities are already exploring these possibilities. For example, the UK Financial Conduct Authority hosted an event where participants demonstrated technology to link regulatory obligations to internal policies in a cost effective, automated and auditable fashion. See Yaa Asare, “JWG and ClauseMatch Launch Next Generation Regulatory Policy Management Solution,” https://regtechfs.com/jwg-and-clausematch-launch-next-generation-regulatory-policy-management-solution/.

    • Coding rules to make them machine readable,

    • Creating common ontologies to make rules more understandable and highlight where rules may be inconsistent or diverge,

    • Creating visual, interactive representations of the regulatory framework, that enable linking of related rules and mapping of regulatory requirements to specific function, teams and individuals within a regulated entity, and

    • Developing machines that “digest” rules to determine data and other requirements, as well as ideal compliance approaches for specific entities.

    (5) Strengthening CFTC's Administrative Process

    Technology-based solutions geared to address regulation, regulatory process, and the day-to-day operations of market regulators present the CFTC a meaningful opportunity to leverage innovative FinTech directly. For example, as a market regulator the CFTC's rulemaking process is of vital importance. A key element of that process is the opportunity for public comment. But when the CFTC puts out a rule proposal, the agency may receive hundreds, sometime thousands, of comment letters. While the Commission currently uses some technology solutions, the review process remains labor intensive and could benefit from automation. How can innovative technology make the notice-and-comment process “smarter,” more dynamic, and more effective?

    B. Administration of Prize Competitions

    In addition to comment on potential competition topics, the Commission also seeks public input on the administration of any prize competition. The SPCA provides significant flexibility to agencies in how a prize competition is conducted. The Commission wishes to structure prize competitions to attract broad interest, to be fair to all participants, and to encourage market-enhancing innovation. Broadly, the Commission is interested in how these goals can best be accomplished through a prize competition. We are particularly interested in the following areas:

    (1) Eligibility

    The SPCA requires that prize competition winners be, in the case of entities, U.S. based or, in the case of individuals, U.S. citizens. The Commission seeks input on what additional requirements, if any, should govern participation in a CFTC-sponsored FinTech prize competition.

    (2) Format

    Prize competitions may take many forms. Hackathons, for example, may take place over a short period: one or perhaps a few days.30 During that time, competitors come together to create and submit a solution that meets the challenge presented. By contrast, a FinTech prize competition could be structured to permit competitors to work at their own pace over a longer period, and then submit their solution by a stated deadline. In the case of a CFTC-sponsored FinTech prize competition, the Commission seeks public input on what format may be most suitable.

    30 Generally, a hackathon is an event typically of short duration at which participants engage in collaborative computer programming, often to address a coding challenge or to develop a solution to an identified problem. Federal agencies such as the Department of Health and Human Services have sponsored successful hackathons, for example, the HHS Opioid Code-a-Thon in December 2017, https://www.challenge.gov/challenge/hhs-opioid-code-a-thon/.

    (3) Conditions of Participation

    The Commission is considering what, if any, conditions of participation it should impose around a potential prize competition.

    (4) Advertising

    The Commission is interested in reaching the widest range of potential participants that it can in regard to CFTC-sponsored FinTech prize competitions.

    (5) Evaluation Standards

    Once entries are submitted as part of a competition, they must be reviewed and evaluated to determine a prize winner. The Commission seeks public input on the evaluation process and appropriate standards of evaluation (e.g., how easily might a proposed solution be scaled, how robust is a proposed solution, how resilient, how adaptable to market changes or changes to the regulatory framework, etc.).

    (6) Judges

    As part of a prize competition, judges must be selected to evaluate entries and select the winner(s). The Commission seeks input on the judge selection process and the appropriate mix of judges from among various stakeholder groups: financial market participants, commercial end-users, researchers and academics, FinTech innovators, specialists and experts (e.g., data scientists, technologists, etc.), financial and technology press, government officials, CFTC staff, and members of the general public.

    (7) Prize

    The Commission seeks feedback on the selection of a suitable prize. For example, the Commission could offer a “CFTC Market Innovator of the Year” award to recognize select competition participants. Generally, the Commission seeks input on what type of prize may best encourage meaningful participation that results in real-world solutions relevant to the competition topic. As noted, the Commission does not at this time anticipate providing a cash purse, but notes that under the SPCA, an agency may partner with outside entities which may sponsor cash awards.31

    31See 15 U.S.C. 3719(m).

    Specific Questions for Input

    As noted, the Commission seeks feedback on candidate prize competition topics and on the administration of a prize competition. The Commission's broad goal is to stimulate thinking and highlight efforts to apply new technology in ways that may enhance our markets. In addition to any general input, the Commission is interested in responses to the following:

    Regarding prize competition topic selection:

    1. Are there subject matter areas or specific topics that the Commission should particularly consider or focus on for a potential prize competition?

    In each case, what is the relevant challenge to be addressed?

    In what ways can FinTech innovation potentially address this challenge?

    How would a prize competition spur development, interest, or broader adoption? Please be specific as possible or provide examples where appropriate.

    2. What criteria should the Commission use to select prize competition topics?

    3. Are there subject matter areas or specific topics that are not suitable for a prize competition? Please be specific as possible or provide examples where appropriate.

    4. What competition topics may help illuminate areas where new technology can reduce costs or improve services for market participants and end-users who depend on these markets to manage risk?

    5. What competition topics may highlight areas where the regulatory framework could work better or needs significant revision to accommodate market-enhancing FinTech?

    6. Which existing regulatory compliance or regulatory reporting processes do you feel would most benefit from RegTech? Please be specific as possible or provide examples where appropriate.

    Regarding administration of a prize competition:

    7. What ground rules should govern participation in a CFTC-sponsored FinTech prize competition?

    For example, are there particular eligibility requirements that the agency should adopt?

    Should competition entries be designated “open source,” or should each participant retain full control of its entry and any decision about its availability?

    Should any different rules apply to winning entries?

    8. How should prize competition judges be selected?

    Should the Commission select a single judge or panel to evaluate prize competition submissions?

    If a panel, how large?

    And what is the appropriate mix of stakeholders?

    What additional requirements, if any, should apply to judges?

    9. What general evaluation standards or criteria may be appropriate in the context of a CFTC-sponsored FinTech prize competition? Regarding the evaluation process, are there models or protocols that the Commission might adapt with regard to prize competitions it sponsors?

    10. What type of prize is likely to encourage the greatest participation from a broad range of innovators? What factors should the Commission consider? If the prize is other than a cash purse, what type of prize may be suitable?

    11. Generally, are there any rules, policies, or practices that the Commission should adopt to facilitate a prize competition or encourage participation? For example, what modes of advertising and publicity may be most effective? And, likewise, are there any rules, policies, or practices that could impede participation in a prize completion?

    In providing your responses, please be as specific as possible, and offer examples where appropriate. The Commission encourages all relevant comments; commenters need not address every item.

    III. Conclusion

    The Commission appreciates your time and effort responding to this Request for Input on potential CFTC-sponsored FinTech prize competitions. The information provided by stakeholders will help us refine our understanding and future approach, and identify how the Commission can best structure prize competitions to maximize their positive impact.

    More broadly, the input from this request will further aid the Commission in identifying FinTech trends and areas where emerging technologies and innovation may offer significant potential benefit.

    In that respect, we look forward to continuing to engage proactively with the innovator community and market participants to promote market-enhancing FinTech, to identify opportunities to update our regulatory framework, and to implement new technology-based approaches to fulfill the CFTC's mission on behalf of the American people.

    Issued in Washington, DC, on April 20, 2018, by the Commission. Christopher Kirkpatrick, Secretary of the Commission. Appendix To Request for Input on LabCFTC Prize Competitions—Commission Voting Summary

    On this matter, Chairman Giancarlo and Commissioners Quintenz and Behnam voted in the affirmative. No Commissioner voted in the negative.

    [FR Doc. 2018-08673 Filed 4-24-18; 8:45 am] BILLING CODE 6351-01-P
    DENALI COMMISSION Denali Commission Fiscal Year 2019 Draft Work Plan AGENCY:

    Denali Commission.

    ACTION:

    Notice.

    SUMMARY:

    The Denali Commission (Commission) is an independent Federal agency based on an innovative federal-state partnership designed to provide critical utilities, infrastructure and support for economic development and training in Alaska by delivering federal services in the most cost-effective manner possible. The Commission was created in 1998 with passage of the October 21, 1998 Denali Commission Act (Act). The Act requires that the Commission develop proposed work plans for future spending and that the annual work plan be published in the Federal Register, providing an opportunity for a 30-day period of public review and written comment. This Federal Register notice serves to announce the 30-day opportunity for public comment on the Denali Commission Draft Work Plan for Federal Fiscal Year 2019 (FY 2019).

    DATES:

    Comments and related material to be received by May 31, 2018.

    ADDRESSES:

    Submit comments to the Denali Commission, Attention: Corrine Eilo, 510 L Street, Suite 410, Anchorage, AK 99501.

    FOR FURTHER INFORMATION CONTACT:

    Corrine Eilo, Denali Commission, 510 L Street, Suite 410, Anchorage, AK 99501. Telephone: (907) 271-1414. Email: [email protected].

    Background

    The Denali Commission's mission is to partner with tribal, federal, state, and local governments and collaborate with all Alaskans to improve the effectiveness and efficiency of government services, to build and ensure the operation and maintenance of Alaska's basic infrastructure, and to develop a well-trained labor force employed in a diversified and sustainable economy.

    By creating the Commission, Congress mandated that all parties involved partner together to find new and innovative solutions to the unique infrastructure and economic development challenges in America's most remote communities. Pursuant to the Act, the Commission determines its own basic operating principles and funding criteria on an annual federal fiscal year (October 1 to September 30) basis. The Commission outlines these priorities and funding recommendations in an annual work plan. The FY 2019 Work Plan was developed in the following manner.

    • A workgroup comprised of Denali Commissioners and Commission staff developed a preliminary draft work plan.

    • The preliminary draft work plan was published on Denali.gov for review by the public in advance of public testimony.

    • A public hearing was held to record public comments and recommendations on the preliminary draft work plan.

    • Written comments on the preliminary draft work plan were accepted for another ten days after the public hearing.

    • All public hearing comments and written comments were provided to Commissioners for their review and consideration.

    • Commissioners discussed the preliminary draft work plan in a public meeting and then voted on the work plan during the meeting.

    • The Commissioners forwarded their recommended work plan to the Federal Co-Chair, who then prepared the draft work plan for publication in the Federal Register providing a 30-day period for public review and written comment. During this time, the draft work plan will also be disseminated to Commission program partners including, but not limited to, the Bureau of Indian Affairs (BIA), the Economic Development Administration (EDA), Department of Agriculture—Rural Utilities Service (USDA/RUS), and the State of Alaska.

    • At the conclusion of the Federal Register Public comment period Commission staff provides the Federal Co-Chair with a summary of public comments and recommendations, if any, on the draft work plan.

    • If no revisions are made to the draft, the Federal Co-Chair provides notice of approval of the work plan to the Commissioners, and forwards the work plan to the Secretary of Commerce for approval; or, if there are revisions the Federal Co-Chair provides notice of modifications to the Commissioners for their consideration and approval, and upon receipt of approval from Commissioners, forwards the work plan to the Secretary of Commerce for approval.

    • The Secretary of Commerce approves the work plan.

    • The Federal Co-Chair then approves grants and contracts based upon the approved work plan.

    FY 2019 Appropriations Summary

    The Commission has historically received federal funding from several sources. The two primary sources at this time include the Energy & Water Appropriation Bill (“base” or “discretionary” funds) and an annual allocation from the Trans-Alaska Pipeline Liability (TAPL) fund. The proposed FY 2019 Work Plan assumes the Commission will receive $15,000,000 of base funds, which is the amount referenced in the reauthorization of the Commission passed by Congress in 2016 (ref: Pub. L. 114-322), and a $1,900,000 TAPL allocation based on discussions with the Office of Management and Budget (OMB). Approximately $4,000,000 of the base funds will be used for administrative expenses and non-project program support, leaving $11,000,000 available for program activities. The total base funding shown in the Work Plan also includes an amount typically available from project closeouts and other de-obligations that occur in any given year. Approximately $200,000 of the TAPL funds will be utilized for administrative expenses and non-project program support, leaving $1,700,000 available for program activities. Absent any new specific direction or limitations provided by Congress in the current Energy & Water Appropriations Bill, these funding sources are governed by the following general principles, either by statute or by language in the Work Plan itself:

    • Funds from the Energy & Water Appropriation are eligible for use in all programs.

    • TAPL funds can only be used for bulk fuel related projects and activities.

    • Appropriated funds may be reduced due to Congressional action, rescissions by OMB, and other federal agency actions.

    • All Energy & Water and TAPL investment amounts identified in the work plan, are “up to” amounts, and may be reassigned to other programs included in the current year work plan, if they are not fully expended in a program component area or a specific project.

    • Energy & Water and TAPL funds set aside for administrative expenses that subsequently become available, may be used for program activities included in the current year work plan.

    Denali Commission FY2019 Funding Summary Source Available for
  • program activities
  • Energy & Water Funds: FY 2019 Energy & Water Appropriation 1 $11,000,000 Prior Year Funds 1,000,000 Subtotal 12,000,000 TAPL Funds: FY 2019 Annual Allocation 1,700,000 Grand Total 13,700,000 Notes: 1. If the final appropriation is less than $15 million the Federal Co-Chair shall reduce investments to balance the FY 2019 Work Plan.
    - Program and type of investment Energy & Water TAPL Total Energy Reliability and Security: Diesel Power Plants $3,800,000 $3,800,000 Audits, TA, Community Energy Efficiency Improvements 500,000 500,000 RPSU Maintenance and Improvement Projects 2,200,000 $2,200,000 Improve Administrative and Operation and Maintenance Practices 300,000 300,000 Subtotal 6,800,000 6,800,000 Bulk Fuel Safety and Security: New/Refurbished Facilities $1,200,000 1,200,000 Maintenance and Improvement Projects 300,000 300,000 Improve Administrative and Operation & Maintenance Practices 200,000 200,000 400,000 Subtotal 200,000 1,700,000 1,900,000 Village Infrastructure Protection: Mertarvik 3,000,000 3,000,000 Shishmaref 500,000 500,000 Shaktoolik 500,000 500,000 Kivalina 500,000 500,000 Program Development and Support for other Vulnerable Communities 500,000 500,000 Subtotal 5,000,000 5,000,000 Totals 12,000,000 1,700,000 13,700,000 Energy and Bulk Fuel Programs

    FY 2019 Denali Commission investments in Energy and Bulk Fuel may include:

    • Remote Power System Upgrade (RPSU) projects at locations selected based on need in consultation with the Alaska Energy Authority (AEA) and Alaska Village Electric Cooperative (AVEC) • Bulk Fuel Upgrade (BFU) projects at locations selected based on need in consultation with AEA and AVEC • Rural power system and bulk fuel facility Maintenance and Improvement (M&I) projects at locations selected based on need in consultation with AEA and AVEC • Continued support of the rural power system and bulk fuel facility operator training programs managed by AEA • Continued support of the Sanitation Energy Efficiency Program at the Alaska Native Tribal Health Consortium (ANTHC) Village Infrastructure Protection Program

    In order to fulfill its role as lead federal coordinating agency the Commission staff, in consultation with State, Federal, and other partners, and the referenced communities in particular, proposes the following investments in support of the new Village Infrastructure Protection (VIP) Program. United States Government Accountability Office (GAO) Report 09-551 (http://www.gao.gov/products/GAO-09-551) has been instrumental in charting prospective Commission investments under this program.

    Mertarvik

    The community of Newtok has initiated its relocation to Mertarvik and has started building infrastructure at Mertarvik. The Commission funds summarized above may be used for the following activities:

    • Continued support for the existing Community Relocation Coordinator • Continued support for professional project management and contracting services • Infrastructure development at Mertarvik Shishmaref

    Shishmaref has voted to relocate and is now working to select a new site. The Commission funds summarized above may be used for the following activities:

    • Continued support for the existing Community Relocation Coordinator • New town-site planning and design • Professional project management services Shaktoolik

    The community of Shaktoolik has decided to protect the community in place for now. The Commission funds summarized above may be used for the following activities:

    • Continued support for the existing Community Relocation Coordinator • Administrative support • Match/gap funds for other related activities Kivalina

    Kivalina is considering relocation and has selected a site for a new school. The Commission funds summarized above may be used for the following activities:

    • Continued support for the existing Community Relocation Coordinator • Administrative support • Match/gap funds for other related activities Program Development and Support for Other Vulnerable Communities

    The $500,000 referenced above for this line item in the Workplan may be used for activities such as the following.

    • Continued support for the ETC (Environmentally Threatened Communities) Grant Writing Center of Excellence at the Alaska Native Tribal Health Consortium • Hazard Mitigation Plan related initiatives and projects • Data/threat analyses related to erosion, flooding and permafrost degradation • VIP related coordination, outreach and partner support Joel Neimeyer, Federal Co-Chair.
    [FR Doc. 2018-08632 Filed 4-24-18; 8:45 am] BILLING CODE 3300-01-P
    DEPARTMENT OF EDUCATION Notice Announcing Availability of Funds and Application Deadlines; Hurricane Education Recovery AGENCY:

    Office of Elementary and Secondary Education, Department of Education.

    ACTION:

    Notice.

    SUMMARY:

    The Department of Education (Department) is issuing a notice announcing availability of funds and application deadlines for the Temporary Emergency Impact Aid for Displaced Students (Emergency Impact Aid) and the Assistance for Homeless Children and Youth programs under the Division B, Subdivision 1, Title VIII, “Hurricane Education Recovery,” of Public Law 115-123, the “Bipartisan Budget Act of 2018.”

    DATES:

    Applications Available: April 25, 2018.

    Deadline for Transmittal of State educational agency (SEA) Application for the Emergency Impact Aid program: May 25, 2018.

    Deadline for Transmittal of State educational agency (SEA) Application for the Homeless Children and Youth program: May 25, 2018.

    Deadline for local educational agencies (LEAs) to submit applications to SEAs under the Emergency Impact Aid program: May 15, 2018.

    Deadline for LEAs to submit applications to SEAs under the Assistance for Homeless Children and Youth program: There is no statutory deadline for LEA applications under this program. Each eligible SEA will set a reasonable deadline for the submission of LEA applications.

    ADDRESSES:

    For the addresses for obtaining and submitting an application, please refer to our Common Instructions for Applicants to Department of Education Discretionary Grant Programs, published in the Federal Register on February 12, 2018 (83 FR 6003) and available at www.thefederalregister.org/fdsys/pkg/FR-2018-02-12/pdf/2018-02558.pdf.

    FOR FURTHER INFORMATION CONTACT:

    For additional information on the Emergency Impact Aid program, please contact Francisco Ramirez. Telephone (202) 260-1541. Email: [email protected] For additional information on the Assistance for Homeless Children and Youth program, please contact Peter Eldridge. Telephone (202) 260-2514. 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:

    Full Text of Announcement I. Funding Opportunity Description

    Purpose of Programs: Under the Emergency Impact Aid program, we will award grants to eligible SEAs to enable them to make emergency impact aid payments to eligible LEAs and eligible Bureau of Indian Education (BIE)—funded schools for the cost of educating during the 2017-2018 school year public and non-public school students displaced by Hurricanes Harvey, Irma, and Maria, or the 2017 California wildfires for which a major disaster or emergency has been declared under sections 401 or 501 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170 and 5190) (covered disaster or emergency). Under the Assistance for Homeless Children and Youth program, we will award grants to eligible SEAs to enable them to provide financial assistance to LEAs serving homeless children and youth displaced by a covered disaster or emergency in order to address the educational and related needs of these students in a manner consistent with section 723 of the McKinney-Vento Homeless Assistance Act (McKinney-Vento Act) and with section 106 of title IV of division B of Public Law 109-148.

    Background: This notice announces availability of funds and application deadlines for eligible applicants for two programs: (1) Emergency Impact Aid (CFDA number 84.938C) and (2) the Assistance for Homeless Children and Youth program (CFDA number 84.938B). The amounts awarded under each program will be based on demand and specific data received from eligible applicants.

    Exemption from Rulemaking: These programs are exempt from the rulemaking requirements in section 437 of the General Education Provisions Act (GEPA) (20 U.S.C. 1232) and section 553 of the Administrative Procedure Act (APA) (5 U.S.C. 553), as established in Division B, Subdivision 1, Title VIII, “Hurricane Education Recovery” paragraph (6), of Public Law 115-123, the “Bipartisan Budget Act of 2018.” 132 Stat. 98.

    Program Authority: Division B, Subdivision 1, Title VIII of Public Law 115-123, the “Bipartisan Budget Act of 2018.”

    Note:

    An SEA seeking funding under Emergency Impact Aid and Assistance for Homeless Children and Youth programs must submit a separate application for each program. The data that the SEA provides in each application will be used by the Department to determine allocations under the respective programs.

    Applicable Regulations: (a) The Education Department General Administrative Regulations (EDGAR) in 34 CFR parts 76, 77, 81, 82, 84, 97, 98, and 99. (b) The Office of Management and Budget Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) in 2 CFR part 180, as adopted and amended as regulations of the Department in 2 CFR part 3485. (c) The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR part 200, as adopted and amended as regulations of the Department in 2 CFR part 3474.

    Note:

    The open licensing requirement in 2 CFR 3474.20 does not apply for these programs.

    II. Award Information

    Estimated Available Funds under Emergency Impact Aid program (CFDA number 84.938C): Congress appropriated a combined amount of approximately $2.5 billion for both the Immediate Aid to Restart School Operations (CFDA number 84.938A) and Emergency Impact Aid programs. The amounts awarded under each program will be based on demand and on specific data received from eligible applicants.

    Available Funds under the Assistance for Homeless Children and Youth program (CFDA number 84.938B): $25 million.

    Period of Funding Availability under the Emergency Impact Aid program: SEAs, LEAs, and BIE-funded schools must obligate funds received under this program by December 31, 2018 for expenses incurred during the 2017-2018 school year. SEAs must return to the Department any funds that are not obligated by SEAs, LEAs, or BIE-funded schools by this deadline.

    Period of Funding Availability under the Assistance for Homeless Children and Youth program: Grantees must expend funds within 24 months of the award date. We strongly encourage SEAs to make these funds available to LEAs at the earliest possible date and for LEAs to obligate the funds in a timely fashion to address the immediate needs of homeless students displaced by a covered disaster or emergency.

    III. Eligibility Information

    1. Eligible Applicants: SEAs in any State, including the District of Columbia, the Commonwealth of Puerto Rico, and each of the outlying areas.

    2. Cost Sharing or Matching: These programs do not require cost sharing or matching.

    IV. Application and Submission Information

    1. Application Submission Instructions: For information on how to submit an application please refer to our Common Instructions for Applicants to Department of Education Discretionary Grant Programs, published in the Federal Register on February 12, 2018 (83 FR 6003) and available at www.thefederalregister.org/fdsys/pkg/FR-2018-02-12/pdf/2018-02558.pdf.

    2. Intergovernmental Review: These programs are subject to Executive Order 12372 and the regulations in 34 CFR part 79. However, under 34 CFR 79.8(a), we waive intergovernmental review in order to make awards by the end of FY 2018.

    V. Application Review Information

    1. Student Enrollment Data for the Emergency Impact Aid program: In the Emergency Impact Aid application for SEA funding, we request quarterly data on the numbers of displaced students enrolled in public, non-public, and BIE-funded schools as of four different count dates. SEAs must report separate counts of displaced students with disabilities, displaced English learners without disabilities, and all other displaced students. The Department has identified four suggested quarterly count dates for identifying numbers of eligible displaced students: October 1, 2017; December 1, 2017; February 1, 2018; and April 1, 2018. SEAs may use these dates or select count dates that fall within a 21-day range for each of the quarters, that is, within 10 calendar days before or after these dates. Each SEA must select four specific dates for the quarterly counts and use those dates consistently for all applicants within the SEA.

    SEAs must submit enrollment data for all four quarters of the 2017-18 school year, which may include estimated data for the fourth quarter, in their initial Emergency Impact Aid applications. SEAs that meet the initial deadline must provide any updated enrollment data generally and any unreported fourth quarter data for the 2017-18 school year by June 29, 2018.

    We will use the enrollment data that are included in the SEA applications to make initial payments under the Emergency Impact Aid program.

    We also are aware that it may take some time for SEAs and LEAs to count, retroactively for all four quarters of the 2017-18 school year, all eligible students, including students who subsequently may have moved to other States or LEAs. Therefore, SEAs and LEAs are encouraged to provide their best available estimates of eligible students for each count date in their initial applications, and, in the event that they collect more satisfactory data that were not available at the time of their initial application, to amend their applications if they need to make upward or downward revisions to their initial child counts. The Secretary will make appropriate upward or downward revisions to subsequent payments, or request a refund for any overpayment, based on the final data provided by an SEA. SEAs must submit any application amendments affecting allocations under the Emergency Impact Aid program to the Department no later than June 29, 2018.

    2. Student Enrollment Data for the Assistance for Homeless Children and Youth program: In the Assistance for Homeless Children and Youth SEA application, we request data on: (1) The total number of displaced children and youth, as defined in the authorizing statute, enrolled in public schools in the State during the 2017-2018 school year; (2) the total number of displaced students enrolled in public school who are also homeless, as defined in section 725(2) of the McKinney-Vento Act; and (3) additional information on demonstrated need for funding, including data on the total number of homeless children and youth, as defined in section 725(2) of the McKinney-Vento Act, who were enrolled in public schools in the State during the 2017-18 school year, whose primary nighttime residence changed as a result of the covered disaster or emergency, and who do not meet the definition of displaced student.

    We will use the data included in the SEA application to determine funding amounts.

    3. Other Requirements for Emergency Impact Aid:

    LEAs must make Emergency Impact Aid payments to accounts on behalf of displaced non-public school students within 14 calendar days of receiving payments from their SEAs.

    The Secretary may solicit from any applicant at any time additional information needed to process an application for either program.

    4. Special Funding Rule for Emergency Impact Aid:

    In calculating funding under the Impact Aid Basic Support Payments program, authorized under section 7003 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7703) for an eligible LEA that receives an Emergency Impact Aid payment, the Secretary shall not count displaced students served by such agency for whom an Emergency Impact Aid payment is received under this section, nor shall such students be counted for the purpose of calculating the total number of children in average daily attendance at the schools served by such agency as provided in section 7003(b)(3)(B)(i) of such Act (20 U.S.C. 7703(b)(3)(B)(i)).

    5. Risk Assessment and Grant Conditions: Consistent with 2 CFR 200.205, before awarding grants under these programs the Department conducts a review of the risks posed by applicants. Under 2 CFR 3474.10, the Secretary may impose specific conditions and, in appropriate circumstances, high-risk conditions on a grant if the applicant or grantee is not financially stable; has a history of unsatisfactory performance; has a financial or other management system that does not meet the standards in 2 CFR part 200, subpart D; has not fulfilled the conditions of a prior grant; or is otherwise not responsible.

    6. Additional Monitoring: The “Bipartisan Budget Act of 2018” designates this program to be “susceptible to significant improper payments” for purposes of the Improper Payments Information Act of 2002 (31 U.S.C. 3321 note). See Public Law 115-123, the “Bipartisan Budget Act of 2018,” Division B, Subdivision 1, Title XII, § 21208(a), Feb. 9, 2018; 132 Stat. 108. Under the statute, once any of these programs expends more than $10,000,000, it will result in additional requirements for grantees under the program, including making expenditure information and documentation available for review by the Department, starting with the Fiscal Year 2019 reporting period. We will provide additional information about this requirement after we make awards, providing advanced notice to ensure grantees understand their responsibilities for documenting all expenditures of Emergency Impact Aid and Homeless Children and Youth funds. We further note that, in general, these documentation requirements are identical to those ordinarily required for all Federal education program expenditures; the primary impact of the Improper Payments Information Act will be increased review of this documentation.

    VI. Award Administration Information

    1. Award Notices: If you receive a grant award under the Emergency Impact Aid or Assistance for Homeless Children and Youth program, we will notify your U.S. Representative and U.S. Senators and send you a Grant Award Notification (GAN); or we may send you an email containing a link to access an electronic version of your GAN. We may also notify you informally.

    2. Reporting: (a) If you apply for a grant under these programs, you must ensure that you have in place the necessary processes and systems to comply with the reporting requirements in 2 CFR part 170 should you receive funding. This does not apply if you have an exception under 2 CFR 170.110(b).

    (b) At the end of your project period, you must submit a final performance report, including financial information, as directed by the Secretary. The Secretary may also require more frequent performance reports under 34 CFR 75.720(c).

    VII. Other Information

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

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

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

    Dated: April 20, 2018. Jason Botel, Principal Deputy Assistant Secretary Delegated the Authority to Perform the Functions and Duties of Assistant Secretary for Elementary and Secondary Education.
    [FR Doc. 2018-08700 Filed 4-24-18; 8:45 am] BILLING CODE 4000-01-P
    DEPARTMENT OF ENERGY U.S. Energy Information Administration Agency Information Collection Extension AGENCY:

    U.S. Energy Information Administration (EIA), U.S. Department of Energy (DOE).

    ACTION:

    Notice.

    SUMMARY:

    EIA submitted an information collection request for extension as required by the Paperwork Reduction Act of 1995. The information collection requests a three-year extension, with no changes, of its Uranium Data Program, OMB Control Number 1905-0160. The Uranium Data Program collects data on domestic uranium supply and demand activities, including production, exploration and development, trade, purchases and sales available to the U.S. The users of these data include Congress, Executive Branch agencies, the nuclear and uranium industry, electric power industry, and the public.

    DATES:

    Comments on this information collection must be received no later than May 25, 2018. If you anticipate any difficulties in submitting your comments by the deadline, contact the DOE Desk Officer at 202-395-4718.

    ADDRESSES:

    Written comments should be sent to DOE Desk Officer: James Tyree, Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 9249, 735 17th Street NW, Washington, DC 20503, [email protected] and to Tim Shear, U.S. Department of Energy, U.S. Energy Information Administration, 1000 Independence Ave. SW, Washington, DC 20585, [email protected].

    FOR FURTHER INFORMATION CONTACT:

    Requests for additional information or copies of the information collection instrument and instructions, send your request to Tim Shear at 202-586-0403 or email it to [email protected] You can view Form EIA-851A Domestic Uranium Production Report (Annual), Form EIA-851Q Domestic Uranium Production Report (Quarterly), and Form EIA-858 Uranium Marketing Annual Survey online at https://www.eia.gov/survey.

    SUPPLEMENTARY INFORMATION:

    This information collection request contains:

    (1) OMB No. 1905-0160;

    (2) Information Collection Request Title: Uranium Data Program;

    (3) Type of Request: Three-year extension;

    (4) Purpose: The Uranium Data Program includes three forms. Form EIA-851A collects annual data from the U.S. uranium industry on uranium milling and processing, uranium feed sources, uranium mining, employment, drilling, expenditures, and uranium reserves. Form EIA-851Q collects monthly data from the U.S. uranium industry on uranium production and sources (mines and other) and is published on a quarterly basis. Form EIA-858 collects annual data from the U.S. uranium market on uranium contracts and deliveries, inventories, enrichment services purchased, uranium in fuel assemblies, feed deliveries to enrichers, and existing unfilled market requirements for the current year and the following ten years.

    (5) Annual Estimated Number of Respondents: 124;

    (6) Annual Estimated Number of Total Responses: 169;

    (7) Annual Estimated Number of Burden Hours: 1,200;

    (8) Annual Estimated Reporting and Recordkeeping Cost Burden: The cost of the burden hours is estimated to be $90,828 (1,200 burden hours times $75.69 per hour). EIA estimates that there are no additional costs to respondents associated with the surveys other than the costs associated with the burden hours.

    Statutory Authority:

    Section 13(b) of the Federal Energy Administration Act of 1974, Pub. L. 93-275, codified as 15 U.S.C. 772(b) and the DOE Organization Act of 1977, Pub. L. 95-91, codified at 42 U.S.C. 7101 et seq.

    Issued in Washington, DC, on April 17, 2018. Nanda Srinivasan Director, Office of Survey Development and Statistical Integration U. S. Energy Information Administration.
    [FR Doc. 2018-08696 Filed 4-24-18; 8:45 am] BILLING CODE 6450-01-P
    DEPARTMENT OF ENERGY Federal Energy Regulatory Commission Notice of Commissioner and Staff Attendance at North American Electric Reliability Corporation Meetings

    The Federal Energy Regulatory Commission hereby gives notice that members of the Commission and/or Commission staff may attend the following meetings:

    North American Electric Reliability Corporation Member Representatives Committee and Board of Trustees Meetings Board of Trustees Corporate Governance and Human Resources Committee, Finance and Audit Committee, Compliance Committee, and Technology and Security Committee Meetings

    The Ritz-Carlton, Pentagon City, 1250 South Hayes Street, Arlington, VA 22202.

    May 9 (8:00 a.m.-5:00 p.m. eastern time) and May 10 (8:30 a.m.-12:00 p.m. eastern time), 2018

    Further information regarding these meetings may be found at: http://www.nerc.com/Pages/Calendar.aspx.

    The discussions at the meetings, which are open to the public, may address matters at issue in the following Commission proceedings:

    Docket No. RR17-6, North American Electric Reliability Corporation

    For further information, please contact Jonathan First, 202-502-8529, or [email protected].

    Dated: April 19, 2018. Kimberly D. Bose, Secretary.
    [FR Doc. 2018-08672 Filed 4-24-18; 8:45 am] BILLING CODE 6717-01-P
    DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket Nos. CP17-40-000, CP17-40-001] Spire STL Pipeline, LLC; Notice Granting Late Interventions

    On February 6, 2017, in Docket No. CP17-40-000, the Commission issued public notice of Spire STL Pipeline, LLC's (Spire) application requesting approval to construct and operate a pipeline project, which would include: (i) The construction of approximately 59 miles of a new greenfield, 24-inch diameter pipeline; (ii) the acquisition of approximately seven miles of existing Line 880, currently owned by Spire Missouri Inc. (Spire Missouri); 1 and (iii) minor modifications to Line 880 after it is acquired. This notice set February 27, 2017, as the deadline for motions to intervene.

    1 Spire Missouri Inc. was formerly known as Laclede Gas Company.

    On May 1, 2017, in Docket No. CP17-40-001, the Commission issued public notice of Spire's amendment to its application to propose a route alternative. Instead of acquiring and refurbishing Spire Missouri's Line 880, Spire's amended application proposes to construct a new six-mile, 24-inch diameter pipeline for the final segment of its proposal (referred to as the North County Extension). This notice set May 22, 2017, as the deadline for motions to intervene.

    Multiple motions to intervene out of time were filed between the intervention deadlines and December 19, 2017. Here, because the deadline for filing a timely intervention passed before the Commission announced its new policy governing late interventions in Tennessee Gas Pipeline Company, L.L.C., 2 the late motions to intervene are granted.3

    2Tennessee Gas Pipeline Co., L.L.C., 162 FERC 61,167, at P 51 (2018).

    3 18 CFR 385.214(d) (2017).

    Dated: April 19, 2018. Kimberly D. Bose, Secretary.
    [FR Doc. 2018-08671 Filed 4-24-18; 8:45 am] BILLING CODE 6717-01-P
    DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket Nos. PR17-60-001; PR17-60-002] Atmos Pipeline-Texas; Notice of Technical Conference

    Take notice that an informal technical conference concerning the above-captioned proceedings will be convened by phone on May 2, 2018, at 2:00 p.m. (EDT). The purpose of the teleconference will be to discuss comments filed in the proceeding.

    All interested parties are invited to participate by phone. Please email Deirdra Archie at [email protected] or call (202) 502-6819 by Tuesday, May 1, 2018, to RSVP and to receive specific instructions on how to participate.

    Dated: April 19, 2018. Nathaniel J. Davis, Sr., Deputy Secretary.
    [FR Doc. 2018-08613 Filed 4-24-18; 8:45 am] BILLING CODE 6717-01-P
    DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket No. IC18-9-000] Commission Information Collection Activities (FERC-725x); Comment Request AGENCY:

    Federal Energy Regulatory Commission, Department of Energy.

    ACTION:

    Comment request.

    SUMMARY:

    In compliance with the requirements of the Paperwork Reduction Act of 1995, the Federal Energy Regulatory Commission (Commission or FERC) is submitting its information collection FERC-725X (Mandatory Reliability Standards: Voltage and Reactive (VAR) Standards) to the Office of Management and Budget (OMB) for review of the information collection requirements. Any interested person may file comments directly with OMB and should address a copy of those comments to the Commission as explained below. The Commission previously issued a Notice in the Federal Register requesting public comments. The Commission received no comments on the FERC-725X and is making this notation in its submittal to OMB.

    DATES:

    Comments on the collection of information are due by May 25, 2018.

    ADDRESSES:

    Comments filed with OMB, identified by the OMB Control No. 1902-0278, should be sent via email to the Office of Information and Regulatory Affairs: [email protected] Attention: Federal Energy Regulatory Commission Desk Officer. The Desk Officer may also be reached via telephone at 202-395-8528.

    A copy of the comments should also be sent to the Commission, in Docket No. IC18-9-000, by either of the following methods:

    eFiling at Commission's website: http://www.ferc.gov/docs-filing/efiling.asp.

    Mail/Hand Delivery/Courier: Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street NE, Washington, DC 20426.

    Instructions: All submissions must be formatted and filed in accordance with submission guidelines at: http://www.ferc.gov/help/submission-guide.asp. For user assistance contact FERC Online Support by email at [email protected], or by phone at: (866) 208-3676 (toll-free), or (202) 502-8659 for TTY.

    Docket: Users interested in receiving automatic notification of activity in this docket or in viewing/downloading comments and issuances in this docket may do so at http://www.ferc.gov/docs-filing/docs-filing.asp.

    FOR FURTHER INFORMATION CONTACT:

    Ellen Brown may be reached by email at [email protected], by telephone at (202) 502-8663, and by fax at (202) 273-0873.

    SUPPLEMENTARY INFORMATION:

    Title: FERC-725X, Mandatory Reliability Standards: Voltage and Reactive (VAR) Standards.

    OMB Control No.: 1902-0278.

    Type of Request: Three-year extension of the FERC-725X information collection requirements with no changes to the reporting requirements.

    Abstract: Pursuant to Section 215 of the Federal Power Act (FPA), NERC established the Voltage and Reactive (VAR) group of Reliability Standards, which consists of two continent-wide Reliability Standards, VAR-001-4 and VAR-002-3.1 These two standards were designed to maintain voltage stability on the Bulk-Power System, protect transmission, generation, distribution, and customer equipment, and support the reliable operation of the Bulk-Power System. Voltage stability is the ability of a power system to maintain acceptable voltage levels throughout the system under normal operating conditions and following a disturbance. Failure to maintain acceptable voltage levels (i.e., voltage levels become too high or too low) may cause violations of System Operating Limits (SOLs) and Interconnection Reliability Operating Limits (IROLs), resulting in damage to Bulk-Power System equipment, and thereby threaten the reliable operation of the Bulk-Power System.

    1 FERC approved these standards in the Order in Docket No. RD14-11-000 (issued on 8/1/2014).

    Reliability Standard VAR-001-4  2

    2 Applies to generation operators only.

    Reliability Standard VAR-001-4 contains the following requirements:

    • Specify a system-wide voltage schedule (which is either a range or a target value with an associated tolerance band) as part of its plan to operate within SOLs and IROLs, and to provide the voltage schedule to its Reliability Coordinator and adjacent Transmission Operators upon request (Requirement R1);

    • Schedule sufficient reactive resources to regulate voltage levels (Requirement R2);

    • Operate or direct the operation of devices to regulate transmission voltage and reactive flows (Requirement R3);

    • Develop a set of criteria to exempt generators from certain requirements under Reliability Standard VAR-002-3 related to voltage or Reactive Power schedules, automatic voltage regulations, and notification (Requirement R4);

    • Specify a voltage or Reactive Power schedule (which is either a range or a target value with an associated tolerance band) for generators at either the high or low voltage side of the generator step-up transformer, provide the schedule to the associated Generator Operator, direct the Generator Operator to comply with that schedule in automatic voltage control mode, provide the Generator Operator the notification requirements for deviating from the schedule, and, if requested, provide the Generator Operator the criteria used to develop the schedule (Requirement R5); and

    • Communicate step-up transformer tap changes, the time frame for completion, and the justification for these changes to Generator Owners (Requirement R6).

    Reliability Standard VAR-002-3 3

    3 Applies to transmission operators only.

    Reliability Standard VAR-002-3 contains the following requirements:

    • Operate each of its generators connected to the interconnected transmission system in automatic voltage control mode or in a different control mode as instructed by the Transmission Operator, unless the Generator Operator (1) is exempted pursuant to the criteria developed under VAR-001-4, Requirement R4, or (2) makes certain notifications to the Transmission Operator specifying the reasons it cannot so operate (Requirement R1);

    • Maintain the Transmission Operator's generator voltage or Reactive Power schedule, unless the Generator Operator (1) is exempted pursuant to the criteria developed under VAR-001-4, Requirement R4, or (2) complies with the notification requirements for deviations as established by the Transmission Owner pursuant to Requirement R5 in VAR-001-4 (Requirement R2);

    • Notify the Transmission Operator of a change in status of its voltage controlling device within 30 minutes, unless the status is restored within that time period (Requirement R3);

    • Notify the Transmission Operator of a change in reactive capability due to factors other than those described in VAR-002-3, Requirement R3 within 30 minutes unless the capability has been restored during that time period (Requirement R4).

    • Provide information on its step-up transformers and auxiliary transformers within 30 days of a request from the Transmission Operator or Transmission Planner (Requirement R5); and

    • Comply with the Transmission Operator's step-up transformer tap change directives unless compliance would violate safety, an equipment rating, or applicable laws, rules or regulations (Requirement R6).

    Type of Respondents: Generator operators and transmission operators.

    Estimate of Annual Burden:4 The Commission estimates the annual public reporting burden for the information collection as:

    4 Burden is defined as the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. For further explanation of what is included in the information collection burden, reference 5 Code of Federal Regulations 1320.3.

    5 TOP = transmission operator; GOP = generator operators.

    6 The estimate for hourly cost is $68.12/hour. This figure is the average salary plus benefits for an electrical engineer (Occupation Code: 17-2071) from the Bureau of Labor Statistics at https://www.bls.gov/oes/current/naics2_22.htm.

    FERC-725X, Mandatory Reliability Standards: Voltage and Reactive (VAR) Standards Number of
  • respondents 5
  • Annual
  • number of
  • responses per
  • respondent
  • Total number
  • of responses
  • Average
  • Burden &
  • Cost per
  • response  6
  • Total annual
  • burden hours
  • & total
  • annual Cost
  • Cost per
  • respondent
  • ($)
  • (1) (2) (1) * (2) = (3) (4) (3) * (4) = (5) (5) ÷ (1) VAR-001-4 (Requirement R1-R6) 181 (TOP) 1 181 160 hrs.; $10,899.20 28,960 hrs.; $1,972,755 $10,899.20 VAR-002-3 (Requirement R1) 944 (GOP) 1 944 80 hrs.; 5,449.60 75,520 hrs.; $5,144,422 5,449.60 VAR-002-3 (Requirement R2-R6) 944 (GOP) 1 944 120 hrs.; $8,174.40 113,280 hrs.; $7,716,634 8,174.40 Total 2,069 217,760 hrs.; $14,833,811

    Comments: Comments are invited on: (1) Whether the collection of information is necessary for the proper performance of the functions of the Commission, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of the burden and cost of the collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information collection; and (4) ways to minimize the burden of the collection of information on those who are to respond, including the use of automated collection techniques or other forms of information technology.

    Dated: April 19, 2018. Kimberly D. Bose, Secretary.
    [FR Doc. 2018-08670 Filed 4-24-18; 8:45 am] BILLING CODE 6717-01-P
    DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket No. PL18-1-000] Certification of New Interstate Natural Gas Facilities AGENCY:

    Federal Energy Regulatory Commission, Department of Energy.

    ACTION:

    Notice of Inquiry.

    SUMMARY:

    In this Notice of Inquiry, the Federal Energy Regulatory Commission (Commission) seeks information and stakeholder perspectives to help the Commission explore whether, and if so how, it should revise its approach under its currently effective policy statement on the certification of new natural gas transportation facilities to determine whether a proposed natural gas project is or will be required by the present or future public convenience and necessity, as that standard is established in section 7 of the Natural Gas Act.

    DATES:

    Comments are due June 25, 2018.

    ADDRESSES:

    Comments, identified by docket number, may be filed in the following ways:

    Electronic Filing through http://www.ferc.gov. Documents created electronically using word processing software should be filed in native applications or print-to-PDF format and not in a scanned format.

    Mail/Hand Delivery: Those unable to file electronically may mail or hand-deliver comments to: Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street NE, Washington, DC 20426.

    Instructions: For detailed instructions on submitting comments and additional information on the rulemaking process, see the Comment Procedures Section of this document.

    FOR FURTHER INFORMATION CONTACT:

    Thomas Chandler (Legal Information), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, 202-502-6699. Maggie Suter (Technical Information), Office of Energy Projects, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, 202-502-6463. Caroline Wozniak (Technical Information), Office of Energy Market Regulation, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, 202-502-8931. Brian White (Technical Information), Office of Energy Market Regulation, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, 202-502-8332. SUPPLEMENTARY INFORMATION:

    1. In this Notice of Inquiry, the Commission seeks information and stakeholder perspectives to help the Commission explore whether, and if so how, it should revise its approach under its currently effective policy statement on the certification of new natural gas transportation facilities (Policy Statement) 1 to determine whether a proposed natural gas project is or will be required by the present or future public convenience and necessity, as that standard is established in section 7 of the Natural Gas Act (NGA).2 Specifically, the Commission seeks input on whether, and if so how, the Commission should adjust: (1) Its methodology for determining whether there is a need for a proposed project, including the Commission's consideration of precedent agreements and contracts for service as evidence of such need; (2) its consideration of the potential exercise of eminent domain and of landowner interests related to a proposed project; and (3) its evaluation of the environmental impact of a proposed project. Finally, the Commission seeks input on whether there are specific changes the Commission could consider implementing to improve the efficiency and effectiveness of its certificate processes including pre-filing, post-filing, and post-order issuance.

    1Certification of New Interstate Natural Gas Pipeline Facilities, 88 FERC ¶ 61,227 (1999), clarified, 90 FERC ¶ 61,128, further clarified, 92 FERC ¶ 61,094 (2000) (Policy Statement).

    2 15 U.S.C. 717f.

    2. Nineteen years have passed since the Commission issued the Policy Statement to describe the criteria and analytical steps that the Commission uses to balance a proposed natural gas pipeline project's public benefits against its potential adverse consequences. That period has seen significant changes, such as: (1) A revolution in natural gas production technology leading to dramatic increases in production; (2) new areas of major natural gas production; (3) flows on pipeline systems becoming bidirectional or reversing; (4) customers routinely entering into long-term precedent agreements for firm service during the formative stage of potential projects and the use of those precedent agreements as applicants' principal evidence of the need for their projects; (5) the increased use of natural gas as a fuel source for electric generation, resulting in a closer relationship between natural gas transportation and natural gas-fired electric generation; (6) increased concerns expressed by landowners and communities potentially affected 3 by proposed projects; (7) an increased interest regarding the Commission's evaluation of the impact that greenhouse gas (GHG) emissions associated with a proposed project have on global climate change; (8) an increased focus on environmental concerns within the NGA public interest determination; and (9) a desire to generally expand or limit the Commission's evaluation under the National Environmental Policy Act of 1969 (NEPA).4

    3 The total miles of interstate natural gas pipeline authorized by the Commission on an annual basis has fluctuated over time, but in recent years reached a high of 2,739 miles in 2017. See generally Federal Energy Regulatory Commission, 2017 State of the Markets Report, at 4 (Apr. 2018), www.ferc.gov/market-oversight/market-oversight.asp (providing the number of approved pipelines projects and miles for 2017).

    4 42 U.S.C. 4332-4370f.

    3. The Commission's aim in this proceeding is the same as in the Policy Statement: “to appropriately consider the enhancement of competitive transportation alternatives, the possibility of over building, the avoidance of unnecessary disruption of the environment, and the unneeded exercise of eminent domain.” 5 In issuing this Notice of Inquiry, the Commission seeks information to examine the Policy Statement and its application, as well as the structure and scope of the Commission's environmental analysis of proposed natural gas projects. Further, it is the Commission's desire to improve the transparency, timing, and predictability of the Commission's certification process. To these ends, we encourage commenters to identify, with specificity, any perceived issues with the Commission's current analytical and procedural approaches and to provide detailed recommendations to address these issues.

    5 Policy Statement, 88 FERC ¶ 61,227 at 61,737.

    4. During the pendency of this proceeding, the Commission intends to continue to process natural gas facility matters before it consistent with the Policy Statement, and to make determinations on the issues raised in those proceedings on a case-by-case basis.6 Should the Commission decide to generally revise its procedures as a result of this proceeding, it will address at that time how and when those changes will be implemented. The Commission will decide any next steps with regard to this review of the Policy Statement after the Commission has reviewed the comments filed in response to this Notice of Inquiry.

    6 The Commission is aware that some of the issues raised in this Notice of Inquiry may overlap with issues raised in pending matters. In this Notice of Inquiry proceeding, the Commission will consider only generic issues, and will not consider any comments that refer to open, contested Commission proceedings.

    I. Background A. The Natural Gas Act of 1938

    5. The NGA declares “that the business of transporting and selling natural gas for ultimate distribution to the public is affected with a public interest, and that Federal regulation in matters relating to the transportation of natural gas and the sale thereof in interstate and foreign commerce is necessary in the public interest.” 7 NGA section 7(c) requires that any person seeking to construct or operate a facility for the transportation of natural gas in interstate commerce must obtain a certificate of public convenience and necessity from the Commission.8 Under NGA section 7(e), the Commission shall issue a certificate to any qualified applicant upon finding that the construction and operation of the proposed project—whether pipeline, storage, or liquefaction facilities—“is or will be required by the present or future public convenience and necessity.” 9 The Commission's regulations provide for public notice and the opportunity to intervene in certificate proceedings to comment on or protest an application, and to participate in the environmental review process.10 If an applicant receives a certificate from the Commission, NGA section 7(h) authorizes the certificate holder to acquire the property rights necessary to construct and operate its project by use of eminent domain if it cannot reach a voluntary agreement with a landowner.11

    7 15 U.S.C. 717(a).

    8Id. 717f(c)(1)(A).

    9Id. 717f(e).

    10See generally 18 CFR 157.1-157.22 (regulations governing applications); id. pt. 380 (implementing NEPA, the Endangered Species Act, and the National Historic Preservation Act, and prescribing environmental reports for Natural Gas Act applications).

    11 15 U.S.C. 717f(h).

    6. The public convenience and necessity standard encompasses all factors bearing on the public interest.12 The words “public interest,” however, are “not a broad license to promote the general public welfare.” 13 The Supreme Court has stated that:

    12Atl. Refining Co. v. Pub. Serv. Comm'n of N.Y., 360 U.S. 378, 391 (1959).

    13NAACP v. Fed. Power Comm'n, 425 U.S. 662, 669-70 (1976).

    in order to give content and meaning to the words `public interest' as used in the [Federal] Power and [Natural] Gas Acts, it is necessary to look to the purposes for which the Acts were adopted. In the case of the Power and Gas Acts it is clear that the principal purpose of those Acts was to encourage the orderly development of plentiful supplies of electricity and natural gas at reasonable prices.14

    14Id.

    7. As part of its decision-making process, the Commission, in accord with the Policy Statement, determines whether there is a need for a proposed project. This analysis is distinct from that required by the Council on Environmental Quality (CEQ) regulations, which specify that environmental documents contain a “purpose and need statement” used to determine the objectives of the proposed action and then to identify and consider reasonable alternative actions.15 Under the NGA, the Commission will take into account all information in the record from the applicant, parties to the proceeding, commenters, and the environmental document to determine whether a proposed project is required by the public convenience and necessity.16

    15 40 CFR 1502.13.

    16Fed. Power Comm'n v. Transcontinental Gas Pipe Line Corp., 365 U.S. 1, 23 (1961).

    8. The Commission's powers under NGA section 7 are limited. The Commission can issue a certificate for a proposed project, subject to “such reasonable terms and conditions as the public convenience and necessity may require.” 17 The Commission can deny an application if, and only if, a balancing of all of the factors weighs against authorization of the proposed project.18 The Policy Statement explains that relevant factors reflecting the need for the project might include, but would not be limited to, precedent agreements, demand projections, potential cost savings to consumers, or a comparison of projected demand with the amount of capacity currently serving the market while adverse effects include economic, competitive, environmental, or other effects on the relevant interests.19 We note the Commission only has authority over facilities for the transportation of natural gas in interstate commerce. The Commission has no authority to certificate intrastate facilities or facilities for the production, gathering, or local distribution of natural gas.20 Nor does the Commission have jurisdiction over facilities used for the generation of electric energy.21

    17 15 U.S.C. 717f(e).

    18See, e.g., Transcontinental Gas Pipe Line Corp., 365 U.S. at 17 (the Commission “can only exercise a veto power over proposed transportation and it can only do this when a balance of all the circumstances weighs against certification”).

    19 Policy Statement, 88 FERC ¶ 61,227 at 61,747.

    20 NGA section 1(b) states that Commission authority applies to interstate transportation of natural gas and sales for resale, “but shall not apply to any other transportation or sale of natural gas or to the local distribution of natural gas or to the facilities used for such distribution or to the production or gathering of natural gas.” 15 U.S.C. 717(b).

    21 Section 201 of the Federal Power Act states, the Commission “shall not have jurisdiction, except as specifically provided in this Part and the Part next following, over facilities used for the generation of electric energy.” 16 U.S.C. 824.

    B. The National Environmental Policy Act of 1969

    9. The Commission's consideration of an application triggers environmental review under NEPA.22 NEPA and its implementing regulations require that before taking a major action, such as action on an application for a natural gas project, an agency must take a “hard look” at the environmental consequences of the proposed action and at alternatives, and disclose its analysis to the public.23 Regulations issued by the CEQ to implement NEPA 24 require agencies, including the Commission, to consider the environmental impacts of a proposed action, generally by preparing either an Environmental Assessment (EA) or an Environmental Impact Statement (EIS).25 The requirements of NEPA are procedural: They are intended to disclose impacts and allow for informed decision-making, but do not mandate a particular result or give preeminent weight to environmental considerations.26

    22 42 U.S.C. 4332(2)(C).

    23Baltimore Gas & Elec. Co. v. Nat. Res. Defense Council, Inc., 462 U.S. 87, 97 (1983) (discussing the twin aims of NEPA).

    24 40 CFR 1500.1-1508.28.

    25Id. 1501.4 (detailing when to prepare an EA versus an EIS).

    26Robertson v. Methow Valley Citizen's Council, 490 U.S. 332, 350 (1989); see also Baltimore Gas & Elec. Co., 462 U.S. at 97 (citing Stryckers' Bay Neighborhood Council v. Karlen, 444 U.S. 223, 227 (1980)).

    10. An agency's environmental document must include a statement to “briefly specify the underlying purpose and need to which the agency is responding in proposing the alternatives including the proposed action.” 27 Agencies use the purpose and need statement to define the objectives of a proposed action and then to identify and consider reasonable alternatives.28 Agencies consider alternatives “that are practical or feasible from the technical and economic standpoint and using common sense, rather than simply desirable from the standpoint of the applicant.” 29 An agency need only evaluate alternatives that can satisfy the purpose and need of the proposed project, and the evaluation is shaped by the application and the function that the agency plays in the decisional process.30 Alternatives that are not environmentally preferable, not able to provide equivalent services, uneconomic, speculative ventures as opposed to planned projects, or otherwise inadequate to function as a serviceable alternative to the proposed project may be eliminated so long as the agency briefly discusses the reasons for the elimination.31

    27 40 CFR 1508.9 (describing requirements for an EA).

    28Colo. Envtl. Coal. v. Dombeck, 185 F.3d 1162, 1175 (10th Cir. 1999).

    29Forty Most Asked Questions Concerning CEQ's National Environmental Policy Act Regulations, 46 FR 18026, 18027 (Mar. 23, 1981).

    30Citizens Against Burlington, Inc. v. Busey, 938 F.2d 190, 195, 199 (DC Cir. 1991).

    31 40 CFR 1502.14(a). See, e.g., Bradwood Landing LLC, 126 FERC ¶ 61,035, at P 158 (2009); Broadwater Energy LLC, 124 FERC ¶ 61,225, at PP 187-189 (2008) (rejecting alternatives that were not technically and economically feasible and practical, or did not offer significant environmental advantages over the proposed project or its components, or were unavailable and/or incapable of being implemented, or do not meet the applicants' stated project objectives).

    11. Commission documents under NEPA first address the scope of the project (i.e., “the range of actions, alternatives, and impacts to be considered”) 32 , then address the environmental impacts of the proposed action, connected actions, and cumulative actions.33 Commission documents under NEPA may also address similar actions if a combined analysis would be the best way to adequately assess combined impacts.34 These NEPA documents disclose and evaluate the direct, indirect, and cumulative impacts of the project on various environmental resources in the context of temporary, short-term, long-term, and permanent impacts, and then consider practical measures to avoid, minimize, or mitigate those impacts. Direct impacts are caused by the proposed action and occur at the same time and place. Indirect impacts are “caused by the [proposed] action and are later in time or farther removed in distance, but are still reasonably foreseeable.” 35 Cumulative impacts are defined as “the impact on the environment which results from the incremental impact of the [proposed] action when added to other past, present, and reasonably foreseeable future actions, regardless of what agency (Federal or non-Federal) or person undertakes such actions.” 36 The impacts of these other actions must occur within the same geographic area and same time period in which the proposed project's impacts will occur.37

    32 40 CFR 1508.25.

    33Id. 1508.25(a)(1)-(2).

    34Id. 1508.25(a)(3).

    35Id. 1508.8(b).

    36Id. 1508.7.

    37 “[A] consideration of cumulative impacts must also consider `[c]losely related and proposed or reasonably foreseeable actions that are related by timing or geography.'” O'Reilly v. U.S. Army Corps of Engineers, 477 F.3d 225 at 234 (5th Cir. 2007) (quoting Vieux Carre Prop. Owners, Residents, & Assocs., Inc. v. Pierce, 719 F.2d 1272, 1277 (5th Cir. 1983)); see also CEQ, Considering Cumulative Effects Under the National Environmental Policy Act, at 12-16 (Jan. 1997), https://www.energy.gov/sites/prod/files/nepapub/nepa_documents/RedDont/G-CEQ-ConsidCumulEffects.pdf.

    C. Conditions and Considerations Leading to the Development of the Policy Statement

    12. Historically, the Commission established prices for natural gas sales and transportation, and there was little competition for gas supply or transportation capacity. Interstate pipelines, operating as merchants, produced and/or purchased natural gas at the wellhead, transported it to a city gate, and sold it to a local distribution company (LDC) at a Commission-regulated price that reflected combined (i.e., bundled) commodity and transportation costs. Congress and the Commission introduced increasingly competitive elements into this merchant model. The Natural Gas Policy Act of 1978 began the process of decontrolling wellhead natural gas prices and eased barriers between intrastate and interstate markets.38 The Commission issued Order No. 436, which initiated open access transportation to allow downstream gas users, such as LDCs and industrial customers, to buy gas directly from producers or merchants and transport their gas on interstate pipelines.39 The Wellhead Decontrol Act of 1989 lifted remaining price controls on wellhead sales as of January 1, 1993.40 In 1992, the Commission issued Order No. 636 to “reflect and finally complete the evolution to competition in the natural gas industry initiated by [the above-cited statutory and regulatory revisions] so that all natural gas suppliers, including the pipeline as merchant, will compete for gas purchasers on an equal footing.” 41 As a result, natural gas markets have changed from being highly regulated to being largely driven by competition and market forces. Instead of merchant pipelines delivering natural gas to customers at a Commission-regulated bundled price, most natural gas pipelines have exited the merchant business and now provide unbundled transportation and storage services. As a result, shippers are able to purchase natural gas at the wellhead or from gas marketers, trade gas among themselves, and purchase pipeline and storage capacity from marketers and other shippers in the secondary market as well as directly from the pipeline. These changes have benefitted natural gas consumers by providing a wider range of options in pipeline services.

    38 15 U.S.C. 3301-3432.

    39Regulation of Natural Gas Pipelines After Partial Wellhead Decontrol, FERC Stats. & Regs. ¶ 30,665 (1985), vacated and remanded, Associated Gas Distribs. v. FERC, 824 F.2d 981 (D.C. Cir. 1987), readopted on an interim basis, Order No. 500, FERC Stats. & Regs. ¶ 30,761 (1987), remanded, Am. Gas Ass'n v. FERC, 888 F.2d 136 (D.C. Cir. 1989), readopted, Order No. 500-H, FERC Stats. & Regs. ¶ 30,867 (1989), reh'g granted in part and denied in part, Order No. 500-I, FERC Stats. & Regs. ¶ 30,880 (1990), aff'd in part and remanded in part, Am. Gas Ass'n v. FERC, 912 F.2d 1496 (D.C. Cir. 1990), order on remand, Order No. 500-J, FERC Stats. & Regs. ¶ 30,915, order on remand, Order No. 500-K, FERC Stats. & Regs. ¶ 30,917, reh'g denied, Order No. 500-L (1991).

    40 Public Law 101-60, 103 Stat. 157 (1989).

    41Pipeline Service Obligations and Revisions to Regulations Governing Self-Implementing Transportation; and Regulation of Natural Gas Pipelines After Partial Wellhead Decontrol, Order No. 636, FERC Stats. & Regs. ¶ 30,939, at 30,391 (footnote omitted), order on reh'g, Order No. 636-A, FERC Stats. & Regs. ¶ 30,950, order on reh'g, Order No. 636-B, 61 FERC ¶ 61,272 (1992), order on reh'g, 62 FERC ¶ 61,007 (1993), aff'd in part and remanded in part sub nom. United Dist. Cos. v. FERC, 88 F.3d 1105 (D.C. Cir. 1996), order on remand, Order No. 636-C, 78 FERC ¶ 61,186 (1997).

    13. As natural gas commodity and transportation markets were becoming more competitive, the 1990s saw significant growth in natural gas consumption in the industrial and electric generation segments. This prompted jurisdictional natural gas companies to urge the Commission to expeditiously authorize new projects to meet anticipated growth in demand. Due to the lower capital costs and shorter construction times of advanced combined-cycle gas-fired plants in comparison with conventional coal-fired plants, and the relative environmental benefits of natural gas compared to coal combustion, industry forecasts at the time showed natural gas-fired electric generation demand tripling in the following twenty years and overall gas demand reaching 32 Trillion Cubic Feet (Tcf) by 2020.42

    42 Energy Information Administration (EIA), Natural Gas 1998: Issues and Trends, DOE/EIA-0560(98), at 71, 109, 115 (Apr. 1999).

    14. In addition, in the 1990s, many LDCs were going through significant changes as they implemented retail unbundling programs, also known as customer choice programs, on their systems. Prior to retail unbundling, LDCs, similar to interstate pipelines, provided a composite bundled service to customers that included the bundled price of the gas and associated pipeline capacity and the price of the distribution service. Retail unbundling programs provided residential and commercial customers with access to competitive markets through the ability to purchase gas supplies from retail marketers that may be different from their LDCs. As a result, LDCs were not certain to what degree they would continue to be responsible for purchasing gas supplies and pipeline capacity in order to provide service for their core retail customers. Because of this uncertainty, many LDCs sought to reduce their firm contract commitments with interstate pipelines, both in terms of the duration and quantity of firm service (this reduction in service is referred to as capacity turnback). In light of the capacity turnback situation and potential stranded cost issues that arose on certain pipelines following restructuring, many LDCs were concerned about the impact any new pipeline expansion construction could have on the value of their existing pipeline capacity contracts, and the potential rate implications of overbuilding.43 These concerns were exacerbated by the fact that the Commission's pricing policy for new construction prior to the Policy Statement called for expansion project costs to be rolled into existing system costs to derive rolled-in rates in a future NGA section 4 rate case.44 At that time, the Commission generally ruled in favor of rolled-in rates when the cost impact of the expansion project, spread across the pipeline's system, resulted in a rate impact on existing customers of five percent or less and the expansion provided operational and/or financial benefits to the system.45 All shippers bore some burden of the expansion project's cost, whether they benefitted from the project or not, without being allowed to adjust their contracted volumes. LDCs and other parties believed that this pricing policy sent the wrong price signals by masking the real costs of an expansion project and could result in overbuilding of capacity and subsidization of an expansion by a pipeline's existing shippers.

    43See, e.g., Policy Statement, 88 FERC ¶ 61,227 at 61,741 (summarizing comments from the American Gas Association, Baltimore Gas and Electric Company, and Philadelphia Gas Works requesting that pipelines not be allowed to impose the costs of unsubscribed capacity created through the construction of excess capacity on existing shippers).

    44Pricing Policy for New and Existing Facilities Constructed by Interstate Natural Gas Pipelines, 71 FERC ¶ 61,241 (1995), order on reh'g, 75 FERC¶ 61,105 (1996).

    45Id., 71 FERC ¶ 61,241 at 61,916-61,917.

    D. Proceedings Leading to the Policy Statement, Purpose of the Policy Statement, and the Issues It Sought To Address

    15. In response to the concerns described above, the Commission issued the Notice of Proposed Rulemaking (NOPR), Regulation of Short-Term Natural Gas Transportation Services, 46 and the Notice of Inquiry, Regulation of Interstate Natural Gas Transportation Services, 47 to explore issues related to its policies on certification and pricing of new construction projects. In the NOPR, the Commission asked questions relating to many of the issues that have arisen in recent certificate proceedings including: Whether the Commission should look behind the precedent agreements or contracts presented as evidence of market demand to assess independently the market's need for additional gas service; whether the Commission should apply a different standard to precedent agreements or contracts with affiliates than with non-affiliates; whether the Commission should, in an effort to check overbuilding and capacity turnback, take a harder look at proposals that are designed to compete for existing market share rather than bring service to a new customer base; and whether the Commission should apply a different standard to project sponsors who do not plan to use either federal or state-granted rights of eminent domain to acquire right-of-way.48

    46Regulation of Short-Term Natural Gas Transportation Services, Notice of Proposed Rulemaking, FERC Stats. & Regs. ¶ 32,533 (1998) (cross-referenced at 84 FERC ¶ 61,085).

    47Regulation of Interstate Natural Gas Transportation Services, Notice of Inquiry, FERC. Stats. & Regs. ¶ 35,533 (1998) (cross-referenced at 84 FERC ¶ 61,087).

    48 NOPR, FERC Stats. & Regs. ¶ 32,533 at 33,489-90.

    16. Information received in these proceedings, as well as experience evaluating proposals for new pipeline construction, persuaded the Commission to revisit its policy for certificating new construction.49 The Commission issued the Policy Statement intending that it would provide the natural gas industry with guidance as to how the Commission would evaluate applications for new natural gas projects. The Commission sought “to foster competitive markets, protect captive customers, and avoid unnecessary environmental and community impacts while serving increasing demands for natural gas.” 50

    49 Policy Statement, 88 FERC ¶ 61,227 at 61,737.

    50Id. at 61,743. These same aims apply to this Notice of Inquiry.

    17. These objectives were realized primarily by a shift from rolled-in pricing to incremental pricing. Under incremental pricing, existing customers using existing facilities do not contribute to, and thereby do not subsidize, the cost of constructing and operating new projects.51 Applicants can recover the costs of the new facilities only from shippers who use them, and are fully at risk for the cost of the new facilities and will bear the financial burden of any unsubscribed capacity. In the Policy Statement, the Commission reasoned that incremental pricing would send the proper price signals for new construction and indicate whether a project is financially viable.52

    51 The Policy Statement recognized there may be instances where expansion project costs should be rolled into the rates of existing customers; for example, when inexpensive expansibility is made possible because of earlier, costly construction. In such a case, “because the existing customers bear the cost of the earlier, more costly construction in their rates, incremental pricing could result in the new customers receiving a subsidy from the existing customers because the new customers would not face the full cost of the construction that makes their new service possible.” Policy Statement, 88 FERC ¶ 61,227 at 61,746.

    52Id.

    18. The Policy Statement stated that the Commission will approve an application for a new project only if its public benefits outweigh its residual adverse effects.53 The Policy Statement described this balancing of benefits and adverse effects as an economic test.54 In addition to the economic screen established by the Policy Statement, the Commission simultaneously considers the environmental impacts of a proposed project and imposes mitigation measures to address potential environmental impacts.

    53Id. at 61,745.

    54Id.

    E. Changed Circumstances Since Issuance of the Policy Statement

    19. Over the last decade, the United States has seen an unprecedented change in the dynamics of the natural gas market and the supply and demand forces driving it. Led by advancements in production technologies, primarily in accessing shale reserves, natural gas supplies have increased dramatically. Domestic natural gas production has increased from 21.3 Tcf in 2010 to 26.9 Tcf in 2017.55 The Energy Information Administration's (EIA) Annual Energy Outlook 2018 forecasts continued supply growth over the next 25 years, increasing to nearly 39 Tcf by 2035 and 43 Tcf by 2050.56 In addition, driven by liquefied natural gas (LNG) exports, increased pipeline exports to Mexico, and reduced imports from Canada, the EIA shows that the United States became a net exporter of natural gas in 2017.57

    55 EIA, Natural Gas Summary (Mar. 30, 2018) (in table see row labeled “Dry Production;” click link in the final column to view history) (Natural Gas Summary), https://www.eia.gov/dnav/ng/ng_sum_lsum_dcu_nus_a.htm.

    56 EIA, Annual Energy Outlook 2018, at tbl.13 (Feb. 6, 2018) (in table see row labeled “Dry Gas Production” under the reference case) (Annual Energy Outlook 2018), https://www.eia.gov/outlooks/aeo/data/browser/#/ ?id=13-AEO2018&cases=ref2018&sourcekey=0.

    57Natural Gas Summary (in table compare rows labeled “Imports” and “Exports”).

    20. As natural gas production has increased, so has demand, rising from 24.1 Tcf in 2010 to 27.1 Tcf in 2017, driven in part by an increase in gas-fired electric generation.58 The EIA's 2018 Annual Energy Outlook projects continued growth in domestic demand to over 31.4 Tcf by 2035 and nearly 35 Tcf by 2050.59

    58Id. (in table see row labeled “Total Consumption;” click link in the final column to view history).

    59Annual Energy Outlook 2018, at tbl.13 (in table see row labeled “Consumption by Sector” under the reference case).

    21. Increases in both domestic and international demand for natural gas produced in the United States, combined with the availability of competitively-priced gas from shale reserves and associated gas extracted in tandem with oil, have reduced prices and price volatility and shifted the emphasis of the types of proposed natural gas infrastructure projects from storage to transportation and exports, leading to the Commission receiving and approving an increased number of pipeline and LNG export terminal applications since 2010.60 Much of the increased production is attributable to Appalachian shale deposits, predominately the Marcellus and Utica, located in Pennsylvania, West Virginia, Ohio, and New York.61 Although these areas have historically produced natural gas, the volumes had been relatively small and much of the infrastructure in the area was built to deliver natural gas to traditional regional markets and was not able to transport the burgeoning supply volumes to more distant markets without significant system expansions. In response to this take-away bottleneck, the Commission received a host of applications proposing either to construct greenfield pipelines 62 to transport gas out of the region or to increase the capacity of existing infrastructure through the addition of compression and pipeline looping.63 Other producing areas have also experienced a dramatic growth in output starting in the mid-2000s, from traditional oil and gas fields in the Permian Basin in West Texas to the more recently developed Bakken Shale Formation in North Dakota. This increased production has also prompted applications to add capacity to transport gas to consumers.

    60 In 2010, the Commission authorized about 24 pipeline projects comprising 9.2 billion cubic feet (Bcf) per day, 20 storage projects comprising 149 Bcf per day capacity with 5.6 Bcf per day deliverability, and no LNG import/export facilities. In 2017, the Commission authorized about 49 pipeline projects comprising 30.8 Bcf per day and 2 storage projects comprising no new capacity but increased deliverability. Between 2014 and 2017 the Commission also authorized 13 LNG import/export projects for 16 Bcf per day deliverability.

    61 New York's shale reserves remain undeveloped due to a prohibition on high-volume hydraulic fracturing in effect since 2008.

    62 A greenfield pipeline is defined as a new pipeline system that is operated as a separately regulated company with its own rates and tariff. For example, the NEXUS Project is a greenfield pipeline. NEXUS Gas Transmission, LLC, 160 FERC ¶ 61,022 (2017).

    63 A pipeline loop is a segment of pipe constructed parallel to an existing pipeline to increase capacity. For example, Southern Natural Gas Company, L.L.C.'s Fairburn Expansion Project includes a 1.6-mile-long, 30-inch-diameter pipeline loop to add capacity to the system. S. Nat. Gas Co., L.L.C., 162 FERC ¶ 61,122 (2018).

    22. In addition, contracting patterns are changing significantly as a result of the supply growth. In the past, LDCs contracted for a large percentage of the total interstate pipeline capacity, transporting supplies from the production area to their customers. Increasingly, however, LDCs are purchasing gas supplies further downstream at market area pooling points or their citygates as other parties increasingly contract for pipeline capacity. Natural gas producers are now contracting for an increasing amount of firm pipeline capacity on expansion projects in an effort to provide a secured commercial outlet for their supplies. For many of these projects, producers are interested in transporting their natural gas to the nearest pooling point on the pipeline system, where the gas can be sold to other parties serving downstream markets. Therefore, an increasing number of projects are being designed to transport gas to a point of distribution on the interstate pipeline grid, which may not correspond to a defined market or end use.

    F. Executive Order 13807, “Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure Projects”

    23. On August 15, 2017, President Trump issued Executive Order 13807 “Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure Projects” to “ensure that the Federal environmental review and permitting process for infrastructure projects is coordinated, predictable, and transparent.” 64 Executive Order 13807 states that inefficiencies in the project decision-making process, including the management of environmental reviews and permit decisions or authorizations, “have delayed infrastructure investments, increased project costs, and blocked the American people from enjoying improved infrastructure that would benefit our economy, society, and environment.” 65 Executive Order 13807 sets forth several components of its policy, including to “ensure that Federal authorities make informed decisions concerning the environmental impacts of infrastructure projects,” “provide transparency and accountability to the public regarding environmental review and authorization decisions,” and “make timely decisions with the goal of completing all Federal environmental reviews and authorization decisions for major infrastructure projects within 2 years.” 66 The Commission is committed to carrying out the goals of Executive Order 13807 to improve the efficiency, timing, and overall predictability of the Commission's certification process.67

    64 Exec. Order No. 13807, 82 FR 40463, 40463 (Aug. 15, 2017).

    65Id.

    66Id. Executive Order 13807 defines “major infrastructure project” as “an infrastructure project for which multiple authorizations by Federal agencies will be required to proceed with construction, the lead Federal agency has determined that it will prepare an environmental impact statement” under NEPA “and the project sponsor has identified the reasonable availability of funds sufficient to complete the project.” Id. 40464.

    67 The Commission is a signatory to the Memorandum of Understanding Implementing the One Federal Decision under Executive Order 13807, which is available at https://www.whitehouse.gov/wp-content/uploads/2018/04/MOU-One-Federal-Decision-m-18-13-Part-2.pdf.

    G. The Commission's Evaluation Under the Policy Statement

    24. The Policy Statement explained that the Commission will consider whether a proposed project's anticipated public benefits outweigh its residual adverse effects on economic interests. If so, the Commission will then complete an analysis of the project's environmental impacts and incorporate those findings in reaching a conclusion on whether a project is required by the public convenience and necessity. If not, an application will be denied and there will be no reason to consider environmental impacts.68

    68E.g., Turtle Bayou Gas Storage Co., LLC, 135 FERC ¶ 61,233 (2014) (Turtle Bayou).

    25. Because the NEPA review typically takes longer than the review of the non-environmental aspects of a proposed project, in practice the Commission often initiates its study of environmental impacts at the applicant's request during pre-filing and before an application is filed. Also, most natural gas projects require approvals from numerous other federal, state, and local agencies or federally recognized Indian tribes.69 Coordinating with other agencies and ensuring that NEPA documents adequately address the concerns of agencies, federally recognized tribes,70 and stakeholders can extend the time needed to complete the NEPA review process.

    69 For example, projects may require Clean Water Act section 401 water quality certifications, Clean Air Act permits, and concurrence letters or Biological Opinions from the National Marine Fisheries Service or United States Fish and Wildlife Service.

    70 The Commission consults with potentially affected federally recognized Indian tribes as set forth in our tribal consultation policy statement. Policy Statement on Consultation with Indian Tribes in Commission Proceedings, Order No. 635, FERC Stats. & Regs. ¶ 31,148 (2003) (cross-referenced at 104 FERC ¶ 61,108).

    H. Applying the Policy Statement 1. Threshold Requirement

    26. The Policy Statement's threshold requirement is that an applicant financially support the project without relying on subsidization from its existing customers.71 For greenfield projects, this is the case by definition, as these new projects have no existing customers.72 For existing jurisdictional natural gas companies, the Policy Statement's adoption of incremental rates as the default pricing mechanism for new capacity ensures that the project sponsor and its expansion customers bear all the economic risks of constructing and operating new facilities, without subsidization from the company's existing customers.73 When an existing natural gas company proposes to use its existing system rates as initial recourse rates for an expansion, the natural gas company is required to demonstrate that the incremental revenue received would exceed the incremental cost of the new project before being granted approval to roll the costs of the expansion into its system rates, thereby ensuring existing customers will not subsidize the expansion.74

    71 Policy Statement, 88 FERC ¶ 61,227 at 61,746.

    72E.g., Sierrita Gas Pipeline, LLC, 147 FERC ¶ 61,192 (2014).

    73Trailblazer Pipeline Co., 95 FERC ¶ 61,258 (2001); see also E. Tenn. Nat. Gas LLC, 154 FERC ¶ 61,161 (2016).

    74 The Policy Statement also allows projects that are designed to improve service to existing customers (i.e., by replacing existing capacity or improving reliability) to be rolled into system rates. The Policy Statement explained that increasing the rates of the existing customers to pay for these improvements is not a subsidy. Policy Statement, 88 FERC ¶ 61,227 at 61,746 n.12.

    2. Factors To Be Balanced in Assessing the Need for a New Project (a) Potential Adverse Effects on Affected Interests

    27. When the no-subsidy threshold requirement is met, the next step in the Commission's analysis is to determine whether the applicant has eliminated or minimized any residual adverse effects the project might have on: (1) The applicant's existing customers, (2) existing pipelines in the market and their captive customers, and (3) landowners and communities affected by the proposed project.75

    75Id at 61,745.

    28. The Policy Statement recognized that the interests of an applicant's existing customers may be adversely affected if the proposed expansion results in a degradation in service for existing customers.76 Furthermore, the interests of an existing pipeline in the same market area and its captive customers may be adversely affected by a new competitor because, under the Commission's current rate model, customer rates on an existing pipeline can rise to cover the costs of any capacity that goes unsubscribed due to volumes (i.e., customers) migrating to a new competing pipeline.

    76 As part of the certification process the Commission confirms through engineering analyses that the proposed facilities are appropriately designed to provide the proposed new services and verifies that the proposed project will not adversely affect the services the applicant is obligated to provide to its existing customers. See, e.g., Tex. Gas Transmission, LLC, 152 FERC ¶ 61,160 (2015).

    29. The Commission has historically taken a pro-competitive approach in approving new projects, believing that potential adverse impacts on existing competitors through the potential future loss of load are likely to be outweighed by the economic and reliability benefits to natural gas consumers that come from increased access to new supply sources of competitively-priced natural gas.77 The Commission's longstanding policy has been to allow companies to compete for markets and to uphold the results of that competition absent a showing of anticompetitive or unfair competition.78 There have been few instances where companies or their customers have raised concerns over the impact that the construction of a new project would have on an existing pipeline system or its captive customers. In those instances, competitor pipelines have argued that their captive shippers would be burdened with stranded costs or discount adjustments.79 The Commission has historically not been persuaded by the objections, finding that a new pipeline would benefit consumers through increased competition.80

    77E.g., Ruby Pipeline, L.L.C., 128 FERC ¶ 61,224, at PP 37-39 (2009); Guardian Pipeline, L.L.C., 91 FERC ¶ 61,285, at 61,976-61,977 (2000).

    78Ruby Pipeline, 128 FERC ¶ 61,224 at P 35; Guardian Pipeline, 91 FERC ¶ 61,285 at 61,977.

    79Ruby Pipeline, 128 FERC ¶ 61,224 at PP 22-26; Guardian Pipeline, 91 FERC ¶ 61,285 at 61,974-61,975.

    80Ruby Pipeline, 128 FERC ¶ 61,224 at P 37; Guardian Pipeline, 91 FERC ¶ 61,285 at 61,976-61,977.

    30. Finally, under the Policy Statement, the Commission looks at adverse impacts on landowners and communities affected by a proposed project. The Policy Statement noted that “[t]raditionally, the interests of the landowners and the surrounding community have been considered synonymous with the environmental impacts of a project,” but explains that “[l]andowner property rights issues are different in character from other environmental issues considered under [NEPA].” 81 Since issuance of the Policy Statement, the Commission's environmental analyses have come to adopt a more expansive consideration of property rights issues, so issues that previously might not have been routinely reviewed in the environmental document—e.g., a project's potential impact on property values, community development, employment, tax revenue, and disadvantaged populations—now are. Thus, these issues are, in effect, considered twice, once in the context of the Policy Statement assessment focusing on economic impacts, and again in the NEPA review focusing on environmental impacts. Economic impacts on landowners and surrounding communities can be, and often are, mitigated, for example, through alternative routing of the proposed rights-of-way, co-location with existing utility corridors, and negotiating the purchase of rights-of-way.82

    81 Policy Statement, 88 FERC ¶ 61,227 at 61,748.

    82 For example, Columbia Gas Transmission, LLC, incorporated eight route variations between issuance of the draft EIS and final EIS of its Leach XPress Project to address landowner requests. Final EIS, at 2-5 (Sept. 1, 2016) (Docket No. CP15-514-000). Also, Algonquin Gas Transmission, LLC, collocated 93 percent of its Algonquin Incremental Market Project pipeline facilities within or adjacent to existing right-of-ways, including its own pipelines, public roadways, railways and electric transmission line corridors. Final EIS, at 2-12 (Jan. 23, 2014) (Docket No. CP14-96-000).

    (b) Public Benefits

    31. The Policy Statement identified various public benefits including: (1) Meeting unserved demand (2) eliminating bottlenecks; (3) providing access to new supplies; (4) lowering costs to consumers; (5) providing new interconnects that improve the interstate pipeline network; (6) providing competitive alternatives; (7) increasing electric reliability; and (8) advancing clean air objectives.83 As evidence of unserved demand following issuance of the Policy Statement, applicants have most often presented precedent agreements with prospective customers for long-term firm service.84

    83 Policy Statement, 88 FERC ¶ 61,227 at 61,748.

    84 In the order authorizing a new project, the Commission requires that prior to construction, the certificate-holder must file a written statement affirming that it has executed contracts that reflect the service commitments described in precedent agreements.

    (c) Balancing Public Benefits and Adverse Effects

    32. The Policy Statement recognized that, in the context of balancing public benefits against adverse effects, it is difficult to construct bright line standards or tests, as such tests are unlikely to be flexible enough to resolve specific cases and to allow the Commission to take into account different relevant interests. The Policy Statement described a sliding scale approach where the “more interests adversely affected or the more adverse impact a project would have on a particular interest, the greater the showing of public benefits from the project required to balance the adverse impact.” 85

    85 Policy Statement, 88 FERC ¶ 61,227 at 61,749.

    33. The Policy Statement provided two examples of the sliding scale approach. First, if an applicant is able to acquire all or substantially all of the necessary rights-of-way by negotiation prior to filing the application, and the proposal is to serve a new, previously unserved market, it would not adversely impact the applicant's existing shippers, competing companies or their existing shippers, or affected landowners and communities.86 Under these circumstances, landowners would not be subject to eminent domain proceedings, and because the proposed project would be new, there would be no existing customers who might be called upon to subsidize the project. In the second example, the Policy Statement recognized that an applicant may not be able to acquire all the necessary rights-of-way by negotiation prior to filing the application.87 Therefore, the applicant might minimize the effect of the project on landowners by negotiating to acquire as much of the rights-of-way as possible. In this case, the applicant may be called upon to present some evidence of market demand, but under the sliding scale approach, the benefits that would need to be shown would be less than in a case where no rights-of-way had been previously acquired by negotiation. If an applicant had precedent agreements with multiple parties for most of the new capacity, this would be strong evidence of market demand and potential public benefits that could outweigh the inability to negotiate right-of-way agreements with some landowners.

    86Id.

    87Id.

    34. The Policy Statement observed that a few holdout landowners cannot veto a project if the applicant provides evidence of project benefits sufficient to justify a finding of public convenience and necessity and issuance of a certificate.88 The strength of the benefit showing will need to be proportional to the applicant's anticipated reliance on eminent domain to acquire necessary property rights. If the Commission finds project benefits will outweigh adverse impacts on economic interests, it then proceeds to consider the results of its NEPA review in reaching a decision on whether the proposed project is required by the public convenience and necessity.89

    88 Policy Statement, 88 FERC ¶ 61,227 at 61,749.

    89 In practice the environmental document is prepared concurrently with the analysis of the economic considerations. However, as described above, if a project's anticipated public benefits fail to outweigh its residual adverse effects on economic interests, the proposal will be denied and there will be no need to consider what the environmental impacts of the project would have been.

    I. Commission Precedent and the Evolution of the Implementation of the Policy Statement

    35. Prior to adopting the Policy Statement, the Commission required applicants to show that some percentage of proposed capacity was subscribed under long-term firm service agreements.90 The Policy Statement adopted a new approach, under which the Commission would allow an applicant to rely on a variety of operational, economic, and environmental factors to demonstrate need.91 In practice, applicants have generally elected to present, and the Commission has accepted, customer commitments as the principal factor in demonstrating project need.92 Today, many proposed projects are fully, or nearly fully, subscribed under long-term firm service agreements that the Commission accepts as strong evidence that there is market demand for a proposed project.93 The Commission has not looked beyond contracts for a further determination of market or supply need since the adoption of incremental pricing and the resultant shifting of the risk of constructing new capacity to the pipeline and the expansion shippers. In instances where an applicant has neither entered into any precedent agreements for its project nor submitted other evidence to show need, and the project will cause adverse effects, the Commission has declined to issue a certificate.94

    90E.g., El Paso Nat. Gas Co., 65 FERC ¶ 61,276, at 61,270-61,271 (1993) (requiring applicant to submit “long-term” contracts or precedent agreements for a “substantial amount” of proposed firm transportation capacity); Tex. E. Transmission Corp., 82 FERC ¶ 61,238, at 61,915-61,917 (1998) (explaining that a minimum level of 25 percent evolved after El Paso Natural Gas).

    91 Policy Statement, 88 FERC ¶ 61,227 at 61,747 (“the Commission will consider all relevant factors reflecting on the need for the project. These might include, but would not be limited to, precedent agreements, demand projections, potential cost savings to consumers, or a comparison of projected demand with the amount of capacity currently serving the market.”).

    92See, e.g., PennEast Pipeline Co., LLC, 162 FERC ¶ 61,053, at PP 27-36 (2018) (PennEast); Atlantic Coast Pipeline, LLC, 161 FERC ¶ 61,042, at PP 56-63 (2017) (Atlantic Coast).

    93 Policy Statement, 88 FERC ¶ 61,227 at 61,743; see, e.g., PennEast, 162 FERC ¶ 61,053 (990,000 Dth/d of 1,107,000 Dth/d capacity subscribed); Mountain Valley Pipeline, LLC, 161 FERC ¶ 61,043 (2017) (2,000,000 Dth/d fully subscribed); Atlantic Coast, 161 FERC ¶ 61,042 (1,440,000 Dth/d of 1,500,000 Dth/d capacity subscribed); Rover Pipeline LLC, 158 FERC ¶ 61,109, at P 44 (2017) (3,100,000 Dth/d of 3,250,000 Dth/d capacity subscribed).

    94See, e.g., Jordan Cove Energy Project, L.P., 154 FERC ¶ 61,190, reh'g denied, 157 FERC ¶ 61,194 (2016); Turtle Bayou, 135 FERC ¶ 61,233.

    36. Stakeholders in some proceedings have raised questions as to whether precedent agreements continue to be an appropriate indicator of project need and whether the Commission should reconsider its approach to examining project need. This includes both the question of the overall need for the proposed project within the energy marketplace, as well as the need for the capacity of individual project shippers. Specific concerns raised have included: (1) Whether existing infrastructure can accommodate the incremental service to be provided by proposed project; (2) whether anticipated demand in the project's markets will truly materialize; (3) the potential for renewable energy to meet future demand for electricity generation and its potential impacts on projects designed to serve natural gas-fired generators; (4) the need for the Commission to evaluate the new natural gas pipeline infrastructure on a region-wide basis; and (5) whether agreements with affiliates constitute a showing of market need.

    II. The Commission's NEPA Review

    37. Since the early 2000s, the Commission has encouraged jurisdictional natural gas companies to use a voluntary pre-filing program for natural gas pipeline projects.95 During the pre-filing process, applicants can coordinate with Commission staff and other agencies to identify and resolve major environmental issues on a project before filing an application.96 Proposed projects that would typically benefit from this pre-filing process have opted to use it. The pre-filing process allows applicants and staff to engage in enhanced and early outreach efforts with stakeholders, and often results in major and minor route modifications prior to the applicant submitting an application to avoid or minimize impacts on sensitive environmental resources identified by Commission staff, other agencies, federally recognized tribes, and affected landowners.97 In addition to enhanced outreach efforts, during the pre-filing process Commission staff performs site visits, consults other agencies and federally recognized tribes, reviews drafts of an applicant's environmental resource reports, and provides comments to applicants regarding alternatives, siting concerns, inaccuracies, additional surveys or studies, and needed mitigation plans to improve the quality of an application. These efforts routinely result in improvements and changes to the proposed projects compared to the applicants' initial plan when initiating the pre-filing process. In conducting its assessment of the economic effects of a proposed project after an application is filed, the Commission can include relevant information about residual adverse effects developed in the pre-filing process or during a concurrent environmental review.98

    95 In addition, in response to the Energy Policy Act of 2005, the Commission established pre-filing regulations, which are mandatory for LNG terminal facilities. 18 CFR 157.21.

    96 The Kern River 2003 Expansion Project (Docket No. CP01-422-000) was the first project to use the Commission's Pre-filing Process.

    97 For example, after participating in the pre-filing process and holding over 200 meetings with public officials, as well as 15 “informational sessions” for impacted landowners, PennEast incorporated 70 of 101 identified route variations into its final proposed route. PennEast, 162 FERC ¶ 61,053 at P 39.

    98 The early elimination or refinement of proposals before and during Commission review leads to a high rate of project certification, subject to protective conditions. This does not demonstrate a bias in favor of certification, as past participants have claimed. See, e.g., NO Gas Pipeline v. FERC, 756 F.3d 764, 770 (DC Cir. 2014) (“Presumably under most regulatory schemes, by the time applicants and their expert counsel have worked through changes, adaptations, and amendments, they are not likely to pursue many certificates that are hopeless. The fact that they generally succeed in choosing to expend their resources on applications that serve their own financial interests does not mean that an agency which recognizes merit in such applications is biased.”); Minisink Residents for Envtl. Pres. and Safety v. FERC, 762 F.3d 97, 108 n.7 (DC Cir. 2014) (Minisink) (same).

    38. In reviewing an application, the Commission currently performs a lengthy NEPA review, including numerous opportunities for public involvement, consultation with other federal, state, and local agencies, and an independent evaluation of the environmental impacts of a proposed project. In July 2015, the Commission issued guidance on best practices for stakeholder outreach programs for natural gas projects.99 This guidance identifies the various opportunities for public engagement by project applicants and Commission staff throughout the pre-filing and NEPA review process, including project briefings to elected officials, open houses, scoping sessions, agency meetings, site visits, and NEPA document comment periods.

    99 FERC, Suggested Best Practices for Industry Outreach Programs to Stakeholders, (2015), https://www.ferc.gov/industries/gas/enviro/guidelines/stakeholder-brochure.pdf. See also FERC, Guidelines for Reporting on Cultural Resources Investigations for Natural Gas Projects (2017), https://www.ferc.gov/industries/gas/enviro/guidelines/cultural-guidelines-final.pdf.

    39. Commission staff performs a thorough independent review of the environmental impacts of a proposed project through verifying submitted information and comments, issuing information requests to clarify inaccuracies or obtain additional information, and consulting with federal, state, and local agencies and federally recognized tribes. Commission NEPA documents address impacts on various environmental resources, including geology, soils, groundwater, surface water, wetlands, aquatic resources, vegetation, wildlife, special status species, cultural resources, land use, recreation, aesthetics, socioeconomics, air quality, climate change, noise, and reliability and safety.

    40. Over the past decade there has been a marked increase in the involvement of federally recognized tribes, affected landowners, and environmental organizations in proposed natural gas project proceedings. Concerns raised have primarily focused on the need for new projects, alternatives, cumulative impacts, and the effects related to the production and consumption of natural gas (particularly the contribution of GHG emissions to global climate change).

    A. Alternatives

    41. The Commission's NEPA documents address a wide variety of alternatives. These include the no-action alternative (i.e., the status quo), system alternatives (using existing, modified, or other proposed gas facilities), design alternatives (using a different pipeline diameter, looping versus compression, and electric-driven versus gas-driven compressor equipment), and route and siting alternatives that could satisfy the purpose and need of the proposed project. Alternatives considered include those contemplated by the applicant and those proposed by agencies, federally recognized tribes, stakeholders, and Commission staff.

    42. Should the Commission find that there is insufficient support for the need for a project, it could select the no-action alternative by rejecting the proposed project. However, the Commission has neither authority to require the construction of any alternative other than the project proposed, nor does it have authority to require the development of nonjurisdictional actions or projects (e.g., renewable projects or energy conservation measures). When an alternative is not reasonable, i.e., when it cannot function as a substitute for the proposed project, the Commission does not consider it in its NEPA analysis.

    B. GHG Emissions and Climate Change

    43. GHG emissions are unique in that, unlike other environmental impacts studied in pipeline proceedings that have localized effects, emissions from around the globe accumulate in the atmosphere and contribute to climate change impacts worldwide.100 In 2010, CEQ issued its first draft guidance on how federal agencies can consider the effects of GHG emissions and climate change under NEPA.101 CEQ revised the draft guidance in 2014,102 and issued final guidance in 2016.103 Throughout the guidance's evolution, CEQ consistently advised agencies to quantify GHG emissions and consider both the extent to which a proposed project's GHG emissions would contribute to climate change and also how a changing climate may impact the proposed project in their NEPA documents. In April 2017, CEQ rescinded its 2016 final guidance as directed by Executive Order 13783 Promoting Energy Independence and Economic Growth. 104

    100 On December 15, 2009, the Environmental Protection Agency (EPA) defined air pollution to include the mix of six long-lived and directly emitted GHGs, finding that the presence of GHGs in the atmosphere may endanger public health and welfare through climate change. Endangerment Finding and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act, 74 FR 66496 (Dec. 15, 2009).

    101 CEQ, Draft NEPA Guidance on Consideration of the Effects of Climate Change and Greenhouse Gas Emissions, (Feb. 18, 2010), https://ceq.doe.gov/docs/ceq-regulations-and-guidance/20100218-nepa-consideration-effects-ghg-draft-guidance.pdf.

    102Revised Draft Guidance for Federal Departments and Agencies on Consideration of Greenhouse Gas Emissions and the Effects of Climate Change in NEPA Reviews, 79 FR 77802 (Dec. 18, 2014) (Revised Draft GHG Guidance).

    103 CEQ, Final Guidance for Federal Departments and Agencies on Consideration of Greenhouse Gas Emissions and the Effects of Climate Change in National Environmental Policy Act Reviews, (Aug. 1, 2016) (Final GHG Guidance), https://ceq.doe.gov/docs/ceq-regulations-and-guidance/nepa_final_ghg_guidance.pdf.

    104 Exec. Order No. 13783, 82 FR 16576 (Apr. 5, 2017).

    44. Since CEQ issued its initial draft guidance, Commission staff has addressed climate change in its NEPA documents. Over the past seven years, Commission staff has expanded its efforts to address GHG emissions and climate change by including GHG emission estimates from project construction (e.g., tailpipe emissions from construction equipment) and operation (e.g., fuel combustion from compressor stations and gas venting and leaks). The Commission's NEPA documents also currently include any mitigation measures the applicant will employ to reduce GHG emissions, including mitigation of methane leaks. Such measures predominantly take the form of best practices and specific technologies developed under the EPA's Natural Gas STAR Program.105 Further, the Commission's NEPA documents discuss the regulations under the Clean Air Act applicable to GHG emissions, recognize that natural gas infrastructure projects contribute GHG emissions that affect global climate change, identify the existing and projected climate change impacts occurring in a project's geographic region, and explain the impacts that climate change may have on a specific project (e.g., future sea level rise and storm surge).106 Current and projected regional climate change impacts are based on the most recently issued National Climate Assessment107 by the United States Global Change Research Program.108 The current assessment provides a regional analysis of climate change for eight defined United States regions: Northeast, Southeast, Northwest, Southwest, Midwest, Great Plains, Coasts, and Alaska.

    105 EPA's Natural Gas STAR program is a voluntary partnership between the EPA and industry to “encourage oil and natural gas companies to adopt cost-effective technologies and best practices that improve operational efficiency and reduce methane emissions.”

    106 42 U.S.C. 7401-7671q.

    107 The current report is the Third National Climate Assessment, issued in May 2014. https://nca2014.globalchange.gov/. The United States Global Change Research Program anticipates releasing the Fourth National Climate Assessment in late 2018.

    108 The United States Global Change Research Program consists of 13 federal agencies and is overseen by the Subcommittee on Global Change Research of the National Science and Technology Council's Committee on Environment, Natural Resources and Sustainability, and the White House Office of Science and Technology Policy. The federal agencies are the Departments of Agriculture, Commerce, Defense, Energy, Health and Human Services, Interior, State, and Transportation, as well as the EPA, the National Aeronautics and Space Administration, the National Science Foundation, the Smithsonian Institution, and the United States Agency for International Development.

    45. To the extent there exist relevant federal, regional, state, tribal, or local plans, policies, or laws for GHG emissions reductions or climate adaptations, the Commission's NEPA documents address the consistency of a proposed project's direct impacts (e.g., compressor station emissions) with those known climate goals. Individual plans may range in scope and specificity from, for example, general commitments to reduce GHG emissions, to particular plans to reduce GHG emissions by sector, as well as plans to adapt to a changing climate.

    46. Historically, CEQ recognized the difficulty in identifying the extent to which a specific action or project may contribute to overall climate change, given that climate change results from the cumulative buildup of carbon dioxide and other GHGs, rather than from the incremental emissions of any one project. Additionally, there is no standard established by international or federal policy, or by a recognized scientific body that the Commission could rely on in determining whether project-specific GHG emissions are significant. Thus, the Commission has stated that, given the information available to date, any attempt by the Commission to create a significance threshold would be arbitrary.109 CEQ's revised draft and final guidance cautioned agencies about calculating a proposed project's emissions as a percentage of sector, nationwide, or global emissions in determining significance, “unless the agency determines that such information would be helpful to decision makers and the public to distinguish among alternatives and mitigations. . . . .” 110 Generally, this percentage would be too low to be considered meaningful because project emissions would be miniscule compared to nationwide or global emissions. CEQ's past guidance also stated that agencies need not undertake new research or analysis of potential climate change in the proposed project area, but may instead summarize and incorporate by reference the relevant scientific literature.111

    109Fla. Se. Connection, LLC, 162 FERC ¶ 61,233, at PP 26-27 (2018) (LaFleur and Glick, Comm'rs, dissenting).

    110 Revised Draft GHG Guidance, 79 FR at 77808; accord Final GHG Guidance at 11, 15-16.

    111 Final GHG Guidance at 22.

    47. In recent years, commenters began raising GHG issues on an increasingly frequent basis in Commission proceedings and on appellate review, with emphasis on upstream and downstream GHG emissions.112 Some commenters suggest that the Commission's current analyses of GHG emissions and climate change are inadequate. They argue that all projects relying on fossil fuels should be considered to cause a significant impact on climate change. Commenters also request that the Commission employ the Social Cost of Carbon tool 113 to monetize climate change impacts from estimated GHG emissions.

    112See, e.g., Atlantic Coast, 161 FERC ¶ 61,042; Transcontinental Gas Pipe Line Co., LLC, 158 FERC ¶ 61,125, order amending certificate, 159 FERC¶ 62,181, order on reh'g, 161 FERC ¶ 61,250 (2017), order denying reh'g, 162 FERC ¶ 61,192 (2018).

    113See generally Interagency Working Group on Social Cost of Carbon, United States Government, Technical Support Document: Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866 (Aug. 2016), https://www.epa.gov/sites/production/files/2016-12/documents/sc_co2_tsd_august_2016.pdf.

    48. The Commission has generally declined to consider the upstream or downstream GHG emissions impacts of natural gas production or end use as indirect impacts of the proposed project because the Commission found no requisite causation and/or because the impacts of such production or end use were speculative and unknown, and therefore not reasonably foreseeable.114 With respect to the cumulative impacts analysis in which causation is not relevant, no analysis of GHG emissions from upstream and downstream activities was included except where identified upstream production wells (new) or end-use facilities (existing or proposed) were within the geographic and temporal scope of the proposed project's direct and indirect impacts.115

    114See, e.g., Cent. N.Y. Oil & Gas Co., 137 FERC ¶ 61,121, at PP 95-105, on reh'g, 138 FERC¶ 61,104, at PP 46-48 (2012), aff'd sub nom. Coal. For Responsible Growth & Res. Conservation v. FERC, 485 F. App'x 472 (2d Cir. 2012) (unpublished opinion).

    115 For example, in the EIS for the proposed Aguirre Offshore GasPort, a jurisdictional floating storage regasification unit and subsea pipeline to deliver gas to an existing non-jurisdictional generating complex, Commission staff disclosed the expected emissions, including GHG emissions, from both the jurisdictional project and non-jurisdictional generating station. Final EIS for the Aquirre Offshore GasPort Project,— at 4-221, tbl.4.12.2-1 (Feb. 20, 2015) (Docket No. CP13-193-000).

    49. In late 2016 the Commission began providing the public with additional information, beyond the requirements of NEPA and its implementing regulations, regarding potential impacts associated with upstream unconventional natural gas production and downstream natural gas combustion even where the criteria of causation and reasonable foreseeability were absent.116 Recent studies identify, on a generic, high-level basis, potential environmental impacts associated with natural gas production and natural gas-fired power generation.117 In Commission orders for projects intended to transport gas produced from the Marcellus and Utica shales, the Commission used this information to provide general estimates of production-related GHG emissions, such as methane released from wells and gathering facilities, and production-related land disturbance and water consumption.118 The Commission estimated downstream GHG emissions by assuming the full combustion of the total volume of gas capable of being transported by the project, typically as part of the cumulative impact analysis.119 The Commission described the full combustion estimate as a worst-case scenario that is unlikely to reflect actual impacts.120 However, in a recent order, DTE Midstream Appalachia, LLC, 121 the Commission did not include information on upstream, production-related impacts, stating that “[a] broad analysis, based on generalized assumptions rather than specific information, will not provide meaningful assistance to the Commission in its decision making, e.g., evaluating potential alternatives to a specific proposal.” 122

    116See, e.g., Columbia Gas Transmission, LLC, 158 FERC ¶ 61,046, at PP 116-120 (2017).

    117E.g., National Energy Technology Laboratory, U.S. Department of Energy, Life Cycle Analysis of Natural Gas Extraction and Power Generation, DOE/NETL-2015/1714 (2016), https://www.netl.doe.gov/energy-analyses/temp/LifeCycleAnalysisofNaturalGasExtractionandPowerGeneration_083016.pdf.

    118E.g., PennEast, 162 FERC ¶ 61,053 at PP 193-210; Millennium Pipeline Co., LLC, 161 FERC¶ 61,229, PP 151-165 (2017) (Millennium).

    119 This information was initially included in certificate orders (in cases where NEPA documents had already been finalized), and subsequently in new NEPA documents. Typically, the end use of the gas to be transported by a project is not known.

    120E.g., Millennium, 161 FERC ¶ 61,229, at P 164 (2017) (“We note that this CO2e [carbon dioxide equivalents] estimate represents an upper bound for the amount of end-use combustion that could result from the gas transported by this project. This is because some of the gas may displace other fuels (i.e., fuel oil and coal) that could result in lower total CO2e emissions. It may also displace gas that otherwise would be transported via different systems, resulting in no change in CO2e emissions, or be used as a feedstock. This estimate also assumes the maximum capacity is transported 365 days per year, which is rarely the case because many projects are designed for peak use.

    Consequently, it is unlikely that this total amount of GHG emissions would occur, and emissions are likely to be significantly lower than the above estimate.”).

    121 162 FERC ¶ 61,238 (2018) (LaFleur and Glick Comm'rs, dissenting).

    122Id. at P 54 (footnote omitted).

    50. As for the use of the Social Cost of Carbon tool, the Commission has found that although this tool is appropriate to use as part of cost-benefit analyses associated with certain rulemakings, it is not useful or appropriate to apply in its NEPA documents.123

    123Fla. Se. Connection, 162 FERC ¶ 61,233 at PP 37-38 (LaFleur and Glick, Comm'rs, dissenting).

    III. Request for Comments

    51. As part of ensuring that the Commission continues to meet its statutory obligations, the Commission, on occasion, engages in public inquiry to gauge whether there is a need to add to, modify, or eliminate certain policies or regulatory requirements. In this proceeding, the Commission seeks comments on potential modifications to its approach to determining whether a proposed project is required by the public convenience and necessity. The Commission has identified four general areas of examination in this inquiry: (1) The reliance on precedent agreements to demonstrate need for a proposed project; (2) the potential exercise of eminent domain and landowner interests; (3) the Commission's evaluation of alternatives and environmental effects under NEPA and the NGA; and (4) the efficiency and effectiveness of the Commission's certificate processes. The Commission seeks comment on the questions set forth below, organized according to these four broad categories. Commenters need not answer every question enumerated below.

    A. Potential Adjustments to the Commission's Determination of Need

    52. In practice, the Commission does not look “behind” or “beyond” precedent agreements when making a determination about the need for new projects or the needs of the individual shippers. The United States Court of Appeals for the District of Columbia Circuit recently found “nothing in the policy statement or in any precedent construing it to suggest that it requires, rather than permits, the Commission to assess a project's benefits by looking beyond the market need reflected by the applicant's existing contracts with shippers.” 124

    124Myersville Citizens for a Rural Cmty. Inc. v FERC, 783 F.3d 1301, 1311 (D.C. Cir. 2015) (citing Minisink, 762 F.3d at 111 n.10).

    53. In retail gas distribution markets, state regulators review LDC commodity and capacity purchases. State regulators also may review electric distribution company fuel purchases. Thus, in these regions, state regulators may review the purchases to determine the prudence of expenditures by the utilities they regulate. For parties purchasing interstate transportation capacity who are not subject to state regulatory oversight, the fact that a purchaser is fully at risk for the cost of the capacity and cannot directly pass through the costs to another party has lessened the need to scrutinize such agreements.

    To date, the Commission has not distinguished between affiliate and non-affiliate precedent agreements in considering the need for a proposed project.125

    125See, e.g., E. Shore Nat. Gas Co., 132 FERC¶ 61,204, at P 31 (2010); Millennium Pipeline Co., L.P., 100 FERC ¶ 61,277, at P 57 (2002).

    54. However, recent changes in the gas industry, whereby producers are contracting for an increasing amount of transportation capacity as well as an increase in the number of shippers that are affiliated with the pipeline companies, have raised questions among some entities as to whether precedent agreements remain an appropriate indicator of need and whether the Commission should examine additional information in evaluating the need for proposed pipeline infrastructure projects. Accordingly, comments are requested on the following questions.

    A1. Should the Commission consider changes in how it determines whether there is a public need for a proposed project? A2. In determining whether there is a public need for a proposed project, what benefits should the Commission consider? For example, should the Commission examine whether the proposed project meets market demand, enhances resilience or reliability, promotes competition among natural gas companies, or enhances the functioning of gas markets? A3. Currently, the Commission considers precedent agreements, whereby entities intending to be shippers on the contemplated pipeline commit contractually to such shipments, to be strong evidence that there is a public need for a proposed project. If the Commission were to look beyond precedent agreements, what types of additional or alternative evidence should the Commission examine to determine project need? What would such evidence provide that cannot be determined with precedent agreements alone? How should the Commission assess such evidence? Is there any heightened litigation risk or other risk that could result from any broadening of the scope of evidence the Commission considers during a certificate proceeding? If so, how should the Commission safeguard against or otherwise address such risks? A4. Should the Commission consider distinguishing between precedent agreements with affiliates and non-affiliates in considering the need for a proposed project? If so, how? A5. Should the Commission consider whether there are specific provisions or characteristics of the precedent agreements that the Commission should more closely review in considering the need for a proposed project? For example, should the term of the precedent agreement have any bearing on the Commission's consideration of need or should the Commission consider whether the contracts are subject to state review? A6. In its determinations regarding project need, should the Commission consider the intended or expected end use of the natural gas? Would consideration of end uses better inform the Commission's determination regarding whether there is a need for the project? What are the challenges to determining the ultimate end use of the new capacity a shipper is contracting for? How could such challenges be overcome? A7. Should the Commission consider requiring additional or alternative evidence of need for different end uses? What would be the effect on pipeline companies, consumers, gas prices, and competition? Examples of end uses could include: LDC contracts to serve domestic use; contracts with marketers to move gas from a production area to a liquid trading point; contracts for transporting gas to an export facility; projects for reliability and/or resilience; and contracts for electric generating resources. A8. How should the Commission take into account that end uses for gas may not be permanent and may change over time? A9. Should the Commission assess need differently if multiple pipeline applications to provide service in the same geographic area are pending before the Commission? For example, should the Commission consider a regional approach to a needs determination if there are multiple pipeline applications pending for the same geographic area? Should the Commission change the way it considers the impact of a new project on competing existing pipeline systems or their captive shippers? If so, what would that analysis look like in practice? A10. Should the Commission consider adjusting its assessment of need to examine (1) if existing infrastructure can accommodate a proposed project (beyond the system alternatives analysis examined in the Commission's environmental review); (2) if demand in a new project's markets will materialize; or (3) if reliance on other energy sources to meet future demand for electricity generation would impact gas projects designed to supply gas-fired generators? If so, how? B. The Exercise of Eminent Domain and Landowner Interests

    55. The Policy Statement described how the Commission takes into account the extent to which an applicant expects to acquire property rights by relying on eminent domain in determining whether a proposed project is needed. Although Commission authorization of a project through the issuance of a certificate of public convenience and necessity under the NGA conveys the right of eminent domain, the Commission itself does not grant the use of eminent domain across specific properties. Only after the Commission authorizes a project can the project sponsor assert the right of eminent domain for outstanding lands for which it could not negotiate an easement.

    56. Recently, the Commission has been seeing more proposed projects where applicants are unable to access potential rights-of-way prior to the Commission's decision on an application, which limits the information that can be included in an application.

    57. Historically, an applicant's inability to complete on-site survey work has not precluded the Commission from completing a meaningful review of a proposal since partial on-site surveys, in combination with aerial overflight and data from other sources, can provide an adequate basis for the Commission to reach an informed decision. The Commission's NEPA documents are based on the best available data at the time of development.126 When information from other data sources is used to complete a NEPA review, the Commission routinely conditions its authorizations requiring applicants to perform on-site surveys to verify this information, prior to construction. In addition, the Commission has developed standard and effective construction mitigation, and restoration and rehabilitation procedures applicable to wetlands and waterbodies, cultural resources, and endangered, threatened, and special concern species.127 Because project sponsors must adhere to these established procedures, if survey work is incomplete at the time a Commission certificate order is issued, these procedures assure that impacts on resources are adequately minimized during construction. The Commission invites comments on the following questions.

    126 An agency reasonably uses “the best information available when it [begins] its analysis and then check[s] the assumptions . . . as new information [becomes] available . . . .” Village of Bensenville v. FAA, 457 F.3d 52, 71 (DC Cir. 2006). See also 40 CFR 1502.22(b)(3) (if relevant information is unavailable, “the agency shall include . . . a summary of existing credible scientific evidence”) (emphasis added).

    127 The Commission's Upland Erosion Control, Revegetation, and Maintenance Plan establishes baseline mitigation measures that project sponsors must implement, except when specifically exempted by Commission staff, to minimize erosion and enhance revegetation associated with their proposed projects. https://www.ferc.gov/industries/gas/enviro/plan.pdf. The Commission's Wetland and Waterbody Construction and Mitigation Procedures establishes baseline mitigation meas