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Office of the Comptroller of the Currency, Department of the Treasury.
Final rule.
The Office of the Comptroller of the Currency (OCC) is adopting a final rule authorizing national banks, Federal branches and agencies of foreign banks, and their operating subsidiaries to engage in off-exchange transactions in foreign currency with retail customers. The rule also describes various requirements with which national banks, Federal branches and agencies of foreign banks, and their operating subsidiaries must comply to conduct such transactions.
This rule is effective July 15, 2011.
Tena Alexander, Senior Counsel, or Roman Goldstein, Attorney, Securities and Corporate Practices Division, (202) 874-5120.
On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).
Retail forex rules must prescribe appropriate requirements with respect to disclosure, recordkeeping, capital and margin, reporting, business conduct, and documentation requirements and may include such other standards or requirements as the Federal regulatory agency determines to be necessary.
In addition, on July 21, 2011, the OCC will become the appropriate Federal banking agency for Federal savings associations.
On September 10, 2010, the Commodity Futures Trading Commission (CFTC) issued a retail forex rule for persons subject to its jurisdiction.
On May 17, 2011, the Federal Deposit Insurance Corporation (FDIC) proposed
The comment period for the proposed OCC retail forex rule ended on May 23, 2011. The OCC received a total of three comments by that date. Of these, one was submitted by a large bank that engages in retail forex transactions (the commenter) and two were submitted by individuals. The latter two comments did not relate to the proposal. The commenter generally supported the OCC's proposed rule while requesting certain clarifications and changes. The commenter's comments to specific sections of the proposal are addressed in the Section-by-Section Analysis below. In light of the comments received, the final rule, for the most part, is similar to the proposed rule; the significant changes are described in the Section-by-Section analysis.
In the preamble to the proposal, the OCC indicated that retail forex transactions are subject to the Interagency Statement on Retail Sales of Nondeposit Investment Products (NDIP Policy Statement).
In the proposal, the OCC asked for comment on whether application of the NDIP Policy Statement created issues that the OCC should address.
The commenter said that the NDIP Policy Statement should not apply to retail forex transactions, asserting that the retail forex rule, alone, would be sufficient to protect retail customers, and the imposition of the NDIP Policy Statement on retail forex transactions would create confusion and ambiguity. No specific provisions were identified, however, that create confusion or ambiguity. The commenter further argued that because the NDIP Policy Statement does not apply to CFTC registrants, its application to retail forex transactions would not promote consistent regulatory treatment of retail forex transactions.
The OCC believes that it is appropriate to apply the NDIP Policy Statement to retail forex transactions. The consumer protections that the NDIP Policy Statement provides are no less important for retail forex transactions than for other nondeposit investment products. Moreover, there is no direct conflict between this rule and the NDIP Policy Statement because the statement requires national banks to develop policies and procedures to ensure that nondeposit investment product sales are conducted in compliance with applicable laws and regulations.
This section authorizes a national bank to conduct retail forex transactions.
The OCC requested comment on whether the retail forex rule should apply to national banks' foreign branches conducting retail forex transactions abroad, whether with U.S. or foreign customers.
The commenter responded that there is no U.S. policy interest in applying U.S. consumer protection rules to transactions with non-U.S. residents conducted by foreign branches. Those transactions are subject to foreign regulatory requirements that could be inconsistent with the retail forex rule. Subjecting those transactions to two sets of regulatory requirements would also place national banks at a competitive disadvantage abroad.
The OCC recognizes the concerns raised by the commenter.
Retail forex transactions between a foreign branch of a national bank and a non-U.S. customer are subject to any applicable disclosure, recordkeeping, capital, margin, reporting, business conduct, documentation, and other requirements of applicable foreign law. Therefore, those transactions are not subject to the requirements of §§ 48.3 and 48.5 to 48.16.
This section defines terms specific to retail forex transactions and to the regulatory requirements that apply to retail forex transactions.
The definition of “retail forex transaction” generally includes the following transactions in foreign currency between a national bank and a person that is not an eligible contract participant:
Certain transactions in foreign currency are not “retail forex transactions.” For example, a spot forex transaction in which one currency is bought for another and the two currencies are exchanged within two days would not meet the definition of “retail forex transaction.”
The proposed rule sought comment on whether leveraged, margined, or bank-financed forex transactions, including rolling spot forex transactions (so-called
The commenter supported the inclusion of rolling spot forex transactions in the definition of “retail forex transaction.” A rolling spot forex transaction nominally requires delivery of currency within two days, like spot transactions. However, in practice, the contracts are indefinitely renewed every other day and no currency is actually delivered until one party affirmatively closes out the position.
The commenter sought clarification that forex forwards would not be included in the definition, because transactions that convert or exchange actual currencies for any commercial or investment purpose are a traditional product offered by national banks and do not raise the consumer protection issues associated with futures or rolling spot forex transactions.
The OCC agrees that a forex forward that is not leveraged, margined, or financed by the national bank does not meet the definition of “retail forex transaction.” However, a leveraged, margined, or bank-financed forex forward is a retail forex transaction unless it creates an enforceable obligation to deliver between a seller and a buyer that have the ability to deliver and accept delivery, respectively, in connection with their line of business
The final rule contains a provision that allows the OCC to exempt specific transactions or kinds of transaction from the third prong of the “retail forex transaction” definition. The OCC is concerned that certain traditional banking products, which are distinguishable from speculative rolling spot forex transactions, may inadvertently fall within the definition of “retail forex transaction” as leveraged, margined, or bank-financed forex transactions. This result was not intended by the Dodd-Frank Act, which requires retail forex rules to treat similarly transactions that are functionally or economically similar to forex futures or options.
The commenter asked for confirmation that deposit accounts with foreign exchange features are outside the scope of the rule.
The Legal Certainty for Bank Products Act of 2000, as amended by the Dodd-Frank Act, generally exempts “identified banking products” from the CEA.
This section defines several terms by reference to the CEA, the most important of which is “eligible contract participant.” Foreign currency transactions with eligible contract participants are not considered retail forex transactions and are therefore not subject to this rule. In addition to a variety of financial entities, certain governmental entities, businesses, and individuals may be eligible contract participants.
(a) A corporation, partnership, proprietorship, organization, trust, or other entity—
(1) That has total assets exceeding $10,000,000;
(2) The obligations of which under an agreement, contract, or transaction are guaranteed or otherwise supported by a letter of credit or keepwell, support, or other agreement by certain other eligible contract participants; or
(3) That—
(i) Has a net worth exceeding $1,000,000; and
(ii) Enters into an agreement, contract, or transaction in connection with the conduct of the entity's business or to manage the risk associated with an asset or liability owned or incurred or reasonably likely to be owned or incurred by the entity in the conduct of the entity's business;
(b) Subject to certain exclusions,
(1) A governmental entity (including the United States, a State, or a foreign government) or political subdivision of a governmental entity;
(2) A multinational or supranational governmental entity; and
(3) An instrumentality, agency, or department of an entity described in (b)(1) or (2); and
(c) An individual who has amounts invested on a discretionary basis, the aggregate of which is in excess of—
(1) $10,000,000; or
(2) $5,000,000 and who enters into the agreement, contract, or transaction in order to manage the risk associated with an asset owned or liability incurred, or reasonably likely to be owned or incurred, by the individual.
This section prohibits a national bank and its institution-affiliated parties from engaging in fraudulent conduct in connection with retail forex transactions. This section also prohibits a national bank from acting as a counterparty to a retail forex transaction if the national bank or its affiliate exercises discretion over the customer's retail forex account because the OCC views such self-dealing as inappropriate.
The OCC received no comments to this section and adopts it as proposed.
This section requires a national bank to obtain a written supervisory non-objection prior to engaging in a retail forex business. To obtain such non-objection, the national bank will have to provide such information as the OCC deems necessary to determine that the national bank would satisfy the requirements of the rule. This information will include information on: Customer due diligence (including credit evaluations, customer appropriateness, and “know your customer” documentation); new product approvals; haircuts for noncash margin; and conflicts of interest. In addition, the national bank must establish that it has adequate written policies, procedures, and risk measurement and management systems and controls.
National banks engaged in retail forex transactions as of the effective date of this rule that promptly request the OCC's review of their retail forex business will have six months, or a longer period provided by the OCC, to bring their operations into conformance with the rule. Under this rule, a national bank that requests the OCC's review within 30 days of the effective date of the final retail forex rule and submits such information as the OCC may request within the timeframe the OCC provides will be deemed to be operating its retail forex business pursuant to a rule or regulation of a Federal regulatory agency, as required under the CEA, for such period.
A national bank need not join a futures self-regulatory organization as a condition of conducting a retail forex business.
The commenter supported the adoption of this section, and the OCC adopts it as proposed.
This section requires a national bank to close out offsetting long and short positions in a retail forex account. The national bank would have to offset such positions regardless of whether the customer has instructed otherwise. The CFTC concluded that keeping open long and short positions in a retail forex customer's account removes the opportunity for the customer to profit on the transactions, increases the fees paid by the customer, and invites abuse.
The commenter stated that a customer should be permitted to provide instructions with respect to the manner in which the customer's retail forex transaction are offset when: (i) The customer maintains separate accounts managed by different advisors; (ii) the customer maintains separate accounts using different trading strategies; or (iii) the customer employs different trading strategies in one account and applies certain orders to risk-manage that exposure. The commenter also sought clarification that a customer could provide specific offset instructions in writing or orally, and that those instructions can be made on a blanket basis.
The OCC agrees that a customer should be able to offset retail forex transactions in a particular manner, if he or she so chooses. Paragraph (c) has been modified to provide that, notwithstanding the default offset rules in paragraphs (a) and (b), the national bank must offset retail forex transactions pursuant to a customer's specific instructions. Blanket instructions are not sufficient for this purpose, as they could obviate the default rule. However, offset instructions need not be given separately for each pair of orders in order to be “specific.” Instructions that apply to sufficiently defined sets of transactions could be specific enough. Finally, consistent with the changes to § 48.12, retail forex customers may make offset instructions in writing or orally. The national bank must create and maintain a record of each offset instruction.
This section requires a national bank to provide retail forex customers with a risk disclosure statement similar to the one required by the CFTC's retail forex rule but tailored to address certain unique characteristics of retail forex in national banks. The prescribed risk disclosure statement would describe the risks associated with retail forex transactions.
The commenter agreed with the need for a robust risk disclosure statement but suggested that a shorter, clearer, more direct, and less redundant statement would be more effective. The final rule incorporates several changes to the disclosures to eliminate redundancies, address ambiguities, and convey the information more clearly.
The proposal requested comment on whether the risk disclosure statement should disclose the percentage of profitable retail forex accounts.
The commenter said that disclosing the ratio of profitable to nonprofitable retail forex accounts is not useful because those ratios depend on many factors (including the trading expertise of customers) and could suggest one national bank is a more attractive retail forex counterparty than another.
In its retail forex rule, the CFTC requires its registrants to disclose to retail customers the percentage of retail forex accounts that earned a profit and the percentage of such accounts that experienced a loss during each of the most recent four calendar quarters.
The proposal requested comment on whether the risk disclosure statement should include a disclosure that when a retail customer loses money trading, the dealer makes money.
The commenter said that this disclosure is inaccurate because the bank immediately hedges retail forex transactions or nets them with similar transactions and therefore does not profit from exchange rate fluctuations. The commenter argued it is more accurate to inform customers that the bank may or does mark-up (or mark-down) transactions or apply commission rates to transactions that will create income for the bank.
The OCC understands that the economic model of a retail forex business may be to profit from spreads, fees, and commissions. Nonetheless, because a national bank engaging in retail forex transactions is trading as principal, by definition, when the retail forex customer loses money on a retail forex transaction, the national bank makes money on that transaction. The OCC therefore believes that this disclosure is accurate and helps potential retail forex customers understand the nature of retail forex transactions. Similarly, the CFTC's retail forex rule requires a disclosure that when a retail customer loses money
The proposal asked whether it would be convenient to national banks and retail forex customers to allow the retail forex risk disclosure to be combined with other disclosures that national banks make to their customers.
The commenter asked the OCC to confirm that national banks may add topics to the risk disclosure statement.
The OCC is concerned that the effectiveness of the disclosure could be diminished if surrounded by other topics. Therefore, the final rule requires the risk disclosure statement to be given to potential retail forex customers as set forth in the rule. National banks may describe and provide additional information on retail forex transactions in a separate document.
The commenter further asked the OCC to confirm that the risk disclosure statement may be appended to account opening agreements or forms and that a single signature by the customer on a combined account agreement and disclosure form can be used as long as the customer is directed to and acknowledges the risk disclosure statement immediately prior to the signature line.
The OCC believes that a separate risk disclosure document appropriately highlights the risks in retail forex transactions and that requiring a separate signature for the separate risk disclosure appropriately calls a potential retail forex customer's attention to the risk disclosure statement. However, a national bank may attach the risk disclosure to a related document, such as the account agreement.
The proposal requested comment on whether the risk disclosure statement should include a disclosure of fees that the national bank charges to retail forex customers.
The commenter agreed that the disclosure of fees is appropriate, but should not include income from hedging retail forex customers' positions or income streams not charged to the customer. Moreover, the commenter stated that it is impractical to numerically state the bid/ask spread given that it may vary.
The final rule, like the proposed rule, does not require national banks to disclose income streams not charged to the retail forex customer. However, a national bank must do more than simply describe the means by which it earns revenue. To the extent practical, it must quantify the fees, charges, spreads, or commissions that the national bank may impose on the retail forex customer in connection with the customer's retail forex account or a retail forex transaction.
The commenter read the disclosure to suggest that the national bank cannot seek to recover losses not covered by a customer's margin account via an appropriate dispute resolution forum and asked the OCC to confirm that this was not the case.
Section 48.9(d)(4) requires a national bank, in the event that a retail forex customer's margin falls below the amount needed to satisfy the margin requirement to either: (1) Collect sufficient margin from the retail forex customer; or (2) liquidate the retail forex customer's retail forex transactions. The final rule does not forbid a national bank from seeking to recover a deficiency from a retail forex customer in an appropriate venue. The disclosure has been revised to make this fact clear.
Finally, the commenter said that the disclosure regarding the availability of FDIC-insurance for retail forex transactions should be clarified.
The disclosure requires a national bank to state that retail forex transactions are not FDIC-insured. The commenter agreed with that statement. It noted, however, that margin funds may be insured deposits. The FDIC-insured status of funds held in a retail forex margin account will depend on whether such funds are held in a manner that meets the requirements of the Federal Deposit Insurance Act and its implementing regulations. National banks may accurately disclose the availability of FDIC insurance for retail forex margin accounts in a separate document as permitted by law.
This section specifies which documents and records that a national bank engaged in retail forex transactions must retain for examination by the OCC. This section also prescribes document maintenance standards. The OCC notes that records may be kept electronically as permitted under the Electronic Signatures in Global and National Commerce Act.
The OCC received no comments on this section. Recordkeeping requirements found in § 48.13(a)(3) of the proposed rule were moved into this section to centralize recordkeeping requirements in one section. Furthermore, the recordkeeping requirements have been modified to accommodate oral orders and offset instructions. A national bank must create an audio recording of oral orders and offset instructions.
This section requires that a national bank that offers or enters into retail forex transactions must be “well capitalized” as defined in the OCC's prompt corrective action regulation.
The proposed rule contained a provision allowing the OCC to exempt a national bank from the well-capitalized requirement. This provision has been removed in light of the general reservation of authority in § 48.17.
Paragraph (a) requires a national bank that engages in retail forex transactions, in advance of any such transaction, to collect from the retail forex customer margin equal to at least 2 percent of the notional value of the retail forex transaction if the transaction is in a major currency pair and at least 5 percent of the notional value of the retail forex transaction otherwise. These margin requirements are identical to the requirements imposed by the CFTC's retail forex rule.
The proposal requested comments on whether it should define the major currencies in the final rule but did not receive any. The final rule adopts the proposal's approach to identifying the major currencies.
A major currency pair is a currency pair with two major currencies. The
For retail forex transactions, margin protects the retail forex customer from the risks related to trading with excessive leverage. The volatility of the foreign currency markets exposes retail forex customers to substantial risk of loss. High leverage ratios can significantly increase a customer's losses and gains. Even a small move against a customer's position can result in a substantial loss. Even with required margin, losses can exceed the margin posted and, if the account is not closed out, and, depending on the specific circumstances, the customer could be liable for additional losses. Given the risks that are inherent in the trading of retail forex transactions by retail customers, the only funds that should be invested in such transactions are those that the customer can afford to lose.
Prior to the CFTC's rule, nonbank dealers routinely permitted customers to trade with 1 percent margin (leverage of 100:1) and sometimes with as little as 0.25 percent margin (leverage of 400:1). When the CFTC proposed its retail forex rule in January 2010, it proposed a margin requirement of 10 percent (leverage of 10:1). In response to comments, the CFTC reduced the required margin in the final rule to 2 percent (leverage of 50:1) for trades involving major currencies and 5 percent (leverage of 20:1) for trades involving non-major currencies.
The proposal requested comment on whether these margin requirements were appropriate to protect retail forex customers.
The commenter did not object to the amount of margin required. However, the commenter suggested that the margin required by this paragraph should be initial margin rather than maintenance margin. The commenter also suggested that national banks be allowed to set maintenance margin levels as a matter of the banks' credit and risk policies in a manner that balances (i) protecting customers from a forced close-put of their positions as soon as an adverse market move erodes margin under the 2 or 5 percent minimum level with (ii) the need to promptly collect margin and close out positions when a customer fails to meet a margin call. The commenter also suggested that customers should have some reasonable time to meet margin calls before they are deemed to have defaulted and face a forced liquidation of their positions.
Subject to reasonable collection times as described below, a national bank must ensure that there is always sufficient margin in a retail forex customer's margin account for the customer's open retail forex transactions. If the amount of margin in a retail forex customer's margin account is insufficient to meet the requirements of paragraph (a), then § 48.9(d)(4) requires the national bank to make a margin call to replenish the margin account to an acceptable level and, if the customer does not comply with the margin call, to liquidate the retail forex customer's retail forex transactions. Retail forex customers should have a reasonable amount of time to post required margin for retail forex transactions. Market practice is for retail forex counterparties to make margin calls at the close of trading on a trading day based on margin levels at the end of that day or at the open of trading on the next trading day based on margin levels at the end of that prior day. If the retail forex customer does not post sufficient margin by the end of the next close of trading, then the retail forex counterparty liquidates the customer's retail forex account. In other words, by the close of business on a given trading day, the margin account must be sufficient to meet the margin requirements as at the end of the prior trading day.
Paragraph (b) specifies the acceptable forms of margin that customers may post. National banks must establish policies and procedures providing for haircuts for noncash margin collected from customers and must review these haircuts annually. It may be prudent for national banks to review and modify the size of the haircuts more frequently. The OCC requested comment on whether the final rule should specify haircuts for noncash margin. The OCC received no comments on this paragraph and adopts this paragraph as proposed.
Paragraph (c) requires a national bank to hold each retail forex customer's retail forex transaction margin in a separate account. This paragraph is designed to work with the prohibition on set-off in paragraph (e), so that a national bank may not have an account agreement that treats all of a retail forex customer's assets held by a bank as margin for retail forex transactions.
The commenter requested clarification that this paragraph allows national banks to place margin into an omnibus or commingled account for operational convenience, provided that the bank keeps records of each customer's margin balance.
A national bank may place margin collected from retail forex customers into an omnibus or commingled account if the bank keeps records of each retail forex customer's margin balance. A “separate account” is one separate from the retail forex customer's other accounts at the bank. For example, margin for retail forex transactions cannot be held in a retail forex customer's savings account. Funds in a savings account pledged as retail forex margin must be transferred to a separate margin account, which could be an individual or an omnibus margin account. The final rule contains slightly modified language to clarify this intent. The FDIC-insured status of funds held in an omnibus account will depend on whether such funds are held in a manner that meets the requirements of the Federal Deposit Insurance Act and its implementing regulations.
Paragraph (d) requires a national bank to collect additional margin from the customer or to liquidate the customer's position if the amount of margin held by the national bank fails to meet the requirements of paragraph (a). The proposed rule would have required the national bank to mark the customer's open retail forex positions and the value of the customer's margin to the market daily to ensure that a retail forex customer does not accumulate substantial losses not covered by margin.
The proposal requested comment on how frequently retail forex customers' margin accounts should be marked to market.
The commenter asked that the final rules permit marking to market more frequently than daily if the national bank's systems and customer agreements permit. The final rule, like the proposed rule, requires marking to market at least once per day. Nothing in paragraph (d) forbids a more frequent schedule.
Paragraph (e) prohibits a national bank from applying a retail forex customer's retail forex obligations against any asset or liability of the retail forex customer other than money or property pledged as margin.
The commenter suggested that retail forex customers should be able to pledge assets other than those held in the customer's margin account. For example, a customer could nominate a deposit account as containing margin for its retail forex transactions.
Nothing in this rule prevents retail forex customers from pledging other assets they have at the bank as margin for retail forex transactions. However, once those assets are pledged as margin, the national bank must transfer them to the separate margin account. For example, if a retail forex customer pledges $500 in her checking account as margin, then the bank must deduct $500 from the checking account and place $500 in the margin account. The OCC believes this transfer appropriately alerts retail forex customers to the nature of the pledge. A national bank may not evade this requirement by merely taking a security interest in assets pledged as margin: pledged assets must be placed in a separate margin account.
This section requires a national bank engaging in retail forex transactions to provide each retail forex customer a monthly statement and confirmation statements.
The proposal sought comment on whether this section provides for statements that would be useful and meaningful to retail forex customers or whether other information would be more appropriate.
The commenter sought clarification that the statements may be provided electronically, and also suggested that retail forex customers would be better served with continuous online access to account information rather than monthly statements.
The OCC encourages national banks to provide real-time, continuous access to account information. This rule does not prevent national banks from doing so. However, the OCC believes it is valuable to require national banks to provide retail forex account information to retail forex customers at least once per month. Monthly statements may be provided electronically as permitted under the Electronic Signatures in Global and National Commerce Act.
This section prohibits a national bank and its institution-affiliated parties from representing that the Federal government, the OCC, or any other Federal agency has sponsored, recommended, or approved retail forex transactions or products in any way. This section also prohibits a national bank from implying or representing that it will guarantee against or limit retail forex customer losses or not collect margin as required by § 48.9. This section does not prohibit a national bank from sharing in a loss resulting from error or mishandling of an order. Guaranties entered into prior to effectiveness of the prohibition would only be affected if an attempt is made to extend, modify, or renew them. This section also does not prohibit a national bank from hedging or otherwise mitigating its own exposure to retail forex transactions or any other foreign exchange risk.
The OCC received no comments to this section and adopts it as proposed.
The proposed rule required national banks to have specific written authorization from a retail forex customer before effecting a retail forex transaction.
The commenter said that requiring specific written authorization from a retail forex customer before effecting a retail forex transaction for that customer would be burdensome and detrimental to the customer's interests, if, for example, the customer cannot convey written instructions because of technical difficulties.
The OCC agrees with this concern and further notes that the CFTC's retail forex rule does not require written authorization for each retail forex transaction. The final rule requires a national bank to obtain a retail forex customer's specific authorization (written or oral) to effect a particular trade. National banks must keep records of authorizations to trade pursuant to this rule.
This section largely follows the trading standards of the CFTC's retail forex rule, which were developed to prevent some of the deceptive or unfair practices identified by the CFTC and the National Futures Association.
Under paragraph (a), a national bank engaging in retail forex transactions is required to establish and enforce internal rules, procedures, and controls (1) to prevent front running, a practice in which transactions in accounts of the national bank or its related persons are executed before a similar customer order; and (2) to establish settlement prices fairly and objectively.
The commenter requested clarification that the prohibition on front running applies only when the person entering orders for the bank's account or the account of related persons has knowledge of unexecuted retail customer orders, and that a national bank may comply with this provision by erecting a firewall between the retail forex order book and other forex trading desks.
The final rule requires national banks to establish reasonable policies, procedures, and controls to address front running. This provision is designed to prevent the national banks from unfairly taking advantage of information they gain from customer trades. Effective firewalls and information barriers are reasonable policies, procedures, and controls to ensure that a national bank does not take unfair advantage of its retail forex customers. The final rule clarifies paragraph (a) accordingly.
Paragraph (b) prohibits a national bank engaging in retail forex transactions from disclosing that it
Paragraph (c) ensures that related persons of another retail forex counterparty do not open accounts with a national bank without the knowledge and authorization of the account surveillance personnel of the other retail forex counterparty with which they are affiliated. Similarly, paragraph (d) ensures that related persons of a national bank do not open accounts with other retail forex counterparties without the knowledge and authorization of the account surveillance personnel of the national bank with which they are affiliated.
The commenter requested confirmation that national banks may rely on a representation of potential customers that they are not affiliated with a retail forex counterparty. Paragraph (c) prohibits a national bank from
The commenter also requested clarification that these paragraphs apply only to employees of firms that offer retail forex transactions, and, in the case of banks, only employees of the retail forex business and not any employee of the bank that offers retail forex transactions. The OCC agrees that the prohibitions in paragraph (c) and (d) should only apply to employees working in the retail forex business; paragraphs (c) and (d) are designed to prevent evasion of the prohibition against front running. The final rule clarifies this point.
Paragraph (e) prohibits a national bank engaging in retail forex transactions from (1) entering a retail forex transaction to be executed at a price that is not at or near prices at which other retail forex customers have executed materially similar transactions with the national bank during the same time period, (2) changing prices after confirmation, (3) providing a retail forex customer with a new bid price that is higher (or lower) than previously provided without providing a new ask price that is similarly higher (or lower) as well, and (4) establishing a new position for a retail forex customer (except to offset an existing position) if the national bank holds one or more outstanding orders of other retail forex customers for the same currency pair at a comparable price.
Paragraph (e)(3) does not prevent a national bank from changing the bid or ask prices of a retail forex transaction to respond to market events. The OCC understands that market practice among CFTC-registrants is not to offer requotes but to simply reject orders and advise customers they may submit a new order (which the dealer may or may not accept). Similarly, a national bank may reject an order and advise customers that they may submit a new order.
The proposal sought comment on whether paragraph (e)(3) appropriately protected retail forex customers or whether a prohibition on re-quoting would be simpler.
The commenter argued that the prohibition on re-quoting in paragraph (e)(3) is overly broad and should permit new bids or offers to reflect updated spreads. In the alternative, the commenter suggested prohibiting re-quoting and requiring that, in the event an order is not confirmed, the customer must submit a new order at the then-currently displayed price. As stated above, rather than allowing requotes, a national bank may reject orders and request that customers submit a new order. Paragraph (e)(3) is consistent with the CFTC's retail forex rule and the OCC adopts it as proposed.
Paragraph (e)(4) requires a national bank engaging in retail forex transactions to execute similar orders in the order they are received. The prohibition prevents a national bank from offering preferred execution to some of its retail forex customers but not others.
This section imposes on a national bank and its agents, officers, and employees a duty to supervise subordinates with responsibility for retail forex transactions to ensure compliance with the OCC's retail forex rule.
The proposal requested comment on whether this section imposed requirements not already encompassed by safety and soundness standards. Having received no comments to this section, the OCC adopts it as proposed.
This section describes the requirements for transferring a retail forex account. Generally, a national bank must provide retail forex customers 30 days' prior notice before transferring or assigning their account. Affected customers may then instruct the national bank to transfer the account to an institution of their choosing or liquidate the account. There are three exceptions to the above notice requirement: a transfer in connection with the receivership or conservatorship under the Federal Deposit Insurance Act; a transfer pursuant to a retail forex customer's specific request; and a transfer otherwise allowed by applicable law. A national bank that is the transferee of retail forex accounts must generally provide the transferred customers with the risk disclosure statement of § 48.6 and obtain each affected customer's written acknowledgement within 60 days.
The OCC received no comments to this section and adopts it as proposed.
This section imposes limitations on how a national bank may handle disputes arising out of a retail forex transaction. For example, this section would restrict a national bank's ability to require mandatory arbitration for such disputes.
The OCC received no comments to this section and adopts is as proposed.
This section allows the OCC to modify certain requirements of this rule consistent with safety and soundness and the protection of retail forex customers. The OCC understands the need for flexibility as foreign exchange products or foreign exchange trading procedures develop and to ensure that such products or trading procedures are subject to appropriate customer protection and safety and soundness standards.
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601
Pursuant to section 605(b) of the RFA, the OCC certified that this rule, as proposed, would not have a significant economic impact on a substantial number of the small entities it supervises. Accordingly, a regulatory flexibility analysis was not required. In making this determination, the OCC estimated that there were no small banking organizations currently engaging in retail forex transactions with their customers. Therefore, the OCC estimates that no small banking organizations under its supervision would be affected by this final rule.
In conjunction with the Notice of Proposed Rulemaking (NPRM),
The information collection requirements contained in this final rule have been submitted by the OCC to OMB for review and approval under 44 U.S.C. 3506 and 5 CFR part 1320. In accordance with section 3512 of the PRA, 44 U.S.C. 3512, the OCC may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid OMB control number. The information collection requirements are found in §§ 48.4-48.7, 48.9-48.10, 48.13, and 48.15-48.16.
Comments continue to be invited on:
(a) Whether the collection of information is necessary for the proper performance of the OCC's functions, including whether the information has practical utility;
(b) The accuracy of the estimate of the burden of the information collection, including the validity of the methodology and assumptions used;
(c) Ways to enhance the quality, utility, and clarity of the information to be collected;
(d) Ways to minimize the burden of information collection on respondents, including through the use of automated collection techniques or other forms of information technology; and
(e) Estimates of capital or startup costs and costs of operation, maintenance, and purchase of services to provide information.
All comments will become a matter of public record. Comments should be addressed to: Communications Division, Office of the Comptroller of the Currency, Public Information Room, Mailstop 2-3,
Additionally, you should send a copy of your comments to the OMB Desk Officer, by mail to U.S. Office of Management and Budget, 725 17th Street, NW., 10235, Washington, DC 20503, or by fax to 202-395-6974.
The reporting requirements in § 48.4 require that, prior to initiating a retail forex business, a national bank provide the OCC with prior notice and obtain a written supervisory non-objection letter. In order to obtain a supervisory non-objection letter, a national bank must have written policies and procedures and risk measurement and management systems and controls in place to ensure that retail forex transactions are conducted in a safe and sound manner. The national bank must also provide other information required by the OCC, such as documentation of customer due diligence, new product approvals, and haircuts applied to noncash margins. A national bank already engaging in a retail forex business may continue to do so, provided it requests an extension of time.
Section 48.5, regarding the application and closing out of offsetting long and short positions, requires a national bank to promptly provide the customer with a statement reflecting the financial result of the transactions and the name of the introducing broker to the account. The customer provides specific written instructions on how the offsetting transaction should be applied.
Section 48.6 requires that a national bank furnish a retail forex customer with a written disclosure before opening an account that will engage in retail forex transactions for a retail forex customer and receive an acknowledgment from the customer that it was received and understood. It also requires the disclosure by a national bank of its fees and other charges and its profitable accounts ratio.
Section 48.10 requires a national bank to issue monthly statements to each retail forex customer and to send confirmation statements following transactions.
Section 48.13(b) allows disclosure by a national bank that an order of another person is being held by them only when necessary to the effective execution of the order or when the disclosure is requested by the OCC. Section 48.13(c) prohibits a national bank engaging in retail forex transactions from knowingly handling the account of any related person of another retail forex counterparty unless it receives proper written authorization, promptly prepares a written record of the order, and transmits to the counterparty copies all statements and written records. Section 48.13(d) prohibits a related person of a national bank engaging in forex transactions from having an account with another retail forex counterparty unless the counterparty receives proper written authorization and transmits copies of all statements
Section 48.15 requires a national bank to provide a retail forex customer with 30 days' prior notice of any assignment of any position or transfer of any account of the retail forex customer. It also requires a national bank to which retail forex accounts or positions are assigned or transferred to provide the affected customers with risk disclosure statements and forms of acknowledgment and receive the signed acknowledgments within 60 days.
The customer dispute resolution provisions in § 48.16 requires certain endorsements, acknowledgments, and signature language. Section 48.16 also requires that within 10 days after receipt of notice from the retail forex customer that the customer intends to submit a claim to arbitration, the national bank provides to the customer a list of persons qualified in the dispute resolution, and that the customer must notify the national bank of the person selected within 45 days of receipt of such list.
Sections 48.7 and 48.13(a) require that a national bank engaging in retail forex transactions keep full, complete, and systematic records and establish and implement internal rules, procedures, and controls. Section 48.7 also requires that a national bank keep account, financial ledger, transaction and daily records; price logs; records of methods used to determine bids or asked prices; memorandum orders; post-execution allocation of bunched orders; records regarding its ratio of profitable accounts and possible violations of law; records for noncash margin; order tickets; and monthly statements and confirmations. Section 48.9 requires policies and procedures for haircuts for noncash margin collected under the rule's margin requirements and annual evaluations and modifications of the haircuts.
Section 202 of the Unfunded Mandates Reform Act of 1995 (Unfunded Mandates Act), 2 U.S.C. 1532, requires that an agency prepare a budgetary impact statement before promulgating any rule likely to result in a Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. If a budgetary impact statement is required, section 205 of the Unfunded Mandates Act also requires an agency to identify and consider a reasonable number of regulatory alternatives before promulgating a rule. The OCC has determined that this rule will not result in expenditures by State, local, and tribal governments, or by the private sector, of $100 million or more in any one year.
This final rule takes effect on July 15, 2011. 5 U.S.C. 553(d)(1) requires publication of a substantive rule not less than 30 days before its effective date, except in cases in which the rule grants or recognizes an exemption or relieves a restriction. Section 2(c)(2)(E)(ii) of the CEA would prohibit national banks from engaging in retail forex transactions unless this final rule becomes effective on July 16, 2011. This final rule would relieve that restriction and allow national banks to continue to engage in retail forex transactions without delay. Furthermore, under 5 U.S.C. 553(d)(3), an agency may find good cause to publish a rule less than 30 days before its effective date. The OCC finds such good cause, as the 30-day delayed effective date is unnecessary under the provisions of the final rule. In § 48.4(c) of the final rule, the OCC allows national banks a 30-day grace period to inform the OCC of its retail forex activity, along with up to a six-month window to comply with the provisions of the retail forex rule.
The Riegle Community Development and Regulatory Improvement Act of 1994 (CDRI Act), 12 U.S.C. 4801
Banks, Consumer protection, Definitions, Federal branches and agencies, Foreign currencies, Foreign exchange, National banks, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, part 48 to Title 12, Chapter I of the Code of Federal Regulations is added to read as follows:
7 U.S.C. 27
(a)
(b)
(c)
(d)
In addition to the definitions in this section, for purposes of this part, the following terms have the same meaning as in the Commodity Exchange Act: “Affiliated person of a futures commission merchant”; “associated person”; “contract of sale”; “commodity”; “eligible contract participant”; “futures commission merchant”; “future delivery”; “option”; “security”; and “security futures product”.
(1) A national bank;
(2) A Federal branch or agency of a foreign bank, each as defined in 12 U.S.C. 3101; and
(3) An operating subsidiary of a national bank or an operating subsidiary of a Federal branch or agency of a foreign bank.
(1) Any general partner, officer, director, or owner of 10 percent or more of the capital stock of the retail forex counterparty;
(2) An associated person or employee of the retail forex counterparty, if the retail forex counterparty is not a national bank;
(3) An IAP of the retail forex counterparty, if the retail forex counterparty is a national bank; and
(4) A relative or spouse of any of the foregoing persons, or a relative of such spouse, who shares the same home as any of the foregoing persons.
(1) A national bank;
(2) A retail foreign exchange dealer;
(3) A futures commission merchant; and
(4) An affiliated person of a futures commission merchant.
(1) The national bank;
(2) An officer, director, or owner of 10 percent or more of the capital stock of the national bank; or
(3) An employee of the national bank, whose duties include:
(i) The management of the national bank's business;
(ii) The handling of the national bank's retail forex transactions;
(iii) The keeping of records, including without limitation the software used to make or maintain those records, pertaining to the national bank's retail forex transactions; or
(iv) The signing or co-signing of checks or drafts on behalf of the national bank;
(4) A spouse or minor dependent living in the same household as any of the foregoing persons; or
(5) An affiliate of the national bank.
(1) A contract of sale of a commodity for future delivery or an option on such a contract;
(2) An option, other than an option executed or traded on a national securities exchange registered pursuant to section 6(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78(f)(a)); or
(3) Offered or entered into on a leveraged or margined basis, or financed by a national bank, its affiliate, or any person acting in concert with the national bank or its affiliate on a similar basis, other than:
(i) A security that is not a security futures product as defined in section 1a(47) of the Commodity Exchange Act (7 U.S.C. 1a(47)); or
(ii) A contract of sale that:
(A) Results in actual delivery within two days; or
(B) Creates an enforceable obligation to deliver between a seller and buyer that have the ability to deliver and accept delivery, respectively, in connection with their line of business; or
(iii) An agreement, contract, or transaction that the OCC determines is not functionally or economically similar to:
(A) A contract of sale of a commodity for future delivery or an option on such a contract; or
(B) An option, other than an option executed or traded on a national securities exchange registered pursuant to section 6(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78(f)(a)).
(a)
(1) Cheat or defraud or attempt to cheat or defraud any person;
(2) Willfully make or cause to be made to any person any false report or statement or cause to be entered for any person any false record; or
(3) Willfully deceive or attempt to deceive any person by any means whatsoever.
(b)
(a)
(b)
(1) In order to obtain a written supervisory non-objection, a national bank must:
(i) Establish to the satisfaction of the OCC that the national bank has established and implemented written policies, procedures, and risk measurement and management systems and controls for the purpose of ensuring that it conducts retail forex transactions in a safe and sound manner and in compliance with this part; and
(ii) Provide such other information as the OCC may require.
(2) The information provided under paragraph (b)(1) of this section must include, without limitation, information regarding:
(i) Customer due diligence, including without limitation credit evaluations, customer appropriateness, and “know your customer” documentation;
(ii) New product approvals;
(iii) The haircuts that the national bank will apply to noncash margin as provided in § 48.9(b)(2); and
(iv) Conflicts of interest.
(c)
(d)
(a)
(1) Engages in a retail forex transaction involving the purchase of any currency for the account of any retail forex customer when the account of such retail forex customer at the time of such purchase has an open retail forex transaction for the sale of the same currency;
(2) Engages in a retail forex transaction involving the sale of any currency for the account of any retail forex customer when the account of such retail forex customer at the time of such sale has an open retail forex transaction for the purchase of the same currency;
(3) Purchases a put or call option involving foreign currency for the account of any retail forex customer when the account of such retail forex customer at the time of such purchase has a short put or call option position with the same underlying currency, strike price, and expiration date as that purchased; or
(4) Sells a put or call option involving foreign currency for the account of any retail forex customer when the account of such retail forex customer at the time of such sale has a long put or call option position with the same underlying currency, strike price, and expiration date as that sold must:
(i) Immediately apply such purchase or sale against such previously held opposite transaction; and
(ii) Promptly furnish such retail forex customer with a statement showing the financial result of the transactions involved and the name of any introducing broker to the account.
(b)
(c)
(a)
(b)
(c)
(d)
Retail forex transactions involve the leveraged trading of contracts denominated in foreign currency with a national bank as your counterparty. Because of the leverage and the other risks disclosed here, you can rapidly lose all of the funds or property you pledge to the national bank as margin for retail forex trading. You may lose more than you pledge as margin.
If your margin falls below the required amount, and you fail to provide the required additional margin, your national bank is required to liquidate your retail forex transactions. Your national bank cannot apply your retail forex losses to any of your assets or liabilities at the bank other than funds or property that you have pledged as margin for retail forex transactions. However, if you lose more money than you have pledged as margin, the bank may seek to recover that deficiency in an appropriate forum, such as a court of law.
You should be aware of and carefully consider the following points before determining whether retail forex trading is appropriate for you.
(1) Trading is not on a regulated market or exchange—your national bank is your trading counterparty and has conflicting interests. The retail forex transaction you are entering into is not conducted on an interbank market nor is it conducted on a futures exchange subject to regulation as a designated contract market by the Commodity Futures Trading Commission. The foreign currency trades you transact are trades with your national bank as
(2) An electronic trading platform for retail foreign currency transactions is not an exchange. It is an electronic connection for accessing your national bank. The terms of availability of such a platform are governed only by your contract with your national bank. Any trading platform that you may use to enter into off-exchange foreign currency transactions is only connected to your national bank. You are accessing that trading platform only to transact with your national bank. You are not trading with any other entities or customers of the national bank by accessing such platform. The availability and operation of any such platform, including the consequences of the unavailability of the trading platform for any reason, is governed only by the terms of your account agreement with the national bank.
(3) You may be able to offset or liquidate any trading positions only through your banking entity because the transactions are not made on an exchange or regulated contract market, and your national bank may set its own prices. Your ability to close your transactions or offset positions is limited to what your national bank will offer to you, as there is no other market for these transactions. Your national bank may offer any prices it wishes, including prices derived from outside sources or not in its discretion. Your national bank may establish its prices by offering spreads from third-party prices, but it is under no obligation to do so or to continue to do so. Your national bank may offer different prices to different customers at any point in time on its own terms. The terms of your account agreement alone govern the obligations your national bank has to you to offer prices and offer offset or liquidating transactions in your account and make any payments to you. The prices offered by your national bank may or may not reflect prices available elsewhere at any exchange, interbank, or other market for foreign currency.
(4) Paid solicitors may have undisclosed conflicts. The national bank may compensate introducing brokers for introducing your account in ways that are not disclosed to you. Such paid solicitors are not required to have, and may not have, any special expertise in trading and may have conflicts of interest based on the method by which they are compensated. You should thoroughly investigate the manner in which all such solicitors are compensated and be very cautious in granting any person or entity authority to trade on your behalf. You should always consider obtaining dated written confirmation of any information you are relying on from your national bank in making any trading or account decisions.
(5) Retail forex transactions are not insured by the Federal Deposit Insurance Corporation.
(6) Retail forex transactions are not a deposit in, or guaranteed by, a national bank.
(7) Retail forex transactions are subject to investment risks, including possible loss of all amounts invested.
Finally, you should thoroughly investigate any statements by any national bank that minimize the importance of, or contradict, any of the terms of this risk disclosure. These statements may indicate sales fraud.
This brief statement cannot, of course, disclose all the risks and other aspects of trading off-exchange foreign currency with a national bank.
I hereby acknowledge that I have received and understood this risk disclosure statement.
(e)(1)
(i) The total number of retail forex customer accounts maintained by the national bank over which the national bank does not exercise investment discretion;
(ii) The percentage of such accounts that were profitable for retail forex customer accounts during the quarter; and
(iii) The percentage of such accounts that were not profitable for retail forex customer accounts during the quarter.
(2) The national bank's statement of profitable trades must include the following legend: “Past performance is not necessarily indicative of future results.” Each national bank must provide, upon request, to any retail forex customer or prospective retail forex customer the total number of retail forex accounts maintained by the national bank for which the national bank does not exercise investment discretion, the percentage of such accounts that were profitable, and the percentage of such accounts that were not profitable for each calendar quarter during the most recent five-year period during which the national bank maintained such accounts.
(f)
(1) The amount of any fee, charge, spread, or commission that the national bank may impose on the retail forex customer in connection with a retail forex account or retail forex transaction;
(2) An explanation of how the national bank will determine the amount of such fees, charges, spreads, or commissions; and
(3) The circumstances under which the national bank may impose such fees, charges, spreads, or commissions.
(g)
(h)
(i)
(a)
(1)
(i) The name and address of the person for whom the account is carried or introduced and the principal occupation or business of the person;
(ii) The name of any other person guaranteeing the account or exercising trading control with respect to the account;
(iii) The establishment or termination of the account;
(iv) A means to identify the person that has solicited and is responsible for the account;
(v) The funds in the account, net of any commissions and fees;
(vi) The account's net profits and losses on open trades;
(vii) The funds in the account plus or minus the net profits and losses on open trades, adjusted for the net option value in the case of open options positions;
(viii) Financial ledger records that show all charges against and credits to the account, including deposits, withdrawals, and transfers, and charges or credits resulting from losses or gains on closed transactions; and
(ix) A list of all retail forex transactions executed for the account,
(2)
(i) The date and time the national bank received the order;
(ii) The price at which the national bank placed the order, or, in the case of an option, the premium that the retail forex customer paid;
(iii) The customer account identification information;
(iv) The currency pair;
(v) The size or quantity of the order;
(vi) Whether the order was a buy or sell order;
(vii) The type of order, if the order was not a market order;
(viii) The size and price at which the order is executed, or in the case of an option, the amount of the premium paid for each option purchased, or the amount credited for each option sold;
(ix) For options, whether the option is a put or call, expiration date, quantity, underlying contract for future delivery or underlying physical, strike price, and details of the purchase price of the option, including premium, mark-up, commission, and fees; and
(x) For futures, the delivery date; and
(xi) If the order was made on a trading platform:
(A) The price quoted on the trading platform when the order was placed, or, in the case of an option, the premium quoted;
(B) The date and time the order was transmitted to the trading platform; and
(C) The date and time the order was executed.
(3)
(4)
(5)
(i) All retail forex transactions that are futures transactions executed on that day, including the date, price, quantity, market, currency pair, delivery date, and the person for whom such transaction was made;
(ii) All retail forex transactions that are option transactions executed on that day, including the date, whether the transaction involved a put or call, the expiration date, quantity, currency pair, delivery date, strike price, details of the purchase price of the option, including premium, mark-up, commission and fees, and the person for whom the transaction was made; and
(iii) All other retail forex transactions executed on that day for such account, including the date, price, quantity, currency and the person for whom such transaction was made.
(6)
(b)
(1) With respect to its active retail forex customer accounts over which it did not exercise investment discretion and that are not retail forex proprietary accounts open for any period of time during the quarter, a national bank must prepare and maintain on a quarterly basis (calendar quarter):
(i) A calculation of the percentage of such accounts that were profitable;
(ii) A calculation of the percentage of such accounts that were not profitable; and
(iii) Data supporting the calculations described in paragraphs (b)(1)(i) and (ii) of this section.
(2) In calculating whether a retail forex account was profitable or not profitable during the quarter, the national bank must compute the realized and unrealized gains or losses on all retail forex transactions carried in the retail forex account at any time during the quarter, subtract all fees, commissions, and any other charges posted to the retail forex account during the quarter, and add any interest income and other income or rebates credited to the retail forex account during the quarter. All deposits and withdrawals of funds made by the retail forex customer during the quarter must be excluded from the computation of whether the retail forex account was profitable or not profitable during the quarter. Computations that result in a zero or negative number must be considered a retail forex account that was not profitable. Computations that result in a positive number must be considered a retail forex account that was profitable.
(3) A retail forex account must be considered “active” for purposes of paragraph (b)(1) of this section if and only if for the relevant calendar quarter a retail forex transaction was executed in that account or the retail forex account contained an open position resulting from a retail forex transaction.
(c)
(d)
(1) A description of the securities or property received;
(2) The name and address of such retail forex customer;
(3) The dates when the securities or property were received;
(4) The identity of the depositories or other places where such securities or property are segregated or held, if applicable;
(5) The dates in which the national bank placed or removed such securities or property into or from such depositories; and
(6) The dates of return of such securities or property to such retail forex customer, or other disposition thereof, together with the facts and circumstances of such other disposition.
(e)
(1) Except as provided in paragraph (e)(2) of this section, immediately upon the receipt of a retail forex transaction order, a national bank must prepare an order ticket for the order (whether unfulfilled, executed, or canceled). The order ticket must include:
(i) Account identification (account or customer name with which the retail forex transaction was effected);
(ii) Order number;
(iii) Type of order (market order, limit order, or subject to special instructions);
(iv) Date and time, to the nearest minute, that the retail forex transaction order was received (as evidenced by time-stamp or other timing device);
(v) Time, to the nearest minute, that the retail forex transaction order was executed; and
(vi) Price at which the retail forex transaction was executed.
(2)
(i) The national bank placing and directing the allocation of an order eligible for post-execution allocation has been granted written investment discretion with regard to participating customer accounts and makes the following information available to retail forex customers upon request:
(A) The general nature of the post-execution allocation methodology the national bank will use;
(B) Whether the national bank has any interest in accounts that may be included with customer accounts in bunched orders eligible for post-execution allocation; and
(C) Summary or composite data sufficient for that customer to compare the customer's results with those of other comparable customers and, if applicable, any account in which the national bank has an interest.
(ii) Post-execution allocations are made as soon as practicable after the entire transaction is executed;
(iii) Post-execution allocations are fair and equitable, with no account or group of accounts receiving consistently favorable or unfavorable treatment; and
(iv) The post-execution allocation methodology is sufficiently objective and specific to permit the OCC to verify the fairness of the allocations using that methodology.
(f)
(g)
(h)
A national bank offering or entering into retail forex transactions must be well capitalized as defined by 12 CFR part 6.
(a)
(1) Two percent of the notional value of the retail forex transaction for major currency pairs and 5 percent of the notional value of the retail forex transaction for all other currency pairs;
(2) For short options, 2 percent for major currency pairs and 5 percent for all other currency pairs of the notional value of the retail forex transaction, plus the premium received by the retail forex customer; or
(3) For long options, the full premium charged and received by the national bank.
(b)(1)
(i) Obligations of the United States and obligations fully guaranteed as to principal and interest by the United States;
(ii) General obligations of any State or of any political subdivision thereof;
(iii) General obligations issued or guaranteed by any enterprise, as defined in 12 U.S.C. 4502(10);
(iv) Certificates of deposit issued by an insured depository institution, as defined in section 3(c)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)(2));
(v) Commercial paper;
(vi) Corporate notes or bonds;
(vii) General obligations of a sovereign nation;
(viii) Interests in money market mutual funds; and
(ix) Such other financial instruments as the OCC deems appropriate.
(2)
(i) Haircuts for noncash margin collected under this section; and
(ii) Annual evaluation, and, if appropriate, modification, of the haircuts.
(c)
(d)
(1) For each retail forex customer, at least once per day, a national bank must:
(i) Mark the value of the retail forex customer's open retail forex positions to market;
(ii) Mark the value of the margin collected under this section from the retail forex customer to market; and
(iii) Determine whether, based on the marks in paragraphs (d)(1)(i) and (ii) of this section, the national bank has collected margin from the retail forex customer sufficient to satisfy the requirements of this section.
(2) If, pursuant to paragraph (d)(1)(iii) of this section, the national bank determines that it has not collected margin from the retail forex customer sufficient to satisfy the requirements of this section then, within a reasonable period of time, the national bank must either:
(i) Collect margin from the retail forex customer sufficient to satisfy the requirements of this section; or
(ii) Liquidate the retail forex customer's retail forex transactions.
(e)
(1) Apply a retail forex customer's retail forex obligations against any funds or other asset of the retail forex customer other than margin in the separate margin account described in paragraph (c) of this section;
(2) Apply a retail forex customer's retail forex obligations to increase the amount owed by the retail forex customer to the national bank under any loan; or
(3) Collect the margin required under this section by use of any right of set-off.
(a)
(1) For each retail forex customer:
(i) The open retail forex transactions with prices at which acquired;
(ii) The net unrealized profits or losses in all open retail forex transactions marked to the market;
(iii) Any money, securities, or other property in the separate margin account required by § 48.9(c); and
(iv) A detailed accounting of all financial charges and credits to the retail forex customer's retail forex accounts during the monthly reporting period, including: Money, securities, or property received from or disbursed to such customer; realized profits and losses; and fees, charges, spreads, and commissions.
(2) For each retail forex customer engaging in retail forex transactions that are options:
(i) All such options purchased, sold, exercised, or expired during the monthly reporting period, identified by underlying retail forex transaction or underlying currency, strike price, transaction date, and expiration date;
(ii) The open option positions carried for such customer and arising as of the end of the monthly reporting period, identified by underlying retail forex transaction or underlying currency, strike price, transaction date, and expiration date;
(iii) All such option positions marked to the market and the amount each position is in the money, if any;
(iv) Any money, securities, or other property in the separate margin account required by § 48.9(c); and
(v) A detailed accounting of all financial charges and credits to the retail forex customer's retail forex accounts during the monthly reporting period, including: Money, securities, or property received from or disbursed to such customer; realized profits and losses; premiums and mark-ups; and fees, charges, and commissions.
(b)
(1) To each retail forex customer, a written confirmation of each retail forex transaction caused to be executed by it for the customer, including offsetting transactions executed during the same business day and the rollover of an open retail forex transaction to the next business day;
(2) To each retail forex customer engaging in forex option transactions, a written confirmation of each forex option transaction, containing at least the following information:
(i) The retail forex customer's account identification number;
(ii) A separate listing of the actual amount of the premium, as well as each markup thereon, if applicable, and all other commissions, costs, fees, and other charges incurred in connection with the forex option transaction;
(iii) The strike price;
(iv) The underlying retail forex transaction or underlying currency;
(v) The final exercise date of the forex option purchased or sold; and
(vi) The date that the forex option transaction was executed.
(3) To each retail forex customer engaging in forex option transactions, upon the expiration or exercise of any option, a written confirmation statement thereof, which statement must include the date of such occurrence, a description of the option involved, and, in the case of exercise, the details of the retail forex or physical currency position that resulted therefrom including, if applicable, the final trading date of the retail forex transaction underlying the option.
(c) Notwithstanding paragraph (b) of this section, a retail forex transaction that is caused to be executed for a pooled investment vehicle that engages in retail forex transactions need be confirmed only to the operator of such pooled investment vehicle.
(d)
(e)
(a)
(1) Guarantee such person or account against loss;
(2) Limit the loss of such person or account; or
(3) Not call for or attempt to collect margin as established for retail forex customers.
(b)
(c)
(d)
(e)
(a)
(b)
(1) The precise retail forex transaction to be effected;
(2) The exact amount of the foreign currency to be purchased or sold; and
(3) In the case of an option, the identity of the foreign currency or contract that underlies the option.
(a)
(1) Ensure, to the extent reasonable, that each retail forex transaction that is executable at or near the price that the national bank has quoted to the retail forex customer is entered for execution before any retail forex transaction for:
(i) A proprietary account;
(ii) An account for which a related person may originate orders without the prior specific consent of the account owner, if the related person has gained knowledge of the retail forex customer's order prior to the transmission of an order for a proprietary account;
(iii) An account in which a related person has an interest, if the related person has gained knowledge of the retail forex customer's order prior to the transmission of an order for a proprietary account; or
(iv) An account in which a related person may originate orders without the prior specific consent of the account owner, if the related person has gained knowledge of the retail forex customer's order prior to the transmission of an order for a proprietary account;
(2) Prevent national-bank related persons from placing orders, directly or indirectly, with another person in a manner designed to circumvent the provisions of paragraph (a)(1) of this section; and
(3) Fairly and objectively establish settlement prices for retail forex transactions.
(b)
(c)
(1) Receives written authorization from a person designated by the other retail forex counterparty with responsibility for the surveillance over the account pursuant to paragraph (a)(2) of this section;
(2) Prepares immediately upon receipt of an order for the account a written record of the order, including the account identification and order number, and records thereon to the nearest minute, by time-stamp or other timing device, the date and time the order was received; and
(3) Transmits on a regular basis to the other retail forex counterparty copies of all statements for the account and of all written records prepared upon the receipt of orders for the account pursuant to paragraph (c)(2) of this section.
(d)
(1) Receives written authorization to open and maintain the account from a person designated by the national bank with responsibility for the surveillance over the account pursuant to paragraph (a)(2) of this section; and
(2) Transmits on a regular basis to the national bank copies of all statements for the account and of all written records prepared by the other retail forex counterparty upon receipt of orders for the account pursuant to paragraph (a)(2) of this section.
(e)
(1) Enter into a retail forex transaction, to be executed pursuant to a market or limit order at a price that is not at or near the price at which other retail forex customers, during that same time period, have executed retail forex transactions with the national bank;
(2) Adjust or alter prices for a retail forex transaction after the transaction has been confirmed to the retail forex customer;
(3) Provide to a retail forex customer a new bid price for a retail forex transaction that is higher than its previous bid without providing a new asked price that is also higher than its previous asked price by a similar amount;
(4) Provide to a retail forex customer a new bid price for a retail forex transaction that is lower than its previous bid without providing a new asked price that is also lower than its previous asked price by a similar amount; or
(5) Establish a new position for a retail forex customer (except one that offsets an existing position for that retail forex customer) where the national bank holds outstanding orders of other retail forex customers for the same currency pair at a comparable price.
(a)
(b)
(a)
(b)
(1) Requested by the retail forex customer;
(2) Made by the Federal Deposit Insurance Corporation as receiver or conservator under the Federal Deposit Insurance Act; or
(3) Otherwise authorized by applicable law.
(c)
(a)
(1) Signing the agreement is not a condition for the customer to use the services offered by the national bank.
(2) If the agreement is contained as a clause or clauses of a broader agreement, the customer separately endorses the clause or clauses.
(3) The agreement advises the retail forex customer that, at such time as the customer notifies the national bank that the customer intends to submit a claim to arbitration, or at such time the national bank notifies the customer of its intent to submit a claim to arbitration, the customer will have the opportunity to choose a person qualified in dispute resolution to conduct the proceeding.
(4) The agreement must acknowledge that the national bank will pay any incremental fees that may be assessed in connection with the dispute resolution, unless it is determined in the proceeding that the retail forex customer has acted in bad faith in initiating the proceeding.
(5) The agreement must include the following language printed in large boldface type:
Two forums exist for the resolution of disputes related to retail forex transactions: Civil court litigation and arbitration conducted by a private
By signing this agreement, you: (1) May be waiving your right to sue in a court of law; and (2) are agreeing to be bound by arbitration of any claims or counterclaims that you or [insert name of national bank] may submit to arbitration under this agreement. In the event a dispute arises, you will be notified if [insert name of national bank] intends to submit the dispute to arbitration.
You need not sign this agreement to open or maintain a retail forex account with [insert name of national bank].
(b)
(1) Within 10 business days after receipt of notice from the retail forex customer that the customer intends to submit a claim to arbitration, the national bank must provide the customer with a list of persons qualified in dispute resolution.
(2) The customer must, within 45 days after receipt of such list, notify the national bank of the person selected. The customer's failure to provide such notice must give the national bank the right to select a person from the list.
(c)
(d)
(e)
(1) Arises out of the transaction or occurrence that is the subject of the retail forex customer's claim or grievance; and
(2) Does not require for adjudication the presence of essential witnesses, parties, or third persons over which the settlement process lacks jurisdiction.
The OCC may modify the disclosure, recordkeeping, capital and margin, reporting, business conduct, documentation, or other standards or requirements under this part for a specific retail forex transaction or a class of retail forex transactions if the OCC determines that the modification is consistent with safety and soundness and the protection of retail forex customers.
Federal Deposit Insurance Corporation (FDIC).
Final rule.
The FDIC is issuing a final rule amending its regulations to reflect section 627 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the DFA),
The final rule is effective July 21, 2011.
Martin Becker, Senior Consumer Affairs Specialist, Division of Consumer and Depositor Protection, (703) 254-2233, Mark Mellon, Counsel, Legal Division, (202) 898-3884, Federal Deposit Insurance Corporation, 550 17th Street, NW., Washington, DC 20429.
Section 627 of the DFA repealed the statutory prohibition against the payment of interest on demand deposits, effective one year from the date of the DFA's enactment, July 21, 2011. Section 343 of the DFA amended section 11(a)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1821(a)(1), to provide full insurance coverage for depository institution noninterest-bearing transaction accounts from December 31, 2010, through December 31, 2012.
In light of the prospective repeal of the demand deposit interest prohibition, the FDIC proposed to rescind 12 CFR part 329, the regulation which implements that prohibition with respect to state-chartered, nonmember (SNM) banks to be effective on the same date as the statutory repeal, July 21, 2011. 76 FR 21265 (Apr. 15, 2011) (NPR). At the same time, however, a regulatory definition of the term “interest” would still be useful in interpreting the requirements of section 343 of the DFA providing temporary, unlimited deposit insurance coverage for noninterest-bearing transaction accounts. For this reason, in the NPR the FDIC also proposed to transfer the definition of “interest” found at 12 CFR 329.1(c) to Part 330, specifically the definitions section at 12 CFR 330.1. The FDIC also specifically solicited comment on whether other parts of Part 329 could also prove useful and therefore should be moved into Part 330 as well. In addition, the FDIC sought comment on every other aspect of the proposed rule.
The FDIC received eight comments on the NPR. Three were from community banks, one was from a large depository institution, two were from depository institution trade groups, one from a financial consulting firm, and one was from a legal representative for a money market fund.
The chief points were:
1. The FDIC should stop or delay repeal of the prohibition (four commenters);
2. Community banks will be harmed by repeal of the prohibition (four commenters);
3. The FDIC should add the Part 329 section concerning premiums to Part 330 (three commenters); and
4. The FDIC should adopt or incorporate all Federal Reserve interpretations and advisory opinions
Commenters opposed to immediate implementation of the repeal of the prohibition made several arguments. All four commenters stated that repeal would result in increased deposit volatility as depository institutions competed for an increased share of business deposits by offering continually higher rates of interest. Three of the four contended this would severely affect community banks. One commenter called for delay until the safety and soundness consequences of repeal are understood, arguing that the FDIC and the Federal Reserve have the authority to issue a statement of policy that would prevent interest payments on deposits. Another commenter recommended a phase-in with immediate implementation of the repeal followed by a twelve- to eighteen-month grandfather for Federal Reserve interpretations and advisory opinions concerning Regulation Q. Another commenter stated that efforts to repeal the prohibition should either cease or be delayed until its impact is understood.
In response to these comments, the FDIC notes that, as previously observed, pursuant to section 627 of the DFA, as of July 21, 2011, the prohibition against the payment of interest on demand deposits will be repealed by operation of statute, as a matter of law.
As noted previously, several commenters contended repeal would result in heightened competition for deposits. They reasoned that large banks will offer high rates of interest and lure away business depositors previously content to do business with community banks based on personal services (relationship deposits). Community banks would then be pressured to offer higher rates of interests in order to stay competitive, further cutting already thin marginal rates of return. Increased deposits might also mean added pressure for depository institutions to loan these new funds out, possibly leading to unsafe and unsound lending and further weakening depository institutions' fiscal health.
As potential responses to these anticipated negative consequences, one commenter recommended that the FDIC take a number of steps: (a) The FDIC should consider issuing a statement of policy to warn depository institutions about the need for interest rate risk management; (b) interest rate risk should be quantified and an increased capital charge should be imposed on depository institutions with heightened risk due to repeal of the statutory prohibition; (c) stress tests should be performed on depository institutions before they are allowed to pay interest on business checking accounts; (d) call reports should be modified to provide for the reporting of interest rate risk; and (e) reserve requirements should be increased to reduce competition for deposits.
Another commenter recommended that the FDIC hold roundtables prior to the July 21, 2011, repeal date, urged the FDIC and the Federal Reserve to work together to clarify issues in connection with the repeal, and requested that the FDIC provide more time for compliance by depository institutions. This commenter noted that while the FDIC has no authority to delay or to phase in the statutory repeal, efforts still need to be made to provide depository institutions with clarity. The commenter noted the need to revise call reports and thrift financial reports to indicate interest-bearing demand deposit accounts. It also noted the need for clarity with respect to so-called “hybrid products,” deposit accounts that both pay interest and offer earnings credits.
A third commenter urged that the Financial Stability Oversight Council (the FSOC) should address the systemic threat which the upcoming repeal poses to the “U.S. banking and financial system and the economy as a whole.”
After carefully considering these comments, the FDIC has concluded that the commenters raise valid concerns about potential risks arising from the repeal of the prohibition against paying interest on demand deposits. Based on currently available information, however, there are also potential benefits which may balance out or outweigh those risks. While it is true that depository institutions may incur added expense by offering interest payments to accounts where it was previously unavailable (such as business checking), they may also save funds by no longer having to waive expenses on such accounts (
Repeal of the prohibition might directly benefit community banks by allowing them to attract more potentially stable deposits which could reduce their need for higher-cost, more volatile funding. This could lower community banks' funding costs and also allow them to plan business growth more dependably and rigorously. Interest rates are currently at a historic low. This should provide depository institutions with an adjustment period. If the cost of funds should increase, depository institutions should have time to make the necessary adjustments to protect profits and manage interest rate risk through measures such as changes to fee structures and rates to balance out increased interest expense. With regard to interest rate risk and potential liquidity issues, the FDIC and the other federal banking agencies have already provided depository institutions with detailed guidance which those institutions are expected to follow.
Three commenters stated that the Part 329 section pertaining to premiums should be added to Part 330 along with the definition of “interest.” Section 329.103 describes the circumstances under which a depository institution's provision of a premium to a depositor will not be considered a payment of interest. It is substantially identical to section 217.101 in Regulation Q. Commenters contended that retaining this section along with the definition of interest might prove useful in determining whether an account qualifies for unlimited insurance coverage as a noninterest-bearing transaction account.
In response to these comments, the FDIC agrees that there would be utility in importing section 329.103 into Part 330. The FDIC will therefore import section 329.103 into Part 330 as an interpretive rule, to be designated as section 330.101. This step is also consistent with the FDIC's decision, as explained in more detail below, to look to Regulation Q and Federal Reserve interpretations of that rule when construing section 343.
Two commenters called for retention of Federal Reserve staff opinions and interpretive letters concerning Regulation Q. They stated that these materials would continue to be useful in determining whether depository institutions may continue to rely on practices established pursuant to these documents (one example given was third party payment programs). One commenter recommended that, as of July 21, 2011, the materials be retained for a period of eighteen months or more.
As noted previously, section 217.101 of Regulation Q is substantially identical to section 329.103. Moreover, the FDIC, along with other federal banking agencies, has regularly interpreted issues arising from the prohibition against the payment of interest on demand deposits in the same manner as the Federal Reserve. In light of this agency consistency and the continued potential instrumental value of agency interpretations regarding this issue, the FDIC will continue to rely upon Regulation Q and Federal Reserve interpretations of that regulation for purposes of implementing temporary, unlimited deposit insurance coverage pursuant to section 343 of the DFA.
For the reasons set forth in the preceding section, the FDIC is issuing the final rule.
Absent a showing of “good cause,” the Administrative Procedure Act (5 U.S.C. 553(d)(3)) requires a 30-day delayed effective date before a final rule may become effective. The FDIC finds good cause for waiving this requirement because the final rule simply conforms the FDIC's regulations to reflect the statutory repeal of the prohibition against the payment of interest on demand deposit accounts. As discussed, that statutory repeal becomes effective July 21, 2011. Delaying the effective date of the final rule for thirty days would result in a gap between the effective date of the statutory repeal and the effective date of the amendments to the FDIC's regulations reflecting that statutory repeal. Also, the FDIC deems it unnecessary to provide a delayed effective date for the final rule because there are no actions SNM banks must take to implement the final rule; as noted, the final rule simply conforms the FDIC's regulations to reflect a statutory change.
The Riegle Community Development and Regulatory Improvement Act provides that any new regulations or amendments to regulations prescribed by a Federal banking agency that impose additional reporting, disclosures, or other new requirements on insured depository institutions shall take effect on the first day of a calendar quarter which begins on or after the date on which the regulations are published in final form, unless the agency determines, for good cause published with the rule, that the rule should become effective before such time.
The final rule is therefore effective upon July 21, 2011, the date when the statutory prohibition against the payment of interest on demand deposits will be repealed under section 627 of the DFA.
No collections of information pursuant to the Paperwork Reduction Act (44 U.S.C. Ch. 3501
The Regulatory Flexibility Act (RFA) requires that each federal agency either certify that a proposed rule would not, if adopted in final form, have a significant economic impact on a substantial number of small entities or prepare an initial regulatory flexibility analysis of the rule and publish the analysis for comment. For purposes of the RFA analysis or certification, financial institutions with total assets of $175 million or less are considered to be “small entities.” The FDIC hereby certifies pursuant to 5 U.S.C. 605(b) that the final rule will not have a significant economic impact on a substantial number of small entities. This is because the FDIC already applies the Part 329 definition of “interest” and the interpretive rule on premiums for purposes of determining whether an account qualifies for full deposit insurance coverage as a noninterest-bearing transaction account. The FDIC is only transferring the definition from Part 329 to Part 330 because the former regulation will become moot on July 21, 2011, pursuant to section 627 of the DFA and its repeal of the statutory ban on the payment of interest on demand deposits. There will therefore be no significant economic impact on a substantial number of small entities as a result of this change.
The Office of Management and Budget (OMB) has determined that the final rule is not a “major rule” within the meaning of the relevant sections of the Small Business Regulatory Enforcement Act of 1996 (SBREFA) (5 U.S.C. 801,
As required by SBREFA, the FDIC will file the appropriate reports with Congress and the General Accounting Office so that the final rule may be reviewed.
The FDIC has determined that the final rule will not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, enacted as part of the Omnibus Consolidated and Emergency Supplemental Appropriations Act of 1999 (Pub. L. 105-277, 112 Stat. 2681).
Section 722 of the Gramm-Leach-Bliley Act, Public Law 106-102, 113 Stat. 1338, 1471 (Nov. 12, 1999), requires the federal banking agencies to use plain language in all proposed and final rules published after January 1, 2000. No commenter suggested that the NPR was materially unclear, and the FDIC believes that the final rule is substantively similar to the NPR.
Banks, Banking, Interest rates.
Bank deposit insurance, Banks, Banking, Reporting and recordkeeping requirements, Savings and loan associations, Trusts and trustees.
For the reasons set forth in the preamble, under the authority of section 627 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the FDIC amends chapter III of title 12 of the Code of Federal Regulations as follows:
(k)
This interpretive rule describes certain payments that are not deemed to be “interest” as defined in § 330.1(k).
(a) Premiums, whether in the form of merchandise, credit, or cash, given by a bank to the holder of a deposit will not be regarded as “interest” as defined in § 330.1(k) if:
(1) The premium is given to the depositor only at the time of the opening of a new account or an addition to an existing account;
(2) No more than two premiums per deposit are given in any twelve-month interval; and
(3) The value of the premium (in the case of merchandise, the total cost to the bank, including shipping, warehousing, packaging, and handling costs) does not exceed $10 for a deposit of less than $5,000 or $20 for a deposit of $5,000 or more.
(b) The costs of premiums may not be averaged.
(c) A bank may not solicit funds for deposit on the basis that the bank will divide the funds into several accounts for the purpose of enabling the bank to pay the depositor more than two premiums within a twelve-month interval on the solicited funds.
(d) The bank must retain sufficient information for examiners to determine that the requirements of this section have been satisfied.
(e) Notwithstanding paragraph (a) of this section, any premium that is not, directly or indirectly, related to or dependent on the balance in a demand deposit account and the duration of the account balance shall not be considered the payment of interest on a demand deposit account and shall not be subject to the limitations in paragraph (a) of this section.
By order of the Board of Directors.
Federal Aviation Administration (FAA), DOT.
Final rule.
We are adopting a new airworthiness directive (AD) for the products listed above. This AD requires initial and repetitive fluorescent penetrant inspections (FPIs) and eddy current inspections (ECIs) of the high-pressure compressor rotor (HPCR) 8-10 stage spool, part numbers (P/Ns) 1844M90G01 and 1844M90G02, for cracks between the 9-10 stages at each piece-part exposure. This AD was prompted by cracks discovered on one HPCR 8-10 spool between the 9-10 stages in the weld joint. We are issuing this AD to prevent failure of the HPCR 8-10 stage spool, uncontained engine failure, and damage to the airplane.
This AD is effective August 18, 2011.
For service information identified in this AD, contact GE-Aviation M/D Rm. 285, One Neumann Way, Cincinnati, OH 45215,
You may examine the AD docket on the Internet at
Jason Yang, Aerospace Engineer, Engine Certification Office, FAA, 12 New England Executive Park, Burlington, MA 01803;
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an airworthiness directive (AD) that would apply to the specified products. That NPRM published in the
We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the proposal and the FAA's response to each comment.
Two commenters, General Electric Company and The Boeing Company, requested that we remove the “Unsafe
We do not agree. AD 2002-04-11 was issued because of additional focused inspection procedures that had been developed by the manufacturer. Because cracks were discovered on one HPCR 8-10 spool between the 9-10 stages in the weld joint, this unsafe condition is likely to exist or develop in other products of the same type design. The unsafe condition could result in failure of the HPCR 8-10 stage spool, uncontained engine failure, and damage to the airplane. We determined that this unsafe condition requires mandatory repetitive inspections for cracks. We did not change the AD.
China Southern Airlines requested that we specify any terminating actions to the repetitive inspections of the affected part numbers of HPCR 8-10 spools.
We disagree. Unless the part is replaced with a part not subject to this AD, no terminating actions to the repetitive inspections exist.
China Southern Airlines asked if the initial and repetitive FPIs and ECIs of the HPCR 8-10 stage spool at each piece-part exposure in the shop effectively prevent failure during normal engine operation, since the high-pressure module overhaul interval is 48,000 hours or 6,000 cycles when the spool can have piece-part exposure per current GE90 Workscope Planning Guide.
Yes, the FAA has determined that the actions required by the AD will effectively prevent failure of the HPCR 8-10 stage spool by removing cracked parts from service.
We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting the AD as proposed.
We estimate that this AD will affect 33 GE90-76B; GE90-77B; GE90-85B; GE90-90B; and GE90-94B engines, installed on airplanes of U.S. registry. We also estimate that it will take about 2 work-hours per engine to perform the inspection, and that the average labor rate is $85 per work-hour. Based on these figures, we estimate the total cost of the AD to U.S. operators to be $5,610 for one inspection cycle.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
(a) This AD is effective August 18, 2011.
(b) None.
(c) This AD applies to General Electric Company GE90-76B; GE90-77B; GE90-85B; GE90-90B; and GE90-94B turbofan engines with a high-pressure compressor rotor (HPCR) 8-10 stage spool, part number (P/N) 1844M90G01 or 1844M90G02, installed.
(d) This AD was prompted by cracks discovered on one HPCR 8-10 spool between the 9-10 stages in the weld joint. We are issuing this AD to prevent failure of the HPCR 8-10 stage spool, uncontained engine failure, and damage to the airplane.
(e) Comply with this AD within the compliance times specified, unless already done.
(f)(1) At the next piece-part exposure of the HPCR 8-10 stage spool after the effective date of this AD, perform a fluorescent penetrant inspection (FPI) and eddy current inspection (ECI) of the weld joint between the 9-10 stages of the HPCR 8-10 stage spool for cracks.
(2) Thereafter, perform repetitive FPIs and ECIs of the weld joint between the 9-10 stages of the HPCR 8-10 stage spool for cracks at every piece-part exposure of the HPCR 8-10 stage spool.
(3) Remove from service any HPCR 8-10 stage spool found cracked.
(4) Guidance on performing the FPI can be found in GE90 (GEK100700) Engine Manual, Chapter 72-31-08, Inspection 001.
(5) Guidance on performing the ECI can be found in GE90 (GEK100700) Engine Manual, Chapter 72-31-08, Special Procedures 001.
(g) For the purpose of this AD, piece-part exposure is when the HPCR stage 8-10 spool is removed from the engine and completely disassembled.
(h) The Manager, Engine Certification Office, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19.
(i)(1) For more information about this AD, contact Jason Yang, Aerospace Engineer, Engine Certification Office, FAA, 12 New England Executive Park, Burlington, MA 01803;
(2) For service information identified in this AD, contact General Electric Company, GE-Aviation, Room 285, 1 Neumann Way, Cincinnati, OH 45215,
(j) None.
Federal Aviation Administration (FAA), DOT.
Final rule.
This action establishes Class E airspace at Florence, OR, to accommodate aircraft using a new Area Navigation (RNAV) Global Positioning System (GPS) standard instrument approach procedures at Florence Municipal Airport. This improves the safety and management of Instrument Flight Rules (IFR) operations at the airport.
Effective date, 0901 UTC, October 20, 2011. The Director of the Federal Register approves this incorporation by reference action under 1 CFR part 51, subject to the annual revision of FAA Order 7400.9 and publication of conforming amendments.
Eldon Taylor, Federal Aviation Administration, Operations Support Group, Western Service Center, 1601 Lind Avenue, SW., Renton, WA 98057; telephone (425) 203-4537.
On April 15, 2011, the FAA published in the
Class E airspace designations are published in paragraph 6005, of FAA Order 7400.9U dated August 18, 2010, and effective September 15, 2010, which is incorporated by reference in 14 CFR Part 71.1. The Class E airspace designations listed in this document will be published subsequently in that Order.
This action amends Title 14 Code of Federal Regulations (14 CFR) part 71 by establishing Class E airspace extending upward from 700 feet above the surface at Florence Municipal Airport, Florence, OR, to accommodate IFR aircraft executing new RNAV (GPS) standard instrument approach procedures at the airport. This action is necessary for the safety and management of IFR operations.
The FAA has determined this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this regulation: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the U.S. Code. Subtitle 1, Section 106 discusses the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it establishes controlled airspace at Florence Municipal Airport, Florence, OR.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR Part 71 as follows:
49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within 3-mile radius of Florence Municipal Airport.
Commodity Futures Trading Commission.
Final rules.
The Commodity Futures Trading Commission (“CFTC” or “Commission”) is adopting final rules pursuant to section 753 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), to implement amended subsections (c)(1) and (c)(3) of section 6 of the Commodity Exchange Act (“CEA”). These rules broadly prohibit fraud and manipulation in connection with any swap, or contract of sale of any commodity in interstate commerce, or contract for future delivery on or subject to the rules of any registered entity.
David Meister, Director, Division of Enforcement, 202-418-5624, or Mark D. Higgins, Counsel, Office of the General Counsel, 202-418-5864,
On July 21, 2010, President Obama signed the Dodd-Frank Act into law. Title VII of the Dodd-Frank Act amended the CEA to establish a comprehensive new regulatory framework for swaps and security-based swaps. The legislation was enacted to reduce risk, increase transparency, and promote market integrity within the financial system by, among other things: (1) Providing for the registration and comprehensive regulation of swap dealers and major swap participants; (2) imposing clearing and trade execution requirements on standardized derivative products; (3) creating robust recordkeeping and real-time reporting regimes; and (4) enhancing the Commission's rulemaking and enforcement authority with respect to, among others, all registered entities and intermediaries.
In the wake of the financial crisis of 2008, Congress adopted section 753 of the Dodd-Frank Act, which provided the Commission with additional and broad authority to prohibit fraud and manipulation. In the following paragraphs, the Commission summarizes Dodd-Frank Act section 753's amendments to CEA section 6(c).
New section 6(c)(1), the full text of which is provided in Section III below, broadly prohibits the use or employment of, or an attempt to use or employ, any “manipulative or deceptive device or contrivance” in contravention of such rules and regulations as the Commission “shall promulgate no later than 1 year after the date of enactment” of the Dodd-Frank Act.
As discussed below, final Rule 180.1 implements the provisions of CEA section 6(c)(1) by prohibiting, among other things, manipulative and deceptive devices, i.e., fraud and fraud-based manipulative devices and contrivances employed intentionally or recklessly, regardless of whether the conduct in question was intended to create or did create an artificial price. This final Rule will help promote the integrity of the markets, and protect market participants.
Section 6(c)(1)(A), a “Special Provision for Manipulation by False Reporting,” extends the Commission's prohibition against unlawful manipulation to include “delivering, or causing to be delivered for transmission through the mails or interstate commerce, by any means of communication whatsoever, a false or misleading or inaccurate report concerning crop or market information or conditions that affect or tend to affect the price of any commodity in interstate commerce, knowing, or acting in reckless disregard of the fact that such report is false, misleading or inaccurate.”
Section 6(c)(2) prohibits the making of “any false or misleading statement of a material fact to the Commission. * * *” A prohibition regarding false statements to the Commission was previously included in section 6(c). Dodd-Frank Act section 753 expands the prohibition against false statements made in registration applications or reports filed with the Commission to include any statement of material fact made to the Commission in any context.
CEA section 6(c)(3), the full text of which is provided in Section III below, makes it unlawful to “manipulate or attempt to manipulate the price of any swap, or of any commodity in interstate commerce, or for future delivery on or subject to the rules of any registered entity.” Final Rule 180.2 codifies section 6(c)(3).
Section 753 of the Dodd-Frank Act also amends prior CEA section 6(c) to provide, in cases of manipulation or attempted manipulation in violation of sections 6(c) or 9(a)(2), for a civil penalty of up to the greater of $1,000,000 or triple the monetary gain to the person for each such violation; and restitution to customers of damages proximately caused by violations of the person. For other violations, section 6(c)(10)(C) provides for a civil penalty of not more than an amount equal to the greater of $140,000 or triple the monetary gain for each such violation.
Finally, section 753 of the Dodd-Frank Act provides that the above-summarized amendments to CEA section 6(c) “shall take effect on the date on which the final rule promulgated by the Commodity Futures Trading Commission pursuant to this Act takes effect.” The final Rules will take effect 30 days after publication in the
This rulemaking proceeding
Upon careful review and consideration of the entire record in this rulemaking and based on its extensive market regulation experience, the Commission has determined that it is appropriate and in the public interest to adopt the final Rules, which among other things, define for the public the statutory prohibition under CEA section 6(c)(1) against using or employing “any manipulative or deceptive device or contrivance” in connection with any swap, or a contract of sale of any commodity in interstate commerce, or for future delivery on or subject to the rules of any registered entity. Consistent with section 6(c)(1), the final Rule 180.1 prohibits, among other things, fraud and fraud-based manipulative schemes, employed intentionally or recklessly (as discussed below), regardless of whether the conduct in question was intended to or did create an artificial price. Final Rules 180.1 and 180.2 will help to promote the integrity of the markets, and protect market participants.
After carefully reviewing the entire rulemaking record, the Commission finds it unnecessary to change the wording of the proposed regulatory text, except in one respect: Adding “inaccurate” to section 180.1(a)(4) (“* * * no violation of this subsection shall exist where the person mistakenly transmits, in good faith, false or misleading or inaccurate information to a price reporting service.”). This change is necessary to ensure symmetry between final Rule 180.1 and CEA section 6(c)(1)(C). However, based on the public comments, the Commission has determined to provide clarification and interpretive guidance in this Preamble to final Rules 180.1 and 180.2.
The Commission's statutory and legal basis for promulgating the final Rules, their purpose, and the Commission's responses to comments filed in this rulemaking, are discussed below.
CEA section 6(c)(1), entitled “Prohibition Against Manipulation,” is the statutory basis for final Rule 180.1, and provides that:
It shall be unlawful for any person, directly or indirectly, touse or employ, or attempt to use or employ, in connection with anyswap, or a contract of sale of any commodity in interstate commerce,or for future delivery on or subject to the rules of any registeredentity, any manipulative or deceptive device or contrivance, incontravention of such rules and regulations as the Commission shallpromulgate by not later than 1 year after the date of enactment ofthe [Dodd-Frank Act], provided no rule or regulation promulgated bythe Commission shall require any person to disclose to anotherperson nonpublic information that may be material to the marketprice, rate, or level of the commodity transaction, except asnecessary to make any statement made to the other person in or inconnection with the transaction not misleading in any materialrespect.
CEA section 6(c)(3), entitled “Other Manipulation,” provides that:
[I]t shall be unlawful for any person, directly or indirectly, to manipulate or attempt to manipulate the price of any swap, or of any commodity in interstate commerce, or for future delivery on or subject to the rules of any registered entity.
CEA section 6(c)(3) and the Commission's general rulemaking authority pursuant to CEA section 8a(5) provide the statutory basis for final Rule 180.2.
Commenters are overwhelmingly supportive of the Commission's efforts to implement clear and fair rules designed to protect market participants and promote the integrity of the markets. In the following sections, the Commission summarizes and responds to the comments received in this rulemaking.
The language of CEA section 6(c)(1), particularly the operative phrase “manipulative or deceptive device or contrivance,” is virtually identical to the terms used in section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”).
Based on the language in Exchange Act section 10(b), the Securities and Exchange Commission (“SEC”) promulgated SEC Rule 10b-5, which makes it unlawful for any person:
(a) To employ any device, scheme, or artifice to defraud,
(b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security.
Given the similarities between CEA section 6(c)(1) and Exchange Act section 10(b), the Commission deems it appropriate and in the public interest to model final Rule 180.1 on SEC Rule 10b-5.
Final Rule 180.1 prohibits fraud and fraud-based manipulations, and attempts: (1) By any person (2) acting intentionally or recklessly (3) in connection with (4) any swap, or contract of sale of any commodity in interstate commerce, or contract for future delivery on or subject to the rules of any registered entity (as defined in the CEA). CEA section 6(c)(1) and final Rule 180.1, like Exchange Act section 10(b) and SEC Rule 10b-5 upon which they are modeled, focus on conduct involving manipulation or deception.
In the following paragraphs, the Commission addresses the comments that pertain to final Rule 180.1 in the following categories: (1) Scope of application of the final Rule; (2) disclosure implications of the final Rule; (3) operation of the provision prohibiting material misstatements and omissions; (4) statutory exception for good faith mistakes; (5) required scienter for a violation of the final Rule; (6) scope of the phrase “in connection with”; and (7) penalty, procedure, effect on automated trading systems, and a proposal to define manipulation.
The Commission received several comments on the scope of the application of proposed Rule 180.1. United States Senator Carl Levin (“Senator Levin”), Chairman of the Permanent Subcommittee on Investigations, Committee on Homeland Security and Governmental Affairs, believes that the CFTC and SEC should harmonize their regulatory structures for combating disruptive and manipulative activities.
Better Markets, a non-profit public interest advocacy organization, states that the proposed Rules are critical to implementing the important expansion of the Commission's enforcement capability so that the transparent and reliable marketplace envisioned by the Dodd-Frank Act can be realized.
University of Maryland School of Law Professor Michael Greenberger (“Professor Greenberger”) believes that proposed Rule 180.1 reflects an effective anti-manipulation rule mandated by section 753 of the Dodd-Frank Act. Professor Greenberger further believes that the Commission correctly asserts that proposed Rule 180.1 be given a broad, remedial reading similar to SEC Rule 10b-5.
The CME Group, Inc. (“CME Group”) and the Commodity Markets Council (“CMC”) believe that proposed Rules 180.1 and 180.2 are vague and fail to provide market participants with sufficient notice of whether contemplated trading practices run afoul of a prohibition.
The Futures Industry Association (“FIA”), International Swaps and Derivatives Association, Inc. (“ISDA”), and the Securities Industry and Financial Markets Association (“SIFMA”) (together, “the Associations”) believe that the Commission should clarify the scope of the proposed regulation, the Commission's existing anti-manipulation authority under CEA section 9(a)(2), and its anti-fraud authority under CEA section 4b.
The American Petroleum Institute (“API”) together with the National Petrochemical and Refiners Association (“NPRA”), and the Coalition of Physical Energy Companies (“COPE”) state that Congress intended the scope of section 753 of the Dodd-Frank Act to address only actual fraudulent manipulation of the commodities markets.
Freddie Mac recommends that the Commission strengthen the protection of customers by clarifying that CEA section 6(c), as amended by section 753 of the Dodd-Frank Act and implemented by proposed Rule 180.1, expressly prohibits “front running” and similar misuse of customer information by swap dealers as a form of fraud-based manipulation.
Upon review of the entire rulemaking record, the Commission determines that final Rule 180.1 is in the public interest and provides fair, reasonable, and adequate notice of the prohibited conduct. With respect to comments claiming that final Rule 180.1 is susceptible to a due process constitutional challenge because it purportedly does not give market participants fair notice of the prohibited conduct, the Commission notes that final Rule 180.1 is modeled on SEC Rule 10b-5, which has been subjected to extensive judicial review and has withstood constitutional challenges, including those based on a fair notice argument.
In response to comments requesting clarification regarding the relationship among final Rule 180.1 and existing CEA sections 4b and 9(a)(2), the Commission notes that section 753(a) of the Dodd-Frank Act makes clear that nothing in new CEA section 6(c)(1) “shall affect, or be construed to affect, the applicability of section 9(a)(2).” Likewise, the Commission finds nothing in CEA section 6(c)(1) or final Rule 180.1 that affects, or should be construed to affect, the applicability of CEA section 4b.
The Commission declines to adopt the request of one commenter to remove language from proposed Rules 180.1 and 180.2 that make it a violation to “attempt” to engage in manipulation.
The Commission declines to adopt the request of certain commenters to interpret CEA section 6(c)(1) as merely extending the Commission's existing anti-fraud and anti-manipulation authority to cover swaps. Such an interpretation would be inconsistent with the language of CEA section 6(c)(1), as amended by section 753 of the Dodd-Frank Act, under which Congress granted the Commission broad new authority to prohibit “any manipulative or deceptive device or contrivance” in connection with any swap, or a contract of sale of any commodity in interstate commerce, or for future delivery on or subject to the rules of any registered entity.
The Commission intends to interpret and apply CEA section 6(c)(1) and final Rule 180.1 “not technically and restrictively, but flexibly to effectuate its remedial purposes.”
The foregoing should not be interpreted, however, to mean that a violation of final Rule 180.1 necessarily requires proof of a market or price effect, as some commenters' recommend. It does not.
In response to comments requesting that “front-running” and similar misuse of customer information be considered a form of fraud-based manipulation under final Rule 180.1, the Commission declines to adopt any per se rule in this regard, but clarifies that final Rule 180.1 reaches all manner of fraud and manipulation within the scope of the statute it implements, CEA section 6(c)(1).
Some commenters express concern regarding whether proposed Rule 180.1
The Associations, CEF, and MFA state that proposed Rule 180.1 should not impose any new duties of disclosure, inquiry or diligence between two sophisticated parties to a bilateral transaction.
API and NPRA urge the Commission to state explicitly that silence, pure omissions (omissions that do not relate to explicit representations), and “no comment” statements are not actionable. They also contend that “[t]here should be no affirmative duty to convey information to a counterparty in the nature of the reporting and information requirements as under securities law.”
The Associations seek clarification that proposed Rule 180.1 will not impede the ability of market participants to take positions and trade on the basis of nonpublic information that they obtain legitimately (
The West Virginia Oil Marketers & Grocers Association (“OMEGA”) states that trading based on inside information should be prohibited.
Responding to other commenters that the CFTC should not incorporate the standards and case law under SEC Rule 10b-5, Professor Greenberger states that the anti-manipulation rules and regulations are not bound by the legal frameworks of the two markets. Professor Greenberger states that the focal point of these anti-manipulation rules is to maintain market integrity, which is a common goal shared by both the securities and futures markets.
PMAA believes that the Commission, in relying on SEC Rule 10b-5, is cognizant of and more than capable of advancing its distinct regulatory responsibilities in ensuring a transparent marketplace free from manipulation.
As a general matter, the Commission does not believe that final Rule 180.1, or the statute it implements, are problematic or will create uncertainty as to the existence of disclosure obligations when applied to the markets the Commission regulates. This is not to say that commenters did not raise valid concerns about how securities law precedent will be applied in the commodities markets with respect to disclosure obligations. The Commission believes that Congress addressed these concerns, however, by enacting CEA section 6(c)(1), which provides that “no rule or regulation promulgated by the Commission shall require any person to disclose to another person nonpublic information that may be material to the market price, rate, or level of the commodity transaction, except as necessary to make any statement made to the other person in or in connection with the transaction not misleading in any material respect.” To be clear, the Commission is not, by this rulemaking, imposing any new affirmative duties of inquiry, diligence, or disclosure.
Further, it is not a violation of final Rule 180.1 to withhold information that a market participant lawfully possesses about market conditions. The failure to disclose such market information prior to entering into a transaction, either in an anonymous market setting or in bilateral negotiations, will not, by itself, constitute a violation of final Rule 180.1. Therefore, the Commission clarifies that silence, absent a pre-existing duty to disclose, is not deceptive within the meaning of final Rule 180.1.
The Commission received comments regarding hedging or speculating (
Depending on the facts and circumstances, a person who engages in deceptive or manipulative conduct in connection with any swap, or contract of sale of any commodity in interstate commerce, or contract for future delivery on or subject to the rules of any registered entity, for example by trading on the basis of material nonpublic information in breach of a pre-existing duty (established by another law or rule, or agreement, understanding, or some other source), or by trading on the basis of material nonpublic information that was obtained through fraud or deception, may be in violation of final Rule 180.1. The Commission believes that this application of the final Rule would be consistent with our responsibility to protect market participants and promote market integrity and with our statement in the NOPR that section 6(c)(1) is a broad catch-all provision, reaching any manipulative or deceptive device or contrivance.”
The Commission declines to adopt comments recommending outright rejection of the potential application of the “fraud-on-the-market” theory under final Rule 180.1.
COPE states that inclusion of the words “attempt to make” any untrue or misleading statement of a material fact in proposed Rule 180.1(a)(2) is vague and confusing. COPE requests that the Commission clarify proposed Rule 180.1(a)(2) to state that the proscribed acts must be done with the intent to deceive, manipulate, or defraud.
API and NPRA believe that the Commission should clarify that only statements and acts pertaining to transactions in futures, swaps, or commodities markets underlying futures or swaps may give rise to liability under proposed Rule 180.1.
Mr. Chris Barnard (“Barnard”) believes the proposed rules should apply to both positive misconduct and misconduct by omission given the ongoing nature of the rights and obligations that may be created in a swap agreement.
The Commission declines to adopt comments recommending deletion of the phrase “or attempt to make” in final Rule subsection 180.1(a)(2). This phrase captures situations where a person attempts to employ a manipulative device or artifice to defraud. For example, when a supervisor attempts to have a subordinate make a fraudulent material misstatement or omission but that subordinate rebuffs the supervisor, the phrase “or attempt to make” would operate to reach the supervisor's attempted fraud.
The Commission declines to modify the proposed Rule in response to comments requesting that only statements and acts pertaining to “transactions” in futures, swaps, or commodities markets underlying futures or swaps may give rise to liability under proposed Rule 180.1.
When considering the application of final Rule 180.1(a)(2), several commenters asked the Commission to extend CEA section 6(c)(1)(C)'s provision for “Good Faith Mistakes” in the mistaken transmission of “false or misleading or inaccurate information to a price reporting service” to other
In crafting CEA section 6(c)(1)(C), Congress could have extended the exception for good faith mistakes to all of CEA sections 6(c) and 9(a)(2) but did not do so. Following the plain text of CEA section 6(c)(1)(C), the Commission limited the good faith exception in final Rule 180.1 to the mistaken transmission of false or misleading or inaccurate information to a price reporting service. The Commission also makes clear that the scienter requirement of final Rule 180.1, final Rule 180.2, and CEA section 9(a)(2) functions to ensure that good-faith mistakes or negligence will not constitute a violation of the final Rules under any circumstance. Thus, a person lacking the requisite scienter cannot be found to have engaged in a manipulative or deceptive device or contrivance within the meaning of CEA section 6(c)(1).
Several commenters asked the Commission to clarify the standard of scienter under proposed Rule 180.1.
Senator Levin recommends that the Commission shift the burden of proof with respect to intent to market participants, which would require them to show that their conduct was not manipulative.
API and NPRA state that the Commission should clarify that scienter may not be premised on the collective knowledge of an entire company, but instead must be based on the knowledge of the person participating in the deceptive or fraudulent conduct.
The ABA Derivatives Committee, CEF, MFA, API and NPRA disagree with the Commission's proposal to adopt recklessness as the scienter requirement, believing instead that the language of the statute supports a specific intent standard.
The ABA Derivatives Committee requests that in cases alleging manipulation under final Rule 180.1, the Commission must show a specific intent to cause an artificial price to satisfy the scienter requirement.
CEF requests that if a recklessness standard is adopted, it should not extend to violations arising under CEA section 9(a)(2).
PMAA supports and encourages the Commission to adopt “recklessness” as the level of scienter, particularly when evaluating issues relating to algorithmic market manipulation.
Mr. Clarence Townsend (“Townsend”) believes the standard of scienter should be strengthened to “reckless manipulation.”
Professor Greenberger states that section 6(c)(1) lowers the standard of manipulation from “knowingly” to “reckless.”
The Air Transport Association (“ATA”) believes that the scienter standard should enable the Commission to police and punish a broader array of potentially manipulative conduct than is reachable under the CEA section 9(a)(2) anti-manipulation provision.
Upon consideration of all the comments in this rulemaking record, the Commission clarifies that a showing of recklessness is, at a minimum, necessary to prove the scienter element of final Rule 180.1.
With respect to comments requesting clarification that scienter may not be premised on the collective knowledge of an entire company, the Commission notes that there is disagreement among the circuits on the collective knowledge theory—that is, the courts disagree on whether the conduct of one corporate agent can be aggregated with another corporate agent's state of mind in holding a corporation liable for fraud.
Given that the collective knowledge theory of alleging and proving scienter against corporate defendants is permissible in certain circuits, and because the Commission finds the policy rationale underlying the theory to be in the public interest (
In response to the NOPR, Better Markets requested the Commission interpret the “in connection with” language of Proposed Rule 180.1 broadly to include not only the transaction giving rise to a swap agreement, but also all of the continuing performance obligations under such agreement.
CME Group states that the Commission should interpret the “in connection with” standard to require a “nexus” between transactions (or offers to transact) subject to CFTC jurisdiction and prohibited fraudulent or deceptive conduct.
Senator Levin believes the Commission should employ its new authority under CEA section 6(c) to prevent manipulative and disruptive activities even where the impacts may only be felt in other markets—including markets regulated by the SEC.
Upon careful consideration of the entire rulemaking record, the Commission finds it unnecessary to alter the text of final Rule 180.1. The Commission interprets the words “in connection with” broadly, not technically or restrictively. Section 6(c)(1) and final Rule 180.1 reach all manipulative or deceptive conduct in connection with the purchase, sale, solicitation, execution, pendency, or termination of any swap, or contract of sale of any commodity in interstate commerce, or contract for future delivery on or subject to the rules of any registered entity. Accordingly, final Rule 180.1 covers conduct including, but not limited to, all of the payment and other obligations arising under a swap.
While broad, the elasticity of the “in connection with” language is not limitless. In this regard, the Commission finds the Supreme Court's decision in
If * * * a broker embezzles cash from a client's account or takes advantage of the fiduciary relationship to induce his client into a fraudulent real estate transaction, then the fraud would not include the requisite connection to a purchase or sale of securities. Likewise if the broker told his client he was stealing the client's assets, that breach of fiduciary duty might be in connection with a sale of securities, but it would not involve a deceptive device or fraud.
The Commission intends to be guided by this and other precedent interpreting the words “in connection with” in the securities context.
As to comments regarding cross-market manipulation, the Commission intends to apply final Rule 180.1 to the fullest extent allowed by law when determining whether conduct in one market is “in connection with” an activity or product subject to the jurisdiction of the Commission. Further, where the Commission's jurisdiction is not exclusive,
With regard to the penalty for violating final Rule 180.1, API and NPRA state that if the Commission chooses to promulgate a catch-all anti-fraud rule without regard to whether the conduct had a manipulative purpose or effect (a proposal that API and NPRA submit would exceed the Commission's authority), then the Commission should clarify that the enhanced sanctions in section 753 of the Dodd-Frank Act apply only to cases of manipulation or attempted manipulation, and not to every alleged violation of the rule.
On the subject of implementation, API and NPRA ask that any final rule adopt a 180-day effective date to enable the industry to design and implement comprehensive compliance programs.
On the issue of use or employment of algorithmic or automated trading systems, the PMAA requests that the Commission establish standards governing the use of algorithmic trading technology by requiring internal controls such as logs and specific notification protocols, directed to the trading entity, when significant code modification of its algorithm takes place, including interpretation by the algorithm of digitized news and social networking sources.
Finally, the Brattle Group economists state that the Commission should adopt its proposed definition of manipulation: “Manipulation is engaging in anomalous price-making behavior intended to alter a price in order to profit in affected price-taking transactions.”
With respect to penalties, the Commission will follow CEA section 6(c)(10)(C)(ii), which states that the Commission may assess “in any case of manipulation or attempted manipulation in violation of [CEA section 6(c)] or section 9(a)(2), a civil penalty of not more than an amount equal to the greater of—(I) $1,000,000; or (II) triple the monetary gain to the person for each such violation.” CEF's request that the penalties for manipulation not apply to violations of CEA section 6(c)(1)(A) is declined because such an outcome would conflict with the plain language of the statute. False or misleading or inaccurate reporting is a type of unlawful manipulation specifically prohibited by CEA section 6(c)(1)(A). Accordingly, where section 6(c)(1)(A) applies, the Commission may assess a penalty of an amount equal to the greater of $1 million or treble damages under CEA section 6(c)(10)(C)(ii) for each such violation.
The Commission declines to adopt comments recommending that it conduct further technical conferences on this rulemaking. The Commission has provided notice and opportunity to comment and has met with numerous groups to discuss this rulemaking.
The Commission declines to adopt comments requesting heightened supervision of algorithmic and automated trading systems as beyond the scope of this rulemaking. Nevertheless, as a general matter, a supervisory failure may be one of the facts and circumstances that the Commission considers in determining whether a violation of the final Rule exists.
The Commission declines to adopt comments proposing a new economics-based definition of manipulation. Instead, as stated above, all relevant
The Commission proposed Rule 180.2 under its general rulemaking authority, CEA section 8a(5) and its statutory authority to prohibit manipulation under new CEA section 6(c)(3). Proposed Rule 180.2 mirrors the text of new CEA section 6(c)(3), by stating that “[i]t shall be unlawful for any person, directly or indirectly, to manipulate or attempt to manipulate the price of any swap, or of any commodity in interstate commerce, or for future delivery on or subject to the rules of any registered entity.” In the NOPR, the Commission proposed to continue “interpreting the prohibition on price manipulation and attempted price manipulation to encompass every effort to improperly influence the price of a swap, commodity, or commodity futures contract.”
The CME Group believes that the Commission should employ a bright-line test under final Rule 180.2 that distinguishes prohibited manipulative conduct from legitimate competitive trading activities. To that end, CME Group urges the Commission to clarify what factors or types of activity the Commission considers to be “intended to interfere with the legitimate forces of supply and demand.”
COPE and EEI believe that the provisions in proposed Rule 180.1 are the same as proposed Rule 180.2 and thus the latter should be deleted.
EEI requests that the Commission affirm in regulatory text that the scienter requirement for proposed Rule 180.2 is specific intent under the Commission's four-prong test.
With respect to the scope of application of proposed Rule 180.2, CMC recommends the Commission clarify that CEA section 6(c)(3) does not confer any additional enforcement authority beyond the holding in the
CMC and MFA recommend that the Commission make clear that proposed Rule 180.2 does not create a presumption that a price is artificial merely because one or more isolated transactions are deemed uneconomic without proof of a specific intent to move prices.
Professor Greenberger states that although the Commission has already interpreted the “prohibition on price manipulation and attempted price manipulation to encompass every effort to influence the price of a swap, commodity, or commodity futures contract that is intended to interfere with the legitimate forces of supply and demand in the marketplace,” it is important to reaffirm the relevance of that legal interpretation.
ATA believes that the Commission should consider whether its complete reliance on past precedent in interpreting manipulation under proposed Rule 180.2 needlessly narrows the potential reach of the amended anti-manipulation provision of section 6(c)(3), anchoring its interpretation to a past standard that has proven remarkably difficult to enforce.
In response to the comments received regarding this matter, the Commission reiterates that, in applying final Rule 180.2, it will be guided by the traditional four-part test for manipulation that has developed in case law arising under 6(c) and 9(a)(2): (1) That the accused had the ability to influence market prices; (2) that the accused specifically intended to create or effect a price or price trend that does not reflect legitimate forces of supply and demand;
The Commission reaffirms the requirement under final Rule 180.2 that a person must act with the requisite specific intent. In other words, recklessness will not suffice under final Rule 180.2 as it will under final Rule 180.1. The Commission finds this level of intent necessary to ensure that legitimate conduct is not captured by final Rule 180.2, which covers non-fraud based manipulation. Given the
The Commission declines requests to limit the application of final Rule 180.2 to the circumstances set forth in the commenters' analysis of particular cases, including the
The Commission interprets the terms “directly or indirectly” as describing the level of involvement necessary to establish a violation of final Rule 180.2. In this context, the Commission interprets “indirectly” to include the circumstance where a person uses a third party (
Notwithstanding the fact that final Rule 180.2 mirrors the text of CEA section 6(c)(3), the Commission deems it appropriate and in the public interest to promulgate this rule and, in so doing, provide the above clarifications to the manner in which the Commission interprets and intends to apply final Rule 180.2.
CEA section 15(a)
In the NOPR, the Commission stated that the proposed rules would enhance the authority of the Commission to ensure fair and equitable markets, and that market participants and the public will substantially benefit from such enhanced prevention and deterrence of manipulation. With respect to costs, the Commission also stated that participants in the markets should already have policies and procedures in place to ensure that their employees, affiliates and agents will refrain from attempting to manipulate the markets. The Commission invited public comment on its cost-benefit considerations.
API and NPRA commented that the potentially significant compliance costs and legal uncertainty must be weighed against the limited benefits of the proposed rules. Specifically, API and NPRA believe that it is problematic to expand the scope of the Commission's enforcement authority to cover routine cash market transactions in all areas of the economy, as it would potentially create inconsistencies with existing statutory and common law standards and would place a tremendous burden on the Commission's resources.
MFA is concerned that ambiguity with respect to legal standards would increase transaction costs and chill legitimate trading practices, in turn decreasing market depth and liquidity.
In contrast, Barnard believes the implementation costs of the proposed rules should be minimal.
The Commission has carefully considered the concerns expressed by some of the commenters that the final Rules could substantially increase costs on market participants, reduce market liquidity or chill legitimate market activity. However, commenters provide no quantification of the potential costs or reliable data as a basis for conclusions that substantial costs will be incurred as a result of the final Rules. Furthermore, commenters have not shown how such rules have negatively impacted comparable markets that trade comparable instruments and operate under comparable anti-manipulation rules.
Specifically, regarding the comments received by API, NPRA, MFA, CME, Argus, and the Associations as to how the new rules may directly increase transaction costs, reduce market liquidity and depth, and hinder risk management functions of markets subject to the Commission's jurisdiction, the Commission notes that final Rule 180.1 is modeled on SEC Rule 10b-5. Many derivatives products in securities markets are traded on national securities exchanges under SEC regulation (
Many of these SEC-regulated derivatives products exhibit high and growing volumes, narrow bid-ask spreads, and high levels of market depth. SEC-regulated stock index ETFs and stock-index options are economically similar to CFTC-regulated stock index futures and options on those futures and, like these CFTC-regulated derivatives, serve primarily as risk-shifting instruments rather than instruments for capital formation. Any argument that the SEC's anti-fraud and anti-manipulation regime has negatively affected the growth of SEC-regulated derivatives lacks a basis in fact and contradicts the generally accepted purpose of the SEC's anti-fraud and anti-manipulation rules, which is to protect investors and to promote market integrity.
As to the concerns of API and NPRA regarding increased costs from the Commission's purported expansion of its authority to cover a plethora of routine cash market transactions in all areas of the economy, with respect to the scope of final Rule 180.1, as discussed above, the Commission intends to exercise its authority under 6(c)(1) to cover transactions related to the futures or swaps markets, or prices of commodities in interstate commerce, or where the fraud or manipulation has the potential to affect cash commodities, futures, or swaps markets or participants in these markets. Thus, concerns about purported increased costs are misplaced in that they rest on an incorrect assumption about the scope of the Commission's expanded authority.
In response to comments from CEF, the Commission re-iterates that the final Rules do not contain any requirement to create, retain, submit, or disclose any information. The final Rules impose no recordkeeping or related data retention or disclosure requirements on any person, including small businesses. Given that the final Rules impose no affirmative duties, it is unlikely that the final Rules will impose any additional ongoing costs beyond the existing costs associated with ensuring that behavior and statements are not fraudulent or manipulative. In that regard, the Commission believes that it will not be necessary for firms that currently have adequate compliance programs to hire additional staff or significantly upgrade their systems to comply with the new Rules. Firms may incur some one-time costs such as costs associated with training traders and staff in the new Rules.
The Commission believes the comments from API, NPRA, and CEF regarding increased costs pertaining to compliance, litigation, and uncertainty with respect to inconsistent standards with other regulatory agencies are misplaced. To the contrary, the Commission believes that market participants and the public will benefit from enhanced regulatory certainty that will arise from the Commission's adoption of an anti-manipulation rule that is more harmonized with existing anti-manipulation rules of the SEC, FERC, and FTC.
In the NOPR, the Commission stated, and re-iterates here, that with respect to benefits, the proposed rules would enhance the authority of the Commission to ensure fair and equitable markets. The Commission stated,
As discussed above, the provisions of Commission Regulations Part 180 would not result in new recordkeeping
The Regulatory Flexibility Act
API and NPRA ask the Commission to adopt a 180-day delay in the effective date of the final Rules to enable the industry to design and implement comprehensive compliance programs.
Commodity futures.
For the reasons stated in the preamble, the Commodity Futures Trading Commission adds a new 17 CFR Part 180 as set forth below:
7 U.S.C. 6c(a), 9, 12(a)(5) and 15, as amended by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, 124 Stat. 1376 (2010); 5 U.S.C. 552 and 552(b), unless otherwise noted.
(a) It shall be unlawful for any person, directly or indirectly, in connection with any swap, or contract of sale of any commodity in interstate commerce, or contract for future delivery on or subject to the rules of any registered entity, to intentionally or recklessly:
(1) Use or employ, or attempt to use or employ, any manipulative device, scheme, or artifice to defraud;
(2) Make, or attempt to make, any untrue or misleading statement of a material fact or to omit to state a material fact necessary in order to make the statements made not untrue or misleading;
(3) Engage, or attempt to engage, in any act, practice, or course of business, which operates or would operate as a fraud or deceit upon any person; or,
(4) Deliver or cause to be delivered, or attempt to deliver or cause to be delivered, for transmission through the mails or interstate commerce, by any means of communication whatsoever, a false or misleading or inaccurate report concerning crop or market information or conditions that affect or tend to affect the price of any commodity in interstate commerce, knowing, or acting in reckless disregard of the fact that such report is false, misleading or inaccurate. Notwithstanding the foregoing, no violation of this subsection shall exist where the person mistakenly transmits, in good faith, false or misleading or inaccurate information to a price reporting service.
(b) Nothing in this section shall be construed to require any person to disclose to another person nonpublic information that may be material to the market price, rate, or level of the commodity transaction, except as necessary to make any statement made to the other person in or in connection with the transaction not misleading in any material respect.
(c) Nothing in this section shall affect, or be construed to affect, the applicability of Commodity Exchange Act section 9(a)(2).
It shall be unlawful for any person, directly or indirectly, to manipulate or attempt to manipulate the price of any swap, or of any commodity in interstate commerce, or for future delivery on or subject to the rules of any registered entity.
The following appendices will not appear in the Code of Federal Regulations.
On this matter, Chairman Gensler and Commissioners Dunn, Sommers, O'Malia and Chilton voted in the affirmative; no Commissioner voted in the negative.
I support the final rulemaking to enhance the Commission's ability to protect against manipulation. Effective regulation requires an effective enforcement program. The Dodd-Frank Act enhances the Commission's enforcement authorities in the futures markets and expands them to the swaps markets. This rule implements new Dodd-Frank authorities to police against fraud and fraud-based manipulative schemes, based upon similar authority that the Securities and Exchange Commission, Federal Energy Regulatory Commission and Federal Trade Commission have for securities and certain energy commodities.
In the past, the CFTC had the ability to prosecute manipulation, but to prevail, it had to prove the specific intent of the accused to create an artificial price. Under the new law and one of the rules before us today, the Commission's anti-manipulation reach is extended to prohibit the reckless use of fraud-based manipulative schemes. This closes a significant gap, as it will broaden the types of cases we can pursue and improve the chances of prevailing over wrongdoers.
The rule also implements the Dodd-Frank Act's price-based manipulation authority to police against corners and squeezes. These new authorities expand the CFTC's arsenal of enforcement tools and strengthen the Commission's ability to effectively deal with threats to market integrity. We will use these tools to be a more effective cop on the beat, to promote market integrity and to protect market participants.
I thank Senator Maria Cantwell for her work to secure this important authority for the CFTC. As Senator Cantwell explained in proposing that this authority be included in the Commodity Exchange Act, “It is a strong and clear legal standard that allows regulators to successfully go after reckless and manipulative behavior.”
Parties filing comments:
* Denotes commenters filing identical comments which were consolidated.
Office of Surface Mining Reclamation and Enforcement (OSM), Interior.
Interim rule; effective date.
On June 29, 2011, OSM published an interim rule approving a program amendment submitted by the West Virginia Department of Environmental Protection (WVDEP). The interim rule provided an opportunity for public comment and gave the comment due date and tentative hearing date. The summary and preamble to the interim rule specified that it was effective upon publication; however, the
The interim final rule published at 76 FR 37996 is effective July 14, 2011.
You may submit comments on the interim rule WV-117-FOR (76 FR 37996; June 29, 2011) by any of the following two methods:
•
•
Mr. Roger W. Calhoun, Director, Charleston Field Office,
On June 29, 2011, we published an interim rule with request for comments at 76 FR 37996. The interim rule announced receipt of a proposed amendment to the West Virginia permanent regulatory program under the Surface Mining Control and Reclamation Act of 1977. On May 2, 2011, the WVDEP submitted a program amendment to OSM that included both statutory and regulatory revisions. West Virginia submitted proposed permit fee revisions to the Code of West Virginia as authorized by House Bill 2955 that passed during the State's regular 2011 legislative session. In addition, West Virginia amended its Code of State Regulations (CSR) to provide for the establishment of a minimum incremental bonding rate as authorized by Senate Bill 121. The changes, due to the passage of House Bill 2995, will increase the filing fee for the State's surface mining permit to $3,500 and establish various fees for other permitting actions. Senate Bill 121 authorizes regulatory revisions which includes, among other things, the establishment of a minimum incremental bonding rate of $10,000 per increment at CSR 38-2-11.4.a.2. Because the West Virginia revisions have an effective date of June 16, 2011, we approved the permit fees and the minimum incremental bonding rate on an interim basis. Our regulations at 30 CFR 732.17(h)(12) state that “[a]ll decisions approving or not approving program amendments must be published in the
Intergovernmental relations, Surface mining, Underground mining.
Postal Service
Final rule.
The Postal Service
Laurence Welling at 202-268-7792, Ken Hollies at 202-268-3083, or Richard Daigle at 202-268-6392.
On November 24, 2010, the Postal Service published a
Group E PO Box service is provided free, with restrictions, to customers whose physical addresses are not eligible for
For this final rule, the Postal Service removes the descriptive term, “business
USPS further deletes the reference to “out-of-bounds delivery receptacles” in favor of language recognizing that Group E PO Box service is not available when a physical address receives
The Postal Service also revises the DMM to acknowledge carrier delivery service that, once established to a particular physical address, eliminates Group E eligibility. Improved language in this section illustrates situations where no eligibility for Group E arises either because carrier delivery is available or because action (or inaction) by third parties precludes USPS from extending carrier delivery.
Three comments were received regarding the proposed rule, addressing multiple issues.
One commenter expressed concerns about the vagueness of terminology in the proposal, for determining how close a “physical address” and delivery receptacle must be. In response, the Postal Service intends to add a sentence to clarify that “at or near a physical address” should be determined by how carrier delivery is already established in a particular locale or ZIP Code
Two separate comments expressed concern that local offices might misuse “unsafe conditions” and “or other conditions” to deny Group E eligibility. One of the commenters also expressed concern about the impact of local discretion on decisions. In response to these concerns, it is the Postal Service opinion that neither commenter was aware that the examples currently listed in the DMM reflect restrictions that are out of Postal Service control and are not all inclusive. Recognizing this lack of clarity, this final rule attempts to provide a better explanation.
With respect to “unsafe conditions”, local Postmasters are best able to determine when mailbox placement might be unsafe for postal employees to attempt delivery or for customers to retrieve mail. Such decisions are made routinely by Postmasters while conforming with local practice, driving conditions, driver expectations,
One commenter expressed concern about the potential misuse of “or other conditions” is now addressed by the Postal Service as: (1) Clarifying that the examples contained in the current DMM consist of conditions outside the control of the Postal Service and, (2) by introducing the examples using “such as” so that it is understood that they are not all inclusive. By using these explanations, the “or other conditions” text is deleted from the final rule.
The foundation of Group E PO Box eligibility is a discretionary Postal Service decision not to extend carrier delivery to a specific carrier delivery point (
The same commenter expressed concern about the fair administration of Group E eligibility. The Postal Service agrees about the importance of Group E in the context of its universal service obligation and at the time of implementation, the Postal Service identified Group E service as one tool for offering universal service under an overarching policy of providing one free form of delivery to each customer.
The Postal Service adopts the following changes to the
Administrative practice and procedure, Postal Service.
Accordingly, 39 CFR Part 111 is amended as follows:
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.
[Revise the title, introductory text and items 4.6.2a, b and c, and eliminate item d in its entirety as follows:]
Customers may qualify for Group E (free) PO Box service at a Post Office if their physical address location meets all of the following criteria:
a. The physical address is within the geographic delivery ZIP Code boundaries administered by a Post Office.
b. The physical address constitutes a potential carrier delivery point of service.
c. USPS does not provide carrier delivery to a mail receptacle at or near a physical address for reasons in 4.6.3b. “At or near a physical address” is defined by reference to how carrier delivery is already established in a particular locale or ZIP Code.
[Revise the title and introductory text of 4.6.3 and add new items a through d as follows:]
Only one Group E (free) PO Box may be obtained for each potential carrier delivery point of service, under the following conditions:
a. Group E PO Box customers are assigned the smallest available box that reasonably accommodates their daily mail volume.
b. Eligibility for Group E PO Boxes does not extend to:
1. Individual tenants, contractors, employees, or other individuals receiving or eligible to receive single-point delivery to a location such as a hotel, college, military installation, campground, or transient trailer park.
2. Locations served, or eligible to be served, by centralized delivery or grouped receptacles such as cluster box
3. Locations where circumstances not within the control of the Postal Service prevent extension of carrier delivery, such as town ordinances, private roads, gated communities, unimproved or poorly maintained roadways, or unsafe conditions.
4. Locations served by a delivery receptacle that a customer chooses to locate along a carrier's line of travel and to which the Postal Service makes delivery.
c. A customer must pay the applicable fee for each PO Box requested in addition to the initial free Group E PO Box.
d. The online application tools described in 4.3.1b cannot be used for free PO Box service.
We will publish an appropriate amendment to 39 CFR Part 111 to reflect these changes.
Postal Service.
Final rule.
The Postal Service is amending 39 CFR part 241 to improve the administration of the Post Office closing and consolidation process. In addition, certain procedures employed for the discontinuance of Post Offices are applied to the discontinuance of other types of retail facilities operated by Postal Service employees.
Jim Boldt, (202) 268-6799.
On March 31, 2011, the Postal Service published a proposed rule in the
The Postal Service is currently in the process of consultation under 39 U.S.C. 1004(b)-(d) about certain aspects of the proposed rule. Therefore, the relevant proposed changes and comments relative to those proposed changes are not included in this final rule, but may be addressed in a subsequent final rule. Under 39 U.S.C. 1004(b)-(d), the Postal Service is obliged to consult with certain supervisory and other managerial organizations about the planning and development of pay policies and schedules, fringe benefit programs, and other programs related to supervisory and other managerial employees. (The Postal Service understands “other programs” to constitute those concerning employment, of a piece with the other enumerated subjects of consultation, and not programs concerning facilities or the operating network more generally, which may have an indirect effect on employees.) Because the subject matter of this final rule does not itself comprise any program subject to 39 U.S.C. 1004(b)-(d), the Postal Service considers it to fall outside the scope of those provisions. Nevertheless, the Postal Service has taken into account comments by supervisory and other managerial organizations, as it has comments by other members of the public.
As explained in the proposed rule, this final rule is not retroactive. Therefore, any change in policy or regulations does not affect the procedures applicable to discontinuance processes initiated before the effective date of this final rule, when previous regulations may have been in effect.
The Postal Service is exempt from the notice requirements of the Administrative Procedure Act (5 U.S.C. 553(d)) regarding final rules by 39 U.S.C. 410(a). Moreover, the chief substance of this final rule is to extend to Postal Service-operated stations and branches the notice and comment procedures applicable to the discontinuance of Post Offices, thereby relieving restrictions that had previously been placed on public participation in the discontinuance process for stations and branches.
The Postal Service received approximately 257 comments in response to the proposed rule. Commenters included 34 Members of Congress, the Postal Regulatory Commission (“Commission” or “PRC”), five state legislators, three postmasters' and postal supervisors' organizations, one postal lessors' organization and various of its members, one mailing industry stakeholder, and numerous other postal customers. Although some comments were favorable about certain aspects of the proposed rule, almost all of the comments expressed concerns about various aspects of the proposed rule. Below we discuss the comments and our response to each.
The overwhelming majority of comments urged the Postal Service not to close Post Offices (as well as, presumably, stations and branches), especially in small and rural communities. These commenters stated that cost savings would be low, that there would be undue hardship on some customers, and other matters. Many expressed concern about a specific postal retail facility. Additionally, many appeared to believe that the proposed rule would eliminate procedures and make it easier to close retail facilities, including for reasons prohibited by statute.
These comments seem to overlook the actual scope of the changes. This rulemaking does not reduce or abolish any transparency attained through, for example, public notice, public input, and consideration of all comments received before any Post Office may be discontinued. In fact, transparency will be enhanced. Nor does the rulemaking change any of the criteria for discontinuing a Post Office, which are set forth in the statute and include consideration of cost savings, the effects on employees and the community, and the prohibition on closing small Post Offices solely for financial reasons. It should be noted that the statutes in question apply only to the justifications for actually discontinuing a facility; they do not restrict Postal Service discretion to evaluate its retail network and identify specific facilities for formal study.
To highlight the distinction between initiation of a preliminary feasibility study and the development of an official proposal, the Postal Service is adding
An initial feasibility study need not lead to evaluation for potential discontinuance. If it does, the public will receive expanded opportunity for comment as the Postal Service considers all of the requisite factors en route to any final determination, just as it has in the past. Although this rulemaking expands the range of factors that can justify a discontinuance study, any formal discontinuance decisions must still be based upon the same considerations as before. Opportunity for public participation will actually increase, because the Postal Service will ensure broad public awareness by sending written notice in the form of a “Dear Customer” letter and questionnaire to all delivery points in the ZIP Code area served by the facility being studied.
As described in the proposed rule, the rulemaking will actually expand application of the most rigorous process for discontinuance of Postal Service-operated retail facilities beyond independent Post Offices. While Congress applied the criteria in 39 U.S.C. 101(b) and 404(d) only to independent Post Offices, and not to stations or branches, the Postal Service is making that same process applicable to the discontinuance of
While some commenters express concern about the possible evaluation by the Postal Service of discontinuance candidates using economic indicators like population or volume trends, applicable law (39 U.S.C. 404(d)) already requires that the Postal Service consider economic savings in any final determination to discontinue a Post Office. Of course, population and volume trends may also inform evaluation of likely impact on the community, which is another mandatory criterion for evaluation in the discontinuance process.
To be sure, Postal Service plans to close or consolidate Post Offices must be consistent with the statutory requirement in 39 U.S.C. 101(b) that “[n]o small post office shall be closed solely for operating at a deficit, it being the specific intent of the Congress that effective postal services be insured to residents of both urban and rural communities.” As a result, a proposed discontinuance of a small Post Office may not proceed to a final determination if the sole reason is that the facility operates at a loss. Consistent with this statutory prohibition, the Postal Service provided in proposed 39 CFR 241.3(a)(4)(ii)(D) that no initial feasibility study of a small Post Office may commence, absent other permissible criteria, if the sole justification is that the office operates at a deficit. This provision is maintained in the final rule.
Many comments offer general support for the continued existence of rural Post Offices; the Postal Service itself remains committed to serving customers in all areas, including rural ones, and Post Offices constitute one key tool for doing so. The primary customer need, however, is
Many commenters articulated concerns about particular retail facilities, thus reflecting a misunderstanding of the instant rulemaking's scope. Such comments are either premature or misdirected; they may become germane when the subject facilities are studied, or should be directed to those conducting studies affecting the subject facilities. This rulemaking concerns only nationwide criteria and procedures, not specific facilities. If and when a particular facility is evaluated in a discontinuance study, the public will have full notice and opportunity to provide input, as under the previous regulations.
Several commenters expressed concern about the proposed rule's reinterpretation of “consolidation,” such that the term would no longer apply to the conversion of an independent Post Office into a Postal Service-operated station or branch. In particular, these commenters claim that this approach, combined with the fact that 39 U.S.C. 404(d)(5) does not confer appeal rights for closings or consolidations of stations and branches, could result in an effective denial of appeal rights if the Postal Service were to convert a Post Office into a station or branch and then proceed to close or consolidate the facility.
The Postal Service is currently in the process of consultation under 39 U.S.C. 1004(b)-(d) about the proposed reinterpretation of “consolidation,” among other aspects of the proposed rule. Therefore, the Postal Service is deferring the relevant changes for the time being. Comments on this aspect of the proposed rule will be taken into consideration and may be addressed in a subsequent final rule.
The Commission recommended that the Postal Service provide notice of appeal rights when proposing or determining to discontinue a station or branch. This Commission noted that the Postal Service proposed to apply procedures to facilities beyond the statutory scope of applicability and suggested that the Postal Service could similarly extend appeal rights.
With respect to notice of appeal rights concerning stations and branches, the Postal Service does not believe that the authority exists to extend the Commission's grant of jurisdiction in 39 U.S.C. 404(d)(5) to the closure or consolidation of a station or branch. This is true regardless of how “consolidation” is interpreted. This rulemaking does not and can not alter the scope of the Commission's jurisdiction, so it does not change when the public is entitled to notice of appeal rights. At the same time, it should be emphasized that this rulemaking does
This rulemaking does not change Postal Service regulations as to whether discontinuances of stations or branches may be appealed, nor does it add measures to preclude such appeals from being filed. While the Postal Service maintains that the Commission does not have appeal jurisdiction over stations and branches under current law, the rulemaking does introduce an explicit recognition that the Postal Service may, in its discretion, decline to challenge the Commission's jurisdiction in certain (or even, if it chooses, all) cases, which contrasts with its previous practice of asserting jurisdictional defenses in all cases. Accordingly, to the extent that commenters believe they would lose the practical ability to seek accountability of station and branch discontinuances through appeal (or through the Postal Service's awareness of the prospect of appeal) to the Commission, such criticisms are overstated.
One commenter stated a belief that the proposed rule would make the discontinuance process more “administrative” by empowering the Commission to modify the Postal Service's final determination. In actuality, however, these aspects of the proposed rule have not changed from prior regulations. Moreover, the nature of the Commission's appeal jurisdiction and the general administrative nature of the discontinuance process were established by Congress in the Postal Reorganization Act Amendments of 1976 (Pub. L. 94-421), the Postal Service's regulations merely track this language.
Finally, one commenter agreed with the Postal Service's analysis of 39 U.S.C. 404(d)(5), but objected to the proposed rule's ultimate framing of the matter in terms of a right to object or not to object to the Commission's assertion of jurisdiction. While the commenter's views are understood and appreciated, it is axiomatic that a party may decline to assert valid jurisdictional defenses in specific cases, without prejudicing its assertion of the same objections in other cases or contexts. To recognize Postal Service counsel's discretion over litigation strategy does not diminish the validity of the general principle that the Commission is without legal authority to entertain purported appeals of station and branch discontinuances.
Several commenters took issue with proposed 39 CFR 241.3(d)(2), which provides that a community meeting is required unless otherwise instructed by the responsible Vice President or the Area Manager, Delivery Programs Support. These commenters expressed the belief that this would undermine a current standard of allowing public input through community meetings in all cases.
Previous Postal Service regulations, however, have not required a community meeting for every Post Office discontinuance. The most recent version of 39 CFR 241.3(d)(3) listed “meeting with community groups” as exemplifying options available if deemed “necessary” to a larger transparency effort. Moreover, sections 243 and 721 of Handbook PO-101,
Several commenters also recommended against the proposed approach whereby a feasibility study could be initiated by a responsible Vice President, as well as by a District Manager. These commenters advised that a national-level Vice President is less likely than a District Manager to have an appropriately nuanced understanding of community-specific conditions.
To clarify, the Vice President's role in proposed 39 CFR 241.3(a)(2) and (a)(4) is to trigger an exploration of possible discontinuance. Thereafter, the District Manager oversees the follow-up investigation and determines whether to proceed with a formal proposal to discontinue the facility. As noted above, the final rule includes additional language in 39 CFR 241.3(a)(4)(i) to clarify the distinction between the initial feasibility study, which a responsible Vice President or a District Manager may initiate, and the formal proposal, for which a Vice President is not responsible.
Concern about the Vice President's role may have been driven by the inclusion of an erroneous reference to a Vice President's discretion in 39 CFR § 241.3(c)(1), which might have suggested that the Vice President could directly determine whether to post a proposal, independent from the District Manager. This error has been corrected in the final rule.
The District Manager evaluates public comments on the proposal and decides whether to forward a recommended final determination to the responsible Vice President for ultimate review and decision. As such, the local knowledge vested in district postal personnel becomes a strength of the foundation for any decision to pursue discontinuance of a retail facility. As such, a Vice President's role at this latter stage extends only to a final check on a District Manager's recommendation that a discontinuance move forward.
Thus, the proposed rule and final rule recognize the importance of the District Manager's assessment of local conditions. Under the final rule, the District Manager accordingly retains significant discretion to take account of local conditions before deciding whether to proceed with a proposal or final determination to discontinue a facility.
Many commenters expressed the view that the Postmaster Equity Act, Public Law 108-86 (2003), precludes the proposed change to 39 CFR 241.1, such that, in their view, a Post Office may not be operated or managed by anyone but a postmaster. As codified in 39 U.S.C. 1004(i)(3), the Postmaster Equity Act defines a “postmaster” as “an individual who is the manager in charge of the operations of a post office, with or without the assistance of subordinate managers or supervisors.” The Postal Service is currently in the process of consultation under 39 U.S.C. 1004(b)-(d) about this aspect of the proposed rule. Therefore, the Postal Service is deferring the relevant changes for the time being. Comments on this aspect of the proposed rule will be taken into
One commenter opined that a previous rule change required a postmaster to reside in the delivery area of the Post Office in which he or she served, and that the Postal Service's regulations should revert to that rule. It is true that local residence was a former requirement for postmaster eligibility, but this requirement did not derive from Postal Service regulations. Rather, it existed in a statute that Congress repealed when the Postal Reorganization Act established the current merit-based system for postmaster appointments.
One commenter requested that the Postal Service include in 39 CFR 241.3 a provision to allow for the possibility that, where the financial viability of a retail facility is a factor in a discontinuance study, the local government can offer to make up the projected shortfall as a means for preserving retail service at the facility. This suggestion is already accounted for in existing discontinuance processes and practice, wherein communities have ample opportunity to offer views and alternatives that might address justifications for a specific discontinuance. The Postal Service takes that input into account as it determines whether a proposal is warranted. It is plausible that an agreement by a municipality or agency to incur certain costs or burdens can be decisive and lead the Postal Service to forgo a discontinuance study. Contractor-operated retail facilities or other arrangements are also possible. Because current practice and the proposed rule already address these concerns, no further revision to the final rule appears warranted.
Another commenter advised that customers should be ensured alternative access channels before the Postal Service proceeds with discontinuance. The Postal Service believes its processes adequately meet this concern. Under the proposed rule, the availability and use of alternative access channels would help inform local officials regarding the necessity for a fully staffed postal facility. Today, retail services are available to customers through a variety of channels beyond traditional brick-and-mortar facilities, such as the
Moreover, before the Postal Service can reach any final determination on a proposed discontinuance, 39 U.S.C. 404(d) requires the Postal Service to consider (among other things) the effect on the community and the statutory policy of providing a maximum degree of effective and regular postal services to rural areas, communities, and small towns where Post Offices are not self-sustaining. In virtually all cases, this means careful consideration of the utility provided by alternative access channels, including services available through letter carriers, particularly as this tends to be a focus of customer input. Therefore, the commenter and other customers may rest assured that the continued availability of retail services will remain a key point of consideration whenever the Postal Service studies a community's needs.
One commenter voiced suspicion that the Postal Service would impermissibly edit or conceal information in publicly available documents under cover of the proposed provision that would allow for redaction of personally identifiable information. Another commenter characterized this change as inappropriate because submitters of public comments to a public administrative record do not have a privacy interest in their identities.
Rather than being a substantive change that the Postal Service could somehow exploit to willfully edit an administrative record, the proposed provision merely updates 39 CFR 241.3 to reflect other statutes and regulations that authorize, on a discretionary basis, the withholding of personally identifiable information from public disclosure.
One commenter suggested that customers formerly served by a suspended retail facility should be notified of discontinuance-related actions by mail, not just by posting at other retail facilities. The Postal Service intends to mail notice and a questionnaire to customers formerly served by a Postal Service-operated retail facility whose operations have undergone an emergency suspension to the same extent that it would have if the facility were not suspended. Because this intention may not have been sufficiently clear, the Postal Service incorporates the commenter's suggestion with clarifying language in new paragraph 241.3(a)(4)(iii).
One commenter notes that, in at least one case, postal customers were informed that a contractor-operated Community Post Office (CPO) would provide many of the same services as a Postal Service-operated retail facility, except for some services such as permit mailing acceptance. The commenter then advises that the same discontinuance procedures should apply to contractor-operated retail facilities, particularly in locations where a CPO may be the only postal retail facility.
Another commenter opined that services provided by a contractor-operated retail facility can, in certain cases, be equivalent to or better than services provided by a Post Office or other Postal Service-operated retail facility. As a result of more flexible office hours or parking, for example, contractor-operated retail facilities may offer more ready access to essential postal services and thereby a handier method to ensure compliance with 39 U.S.C. 403(b)(3). Hence, the commenter concludes that distinctions based on the identity of the retail facility operator might not have universal validity.
The Postal Service acknowledged in the proposed rule that customers of contractor-operated retail facilities may experience and expect comparable (or better) levels of service relative to those at Postal Service-operated retail facilities. However, the Postal Service also explained that exigencies of contracting relationships make it generally impractical to harmonize their discontinuance procedures with the deliberative timeframe and procedures
CPO operators would also gain substantial bargaining leverage against the Postal Service, if the Postal Service's ability to change the contractual provision of postal services in the affected community were subject to the lengthy and costly discontinuance study, if not also litigation. Moreover, assuming a formal discontinuance study were required, the CPO operator might demand additional compensation for participating in the study. If a study were not conducted because replacement services would not provide the maximum degree of regular and effective service, a CPO operator might also gain a significant bargaining advantage for negotiating a price increase.
As noted throughout this rulemaking, the legislative history and text of 39 U.S.C. 404(d) limit that statute's scope to independent Post Offices. The Postal Service does not currently believe that it would be prudent to apply the same procedures, as a policy matter, to contractor-operated retail facilities. This policy distinction does not cast a value judgment on the quality of service available from contractor-operated retail facilities or on whether such facilities may be suitable replacements for Postal Service-operated retail facilities.
Two commenters asked whether a postmaster of an independent Post Office would become a station or branch manager where the Post Office is converted into another Postal Service-operated retail facility type, or whether the Postal Service would use such conversions to eliminate postmaster positions. Facility-specific staffing is outside the scope of this rulemaking and is subject to local management discretion, as guided by any applicable laws, regulations, policies and agreements.
One commenter recommended that, where a discontinuance study is related to expiration or cancellation of a lease without suitable alternative quarters in the community, the Postal Service should initiate the discontinuance study sufficiently in advance of the lease's end date to allow the lessor and customers an opportunity to explore alternatives and provide input. Alternatively, the commenter suggested that the retail facility in question could be kept open as long as necessary to gather information in a discontinuance study. The Postal Service agrees with the general thrust of this comment and includes a new paragraph 241.3(a)(4)(iii) in the final rule to encourage local management accordingly. This new provision is framed as guidance to be followed wherever possible, rather than a universal requirement, because a single solution can never be made to fit every challenge or suspension.
One commenter asserted numerous allegations about the Postal Service's handling of emergency suspensions: Disregard for existing rules, manipulation of lease renewal and termination processes, and maintenance of facilities in suspended status without undergoing a formal discontinuance. Allegations of failure to comply with regulations are beyond the scope of this rulemaking. The improved process for discontinuance actions provided in this final rule may, however, address the timely and final disposition of many suspended offices and diminish pressure to seek solutions outside current policy.
One commenter also noted that the emergency suspension form in Handbook PO-101,
One commenter objected to the change from a 90-day waiting period to a 60-day waiting period after posting of the final determination. This commenter opined that the change would diminish the public's opportunity to provide input. The pertinent change to 39 CFR 251.3(g)(2) concerns the period between posting by the Postal Service of its final determination and when operational discontinuance takes effect (barring an appeal to the Commission). At that point, two rounds of public input on a possible discontinuance, and responses to each,will already have been undertaken before the Postal Service reached a final decision. Therefore, the need for additional public input does not affect, and is unrelated to, the length of time the final determination is posted or the duration before final action. This change by the Postal Service merely harmonizes the waiting period with the 60-day statutory posting requirement established by Congress in 39 U.S.C. 404(d)(4).
Three other commenters asked more generally that the Postal Service reverse proposed changes believed to shorten time periods for comment. Aside from the revision of the final determination posting period discussed above (which does not concern comment periods), the Postal Service has not proposed any adjustment to comment periods in 39 CFR 241.3. Nor is it evident that the existing 60-day comment period on discontinuance proposals, which has been in effect for decades, provides insufficient opportunity for public participation as envisioned by 39 U.S.C. 404(d).
Finally, one commenter stated a belief that the 30-day period for appeals of Post Office discontinuances is too short and should be extended to a 60-day period. Congress has provided that a final determination to discontinue a Post Office can be appealed only within 30 days after the final determination is made available. 39 U.S.C. 404(d)(5). The Postal Service does not have the power to change a jurisdictional limitation set by Congress.
One commenter urged the Postal Service to end relocations of retail facilities, which the commenter advised could result in curtailed services to customers near the original location. Relocations of existing facilities that do not result in an actual closure or
Two postal supervisors' organizations cautioned that extensive closures of Post Offices could result in gaps and delays in service and could erode public confidence in the Postal Service generally. In offering this advice, the commenters assume that the intent of the rulemaking is to usher in sweeping closures of small and rural Post Offices.
The rulemaking establishes and updates procedures and considerations for discontinuance of all Postal Service-operated retail facilities, not just small and rural Post Offices. The Postal Service does not believe that the proposed rule's innovations, such as allowing an initial feasibility study to commence on the basis of volume trends or upon the identification of a facility by a Headquarters Vice President, necessarily target small or rural Post Offices. A large or medium-sized urban Post Office can be equally subject to declining volume or population trends that warrant reconsideration of its role in the postal retail network.
Even if the Postal Service were, in the future, to develop a program to study the discontinuance of large numbers of retail facilities that had the potential to effect a nationwide or substantially nationwide change in service, the Postal Service would intend to seek an advisory opinion from the Commission under 39 U.S.C. 3661(b)-(c). Parties would have a full opportunity to raise their concerns and assess the impact of such a program on service levels and public confidence at that time. Unless and until such a program is developed and presented to the Commission, however, such concerns are speculative and premature. In the meantime, impact on service is necessarily taken into account in each discontinuance study.
In its comments, the Commission incorporated by reference all of the detailed recommendations in its SBOC Opinion, while highlighting certain of them. The Commission's recommendations have indeed had a major influence on the Postal Service's larger effort to revise its discontinuance procedures, of which this rulemaking is a part. Most of the resulting changes will be reflected in a corresponding revision to Handbook PO-101, which contains detailed internal regulations; the Postal Service does not necessarily consider 39 CFR part 241 to be a suitable repository for such extensive and fine-grained rules. As a more specific response to the Commission's comments, the Postal Service provides the following summation:
The final rule includes the following changes to the proposed rule.
As explained in the preceding sections, certain issues are currently subject to consultation under 39 U.S.C. 1004(b)-(d) and further consideration by the Postal Service. These include the types of personnel that may be responsible for operations in a Post Office, and the definition of consolidation as not pertaining to personnel changes or to reclassification of Post Offices as other types of Postal Service-operated retail facilities. Therefore, the second sentence of 39 CFR 241.1(a) and the entirety of 39 CFR 241.3(a)(1)(iii), as proposed or modified, are not included in the final rule at this time. Other provisions pertinent to consolidations will, for the time being, remain as they were under previous regulations, with modifications only to reflect the inclusion of Postal Service-to-contractor conversions in the meaning of “consolidation.” The initially proposed modifications, or modifications thereto, may be included in the regulations upon the conclusion of the ongoing deliberations, in which case the Postal Service will issue a further final rule. Until then, the Postal Service will continue applying existing discontinuance procedures according to 39 CFR 241.3. A new clause 241.3(a)(1)(i)(D) is added to reflect this interim state of affairs.
Consistent with disclaimers in the proposed rule and this final rule, a new paragraph 241.3(a)(1)(iii) is added to clarify that the revised regulations are mandatory only for discontinuance actions commenced on or after the regulations' effective date. The previous regulations shall continue to apply to discontinuance actions initiated earlier, unless management directs utilization of the new rules.
For reference, a new paragraph 241.3(a)(2) is added to provide definitions of “USPS-operated retail facility,” “contractor-operated retail facility,” “closing,” “consolidation,” and “discontinuance.” “USPS-operated retail facility” and “contractor-operated retail facility” are defined as in the proposed rule. “Closing” and “discontinuance” are defined in accordance with the definitions in the most recent version of Handbook PO-101; these definitions do not represent a substantive change from previous regulations. “Consolidation” incorporates the meaning under both the previous regulations (conversion of a Post Office into a Classified Station or Classified Branch) and the proposed rule (conversion of a USPS-operated retail facility into a contractor-operated retail facility). The remaining paragraphs in subsection 241.3(a) are renumbered accordingly.
The introductory language to paragraph 241.3(a)(4) (renumbered as (a)(5)) has been reorganized and revised to clarify that the initial feasibility study constitutes a distinct phase preliminary to any development of a written proposal. The justification for initiating a feasibility study, and the Vice-President's discretion to direct such action, therefore pertain only to the initial phase. Other references throughout 39 CFR 241.3 have been changed to “initial feasibility study,” where appropriate, in order to clarify the intended scope of the relevant provision.
The phrase “severe safety and health hazards” in proposed clause 241.3(a)(4)(i)(B) (renumbered as (a)(5)(i)(B)) has been restated as “irreparable damage when no suitable alternate quarters are available in the community,” in order to avoid potentially conflicting implications under § 241.3(a)(5)(ii).
Section 241.3(a)(4)(ii) (renumbered as § 241.3(a)(5)(ii)) has been revised somewhat to express more clearly the distinction between the circumstances in clauses (A) through (C), none of which can justify an initial feasibility study, and those in clause (D), which can justify an initial feasibility study but only in the presence of one or more of the permissible circumstances listed in § 241.3(a)(5)(i). This distinction tracks that in the governing statute.
A new § 241.3(a)(5)(iii) has been added to specify how customers will receive notice and questionnaires for the initial feasibility study. Notice and questionnaires will be provided to retail customers at the Postal Service-operated retail facility under study, as well as by mail to customers in the five-digit ZIP Code delivery area of the facility and to certain other customers. In addition, local management may determine whether notification through media outlets is appropriate.
A new § 241.3(a)(5)(iv) has been added with guidance to the effect that when an initial feasibility study is to be initiated due to an emergency suspension (for example, when it is anticipated that a lease or rental agreement will be cancelled with no suitable alternate quarters available in the community), responsible personnel should, wherever possible, initiate the discontinuance process sufficiently in advance of the circumstance prompting the emergency suspension to allow a meaningful opportunity for public input to be taken into account prior to the suspension taking effect. If necessary to continue gathering information, responsible personnel should also seek to extend operations for the necessary duration, to the extent possible. Paragraph 241.3(a)(5)(iv) also clarifies that customers formerly served by a Postal Service-operated retail facility in suspension status should receive the same level of notice throughout the discontinuance process, including notice by mail, as they would have if the facility were not in suspension status.
Paragraph 241.3(b)(4) has been revised to acknowledge that a contractor-operated retail facility can, but need not necessarily, retain the name of the pre-consolidation Postal Service-operated retail facility, if appropriate. For example, some
Paragraph 241.3(c)(1) has been amended to delete the reference to the responsible Vice President as having discretion to initiate a discontinuance proposal. This phrase had been erroneously included in the proposed rule.
Paragraph 241.3(c)(3) has been revised such that postmasters and officers in charge must be invited to submit comments, rather than indicating that they must do so. The previous phrasing gave rise to confusion as to whether such personnel have the option of avoiding submission of comments.
Paragraph 241.3(d)(1) has been revised to specify in greater detail the Postal Service-operated retail facilities at which the proposal and comment notice must be posted, and to require additional copies of the proposal and comment notice to be given to customers upon request. The description of the comment notice, which had also been in paragraph 241.3(d)(1), has been moved to a new paragraph 241.3(d)(2), and the succeeding paragraphs have been renumbered accordingly.
Paragraph 241.3(d)(2) (renumbered as (d)(3)) has been revised to clarify that a community meeting should be forgone only when exceptional circumstances make a community meeting infeasible, such as where the community no longer exists because of a natural disaster or because residents have moved elsewhere. The revised paragraph also explains that the purpose of the community meeting is to provide public outreach and to gain public input, and that it should occur during the comment period after a proposal has been posted. Finally, one class of personnel authorized to make exceptions to the community meeting requirement is changed from the Manager, Delivery Programs Support, to the applicable Vice President, Area Operations.
In the interest of consistency and clarity, references to locations where materials are to be posted in § 241.3(d)(3)(v) (renumbered as (d)(4)(v), (e)(2)(i), (f)(3), (g)(1)(i), (g)(1)(ii)(A), and (g)(1)(ii)(B) have been revised to refer back to the locations now specified in § 241.3(d)(1).
References throughout the proposed rule to “responsible Vice President” have been changed to “responsible Headquarters Vice President,” in order to avoid confusion with Vice Presidents, Area Operations.
The Postal Service has determined that the changes described herein are necessary to standardize and clarify the procedures of Part 241 with regard to the discontinuance of USPS-operated retail facilities and to eliminate potential confusion regarding the policies governing these matters. Accordingly, the Postal Service has determined that this final rule should take effect upon publication. The Postal Service hereby adopts the following changes to 39 CFR part 241.
Organization and functions (government agencies), Postal Service.
Accordingly, 39 CFR Part 241 is amended as follows:
39 U.S.C. 101, 401, 403, 404, 410, 1001.
(a)
(b)
(1)
(2)
(3)
(4)
(a)
(A) Replace a USPS-operated post office, station, or branch with a contractor-operated retail facility;
(B) Consolidate a USPS-operated post office, station, or branch by combining it with another USPS-operated retail facility; or
(C) Discontinue a USPS-operated post office, station, or branch without providing a replacement facility.
(ii) The regulations in this section are mandatory only with respect to discontinuance actions for which initial feasibility studies have been initiated on or after July 14, 2011. Unless otherwise provided by responsible personnel, the rules under section 241.3 as in effect prior to July 14, 2011 shall apply to discontinuance actions for which initial feasibility studies have been initiated prior to July 14, 2011.
(2)
(i) “
(ii) “
(iii) “
(iv) “
(v) “
(3)
(i) The public must be given 60 days' notice of a proposed action to enable the persons served by a USPS-operated retail facility to evaluate the proposal and provide comments.
(ii) After public comments are received and taken into account, any final determination to close or consolidate a USPS-operated retail facility must be made in writing and must include findings covering all the required considerations.
(iii) The written determination must be made available to persons served by the USPS-operated retail facility at least 60 days before the discontinuance takes effect.
(iv) Within the first 30 days after the written determination is made available, any person regularly served by a Post Office subject to discontinuance may appeal the decision to the Postal Regulatory Commission. Where persons regularly served by another type of USPS-operated retail facility subject to discontinuance file an appeal with the Postal Regulatory Commission, the General Counsel reserves the right to assert defenses, including the Commission's lack of jurisdiction over such appeals. For purposes of determining whether an appeal is filed within the 30-day period, receipt by the Commission is based on the postmark of the appeal, if sent through the mail, or on other appropriate documentation or indicia, if sent through another lawful delivery method.
(v) The Commission may only affirm the Postal Service determination or return the matter for further consideration but may not modify the determination.
(vi) The Commission is required to make any determination subject to 39 U.S.C. 404(d)(5) no later than 120 days after receiving the appeal.
(vii) The following table summarizes the notice and appeal periods defined by statute.
(4)
(i) Rules to ensure that the community's identity as a postal address is preserved.
(ii) Rules for consideration of a proposed discontinuance and for its implementation, if approved. These rules are designed to ensure that the reasons leading to discontinuance of a particular USPS-operated retail facility are fully articulated and disclosed at a stage that enables customer participation to make a helpful contribution toward the final decision.
(5)
(i)
(A) A postmaster vacancy;
(B) Emergency suspension of the USPS-operated retail facility due to cancellation of a lease or rental agreement when no suitable alternate quarters are available in the community, a fire or natural disaster, irreparable damage when no suitable alternate quarters are available in the community, challenge to the sanctity of the mail, or similar reasons;
(C) Earned workload below the minimum established level for the lowest non-bargaining (EAS) employee grade;
(D) Insufficient customer demand, evidenced by declining or low volume, revenue, revenue units, local business activity, or local population trends;
(E) The availability of reasonable alternate access to postal services for the community served by the USPS-operated retail facility; or
(F) The incorporation of two communities into one or other special circumstances.
(ii)
(A) Any claim that the continued operation of a building without handicapped modifications is inconsistent with the Architectural Barriers Act (42 U.S.C. 4151 et seq.);
(B) The absence of running water or restroom facilities;
(C) Compliance with the Occupational Safety and Health Act of 1970 (29 U.S.C. 651 et seq.); or
(D) In the absence of any circumstances identified in paragraph (a)(5)(i) of this section, the operation of a small Post Office at a deficit.
(iii)
(A) Post Office Box customers at the USPS-operated retail facility under study;
(B) Customers whose delivery carrier is stationed out of the USPS-operated retail facility under study;
(C) Customers in the delivery area of the same ZIP Code as the retail facility under study, regardless of whether the delivery carriers for those customers are stationed out of the retail facility under study or out of a nearby facility; and
(D) Customers whom the retail facility under study serves for allied delivery services such as mail pick-up.
(iv)
(b)
(2)
(i) In a consolidation, the ZIP Code for the replacement contractor-operated retail facility, classified station, or classified branch is the ZIP Code originally assigned to the discontinued facility.
(ii) If the ZIP Code is changed and the parent or gaining USPS-operated retail facility covers several ZIP Codes, the ZIP Code must be that of the delivery area within which the facility is located.
(3)
(4)
(c)
(i) Must use the standards and procedures in § 241.3(c) and (d).
(ii) Must investigate the situation.
(iii) May propose the USPS-operated retail facility be discontinued.
(2)
(i) The communities served by two or more post offices are being merged into a single incorporated village, town, or city; or
(ii) A replacement facility is necessary for regular and effective service to the area served by the post office considered for discontinuance.
(3)
(4)
(i)
(A) Contrast the services available before and after the proposed change;
(B) Describe how the changes respond to the postal needs of the affected customers; and
(C) Highlight particular aspects of customer service that might be less advantageous as well as more advantageous.
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(A)
(B)
(C)
(D)
(d)
(i) The USPS-operated retail facility under study, unless service at the facility has been suspended;
(ii) The USPS-operated retail facility proposed to serve as the supervising facility;
(iii) Any USPS-operated retail facility likely to serve a significant number of customers of the USPS-operated retail facility under study; and
(iv) If service at the facility under study has been suspended, any USPS-operated retail facility providing alternative service for former customers of the facility under study.
(2)
(i) Ask interested persons to provide written comments within 60 days, to a stated address, offering specific opinions and information, favorable or unfavorable, on the potential effect of the proposed change on postal services and the community.
(ii) State that copies of the proposal with attached optional comment forms are available in the affected USPS-operated retail facilities.
(iii) Provide a name and telephone number to call for information.
(3)
(i) If oral contacts develop views or information not previously documented, whether favorable or unfavorable to the proposal, the District Manager should encourage persons offering the views or information to provide written comments to preserve them for the record.
(ii) As a factor in making his or her decision, the District Manager may not rely on communications received from anyone unless submitted in writing for the record.
(4)
(i) The record must include all information that the District Manager considered, and the decision must stand on the record. No written information or views submitted by customers may be excluded.
(ii) The docket number assigned to the proposal must be the ZIP Code of the office proposed for closing or consolidation.
(iii) The record must include a chronological index in which each document contained is identified and numbered as filed.
(iv) As written communications are received in response to the public notice and invitation for comments, they are included in the record.
(v) A complete copy of the record must be available for public inspection during normal office hours at the USPS-operated retail facilities where the proposal was posted under paragraph (d)(1) of this section, beginning no later than the date on which notice is posted and extending through the posting period. When appropriate, certain personally identifiable information, such as individual names or residential addresses, may be redacted from the publicly accessible copy of the record.
(vi) Copies of documents in the record (except the proposal and comment form) are provided on request and on payment of fees as noted in chapter 4 of Handbook AS-353,
(e)
(2)
(i)
(ii)
(A) Transmit the revised proposal and the entire record to the responsible Headquarters Vice President.
(B) Certify that all documents in the record are originals or true and correct copies.
(f)
(2)
(i)
(ii)
(3)
(4)
(5)
(g)
(i) Provide notice of the Final Determination by posting a copy prominently in the USPS-operated retail facilities in each affected USPS-operated retail facilities where the proposal was posted under paragraph (d)(1) of this section, including the USPS-operated retail facilities likely to be serving the affected customers. The date of posting must be noted on the first page of the posted copy as follows: “Date of posting.”
(ii) Ensure that a copy of the completed record is available for public inspection during normal business hours at each USPS-operated retail facility where the Final Determination is posted for 30 days from the posting date.
(iii) Provide copies of documents in the record on request and payment of fees as noted in chapter 4 of Handbook AS-353,
(2)
(3)
(ii)
(A) The District Manager must ensure that copies of all these documents are prominently displayed and available for public inspection in the USPS-operated retail facilities where the Final Determination was posted under paragraph (g)(1)(i) of this section. If the operation of that USPS-operated retail facility has been suspended, the District Manager must ensure that copies are displayed in the USPS-operated retail facilities likely to be serving the affected customers.
(B) All documents except the Postal Regulatory Commission's final order and opinion must be displayed until the final order and opinion are issued. The final order and opinion must be displayed at the USPS-operated retail facility to be discontinued for 30 days or until the effective date of the discontinuance, whichever is earlier. The final order and opinion must be displayed for 30 days in all other USPS-operated retail facilities where the Final Determination was posted under paragraph (g)(1)(i) of this section.
(4)
(ii)
(A) Notice be provided under paragraph (f)(3) of this section that the proposed discontinuance is determined not to be warranted or
(B) The matter be returned to an appropriate stage under this section for further consideration following such instructions as the responsible Headquarters Vice President may provide.
Environmental Protection Agency.
Final rule.
Pursuant to the Environmental Protection Agency's (EPA) authority in the Clean Air Act (CAA or Act), section 110(k)(5), to call for plan revisions, EPA is making a finding that the Iowa State Implementation Plan (SIP) is substantially inadequate to maintain the 2006 24-hour National Ambient Air Quality Standard (NAAQS) for Fine Particulate Matter (PM
This final rule is effective on August 15, 2011.
EPA has established a docket for this action under Docket ID No. EPA-R07-OAR-2010-1083. All documents in the docket are listed on the
Steven Brown at (913) 551-7718 or by e-mail at
Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This section provides additional information by addressing the following questions:
EPA is finding that the Iowa SIP is substantially inadequate to maintain the 2006 24-hour NAAQS for PM
EPA promulgated the 2006 24-hour NAAQS for PM
Section 110(a)(2)(B) requires each state to establish and operate appropriate devices, methods, systems and procedures necessary to monitor, compile and analyze data on ambient air quality. Pursuant to this authority, the state maintains a network of air quality monitors for PM
In accordance with section 107(d)(1)(B) of the CAA, no later than 2 years after promulgation of a new or revised NAAQS, the Administrator must designate all areas, or portions thereof, within each state as nonattainment, attainment or unclassifiable. This process is commonly referred to as the “designations process.”
With respect to all pollutants, including PM
On May 20, 2010, the State submitted certified SLAMS monitoring data, for calendar year 2009, in accordance with 40 CFR Part 58. When determining the design value for the current 24-hour PM
The area was not designated nonattainment at the time of EPA's initial designations rulemaking for the 2006 24-hour PM
Section 110(k)(5) of the CAA provides, in relevant part, that “[w]henever the Administrator finds that the applicable implementation plan for an area is substantially inadequate to attain or maintain the relevant national ambient air quality standard, * * * the Administrator shall require that state to revise the plan as necessary to correct such inadequacies.”
Because monitor data in the Muscatine area show violations of the 2006 24-hour PM
The State must submit several specific plan elements to EPA in order to correct the inadequacy of the SIP identified above. These specific elements are: (1) A revised emissions inventory for all sources (including area sources, mobile sources and other significant sources) that could be expected to contribute to the violating monitor because of their size, proximity, or other relevant factors consistent with 40 CFR 51.114(a); (2) a modeling demonstration consistent with Appendix W to 40 CFR part 51 showing what reductions will be needed to attain and maintain the PM
The Muscatine area is currently designated as attainment of the 2006 24-hour PM
Consistent with the February 2, 2011, proposal, all adopted measures to achieve reductions, determined through the modeling demonstration to be necessary to attain and maintain the 2006 24-hour PM
EPA believes that it is reasonable to expect that the 98th percentile value for the calendar year after the necessary controls are implemented should be at or below the 24-hour PM
Section 110(k)(5) of the CAA provides that after EPA makes a finding that a plan is substantially inadequate, it may establish a reasonable deadline for the State to submit SIP revisions correcting the deficiencies, but the date cannot be later than 18 months after the State is notified of the finding. Consistent with this provision, EPA is requiring the submittal within 18 months following the final finding of substantial inadequacy. The 18-month period begins on the effective date of this rule.
This rule requires the State to establish a specific date in its SIP revision by which the Muscatine area will attain the standard. The date must be as expeditiously as practicable based upon implementation of Federal, State and local measures. As discussed previously, we expect that the date for attainment (for the purpose of this rule, the date by which the 98th percentile 24 hour PM
As stated above, on February 22, 2011, EPA proposed to find that the Iowa SIP was substantially inadequate to maintain the 2006 24-hour PM
In order to revise the SIP, the State must conduct modeling; analyze the modeling; and determine what emission reductions are needed and the appropriate emission controls to achieve those reductions. The rulemaking process includes the opportunity for the public to comment on the proposed SIP revisions, including the proposed emission controls, at the State level. Once the public has been given adequate opportunity to submit comments, the State must respond to those comments, finalize its plan, and then submit it to EPA for review and approval. In order to have a complete submittal for EPA review, the State must ensure EPA that all of the requirements in 40 CFR part 51, Appendix V are met, including for example, a control strategy demonstration with adequate justification which has been fully vetted through the public process.
As described above, the process for developing and finalizing the State's plan can take a significant amount of time, much of which is used to allow the public (as well as affected sources) time to comment on the proposal. Therefore, EPA has determined that the 18 month timeframe is reasonable for submission of the plan.
EPA is also addressing air quality issues related to SO
This action is a SIP Call under section 110(k)(5). The area has not yet been designated as nonattainment and therefore, there is no statutory process for extending the “attainment date.” Through this action, EPA is setting forth a date by which the area must meet the NAAQS standard.
EPA is taking the following actions relating to the Iowa SIP for PM
1. Finds that the SIP is substantially inadequate to maintain the NAAQS for 24-hour PM
2. Requires that Iowa revise and submit to EPA a SIP to meet all of the applicable requirements of section 110 of the Act with respect to PM
3. Requires the State to submit revisions to the SIP within 18 months of the effective date of this rule;
4. Requires that all adopted measures to achieve reductions determined necessary to attain and maintain the 2006 24-hour PM
5. Requires that the SIP provide for attainment and maintenance of the 2006 24-hour PM
Under the CAA, a finding of substantial inadequacy and subsequent obligation for a State to revise its SIP arise out of section 110(a) and 110(k)(5). The finding and State obligation do not directly impose any new regulatory requirements. In addition, the State obligation is not legally enforceable by a court of law. EPA would review its intended action on any SIP submittal in response to the finding in light of applicable statutory and Executive Order requirements, in subsequent rulemaking acting on such SIP submittal. For those reasons, this rule:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the finding of SIP inadequacy would not apply in Indian country located in the State, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.
The Congressional Review Act, 5 U.S.C. 801
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 September 12, 2011. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2)).
The statutory authority for this action is provided by sections 110 and 301 of the CAA, as amended (42 U.S.C. 7410 and 7601).
Environmental protection, Air pollution control, Incorporation by reference, Iowa, Particulate matter, State implementation plan.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for certain PW4000 turbofan engines. This proposed AD was prompted by an updated low-cycle fatigue (LCF) life analysis performed by Pratt & Whitney. This proposed AD would require removing certain part number (P/N) high-pressure turbine (HPT) stage 1 and HPT stage 2 airseals and HPT stage 1 airseal rings before their published life limit, and establishes a new lower life limit for these parts. We are proposing this AD to correct the unsafe condition on these products.
We must receive comments on this proposed AD by August 29, 2011.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
You may examine the AD docket on the Internet at
James Gray, Aerospace Engineer, Engine Certification Office, FAA, 12 New England Executive Park, Burlington, MA 01803;
We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the
We will post all comments we receive, without change, to
A PW2000 field event led Pratt & Whitney to re-evaluate the low-cycle fatigue (LCF) lives of its PW2000 engine, and similar engines models, including the PW4000 engine and its high-pressure turbine (HPT). Pratt and Whitney's updated analysis indicated that the current certified life limits for the PW4000 HPT stage 1 and stage 2 air seals and air seal rings should be reduced to prevent failure of those life limited parts. The current certified life limits, if not reduced, present an unacceptable level of risk of part failure. This condition, if not corrected, could result in engine failure and damage to the airplane.
We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.
This proposed AD would require removing the HPT stage 1 airseal, P/N 50L879; the HPT stage 2 airseal, P/N 53L030; and the HPT airseal ring, P/N 50L664, prior to their published life limits, using a drawdown plan.
We estimate that this proposed AD would affect 869 engines installed on airplanes of U.S. registry. We also estimate that, because the removals would be performed at piece-part level, no additional work-hours would be required. Prorated life for the HPT would be about $46,835 per engine. Based on these figures, we estimate the total cost of the proposed AD to U.S. operators to be $40,699,615.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
1. The authority citation for part 39 continues to read as follows:
49 U.S.C. 106(g), 40113, 44701.
2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD):
We must receive comments by August 29, 2011.
None.
This AD applies to the following Pratt & Whitney Division (PW) turbofan engines, with high-pressure turbine (HPT) stage 1 airseal, part number (P/N) 50L879; HPT stage 2 airseal, P/N 53L030; or HPT stage 1 airseal ring, P/N 50L664, installed:
PW4000-100” engine models PW4164, PW4164C, PW4164C/B, PW4168, and PW4168A.
(i) PW4000-94” engine models PW4060, PW4060A, PW4060C, PW4062, PW4062A, PW4156A, PW4158, PW4160, PW4460, and PW4462 engines that have incorporated Pratt & Whitney Service Bulletins (SBs) PW4ENG 72-490, or PW4ENG 72-504, or PW4ENG 72-512, or PW4ENG 72-572, or PW4ENG 72-588, or PW4ENG 73-150, or Engineering Change Number EC92KK322G, H, I, J, and K, as indicated with a (-3), or (-3A), or (-3B) suffix on the engine data plate.
(ii) PW4000-94” engines models PW4050, PW4052, PW4056, PW4152, PW4156, and PW4650 engines that have incorporated Pratt & Whitney SBs PW4ENG 72-490, or PW4ENG 72-504, or PW4ENG 72-512, or PW4ENG 72-572, or PW4ENG 72-588, or PW4ENG 73-150, or Engineering Change Number EC92KK322G, H, I, J, and K, as indicated with a (-3), or (-3A), or (-3B) suffix on the engine data plate.
This AD was prompted by an updated low-cycle fatigue (LCF) life analysis performed by Pratt & Whitney. We are issuing this AD to correct the unsafe condition on these products.
Comply with this AD within the compliance times specified, unless already done.
Remove the stage 1 HPT airseal, P/N 50L879, at the next piece-part exposure after the effective date of this AD, or before accumulating the number of cycles listed in Table 1 of this AD, whichever occurs later.
Remove the stage 2 HPT airseal, P/N 53L030, at the next piece-part exposure after the effective date of this AD, or before accumulating the number of cycles listed in Table 2 of this AD, whichever occurs later.
Remove the stage 1 HPT airseal ring, P/N 50L664, at the next piece-part exposure after the effective date of this AD, or before accumulating the number of cycles listed in Table 3 of this AD, whichever occurs later.
After the effective date of this AD, do not install any stage 1 HPT airseal, P/N 50L879, stage 2 HPT airseal, P/N 53L030, or stage 1 HPT airseal ring, P/N 50L664, that is at piece-part exposure and exceeds the new life limit listed in Table 1, Table 2, or Table 3, respectively, of this AD.
For the purpose of this AD, piece-part exposure means that the part is completely disassembled and removed from the engine.
The Manager, Engine Certification Office, FAA, has the authority to approve AMOCs for this AD, if requested, using the procedures found in 14 CFR 39.19.
For more information about this AD, contact James Gray, Aerospace Engineer, Engine Certification Office, FAA, 12 New England Executive Park, Burlington, MA 01803;
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for the products listed above. This proposed AD results from mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as:
A broken aileron servo actuator centering spring rod was discovered on a model G100 aircraft during a routine scheduled maintenance inspection. * * * This latent failure of a centering spring rod, if not detected and corrected, in conjunction with the disconnection of the normal mechanical control system of the same servo actuator would lead to loss [of] control of the flight control surface [aileron or elevator]. This condition would reduce the control capability of the airplane and imposes a higher workload on the flight crew reducing their ability to cope with adverse operating conditions.
We must receive comments on this proposed AD by August 29, 2011.
You may send comments by any of the following methods:
•
•
•
•
For service information identified in this proposed AD, contact Gulfstream Aerospace Corporation, P.O. Box 2206, Mail Station D-25, Savannah, Georgia 31402-2206; telephone 800-810-4853; fax 912-965-3520; e-mail
You may examine the AD docket on the Internet at
Mike Borfitz, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone (425) 227-2677; fax (425) 227-1149.
We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
The Civil Aviation Authority (CAA), which is the aviation authority for Israel, has issued Airworthiness Directives 27-10-11-03, dated December 6, 2010; and 27-10-12-29, dated January 4, 2011 (referred to after this as “the MCAI”); to correct an unsafe
Gulfstream Aerospace LP has issued Gulfstream Service Bulletins 150-27-123; and 200-27-374; both Revision 1, both dated January 27, 2011. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI.
This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of the same type design.
We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information.
We might also have proposed different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are highlighted in a NOTE within the proposed AD.
Based on the service information, we estimate that this proposed AD would affect about 200 products of U.S. registry. We also estimate that it would take about 19 work-hours per product to comply with the basic requirements of this proposed AD. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of the proposed AD on U.S. operators to be $323,000, or $1,615 per product.
In addition, we estimate that any necessary follow-on actions would take up to 20 work-hours per product, and require parts costing $0, for a cost of $1,700 per product. We have no way of determining the number of products that may need these actions. Where the service information lists required parts costs that are covered under warranty, we have assumed that there will be no charge for these costs. As we do not control warranty coverage for affected parties, some parties may incur costs higher than estimated here.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and
3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
1. The authority citation for part 39 continues to read as follows:
49 U.S.C. 106(g), 40113, 44701.
2. The FAA amends § 39.13 by adding the following new AD:
(a) We must receive comments by August 29, 2011.
(b) None.
(c) This AD applies to the products identified in paragraphs (c)(1) and (c)(2) of this AD, certificated in any category.
(1) Gulfstream Aerospace LP (Type Certificate previously held by Israel Aircraft Industries, Ltd.) Model Gulfstream G150 airplanes, serial numbers 201 through 286 inclusive.
(2) Gulfstream Aerospace LP (Type Certificate previously held by Israel Aircraft Industries, Ltd.) Model Galaxy airplanes; and Gulfstream Aerospace LP Model Gulfstream 200 airplanes; serial numbers 004 through 231 inclusive.
(d) Air Transport Association (ATA) of America Code 27: Flight controls.
(e) The mandatory continuing airworthiness information (MCAI) states:
(f) You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done.
(g) Within 12 months after the effective date of this AD, do the actions specified by paragraph (g)(1) or (g)(2) of this AD, as applicable.
(1) For Model Gulfstream G150 airplanes: Do a one-time detailed inspection of the aileron control servo actuators to detect fractured or broken centering spring rods, in accordance with the Accomplishment Instructions of Gulfstream Service Bulletin 150-27-123, Revision 1, dated January 27, 2011.
(2) For Model Galaxy and Gulfstream 200 airplanes: Do a one-time detailed inspection of the aileron and elevator control servo actuators to detect fractured or broken centering spring rods, in accordance with the Accomplishment Instructions of Gulfstream Service Bulletin 200-27-374, Revision 1, dated January 27, 2011.
(h) If any centering spring rod is found fractured or broken during any inspection required by this AD: Before further flight, replace the centering spring rod in accordance with a method approved by the Manager, International Branch, ANM 116, Transport Airplane Directorate, FAA, or the Civil Aviation Authority of Israel (CAAI) (or its delegated agent).
(i) Actions done before the effective date of this AD in accordance with Gulfstream Service Bulletin 150-27-123 or 200-27-374, both dated October 27, 2010, are considered acceptable for the actions required by paragraph (g) of this AD.
This AD differs from the MCAI and/or service information as follows: The MCAI AD does not specify a corrective action for fractured or broken rods; however, paragraph (h) of this AD requires corrective action.
(j) The following provisions also apply to this AD:
(1)
(2)
(k) Refer to MCAI Civil Aviation Authority of Israel Airworthiness Directives 27-10-11-03, dated December 6, 2010, and 27-10-12-29, dated January 4, 2011; and Gulfstream Service Bulletins 150-27-123 and 200-27-374, both Revision 1, both dated January 27, 2011; for related information.
Food and Drug Administration, HHS.
Proposed rule.
The Food and Drug Administration (FDA) is proposing to remove a section of the Prescription Drug Marketing Act (PDMA) regulations requiring that prior to the completion of any wholesale distribution of a prescription drug, an unauthorized distributor must provide to the purchaser “a statement identifying each prior sale, purchase, or trade of such drug,” starting with the manufacturer, and that the identifying statement (also known as the “pedigree”) must include certain information about the drug and each prior sale, purchase, or trade. This action is being taken in response to longstanding issues, including an injunction currently in effect, regarding the application of and compliance with this requirement. FDA is also announcing that it intends to exercise enforcement discretion with respect to certain requirements of the regulation while the rulemaking is pending and with respect to the statutory pedigree requirements of the PDMA, as long as the pedigree identifies the names and addresses of the last authorized distributor of record that handled the drug and the associated dates of transactions involving that last authorized distributor of record and the drug, as well as the names and addresses of all subsequent unauthorized distributors that handled the drug and the corresponding dates of those transactions.
Submit either electronic or written comments on the proposed rule by September 12, 2011.
You may submit comments, identified by Docket No. FDA-2011-N-0446, by any of the following methods:
Submit electronic comments in the following way:
•
Submit written submissions in the following ways:
•
•
Karen Rothschild, Center for Drug Evaluation and Research, Food Drug Administration, 10903 New Hampshire Ave., Silver Spring, MD 20993, 301-796-3689,
The PDMA (Pub. L. 100-293) was enacted on April 22, 1988, and was modified by the PDA (Pub. L. 102-353) on August 26, 1992. The PDMA, as modified, amended the Federal Food, Drug, and Cosmetic Act (the FD&C Act) to establish restrictions and requirements relating to various aspects of human prescription drug marketing and distribution. The primary purpose of the PDMA was to increase safeguards to prevent the introduction and retail sale of substandard, ineffective, and counterfeit drugs into the U.S. drug supply chain. Among other things, the PDMA, in section 503(e)(1)(A) of the FD&C Act (21 U.S.C. 353), requires a wholesale distributor “who is not the manufacturer or authorized distributor of record” to provide drug pedigrees to purchasers “identifying each prior sale, purchase or trade of such drug (including the date of the transaction and the names and addresses of all parties to the transaction).”
On August 1, 1988, the Agency issued a letter that provided guidance on the PDMA for industry pending the issuance of implementing regulations (the 1988 guidance letter) (see attachment E of FDA's 2001 Report to Congress (
In the
The December 1999 final rule thus codified § 203.50(a) (21 CFR 203.50(a)), which follows section 503(e)(1)(A) of the FD&C Act, requiring that, before the completion of any wholesale distribution by a wholesale distributor of a prescription drug for which the seller is not a manufacturer or an authorized distributor of record, the seller must provide to the purchaser a statement (also referred to as a pedigree) identifying each prior sale, purchase, or trade of the drug. According to § 203.50(a), the identifying statement must include: The proprietary and established name of the drug; dosage; container size; number of containers; the lot or control numbers of the drug being distributed; the business name and address of all parties to each prior transaction involving the drug, starting with the manufacturer; and the date of each previous transaction.
After publication of the December 1999 final rule, we received many comments on, and held several meetings to discuss, the implications of the final regulations regarding, among other things, the pedigree provisions at § 203.50(a) requiring unauthorized distributors to provide a pedigree showing all prior sales going back to the manufacturer. Industry representatives of unauthorized distributors represented that they could not obtain the required pedigree showing all prior sales of the drugs they purchase because a large portion of these drugs are purchased from authorized distributors who are not required to provide pedigrees and who are unwilling to voluntarily provide them.
In the 2001 Report to Congress, we noted that we would be able to address some, but not all of the concerns raised by unauthorized distributors. We stated that we believed that “the concerns related to continuing to exempt authorized distributors from the pedigree requirement and the exact meaning of the phrase
As a result of these comments, other informal communications that FDA had with industry, industry associations, and Congress, and the Agency's consideration of a petition for stay of action received on May 3, 2000, FDA delayed the effective date of several provisions of the December 1999 final rule until October 1, 2001, and reopened the administrative record to receive additional comments (65 FR 25639, May 3, 2000). In the
While § 203.50 was stayed, the industry followed the advice given in the 1988 guidance letter, which, as noted previously, stated that the pedigree should include “all necessary identifying information regarding all sales in the chain of distribution of the product, starting with the manufacturer or the authorized distributor.”
In the
On September 20, 2006, a group of unauthorized wholesalers of prescription drugs filed a lawsuit against FDA in the U.S. District Court for the Eastern District of New York, seeking, among other things, a declaratory judgment that § 203.50(a) erroneously interprets the statutory requirement for pedigrees (21 U.S.C. 353(e)(1)(A)), and violates the U.S. Constitution's guarantees of equal protection and due process. (
The Agency appealed the district court's preliminary injunction order, but the district court's order was affirmed on July 10, 2008, by the U.S. Court of Appeals for the Second Circuit. (See
The district court's preliminary injunction, as affirmed by the circuit court, halted FDA's implementation of the requirements of § 203.50(a). Specifically, the order enjoins FDA from implementing the requirement in § 203.50(a) that a pedigree identify each prior sale or trade of a drug back to the drug's original manufacturer and the requirement that specifies the types of information that must be included in the pedigree, including lot numbers and container sizes.
Under the district court's order, unauthorized distributors are only required to provide pedigrees that include information regarding transactions going back to either the manufacturer or the last authorized distributor of record that handled the drugs. In addition, as specified in the FD&C Act, all pedigrees must include the dates of the listed transactions and the names and addresses of all parties to those transactions. We recognized that these circumstances resulting from the court's order could lead to confusion and possible disruptions or delays in the nation's drug distribution system for wholesale distributors operating outside of the court's jurisdiction and could provide an undue advantage to certain wholesaler distributors. Therefore, we announced that we would exercise enforcement discretion in a manner consistent with the court's opinion throughout the rest of the country.
FDA is now proposing to remove § 203.50(a). Over the past 20 years, we have endeavored to ensure that the pedigree requirements in our regulations are consistent with congressional intent and provide appropriate accountability to protect our nation's drug supply. We have made a good faith effort to implement the requirements in § 203.50(a) consistent with the language of the PDMA through public meetings,
By proposing to remove § 203.50(a), we would remove the requirement in the regulation that the pedigree identify each prior sale or trade of a drug back to the drug's manufacturer. In addition, this proposal would remove the requirement in the regulation that the identifying statement include certain information, such as the proprietary and established name of the drug, the dosage, container size, number of containers, the drug's lot or control number(s), the business name and address of all parties for each prior transaction, starting with the manufacturer, and the date of each previous transaction. While the rulemaking to remove the regulation is pending, we intend to exercise enforcement discretion with respect to all of these requirements in § 203.50(a).
We note that even with the removal of § 203.50(a), the pedigree requirements of section 503(e)(1)(A) of the FD&C Act would still be in effect. However, with respect to these statutory pedigree requirements, the Agency intends to exercise enforcement discretion and not initiate an enforcement action against any wholesalers for failing to provide a pedigree that goes back to the manufacturer or for failing to include the specific information listed in the regulation, as long as the pedigree otherwise identifies the last authorized distributor of record that handled the drugs and the associated dates of the transactions, as well as the names and addresses of all unauthorized distributors that handled the drug after the last authorized distributor, and the corresponding dates of those transactions.
In summary, unauthorized distributors need to be aware that their pedigree(s) must: (1) Include information regarding transactions going back to either the manufacturer or the last authorized distributor of record that handled the drugs, consistent with the preliminary injunction order previously referenced and (2) include the date of the transaction and the names and addresses of all parties to the transaction as explicitly required under section 503(e)(1)(A) of the FD&C Act. Furthermore, while FDA is proposing to remove § 203.50(a) and intends to exercise enforcement discretion under these described circumstances with respect to the statutory requirements for a pedigree, FDA encourages wholesalers to include the drug, dosage, container size, number of containers, and the drug's lot or control number(s) in the pedigree as well.
FDA continues to believe that drug supply chain security is of the utmost importance and that transparency of transactions and accountability are essential to further secure our nation's drug supply. Counterfeit and diverted drugs continue to be found in our drug supply chain and the action proposed in this document should not be interpreted to mean that there is not a problem with counterfeit and diverted drugs. Rather, FDA remains committed to the framework set forth in the 2004 FDA Counterfeit Drug Task Force Report (Task Force Report) and subsequent updates to that Task Force Report (
As stated in the Task Force Report, such measures include implementation of tracking and tracing, which would help secure the integrity of the supply chain by providing an accurate electronic record of transactions in the drug supply chain. Such electronic records documenting the movement of a drug product from the manufacturer to the dispenser would be an important step in preventing counterfeit and diverted drugs from entering the drug supply chain. FDA will continue to develop standards for the purpose of securing the drug supply chain against counterfeit, diverted, subpotent, substandard, adulterated, misbranded, or expired drugs, including standards for the identification, validation, authentication, and tracking and tracing of prescription drugs. We are not proposing any new provisions in lieu of § 203.50(a) at this time.
FDA is issuing this proposed rule to remove the provisions in § 203.50(a) under its rulemaking authority under section 701(a) of the FD&C Act (21 U.S.C. 371) and based on those reasons provided in section II of this document. Specifically, FDA can issue regulations through its rulemaking authority to establish requirements for section 503(e) of the FD&C Act. As described in section I of this document, FDA previously issued a final rule establishing certain requirements for section 503(e)(1)(a). Similarly, under its rulemaking authority, FDA can propose to remove those specific requirements that have been established by regulation. FDA is basing the proposed removal of § 203.50(a) on the grounds described in section II of this document. As explained earlier, the statutory provisions of section 503(e) of the FD&C Act, as well as the other provisions of § 203.50 that would not be removed by this proposed rule, would remain legally effective.
FDA has examined the impacts of the proposed rule under Executive Order 12866, Executive Order 13563, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Orders 12866 and 13563 direct Agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The Agency believes that this proposed rule is not a significant regulatory action as defined by Executive Order 12866.
The Regulatory Flexibility Act requires Agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because the removal of the specified pedigree requirements for prescription drug distribution in § 203.50(a) would not measurably decrease the estimated compliance costs of the December 1999 final rule, the Agency proposes to certify that the final rule will not have a significant economic impact on a substantial number of small entities.
Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that Agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $136 million, using the most current (2010) Implicit Price Deflator for the Gross Domestic Product. FDA does not expect this proposed rule to result in any 1-year expenditure that would meet or exceed this amount.
The Agency published a final rule on December 3, 1999, codified in § 203.50(a), that contained certain requirements concerning prescription drug distribution. Specifically, it required that before the wholesale distribution of any prescription drug to another wholesale distributor or retail pharmacy for which the seller is not an authorized distributor of record, the wholesale distributor must provide to the purchaser a statement identifying each prior sale, purchase or trade. Further, it contained a list of specific information to be contained in the identifying statement. As explained previously, this regulation is the subject of a preliminary injunction. In the December 1999 final rule, the Agency estimated that the wholesale distribution requirements, including the drug identifying (or origin) statement and a separate distributor list to be provided by manufacturers, would together impose $258,000 in annual recordkeeping costs. In making this estimate, the Agency judged that the marginal costs for the inclusion of the additional information that § 203.50(a) would have required beyond that information that would be required in the PDMA pedigree provision would be negligible, and did not increase its cost estimate to reflect this additional effort. The removal of § 203.50(a), therefore, is expected to reduce compliance costs by only that negligible amount that the Agency did not separately estimate for the final rule, as the pedigree provision of the PDMA still requires its own, slightly less expansive, pedigree provision. This regulatory action that removes a provision of the December 1999 final rule is expected to reduce the previously estimated annual compliance costs of $258,000 for this provision by a negligible, but unquantified, amount.
FDA tentatively concludes that this proposed rule contains no collection of information. Therefore, clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1995 is not required.
The Agency has determined under 21 CFR 25.30 this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.
FDA has analyzed this proposed rule in accordance with the principles set forth in Executive Order 13132. FDA has determined that the proposed rule, if finalized, would not contain policies that would have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, the Agency tentatively concludes that the proposed rule does not contain policies that have federalism implications as defined in the Executive order and, consequently, a federalism summary impact statement is not required.
The Agency is proposing that any final rule that may issue based upon this proposed rule become effective upon its publication in the
Interested persons may submit to the Division of Dockets Management (see
Labeling, Prescription drugs, Reporting and recordkeeping requirements, Warehouses.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, it is proposed that 21 CFR part 203 be amended as follows:
1. The authority citation for 21 CFR part 203 continues to read as follows:
21 U.S.C. 331, 333, 351, 352, 353, 360, 371, 374, 381.
2. Section 203.50 is amended by removing and reserving paragraph (a).
Department of State.
Proposed rule.
The Department of State proposes to amend the International Traffic in Arms Regulations (ITAR) to remove reference to the International Import Certificate. This amendment will effectively cease the Department's current practice of accepting DSP-53 submissions, as there is no statutory, regulatory, or other authoritative basis for the Department to do so.
The Department of State will accept comments on this proposed rule until August 29, 2011.
Interested parties may submit comments within 45 days of the date of the publication by any of the following methods:
•
•
Samuel C. Harmon, Office of Defense Trade Controls Policy, Department of State, by
The Arms Export Control Act authorizes the President to control the import and export of defense articles. Executive Order 11958, as amended, delegated the authority to regulate permanent exports and temporary imports and exports of defense articles to the Department of State, and delegated the authority to regulate permanent imports to the Attorney General. The International Import Certificate (IIC), Form BIS-645P/ATF-4522/DPS-53, is identified as a form issued by the Department of Commerce's Bureau of Industry & Security; the Department of Justice's Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Department of State's Directorate of Defense Trade Controls (DDTC). It is meant to
The Department of State is of the opinion that controlling the import and export of defense articles and services is a foreign affairs function of the United States Government and that rules implementing this function are exempt from § 553 (Rulemaking) and § 554 (Adjudications) of the Administrative Procedure Act. Although the Department is of the opinion that this proposed rule is exempt from the rulemaking provisions of the APA, the Department is publishing this proposed rule with a 45-day provision for public comment and without prejudice to its determination that controlling the import and export of defense services is a foreign affairs function.
Since this proposed amendment is not subject to the notice-and-comment procedures of 5 U.S.C. 553, it does not require analysis under the Regulatory Flexibility Act.
This proposed amendment does not involve a mandate that will result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any year and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.
The Department has determined that this proposed rule will not have tribal implications, will not impose substantial direct compliance costs on Indian tribal governments, and will not pre-empt tribal law. Accordingly, the requirements of Section 5 of Executive Order 13175 do not apply to this rule.
This proposed amendment has been found not to be a major rule within the meaning of the Small Business Regulatory Enforcement Fairness Act of 1996.
This proposed amendment will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this proposed amendment does not have sufficient federalism implications to require consultations or warrant the preparation of a federalism summary impact statement. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this proposed amendment.
The Department of State does not consider this proposed rule to be a “significant regulatory action” under Executive Order 12866, section 3(f), Regulatory Planning and Review. The Department is of the opinion that controlling the import and export of defense articles and services is a foreign affairs function of the United States Government and that rules governing the conduct of this function are exempt from the requirements of Executive Order 12866.
The Department of State has considered this proposed rule in light of Section 1(b) of Executive Order 13563, dated January 18, 2011, and affirms that this regulation is consistent with the guidance therein.
The Department of State has reviewed this proposed amendment in light of sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate ambiguity, minimize litigation, establish clear legal standards, and reduce burden.
This proposed rule does not impose any new reporting or recordkeeping requirements subject to the Paperwork Reduction Act, 44 U.S.C. chapter 35.
Arms and munitions, Exports.
Accordingly, for the reasons set forth above, Title 22, chapter I, subchapter M, parts 120 and 123 are proposed to be amended as follows:
1. The authority citation for part 120 continues to read as follows:
Secs. 2, 38, and 71, Public Law 90-629, 90 Stat. 744 (22 U.S.C. 2752, 2778, 2797); 22 U.S.C. 2794; E.O. 11958, 42 FR 4311; E.O. 13284, 68 FR 4075; 3 CFR, 1977 Comp. p. 79; 22 U.S.C. 2651a; Public Law 105-261, 112 Stat. 1920.
2. Section 120.28 is amended by redesignating paragraph (b)(3) as paragraph (c) and by revising paragraph (b)(1) to read as follows:
(b) * * *
(1) International Import Certificate (Form BIS-645P/ATF-4522).
3. The authority citation for part 123 continues to read as follows:
Secs. 2, 38, and 71, Public Law 90-629, 90 Stat. 744 (22 U.S.C. 2752, 2778, 2797); 22 U.S.C. 2753; E.O. 11958, 42 FR 4311; 3 CFR, 1977 Comp. p. 79; 22 U.S.C. 2651a; 22 U.S.C. 2776; Pub. L. 105-261, 112 Stat. 1920; Sec 1205(a), Public Law 107-228.
4. Section 123.4 is amended by adding paragraph (c)(4) to read as follows:
(c) * * *
(4) If the foreign exporter requires documentation for a temporary import
Department of State.
Proposed rule.
The Department of State proposes to amend the International Traffic in Arms Regulations (ITAR) to reflect changes in the requirements for the return of licenses. Applicants will no longer be required to return certain expired or exhausted DSP-5s. This change will reduce administrative burden on applicants.
Interested parties may submit comments within 45 days of the date of the publication by any of the following methods:
•
•
Nicholas Memos, Office of Defense Trade Controls Policy, Bureau of Political-Military Affairs, Department of State, (202) 663-2804 or FAX (202) 261-8199; E-mail
The Department of State proposes to amend § 123.22(c) to institute changes in the requirements for the return of licenses. With this proposed change, applicants with DSP-5 licenses that have been issued electronically by the Directorate of Defense Trade Controls (DDTC) and decremented electronically by the U.S. Customs and Border Protection through the Automated Export System (AES) will no longer need to return them to DDTC. The return of these licenses is redundant and unnecessary as all of the export information has been captured and saved electronically.
All other DSP-5 licenses that do not meet the criteria described above must be returned by the applicant to DDTC. All DSP-61, DSP-73, and DSP-85 licenses, and DSP-94 authorizations, are to be returned by the applicant to DDTC as these licenses and authorizations are not decremented electronically, even if an Electronic Export Information is filed via AES.
Proposed § 123.22(c)(4) provides that licenses issued but not used by the applicant do not need to be returned to DDTC
Proposed § 123.22(c)(5) provides that licenses which have been revoked by DDTC are considered expired.
Section 123.21(b) is to be amended to conform to the proposed changes to § 123.22(c).
The Department of State is of the opinion that controlling the import and export of defense articles and services is a foreign affairs function of the United States Government and that rules implementing this function are exempt from § 553 (Rulemaking) and § 554 (Adjudications) of the Administrative Procedure Act. Although the Department is of the opinion that this rule is exempt from the rulemaking provisions of the APA, the Department is publishing this rule with a 45-day provision for public comment and without prejudice to its determination that controlling the import and export of defense services is a foreign affairs function.
Since this amendment is not subject to the notice-and-comment procedures of 5 U.S.C. 553, it does not require analysis under the Regulatory Flexibility Act.
This amendment does not involve a mandate that will result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any year and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.
The Department has determined that this rule will not have tribal implications, will not impose substantial direct compliance costs on Indian tribal governments, and will not pre-empt tribal law. Accordingly, the requirements of Executive Order 13175 do not apply to this rule.
This amendment has been found not to be a major rule within the meaning of the Small Business Regulatory Enforcement Fairness Act of 1996.
This amendment will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this amendment does not have sufficient federalism implications to require consultations or warrant the preparation of a federalism summary impact statement. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this amendment.
The Department of State does not consider this rule to be a “significant regulatory action” under Executive Order 12866, section 3(f), Regulatory Planning and Review. The Department is of the opinion that controlling the import and export of defense articles and services is a foreign affairs function of the United States Government and that rules governing the conduct of this function are exempt from the requirements of Executive Order 12866.
The Department of State has considered this rule in light of Executive Order 13563, dated January 18, 2011, and affirms that this regulation is consistent with the guidance therein.
The Department of State has reviewed the amendment in light of sections 3(a)
This rule does not impose any new reporting or recordkeeping requirements subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35.
Arms and munitions, Exports.
Accordingly, for the reasons set forth above, Title 22, Chapter I, Subchapter M, part 123 is proposed to be amended as follows:
1. The authority citation for part 123 continues to read as follows:
Secs. 2, 38, and 71, Pub. L. 90-629, 90 Stat. 744 (22 U.S.C. 2752, 2778, 2797); 22 U.S.C. 2753; E.O. 11958, 42 FR 4311; 3 CFR, 1977 Comp. p. 79; 22 U.S.C. 2651a; 22 U.S.C. 2776; Pub. L. 105-261, 112 Stat. 1920; Sec 1205(a), Pub. L. 107-228.
2. Section 123.21 is amended by revising the heading and paragraph (b) to read as follows:
(b) Unused, expired, suspended, or revoked licenses must be handled in accordance with § 123.22(c) of this subchapter.
3. Section 123.22 is amended by revising paragraph (c) to read as follows:
(c)
(1) DSP-5 licenses issued electronically by DDTC and decremented electronically by the U.S. Customs and Border Protection through the Automated Export System (AES) are not required to be returned to DDTC. The DSP-5 licenses, when fully decremented or expired, must be maintained by the applicant in accordance with § 122.5 of this subchapter.
(2) DSP-5, DSP-61, DSP-73, and DSP-85 licenses issued by DDTC but not decremented electronically by the U.S. Customs and Border Protection through AES (
(3) A DSP-94 authorization filed with the U.S. Customs and Border Protection must be returned by the applicant to DDTC upon expiration, to include when the total value or quantity has been shipped. AES does not decrement the DSP-94 authorization. Submitting the Electronic Export Information is not considered to be decremented electronically for the DSP-94. A copy of the DSP-94 must be maintained by the applicant in accordance with § 122.5 of this subchapter.
(4) Licenses issued but not used by the applicant do not need to be returned to DDTC, even when expired.
(5) Licenses which have been revoked by DDTC are considered expired and must be handled in accordance with paragraphs (c)(1) and (2) of this section.
Office of the Assistant Secretary of Housing—Federal Housing Commissioner, HUD.
Proposed rule.
This proposed rule updates HUD's regulations to conform to the statutory requirement that appraisers must be certified, rather than licensed, by a state appraisal licensing board in order to appear on the FHA Appraiser Roster. This requirement was established by the Housing and Economic Recovery Act of 2008. Although current HUD practice is in compliance with the statutory mandate, the regulations reflect outdated prior policy of permitting state-licensed appraisers to be listed on the FHA Appraiser Roster. In addition, HUD has taken this opportunity to update the FHA Appraiser Roster by replacing the obsolete references to the Credit Alert Interactive Voice Response System with references to its successor, the online-based Credit Alert Verification Reporting System.
Interested persons are invited to submit comments regarding this proposed rule to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street, SW., Room 10276, Washington, DC 20410-0500. Communications must refer to the above docket number and title. There are two methods for submitting public comments. All submissions must refer to the above docket number and title.
Karin Hill, Director, Office of Single Family Program Development, Office of Housing, Department of Housing and Urban Development, 451 7th Street, SW., Room 9278, Washington, DC 20410-8000; telephone number 202-708-2121 (this is not a toll-free number). Persons with hearing or speech impairments may access this number via TTY by calling the Federal Relay Service at 1-800-877-8339.
To qualify for FHA insurance for a single-family mortgage, a lender must obtain an appraisal of the property that is to be the security for the loan. Only an appraiser listed on HUD's FHA Appraiser Roster may perform the appraisal. Under HUD's current regulation in 24 CFR 200.202(b), an applicant who wishes to be included on the FHA Appraiser Roster must be a state-licensed or state-certified appraiser under the minimum criteria issued by the Appraiser Qualifications Board (AQB) of the Appraisal Foundation, a not-for-profit, private educational foundation. The applicant must not be listed on the General Services Administration's Suspension and Debarment list, on HUD's Limited Denial of Participation list, or in HUD's Credit Alert Interactive Voice Response System (CAIVRS). HUD's regulations for the Appraiser Roster are codified in subpart G of 24 CFR part 200 (consisting of §§ 200.200-200.206).
Section 1404 of the Housing and Economic Recovery Act of 2008 (HERA) (Pub. L. 110-289, approved July 30, 2008) amended section 202 of the National Housing Act (12 U.S.C. 1708) to revise qualification standards for FHA-approved appraisers. HERA amended what is now section 202(g) of the National Housing Act
In order to comply with HERA's requirements governing who qualifies as an FHA-approved appraiser, HUD issued a Mortgagee Letter, ML 2008-39, on December 17, 2008. The mortgagee letter advised appraisers of the revised eligibility requirements to qualify for placement on the FHA Appraiser Roster and provided a timeline for implementation of those requirements. Despite the fact that HERA's provisions were made effective upon enactment, FHA determined that the loss of available FHA Roster appraisers in certain locations would impede its ability to support affordable mortgage financing in those areas and hinder use of FHA single-family programs at a time when use of those programs has increased significantly. Therefore, in order to implement this change in appraiser eligibility requirements in a manner that was not disruptive to the FHA mortgage lending process, ML 2008-39 provided a deadline of October 1, 2009, for all FHA appraisers on the Appraisal Roster to become state-certified. In addition, the mortgage letter indicated that FHA had ceased to accept applications by state-licensed appraisers on October 1, 2008, in order to comply with HERA.
Given the need to implement the new HERA requirements as quickly as possible, HUD chose the HERA option that FHA appraisers must be state-certified rather than the option that would permit appraisers to be certified by appraisal organizations. HUD recognized that it would take time for HUD to decide upon which nationally recognized professional appraisal organizations HUD would designate as organizations acceptable for certification of appraisers who would be approved for the FHA Appraiser Roster. HUD would need to review the organization's appraiser approval criteria and ensure that the organization, in fact, issues certifications. Since HERA allowed for FHA-approved appraisers to be state-certified appraisers, HUD determined, as is more fully discussed in the next section, that state-certified appraisers not only meet the higher education and experience standards that HERA sought to be used for FHA-insured transactions (all states provide for higher education and experience standards for state-certified appraisers than are provided for state-licensed appraisers) but also that utilizing only state-certified appraisers is a more efficient and expedient approach to ensure the availability of highly qualified appraisers to serve as FHA-approved appraisers.
HERA provides that appraisers may either be state-certified or certified by a “nationally recognized professional appraisal organization” in order to appear on the Roster. FHA recognizes the potential benefits of the flexibility of accepting either form of certification. However, FHA has determined that in order to prevent disruption and to ensure efficient processing of mortgage insurance, FHA will accept only state certification and not the certification of a “nationally recognized professional appraisal organization.”
Currently, there are approximately 55,000 appraisers on the Roster, and all of these appraisers are state-certified and would already be in compliance with the changes this proposed rule would make. Accordingly, choice of appraisers who are state-certified would mean no interruption of processing mortgage insurance. FHA recognizes that in ML 2008-39 it was announced that FHA considered the Appraisal Foundation to be a nationally recognized professional appraisal organization and that FHA would publish a notice in the
CAIVRS was implemented in 1988 as an FHA loan origination aid. CAIVRS is used to determine if a potential borrower has a federal debt that is currently in default or foreclosure or has had a claim paid by the reporting agency within the last 3 years. Federally approved lenders use CAIVRS to prescreen all applicants for federally insured loans. Since 1997, FHA-approved lenders have had Internet access to CAIVRS via the FHA Connection online system to check the Social Security Number of each borrower and coborrower or nonprofit agency acting as a borrower listed on a new FHA loan application. As noted above, under the existing FHA Appraiser Roster regulations, an appraiser will not be approved by FHA if the appraiser is listed on CAIVRS and thus has a federal debt that is currently in default or foreclosure or has had a claim paid by the reporting agency within the last 3 years.
On July 11, 2008, HUD issued ML 2008-18, stating that HUD was discontinuing telephone access to CAIVRS because the hardware supporting the telephone access was obsolete and could no longer be repaired or maintained. Access to CAIVRS is now available solely through the Internet, and CAIVRS is now known as the Credit Alert Verification Reporting System, although the acronym remains the same.
This proposed rule conforms the FHA Appraiser Roster regulations regarding eligibility requirements of appraisers to qualify for placement and retention on the Appraiser Roster by making the regulations consistent with both HERA's mandate that all FHA approved appraisers be state-certified and HUD's current policy regarding state-certification of appraisers as set forth in ML 2008-39. In order to make the Appraiser Roster regulations consistent with current statute, all references to state licensing and state-licensed appraisers are removed from the regulations in § 200.202 and § 200.204. This final rule also eliminates the reference to the Credit Alert Interactive Voice Response System in § 200.202. Because the Credit Alert Interactive Voice Response System no longer exists, the phrase has been replaced with “Credit Alert Verification Reporting System,” the new appraiser alert system put in place by ML 2008-18.
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601
The proposed rule would not add any new regulatory burdens on FHA-approved appraisers or applicants for FHA approval. HERA requires that an appraiser be state-certified to be approved by FHA to be on the Appraiser Roster. HUD ceased accepting applications from state-licensed appraisers on October 1, 2008, and all appraisers already on the Appraiser Roster must have become state-certified by October 1, 2009, to remain on the Appraiser Roster. This proposed rule will not create new costs for small entities of appraisers or of lenders because the rule does not impose any new requirements on appraisers. In addition, FHA's Appraisal Roster pertains solely to individuals, not to entities. Individual appraisers must apply to be on the FHA Appraiser Roster. Therefore, the undersigned certifies that this rule will not have a significant impact on a substantial number of small entities.
Notwithstanding HUD's view that this rule will not have a significant effect on a substantial number of small entities, HUD specifically invites comments regarding any less burdensome alternatives to this rule that will meet HUD's objectives as described in this preamble.
Executive Order 13132 (entitled “Federalism”) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial direct compliance costs on state and local governments and is not required by statute, or the rule preempts state law, unless the agency meets the consultation and funding requirements of section 6 of the Executive Order. This rule will not have federalism implications and would not impose substantial direct compliance costs on state and local governments or preempt state law within the meaning of the Executive Order.
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) (UMRA) establishes requirements for federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments, and on the private sector. This rule does not impose any federal mandates on any state, local, or tribal governments, or on the private sector, within the meaning of UMRA.
This proposed rule does not direct, provide for assistance or loan and mortgage insurance for, or otherwise govern or regulate, real property acquisition, disposition, leasing, rehabilitation, alteration, demolition, or new construction, or establish, revise, or provide for standards for construction or construction materials, manufactured housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this rule is categorically excluded from environmental review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321).
The information collection requirements for this rule have been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB control number 2502-0538. In accordance with the Paperwork Reduction Act, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information, unless the collection displays a currently valid OMB control number.
The Catalogue of Federal Domestic Assistance Number for the principal FHA single-family mortgage insurance program is 14.117.
Administrative practice and procedure, Claims, Equal employment opportunity, Fair housing, Housing standards, Lead poisoning, Loan programs—housing and community development, Mortgage insurance, Organization and functions (Government agencies), Penalties, Reporting and recordkeeping requirements, Social Security, Unemployment compensation, Wages.
Accordingly, for the reasons discussed in the preamble, HUD proposes to amend 24 CFR part 200 to read as follows:
1. The authority citation for part 200 continues to read as follows:
12 U.S.C. 1702-1715-z-21; 42 U.S.C. 3535(d).
2. In § 200.202, revise paragraphs (b)(1) and (b)(2)(iii) as follows:
(b) * * *
(1) You must be a state-certified appraiser with credentials that complied with the applicable certification criteria established by the Appraiser Qualification Board (AQB) of the Appraisal Foundation and in effect at the time the certification was awarded by the issuing jurisdiction; and
(2) * * *
(iii) HUD's Credit Alert Verification Reporting System.
3. In § 200.204, revise paragraphs (a)(1)(ii), (c)(1) and (2) as follows:
(a) * * *
(1) * * *
(ii) Losing standing as a state-certified appraiser due to disciplinary action in any state in which the appraiser is certified;
(c) * * *
(1)
(2)
Environmental Protection Agency (EPA).
Proposed rule.
EPA is proposing to approve submittals from the Commonwealth of Virginia pursuant to the Clean Air Act (CAA) sections 110(k)(2) and (3). These submittals address the infrastructure elements specified in CAA section 110(a)(2), necessary to implement, maintain, and enforce the 1997 8-hour ozone and fine particulate matter (PM
Written comments must be received on or before August 15, 2011.
Submit your comments, identified by Docket ID Number EPA-R03-OAR-2010-0160 by one of the following methods:
A.
B.
C.
D.
Marilyn Powers, (215) 814-2380, or by e-mail at
On July 18, 1997, EPA promulgated a revised 8-hour ozone NAAQS (62 FR 38856) and a new PM
Section 110(a) of the CAA requires States to submit State Implementation Plans (SIPs) that provide for the implementation, maintenance, and enforcement of new or revised NAAQS within three years following the promulgation of such NAAQS. In March of 2004, Earthjustice initiated a lawsuit against EPA for failure to take action against States that had not made SIP submissions to meet the requirements of sections 110(a)(1) and (2) for the 1997 8-hour ozone and PM
This action also does not include the portions of 110(a)(2)(C), (D)(i)(II), and (J) as they pertain to a permit program as required by Part C of Title I of the CAA, and the portion of 110(a)(2)(D)(i)(II) as it pertains to visibility. These portions of these elements will be addressed by separate actions.
Virginia provided multiple submittals to satisfy the section 110(a)(2) requirements that are the subject of this proposed action for the 1997 8-hour ozone NAAQS and the 1997 and 2006 PM
EPA analyzed the above identified submissions and is proposing to make a determination that such submittals meet the requirements of section 110(a)(2)(A), (B), (C), (D)(ii), (E), (F), (G), (H), (J), (K), (L), and (M), or portions thereof, for the 1997 8-hour ozone and PM
In 1995, Virginia adopted legislation that provides, subject to certain conditions, for an environmental assessment (audit) “privilege” for voluntary compliance evaluations performed by a regulated entity. The legislation further addresses the relative burden of proof for parties either asserting the privilege or seeking disclosure of documents for which the privilege is claimed. Virginia's legislation also provides, subject to certain conditions, for a penalty waiver for violations of environmental laws when a regulated entity discovers such violations pursuant to a voluntary compliance evaluation and voluntarily discloses such violations to the Commonwealth and takes prompt and appropriate measures to remedy the violations. Virginia's Voluntary Environmental Assessment Privilege Law, Va. Code Sec. 10.1-1198, provides a privilege that protects from disclosure documents and information about the content of those documents that are the product of a voluntary environmental assessment. The Privilege Law does not extend to documents or information (1) That are generated or developed before the commencement of a voluntary environmental assessment; (2) that are prepared independently of the assessment process; (3) that demonstrate a clear, imminent and substantial danger to the public health or environment; or (4) that are required by law.
On January 12, 1998, the Commonwealth of Virginia Office of the Attorney General provided a legal opinion that states that the Privilege law, Va. Code Sec. 10.1-1198, precludes granting a privilege to documents and information “required by law,” including documents and information “required by Federal law to maintain program delegation, authorization or approval,” since Virginia must “enforce Federally authorized environmental programs in a manner that is no less stringent than their Federal counterparts. * * *” The opinion
Virginia's Immunity law, Va. Code Sec. 10.1-1199, provides that “[t]o the extent consistent with requirements imposed by Federal law,” any person making a voluntary disclosure of information to a state agency regarding a violation of an environmental statute, regulation, permit, or administrative order is granted immunity from administrative or civil penalty. The Attorney General's January 12, 1998 opinion states that the quoted language renders this statute inapplicable to enforcement of any Federally authorized programs, since “no immunity could be afforded from administrative, civil, or criminal penalties because granting such immunity would not be consistent with Federal law, which is one of the criteria for immunity.”
Therefore, EPA has determined that Virginia's Privilege and Immunity statutes will not preclude the Commonwealth from enforcing its program consistent with the Federal requirements. In any event, because EPA has also determined that a state audit privilege and immunity law can affect only state enforcement and cannot have any impact on Federal enforcement authorities, EPA may at any time invoke its authority under the CAA, including, for example, sections 113, 167, 205, 211 or 213, to enforce the requirements or prohibitions of the state plan, independently of any state enforcement effort. In addition, citizen enforcement under section 304 of the CAA is likewise unaffected by this, or any, state audit privilege or immunity law.
EPA is proposing to approve Virginia's submittals that provide the basic program elements specified in the CAA sections 110(a)(2)(A), (B), (C), (D)(ii), (E), (F), (G), (H), (J), (K), (L), and (M), or portions thereof, necessary to implement, maintain, and enforce the 1997 8-hour ozone and PM
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely 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 proposed action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, this proposed rule, pertaining to Virginia's section 110(a)(2) infrastructure requirements for the 1997 8-hour ozone and PM
Environmental protection, Air pollution control, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Volatile organic compounds.
42 U.S.C. 7401
Commerce, National Oceanic and Atmospheric Administration (NOAA), National Marine Fisheries Service (NMFS).
Notice of public hearings.
We, National Marine Fisheries Service (NMFS), are announcing six public hearings to be held for the proposed rule to revise critical habitat for the Hawaiian monk seal, which was published in the
See
•
•
Jean Higgins, NMFS, Pacific Islands Regional Office, (808) 944-2157; Lance Smith, NMFS, Pacific Islands Regional Office, (808) 944-2258; or Marta Nammack, NMFS, Office of Protected Resources (301) 427-8403.
In the notice of the proposed rulemaking, we propose to revise the current critical habitat for the Hawaiian monk seal (
Joint Commerce-Interior ESA implementing regulations state that the Secretary of Commerce shall promptly hold at least one public hearing if any person requests one with 45 days of publication of a proposed regulation to list a species or to designate critical habitat (see 50 CFR 424.16 (c)(3)). To allow the public an opportunity to provide comment on the proposed rule, we will hold six public hearings. We will accept oral and written comments on the proposed rule to revise Hawaiian monk seal critical habitat (76 FR 32026; June 2, 2011) during these hearings as described in this notice.
August 8, 2011—Mitchell Pauole Center, 90 Ainoa Street, Kaunakakai, Molokai 96748—5:30-8 p.m.
August 9, 2011—Kihei Community Center, 303 E. Lipoa Street, Kihei, Maui 96753—5:30-8 p.m.
August 10, 2011—Kauai War Memorial Convention Hall, 4191 Hardy Street, Lihue, Kauai 96766—5:30-8 p.m.
August 11, 2011—McCoy Pavilion at Ala Moana Park, 1201 Ala Moana Blvd., Honolulu, Oahu 96814—5:30-8 p.m.
August 15, 2011—Mokupapapa Discovery Center, 308 Kamehameha Avenue, Suite 109, Hilo, Hawaii 96720—5:30-8 p.m.
August 16, 2011—Kahakai Elementary School, 76-147 Royal Poinciana Drive, Kailua Kona, Hawaii 96740—6:30-9 p.m.
Oral and written comments on the proposed rule to revise Hawaiian monk seal critical habitat (76 FR 32026; June 2, 2011) received during these hearings will be part of the administrative record. People wishing to make an oral statement for the record at a public hearing are encouraged to provide a written copy of the statement and present it to us at the hearing. In the event that attendance at the public hearings is large, the time allotted for oral statements may be limited. Oral and written statements receive equal consideration. There are no limits on the length of written comments submitted to us.
These meetings are physically accessible to people with disabilities. Persons requesting sign language interpretation or other reasonable accommodations to participate in the public meetings should contact Jean Higgins (808) 944-2157. To allow sufficient time to process requests, please call not later than 5 p.m. on July 28, 2011.
16 U.S.C. 1533
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments regarding (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility and clarity of the information to be collected; (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB),
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments regarding: (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility and clarity of the information to be collected; (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB),
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments regarding: (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility and clarity of the information to be collected; (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB),
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments regarding (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility and clarity of the information to be collected; (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB),
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
Foreign Agricultural Service, USDA.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, this notice announces that the Foreign Agricultural Service (FAS) intends to request an extension for a currently approved information collection procedure for Sugar Import Licensing Programs described in 7 CFR part 1530.
Comments should be received on or before September 12, 2011 to be assured of consideration.
Mail or deliver comments to William Janis, International Economist, Import Policies and Programs Division, Foreign Agricultural Service, U.S. Department of Agriculture, Stop 1021, 1400 Independence Ave., SW., Washington, DC 20250-1021.
William Janis at the address stated above or telephone at (202) 720-2194, or by e-mail at:
In addition, each participant must maintain records on all program reports as set forth in section 1530.110. The information collected is used by the licensing authority to manage, plan, evaluate, and account for program activities. The reports and records are required to ensure the proper operations of these programs.
Copies of this information collection can be obtained from Tamoria Thompson-Hall, the Agency Information Collection Coordinator, at (202) 690-1690.
Foreign Agricultural Service, USDA.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, this notice announces that the Foreign Agricultural Service (FAS) intends to request an extension for a currently approved information collection procedure for entry of specialty sugars into the United States as described in 7 CFR part 2011.
Comments should be received on or before September 12, 2011 to be assured of consideration.
Mail or deliver comments to William Janis, International Economist, Import Policies and Programs Division, Foreign Agricultural Service, U.S. Department of Agriculture, Stop 1021, 1400 Independence Ave. SW., Washington, DC 20250-1021.
William Janis at the address stated above, or telephone at (202) 720-2194; or by e-mail at
Copies of this information collection can be obtained from Tamoria Thompson-Hall, the Agency Information Collection Coordinator, at (202) 690-1690.
Forest Service, USDA.
Notice of meeting.
The White Pine-Nye Resource Advisory Committee will meet in Eureka, Nevada. The committee is authorized under the Secure Rural Schools and Community Self-Determination Act (Pub. L 110-343) (the Act) and operates in compliance with the Federal Advisory Committee Act. The purpose of the committee is to improve collaborative relationships and to provide advice and recommendations to the Forest Service concerning projects and funding consistent with the title II of the Act. The meeting is open to the public. The purpose of the meeting is to decide on monitoring the implementation of projects, decide on consideration of additional projects and review and recommend funding allocation for any additional projects.
The meeting will be held August 8, 2011, 9 a.m.
The meeting will be held at Eureka County Annex, 701 S. Main Street, Eureka, Nevada 89316. Written comments may be submitted as described under
All comments, including names and addresses when provided, are placed in the record and are available for public inspection and copying. The public may inspect comments received at Tonopah Ranger District Office, 1400 S. Erie Main Street, Tonopah, Nevada. Please call ahead to 775-482-6286 to facilitate entry into the building to view comments.
Steven Williams, RAC Designated Federal Official, Austin Ranger District, 100 Midas Canyon Road, P.O. Box 130,
Individuals who use telecommunication devices for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339 between 8 a.m. and 8 p.m., Eastern Standard Time, Monday through Friday. Requests for reasonable accommodation for access to the facility or procedings may be made by contacting the person listed
The following business will be conducted: Review and approve previous meeting's minutes and business expenses, Recommend funding allocation for proposed projects, and Public Comment. More information is available at:
Written comments and requests for time for oral comments must be sent to Tonopah Ranger District, P.O. Box 3940, Tonopah, Nevada 89049, or by e-mail to
The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35).
NMFS is aware of a survey begun by the University of Rhode Island (URI) in 2009/2010 in New England under a grant from the Commercial Fisheries Research Foundation, that seeks Paperwork Reduction Act clearance for a follow-up in the Mid-Atlantic in summer 2011 under NOAA funding (Social Impacts of the Implementation of Catch Shares Programs in the Mid-Atlantic, OMB Control No. 0648-xxxx). The current request has learned from some elements of the URI and follow-on survey. However, this request (1) Is focused on fisheries management in general while the earlier study is focused solely on catch shares, (2) is an ongoing survey rather than a one-time effort, and (3) specifically targets performance indicators for which data are not currently being collected.
Copies of the above information collection proposal can be obtained by calling or writing Diana Hynek, Departmental Paperwork Clearance Officer, (202) 482-0266, Department of Commerce, Room 6616, 14th and Constitution Avenue, NW., Washington, DC 20230 (or via the Internet at
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Department of Commerce, International Trade Administration, Import Administration.
The Department of Commerce (the Department) is rescinding the administrative review of the antidumping duty order on certain tissue paper products from the People's Republic of China (PRC) for the period of review (POR) of March 1, 2010, to February 28, 2011, with respect to Max
Brian Smith or Gemal Brangman, AD/CVD Operations, Office 2, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-1766 or (202) 482-3773, respectively.
On March 1, 2011, the Department published a notice of opportunity to request an administrative review of the antidumping duty order on certain tissue paper products from the PRC.
In a letter dated June 10, 2011, the petitioner withdrew its request for review of Max Fortune Industrial, Max Fortune Fuzhou, Max Fortune Vietnam, and Tian Jun, and requested that the Department rescind the review with respect to these companies. No other parties requested a review.
Pursuant to 19 CFR 351.213(d)(1), the Secretary will rescind an administrative review, in whole or in part, if the party who requested the review withdraws the request within 90 days of the date of publication of the notice of initiation of the requested review. Accordingly, the petitioner timely withdrew its request for review of Max Fortune Industrial, Max Fortune Fuzhou, Max Fortune Vietnam, and Tian Jun. Because no other party requested a review, pursuant to 19 CFR 351.213(d)(1), the Department is rescinding the entire administrative review of the antidumping duty order on certain tissue paper products from the PRC for the period March 1, 2010, to February 28, 2011.
The Department will instruct U.S. Customs and Border Protection (CBP) to assess antidumping duties on all appropriate entries. Antidumping duties shall be assessed at rates equal to the cash deposit of estimated antidumping duties required at the time of entry, or withdrawal from warehouse, for consumption, in accordance with 19 CFR 351.212(c)(1)(i). The Department intends to issue appropriate assessment instructions directly to CBP 15 days after the date of publication of this notice in the
This notice serves as a 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 review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
This notice also serves as a reminder to parties subject to administrative protective orders (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return 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.
This notice is published in accordance with sections 751(a) and 777(i) of the Act, and 19 CFR 351.213(d)(4).
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of intent to prepare a Supplemental Environmental Impact Statement (SEIS); request for comments.
NOAA announces its intention to prepare an SEIS in accordance with the National Environmental Policy Act of 1969, the Council on Environmental Quality Regulations, and NOAA Administrative Order 216-6
Written comments and input will be accepted on or before August 15, 2011.
Written comments should be sent to Robb Gries, Project Engineer, NOAA, Project Planning & Management—Western Region, 7600 Sand Point Way, NE., BIN C15700, Seattle, WA 98115; e-mail
Mr. Robb Gries, NOAA Project Engineer, at the address provided above.
Since completion of the Final EIS/EIR, substantial changes are being made to the scope of actions originally proposed
Consistent with 40 CFR 1502.9(c)(1)(i), this SEIS will focus on the environmental effects of the proposed changes and feasible alternatives including the no-action alternative, and analyze the potential effects to affected resources such as: Geological conditions, hydraulic processes, construction noise, traffic/pedestrian circulation, air emissions, and protected wildlife. While scoping meetings are not being held for the SEIS, NOAA is requesting written comments and input, including, but not limited to, technical information related to the proposed actions, information regarding potentially affected resources in the area, and community interests or concerns on the potential for environmental effects of the proposed action and alternatives. NOAA will also rely on prior scoping documents and comments received during preparation of the original FEIS/EIR. Additional public involvement opportunities associated with this SEIS will occur, including a public comment period on the Supplemental Draft EIS to be announced as a Notice of Availability in the
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public hearings.
The Caribbean Fishery Management Council will hold public hearings to obtain input from fishers, the general public, and the local agencies representatives on the Draft Comprehensive Amendment to the FMPs establishing annual catch limits (ACL) and accountability measures (AMs) for species not overfished or undergoing overfishing.
The scoping meetings will be held on the following dates and locations:
All meetings will be held from 7 to 10 p.m.
Caribbean Fishery Management Council, 268 Muñoz Rivera Avenue, Suite 1108, San Juan, Puerto Rico 00918-1920, telephone (787) 766-5926.
The Caribbean Fishery Management Council will hold public hearings to receive public input on the following management options. The complete document is available at:
4.1.1Action 1(a). Establish a year sequence for determining average annual landings for each species or species group within the Reef Fish Fishery Management Plan (FMP).
Alternative 1. No action. Retain the year sequence as defined in the 2005 Comprehensive Sustainable Fisheries Act Amendment (Caribbean SFA Amendment).
Alternative 2. Redefine management reference points or proxies for the Reef Fish FMP based on the longest year sequence of reliable landings data.
Alternative 3. Redefine management reference points or proxies for the Reef Fish FMP based on the longest year sequence of pre-Caribbean SFA Amendment landings data that is considered consistently reliable across all islands.
Alternative 4. Redefine management reference points or proxies for the Reef Fish FMP based on the longest year sequence of recent reliable landings data.
Alternative 5. Redefine management reference points or proxies for the Reef Fish FMP based on the most recent five years of available landings data.
4.1.2Action 1(b). Establish management reference points for the reef fish species not undergoing overfishing.
Sub-Action 1. Establish management reference points for the reef fish species not undergoing overfishing in Puerto Rico.
Alternative 1: No action. Retain current management reference points or proxies for species/species groups.
Alternative 2(a) through 2(o): Redefine management reference points or proxies based on the year sequence of landings data as defined in Action 1(a) Alternatives 1-5.
Sub-Action 2. Establish management reference points for the reef fish species not undergoing overfishing in St Croix.
Alternative 1: No action. Retain current management reference points or proxies for species/species groups.
Alternative 2(a) through 2(o): Redefine management reference points or proxies based on the year sequence of landings data as defined in Action 1(a) Alternatives 1-5.
Sub-Action 3. Establish management reference points for the reef fish species not undergoing overfishing in St. Thomas/St. John.
Alternative 1: No action. Retain current management reference points or proxies for species/species groups.
Alternative 2(a) through 2(o): Redefine management reference points or proxies based on the year sequence of landings data as defined in Action 1(a) Alternatives 1-5.
4.2.1Action 2(a). Establish a year sequence for determining average annual landings for the Caribbean Spiny Lobster.
Alternative 1. No action. Retain the year sequence for Caribbean Spiny Lobster FMP landings as defined in the Caribbean SFA Amendment.
Alternative 2. Redefine management reference points or proxies for the Caribbean Spiny Lobster FMP based on the longest year sequence of reliable landings data.
Alternative 3. Redefine management reference points or proxies for the Caribbean Spiny Lobster FMP based on the longest year sequence of pre-Caribbean SFA Amendment landings data that is considered consistently reliable across all islands.
Alternative 4. Redefine management reference points or proxies for the Caribbean Spiny Lobster FMP based on the longest year sequence of recent reliable landings data.
Alternative 5. Redefine management reference points or proxies for the Caribbean Spiny Lobster FMP based on the most recent five years of available landings data.
4.2.2Action 2(b). Establish management reference points for the Caribbean Spiny Lobster.
Sub-Action 1. Establish management reference points for the Caribbean Spiny Lobster in Puerto Rico.
Alternative 1: No action. Retain current management reference points or proxies for spiny losbter.
Alternative 2(a) through 2(n): Redefine management reference points or proxies based on the year sequence of landings data as defined in Action 2(a) Alternatives 1-5.
Sub-Action 2. Establish management reference points for the Caribbean Spiny Lobster in St. Croix.
Alternative 1: No action. Retain current management reference points or proxies for spiny lobster.
Alternative 2(a) through 2(n): Redefine management reference points or proxies based on the year sequence of landings data as defined in Action 2(a) Alternatives 1-5.
Sub-Action 3. Establish management reference points for the Caribbean Spiny Lobster in St. Thomas/St. John.
Alternative 1: No action. Retain current management reference points or proxies for spiny lobster groups.
Alternative 2(a) through 2(n): Redefine management reference points or proxies based on the year sequence of landings data as defined in Action 2(a) Alternatives 1-5.
4.3.1Action 3(a): Redefine the management of aquarium trade species FMU.
Alternative 1: No action. Retain aquarium trade species in both the Corals and Reef Associated Plants and Invertebrates FMP (Coral FMP) and the Reef Fish FMP as defined in the Caribbean SFA Amendment.
Alternative 2: Consolidate all aquarium trade species listed in the FMP for Coral FMP and the Reef Fish FMP into a single FMP.
Alternative 2A: Move all aquarium trade species listed in the Coral FMP into the Reef Fish FMP.
Alternative 2B: Move all of the aquarium trade species listed in the Reef Fish FMP into the Coral FMP.
Alternative 2C: Move all of the aquarium trade species listed in both the Coral FMP and the Reef Fish FMPs into a new FMP specific to aquarium trade species.
Alternative 3: Remove all aquarium trade species from both the Coral FMP and from the Reef Fish FMPs.
Alternative 4: Manage only those aquarium trade species listed in either the Coral FMP or the Reef Fish FMP, for which landings data are available during the year sequence chosen in Action 1(a). Remove remaining aquarium trade species from the Coral FMP and the Reef Fish FMP.
Alternative 4A: Aquarium trade species that continue to be Federally-managed under this alternative will be retained in either the Coral FMP or the Reef Fish FMP as listed after the Caribbean SFA Amendment (Table 4.3.1).
Alternative 4B: Aquarium trade species that continue to be Federally-managed under this alternative will be consolidated and moved into the Coral FMP.
Alternative 4C: Aquarium trade species that continue to be Federally-managed under this alternative will be consolidated and moved into the Reef fish FMP.
Alternative 4D: Aquarium trade species that continue to be Federally-managed under this alternative will be consolidated and moved into a new FMP specific to aquarium trade species.
Alternative 5: Delegate management authority for all aquarium trade species listed in either the Coral FMP or the Reef Fish FMP to the jurisdiction of the appropriate commonwealth or territory as defined by Action 5 of this document.
Table 4.3.1. List of all species included in the Aquarium Trade category in both the Reef Fish and Coral FMPs. Table contents are extracted from Table 8 of the Comprehensive Amendment to the FMPs of the U.S. Caribbean to Address Required Provisions of the Magnuson-Stevens Fishery Conservation and Management Act (Caribbean SFA Amendment).
Table 4.3.1. (continued). List of all species included in the Aquarium Trade category in both the Reef Fish and Coral FMPs. Table contents are extracted from Table 8 of the Comprehensive Amendment to the FMPs of the U.S. Caribbean to Address Required Provisions of the Magnuson-Stevens Fishery Conservation and Management Act (Caribbean SFA Amendment).
4.3.2Action 3(b). Establish management reference points for the aquarium trade species FMU. Alternative 1: No action. Keep the aquarium trade species in the “data collection only” category as defined in the Caribbean SFA Amendment.
Alternative 2(a) through 2(k): Establish management reference points or proxies for the aquarium trade species based on alternative selected in Action 3(a) and time series of landings data as defined in Action 1(a) in Alternatives 1-5.
Alternative 1: No action. Do not re-evaluate and revise the conch species FMU.
Alternative 2: Remove all conch species, except for the queen conch (
Alternative 3: Delegate management authority, for all conch species except queen conch (
Alternative 4: Retain all conch species under the Queen Conch FMP and define management reference points or proxies based on the ACL established for queen conch in the 2010 Caribbean ACL Amendment public hearing draft.
Alternative 1. No Action. Maintain U.S. Caribbean-wide reference points.
Alternative 2. Divide and manage ACLs by island group (
Alternative 2A. Use a mid-point or equidistant method for dividing the EEZ among islands.
Alternative 2B. Use a straight-line approach for dividing the EEZ among islands.
Alternative 2C. Use the St. Thomas Fishermen's Association recommendation for dividing the EEZ among islands.
4.6.1Action 6(a) Separation of recreational and commercial sectors (Puerto Rico only).
Alternative 1. No action. Do not specify sector-specific ACLs.
Alternative 2. Specify separate commercial and recreational ACLs based on the preferred management reference point time series.
4.6.2Action 6(b) Establish bag limit restrictions on recreational reef fish harvest.
Alternative 1. No action. Do not establish bag limit restrictions on recreational reef fish harvest.
Alternative 2. Establish a 5-fish aggregate bag limit per person per fishing day (would not apply to a fisher who has a valid commercial fishing license)
Alternative 3. Establish a 2-fish aggregate bag limit per person per fishing day (would not apply to a fisher who has a valid commercial fishing license)
Alternative 4. Prohibits the harvest of species in the surgeonfish FMU (would not apply to a fisher who has a valid commercial fishing license).
Alternative 5. Establish an aggregate bag limit of 10 fish per fisher including not more than two surgeonfish per fisher or six surgeonfish per boat, and 30 aggregate fish per boat on a fishing day (would not apply to a fishers who has a valid commercial fishing license).
Alternative 6. Establish an aggregate bag limit of 5 fish per fisher including not more than two surgeonfish per fisher or six surgeonfish per boat, and 15 aggregate fish per boat on a fishing day (would not apply to a fisher who has a valid commercial fishing license).
4.6.3Action 6(c) Establish bag limit restrictions on recreational spiny lobster harvest.
Alternative 1. No action. Do not establish bag limit restrictions on recreational lobster harvest.
Alternative 2. Establish a 5-spiny lobster aggregate bag limit per person per fishing day (would not apply to a fisher who has a valid commercial fishing license).
Alternative 3. Establish a 2-spiny lobster bag limit per person per fishing day (would not apply to a fisher who has a valid commercial fishing license).
Alternative 4. Prohibits the harvest of spiny lobster (would not apply to a fishers who has a valid commercial fishing license).
Alternative 5. Establish a bag limit of: 5 spiny lobster per fisher and 15 spiny lobster per boat on a fishing day (would not apply to a fisher who has a valid commercial fishing license).
Alternative 6. Establish a bag limit of: 2 spiny lobster per fisher and 12 spiny lobster per boat on a fishing day (would not apply to a fisher who has a valid commercial fishing license).
Accountability measures (AMs) are defined as management controls to prevent ACLs, including sector-specific ACLs, from being exceeded, and to correct or mitigate overages of the ACL if they occur (50 CFR 310(g)(1)).
4.7.1Action 7(a) Triggering accountability measures. Actions 1, 2, 3, and 4 include alternatives to establish and allocate ACLs. If an ACL is exceeded, AM alternatives are provided to address overages. Action 7 alternatives are presented in two parts, the first addresses the triggering of AMs and the second addresses the actual actions needed to redress overages.
Alternative 1. No Action. Do not establish criteria for triggering AMs.
Alternative 2. Trigger AMs if the ACL is exceeded based upon:
Alternative 2A: A single year of landings beginning with landings from 2011.
Alternative 2B: A single year of landings beginning with landings from 2011, then a 2-year running average of landings in 2012 (average of 2011+2012) and thereafter (
Alternative 2C: A single year of landings beginning with landings from 2011, a 2-year average of landings in 2012 (average of 2011+2012), then a 3-year running average of landings in 2013 (average of 2011+2012+2013) and thereafter (
Alternative 3. Trigger AMs if the ACL is exceeded as defined below unless NOAA Fisheries' SEFSC (in consultation with the Council and its SSC) determines the overage occurred because data collection/monitoring improved rather than because catches actually increased:
Alternative 3A: A single year of landings effective beginning 2011.
Alternative 3B: A single year of landings effective beginning 2011, then a 2-year running average of landings effective 2012 and thereafter (
Alternative 3C: A single year of landings effective beginning 2011, a 2-year running average of landings effective 2012, then a 3-year running average of landings effective 2013 and thereafter (
4.7.2Action 7(b) Applying accountability measures.
Alternative 1. No Action. Do not apply AMs.
Alternative 2. If AMs are triggered, based upon the preferred criteria chosen in Action 7(a), reduce the length of the fishing season for that species or species group the year following the trigger determination by the amount needed to prevent such an overage from occurring again. The needed changes will remain in effect until modified.
Alternative 3. If AMs are triggered based upon the preferred criteria chosen in action 7(a), reduce the length of the fishing season for that species or species group the year following the trigger determination by the amount needed to prevent such an overage from occurring again and to pay back the overage. The needed changes will remain in effect until modified.
4.8.1Action 8(a): Establish Framework Measures for Spiny Lobster FMP.
Alternative 1: No Action. Do not establish framework measures for the Spiny Lobster FMP.
Alternative 2: Amend the framework procedures for the Spiny Lobster FMP to provide a mechanism to expeditiously adjust the following reference points and management measures through framework action:
Alternative 3: Amend the framework procedures for the Spiny Lobster FMP to provide the Council with a mechanism to expeditiously adjust a subset of management measures outlined in Alternative 2.
4.8.2Action 8 (b): Establish Framework Measures for Corals and
Alternative 1: No Action. Do not amend the current framework measures for the Corals FMP.
Alternative 2: Amend the framework procedures for the Coral FMP to provide a mechanism to expeditiously adjust the following reference points and management measures through framework action:
Alternative 3: Amend the framework procedures for the Coral FMP to provide the Council with a mechanism to expeditiously adjust a subset of management measures outlined in Alternative 2.
Written comments can be sent to the Council not later than August 15, 2011, or submitted at the Council meeting that will take place at La Concha hotel, in San Juan, Puerto Rico on August 30-31, 2011.
These meetings are physically accessible to people with disabilities. For more information or request for sign language interpretation and other auxiliary aids, please contact Mr. Miguel A. Rolón, Executive Director, Caribbean Fishery Management Council, 268 Muñoz Rivera Avenue, Suite 1108, San Juan, Puerto Rico 00918-1920, telephone (787) 766-5926, at least five days prior to the meeting date.
Commerce, National Oceanic and Atmospheric Administration (NOAA), National Marine Fisheries Service (NMFS).
Notice; proposed incidental harassment authorization; request for comments.
NMFS has received an application from the University of Alaska Geophysics Institute (UAGI) for an Incidental Harassment Authorization (IHA) to take marine mammals, by harassment, incidental to conducting a marine geophysical seismic survey in the Arctic Ocean during September-October 2011. Pursuant to the Marine Mammal Protection Act (MMPA), NMFS is requesting comments on its proposal to issue an IHA to UAGI to take, by Level B harassment only, several species of marine mammals during the specified activity.
Comments and information must be received no later than August 15, 2011.
Comments on the application should be addressed to P. Michael Payne, Chief, Permits, Conservation and Education Division, Office of Protected Resources, National Marine Fisheries Service, 1315 East-West Highway, Silver Spring, MD 20910. The mailbox address for providing e-mail comments is
A copy of the application used in this document may be obtained by writing to the address specified above, telephoning the contact listed below (see
The National Science Foundation (NSF), which is providing funding to UAGI to conduct the survey, has prepared a draft “Environmental Assessment of a Marine Geophysical Survey by the
Candace Nachman, Office of Protected Resources, NMFS, (301) 427-8401.
Sections 101(a)(5)(A) and (D) of the MMPA (16 U.S.C. 1361
Authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s), will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant), and if the permissible methods of taking and requirements pertaining to the mitigation, monitoring, and reporting of such takings are set forth. NMFS has defined “negligible impact” in 50 CFR 216.103 as “* * * an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.”
Section 101(a)(5)(D) of the MMPA established an expedited process by which citizens of the U.S. can apply for an authorization to incidentally take small numbers of marine mammals by harassment. Section 101(a)(5)(D) establishes a 45-day time limit for NMFS review of an application followed by a 30 day public notice and comment period on any proposed
Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as:
NMFS received an application on March 4, 2011, from UAGI for the taking, by harassment, of marine mammals incidental to conducting a marine geophysical seismic survey in the Arctic Ocean. NMFS reviewed UAGI's application and identified a number of issues requiring further clarification. After addressing comments from NMFS, UAGI modified its application and submitted a revised application on May 10, 2011. The May 10, 2011, application is the one available for public comment (see
UAGI proposes to conduct a 2D seismic survey in the Arctic Ocean, Chukchi Sea, in both international waters and within the U.S. Exclusive Economic Zone (EEZ) in water depths ranging from 30-3,800 m (98-12,467 ft). UAGI plans to conduct the proposed seismic survey from September 5 through October 9, 2011, which includes vessel transit time from Dutch Harbor.
UAGI plans to use one source vessel, the R/V
Acoustic stimuli (
UAGI's survey is proposed to occur in the area 72.5-77° N. and 160-175° W. in international waters and within the U.S. EEZ (see Figure 1 in UAGI's application). The project is scheduled to occur from September 5-October 9, 2011. Some minor deviation from these dates is possible, depending on logistics and weather. Therefore, NMFS is proposing to make the IHA valid from September 5-October 23, 2011. The vessel will not be able to remain in the area once ice begins to form, as the
The proposed survey will include collection of seismic reflection data across the transition from the Chukchi Shelf to the Chukchi Borderland to define the apparent change in structure between two large continental blocks. This study will test existing tectonic models and develop new constraints on the development of the Amerasian Basin and will substantially advance our understanding of the Mesozoic history of this basin. In addition, these data will enable the formulation of new tectonic models for the history of this region, which will improve our understanding of the surrounding continents.
The survey will involve one source vessel, the
The proposed program will consist of a total of approximately 5,502 km (3,419 mi) of survey lines, not including transits to and from the survey area when airguns will not be in use (see Figure 1 in UAGI's application). Water depths within the study area range from approximately 30-3,800 m (98-12,467). Just over half of the survey effort (55%) will occur in water 100-1,000 m (328-3,281 ft) deep, 32% will take place in water >1,000 m (3,281 ft) deep, and 13% will occur in water depths <100 m (328 ft). There will be additional seismic operations in the survey area associated with turns, airgun testing, and repeat coverage of any areas where initial data quality is sub-standard. In addition to the operations of the airgun array, a Kongsberg EM 122 MBES and a Knudsen 320B SBP will also be operated from the
All planned geophysical data acquisition activities will be conducted by L-DEO with on-board assistance by the scientists who have proposed the study. The Principal Investigator is Dr. Bernard Coakley of UAGI. The vessel will be self-contained, and the crew will live aboard the vessel for the entire cruise.
The
The vessel has a length of 71.5 m (235 ft); a beam of 17 m (56 ft); a maximum draft of 5.9 m (19 ft); and a gross tonnage of 3,834. The
The
The vessel also has an observation tower from which protected species visual observers (PSVO) will watch for marine mammals before and during the proposed airgun operations. When stationed on the observation platform, the PSVO's eye level will be approximately 21.5 m (71 ft) above sea level, providing the PSVO an unobstructed view around the entire vessel.
During the survey, the airgun array to be used will consist of 10 airguns, with a total volume of approximately 1,830 cubic inches (in
The tow depth of the array will be 6 m (19.7 ft). Because the actual source is a distributed sound source (10 airguns) rather than a single point source, the highest sound levels measurable at any location in the water will be less than the nominal source level. In addition, the effective source level for sound propagating in near-horizontal directions will be substantially lower than the nominal source level applicable to downward propagation because of the directional nature of the sound from the airgun array.
The
For deep-water operations, each ping consists of eight (in water greater than 1,000 m [3,281 ft]) or four (in water less than 1,000 m [3,281 ft]) successive, fan-shaped transmissions, each ensonifying a sector that extends 1° fore-aft. Continuous-wave pulses increase from 2 to 15 milliseconds (ms) long in water depths up to 2,600 m (8,530.2 ft), and frequency-modulated chirp pulses up to 100 ms long are used in water greater than 2,600 m (8,530.2 ft). The successive transmissions span an overall cross-track angular extent of about 150°, with 2 ms gaps between the pulses for successive sectors.
The
The Ocean Surveyor 75 is an ADCP operating at a frequency of 75 kHz, producing a ping every 1.4 s. The system is a four-beam phased array with a beam angle of 30°. Each beam has a width of 4°, and there is no overlap. Maximum output is 1 kilowatt, with a maximum depth range of 700 m (2,296.6 ft).
This section includes a brief explanation of the sound measurements frequently used in the discussions of acoustic effects in this document. Sound pressure is the sound force per unit area, and is usually measured in micropascals (μPa), where 1 pascal (Pa) is the pressure resulting from a force of one newton exerted over an area of one square meter. Sound pressure level (SPL) is expressed as the ratio of a measured sound pressure and a reference level. The commonly used reference pressure level in underwater acoustics is 1 μPa, and the units for SPLs are dB re: 1 μPa. SPL (in decibels [dB]) = 20 log (pressure/reference pressure).
SPL is an instantaneous measurement and can be expressed as the peak, the peak-peak (p-p), or the root mean square (rms). Root mean square, which is the square root of the arithmetic average of the squared instantaneous pressure values, is typically used in discussions of the effects of sounds on vertebrates, and all references to SPL in this document refer to rms unless otherwise noted. SPL does not take the duration of a sound into account.
Received sound levels have been predicted by Marine Acoustics, Inc. (MAI), in relation to distance and direction from the airguns, for the 10-airgun array. The MAI model was site specific; sound velocity profiles, bathymetry, and bottom composition were used to model propagation at seven sites 120-2,727 m (328-8,947 ft) deep in the survey area that represented different physiographic provinces described by Jakobsson
Received sound levels for a single 40-in
Table 1 in this document and Table 1 in UAGI's application show the distances at which three rms sound levels are expected to be received from the 10-airgun array and a single airgun. For the 10-airgun array, distances were modeled at seven sites; the distances in Table 1 are the averages from the sites in each depth range.
NMFS expects that acoustic stimuli resulting from the proposed operation of the single airgun or the 10 airgun array has the potential to harass marine mammals, incidental to the conduct of the proposed seismic survey. NMFS expects these disturbances to be temporary and result, at worst, in a temporary modification in behavior and/or low-level physiological effects (Level B harassment) of small numbers of certain species of marine mammals. NMFS does not expect that the movement of the
The Chukchi Sea supports a diverse assemblage of marine mammals, including: Bowhead, gray, beluga, killer, minke, humpback, and fin whales; harbor porpoise; ringed, ribbon, spotted, and bearded seals; narwhals; polar bears; and walruses. The bowhead, humpback, and fin whales are listed as endangered, and the polar bear is listed as threatened under the U.S. Endangered Species Act of 1973 (ESA; 16 U.S.C. 1531
The bowhead and beluga whales and the ringed and bearded seals are the marine mammal species most likely to be encountered during this survey, with the ringed seal being the most likely marine mammal species to occur throughout the proposed survey area. Although humpback and minke whales are uncommon in the Arctic Ocean, sightings of both species have occurred in the Chukchi Sea in recent years (Brueggeman, 2009; Haley
There are scattered records of narwhal in Alaskan waters, where the species is considered extralimital (Reeves
Refer to Sections III and IV of UAGI's application for detailed information regarding the abundance and distribution, seasonal distribution, population status, and life history and behavior of these species and their occurrence in the proposed project area. When reviewing the application, NMFS determined that the species descriptions provided by UAGI correctly characterized the abundance and distribution, seasonal distribution, population status, and life history and behavior of each species. Additional information can also be found in the NMFS Stock Assessment Reports (SAR). The 2010 Alaska Marine Mammal SAR is available on the Internet at:
The application also presents how UAGI calculated the estimated densities for the marine mammals in the proposed survey area. NMFS has reviewed these data and determined them to be the best available scientific information for the purposes of the proposed IHA. UAGI's methodology for estimating take is described further in the “Estimated Take by Incidental Harassment” section found later in this document.
When considering the influence of various kinds of sound on the marine environment, it is necessary to understand that different kinds of marine life are sensitive to different frequencies of sound. Based on available behavioral data, audiograms have been derived using auditory evoked potentials, anatomical modeling, and other data, Southall
• Low frequency cetaceans (13 species of mysticetes): Functional hearing is estimated to occur between approximately 7 Hz and 22 kHz (however, a study by Au
• Mid-frequency cetaceans (32 species of dolphins, six species of larger toothed whales, and 19 species of beaked and bottlenose whales): Functional hearing is estimated to occur between approximately 150 Hz and 160 kHz;
• High frequency cetaceans (eight species of true porpoises, six species of river dolphins, Kogia, the franciscana, and four species of cephalorhynchids): functional hearing is estimated to occur between approximately 200 Hz and 180 kHz; and
• Pinnipeds in Water: functional hearing is estimated to occur between approximately 75 Hz and 75 kHz, with the greatest sensitivity between approximately 700 Hz and 20 kHz.
As mentioned previously in this document, 11 marine mammal species (seven cetacean and four pinniped species) are likely to occur in the proposed survey area. Of the seven cetacean species likely to occur in UAGI's propose survey area, five are classified as low frequency cetaceans (
Acoustic stimuli generated by the operation of the airguns, which introduce sound into the marine environment, may have the potential to cause Level B harassment of marine mammals in the proposed survey area. The effects of sounds from airgun operations might include one or more of the following: tolerance, masking of natural sounds, behavioral disturbance, temporary or permanent hearing impairment, or non-auditory physical or physiological effects (Richardson
Studies on marine mammals' tolerance to sound in the natural environment are relatively rare. Richardson
Numerous studies have shown that pulsed sounds from airguns are often readily detectable in the water at distances of many kilometers. Malme
Weir (2008) observed marine mammal responses to seismic pulses from a 24 airgun array firing a total volume of either 5,085 in
The term masking refers to the inability of a subject to recognize the occurrence of an acoustic stimulus as a result of the interference of another acoustic stimulus (Clark
Masking effects of pulsed sounds (even from large arrays of airguns) on marine mammal calls and other natural sounds are expected to be limited. Because of the intermittent nature and low duty cycle of seismic airgun pulses, animals can emit and receive sounds in the relatively quiet intervals between pulses. However, in some situations, reverberation occurs for much or the entire interval between pulses (
Although some degree of masking is inevitable when high levels of manmade broadband sounds are introduced into the sea, marine mammals have evolved systems and behavior that function to reduce the impacts of masking. Structured signals, such as the echolocation click sequences of small toothed whales, may be readily detected even in the presence of strong background noise because their frequency content and temporal features usually differ strongly from those of the background noise (Au and Moore, 1988, 1990). The components of background noise that are similar in frequency to the sound signal in question primarily determine the degree of masking of that signal.
There is evidence of other marine mammal species continuing to call in the presence of industrial activity. For example, bowhead whale calls are frequently detected in the presence of seismic pulses, although the number of calls detected may sometimes be reduced (Richardson
Redundancy and context can also facilitate detection of weak signals. These phenomena may help marine mammals detect weak sounds in the presence of natural or manmade noise. Most masking studies in marine mammals present the test signal and the masking noise from the same direction. The sound localization abilities of marine mammals suggest that, if signal and noise come from different directions, masking would not be as severe as the usual types of masking studies might suggest (Richardson
These data demonstrating adaptations for reduced masking pertain mainly to the very high frequency echolocation signals of toothed whales. There is less information about the existence of corresponding mechanisms at moderate or low frequencies or in other types of marine mammals. For example, Zaitseva
In general, NMFS expects the masking effects of seismic pulses to be minor, given the normally intermittent nature of seismic pulses. Refer to Appendix B (4) of the draft EA for a more detailed discussion of masking effects on marine mammals.
Disturbance includes a variety of effects, including subtle to conspicuous changes in behavior, movement, and displacement. Reactions to sound, if any, depend on species, state of maturity, experience, current activity, reproductive state, time of day, and many other factors (Richardson
The sound criteria used to estimate how many marine mammals might be disturbed to some biologically-
Studies of gray, bowhead, and humpback whales have shown that seismic pulses with received levels of 160 to 170 dB re 1 μPa (rms) seem to cause obvious avoidance behavior in a substantial fraction of the animals exposed (Malme et al., 1986, 1988; Richardson
McCauley
Data collected by observers during several seismic surveys in the Northwest Atlantic showed that sighting rates of humpback whales were significantly greater during periods of no seismic compared with periods when a full array was operating (Moulton and Holst, 2010). In addition, humpback whales were more likely to swim away and less likely to swim towards a vessel during seismic vs. non-seismic periods (Moulton and Holst, 2010).
Humpback whales on their summer feeding grounds in southeast Alaska did not exhibit persistent avoidance when exposed to seismic pulses from a 100 in
Studies have suggested that south Atlantic humpback whales wintering off Brazil may be displaced or even strand upon exposure to seismic surveys (Engel
Studies of the bowhead whale show that their responsiveness to seismic surveys can be quite variable depending on their activity (migrating vs. feeding). Bowhead whales migrating west across the Alaskan Beaufort Sea in autumn, in particular, are unusually responsive, with substantial avoidance occurring out to distances of 20-30 km (12.4-18.6 mi) from a medium-sized airgun source at received sound levels of around 120 to 130 dB re 1 μPa (Miller
Reactions of migrating and feeding (but not wintering) gray whales to seismic surveys have been studied. Malme
Various species of
Ship-based monitoring studies of baleen whales (including blue, fin, sei, minke, and humpback whales) in the Northwest Atlantic found that, overall, this group had lower sighting rates during seismic vs. non-seismic periods (Moulton and Holst, 2010). Baleen whales as a group were also seen significantly farther from the vessel during seismic compared with non-seismic periods, and they were more often seen to be swimming away from the operating seismic vessel (Moulton and Holst, 2010). Blue and minke whales were initially sighted significantly farther from the vessel during seismic operations compared to non-seismic periods; the same trend was observed for fin whales (Moulton and Holst, 2010). Minke whales were most often observed to be swimming away from the vessel when seismic operations were underway (Moulton and Holst, 2010).
Data on short-term reactions by cetaceans to impulsive noises are not necessarily indicative of long-term or biologically significant effects. It is not known whether impulsive sounds affect reproductive rate or distribution and habitat use in subsequent days or years. However, gray whales have continued to migrate annually along the west coast of North America with substantial increases in the population over recent years, despite intermittent seismic exploration (and much ship traffic) in that area for decades (Appendix A in Malme
Seismic operators and marine mammal observers on seismic vessels regularly see dolphins and other small toothed whales near operating airgun arrays, but, in general, there is a tendency for most delphinids to show some avoidance of operating seismic vessels (
Captive bottlenose dolphins and beluga whales exhibited changes in behavior when exposed to strong pulsed sounds similar in duration to those typically used in seismic surveys (Finneran
Results for porpoises depend on species. The limited available data suggest that harbor porpoises show stronger avoidance of seismic operations than do Dall's porpoises (Stone, 2003; MacLean and Koski, 2005; Bain and Williams, 2006; Stone and Tasker, 2006). Dall's porpoises seem relatively tolerant of airgun operations (MacLean and Koski, 2005; Bain and Williams, 2006), although they too have been observed to avoid large arrays of operating airguns (Calambokidis and Osmek, 1998; Bain and Williams, 2006). This apparent difference in responsiveness of these two porpoise species is consistent with their relative responsiveness to boat traffic and some other acoustic sources (Richardson
Most studies of sperm whales exposed to airgun sounds indicate that the sperm whale shows considerable tolerance of airgun pulses (
There are almost no specific data on the behavioral reactions of beaked whales to seismic surveys. However, some northern bottlenose whales remained in the general area and continued to produce high-frequency clicks when exposed to sound pulses from distant seismic surveys (Gosselin and Lawson, 2004; Laurinolli and Cochrane, 2005; Simard
Odontocete reactions to large arrays of airguns are variable and, at least for delphinids and Dall's porpoises, seem to be confined to a smaller radius than has been observed for the more responsive of the mysticetes, belugas, and harbor porpoises (see Appendix B of NSF's EA for more information).
Visual monitoring from seismic vessels has shown only slight (if any) avoidance of airguns by pinnipeds, and only slight (if any) changes in behavior, see Appendix B(5) of NSF's EA. In the Beaufort Sea, some ringed seals avoided an area of 100 m (328 ft) to (at most) a few hundred meters around seismic vessels, but many seals remained within 100-200 m (328-656 ft) of the trackline as the operating airgun array passed by (
Temporary or permanent hearing impairment is a possibility when marine mammals are exposed to very strong sounds. Non-auditory physical effects might also occur in marine mammals exposed to strong underwater sound. Possible types of non-auditory physical effects or injuries that theoretically might occur in mammals close to a strong sound source include stress, neurological effects, bubble formation, and other types of organ or tissue damage. It is possible that some marine mammal species (
Factors that influence the amount of threshold shift include the amplitude, duration, frequency content, temporal pattern, and energy distribution of noise exposure. The magnitude of hearing threshold shift normally decreases over time following cessation of the noise exposure. The amount of threshold shift just after exposure is called the initial threshold shift. If the threshold shift eventually returns to zero (
Researchers have derived TTS information for odontocetes from studies on the bottlenose dolphin and beluga. For the one harbor porpoise tested, the received level of airgun sound that elicited onset of TTS was lower (Lucke
For baleen whales, there are no data, direct or indirect, on levels or properties of sound that are required to induce TTS. The frequencies to which baleen whales are most sensitive are assumed to be lower than those to which odontocetes are most sensitive, and natural background noise levels at those low frequencies tend to be higher. As a result, auditory thresholds of baleen whales within their frequency band of best hearing are believed to be higher (less sensitive) than are those of odontocetes at their best frequencies (Clark and Ellison, 2004), meaning that baleen whales require sounds to be louder (
In pinnipeds, TTS thresholds associated with exposure to brief pulses (single or multiple) of underwater sound have not been measured. Initial evidence from more prolonged (non-pulse) exposures suggested that some pinnipeds (harbor seals in particular) incur TTS at somewhat lower received levels than do small odontocetes exposed for similar durations (Kastak
NMFS has established acoustic thresholds that identify the received sound levels above which hearing impairment or other injury could potentially occur, which are 180 and 190 dB re 1 μPa (rms) for cetaceans and pinnipeds, respectively (NMFS 1995, 2000). The established 180- and 190-dB re 1 μPa (rms) criteria are the received levels above which, in the view of a panel of bioacoustics specialists convened by NMFS before additional TTS measurements for marine mammals became available, one could not be certain that there would be no injurious effects, auditory or otherwise, to marine mammals. TTS is considered by NMFS to be a type of Level B (non-injurious) harassment. The 180- and 190-dB levels are shutdown criteria applicable to cetaceans and pinnipeds, respectively, as specified by NMFS (2000); these levels were used to establish the exclusion zones (EZs) described later in this document.
Relationships between TTS and PTS thresholds have not been studied in marine mammals but are assumed to be similar to those in humans and other terrestrial mammals. PTS might occur at a received sound level at least several dB above that inducing mild TTS if the animal were exposed to strong sound pulses with rapid rise time—see Appendix B (6) of NSF's EA. Based on data from terrestrial mammals, a precautionary assumption is that the PTS threshold for impulse sounds (such as airgun pulses as received close to the source) is at least 6 dB higher than the TTS threshold on a peak-pressure basis and probably greater than 6 dB (Southall
Given the higher level of sound necessary to cause PTS as compared with TTS, it is considerably less likely that PTS would occur. Baleen whales generally avoid the immediate area around operating seismic vessels, as do some other marine mammals.
In general, very little is known about the potential for seismic survey sounds (or other types of strong underwater sounds) to cause non-auditory physical effects in marine mammals. Such effects, if they occur at all, would presumably be limited to short distances and to activities that extend over a prolonged period. The available data do not allow identification of a specific exposure level above which non-auditory effects can be expected (Southall
Marine mammals close to underwater detonations of high explosives can be killed or severely injured, and the auditory organs are especially susceptible to injury (Ketten
Specific sound-related processes that lead to strandings and mortality are not well documented, but may include:
(1) Swimming in avoidance of a sound into shallow water;
(2) A change in behavior (such as a change in diving behavior) that might contribute to tissue damage, gas bubble formation, hypoxia, cardiac arrhythmia, hypertensive hemorrhage or other forms of trauma;
(3) A physiological change, such as a vestibular response leading to a behavioral change or stress-induced hemorrhagic diathesis, leading in turn to tissue damage; and
(4) Tissue damage directly from sound exposure, such as through acoustically-mediated bubble formation and growth or acoustic resonance of tissues.
Some of these mechanisms are unlikely to apply in the case of impulse sounds. However, there are indications that gas-bubble disease (analogous to “the bends”), induced in supersaturated tissue by a behavioral response to acoustic exposure, could be a pathologic mechanism for the strandings and mortality of some deep-diving cetaceans
Seismic pulses and mid-frequency sonar signals are quite different, and some mechanisms by which sonar sounds have been hypothesized to affect beaked whales are unlikely to apply to airgun pulses. Sounds produced by airgun arrays are broadband impulses with most of the energy below 1 kHz. Typical military mid-frequency sonar emits non-impulse sounds at frequencies of 2-10 kHz, generally with a relatively narrow bandwidth at any one time. A further difference between seismic surveys and naval exercises is that naval exercises can involve sound sources on more than one vessel. Thus, it is not appropriate to assume that there is a direct connection between the effects of military sonar and seismic surveys on marine mammals. However, evidence that sonar signals can, in special circumstances, lead (at least indirectly) to physical damage and mortality (
There is no conclusive evidence of cetacean strandings or deaths at sea as a result of exposure to seismic surveys, but a few cases of strandings in the general area where a seismic survey was ongoing have led to speculation concerning a possible link between seismic surveys and strandings. Suggestions that there was a link between seismic surveys and strandings of humpback whales in Brazil (Engel
UAGI intends to operate the Kongsberg EM 122 MBES from the source vessel during the proposed study. Sounds from the MBES are very short pings, occurring for 2-15 ms once every 5-20 s, depending on water depth. Most of the energy in the sound pulses emitted by this MBES is at frequencies near 12 kHz, and the maximum source level is 242 dB re 1 μPa (rms). The beam is narrow (1-2°) in fore-aft extent and wide (150°) in the cross-track extent. Each ping consists of eight (in water greater than 1,000 m [3,280 ft] deep) or four (in water less than 1,000 m [3,280 ft] deep) successive fan-shaped transmissions (segments) at different cross-track angles. Any given mammal at depth near the trackline would be in the main beam for only one or two of the nine segments. Also, marine mammals that encounter the Kongsberg EM 122 are unlikely to be subjected to repeated pulses because of the narrow fore-aft width of the beam and will receive only limited amounts of pulse energy because of the short pulses. Animals close to the ship (where the beam is narrowest) are especially unlikely to be ensonified for more than one 2-15 ms pulse (or two pulses if in the overlap area). Similarly, Kremser
Navy sonars that have been linked to avoidance reactions and stranding of cetaceans: (1) Generally have longer pulse duration than the Kongsberg EM 122; and (2) are often directed close to horizontally versus more downward for the MBES. The area of possible influence of the MBES is much smaller—a narrow band below the source vessel. Also, the duration of exposure for a given marine mammal can be much longer for naval sonar. During operation of this MBES for this proposed seismic survey, the individual pulses will be very short, and a given mammal would not receive many of the downward-directed pulses as the vessel passes by. Possible effects of a MBES on marine mammals are discussed next.
Captive bottlenose dolphins and a beluga whale exhibited changes in behavior when exposed to 1 s tonal signals at frequencies similar to those that will be emitted by the MBES used by UAGI and L-DEO (the ship operator), and to shorter broadband pulsed signals. Behavioral changes typically involved what appeared to be deliberate attempts to avoid the sound exposure (Schlundt
Very few data are available on the reactions of pinnipeds to echosounder sounds at frequencies similar to those used during seismic operations. Hastie and Janik (2007) conducted a series of behavioral response tests on two captive gray seals to determine their reactions to underwater operation of a 375 kHz multibeam imaging echosounder that included significant signal components down to 6 kHz. Results indicated that the two seals reacted to the signal by significantly increasing their dive durations. Because of the likely brevity of exposure to the MBES sounds,
NMFS believes that the brief exposure of marine mammals to one pulse, or small numbers of signals, from the MBES is not likely to result in the harassment of marine mammals.
UAGI also intends to operate a SBP from the source vessel during the proposed survey. Sounds from the SBP are very short pulses, occurring for 1-4 ms once every second. Most of the energy in the sound pulses emitted by the SBP is at 3.5 kHz, and the beam is directed downward. The SBP on the
Kremser
UAGI intends to operate an ADCP during the proposed seismic survey. Sounds from the ADCP are very short, occurring every 0.65-1.4 ms. Most of the energy in the sound emitted is at high frequencies (approximately 75 kHz). The ADCP produces sounds that are within the range of frequencies used by odontocetes that may occur in the proposed project area; however, it is outside the hearing range of mysticetes and at the extreme upper end of the hearing range for pinnipeds.
The potential effects to marine mammals from the acoustic sources described in this section of the document do not take into consideration the proposed monitoring and mitigation measures described later in this document (see the “Proposed Mitigation” and “Proposed Monitoring and Reporting” sections), which, as noted, are designed to ensure the least practicable impact on affected marine mammal species and stocks.
The proposed seismic survey is not anticipated to have any permanent impact on habitats used by the marine mammals in the proposed survey area, including the food sources they use (
One reason for the adoption of airguns as the standard energy source for marine seismic surveys is that, unlike explosives, they have not been associated with large-scale fish kills. However, existing information on the impacts of seismic surveys on marine fish populations is limited (see
The specific received sound levels at which permanent adverse effects to fish potentially could occur are little studied and largely unknown. Furthermore, the available information on the impacts of seismic surveys on marine fish is from studies of individuals or portions of a population; there have been no studies at the population scale. The studies of individual fish have often been on caged fish that were exposed to airgun pulses in situations not representative of an actual seismic survey. Thus, available information provides limited insight on possible real-world effects at the ocean or population scale.
Hastings and Popper (2005), Popper (2009), and Popper and Hastings (2009a,b) provided recent critical reviews of the known effects of sound on fish. The following sections provide a general synopsis of the available information on the effects of exposure to seismic and other anthropogenic sound as relevant to fish. The information comprises results from scientific studies of varying degrees of rigor plus some anecdotal information. Some of the data sources may have serious shortcomings in methods, analysis, interpretation, and reproducibility that must be considered when interpreting their results (see Hastings and Popper, 2005). Potential adverse effects of the program's sound sources on marine fish are noted.
Little is known about the mechanisms and characteristics of damage to fish that may be inflicted by exposure to seismic survey sounds. Few data have been presented in the peer-reviewed scientific literature. As far as UAGI and NMFS know, there are only two papers with proper experimental methods, controls, and careful pathological investigation implicating sounds produced by actual seismic survey airguns in causing adverse anatomical effects. One such study indicated anatomical damage, and the second indicated TTS in fish hearing. The anatomical case is McCauley
Wardle
Some studies have reported, some equivocally, that mortality of fish, fish eggs, or larvae can occur close to seismic sources (Kostyuchenko, 1973; Dalen and Knutsen, 1986; Booman
There is general concern about potential adverse effects of seismic operations on fisheries, namely a potential reduction in the “catchability” of fish involved in fisheries. Although reduced catch rates have been observed in some marine fisheries during seismic testing, in a number of cases the findings are confounded by other sources of disturbance (Dalen and Raknes, 1985; Dalen and Knutsen, 1986; Lokkeborg, 1991; Skalski
In general, any adverse effects on fish behavior or fisheries attributable to seismic testing may depend on the species in question and the nature of the fishery (season, duration, fishing method). They may also depend on the age of the fish, its motivational state, its size, and numerous other factors that are difficult, if not impossible, to quantify at this point, given such limited data on effects of airguns on fish, particularly under realistic at-sea conditions.
The existing body of information on the impacts of seismic survey sound on marine invertebrates is very limited. However, there is some unpublished and very limited evidence of the potential for adverse effects on invertebrates, thereby justifying further discussion and analysis of this issue. The three types of potential effects of exposure to seismic surveys on marine invertebrates are pathological, physiological, and behavioral. Based on the physical structure of their sensory organs, marine invertebrates appear to be specialized to respond to particle displacement components of an impinging sound field and not to the pressure component (Popper
The only information available on the impacts of seismic surveys on marine invertebrates involves studies of individuals; there have been no studies at the population scale. Thus, available information provides limited insight on possible real-world effects at the regional or ocean scale. The most important aspect of potential impacts concerns how exposure to seismic survey sound ultimately affects invertebrate populations and their viability, including availability to fisheries.
Literature reviews of the effects of seismic and other underwater sound on invertebrates were provided by Moriyasu
Some studies have suggested that seismic survey sound has a limited pathological impact on early developmental stages of crustaceans (Pearson
In conclusion, NMFS has preliminarily determined that UAGI's proposed marine seismic survey is not expected to have any habitat-related effects that could cause significant or long-term consequences for individual marine mammals or on the food sources that they utilize.
In order to issue an incidental take authorization (ITA) under section 101(a)(5)(D) of the MMPA, NMFS must, where applicable, set forth the permissible methods of taking pursuant to such activity, and other means of effecting the least practicable impact on such species or stock and its habitat,
UAGI and L-DEO have based the proposed mitigation measures described herein, to be implemented for the proposed seismic survey, on the following:
(1) Protocols used during previous L-DEO seismic research cruises as approved by NMFS; and
(2) Recommended best practices in Richardson
To reduce the potential for disturbance from acoustic stimuli associated with the proposed activities, UAGI and/or its designees has proposed to implement the following mitigation measures for marine mammals:
(1) Proposed exclusion zones;
(2) Power-down procedures;
(3) Shut-down procedures; and
(4) Ramp-up procedures.
Prior to submitting a final MMPA ITA request to NMFS, NSF works with the scientists that propose studies to determine when to conduct the research study. Dr. Coakley worked with L-DEO and NSF to identify potential time periods to carry out the proposed survey, taking into consideration key factors such as environmental conditions (
Received sound levels for the 10-airgun array have been predicted by MAI in relation to distance and direction from the airguns, and received sound levels for a single 40-in
A power-down involves decreasing the number of airguns in use such that the radius of the 180 dB (or 190 dB) zone is decreased to the extent that marine mammals are no longer in or about to enter the EZ. A power-down of the airgun array can also occur when the vessel is moving from one seismic line to another. During a power-down for mitigation, UAGI and L-DEO will operate one airgun. The continued operation of one airgun is intended to alert marine mammals to the presence of the seismic vessel in the area. In contrast, a shut-down occurs when the
If the PSVO detects a marine mammal outside the EZ, but it is likely to enter the EZ, the airguns will be powered-down before the animal is within the applicable EZ (dependent upon species). Likewise, if a marine mammal is already within the EZ when first detected, UAGI and L-DEO will power-down the airguns immediately. During a power-down of the airgun array, USGS will also operate the 40 in
Following a power-down, airgun activity will not resume until the marine mammal has cleared the EZ. UAGI and L-DEO will consider the animal to have cleared the EZ if:
• A PSVO has visually observed the animal leave the EZ, or
• A PSVO has not sighted the animal within the EZ for 15 min for species with shorter dive durations (
The airgun array will be ramped up gradually after the marine mammal has cleared the EZ (see
UAGI and L-DEO will shut down the operating airgun(s) if a marine mammal is seen within or approaching the EZ for the single airgun. A shut-down shall be implemented:
(1) If an animal enters the EZ of the single airgun after a power-down has been initiated; or
(2) If an animal is initially seen within the EZ of the single airgun when more than one airgun (typically the full airgun array) is operating.
UAGI and L-DEO shall not resume airgun activity until the marine mammal has cleared the EZ or until the PSVO is confident that the animal has left the vicinity of the vessel. Criteria for judging that the animal has cleared the EZ will be as described in the preceding section regarding a power-down.
UAGI and L-DEO shall follow a ramp-up procedure when the airgun array begins operating after a specified period without airgun operations or when a power-down has exceeded that period. UAGI proposes that, for the present cruise, this period would be approximately 8 min. L-DEO has used similar periods (approximately 8 to 10 min) during previous L-DEO surveys.
Ramp-up will begin with the smallest airgun in the array (40 in
If the complete EZ has not been visible for at least 30 min prior to the start of operations in either daylight or nighttime, ramp-up shall not commence unless at least one airgun (40 in
NMFS has carefully evaluated the applicant's proposed mitigation measures and considered a range of other measures in the context of ensuring that NMFS prescribes the means of effecting the least practicable impact on the affected marine mammal species and stocks and their habitat. Our evaluation of potential measures included consideration of the following factors in relation to one another:
• The manner in which, and the degree to which, the successful implementation of the measure is expected to minimize adverse impacts to marine mammals;
• The proven or likely efficacy of the specific measure to minimize adverse impacts as planned; and
• The practicability of the measure for applicant implementation.
Based on our evaluation of the applicant's proposed measures, NMFS has preliminarily determined that the mitigation measures proposed above provide the means of effecting the least practicable impact on marine mammal species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance. Proposed measures to ensure availability of such species or stock for taking for certain subsistence uses is discussed later in this document (see “Impact on Availability of Affected Species or Stock for Taking for Subsistence Uses” section).
In order to issue an ITA for an activity, section 101(a)(5)(A) of the MMPA states that NMFS must, where applicable, set forth “requirements pertaining to the monitoring and reporting of such taking.” The MMPA implementing regulations at 50 CFR 216.104 (a)(13) indicate that requests for ITAs must include the suggested means of accomplishing the necessary monitoring and reporting that will result in increased knowledge of the species and of the level of taking or impacts on populations of marine mammals that are expected to be present in the proposed action area.
UAGI proposes to sponsor marine mammal monitoring during the proposed project, in order to implement the proposed mitigation measures that require real-time monitoring and to satisfy the anticipated monitoring requirements of the IHA (if issued). UAGI's proposed Monitoring Plan is described next. UAGI understands that this monitoring plan will be subject to review by NMFS (as well as the public), and that refinements may be required. The monitoring work described here has been planned as a self-contained project independent of any other related monitoring projects that may be occurring simultaneously in the same regions. UAGI is prepared to discuss coordination of its monitoring program with any related work that might be done by other groups insofar as this is practical and desirable.
PSVOs will be based aboard the seismic source vessel and will watch for marine mammals near the vessel during daytime airgun operations and during any ramp-ups at night. PSVOs will also watch for marine mammals near the seismic vessel for at least 30 min prior to the start of airgun operations after an extended shut-down (as described in the “Proposed Mitigation” section earlier in this document). PSVOs will conduct observations during daytime periods when the seismic system is not operating for comparison of sighting rates and behavior with and without airgun operations and between acquisition periods. Based on PSVO observations, the airguns will be powered-down or shut-down when marine mammals are observed within or about to enter a designated EZ.
During seismic operations in the Arctic Ocean, at least five PSOs will be based aboard the
Two PSVOs will also be on visual watch during all nighttime ramp-ups of the seismic airguns. A third PSO will monitor the passive acoustic monitoring (PAM) equipment 24 hours a day to detect vocalizing marine mammals present in the action area. In summary, a typical daytime cruise would have scheduled two PSVOs on duty from the observation tower, and a third PSO on PAM. Other crew will also be instructed to assist in detecting marine mammals and implementing mitigation requirements (if practical). Before the start of the seismic survey, the crew will be given additional instruction on how to do so.
The
When marine mammals are detected within or about to enter the designated EZ, the airguns will immediately be powered-down or shut-down if necessary. The PSO(s) will continue to maintain watch to determine when the animal(s) are outside the EZ by visual confirmation. Airgun operations will not resume until the animal is confirmed to have left the EZ, or if not observed after 15 min for species with shorter dive durations (small odontocetes and pinnipeds) or 30 min for species with longer dive durations (mysticetes).
PAM will complement the visual monitoring program, when practicable. Visual monitoring typically is not effective during periods of poor visibility or at night, and even with good visibility, is unable to detect marine mammals when they are below the surface or beyond visual range.
Besides the three PSVOs, an additional Protected Species Acoustic Observer (PSAO) with primary responsibility for PAM will also be aboard the vessel. UAGI and L-DEO can use acoustic monitoring in addition to visual observations to improve detection, identification, and localization of marine mammals. The
The PAM system consists of hardware (
Ideally, the PSAO will monitor the towed hydrophones 24 hr per day at the seismic survey area during airgun operations and during most periods when the
One PSAO will monitor the acoustic detection system at any one time, by listening to the signals from two channels via headphones and/or speakers and watching the real-time spectrographic display for frequency ranges produced by marine mammals. PSAOs monitoring the acoustical data will be on shift for 1-6 hours at a time. Besides the PSVO, an additional PSAO with primary responsibility for PAM will also be aboard the source vessel. All PSVOs are expected to rotate through the PAM position, although the most experienced with acoustics will be on PAM duty more frequently.
When a vocalization is detected while visual observations are in progress, the PSAO will contact the PSVO immediately, to alert him/her to the presence of marine mammals (if they have not already been seen), and to allow a power-down or shut-down to be initiated, if required. The information regarding the call will be entered into a database. Data entry will include an acoustic encounter identification number, whether it was linked with a visual sighting, date, time when first and last heard and whenever any additional information was recorded, position and water depth when first detected, bearing if determinable, species or species group (
PSVOs will record data to estimate the numbers of marine mammals exposed to various received sound levels and to document apparent disturbance reactions or lack thereof. Data will be used to estimate numbers of animals potentially `taken' by harassment (as defined in the MMPA). They will also provide information needed to order a power-down or shut-down of the airguns when a marine mammal is within or near the EZ. Observations will also be made during daytime periods when the
When a sighting is made, the following information about the sighting will be recorded:
1. Species, group size, age/size/sex categories (if determinable), behavior when first sighted and after initial sighting, heading (if consistent), bearing and distance from seismic vessel, sighting cue, apparent reaction to the airguns or vessel (
2. Time, location, heading, speed, activity of the vessel, sea state, visibility, and sun glare.
The data listed under (2) will also be recorded at the start and end of each observation watch and during a watch whenever there is a change in one or more of the variables.
All observations and power-downs or shut-downs will be recorded in a standardized format. Data will be entered into an electronic database. The accuracy of the data entry will be verified by computerized data validity checks as the data are entered and by subsequent manual checking of the database. These procedures will allow initial summaries of data to be prepared during and shortly after the field program and will facilitate transfer of the data to statistical, graphical, and other programs for further processing and archiving.
Results from the vessel-based observations will provide:
1. The basis for real-time mitigation (airgun power-down or shut-down).
2. Information needed to estimate the number of marine mammals potentially taken by harassment, which must be reported to NMFS.
3. Data on the occurrence, distribution, and activities of marine mammals in the area where the seismic study is conducted.
4. Information to compare the distance and distribution of marine mammals relative to the source vessel at times with and without seismic activity.
5. Data on the behavior and movement patterns of marine mammals seen at times with and without seismic activity.
UAGI will submit a report to NMFS and NSF within 90 days after the end of the cruise. The report will describe the operations that were conducted and sightings of marine mammals near the operations. The report will provide full documentation of methods, results, and interpretation pertaining to all monitoring. The 90-day report will summarize the dates and locations of seismic operations and all marine mammal sightings (dates, times, locations, activities, associated seismic survey activities). The report will also include estimates of the number and nature of exposures that could result in “takes” of marine mammals by harassment or in other ways.
In the unanticipated event that the specified activity clearly causes the take of a marine mammal in a manner prohibited by the IHA (if issued), such as an injury (Level A harassment), serious injury or mortality (
• Time, date, and location (latitude/longitude) of the incident;
• Name and type of vessel involved;
• Vessel's speed during and leading up to the incident;
• Description of the incident;
• Status of all sound source use in the 24 hours preceding the incident;
• Water depth;
• Environmental conditions (
• Description of all marine mammal observations in the 24 hours preceding the incident;
• Species identification or description of the animal(s) involved;
• Fate of the animal(s); and
• Photographs or video footage of the animal(s) (if equipment is available).
In the event that UAGI discovers an injured or dead marine mammal, and the lead PSO determines that the cause of the injury or death is unknown and the death is relatively recent (
In the event that UAGI discovers an injured or dead marine mammal, and the lead PSO determines that the injury or death is not associated with or related to the activities authorized in the IHA (
Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as: “any act of pursuit, torment, or annoyance which (i) Has the potential to injure a marine mammal or marine mammal stock in the wild [Level A harassment]; or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering [Level B harassment].” Only take by Level B harassment is anticipated and proposed to be authorized as a result of the proposed marine seismic survey in the Arctic Ocean. Acoustic stimuli (
The following sections describe UAGI's methods to estimate take by incidental harassment and present the applicant's estimates of the numbers of marine mammals that could be affected during the proposed seismic program. The estimates are based on a consideration of the number of marine mammals that could be disturbed appreciably by operations with the 10-airgun array to be used during approximately 5,500 km (3,417.5 mi) of survey lines in the Arctic Ocean.
The anticipated radii of influence of the MBES, SBP, and ADCP are less than those for the airgun array. UAGI assumes that, during simultaneous operations of the airgun array and the other sources, any marine mammals close enough to be affected by the MBES, SBP, and ADCP would already be affected by the airguns. However, whether or not the airguns are operating simultaneously with the other sources, marine mammals are expected to exhibit no more than short-term and inconsequential responses to the MBES, SBP, and ADCP given their characteristics (
UAGI calculated densities using data from the Chukchi Sea for the fall in depth strata 35-50 m (115-164 ft), 51-200 m (167-656 ft), and greater than 200 m (656 ft), mean group sizes from the Beaufort Whale Aerial Survey Project (BWASP) database, and values for trackline detection probability bias and availability bias,
There is evidence of the occasional occurrence of humpback, minke, fin, and killer whales in the northern Chukchi Sea, but because they occur so infrequently in the Chukchi Sea, little to no data are available for the calculation of densities. Minimal densities have therefore been assigned to these species to allow for chance encounters.
Four species of pinnipeds under NMFS jurisdiction could be encountered in the proposed seismic survey area: ringed seal, bearded seal, ribbon seal, and spotted seal. Bengtson
Little information is available on spotted seal or ribbon seal densities in offshore areas of the Chukchi Sea. Spotted seal density in the summer was estimated by multiplying the ringed seal density by 0.02. This calculation was based on the ratio of the estimated Chukchi populations of the two species: 8% of the Alaskan population of spotted seals is present in the Chukchi Sea during the summer and fall (Rugh
Table 2 in this document (and Table 3 in UAGI's application) provides the estimated densities of marine mammals expected to occur in the proposed survey area. As noted previously, there is some uncertainty about the representativeness of the data and assumptions used in the calculations. Because few data were available for the survey area, UAGI calculated densities based on densities observed in adjacent areas of the northern Chukchi Sea, adjusted downward by various assumed factors (see above and UAGI's application). For species seen only rarely in the northern Chukchi Sea, UAGI assigned low densities. It is not known how closely the densities that were used reflect the actual densities that will be encountered; however, the approach used here is believed to be the best available at this time. The estimated numbers of individuals potentially exposed are presented below based on the 160-dB re 1 μParms criterion for all marine mammals.
UAGI's estimates of exposures to various sound levels assume that the proposed survey will be fully completed; in fact, the ensonified areas calculated using the planned number of line-kilometers have been increased by 25% to accommodate turns, lines that may need to be repeated, equipment testing, etc. As is typical during offshore ship surveys, inclement weather and equipment malfunctions are likely to cause delays and may limit the number of useful line-kilometers of seismic operations that can be undertaken. The
UAGI estimated the number of different individuals that may be exposed to airgun sounds with received levels greater than or equal to 160 dB re 1 μPa (rms) on one or more occasions by considering the total marine area that would be within the 160 dB radius around the operating airgun array on at least one occasion and the expected density of marine mammals. The number of possible exposures (including repeated exposures of the same individuals) can be estimated by considering the total marine area that would be within the 160 dB radius around the operating airguns, including areas of overlap. In the proposed survey, the seismic lines are widely spaced in the survey area, so few individual marine mammals would be exposed more than once during the survey. The area including overlap is only 1.3 times the area excluding overlap. Moreover, it is unlikely that a particular animal would stay in the area during the entire survey. The number of different individuals potentially exposed to received levels greater than or equal to 160 re 1 µPa (rms) was calculated by multiplying:
(1) The expected species density, times.
(2) The anticipated area to be ensonified to that level during airgun operations in each depth stratum, excluding overlap.
The area expected to be ensonified was determined by entering the planned survey lines into a MapInfo GIS, using the GIS to identify the relevant areas by
For species whose densities were the same regardless of water depth, UAGI used ensonified areas for all water depths to calculate numbers exposed. For species whose densities were different in water depths less than 200 m (656 ft) and greater than 200 m (656 ft; see Table 2 in this document and Table 3 in UAGI's application), UAGI used ensonified areas for tracklines in water depths less than 200 m (656 ft) and the sum of the ensonified areas in water depths 200-1,000 m (656-3,280 ft) and greater than 1,000 m (3,280 ft) and applied them to the different densities.
Table 4 in UAGI's application shows the estimates of the number of different individual marine mammals that potentially could be exposed to sounds greater than or equal to 160 dB re 1 μPa (rms) during the proposed seismic survey if no animals moved away from the survey vessel. Table 3 in this document presents the abundance of the different species or stocks, proposed take authorization, and the percentage of the regional population or stock. Table 4 in UAGI's application includes species beyond those presented in Table 3 in this document for which take is requested. Walrus and polar bears are not included in this document because those species are under the jurisdiction of the USFWS. Although presented in Table 4 in UAGI's application, no take has been requested and none is proposed to be authorized for narwhal or harbor porpoise. Because the harbor porpoise is mainly a shallow-water species, it is not expected to occur in the survey area. Narwhals are considered extralimital in Alaska, and any vagrants likely would be associated with sea ice. The
Applying the approach described above, approximately 122,530 km
UAGI and NSF will coordinate the planned marine mammal monitoring program associated with the seismic survey in the Arctic Ocean with other parties that may have interest in the area and/or be conducting marine mammal studies in the same region during the proposed seismic survey. No other marine mammal studies are expected to occur in the study area at the proposed time. However, other industry-funded seismic surveys may be occurring in the northeast Chukchi and/or western Beaufort Sea closer to shore, and those projects are likely to involve marine mammal monitoring. UAGI and NSF have coordinated, and will continue to coordinate, with other applicable Federal, State, and Borough agencies, and will comply with their requirements.
NMFS has defined “negligible impact” in 50 CFR 216.103 as “* * * an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.” In making a negligible impact determination, NMFS considers a variety of factors, including
For reasons stated previously in this document, no injuries or mortalities are anticipated to occur as a result of UAGI's proposed seismic survey, and none are proposed to be authorized by NMFS. Additionally, for reasons presented earlier in this document, temporary hearing impairment (and especially permanent hearing impairment) is not anticipated to occur during the proposed specified activity. Impacts to marine mammals are anticipated to be in the form of Level B behavioral harassment only, due to the brief duration and sporadic nature of the survey. Certain species may have a behavioral reaction (
While some of the species could potentially occur in the proposed survey area year-round, some species only occur at certain times of the year. In the fall, bowhead whales begin their westward migration through the Beaufort Sea in late August/early September. The whales usually reach Barrow around mid-September. It is likely that most bowhead whales will not enter the proposed survey area until about the second half of the proposed survey time period. Additionally, humpback and fin whales have only started to be sighted in the Chukchi Sea in the last 5-6 years. As the extent of Arctic sea ice begins to change, these species may be expanding their normal range further north. However, this is still considered the extreme northern edge of the range of these species, so it is unlikely that they will be present throughout the entire proposed survey time period.
Of the 11 marine mammal species likely to occur in the proposed survey area, three are listed as endangered under the ESA: Bowhead, humpback, and fin whale. All of these species are also considered depleted under the MMPA. As stated previously in this document, the affected bowhead whale stock has been increasing at a rate of 3.4% per year since 2001. On December 10, 2010, NMFS published a notification of proposed threatened status for subspecies of the ringed seal (75 FR 77476) and a notification of proposed threatened and not warranted status for subspecies and distinct population segments of the bearded seal (75 FR 77496) in the
As has been noted previously in this document, many cetacean species, especially mysticetes, may display avoidance reactions and not enter into areas close to the active airgun array. However, alternate areas are available to these species. The location of the survey is not a known feeding ground for these species. It is not used for breeding or nursing. Although ice seals breed and nurse in the Chukchi Sea, the survey occurs outside of the time for ice seal breeding or nursing in the Chukchi Sea.
The population estimates for the species that may potentially be taken as a result of UAGI's proposed seismic survey were presented earlier in this document. For reasons described earlier in this document, the maximum calculated number of individual marine mammals for each species that could potentially be taken by harassment is small relative to the overall population sizes (3% for ringed seals, 1.8% for beluga whales, and less than 1% of each of the other 9 marine mammal populations or stocks).
Based on the analysis contained herein of the likely effects of the specified activity on marine mammals and their habitat, and taking into consideration the implementation of the mitigation and monitoring measures, NMFS preliminarily finds that the proposed seismic survey will result in the incidental take of small numbers of marine mammals and that the total taking from UAGI's proposed activities will have a negligible impact on the affected species or stocks. Impact on
Subsistence remains the basis for Alaska Native culture and community. Marine mammals are legally hunted in Alaskan waters by coastal Alaska Natives. In rural Alaska, subsistence activities are often central to many aspects of human existence, including patterns of family life, artistic expression, and community religious and celebratory activities. Additionally, the animals taken for subsistence provide a significant portion of the food that will last the community throughout the year. The main species that are hunted include bowhead and beluga whales, ringed, spotted, and bearded seals, walruses, and polar bears. (As mentioned previously in this document, both the walrus and the polar bear are under the USFWS' jurisdiction.) The importance of each of these species varies among the communities and is largely based on availability.
Barrow and Wainwright, which is in the Chukchi Sea, are the two villages that are closest to the proposed survey area, which will be initiated more than 200 km (124 mi) offshore. Marine mammals are also hunted in the Beaufort Sea villages of Kaktovik and Nuiqsut (mostly from Cross Island). Other villages in the Chukchi Sea that hunt for marine mammals include Point Lay, Point Hope, Kivalina, and Kotzebue. The villages of Kivalina and Kotzebue are many hundreds of miles south of the proposed project area.
Bowhead whale hunting is the key activity in the subsistence economies of Barrow and two smaller communities to the east, Nuiqsut and Kaktovik. Bowhead whales are also hunted by communities along the Chukchi Sea. The community of Barrow hunts bowhead whales in both the spring and fall during the whales' seasonal migrations along the coast. The communities of Nuiqsut and Kaktovik participate only in the fall bowhead harvest. The spring hunt at Barrow occurs after leads open because of the deterioration of pack ice; the spring hunt typically occurs from early April until the first week of June. The fall migration of bowhead whales that summer in the eastern Beaufort Sea typically begins in late August or September. The location of the fall subsistence hunt depends on ice conditions and (in some years) industrial activities that influence the bowheads movements as they move west (Brower, 1996). In the fall,
The proposed survey will not have any impacts on the spring bowhead whale hunt by communities along the Chukchi Sea and Barrow, as those hunts are completed many months prior to the beginning of this proposed survey. The villages of Kaktovik and Nuiqsut are several hundred miles to the east of the proposed survey location. Therefore, no impacts are anticipated on the fall hunts at Kaktovik or Nuiqsut (Cross Island). The closest tracklines to Barrow are more than 200 km (124 mi) and in most cases between 250 and 800 km (155-497 mi) to the northwest of Barrow. The whales will reach Barrow before they enter into the proposed survey area.
Beluga whales are available to subsistence hunters at Barrow in the spring when pack-ice conditions deteriorate and leads open up. Belugas may remain in the area through June and sometimes into July and August in ice-free waters. Hunters usually wait until after the spring bowhead whale hunt is finished before turning their attention to hunting belugas. Few, if any, belugas are taken by Kaktovik and Nuiqsut hunters and only during the fall whale harvest. Along the Chukchi Sea, belugas are hunted during the spring and in the summer (between July and August) by residents of Wainwright and Point Hope. Near Point Lay, belugas are taken in June and July. During 2002-2006, Alaska Native subsistence hunters took a mean annual number of 25.4 beluga whales from the Beaufort Sea stock and 59 from the eastern Chukchi Sea stock. The average annual harvest of beluga whales taken by Barrow for 1962-1982 was five (MMS, 1996). The Alaska Beluga Whale Committee recorded that 23 beluga whales had been harvested by Barrow hunters from 1987 to 2002, ranging from 0 in 1987, 1988, and 1995 to the high of 8 in 1997 (Fuller and George, 1999; Alaska Beluga Whale Committee, 2002 cited in USDI/BLM, 2005).
UAGI's proposed seismic survey is not anticipated to impact beluga hunts conducted by villages of the North Slope. The timing of the proposed survey is after the spring and summer beluga harvests in the Chukchi Sea. Although hunting of beluga from Point Hope may extend into September, off Point Hope, the vessel will remain approximately 80 km (50 mi) from the coast, in transit northward to the study area.
Ringed seals are hunted by villagers along the Beaufort Sea coast mainly from October through June. Hunting for these smaller mammals is concentrated during winter because bowhead whales, bearded seals, and caribou are available through other seasons. Winter leads in the area off Point Barrow and along the barrier islands of Elson Lagoon to the east are used for hunting ringed seals. The average annual ringed seal harvest by the community of Barrow from the 1960s through much of the 1980s has been estimated as 394. Along the Chukchi Sea coast, ringed seals are
The spotted seal subsistence hunt on the Beaufort Sea coast peaks in July and August, at least in 1987-1990, but involves few animals. Spotted seals typically migrate south by October to overwinter in the Bering Sea. Admiralty Bay, less than 60 km (37 mi) to the east of Barrow (and more than 260 km [162 mi] from the proposed survey area), is a location where spotted seals are harvested. Spotted seals are also occasionally hunted in the area off Point Barrow and along the barrier islands of Elson Lagoon to the east (USDI/BLM, 2005). The average annual spotted seal harvest by the community of Barrow from 1987-1990 was one (Braund
The proposed seismic survey will take place at least 200 km offshore from the preferred nearshore harvest area of these seals. It is unlikely that accessibility to spotted seals during the subsistence hunt could be impaired during the
Bearded seals, although not favored for their meat, are important to subsistence activities in Barrow because of their skins. Six to nine bearded seal hides are used by whalers to cover each of the skin-covered boats traditionally used for spring whaling. Because of their valuable hides and large size, bearded seals are specifically sought. Bearded seals are harvested during the summer months in the Beaufort Sea (USDI/BLM, 2005). The summer hunt typically occurs near Thetis Island in July through August (prior to initiation of UAGI's proposed survey). The animals inhabit the environment around the ice floes in the drifting ice pack, so hunting usually occurs from boats in the drift ice. Braund
NMFS has defined “unmitigable adverse impact” in 50 CFR 216.103 as:
Noise emitted during the proposed seismic survey from the acoustic sources has the potential to impact marine mammals hunted by Native Alaskans. In the case of cetaceans, the most common reaction to anthropogenic sounds (as noted previously in this document) is avoidance of the ensonified area. In the case of bowhead whales, this often means that the animals divert from their normal migratory path by several kilometers. However, because the proposed survey occurs so far from any of the traditional hunting grounds and to the west of the fall bowhead hunting areas (meaning the whales would reach the hunting grounds before entering the survey area), it is not anticipated that there will be impacts to subsistence uses.
Regulations at 50 CFR 216.104(a)(12) require MMPA authorization applicants for activities that take place in Arctic waters to provide a POC or information that identifies what measures have been taken and/or will be taken to minimize adverse effects on the availability of marine mammals for subsistence purposes. UAGI has worked with the people of the North Slope Borough (NSB) to identify and avoid areas of potential conflict. The project's principal investigator (PI) contacted Dr. Glenn Sheehan of the Barrow Arctic Science Consortium and NSB biologist, Dr. Robert Suydam, on January 7, 2010, to inform them of the proposed study and the elements intended to minimize potential subsistence conflict. The PI presented the proposed UAGI survey at a meeting of the Alaska Eskimo Whaling Commission (AEWC) in Barrow on February 11, 2010. He explained the survey plans to the local residents, including NSB Department of Wildlife Management biologists, consulted with stakeholders about their concerns, and discussed the aspects of the survey designed to mitigate impacts. No major concerns were expressed. The PI also attended the 2011 AEWC meeting on February 17-18; representatives from all NSB communities attended. The only concern expressed was that AEWC would like a good communication link with the
As part of its MMPA IHA application, UAGI submitted a POC to NMFS. As noted in the POC, a Barrow resident knowledgeable about the mammals and fish of the area is expected to be included as a PSO aboard the
NMFS has preliminarily determined that UAGI's proposed marine seismic survey in the Arctic Ocean will not have an unmitigable adverse impact on the availability of marine mammal species or stocks for taking for subsistence uses.
Based on the measures described in UAGI's POC, the proposed mitigation and monitoring measures (described earlier in this document), and the project design itself, NMFS has determined preliminarily that there will not be an unmitigable adverse impact on subsistence uses from UAGI's marine seismic survey.
Three of the marine mammal species that could occur in the proposed seismic survey area are listed under the ESA: Bowhead whale; humpback whale; and fin whale. Under Section 7 of the ESA, NSF has initiated formal consultation with the NMFS, Office of Protected Resources, Endangered Species Division, on this proposed seismic survey. NMFS's Office of Protected Resources, Permits, Conservation and Education Division, has also initiated formal consultation under section 7 of the ESA with NMFS' Office of Protected Resources, Endangered Species Division, to obtain a Biological Opinion evaluating the effects of issuing the IHA on ESA-listed marine mammals and, if appropriate, authorizing incidental take. NMFS will conclude formal section 7 consultation prior to making a determination on whether or not to issue the IHA. If the IHA is issued, UAGI, in addition to the mitigation and monitoring requirements included in the IHA, will be required to comply with the Terms and Conditions of the Incidental Take Statement corresponding to NMFS's Biological Opinion issued to both NSF and NMFS's Office of Protected Resources. Although the ringed seal and bearded seal have been proposed for listing under the ESA, neither of the listings will be finalized prior to conclusion of the proposed seismic survey. Therefore, consultation pursuant to section 7 of the ESA is not needed for these species.
With its complete application, UAGI and NSF provided NMFS an EA analyzing the direct, indirect, and cumulative environmental impacts of the proposed specified activities on marine mammals including those listed as threatened or endangered under the ESA. The EA, prepared by LGL on behalf of NSF is entitled “Environmental Assessment of a Marine Geophysical Survey by the R/V Marcus G. Langseth in the Arctic Ocean, September-October 2011.” Prior to making a final decision on the IHA application, NMFS will either prepare an independent EA, or, after review and evaluation of the NSF EA for consistency with the regulations published by the Council on Environmental Quality and NOAA Administrative Order 216-6, Environmental Review Procedures for Implementing the National Environmental Policy Act, adopt the NSF EA and make a decision of whether or not to issue a Finding of No Significant Impact.
As a result of these preliminary determinations, NMFS proposes to authorize the take of marine mammals incidental to UAGI's proposed marine seismic survey in the Arctic Ocean, provided the previously mentioned mitigation, monitoring, and reporting requirements are incorporated.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of issuance of a Letter of Authorization.
In accordance with the Marine Mammal Protection Act (MMPA), as amended, and implementing regulations, notification is hereby given that a Letter of Authorization (LOA) has been issued to Neptune LNG LLC (Neptune) to take marine mammals, by harassment, incidental to port commissioning and operations, including maintenance and repair activities, at the Neptune Deepwater Port (the Port) in Massachusetts Bay.
Effective from July 12, 2011, through July 10, 2016.
The LOA and supporting documentation may be obtained by writing to Michael Payne, Chief, Permits, Conservation and Education Division, Office of Protected Resources, NMFS, 1315 East-West Highway, Silver Spring, MD 20910, calling the contact listed under
The Final Environmental Impact Statement (Final EIS) on the Neptune Deepwater Port License Application authored by the Maritime Administration (MARAD) and U.S. Coast Guard (USCG) is available for viewing at
Section 101(a)(5)(A) of the MMPA (16 U.S.C. 1361
Authorization for incidental takings may be granted for periods up to 5 years, after notification and opportunity for public comment, if NMFS finds that the taking will have a negligible impact on the species or stock(s), will not have an unmitigable adverse impact on the
Regulations governing the take of 14 species of marine mammals, by Level B harassment only, incidental to operation and repair and maintenance activities at the Neptune Port off Massachusetts were issued on June 13, 2011 (76 FR 34157). These regulations are effective from July 11, 2011, through July 10, 2016 (76 FR 35995, June 21, 2011). The species which are authorized for taking are: North Atlantic right whale; humpback whale; fin whale; sei whale; minke whale; long-finned pilot whale; killer whale; Atlantic white-sided dolphin; harbor porpoise; common dolphin; Risso's dolphin; bottlenose dolphin; harbor seal; and gray seal. For detailed information on this action, please refer to the final rule and correction to the final rule (76 FR 34157, June 13, 2011; 76 FR 35995, June 21, 2011). These regulations include mitigation, monitoring, and reporting requirements for the incidental take of marine mammals during operation and repair and maintenance activities at the Neptune Port.
This LOA is effective from July 12, 2011, through July 10, 2016, and authorizes the incidental take of the 14 marine mammal species listed above that may result from port commissioning and operations, including maintenance and repair activities, at the Neptune Deepwater Port off Massachusetts. Once the Port is fully operational, it is anticipated that there may be up to 50 shuttle regasification vessel (SRV) trips per year.
Potential effects of Neptune's port operations and maintenance/repair activities would most likely be acoustic in nature. LNG port operations and maintenance/repair activities introduce sound into the marine environment. Potential acoustic effects on marine mammals relate to sound produced by thrusters during maneuvering of the SRVs while docking and undocking, occasional weathervaning at the port, and during thruster use of dynamic positioning maintenance vessels should a major repair be necessary. Marine mammals may experience masking and behavioral disturbance.
Take of marine mammals will be minimized through the implementation of the following mitigation measures: (1) Restricting repair and maintenance activities to the period between May 1 and November 30, to the greatest extent practicable, so that acoustic disturbance to the endangered North Atlantic right whale can largely be avoided; (2) using NMFS-approved protected species observers (PSOs) onboard vessels and bioacoustic technicians; (3) taking appropriate actions to minimize the risk of striking whales, including reducing speed to 10 knots or less in certain seasons and areas and alerting personnel responsible for navigation and lookout duties to concentrate their efforts when a marine mammal is sighted; (4) remaining 1 km (0.6 mi) away from North Atlantic right whales and other whales to the extent possible while moving, and PSOs will direct a moving vessel to slow to idle if a baleen whale is seen less than 1 km (0.6 mi) from the vessel; (5) remaining 91 m (100 yd) away from all other marine mammal species; (6) ceasing any noise emitting activities that exceed a source level of 139 dB re 1 µPa if a right whale is sighted within or approaching to a distance of 457 m (500 yd); (7) ceasing any noise emitting activities that exceed a source level of 139 dB re 1 µPa if a marine mammal other than a right whale is sighted within or approaching to a distance of 91 m (100 yd); and (8) implementing passive acoustic monitoring of marine mammals to supplement the effectiveness of visual sightings. Additionally, the rule includes an adaptive management component that allows for timely modification of mitigation or monitoring measures based on new information, when appropriate. No injury or mortality is anticipated, and none is authorized.
Through this LOA, Neptune is required to monitor for marine mammals using both visual observers (
Consumer Product Safety Commission.
Notice.
It is the policy of the Commission to publish settlements which it provisionally accepts under the Consumer Product Safety Act in the
Any interested person may ask the Commission not to accept this agreement or otherwise comment on its contents by filing a written request with the Office of the Secretary by July 29, 2011.
Persons wishing to comment on this Settlement Agreement should send written comments to the Comment 11-C0006, Office of the Secretary, Consumer Product Safety Commission, 4330 East-West Highway, Room 820, Bethesda, Maryland 20814-4408.
Seth B. Popkin, Lead Trial Attorney, Division of Enforcement and Information, Office of the General Counsel, Consumer Product Safety Commission, 4330 East-West Highway, Bethesda, Maryland 20814-4408; telephone (301) 504-7612.
The text of the Agreement and Order appears below.
1. In accordance with 16 CFR 1118.20, Macy's, Inc. (“Macy's”) and the U.S. Consumer Product Safety Commission (“Commission”) staff (“Staff”) enter into this Settlement Agreement (“Agreement”). The Agreement and the
2. Staff is the staff of the Commission, an independent Federal regulatory agency established pursuant to, and responsible for the enforcement of, the Consumer Product Safety Act, 15 U.S.C. 2051-2089 (“CPSA”).
3. Macy's is a corporation organized and existing under the laws of Delaware, with its principal offices located in Cincinnati, Ohio. At all relevant times, Macy's sold apparel and other products.
4. During periods of time from April 2006 through October 2010, Macy's, through its subsidiaries, imported, sold, and/or held for sale various quantities of the following children's upper outerwear products with drawstrings at the neck: Quiksilver, Inc.—Hide & Seek hooded sweatshirts; Jerry Leigh of California, Inc.—Harajuku Lovers hooded jackets; La Jolla Sport USA, Inc.—O'Neill hooded sweatshirts; Dysfunctional Clothing, LLC—Lost hooded sweatshirts; Macy's Merchandising Group, Inc.—Epic Threads hooded sweatshirts; Macy's Merchandising Group, Inc.—Greendog sweaters; C-MRK, Inc.—Ocean Current hooded sweatshirts; NTD Apparel, Inc.—Hello Kitty hooded sweatshirts; S. Rothschild & Co., Inc.—wool coats; and VF Contemporary Brands, Inc.—Splendid hooded jackets and hooded vest sets. The products identified in this paragraph are collectively referred to herein as “Garments.”
5. Macy's sold the Garments, and/or held the Garments for sale, to consumers.
6. The Garments are “consumer product[s],” and, at all relevant times, Macy's was a “manufacturer” and/or “retailer” of those consumer products, which were “distributed in commerce,” as those terms are defined in CPSA sections 3(a)(5), (8), (11), and (13), 15 U.S.C. 2052(a)(5), (8), (11), and (13).
7. In February 1996, Staff issued the Guidelines for Drawstrings on Children's Upper Outerwear (“Guidelines”) to help prevent children from strangling or entangling on neck and waist drawstrings. The Guidelines state that drawstrings can cause, and have caused, injuries and deaths when they catch on items such as playground equipment, bus doors, or cribs. In the Guidelines, Staff recommends that no children's upper outerwear in sizes 2T to 12 be manufactured or sold to consumers with hood and neck drawstrings.
8. In June 1997, ASTM adopted a voluntary standard (ASTM F1816-97) incorporating the Guidelines. The Guidelines state that firms should be aware of the hazards associated with drawstrings and should ensure that garments they sell conform to the voluntary standard.
9. On May 19, 2006, the Commission posted on its website a letter from the Commission's Director of the Office of Compliance to manufacturers, importers, and retailers of children's upper outerwear. The letter urges them to make certain that all children's upper outerwear sold in the United States complies with ASTM F1816-97. The letter states that Staff considers children's upper outerwear with drawstrings at the hood or neck area to be defective and to present a substantial risk of injury to young children under Federal Hazardous Substances Act (“FHSA”) section 15(c), 15 U.S.C. 1274(c). The letter also references the CPSA's section 15(b) (15 U.S.C. 2064(b)) reporting requirements.
10. Macy's informed the Commission that there had been no reported incidents or injuries associated with the Garments.
11. Macy's distribution in commerce of the Garments did not meet either the Guidelines or ASTM F1816-97, failed to comport with Staff's May 2006 defect notice, and posed a strangulation hazard to children.
12. The Commission, in cooperation with Macy's and/or other firms that were the Garments' manufacturers, importers, or distributors, announced recalls of the Garments.
13. Based in part on information available through the sources set forth in paragraphs 7 through 9 herein, Macy's had presumed and actual knowledge that the Garments distributed in commerce posed a strangulation hazard and presented a substantial risk of injury to children under FHSA section 15(c)(1), 15 U.S.C. 1274(c)(1). Macy's obtained information that reasonably supported the conclusion that the Garments contained a defect that could create a substantial product hazard or that the Garments created an unreasonable risk of serious injury or death. Pursuant to CPSA sections 15(b)(3) and (4), 15 U.S.C. 2064(b)(3) and (4), Macy's was required to immediately inform the Commission of the defect and risk.
14. Macy's knowingly failed to immediately inform the Commission about the Garments as required by CPSA sections 15(b)(3) and (4), 15 U.S.C. 2064(b)(3) and (4), and as the term “knowingly” is defined in CPSA section 20(d), 15 U.S.C. 2069(d). This failure violated CPSA section 19(a)(4), 15 U.S.C. 2068(a)(4). Pursuant to CPSA section 20, 15 U.S.C. 2069, this knowing failure subjected Macy's to civil penalties.
15. On multiple occasions from March 2009 to January 2010, Macy's offered Garments for sale, sold Garments, and/or distributed Garments in commerce that were subject to voluntary corrective action taken by the Garments' manufacturers, in consultation with the Commission. The Commission notified the public of that action, or Macy's knew or should have known of that action.
16. Macy's knowingly engaged in the acts alleged in paragraph 15 as the term “knowingly” is defined in CPSA section 20(d), 15 U.S.C. 2069(d). These acts violated CPSA section 19(a)(2)(B), 15 U.S.C. 2068(a)(2)(B). Pursuant to CPSA section 20, 15 U.S.C. 2069, these acts subjected Macy's to civil penalties.
17. Macy's denies Staff's allegations above, including, but not limited to, any claim that Macy's failed to timely report to the Commission the sale or distribution of any children's upper outerwear products with drawstrings pursuant to section 15(b) of the CPSA.
18. Macy's promptly notified the Commission pursuant to section 15(b) of the CPSA upon learning that certain children's upper outerwear products contained drawstrings.
19. Under the CPSA, the Commission has jurisdiction over this matter and over Macy's.
20. The parties enter into the Agreement for settlement purposes only. The Agreement does not constitute an admission by Macy's, or a determination by the Commission, that Macy's knowingly violated the CPSA.
21. In settlement of Staff's allegations, Macy's shall pay a civil penalty in the amount of seven hundred fifty thousand dollars ($750,000.00). The civil penalty shall be paid within twenty (20) calendar days of service of the Commission's final Order accepting the Agreement. The payment shall be made electronically to the Commission via
22. Macy's agrees that it will not seek or accept, directly or indirectly, indemnification, reimbursement, insurance, or any other form of compensation or payment, including, but not limited to, cash, account credit, or set-off, from any vendor or supplier from which Macy's acquired the Garments, or from any other firm or person, for the civil penalty that Macy's
23. Upon provisional acceptance of the Agreement, the Agreement shall be placed on the public record and published in the
24. Macy's shall conduct annual training of all employees responsible for purchasing children's upper outerwear, including training regarding all drawstring prohibitions, restrictions, guidelines, rules, and laws, and shall include such training when first hiring or assigning employees responsible for purchasing children's upper outerwear.
25. Within twenty (20) calendar days of service of the Commission's final Order accepting the Agreement, Macy's shall conduct a comprehensive review of its existing children's apparel inventory to identify any children's upper outerwear bearing drawstrings at the neck (“Drawstring Garments”).
26. Within ten (10) calendar days of the completion of the review Macy's conducts pursuant to paragraph 25, Macy's shall submit to Staff an Inventory Review Completion Report, covering the review that Macy's conducted pursuant to paragraph 25. The report shall, at a minimum, include the following:
a. A comprehensive list of all Drawstring Garments that Macy's has identified, including, but not limited to, the following: item description; style number(s); garment sizes in inventory; number of units of each size in inventory; date(s) of purchase; identity of the company/ies from which the garment was purchased; and (if applicable) the period of time during which Macy's sold and/or offered for sale the Drawstring Garment.
b. One sample of each available size of each Drawstring Garment identified during the inventory review;
c. A description of the step(s) that Macy's has taken to eliminate the strangulation hazards posed by each of the Drawstring Garments; and
d. The following certification signed by an officer of Macy's:
Pursuant to 28 U.S.C. 1746, I certify under penalty of perjury that I have examined and am familiar with the information submitted in this document and all attachments, and that the information is true and correct. I am aware that there are significant penalties for submitting false information to Federal officials, including the possibility of fines and imprisonment.
The report shall be directed to the following Staff:Seth B. Popkin, Lead Trial Attorney,Office of the General Counsel,Division of Compliance,U.S. Consumer Product Safety Commission,4330 East-West Highway,Bethesda, MD 20814.
27. Upon the Commission's final acceptance of the Agreement and issuance of the final Order, Macy's knowingly, voluntarily, and completely waives any rights it may have in this matter to the following: (1) An administrative or judicial hearing; (2) judicial review or other challenge or contest of the validity of the Order or of the Commission's actions; (3) a determination by the Commission of whether Macy's failed to comply with the CPSA and its underlying regulations; (4) a statement of findings of fact and conclusions of law; and (5) any claims under the Equal Access to Justice Act.
28. The Commission may publicize the terms of the Agreement and the Order.
29. The Agreement and the Order shall apply to, and be binding upon, Macy's and each of its successors and assigns.
30. The Commission issues the Order under the provisions of the CPSA, and violation of the Order may subject Macy's and each of its successors and assigns to appropriate legal action.
31. The Agreement may be used in interpreting the Order. Understandings, agreements, representations, or interpretations apart from those contained in the Agreement and the Order may not be used to vary or contradict their terms. The Agreement shall not be waived, amended, modified, or otherwise altered without written agreement thereto executed by the party against whom such waiver, amendment, modification, or alteration is sought to be enforced.
32. If any provision of the Agreement and the Order is held to be illegal, invalid, or unenforceable under present or future laws effective during the terms of the Agreement and the Order, such provision shall be fully severable. The balance of the Agreement and the Order shall remain in full force and effect, unless the Commission and Macy's agree that severing the provision materially affects the purpose of the Agreement and the Order.
Dated: 6/21/11.
Dated: 6/22/11.
Dated: 6/28/11.
Upon consideration of the Settlement Agreement entered into between Macy's, Inc. (“Macy's”) and the U.S. Consumer Product Safety Commission (“Commission”) staff, and the Commission having jurisdiction over the subject matter and over Macy's, and it appearing that the Settlement Agreement and the Order are in the public interest, it is
By Order of the Commission.
Department of the Army, DoD.
Meeting notice.
Under the provisions of the Federal Advisory Committee Act of 1972 (5 U.S.C., Appendix, as amended), the Government in the Sunshine Act of 1976 (5 U.S.C. 552b, as amended), and 41 CFR 102-3.150, the Department of Defense announces that the following Federal advisory committee meeting will take place:
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Any member of the public is permitted to file a written statement with the USMA Board of Visitors. Written statements should be sent to the Designated Federal Officer (DFO) at: United States Military Academy, Office of the Secretary of the General Staff (MASG), 646 Swift Road, West Point, NY 10996-1905 or faxed to the Designated Federal Officer (DFO) at (845) 938-3214. Written statements must be received no later than five working days prior to the next meeting in order to provide time for member consideration. By rule, no member of the public attending open meetings will be allowed to present questions from the floor or speak to any issue under consideration by the Board.
The Committee's Designated Federal Officer or Point of Contact is Ms. Joy A. Pasquazi, (845) 938-5078,
Department of Education.
Comment Request.
The Director, Information Collection Clearance Division, Privacy, Information and Records Management Services, Office of Management, invites comments on the submission for OMB review as required by the Paperwork Reduction Act of 1995 (Pub. L. 104-13).
Interested persons are invited to submit comments on or before August 15, 2011.
Written comments should be addressed to the Office of Information and Regulatory Affairs, Attention: Education Desk Officer, Office of Management and Budget, 725 17th Street, NW., Room 10222, New Executive Office Building, Washington, DC 20503, be faxed to (202) 395-5806 or e-mailed to
Section 3506 of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35) requires that the Office of Management and Budget (OMB) provide interested Federal agencies and the public an early opportunity to comment on information collection requests. The OMB is particularly interested in comments which: (1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) Enhance the quality, utility, and clarity of the information to be collected; and (4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Copies of the information collection submission for OMB review may be accessed from the RegInfo.gov Web site at
Individuals who use a telecommunications device for the deaf (TDD) may call the Federal Information
Office of Innovation and Improvement, Department of Education.
Notice.
Arts in Education National Program.
Notice inviting applications for new awards for fiscal year (FY) 2011.
Dates:
This priority is:
High-quality projects that are designed to develop and implement, or expand, initiatives in arts education and arts integration on a national level for pre-kindergarten-through-grade-12 children and youth, with special emphasis on serving students from low-income families and students with disabilities.
In order to meet this priority, an applicant must demonstrate that the project for which it seeks funding will provide services and develop initiatives in multiple schools, school districts, and communities throughout the country.
This priority is:
Projects that are supported by strong or moderate evidence. A project that is supported by strong evidence (as defined in this notice) will receive more points than a project that is supported by moderate evidence (as defined in this notice).
A project must describe how it would (a) Serve low-income students and students with disabilities; and (b) implement the following activities on a national level:
1. Professional development based on national standards for pre-kindergarten-through-grade-12 arts educators.
2. Development and dissemination of instructional materials, including online resources, in multiple arts disciplines for arts educators.
3. Arts-based educational programming in music, dance, theater, media arts, and visual arts, including folk arts for pre-kindergarten-through-grade-12 students and arts educators.
4. Community and national outreach activities that strengthen and expand partnerships among schools, school districts, and communities throughout the country.
As used in this notice—
(1) At least one well-designed and well-implemented experimental or quasi-experimental study supporting the effectiveness of the practice, strategy, or program, with small sample sizes or other conditions of implementation or analysis that limit generalizability;
(2) At least one well-designed and well-implemented experimental or quasi-experimental study that does not demonstrate equivalence between the intervention and comparison groups at program entry but that has no other major flaws related to internal validity; or
(3) Correlational research with strong statistical controls for selection bias and for discerning the influence of internal factors.
(1) More than one well-designed and well-implemented (as defined in this notice) experimental study (as defined in this notice) or well-designed and well-implemented (as defined in this notice) quasi-experimental study (as defined in this notice) that supports the effectiveness of the practice, strategy, or program; or
(2) One large, well-designed and well-implemented randomized controlled, multisite trial that supports the effectiveness of the practice, strategy, or program.
The Department is not bound by any estimates in this notice.
The applicant should propose to use the entire amount of available funds ($6,654,000) during the twelve month budget period. If additional funds subsequently become available, we may make continuation awards.
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If you use a telecommunications device for the deaf (TDD), call the
Individuals with disabilities can obtain a copy of the application package in an accessible format (
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• A “page” is 8.5″ x 11″, on one side only, with 1″ margins at the top, bottom, and both sides.
• Double space (no more than three lines per vertical inch) all text in the application narrative, including titles, headings, footnotes, quotations, references, and captions, as well as all text in charts, tables, figures, and graphs.
• Use a font that is either 12 point or larger or no smaller than 10 pitch (characters per inch).
• Use one of the following fonts: Times New Roman, Courier, Courier New, or Arial.
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Applications for a grant under this competition must be submitted in paper format by mail or hand delivery. For information (including dates and times) about how to submit your application by mail or hand delivery, please refer to section IV.7.
We do not consider an application that does not comply with the deadline requirements.
Individuals with disabilities who need an accommodation or auxiliary aid in connection with the application process should contact the person listed under
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a. Have a Data Universal Numbering System (DUNS) number and a Taxpayer Identification Number (TIN);
b. Register both your DUNS number and TIN with the Central Contractor Registry (CCR), the Government's primary registrant database;
c. Provide your DUNS number and TIN on your application; and
d. Maintain an active CCR registration with current information while your application is under review by the Department and, if you are awarded a grant, during the project period.
You can obtain a DUNS number from Dun and Bradstreet. A DUNS number can be created within one business day.
If you are a corporate entity, agency, institution, or organization, you can obtain a TIN from the Internal Revenue Service. If you are an individual, you can obtain a TIN from the Internal Revenue Service or the Social Security Administration. If you need a new TIN, please allow 2-5 weeks for your TIN to become active.
The CCR registration process may take five or more business days to complete. If you are currently registered with the CCR, you may not need to make any changes. However, please make certain that the TIN associated with your DUNS number is correct. Also note that you will need to update your CCR registration on an annual basis. This may take three or more business days to complete.
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Applications for grants under this program must be submitted in paper format by mail or hand delivery.
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If you submit your application by mail (through the U.S. Postal Service or a commercial carrier), you must mail the original and two copies of your application, on or before the application deadline date, to the Department at the following address:U.S. Department of Education,Application Control Center,
You must show proof of mailing consisting of one of the following:
(1) A legibly dated U.S. Postal Service postmark.
(2) A legible mail receipt with the date of mailing stamped by the U.S. Postal Service.
(3) A dated shipping label, invoice, or receipt from a commercial carrier.
(4) Any other proof of mailing acceptable to the Secretary of the U.S. Department of Education.
If you mail your application through the U.S. Postal Service, we do not accept either of the following as proof of mailing:
(1) A private metered postmark.
(2) A mail receipt that is not dated by the U.S. Postal Service.
If your application is postmarked after the application deadline date, we will not consider your application.
The U.S. Postal Service does not uniformly provide a dated postmark. Before relying on this method, you should check with your local post office.
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If you submit your application by hand delivery, you (or a courier service) must deliver the original and two copies of your application by hand, on or before the application deadline date, to the Department at the following address:U.S. Department of Education,Application Control Center,
(1) You must indicate on the envelope and—if not provided by the Department—in Item 11 of the SF 424 the CFDA number, including suffix letter, if any, of the competition under which you are submitting your application; and
(2) The Application Control Center will mail to you a notification of receipt of your grant application. If you do not receive this notification within 15 business days from the application deadline date, you should call the U.S. Department of Education Application Control Center at (202) 245-6288.
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The maximum score for each criterion is indicated in parentheses. The maximum score for all of the selection criteria is 100 points. The total maximum score of an application is 110 points (100 points under the selection criteria and an additional 10 points under the competitive preference priority). Each criterion also includes the factors that the reviewers will consider in determining how well an application meets the criterion. The notes following the selection criteria are provided as guidance to help applicants in preparing their applications, and are not required by statute or regulations.
The selection criteria are as follows:
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(a) The national significance of the proposed project.
(b) The extent to which the proposed project is likely to build local capacity to provide, improve, or expand services that address the needs of children and youth, with special emphasis on serving students from low-income families and students with disabilities.
(c) The extent to which the applicant has a history of three or more years of demonstrated excellence in the areas of arts education and arts integration on a national scale.
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(a) The extent to which the design of the proposed project is appropriate to, and will successfully address, the needs of pre-kindergarten-through-grade-12 children and youth, with special emphasis on serving students from low-income families and students with disabilities.
(b) The extent to which the proposed project will provide high-quality professional development for pre-kindergarten-through-grade-12 arts educators and other staff who provide instruction in music, dance, drama, media arts, or visual arts, including folk arts.
(c) The extent to which the proposed project will develop and disseminate instructional materials, including online resources, in multiple arts disciplines for arts educators and other instructional staff.
(d) The extent to which the proposed project will support arts-based educational programming.
(e) The extent to which the proposed project will provide community and national outreach.
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(a) The extent to which the services to be provided by the proposed project involve the collaboration of appropriate partners in order to maximize the effectiveness of project services.
(b) The extent to which the proposed project will provide services and initiatives that will reach students and educators in multiple schools, school districts, and communities throughout the country.
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(a) The extent to which the methods of evaluation include the use of objective performance measures that are clearly related to the intended outcomes of the project and will produce quantitative and qualitative data to the extent possible.
(b) The extent to which the methods of evaluation will provide performance feedback and permit periodic assessment of progress toward achieving intended outcomes.
A strong evaluation plan should be included in the application narrative and should be used, as appropriate, to shape the development of the project from the beginning of the grant period. The evaluation plan should include benchmarks to monitor progress toward specific project objectives and also outcome measures to assess the impact on teaching and learning, or other important outcomes for project participants. More specifically, the plan should identify the individual or organization that has agreed to serve as evaluator for the project and describe the qualifications of that evaluator. The plan should describe the evaluation design, indicating: (1) What types of data will be collected; (2) when various types of data will be collected; (3) what methods will be used; (4) what instruments will be developed and when these instruments will be developed; (5) how data will be analyzed; (6) when reports of results and outcomes will be available; and (7) how the applicant will use the information collected through the evaluation to monitor progress of the funded project and to provide accountability information both about success at the initial site and about effective strategies for replication in other settings. Applicants are encouraged to devote an appropriate level of resources to project evaluation.
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In addition, in making a competitive grant award, the Secretary also requires various assurances including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department of Education (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
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If your application is not evaluated or not selected for funding, we notify you.
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We reference the regulations outlining the terms and conditions of an award in the
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(b) At the end of your project period, you must submit a final performance report, including financial information, as directed by the Secretary. If you receive a multi-year award, you must submit an annual performance report that provides the most current performance and financial expenditure information as directed by the Secretary under 34 CFR 75.118. The Secretary may also require more frequent performance reports under 34 CFR 75.720(c). For specific requirements on reporting, please go to
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Carolyn Warren, U.S. Department of Education, 400 Maryland Avenue, SW., Room 4W209, Washington, DC 20202-5950.
If you use a TDD, call the FRS, toll free, at 1-800-877-8339.
You may also access documents of the Department published in the
Environmental Protection Agency (EPA).
Notice.
The Regional Administrator of EPA Region 10 is hereby granting a waiver from the Buy American requirements of ARRA Section 1605(a) under the authority of Section 1605(b)(2) [manufactured goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality] to the City for the purchase of Greensand Plus pressure filter media, manufactured in Brazil. This is a project specific waiver and only applies to the use of the specified products for the ARRA project being proposed. Any other ARRA recipient that wishes to use the same product must apply for a separate waiver based on project specific circumstances. The waiver applicant states that the project requires the Greensand Plus filter media for use in their new shallow aquifer treatment plant. The design specifications of the project require a combination treatment process comprised of greensand filtration and MIEX ® treatment. The greensand filtration process will primarily target the removal of iron and manganese, whereas the proprietary MIEX ® process targets removal of dissolved organic carbon and other anionic species. Greensand Plus is currently used in the City's existing water treatment plant 1. In 2005, the City utilized Greensand Plus for their greensand filter media during pilot testing, and identified that product as the desired filter media for the proposed water treatment plant.
The Regional Administrator is making this determination based on the review and recommendations of the Drinking Water Unit. The City has provided sufficient documentation to support their request.
July 14, 2011.
Johnny Clark, DWSRF ARRA Program Management Analyst, Drinking Water Unit, Office of Water & Watersheds (OWW), (206) 553-0082, U.S. EPA Region 10 (OWW-136), 1200 Sixth Avenue, Suite 900, Seattle, WA 98101.
In accordance with ARRA Section 1605(c), the EPA hereby provides notice that it is granting a project waiver of the requirements of Section 1605(a) of Public Law 111-5, Buy American requirements, to the City for purchase of non-domestic manufactured Greensand Plus pressure filter media. The City is replacing an existing deep aquifer water treatment plant with a new shallow aquifer water treatment plant. The shallow aquifer water supply contains levels of iron, manganese, and color near or exceeding their secondary maximum contaminant levels, and also has detectable levels of hydrogen sulfide, ammonia, and organic nitrogen, as well as relatively high total organic carbon. The proposed new shallow aquifer treatment plant is designed to accommodate an average day demand of 1 MGD and a maximum day demand of 2 MGD. After conducting a pilot plant treatment study and evaluating three treatment alternatives, the City selected a combination treatment process comprising greensand filtration and MIEX ® treatment. The City previously obtained a Buy American waiver, granted July 24, 2009 for this project for the use of MIEX ® DOC Resin used in the MIEX ® filtration process. The greensand filtration process primarily targets removal of iron and manganese, whereas the proprietary MIEX ® process targets removal of dissolved organic carbon and other anionic species. Greensand Plus media was used by the City during their pilot testing, consistent with existing plant greensand operations. The shallow aquifer treatment plant project will require approximately 900 cubic feet (79,200 lbs) of Greensand Plus filter media.
During the City's recent experience with Greensand Plus, currently used in their existing water treatment plant 1 process, the City utilized this product during greensand filter pilot testing and identified that product as the desired media for the proposed water treatment plan. The shallow aquifer raw water supply is a challenging water source from a water quality perspective; therefore, an extensive effort was made by the City to pilot a number of processes and to select the most suitable combination of treatment processes for effective water treatment. If a traditional greensand filter media, such as Manganese Greensand, is used, it could introduce uncertainty based on the unproven effectiveness of an alternative agent. Greensand Plus has a number of properties that set it apart from traditional greensand media. Key distinguishing points for Greensand Plus media relate to its performance and durability. Greensand Plus has a more robust physical structure and is expected to have a longer service life of 10-15 years compared to traditional greensand, which typically has 5-8 years of service life. Greensand Plus has more of an absorptive capacity over traditional media and a lower headloss profile. This contributes to more effective iron and manganese removal, with less backwashing resulting in higher average plant capacity. Use of a traditional media would likely result in diminished plant performance and plant capacity de-rating. Based on available information, it is unlikely that other traditional greensand filter media would function within the requirement of the project specifications. Additionally, the City was informed that traditional greensand filter media is in short supply because it is no longer commonly used since the advent of Greensand Plus, which is a superior product.
EPA has also evaluated the City's request to determine if its submission is considered late or if it could be considered timely, as per the OMB Guidance at 2 CFR 176.120. EPA will generally regard waiver requests with respect to components that were specified in the bid solicitation or in a general/primary construction contact as “late” if submitted after the contract date. However, EPA could also determine that a request be evaluated as timely, though made after the date that the contract was signed, if the need for a waiver was not reasonably foreseeable. If the need for a waiver is reasonably foreseeable, then EPA could still apply discretion in these late cases as per the OMB Guidance, which says “the award official
In this case, there are no U.S. manufacturers that meet the City's requirement for Greensand Plus pressure filter media, which was selected based on their pilot testing. The waiver request was submitted after contract signing; however, it was reasonably unforeseeable. During the design and bid preparation process, this product was understood by the greensand filter vendor Roberts Filter to be manufactured in the United States. A request for ARRA compliance documentation was sent by Roberts Filter to their filter media supplier CEI on January 17, 2010.
Documentation of ARRA compliance was provided; however, the ARRA compliance supplied was for a lesser greensand material, manufactured in New Jersey and not Greensand Plus, a fact which was overlooked at the time even though they have variations in their chemical properties. In a letter dated January 28, 2011, Roberts Filter notified the contractor Pease and Sons that Roberts had determined based on communications about material shipping that Greensand Plus is not manufactured in the United States, but is instead, produced by an American company in Brazil and subsequently imported to the U.S. This was the first time they were notified of the fact that Greensand Plus filter media was not manufactured in the United States. Because ARRA compliance documentation was solicited and thought to be in hand, the circumstance of applying for a waiver after the start of construction was not foreseen. EPA has evaluated this information and recognizes that the responses submitted to the City regarding Buy American compliance were done so in error. EPA will consider the City's waiver request as a timely request since it was reasonably unforeseeable.
The April 28, 2009 EPA HQ Memorandum, Implementation of Buy American provisions of Public Law 111-5, the “American Recovery and Reinvestment Act of 2009”, defines “satisfactory quality” as the quality of iron, steel or the relevant manufactured good as specified in the project plans and design. The City has provided information to the EPA representing there are no current domestic manufacturers of the Greensand Plus pressure filter media. EPA's consulting contractor (Cadmus) reviewed the information provided by the City and determined that the project specifications include the option for traditional greensand filter media as well as Greensand Plus and identified traditional greensand mined and produced domestically by Inversand Company (Inversand) as an available alternative. However, the City provided information from Inversand indicating that it has permanently reduced production of traditional greensand as it is no longer commonly used since it does not perform as well as Greensand Plus. The City provided information indicating that the reduced production by Inversand has resulted in extensive lead time and potential project delays for the use of the traditional greensand. Based on the information provided by Inversand, the project engineers began the process of modifying the project
Furthermore, the purpose of the ARRA provisions was to stimulate economic recovery by funding current infrastructure construction, not to delay projects that are already shovel ready by requiring entities, like the City, to revise their design and potentially choose a more costly and less effective project. The implementation of ARRA Buy American requirements on such projects eligible for DWSRF assistance would result in unreasonable delay and thus displace the “shovel ready” status for this project. To further delay construction is in direct conflict with the most fundamental economic purposes of ARRA to create or retain jobs.
The Drinking Water Unit has reviewed this waiver request and has determined that the supporting documentation provided by the City is sufficient to meet the following criteria listed under Section 1605(b) and in the April 28, 2009, Implementation of Buy American provisions of Public Law 111-5, the “American Recovery and Reinvestment Act of 2009” Memorandum:
Iron, steel, and the manufactured goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality.
The basis for this project waiver is the authorization provided in Section 1605(b)(2), due to the lack of production of this product in the United States in sufficient and reasonably available quantities and of a satisfactory quality in order to meet the City's design specifications. The March 31, 2009 Delegation of Authority Memorandum provided Regional Administrators with the authority to issue exceptions to Section 1605 of ARRA within the geographic boundaries of their respective regions and with respect to requests by individual assistance recipients. Having established both a proper basis to specify the particular good required for this project and that this manufactured good was not available from a manufacturer in the United States, the City is hereby granted a waiver from the Buy American requirements of Section 1605(a) of Public Law 111-5 for the purchase of Greensand Plus pressure filter media, manufactured in Brazil, for a shallow aquifer water treatment plant project specified in the City's waiver request of February 11, 2011. This supplementary information constitutes the detailed written justification required by Section 1605(c) for waivers based on a finding under subsection (b).
Pub. L. 111-5, section 1605.
Notice of a Partially Open Meeting of the Board of Directors of the Export-Import Bank of the United States.
Thursday, July 14, 2011 at 9:30 a.m. The meeting will be held at Ex-Im Bank in Room 1143, 811 Vermont Avenue, NW., Washington, DC 20571.
Item No. 1: Resolution honoring the service of Ex-Im Bank's outgoing Director, Diane Farrell.
The meeting will be open to public observation for Item No. 1 only.
Office of the Secretary, 811 Vermont Avenue, NW., Washington, DC 20571, (202) 565-3957.
Federal Communications Commission (FCC or Commission).
Notice; one altered Privacy Act system of records.
Pursuant to subsection (e)(4) of the Privacy Act of 1974, as amended (Privacy Act), 5 U.S.C. 552a, the FCC proposes to alter one system of records, FCC/OSP-1, “Broadband Dead Zone Report and Consumer Broadband Test.” The altered system of records incorporates more details about the voluntary fixed and mobile consumer broadband test. The FCC will also alter the categories of individuals; categories of records; the purposes for which the information is maintained; the retrievability procedures; Routine Use (5); and delete Routine Use (2); and make other edits and revisions as necessary to update the information and to comply with the requirements of the Privacy Act.
In accordance with 5 U.S.C. 552a(e)(4) and (e)(11) of the Privacy Act, any interested person may submit written comments concerning the alteration of this system of records on or before August 15, 2011. The Office of Information and Regulatory Affairs (OIRA), Office of Management and Budget (OMB), which has oversight responsibility under the Privacy Act to review the system of records, and Congress may submit comments on or before August 23, 2011. The proposed altered system of records will become effective on August 23, 2011 unless the FCC receives comments that require a contrary determination. The Commission will publish a document in the
Address comments to Leslie F. Smith, Privacy Analyst, Performance Evaluation and Records Management (PERM), Room 1-C216, Federal Communications Commission (FCC), 445 12th Street, SW., Washington, DC 20554, or via the Internet at
Contact Leslie F. Smith, Performance Evaluation and Records Management (PERM), Room 1-C216, Federal Communications Commission (FCC), 445 12th Street, SW., Washington, DC 20554, (202) 418-0217, or via the Internet at
As required by the Privacy Act of 1974, as amended, 5 U.S.C. 552a(e)(4) and (e)(11), this document sets forth notice of the proposed alteration of one system of records maintained by the FCC. The FCC previously gave complete notice of the system of records (FCC/OSP-1, “Broadband Dead Zone Report and Consumer Broadband Test”) covered under this Notice by publication in the
The FCC will achieve these purposes by altering this system of records with these changes: Revision of the language regarding the categories of individuals in the system, for clarity and to add that the categories of individuals in this system include individuals who participate in the Broadband Dead Zone Report voluntary survey and individuals who participate in both the fixed and mobile versions of the voluntary Consumer Broadband Test.
Revision of the language regarding the categories of records in the system, for clarity and to add that the categories of records in this system include the street address, city, state, zip code, of each individual who selects to participate in the Broadband Dead Zone Report voluntary survey and each individual who participates in both the fixed and mobile versions of the voluntary Consumer Broadband Test. The voluntary fixed and mobile Consumer Broadband Test also collects the “Internet Protocol (IP) address” of each user who selects to participate. The voluntary fixed and mobile consumer broadband test collects the “unique handset identification number” of each individual's smartphone used to access the test, and collects the location reported by each user's handset (reported as a latitude and longitude point) at the moment the user initiates the test.
Revision of the language regarding the purposes for which the information is maintained, for clarity and to add that the Commission uses the records in this system collected from the Broadband Dead Zone Report and the voluntary fixed and mobile Consumer Broadband Test to determine the access of US residents to broadband—cable, DSL, fiber, mobile wireless, and other broadband services, and to gather data on the quality of the broadband services being provided. The Consumer Broadband Test permits users to measure the quality of their fixed or mobile Internet broadband connection. Individual street addresses, IP addresses, mobile handset location, and unique handset identification numbers are not made public by the FCC, but aggregated or anonymized data from the database may be made public. Additionally, IP addresses, mobile handset location, and unique handset identification numbers may be shared with FCC software partners as part of the Consumer Broadband Test application. These partners may publish the IP address, mobile handset location, unique handset identification numbers, and broadband performance data, or otherwise make this information available to the public (but the IP address is not associated with a street address). These data may be used to inform implementation of the National Broadband Plan, the National Broadband Map, and other proceedings related to the provisioning of broadband services.
Minor revision to each of the Routine Uses to add a title to each use for clarity;
Deletion of Routine Use (2) which the Commission has determined is duplicated by Routine Use (3) and its, therefore, redundant;
Revision of Routine Use (5) to add the Department of Justice (DOJ) and the Office of Management and Budget (OMB) to the Federal agencies to whom the Commission may disclose information in this system of records and for the reasons listed: Government-wide Program Management and Oversight—A record from this system of records may be disclosed to General Services Administration (GSA) and to the National Archives and Records Administration (NARA) for the purpose of records management inspections conducted under authority of 44 U.S.C. 2904 and 2906; to the U.S. Department of Justice (DOJ) in order to obtain that department's advice regarding disclosure obligations under the Freedom of Information Act; or to the Office of Management and Budget (OMB) in order to obtain that office's advice regarding obligations under the Privacy Act. Such disclosure shall not be used to make a determination about individuals; and
Revision of the language regarding the policy and practice for retrieving records in the system, for clarity and to add a fifth and a sixth broadband Internet access question so that [i]nformation in the Broadband Dead Zone Report and voluntary fixed and mobile Consumer Broadband Test system may be retrieved by the responses to the broadband Internet access questions: (1) Broadband access (yes/no); (2) broadband service availability (check boxes for types of broadband services available at an individual's home); (3) the individual's home address: Street address, city, state, and zip code; (4) the individual's IP address; (5) the individual's reported handset location; and (6) the individual's unique handset identifcation number. Furthermore, the information may be retreived and/or aggregated based upon other voluntary fixed and mobile Consumer Broadband Test variables, such as broadband speed, latency, jitter, and packet loss, among other broadband quality variables.
This notice meets the requirement of documenting the changes to this system of records that the FCC maintains, and provides the public, OMB, and Congress an opportunity to comment.
Broadband Dead Zone Report and Consumer Broadband Test.
The FCC's Security Operations Center (SOC) has not assigned a security classification to this system of records.
Office of Strategic Planning (OSP), Federal Communications Commission (FCC), 445 12th Street, SW., Washington, DC 20554.
The categories of individuals in this system include individuals who participate in the Broadband Dead Zone Report voluntary survey and individuals who participate in both the fixed and mobile versions of the voluntary Consumer Broadband Test.
The categories of records in this system include the street address, city, state, zip code, of each individual who selects to participate in the Broadband Dead Zone Report voluntary survey and each individual who participates in both the fixed and mobile versions of the voluntary Consumer Broadband Test. The voluntary fixed and mobile Consumer Broadband Test also collects the “Internet Protocol (IP) address” of each user who selects to participate. The voluntary fixed and mobile consumer broadband tests collects the “unique handset identification number” of each individual's smartphone used to access the test, and collects the location reported by each user's handset (reported as a latitude and longitude point) at the moment the user initiates the test.
Broadband Data Improvement Act of 2008, Public Law 110-385, Stat 4096 § 103(c)(1); American Reinvestment and Recovery Act of 2009 (ARRA), Public Law 111-5, 123 Stat 115 (2009); and Communications Act, 47 U.S.C. 154(i).
The Commission uses the records in this system collected from the Broadband Dead Zone Report and the voluntary fixed and mobile Consumer Broadband Test to determine the access of U.S. residents to broadband—cable, DSL, fiber, mobile wireless, and other broadband services, and to gather data on the quality of the broadband services being provided. The Consumer Broadband Test permits users to measure the quality of their fixed or mobile Internet broadband connection. Individual street addresses, IP addresses, mobile handset location, and unique handset identification numbers are not made public by the FCC, but aggregated or anonymized data from the database may be made public. Additionally, IP addresses, mobile handset location, and unique handset identification numbers may be shared with FCC software partners as part of the Consumer Broadband Test application. These partners may publish the IP address, mobile handset location, unique handset identification numbers, and broadband performance data, or otherwise make this information available to the public (but the IP address is not associated with a street address). These data may be used to inform implementation of the National Broadband Plan, the National Broadband Map, and other proceedings related to the provisioning of broadband services.
Information about individuals in this system of records may routinely be disclosed under the following conditions:
1. Law Enforcement and Investigation—Where there is an indication of a violation or potential violation of a statute, regulation, rule, or order, records from this system may be referred to the appropriate Federal, state, or local agency responsible for investigating or prosecuting a violation or for implementing or enforcing the statute, rule, regulation, or order.
2. Department of Justice, Courts, and Adjudicative Bodies—A record from this system of records may be disclosed to the Department of Justice (DOJ) or in a proceeding before a court or adjudicative body when:
(a) The United States, the Commission, a component of the Commission, or, when represented by the government, an employee of the Commission is a party to litigation or anticipated litigation or has an interest in such litigation, and
(b) The Commission determines that the disclosure is relevant or necessary to the litigation.
3. Congressional Inquiries—A record on an individual in this system of records may be disclosed to a Congressional office in response to an inquiry the individual has made to the Congressional office.
4. Government-wide Program Management and Oversight—A record from this system of records may be disclosed to General Services Administration (GSA) and to the National Archives and Records Administration (NARA) for the purpose of records management inspections conducted under authority of 44 U.S.C. 2904 and 2906; to the U.S. Department of Justice (DOJ) in order to obtain that department's advice regarding disclosure obligations under the Freedom of Information Act; or to the Office of Management and Budget (OMB) in order to obtain that office's advice regarding obligations under the Privacy Act. Such disclosure shall not be used to make a determination about individuals.
5. Data Breach—A record from this system may be disclosed to appropriate agencies, entities, and persons when (1) The Commission suspects or has confirmed that the security or confidentiality of information in the system of records has been compromised; (2) the Commission has determined that as a result of the suspected or confirmed compromise there is a risk of harm to economic or property interests, identity theft or fraud, or harm to the security or integrity of this system or other systems or programs (whether maintained by the Commission or another agency or entity) that rely upon the compromised information; and (3) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with the Commission's efforts to respond to the suspected or confirmed compromise and prevent, minimize, or remedy such harm.
6. Public-Private Partnerships and the USDA Rural Development Agency's Telecommunications Program—The information collected through the Broadband Dead Zone Report and voluntary fixed and mobile Consumer Broadband Test, with the exception of any personally identifiable information (PII), may be shared with public-private partnerships and with the Telecommunications Program of the United States Department of Agriculture (USDA) Rural Development Agency. This sharing regime is described in the Commission's Broadband Data Order of 2008 (FCC 08-89).
7. NTIA and State Designated Entities—The information collected through the Broadband Dead Zone Report and voluntary fixed and mobile Consumer Broadband Test, including the personally identifiable information (PII), may be shared with the National Telecommunications and Information Administration (NTIA) and the 56 State Designated Entities for the State Broadband Data & Development Grant Program, who are tasked with gathering broadband availability information that is delivered to the FCC and NTIA for compilation into the National Broadband Map. Any PII shared with these entities is disclosed under the rules of the agreement between NTIA and the state grantees governing the protection of sensitive, protected, or classified data collected pursuant to the grant program. The NTIA and the state grantees do not make any PII publicly available.
In each of these cases, the FCC will determine whether disclosure of the records is compatible with the purpose for which the records were collected.
None.
The information includes the electronic data and records that are stored in the FCC's computer network databases.
Information in the Broadband Dead Zone Report and voluntary fixed and mobile Consumer Broadband Test system may be retrieved by the responses to the broadband Internet access questions: (1)Broadband access (yes/no); (2) broadband service availability (check boxes for types of broadband services available at an individual's home); (3) the individual's home address: street address, city, state, and zip code; (4) the individual's IP address; (5) the individual's reported handset location; and (6) the individual's unique handset indentifcation number. Furthermore, the information may be retreived and/or aggregated based upon other voluntary fixed and mobile Consumer Broadband Test variables, such as broadband speed, latency, jitter, and packet loss, among other broadband quality variables.
Access to the information in the Broadband Dead Zone Report or the
The information in this system is limited to electronic files, records, and data, which pertains to the Dead Zone Report, which includes:
(1) The information obtained from individuals who participated in the Consumer Information survey; and
(2) The information obtained from individuals who participated in the voluntary fixed and mobile Consumer Broadband Test.
Until the National Archives and Records Administration (NARA) approves the retention and disposal schedule, these records will be treated as permanent.
Address inquiries to the Office of Strategic Planning (OSP), Federal Communications Commission (FCC), 445 12th Street, SW., Washington, DC 20554.
Address inquiries to the Office of Strategic Planning (OSP), Federal Communications Commission (FCC), 445 12th Street, SW., Washington, DC 20554.
Address inquiries to the Office of Strategic Planning (OSP), Federal Communications Commission (FCC), 445 12th Street, SW., Washington, DC 20554.
Address inquiries to the Office of Strategic Planning (OSP), Federal Communications Commission (FCC), 445 12th Street, SW., Washington, DC 20554.
The sources for the information in this system are the Broadband Dead Zone Report survey respondents and voluntary fixed and mobile Consumer Broadband Test participants.
None.
Federal Election Commission.
Tuesday, July 19, 2011, at 10 a.m.
999 E Street, NW., Washington, DC.
This Meeting Will Be Closed to the public.
Compliance matters pursuant to 2 U.S.C. 437g.
Audits conducted pursuant to 2 U.S.C. 437g, § 438(b), and Title 26, U.S.C.
Matters concerning participation in civil actions or proceedings or arbitration.
Internal personnel rules and procedures or matters affecting a particular employee.
Judith Ingram, Press Officer,
The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than July 29, 2011.
A. Federal Reserve Bank of Chicago (Colette A. Fried, Assistant Vice President) 230 South LaSalle Street, Chicago, Illinois 60690-1414:
1.
9 a.m. (EST) July 18, 2011.
4th Floor Conference Room,1250 H Street, NW.,Washington, DC.
Open.
Thomas J. Trabucco, Director,Office of External Affairs,(202) 942-1640.
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice.
This notice provides public announcement of CDC's intent to award Affordable Care Act (ACA) appropriations to the following 7 grantees: Colorado, Iowa, Kansas, Louisiana, Minnesota, South Carolina, and Vermont to develop and implement their Tracking Networks. These activities are proposed by the above-mentioned grantees in their FY 2011 applications submitted under funding opportunity EH09-907, “National Environmental Public Health Tracking Program—Network Implementation (EPHT),” Catalogue of Federal Domestic Assistance Number (CFDA): 93.070.
Approximately $4,920,000 in ACA funding will be awarded to the grantees for network expansion and enhancement. Funding is appropriated under the Affordable Care Act (Pub. L. 111-148), Section 4002 [42 U.S.C. 300u-11]; (Prevention and Public Health Fund).
Accordingly, CDC adds the following information to the previously published funding opportunity announcement of EH09-907:
Type of Award: Non-Competing Continuation Cooperative Agreement.
Funding will be awarded to applicants based on results from successful past performance review.
CDC will add the ACA Authority to that which is reflected in the published Funding Opportunity CDC-RFA-EH09-907. The revised funding authority language will read:
The effective date for this action is the date of publication of this Notice and remains in effect until the expiration of the project period of the ACA funded applications.
Elmira Benson, Acting Deputy Director, Procurement and Grants Office, Centers for Disease Control and Prevention, 2920 Brandywine Road, Atlanta, GA 30341, telephone (770) 488-2802, e-mail
On March 23, 2010, the President signed into law the Affordable Care Act (ACA), Public Law 111-148. The ACA is designed to improve and expand the scope of health care coverage for Americans. Cost savings through disease prevention is an important element of this legislation and the ACA has established a Prevention and Public Health Fund (PPHF) for this purpose. Specifically, the legislation states in Section 4002 that the PPHF is to “provide for expanded and sustained national investment in prevention and public health programs to improve health and help restrain the rate of growth in private and public sector health care costs.” The ACA and the Prevention and Public Health Fund make improving public health a priority with investments to improve public health.
The PPHF states that the Secretary shall transfer amounts in the Fund to accounts within the Department of Health and Human Services to increase funding, over the fiscal year 2008 level, for programs authorized by the Public Health Service Ac