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Internal Revenue Service (IRS), Treasury.
Temporary regulations.
This document contains temporary regulations that provide guidance on the annual fee imposed on covered entities engaged in the business of manufacturing or importing branded prescription drugs. This fee was enacted by section 9008 of the Patient Protection and Affordable Care Act, as amended by section 1404 of the Health Care and Education Reconciliation Act of 2010. The regulations affect persons engaged in the business of manufacturing or importing certain branded prescription drugs. The text of the temporary regulations also serves as the text of the proposed regulations set forth in the notice of proposed rulemaking on this subject in the Proposed Rules section of this issue of the
Celia Gabrysh, (202) 622-3130 (not a toll-free number).
These temporary regulations are being issued without prior notice and public procedure pursuant to the Administrative Procedure Act (5 U.S.C. 553). For this reason, the collection of information contained in these regulations has been reviewed and pending receipt and evaluation of public comments, approved by the Office of Management and Budget under control number 1545-2209.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.
For further information concerning this collection of information, and where to submit comments on the collection of information and the accuracy of the estimated burden, and suggestions for reducing this burden, please refer to the preamble to the cross-reference notice of proposed rulemaking on this subject in the Proposed Rules section in this issue of the
Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
This document adds the Branded Prescription Drug Fee Regulations to the Code of Federal Regulations (26 CFR Part 51) under section 9008 of the Patient Protection and Affordable Care Act (ACA), Public Law 111-148 (124 Stat. 119 (2010)), as amended by section 1404 of the Health Care and Education Reconciliation Act of 2010 (HCERA), Public Law 111-152 (124 Stat. 1029 (2010)). All references in this preamble to section 9008 are references to section 9008 of ACA, as amended by section 1404 of HCERA. Section 9008 did not amend the Internal Revenue Code (Code) but cross-references to specified Code sections.
Section 9008(a) imposes an annual fee on each covered entity engaged in the business of manufacturing or importing branded prescription drugs, to be paid not later than the annual date specified by the Secretary of the Treasury or his delegate (Secretary), but in no event later than September 30th of each calendar year in which a fee must be paid (fee year).
Section 9008(d)(1) defines a
Section 9008(e)(2) defines
Section 9008(b) provides rules for determining the amount of the annual fee for each covered entity. Under section 9008(b)(4), the aggregate fee amount each year for all covered entities (referred to as the
Specifically, section 9008(b)(1) provides that the annual fee for each covered entity is calculated by determining the ratio of (i) the covered entity's branded prescription drug sales
Section 9008(b)(3) requires the Secretary to determine the amount of each covered entity's fee and permits the Secretary to rely on reports submitted by the Agencies and any other source of information available to the Secretary in determining that amount. Section 9008(i) also directs the Secretary to publish guidance necessary to carry out the purposes of the statute.
Section 9008(f) treats the fee as an excise tax with respect to which only civil actions for refunds under the provisions of subtitle F of the Code will apply. Thus, the fee may be assessed and collected using the procedures in subtitle F without regard to the restrictions on assessment in section 6213 (relating to petitions to the Tax Court). Section 9008(f) also characterizes the fee as a nondeductible tax under section 275 of the Code.
On November 29, 2010, the Internal Revenue Service (IRS) released Notice 2010-71 (2010-50 IRB 822), which proposed an approach to implementing the section 9008 fee and requested comments on the proposed approach. The proposed approach included an opportunity to report certain information to the IRS relevant to the fee calculation and provided that the IRS would provide each covered entity with notice of a preliminary fee calculation. This notice was modified and superseded by Notice 2011-9 (2011-6 IRB 459), which was released on January 14, 2011.
On April 29, 2011, the IRS released Rev. Proc. 2011-24 (2011-20 IRB 787), which established a process for covered entities to submit claimed errors in their preliminary fee calculations for consideration before final fee calculations for 2011. On May 27, 2011, the IRS released Notice 2011-46 (2011-25 IRB 887) to defer the due date for submission of error reports and the last possible date for sending final fee calculations for 2011.
The temporary regulations describe the rules related to the fee and the actions to be taken before the September 30th due date of each year's fee. The temporary regulations first provide a general overview of the rules and then provide an explanation of terms used in implementing the fee. Next, the temporary regulations describe the information requested from covered entities and provided by the Agencies. The temporary regulations then describe how the fee is calculated and provide for a subsequent adjustment. The temporary regulations then provide for a notice of the preliminary fee calculation, a dispute resolution process to allow covered entities to submit error reports relating to the preliminary fee calculation, and a notice of the final fee calculation. The temporary regulations also explain how to pay the fee, how the fee is treated for tax purposes, and how to make refund claims.
These temporary regulations are generally consistent with the approach proposed in previous IRS guidance. Certain modifications and additions were made in response to public comments that were received in response to the solicitation in Notice 2011-9. The changes and the public comments are discussed in more detail in this preamble.
The temporary regulations provide guidance on the annual fee imposed on covered entities engaged in the business of manufacturing or importing branded prescription drugs by section 9008. Generally, each covered entity with aggregate branded prescription drug sales of over $5 million to the Programs (or pursuant to the Programs) is liable for an annual fee in each fee year that is based on its sales of branded prescription drugs in the sales year that corresponds to the fee year in an amount determined by the IRS under these temporary regulations.
The temporary regulations define numerous key terms used in section 9008 and in these regulations, including
Section 9008(d)(1) provides that
Consistent with the proposal in previous IRS guidance, the temporary regulations provide that, in the case of a controlled group that is treated as a single covered entity under section 9008(d)(2), the controlled group may identify a person as the designated entity that acts for the controlled group concerning the section 9008 fee. However, the temporary regulations further provide that if the controlled group, without regard to foreign corporations included under section 9008(d), is also an affiliated group that filed a consolidated return for Federal income tax purposes, the designated entity is the common parent of the affiliated group identified on the tax return filed for the sales year. If the controlled group is not an affiliated group that filed a consolidated return for Federal income tax purposes, it may select a person as the designated entity on Form 8947, “Report of Branded Prescription Drug Information.” If the controlled group does not select a person as a designated entity on its Form 8947, the IRS will select a person as a designated entity for the controlled group and advise the filer accordingly.
Section 9008(e)(3) excludes orphan drug sales from the definition of branded prescription drug sales. Consistent with the proposal in previous IRS guidance, the temporary regulations define
Several commentators suggested that a drug should be considered an orphan drug if the section 45C credit was “allowable”; that is, the section 45C credit could have been claimed, rather than was claimed. Other commentators suggested that orphan drug status should be given to a drug for which a section 45C credit was allowed even though the drug had been approved by the FDA for marketing for an indication other than the treatment of a rare disease or condition for which a section 45C credit was allowed.
The temporary regulations do not adopt these suggestions. The plain language of section 9008(e)(3) requires the section 45C credit to have actually been allowed rather than to have merely been allowable. In addition, the Treasury Department and the IRS interpret section 9008(e)(3) to mean that if a drug is ever approved for an indication other than the treatment of a rare disease or condition for which a section 45C credit was allowed, whether before, during, or after a section 45C credit was allowed for the drug, sales of that drug are not considered sales of an orphan drug. However, a drug will retain its orphan drug status if the drug receives approval for a subsequent indication for a rare disease or condition for which a subsequent section 45C credit was allowed.
Consistent with the proposal in previous IRS guidance, the temporary regulations give each covered entity the opportunity to provide information relevant to the determination of the section 9008 fee by annually submitting Form 8947, “Report of Branded Prescription Drug Information,” and providing the information specified by the form and instructions, including the NDCs for branded prescription drugs that the covered entity sold to the Programs (or pursuant to coverage under the Programs), Medicare and Medicaid rebate information, section 45C orphan drug information, members of controlled groups, and designated entity information.
One commentator suggested that the Treasury Department and the IRS confirm that submission of Form 8947 is voluntary. Section 51.3T(a) of the temporary regulations provides that a covered entity
Commentators expressed a preference for CMS to include all rebate data in their reports to the IRS rather than collecting rebate data from the covered entities on Form 8947. The IRS and CMS are continuing to work on this issue. Until CMS can report all the relevant rebate data, covered entities will continue to have the opportunity to submit rebate data as requested on Forms 8947 and in the format prescribed in the form instructions.
Several commentators suggested that the Treasury Department and the IRS provide guidance on how covered entities may amend their Form 8947 to correct errors or omissions in the information reported. A number of covered entities notified the IRS of corrections to their Forms 8947 in the error reports that they submitted as part of the dispute resolution process provided under Rev. Proc. 2011-24. That proved to be an efficient and effective way to relay corrections. Accordingly, under the temporary regulations, a covered entity may notify the IRS of any changes or additions to information it submitted on Form 8947 by submitting error reports in the dispute resolution process, discussed later in this preamble.
Consistent with the proposal in the previous IRS guidance, the temporary regulations provide that the IRS will (1) compile a list of branded prescription drugs by NDC using the data submitted on Forms 8947; (2) apply appropriate due diligence; and (3) provide the Agencies with the list. The temporary regulations describe the data the Agencies are to provide the IRS annually for each NDC on the list by Program. The temporary regulations further clarify that the IRS may revise the list of NDCs as a result of information received in the dispute resolution process, and that the data the IRS uses to produce the final fee determination includes any revisions provided by the Agencies at the completion of the dispute resolution process.
Commentators raised questions about the descriptions in previous IRS guidance of the methodology used by the Agencies to report branded prescription drug sales to the IRS and asked that these descriptions be clarified. In addition, some of the error reports submitted as part of the dispute resolution process under Rev. Proc. 2011-24 identified the need for clarification in describing Agency data. In response to the comments and the issues illuminated by the error reports, the temporary regulations provide revised descriptions of the data and computations for some of the Programs.
Commentators raised questions about the methodology proposed for computing branded prescription drug sales for Medicare Part B. Specifically, they questioned the use of Medicare-allowed charges to establish the sales rather than a computation based on the per-unit average sales price (ASP) and the units paid for under Medicare Part B as specified in section 9008(g)(2). Commentators also asked whether CMS would use ASP (that is, ASP plus 0%) or ASP plus 6% (which reflects amounts actually paid) in computing the sales figures. After considering the comments, CMS refined its calculation process. Thus, the temporary regulations provide that branded prescription drug sales for Medicare Part B will be computed based on ASP and units paid for under Medicare Part B.
Commentators also requested clarification about how sales will be calculated for branded prescription drugs that are not separately payable or reported. In the unusual situation where CMS is unable to establish a reliable proportion of sales by NDC, for example due to unavailable, inaccurate, or incomplete manufacturer sales data, the temporary regulations clarify that CMS has a back-up method that will use Medicare Part D utilization percentages in lieu of manufacturer data. It should be noted, however, that for the 2011 fee calculations, this back-up method was not required.
Commentators also expressed concerns about whether Medicare Part B is capturing complete data with respect to non-separately payable drugs, that is, drugs that are not directly correlated with a specific HCPCS Code. CMS recognizes the commentators' concern and has made extensive efforts to gather as complete a data set as possible. CMS will continue to work with the data available to capture non-separately payable drugs.
Some commentators asked whether the sales data from Medicaid reflected sales where Medicaid was the secondary payer, resulting potentially in duplicate reporting where another one of the Programs (for example, Medicare Part B), was the primary payer. In response, CMS has revised the Medicaid methodology to exclude non-Medicaid payments, and the temporary regulations include a description of this aspect of the methodology.
The temporary regulations clarify that the IRS will compute the fee for a covered entity based on the branded prescription drug sales data for each NDC reported by the Agencies and any rebate data for each NDC reported by the covered entities. For purposes of computing the fee, each NDC will be assigned to the covered entity that owns the NDC as of the end of the day on December 31st of the sales year. For a covered entity that is a controlled group, this includes all NDCs that a member of the covered entity owns as of the end of the day on December 31st of the sales year.
The temporary regulations provide that two years are relevant to the calculation of the section 9008 fee: The fee year, and the calendar year of the branded prescription drug sales, which will be used to determine the amount of the fee (the sales year). As proposed in previous IRS guidance, the temporary regulations use the second calendar year preceding the fee year as the sales year for purposes of calculating the section 9008 fee. The Treasury Department and the IRS have determined that, although DOD and VA are expected to have complete data on branded prescription drug sales for the calendar year immediately preceding the fee year within the time frame necessary to administer the fee, CMS is not expected to have comparable data because it cannot complete its data processing within the necessary time frame. Accordingly, the IRS will calculate the fee based on the branded prescription drug sales data provided by the Agencies for the second calendar year preceding the fee year. Because the use of the second preceding year as the sales year, rather than the immediately preceding year, may affect the amount of the fee paid by a covered entity, the annual fee due in every year after 2011 will include an adjustment amount. This adjustment amount will be added (or subtracted), as appropriate, to (or from) the fee otherwise payable by the covered entity in the fee year in which the adjustment is calculated.
The proposal in previous guidance was to compute the adjustment separately for each NDC. Commentators raised questions about the effect of the adjustment where a drug is owned by different covered entities in the second preceding year and immediately preceding year and asked whether the adjustment could be computed at the covered entity level rather than the NDC level. The Treasury Department and the IRS have considered these questions, and have decided to calculate the adjustment at the covered entity level.
The adjustment will reflect the difference between the fee determined for a covered entity in the immediately preceding fee year, using data from the second calendar year preceding that fee year, and what the fee for the covered entity would have been for the immediately preceding fee year using data from the calendar year immediately preceding the prior fee year. For example, for 2012, the adjustment amount for a covered entity will be the difference between the 2011 fee computed using 2009 sales data, and what the 2011 fee would have been using 2010 sales data. Although the adjustment reflects a revision of the prior year's fee based on data from the sales year immediately preceding the prior fee year, the adjustment is only taken into account by adding it to or subtracting it from the fee computed for the current fee year.
Consistent with the proposal in the previous IRS guidance, the temporary regulations provide that the IRS will provide each covered entity with a notice of preliminary fee calculation each year that will include the covered entity's preliminary fee calculation; the covered entity's branded prescription drug sales, by NDC, for each Program; the covered entity's branded prescription drug sales taken into account after application of section 9008(a)(2); the aggregate branded prescription drug sales taken into account for all covered entities; after the 2011 fee year, a preliminary adjustment amount; and a reference to the fee dispute resolution process set forth in guidance published in the Internal Revenue Bulletin. The date by which the IRS will send the preliminary fee calculation notice will be specified for future years in guidance published in the Internal Revenue Bulletin. For 2011, the IRS sent the notices by May 16, 2011. The Treasury Department and the IRS anticipate sending these notices earlier in future years.
Consistent with previous IRS guidance, the temporary regulations provide for a dispute resolution process that allows a covered entity to submit error reports in response to the preliminary fee calculation for the IRS to consider before performing a final fee calculation. The temporary regulations describe the information that covered entities must submit. The IRS will specify in guidance published in the Internal Revenue Bulletin the format for error report submissions and the date by which a covered entity must submit an error report(s). For 2011, a covered entity's error report was required to be submitted no later than June 10, 2011. The Treasury Department and the IRS anticipate that covered entities will have more time to prepare and send their error reports to the IRS in future years.
Several commentators requested the ability to submit additional error reports after the IRS sends notification of the final fee determination. In the interest of providing finality to the fee calculation process, the temporary regulations do not adopt this suggestion.
Section 9008(a) provides that the annual fee must be paid not later than the annual date specified by the Secretary, but in no event later than September 30th of each fee year. The temporary regulations provide that the IRS will send each covered entity its final fee calculation for that year no later than August 31st and that the covered entity must pay the fee by September 30th by electronic funds transfer. For 2011, the IRS will send covered entities notification of their 2011 final fee calculation by August 24th. This notification will include the covered entity's final fee; the covered entity's branded prescription drug sales by NDC for each Program; the covered entity's branded prescription drug sales taken into account after application of section 9008(a)(2); the aggregate branded prescription drug sales taken into account for all covered entities; after the 2011 fee year, an adjustment
There is no tax return to be filed for the section 9008 fee.
Section 9008(f)(1) provides that the branded prescription drug fee for purposes of subtitle F of the Internal Revenue Code shall be treated as an excise tax with respect to which only civil actions for refund under procedures of subtitle F shall apply. Thus, under the temporary regulations, the section 9008 fee is treated as an excise tax for purposes of subtitle F of the Code (sections 6001-7874) to which the deficiency procedures of sections 6211-6216 do not apply. The temporary regulations provide that the IRS must assess the amount of the section 9008 fee for any fee year within three years of September 30th of that fee year.
The temporary regulations provide that any claim for refund must be filed on Form 843, “Claim for Refund and Request for Abatement.”
IRS notices and the revenue procedure cited in this preamble are published in the Internal Revenue Bulletin or Cumulative Bulletin and are available at IRS.gov.
It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (APA) (5 U.S.C. chapter 5) does not apply to these regulations. For applicability of the Regulatory Flexibility Act (5 U.S.C. chapter 6), please refer to the Special Analysis section in the preamble to the cross-referenced notice of proposed rulemaking in the Proposed Rules section in this issue of the
Section 553(b) of the APA does not apply to these regulations because they are interpretative rules. Alternatively, the Treasury Department and the IRS have determined that good cause exists under section 553(b)(B) of the APA. That section provides that an agency is not required to publish a notice of proposed rulemaking in the
In the months following enactment of section 9008, the Treasury Department and the IRS, in coordination with other governmental agencies, developed the proposed methodologies and processes to compute, verify, assess and collect the annual fee amounts, and published notices and a revenue procedure in the Internal Revenue Bulletin describing the proposed approach and soliciting public comments. The Treasury Department and the IRS provided an extended comment period to give the covered entities an opportunity to review their preliminary fee calculations before submitting comments on the proposed approach. In addition, the Treasury Department and the IRS engaged in discussions with affected external stakeholders and extensively coordinated with other governmental agencies. Consequently, the Treasury Department and the IRS also have determined that additional notice and comment before implementation of the process set forth in these regulations is unnecessary.
Since Congress mandated that the IRS collect the applicable fee amount for the first fee year no later than September 30, 2011, it is necessary that these regulations be issued immediately in order to provide covered entities with the rules governing the fee and payment prior to issuance of final fee determinations. However, comments are being solicited in the cross-referenced notice of proposed rulemaking that is in the Proposed Rules section in this issue of the
The principal author of these regulations is Celia Gabrysh, Office of the Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the Treasury Department and the IRS participated in their development.
Drugs, Reporting and recordkeeping requirements.
Reporting and recordkeeping requirements.
Accordingly, 26 CFR chapter 1 is amended by adding part 51 to subchapter D and amending part 602 as follows:
26 U.S.C. 7805; sec. 9008, Public Law 111-347 (124 Stat. 119).
Section 51.8 also issued under 26 U.S.C. 6302(a).
Section 51.6302-1 also issued under 26 U.S.C. 6302(a).
(a) The regulations in this part 51 are designated “Branded Prescription Drug Fee Regulations.”
(b) The regulations in this part 51 provide guidance on the annual fee imposed on covered entities engaged in the business of manufacturing or importing branded prescription drugs by section 9008 of the Patient Protection and Affordable Care Act (ACA), Public Law 111-148 (124 Stat. 119 (2010)), as amended by section 1404 of the Health Care and Education Reconciliation Act of 2010 (HCERA), Public Law 111-152 (124 Stat. 1029 (2010)). All references in
(c) Section 9008(b)(4) sets an applicable fee amount for each year, beginning with 2011, that will be apportioned among covered entities with aggregate branded prescription drug sales of over $5 million to government programs or pursuant to coverage under such programs. Generally, each covered entity is liable for a fee in each fee year that is based on its sales of branded prescription drugs in the sales year that corresponds to the fee year in an amount determined by the Internal Revenue Service (IRS) under the rules of this part.
(a)
(b)
(1) The Centers for Medicare and Medicaid Services of the Department of Health and Human Services (CMS);
(2) The Department of Veterans Affairs (VA); and
(3) The Department of Defense (DOD).
(c)
(i) Any prescription drug the application for which was submitted under section 505(b) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(b)); or
(ii) Any biological product the license for which was submitted under section 351(a) of the Public Health Service Act (42 U.S.C. 262(a)).
(2)
(d)
(e)
(i) A single-person covered entity; or
(ii) A controlled group.
(2)
(3)
(4)
(i) A foreign entity subject to tax under section 881 is included within a group under section 52(a) or 52(b); and
(ii) A covered entity is treated as being a member of a controlled group if it is a member of the group on the end of the day on December 31st of the sales year.
(f)
(i) Filing Form 8947, “Report of Branded Prescription Drug Information”;
(ii) Receiving IRS communications about the fee for the group;
(iii) Filing an error report for the group, if applicable, as described in § 51.7T; and
(iv) Paying the fee to the IRS.
(2)
(ii)
(iii)
(g)
(h)
(1) The Medicare Part B program;
(2) The Medicare Part D program;
(3) The Medicaid program;
(4) Any program under which branded prescription drugs are procured by the Department of Veterans Affairs;
(5) Any program under which branded prescription drugs are procured by the Department of Defense; and
(6) The TRICARE retail pharmacy program.
(i)
(j)
(k)
(2)
(i) Any drug for which there has been a final assessment or court order disallowing the full section 45C credit taken for the drug; or
(ii) Any drug for any sales year after the calendar year in which the FDA approved the drug for marketing for any indication other than the treatment of a rare disease or condition for which a section 45C credit was allowed, regardless of whether a section 45C credit was allowed for the drug either before, in the same year as, or after this FDA designation.
(3)
(4)
(ii)
(ii)
(ii)
(l)
(m)
(a)
(b)
(a)
(b)
(c)
(i) CMS will use data reported by manufacturers pursuant to section 1847A(c) of the Social Security Act to calculate the annual weighted average sales price (ASP) for each Healthcare Common Procedure Coding System (HCPCS) code for the sales year.
(ii) CMS will use the Medicare Part B National Summary Data File located at
(2)
(3)
(4)
(A) The annual weighted ASP for the HCPCS code;
(B) The total number of allowed billing units paid by Medicare Part B for each HCPCS code during the sales year;
(C) The names of the entities engaged in manufacturing each NDC assigned to the HCPCS code; and
(D) Those entities (if any) identified in paragraph (c)(4)(C) of this section that are manufacturing branded prescription drugs assigned to the HCPCS code.
(ii)
(A) Calculate the proportion of sales, expressed as a percentage, attributed to each NDC assigned to the HCPCS code by determining the percentage of total sales reported to CMS by each manufacturer of NDC(s) that are assigned to the HCPCS code. For example, if HCPCS code JXXXX contains three drugs with a total of $310,000 sales reported by manufacturers to CMS for the sales year, and $100,000 was reported for Drug A, $200,000 was reported for Drug B, and $10,000 was reported for Drug C, the proportion of sales attributed to each NDC will be 32.26 percent for Drug A, 64.52 percent for Drug B, and 3.22 percent for Drug C; and
(B) For each NDC, multiply the product of the annual weighted ASP and the total allowed billing units paid by Medicare Part B for the HCPCS code by the proportion of sales calculated in paragraph (c)(4)(ii)(A) of this section to determine the sales reportable to the IRS (that is, percentage × (annual weighted ASP × allowed units) = total sales reported to IRS for the NDC). The sales for each manufacturer's NDCs assigned to a HCPCS code are summed and the total sales for each manufacturer's NDCs in a HCPCS code will be reported to the IRS.
(5)
(d)
(2) For any covered entity identified in the first five (or six) digits of an NDC during any of the four quarters of a sales year, CMS will use the following methodology to derive the sales figures that account for third-party payers, such as Medicare Part B:
(i) Report total dollars per NDC for AMP-URA multiplied by the units reported by a state or states.
(ii) Determine the percentage of the total amount reimbursed that is the Medicaid amount of that reimbursement. For example, if the total amount reimbursed is $100,000, and the Medicaid amount reimbursed is $20,000, then the percentage is 20 percent.
(iii) Multiply the percentage of the Medicaid amount of that reimbursement (in the example in paragraph (d)(2)(ii) of this section, 20 percent) by the dollar figure derived from paragraph (d)(2)(i) of this section (AMP minus URA multiplied by units) to get the new adjusted sales dollar totals.
(e)
(f)
(a)
(2)
(3)
(3)
(b)
(c)
(2) For each sales year, the IRS will calculate the aggregate branded prescription drug sales taken into account for all covered entities. The resulting number is the denominator of the ratio described in paragraph (d)(2) of this section.
(d)
(1) The numerator of which is the covered entity's branded prescription drug sales taken into account during the sales year (described in paragraph (c)(1) of this section); and
(2) The denominator of which is the aggregate branded prescription drug sales taken into account for all covered entities during the same year (described in paragraph (c)(2) of this section).
(e)
(a)
(1) The covered entity's allocated fee;
(2) The covered entity's branded prescription drug sales, by NDC, by Program;
(3) The covered entity's branded prescription drug sales taken into account after application of § 51.5T(a)(3);
(4) The aggregate branded prescription drug sales taken into account for all covered entities;
(5) After the 2011 fee year, the covered entity's adjustment amount calculated as described in § 51.5T(e); and
(6) A reference to the fee dispute resolution procedures set forth in guidance published in the Internal Revenue Bulletin.
(b)
(a)
(b)
(1) Entity name, entity number (if applicable, from Part I (a) of the Form 8947), address, and Employer Identification Number (EIN) as previously reported on the Form 8947;
(2) The name, telephone number, and e-mail address (if available) of one or more employees or representatives of the entity with whom the Agencies may discuss the claimed errors. A Form 2848, “Power of Attorney and Declaration of Representative,” must be filed with the error report; and
(3) The name of the Program that reported the data, the NDC, the specific amount of sales data disputed, the proposed corrected amount, an explanation of why the Agency should use the proposed corrected data instead,
(c)
(1) Entity name, entity number (if applicable, from Part I (a) of the Form 8947), address, and EIN as previously reported on the Form 8947;
(2) The name, telephone number, and e-mail address (if available) of one or more employees or representatives of the entity with whom the IRS and/or the Agencies may discuss the claimed errors. If the representative is not an employee of the entity, a Form 2848 must be filed with the error report;
(3) For a mathematical calculation error, the specific calculation element(s) that the entity disputes and its proposed corrected calculation;
(4) For a rebate data error, the NDC for the drug to which it relates; a discussion of whether the data used in the preliminary fee calculation matches previously reported Form 8947 data on rebates; and, if the data used in the preliminary fee calculation does match the Form 8947 data, an explanation of why the Form 8947 data was erroneous and why the IRS should use the proposed corrected data instead;
(5) For the listing of an NDC for an orphan drug, the name and NDC of the orphan drug; a discussion of whether the data used in the preliminary fee calculation matches previously reported Form 8947 data on orphan drugs; and, if the data used in the preliminary fee calculation does match the Form 8947 data, an explanation of why the Form 8947 data was erroneous and why the IRS should use the proposed corrected data instead;
(6) For any other asserted error, an explanation of the nature of the error, how the error affects the fee calculation, an explanation of how the entity established that an error occurred, the proposed correction to the error, and an explanation of why the IRS or Agency should use the proposed corrected data instead;
(7) If an entity is using data to establish the existence of an error and that data was not reported on Form 8947 or contained in the notification of the preliminary fee calculation, a description of what the data is, how the entity acquired the data, and who maintains it; and
(8) Documentation of any rebate and orphan drug data, or other information used to establish the existence of any errors.
(d)
(a)
(1) The covered entity's allocated fee;
(2) After the 2011 fee year, an adjustment amount calculated as described in § 51.5T;
(3) The covered entity's branded prescription drug sales, by NDC, by Program;
(4) The covered entity's branded prescription drug sales taken into account after application of § 51.5T(a)(3);
(5) The aggregate branded prescription drug sales taken into account for all covered entities; and
(6) The final determination with respect to error reports.
(b)
(c)
(d)
(a)
(b)
(c)
(d)
Any claim for a refund of the fee must be made by the person that paid the fee to the government and must be made on Form 843, “Claim for Refund and Request for Abatement,” in accordance with the instructions for that form.
Sections 51.1T through 51.10T apply to any fee on branded prescription drug sales that is due on or after September 30, 2011.
The applicability of §§ 51.1T through 51.10T expires August 15, 2014.
(a)
(b)
(c)
26 U.S.C. 7805.
(b) * * *
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary security zone encompassing certain waters of the Potomac River, Georgetown Channel, in Washington, DC, in order to safeguard high-ranking public officials from terrorist acts and incidents. This action is necessary to ensure the safety of persons and property, and prevent terrorist acts or incidents. This rule prohibits vessels and people from entering the security zone and requires vessels and persons in the security zone to depart the security zone, unless specifically exempt under the provisions in this rule or granted specific permission from the Coast Guard Captain of the Port Baltimore.
This rule is effective from 6 a.m. until 6 p.m. on August 28, 2011.
Documents indicated in this preamble as being available in the docket are part of docket USCG-2011-0760 and are available online by going to
If you have questions on this temporary rule, call or e-mail Mr. Ronald L. Houck, at Sector Baltimore Waterways Management Division, Coast Guard; telephone 410-576-2674, e-mail
The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is contrary to public interest to delay the effective date of this rule. The Coast Guard is establishing the security zone to protect high-ranking government officials, mitigate potential terrorist acts, and enhance public and maritime safety and security. The Coast Guard was unable to publish a NPRM due to the short time period between event planners notifying the Coast Guard of the event and publication of the security zone. Furthermore, delaying the effective date would be contrary to the security zone's intended objectives of protecting high-ranking government officials, mitigating potential terrorist acts and enhancing public and maritime safety security.
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The President of the United States will be attending the Martin Luther King, Jr. National Memorial in Washington, DC dedication ceremony on August 28, 2011. The ceremony is located along the waterfront in Washington, DC, in close proximity to navigable waterways within the Captain of the Port's Area of Responsibility.
The Coast Guard has given each Coast Guard Captain of the Port the ability to implement comprehensive port security regimes designed to safeguard human life, vessels, and waterfront facilities while still sustaining the flow of commerce. The Captain of the Port Baltimore is establishing this security zone to protect high-ranking government officials, mitigate potential terrorist acts, and enhance public and maritime safety and security in order to safeguard life, property, and the environment on or near the navigable waters.
Through this regulation, the Coast Guard will establish a security zone. The security zone will be in effect from 6 a.m. until 6 p.m. on August 28, 2011. The security zone will include all navigable waters of the Potomac River, Georgetown Channel, within 75 yards from eastern shore measured perpendicularly to the shore between the Theodore Roosevelt Memorial Bridge and the Arlington Memorial
This rule requires that entry into, attempted entry into, or remaining in this security zone is prohibited unless authorized by the Coast Guard Captain of the Port Baltimore. Except for persons or vessels authorized by the Captain of the Port Baltimore, no person or vessel may enter or remain in the regulated area during the enforcement period. All vessels underway within the security zone at the time it is in effect are to depart the zone immediately. To seek permission to transit the area, the Captain of the Port Baltimore can be contacted at telephone number 410-576-2693 or on Marine Band Radio, VHF-FM channel 16 (156.8 MHz). Coast Guard vessels enforcing the security zone can be contacted on Marine Band Radio, VHF-FM channel 16 (156.8 MHz). The Coast Guard will issue Broadcast Notices to Mariners to further publicize the security zone.
We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on 13 of these statutes or executive orders.
This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. Although this security zone restricts vessel traffic from transiting through the affected area, vessels may transit safely around the zone. Furthermore, the effect of this regulation will not be significant due to the limited size and duration that the regulated area will be in effect. In addition, notifications will be made to the maritime community via marine information broadcasts so mariners may adjust their plans accordingly.
Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.
The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule may affect the following entities, some of which might be small entities: The owners or operators of vessels intending to operate or transit through or within the security zone during the enforcement period. The security zone will not have a significant economic impact on a substantial number of small entities for the following reasons. The security zone is of limited size and duration. Vessel traffic may safely transit around the zone. Before the effective period, maritime advisories will be widely available to the maritime community.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offer to assist small entities in understanding the rule so that they can better evaluate its effects on them and participate in the rulemaking process.
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This rule will not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.
This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant
The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.
This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.
We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction. This rule involves establishing a temporary security zone. An environmental analysis checklist and a categorical exclusion determination are available in the docket where indicated under
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
33 U.S.C. 1231; 46 U.S.C. Chapter 701, 3306, 3703; 50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, 160.5; Pub. L. 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(c)
(1) All persons are required to comply with the general regulations governing security zones found in 33 CFR 165.33.
(2) Entry into or remaining in this zone is prohibited unless authorized by the Coast Guard Captain of the Port Baltimore. All vessels underway within this security zone at the time it is implemented are to depart the zone.
(3) Persons desiring to transit the area of the security zone must first obtain authorization from the Captain of the Port Baltimore or his designated representative. To seek permission to transit the area, the Captain of the Port Baltimore and his designated representatives can be contacted at telephone number 410-576-2693 or on Marine Band Radio, VHF-FM channel 16 (156.8 MHz). The Coast Guard vessels enforcing this section can be contacted on Marine Band Radio, VHF-FM channel 16 (156.8 MHz). Upon being hailed by a U.S. Coast Guard vessel, or other Federal, State, or local agency vessel, by siren, radio, flashing light, or other means, the operator of a vessel shall proceed as directed. If permission is granted, all persons and vessels must comply with the instructions of the Captain of the Port Baltimore or his designated representative and proceed at the minimum speed necessary to maintain a safe course while within the zone.
(4)
(d)
Postal Service
Final rule.
The Postal Service is revising
Markes Lucius at 202-268-6140 or Bill Chatfield at 202-268-7278.
On February 24, 2011, the Postal Service filed a notice with the Postal Regulatory Commission to institute a new competitive product, then tentatively called “Lightweight Commercial Parcels,” and to remove First-Class Mail commercial base and commercial plus parcels from the market-dominant product offerings. The Commission completed its review on April 6, 2011.
In this final rule, the Postal Service provides a description of the conditions
The Postal Service will begin to account for any First-Class Mail commercial base or commercial plus priced parcels as the competitive First-Class Package Service product on October 1, 2011. Mailers will retain the option to mail eligible items weighing 13 ounces or less at retail First-Class Mail single-piece parcel prices.
Mailers may begin using the new labeling and marking methods outlined in this final rule as of October 3, 2011, but will not be required to do so until May 2012.
The Postal Service adopts the following changes to
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.
* * * Lower weight limits apply to parcels mailed at Priority Mail commercial plus cubic, Regional Rate Box, First-Class Package Service, Standard Mail, Parcel Select Regional Ground, and Bound Printed Matter prices. * * *
First-Class Package Service parcels cannot exceed 13 ounces, except for commercial plus parcels, which may exceed 13 ounces but must weigh less than 16 ounces.
* * * First-Class Package Service parcels are eligible for Delivery Confirmation and Signature Confirmation services. A First-Class Package Service parcel is:
Markings must be placed as follows:
a. * * * The basic required marking “Presorted (or “PRSRT”) First-Class Package” (or “PKG”) must be printed as part of; directly below; or to the left of the postage on presorted parcels. * * *
b. * * * In addition to the basic marking in 2.4.1a, First-Class Package Service parcels claiming commercial parcel prices must be marked as follows in a prominent location on the address side of the parcel:
1. Except for parcels with permit imprint postage, parcels claiming commercial base prices must be marked “Commercial Base Price” or “ComBasPrice.”
2. All parcels claiming commercial plus prices must be marked “Commercial Plus Price” or “ComPlsPrice.”
* * * All prices and fees can be found in Notice 123-Price List.
First-Class Package Service commercial base prices are the same price for the first three ounces, with additional prices per additional ounce or fraction thereof; any fraction of an ounce after the first three ounces is considered a whole ounce. The minimum postage per addressed piece is that for a piece weighing 3 ounces. First-Class Package Service commercial plus prices are not based on ounce increments but are flat rate prices at each sortation level for parcels weighing less than 16 ounces.
First-Class Package Service presorted parcels no more than 13 ounces in weight are eligible for commercial base prices. Nonpresorted First-Class Package Service parcels no more than 13 ounces in weight mailed under the following conditions are eligible for single-piece commercial base prices:
a. The residual portion of a presorted mailing prepared under 435.4.0.
b. Nonpresorted mailings paid by permit imprint, IBI meter, or PC Postage.
c. See 402.2.4 for marking requirements.
First-Class Package Service machinable parcels less than 16 ounces and Merchandise Return Service parcels are eligible for commercial plus prices for customers that:
a. Establish a customer commitment agreement with the Postal Service to mail more than 5,000 First-Class Package Service machinable parcels (including those parcels returned using Merchandise Return Service) at commercial plus prices in a calendar year. Customers may contact their account manager or the manager, Shipping Support (see 608.8.0 for address) for additional information.
b. Pay for postage by using a permit imprint.
c. Enter a minimum of 500 pieces of mail for each presorted mailing, or a minimum of 200 pieces or 50 pounds of mail for each single-piece mailing, or receive parcels returned using Merchandise Return Services.
d. Use the Electronic Verification System (eVS) or submit an electronic postage statement with a computerized manifest.
e. Mark parcels under 402.2.4.
Payment of a presort mailing fee is required once each 12-month period at each office of mailing by any person or organization entering mailings at automation or Presorted First-Class Mail or any First-Class Package Service prices. Payment of one fee allows a mailer to enter mail at all those prices. Persons or organizations paying this fee may enter mail of their clients as well as their own mail. The fee may be paid in advance only for the next 12 months and only during the last 60 days of the current service period. The fee charged is that which is in effect on the date of payment.
Affix postage to each piece or, for permit imprint mailings, multiply the number of pieces at each price increment by the corresponding postage price, add the
With the exception of restricted material described in 601.8.0, any mailable item may be mailed at First-Class Package Service commercial plus prices. Parcels mailed at First-Class Package Service commercial base prices are not sealed against inspection and may not contain documents or personal correspondence, except that such parcels may contain invoices, receipts, incidental advertising, and other documents that relate in all substantial respects to merchandise contained in the parcels.
See 133.3.0 for a detailed description of matter required to be mailed as First-Class Mail (or Express Mail or Priority Mail). The following types of contents must be mailed as First-Class Mail (or Express Mail or Priority Mail):
a. Bills and statements of account.
b. Personal information.
c. Handwritten and typewritten material.
All First-Class Package Service parcels are subject to limitations for air transportation. See 601.10.0 for restrictions on air transportation.
First-Class Package Service parcels receive expeditious handling and transportation.
Parcels mailed at First-Class Package Service commercial plus prices are closed against postal inspection. Federal law and USPS regulations restrict both opening and reviewing the contents of First-Class Package Service commercial plus parcels by anyone other than the addressee.
The postage price of First-Class Package Service parcels includes forwarding service to a new address for up to 12 months and return of undeliverable parcels to the sender.
Extra services available for First-Class Package Service parcels are certificate of mailing service, Certified Mail service, COD service, Delivery Confirmation service, insured mail service (merchandise only), Registered Mail service, return receipt service, restricted delivery service, Signature Confirmation service, and special handling. See information regarding extra services in 503. See 508.7.0 for details about Hold for Pickup service.
All presorted First-Class Package Service parcels must:
a. Meet the applicable postage payment standards in 434 and 604.7.0.
b. Bear a delivery address that includes the correct ZIP Code or ZIP+4 code and that meets the address quality standards in 3.4 and 3.5.
Postage for First-Class Package Service parcels must be paid with
All First-Class Package Service parcels may bear permit imprint postage under 604.5.0. * * *
Each First-Class Package Service parcel bearing affixed postage (not allowed for commercial plus parcels) must bear the full postage at the First-Class Package Service price for which it qualifies.
Supporting documentation (see 708.1.0) of postage is required for each mailing except for eVS mailings under 705.2.9, or unless the correct price is affixed to each piece or each piece is of identical weight and the pieces are separated by price when presented for acceptance.
Terms used for presort levels are defined as follows:
a. 5-digit scheme for First-Class Package Service parcels: * * *
Line 2 (content line) must meet these standards:
b.
Each Presorted First-Class Package Service mailing must be prepared in USPS-approved sacks and each parcel marked “Presorted” (or “PRSRT”) and “First-Class Package Service.” All parcels must be sorted together and prepared under 4.3 and 4.4.
Single-piece (nonpresorted) First-Class Package Service parcels may be presented as a separate mailing or with a presorted mailing and reported on the same postage statement as follows:
a. The single-piece mail must be physically separated from other pieces.
b. The single-piece mail must bear no presorted price marking, or must be marked with the correction marking: “Single-Piece” or “SNGLP” under 402.2.4.
Preparation sequence, sack size, and labeling:
a. * * * labeling:
2. Line 2: For 5-digit scheme sacks, “FC PARCELS 5D SCH.” For 5-digit sacks, “FC PARCELS 5D.”
b. * * * labeling:
2. Line 2: “FC PARCELS 3D.”
c. * * * labeling:
2. Line 2: “FC PARCELS ADC.”
d. * * * labeling:
2. Line 2: “FC PARCELS WKG.”
First-Class Package Service parcels must be deposited at locations and times designated by the postmaster. Metered mail must be deposited in locations under the jurisdiction of the licensing Post Office except under 604.4.5.3. Permit imprint mail must be deposited under 604.5.0 and 705.
The USPS may collect First-Class Package Service parcels at a mailer's facility if part of an approved collection service for other classes of mail; space is available on the transportation; and:
Mailings are subject to USPS procedures to verify correct preparation and postage payment. If, at the acceptance unit, a mailing is found not to qualify for a First-Class Package Service presort price, the mailer must take corrective action or pay a single-piece price (see 2.3). The return of mailings to the mailer's facility for reworking is the mailer's responsibility.
A mailer who pays a single-piece First-Class Package Service price rather than correcting presorting errors in a mailing paid with meter or precanceled stamps must either affix metered postage for the additional amount on each piece or pay the difference in cash (or by check) and present the receipt to the acceptance point before the mail may be released for processing. A mailer who makes the same choice for a permit imprint mailing must correct the postage statement to show the higher price.
Only mailable matter prepaid with postage at the First-Class Mail, First-Class Package Service, or Priority Mail (excluding Critical Mail) prices may be sent as Registered Mail. * * *
Only mailable matter prepaid with postage at the First-Class Mail, First-Class Package Service, or Priority Mail (excluding Critical Mail) prices may be sent as Certified Mail.
The following types of mail may be insured:
a. First-Class Mail, First-Class Package Service and Priority Mail (including Critical Mail), if it contains matter that is eligible to be mailed at Standard Mail or Package Services prices.
The following options are available for mailers who print their own labels:
c. Mailers must use an integrated barcode (see Exhibit 4.3.5c) when insurance is purchased online for Priority Mail and for parcels mailed at First-Class Mail, First-Class Package Service, Media Mail, Parcel Post, or Parcel Select prices. * * *
* * * The correct fee must be paid in addition to postage for mailings of identical pieces of First-Class Mail, First-Class Package Service (except for parcels mailed at commercial plus prices), Priority Mail (excluding Critical Mail), and Package Services. * * *
* * * This certificate is provided only for a mailing of identical pieces of First-Class Mail, First-Class Package Service (except for parcels mailed at commercial plus prices), Priority Mail (excluding Critical Mail), Standard Mail, and Package Services. * * *
Return receipt service is available for:
b. First-Class Mail, First-Class Package Service, and Priority Mail (excluding Critical Mail) when purchased at the time of mailing with Certified Mail, COD, insured mail (for more than $200.00), or Registered Mail service.
Restricted Delivery service is available for:
a. First-Class Mail, First-Class Package Service, and Priority Mail (excluding Critical Mail) when purchased at the time of mailing with Certified Mail, COD, insured mail (for more than $200.00), or Registered Mail service.
Delivery Confirmation is available for First-Class Mail parcels and First-Class Package Service parcels; all Priority Mail pieces; Standard Mail Not Flat-Machinable pieces and machinable or irregular parcels (electronic option only); Package Services, Parcel Select, and Parcel Select Regional Ground parcels (electronic option only) under 401.1.0. * * *
Signature Confirmation is available for First-Class Mail parcels and First-Class Package Service parcels; all Priority Mail pieces; Standard Mail Not Flat-Machinable pieces and machinable or irregular parcels (electronic option only); Package Services, Parcel Select, and Parcel Select Regional Ground
COD service may be used for Express Mail, First-Class Mail, First-Class Package Service, Priority Mail (excluding Critical Mail), and any Package Services or Parcel Select sub-category if:
Sealed domestic mail of any class bearing First-Class Mail or First-Class Package Service postage may be sent as registered COD mail. * * *
Special handling service is available only for First-Class Mail, First-Class Package Service, Priority Mail (excluding Critical Mail), Package Services, and Parcel Select pieces.
Unless sent at First-Class Mail, First-Class Package Service, or Priority Mail prices, special handling is required for parcels containing honeybees or baby poultry.
Mail with extra services is treated according to the charts for each class of mail in 1.5, except that:
b. All insured First-Class Mail. First-Class Package Service and Priority Mail pieces are forwarded and returned at no additional charge. All insured Standard Mail, Package Services, and Parcel Select pieces are forwarded or returned.
Undeliverable-as-addressed First-Class Mail (including postcards), First-Class Package Service, and Priority Mail pieces are treated under Exhibit 1.5.1, with these additional conditions:
d. First-Class Mail, First-Class Package Service or Priority Mail pieces bearing Standard Mail markings and endorsements under 202 and 244.5.1 for letters, 302 and 344.5.1 for flats, and 402 and 444.4.1 for parcels receives forwarding, return, and address correction services for Standard Mail under 1.5.3.
e. “Change Service Requested” is not permitted for the following:
2. First-Class Mail, First-Class Package Service, or Priority Mail pieces containing hazardous materials under 601.10.0.
3. First-Class Mail, First-Class Package Service or Priority Mail pieces with an extra service other than Delivery Confirmation or Signature Confirmation.
f. Address Change Service under 4.0 is available for First-Class Mail, First-Class Package Service, and Priority Mail pieces with the ACS participant code for an authorized ACS participant and a valid ancillary service endorsement. Mailers participating in OneCode ACS under 4.2.6 may print an Intelligent Mail barcode on First-Class Mail automation letters instead of a participant code and endorsement. The only endorsements permitted on First-Class Mail, First-Class Package Service and Priority Mail valid ACS pieces are “Address Service Requested”, “Change Service Requested” or “Electronic Service Requested” subject to the following:
(b) First-Class Mail and First-Class Package Service (excluding hazardous materials).
Mailpieces sent as Express Mail, Priority Mail, First-Class Mail, or First-Class Package Service that cannot be delivered as addressed or forwarded to a new address, unless otherwise requested by the sender, are returned to the sender at no additional charge. Excluding pieces containing live animals, the following are disposed of by the USPS:
a. Priority Mail pieces with a valid Address Change Service (ACS) participant code marked “Perishable” and endorsed “Change Service Requested.”
b. First-Class Mail or First-Class Package Service pieces with a valid ACS participant code and endorsed “Change Service Requested.”
Dead mail is matter deposited in the mail that is undeliverable and cannot be returned to the sender. A reasonable effort is made to match articles found loose in the mail with the envelope or wrapper and to return or forward the articles. The disposition of dead mail items is as follows:
e. Except for unendorsed Standard Mail, undeliverable Standard Mail and Package Services, and insured First-Class Mail or First-Class Package
All Express Mail, Priority Mail, First-Class Mail, First-Class Package Service, Periodicals, and Package Services pieces addressed to a discontinued Post Office may be forwarded without added charge to a Post Office that the addressee designates as more convenient than the office to which the USPS ordered the mail sent.
When rural delivery service is established or changed, a customer of any office receiving mail from the rural carrier of another office may have all Express Mail, Priority Mail, First-Class Mail, First-Class Package Service, Periodicals, and Package Services pieces forwarded to the latter office for delivery without added charge, if the customer files a written request with the postmaster at the former office.
All Express Mail, First-Class Mail, First-Class Package Service, Periodicals, and Package Services mailpieces addressed to persons in the U.S. Armed Forces (including civilian employees) serving where U.S. mail service operates is forwarded at no added charge when the change of address is caused by official orders. * * *
Priority Mail, First-Class Mail (including postcards), and First-Class Package Service mailpieces are forwarded without charge when postage is fully prepaid by the sender.
Mailpieces requiring a scan or signature at delivery, such as Express Mail or numbered insured mail, are scanned, and then rerouted immediately and separately to the temporary address, subject to the following:
a. Express Mail, Priority Mail, First-Class Mail and First-Class Package Service mailpieces are rerouted at no additional charge.
First-Class Mail, First-Class Package Service, and Periodicals parcels not requiring a scan or signature at delivery and that do not fit into the weekly Priority Mail shipment are separately rerouted at no additional charge.
* * * Mailpieces arriving postage due are rerouted as follows:
a. Postage due First-Class Mail and First-Class Package Service mailpieces are rerouted as First-Class Mail or First-Class Package Service postage due. Only the original postage due amount is collected. There is no additional charge for rerouting the mailpiece.
When possible, “on-piece” address correction is provided for Express Mail, Priority Mail, First-Class Mail, First-Class Package Service, Standard Mail, Package Services, and Parcel Select pieces. If the piece cannot be forwarded, it is returned with new address information or reason for nondelivery attached. When separate corrections are necessary, Form 3547 is mailed to the sender with the address correction fee charged and the mail is forwarded. This service is not available for mailpieces to be delivered by military personnel at any military installation, including APOs and FPOs.
The mailer must pay all expenses of recalling mail (including return postage for other than First-Class Mail or First-Class Package Service mailpieces). * * *
All mail not bearing a simplified address must bear a delivery address that contains at least the following elements in this order from the top line:
e. ZIP Code where required:
1. ZIP Codes are required on Express Mail, commercial First-Class Mail, First-Class Package Service, Periodicals, Standard Mail, Package Services and Parcel Select mailpieces, all mail sent to military addresses within the United States and to APO and FPO addresses, official mail, Business Reply Mail, and merchandise return service mail.
Basic addressing standards are in the Prices and Eligibility section for each class of mail.
Mailers may use postage evidencing systems to affix or apply indicia on any class of mail except First-Class Package Service commercial plus parcels, Periodicals, and Bound Printed Matter.
* * * The mailing date format used in the indicia is also subject to the following conditions.
a. Complete Date. Mailers must use a complete date for the following:
1. All Express Mail, Priority Mail, First-Class Mail, and First-Class Package Service pieces.
A mailer may be authorized to mail material without affixing postage when payment is made at the time of mailing from a permit imprint advance deposit account established with USPS. This payment method may be used for postage and extra service fees for Express Mail (“eVS” only), Priority Mail, First-Class Mail, First-Class Package Service, Standard Mail, Package Services, and Parcel Select mailpieces. This method is not available for Periodicals.
A permit imprint indicia on Express Mail, Priority Mail, Critical Mail, First-Class Mail, or First-Class Package Service mailpieces must show “Express Mail,” “Priority Mail” (or “Priority”), “Critical Mail,” “First-Class Mail,” or “First-Class Package” (or “First-Class Pkg”) as applicable; “U.S. Postage Paid”; city and state; and permit number. * * *
Line 2 (content line) must meet these standards:
We will publish an appropriate amendment to 39 CFR Part 111 to reflect these changes.
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is approving portions of a proposed State Implementation Plan revision submitted by New York that are intended to meet several Clean Air Act requirements for attaining the 0.08 part per million 8-hour ozone national ambient air quality standards. Specifically, EPA is approving into the SIP the following elements which are required by the Act: The 2002 base year and 2008 projection year emissions inventories, the 2008 motor vehicle emissions budgets used for planning purposes, the 2008 Reasonable Further Progress (RFP) plan, and the 2008 RFP Plan contingency measures as they apply to the New York portion of the New York-Northern New Jersey-Long Island, NY-NJ-CT 8-hour ozone moderate nonattainment area. EPA is also approving the 2002 base year emissions inventory for the Poughkeepsie 8-hour ozone moderate nonattainment area and the state-wide 2002 base year ozone emissions inventory.
EPA has established a docket for this action under Docket ID No. EPA-R02-OAR-2010-1058. All documents in the docket are listed on the
Raymond K. Forde, Air Programs Branch, Environmental Protection Agency, 290 Broadway, 25th Floor, New York, New York 10278, (212) 637-3716.
On March 31, 2011 (76 FR 17801), EPA proposed approval of the New York State Implementation Plan (SIP) submitted on February 8, 2008 and supplemented on December 28, 2009 and January 26, 2011. The SIP submittal addresses the requirements for the New York portion of the New York-Northern New Jersey-Long Island and Poughkeepsie 8-hour ozone moderate nonattainment areas. The New York portion of the New York-Northern New
The following Clean Air Act (CAA) requirements were the subject of the March 31, 2011 proposal: The 2002 base year emissions inventory, the 2008 projection year emissions inventories, the 2008 motor vehicle emissions budgets used for planning purposes, the 2008 RFP plan, the 2008 RFP Plan contingency measures as they apply to the New York portion of the New York Metro ozone moderate nonattainment area, the 2002 base year emissions inventory for the Poughkeepsie 8-hour ozone moderate nonattainment area and the state-wide 2002 base year ozone emissions inventory.
With respect to the Poughkeepsie area, EPA has evaluated its air quality monitoring data and has determined the Poughkeepsie area has attained the 8-hour ozone standard. On December 7, 2009, EPA announced this determination in the
A detailed discussion of the SIP revisions and EPA's rationale for approving them is contained in the March 31, 2011 proposal and will not be restated here. The reader is referred to the proposal for more details.
EPA received no comments in response to the March 31, 2011 proposal. Therefore, in this action, EPA is approving New York's plans.
EPA has evaluated New York's submittal for consistency with the Clean Air Act and Agency regulations and policy. EPA is approving into the SIP the following components for the New York portion of the New York-Northern New Jersey-Long Island, NY-NJ-CT 8-hour ozone moderate nonattainment area which are required by the Act: the 2002 base and 2008 projection year emissions inventories, the 2008 motor vehicle emissions budgets used for planning purposes, the 2008 RFP plan, and the 2008 RFP Plan contingency measures. These components were submitted to EPA by New York in a package entitled “New York SIP for Ozone—Attainment Demonstration for New York Metro Area,” dated February 8, 2008 and supplemented on December 28, 2009 and January 26, 2011.
EPA is also approving the 2002 base year emissions inventory for the Poughkeepsie 8-hour ozone moderate nonattainment area and the state-wide 2002 base year emissions inventory. New York submitted these revisions to EPA for review and approval on February 8, 2008 in a package entitled, “New York SIP for Ozone—Attainment Demonstration for Poughkeepsie, NY Area” and supplemented on December 28, 2009 and January 26, 2011.
Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive 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 Clean Air Act; 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 SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 17, 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).)
Environmental protection, Air pollution control, Carbon monoxide, Incorporation by reference,
Part 52, chapter I, title 40 of the Code of Federal Regulations is amended as follows:
42 U.S.C. 7401
(e) * * *
(l)(1) The following State Implementation Plan (SIP) elements are approved: The 2002 base year emissions inventory, the 2008 projection year emissions inventories, the 2008 motor vehicle emissions budgets used for planning purposes, the 2008 ozone reasonable further progress (RFP) plan, and the 2008 RFP Plan contingency measures as they apply to the New York portion of the New York-Northern New Jersey-Long Island, NY-NJ-CT 8-hour ozone moderate nonattainment area. These elements are included in the package entitled “New York SIP for Ozone-Attainment Demonstration for New York Metro Area,” dated February 8, 2008 and supplemented on December 28, 2009 and January 26, 2011.
(2) The following SIP elements are approved: The 2002 base year emissions inventory for the Poughkeepsie 8-hour ozone moderate nonattainment area and the state-wide 2002 base year emissions inventory. These elements are included in a package entitled, “New York SIP for Ozone-Attainment Demonstration for Poughkeepsie, NY Area,” dated February 8, 2008 and supplemented on December 28, 2009 and January 26, 2011.
Environmental Protection Agency.
Direct final rule.
The Environmental Protection Agency (EPA) Region II is publishing a direct final Notice of Deletion of the Barceloneta Landfill Superfund Site (Site), located in Florida Afuera, Puerto Rico, from the National Priorities List (NPL). The NPL, promulgated pursuant to section 105 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980, as amended, is an appendix of the National Oil and Hazardous Substances Pollution Contingency Plan (NCP). This direct final deletion is being published by EPA with the concurrence of the Commonwealth of Puerto Rico, through the Puerto Rico Environmental Quality Board, because EPA has determined that all appropriate response actions under CERCLA, other than operation, maintenance, and five-year reviews, have been completed. However, this deletion does not preclude future actions under Superfund.
This direct final deletion is effective October 3, 2011 unless EPA receives adverse comments by September 19, 2011. If adverse comments are received, EPA will publish a timely withdrawal of the direct final deletion in the
Submit your comments, identified by Docket ID no. EPA-HQ-SFUND-1983-0002, by one of the following methods:
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Luis E. Santos, Remedial Project Manager, U.S. Environmental Protection Agency, Region II, telephone at (787) 977-5824; fax at 787-289-7104; or e-mail at
EPA Region II is publishing this direct final Notice of Deletion of the Barceloneta Landfill Superfund Site (Site), from the National Priorities List (NPL). The NPL constitutes Appendix B of 40 CFR part 300, which is the National Oil and Hazardous Substances Pollution Contingency Plan (NCP), which EPA promulgated pursuant to section 105 of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) of 1980, as amended. EPA maintains the NPL as the list of sites that appear to present a significant risk to public health, welfare, or the environment. Sites on the NPL may be the subject of remedial actions financed by the Hazardous Substance Superfund (Fund). As described in 300.425(e) (3) of the NCP, sites deleted from the NPL remain eligible for Fund-financed remedial actions if future conditions warrant such actions.
Because EPA considers this action to be noncontroversial and routine, this action will be effective October 3, 2011 unless EPA receives adverse comments by September 19, 2011. Along with this direct final Notice of Deletion, EPA is co-publishing a Notice of Intent to Delete in the “Proposed Rules” section of the
Section II of this document explains the criteria for deleting sites from the NPL. Section III discusses procedures that EPA is using for this action. Section IV discusses the Barceloneta Landfill Superfund Site and demonstrates how it meets the deletion criteria. Section V discusses EPA's action to delete the Site from the NPL unless adverse comments are received during the public comment period.
The NCP establishes the criteria that EPA uses to delete sites from the NPL. In accordance with 40 CFR 300.425(e), sites may be deleted from the NPL where no further response is appropriate. In making such a determination pursuant to 40 CFR 300.425(e), EPA will consider, in consultation with the state, whether any of the following criteria have been met:
i. Responsible parties or other persons have implemented all appropriate response actions required;
ii. all appropriate Fund-financed response under CERCLA has been implemented, and no further response action by responsible parties is appropriate; or
iii. the remedial investigation has shown that the release poses no significant threat to public health or the environment and, therefore, the taking of remedial measures is not appropriate.
Pursuant to CERCLA section 121 (c) and the NCP, EPA conducts five-year reviews to ensure the continued protectiveness of remedial actions where hazardous substances, pollutants, or contaminants remain at a site above levels that allow for unlimited use and unrestricted exposure. EPA conducts such five-year reviews even if a site is deleted from the NPL. EPA may initiate further action to ensure continued protectiveness at a deleted site if new information becomes available that indicates it is appropriate. Whenever there is a significant release from a site deleted from the NPL, the deleted site may be restored to the NPL without application of the hazard ranking system.
The following procedures apply to deletion of the Site:
(1) EPA consulted with the Commonwealth of Puerto Rico prior to
(2) EPA has provided the state 30 working days for review of this notice and the parallel Notice of Intent to Delete prior to their publication today, and the Commonwealth, through the Puerto Rico Environmental Quality Board, has concurred on the deletion of the Site from the NPL.
(3) Concurrently with the publication of this direct final Notice of Deletion, a notice of the availability of the parallel Notice of Intent to Delete is being published in a major local newspaper, El Norte y Puerto Rico Daily Sun. The newspaper notice announces the 30-day public comment period concerning the Notice of Intent to Delete the Site from the NPL.
(4) The EPA placed copies of documents supporting the proposed deletion in the deletion docket and made these items available for public inspection and copying at the Site information repositories identified above.
(5) If adverse comments are received within the 30-day public comment period on this deletion action, EPA will publish a timely notice of withdrawal of this direct final Notice of Deletion before its effective date and will prepare a response to comments and continue with the deletion process on the basis of the Notice of Intent to Delete and the comments already received.
Deletion of a site from the NPL does not itself create, alter, or revoke any individual's rights or obligations. Deletion of a site from the NPL does not in any way alter EPA's right to take enforcement actions, as appropriate. The NPL is designed primarily for informational purposes and to assist EPA management. Section 300.425(e)(3) of the NCP states that the deletion of a site from the NPL does not preclude eligibility for future response actions, should future conditions warrant such actions.
The following summary provides the Agency's rationale for recommending deletion of the Barceloneta Landfill Superfund Site from the NPL:
The Barceloneta Landfill, an inactive non-hazardous domestic and industrial waste disposal facility, is located in Barceloneta, Puerto Rico on the north coast of the island, approximately 20 miles due west of San Juan. The Landfill is about 4.5 kilometers south of the Town of Barceloneta in Florida Afuera Ward. The property which contains the Barceloneta Landfill is approximately 32.6 hectares (80.6 acres) in size and is owned by the Municipality of Barceloneta. The Landfill is surrounded by a tropical forest. The Quebrada Cimarrona, a tributary of the Rio Grande de Manatí, is located 0.8 kilometers north of the Landfill. A small residential area of approximately 150 residences in Barrio Bajura Adentro is located approximately one kilometer east of the Landfill. Approximately two kilometers north of the Landfill, in an area with more gentle topographic relief, there are a series of manufacturing facilities. The nearest village is Cruce Magueyes, located approximately two kilometers to north-west of the Landfill. The residences in the area of the Landfill are served by a public water supply system that uses ground water as a source.
The property contained three surface depressions which were used for waste disposal. These waste disposal areas are known as the northern, southern, and southeastern disposal areas. Each disposal area was located in a depression or “sumidero” (sinkhole) that is surrounded by conical limestone hills referred to as “mogotes”. The three waste disposal areas cover about 15 acres. The northern disposal area is separated into two sections by an access road. The southern disposal area was also known as the Superfund disposal area or “El Superfondo”. The northern and southern disposal areas were filled and inactive at the time of the 1996 Record of Decision (ROD). The southeastern disposal area remained active until December 31, 1998. Although the southern disposal area was known as the Superfund disposal area, all three disposal areas are covered by the Superfund National Priorities List (NPL) site listing and were addressed under CERCLA.
The Barceloneta Landfill is located in a belt of rugged karst topography that extends along the north coast from 30 kilometers (19 miles) east of San Juan to the west of the island. In the vicinity of the Site, this belt is located from about one kilometer south of the coast to about 20 kilometers (12 miles) inland. North (seaward) of this rugged karst region is a belt of relatively flat coastal plain sediments. South (landward), the rugged karst terrain transitions into the central mountainous core of the island. Features of this karst landscape include numerous sumideros, steep scarp cliffs on the mogotes and adjoining ridges which surround the sumideros, and a lack of surface streams or drainage features associated with individual sumideros.
The Site is underlain by the northern limestone province of Puerto Rico which consists of blanket deposits, the Aymamon Limestone, the Aguada Limestone, the Cibao Formation, and the Lares Formation. Groundwater exists under unconfined conditions in the Aymamon and Aguada Limestones and under confined conditions in the Cibao and Lares Formations. Groundwater flow is to the north.
Groundwater in this area of the northern province discharges to the Rio Grande de Manatí (river) and the Cano Tiburones (wetlands) which are 2.7 kilometers (1.7 miles) north of the Site. Groundwater also feeds the Ojo de Guillo spring located 1 kilometer (0.6 miles) northeast of the Site.
The property on which the Barceloneta Landfill is located was purchased by the Municipality of Barceloneta during the early 1970s. Preparation of the Site for landfill use began in April 1972, and the landfill operations commenced in August 1973. Reportedly, the Landfill was initially approved to receive both municipal and industrial waste, but was restricted to only municipal waste disposal in 1975. However, disposal of industrial wastes appears to have continued past 1975. Specific dates of active filling in each of the three disposal areas are difficult to determine given the lack of detailed record keeping. The Puerto Rico Environmental Quality Board (EQB) has information which indicates that the Landfill (all three disposal areas) was used in the late 1970's for disposal of wastes which contained hazardous substances. Personnel from EQB and the Department of Health conducted numerous inspections of the Site and listed various violations. These violations included: Insufficient cover material; allowing refuse to burn; the presence of flies, rats and mosquitoes; allowing unlimited access to the Landfill; and, allowing people to inhabit structures in the Landfill. The Site was proposed for inclusion on the NPL in December 1982 (47 FR 58476), and was subsequently approved and listed as an NPL site in September 1983 (48 FR 40658). No activities were conducted using EPA removal authority at this site. The site property consists mainly of forested areas which provide a habitat for various plant, insect and animal species. In order to protect the landfill cap, trees will not be allowed to grow on the capped area. However, grasses will be permitted to grow and it is expected that the landfill areas will be comparable to surrounding ecology. No reuse is planned for the site.
In 1984, a Remedial Action Master Plan (RAMP) was prepared by an EPA contractor for the Site. Based on the RAMP, a Remedial Investigation and Feasibility Study (RI/FS) Work Plan was developed. In September 1990, Consent Order was signed in which ten Settling Defendents (SDs) agreed to perform the RI/FS for the Site. Pursuant to the Work Plan, sampling of subsurface soils, ground water and surface water was completed. The first phase of the RI was completed in 1992 and the second phase of the RI field work was completed in January 1994. A final RI report was received by EPA in March 1995 and the streamlined Risk Assessment was completed in May 1995. An abbreviated Final FS was conducted in accordance with EPA's Presumptive Remedy approach and was received by EPA in September 1995.
Consistent with EPA's Presumptive Remedy approach, EPA conducted a streamlined baseline Risk Assessment by comparing the levels of contaminants in ground water to MCLs. These levels were exceeded, indicating that the Landfill is a source of contamination to the ground water and therefore remedial measures are necessary to protect human health and the environment. EPA's Risk Assessment indicated that the levels of contaminants present in the ground water pose a relatively low long-term threat to the human health. However, if no action were to be taken with respect to the Landfill, the continued release of contaminants into ground water could potentially result in a greater risk at some point in the future. Therefore, based on the results of the Risk Assessment, it was determined that actual or threatened release of hazardous substances from this Site present a threat to public health, welfare, or the environment.
On July 5, 1996, the Regional Administrator signed a ROD.The following remedial action objectives were established for the Site:
• To prevent direct contact with waste material;
• To reduce or eliminate the potential for the Landfill disposal areas to release hazardous substances to ground water;
• To reduce or eliminate the potential for migration of hazardous substances to ground water downgradient of the Landfill;
• To prevent the migration of and control Landfill gas; and
• To minimize any potential future impacts of hazardous substances that may migrate into environmental media.
• Installing a low permeability cover system for the three Landfill cells meeting the requirements of the RCRA Subtitle D and Puerto Rico's Regulations Governing Landfill Closure. This cover system or landfill cap(s) will further reduce infiltration of precipitation water into the landfill and reduce leachate generation thus mitigating impacts to ground water.
• Regrading the Site and installing storm water management improvements at the Site to reduce infiltration of storm water into the Landfill and reduce leachate generation.
• Conducting long term ground water and surface water monitoring to evaluate the effectiveness of the cover system. It is anticipated that monitoring will be conducted on a quarterly basis for the first year, semi-annually for the next four years, and then annually. Monitoring will include the eight existing monitoring wells. Initially, the wells will be sampled for a broad parameter list. The list has been developed based on constituents detected above Safe Drinking Water Act Maximum Contaminant Levels in the Remedial Investigation and on the requirements of the RCRA Subtitle D and Puerto Rico's Regulation Governing Landfill Closure (RMNHSW). After the first five years, the parameter list would be reviewed and those parameters not detected above standards would be omitted. The exact long term ground water monitoring program will be further defined remedial design (RD).
• Conducting a landfill gas survey during predesign to determine the necessity of a landfill gas collection system. The appropriate type of system, if necessary, will be determined during RD.
• Implementing a long term operation and maintenance program for the cover system which will include inspection of the system and provision for repair.
• Recommending to appropriate authorities that institutional controls be emplaced. Institutional controls are recommended in order to protect the integrity of the landfill cover system and to reduce potential exposure to landfill contents. The institutional controls will include recommending that zoning restrictions be applied to the Site to limit future land use and recommending that a deed restriction be established to limit future land and ground-water use.
• Installing a perimeter fence with signs to restrict access.
• Reevaluating Site conditions at least once every five years to determine if a modification of the selected remedy is necessary.
A September 30, 1997 Consent Decree (CD) memorialized a settlement whereby ten parties agreed to implement the remedy which was selected in the ROD. The SDs hired M&S Ingenieria y Ciencia Asociados who prepared remedial design plans and specifications, which EPA approved on September 17, 1999. On December 16, 1999, EPA approved the Remedial Action Work Plan and M&S Ingenieria y Ciencia Asociados as the Settling Defendants proposed a remedial action contractor.
During the RD activities a new area of waste disposal was discovered at the Site outside the limits of the three waste cells delineated for closure in the ROD. The waste was located in a sinkhole which lies immediately to the east of the Superfund cell. In agreement with EPA & EQB, the SDs relocated this waste material and performed a clean closure. This waste was incorporated and capped with the waste in Superfund disposal area.
The gas venting system was constructed on the Site. The gas venting system is monitored by the PRPs' contractor and results reviewed by EPA. The system is functioning as intended and it is not a necessity landfill gas collection system.
The groundwater monitoring program was developed during the RD phase: The system included the eight existing monitoring wells. It was determined that groundwater sampling would be conducted quarterly for the first year, semi-annually for the next four years, and then conducted annually. It was determined that the wells would be sampled for a broad parameter list developed based on constituents detected above MCLs and SDWS in the RI, RCRA Subtitle D requirements, and Puerto Rico's Regulation Governing Landfill Closure. This initial list of parameters included:
• Volatile Organic Compounds of Concern (VOCs). Only l,l-dichloroethane was detected above MCLs during the RI. However, a more conservative approach that included the complete EPA Method Scan for volatile organic compounds was implemented.
• Metals of Concern include mercury, chromium, manganese and nickel. These were detected above MCLs and SDWS during the RI.
After the first five years, the parameter list would be reviewed and those parameters not detected above standards would be omitted; The O&M Plan, dated March 28, 2000, and approved by EPA, establishes the criteria used to reevaluate and modify
EPA approved early Remedial Actions to be carried out prior to the final approval of the Remedial Design Report. These activities included the excavation and stockpiling of clay and the excavation and relocation of waste from the discovered waste area. These activities were started on September 7, 1999. The Remedial Action on-site construction started in January 24, 2000 and was completed on August 30, 2000.
On September 5, 2000, EPA and the State conducted a prefinal inspection and notified the Settling Defendants to proceed with the development of the draft Remedial Action (RA) Report. Punch list items identified during the prefinal inspection will be addressed in the final inspection. On September 27, 2001, EPA approved the final RA Report.
The Municipality of Barceloneta has implemented the Institutional Controls at the Site. The Institutional Controls including zoning restrictions and a deed restriction are in place. These controls were implemented at Barceloneta Landfill Deed on February 22, 2010.
The ROD called for conducting long-term groundwater monitoring to evaluate the effectiveness of the cover system, ensure that the concentrations of contaminants in the groundwater are decreasing over time, and monitor the natural attenuation of contaminants within the plume.
MW-3, has had only one parameter, 1,1-dichloroethene, exceeding MCLs during the two years of monitoring. However, on two consecutive monitoring periods (March 2003 and October 2003), the results for 1,1-dichloroethene were non-detect and 4.9 mg/l, respectively, and below the MCL of 7 mg/l. Based on the June 2004 groundwater monitoring report for the Site and according to the criteria in the O&M Plan, on September 2004, groundwater monitoring was reduced to five of the original eight wells and to the following parameters: mercury, chromium, manganese and nickel. These five wells are currently sampled annually. Mercury and chromium are monitored to ensure that levels remain below MCLs. Chromium was identified below the MCLs for three consecutive monitoring events it was omitted from the parameter list according to the O&M Plan, dated March 28, 2000. Since the ROD was signed, the MCL and MCLG were remanded for nickel. As a result, EPA no longer has an enforceable legal limit for nickel in drinking water. Therefore, mercury, nickel and manganese contaminant concentrations are still monitoring but there is no MCL threshold. The remaining five wells (MW-1, MW-4, MW-6, MW-7 and MW-8) are currently sampled annually.
Since 2004, the results of the Site Groundwater Analytical Results are summarized on a well by well basis below:
• MW-1, the background well, had concentrations below MCLs and SDWS for manganese, mercury and nickel during the Spring 2011 sampling event. These results showed similar concentrations to the last annual sampling event in March 2010.
• MW-4, located in the middle of the site, had concentrations of mercury below the MCL of 0.002 mg/L (0.00132 mg/L) during the Spring 2011 sampling event. These concentrations have decreased since 2004. Manganese and nickel were below SDWS during this sampling event.
• MW-6, a downgradient well, had concentrations of mercury below the MCL of 0.002 mg/L during the Spring 2011 sampling event. These concentrations have been consistently below the MCL since 2004. Nickel was found at a concentration of 0.192 mg/L. Concentrations of nickel at this well continue to decrease compared to previous sampling events. Manganese was detected above the SDWS and shows concentrations similar to the March 2010 sampling event.
• MW-7, a downgradient well, had concentrations of mercury, nickel and manganese below MCLs and SDWS. The last sampling event of March 2010 also showed concentrations similar to this sampling event.
• MW-8, a downgradient well, had concentrations of mercury, nickel and manganese below MCLs and SDWS. The last two sampling events, October 2009 and March 2010, show all parameters below MCLs and SDWS.
In summary, all wells monitored at the site show contaminants below MCLs. Although nickel and manganese are present in groundwater, these contaminants do not have an enforceable MCL and will continue to be monitored.
Currently, five groundwater monitoring wells are sampled and analyzed on an annually basis for mercury, manganese and nickel, and the results are compared to the Maximum Contaminant Levels or Secondary Drinking Water Standards identified in the Record of Decision. The five groundwater monitoring wells are designated MW-1, MW-4, MW-6, MW-7 and MW-8 will continue to be monitored by annual inspections and the five-year review process.
Hazardous substances were not remediated to levels that would allow for unlimited use and unrestricted exposure, therefore the five-year review requirement of Section 121(c) of CERCLA, as amended, is applicable. On August 2005 and 2010 respectively, two five-year reviews (FYR) were conducted. In August 2010, the FYR concluded that the remedy at the Barceloneta Landfill currently protects human health and the environment in the short term because all remedy components are functioning as intended and institutional controls are in place to prevent exposure to contaminated groundwater. In order for the remedy to be protective in the long term, the O & M plan should be reviewed to ensure that the appropriate monitoring wells are being sampled and the correct analytes are being reported.
Since the FYR was conducted, EPA requested the PRP to review the O & M plan to ensure that the appropriate monitoring wells are being sampled and the correct analytes are being reported. It was concluded that the correct monitoring wells are being sampled and the appropriate parameters are being evaluated and reported. However, because Chromium was identified below the MCL for three consecutive periods, it was omitted from the parameter list. The groundwater will continue to be monitored annually based on the criteria identified in the 2000 O&M Plan.
In addition, the ROD stated that surface water monitoring would be conducted. After the FYR was completed, it was concluded that surface water sampling would not be conducted because there was no surface waters present at the Site. The nearest surface water is the Ojo de Guillo, a spring located 1 kilometer (0.6 miles) northeast of the Site. Therefore, this recommendation was not implemented.
The next FYR will be completed on or before August 30, 2015.
Public participation activities for this Site have been satisfied as required inCERCLA sections 113(k) and 117, 42 U.S.C. 9613(k) and 9617. Throughout the remedial process, EPA and the Puerto Rico Department of Environmental Quality have kept the public informed of the activities being conducted at the Site by way of public meetings, progress fact sheets, and the announcement through local newspaper advertisement on the availability of documents such as the RI/FS, Risk
EPA has determined that this Site poses no significant threat to public health or the environment because the landfill has been capped, removing direct contact exposure (
The EPA, with concurrence of the Puerto Rico Environmental Quality Board, has determined that all appropriate response actions under CERCLA, other than operation, maintenance, monitoring and five-year reviews have been completed. Therefore, EPA is deleting the Site from the NPL.
Because EPA considers this action to be noncontroversial and routine, EPA is taking it without prior publication. This action will be effective October 3, 2011 unless EPA receives adverse comments by September 19, 2011. If adverse comments are received within the 30-day public comment period, EPA will publish a timely withdrawal of this direct final notice of deletion before the effective date of the deletion, and it will not take effect. EPA will prepare a response to comments and continue with the deletion process on the basis of the notice of intent to delete and the comments already received. There will be no additional opportunity to comment.
Environmental protection, Air pollution control, Chemicals, Hazardous waste, Hazardous substances, Intergovernmental relations, Penalties, Reporting and recordkeeping requirements, Superfund, Water pollution control, Water supply.
For the reasons set out in this document, 40 CFR part 300 is amended as follows:
33 U.S.C. 1321(c)(2); 42 U.S.C. 9601-9657; E.O. 12777, 56 FR 54757, 3 CFR, 1991 Comp., p. 351; E.O. 12580, 52 FR 2923; 3 CFR, 1987 Comp., p. 193.
Federal Communications Commission.
Final rule.
In this document, the Commission adopts an initial set of rules necessary to ensure the development of a nationwide interoperable public safety broadband network. The establishment of a common air interface for 700 MHz public safety broadband networks will create a foundation for interoperability and provide a clear path for the deployment and evolution of the nationwide network.
Jennifer Manner, Federal Communications Commission, Public Safety and Homeland Security Bureau, 445 12th Street, SW., Room 7-C761, Washington, DC 20554. Telephone: (202)-418-3619, e-mail:
In the
As required by the Regulatory Flexibility Act, the Commission certifies that the requirements of the
Administrative practice and procedure, Business and industry, Civil defense, Common carriers, Communications equipment, Emergency medical services, Incorporation by reference, Individuals with disabilities, Radio, Reporting and recordkeeping requirements.
For the reasons discussed in the preamble, The Federal Communications Commission amends 47 CFR part 90 as follows:
Sections 4(i), 11, 303(g), 303(r), and 332(c)(7) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 161, 303(g), 303(r), and 332(c)(7) unless otherwise noted.
(p)
(d) Public Safety Broadband Network Operators must use at least 3GPP TS 23.401, V8.8.0 (2009-12), “3rd Generation Partnership Project; Technical Specification Group Services and System Aspects; General Packet Radio Service (GPRS) enhancements for Evolved Universal Terrestrial Radio Access Network (E-UTRAN) access (Release 8),” December, 2009 (incorporated by reference). The Director of the Federal Register approves this incorporation by reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies may be inspected at the Federal Communications Commission, 445 12th Street, SW., Washington, DC 20554 or National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741- 6030, or go to:
(e) Systems in the network must support the following interfaces: Uu-LTE air interface; S6a—Visited MME to Home HSS; S8—Visited SGW to Home PGW; S9—Visited PCRF to Home PCRF for dynamic policy arbitration; S10—MME to MME support for Category 1 handover support; X2—eNodeB to eNodeB; S1-u—between eNodeB and SGW; S1-MME—between eNodeB and MME; S5—between SGW and PGW; S6a—between MME and HSS; S11—between MME and SGW; SGi—between PGW and external PDN; Gx—between PGW and PCRF (for QoS policy, filter policy and charging rules); Rx—between PCRF and AF located in a PDN; Gy/Gz—offline/online charging interfaces.
(f) A Public Safety Broadband Network Operator must submit to the Chief of the Public Safety and Homeland Security Bureau prior to deployment of any Radio Access Network equipment a certification that it will be in compliance with paragraph (e) of this section prior to the date its network achieves service availability.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; closure.
NMFS announces that 90 percent of the Trimester 2
Effective 0001 hours, August 23, 2011, through 2400 hours, August 31, 2011.
Lindsey Feldman, Fishery Management Specialist, 978-675-2179, Fax 978-281-9135.
Regulations governing the
The 2011 specification of DAH for
The Administrator, Northeast Region, NMFS, based on dealer reports and other available information, has determined that 90 percent of the Trimester 2
This action is required by 50 CFR part 648, and is exempt from review under Executive Order 12866.
The Assistant Administrator for Fisheries, NOAA (AA), finds good cause pursuant to 5 U.S.C. 553(b)(B) to waive prior notice and the opportunity for public comment because it would be contrary to the public interest. This action closes the directed
16 U.S.C. 1801
Food and Nutrition Service, USDA.
Proposed rule.
This rule proposes to amend Supplemental Nutrition Assistance Program (SNAP—formerly the Food Stamp Program) regulations to implement the Food, Conservation, and Energy Act of 2008, (“FCEA”). Section 4133, The “Major System Failures” section of the FCEA, amends the Food and Nutrition Act of 2008 (“the Act”) to require the United States Department of Agriculture (USDA) to determine when a systemic State error is resulting in the overissuance of benefits to a substantial number of SNAP households and the actions the Department may take if such a determination were made. This rule proposes criteria for determining if a State experienced a systemic error that resulted in the overissuance of benefits to a substantial number of households and specifies the steps that the Department may take to collect data, instruct the State to terminate claims collection from the affected households, and issue a bill to the State for the value of the over-issuances. It also identifies the review and appeal process for any such billing.
Comments must be received on or before October 17, 2011.
The Food and Nutrition Service invites interested persons to submit comments on this proposed rule. Comments may be submitted by any of the following methods:
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For further information concerning this proposed rule, you may contact Moira Johnston, Program Development Division, Supplemental Nutrition Assistance Program, 3101 Park Center Drive, Room 800, Alexandria, Virginia 22302 or via the Internet at
This rule has been determined to be not significant and was reviewed by the Office Management and Budget in conformance with Executive Order (E.O.) 12866.
This rule has been reviewed with regard to the requirements of the Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). It has been certified that this rule will not have a significant economic impact on a substantial number of small entities. State agencies that administer SNAP will be affected to the extent they implement major changes in program operations.
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under Section 202 of the UMRA, the Department generally must prepare a written statement, including a cost/benefit analysis, for proposed and final rules with Federal mandates that may result in expenditures to State, local, or tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. When such a statement is needed for a rule, section 205 of the UMRA generally requires the Department to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, more cost-effective or least burdensome alternative that achieves the objectives of the rule.
This rule contains no Federal mandates (under the regulatory provisions of Title II of the UMRA) that impose costs on State, local, or tribal governments or to the private sector of $100 million or more in any one year. This rule is, therefore, not subject to the
The SNAP is listed in the Catalog of Federal Domestic Assistance under No. 10.551. For the reasons set forth in the final rule in 7 CFR part 3015, Subpart V and related document published June 24, 1983 (48 FR 29114 for SNP; 48 FR 29115 for FSP), this Program is excluded from the scope of E.O. 12372, which requires intergovernmental consultation with State and local officials.
E.O. 13132 requires Federal agencies to consider the impact of their regulatory actions on State and local governments. Where such actions have federalism implications, agencies are directed to provide a statement for inclusion in the preamble to the regulations describing the agency's considerations in terms of the three categories called for under section (6)(b)(2)(B) of E.O. 13132. FNS has considered the impact of this rule on State and local governments and has determined that this rule does not have Federalism implications. This rule does not impose substantial or direct compliance costs on State and local governments. Therefore, under Section 6(b) of the E.O., a federalism summary impact statement is not required.
After the FCEA was enacted on June 18, 2008, FNS held a series of conference calls with State agencies and FNS regional offices to explain the SNAP provisions included in the public law and to answer questions that State agencies had about implementing the changes to the program. On July 3, 2008, FNS issued an implementation memorandum that described each SNAP-related provision in the FCEA and provided basic information to assist State agencies in meeting statutorily-mandated implementation timeframes. FNS responded to additional questions that State agencies submitted and posted the answers on the FNS Web site. Another forum for consultation with State officials on implementation of the FCEA provisions included various conferences hosted by FNS regional offices, State agency professional organizations, and program advocacy organizations. During these conferences, held in the latter part of 2008 and early months of 2009, FNS officials responded to a range of questions posed by State agency officials related to implementation of FCEA provisions.
This rule has been reviewed under E.O. 12988, “Civil Justice Reform.” This rule, when published final, is not intended to have preemptive effect with respect to any State or local laws, regulations, or policies that conflict with its provisions or that would otherwise impede its full implementation. This rule is not intended to have retroactive effect unless so specified in the “Effective Date” paragraph of the final rule. Prior to any judicial challenge to the provisions of this rule or the application of its provisions, all applicable administrative procedures must be exhausted. In SNAP, the administrative procedures are as follows: For program benefit recipients—State administrative procedures issued pursuant to 7 U.S.C. 2020(e)(10) of the Food and Nutrition Act of 2008 and regulations at § 273.15; for State agencies—administrative procedures issued pursuant to 7 U.S.C. 2023 of the Act and regulations at § 276.7 (for rules related to non-Quality Control liabilities) or 7 CFR part 283 (for rules related to Quality Control liabilities); or Program retailers and wholesalers—administrative procedures issued pursuant to 7 U.S.C. 2023 and 7 CFR part 279.
FNS has reviewed this rule in accordance with the Department Regulation 4300-4, “Civil Rights Impact Analysis,” to identify and address any major civil rights impacts the rule might have on minorities, women, and persons with disabilities. After a careful review of the rule's intent and provisions, and the characteristics of SNAP households and individual participants, FNS has determined that an important impact of this rule will be to help relieve the adverse effects of errors in program operations on recipients, including protected classes. All data available to FNS indicate that protected individuals have the same opportunity to participate in SNAP as non-protected individuals. FNS specifically prohibits State and local government agencies that administer the Program from engaging in actions that discriminate based on race, color, national origin, gender, age, disability, marital or family status. SNAP non-discrimination policy can be found at 7 CFR 272.6(a). Where State agencies have options, and they choose to implement a certain provision, they must implement it in such a way that it complies with 7 CFR 272.6.
E.O. 13175 requires Federal agencies to consult and coordinate with tribes on a government-to-government basis on policies that have tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. We are unaware of any current Tribal laws that could be in conflict with the proposed rule. We request that commenters address any concerns in this regard in their responses.
The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR part 1320) requires that the Office of Management and Budget (OMB) approve all collections of information by a Federal agency from the public before they can be implemented. Respondents are not required to respond to any collection of information unless it displays a current valid OMB control number. This proposed rule contains information collections that are subject to review and approval by OMB; therefore, FNS is submitting for public comment the changes in the information collection burden that would result from adoption of the proposals in the rule. Comments on this proposed rule must be received by October 17, 2011.
Send comments to Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for FNS, Washington, DC 20503. Please also send a copy of your comments to Lizbeth Silbermann, Director Program Development Division, Food and Nutrition Service, U.S. Department of Agriculture, 3101 Park Center Drive, Alexandria, VA 22302. For further information, or for copies of the information collection package, please contact Moira Johnston at the above address or via the Internet at
All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record. For further information, or for copies of the information collection requirements, please contact Moira Johnston at the address indicated above.
The above estimate is based upon the following assumptions and calculations:
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It is estimated that it would take a State about 10 staff days to construct a sample frame, and select and assign the sample. An additional 20 staff days would be necessary to develop the review guidance and forms. Since desk reviews of case files together with some phone interviews with households and collateral contacts should provide sufficient information, each case review should require no more than one staff day to complete (for example, given an average of 450 case reviews, the average burden to complete the case reviews would be 450 staff days). Another 20 staff days would be needed to compile and report the results of the sample including examination of the cases originally selected for QC review. Based upon the above, the average requirement would the 500 staff days when a sample of cases is required.
Averaging the 80 hours (10 staff days) with the 500 staff days yields 255 days per systemic error if the frequency of using IMS data and reviews of case samples were equal (there is no information to suggest otherwise).
FNS is committed to complying with the E-Government Act of 2002 to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.
Section 4133 of the FCEA amends Section 13 of the Act to provide the Secretary with the authority to define and determine when a State has overissued SNAP benefits to a substantial number of households in a fiscal year as a result of a major systemic error. If the Secretary made such a determination, the State agency could be prohibited from collecting these overissuances from some or all of the affected households and a claim would be established against the State for the value of the overissuances caused by the systemic error. States are required to provide the Secretary with information on which to base such a determination. The State has the right to appeal such a claim under the provisions of Section 14 of the Act. With many State's automated systems aging and the growing potential for replacement of those systems over the next several years, this provision provides a protection to households from claims collections if errors in the new system designs or their implementation result in systemic over-issuances to a substantial number of households.
In the discussion of the proposed provisions in this rule, we use the following acronyms or abbreviations to stand in for certain words or phrases:
The legislative language includes the following:
• The Secretary will define what constitutes a major systemic error that affects a substantial number of households.
• State agencies shall provide all information requested by the Secretary concerning the issuance of benefits to households by the State agency in the applicable fiscal year.
• The Secretary will make a final determination after reviewing relevant information provided by a State agency.
• The final determination will include whether the State agency overissued benefits to a substantial number of households as a result of a systemic error and the amount of the overissuance in the applicable fiscal year.
• The Secretary shall establish a claim against the State agency equal to the value of the overissuance caused by the systemic error.
• Administrative and judicial review, as provided in Section 14 of the Act, shall apply to the final determinations by the Secretary once the claim is established.
• The State agency shall, as soon as practical, remit to the Secretary the dollar amount specified in the claim if the determination of the Secretary is not appealed.
• When the determination of the Secretary is appealed, and after completion of the administrative or judicial review there is a finding of liability on the part of the State, it shall remit to the Secretary the dollar amount of the liability found in the administrative or judicial review. The payment shall be made by the State to the Secretary as soon as practical.
• The Secretary may reduce any amount due to the State agency under any other provision of the Act by the amount due if a State agency fails to make a payment within a reasonable period of time determined by the Secretary.
The FCEA language does not specifically define what constitutes a substantial number of households being overissued benefits or a major systemic error. The language is not specific to “systems failures,” and could be interpreted to include errors resulting from a variety of causes. Given the other authorities the Act provides to deal with error situations, the Department believes the intent of this provision is to focus on errors associated with automated eligibility systems and the effects of their implementation.
States have experienced technological and operational failures in the past when major systems were implemented before they were fully tested and staff fully trained in their use. The Department is proposing that a major systemic error be defined as an error resulting from a State's implementation of a new SNAP automated eligibility (data processing) system, reprogramming of an existing system, or adding new programming to an older system. While the legislative language does not limit the term systemic to “systems” errors, given the other authorities and remedies in the Act, the Department believes this is the most reasonable interpretation of this new authority (there is no practical utility relative to this proposed rulemaking in defining what might constitute a “minor” systemic error). The second criterion for use of the subject authority is that the systemic error affects a substantial number of households as discussed below.
The Department is particularly interested in comments on this aspect of the proposal. Clearly, defining “substantial” in the context of this rule is problematic. The Department considered using a specific number of households, but with the vast differences in States' caseload sizes, a single number could not be equitable between States. The better alternative is use of a percentage of States' caseloads that experience overissuances to define substantial. Since the national average
States are required to take corrective action immediately when they are become aware of a potential systemic error and, if the action were effective, could prevent the error affecting 8 percent of its households over the 6-month period, thus avoiding liability under these provisions. However, once the systemic error has affected 8 percent of the caseload over the 6-month period, the Act does not provide for any consideration of a State's corrective action efforts. Even if a major systemic error was determined to exist, timely corrective action could reduce the State's exposure to additional months of liability.
The Department is proposing that the amount of the error be at least $21 per month for a case to be included in the calculation of a “substantial” number of households. The primary purpose of this proposed provision is to relieve households from payment of claims resulting from systemic errors. Since States have the option of establishing claims of less than $125 against those households that are no longer on the Program, households overissued less than $21 per month over a 6-month period would not reach $125 and may not be required to pay a claim even in the absence of this provision. Therefore, including cases with monthly loses of less than $21 in the count of households would not contribute to the purpose of this provision.
This proposal does not represent a significant departure from the Department's policy in dealing with State error and compliance issues. FNS has long focused on working in partnership with States to prevent errors or develop strong corrective action measures through technical assistance and identifying promising State practices. While most States already test new automated eligibility systems extensively, this provision should help encourage all States to implement new systems using sound testing. The Act has four other primary authorities for billing States for the loss of Federal funds and non-compliance with Federal law and regulations. Each is based on a different set of concepts, but there is potential for overlap, depending on the nature of the error or compliance issue. None of these other authorities allow for prohibition of claims collection against households for overissuances.
Section 11(g) of the Act, 7 CFR 276.4, specifies that if FNS determines that a State agency's administration of the Program is inefficient or ineffective, FNS may warn the State agency that a suspension and/or disallowance of administrative funds is being considered. After a State agency receives a warning, FNS may either suspend or disallow administrative funds if the problem is not corrected. Since this authority deals with administrative funds and the systemic error authority deals with overissued benefits, there can be no direct overlap between the claim amounts. In addition, while FNS could use the two authorities sequentially or simultaneously in dealing with a severe compliance issue, the suspension/disallowance authority is generally viewed as more appropriate to issues of non-compliance that affect program access or application processing.
Section 11(h) of the Act, 7 CFR 276.3 specifies that FNS may determine that a State agency has been negligent in the certification of applicant households if a State agency disregards SNAP requirements or implements procedures that deviate from the Act, the regulations, or the FNS-approved State Plan of Operation without first obtaining FNS approval, and the result is a loss of Federal funds. In computing amounts of losses of Federal funds due to negligence, FNS may use actual, documented amounts or amounts which have been determined through the use of statistically valid projections. When a statistically valid projection is used, the methodology will include a 95 percent, one-sided confidence level.
If FNS makes a determination that there has been negligence or fraud on the part of a State agency in the certification of households for participation in the Program, FNS is authorized to bill the State agency for an amount equal to the amount of benefits issued as a result of the negligence or fraud.
While there are some structural similarities in terms of benefit loss and claim calculation, the systemic error authority does not require the State to “disregard” or “deviate from” a policy. There is potential for overlap in the use of the two authorities and to the extent that a State actually pays the Federal government for either a negligence billing or a systemic error billing under this authority, the second collection amount would be reduced.
In accordance with Section 7(e) of the Act, 7 CFR 276.1(a)(2), FNS holds State agencies strictly liable for all losses that occur during issuance. This authority can only be used in cases of issuance errors. Since errors that fall outside of QC data are difficult to identify without review of States' issuance and certification files, FNS has employed data mining as necessary to determine if losses are occurring in the process of issuing benefits. It is possible that the systemic error in a States' operation could be in the issuance process so there is potential for overlap in the use of the two authorities and to the extent that a State actually pays the Federal government for both a strict liability billing and for a systemic error billing under this authority, the second collection amount would be reduced.
States' payment error rates are measured annually based on an in-
The key differences between the QC sanction and this authority is that the QC error rate is an index made up of errors with many different causes (potentially including certain systemic errors), QC liability amounts are not dollar-for-dollar relative to the over-issuances measured, and QC liability amounts are not necessarily repaid to the Federal government. To the extent that a State is billed by the Federal government for both a QC based liability and for a systemic error under this authority, the second collection amount would be reduced.
Yes. In certain situations the Department could use the systemic error authority and another authority to address different aspects of an issue in a State. However, any collections based on the same overissuance or direct liability loss would be offset in the second collection amount.
Section 16(g) of the Act requires States designing new automated eligibility systems to thoroughly test and pilot such systems prior to full implementation. Through the advanced planning document process (7 CFR 277.18), FNS strives to work closely with States in their planning, and later, in their implementation of new systems. While it is not unusual for such potential errors to be present in the early stages of new software development and application, it is the purpose of the testing and piloting process to identify and correct such errors. A cautious and measured roll-out of new systems within a State also allows for identification and correction of any errors before they can affect the entire caseload. If a State complies with the required testing and piloting provisions of the Act and resulting regulations, deals effectively with issues identified in this process prior to rolling the new system out, and implements effectively in terms of case conversion and worker training, the potential for a systemic error that affects a substantial number of households is minimal.
However unlikely, it is possible that a State could experience a systemic error situation even if all precautions have been taken. While FNS would be reluctant to use the systemic error authority in this situation, the intent of the subject provision of the FCEA is to relieve the burden of reduced benefits by prohibiting claims collection for systemic overissuances to households. While the FCEA does give the Department discretion regarding the prohibition of collecting claims against households when a major systemic error occurs, it does not allow discretion regarding a State's liability for such an error; even when the State has been prudent in its planning and implementation. While such a situation would preclude a negligence billing, the Department would prohibit individual household claims collection and establish a liability against the State under this proposal.
No, the FCEA is clear that the determination that a systemic error has occurred will result in a claim against the State for the amount of the systemic error. This rule links the determination to prohibit claims collection for resulting overissuances to the mandate to bill the State. However, the Department has general discretionary authority under Section 13 of the Act to waive part or all of a claim against a State. If a State has adhered to the planning, testing, and piloting requirements of the Act and regulations, FNS would strongly consider recommending reduction or elimination of any claim against the State for a systemic error.
No, the implementation of a new system or significant system changes may also require worker training, case conversion, sufficient server capacity, proper equipment and changes to the States' business processes in the local offices. If systemic errors arose from factors related to implementation, the Department could prohibit claims collection for the error and pursue a claim against the State.
The Department monitors States' implementation of new systems and their impact on program performance through on-site reviews and standard reports such as QC and participation reports. In addition, recipients, advocate groups and the media can provide indications of problems that FNS follows up on with inquires to the State, requests for additional data, and/or additional reviews of States operations. FNS can go further by using data mining techniques on States' data or analyzing QC data for error patterns that may have a systemic cause. Therefore, except in the most extreme circumstances, the process of identifying a systemic error would typically require a series of steps, within each of which FNS would be seeking to work with the State to correct the problem. If, upon State-wide implementation of a system, the systemic error was pervasive and readily identified, the process for using this authority to prohibit claims collection could be more immediate.
FNS' data needs will be determined by the nature and timing of the systemic error. While the FCEA and this proposal requires States to provide all information requested by the Department, FNS will negotiate with the State on the data request to ensure that only the information needed to make a determination and calculate the proper amount of a claim would be required from the State. For example, FNS could use the authority of the FCEA to require States to conduct additional reviews of a sample of cases (similar to a QC review) to determine the extent of a potential systemic error, but would negotiate with the State on the extent of the review process, the timing of reviews and the size of the sample. States could also be required to provide data from their automated eligibility system. FNS will base its determination on whether there has been a systemic error that affected a substantial number of households on the data it gathers from the State. FNS would base its determination on the point estimate of
FNS will be in communication with any State that may be subject to this authority, but will notify the State that the State will have 10 days from the date of notification to stop claims collection against households affected by the systemic error.
Unless otherwise specified by FNS, States shall provide required information to FNS within 3 months of being notified of the data requirements.
States will have 10 business days after notification from FNS to stop claims collection against households affected by the systemic error.
Yes, claims resulting from the systemic error that are collected must be restored to households' Electronic Benefit Transfer (EBT) accounts.
No, claims establishment and collection would only be prohibited for the claims resulting from the systemic error(s) identified by FNS. States would be expected to continue to pursue claims against households that are overissued benefits in accordance with the Act, except those affected by the systemic error.
Once FNS notifies a State that claims collection is to be prohibited for a systemic error, all claims in process and any claims that could be pursued for that error would be prohibited until the systemic error is determined by FNS to have been substantially corrected. For example, a State implements a major system change on March 1, and on August 1, FNS notifies the State to prohibit claims collection due to a systemic error in the certification process arising from that system change. The State takes corrective action to address the problem on October 1 and the State is notified on December 1 that FNS has determined that the systemic error has been eliminated. All claims against cases arising from systemic errors made between March 1st and December 1st would be prohibited, including benefits issued to such cases after December 1st until they are recertified. However, no claims resulting from an error occurring after December 1st could have claim collection prohibited.
While the State will be required to document the cases where overissuances are caused by the systemic error and claims are not being pursued, no additional reporting will be required.
FNS will use information from its standard reports together with the data it obtains from the State under the authority of this provision of the FCEA. QC data alone may be used or it may be used in conjunction with an additional sample of cases. Data mining techniques may be employed when QC data cannot provide the necessary information on the error. When FNS uses sample data, it will apply a 95 percent one-sided confidence level to determine the amount of a claim. The example of how this calculation will be made is provided in § 273.19(c)(5) as: the sample estimate of the major systemic error is 8 percent over a 6 month period, but based on a 95 percent confidence interval of 2 percentage points, the rate used would be 6 percent. Therefore the claim would be 6 percent of value of the State's total issuance over the 6 months.
The administrative appeal process for claims asserted under this authority is specified in § 276.7 and permits States to request an administrative review within 10 days of the date of delivery of the notice of claim. This proposed rule adds reference to billings based upon systemic errors into § 276.7(a)(1).
FNS' decision on prohibiting collection of recipient claims resulting from systemic error cannot be appealed. Only the related, but separate, claim against the State can be appealed.
As specified in § 276.7(j), “State agencies aggrieved by the final determination may obtain judicial review and trial de novo
As soon as practicable, the State would remit the claim amount as specified in the FNS billing. If a State agency fails to make a payment within a reasonable period of time, FNS would reduce the administrative funding due to the State agency by the amount of the claim.
Administrative practice and procedure, Aliens, Claims, Employment, Grant programs—social programs, Income taxes, Reporting and recordkeeping requirements, Students, Supplemental Security Income.
State agency liabilities, Negligence or fraud, Suspension/disallowance of administrative funds, Injunctive relief, Good cause, Administrative review process.
Accordingly, 7 CFR parts 273 and 276 are proposed to be amended as follows:
1. The authority citation for part 273 and continues to read as follows:
7 U.S.C. 2011-2036.
2. Add § 273.19 to read as follows.
(a)
(2) The causes of major systemic errors may include, but are not limited to: Incorrect computer programming, ineffective worker training, problems in case conversion, insufficient server capacity, improper equipment, and ineffective States' business processes in the local offices related to the systems change.
(b)
(2) Unless otherwise specified by FNS, States shall report to FNS within 3 months of being notified of the data requirements.
(c)
(2) FNS will notify a State of its determination and, when a major systemic error is determined to exist, inform the State of the specifics of the error(s) and prohibit claims collection from the affected cases. FNS will establish and inform the State on the time period for which overissuances to the subject cases are not subject to recipient claims collection.
(3) When FNS determines that a major systemic error exists, FNS shall determine the amount of the overissuance caused by the major systemic error. FNS will calculate the claim amount based on the best information available and may require the State to provide information from its information management system or review a sample of cases.
(4) Error amounts below $20 in a given month shall not be included in the determination of a systemic error.
(5) When a sample is used, the claim shall be based on the lower boundary of a 95 percent confidence interval. Example of calculation based on information from a sample: The sample estimate of the major systemic error is 8 percent over a 6 month period, but based on a 95 percent confidence interval of 2 percentage points, the rate used would be 6 percent. Therefore the claim would be 6 percent of value of the State's total issuance over the 6 months.
(6) If any funds resulting from the systemic error caused overissuances are collected based on the negligence or quality control provisions of 7 CFR parts 276 and 275, the claim calculated under paragraph (c)(3) of this section would be reduced by the amount collected.
(d)
(2) States shall have 10 days from the date of notification by FNS to stop collection of the claims resulting from the systemic error.
(3) Once FNS determines that the systemic error has been corrected to the extent that it no longer affects a substantial number of households, the State will be notified of the ending date for prohibition on collection of claims for overissuances resulting from the major systemic error and that claims shall again be collected for all overissuances.
(4) If claims are collected from households based on overissuances caused the major systemic error, the State shall return the claim amount collected to these households by restoring benefits to households EBT account.
(e)
3. The authority citation for part 276 continues to read as follows:
7 U.S.C. 2011-2036.
4. In § 276.7, paragraph (a)(1) is revised to read as follows:
(a)
(1) Whenever FNS asserts a claim against a State agency, the State agency may appeal the claim by requesting an administrative review. FNS claims that may be appealed are billings resulting from financial losses involved in the acceptance, storage, and issuance of coupons (§ 276.2), billings based on charges of negligence or fraud (§ 276.3), billings based on over-issuances for systemic errors (§ 276.3) and disallowances of Federal funds for State agency failures to comply with the Food and Nutrition Act, regulations, or the FNS-approved State Plan of Operations (§ 276.4).
Office of Energy Efficiency and Renewable Energy, Department of Energy.
Statement of Policy.
In its effort to adopt several National Academy of Sciences (the Academy) recommendations, the U.S. Department of Energy (DOE) intends to modify the methods it uses to estimate the likely impacts of energy
The docket is available for review at
A link to the docket Web page can be found at:
In its August 2010 Notice of Proposed Policy (referred to herein as “Notice” or “NOPP”) (75 FR 51423), the U.S. Department of Energy (DOE) proposed to use full-fuel-cycle (FFC) measures of energy use and greenhouse gas (GHG) and other emissions in the national impact analyses and environmental assessments included in rulemakings for future energy conservation standards (referred to herein as “energy conservation standards” or “energy efficiency levels”). DOE stated that using the FFC measure in these analyses will provide more complete information about the total energy use and GHG emissions associated with a specific energy efficiency level than the primary (or site) energy measures currently used by DOE. DOE also indicated that utilizing the FFC measure for environmental assessments and national impact analyses would not require alteration of the measures used to determine the energy efficiency of covered products (referred to herein as “appliances and equipment” or just “appliances”) because the Energy Policy and Conservation Act (EPCA), as amended, requires that such measures be based solely on the energy consumed at the point of use. (42 U.S.C. 6291(4)-(6), 6311(3)-(4), (18)) However, the Notice stated that using the FFC measure in lieu of primary energy in environmental assessments and national impact analyses could affect the alternative standard levels that DOE considers before choosing an energy efficiency level in the future. A policy change to consider FFC impacts would increase the energy and emission reductions estimated to result from energy efficiency levels. This shift would, consequently, increase some of the estimated benefits of such standards.
The NOPP also proposed that DOE would significantly improve upon the Federal Trade Commission's (FTC) existing online databases of appliance site energy use and efficiency ratings by including FFC energy use and emissions data. DOE's Notice indicated that the improved databases could provide tools to enable users to easily compare a product's energy use, emissions, and costs to similar products, including products that are in different classes, have different features or use different fuels. DOE solicited public comment on whether such an online service would likely benefit consumers and, if so, the most effective way to present this information. DOE also solicited comments on the merits of providing GHG emissions and other product-specific comparative data on Energy Guide labels.
After consideration of the comments received on its NOPP, DOE has decided to use FFC measures of energy use and GHG and other emissions in the national impact analyses and environmental assessments included in future energy conservation standards rulemakings. DOE currently uses primary (or site) energy consumption for national impact analyses and environmental assessments using the National Energy Modeling System (NEMS) developed by DOE's Energy Information Administration (EIA). DOE will continue to rely upon NEMS-based estimates of primary energy and emission impacts, but intends to use conversion factors generated by the DOE Argonne National Laboratory (ANL) Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model to convert these estimates into estimates of FFC energy and emission impacts. DOE also will, subject to the availability of funds, support efforts to make readily available to consumers and other users of regulated products information on the FFC energy use and emissions associated with specific products, and the means to compare this energy use and emissions to other comparable products, whether or not those other products use the same type of energy. The following sections more clearly state today's policy as it applies to the different issues raised in DOE's NOPP.
Section 1802 of the Energy Policy Act of 2005 (EPACT 2005) directed DOE to commission a study with the National Academy of Sciences (the Academy) to examine whether the goals of energy conservation standards are best served by measurement of energy consumed, and efficiency improvements at, the actual point-of-use or through the use of the FFC, beginning at the source of energy production (Pub. L. 109-58). The FFC measure includes point-of-use energy, the energy losses associated with generation, transmission, and distribution of electricity, and the energy consumed in extracting, processing, and transporting or distributing primary fuels. The study, “Review of Site (Point-of-Use) and Full-Fuel-Cycle Measurement Approaches to DOE/EERE Building Appliance Energy-
The Academy's primary recommendation is that “DOE consider moving over time to use of a FFC measure of energy consumption for assessment of national and environmental impact, especially levels of GHG emissions, and to providing more comprehensive information to the public through labels and other means such as an enhanced Web site.”
DOE's energy conservation program for consumer products and certain commercial and industrial equipment sets energy conservation standards to reduce U.S. energy consumption in residential and commercial buildings. DOE separates covered products into classes differentiated by energy source, technology, and capacity. EPCA, as amended, requires DOE to set energy conservation standards for covered products based on energy consumption at the point-of-use. (42 U.S.C. 6291(4)-(6), 6311(3)-(4), (18))
The point-of-use method for measuring energy consumption considers the use of electricity, natural gas, propane, and/or fuel oil by an appliance at the site where the appliance is operated. DOE uses point-of-use measures of energy consumption, usually presented in the physical units typically used for the relevant fuel (or electricity), for setting energy conservation standards. Before choosing an energy conservation standard, however, DOE performs several analyses to estimate the likely impacts of alternative standard levels. DOE impact analyses include a: life-cycle cost analysis, manufacturer impact analysis, national impact analysis, engineering analysis, screening analysis, environmental assessment, utility impact assessment, and employment impact assessment. For many years, DOE has used primary energy measures of energy consumption and related emissions in several of these analyses, including the national impact analysis and the environmental assessment, to estimate the total projected energy savings and emission impacts likely to result from the imposition of alternative standard levels. Primary energy includes energy consumed on-site, plus energy losses that occur in the generation, transmission, and distribution of electricity.
Based on the results of these various analyses, DOE then proposes (and, ultimately, adopts) the energy conservation standard that it determines achieves the maximum energy efficiency improvement that is technologically feasible and economically justified as required by EPCA, as amended. (42 U.S.C. 6295(o)(2)(A) Additionally, DOE must determine that the establishment of a new or amended energy conservation standard will result in significant energy conservation. (42 U.S.C. 6295(o)(3)(B))
In response to DOE's Notice, DOE received comments from 41 entities. Comments were submitted by utilities, research facilities, consumer representatives, non-profit organizations, farmers and others. In the following sections, the comments received concerning this proposed change in policy are summarized and addressed, and DOE provides a statement of the resulting policy that it will apply in the development of future energy efficiency rules and related activities.
There were, however, a number of comments received in response to the Notice that are peripheral to the issues addressed in the Notice. For example, several comments indicated that the Department should not use estimates of the social cost of carbon in assessing the impacts of prospective energy conservation standards and others disagreed with the methods now used by DOE to estimate such cost. (See
American Public Power Association (APPA) commented that DOE should be noting the high degree of subjectivity involved in the monetary benefit of reduced carbon dioxide (CO
The Edison Electric Institute (EEI) indicated that the method used by DOE to derive estimates of primary energy inappropriately “assigns” a fossil fuel heat rate for electricity generated by renewable and nuclear resources. EEI indicated that this approach resulted in an inflated value for the national energy savings associated with the electricity demand reductions estimated by appliance efficiency standards analyses. (EEI, Public Comment, EERE-2010-BT-NOA-0028-0007, p. 3) Today's policy would not modify the methods used by DOE to calculate primary energy.
Michigan dairy farmers provided a comment concerning the final water heater energy conservation standard. (Weiss, Public Comment, EERE-2010-BT-NOA-0028-0009, p. 1) Comments on DOE directives made under previous energy conservation standards rulemakings are outside the scope of the Notice and are not addressed in this Statement of Policy.
In its August 2010 Notice, DOE proposed to modify the methods it uses to estimate the likely impacts of energy conservation standards for covered products in order to use FFC measures of energy and related emissions in national impact analyses and environmental assessments, rather than the primary energy measures that DOE currently uses in these analyses. The NOPP also provided various tables with examples of the preliminary estimates of the conversion factors that DOE would use to shift its estimates of the primary energy savings and emission reductions likely to result from various energy efficiency levels to their FFC equivalents.
A few of the comments noted that existing law requires the development of efficiency standards based on the energy consumed by an appliance at its point-of-use (or site energy). While some commenters questioned whether this legal constraint was appropriate, no comments argued that DOE was not obligated by existing law to set its energy conservation standards using metrics derived from point-of-use (or site) energy. In a related comment, the American Council for an Energy-Efficient Economy (ACEEE) recommended that DOE make a statement indicating DOE's intention of keeping gas and electric appliances in separate product classes for energy
In response, DOE is confirming that it intends to continue to set energy conservation standards for covered products based on energy consumption at the point-of-use, as required by EPCA, as amended. (42 U.S.C. 6291(4)-(6), 6311(3)(4), (18)) DOE is also confirming that it will continue to consider comparable products that use different fuels in separate classes as required by 42 U.S.C. 6295(q)(1). However, DOE does not agree that EPCA, as amended, mandates fuel neutral energy conservation standards. In evaluating and establishing energy conservation standards, DOE divides covered products into classes based on the type of energy used, their size or capacity and other features that directly affect the product's energy use or efficiency. EPCA, as amended, specifically provides that energy conservation standards for different product classes can have higher or lower levels. (See 42 U.S.C. 6295(q)) DOE sets the energy conservation standard for each product class independently based upon the maximum energy efficiency improvement that is technologically feasible and economically justified, and that results in significant conservation of energy for each product class. (See 42 U.S.C. 6295(o)(2)(A)-(B) and (3)(B))
A number of comments focused on the primary issue raised by the Notice: Should DOE consider the FFC energy and emission impacts of prospective energy conservation standards in determining whether a particular standard should be selected? An appliance efficiency standard is chosen based on the results of various analyses—some of which EPCA, as amended, directs DOE to perform and some of which DOE performs under the discretionary provisions of EPCA. (42 U.S.C. 6295(o)(2)(B)) EPCA, as amended, does not mandate the use of point-of-use measures in these analyses, although the ultimate energy conservation standard chosen must be expressed as a point-of-use measure. (42 U.S.C. 6291(4)-(6), 6311(3)-(4), (18))
Several commenters supported DOE's proposal to begin considering the FFC energy and emission impacts of prospective energy conservation standards. The American Gas Association (AGA) indicated their support by stating, “Current efficiency standards and appliance labels rely on incomplete energy consumption and emission measurements.” (AGA, Public Comment, EERE-2010-BT-NOA-0028-0004, p. 1) Also in support, the National Propane Gas Association commented that the FFC approach will enable “a more comprehensive analysis of total energy and environmental impacts of energy efficiency standards.” (NPGA, Public Comment, EERE-2010-BT-NOA-0028-0034, p. 2)
The Air-Conditioning, Heating, and Refrigeration Institute (AHRI) expressed their concern that the use of FFC factors would lengthen the rulemaking process by sidetracking discussions of important aspects of a rulemaking, such as benefits to the consumer. (AHRI, Public Comment, EERE-2010-BT-NOA-0028-0017, p. 3)
DOE does not believe that the incorporation of FFC energy and emission impact analyses will substantially alter the focus of public review and comment on DOE's energy conservation standards rulemakings. DOE already conducts and presents the results of analyses on a broad range of criteria other than the direct impacts of appliance efficiency standards on the users of the covered product, as required by statute. While new impact analyses or methods often receive considerable attention when they are introduced, over time, public comments tend to focus on those elements of DOE's analysis that have the greatest impact on the identification and selection of the minimum standard level that is ultimately adopted. DOE does not believe that the use of FFC factors in the national impacts analysis and environmental assessment will significantly impact the selection of the minimum standard level adopted.
Other commenters also opposed such a change to the use of FFC factors. CECA and EEI both stated that considering FFC impacts would push the analysis used to set energy conservation standards beyond what is economically feasible and technically justified. EEI also questioned whether DOE had a sufficiently reliable basis for estimating FFC energy and emission impacts. (CECA, Public Comment, EERE-2010-BT-NOA-0028-0042, p. 7; EEI, Public Comment, EERE-2010-BT-NOA-0028-0007, p. 2) Specifically, EEI commented that “there is significant disagreement” as to the appropriate FFC and primary energy factors for the same energy source among different entities. (EEI, Public Comment, EERE-2010-BT-NOA-0028-0037, pp. 5-6)
Under today's policy, DOE will continue to use EIA estimates of primary energy and emission impacts as the basis for its impact analyses and the GREET model will be used simply to convert these primary energy values to their FFC equivalents. This approach avoids making any changes to the methods long used by DOE's EIA (and by DOE's appliance efficiency standards program) to convert energy end-use values to primary energy values, which are the source of many of the disagreements referenced by EEI. DOE's ANL has, in the past, compared different life-cycle assessment methods and found that the results are consistent with those generated by GREET when the same critical input parameters are used. This analysis will be cited in future standards rulemakings, as appropriate.
The statute specifically directs DOE to set appliance efficiency standards at levels that achieve the maximum energy savings that is technologically feasible and economically justified; DOE must also determine that the establishment of the chosen standard will result in significant energy conservation. (42 U.S.C. 6295(o)(2)-(3)) DOE does not believe that the consideration of the FFC energy and emission impacts in the national impacts analysis and environmental assessment of a standard under consideration is in conflict with this statutory directive. In practice, the consideration of FFC energy and emission impacts is likely to have comparatively small effects on DOE's analysis of the economic justification of specific alternative appliance efficiency standards. As indicated by the illustrative tables included in the NOPP that provided preliminary estimates of FFC conversion factors, the estimated energy savings likely to result from efficiency levels under consideration using the FFC method could increase by approximately seven to fifteen percent for gas or oil-fired appliances and two to fifteen percent for electric appliances, relative to the estimates of primary energy savings used currently. These relative increases were based on the ratio of FFC energy use and primary energy use, which were estimated by the GREET model. This increase in energy savings would not affect the estimated value or cost of the resulting energy savings, nor the estimated net present value of consumer life-cycle costs savings, since all energy costs savings are based on DOE estimates of the energy costs (derived from retail energy prices) paid directly by energy users. As a result of a change to consider FFC impacts, there also would be a
While estimates of the additional energy use and emissions resulting from the FFC methodology will add some new uncertainties to DOE's impact analyses, these new uncertainties are small relative to the total additional energy and emission impacts being estimated and are comparable to the uncertainties associated with previous DOE analyses. Since FFC-based estimates will more fully reflect the total energy and emission reductions associated with the imposition of energy conservation standards and are not significantly less reliable than current methods, DOE has concluded that such estimates should be used in future impact analyses.
In the NOPP, DOE proposed to use FFC measures of energy use and related emissions in the national impact analyses and environmental assessments included in future energy conservation standards rulemakings, but did not propose to create or use extended site or FFC measures of energy efficiency in its rules or regulatory impact analyses.
For rulemakings for covered products for which there is a choice of fuel, AGA noted the Academy's third recommendation that “efficiency ratings should be calculated using the extended site (source) measure of energy consumption until the Department can consider and complete a transition to the use of a full fuel-cycle measure of consumption.” AGA recommended that DOE make “side-by-side comparisons of the calculated energy savings from proposed efficiency standard for each appliance” as part of its analysis of the likely impacts of prospective standards. While recognizing that DOE does not have the statutory authority to use FFC energy efficiency metrics as the basis for DOE conservation standards, AGA recommended that DOE create and use such metrics as part of its analysis of the likely impacts of prospective energy conservation standards. (AGA, Public Comment, EERE-2010-BT-NOA-0028-0035, pp. 4-5)
DOE has the statutory authority to create and consider extended site or FFC energy efficiency metrics as part of its analysis of the likely impacts of prospective energy conservation standards. (See 42 U.S.C. 6295(o)(2)(B)(i)(VII)) Extended site or FFC energy efficiency metrics would provide DOE with a rough indication of the likely energy impacts of a shift in the market of products using different fuels (
For this reason, DOE carefully considered whether it should establish a policy to calculate and use in future rulemakings such extended-site or FFC efficiency metrics for appliances for which there is a fuel choice. DOE concluded, however, that the use of extended site or FFC energy efficiency metrics would only provide a rough indicator of the impacts of possible fuel switching on total energy savings and emissions and, therefore, would not enhance current DOE estimates of the direct impacts of alternative standard levels on fuel choice, energy savings, emissions and other factors. On the other hand, such FFC energy efficiency metrics may prove to be a useful mechanism for conveying complex information to consumers. The issue of consumer information is discussed further in Section E of this notice.
As part of its rulemaking analyses, DOE currently estimates the impacts of alternative standard levels on emissions of Carbon Dioxide (CO
Southern Company agreed in their comments that it is reasonable to use estimates of the CO
DOE notes that, for electricity generation from natural gas, the GREET model includes methane leakage associated with gas transmission systems, but not leakage associated with gas distribution from city gate to households. Also, methane leakage in gas production is accounted for in the natural gas fuel cycle in GREET.
NEEA questioned whether the flaring of natural gas and other gases during oil production, and methane from coal mining, is included in the FFC emissions analysis. (NEEA, Public Comment, EERE-2010-BT-NOA-0028-0021, p. 3) The emissions from both flaring and venting of gas in oil production are accounted for in GREET simulations. Methane released into the atmosphere during the production of oil or gas, or during coal mining, is also considered as an emission.
DOE did not receive any comments opposing the addition of these gases.
DOE proposed to use the GREET model in energy conservation standards rulemakings to convert primary energy and emission impacts, including CH
In the NOPP, for each alternative energy conservation standard under consideration, DOE proposed to first estimate the primary energy and related emission impacts by using the same methodologies and NEMS projections that DOE's conservation standards program has traditionally used. Second, for each alternative energy conservation standard under consideration, DOE proposed to use the energy conversion factors that are generated using the GREET model to convert primary energy use and emission impacts to FFC energy use and emission impacts.
EEI asked which version of the GREET model was used to derive the preliminary conversion values shown in Tables 1 and 2 of the Notice. (EEI, Public Comment, EERE-2010-BT-NOA-0028-0037, p. 5) The most recent version of the GREET model available at the time, version 1.8d, was used to calculate the values in Tables 1 and 2. There will be a new version of GREET released in 2011. The latest version of GREET will be used when the FFC is calculated in future energy conservation standards rulemakings.
Southern Company commented that DOE's proposal to use existing methodologies and NEMS, together with conversion factors generated by the GREET model, was a reasonable approach. (Southern, Public Comment, EERE-2010-BT-NOA-0028-0027, p. 3) Both AGA and the Natural Gas Supply Association (NGSA) commented in support of the GREET model, stating that GREET provides “an adequate modeling platform for the calculation of energy consumption and greenhouse gas emissions data as part of the Department's energy conservation standards program.” (AGA, Public Comment, EERE-2010-BT-NOA-0028-0035, p. 3; NGSA, Public Comment, EERE-2010-BT-NOA-0028-0019, p. 2)
The American Public Gas Association (APGA) commented that it is important that DOE use a transparent process to ensure that stakeholders understand how the GREET model would be used to calculate FFC energy and GHG emissions impacts as part of energy conservation standards rulemakings. The National Association of Home Builders expressed concern about the level of technical documentation and verifiable data provided in the Notice. (APGA, Public Comment, EERE-2010-BT-NOA-0028-0024, p. 5)
The methods, data and assumptions used in the GREET model were subject to public review and comment under separate Federal and State rulemakings. When the current GREET model, or a new version of the model, is used in future DOE rulemakings, the methods, data and assumptions will again be fully documented and subject to public review and comment.
The Northwest Energy Efficiency Alliance (NEEA) commented that the conversion factors and other GREET model estimates presented in the Notice appeared frozen in time, yielding minimal changes for most fuels analyzed from 2010 to 2030. (NEEA, Public Comment, EERE-2010-BT-NOA-0028-0021, p. 1) The NEMS and GREET models both forecast or simulate changes in energy use and emissions over time. The small changes in the conversion factors in Tables 1 and 2 of the Notice reflect the fact that large, long-lived capital stocks dominate the energy production and transport sector, and change slowly over time. New facilities or processes replace existing facilities and processes only gradually over many decades. Retrofitting of existing facilities to alter the fuels used or substantially reduce emissions can result in more rapid changes, and there are efforts to continually improve the ability of the GREET model to capture these types of changes.
Additionally, NEEA asked how to interpret the analyses as they apply to nuclear-fueled electricity, noting that the energy returned on energy invested (EROEI) for nuclear electricity is likely different than the two EROEI values reflected in the current DOE ANL estimates of the FFC factors for this source of energy. (NEEA, Public Comment, EERE-2010-BT-NOA-0028-0021, p. 2) GREET simulations for energy input versus output are based on fossil energy input only. This may be the reason why the imputed EROEI from the GREET model appears higher than some other estimates. The FFC factors are not the same as the EROEI values, since EROEI cannot separate use of different types of energy sources, which is necessary for FFC and GHG emission estimation. Details of the nuclear electricity pathway used in GREET are documented in a paper published in 2007 and posted at the GREET Web site.
EEI commented that the values in Tables 1 and 2 of the Notice are stochastic and do not include all aspects of energy production (such as energy used for oil drilling or to produce chemicals used in the natural gas hydraulic fracturing process). In addition, the tables do not show the range of values in the GREET model for different energy production methods. (EEI, Public Comment, EERE-2010-BT-NOA-0028-0037, p. 5)
DOE agrees that the values generated by the GREET model reflect industry averages that are the product of widely variable processes and practices. DOE
Details of the estimates used for specific technology pathways (such as residual oil production, natural gas production, electricity generation) are provided in the GREET model and the methods, data and assumptions underlying these estimates are provided in the GREET documentation, both of which are available at
APPA commented that the GREET model is susceptible to multiple forms of error because of its large set of base assumptions. APPA also stated that the model is subject to manipulation. (APPA, Public Comment, EERE-2010-BT-NOA-0028-0033, p. 3) APPA is correct that the GREET model, like any life-cycle assessment (LCA) model, is based on a multitude of assumptions. The data supporting these assumptions come from Federal and State databases, as well as data provided by industry. The public can view the model, its assumptions, and the data. This transparency helps produce reliable estimates of FFC impacts.
CECA commented that: “A simple conversion factor from site energy to full fuel cycle is not adequate. There are myriad criteria for determining full-fuel-cycle analysis and reaching agreement on a satisfactory procedure would likely be beyond DOE/EERE's time and resources.” CECA also cited environmental externalities such as those in the European Commission's ExternE model. The ExternE model includes not just energy costs but societal concerns such as environmental impacts, global warming, accidents, energy security, employment impacts, and depletion of non-renewable resources. (CECA, Public Comment, EERE-2010-BT-NOA-0028-0012, p. 3) The State of California developed a model for transportation fuels which defines a “Full Fuel Cycle Assessment” as evaluating and comparing the full environmental and health impacts of each step in the life-cycle of a fuel, which include, but are not limited to, feedstock extraction, transport, storage, fuel production, distribution, vehicle operation, refueling, combustion, or conversion and evaporation. (California Energy Commission, Development of the State Plan for Alternative Transportation Fuels, AB 1007, 3/2/2007) These and other models, in addition to GREET, are cited in the Academy's report. Other entities had similar concerns regarding other available models. (AHRI, Public Comment, EERE-2010-BT-NOA-0028-0017, p. 3) AHRI also noted that the GREET model was not “specifically designed for use in DOE efficiency standard rulemakings.”
Today's Policy Statement addresses the energy use and associated emissions directly used in, or emitted from, the point of primary fuel production to the point of end-use, as specified in the recommendations of the Academy's report. Consequently, the scope of FFC, as this term is used in this Policy Statement, is limited. Other social and environmental impacts, such as the indirect energy and emission impacts associated with the manufacture of covered appliances and equipment, or the manufacture of the equipment used in fuel production and refining, as well as other impacts on health or the environment, are not within the scope of the FFC estimates referenced in this Policy Statement.
In its evaluation of alternative transportation fuels under AB 1007, the California Energy Commission uses GREET and a fuel-cycle definition that is very similar to the FFC approach proposed for use in the development of DOE energy conservation standards.
DOE acknowledges that the GREET model was not specifically designed to generate the factors necessary to convert the primary energy and emission values now used in DOE's energy conservation standards impact analyses into FFC values. DOE is not aware of any model that was specifically designed for this purpose. Nevertheless, DOE has concluded that the GREET model can be appropriately used for this purpose and that the resulting values will be sufficiently reliable to significantly improve the usefulness of the resulting energy and emission impact estimates. The GREET model has been previously used to support certain Federal and State regulatory actions on GHG emissions (such as the EPA's Renewable Fuel Standard development and California's low-carbon fuel standard development) and Federal vehicle fuel efficiency labeling by EPA and DOE. It has already been subject to considerable public review and comment. For these reasons, DOE concludes that GREET is the best model to use for the purposes of today's Policy Statement.
From time to time, DOE will review alternative approaches to estimating these factors and may decide to use a model other than GREET to estimate the FFC energy and emission impacts in any particular future appliance efficiency standards rulemaking. For example, DOE is aware that a future version of the NEMS model may provide the detail necessary to estimate FFC energy and emission impacts. Whether DOE uses the GREET model or another model identified in the future, the model and FFC energy and emission impacts will be subject to public review and comments within an energy conservation standards rulemaking.
The Academy recommended that DOE work with the FTC to initiate a project to consider the merits of providing consumers with information about FFC energy use and GHG emissions of individual appliances so that the public can make more informed purchasing decisions. In particular, the Academy recommended that DOE and FTC should initiate a project to consider the merits of adding to the Energy Guide label an indicator of how an appliance's total energy consumption might affect levels of GHG emissions.
DOE indicated in its NOPP that the FTC maintains online databases of the site energy use and efficiency ratings of appliances currently on the market. These databases do not, however, include FFC energy use or any energy cost or emissions-related data. While it is possible to compare the site energy
In response to the Academy's recommendations, DOE proposed to significantly improve upon the FTC's existing on-line databases by making FFC energy use and emissions data (and possibly annual energy cost data) available to the public. The improved databases could enable users to easily compare a product's energy use, associated emissions, and costs to similar products, including products that are in different classes because they have different features or use different fuels. Additional energy, emissions, and cost data could be included by updating FTC's online database with the emissions factors developed with the GREET model and estimated annual energy use and/or energy cost data reported by manufacturers on appliance Energy Guide labels. This proposed action was also supported by comments from the Natural Resources Defense Council. (NRDC, Public Comment, EERE-2010-BT-NOA-0028-0030, p. 2)
Regarding the Energy Guide label, DOE stated in the NOPP that it is not clear to DOE that including additional label disclosures, such as the GHG emissions indicator mentioned by the Academy, would be valuable to customers unless they could easily compare the GHG emissions associated with one product to other comparable products or other common energy uses. DOE indicated in its proposal that because the GHG emissions associated with a particular class of products using the same fuel would be directly proportional to that class of products' estimated annual energy costs, simply comparing an individual product to products of the same class using the same fuel would add little useful information to the label. DOE also stated that providing comparisons to the energy use, costs or emissions associated with other comparable products with different features or that use different fuels on the Energy Guide label may increase the complexity of the label, making the label more difficult to understand and decreasing the utility of the basic annual operating cost information already on the label.
AGA supported the inclusion of emissions information on Energy Guide labels to allow customers to better understand the emissions implications of their appliance choices. AGA commented that “any concerns regarding the complexity and utility of any particular Energy Guide label can and should be addressed in a rulemaking proceeding by the FTC to revise the labels. The potential that some labels may be perceived by some users as less than clear should not be a basis for denying consumers the emissions information they need to make environmentally sound appliance choices.” (AGA, Public Comment, EERE-2010-BT-NOA-0028-0004, pp. 3-4)
DOE will make available to the FTC the FFC energy and emission factors that it generates for use in rulemakings. DOE still has some concerns that using these factors to provide FFC information to consumers via the Energy Guide Label is likely to increase the complexity of the label and, therefore, may decrease its effectiveness. However, DOE believes that other means of providing this information to consumers could be as or more effective.
The Institute for Policy Integrity disagreed with DOE's concerns about adding GHG emissions to the Energy Guide labels. The Institute pointed out that other labels are far more complex, which indicates that consumers are accustomed to relatively complex labels, and encouraged DOE to work with the FTC on label modifications. (Institute, Public Comment, EERE-2010-BT-NOA-0028-0032, pp. 5-6)
In contrast, EEI commented that providing consumers with accurate product-specific GHG emissions data associated with electricity use would likely be extremely complex because each utility has its own distinct GHG emission mix. As a result, national or even regional average data can be very misleading. If product-specific GHG emissions data was made available, EEI, along with others, indicated that it supported the use of a website providing such information as opposed to including the information on Energy Guide labels. (EEI, Public Comment, EERE-2010-BT-NOA-0028-0007, p. 3)
EEI and CECA Solutions commented that DOE's proposal to provide customers with energy use and emissions data back to the point of extraction of fossil fuels would lead consumers to incorrectly believe that they will save more energy than is the case and could harm the ability of consumers to make smart purchasing decisions. (EEI, Public Comment, EERE-2010-BT-NOA-0028-0007, p. 2; CECA, Public Comment, EERE-2010-BT-NOA-0028-0012, p. 2)
Similarly, NRECA stated that consumers will not accurately understand the amount of energy being utilized by their appliances and providing this information would burden manufacturers, possibly resulting in higher costs for the consumer. (NRECA, Public Comment, EERE-2010-BT-NOA-0028-0002, p. 3)
In response, DOE emphasizes that it is not proposing to provide consumers with information that might lead them to conclude that the benefits associated with the reduction of FFC energy or emissions would be reflected in additional consumer cost savings. DOE does not believe that providing consumers with information about the FFC impacts of appliances on GHG emissions would mislead consumers about the actual energy use of their appliances, nor that providing such information would place a significant new cost on manufacturers that would increase product costs. However, DOE agrees that providing this type of information in a meaningful way, given the large regional variations in the electric sector, may well be difficult.
NRECA went on to comment that “the analysis and cost effectiveness of the efficiency standard must be based upon costs and savings that the customers experience.” They indicated that they believe that “placing source energy consumption on a label for the customer is misleading at best, and very confusing. Customers could choose the “highest” efficiency unit on the label but find their utility bills increasing because the appliance would not be operating on the most efficient energy source at the site.” (NRECA, Public Comment, EERE-2010-BT-NOA-0028-0002, p. 3)
DOE agrees that energy conservation standards should continue to be based, in large part, on the costs and savings that user's experience. However, EPCA, as amended, and other laws direct DOE to consider a range of other factors as well, including the energy resource and environmental impacts of alternative standard levels. While ongoing changes in the electric sector sometimes may make this type of analysis complex and less certain, DOE believes that such analyses are nevertheless possible and, ultimately, useful to government decision-makers and many consumers. Regarding the information made available to consumers, DOE agrees that information on energy costs and life-cycle costs should continue to be emphasized. However, DOE also believes that consumers should be given ready access to better information on the energy resource and environmental impacts of their appliance choices. DOE believes that this objective can be achieved, at least in part, through web-
DOE agrees with NEEA's comment that the difference between primary energy use estimates and FFC energy use estimates is relatively small. (NEEA, Public Comment, EERE-2010-BT-NOA-0028-0021, p. 2) However, to date, consumers have not had ready access to information on either the primary or FFC energy and emission impacts of products. Making such information available in a manner that would enable consumers to make cross-fuel and cross-class comparisons of comparable products could provide consumers with significant new information.
The Consumer's Union commented that the Energy Guide labels must increase consumer awareness of GHG emissions to effectively educate consumers and engage them in energy and climate change policy. Such labels should “address regional variation of electricity fuel mixes and provide consumers guidance on how to interpret the data given their region or particular utility.” (Consumers, Public Comment, EERE-2010-BT-NOA-0028-0028, p. 5) DOE agrees that consumers should be given ready access to better information on the energy resource and environmental impacts of their appliance choices and how to provide this information in a meaningful way will be a significant issue for DOE and the FTC to consider.
Any updates to Energy Guide labels will be promulgated by the FTC, which has statutory authority over Energy Guide labels.
DOE has determined that this Policy Statement falls into a class of actions that are categorically excluded from review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321
In consultation with the Office of Science and Technology Policy (OSTP), OMB issued on December 16, 2004, its “Final Information Quality Bulletin for Peer Review” (the Bulletin). 70 FR 2664 (Jan. 14, 2005). The Bulletin establishes that certain scientific information shall be peer reviewed by qualified specialists before it is disseminated by the Federal government, including influential scientific information related to agency regulatory actions. The purpose of the Bulletin is to enhance the quality and credibility of the government's scientific information. Under the Bulletin, the Academy recommendations and GREET model are “influential scientific information,” which the Bulletin defines as “scientific information that the agency reasonably can determine will have or does have a clear and substantial impact on important public policies or private sector decisions.” 70 FR 2664, 2667 (Jan. 14, 2005). The Academy recommendations have been peer reviewed pursuant to section II.2 of the Bulletin. The GREET model, which is in the public domain, has been reviewed through its development and applications over the past 16 years.
The Assistant Secretary of DOE's Office of Energy Efficiency and Renewable Energy has approved publication of this final policy.
Farm Credit Administration.
Proposed rule.
The Farm Credit Administration (FCA, Agency, us, our, or we) proposes to amend our regulations governing investments held by institutions of the Farm Credit System (FCS or System). We propose to strengthen our regulations governing investment management, interest rate risk management, and association investments; revise the list of eligible investments to ensure it is limited only to high-quality, liquid investments; reduce regulatory burden for investments that fail to meet eligibility criteria after purchase or are unsuitable; and make other changes that will enhance the safety and soundness of System institutions. In this proposal, we also seek comments on compliance with section 939A of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act or DFA), which requires us to remove all references to and requirements relating to credit ratings and to substitute other appropriate standards of creditworthiness. We also seek comment on other issues.
You may send us comments by November 16, 2011.
We offer a variety of methods for you to submit comments on this proposed rule. For accuracy and efficiency reasons, commenters are encouraged to submit comments by e-mail or through the Agency's Web site. As facsimiles (fax) are difficult for us to process and achieve compliance with section 508 of the Rehabilitation Act, we are no longer accepting comments submitted by fax. Regardless of the method you use, please do not submit your comment multiple times via different methods. You may submit comments by any of the following methods:
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You may review copies of all comments we receive at our office in McLean, Virginia, or on our Web site at
Timothy T. Nerdahl, Senior Financial Analyst, Office of Regulatory Policy, Farm Credit Administration, McLean, VA 22102-5090, (952) 854-7151 extension 5035, TTY (952) 854-2239; or Jennifer A. Cohn, Senior Counsel, Office of General Counsel, Farm Credit Administration, McLean, VA 22102-5090, (703) 883-4020, TTY (703) 883-4020.
The objectives of this proposed rule are to:
• Ensure that Farm Credit banks
• Strengthen the safety and soundness of System institutions;
• Discuss the requirements of section 939A of the Dodd-Frank Act;
• Reduce regulatory burden with respect to investments that fail to meet eligibility criteria after purchase or are unsuitable; and
• Enhance the ability of the System to supply credit to agriculture and aquatic producers by ensuring adequate availability to funds.
Congress created the System as a Government-sponsored enterprise (GSE) to provide a permanent, stable, and reliable source of credit and related services to American agriculture and aquatic producers. Farm Credit banks obtain funds used by System banks and associations to provide credit and related services primarily through the issuance of System-wide debt securities.
Subpart E of part 615 imposes comprehensive requirements regarding the investments of System institutions (primarily Farm Credit banks).
We adopted our last major revisions to our investment regulations in 1999 and amended them in a more limited manner in 2005. Since 1999, the marketplace pertaining to investments has changed significantly. Innovations in investment products have led to their increasing complexity, and investors need to have greater expertise to fully understand them. In addition, the financial crisis that began in 2007 resulted in numerous investment downgrades and the loss of billions of dollars by financial institutions.
While System banks suffered considerably less stress during the crisis than many other financial institutions, they did experience numerous downgrades and some losses on individual investments. In 2010, we issued a bookletter that provides clarification and guidance regarding our regulations and expectations with respect to the key elements of a robust investment asset management framework that institutions should establish to prudently manage their investments in changing markets.
In July 2010, the President signed into law the Dodd-Frank Act to strengthen regulation of the financial industry in the wake of the financial crisis that unfolded in 2007 and 2008. As discussed in greater detail below, section 939A of the DFA requires each Federal agency to revise all of its regulations that refer to or require reliance on credit ratings to assess creditworthiness of an instrument to remove the reference or requirement and to substitute other appropriate creditworthiness standards.
We now propose amendments that would strengthen our investment regulations. In addition, in certain areas, including compliance with section 939A of the DFA, we seek comments but propose no specific regulatory revisions. In these areas, we will likely have to propose revisions before we will be able to adopt revisions as final. We will consider all comments received in this or future rulemakings, as appropriate.
Following is a section-by-section description of the proposed revisions to our rules.
We propose to amend § 615.5131 to add two new definitions to reflect clarifications we propose to make to § 615.5140, as discussed below. We propose adding a definition for
In 2005, we modified § 615.5132 to increase the permissible level of investments that Farm Credit banks may hold from 30 to 35 percent of total outstanding loans. The reason for the increase was to provide the banks with additional flexibility to meet their liquidity needs and accomplish their asset/liability management strategies in varying economic conditions. At this time, we continue to believe that the investment maximum of 35 percent of total outstanding loans provides the banks adequate flexibility to maintain their liquidity reserve at an appropriate amount. However, as discussed below, we solicit public comments on this issue.
In this discussion, we emphasize the proper application of a provision of this regulation. We also discuss a proposed revision and an area where we specifically seek the views of commenters.
Section 615.5132 permits each Farm Credit bank to hold eligible investments for the purposes of maintaining a liquidity reserve, managing surplus short-term funds, and managing interest rate risk. These purposes do not authorize Farm Credit banks to accumulate investment portfolios for arbitrage activities or to engage in trading for speculative or primarily capital gains purposes.
Section 615.5132 permits Farm Credit banks to hold eligible investments, for specified purposes, in an amount not to exceed 35 percent of its total outstanding loans. We propose to permit banks to exclude investments pledged to meet margin requirements for derivative transactions (collateral) when calculating the 35-percent investment limit. We note that investments that are pledged as collateral do not count toward a Farm Credit bank's compliance with its liquidity reserve requirement.
Historically, Farm Credit banks have invested in instruments that generate yield in excess of the cost of funds (positive carry). Since the recent financial crisis, however, the banks have experienced decreased liquidity with these instruments at times, and they have turned to United States Treasury securities because of their high liquidity.
Under our existing 35-percent investment limit, holding Treasury securities reduces the maximum amount of investments that Farm Credit banks may hold in other eligible securities. Thus, the banks must choose between greater liquidity but a negative carry, or a positive carry but reduced liquidity.
We currently believe that the 35-percent limit continues to provide sufficient flexibility for Farm Credit banks to maintain adequate liquidity. However, we have received a request from a System workgroup asking us to consider treating Treasury securities as cash for purposes of this provision.
Consequently, we seek comment on whether and how to address the situation Farm Credit banks face in holding Treasury securities. Are Farm Credit banks able to purchase sufficient Treasury securities to enhance liquidity, while remaining within the constraint that total investments may not exceed 35 percent of total outstanding loans? Or should the percentage be raised and, if so, to what level and why? Should Treasuries be excluded from total investments when calculating the percentage of total investments to total loans outstanding? Would it be appropriate to exclude a portion of Treasury securities from the calculation? Would it be appropriate to apply a discount to Treasuries? What would be the basis for such a calculation change?
Effective investment management requires financial institutions to establish policies that include risk limits, approved mechanisms for identifying, measuring, and reporting exposures, and strong corporate governance. The recent crisis and its lingering effects have re-emphasized the importance of sound investment management, and we believe that strengthened regulation would further ensure the safe and sound management of investments. Accordingly, we are proposing significant changes to § 615.5133, which governs investment management.
In addition, we propose minor technical, clarifying, and non-substantive language changes to this section that we do not specifically discuss in this preamble.
We propose enhancements to the responsibilities of each board of directors set forth in § 615.5133(a). The existing regulation requires the board to review its investment policies annually and to make any changes that are needed. We believe that depending on the situation, this review may need to occur more than once a year. We would continue to require a review at least annually but, to reduce unnecessary regulatory burden, we propose to permit a designated board committee to conduct this review and to validate the
Section 615.5133(b) lists the items that a board's investment policy must address, but it currently does not include every requirement of § 615.5133. For example, existing § 615.5133(e) requires an institution to establish internal controls, and existing § 615.5133(f) requires specified securities valuation, but existing § 615.5133(b) does not require these items to be addressed in the investment policy. Our proposal would require that the investment policy address every requirement of § 615.5133. This revision would clarify our expectations as to the appropriate content of the board's policies.
We would also require that investment policies must address the means for reporting, and approvals needed for, exceptions to established policies. Because the investment policies are established by the board, we believe it is important for the board's policies to address how exceptions to those policies will be handled. We believe exceptions to a policy should be rare, because frequent exceptions call into question the adequacy of the policy.
In addition, we propose that institutions must document in their records or board minutes any analyses used in formulating policies or amendments to the policies. An accurate record of the analysis used to formulate investment policies documents appropriate governance. It also provides a trail for future directors and managers to review to fully understand how previous boards of directors arrived at their decisions and why they approved the policy in the form they did.
Our proposed changes are intended to make the investment policies' risk tolerance discussion more robust. In addition to the existing requirements of this section, investment policies would have to establish concentration limits for the various types and sectors of eligible investments and for the entire investment portfolio. We propose to delete the requirement that investment policies must establish diversification requirements, because the new concentration limit requirement would necessarily lead to diversification.
Existing § 615.5133(c)(1)(i) provides that investment policies must establish credit quality standards, limits on counterparty risk, and risk diversification standards that limit concentrations based on a single or related counterparty(ies), a geographical area, industries, or obligations with similar characteristics. We propose to clarify that concentration limits be based on either a single or related counterparty(ies). Further, concentration limits must also be based on a geographical area, industries or sectors, asset classes, or obligations with similar characteristics. We believe this amendment would ensure that diversification is more thoroughly considered by System institutions.
Existing § 615.5133(c)(1)(ii) requires investment policies to establish criteria for selecting securities firms. It requires the board annually to review the criteria for selecting securities firms and determine whether to continue existing relationships. To reduce unnecessary regulatory burden, we propose to permit a designated committee of the board to review the criteria and to determine whether to continue existing relationships, but the board must approve any changes to the criteria and any changes to the existing relationships. This change would permit a designated committee to use its technical expertise to assist the board in carrying out its responsibilities.
Existing § 615.5133(c)(1)(iii) requires investment policies to establish collateral margin requirements on repurchase agreements. We propose to require institutions to regularly mark the collateral to market and ensure appropriate controls are maintained over collateral held. We believe it is prudent for institutions to manage potential counterparty risk and to establish appropriate counterparty margin requirements based on the quality of the collateral and the terms of the agreement.
We propose changes to § 615.5133(c)(2), which relates to market risk. Specifically, we propose to link this regulation to our stress-testing requirements contained in proposed § 615.5133(f)(2), our interest rate risk requirements contained in § 615.5135, and other policies and guidance. These changes clarify our expectations that the board consider all aspects of market risk.
We propose to modify our internal controls requirements in § 615.5133(e). In § 615.5133(e)(2), we propose adding additional personnel to the list of personnel whose duties and supervision should be separated from personnel who execute investment transactions. These additional personnel are those who post accounting entries, reconcile trade confirmations, and report compliance with investment policy. We believe this additional separation is a best practice that System institutions should have in place to ensure controls are sufficient and appropriate.
We also propose a new § 615.5133(e)(4). This provision would require each institution to implement an effective internal audit program to review, at least annually, investment controls, processes, and compliance with FCA regulations and other regulatory guidance. The internal audit program would specifically have to include a review of the processes used for ensuring all investments, at the time of purchase, are eligible and suitable for purchase under the board's investment policies and for ensuring investments continue to meet all applicable generally accepted accounting principles even if they are no longer part of the liquidity portfolio.
Existing § 618.8430 requires each institution's board to adopt an internal control policy that provides direction to the institution in establishing effective control over, and accountability for, operations, programs, and resources. Our regulations do not, however, discuss the internal audit of the investment function specifically. However, FCA Bookletter BL-064 provides guidance on FCA expectations in this area. We now propose to strengthen this guidance by adding it as a regulatory requirement in § 615.5133(e)(4).
As we stated in FCA Bookletter BL-064, under § 618.8430 an institution's board is responsible for ensuring that sound systems and controls are in place to manage investment risks. Senior management is responsible for implementing an effective control environment to manage risk in an institution's investment portfolio, as well as to ensure compliance with applicable laws and regulations. Internal audit is a critical function that ensures appropriate internal controls are in place. Accordingly, our proposal would require System institutions to establish internal controls to ensure that an independent review over investment practices and controls, including
An institution's audit plan must include a risk assessment, at least annually, of the investment function by the internal audit department or by an outside vendor if the expertise in-house does not exist. Moreover, an institution must conduct an internal audit of the investment function at least annually. As we stated in FCA Bookletter BL-064, the frequency and scope of review should be based on the complexity and size of the investment portfolio. In addition, auditors should be rotated to obtain alternate views of investment operations. Outside audits of the portfolio should be conducted periodically as necessary to ensure an objective evaluation of practices and controls by qualified auditors.
We propose to add a new § 615.5133(f). This provision would cover the due diligence institutions must perform to determine eligibility, suitability, and value of investments. This provision would combine in one location the requirements governing securities valuation and those governing stress testing that are now in existing § 615.5133(f) and § 615.5141, respectively. Our proposed revisions would make these requirements more robust and less burdensome.
In new § 615.5133(f)(1), we propose that before an institution purchases an investment, it must conduct sufficient due diligence to determine whether the investment is eligible under § 615.5140 and suitable for purchase under the investment policies of the institution's board. We propose to retain from existing § 615.5133(f)(1) the requirement that the institution must verify the value of the investment (unless it is a new issue) with a source that is independent of the broker, dealer, counterparty, or other intermediary to the transaction. We also propose to require that an institution's investment policies must fully address the extent of pre-purchase analysis that management must perform for various classes of investments and that the institution must document its assessment of eligibility and suitability, including the information used in its assessment. The provision would permit the institution to use all available sources, including third party sources, to assess the investment. Finally, the provision would require that the institution's assessment of each investment at the time of purchase must at a minimum include an evaluation of credit risk, liquidity risk, market risk, and interest rate risk, and an assessment of the cash flows and the underlying collateral of the investment.
This proposed regulation builds on our expectations for institutions to conduct proper due diligence, which we conveyed in FCA Bookletter BL-064. System institutions must conduct due diligence prior to purchasing a security. The degree of due diligence that an institution conducts must be commensurate with the complexity of the security. The need to evaluate and make a decision on a transaction quickly does not obviate the due diligence requirement. FCA expects that institutions must thoroughly understand the risks and cash flow characteristics of their investments, particularly for products that have unusual, leveraged, or highly variable cash flows. System institutions must identify and measure risks prior to acquisition. In general, institutions should conduct and document due diligence analyses separately for each investment security. Modeling cash flows and assumptions at the time of purchase provides insight into the changing risks certain investments present.
We believe that documentation of the analysis conducted is a critical component for assessing and verifying eligibility and suitability. Investment policies must require that an adequate level of analysis be conducted on the various classes of investments purchased. Under this proposed regulation, System institutions that engage in investment activity will need to strengthen their due diligence process and improve their documentation as to why the investment was purchased.
We expect that institutions will evaluate each investment they purchase using various sources available to them, including third parties if warranted, to assess whether an investment meets the eligibility requirements. Institutions may not, however, rely exclusively on third parties to justify the purchase of a security. Institutions must always conduct their own due diligence, because management and the board are ultimately responsible for any decisions. Moreover, because of the particular concerns surrounding the accuracy of credit ratings, institutions must be especially cautious if they choose to consider them.
We propose moving our investment stress-testing requirements into § 615.5133(f)(2), as part of our due diligence and security valuation requirements, and removing existing § 615.5141 as a stand-alone, stress-testing regulation. We propose this change because stress-testing is a key component of due diligence. It is used to assess the risk presented by an investment and the changes in valuation that may be experienced from movements in interest rates. In addition, we propose changes to the substance of the stress-testing requirements.
Existing § 615.5141 requires pre-purchase and quarterly interest rate stress testing for mortgage securities. It provides that mortgage securities are not eligible investments unless they pass a stress test, and it requires divestiture of a mortgage security that no longer complies with the stress-testing requirements.
In the preamble to the 1999 final rule, in which we adopted the existing stress-testing requirements, we stated that we believed stress-testing was an essential risk management practice because even highly rated mortgage securities may expose investors to significant interest rate risk.
Because of the importance of stress testing and the increasing complexity of investments, we propose in a new § 615.5133(f)(2) that all investments— not just mortgage securities, and including Treasury securities—must be stress tested before purchase and on a quarterly basis. This new requirement would enable System institutions to gain insight into the price movements of all securities they purchase. We understand that stress-testing for investments that have indexed rates that reprice at intervals of 12 months or less or have extremely short terms (such as Fed Funds and certain commercial paper) may be viewed as unnecessary. However, we believe that all investments must be stress tested to build a robust stress-testing environment that provides for a comprehensive and consistent analytical framework from which to evaluate the risks in the investment portfolio. It is also an important part of
Existing § 615.5141 provides two stress-testing options. In the first option, we set forth a standardized, three-pronged stress test that includes an average life test, an average life sensitivity test, and a price sensitivity test. In the second prong, we permit institutions to use alternative stress-test criteria and methodologies to evaluate the price sensitivity of mortgage securities.
We now propose to eliminate the standardized stress test. Since we first allowed the alternative stress test, we believe that every Farm Credit bank that invests in mortgage securities has moved to the alternative test and that none continue to use the standardized test. We discuss new stress-testing requirements, set forth in § 615.5133(f)(2)(iii), below.
To reduce regulatory burden, we propose in new § 615.5133(f)(2)(i) that an institution may purchase, with board approval, an investment that exceeds the stress-test parameters defined in its board's policies. We believe this flexibility is necessary because the financial markets continue to be very dynamic and a particular investment may not meet a board's parameters but may nevertheless provide additional liquidity or interest risk protection.
We propose in new § 615.5133(f)(2)(ii) that at the end of each quarter, each institution must stress test its entire investment portfolio, including a stress test of each individual investment, in accordance with paragraph (f)(2)(iii), as defined in its board policy. An investment that exceeds the board-defined stress parameters would not become ineligible and would not need to be divested. Rather, the board policy defining the stress tests would have to specify what actions the institution would take if its portfolio (but not an individual investment) exceeded the quarter-end, stress-test parameters defined in the policy, including the development of a plan to bring the portfolio back into compliance with those parameters.
We believe that stress testing the entire investment portfolio at each quarter-end will provide significant insight into the risks associated with the investment portfolio. We also believe that requiring the stress testing of individual investments on a quarterly basis is just a component of understanding how each individual investment affects the entire portfolio. Should an institution's entire portfolio exceed its board's stress-testing policy parameters it would have to develop a plan to bring the portfolio back into compliance. This plan should specify how the institution would bring the portfolio back into compliance and what timeframes are involved.
As discussed below, in § 615.5133(g)(2) we propose to require an institution to provide immediate notification to the board or a designated board committee if its stress test for the entire portfolio exceeds its board's policy parameters. We believe that a portfolio stress test that exceeds board parameters discloses a serious situation that could threaten the safety and soundness of the institution and that directors should be notified and a plan developed to reduce portfolio risk.
Proposed § 615.5133(f)(2)(iii) sets forth the requirements for pre-purchase and quarter-end stress tests. These requirements are for the most part unchanged from our existing requirements in § 615.5141 governing the alternative stress test. We discuss the differences below.
Proposed § 615.5133(f)(2)(iii) would require that the pre-purchase and quarter-end stress tests be defined in a board approved policy and include defined parameters for the types of securities an institution purchases. The stress tests would have to be comprehensive and appropriate for the risk profile of the institution. At a minimum, the stress tests would have to be able to measure the price sensitivity of investments over different interest rate/yield curve scenarios. The methodology that the institution uses to analyze investment securities would have to be appropriate for the complexity, structure, and cash flows of the investments in its portfolio.
The stress tests would have to enable the institution to determine at the time of purchase and each subsequent quarter-end that its investment securities, either individually or on a portfolio-wide basis, do not expose its capital, earnings, or liquidity to excessive risks. Also, the stress tests would have to enable the institution to evaluate the overall risk in the investment portfolio and compare it with defined board policy limits.
Two of the new requirements in this proposal—the requirement that all securities, not just mortgage securities, must be stress tested; and the requirement that securities must be stress tested on a portfolio-wide basis—are discussed above. The other new requirement is that stress tests would have to enable an institution to determine that its investment securities do not expose it to excessive liquidity risk. We propose this requirement because we believe an institution should have insight into the amount of cash it could obtain through the sale of investments, if necessary.
In conducting its stress tests, an institution would have to rely, to the maximum extent practicable, on verifiable information to support all of its assumptions, including prepayment and interest rate volatility assumptions, when applying its stress tests. An institution would have to document the basis for all assumptions used to evaluate a security and its underlying collateral, and it would also have to document all subsequent changes in its assumptions.
In this proposal, we specifically seek comment on several areas related to stress testing. Should FCA retain a standardized stress-testing option for institutions that do not wish to or do not have the capability of defining their own stress tests? Given that the Dodd-Frank Act requires us to eliminate credit ratings as a criterion for the eligibility of investments, would allowing System institutions to develop their own standards result in a variety of investment portfolios that exhibit substantially different risk profiles? Could this result in an inappropriate amount of risk in some investment portfolios? Also, should our regulations require stress-testing on all investments at the time of purchase? If not, on which investments should we require stress-testing, and why? Should institutions be required to stress test their individual investments and their entire investment portfolio on a quarterly basis? Why or why not?
We propose to redesignate existing § 615.5133(f)(2) as § 615.5133(f)(3). We propose to revise the last sentence of this provision to require an institution to evaluate the credit quality and price sensitivity of each investment in its portfolio and of its whole investment portfolio to the change in market interest rates. This change would clarify the meaning of this provision. We also propose to make other non-substantive changes to this provision.
We propose to redesignate existing § 615.5133(f)(3) as § 615.5133(f)(4) and to change the word “security” to “investment.”
We propose revisions to § 615.5133(g), which specifies information that management must report to the board or a board committee each quarter.
Proposed § 615.5133(g)(1) would require management to report to the board of directors or a designated board committee at least quarterly on the following:
• Plans and strategies for achieving the board's objectives for the investment portfolio;
• Whether the investment portfolio effectively achieves the board's objectives;
• The current composition, quality, and liquidity profile of the investment portfolio;
• The performance of each class of investments and the entire investment portfolio, including all gains and losses that the institution incurred during the quarter on individual investments that it sold before maturity and why they were liquidated;
• Potential risk exposure to changes in market interest rates as identified through quarterly stress testing and any other factors that may affect the value of the institution's investment holdings;
• How investments affect the institution's capital, earnings, and overall financial condition;
• Any deviations from the board's policies (must be specifically identified); and
• The results of the institution's quarterly stress test.
We believe that these reporting requirements are best practices and are items that boards of directors or a designated board committee must know to exercise proper governance. We also believe that the use of the investment plan discussed below would be an important tool and an effective way to report to the board on the requirements above. Presenting an investment plan and its results to the board or designated board committee would provide assurances that all required reporting takes place.
Proposed § 615.5133(g)(2) would add a special reporting requirement. It would require an institution to provide immediate notification to its board of directors or to a designated board committee if its portfolio exceeded the quarterly stress-test parameters defined in the board policy required by proposed § 615.5133(f)(2)(ii). We propose this requirement because exceeding board policy parameters could lead to serious risk exposures for the institution.
Although not a regulatory requirement, each System institution that maintains an investment portfolio should develop an investment plan and establish a formal investment oversight committee. These practices enable management to implement the investment direction provided by the institution's board. In addition, as discussed above under reporting, management's presentation of an investment plan to the board or designated board committee, along with the investment portfolio results, would provide assurances that required reporting takes place.
An institution's senior management should develop a sufficiently detailed investment plan to appropriately execute the board's approved investment strategies and achieve business plan goals of the institution. The plan should be approved by senior management or an appropriate management committee. The investment plan should help provide for effective guidelines and control over the investment portfolio. The plan should be a working document that can deal with changes in market conditions. Investment plans should describe:
• The target portfolio composition given the board's investment policy, current market conditions, and projected liquidity needs;
• The rebalancing activities needed to achieve the target portfolio; and
• The performance measures that will be used to measure portfolio performance. Such measures should include target portfolio spread given the target portfolio composition and anticipated various spreads in relation to the institution's cost of funds.
To effectively implement the investment plan, each institution should consider establishing a formal investment committee to provide additional expertise and to serve as an additional control over investment management. In the past, the asset/liability management committees, which oversee the management of investment portfolios in most System institutions, have generally provided sufficient oversight of these portfolios. However, the importance, volume, and growing complexity of System investments may warrant additional expertise in the form of a more specialized investment committee. In addition to providing additional expertise, the investment committee would also provide for separation of duties between allocation and risk strategies and the actual traders. This committee could also provide appropriate monitoring and governance as well as provide structure or formalization of many of the informal processes.
Interest rate risk management is an important part of the overall financial management of a Farm Credit bank. The potentially adverse effects that interest rate risk may have on net interest income and the market value of equity is of particular importance.
We believe that strong policy direction from a Farm Credit bank's board of directors is essential to an effective interest rate risk management program. Existing § 615.5135 requires a bank's board to adopt an interest rate risk management section of an asset/liability management policy. Our proposed revisions to this rule would strengthen a bank's interest rate risk management program. The existing requirements would remain. In addition, the revisions would require the interest rate risk management section of the asset/liability management policy to establish policies and procedures for the bank to:
• Address the purpose and objectives of interest rate risk management;
• Consider the impact of investments on interest rate risk based on the results of the stress testing required under proposed § 615.5133(f)(2);
• Describe actions needed to obtain its desired risk management objectives;
• Identify exception parameters and approvals needed for any exceptions to the requirements of the board's policies;
• Describe delegations of authority;
• Describe reporting requirements, including exceptions to limits contained in the board's policies; and
• Consider the nature and purpose of derivative contracts and establish counterparty risk thresholds and limits for derivatives used to manage interest rate risk.
Boards of directors set policy direction for the institution. Bank management carries out this direction and is responsible for reporting back to
In addition, our proposal would require that management of each Farm Credit bank must report at least quarterly to its board of directors, or to a designated committee of the board, describing the nature and level of interest rate risk exposure. Any deviations from the board's policy on interest rate risk must be specifically identified in the report and approved by the board or a designated committee of the board.
Finally, we propose several minor technical and clarifying amendments, such as changing “shall” to “must”.
This section provides that an emergency shall be deemed to exist whenever a financial, economic, agricultural, or national defense crisis could impede the normal access of Farm Credit banks to the capital markets. Whenever FCA determines, after consultations with the Funding Corporation, that such an emergency exists, the FCA Board shall, in its sole discretion, adopt a resolution that increases the amount of eligible investments that banks are authorized to hold pursuant to § 615.5132, and/or modifies or waives the liquidity reserve requirement in § 615.5134.
We propose revisions to provide additional flexibility to the resolution that the FCA Board may adopt. First, in recognition that events such as the 2008 market turmoil may not allow for the deliberation contemplated by this regulation, we propose to clarify that the Funding Corporation consultation should occur only “to the extent practicable.” Second, the proposed rule would provide that FCA “may”, rather than “shall”, adopt a resolution. Third, rather than permitting the resolution to increase the authorized amount of eligible investments, the proposed rule would permit the resolution to modify the amount, qualities, and types of authorized, eligible investments. Finally, we propose to expressly permit the resolution to authorize other actions as deemed appropriate.
We last revised our listing of eligible investments, at § 615.5140, in 1999.
The recent financial crisis resulted in substantial turmoil in the financial markets. Overall, System institutions weathered this crisis better than many other regulated financial institutions. We believe this is due in part to the limited scope of authorized investments. Even so, some System institutions did experience losses on certain types of investments.
Based on this experience, we now propose amendments that would clarify which investments are eligible, eliminate certain investments, and reduce portfolio limits where appropriate. In addition, we ask questions about the most effective way to comply with section 939A of the DFA. As discussed in greater detail below, that provision requires each Federal agency to revise all regulations that refer to or require reliance on credit ratings to assess creditworthiness of an instrument to remove the reference or requirement and to substitute other appropriate creditworthiness standards.
We propose revisions to the language in the introductory paragraph of § 615.5140(a). The existing language authorizes institutions to hold only the eligible investments that are listed and prohibits institutions from purchasing investments that are not listed. It also prohibits them from holding investments that were eligible when purchased but that subsequently became ineligible.
Like our existing regulation, our proposal would permit institutions to purchase only those investments that satisfy the eligibility criteria in § 615.5140. An investment that does not satisfy the eligibility criteria would not be eligible for purchase and would be subject to the divestiture requirements of proposed § 615.5143(a) if it were purchased.
In a change from our existing approach, however, eligibility would be determined only at the time of purchase. An investment that satisfies the eligibility criteria at the time of purchase but that subsequently failed to satisfy the eligibility criteria would not become ineligible and would not have to be divested. Instead, it would be subject to the requirements of proposed § 615.5143(b), which would permit an institution to retain the investment subject to certain conditions.
In addition, existing § 615.5140(a) states that all investments must be denominated in United States dollars. We propose to relocate this language to § 615.5140(b).
Existing § 615.5140(a)(1) lists “Obligations of the United States” as an eligible asset class. Under that heading three items are listed: Treasuries; agency securities (except mortgage securities); and other obligations fully insured or guaranteed by the United States, its agencies, instrumentalities, and corporations. We believe this listing is confusing and does not appropriately differentiate among obligors. Although the heading reads “Obligations of the United States”, the second and third items are intended to include debt securities and other non-mortgage obligations of GSEs such as Fannie Mae and Freddie Mac, which are not obligations of the United States.
Accordingly, we propose to split this listing into two categories. We do not intend any substantive changes with this proposed revision. We intend only to clarify the existing language.
The first listing, under § 615.5140(a)(1), would be headed “Obligations of the United States”, and it would include only non-mortgage obligations, including but not limited to Treasuries, that are fully insured or guaranteed by a
Proposed § 615.5140(a)(2) would permit institutions to purchase obligations of Government-sponsored agencies only if the obligations are senior debt securities. We believe that limiting permissible investments in this manner helps to ensure that institutions maintain only the highest quality investments in their portfolios.
Existing § 615.5140(a)(2) places no investment portfolio limits for general obligation municipal securities. We propose to modify this provision (redesignated as § 615.5140(a)(3)) to impose a 15-percent investment portfolio limit on these securities. We propose this limit because we believe that a portfolio solely comprised of general obligation municipal securities would not provide sufficient liquidity in the event of a crisis in that particular market. We note that this limit is consistent with our existing revenue bond municipal securities investment portfolio limit.
Existing § 615.5140(a)(3) places no final maturity limit and no investment portfolio limit on international and multilateral development bank obligations. In redesignated § 615.5140(a)(4), we propose imposing a 10-year maturity limit and a 15-percent investment portfolio limit, to ensure a more diversified and liquid portfolio. We believe that a portfolio containing longer term obligations or comprised of an excess of these obligations would not provide sufficient liquidity in the event of a crisis in that particular market. We note that System institutions have invested in these obligations only on a limited basis.
Existing § 615.5140(a)(4) permits institutions to invest in repurchase agreements that satisfy specified conditions. If the counterparty defaults, the regulation requires the institution to divest non-eligible securities in accordance with the divestiture requirements of § 615.5143. Under our proposal, (redesignated § 615.5140(a)(5)) as discussed above, an eligible investment could not become ineligible, and would not be required to be divested. Accordingly, we propose to delete this divestiture requirement.
Existing § 615.5140(5) requires stress testing of all mortgage securities. As discussed above, proposed § 615.5133(f) would require stress testing on all investments held in an institution's portfolio. Accordingly, we propose to delete the specific stress-testing requirement for mortgage securities (which would be listed in redesignated § 615.5140(a)(6)).
The first category listed in existing § 615.5140(a)(5) is mortgage securities that are issued or guaranteed by the United States. In redesignated § 615.5140(a)(6), we propose to revise this category to refer to mortgage securities that are fully guaranteed or fully insured by a Government agency.
The second category listed in existing § 615.5140(a)(5) is Fannie Mae and Freddie Mac mortgage securities. As discussed above, the United States Government placed these two housing GSEs in conservatorship in September 2008, and their future remains uncertain. As long as they remain in conservatorship, we believe the existing 50-percent investment portfolio limit is appropriate. Accordingly, we propose no changes to this category (which would be included in redesignated § 615.5140(a)(6)) at this time. Depending on what happens to these GSEs in the future, a portfolio limit reduction or other restriction may become warranted. We invite your comments regarding revisions you believe we should make to this category of investments.
The third category listed in existing § 615.5140(a)(5) is non-Agency securities that comply with 15 U.S.C. 77d(5) or 15 U.S.C. 78c(a)(41). For the purpose of clarification, in redesignated § 615.5140(a)(6), we propose to replace the term “non-Agency” with a reference to securities that are not fully insured or guaranteed by a Government agency, Fannie Mae, or Freddie Mac. We intend no substantive change with this clarification. Furthermore, in this preamble we continue the shorthand reference to these securities as non-Agency mortgage securities.
Under proposed § 615.5140(a)(6), a position in a non-Agency mortgage security would be eligible only if it is the senior-most position at the time of purchase. The FCA considers a position in a non-Agency mortgage security to be the senior-most position only if it currently meets both of the following criteria:
• No other remaining position in the securitization has priority in liquidation. Remaining positions that are the last to experience losses in the event of default and which share those losses pro rata meet this criterion.
• No other remaining position in the securitization has a higher priority claim to any contractual cash flows. Remaining positions that have the first priority claim to contractual cash flows (including planned amortization classes), as well as those that share on a pro rata basis a first priority claim to cash flows meet this criterion.
Institutions should be aware that the tranche that is the senior-most position at the time they are considering
In addition, we propose to reduce the investment portfolio limit for non-Agency mortgage securities from 15 to 10 percent to reduce the exposure in MBS that are not fully insured or guaranteed by the United States. We believe reducing exposure in this area of uninsured securities would result in a more diversified and liquid portfolio.
We note that the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, United States Securities and Exchange Commission, Federal Housing Finance Agency, and Department of Housing and Urban Development (collectively, the other agencies) have proposed a rule to implement the credit risk retention requirements of section 15G of the Securities and Exchange Act of 1934, as added by section 941 of the DFA.
Finally, we propose to eliminate commercial mortgage-backed securities, which are included in existing § 615.5140(a)(5), from the list of eligible investments. We believe that these securities pose undue risk due to the nature of the collateral underlying these securities.
Existing § 615.5140(a)(6) authorizes investments in asset-backed securities with a 20-percent investment portfolio limit. In redesignated § 615.5140(a)(7), we propose to reduce the investment portfolio limit from 20 to 15 percent, with no more than 5 percent of the investment portfolio in any one type of collateral. We propose this change because we believe that certain asset-backed securities, such as home equity loans and manufactured housing loans, present appreciable, albeit manageable, risk. We believe this reduction will help limit the exposure of System institutions in investments such as manufactured housing and home equity loans that experienced considerable stress during the financial crisis.
Existing § 615.5140(a)(7) authorizes investments in corporate debt securities, subject to a 20-percent investment portfolio limit. The provision also prohibits investments in securities that are convertible to equity securities.
In redesignated § 615.5140(a)(8), we propose to add a requirement that the securities must be senior debt securities to be eligible for purchase. We would leave the portfolio limit the same, but we would create additional diversification by requiring that no more than 10 percent of the investment portfolio be in any one of the 10 industry sectors as defined by the Global Industry Classification Standard (GICS).
We propose to clarify our expectations for diversified investment funds contained in our existing § 615.5140(a)(8). We believe the term “diversified investment funds” could include closed-end funds, which are typically exchange-traded. We propose to add language stating that only open-end funds are eligible, in order to reduce the possibility that investments are purchased for potentially speculative purposes.
In addition, the existing rule imposes no investment portfolio limitation, as long as shares in each investment company comprise 10 percent or less of an institution's portfolio. Our proposal would impose a 50-percent total investment portfolio limit, with no more than 10 percent in any single fund. We believe this proposal would provide for more appropriate diversification across an institution's investment portfolio.
In July 2010, to strengthen regulation of the financial industry in the wake of the financial crisis that unfolded in 2007 and 2008, the President signed into law the Dodd-Frank Act. Section 939A of the DFA requires the following:
• Each Federal agency must review (i) all of its regulations that require the use of an assessment of the creditworthiness of a security or money market instrument, and (ii) any references to or requirements in its regulations regarding credit ratings.
• Each Federal agency must modify its regulations to remove any reference to or requirement of reliance on credit ratings and to substitute in the regulations such standards of creditworthiness as the agency determines is appropriate. In making this determination, the agency must seek to establish, to the extent feasible, uniform standards of creditworthiness.
We have completed our review of FCA regulations that impose creditworthiness requirements or that refer to or require the use of credit ratings. Existing § 615.5140(a) is one such regulation; it requires minimum NRSRO
There are a number of different ways to assess creditworthiness, and we are considering which approach or combination of approaches would be most appropriate in this context. It may well be that we would want to propose several of these approaches in concert with one another. In the discussion below, we explore various approaches that could be considered for assessing creditworthiness as a determinant of eligibility for purposes of § 615.5140(a).
First, our regulation could specify financial measurements, benchmark indexes, and other measurable criteria against which institutions could evaluate the creditworthiness of their investments. The regulation could
• Credit spreads (
• Default statistics (
• Inclusion on an index (
• Priorities and enhancements (
• Price, yield and/or volume (
• Asset class-specific factors (
Is this approach one that FCA should consider, and are there other criteria that should be included? Should the creditworthiness standard include specific standards for probability and loss given default? If so, why, and where could the Agency source such data to derive such probabilities? Also, should this vary by asset class and/or type of investment? Finally, would it be appropriate to combine this approach with one or more of the other approaches, and if so, which ones, and why?
Second, our regulation could require System institutions to develop their own internal assessment process for evaluating the creditworthiness of investments. We believe that the level of due diligence needed to validate such a system could require significant effort on the part of System institutions. In addition, the internal evaluation system would need to be validated and might need to be frequently recalibrated based on changes in the marketplace. Institutions would need to be able to demonstrate to FCA that the probability of default characteristics and loss given default characteristics are verifiable and accurate. Any internal assessment would also have to consider an investment's marketability, liquidity, and pricing risk for determining eligibility and suitability.
The System has developed a standardized 14-point risk rating summary that institutions use to classify their loan portfolios. Similar criteria could possibly be used in the assessment of whether an investment is eligible or suitable for the portfolio. However, additional validation would likely be needed to ensure appropriate recognition of the critical factors present in investments.
Is this second approach one that we should consider? Do System institutions have the capability of validating an internal assessment system for investments, and is it appropriate to allow institutions to develop their own internal model for assessing creditworthiness of investments? If so, what standards of creditworthiness should be included, and why? If we consider an internal model approach, what would be the criteria for eligibility, and why? Also, should an assessment of creditworthiness link directly to a bank's loan rating system and if so, how should differences in classifications pertaining to eligibility be handled? Finally, would it be appropriate to combine this approach with one or more of the other approaches and, if so, which ones, and why?
Third, FCA could develop regulations that would require institutions to use third party assessments to assess creditworthiness. Organizations other than NRSROs may have the capability to evaluate creditworthiness, and this evaluation could be considered in an institution's eligibility and suitability assessment. We also believe that the DFA does not prohibit System institutions from looking to the NRSROs as a tool for assessing creditworthiness. Institutions that do so, however, should evaluate the quality of third party assessments by considering whether issuers or investors pay the rating fees. Moreover, as we have seen in the recent crisis, reliance on third party analysis can be problematic and cannot be used in isolation. Accordingly, if we were to require this approach, it would likely be in concert with one or more of the other approaches.
Is this third approach one that we should consider? What reliable third party sources exist? Would it be appropriate to combine this approach with one or more of the other approaches and if so, which ones, and why?
Fourth, FCA could develop a set of clearly defined criteria from which we would create a scale that ranks creditworthiness. We would then require System institutions to conduct due diligence to ensure that an investment they purchase actually complies with the criteria. The criteria could be as follows:
We recognize that these standards may be viewed differently by different System institutions. This approach would require significant due diligence and controls in place to ensure consistency. It could also result in one institution determining an investment is eligible while another may determine an investment is not eligible at the time of purchase.
Is this fourth approach one that we should consider and, if so, what definitional criteria should be used? Would it be appropriate to combine this approach with one or more of the other approaches and, if so, which ones, and why?
In considering the requirements of the Dodd-Frank Act and the reasons for its enactment, do the above approaches allow for too much subjectivity and inconsistency? Alternatively, is there an approach that would allow for objective criteria that would lead to consistency in assessing eligibility? We are also considering how difficult and costly in practice any of the potential approaches or combination of approaches would be. In addition, we are considering whether there are other approaches to assessing creditworthiness that would be more appropriate. Finally, as a related matter, we are interested in what specific methods and standards an institution should be required to apply to appropriately assess the political and economic stability of a foreign country
As discussed above, we propose to relocate to § 615.5140(b) the requirement, currently contained in the introductory paragraph of § 615.5140(a), that all investments must be denominated in United States dollars.
We propose to delete our existing § 615.5140(c), which requires that all eligible investments, except money market instruments, must be marketable. We expect that in an upcoming rulemaking, we will propose to include that requirement in § 615.5134.
We propose to reduce to 15 percent the 20-percent obligor limit contained in our existing § 615.5140(d)(1). We believe this reduction is appropriate because it helps to ensure diversification among obligors.
We also propose to clarify, consistent with the amendments to terminology that we propose in § 615.5140(a) and (b), that the obligor limit does not apply to obligations that are issued or guaranteed as to interest and principal by Government agencies or Government-sponsored agencies (rather than to obligations that are issued or guaranteed as to interest and principal by the United States, its agencies, instrumentalities, or corporations). We intend no substantive change with this clarification.
Obligations that are not fully insured or fully guaranteed by a Government agency or Government-sponsored agency present relatively greater risk than do obligations that are so insured or guaranteed. We also believe that money market instruments generally present more limited risk. We seek comment on whether an overall combined portfolio limit—including all obligations except for money market instruments and those fully insured or fully guaranteed by Government agencies and Government-sponsored agencies—would be appropriate. Should we implement such a limit and, if so, what should the limit be? In addition, in light of the concentration that can occur in the housing sector, should we consider implementing a housing sector limit? Why or why not?
Because we propose to relocate our stress-testing requirements to § 615.5133(f), we also propose to remove this stand-alone, stress-testing section from our regulations.
Section 615.5142 implements sections 2.2(10) and 2.12(18) of the Act, which require each funding bank to supervise and approve the investment activities of its affiliated associations. Section 615.5142 authorizes an association to hold eligible investments, listed in § 615.5140, with the approval of its funding bank, for the purposes of reducing interest rate risk and managing surplus short-term funds. Each bank must review annually the investment portfolio of every association that it funds.
Although funding banks are required to supervise and approve the investment activities of an association, when we adopted this regulation in 1999, we emphasized that bank oversight does not absolve an association's board and managers of their fiduciary duties to manage investments in a safe and sound manner. We stated that the fiduciary responsibilities of association boards obligate them to develop appropriate investment management policies and practices to manage the risks associated with investment activities. We also stated that each association's investment managers must fully understand the risks of its investments and make independent and objective evaluations of investments prior to purchase.
In addition, we emphasized that each association with a nonagricultural investment portfolio is required to develop an investment policy that is based on its unique characteristics and that is commensurate with the nature of its investment activities and portfolio. An association must comply with all the requirements in § 615.5133 if the level or type of its investments could expose its capital to material loss.
This guidance is still valid today. However, we believe additional clarification and a regulatory revision are appropriate.
As a point of clarification, although § 615.5142 permits association investments for the purpose of, in pertinent part, reducing interest rate risk, the interest rate risk of most associations is managed by their respective funding banks. Accordingly, interest rate risk at the association level is generally minimized although not completely eliminated. The use of investments for reducing interest rate risk should be commensurate with the actual interest rate risk exposure of the association. Furthermore, associations that engage in investment activities must ensure that their investments do not increase interest rate risk.
Section 615.5142 also permits associations to invest surplus short-term funds. We are concerned that an association could draw on its line of credit with its funding bank to obtain “surplus” short-term funds that it would invest in an investment with a longer term or repricing characteristics than the term and repricing characteristics of the funding. Funding a longer term investment with short-term funds creates the potential for interest rate risk. Because of this potential risk, associations must carefully manage their investments of surplus short-term funds.
Accordingly, we propose to add paragraph (b) to § 615.5142. Paragraph (b) would require that before an association purchases an eligible investment for the purpose of managing surplus short-term funds, it must ensure that the investment's repricing and maturity characteristics match the characteristics of the surplus short-term funds to be invested.
In addition, although we do not propose this as a requirement at this time, we believe that in order for an investment to be made for the purpose of managing surplus “short-term” funds, the funds generally should be invested in instruments that are “overnight” or that have maturities of 30 days or less. We seek comment on whether we should define surplus short-term funds and if so how. Further, is our belief that surplus short-term funds should only be invested in overnight investments or in investments with maturities of 30 days or less appropriate? Lastly, is our proposed limitation on the permissible characteristics of investments purchased for the purpose of managing surplus short-term funds appropriate for associations, or does it unreasonably restrict an association's ability to properly hold and manage investments?
Existing § 615.5143 requires an institution to dispose of an investment that is ineligible (under the § 615.5140 criteria) within 6 months unless we approve, in writing, a plan that authorizes the institution to divest the instrument over a longer period of time. An acceptable divestiture plan must require the institution to dispose of the ineligible investment as quickly as possible without substantial financial loss. Until the institution actually disposes of the ineligible investment, the institution's investment portfolio managers must report on specified
During the financial crisis of the past few years, we have received numerous divestiture plans from System institutions seeking our permission to continue to retain ineligible investments. Nearly all of these plans have involved investments that have become ineligible due to credit ratings downgrades.
The automatic 6-month divestiture requirement, with FCA approval needed for a longer divestiture period, has proven to be inefficient and unnecessary. The existing regulation requires institutions to expend time and effort to develop a divestiture plan, requires FCA staff to expend time and effort reviewing the plan and developing a recommendation, and requires the FCA Board to expend time and effort determining whether to approve the plan.
Accordingly, to reduce the regulatory burden on System institutions and to improve efficiency, proposed § 615.5143(b) would permit an institution to retain an investment that no longer satisfies the eligibility criteria set forth in § 615.5140 (that satisfied the criteria when purchased), without the need for FCA approval, subject to specified requirements that are summarized below.
Section 615.5143(b) would also permit an institution to retain an investment that satisfies the § 615.5140 eligibility criteria but that is not suitable because it does not satisfy the risk tolerance established in the institution's board policy pursuant to § 615.5133(c), subject to the same specified requirements.
The specified requirements that would have to be satisfied in order to retain an investment that no longer satisfies the § 615.5140 eligibility criteria or that is unsuitable are as follows:
1. The institution must notify FCA promptly in writing upon determining that the investment no longer satisfies the § 615.5140 eligibility criteria or is unsuitable;
2. The investment must not be used to fund the liquidity reserve requirement in § 615.5134;
3. The institution must include the investment in the § 615.5132 investment portfolio limit;
4. The institution must include the investment as collateral under § 615.5050 and net collateral under § 615.5301(c) at the lower of cost or market value; and
5. The institution must develop a plan to reduce risk arising from the investment.
The first requirement, regarding FCA notification, is necessary so that we can evaluate whether the institution is responding appropriately to the situation. The second and fourth requirements, regarding exclusion from the liquidity reserve and inclusion in collateral and net collateral, are warranted by safety and soundness concerns. The third condition, regarding inclusion in the investment portfolio limit under § 615.5132, is simply an express statement that we find no basis to exclude these investments from that limit. And the final requirement, regarding the development of a risk reduction plan, is necessary for safety and soundness purposes.
Proposed § 615.5143(a) provides that an investment that does not satisfy the § 615.5140 eligibility criteria at the time of purchase is ineligible. Institutions must not purchase ineligible investments. An institution that purchases an ineligible investment must notify us promptly, in writing, and must divest of the investment no later than 60 calendar days after determining that the investment is ineligible unless we approve, in writing, a plan that authorizes divestiture over a longer period of time.
Although it is not stated in the regulation, we clarify here that an acceptable divestiture plan must require an institution to dispose of the investment as quickly as possible without substantial financial loss. The plan must also contain sufficient analysis to support continued retention of the investment, including its impact on the institution's capital, earnings, liquidity, and collateral position. Our decision will not be based solely on financial loss.
Until the institution divests of the investment:
1. It must not be used to fund the liquidity reserve requirement in § 615.5134;
2. It must be included in the § 615.5132 investment portfolio limit; and
3. It must not be included as collateral under § 615.5050 or net collateral under § 615.5301(c).
We believe each institution should exercise sufficient due diligence to ensure it does not purchase ineligible investments. Such a purchase would indicate weaknesses in an institution's internal controls and due diligence, and the institution should expect greater examination scrutiny if this occurs. We expect such a purchase to be extremely rare.
Proposed § 615.5143(c) would require each institution to report to its board at least quarterly on the following:
1. The status and performance of each investment that is ineligible; was eligible when purchased but now does not meet the eligibility criteria; or is unsuitable because it does not fit the institution's risk tolerance;
2. The impact that the investments described above may have on the institution's capital, earnings, liquidity, and collateral position; and
3. The terms and status of any required divestiture plan or risk reduction plan.
This reporting allows the institution's board to exercise appropriate oversight over investments that are ineligible, unsuitable, or otherwise problematic.
Finally, proposed § 615.5143(d) would reserve FCA's authority to require an institution to divest of any investment at any time for safety and soundness purposes. In using this authority, the FCA would consider the expected loss on the transaction (or transactions) and the impact on the institution's financial condition and performance. Because the proposed rule would not require divestiture of any investment that was eligible when purchased, FCA must reserve the authority to require divestiture of investments when necessary.
We propose changes to § 615.5174(d), which governs stress testing of Farmer Mac securities, which Farm Credit banks, associations, and service corporations are permitted to purchase and hold for the purposes of managing credit and interest rate risk and furthering their mission to finance agriculture. Existing § 615.5174(d) requires institutions to perform stress tests on Farmer Mac securities in accordance with the requirements of § 615.5141. It also requires institutions to divest Farmer Mac securities that fail a stress test, as required by § 615.5143.
Institutions often participate existing mortgage loans to Farmer Mac in exchange for mortgage-backed securities guaranteed by Farmer Mac. These securities are, in essence, loans that have had the credit risk transferred to Farmer Mac. The loans were not subject to the stress-testing requirements applicable to investments, and it does not seem reasonable to impose those stress-testing requirements on the securities with which the loans were exchanged. Accordingly, we propose to remove the requirement that a System institution must subject Farmer Mac securities backed by loans that the institution originated to the stress testing applicable to investments.
In addition, because other investments would no longer have to be divested if they fail a stress test, we propose to remove this requirement for Farmer Mac securities as well.
We also propose to add a definition of the term “you” in a new § 615.5174(e), to clarify that the regulation applies to Farm Credit banks, associations, and service corporations.
Finally, throughout § 615.5174 we propose conforming changes to references to regulations we are proposing to revise, to ensure the references continue to refer to the appropriate regulatory provisions.
Pursuant to section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 601
Accounting, Agriculture, Banks, banking, Government securities, Investments, Rural areas.
For the reasons stated in the preamble, part 615 of chapter VI, title 12 of the Code of Federal Regulations is proposed to be amended as follows:
1. The authority citation for part 615 is revised to read as follows:
Secs. 1.5, 1.7, 1.10, 1.11, 1.12, 2.2, 2.3, 2.4, 2.5, 2.12, 3.1, 3.7, 3.11, 3.25, 4.3, 4.3A, 4.9, 4.14B, 4.25, 5.9, 5.17, 6.20, 6.26, 8.0, 8.3, 8.4, 8.6, 8.7, 8.8, 8.10, 8.12 of the Farm Credit Act (12 U.S.C. 2013, 2015, 2018, 2019, 2020, 2073, 2074, 2075, 2076, 2093, 2122, 2128, 2132, 2146, 2154, 2154a, 2160, 2202b, 2211, 2243, 2252, 2278b, 2278b-6, 2279aa, 2279aa-3, 2279aa-4, 2279aa-6, 2279aa-7, 2279aa-8, 2279aa-10, 2279aa-12); sec. 301(a) of Pub. L. 100-233, 101 Stat. 1568, 1608; sec. 939A of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, 124 Stat 1326, 1887 (15 U.S.C. 78o-7 note) (July 21, 2010).
2. Section 615.5131 is amended by:
a. Removing designations for paragraphs (a) through (l); and
b. Adding alphabetically two new definitions to read as follows:
3. Section 615.5132 is amended by adding a new sentence at the end to read as follows:
* * * Eligible investments listed under § 615.5140 that are pledged by a Farm Credit bank to meet margin requirements for derivative transactions may be excluded when calculating the amount of eligible investments held by the Farm Credit bank pursuant to this section.
4. Revise §§ 615.5133 to read as follows:
(a)
(b)
(c)
(1)
(i)
(ii)
(iii)
(2)
(3)
(4)
(d)
(e)
(1) Establish appropriate internal controls to detect and prevent loss, fraud, embezzlement, conflicts of interest, and unauthorized investments.
(2) Establish and maintain a separation of duties and supervision between personnel who execute investment transactions and personnel who post accounting entries, reconcile trade confirmations, report compliance with investment policy, and approve, revalue, and oversee investments.
(3) Maintain management information systems that are appropriate for the level and complexity of your investment activities.
(4) Implement an effective internal audit program to review, at least annually, your investment controls, processes, and compliance with FCA regulations and other regulatory guidance. Your internal audit program must specifically include a review of your process for ensuring all investments, at the time of purchase, are eligible and suitable for purchase under your board's investment policies.
(f)
(1)
(2)
(i) Prior to purchasing an investment, you must stress test it, in accordance with paragraph (f)(2)(iii) of this section, as defined in your board policy. Your board must approve the purchase of any investment that exceeds the stress-test parameters defined in your board policy.
(ii) On a quarter-end basis, you must stress test your entire investment portfolio, including a stress test of each individual investment, in accordance with paragraph (f)(2)(iii) of this section, as defined in your board policy. The policy defining the stress tests must specify what actions you will take if your portfolio exceeds the quarter-end, stress-test parameters defined in the board policy, and, at a minimum must include the development of a plan to bring your portfolio back into compliance with those parameters.
(iii) Your pre-purchase and quarter-end stress tests must be defined in a board approved policy and must include defined parameters for the types of securities you purchase. The stress tests must be comprehensive and appropriate for the risk profile of your institution. At a minimum, the stress tests must be able to measure the price sensitivity of investments over different interest rate/yield curve scenarios. The methodology that you use to analyze investment securities must be appropriate for the complexity, structure, and cash flows of the investments in your portfolio. The stress tests must enable you to determine at the time of purchase and each subsequent quarter that your investment securities, either individually or on a portfolio-wide basis, do not expose your capital, earnings, or liquidity to excessive risks. Your stress tests must enable you to evaluate the overall risk in the investment portfolio compared to your defined board policy limits. You must rely to the maximum extent practicable on verifiable information to support all your assumptions, including prepayment and interest rate volatility assumptions, when you apply your stress tests. You must document the basis for all assumptions that you use to evaluate the security and its underlying collateral. You must also document all subsequent changes in your assumptions.
(3)
(4)
(g)
(1)
(i) Plans and strategies for achieving the board's objectives for the investment portfolio;
(ii) Whether the investment portfolio effectively achieves the board's objectives;
(iii) The current composition, quality, and liquidity profile of the investment portfolio;
(iv) The performance of each class of investments and the entire investment portfolio, including all gains and losses that you incurred during the quarter on individual investments that you sold before maturity and why they were liquidated;
(v) Potential risk exposure to changes in market interest rates as identified through quarterly stress testing and any other factors that may affect the value of your investment holdings;
(vi) How investments affect your capital, earnings, and overall financial condition;
(vii) Any deviations from the board's policies (must be specifically identified); and
(viii) The results of your quarterly stress test.
(2)
5. Revise §§ 615.5135, 615.5136 and 615.5140 to read as follows:
(a) The board of directors of each Farm Credit Bank, bank for cooperatives, and agricultural credit bank must develop and implement an interest rate risk management program as set forth in subpart G of this part.
(b) The board of directors of each Farm Credit Bank, bank for cooperatives, and agricultural credit bank must adopt an interest rate risk management section of an asset/liability management policy that establishes interest rate risk exposure limits as well as the criteria to determine compliance with these limits. At a minimum, the interest rate risk management section must establish policies and procedures for the bank to:
(1) Address the purpose and objectives of interest rate risk management;
(2) Identify and analyze the causes of risks within its existing balance sheet structure;
(3) Measure the potential impact of these risks on projected earnings and market values by conducting interest rate shock tests and simulations of multiple economic scenarios at least on a quarterly basis and by considering the impact of investments on interest rate risk based on the results of the stress testing required under § 615.5133(f)(2);
(4) Describe, explore, and implement actions needed to obtain its desired risk management objectives;
(5) Document the objectives that the bank is attempting to achieve by purchasing eligible investments that are authorized by § 615.5140 of this subpart;
(6) Evaluate and document, at least quarterly, whether these investments have actually met the objectives stated under paragraph (b)(5) of this section;
(7) Identify exception parameters and approvals needed for any exceptions to the requirements of the board's policies;
(8) Describe delegations of authority;
(9) Describe reporting requirements, including exceptions to limits contained in the board's policies;
(10) Consider the nature and purpose of derivative contracts and establish counterparty risk thresholds and limits for derivatives used to manage interest rate risk.
(c) At least quarterly, management of each Farm Credit Bank, bank for cooperatives, or agricultural credit bank must report to its board of directors, or a designated committee of the board, describing the nature and level of interest rate risk exposure. Any deviations from the board's policy on interest rate risk must be specifically identified in the report and approved by the board.
An emergency shall be deemed to exist whenever a financial, economic, agricultural or national defense crisis could impede the normal access of Farm Credit banks to the capital markets. Whenever the Farm Credit Administration determines, after consultation with the Federal Farm Credit Banks Funding Corporation to the extent practicable, that such an emergency exists, the Farm Credit Administration Board may, in its sole discretion, adopt a resolution that:
(a) Modifies the amount, qualities, and types of eligible investments that Farm Credit Banks, banks for cooperatives and agricultural credit banks are authorized to hold pursuant to § 615.5132 of this subpart;
(b) Modifies or waives the liquidity reserve requirement in § 615.5134 of this subpart; and/or
(c) Authorizes other actions as deemed appropriate.
(a) You may purchase only the investments that satisfy the eligibility criteria in this section. An investment that does not satisfy the eligibility criteria at the time of purchase is not eligible for purchase and is subject to the requirements of § 615.5143(a) if purchased. An investment that satisfies the eligibility criteria at the time of purchase but subsequently fails to satisfy the eligibility criteria is subject to the requirements of § 615.5143(b).
(b)
(c)
(d)
(1)
(2)
(e)
6. Section 615.5141 is removed.
7. Section 615.5142 is amended by:
a. Adding the designation (a) to the existing paragraph; and
b. Adding a new paragraph (b) to read as follows:
(a) * * *
(b) Before an association purchases an eligible investment for the purpose of managing surplus short-term funds, it must ensure that the investment's repricing and maturity characteristics match the characteristics of the surplus short-term funds to be invested.
8. Section 615.5143 is revised to read as follows:
(a)
(1) It must not be used to fund the liquidity reserve necessary to meet the liquidity reserve requirement in § 615.5134;
(2) It must be included in the § 615.5132 investment portfolio limit; and
(3) It must not be included as collateral under § 615.5050 or net collateral under § 615.5301(c).
(b)
(1) You must notify FCA promptly in writing upon your determination that the investment no longer satisfies the eligibility criteria contained in § 615.5140 or is not suitable;
(2) You must not use the investment to fund the liquidity reserve necessary to meet the liquidity reserve requirement in § 615.5134;
(3) You must include the investment in the § 615.5132 investment portfolio limit;
(4) You must include the investment as collateral under § 615.5050 and net collateral under § 615.5301(c) at the lower of cost or market value; and
(5) You must develop a plan to reduce the investment's risk to you.
(c)
(1) The status and performance of each investment described in paragraphs (a) and (b) of this section.
(2) The impact that any investments described in paragraphs (a) and (b) of this section may have on your capital, earnings, liquidity, and collateral position; and
(3) The terms and status of any required divestiture plan or risk reduction plan.
(d)
9. Section 615.5174 is amended by:
a. Removing the reference “§ 615.5131(f)” and adding in its place, the reference “§ 615.5131” in paragraph (a); and
b. Revising paragraph (d); and
c. Adding a new paragraph (e) to read as follows:
(d)
(e)
Federal Trade Commission (“FTC” or “Commission”).
Advance notice of proposed rulemaking; request for public comment.
As part of the Commission's systematic review of all current FTC rules and guides, the Commission requests public comment on the overall costs, benefits, necessity, and regulatory and economic impact of the FTC's rule for “Retail Food Store Advertising and Marketing Practices” (“Unavailability Rule” or “Rule”).
Comments must be received on or before October 19, 2011.
Interested parties may file a comment online or on paper, by following the instructions in the Request for Comment part of the
Jock Chung, (202) 326-2984, Attorney, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue, NW., Washington, DC 20580.
The Unavailability Rule states that it is an unfair or deceptive act or practice for “retail food stores” to advertise “food, grocery products or other merchandise” at a stated price if those stores do not have the advertised products in stock and readily available to consumers during the effective period of the advertisement. The original Rule, promulgated in 1971,
In 1989, after a comment period and public hearings, the Commission concluded that the costs of complying with the original Rule exceeded the benefits to consumers and amended the Rule.
The Commission reviews its rules and guides periodically. These reviews seek information about the costs and benefits of the rules and guides as well as their regulatory and economic impact. These reviews assist the Commission in identifying rules and guides that warrant modification or rescission. Therefore, the Commission now solicits comments on, among other things, the economic impact of, and the continuing need for, the Unavailability Rule; the benefits of the Rule to consumers purchasing products at retail food stores; and the burdens the Rule places on firms subject to its requirements.
The Commission solicits comments on the following specific questions related to the Unavailability Rule:
(1) Is there a continuing need for the Rule? Why or why not?
(2) What benefits has the Rule provided to consumers, or what significant costs has the Rule imposed on consumers? Provide any evidence that supports your position.
(3) What modifications, if any, should the Commission make to the Rule to increase its benefits or reduce its costs to consumers?
(a) Provide any evidence that supports your proposed modifications.
(b) How would these modifications affect the costs and benefits of the Rule for consumers?
(c) How would these modifications affect the costs and benefits of the Rule for businesses, particularly small businesses?
(4) What impact has the Rule had on the flow of truthful information to consumers and on the flow of deceptive information to consumers? Provide any evidence that supports your position.
(5) What benefits, if any, has the Rule provided to businesses, or what significant costs, including costs of compliance, has the Rule imposed on businesses, particularly small businesses? Provide any evidence that supports your position.
(6) What modifications, if any, should be made to the Rule to increase its benefits or reduce its costs to businesses, particularly small businesses?
(a) Provide any evidence that supports your proposed modifications.
(b) How would these modifications affect the costs and benefits of the Rule for consumers?
(c) How would these modifications affect the costs and benefits of the Rule for businesses, particularly small businesses?
(7) Provide any evidence concerning the degree of industry compliance with the Rule. Does this evidence indicate that the Rule should be modified? If so, why, and how? If not, why not?
(8) Provide any evidence concerning whether any of the Rule's provisions are no longer necessary. Explain why these provisions are unnecessary.
(9) What potentially unfair or deceptive practices, not covered by the Rule, concerning price advertising of products by retail food stores are occurring in the marketplace?
(a) Provide any evidence, such as empirical data, consumer perception studies, or consumer complaints, that demonstrates the extent of such practices.
(b) Provide any evidence that demonstrates whether such practices cause consumer injury.
(c) With reference to such practices, should the Rule be modified? If so, why, and how? If not, why not?
(10) Should the Commission broaden the Rule to include stores not currently covered, such as drugstores, department stores, electronics retailers, etc.? Provide any evidence that supports your position.
(11) What modifications, if any, should be made to the Rule to account for current or impending changes in technology or economic conditions?
(a) Provide any evidence that supports your position.
(b) How would these modifications affect the costs and benefits of the Rule for consumers and businesses, particularly small businesses?
(12) Does the Rule overlap or conflict with other federal, state, or local laws or regulations? If so, how?
(a) Provide any evidence that supports your position.
(b) With reference to the asserted conflicts, should the Rule be modified? If so, why, and how? If not, why not?
(c) Provide any evidence concerning whether the Rule has assisted in promoting national consistency with respect to the advertising by retail food stores of products for sale at a stated price.
You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before October 19, 2011. Write “16 CFR Part 424—Retail Food Store Advertising Rule, Project No. P104203” on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at
Because your comment will be made public, you are solely responsible for making sure that your comment doesn't include any sensitive personal information, such as anyone's Social Security number, date of birth, driver's license number or other state identification number or foreign country equivalent, passport number, financial account number, or credit or debit card number. You are also solely responsible for making sure that your comment doesn't include any sensitive health information, like medical records or other individually identifiable health information. In addition, don't include any “[t]rade secret or any commercial or financial information which is obtained from any person and which is privileged or confidential,” as provided in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, don't include competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names.
If you want the Commission to give your comment confidential treatment, you must file it in paper form, with a request for confidential treatment, and you have to follow the procedure explained in FTC Rule 4.9(c), 16 CFR
Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online. To make sure that the Commission considers your online comment, you must file it at
If you file your comment on paper, write “16 CFR Part 424—Retail Food Store Advertising Rule, Project No. P104203” on your comment and on the envelope, and mail or deliver it to the following address: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex N), 600 Pennsylvania Avenue, NW., Washington, DC 20580. If possible, submit your paper comment to the Commission by courier or overnight service.
Visit the Commission Web site at
Advertising, Foods, Trade practices.
15 U.S.C. 41-58.
By direction of the Commission.
Internal Revenue Service (IRS), Treasury.
Notice of proposed rulemaking by cross-reference to temporary regulations.
In the Rules and Regulations section of this issue of the
Written and electronic comments and requests for a public hearing must be received by November 16, 2011.
Send submissions to: CC:PA:LPD:PR (REG-112805-10), room 5205, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-112805-10), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC, or sent electronically via the Federal eRulemaking Portal at
Concerning the proposed regulations, Celia Gabrysh at (202) 622-3130; concerning submissions of comments and requests for a hearing
The collection of information contained in this notice of proposed rulemaking has been approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) and assigned control number 1545-2209.
Comments on the collection of information should be sent to the Office of Management and Budget, Attn: Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Washington, DC 20503, with copies to the Internal Revenue Service,
Whether the proposed collection of information is necessary for the proper performance of the functions of the Internal Revenue Service, including whether the information will have practical utility;
The accuracy of the estimated burden associated with the proposed collection of information;
How the quality, utility, and clarity of the information to be collected may be enhanced;
How the burden of complying with the proposed collection of information may be minimized, including through the application of automated collection techniques or other forms of information technology; and
Estimates of capital or start-up costs of operation, maintenance, and purchase of service to provide information.
The collection of information in this proposed regulation is in § 51.7. This information is necessary to evaluate whether an error report regarding a preliminary fee calculation is valid and justifies an adjustment to the preliminary fee calculation. The likely respondents are manufacturers and importers of branded prescription drugs.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.
Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Temporary regulations in the Rules and Regulations section of this issue of the
It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory flexibility assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. It is hereby certified that the collection of information in these regulations will not have a significant economic impact on a substantial number of small entities. This certification is based on the fact that these regulations primarily affect large corporations. Thus, Treasury Department and the IRS do not expect a substantial number of small entities to be effected. Therefore, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Pursuant to section 7805(f) of the Internal Revenue Code, this notice of proposed rulemaking has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.
Before these proposed regulations are adopted as final regulations, consideration will be given to any written comments (a signed original and eight (8) copies) or electronic comments that are submitted timely to the IRS. Comments are requested on all aspects of the proposed regulations. In addition, the IRS and the Treasury Department specifically request comments on the clarity of the proposed regulations and how they may be made easier to understand. All comments will be available for public inspection and copying. A public hearing may be scheduled if requested in writing by any person that timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for the hearing will be published in the
The principal author of these regulations is Celia Gabrysh, Office of Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the IRS and the Treasury Department participated in their development.
Drugs, Reporting and recordkeeping requirements.
Accordingly, and under the authority of 26 U.S.C. 7805 (sec. 9008, Pub. L. 111-347 (124 Stat. 119)), 26 CFR part 51 is proposed to be added to read as follows:
[The text of proposed §§ 51.1 through 51.11 is the same as the text of §§ 51.1T through 51.11T published elsewhere in this issue of the
[The text of proposed § 51.6302-1 is the same as the text of paragraphs (a) and (b) of § 51.6302-1T published elsewhere in this issue of the
Postal Regulatory Commission.
Notice of proposed rulemaking.
A Federal statute directs the Commission to implement a modern classification system. This proposal responds to that directive by presenting a comprehensive Mail Classification Schedule. Issuance of this document will allow the Commission to consider comments and, if appropriate, to make revisions prior to adoption of a final schedule.
Submit comments electronically by accessing the “Filing Online” link in the banner at the top of the Commission's Web site (
Stephen L. Sharfman, General Counsel, at 202-789-6820 (case-related information) or
The Postal Regulatory Commission (Commission) establishes a rulemaking docket pursuant to its responsibilities under the Postal Accountability and Enhancement Act (PAEA), Public Law 109-435, 120 Stat. 3198, December 20, 2006, to consider modifications to the Commission's rules governing the Mail Classification Schedule (MCS). Modifications are proposed to add material describing some Postal Service products and make conforming changes. The Commission provides this notice and opportunity for comment on whether the Commission should incorporate the proposed modifications by final rule into the Commission's rules at 39 CFR 3020, Subpart A—Mail Classification Schedule.
For products currently being offered by the Postal Service, this rulemaking does not add products to, remove products from, or transfer products between the existing market dominant or competitive product lists. However, this rulemaking does reorganize how products appear within each individual list. This reorganization is most apparent within the competitive product list where, at the suggestion of the Postal Service, the vestiges of “class” groupings have been replaced with functional product groupings.
Additionally, the currently published product lists require updating to remove
The Commission has consulted with the Postal Service as the proposed MCS was developed and has found the Postal Service's input invaluable in concisely and accurately describing all product offerings.
On August 15, 2007, the Commission initiated the process of developing an MCS with a request to the Postal Service to develop language describing individual products.
An initial MCS was published on October 29, 2007.
The publication of the initial product lists, which for the first time included international products and a division of products into market dominant and competitive categories, generated a need for additional descriptive material to more accurately describe the then-current state of the product lists. The Commission again asked the Postal Service to provide additional proposals for MCS language. Order No. 26 at 4002-4. The additional material focused on treatment of negotiated service agreements, certain international products, and the final categorization of products as either market dominant or competitive. The Postal Service complied with this request and provided additional proposals on November 20, 2007.
In the interim, the Commission developed a “draft” MCS which included material describing each product. As various market dominant product price adjustments, competitive product price adjustments, and classification changes have been reviewed and approved by the Commission, the Commission has kept this draft version of the MCS up to date. Price and classification changes have been incorporated into the proposed MCS as of December 31, 2010. The Commission intends to incorporate any subsequently approved rate or classification changes that occur prior to issuing the final rule in this docket into the final rule in this docket. This proceeding shall consider formal incorporation of all draft material describing each market dominant and competitive product into the official MCS, and conforming language to the Commission's rules governing the MCS.
The Commission intends to make two versions of the MCS available. The first version will be posted to the Commission's Web site in a format that will allow interested persons the ability to search and copy sections of the MCS for use in Commission proceedings. The Postal Service, and others, may find this version most convenient for communicating proposals to the Commission. The second version will appear in the Code of Federal Regulations (CFR). The organization and appearance of the MCS in the CFR will be different to meet CFR publication requirements. However, there should be no difference in substantive material between the Web site and the CFR versions.
The electronic documentation appearing on the Commission's Web site with this order will contain both versions of the MCS. The Commission would find it helpful if comments addressing the contents of the MCS refer to the version of the MCS that will appear on the Commission's Web site.
The revised MCS, as proposed, consists of preface material followed by four substantive sections. The preface material includes a Revision History, which is intended to comply with the 39 U.S.C. 3642(d)(2) requirement to “indicate how and when” product lists are modified, Trademark Notices, and a Table of Contents. The four substantive sections that follow are titled Part A—Market Dominant Products, Part B—Competitive Products, Part C—Glossary of Terms and Conditions, and Part D—Country Price Lists for International Mail.
Part A—Market Dominant Products, is divided into two major sections: the Market Dominant Product List, and the Market Dominant Product Descriptions. Both sections retain the “class” structure for categorizing products developed under the Postal Reorganization Act with the classes including: First-Class Mail, Standard Mail (Commercial and Nonprofit), Periodicals, Package Services, and Special Services.
Each class subsection in Part A follows a similar structure. The individual class subsections first provide a description of class-wide characteristics and a list of all products in the class. This is followed by information about each product in the class. The individual product descriptions generally include the following topics in the following order: (1) Product description (where necessary); (2) size and weight limitations; (3) minimum volume requirements; (4) price categories; (5) optional features; and (6) prices. The Special Services subsection requires less detail and generally includes the following topics in the following order: (1) Product description; and (2) prices.
Part B—Competitive Products also is divided into two major sections: the Competitive Product List, and the Competitive Product Descriptions. As originally published in Order No. 43, the competitive product list retained a class-like structure for organizing competitive products. In informal discussions, the Postal Service appropriately pointed out that a class-like structure has lost much of its meaning for competitive products under the PAEA. The Postal Service proposed that the products in the competitive product list be reorganized into three subsections: Domestic Products, International Products, and Negotiated Service Agreements. The proposed organization better aligns competitive
Part B has a similar structure to Part A, except that class separations are not made in competitive products. Thus, there is no need for class descriptions. Each subsection contains a list of all products appearing within that heading. Descriptions applicable to several related products are provided where appropriate. This is followed by information about each product in the subsection. The product descriptions generally include the following topics in the following order: (1) Product description (where necessary); (2) size and weight limitations; (3) minimum volume requirements; (4) price categories; (5) optional features; and (6) prices. The competitive Special Services subsection requires less detail and generally includes the following topics in the following order: (1) Product description; and (2) prices. Note that many of the Negotiated Service Agreement products merely reference the product name, associated dockets, PRC order numbers, and termination dates due to the confidential nature of these agreements.
Part C—Glossary of Terms and Conditions is self explanatory. Part D—Country Price Lists for International Mail contains the country codes used to identify individual countries in the various international product price lists appearing in Parts A and B.
The Commission's rules concerning the MCS currently are codified at 39 CFR 3020, Subpart A—Mail Classification Schedule. The existing MCS itself is codified at Appendix A to Subpart A—Mail Classification Schedule of 39 CFR 3020.
This rulemaking proposes changes to the rules governing the MCS and replaces the existing Appendix A with four more administratively manageable appendices. The intent of the rule changes are to incorporate the market dominant product list and the competitive product list into the Commission's rules so that the lists are prominently available for examination, and to incorporate the majority of the material describing individual products into four appendices.
Rule 3020.2 General (old rule 3020.10) is revised to describe the proposed new format of the MCS.
Rule 3020.11 Initial Mail Classification Schedule is being deleted. It only was applicable to the initial MCS that is now being replaced.
Rule 3020.3 Publication of the Mail Classification Schedule (old rule 3020.12), paragraph (a), is revised to indicate that the MCS is being incorporated into the rules themselves,
Rule 3020.4 Notice of change (old rule 3020.14) is revised to indicate that any changes to the material describing products will cause notice to be published in the
Rule 3020.5 Contents of the Mail Classification Schedule (old rule 3020.13) will contain the MCS. The same information contained within the MCS version proposed to appear on the Commission's Web site will be divided among paragraphs (b) through (h) of this rule.
Paragraph (b) will provide a revision history as required by 39 U.S.C. 3642(d)(2).
Paragraph (c) will provide trademark notices.
Paragraph (d) will provide a table of contents by section numbers. The section numbers will correspond to the section numbers appearing in the Appendices.
Paragraph (e) will provide information concerning market dominant products. This paragraph is divided into (e)(1), which contains the list of market dominant products, and (e)(2), which specifies the market dominant product descriptive information that is to be provided and references Appendix A where that information is provided.
Paragraph (f) will provide information concerning competitive products. This paragraph is divided into (f)(1), which contains the list of competitive products, and (f)(2), which specifies the competitive product descriptive information that is to be provided and references Appendix B where that information is provided.
Paragraph (g) references Appendix C, which provides a glossary of terms of conditions.
Paragraph (h) references Appendix D, which provides the country price lists for international mail.
The four appendices will contain the majority of the descriptive material. Appendix A will contain the description of market dominant products. This corresponds to Part A, Section 1001, Market Dominant Product Descriptions provided in the proposed Web version of the MCS. Appendix B will contain the description of competitive products. This corresponds to Part B, Section 2001, Competitive Product Descriptions provided in the proposed Web version of the MCS. Appendix C will contain a glossary of terms and conditions. This corresponds to Part C, Section 3000, Glossary of Terms and Conditions provided in the proposed Web version of the MCS. Appendix D, Section 4000, will contain the country price lists for international mail. This corresponds to Part D, Country Price Lists for International Mail provided in the proposed Web version of the MCS.
Pursuant to 39 U.S.C. 505, Kenneth E. Richardson is appointed to serve as officer of the Commission (Public Representative) to represent the interests of the general public in this docket.
Comments concerning the proposed modifications to the MCS by interested persons are due September 6, 2011.
An abbreviated version of this notice shall be published in the
The abbreviated version shall also include pages 1 through 13 of the material titled “Mail Classification Schedule” appearing after the signature in Order No. 666 issued on February 7, 2011. This material describes the textual changes proposed to existing 39 CFR part 3020, subpart A.
As previously stated in paragraph III of this notice, all material, including the proposed four new appendices, appears on the Commission's Web site. For interested persons without access to the Internet, a copy of all material is available for inspection at the Postal Regulatory Commission, 901 New York Avenue, NW., Suite 200, Washington, DC 20268-0001. Reasonable alternative access also may be arranged by contacting the Commission's docket section at 202-789-6846.
1. Docket No. RM2011-8 is established for the purpose of receiving comments on the Commission's proposal.
2. The Commission proposes to amend its rules of practice and procedure. The proposed amendments involve amending 39 CFR part 3020 Subpart A—Mail Classification Schedule.
3. Kenneth E. Richardson is designated as an officer of the Commission representing the interests of the general public in this docket.
4. Interested persons may submit comments by September 6, 2011.
5. The Secretary shall arrange for publication of this notice in the
Administrative practice and procedure, Postal Service.
By the Commission.
Environmental Protection Agency (EPA).
Proposed rule.
EPA is proposing to approve a State Implementation Plan (SIP) revision submitted by the State of Maryland (Maryland). This SIP revision includes amendments to the Code of Maryland (COMAR) 26.11.19.13, Volatile Organic Compounds from Specific Processes, Drum and Pail Coating. Maryland's SIP revision meets the requirement to adopt Reasonably Available Control Technology (RACT) for sources covered by EPA's Control Techniques Guidelines (CTG) for Miscellaneous Metal and Plastic Parts Coatings and will help Maryland attain and maintain the National Ambient Air Quality Standard (NAAQS) for ozone. This action is being taken under the Clean Air Act (CAA).
Written comments must be received on or before September 19, 2011.
Submit your comments, identified by Docket ID Number EPA-R03-OAR-2011-0610 by one of the following methods:
A.
B.
C.
D.
Irene Shandruk, (215) 814-2166, or by e-mail at
On June 22, 2011, the Maryland Department of the Environment (MDE) submitted to EPA a SIP revision concerning the adoption of the drum and pail coating standards found in the Miscellaneous Metal and Plastic Parts Coatings CTG.
Section 172(c)(1) of the CAA provides that SIPs for nonattainment areas must include reasonably available control measures (RACM), including RACT for sources of emissions. Section 182(b)(2)(A) provides that for certain nonattainment areas, states must revise their SIPs to include RACT for sources of VOC emissions covered by a CTG document issued after November 15, 1990 and prior to the area's date of attainment.
CTGs are intended to provide state and local air pollution control
In June 1978, EPA published a CTG for controlling VOC emissions from surface coating of miscellaneous metal and plastic products (EPA-450/2-78-015), which includes drum and pail coatings. This CTG discusses the nature of VOC emissions from this industry, available control technologies for addressing such emissions, the costs of available control options, and other items. EPA promulgated national standards of performance for new stationary sources New Source Performance Standards for miscellaneous metal and plastic products industry and EPA also published a national emission standard for hazardous air pollutants (NESHAP) for this industry.
In 2008, after conducting a review of currently existing state and local VOC emission reduction approaches for this industry, reviewing the 1978 CTG and the NESHAP for this industry, and taking into account the information that has become available since then, EPA developed a new CTG for miscellaneous metal and plastic parts, entitled
The miscellaneous metal product and plastic parts surface coatings categories under section 183(e) of the CAA includes the coatings that are applied to the surfaces of a varied range of metal and plastic parts and products. Such parts or products are constructed either entirely or partially from metal or plastic. The VOC emissions from miscellaneous metal product and plastic parts surface coating processes result from the evaporation of the volatile components of the coatings and cleaning materials used in these operations.
On June 22, 2011, MDE submitted to EPA a SIP revision (#11-04) concerning the adoption of the emission limits for drum and pail coatings, part of the EPA miscellaneous metal and plastic parts coatings CTG. EPA develops CTGs as guidance on control requirements for source categories. States can follow the CTGs or adopt more restrictive standards. Maryland has adopted EPA's CTG standards for drum and pail coating processes. These regulations are in COMAR 26.11.19, Volatile Organic Compounds from Specific Processes. Specifically, this revision amends the existing regulation in Section 26.11.19.13 to include emission limits for drum and pail coatings (Table 1). A detailed summary of EPA's review of and rationale for proposing to approve this SIP revision may be found in the Technical Support Document (TSD) for this action which is available on line at
EPA is proposing to approve Maryland's SIP revision for adoption of the CTG standards for drum and pail coatings. EPA is soliciting public comments on the issues discussed in this document. These comments will be considered before taking final action.
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 concerning Maryland's adoption of CTG standards for drum and pail coatings does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.
Environmental protection, Air pollution control, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.
42 U.S.C. 7401
Environmental Protection Agency.
Proposed rule; notice of intent.
The Environmental Protection Agency (EPA) Region II is issuing a Notice of Intent to Delete the Barceloneta Landfill Superfund Site (Site) located in Florida Afuera, Puerto Rico from the National Priorities List (NPL) and requests public comments on this proposed action. The NPL, promulgated pursuant to section 105 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980, as amended, is an appendix of the National Oil and Hazardous Substances Pollution Contingency Plan (NCP). The EPA and the Commonwealth of Puerto Rico, through the Puerto Rico Environmental Quality Board, have determined that all appropriate response actions under CERCLA, other than operation, maintenance, and five-year reviews, have been completed. However, this deletion does not preclude future actions under Superfund.
Comments must be received by September 19, 2011.
Submit your comments, identified by Docket ID no. EPA-HQ-SFUND-1983-0002, by one of the following methods:
•
•
•
•
•
Or
Luis E. Santos, Remedial Project Manager, U.S. Environmental Protection Agency, Region II, telephone at (787) 977-5824; fax at 787-289-7104; or e-mail at
In the “Rules and Regulations” Section of today's
For additional information, see the direct final Notice of Deletion which is located in the Rules section of this
Environmental protection, Air pollution control, Chemicals, Hazardous waste, Hazardous substances, Intergovernmental relations, Penalties, Reporting and recordkeeping requirements, Superfund, Water pollution control, Water supply.
33 U.S.C. 1321(c)(2); 42 U.S.C. 9601-9657; E.O. 12777, 56 FR 54757, 3 CFR, 1991 Comp., p. 351; E.O. 12580, 52 FR 2923; 3 CFR, 1987 Comp., p. 193.
Coast Guard, DHS.
Notice of proposed rulemaking.
The Coast Guard proposes to add to its regulations a description of the procedures for requesting and processing waivers of citizenship requirements on commercial fishing vessels. The Coast Guard aims to improve its efforts to inform the commercial fishing industry of this opportunity by publishing the application procedure policy into the Code of Federal Regulations (CFR).
Comments and related material must either be submitted to our online docket via
You may submit comments identified by docket number USCG-2010-0625 using any one of the following methods:
(1)
(2)
(3)
(4)
To avoid duplication, please use only one of these four methods. See the “Public Participation and Request for Comments” portion of the
If you have questions on this proposed rule, call or e-mail Mr. David Belliveau, Office of Vessel Activities (CG-5433), Coast Guard; telephone 202-372-1247, e-mail
We encourage you to participate in this rulemaking by submitting comments and related materials. All comments received will be posted without change to
If you submit a comment, please include the docket number for this rulemaking (USCG-2010-0625), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. We recommend that you include your name and a mailing address, an e-mail address, or a phone number in the body of your document so that we can contact you if we have questions regarding your submission.
To submit your comment online, go to
We will consider all comments and material received during the comment period and may change this proposed rule based on your comments.
To view comments, as well as documents mentioned in this preamble as being available in the docket, go to
Anyone can search the electronic form of comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review a Privacy Act notice regarding our public dockets in the January 17, 2008, issue of the
We do not now plan to hold a public meeting. But you may submit a request for one to the docket using one of the methods specified under
Under title 46 United States Code (U.S.C.) 8103(i)(1), each unlicensed seaman on a fishing, fish processing, or fish tender vessel that is engaged in the fisheries in the navigable waters of the United States or the exclusive economic zone must be—
1. A citizen of the United States;
2. An alien lawfully admitted to the United States for permanent residence; or
3. Any other alien allowed to be employed under the Immigration and Nationality Act (8 U.S.C. 1101
Furthermore, 46 U.S.C. 8103(i)(2) states that no more than 25 percent of the unlicensed seamen on these vessels may be non-permanent resident aliens authorized for employment in the United States under the Immigration and Nationality Act (INA), category 3 above.
Relief from these citizenship and permanent resident status requirements is provided in 46 U.S.C. 8103(b)(3)(C). If the Secretary of Homeland Security determines, after an investigation, that qualified seamen who are citizens of the United States are not available, the Secretary may waive these citizenship requirements.
Congress did not specify a procedure for requesting the waiver allowed under section 8103(b)(3). To fill the need for a procedure, the Coast Guard published a policy letter in June 2001 titled “Procedures for Waiver of Requirements for Citizenship Aboard Commercial Fishing Vessels” (2001 policy letter). This policy letter is available at
In past years, the Coast Guard received between 125 and 200 waiver requests annually. In 2008, that volume slowed appreciably.
Despite the benefits of the waiver option for owners, operators, and employers, the Coast Guard is concerned that the continued practice of granting requests for waivers under this program gives rise to potential safety and emergency preparedness problems on fishing vessels for U.S. citizen and alien crewmembers. It is incumbent on owners, operators, and employers to ensure the vessel is in full compliance with all safety, survival equipment, and systems requirements.
Therefore, in this proposed rule, the Coast Guard proposes to make satisfactory completion of a dockside safety examination under the Coast Guard's Commercial Fishing Industry Vessel Safety program a condition for receiving a waiver from the citizenship requirements. (For more information on this program, see
Through this rulemaking, the Coast Guard would amend 46 CFR part 28, Requirements for Commercial Fishing Industry Vessels, by adding a new subpart to specifically address the citizenship waiver program. This subpart would formally incorporate the 2001 policy letter into the CFR and would also require that any vessel citizenship waiver request and approval be conditioned on the successful completion of a required dockside exam.
In the proposed new subpart, the Coast Guard would explain that owners, operators, and employers must send to the Coast Guard a written citizenship waiver request, which would include the number of alien seamen to be employed who are not lawfully admitted for permanent residence but are otherwise authorized for employment in the United States under the INA, along with certification that the vessel(s) would comply with all other applicable citizenship requirements regarding the Master or other officers in charge of deck or engineering watches on a documented vessel. The owner, operator, or employer would also be required to provide a U.S. Citizenship and Immigration Services (USCIS) or other DHS-issued authorization for employment in the U.S. under the INA for each alien seaman it intends to employ who is not lawfully admitted for permanent residence, as well as information, as discussed below, demonstrating that there are no qualified U.S. seamen available for the position.
If, within 30 days of receipt of a request for a waiver, the Coast Guard does not make a determination, or informs the employer that the Coast Guard needs more time for review, the waiver request would be provisionally approved for 90 days from the end of the original 30 days. If the Coast Guard grants a waiver, the term of the approval would be for the same period as specified by the USCIS or other DHS-issued authorization for employment in the U.S. under the INA.
Additionally, to help ensure the safe condition of the vessel, the Coast Guard would require the employer to submit documentation of a satisfactory dockside safety examination conducted by the Coast Guard.
The written request for a waiver must contain the following:
1.
2.
3.
4.
5.
6.
7.
The H-2B visa has proven to be the primary avenue for demonstrating compliance with these statutory requirements. The 2001 policy letter thus required a temporary labor certification from the Department of Labor (DOL) for the position in question in addition to DHS authorization for the alien's employment with the owner, operator, or employer as an H-2B nonimmigrant. Together, the documents from DHS and DOL demonstrate that these prerequisites are met. In this proposed rulemaking, we plan on removing the requirement in the 2001 policy letter that an alien authorized for employment with the owner, operator, or employer as a seaman pursuant to admission as H-2B nonimmigrant provide evidence of a DOL temporary labor certification; the owner, operator, or employer need only provide evidence of the alien's authorization from DHS to work with the employer as a crewman in H-2B nonimmigrant status. The requirement to provide evidence of the DOL temporary labor certification is being removed because USCIS approval of an H-2B nonimmigrant visa petition is premised on DOL certification that there are no qualified and available U.S. workers (a term which includes U.S. citizens) to perform the respective temporary services or labor as a seaman. See 8 CFR 214.2(h)(6)(iii)(A); 20 CFR 655.4 (defining “United States Worker” for H-2B purposes).
Additionally, we seek comment on alternative documentation that may be submitted for our review and evaluation if an alien is not authorized for employment with the owner, operator, or employer as an H-2B nonimmigrant. H-2B nonimmigrant status is but one means by which a non-permanent resident alien might be authorized for employment in the U.S. under the INA. If an alien who is neither a lawful permanent resident nor an H-2B nonimmigrant is authorized for employment, the owner, operator, or employer must nevertheless establish that qualified seamen who are citizens of the United States are not available in order to qualify for a waiver. In this instance, the burden is upon the requestor of the waiver to provide satisfactory evidence (1) Of authorization for employment with the owner, operator, or employer as a seaman under the INA, as required by 46 U.S.C. 8103(i)(1)(C), and (2) that qualified U.S. citizen seamen are not available as required by 46 U.S.C. 8103(b)(3)(C). We seek comments on the type of documents that could possibly be submitted to establish compliance with the statutory requirements when an alien's authorization for employment in the U.S. with the owner, operator, or employer is not derived from his or her classification as an H-2B nonimmigrant.
We developed this proposed rule after considering numerous statutes and executive orders related to rulemaking. Below, we summarize our analyses based on 13 of these statutes or executive orders.
This proposed rule is not a significant regulatory action under section 3(f) of
The following table summarizes the costs and benefits of this rule. We estimated annual and 10-year costs of the rule. And, based on data availability, we identified qualitative benefits of the proposed rule.
This proposed rule would create a regulatory burden for those owners and operators of commercial fishing vessels electing to request a waiver. From 2005 to 2009, there was an average of 91 requests for waivers sent to the Coast Guard per year. Note that applications for waivers have declined from a high of 203 in 2005 to 20 in 2009. The number of applications for waivers will vary from year to year based on many factors, such as national and regional economic conditions and management programs for specific fisheries. We use a 5-year average to reflect the range of conditions that may occur over the 10-year period of analysis. In addition, during the period of 2005 to 2009, Coast Guard issued an average of 108 violations of 46 U.S.C. 8103, which would include violations related to the citizenship requirements for the crew of fishing vessels and the citizenship requirements for the Master and Officer in charge of deck or engineering watches. During 2009, 75 of these violations were issued. Based on the continuing level of violations of citizenship requirements for fishing vessels, the average over 5 years of requests for waivers, rather than the low number of recent requests, is more indicative of the future use of waivers once their use is established in the regulations.
We estimate that it takes an owner or operator approximately 9.25 hours
As noted, the Coast Guard Authorization Act of 2010 added a requirement for mandatory dockside safety examinations once every 2 years for vessels that operate beyond 3 nautical miles from the shoreline. Some of the vessels requesting citizenship waivers may be required to undergo the dockside examinations due to the Authorization Act. Since this proposal would make the dockside safety examination a requirement for obtaining a waiver, the total cost of these examinations is attributable to this proposed rule.
According to Coast Guard Fishing Vessel Safety Division subject matter experts, the dockside safety examination takes, on average, 2 hours to complete, which would represent an opportunity cost to the vessel owner, operator, or employer equal to the time lost multiplied by the wage for a captain, mate or pilot. This opportunity cost would equal approximately $9,160 (2 hours × $50.33 × 91 examinations).
The dockside examination would serve as a check to ensure that the vessel is in full compliance with all applicable safety and other regulatory requirements set forth in 46 CFR part 28. Vessels may have to take corrective actions as a result of the dockside examinations. As the examinations focus on compliance with existing regulations, the costs of any corrective actions would not be attributable to this rulemaking, but instead is attributable to compliance with existing regulations.
The total annual cost to industry associated with this proposal would be approximately $51,537. This includes the $42,365 cost for applying for a waiver per the 2001 policy letter and the $9,160 opportunity cost associated with the addition of the dockside examination to the current request for a waiver process.
Reviewing a waiver application currently takes a Coast Guard employee approximately 3 hours, on average. We assume a wage rate equal to that of a GS-13 for the reviewer. Based on Commandant Instruction (COMDTINST) 7310.1L, Coast Guard Reimbursable Standard Rates, (available at
By incorporating the current policy into regulation, the Coast Guard would promote greater awareness of the policy, and provide commercial fishermen with one location for all rules governing their operations. Greater visibility of the application procedures may help reduce the number of crew requirement violations. Also, the inclusion of the dockside examination would ensure that all vessels granted waivers are in compliance with existing safety regulations that apply to commercial fishing vessels.
Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this proposed rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.
Based on 2007 data, we identified 79,058 entities owning fishing vessels. Of these, a small number (13) were owned by government entities or non-profits, all of which exceed the threshold for being classified as a small entity. The remaining owners are classified as businesses. Based on available revenue data, approximately 99.8 percent (78,901) of the commercial fishing businesses fall below the Small Business Administration threshold for a small business based on their primary North American Industry Classification System designation.
Based on historical data, we expect an average of 91 requests for a waiver per year. If we assume that all of these requests are from small commercial fishing businesses, we can assess the potential impacts of this proposal on the industry. Coast Guard records show that the majority of vessels requesting waivers in the period from 2006-2009 are between 50 and 70 feet in length. By comparing the $566 cost per vessel of the proposal to the revenues for commercial fishing vessels in the 50-70 ft. size range, we estimate that only 3 percent of all commercial fishing vessels would have a revenue impact greater than 3 percent from this proposal. Table 2 shows the percent of vessels by revenue impact.
The primary purpose of this proposed rule is to codify existing policy into regulation, although, there would be one new cost element introduced. We estimate 91 of approximately 80,000 commercial fishing vessels apply for a waiver annually, which is not a substantial number. Furthermore, because the waiver process is voluntary, in that vessel owners, operators, or employers would only apply for a waiver if the benefits of doing so outweigh the costs, we can assume that if the approximate $566 per vessel cost of this rulemaking is prohibitive, vessel owners would choose to not pursue a waiver. Therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities. If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment to the Docket Management Facility at the address under
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule so that they can better evaluate its effects on them and participate in the rulemaking. If the proposed rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please consult with the Coast Guard personnel listed under
This proposed rule would call for a revision to an existing collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). This revision is explained below under ESTIMATE OF TOTAL ANNUAL BURDEN. As defined in 5 CFR 1320.3(c), “collection of information” comprises reporting, recordkeeping, monitoring, posting, labeling, and other, similar actions. The title and description of the information collections, a description of those who must collect the information, and an estimate of the total annual burden follow. The estimate covers the time for reviewing instructions, searching existing sources of data, gathering and maintaining the data needed, and completing and reviewing the collection.
As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), we will submit a copy of this proposed rule to the Office of Management and Budget (OMB) for its review of the collection of information.
We ask for public comment on the proposed collection of information to help us determine how useful the information is; whether it can help us perform our functions better; whether it is readily available elsewhere; how accurate our estimate of the burden of collection is; how valid our methods for determining the burden are; how we can improve the quality, usefulness, and clarity of the information; and how we can minimize the burden of collection.
If you submit comments on the collection of information, submit them both to OMB and to the Docket Management Facility where indicated under
You need not respond to a collection of information unless it displays a currently valid control number from OMB. Before the Coast Guard could enforce the collection of information requirements in this proposed rule, OMB would need to approve the Coast Guard's request to collect this information.
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them.
We have analyzed this proposed rule under that Order and have determined that it does not have implications for federalism because states may not regulate citizenship requirements onboard fishing, fish processing, or fish tender vessels engaged in the fisheries in the navigable waters of the United States or the exclusive economic zone.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this proposed rule would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This proposed rule would not cause a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This proposed rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this proposed rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and would not create an environmental risk to health or risk to safety that might disproportionately affect children.
This proposed rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
We have analyzed this proposed rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy.
The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (
This proposed rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.
We have analyzed this proposed rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. A preliminary environmental analysis checklist supporting this determination is available in the docket where indicated under the “Public Participation and Request for Comments” section of this preamble. This rule involves the qualifying of maritime personnel and the manning of vessels and falls under § 2.B.2, figure 2-1, paragraphs (c) and (d) of the Instruction. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.
Alaska, Fire prevention, Fishing vessels, Marine safety, Occupational safety and health, Reporting and recordkeeping requirements, Seamen.
For the reasons discussed in the preamble, the Coast Guard proposes to amend 46 CFR Part 28 as follows:
1. The authority citation for part 28 is revised to read as follows:
46 U.S.C. 4502, 4505, 4506, 8103; Department of Homeland Security Delegation No. 0170.1.
2. Amend part 28 by reserving subpart H.
3. Amend part 28 by adding new subpart I to read as follows:
As set forth in 46 U.S.C. 8103, a citizenship requirement, other than a requirement that applies to the master of a documented vessel, on commercial fishing vessels may be waived for unlicensed seamen when qualified seamen who are citizens of the United States are not available. Under the provisions of this subpart, the Coast Guard approves or denies requests for a waiver of the citizenship requirement from owners, operators, or employers seeking to exceed the 25 percent limit applicable to unlicensed seamen aboard fishing industry vessels who are non-permanent resident aliens authorized for employment in the United States under the Immigration and Nationality Act (INA) (8 U.S.C. 1101
(a) Vessel owners, operators, or employers who desire a waiver of citizenship requirements from the Coast Guard must submit a written request to the Commandant (CG-5433), United States Coast Guard, 2100 Second St., SW., Stop 7581, Washington, DC 20593-7581.
(b) The written request required under paragraph (a) of this section must contain—
(1) The vessel owner, operator, or employer's contact information—
(i) The vessel owner, operator, or employer's full name (last, first, middle initial);
(ii) Address;
(iii) Work phone number;
(iv) Fax number (if applicable); and
(v) E-mail address (if applicable);
(2) Information on fishing vessel(s) for which the owner, operator, or employer requests a citizenship waiver. For each listed vessel, the owner, operator, or employer must include—
(i) Fishing vessel name;
(ii) Fishing vessel official number;
(iii) Fishing vessel length (in feet);
(iv) Fishing vessel gross tonnage; and
(v) Type(s) of fishery(ies) in which the vessel is engaged;
(3) Information on persons who will work on the vessel(s). For each listed vessel, the owner, operator, or employer must include—
(i) The total number of unlicensed crew normally employed;
(ii) The name, nationality, birth place, position to be held, and basis for employment authorization in the United States of each alien who is not lawfully admitted for permanent residence but is otherwise authorized for employment in the United States under the INA; and
(iii) The number of alien seamen who are not lawfully admitted for permanent residence but are otherwise authorized for employment in the United States under the INA for which the waiver is requested; and
(4) The time period over which the 25 percent limit will be exceeded—
(i) Start date (MM/DD/YYYY); and
(ii) Expiration date (MM/DD/YYYY).
(c) The vessel owner, operator, or employer submitting a request for a waiver under paragraph (a) of this section is required to demonstrate that the vessel(s) is/are in full compliance with all applicable safety and other regulatory requirements set forth in 46 CFR part 28. To that end, the owner, operator, or employer must submit documentation that shows—
(1) A dockside safety examination was conducted;
(2) The examination was successfully passed and a safety decal was issued and affixed to the vessel;
(3) The serial number of the decal issued; and
(4) The period of validity of the safety decal issued.
(d) The owner, operator, or employer submitting a request for a waiver under paragraph (a) of this section must include a statement certifying that the vessel(s) will operate in compliance with all other applicable citizenship requirements regarding the Master or other Officers in Charge of deck or engineering watches on U.S. documented vessels.
(e) The owner, operator, or employer submitting a request for a waiver under paragraph (a) of this section must provide evidence that aliens who are not lawfully admitted for permanent residence are authorized for employment with the owner, operator, or employer under the INA and evidence that qualified seamen who are U.S. citizens are not available for employment. The following documentation is satisfactory evidence both of authorization for employment with the owner, operator, or employer under the INA and that qualified seamen who are U.S. citizens are not available:
Documentation for H-2B nonimmigrants.
(1) U.S. Citizenship and Immigration Services (USCIS) Form I-797, “Notice of Action: Approval Notice” classifying the alien as an H-2B nonimmigrant for purposes of employment with the owner, operator, or employer submitting a request for a waiver under paragraph (a) of this section; and
(2) USCIS Form I-94 indicating that the alien has been lawfully admitted to the United States (or has been lawfully granted a change of nonimmigrant status or extension of nonimmigrant stay in H-2B classification) for the dates covered by the proposed employment.
(f) Upon receipt of a request submitted under paragraph (a) of this section and required information submitted in accordance with paragraphs (b)-(e) of this section, the Coast Guard (CG-5433) will evaluate the information and may investigate further, as necessary, to determine the validity of the information provided.
(a)(1) If, within 30 days of receipt of a properly submitted request for a waiver, the Coast Guard does not make a determination whether to approve the request or does not advise the owner, operator, or employer that additional time is needed for consideration, the request will be considered provisionally approved for 90 days from the end of that 30-day period.
(2) If the Coast Guard does not make a determination whether to approve a properly submitted request for a waiver in writing within 30 days of receipt, the owner, operator, or employer must have a copy of the request and supporting documentation available onboard the vessel as proof of submission of a request for waiver of the citizenship requirement for unlicensed seamen for that vessel.
(b)(1) If the Coast Guard determines, based on the waiver request, supporting documentation, and any other relevant information, that no qualified U.S. citizen seamen are available, the Coast Guard (CG-5433) will grant the waiver to exceed the 25 percent limit for employment of non-permanent resident alien seaman for the period of employment authorized for each alien under the INA. The Coast Guard will issue a letter of approval to the owner, operator, or employer for the applicable vessel(s).
(2) The owner, operator or employer must have a copy of the waiver approval letter available onboard the vessel as proof of waiver of the citizenship requirement for unlicensed seamen for that vessel.
The Coast Guard will maintain a record of citizenship waiver requests and approvals. Approvals will be documented for the applicable vessel(s) in the Coast Guard's vessel information database.
Pipeline and Hazardous Materials Safety Administration (PHMSA), DOT.
Notice of proposed rulemaking (NPRM).
The Pipeline and Hazardous Materials Safety Administration is proposing to amend the Hazardous Materials Regulations to incorporate provisions contained in certain widely used or longstanding special permits that have general applicability and established safety records. Special permits allow a company or individual to package or ship a hazardous material in a manner that varies from the regulations provided that an equivalent level of safety is maintained. The revisions in this proposed rule are intended to provide wider access to the regulatory flexibility offered in special permits and eliminate the need for numerous renewal requests, thus reducing paperwork burdens and facilitating commerce while maintaining an appropriate level of safety. This rulemaking also proposes to respond to two petitions for rulemaking, P-1497 concerning the use of electronic shipping papers, and P-1567 concerning the removal of the Association of American Railroad's (AAR's) AAR-600 portable tank program for previously adopted standards that meet or exceed the AAR-600 requirements.
Written comments should be submitted on or before October 17, 2011.
You may submit comments identified by the docket number (PHMSA-2010-0018 (HM-216B)) by any of the following methods:
Eileen Edmonson or Steven Andrews, Standards and Rulemaking Division, Office of Hazardous Materials Safety, (202) 366-8553, Pipeline and Hazardous Materials Safety Administration (PHMSA), or Karl Alexy, Office of Safety Assurance and Compliance, (202) 493-6247, Federal Railroad Administration (FRA), 1200 New Jersey Avenue, SE., Washington, DC 20590.
The Pipeline and Hazardous Materials Safety Administration (PHMSA) is proposing to amend the Hazardous Materials Regulations (HMR; 49 CFR parts 171-180) to incorporate certain requirements based on existing special permits for transportation by railroad issued by PHMSA under 49 CFR part 107, subpart B (§§ 107.101 to 107.127). A special permit sets forth alternative requirements (variances) to the requirements in the HMR by means that achieve a safety level that at a minimum corresponds to the safety level required under the regulations and is consistent with the public interest. Congress expressly authorized DOT to issue these variances in the Hazardous Materials Transportation Act of 1975.
The HMR generally are performance-oriented regulations that provide the regulated community a certain amount of flexibility in meeting safety requirements. Even so, not every transportation situation can be anticipated and built into the regulations. Innovation is a strength of our economy, and the hazardous materials community is particularly strong at developing new materials and technologies as well as innovative ways of transporting materials. Special permits enable the hazardous materials industry to quickly, effectively, and safely integrate new products and technologies into the production and transportation streams. Thus, special permits provide a mechanism for testing new technologies, promoting increased transportation efficiency and productivity, and ensuring global competitiveness.
A special permit must achieve at least an equivalent level of safety to that specified in the HMR. Implementation of new technologies and operational techniques can enhance safety because the authorized operations or activities may achieve a greater level of safety than currently required under the regulations. Special permits also reduce the volume and complexity of the HMR by addressing unique or infrequent transportation situations that would be difficult to accommodate in regulations intended for use by a wide range of shippers and carriers.
PHMSA conducts ongoing reviews of special permits to identify widely used and longstanding special permits having general applicability with established safety records for adoption into regulations for broader applicability. To
Further, although we make every effort to stay as true as possible to the conditions prescribed in each special permit when converting it to proposed regulatory text, PHMSA recognizes that sometimes, due to existing regulations or historical interpretations, provisions in a special permit may require revision to convert them into regulations of general applicability. In addition, when converting special permits we often have to modify the language to describe documents and procedures that are authorized under the special permit but not specifically described in it or to modify the language to comply with requirements for proposed regulatory text prescribed by this agency, the Department of Transportation, and the
This notice of proposed rulemaking (NPRM) proposes to incorporate seven (7) special permits that authorize tank car transportation operations not specifically permitted under the HMR. These special permits were initially issued to members of industry associations or similar organizations. They are DOT-SP:
1. 7616
2. 9388
3. 11184
4. 12095
5. 12905
6. 14333
7. 14622
These special permits have well-established safety records and, thus, are candidates for incorporation into the HMR. A few of the special permits in this NPRM have expired for various reasons, such as from delays that occur during the renewal process, or as a result of modifications to the HMR, packagings, processes, or other technologies that eliminate the need for the special permit. PHMSA has included them in this NPRM because both PHMSA and the Federal Railroad Administration (FRA) have determined these special permits also have well-established safety records and would benefit the regulated industry if incorporated into the HMR. Incorporating these special permits into the HMR would eliminate the need for over 250 current grantees to reapply for the renewal of these special permits every four years and for PHMSA to process the renewal applications.
Incorporation of these special permits into the HMR also eliminates a significant paperwork burden for the recipient. Unless otherwise excepted by this agency, a copy of each special permit must be: maintained at each facility where a packaging is manufactured under a special permit, maintained at each facility where a package is offered or re-offered for transportation under a special permit, carried on board each cargo vessel or aircraft, and, in some cases, carried on board each transport vehicle when used to transport a hazardous material under a special permit.
Two proposals PHMSA is addressing in this proposed rulemaking were also presented to PHMSA in petitions for rulemaking. A more detailed description of each is provided below.
The petition from the International Vessel Operators Hazardous Materials Association, Inc. (IVOHMA) (P-1497), dated March 15, 2007, is similar to relief authorized under DOT-SP 7616 in that it requests PHMSA allow shipping paper information required under 49 CFR Part 172, Subpart C (shipping papers) to be transmitted electronically by computer through use of electronic data interchange (EDI). The IVOHMA states “differences in hazard communication or the interpretation of their application are a principle[sic] source of disharmony in intermodal and/or international transportation of [hazardous materials].” The IVOHMA also states “electronic data interchange has become a recognized method of efficient and accurate communication currently being used successfully throughout the industrialized world” that permits “immediate access to hazard communication by all those involved in the transportation infrastructure as well as by emergency responders equipped” with this technology. Further, the IVOHMA states in its petition that the proposals it submitted were vetted with its staff and members and determined to be opportunities for regulatory amendment to promote efficiencies in the modal interchange of these containers in both domestic and international transportation.
PHMSA and the FRA met with the IVOHMA, on January 17, 2007, to discuss several issues concerning the HMR and containerized hazardous materials cargo that the association and its members believe may be presenting operational difficulties, impediments, and obstacles to efficient and safe intermodal transportation. These issues included inconsistencies between the shipping paper requirements for each mode for documents that can be construed as meeting the HMR shipping paper requirements, “such as work orders, dock receipts or train consists,” and determining which shipping document is considered legally in control of the shipment. The IVOHMA also identified two problems associated with the train consist. The first problem is §§ 174.24 and 174.26 do not require that the agency or person be identified that corresponds to the emergency response information telephone number on the document. The HMR requires this information on a shipping paper document under § 172.604(b). The IVOHMA states “valuable time is often lost” while emergency responders using these telephone numbers or inspectors checking their validity track down the correct individual and/or organization associated with a specific telephone number. The IVOHMA also states a similar problem occurs when international telephone numbers are offered as the emergency response telephone number that provides access from the United States to the emergency responder, and includes delays that occur obtaining a telephonic connection while using the international access codes. The second problem is the
To address these concerns, the IVOHMA submitted proposed regulatory language that would define the term “interlining carrier” in § 171.8, establish requirements for “interlining carrier documents” in a new § 172.206, and make several additional related revisions concerning shipping papers and emergency response information in §§ 172.204(d), 172.604(a), and 174.26(b). Although the petition the IVOHMA submitted primarily concerned the transportation of containerized hazardous materials between railcars and vessels, the regulatory language the IVOHMA proposed would apply to interlining carriers in all modes. This rulemaking applies to rail transportation only. Therefore, PHMSA determined proposing regulations that apply to carriers in all modes would exceed the scope of this rulemaking. PHMSA considered revising the IVOHMA's proposals to limit them to rail transport only with the possibility of considering their application to other modes of transport in a future rulemaking. However, FRA determined the IVOHMA's proposals are not needed because the language in existing § 174.24(a) applies to the transfer of all interlining documents. This section requires that each person accept a hazardous material for rail transportation or transport a hazardous material by rail only if that person has received a shipping paper for that material. If the material is excepted from the shipping paper requirements under the HMR, this section does not apply. PHMSA requests public comment not only on the proposals in this rulemaking, but on IVOHMA's suggestions not included in this rulemaking and on the possible effects EDI may have on distributing hazardous materials shipping paper information if its use is permitted in all modes of transport. Based on the comments received, PHMSA may consider the use of EDI in other modes of transport in a future rulemaking.
PHMSA adopted standards for portable tanks in container-on-flat-car (COFC) or trailer-on-flat-car (TOFC) service under § 174.63 and other sections of the HMR that meet or exceed the AAR-600 requirements. The petition from the Gold Tank Inspection Service, Inc. (P-1567), requests that PHMSA discontinue the AAR-600 program and amend § 174.63(c) to remove the requirement that portable tanks in COFC or TOFC service comply with the standard “AAR-600” of the Association of American Railroad's (AAR's) Specification for Tank Cars, entitled “Specifications for the Acceptability of Tank Containers,” because: (1) The current HMR regulations exceed the AAR 600 requirements; (2) after January 1, 2003, all the specifications for original portable tank construction listed in the AAR 600 standard are not allowed to be built except DOT Specification 60 and International standard 1496-3 portable tanks, which are already covered under §§ 178.255 and 178.274, respectively, of the HMR; and (3) after January 1, 2010, the AAR 600 standard will no longer be needed since, in accordance with § 171.14, all portable tanks will have to meet or exceed the AAR 600 requirements and AAR 600 does not cover portable tank requirements. In a May 20, 2009 letter of clarification PHMSA issued to Robert E. Fronczak, Assistant Vice President, Environment and Hazardous Materials, Association of American Railroads, under Reference No. 09-0125, PHMSA states “most of the portable tanks listed in the AAR-600 standard are prohibited from new construction, although they may remain in service provided they continue to meet the applicable standard,” and that “we intend to propose a revision to § 174.63(c) as soon as practicable.” The changes Mr. Fronczak described have effectively made the HMR's reference to the AAR-600 standard outdated. Therefore, PHMSA proposes to revise § 173.63(c) to remove its reference to the AAR 600 standard and to require that portable tanks transported in COFC or TOFC service must conform to all HMR requirements applicable to portable tanks in this type of service.
In this NPRM, PHMSA is proposing to incorporate into the HMR provisions that: (a) Establish an alternative tank car qualification program; (b) permit the electronic transmission of shipping paper information; (c) permit straight threads in the clean out and/or inspection port openings of a DOT Specification 110A500W multi-unit tank car tank; (d) permit alternative start-to-discharge pressure requirements for certain DOT Specification 105J500W tank cars containing chlorine; (e) permit alternative pressure relief requirements for pressure relief devices for DOT Specification 105J300W tank cars containing certain flammable liquids; (f) permit certain DOT and AAR specification tank cars with stainless steel identification plates to have their specification and other required information stamped on the identification plate instead of the tank car head provided certain requirements are met; (g) permit liquefied anhydrous ammonia gas to be measured by a metering device when loaded into a tank car as an alternative to measuring the cars by weight; (h) revise § 179.13(b) to require that rail tank cars with a gross weight that exceeds 263,000 but not 286,000 pounds containing poisonous-by-inhalation (PIH) materials must be approved for use by the Federal Railroad Administration's (FRA's) Associate Administrator for Railroad Safety; and (i) eliminate use of the AAR 600 program concerning the FRA's approval of bulk packagings in COFC and TOFC service that is incorporated into § 174.63(c)(2). PHMSA invites comment on the potential costs and safety benefits associated with the proposals in this NPRM, including any information that may be used in a cost-benefit safety analysis. Each proposal is discussed in greater detail in the following preamble sections.
The FRA established the Alternative Tank Car Qualification Program, also known as TCQ-1, in 1998 in collaboration with the railroad industry and PHMSA under Special Permit DOT-SP 12095. The TCQ-1 program serves as a minimally acceptable framework for owners to qualify their DOT specification and non-specification tank cars and components using requirements in place of those prescribed in 49 CFR Part 180. The TCQ-1 program permits owners to develop tank car inspection requirements specific to their construction and use, provided the FRA has determined the new methods are as safe or safer than those prescribed in the HMR. FRA determined the new program is successful and its use has dramatically increased since its inception. In fact, FRA and PHMSA have determined the industry's use of the TCQ-1 program is so complete that it essentially is the only tank car inspection standard used today. Currently, 559 parties are operating under TCQ-1. PHMSA and FRA are not aware of any incidents that have occurred as a result of the issuance of special permits for the tank car qualification program.
PHMSA and FRA believe incorporating Special Permit DOT-SP 12095 into the HMR will provide an equivalent level of safety for the qualification of both specification and
Additional provisions from Special Permit DOT-SP 12095 as proposed will be in §§ 179.201-10, 179.220-25, and 180.501, and 180.503, 180.507, 180.509, 180.511, 180.513, 180.515, 180.517, and Appendix D of part 180.
Special Permit DOT-SP 7616 permits the transmission of shipping paper information by telephone and electronic data interchange (EDI). Special Permit DOT-SP 7616 is currently used by 626 parties. Prior to this special permit, shippers entered information on shipping papers by hand, typewriter, or with the use of a computer and then transmitted these documents by hand, railroad agent, facsimile, or postal system to a train crew or rail yard. These methods were very time consuming. This shipping information would then be entered into the receiver's tracking system, a process that resulted in a large number of key entry errors for hazardous materials shipments.
Starting in the 1960s, many companies began using in-house computer systems and networks to assist with preparing and tracking shipping information, but technological limitations often prevented or restricted one company's system from communicating with another's. Rail companies and shippers attempting to address these issues and find solutions formed the Transportation Data Coordination Committee (TDCC) in 1968, and started publishing standards on EDI in 1975. In the mid-1970's, the U.S. Department of Transportation (USDOT) issued Exemption DOT-E 7616 to permit railroad companies to “certify” their shipping papers for hazardous materials by permitting the shipper to leave a “voice” message stating that a hazardous materials shipment loaded on a railcar was being offered for transportation. Eventually, the exemption was revised to allow an “electronic” shipping document to be faxed and later transmitted electronically from computer to computer. Today, EDI standards are used worldwide for most industries that rely on electronic data transfer of information, such as banks, medical institutions, and shipping companies outside of railroad-related businesses.
In consultation with USDOT, the TDCC evolved, and the EDI standards were published as guidelines on electronic data standards for the transportation industry. These guidelines established format codes and protocols for communicating and verifying the accuracy of electronic information, including hazardous materials information on a shipping paper, for hazardous materials shippers and carriers. Currently, the Accredited Standards “X12” Committee (ACS) of the American National Standards Institute (ANSI) creates standards specifically for EDI. Industry organizations take these standards and modify them to fit the types of electronic transmissions and/or transactions needed by each industry. This is what is done in the railway industry. As a result, there is no one specific standard that includes all the electronic transmissions permitted as EDI.
Special Permit DOT-SP 7616 allows a carrier to accept shipping paper information via telephone (
PHMSA and FRA are not aware of any incidents that have occurred as a result of the issuance of Special Permit DOT-SP 7616. PHMSA and FRA have also determined the overall effect of the special permit has improved the timely and accurate receipt of hazardous materials information, thereby improving safety. As mentioned earlier in this preamble, the IVOHMA also requested through a petition for rulemaking (P-1497) that PHMSA revise the HMR to include the transmission of shipping documents through EDI. PHMSA and FRA acknowledge that hazardous materials shipping document information is routinely transmitted by computer but no provision in the HMR specifically addresses this. PHMSA and FRA also note that the use of EDI to transmit this information does not eliminate the requirement for the printed copy of a shipping paper to accompany a hazardous materials shipment. PHMSA and FRA specifically request comments on the costs and safety benefits associated with these proposals, as well as the possible effects and/or modifications needed to permit EDI to transmit successfully the shipping paper information for hazardous materials in all transportation modes.
The provisions for Special Permit DOT-SP 7616 and Petition No. P-1497 are proposed in §§ 172.201, 172.202, 172.204, and 172.604. The changes that IVOHMA proposed for § 174.24 are also located in § 172.202; therefore, they are not needed in § 174.24 and we are not proposing to revise that section.
Special Permit DOT-SP 14333 authorizes the manufacture, marking, sale and use of a non-DOT specification tank car conforming to all the regulations applicable to the DOT Specification 110A500W multi-unit tank car tank, except that the tank must be equipped with straight threads in the clean-out/inspection port openings instead of the National Gas Taper Threads. Four parties currently use this special permit.
This special permit also permits retrofitting. Section 179.300-13(b) requires that taper threads must be used on the valve opening. In the safety equivalency evaluation for Special Permit DOT-SP 14333, PHMSA and FRA determined that straight threads on the clean-out/inspection port opening would provide an equivalent level of safety. Tapered threads are designed to provide a seal when torqued. The seal is a result of the compression of the male and female threads. Because they compress, there is an inevitable degree of deformation. This deformation decreases the likelihood that a proper seal can be obtained upon subsequent applications. Straight threads are used on connections where a gasket is compressed to create a seal. Therefore, a seal can be obtained by repeated application as long as the gasket has not degraded. The clean-out/inspection port openings are used repeatedly and introduce an opportunity for leaks. The straight threads on these openings help to minimize leaking. Special Permit DOT-SP 14333 limits the use of the straight threads opening to certain high-hazard Division 2.3 (poisonous gas), Division 6.1 (poisonous), and Class 8 (corrosive) hazardous materials, as well as those materials authorized to be transported in DOT Specification 110A500W multi-unit tank car tanks. However, PHMSA and FRA believe straight threads in inspection ports can be used for all hazardous materials authorized to be transported in DOT Specification 110A multi-unit tank car tanks and are proposing this action in this NPRM.
PHMSA and FRA are not aware of any incidents that have occurred as a result of the issuance of this special permit, and believe these provisions, if adopted, will provide an adequate level of safety. Therefore, PHMSA and FRA are proposing to incorporate Special Permit DOT-SP 14333 into the HMR and further allowing straight threads in inspection ports to be used for all hazardous materials authorized to be transported in DOT Specification 110A multi-unit tank car tanks. The provisions for this special permit are proposed in § 179.300-13(b) for DOT Specification 110A multi-unit tank cars only.
Special Permit DOT-SP 14622 authorizes the transportation of certain DOT Specification 105J500W tank cars containing chlorine that have start-to-discharge settings that do not meet the regulatory requirements for pressure relief devices. Three parties currently use this special permit.
In its original application for this special permit, Occidental Chemical Corporation (OxyChem) requested relief from § 179.15(b) to allow tank cars in chlorine service to be equipped with combination pressure relief valves (PRV) with a set pressure of 360 pounds per square inch (psi) rather than the required set pressure of 356 psi. OxyChem justified its request based on its history of operating tank cars safely in a manner similar to what it was requesting. OxyChem also based its request on the HMR's regulatory history prior to the final rule issued under Docket No. HM-216, effective on October 1, 1996 (61 FR 28666; 61 FR 38642; 61 FR 50252), which permitted DOT Specification 105J500W tank cars used to transport chlorine to be equipped with a PRV with a set pressure of 356 psi.
The FRA conducted an evaluation of the level of safety provided by the terms and allowances of Special Permit DOT-SP 14622. As part of this evaluation, FRA staff contacted the Chlorine Institute, which represents all of the companies that are a party to this special permit. The Chlorine Institute reported it has not received a report of any incident related to the conditions allowed under Special Permit DOT-SP 14622. In addition, the Chlorine Institute found the PRV setting does not affect the standard start-to-discharge pressure that is the basis for the flow rating pressure. The flow rating pressure, in turn, is used to calculate the required PRV flow capacity. Therefore, the FRA finds the valve is sized appropriately for the required design conditions.
The FRA has one safety concern related to Special Permit DOT-SP 14622. If the relief discs or pins burst or break within their tolerances, there is the potential that the valve will be exposed to the lading and its vapor for an extended period of time. A rupture disc or breaking pin is used in conjunction with a reclosing PRV to
A rupture disc has a rated pressure burst-pressure tolerance of +/− 5 percent. A breaking pin has a rated pressure burst-pressure tolerance of +/− 10 percent (see ASME Section VIII, UG-126 Pressure Relief Valves). An evaluation of the special permit relative to both the rupture disc and breaking pin is provided in the following paragraph.
Special Permit DOT-SP 14622 allows for the PRV to have a set pressure of 360 psi. The special permit allows the burst pressure of the relief device to be 96 percent of the start-to-discharge pressure rather than the required maximum of 95 percent. As stated earlier, the set pressure in SP-14622 is within the rated pressure burst tolerance of the rupture disc and rated pressure burst tolerance of the breaking pin described earlier in this paragraph. However, it is possible that a rupture disc could burst at the limit of its negative tolerance at 356 psi. In this case, the valve with a set pressure of 360 psi would be undetected and exposed to the lading or the vapor of the lading. While this sequence is possible, the negative effects to the valve are very limited. This can be demonstrated by reviewing the thermodynamic properties of chlorine and the time needed to increase the vapor pressure of the chlorine to the set pressure of the PRV. Based on the vapor pressure-temperature relationship of chlorine, the temperature of chlorine at a vapor pressure of 356 psi is approximately 165 °F and its temperature at 360 psi is approximately 170 °F. It is evident that as the temperature of chlorine increases, the vapor pressure of the chlorine also increases at a slightly faster rate.
A pool fire represents the only scenario in which the temperature of chlorine in a tank could reach 165 °F. In this scenario, the heat input is so great that the specific heat and heat of vaporization requirements would be met quickly and raise the temperature and the respective vapor pressure of the chlorine in the tank car to a level that would actuate the PRV, causing the PRV to function and vent the pressure in the tank. Under these hazardous conditions, corrosion of the PRV body and components are very minor considerations.
Regarding the breaking pin, as stated earlier, the rated pressure tolerance is +/− 10 percent. Both the start-to-discharge pressure requested in Special Permit DOT-SP 14622 and required in the HMR are within the design tolerance of the breaking pin. As a result, neither poses a greater risk to the safe operation of the relief valve and tank car.
Based on this analysis, PHMSA and FRA believe operation of a tank car under the terms of Special Permit DOT-SP 14622 provides a level of safety that is equivalent to that of a similar tank car operated under the HMR. Therefore, we propose to adopt this requirement into the HMR. The provisions for this special permit are proposed in § 173.314(k)(2).
Special Permit DOT-SP 11184 authorized the transportation in commerce of certain Class 3 materials in DOT Specification 105J300W tank cars with a pressure relief device rated at 25 percent of tank test pressure. The commodities authorized under this special permit were typically shipped in general purpose (GP) tank cars (
PHMSA and FRA are discussing DOT-SP 11184 in this NPRM to clarify that the rulemaking action issued under Docket No. HM-216 eliminated the need for this special permit, and to emphasize that this revision improved safety in two ways. First, it lowered the start-to-discharge pressure for the PRV, which allowed the car to vent at lower pressures when in an overheated condition—such as a pool fire. Commodities listed in this special permit when exposed to extreme heat and pressure will undergo rapid polymerization that could result in an energetic and catastrophic failure of the tank car. Second, the DOT Specification 105J300W tank car's thicker shell and head will result in the tank car having a significantly greater survivability than its GP tank car counterparts. PHMSA and FRA have determined these revisions to the HMR are performing satisfactorily; therefore, we are expiring this special permit. PHMSA and FRA are not aware of any incidents that have occurred as a result of the issuance of Special Permit DOT-SP 11184.
Special Permit DOT-SP 12905 permits certain DOT and AAR specification tank cars with stainless steel identification plates to have their specification and other required information stamped on the identification plate instead of the tank car heads if certain requirements are met. The AAR requires all cars built after December 31, 2003, to be equipped with identification plates as specified in Appendix C, paragraph 4.0. Additionally, for several years manufacturers have built portable tanks and cargo tanks with a data plate containing all pertinent information related to the construction of the tank. Incorporating Special Permit DOT-SP 12905 into the HMR will bring the railcar data identification in line with the AAR standards and the portable tank and cargo tank industries. Also, FRA acknowledges that stamping this information into the tank car wall may introduce a defect into its steel. Although minimal, stamping results in a stress concentration in the area of the stamp. Use of a data plate would eliminate this defect. Currently, 22 parties use this special permit.
PHMSA and FRA are not aware of any incidents that have occurred as a result of the issuance of Special Permit DOT-SP 12905. PHMSA and FRA believe that incorporating this special permit into the HMR will provide an equivalent level of safety for the qualification of both specification and non-specification rail tank cars. AAR tank cars are required to have an identification plate after December 31, 2011. Therefore, PHMSA and FRA are proposing to amend the HMR to require tank cars to
Special Permit DOT-SP 9388 authorizes the transportation in commerce of DOT specification tank cars that have “UN 1005, Ammonia, anhydrous, 2.2 (non-flammable gas)” liquefied gas measured by a metering device when loaded into the tank. Although anhydrous ammonia is defined as meeting both a Division 2.3 (poisonous gas) and Class 8 (corrosive) hazard class under the United Nations Recommendations on the Transport of Dangerous Goods, International Civil Aviation Organization Technical Instructions on the Transport of Dangerous Goods by Air, and International Maritime Dangerous Goods Code, the HMR permits anhydrous ammonia to be defined as meeting the Division 2.2 hazard class in domestic transportation only. For increased safety, DOT-SP 9388 requires that each of these tank cars must be loaded and unloaded using procedures that specify at a minimum: Employee safety equipment; proper signage; set brakes and installed wheel blocks; an examination of the tank and/or jacket, its undercarriage assembly, hoses, connections, valves, and accessories inside the loading dome for damage; recording of defects; certification of inspection and completion of loading and/or unloading procedures, as well as other recordkeeping requirements. PHMSA and FRA propose to incorporate these requirements in new § 173.314(e)(2)(i). Also, DOT-SP 9388 requires that one out of every 10 tanks cars must have the metered gauge verified with the tank car gauge in accordance with certain procedures to determine the current capacity of the car. PHMSA and FRA propose to incorporate these procedures in new § 173.314(e)(2)(ii). Although Special Permit DOT-SP 9388 is currently expired, 28 parties previously used it. Since the original issuance of DOT-SP 9388, flow meter technology is much more accurate and reliable.
PHMSA and FRA are not aware of any incidents that have occurred as a result of the issuance of this special permit. PHMSA and FRA believe that incorporating this special permit into the HMR will provide an equivalent level of safety for the qualification of both specification and non-specification rail tank cars. Therefore, we propose to adopt this requirement, with the additions noted above, into § 173.314(e) of the HMR.
Special Permits DOT-SP 11241, 11654, 11803, 12423, 12561, 12613, 12768, 12858, 12903, 13856, 13936, 14004, 14038, 14442, 14505, 14520, 14570, and 14619, allowed rail tank cars with a gross weight on rail that exceeded 263,000 pounds but not exceeding 286,000 pounds to be used to transport certain hazardous materials provided the tank car is approved by the FRA's Associate Administrator for Railroad Safety. PHMSA adopted these special permits, along with several others, in a final rule issued under Docket No. PHMSA-2009-0289 (HM-233A; 75 FR 27205, 5/14/2010) because they were widely used and had established safety records. However, the final rule erroneously omitted from § 179.13(b) a provision to require FRA approval for those gross-weight-on-rail tank cars authorized to contain materials that are poisonous-by-inhalation. PHMSA is proposing to correct this omission in this rulemaking by revising § 179.13(b) to add the FRA approval statement.
The AAR Tank Car Committee and the AAR Hazardous Materials Committee have recommended the discontinuance of the AAR 600 program as incorporated in § 174.63(c)(2). Currently, this program requires that a bulk packaging, including a portable tank, transported in COFC or TOFC service must conform to the conditions specified in § 174.63 of the HMR. These regulations require approval by FRA's Associate Administrator for Railroad Safety, unless, among other things, the tank conforms to requirements in AAR 600 of the AAR Specifications for Tank Cars, “Specifications for Acceptability of Tank Containers.” In accordance with AAR 600, approval and registration of compliant portable tanks is required based on a determination that the tank meets all applicable standards and payment of a registration fee.
Since incorporation of the AAR 600 standard into the HMR, PHMSA has adopted standards for portable tanks that meet or exceed the AAR 600 requirements. The AAR committees believe that the current HMR portable tank regulations have now exceeded the AAR 600 requirements and that all of the specifications for original construction listed in the AAR 600 Standard were not allowed to be built after January 1, 2003, except for the DOT Specification 60 and other United Nations (UN) portable tanks that are authorized in the HMR. As stated earlier in this rulemaking, PHMSA agreed with the AAR proposal in a letter dated May 20, 2009 and stated we would propose a revision to § 174.63(c). As also discussed earlier in this preamble, PHMSA received a petition (P-1567) dated July 9, 2010, from Gold Tank Inspection Services, Inc., requesting the removal of the reference to the AAR 600 program in § 174.63 because the HMR now includes standards for portable tanks that meet or exceed AAR 600 requirements. Accordingly, in this NPRM, PHMSA is proposing to require that portable tanks transported in COFC or TOFC service must conform to all HMR requirements applicable to portable tanks. Consistent with this proposed revision, PHMSA is proposing to remove the reference in § 171.7(a)(3) to § 173.63 under the listing “AAR Manual of Standards and Recommended Practices, Section C-Part III, Specifications for Tank Cars, Specification M-1002, (AAR Specifications for Tank Cars), December 2000.”
This NPRM is published under the authority of 49 U.S.C. 5103(b) which authorizes the Secretary to prescribe regulations for the safe transportation, including security, of hazardous material in intrastate, interstate, and foreign commerce. 49 U.S.C. 5117(a) authorizes the Secretary of Transportation to issue a special permit from a regulation prescribed in sections 5103(b), 5104, 5110, or 5112 of the Federal Hazardous Materials Transportation Law to a person transporting, or causing to be transported, hazardous material in a way that achieves a safety level at least equal to the safety level required under the law, or consistent with the public interest, if a required safety level does not exist. If adopted as proposed, the final rule would amend the regulations incorporating provisions from certain widely used and longstanding special permits that have established a history of safety and which may, therefore, be converted into the regulations for general use.
This proposed rule is not considered a significant regulatory action under section 3(f) and was not reviewed by the Office of Management and Budget (OMB). The proposed rule is not considered a significant rule under the Regulatory Policies and Procedures order issued by the Department of Transportation [44 FR 11034].
Executive Orders 12866 (“Regulatory Planning and Review”) and 13563 (“Improving Regulation and Regulatory Review”) require agencies to regulate in the “most cost-effective manner,” to make a “reasoned determination that the benefits of the intended regulation justify its costs,” and to develop regulations that “impose the least burden on society.” In this notice, PHMSA proposes to amend the HMR by incorporating alternatives this agency has permitted under widely used and longstanding special permits with established safety records that we have determined meet the safety criteria for inclusion in the HMR. Incorporation of these special permits into regulations of general applicability will provide shippers and carriers with additional flexibility to comply with established safety requirements, thereby reducing transportation costs and increasing productivity. In addition, the proposals in this NPRM will reduce the paperwork burden on industry and this agency caused by continued renewals of special permits. The provisions of this proposed rule will promote the continued safe transportation of hazardous materials while reducing transportation costs for the industry and administrative costs for the agency. Therefore, the requirements of Executive Orders 12866 and 13563, and the DOT policies and procedures concerning these orders have been satisfied.
This proposed rule was analyzed in accordance with the principles and criteria contained in Executive Order 13132 (“Federalism”). This proposed rule would preempt state, local and Indian Tribe requirements but does not propose any regulation that has substantial direct effects on the states, the relationship between the national government and the states, or the distribution of power and responsibilities among the various levels of governments. Therefore, the consultation and funding requirements of Executive Order 13132 do not apply. Federal hazardous material transportation law, 49 U.S.C. 5101,
(1) The designation, description, and classification of hazardous material;
(2) The packing, repacking, handling, labeling, marking, and placarding of hazardous material;
(3) The preparation, execution, and use of shipping documents related to hazardous material and requirements related to the number, contents, and placement of those documents;
(4) The written notification, recording, and reporting of the unintentional release in transportation of hazardous material; or
(5) The designing, manufacturing, fabricating, marking, maintaining, reconditioning, repairing, or testing of a package, container or packaging component that is represented, marked, certified, or sold as qualified for use in transporting hazardous material in commerce.
This proposed rule addresses covered subject items (2), (3), and (5) and would preempt any State, local, or Indian Tribe requirements not meeting the “substantively the same” standard. Federal hazardous materials transportation law provides at 49 U.S.C. 5125(b)(2) that if PHMSA issues a regulation concerning any of the covered subjects, PHMSA must determine and publish in the
This proposed rule was analyzed in accordance with the principles and criteria contained in Executive Order 13175 (“Consultation and Coordination with Indian Tribal Governments”). Because this proposed rule does not have Tribal implications and does not impose substantial direct compliance costs on Indian Tribal governments, the funding and consultation requirements of Executive Order 13175 do not apply.
The Regulatory Flexibility Act (5 U.S.C. 601-611) requires each agency to analyze regulations and assess their impact on small businesses and other small entities to determine whether the rule is expected to have a significant impact on a substantial number of small entities. The NPRM proposes to amend the HMR to incorporate provisions contained in seven widely used or longstanding railroad special permits that have an established safety record. Although many of the applicants may be small businesses or other small entities, PHMSA believes that the revisions in this proposed rule are intended to provide wider access to the regulatory flexibility offered in special permits and eliminate the need for numerous renewal requests, thus reducing paperwork burdens and facilitating commerce while maintaining an appropriate level of safety. Therefore, PHMSA certifies that the provisions of this NPRM would not have a significant economic impact on a substantial number of small entities.
This proposed rule has been developed in accordance with Executive Order 13272 (“Proper Consideration of Small Entities in Agency Rulemaking”) and DOT's procedures and policies to promote compliance with the Regulatory Flexibility Act to ensure that potential impacts of draft rules on small entities are properly considered.
PHMSA has approved information collections under OMB Control Number 2137-0051, “Rulemaking, Special Permits, and Preemption Requirements,” OMB Control Number 2137-0557, “Approvals for Hazardous Materials,” and OMB Control Number 2137-0559, “(Rail Carriers and Tank Car Requirements) Requirements for Rail Tank Cars—Transportation of Hazardous Materials by Rail. This NPRM may result in a decrease in the annual burden and costs under OMB Control Number 2137-0051 and an increase in the annual burden and costs under OMB Control Number 2137-0557 and OMB Control Number 2137-0559 due to proposed changes to incorporate provisions contained in certain widely used or longstanding special permits that have an established safety record.
Under the Paperwork Reduction Act of 1995, no person is required to respond to an information collection unless it has been approved by OMB and displays a valid OMB control number. Section 1320.8(d), title 5, Code of Federal Regulations requires that PHMSA provide interested members of the public and affected agencies an opportunity to comment on information and recordkeeping requests.
This notice identifies a revised information collection request that PHMSA will submit to OMB for approval based on the requirements in
PHMSA specifically requests comments on these information collections and recordkeeping burdens associated with developing, implementing, and maintaining these requirements for approval under this proposed rule.
Requests for a copy of this information collection should be directed to Deborah Boothe or Steven Andrews, Standards and Rulemaking Division, (PHH-10), Pipeline and Hazardous Materials Safety Administration, 1200 New Jersey Avenue, SE., Washington, DC 20590-0001, Telephone (202) 366-8553.
Address written comments to the Dockets Unit as identified in the
A regulation identifier number (RIN) is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN contained in the heading of this document may be used to cross-reference this action with the Unified Agenda.
This proposed rule does not impose unfunded mandates under the Unfunded Mandates Reform Act of 1995. It does not result in costs of $141.3 million or more to either state, local or Tribal governments, in the aggregate, or to the private sector, and is the least burdensome alternative that achieves the objective of the rule.
The National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321-4347), and implementing regulations by the Council on Environmental Quality (40 CFR part 1500) require Federal agencies to consider the consequences of Federal actions and prepare a detailed statement on actions that significantly affect the quality of the human environment.
The hazardous materials regulatory system is a risk management system that is prevention oriented and focused on identifying a hazard and reducing the probability and quantity of a hazardous materials release. This rulemaking is concerned with the transportation of hazardous materials by rail, but is prepared with the understanding that these materials are often transported by aircraft, vessel, and highway before or after they are transported by rail. The need for hazardous materials to support essential services means transportation of highly hazardous materials is unavoidable. However, these shipments frequently move through densely populated or environmentally sensitive areas where the consequences of an incident could be loss of life, serious injury, or significant environmental damage. The ecosystems that also could be affected by a hazardous materials release during transportation include atmospheric, aquatic, terrestrial, and vegetal resources (for example, wildlife habitats). The adverse environmental impacts associated with releases of most hazardous materials are short-term impacts that can be greatly reduced or eliminated through prompt clean-up of the incident scene. In this NPRM, we are requesting comments on the potential environmental impacts of the proposals.
In all modes of transport, the potential for environmental damage or contamination exists when packages of hazardous materials are involved in transportation incidents. Most of the special permits considered in this rulemaking involve bulk packages of hazardous materials in DOT specification and non-specification tank cars. While the volume of hazardous material present in these packagings has the potential to be released into the environment during a transportation incident, these packagings are constructed to withstand greater forces during impact and are also equipped with safety relief devices and valves specifically designed to maintain the containment ability of the tank car.
The purpose and need of this rulemaking is to incorporate widely used special permits or those with an established safety record into the HMR for universal use. More information about benefits of the proposed action can be found in the preamble (
In considering the potential environmental impacts of the proposed action, PHMSA does not anticipate that the incorporation of the listed special permits will result in any significant impact on the human environment because the process through which special permits are issued requires the applicant to demonstrate that the alternative transportation method or packaging proposed provides an equivalent level of safety as that provided in the HMR. However, PHMSA welcomes and will consider and address comments about foreseeable environmental impacts or risk associated with the incorporation of any proposed special permit. The agencies and persons consulted in the development of this regulatory proposal include the International Vessel Operators Hazardous Materials Association, Inc.; Gold Tank Inspection Services, Inc.; Surface Deployment and Distribution Command (SDDC); Conrail; Agrium N.A.Wholesale Transportation Compliance; Koch Nitrogen Company; Columbiana Boiler Company; and subject matter expert staff in FRA and PHMSA.
Given that this rulemaking proposes to amend the HMR to incorporate provisions contained in certain widely used or longstanding railroad special permits that have an established safety record, these proposed change in regulation would increase safety and environmental protections. There are no significant environmental impacts associated with this proposed rule.
Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union,
Exports, Hazardous materials transportation, Hazardous waste, Imports, Reporting and recordkeeping requirements.
Education, Hazardous materials transportation, Hazardous waste, Labeling, Markings, Packaging and containers, Reporting and recordkeeping requirements.
Hazardous materials transportation, Packaging and containers, Radioactive materials, Reporting and recordkeeping requirements, Uranium.
Hazardous materials transportation, Radioactive materials, Rail carriers, Railroad safety, Reporting and recordkeeping requirements.
Hazardous materials transportation, Railroad safety, Reporting and recordkeeping requirements.
Hazardous materials transportation, Motor carriers, Motor vehicle safety, Packaging and containers, Railroad safety, Reporting and recordkeeping requirements.
In consideration of the foregoing, we propose to amend 49 CFR Chapter I as follows:
1. The authority citation for part 171 continues to read as follows:
49 U.S.C. 5101-5128, 44701; 49 CFR 1.45 and 1.53; Pub. L. 101-410 section 4 (28 U.S.C. 2461 note); Pub. L. 104-134 section 31001.
2. In the “Table of material incorporated by reference,” at § 171.7(a)(3), for the entry “AAR Manual of Standards and Recommended Practices, Section C-Part III, Specifications for Tank Cars, Specification M-1002, (AAR Specifications for Tank Cars), December 2000, the reference to § 174.63 is removed.
3. In § 171.8, the definition “Train consist” is added in alphabetical order to read as follows:
4. The authority citation for part 172 continues to read as follows:
49 U.S.C. 5101-5128, 44701; 49 CFR 1.53.
5. In § 172.201, revise paragraph (a)(2) and add paragraph (a)(5) to read as follows:
(a) * * *
(2) The required shipping description on a shipping paper and all copies of the shipping paper used for transportation purposes must be legible and printed (manually or mechanically) in English.
(5)
(i) When the information applicable to the consignment is provided under this requirement the information must be available to the shipper and carrier at all times during transport, and the carrier must have and maintain a printed copy of this information until delivery of the hazardous materials on the shipping paper is complete. When a paper document is produced, the data must be presented as required by this subpart.
(ii) The offeror must forward the shipping paper (record) for a loaded movement to the carrier prior to shipment unless the carrier prepares the shipping paper on behalf of the offeror. The offeror is only relieved of the duty to forward the shipping paper once the offeror has received a copy of the shipping paper from the carrier;
(iii) A carrier that generates a residue shipping paper using information from the previous loaded movement of a hazardous materials packaging must ensure the description of the hazardous material that accompanies the shipment complies with the offeror's request;
(iv)
(v)
6. In § 172.202, paragraph (b) is amended by adding a third sentence to read as follows:
(b) * * * Shipping descriptions for hazardous materials offered or intended for transportation by rail that contain all the information required in this subpart and that are formatted and ordered in accordance with recognized electronic data interchange standards and, to the extent possible, in the order and manner required by this subpart are deemed to comply with this paragraph.
7. In § 172.204 paragraph (a) introductory text, a sentence is added to the end and paragraphs (a)(3) and (d)(3) are added to read as follows:
(a) * * * For transportation by rail only, the certification may be received verbally or with abbreviated written language in conformance with paragraphs (a)(3)(i) and (ii) of this section.
(3)
(i)
(ii)
(d) * * *
(3) For transportation by rail, when transmitted by telephone or electronically, the signature may be in one of the following forms: the name of the principal person, partner, officer, or employee of the offeror or his agent in a computer field defined for that purpose.
8. In § 172.604, paragraphs (a) introductory text and (a)(3)(ii) are revised to read as follows:
(a) A person who offers a hazardous material for transportation must provide an emergency response telephone number, including the area code, for use in an emergency involving the hazardous material. For telephone numbers outside the United States, the international access code or the “+” (plus) sign, country code, and city code, as appropriate, that are needed to complete the call must be included. The telephone number must be—
(3) * * *
(ii) Entered once on the shipping paper in the manner prescribed in paragraph (b) of this section in a prominent, readily identifiable, and clearly visible manner that allows the information to be easily and quickly found, such as by highlighting, use of a larger font or a font that is a different color from other text and information, or otherwise setting the information apart to provide for quick and easy recognition. This provision may be used only if the telephone number applies to each hazardous material entered on the shipping paper, and if it is indicated that the telephone number is for emergency response information (for example: “EMERGENCY CONTACT: * * *”).
9. The authority citation for part 173 continues to read as follows:
49 U.S.C. 5101-5128, 44701; 49 CFR 1.45, 1.53.
10. In § 173.314, paragraph (e) is redesignated as (e)(1) and its first sentence is revised, paragraph (k) is redesignated as (k)(1), and paragraphs (e)(2) and (k)(2) are added to read as follows:
(e)
(2)
(A) The minimum safety equipment that must be worn by each employee performing a loading and unloading task under this paragraph (e)(2). The equipment must be designed to protect employees from the dangers associated with exposure to and contact with the hazardous material and must also comply with the laws of the Department of Labor's Occupational Safety and Health Administration, and the state and local laws of the jurisdiction where the task is being performed.
(B) That prior to loading a rail tank car all truck brakes must be set and chock blocks installed on one set of truck's wheels, and the rail tank car must be properly spotted and signed, and the tank visually inspected for any sign of damage in the—
(1) Hoses, connections, and valves;
(2) Truck and rail car under carriage assemblies;
(3) Tank and/or jacket; and
(4) Accessories inside of loading dome.
(C) Any defects found must be recorded, and the tank must not be loaded until the repairs to eliminate each defect are completed.
(D) The tank car must be allowed to sit undisturbed for at least 10 minutes after loading to allow material within the tank to settle. After this has occurred a final check for leaks must be conducted prior to closing the dome cover and properly inserting the dome pin.
(ii)
(iii)
(A) Date loaded,
(B) Date shipped,
(C) Tank car reporting marks,
(D) DOT Specification,
(E) Tank car stenciled shell capacity (gallons),
(F) Tank car stenciled tare weight (pounds),
(G) Outage or innage table number,
(H) Water capacity of tank car (pounds),
(I) Maximum permitted filling density (see § 173.314, Table note 1),
(J) Specific gravity of NH
(K) Tank car outage (inches/gallons),
(L) Gallons of liquid ammonia in tank car,
(M) Quantity of vapor ammonia in tank car, and
(N) Total calculated ammonia (liquid & vapor) in tank car (pounds).
(k)
(2) DOT105J500W tank cars may be used as authorized packagings, as prescribed in this subchapter for transporting “Chlorine, 2.3 (8), UN 1017, Poison Inhalation Hazard, Zone B, RQ,” if the tank cars meet all DOT specification requirements and the tank cars are equipped with combination safety relief valves with a start-to-discharge pressure of 360 psi, rather than the 356 psi. The start-to-discharge pressure setting must be marked on the pressure relief device in conformance with the AAR Specification for Tank Cars (IBR, see § 171.7 of this subchapter).
11. The authority citation for part 174 continues to read as follows:
49 U.S.C. 5101-5128; 49 CFR 1.53.
12. In § 174.63(c)(2) is removed and reserved.
13. The authority citation for part 179 is revised to read as follows:
49 U.S.C. 5101-5128; 49 CFR 1.53.
14. In § 179.13, paragraph (b) is revised to read as follows:
(b) Tank cars containing poisonous-by-inhalation material meeting the applicable authorized tank car specifications listed in § 173.244(a)(2) or (3), or § 173.314(c) or (d) may have a gross weight on rail of up to 286,000 pounds upon approval by the Associate Administrator for Railroad Safety, FRA. Tank cars exceeding 263,000 pounds and up to 286,000 pounds gross weight on rail must meet the requirements of AAR Standard S-286, Free/Unrestricted Interchange for 286,000 lb Gross Rail Load Cars (IBR, see § 171.7 of this subchapter). Any increase in weight above 263,000 pounds may not be used to increase the quantity of the contents of the tank car.
15. In Subpart B, add § 179.24 to read as follows:
(a)(1) After December 31, 2011, to certify compliance with Federal requirements, the tank manufacturer must install two identical permanent identification plates, one located on both inboard surfaces of the “A” (
(2) Each plate must be stamped, embossed, or otherwise marked by an equally durable method in letters 3/16-inch high with the following information (parenthetical abbreviations may be used, and the AAR form reference is to the AAR Specifications for Tank Cars, December 2000 edition (IBR, see § 171.7 of this subchapter)):
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(3) When a modification to the tank changes any of the information shown in paragraph (a)(2) of this section, the car owner or the tank car facility making the modification must install an additional variable identification plate on the tank in accordance with paragraph (a)(1) of this section showing the following information:
(i)
(ii) All items of paragraph (a)(2) of this section that were modified, followed by the month and year of modification.
(b) [Reserved]
16. In § 179.100-20, paragraph (b) is added to read as follows:
(b) Authorized DOT tank cars with stainless steel identification plates must have their DOT Specification and other required information stamped plainly and permanently on their identification plate in conformance with the applicable requirements prescribed in § 179.24(a).
17. In § 179.200-24, paragraph (c) is added to read as follows:
(c) Authorized DOT non-pressure tank car tanks with stainless steel identification plates may have their DOT Specification and other required information stamped plainly and permanently on their identification plate instead of into the metal of the tank in conformance with the applicable requirements prescribed in § 179.24(a).
18. In § 179.201-10, paragraph (b) is added to read as follows:
(b) After December 31, 2011, authorized DOT non-pressure tank cars that comply with this section and are equipped with stainless steel identification plates may have the water capacity of the tank in pounds prescribed in the first sentence of paragraph (a) of this section stamped plainly and permanently on their identification plate instead of into the
19. In § 179.220-25, the existing text is redesignated as paragraph (a) and paragraph (b) is added to read as follows:
(b) Authorized Class DOT-115 non-pressure tank car tanks with stainless steel identification plates may have their DOT Specification and other required information stamped plainly and permanently on their identification plate instead of into the metal of the tank in conformance with the applicable requirements prescribed in § 179.24(a).
20. In § 179.300-13, paragraph (b) is revised to read as follows:
(b) Threads for openings must be National Gas Taper Threads (NGT) tapped to gauge, clean cut, even and without checks. Threads for the clean-out/inspection ports of DOT Specification 110A multi-unit tank car tanks may be straight threads instead of taper threads. The straight threads must meet the requirements of § 178.61(h)(3)(i) and (iii). Taper threads must comply with § 178.61(h)(3)(i) and (ii). Hex plugs may be secured to threaded boss ports using stainless steel safety wire of adequate strength and design for its intended use.
21. The authority citation for part 180 continues to read as follows:
49 U.S.C. 5101-5128; 49 CFR 1.53.
22. Revise § 180.501 to read as follows:
(a) This subpart prescribes requirements, in addition to those contained in parts 107, 171, 172, 173, 174, and 179 of this subchapter, applicable to any person who manufactures, fabricates, marks, maintains, repairs, inspects, or services tank cars to ensure continuing qualification.
(b) This subpart also establishes the minimum acceptable framework for an owner's qualification program for tank cars and components. Owners should follow this subpart in developing their written procedures (work instructions), as required under § 179.7(d), for use by tank car facility employees. The owner's qualification program for each tank car, or a fleet of tank cars, must identify where to inspect, how to inspect, and the acceptance criteria. Tank car facilities must incorporate the owner's qualification program in their quality assurance program, as required under § 179.7(a)(2), (b)(3), and (b)(5).
(c) Any person who performs a function prescribed in this part must perform that function in accordance with this part.
(d) Where, in this subpart, a person is required to make documents available to FRA upon request, such request means that credentialed FRA personnel or an authorized representative of the Department may view the documents and make copies of them. The document owner's may seek confidential treatment of the documents presented. See § 105.30.
23. Revise § 180.503 to read as follows:
The following definitions and those contained in §§ 171.8 and 179.2 of this subchapter apply:
24. In § 180.507, the first sentence in paragraph (b)(2) is revised to read as follows:
(b) * * *
(2) For each tank car conforming to and used under a special permit (exemption) issued before October 1, 1984, which authorized the transportation of a cryogenic liquid in a tank car, the owner or operator must remove the exemption number stenciled on the tank car and mark the tank car with the appropriate Class DOT-113 specification followed by the applicable Special Permit (DOT SP) number. * * *
25. Amend § 180.509 as follows:
a. Revise paragraphs (a), (b)(1), (2), and (4), (c) introductory text heading, and (c)(3);
b. Add paragraphs (d)(1)(i) and (ii);
c. Revise paragraphs (d)(2) through (6);
d. Add paragraph (d)(7);
e. Revise paragraphs (e) and (f);
f. Redesignate paragraph (g)(1) as (g) and revise it;
g. Revise paragraphs (h) through (l); and
h. Add paragraph (m).
The revisions and additions read as follows:
(a)
(1) Inspects and tests each item according to the requirements specified in this section;
(2) Evaluates each item according to the acceptable results of inspections and tests specified in § 180.511;
(3) Marks each tank car as specified in § 180.515 for each item that successfully passes an inspection and test, and
(4) Prepares the documentation as required by § 180.517 for each item qualified under this section. A copy of the documentation required by § 180.517 must be sent to the builder or owner as appropriate and according to the builder's or owner's instructions.
(b)
(1) The tank car shows evidence of abrasion, corrosion, cracks, dents, distortions, defects in welds, or any other condition that may make the tank car unsafe for transportation,
(2) The tank car was in an accident and shows evidence of damage to an extent that may adversely affect its capability to retain its contents or to otherwise remain railworthy.
(4) The Associate Administrator for Railroad Safety, FRA, requires it based on the existence of an objectively reasonable and articulable belief that a tank car or a class or design of tank cars may be in an unsafe operating condition.
(c)
(3) Fusion welded tank cars must be inspected and tested to be qualified and maintained in accordance with the following table. All qualification requirements need not be done at the same time or at the same facility.
Frequency of qualification inspection and tests.
(d) * * *
(1) * * *
(i) Except in areas where tank structure, insulation, head protection, thermal protection, internal linings or coatings preclude it, an internal and external inspection of the tank shell and heads for abrasion, corrosion, cracks, dents, distortions, flaws in welds, or any other condition that may make the tank car unsafe for transportation; and
(ii) For DOT 115 class tank cars, an internal inspection of the inner container and external inspection of the outer shell and heads for defects in welds, or any other condition that may
(2) When a lining, coating, head protection, insulation, or thermal protection is removed in part or in whole, the exposed surface,
(3) An inspection of the service equipment, including gaskets, for indications of corrosion and other conditions that may make the tank car unsafe for transportation;
(4) An inspection for missing or loose bolts, nuts, or elements that may make the tank car unsafe for transportation;
(5) An inspection of all closures on the tank car for conditions that may make the tank car unsafe for transportation, including an inspection of the protective housings for proper condition;
(6) An inspection of excess flow valves with threaded seats for tightness; and
(7) An inspection of the required markings on the tank car for legibility.
(e)
(i) All transverse fillet welds greater than 0.64 cm (0.25 inch) within 121.92 cm (4 feet) of the bottom longitudinal centerline except body bolster pad attachment welds;
(ii) The termination of longitudinal fillet welds greater than 0.64 cm (0.25 inch) within 121.92 cm (4 feet) of the bottom longitudinal centerline; and
(iii) The tank shell butt welds within 60.96 cm (2 feet) of the bottom longitudinal centerline, unless the tank car owner can determine by analysis (
(2) For DOT 115 class tanks, paragraphs (e)(1)(i—iii) of this section apply only to the outer shell fillet welds and to the non-reinforced exposed outer shell butt welds.
(3) The inspection requirements of paragraph (e)(1)(iii) of this section do not apply to reinforced tank shell butt welds until the time of lining removal or application for tank cars with an internal lead, glass, or rubber lining.
(4) Each tank car facility must inspect and test the elements identified in paragraph (e)(1) of this section by one or more of the following methods:
(i) Dye penetrant testing (PT);
(ii) Radiographic examination (RT);
(iii) Magnetic particle testing (MT);
(iv) Ultrasonic testing (UT); and
(v) Direct, remote, or enhanced visual inspection, using, for example, magnifiers, fiberscopes, borescopes, and/or machine vision technology (VT).
(f)
(2) The tank car owner must ensure that each tank car has a thickness test measurement:
(i) At the time of an internal lining or coating application or replacement, or
(ii) At least once every ten (10) years for a tank that does not have an internal lining or coating, or
(iii) At least once every five (5) years for a tank that does not have an internal lining or coating when:
(A) The tank is used to transport a material that is corrosive or reactive to the tank (see Appendix D of this part) or service equipment as defined § 180.503, and
(B) The remaining shell and head thickness is at or below line C in Figure A of this paragraph.
AAs-built tank shell or head thickness with additional thickness.
BRequired minimum tank shell or head thickness after forming per part 179.
CInspection frequency adjustment point (design minimum shell or head thickness, minus ½ of the table value in paragraph (g) of this section).
DCondemning limit for general corrosion (required minimum shell or head thickness, minus the value in paragraph (g) of this section).
ECondemning limit for localized corrosion (required minimum shell or head thickness, minus the table value in paragraph (g) of this section, minus 1.58 mm (
FAllowable shell or head thickness reduction (table value in paragraph (g) of this section).
GAdditional thickness reduction for localized areas in paragraph (g) of this section.
(3) For a localized repair of an internal lining or internal coating where a material corrosive to the tank or service equipment as defined § 180.503 has contacted the tank, a qualified individual must verify conformance with paragraph (g) of this section by measuring the shell or head in the area of the repair. The thickness test applies only to the non-lined or coated repaired area, and is not a qualification event.
(4) Operation of a tank car below the condemning limit for general corrosion or the condemning limit for localized corrosion (as shown in Figure A of this section) is prohibited.
(5) For sumps, domes, nozzles, and nozzle reinforcements, the tank car owner must determine if any reduction in wall thickness affects the design levels of reliability and safety built into sump, dome, nozzle, or nozzle reinforcement. Each tank car owner must maintain at its principal place of business documentation describing the allowable thickness reductions for sumps, domes, and nozzles, and nozzle reinforcements. This documentation must be made available to FRA or an authorized representative of the Department upon request.
(6) After repairs, alterations, conversions, modifications, or blasting of tank car that results in a reduction of the tank's thickness, a qualified individual must measure the thickness of the tank in the area of reduced thickness to ensure that the thickness of the tank conforms to paragraph (g) of this section.
(g)
(h)
(i)
(2) The owner of the lining or coating must establish and maintain a record of the service life of the lining or coating and commodity combination, that is, the specific hazardous materials that were loaded into a tank and the lining or coating in place at the time of loading. The owner of the lining or coating must use its knowledge of the service life of each lining or coating and commodity combination to establish an appropriate inspection interval for that lining or coating and commodity combination. This interval must not exceed eight (8) years, unless the lining or coating owner can establish, document, and show that the service history or scientific analysis of the lining or coating and commodity pairing supports a longer inspection interval. The owner must maintain at its principal place of business a written procedure for collecting and documenting the life of the lining or coating applied within the tank car. The lining or coating owner must provide this documentation, including inspection and test, repair, removal, and application procedures, to the FRA or car owner upon request. In addition, any person who offers a loaded tank car into transportation must provide commodity information to the car owner and the owner of the lining or coating upon request.
(3) The owner of the lining or coating must provide the test method and acceptance criteria for the lining or coating to the tank car owner and to the person responsible for qualifying the lining or coating. The tank car facility inspecting and testing the lining or coating must follow the inspection and test requirements, including the acceptance requirements, established by the lining or coating owner.
(j)
(k)
(2) Each tank car facility must qualify service equipment, including reclosing pressure relief devices and interior heater systems in accordance with Appendix D of the AAR Specifications for Tank Cars (IBR, see § 171.7 of this subchapter).
(l)
(m)
(2) For insulated or jacketed tank cars on a 20-year periodic hydrostatic pressure test interval (
26. In § 180.511, revise the introductory text and paragraphs (d) and (g) and add paragraph (h) to read as follows:
Provided it conforms to other applicable requirements of this subchapter, a tank car is qualified for use if it successfully passes the inspections and tests set forth below conducted in accordance with this subpart. A representation of that qualification must consist of marking the tank in accordance with § 180.515.
(d)
(g)
(h)
27. Revise § 180.513 to read as follows:
(a) To work on tank cars, a tank car facility must comply with the applicable requirements of this subpart, the AAR Specifications for Tank Cars (IBR, see § 171.7 of this subchapter), and the owner's requirements.
(b) An owner of a tank car or component is responsible for ensuring that each tank car facility complies with the owner's maintenance program by conducting periodic analyses and surveillance activities.
(c) Unless the exterior tank car shell or interior tank car jacket has a protective coating, after a repair that requires the complete removal of the tank car jacket, the exterior tank car shell and the interior tank car jacket must have a protective coating applied to prevent the deterioration of the tank shell and tank jacket. Previously applied coatings that still provide effective protection need not be covered over.
(d) After repair, replacement, or qualification of tank car service equipment, the tank service equipment must successfully pass the leak test prescribed in § 180.509(j).
28. Revise § 180.515 to read as follows:
(a) When a tank car passes the required inspection and test with acceptable results, the tank car facility must mark the date of the inspection and test and the due date of the next inspection and test qualified on the tank car in accordance with Appendix C of the AAR Specifications for Tank Cars (IBR, see § 171.7 of this subchapter). When a tank car facility performs multiple inspections and tests at the same time, one date may be used to satisfy the requirements of this section. One date also may be shown when multiple inspections and test have the same due date. Dates displayed on the “consolidated stencil” (see Appendix C of the AAR specifications for Tank Cars) take precedence over dates modified, and not stenciled, pursuant to interval adjustments for service equipment, linings, and granted alternative inspection intervals.
(b) Converted DOT 105, 109, 112, 114, or 120 class tank cars must have the new specification and conversion date permanently marked in letters and figures at least 0.95 cm (0.375 inch) high on the outside of the manway nozzle or the edge of the manway nozzle flange on the left side of the car. The marking may have the last numeral of the specification number omitted (
(c) When qualified within six months of installation and protected from deterioration, the test date marking of a reclosing pressure relief device is the installation date on the tank car.
29. In § 180.517, revise paragraph (a), paragraph (b) introductory text, and paragraphs (b)(3). (4), and (7), and add paragraph (b)(8) to read as follows:
(a)
(b)
(3) Tank car reporting mark and number;
(4) Tank car specification;
(7) The name and address of the tank car facility and the name and signature of inspector; and
(8) The unique code (station stencil) identifying the facility.
30. Add Appendix D to Part 180 to read as follows:
This list contains materials identified either by proper shipping name in 49 CFR 172.101 or shipped under an “n.o.s.” shipping description that, under certain conditions, can corrode carbon steel tanks or service equipment at a rate that will reduce the design level of reliability and safety of the tank or equipment to an unsafe level before the next qualification. Materials identified on this list are considered corrosive to the tank or service equipment.
While every effort was made to identify materials deemed corrosive to the tank or service equipment, owners and operators are cautioned that this list may not be inclusive. Tank car owners and operators are reminded of their duty to ensure that no in-service tank will deteriorate below the specified minimum thickness requirements in this subchapter. See § 180.509(f)(3). In addition, FRA states a tank car owner must designate an interior coating or lining appropriately based on their knowledge of the chemical and not rely simply on this list. Regarding future thickness tests, this list may also be modified based on an analysis of the test results by the car owner, the Department of Transportation, or the Association of American Railroads' Tank Car Committee.
Agricultural Marketing Service, USDA.
Notice and request for comments.
The Agricultural Marketing Service (AMS), prior to undertaking research and other work associated with revising official U.S. grade standards, is soliciting comments on a request to revise the United States Standards for Grades of Grapefruit Juice. AMS received a petition from the Florida Citrus Processors Association asking AMS to consider revising the current U.S. grade standards for grapefruit juice to account for advances in industry processing technology.
Comments must be received by October 17, 2011.
Interested persons are invited to submit written comments on the Internet at
Please be advised that all comments submitted in response to this notice will be included in the record and will be made available to the public on the Internet via
Brian E. Griffin, Inspection and Standardization Section, Processed Products Branch, Agricultural Marketing Service, U.S. Department of Agriculture, telephone (202) 720-5021; or fax (202) 690-1527.
AMS received a petition from the Florida Citrus Processors Association, an association of citrus producers, requesting revisions to the United States Standards for Grades of Grapefruit Juice. These standards are issued under the Agricultural Marketing Act of 1946 (7 U.S.C. 1621-1627). The petitioners are requesting the removal of the maximum limit for “free and suspended pulp” (referred to in the industry as “sinking pulp”) from the U.S. grade standards for all forms of grapefruit juice.
The current grade standards, effective since September 12, 1983, provide that grapefruit juice from concentrate, grapefruit juice, and frozen concentrated grapefruit juice establish limits for maximum free and suspended pulp as follows: Grade A—10 percent by volume, Grade B—15 percent by volume. Concentrated grapefruit juice for manufacturing requirements for maximum free and suspended pulp are as follows: Grade A—10 percent by volume, and Grade B—12 percent by volume.
The petitioners believe that, with respect to maximum values for free and suspended pulp, the existing U.S. Standards for Grades of Grapefruit Juice do not take into account modern extraction and finishing technologies, nor are they supported by evidence of a correlation between these criteria and acceptable flavor. The petitioners are requesting that AMS revise the U.S. Standards for Grades of Grapefruit Juice by removing any parameters for maximum free and suspended pulp.
The petitioners believe that removing the free and suspended pulp values from the grade standards would allow processors to process the entire grapefruit crop without resorting to expensive technologies that increase the cost of juice with no concomitant benefit. More mature grapefruit tends to be sweeter, but when juiced tends to cause the product to exceed maximum free and suspended pulp values. The petitioners have submitted research data covering a six-season period which illustrates levels of sinking pulp vs. naringin, and levels of sinking pulp vs. limonin using various extractor setups. The petitioners have also submitted data on a sensory evaluation performed by the University of Florida on consumer acceptability of grapefruit juice with two free and suspended pulp levels. A copy of the petitioner's request and supporting documentation is located on the Internet at
AMS is soliciting comments on the proposed revision of the U.S. Standards for Grades of Grapefruit Juice. In particular, AMS would welcome comments and information regarding the probable impact on processors and growers. Further details are provided in the petition and are available from Brian E. Griffin at the previously mentioned address in the
7 U.S.C. 1621-1627.
Forest Service, USDA.
Notice of meeting.
The Mendocino County Resource Advisory Committee will meet September 16, 2011 (RAC) in Willits, California. Agenda items to be covered include: (1) Approval of minutes, (2) Handout Discussion (3) Public Comment, (4) Financial Report (5) Sub-committees (6) Matters before the group (7) Discussion—approval of projects (8) Next agenda and meeting date.
The meeting will be held on September 16, 2011, from 9 a.m. until 12 noon.
The meeting will be held at the Mendocino County Museum, located at 400 E. Commercial St. Willits, California.
Roberta Hurt, Committee Coordinator, USDA, Mendocino National Forest, Covelo Ranger District, 78150 Covelo Road, Covelo, CA 95428. (707) 983-6658;
The meeting is open to the public. Persons who wish to bring matters to the attention of the Committee may file written statements with the Committee staff by September 10, 2011. Public comment will have the opportunity to address the committee at the meeting.
Forest Service, USDA.
Notice of Meeting.
The Butte County Resource Advisory Committee (RAC) will hold a meeting on August 29, 2011 in Oroville, CA. The purpose of the meeting is to review Cycle 2 project applications for potential funding recommendations to Lassen, Plumas or Mendocino National Forest Supervisors. The funding is made available under Title II provisions of the Secure Rural Schools and Community Self-Determination Act of 2000. This is the last cycle of funding under the current legislation.
The meeting will take place from 6:30-9 p.m. at the Feather River Ranger District Office, 875 Mitchell Avenue, Oroville, CA.
(or for special needs): Lee Anne Schramel Taylor, Forest Coordinator, USDA, Plumas National Forest, P.O. Box 11500/159 Lawrence Street, Quincy, CA 95971; (530) 283-7850; or by e-mail
Rural Housing Service, USDA.
Notice; correction.
This notice corrects the scoring points available to a Notice published in the
Mirna Reyes-Bible, Finance and Loan Analyst, Multi-Family Housing Preservation and Direct Loan Division, STOP 0781 (Room 1263-S), USDA Rural Development, 1400 Independence Avenue, SW., Washington, DC 20250-0781,
In the notice beginning on page 39,813 in the issue of July 7, 2011, make the following correction under paragraph (b) entitled Energy Conservation for Purchase and Substantial Rehabilitation for an existing non-FLH property. In the first column for page 39,818 replace the entire paragraph (b) with the following:
(b)
If you are participating in (1) The Green Communities program, you may not receive additional points for items listed under (2). In other words, you may participate in (1) and (3) or (2) and (3), but not all three:
(1) Participation in the Green Communities program by the Enterprise Community Partners,
(2) Energy conservation points can be awarded for the following energy conservation measures only when the applicant is not enrolled in Green Communities and conservation measures are listed in the preliminary plans for substantial rehabilitation. (maximum 20 points).
• Replacement of heating, ventilation and air conditioning (HVAC) equipment with Energy Star qualified heating, HVAC equipment. (3 points).
• Replacement of windows and doors with Energy Star qualified windows and doors. (3 points).
• Additional insulation is added to the property to exceed the required R-Value of those building elements in that area of the country per the International Energy Conservation Code 2009. Two points will be awarded if all exterior walls exceed insulation code and 1 point will be awarded if attic insulation exceeds code for a maximum of 3 points. (maximum 3 points).
• Reduction in building shell air leakage by at least 15 percent as determined by pre- and post-rehabilitation blower door testing on a sample of units. Building shell air leakage may be reduced through materials such as caulk, spray foam, gaskets, and house-wrap. Sealing of duct work with mastic, foil-backed tape, or aerosolized duct sealants can also help reduce air leakage. (3 points).
• 100 percent of installed appliances and exhaust fans are Energy Star qualified. (2 points).
• 100 percent of installed water heaters as Energy Star qualified. (2 points).
• 100 percent of toilets with flush capacity of more than 1.6 gallon flush capacity are replaced with new toilets with 1.6 gallon capacity or less, with Environmental Protection Agency (EPA) Water Sense label. (1 point).
• 100 percent of showerheads are replaced with new showerheads with EPA Water Sense label. (1 point).
• 100 percent of faucets are replaced with new faucets with EPA Water Sense label. (1 point).
• 100 percent Energy-efficient lighting including Energy Star qualified fixtures, compact fluorescent replacement bulbs in standard incandescent fixtures, and Energy Star Ceiling Fans. (1 point);
(3) Participation in local green/energy efficient building standards. Applicants, who participate in a city, county or municipality program, will receive an additional 2 points. The applicant should be aware of and look for additional requirements that are sometimes embedded in the third-party program's rating and verification systems. (2 points).
Federal Chief Information Officers Council, Architectural and Transportation Barriers Compliance Board.
Notice of meeting.
This notice announces a listening session that the Federal Chief Information Officers Council will be conducting to hear from the public on ways the federal government can take stronger steps toward improving the acquisition and implementation of accessible technology for people with disabilities. In order to better understand the needs of diverse communities, the Federal Chief Information Officers Council, in collaboration with the Chief Acquisition Officers Council, the General Services Administration Office of Governmentwide Policy, and the U.S. Access Board, will hold a virtual listening session, where participants may either call in or log onto a Web site to participate and express concerns and propose ideas.
The listening session will be held on September 8, 2011 from 2 p.m. to 5 p.m. Eastern Time (E.T.).
The listening session will be held by telephone and online. Instructions on how to participate are at:
Tim Creagan, Office of Technical and Information Services, Architectural and Transportation Barriers Compliance Board, 1331 F Street, NW., Suite 1000, Washington, DC 20004-1111. Telephone (202) 272-0016 (voice) or (202) 272-0074 (TTY). e-mail address
In 1998, Congress amended the Rehabilitation Act of 1973 to require Federal agencies to make their electronic and information technology accessible to people with disabilities. Inaccessible technology interferes with an ability to obtain and use information quickly and easily. Section 508 of the Rehabilitation Act (29 U.S.C. 794d) was created to eliminate barriers in information technology, open new opportunities for people with disabilities, and encourage development of technologies that will help achieve these goals. The law applies to all federal agencies when they develop, procure, maintain, or use electronic and information technology. Under Section 508, agencies must give employees with disabilities and members of the public with disabilities access to information that is comparable to access available to others without disabilities.
Effective implementation of Section 508 is an essential element of President Obama's principles of open government, requiring that all government and data be accessible to all citizens. In order for the goal of open government to be meaningful for persons with disabilities, technology must also be accessible, including digital content.
On July 19, 2010, the Office of Management and Budget (OMB) took steps to assure that the Federal government's progress in implementing Section 508 is stronger and achieves results more quickly by releasing a memorandum to agencies, titled “Improving the Accessibility of Government Information” (see
The OMB has directed that a series of listening sessions be held to gain feedback on ways to improve Section 508 performance. The Federal Chief Information Officers Council, in collaboration with the Chief Acquisition Officers Council, the General Services Administration Office of Governmentwide Policy, and the U.S. Access Board, have held four listening sessions to engage citizens and federal employees and hear their concerns and ideas. Transcripts from the previous listening sessions can be found on the Federal Chief Information Officers Council Accessibility Committee webpage (
• What is private industry doing to implement information technology (IT) accessibility that the federal government should follow?
• How can implementation of Section 508 be improved?
• What could the federal government ask for that would allow vendors to better show that their products meet accessibility provisions?
• What support do newly emerging technology companies need to build in accessibility in their product and service offerings?
Input is also sought on the following questions:
• What can the federal government do to use technology better or in new ways?
• What can the federal government do to make technology more accessible?
• What emerging technologies does the federal government use that you cannot?
• What technologies should the federal government use that would enhance your interactions with government agencies?
• What are state and local governments doing to implement information technology accessibility that the federal government should follow?
• What is academia doing to implement IT accessibility that the federal government should follow?
• What can the federal government do to influence technology accessibility?
• What can the federal government do to support the availability of effective communities of practice on IT accessibility?
• Would the IT industry benefit from a professional certification or credential that denotes a company's expertise in accessibility? If so, how could it be implemented and what role should the government play?
Feedback from the listening session will be used by, and shared across agencies to improve accessibility and usability of electronic and information technology. The listening session will be accessible. Computer assisted real-time transcription (CART) will be provided. Persons wishing to participate in the virtual listening session can either call in and speak their comments over the telephone or go online and type them on the afternoon of the listening session. Callers should dial 1-877-939-0745 and then enter 51300082 # to join the session; callers must use a touch-tone telephone. Persons going online should go to the Access Board's Web site at
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).
Regulations at 50 CFR part 665, and at 50 CFR part 300 subparts D and O, require that all vessels (and their gear) with permits issued under authority of the National Marine Fishery Service's (NMFS) Fishery Management Plan for United States (U.S.) Pacific Island Region Fisheries display the vessel's official number. The numbers must be of a specific size and format and located at specified locations. The display of the identifying number aids in fishery law enforcement.
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
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).
A prohibited species donation (PSD) program for Pacific salmon and Pacific halibut has effectively reduced regulatory discard of salmon and halibut by allowing fish that would otherwise be discarded to be donated to needy individuals through tax-exempt organizations. Vessels and processing plants participating in the donation program voluntarily retain and process salmon and halibut bycatch. An authorized, tax-exempt distributor, chosen by NMFS, is responsible for monitoring the retention and processing of fish donated by vessels and processors. The authorized distributor also coordinates the processing, storage, transportation, and distribution of salmon and halibut.
The PSD program requires a collection-of-information so that the National Marine Fisheries Service (NMFS) can monitor the authorized distributors' ability to effectively supervise program participants and ensure that donated fish are properly processed, stored, and distributed.
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
The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of
For the 2011 ARTS the Census Bureau will request two years of data to link our old and new samples, ensuring that our published estimates continue to be reliable and accurate. For the 2012 ARTS the Census Bureau will request data on detailed operating expenses. These data items were previously requested under a separate supplemental mailing that was conducted every 5 years. The last supplemental mailing was conducted in conjunction with the 2007 ARTS under OMB No. 0607-0942. While the retail portion of that program will be collapsed into the ARTS, we will continue to ask only the additional detailed expense questions every 5 years.
The Bureau of Economic Analysis (BEA) uses the data to estimate the change in private inventories component of gross domestic product (GDP) and output in both the benchmark and annual input-output (I-O) accounts and GDP by industry. Data on sales taxes are also used to prepare estimates of GDP by industry and to derive industry output for the I-O accounts. Data on detailed operating expenses, which will now be collected on this survey quinquennially, are used to produce national estimates of value added, gross output, and intermediate inputs and serve as a benchmark for the annual industry accounts, which provide the control totals for the GDP-by-state accounts. The Bureau of Labor Statistics uses the data as input to its Producer Price Indexes and in developing productivity measurements. Private businesses use the estimates in computing business activity indexes. Other government agencies and businesses use the data to satisfy a variety of public and business needs such as economic market analysis, company performance, and forecasting future demands.
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 Brian Harris-Kojetin, OMB Desk Officer either by fax (202-395-7245) or e-mail (
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).
Census Bureau field representatives (FRs) mail forms SOC-QI/SF.1 and SOC-QI/MF.1 to new respondents to complete. A few days later, the FRs either call or visit the respondents to enter their survey responses into a laptop computer using the Computer Assisted Personal Interviewing (CAPI) software. The respondents are home builders, real estate agents, rental agents, or new homeowners of sampled residential buildings. FRs contact respondents multiple times based on the number of projects in the sample and the number of months required to complete the project.
The Census Bureau uses the information collected in the SOC to publish estimates of the number of new residential housing units started, under construction, completed, and the number of new houses sold and for sale. The Census Bureau also publishes many financial and physical characteristics of new housing units. Government agencies use these statistics to evaluate economic policy, measure progress towards the national housing goal, make policy decisions, and formulate
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 Brian Harris-Kojetin, OMB Desk Officer either by fax (202-395-7245) or e-mail (
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).
Respondents are separated into three classifications: (1) Merchant wholesale establishments, excluding manufacturers' sales branches and offices; (2) manufacturers' sales branches and offices; and (3) agents, brokers, and business to business electronic markets. The first classification is asked to provide sales, e-commerce, inventories, method of inventory valuation, inventories held outside the United States, purchases, and operating expenses. The second classification is asked to provide sales, e-commerce, inventories, method of inventory valuation, inventories held outside the United States, and operating expenses. The third classification is asked to provide commissions, sales on their own account, and operating expenses. These data are collected to provide a sound statistical basis for the formation of policy by various government agencies, as well as to serve as a benchmark for the estimates compiled from the Monthly Wholesale Trade Survey (OMB No. 0607-0190). Results will be made available, at the United States summary level, for selected wholesale industries approximately fourteen months after the end of the reference year.
For the 2011 AWTS the Census Bureau will request two years of data to link our old and new samples, ensuring that our published estimates continue to be reliable and accurate. For the 2012 AWTS the Census Bureau will request data on detailed operating expenses. These data items were previously requested under a separate supplemental mailing that was conducted every 5 years. The last supplemental mailing was conducted in conjunction with the 2007 AWTS under OMB No. 0607-0942. While the wholesale portion of that program will be collapsed into the AWTS, we will continue to ask only the additional detailed expense questions every 5 years. These detailed expense questions are only applicable to the merchant wholesale establishments, excluding manufacturers' sales branches and offices. Additionally, the 2012 AWTS will collect data on sales taxes, which is done once every 5 years.
The Bureau of Economic Analysis (BEA) uses the data to estimate the change in private inventories component of gross domestic product (GDP) and output in both the benchmark and annual input-output (I-O) accounts and GDP by industry. Data on sales taxes, which are collected on this survey quinquennially, are also used to prepare estimates of GDP by industry and to derive industry output for the I-O accounts. Data on detailed operating expenses, which will now be collected on this survey quinquennially, are used to produce national estimates of value added, gross output, and intermediate inputs and serve as a benchmark for the annual industry accounts, which provide the control totals for the GDP-by-state accounts. The Bureau of Labor Statistics uses the data as input to its Producer Price Indexes and in developing productivity measurements. Private businesses use the estimates in computing business activity indexes. Other government agencies and businesses use the data to satisfy a variety of public and business needs such as economic market analysis, company performance, and forecasting future demands.
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 Brian Harris-Kojetin, OMB Desk Officer either by fax (202-395-7245) or e-mail (
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).
The questions on Form C-411 pertain to the legal requirements for issuing building or zoning permits in the local jurisdictions. Information is obtained on such items as geographic coverage and types of construction for which permits are issued.
We have redesigned the form to create three versions: C-411(V) for verification of coverage for jurisdictions with existing permit systems; C-411(M) for municipalities where a new permit system may have been established; and C-411(C) for counties where new permit systems may have been established.
This will clarify the instructions and the information requested in each of these situations but will not affect respondent burden.
The appropriate form is sent to a jurisdiction when we have reason to believe that a new permit system has been established or an existing one has changed. This is based on information from a variety of sources including survey respondents, regional councils and our own efforts to keep abreast of changes in corporate status.
We use the information to verify the existence of new permit systems or changes to existing systems. Based on the information, we add new permit-issuing places to the universe, delete places no longer issuing permits, and make changes to the universe to reflect those places that have merged.
Failure to maintain the universe of permit-issuing places would result in deficient samples and inaccurate statistics. This in turn jeopardizes the accuracy of the above mentioned economic indicators. These indicators are closely monitored by the Board of Governors of the Federal Reserve System and other economic policy makers because of the sensitivity of the housing industry to changes in interest rates.
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 Brian Harris-Kojetin, OMB Desk Officer either by fax (202-395-7245) or e-mail (
A request has been submitted to the Foreign-Trade Zones Board (the Board) by the Indianapolis Airport Authority, grantee of FTZ 72, requesting manufacturing authority on behalf of Brevini Wind USA, Inc. (Brevini), to manufacture wind turbine gear boxes under FTZ procedures within FTZ 72. The application was submitted pursuant to the provisions of the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the regulations of the Board (15 CFR part 400). It was formally filed on August 11, 2011.
The Brevini facility (approximately 400 employees, 20 acres) is located at 2400 Priority Way, within the Muncie Delaware County Park One Industrial Park in Yorktown, Indiana. The facility is used to manufacture and repair wind turbine gear boxes and related winches (up to 2,000 units of each per year) for the U.S. market and export. Components and materials sourced from abroad (representing 25% of the value of the finished products) include: parts of gear boxes, seals (rubber, metal), fasteners, pumps, filters, valves, bearings, shafts, gears, parts of gear boxes, clutches, brakes, cooling units, covers, discs, flanges, housings, sprockets, heating units, hoses, hydraulic parts, lubrication units, pinions, planet carriers, reduction stages, rotor lock discs, and electric motors (duty rate ranges from free to 5.8%).
FTZ procedures could exempt Brevini from customs duty payments on the foreign materials and components used in export production. The company
In accordance with the Board's regulations, Pierre Duy of the FTZ Staff is designated examiner to evaluate and analyze the facts and information presented in the application and case record and to report findings and recommendations to the Board.
Public comment is invited from interested parties. Submissions (original and 3 copies) shall be addressed to the Board's Executive Secretary at the address below. The closing period for receipt of comments is October 17, 2011. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period to November 1, 2011.
A copy of the application will be available for public inspection at the Office of the Executive Secretary, Foreign-Trade Zones Board, Room 2111, U.S. Department of Commerce, 1401 Constitution Avenue, NW., Washington, DC 20230-0002, and in the “Reading Room” section of the Board's Web site, which is accessible via
For further information, contact Pierre Duy at
International Trade Administration, Department of Commerce.
Notice.
The U.S. Department of Commerce, International Trade Administration (ITA), Aerospace & Defense Technologies Team and the U.S. Commercial Service in Seoul (CS Korea) are organizing an Aerospace Executive Service Trade Mission (AESTM) to Seoul in conjunction with the Seoul ADEX 2011 (International Aerospace & Defense Exhibition) (
The AESTM, to be led by a senior official of the Department of Commerce, will include representatives from a variety of U.S. aerospace and defense industry manufacturers and service providers. These mission participants will be introduced to international agents, distributors and end-users whose capabilities are targeted to each U.S. participant's needs. Mission participants will also be briefed by key local industry players and Joint U.S. Military Affairs Group—Korea (JUSMAG-K) who can advise on local market conditions and opportunities.
The Republic of Korea (Korea) is an economic leader in East Asia. Korea is the 7th largest market for U.S. exports as well as the 9th largest market for U.S. aerospace exports with $3.0 billion of U.S. aerospace exports in 2010. Korea is a growing market for the aerospace and defense industry, with U.S. aerospace exports growing 51% from 2004 and 2010. With the world's sixth largest military, and continued spending for new weapon systems as part of its defense modernization program, Korea continues to attract the interest of U.S. defense suppliers. In addition to its traditional focus on air power, Seoul ADEX 2011 will also incorporate land forces technology.
Seoul ADEX is one of the world's premier aerospace and defense technology events. The 2009 ADEX show was the largest to date and featured 273 exhibitors from 27 countries, 72 VIPs from 41 countries, and approximately 20,000 trade visitors. Encompassing all civil and military sectors of the international aerospace and ground support industry, Seoul ADEX is the foremost platform for companies to showcase their products and services in the region. Attendees and visitors to the Seoul ADEX include foreign and Korean VIPs, government officials, senior company managers, and high-level executives involved in the aerospace and defense market in Korea and the rest of the region.
With a close working relationship between the U.S. and Korean governments and private aerospace and defense companies, the AESTM service at this major aerospace and defense show will assist American companies in making important contact with the industry's key players in this region.
The U.S.-Korea Trade Agreement (KORUS) would provide significant commercial opportunities to U.S. aerospace exporters, including duty-free treatment for all U.S. aerospace exports to Korea within three years of implementation of KORUS (Korean aerospace tariffs currently average 3.5 percent, ranging up to 8 percent).
The goal of the AESTM at the Seoul ADEX 2011 is to facilitate an effective presence for small- and medium-sized companies while combining aspects of a trade mission, such as one on one pre-scheduled business-to-business meetings, trade show participation, and networking activities, in one package.
The AESTM Program enables U.S. aerospace companies to familiarize themselves with this important trade fair, to conduct market research and to explore export opportunities through pre-arranged meetings with potential partners. AESTM participants will be supported by knowledgeable Commercial Service specialists focused on furthering their company-specific objectives.
Participants will have individual company kiosk space within the U.S. Pavilion where they can display company literature and conduct meetings with visitors to the air show. Company information and literature will be forwarded by the companies to CS Korea in advance whereupon CS Korea will search for relevant partners and coordinate logistics with respect to arranging meetings for each participant at the show. Prior to the end of the AESTM program, CS Korea staff will undertake a debriefing session with mission participants as well as counsel and coordinate with them on appropriate follow-up procedures.
In summary, participation in the AESTM Program includes:
• Pre-show Outreach and Press Release by CS Korea;
• Pre-show breakfast briefing on October 17, 2011, by CS Korea and other inter agencies in American Embassy such as JUSMAG-K;
• Daily Transportation between AESTM hotel and ADEX 2011 and vice versa;
• Pre-scheduled meetings with potential partners, distributors, and/or end users and on-site meeting if requested;
• One show entry pass per company representative;
• Participation in U.S. Exhibitors Welcome Reception on October 17 by the show organizer;
• One invitation to the U.S. VIP reception per participant by the U.S. Ambassador to Korea;
• Access to Official U.S. Pavilion/Business Information Office amenities, including meeting area;
• Individual kiosk space within the U.S. Pavilion for display of company literature, poster and meetings;
• Copy of the official ADEX 2011 Air Show Exhibitor's Directory;
• Copy of AES Trade Mission Directory;
• On-site AESTM program coordinator.
Mission Timetable: ITA Aerospace & Defense Technologies Team members arrive in Seoul prior to the show. The proposed program is below:
All parties interested in participating in the Aerospace Executive Service Trade Mission must complete and submit an application for consideration by the Department of Commerce. All applicants will be evaluated on their ability to meet certain conditions and best satisfy the selection criteria as outlined below. A minimum of 8 and a maximum of 11 companies will be selected to participate in the mission from the applicant pool. U.S. companies already doing business in Korea as well as U.S. companies seeking to enter the market for the first time are encouraged to apply.
After a company has been selected to participate in the mission, a payment to the Department of Commerce in the form of a participation fee is required. The participation fee will be $5,000 for a small or medium-sized enterprise (SME)
• An applicant must submit a completed and signed mission application and supplemental application materials, including adequate information on the company's products and/or services, primary market objectives, and goals for participation. If the U.S. Department of Commerce receives an incomplete application, the Department may reject the application, request additional information, or take the lack of information into account when evaluating the applications.
• Each applicant must also certify that the products and services it seeks to export through the mission are either produced in the United States, or, if not, marketed under the name of a U.S. firm and have at least 51 percent U.S. content of the value of the finished product or service.
• Suitability of the company's products or services to the Korean market.
• Consistency of the applicant's goals and objectives with the stated scope and design of the mission.
• Applicant's potential for business in Korea, including likelihood of exports resulting from the mission.
Referrals from political organizations and any documents containing references to partisan political activities (including political contributions) will be removed from an applicant's submission and not considered during the selection process.
Mission recruitment will be conducted in an open and public manner, including publication in the
Recruitment for the mission will begin August 8, 2011, and conclude August 26, 2011. The U.S. Department of Commerce will review applications and make selection decisions on a rolling basis, and will inform all applicants of selection decisions as soon as possible. Applications received after the August 26 deadline will be considered only if space and scheduling constraints permit.
Jason Sproule, Senior International Trade Specialist, Irvine U.S. Export Assistance Center, 2302 Martin Court, Irvine, California 92612,
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of receipt and request for comment.
Notice is hereby given that NMFS has received an application from the Washington Department of Fish and Wildlife (WDFW), for a direct take permit pursuant to the Endangered Species Act of 1973, as amended (ESA). The duration of the proposed Permit is ten years. This document serves to notify the public of the availability for comment of the permit application. All comments received will become part of the public record and will be available for review pursuant to the ESA.
Written comments on the application must be received at the appropriate address or fax number (see
Written responses to the application should be sent to Brian Allee, National Marine Fisheries Services, Salmon Management Division, 1201 N.E. Lloyd Boulevard, Suite 1100, Portland, OR 97232. Comments may also be submitted by e-mail to:
Brian Allee at (503) 231-2009 or
Chinook salmon (
Chum salmon (
Coho salmon (
Steelhead (
Section 9 of the ESA and Federal regulations prohibit the “taking” of a species listed as endangered or threatened. The term “take” is defined under the ESA to mean harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct. NMFS may issue permits to take listed species for any act otherwise prohibited by section 9 for scientific purposes or to enhance the propagation or survival of the affected species, under section 10(a)(1)(A) of the ESA. NMFS regulations governing permits for threatened and endangered species are promulgated at 50 CFR 222.307.
In an application dated May 2, 2011, and updated on May 23, 2011, the Washington Department of Fish and Wildlife proposes to install weirs in the Grays River and Elochoman River, both tributaries of the Columbia River, and the Coweeman River, a tributary of the Cowlitz River in southwest Washington State. The weir on the Grays River would represent a re-location of an existing weir. The weirs are intended to address adult salmonid monitoring needs outlined in the Lower Columbia Fish Recovery Board's Watershed Conservation Plan through development of accurate and precise abundance estimates, and remove hatchery fall Chinook salmon from naturally spawning tule fall Chinook salmon populations.
This notice is provided pursuant to section 10(c) of the ESA. NMFS will evaluate each application, associated documents, and comments submitted thereon to determine whether the applications meet the requirements of section 10(a)(1)(A) of the ESA. If it is determined that the requirements are met, the permit will be issued to WDFW for the purpose of carrying out the installation, operation, and management of the weirs. NMFS will publish a record of its final action in the
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; issuance of four Letters of Authorization.
In accordance with the Marine Mammal Protection Act (MMPA), as amended, and implementing regulations, notification is hereby given that NMFS has issued four one-year Letters of Authorization (LOAs) to take marine mammals by harassment incidental to the U.S. Navy's operation of Surveillance Towed Array Sensor System Low Frequency Active (SURTASS LFA) sonar operations to the Chief of Naval Operations, Department of the Navy, 2000 Navy Pentagon, Washington, DC 20350 and persons operating under his authority.
Effective from August 16, 2011, through August 15, 2012.
Electronic copies of the Navy's March 31, 2011, LOA application letter, the LOAs, the Navy's 2010 annual report are available by writing 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 20910-3225, by telephoning the contact listed here (see
Jeannine Cody, Office of Protected Resources, NMFS (301) 427-8401.
Section 101(a)(5)(A) of the MMPA (16 U.S.C. 1361
Authorization may be granted for periods of five years or less if NMFS finds that the taking will have a negligible impact on the species or stock(s), and will not have an unmitigable adverse impact on the availability of the species or stock(s) for certain subsistence uses. In addition, NMFS must prescribe regulations that include permissible methods of taking and other means effecting the least practicable adverse impact on the species and its habitat, and on the availability of the species for subsistence uses, paying particular attention to rookeries, mating grounds, and areas of similar significance. The regulations also must include requirements pertaining to the monitoring and reporting of such taking.
Regulations governing the taking of marine mammals incidental to the U.S. Navy's operation of SURTASS LFA sonar were published on August 21, 2007 (72 FR 46846) and remain in effect through August 15, 2012. They are codified at 50 CFR part 216 subpart Q. These regulations include mitigation, monitoring, and reporting requirements for the incidental taking of marine mammals by the SURTASS LFA sonar system. For detailed information on this action, please refer to the August 21, 2007
NMFS received an application from the U.S. Navy for four LOAs, one covering the USNS VICTORIOUS (T-AGOS 19), one covering the USNS ABLE (T-AGOS 20), one covering the USNS EFFECTIVE (T-AGOS 21), and one covering the USNS IMPECCABLE (T-AGOS 23), under the regulations issued on August 21, 2007 (72 FR 46846). (
In compliance with NMFS' 2007 SURTASS LFA sonar regulations, the Navy submitted an annual report (No. 3) for SURTASS LFA sonar operations during 2009-2010. The Navy also submitted a comprehensive report on SURTASS LFA sonar operations and the mitigation and monitoring activities conducted under the LOAs issued under its previous rule for the 2002 through 2007 period. A copy of these reports can be viewed and/or downloaded at:
In accordance with the current SURTASS LFA sonar regulations (50 CFR 216.186), the Navy has submitted classified quarterly mission reports. Under the first three LOA periods in the current rule, the Navy has not exceeded the take authorized by NMFS. Based on the submitted quarterly reports for the 2010 LOAs, NMFS does not expect the Navy to exceed authorized take (requested and authorized) based on the Navy's 2010 application. The annual report (No. 4) for the 2010-2011 LOAs is due on September 30, 2011. Upon receipt, NMFS will post this annual report at
NMFS has issued four LOAs to the U.S. Navy, authorizing the incidental harassment of marine mammals, incidental to operating the four SURTASS LFA sonar systems for training, testing and routine military operations. Issuance of these four LOAs is based on findings, described in the preamble to the final rule (72 FR 46846, August 21, 2007) and supported by information contained in the Navy's required reports on SURTASS LFA sonar, that the activities described under these four LOAs will have no more than a negligible impact on marine mammal stocks and will not have an unmitigable adverse impact on the availability of the affected marine mammal stocks for subsistence uses.
These LOAs remain valid through August 15, 2012, provided the Navy remains in conformance with the conditions of the regulations and the LOAs, and the mitigation, monitoring, and reporting requirements described in 50 CFR 216.184-216.186 (72 FR 46846, August 21, 2007) and in the LOAs are undertaken.
Department of the Navy, DoD.
Notice.
The Ocean Research Advisory Panel (ORAP) is soliciting nominations for new members.
Nominations should be submitted no later than September 15, 2011.
Nominations should be submitted via e-mail to CDR Stephen D. Martin, U.S. Navy, at
Dr. Charles L. Vincent, Office of Naval Research, 875 North Randolph Street Suite 1425, Arlington, VA 22203-1995, telephone 703-696-4120.
ORAP is a statutorily mandated federal advisory committee that provides senior advice to the National Ocean Research Leadership Council (NORLC), the governing body of the National Oceanographic Partnership Program (NOPP). Under the National Ocean Policy, the National Ocean Council (NOC) Deputy-level Committee has assumed the responsibilities of the NORLC. ORAP provides independent advice and guidance to the NOC. The NOC routinely provides guidance and direction on the areas for which it seeks advice and recommendations from ORAP. ORAP also advises on selection of projects and allocation of funds for NOPP.
The panel meets for at least one two-day public meeting per year, but possibly meets three times per year, on dates agreeable by the panel members; attendance at meetings is expected. Intercessional activities not involving formal decisions or recommendations may be carried out electronically, and the panel may establish sub-panels composed of less than full membership to carry out panel duties.
Process and Deadline for Submitting Nominations: Submit nominations via e-mail to CDR Stephen Martin (
In accordance with section 7903 of title 10, United States Code, the short-list of candidates will then be submitted for approval by the Secretaries of the Navy and Defense who are the appointing officials for their consideration. At this time, six openings are envisioned on the Panel and the final set of nominees will seek to balance a range of geographic and sector representation and experience. Applicants must be U.S. citizens. Successful nominees must provide detailed information required to evaluate potential conflicts of interest. Typically the time required to achieve the final appointments to the Panel is 10-12 months. Members of the Panel serve as Special Government Employees who volunteer their time but whose travel costs for Panel business is provided by the Government. ORAP is a Federal Advisory Committee and operates under the principles of open and transparent development of advice to the government.
The selection of new panel members will be based on the nominee's qualifications to provide senior advice to the NOC; the availability of the potential panel member to fully participate in the panel meetings; absence of any conflict of interest or appearance of lack of impartiality, and lack of bias; the candidates' areas of expertise and professional qualifications; and achieving an overall balance of different perspectives, geographic representation, and expertise on the panel.
Department of Education.
Comment Request.
The Department of Education (the Department), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed and continuing collection of information. This helps the Department assess the impact of its information collection requirements and minimize the reporting burden on the public and helps the public understand the Department's information collection requirements and provide the requested data in the desired format. The Director, Information Collection Clearance Division, Privacy, Information and Records Management Services, Office of Management, invites comments on the proposed information collection requests as required by the Paperwork Reduction Act of 1995.
Interested persons are invited to submit comments on or before October 17, 2011.
Comments may be submitted electronically to
Section 3506 of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35) requires that Federal agencies provide interested parties an early opportunity to comment on information collection requests. The Director, Information Collection Clearance Division, Privacy, Information and Records Management Services, Office of Management, publishes this notice containing proposed information collection requests at the beginning of the Departmental review of the information collection. The Department of Education is especially interested in public comment addressing the following issues: (1) Is the collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology.
As required by the Paperwork Reduction Act of 1995, this notice requests comments on the 2012-2013 versions of the forms used by individuals applying for Federal student aid including the Free Application for Federal Student Aid (FAFSA) and the Student Aid Report (SAR).
The determination of need and eligibility are for the following Title IV, HEA, Federal student financial assistance programs: the Federal Pell Grant Program; the Campus-Based programs (Federal Supplemental Educational Opportunity Grant (FSEOG), Federal Work-Study (FWS), and the Federal Perkins Loan Program); the William D. Ford Federal Direct Loan Program; the Teacher Education Assistance for College and Higher Education (TEACH) Grant; and the Iraq and Afghanistan Service Grant.
Federal Student Aid, an office of the U.S. Department of Education (hereafter “the Department”), developed an application process to collect and process the data necessary to determine a student's eligibility to receive Title IV, HEA program assistance. The application process involves an applicant's submission of the
The Department seeks OMB approval of all application components as a single “collection of information”. The aggregate burden will be accounted for under OMB Control Number 1845-0001. The specific application components, descriptions and submission methods for each are listed in Table 1.
This information collection also documents an estimate of the annual public burden as it relates to the application process for Federal student aid. The Applicant Burden Model (ABM), measures applicant burden through an assessment of the activities each applicant conducts in conjunction with other applicant characteristics. The ABM has been designed to accurately describe, in terms of burden, the average applicant's experience. Key determinants of the ABM include:
• The total number of applicants that will potentially apply for Federal student aid;
• How the applicant chooses to complete and submit the FAFSA,
• How the applicant chooses to submit any corrections and/or updates (
• The type of SAR document the applicant receives (paper SAR, SAR acknowledgment, or the eSAR);
• The formula applied to determine the applicant's EFC (full need analysis formula, Simplified Needs Test or Automatic Zero); and
• The average amount of time involved in preparing to complete the application.
The ABM is largely driven by the number of potential applicants for the application cycle. The total application projection for 2012-2013 is based upon two factors—estimates of the total enrollment in all degree-granting institutions and the percentage change in FAFSA submissions for the last completed application cycle. The ABM is also based on the application options available to students and parents. The Department accounts for each application component based on web trending tools, survey information, and other Department data sources.
For 2012-2013, the Department is reporting a net burden reduction of 2,881,475 hours. The reduction is a reflection of the effects of simplifying FAFSA on the Web, which is utilized by the majority of applicants who apply for aid. For example, data reported in the 2011-2012 burden estimates reflected that an applicant that completed FOTW and had the ability to use a renewal version of the application (see FOTW—Renewal component in Table 1) would take approximately 1.20 hours (72 minutes). The most recent statistics reflect that on average that renewal applicant would actually spend about 1.08 hours (64.8 minutes).
Updated completion times were calculated for each component and have been used to estimate the burden, excluding the change in the applicant volume. The results demonstrate that the burden for all applicants would have decreased by almost 13 percent or 4,181,899 hours, if the application volume had remained constant.
If the Department had not simplified the application process, thus reducing the time required to complete the FAFSA, the new burden estimates would only need to account for the change in applicants. The 4.63% increase in applicants would result in an increase in burden of 1,300,424 hours.
Accounting for both the increase in total applicants and the decrease in individual applicant burden, the net change is an overall decrease of almost 9 percent or 2,881,475 hours. The following Table shows the net burden change and total cost for applicants. The change in total annual responses is also listed in the Table. Total annual responses include the original FAFSA submission, which is counted as one response for each applicant; and also includes a response for any subsequent correction generated by the applicant.
The Department is proud that efforts to simplify the FAFSA submission process have resulted in a continued decrease in the burden associated with the application process, even as the Department serves more students each year. The results demonstrate the significant improvements that have been made to the application process. The Department believes that these changes will contribute to more students completing the FAFSA and will assist more students with their pursuit of postsecondary education.
The U.S. Department of Energy.
Notice of availability.
The U.S. Department of Energy (DOE) is creating the American Assured Fuel Supply (AFS), a reserve of low enriched uranium (LEU) to serve as a backup fuel supply for foreign recipients to be supplied through U.S. persons, or for domestic recipients, in the event of a fuel supply disruption. DOE is committed to making the AFS available to eligible recipients in the case of supply disruptions in the nuclear fuel market. This effort supports DOE's nuclear nonproliferation objectives by supporting civil nuclear energy development while minimizing proliferation risks. This notice announces the availability of the AFS and the DOE policy and process for eligible recipients to purchase LEU from the AFS.
Rich Goorevich, Senior Policy Advisor, Office of Nonproliferation and International Security, National Nuclear Security Administration, U.S. Department of Energy, 1000 Independence Ave., SW., Washington, DC 20585,
The Secretary of Energy is authorized pursuant to the Atomic Energy of 1954, as amended (Pub. L. 83-703), and the Nuclear Non-Proliferation Act of 1978 (NNPA) (Pub. L. 95-242) to encourage the widespread use of atomic energy for peaceful purposes, and to enter into and distribute nuclear material in cooperation with other nations where appropriate safeguard measures are in place to ensure the material is properly controlled and used for peaceful purposes. Consistent with those responsibilities and missions, in 2005, Secretary of Energy Samuel Bodman announced that the United States would set aside 17.4 metric tons of surplus highly-enriched uranium (HEU) to be down-blended to LEU and held in reserve to address disruptions in the nuclear fuel supply of foreign recipients that have good nonproliferation credentials. This initiative was originally referred to as the Reliable Fuel Supply Initiative, and more recently renamed the American Assured Fuel Supply (AFS).
Congress appropriated $49,540,000 in the Consolidated Appropriations Act, 2008 (Pub. L. 110-161) to fund a portion of the International Atomic Energy Agency's (IAEA) International Nuclear Fuel Bank (INFB) initiative, which is envisioned as an LEU reserve that will be administered by the IAEA and that will serve as a back-up for global supply disruptions. Congress, in the Explanatory Statement accompanying the House Appropriations Committee Print (which in this Act was given the same effect as a joint explanatory statement), noted that the INFB freed up the LEU set-aside initiated pursuant to Secretary Bodman's 2005 announcement, and recommended DOE also “allow U.S. interests to purchase uranium fuel from the Reliable Fuel Supply [now the AFS] in the event of supply disruption.” (H. Approp. Cmte. Print at 592.)
The AFS is intended to complement the INFB. Specifically, the AFS will support countries that pursue peaceful civilian nuclear programs by providing a back-up source of fuel in the event of a supply disruption that threatens the normal operation of their programs. In addition, in accordance with the congressional request, the AFS will be available to address supply disruptions affecting domestic nuclear power plants. The AFS reserve is modest in size and designed to not disrupt or replace market mechanisms. Rather, it is to be drawn upon only in the event of
The National Nuclear Security Administration (NNSA), a semi-autonomous agency within DOE, is responsible for the administration and implementation of the AFS. Down-blending of the 17.4 metric tons of surplus HEU began in 2007 and is scheduled for completion in 2012. When complete, the down-blending will result in approximately 290 metric tons of LEU, of which approximately 230 metric tons will form the reserve. The remainder will be used to pay for the down-blending and processing costs.
For additional information on the potential environmental impacts of DOE's ongoing HEU disposition activities and the AFS initiative in particular, please see “Amended Record of Decision: Disposition of Surplus Highly Enriched Uranium Environmental Impact Statement,” also published in today's
DOE intends to implement the following policies and processes to evaluate requests for purchases and the sale of LEU from the AFS.
The sale of LEU from the AFS will be conducted consistent with the policies and guidance in the “Secretary of Energy's 2008 Policy Statement on Management of Department of Energy's Excess Uranium Inventory” (March 11, 2008) and the DOE Excess Uranium Inventory Management Plan. In all cases, the U.S. person purchasing the LEU must meet all applicable licensing requirements and other authorizations for the possession, use, and transportation of nuclear materials. If the AFS is used to supply a foreign recipient, the U.S. person exporting the LEU must obtain or possess an appropriate license from the Nuclear Regulatory Commission. DOE will establish the price of the LEU at the time of delivery using commercially acceptable market indices, to the extent practical, and ensure that reasonable value is obtained. All proceeds from the sale will be deposited in the U.S. Treasury.
The U.S. person purchasing LEU from the AFS will be solely responsible for transportation, insurance, safety, and liability issues once title to the LEU transfers. The LEU will be in the form of uranium hexafluoride at a specific assay (generally 4.95% U-235); DOE will assume no responsibility beyond certification that the LEU meets ASTM International, formerly American Society for testing (ASTM), specifications and is of a certain quantity and assay.
DOE will respond to requests within a reasonable time period, consistent with the requester's needs, the circumstances surrounding the request, and other relevant and necessary governmental interests. DOE reserves the right to prioritize requests, and to seek additional information as necessary to review the request.
DOE will establish an AFS Committee, which will be responsible for reviewing requests for LEU in the AFS and make recommendations to the Secretary of Energy on the sale of LEU from the AFS. The Committee will be chaired by the NNSA Office of Nonproliferation and International Security and include representatives from NNSA's Office of Fissile Material Disposition, DOE's Office of Nuclear Energy, DOE's Office of Environmental Management, and the DOE and NNSA Offices of General Counsel. For transactions that trigger the requirements of section 3112(d) of the USEC Privatization Act, DOE will assess the impact of a sale from the AFS on the domestic uranium market, and will provide its recommendation to the Secretary to make the requisite determination that the transfer will not have an adverse material impact on the domestic uranium enrichment, conversion, or mining industries.
DOE will receive concurrence from the Department of State, and consult with the Department of Commerce and the Department of Defense, prior to the approval and sale of AFS material to a U.S. person for use in a foreign country. For all sales from the AFS, DOE will notify other federal agencies (e.g., U.S. Nuclear Regulatory Commission, Department of State, Department of Commerce and the Department of Defense) prior to the sale, as appropriate.
The LEU for the AFS will come from down-blending 17.4 metric tons of HEU. When complete, the down-blending will result in approximately 290 metric tons of LEU, of which approximately 230 metric tons will form the reserve. The remainder will be used to pay for the down-blending and processing costs. This will leave the AFS with approximately 6 reloads for an average 1000 MW reactor. The down-blending will be completed in 2012.
As of the publication of this notice, most of the down-blending for the AFS has been completed. DOE will begin accepting requests for purchases of the AFS material pursuant to the above-stated policy and process at this time.
National Nuclear Security Administration, U.S. Department of Energy.
Amended Record of Decision.
The National Nuclear Security Administration (NNSA), a semi-autonomous agency within the U.S. Department of Energy (DOE), is amending the August 5, 1996, Record of Decision (the 1996 ROD) (61 FR 40619) for the
For further information about the Surplus HEU Disposition Program and the American Assured Fuel Supply, contact: Robert M. George, HEU Disposition Program Manager, Office of Fissile Materials Disposition, National Nuclear Security Administration, U.S. Department of Energy, 1000 Independence Avenue, SW., Washington, DC 20585; (202) 586-1530.
For general information concerning the DOE National Environmental Policy Act (NEPA) process, contact: Ms. Carol M. Borgstrom, Director, Office of NEPA Policy and Compliance (GC-54), U.S. Department of Energy, 1000 Independence Avenue, SW., Washington, DC 20585; (202) 586-4600; leave a message at (800) 472-2756; or send an e-mail to
Following the end of the Cold War, the United States identified a surplus of weapons-usable HEU. HEU has a concentration of 20 percent or more of uranium-235, which is a fissile material that can be used to make nuclear weapons. In 1994, the United States declared 174 metric tons of HEU to be surplus to defense needs. In the HEU EIS, DOE analyzed alternatives to disposition a nominal 200 metric tons of surplus HEU in order to reduce the threat of nuclear weapons proliferation in an environmentally safe manner by reducing stockpiles of weapons-usable fissile materials, setting a nonproliferation example for other nations, and allowing peaceful beneficial re-use of the material.
Alternatives analyzed in the HEU EIS involved the continued storage of HEU or mixing the surplus HEU with other uranium materials (LEU, natural uranium, or depleted uranium) to lower the concentration of uranium-235 so that it is not weapons-usable, a process called “down-blending.” DOE analyzed a range of scenarios regarding how much HEU would be down-blended (to approximately four percent uranium-235) for use in commercial reactors as opposed to blending to approximately 0.9 percent uranium-235 for disposal as low-level radioactive waste (LLW).
The HEU EIS evaluated the potential environmental impacts of down-blending at up to four existing U.S. facilities: DOE's Y-12 National Security Site in Oak Ridge, Tennessee; DOE's Savannah River Site (SRS) in Aiken, South Carolina; The Babcock & Wilcox Company (now B&W Nuclear Operations Group, Inc. [B&W NOG]) in Lynchburg, Virginia; and Nuclear Fuel Services, Inc., (NFS) in Erwin, Tennessee. These sites were considered because they have technically viable HEU conversion and blending capabilities and could down-blend surplus HEU to LEU for use in commercial fuel or for disposal as waste. B&W NOG and NFS, which is now owned by B&W NOG, are both licensed by the U.S. Nuclear Regulatory Commission (NRC) to process HEU.
As described in the 1996 ROD (61 FR 40619; August 5, 1996), DOE planned to down-blend as much surplus HEU as possible (then assumed to be up to 85 percent of the 200 metric tons,
In the fall of 2005, up to an additional 200 metric tons of HEU were declared surplus to nuclear weapon program needs. Of this, up to 160 metric tons were designated for the U.S. Naval Reactors Program for use as reactor fuel. However, based on historical data, DOE anticipated that up to approximately 32 metric tons of this HEU might be unsuitable for use as naval reactor fuel, and proposed to down-blend rejected material to LEU. Another 20 metric tons of the 200 metric ton declaration were designated for down-blending. Down-blending this HEU began in 2009, consistent with the 1996 ROD.
In 2005, the Secretary of Energy announced that DOE would set aside a stockpile of LEU derived from 17.4 metric tons of surplus HEU to be held in reserve to address potential disruptions in the nuclear fuel supply of eligible foreign recipients that meet certain nonproliferation criteria. In the Explanatory Statement accompanying the House Appropriations Committee Print for the Consolidated Appropriations Act, 2008 (Pub. L. 110-161), which was given the same effect as a joint explanatory statement, Congress recommended that DOE also make the LEU available to domestic reactors in the event of a supply disruption. This effort to establish and manage an LEU reserve was originally referred to as the Reliable Fuel Supply Initiative, but now is called the American Assured Fuel Supply (AFS).
NNSA proposes to implement the AFS initiative and modify certain elements of the existing surplus HEU disposition program:
(1)
Down-blending the 17.4 metric tons of surplus HEU commenced in 2007 and is scheduled to be completed by 2012.
The sale of LEU from the AFS will be conducted consistent with the policies and guidance in the “Secretary of Energy's 2008 Policy Statement on Management of Department of Energy's Excess Uranium Inventory” (March 11, 2008) and the DOE Excess Uranium Inventory Management Plan.
The U.S. persons purchasing LEU from the AFS will be solely responsible for transportation, insurance, safety, and liability issues once title is transferred. The LEU will be in the form of uranium hexafluoride (UF
For additional information on the policies and process for use of the AFS, please see “Notice of Availability: American Assured Fuel Supply,” also published in today's
(2)
(3)
Down-blending of HEU from foreign or domestic research reactor spent nuclear fuel would occur only if DOE decides to chemically process, (reprocess) that fuel, which would separate the HEU from other components of the fuel. DOE currently plans to accept research reactor spent nuclear fuel through 2019, as announced in amended RODs (69 FR 69901; December 1, 2004 and 74 FR 4173; January 23, 2009) for the
Associated reprocessing operations are evaluated in the
The Council on Environmental Quality (CEQ) regulations implementing NEPA at 40 CFR 1502.9(c) require Federal agencies to prepare a supplement to an EIS when an agency makes substantial changes in the proposed action that are relevant to environmental concerns or when there are significant new circumstances or information relevant to environmental concerns and bearing on the proposed action or its impacts. DOE NEPA Implementing Procedures at 10 CFR 1021.314(c) direct that a supplement analysis be prepared to assist in making that determination when it is unclear whether a supplement to an EIS is required. NNSA prepared the
In the HEU Supplement Analysis, NNSA analyzed the potential environmental impacts from the ongoing HEU disposition program, as well as potential impacts from port activities and transportation of LEU by ship across the global commons (ocean) to support the proposal to make LEU available to reactors in foreign countries. The Supplement Analysis did not identify an end date for implementation of the proposed activities because, as noted above, receipt of surplus HEU into the disposition program is ongoing.
The Supplement Analysis assumed the continued availability of the four facilities identified in the HEU EIS for continued blend down of HEU.
The potential impacts would remain similar to those analyzed in the HEU EIS and Supplement Analysis. NNSA expects that there would be changes over time due to factors such as normal population fluctuations among work forces and in communities near the involved facilities. These changes would not create any significant new circumstances or information related to the proposed actions. Activities would continue in existing, appropriately licensed or approved facilities. Potential environmental impacts would remain small and within applicable regulatory and other limits.
For AFS, which was not envisioned in the HEU EIS, potential impacts of the domestic program would be identical to those associated with the ongoing HEU disposition program. Prior to delivery to a reactor, one or more commercial nuclear fuel fabrication facilities would accommodate the LEU for the AFS reserve in its working inventory and existing storage capacity. This activity would be consistent with the facilities' existing NRC operating licenses and would not require additional construction. In addition, as analyzed in the Supplement Analysis, transportation activities to provide LEU to foreign reactors would add small potential impacts associated with transfer activities at the port of departure and overseas shipments through the global commons.
Disposal of certain HEU materials as LLW would result in potential impacts associated with transportation and disposal. Nevada National Security Site (NNSS) is the most likely disposal site for this LLW. The HEU EIS included an analysis of transporting 0.9 percent LEU to NNSS for disposal. Without down-blending, the low-equity HEU materials would have a higher concentration of uranium-235, but with approved packaging and other required controls, the potential impacts would be similar to the transportation and disposal of 0.9 percent LEU at NNSS. DOE also has analyzed transportation of low-level radioactive wastes to NNSS in the
Consistent with the decisions announced in the ROD issued pursuant to the HEU EIS (61 FR 40619; August 5, 1996), NNSA will continue ongoing surplus HEU disposition program activities. NNSA has decided to also make the following changes to the HEU disposition program:
(1) Implement the AFS, including storage of LEU and, as needed, transportation of the LEU by ship across the ocean for use in foreign reactors.
(2) Dispose of certain HEU materials as low-level radioactive waste without prior down-blending if the materials meet applicable waste acceptance criteria.
(3) Increase the quantity of HEU available for down-blending and continue down-blending operations beyond the 20 years anticipated in the 1996 HEU EIS.
NNSA will use all practicable means to avoid or minimize environmental harm when implementing the actions described in this Amended ROD. NNSA operates pursuant to a number of Federal laws including environmental laws, DOE Orders, and Federal, State, and local controls and agreements. Also, the commercial activities associated with the down-blending, transportation, and storage of HEU and LEU are regulated by the NRC and the Department of Transportation. Many of these requirements mandate actions that serve to mitigate potential adverse environmental impacts.
For transactions that trigger the requirements of section 3112(d) of the United States Enrichment Corporation Privatization Act, DOE will assess the impact of a release from the AFS on the domestic market, and will provide its recommendation to the Secretary to make the appropriate determination as to whether the transfer will have an adverse material impact on the domestic uranium enrichment, conversion, or mining industries.
Department of Energy (DoE).
Notice of Open Meeting.
This notice announces a meeting of the Environmental Management Site-Specific Advisory Board (EM SSAB), Northern New Mexico. The Federal Advisory Committee Act (Pub. L. 92-463, 86 Stat. 770) requires that public notice of this meeting be announced in the
Wednesday, September 28, 2011; 1 p.m.-7 p.m.
Sagebrush Inn and Conference Center, 1508 Paseo de Pueblo Sur, Taos, New Mexico.
Menice Santistevan, Northern New Mexico Citizens' Advisory Board (NNMCAB), 1660 Old Pecos Trail, Suite B, Santa Fe, NM 87505. Phone (505) 995-0393; Fax (505) 989-1752 or
Public Participation: The EM SSAB, Northern New Mexico, welcomes the attendance of the public at its advisory committee meetings and will make every effort to accommodate persons with physical disabilities or special needs. If you require special accommodations due to a disability, please contact Menice Santistevan at least seven days in advance of the meeting at the telephone number listed above. Written statements may be filed with the Board either before or after the meeting. Individuals who wish to make oral statements pertaining to agenda items should contact Menice Santistevan at the address or telephone number listed above. Requests must be received five days prior to the meeting and reasonable provision will be made to include the presentation in the agenda. The Deputy Designated Federal Officer is empowered to conduct the meeting in a fashion that will facilitate the orderly conduct of business. Individuals wishing to make public comments will be provided a maximum of five minutes to present their comments.
Minutes: Minutes will be available by writing or calling Menice Santistevan at the address or phone number listed above. Minutes and other Board documents are on the Internet at:
Department of Energy.
Notice of open meeting.
This notice announces a meeting of the Environmental Management Site-Specific Advisory Board (EM SSAB), Nevada. The Federal Advisory Committee Act (Pub. L. 92-463, 86 Stat. 770) requires that public notice of this meeting be announced in the
Wednesday, September 14, 2011, 4 p.m.
Atomic Testing Museum, 755 East Flamingo Road, Las Vegas, Nevada 89119.
Denise Rupp, Board Administrator, 232 Energy Way, M/S 505, North Las Vegas, Nevada 89030.
1. Update—Site-Specific Environmental Impact Statement Committee.
2. Update—Transportation Working Group.
3. Fiscal Year 2011 Work Plan Development.
4. Election of Officers.
Environmental Protection Agency.
Notice.
In compliance with the Paperwork Reduction Act (PRA) (44 U.S.C. 3501
Comments must be submitted on or before October 17, 2011.
Submit your comments, clearly identified as referring to Docket ID No. EPA-HQ-OAR-2007-1121, by one of the following methods:
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Anne-Marie C. Pastorkovich, Attorney/Advisor, Mail Code: 6406J, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460;
EPA has established a public docket for this ICR under Docket ID No. EPA-HQ-OAR-2007-1121, which is available for online viewing at
Use
Pursuant to section 3506(c)(2)(A) of the PRA, EPA specifically solicits comments and information to enable us to:
(i) 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;
(ii) 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;
(iii) enhance the quality, utility, and clarity of the information to be collected; and
(iv) 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,
You may find the following suggestions helpful for preparing your comments:
1. Explain your views as clearly as possible and provide specific examples.
2. Describe any assumptions that you used.
3. Provide copies of any technical information and/or data you used that support your views.
4. If you estimate potential burden or costs, explain how you arrived at the estimate that you provide.
5. Offer alternative ways to improve the collection activity.
6. Make sure to submit your comments by the deadline identified under
7. To ensure proper receipt by EPA, be sure to identify the Docket ID number assigned to this action in the subject line on the first page of your response. You may also provide the name, date, and
A document entitled “Proposed Supporting Statement—Part A: Recordkeepking and Reporting Related to Fuel Quality Regulations for Diesel Fuel Sold in 2001 & Later Years; for Tax-Exempt (Dyed) Highway Diesel Fuel; and Non-Road Locomotive & Marine Diesel Fuel: Renewal” has been placed in Docket No. EPA-HQ-OAR-2007-1121. This draft document provides a more detailed explanation of the Agency's estimate, which is only briefly summarized here:
There is a decrease in the total estimated respondent burden and cost compared to the currently approved ICR. Most of the decrease is because motor vehicle diesel reporting requirements are no longer applicable and because virtually all laboratory qualifications for test methods have already been submitted to, and acted upon by, EPA.
EPA will consider the comments received and amend the ICR as appropriate. The final ICR package will then be submitted to OMB for review and approval pursuant to 5 CFR 1320.12. At that time, EPA will issue another
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA or Agency) Science Advisory Board (SAB) Staff Office announces a public teleconference of the SAB Panel to discuss its draft advisory report on the interagency
The teleconference will be held on September 16, 2011 from 1 p.m. to 5 p.m. (Eastern Daylight Time).
The public teleconference will be conducted by telephone only.
Any member of the public wishing further information regarding this teleconference meeting may contact Mr. Thomas Carpenter, Designated Federal Officer (DFO), SAB Staff Office, by telephone/voice mail at (202) 564-4885; by fax at (202) 565-2098 or via e-mail
The SAB was established pursuant to the Environmental Research, Development, and Demonstration Authorization Act (ERDAA), codified at 42 U.S.C. 4365 to provide independent scientific and technical advice to the Administrator on the technical basis for Agency positions and regulations. The SAB is a Federal Advisory Committee chartered under the Federal Advisory Committee Act (FACA), 5 U.S.C., App. 2. Pursuant to FACA and EPA policy, notice is hereby given that an
The panel held a public meeting on July 12 and 13, 2011 (76 FR 115, 34977-34978 and 76 FR 131 40355) to discuss their comments on the Action Plan. The purpose of the September 16, 2011 teleconference is for the Panel to discuss their draft advisory report.
Environmental Protection Agency (EPA).
Notice.
The EPA Science Advisory Board (SAB) Staff Office announces a public teleconference of the CASAC Lead Review Panel to discuss its draft letter reviewing EPA's
The CASAC Lead Review Panel teleconference will be held on Thursday, September 15, 2011, from 12 p.m. to 3 p.m. (Eastern Time).
The public teleconference will take place by telephone only.
Any member of the public wishing to obtain general information concerning the public teleconference may contactMr. Aaron Yeow, Designated Federal Officer (DFO), via telephone at (202) 564-2050 or e-mail at
The CASAC was established pursuant to the Clean Air Act (CAA) Amendments of 1977, codified at 42 U.S.C. 7409D(d)(2), to provide advice, information, and recommendations to the Administrator on the scientific and technical aspects of issues related to the criteria for air quality standards, research related to air quality, sources of air pollution, and the strategies to attain and maintain air quality standards and to prevent significant deterioration of air quality. The CASAC is a Federal Advisory Committee chartered under the Federal Advisory Committee Act (FACA), 5 U.S.C., App. 2. The CASAC Lead Review Panel and the CASAC will comply with the provisions of FACA and all appropriate SAB Staff Office procedural policies.
Section 109(d)(1) of the CAA requires that the Agency periodically review and revise, as appropriate, the air quality criteria and the NAAQS for the six “criteria” air pollutants, including lead. EPA is currently reviewing the primary (health-based) and secondary (welfare-based) NAAQS for lead. The Lead Review Panel held a face-to-face meeting on July 20-21, 2011 (as noticed in 76 FR 36120-36121) to provide a peer review of EPA's draft
Federal advisory committees and panels, including scientific advisory committees, provide independent advice to EPA. Members of the public can submit comments for a federal advisory committee to consider as it develops advice for EPA. Input from the public to the CASAC will have the most impact if it provides specific scientific or technical information or analysis for CASAC panels to consider or if it relates to the clarity or accuracy of the technical information. Members of the public wishing to provide comment should contact the Designated Federal Officer directly.
Federal Deposit Insurance Corporation.
Update Listing of Financial Institutions in Liquidation.
Notice is hereby given that the Federal Deposit Insurance Corporation (Corporation) has been appointed the sole receiver for the following financial institutions effective as of the Date Closed as indicated in the listing. This list (as updated from time to time in the
Federal Election Commission.
Notice of filing dates for special election.
Oregon has scheduled elections on November 8, 2011, and January 31, 2012, to fill the U.S. House seat in the 1st Congressional District vacated by Representative David Wu.
Committees required to file reports in connection with the Special Primary Election on November 8, 2011, shall file a 12-day Pre-Primary Report. Committees required to file reports in connection with both the Special Primary and Special General Election on January 31, 2012, shall file a 12-day Pre-Primary Report, a consolidated 12-day Pre-General Report and Year-End Report, and a 30-day Post-General Report.
Mr. Greg J. Scott, Information Division, 999 E Street, NW., Washington, DC 20463;
All principal campaign committees of candidates who participate in the Oregon Special Primary and Special General Elections shall file a 12-day Pre-Primary Report on October 27, 2011; a consolidated 12-day Pre-General and Year-End Report on January 19, 2012; and a 30-day Post-General Report on March 1, 2012. (See chart below for the closing date for each report.)
All principal campaign committees of candidates participating
Note that these reports are in addition to the campaign committee's regular quarterly filings. (See chart below for the closing date for each report.)
Political committees filing on a semi-annual basis in 2011 or a quarterly basis in 2012 are subject to special election reporting if they make previously undisclosed contributions or expenditures in connection with the Oregon Special Primary or Special General Election by the close of books for the applicable report(s). (See chart below for the closing date for each report).
Since disclosing financial activity from two different calendar years on one report would conflict with the calendar year aggregation requirements stated in the Commission's disclosure rules, unauthorized committees that trigger the filing of the consolidated Pre-General & Year-End Report will be
Committees filing monthly that make contributions or expenditures in connection with the Oregon Special Primary or General Elections will continue to file according to the monthly reporting schedule.
Additional disclosure information in connection with the Oregon Special Election may be found on the FEC Web site at
Campaign committees, party committees and Leadership PACs that are otherwise required to file reports in connection with the special elections must simultaneously file FEC Form 3L if they receive two or more bundled contributions from lobbyists/registrants or lobbyist/registrant PACs that aggregate in excess of the lobbyist bundling disclosure threshold during the special election reporting periods (see charts below for closing date of each period). 11 CFR 104.22(a)(5)(v).
The lobbyist bundling disclosure threshold for calendar year 2011 is $16,200. This threshold amount may change in 2012 based upon the annual cost of living adjustment (COLA). As soon as the adjusted threshold amount is available, the Commission will publish it in the
On behalf of the Commission.
Notice is given that a complaint has been filed with the Federal Maritime Commission (Commission) by China Shipping Container Lines Co., Ltd.; COSCO Container Lines Company Limited; Evergreen Line A Joint Service Agreement; Hanjin Shipping Co., Ltd.; Horizon Lines, LLC; Kawasaki Kisen Kaisha, Ltd.; Nippon Yusen Kaisha; United Arab Shipping Company (S.A.G.); and Yang Ming Marine Transport Corporation, hereinafter “Complainants,” against the Port Authority of New York and New Jersey, hereinafter “Respondent”. Complainants are each ocean common carriers. Complainants allege that Respondent is a marine terminal operator that “owns and operates marine terminal facilities in the New York and New Jersey area, including leased marine terminal facilities and public berths.”
Complainants allege that Respondent violated the Shipping Act of 1984, 46 U.S.C. 41102(c) and 41106(2) because
This proceeding has been assigned to the Office of Administrative Law Judges. Hearing in this matter, if any is held, shall commence within the time limitations prescribed in 46 CFR 502.61, and only after consideration has been given by the parties and the presiding officer to the use of alternative forms of dispute resolution. The hearing shall include oral testimony and cross-examination in the discretion of the presiding officer only upon proper showing that there are genuine issues of material fact that cannot be resolved on the basis of sworn statements, affidavits, depositions, or other documents or that the nature of the matter in issue is such that an oral hearing and cross-examination are necessary for the development of an adequate record. Pursuant to the further terms of 46 CFR 502.61, the initial decision of the presiding officer in this proceeding shall be issued by August 13, 2012 and the final decision of the Commission shall be issued by December 11, 2012.
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The application also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 4 of the BHC Act (12 U.S.C. 1843). Unless otherwise noted, nonbanking activities will be conducted throughout the United States.
Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than September 12, 2011.
A. Federal Reserve Bank of Chicago (Colette A. Fried, Assistant Vice President) 230 South LaSalle Street, Chicago, Illinois 60690-1414:
1.
B. Federal Reserve Bank of Kansas City (Dennis Denney, Assistant Vice President) 1 Memorial Drive, Kansas City, Missouri 64198-0001:
1.
Board of Governors of the Federal Reserve System.
11:30 a.m., Monday, August 22, 2011.
Marriner S. Eccles Federal Reserve Board Building, 20th and C Streets, NW., Washington, DC 20551.
Closed
1. Personnel Matter.
Michelle Smith, Director, or Dave Skidmore, Assistant to the Board, Office of Board Members at 202-452-2955.
You may call 202-452-3206 beginning at approximately 5 p.m. two business days before the meeting for a recorded announcement of bank and bank holding company applications scheduled for the meeting; or you may contact the Board's Web site at
Federal Trade Commission.
Notice.
Notice is hereby given of the appointment of members to the FTC Performance Review Board.
Karen Leydon, Chief Human Capital Officer, 600 Pennsylvania Avenue, NW., Washington, DC 20580, (202) 326-3633.
Publication of the Performance Review
The following individuals have been designated to serve on the Commission's Performance Review Board:
Eileen Harrington, Executive Director, Chair.
Willard K. Tom, General Counsel.
Pauline M. Ippolito, Deputy Director, Bureau of Economics.
Richard A. Feinstein, Director, Bureau of Competition.
Jessica L. Rich, Deputy Director, Bureau of Consumer Protection.
By direction of the Commission.
Department of Health and Human Services, Office of the Secretary.
Notice.
As stipulated by the Federal Advisory Committee Act, the U.S. Department of Health and Human Services is hereby giving notice that the National Biodefense Science Board (NBSB) will be holding a public meeting. The meeting is open to the public.
The NBSB will hold a public meeting on September 22, 2011 from 9 a.m. to 5 p.m. E.S.T. The agenda is subject to change as priorities dictate.
Almas Temple—Sphinx Grand Ballroom; 1315 K Street, NW., Washington, DC 20005 (adjacent to the Hamilton Crowne Plaza Washington). To attend by teleconference, please check the NBSB September meeting webpage,
Pursuant to section 319M of the Public Health Service Act (
• Assisted and applicant households, by type of LIHEAP assistance;
• Assisted and applicant households, by type of LIHEAP assistance and poverty level;
• Assisted households, regardless of the type(s) of LIHEAAP assistance;
• Assisted households, by type of LIHEAP assistance, having at least one vulnerable member broken out; by a person at least 60 years or younger, disabled person, or a child five years older or younger;
• Assisted households, by type of LIHEAP assistance, with at least one member age 2 years or under;
• Assisted households, by type of LIHEAP assistance, with at least one member ages 3 years through 5 years; and
• Assisted households, regardless of the type(s) of LIHEAP assistance, having at least one member 60 years or older, disabled, or five years old or younger.
The information is being collected for the Department's annual
Copies of the proposed collection may be obtained by writing to the Administration for Children and Families, Office of Administration, Office of Information Services, 370 L'Enfant Promenade, SW., Washington, DC 20447,
OMB is required to make a decision concerning the collection of information between 30 and 60 days after publication of this document in the
Office of Management and Budget, Paperwork Reduction Project,
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Fax written comments on the collection of information by September 19, 2011.
To ensure that comments on the information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB,
Denver Presley, Jr., Office of Information Management, Food and Drug Administration, 1350 Piccard Dr., PI50-400B, Rockville, MD 20850, 301-796-3793.
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
Section 401 of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 341) directs FDA to issue regulations establishing definitions and standards of identity for food “[w]henever * * * such action will promote honesty and fair dealing in the interest of consumers * * *.” Under section 403(g) of the FD&C Act (21 U.S.C. 343(g)), a food that is subject to a definition and standard of identity prescribed by regulation is misbranded if it does not conform to such definition and standard of identity. Section 130.17 (§ 130.17) provides for the issuance by FDA of temporary marketing permits that enable the food industry to test consumer acceptance and measure the technological and commercial feasibility in interstate commerce of experimental packs of food that deviate from applicable definitions and standards of identity. Section 130.17(c) enables the Agency to monitor the manufacture, labeling, and distribution of experimental packs of food that deviate from applicable definitions and standards of identity. The information so obtained can be used in support of a petition to establish or amend the applicable definition or standard of identity to provide for the variations. Section 130.17(i) specifies the information that a firm must submit to FDA to obtain an extension of a temporary marketing permit.
In the
FDA estimates the burden of this collection of information as follows:
The estimated number of temporary marketing permit applications and hours per response is an average based on the Agency's experience with applications received for the past 3 years, and information from firms that have submitted recent requests for temporary marketing permits. Based on this information, we estimate that there will be, on average, approximately 13 firms submitting requests for two temporary marketing permits per year over the next 3 years.
Thus, FDA estimates that 13 respondents will submit 2 requests for temporary marketing permits annually under § 130.17(c). The estimated number of respondents for § 130.17(i) is minimal because this section is seldom used by the respondents; therefore, the Agency estimates that there will be one or fewer respondents annually with two or fewer requests for extension of the marketing permit under § 130.17(i). The estimated number of hours per response is an average based on the Agency's experience and information from firms that have submitted recent requests for temporary marketing permits. We estimate that 13 respondents each will submit 2 requests for temporary marketing permits under § 130.17(c) and that it will take a respondent 25 hours per request to comply with the requirements of that section, for a total of 650 hours. We estimate that one respondent will submit two requests for extension of its temporary marketing permits under § 130.17(i) and that it will take a respondent 2 hours per request to comply with the requirements of that section, for a total of 4 hours.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Fax written comments on the collection of information by September 19, 2011.
To ensure that comments on the information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB,
Denver Presley, Jr., Office of Information Management, Food and Drug Administration, 1350 Piccard Dr., PI50-400B, Rockville, MD 20850, 301-796-3793.
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
Section 412(e) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 350a(e)) provides that if the manufacturer of an infant formula has knowledge that reasonably supports the conclusion that an infant formula processed by that manufacturer has left its control and may not provide the nutrients required in section 412(i) of the FD&C Act or is otherwise adulterated or misbranded, the manufacturer must promptly notify the Secretary of Health and Human Services (the Secretary). If the Secretary determines that the infant formula presents a risk to human health, the manufacturer must immediately take all actions necessary to recall shipments of such infant formula from all wholesale and retail establishments, consistent with recall regulations and guidelines issued by the Secretary. Section 412(f)(2) of the FD&C Act states that the Secretary shall by regulation prescribe the scope and extent of recalls of infant formula necessary and appropriate for the degree of risk to human health presented by the formula subject to recall. FDA's infant formula recall regulations in part 107 (21 CFR part 107) implement these statutory provisions.
Section 107.230 requires each recalling firm to conduct an infant formula recall with the following elements: (1) Evaluate the hazard to human health, (2) devise a written recall strategy, (3) promptly notify each affected direct-account (customer) about the recall, and (4) furnish the appropriate FDA district office with copies of these documents. If the recalled formula presents a risk to human health, the recalling firm must also request that each establishment that sells the recalled formula post (at point of purchase) a notice of the recall and provide FDA with a copy of the notice. Section 107.240 requires the recalling firm to conduct an infant formula recall with the following elements: (1) Notify the appropriate FDA district office of the recall by telephone within 24 hours, (2) submit a written report to that office within 14 days, and (3) submit a written status report at least every 14 days until the recall is terminated. Before terminating a recall, the recalling firm is required to submit a recommendation
The reporting and recordkeeping requirements described previously are designed to enable FDA to monitor the effectiveness of infant formula recalls in order to protect babies from infant formula that may be unsafe because of contamination or nutritional inadequacy or otherwise adulterated or misbranded. FDA uses the information collected under these regulations to help ensure that such products are quickly and efficiently removed from the market.
In the
FDA has added a new table 2 to this document to comply with the new requirement to report third-party disclosure burden hours in a separate table. The third-party disclosure burden hours were previously reported in the 60-day notice under the reporting burden table (table 1). In compliance with the new requirement, we have broken out the third-party disclosure burden hours in a new third-party disclosure burden table (table 2). FDA has moved 50 hours per recall from line 1 of table 1 to line 1 of table 2, and 25 hours per recall from line 4 of table 1 to line 2 of table 2. This is being done to show the third-party disclosure burden previously disclosed in table 1. The total estimated burden of this collection remains unchanged at 12,864 hours.
FDA estimates the burden of this collection of information as follows:
The reporting and third-party disclosure burden estimates are based on Agency records, which show that there are five manufacturers of infant formula and that there have been, on average, two infant formula recalls per year for the past 3 years. Based on this information, we estimate that there will be, on average, approximately two infant formula recalls per year over the next 3 years.
Thus, FDA estimates that two respondents will conduct recalls annually under §§ 107.230, 107.240, and 107.250. The estimated number of respondents for § 107.260 is minimal because this section is seldom used by FDA; therefore, the Agency estimates that there will be one or fewer respondents annually for § 107.260.
The estimated number of reporting burden hours per response is an average based on the Agency's experience and information from firms that have conducted recalls. We estimate that two respondents will conduct infant formula recalls under § 107.230 and that it will take a respondent 4,450 hours to comply with the requirements of that section, for a total of 8,900 hours. In the 60-day notice, we estimated that it will take a respondent 4,500 hours per recall to comply with § 107.230 for a total of 9,000 hours. As noted, we have added a new table 2 to report third-party disclosure burden hours. The new lower figure of 4,450 hours per recall reflects that 50 hours are being reported in new table 2. We estimate that two respondents will conduct infant formula recalls under § 107.240 and that it will take a respondent 1,482 hours to comply with the requirements of that section, for a total of 2,964 hours. We estimate that two respondents will submit recommendations for termination of infant formula recalls under § 107.250 and that it will take a respondent 120 hours to comply with the requirements of that section, for a total of 240 hours. Finally, we estimate that one respondent will need to carry out additional effectiveness checks and issue additional notifications under § 107.260, for a total of 625 hours. In the 60-day notice, we estimated that it will take a respondent 650 hours per recall to comply with § 107.260 for a total of 650 hours. As noted, we have added a new table 2 to report third-party disclosure burden hours. The new lower figure of 625 hours per recall reflects that 25 hours are being reported in new table 2.
Under 5 CFR 1320.3(b)(2), the time, effort, and financial resources necessary to comply with a collection of information are excluded from the burden estimate if the reporting, recordkeeping, or disclosure activities needed to comply are usual and customary because they would occur in the normal course of activities. No burden has been estimated for the recordkeeping requirement in § 107.280 because these records are maintained as a usual and customary part of normal business activities. Manufacturers keep infant formula distribution records for the prescribed period as a matter of routine business practice.
New table 2 reports the Agency's third-party disclosure burden estimates for §§ 107.230 and 107.260. The estimated burden hours per disclosure is an average based on the Agency's experience. The third-party disclosure burden in § 107.230 is the requirement to promptly notify each affected direct-account (customer) about the recall and if the recalled formula presents a risk to human health, the requirement that the recalling firm must also request that each establishment that sells the recalled formula post (at the point of purchase) a notice of the recall. We estimate that two respondents will conduct infant formula recalls under § 107.230 and that it will take a respondent 50 hours to comply with the third-party disclosure requirements of that section, for a total of 100 hours. The third-party disclosure burden in § 107.260 is the requirement to issue additional notifications where the recall strategy or implementation is determined to be deficient. We estimate that one respondent will issue additional notifications under § 107.260 and that it will take a respondent 25 hours to comply with the third-party disclosure requirements of that section, for a total of 25 hours.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Fax written comments on the collection of information by September 19, 2011.
To ensure that comments on the information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB,
Denver Presley, Jr., Office of Information Management, Food and Drug Administration, 1350 Piccard Dr., PI50-400B,Rockville, MD 20850, 301-796-3793.
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
Under section 403A(b) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 343-1(b)), States may petition FDA for exemption from Federal preemption of State food labeling and standard of identity requirements. Section 100.1(d) (21 CFR 100.1(d)) sets forth the information a State is required to submit in such a petition. The information required under § 100.1(d) enables FDA to determine whether the State food labeling or standard of identity requirement satisfies the criteria of section 403A(b) of the FD&C Act for granting exemption from Federal preemption.
In the
FDA estimates the burden of this collection of information as follows:
The reporting burden for § 100.1(d) is minimal because petitions for exemption from preemption are seldom submitted by States. In the last 3 years, FDA has not received any new petitions for exemption from preemption; therefore, the Agency estimates that one or fewer petitions will be submitted annually. Although FDA has not received any new petitions for exemption from preemption in the last 3 years, it believes these information collection provisions should be extended to provide for the potential future need of a State or local
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing the availability of grant funds for the support of a sole source cooperative agreement with the University of Oklahoma Health Sciences Center. The goal of the FDA, Center for Drug Evaluation and Research, Office of Chief Scientist, is to develop technology to molecularly characterize peptide epitopes that are processed and presented on soluble HLA (human leucocyte antigen) expressed by human cells. Initial studies will examine and characterize influenza peptides isolated from several different soluble Class I HLAs produced from influenza infected human lung cell lines. There is a growing interest in developing universal vaccines for influenza by targeting conserved internal proteins to stimulate cross-protective CTLs (cytolytic T lymphocyte) to provide long-lasting immunity. It is therefore critically important to identify which viral epitopes are generated by antigen processing in influenza infected lung cells, the target cells of cell mediated immune response to respiratory viruses. FDA seeks a collaboration to develop this technology for this purpose which can then be applied to identifying and characterizing other HLA-presented epitopes in viral infections, cancer, and immune toxicities.
Important dates are as follows:
1. The application due date is September 1, 2011.
2. The anticipated start date is November 1, 2011.
3. The opening date is August 18, 2011.
4. The expiration date is November 2, 2011.
For more information on this funding opportunity announcement (FOA) and to obtain detailed requirements, please refer to the full FOA located at:
Knowledge on how viral and self proteins are processed and presented in HLA molecules is important to understand how the body defends itself from infection and how immune responses can lead to tissue toxicities. Developing technology to allow direct identification of epitopes bound by HLA molecules is critical to vaccine and therapeutic immune strategies. FDA is interested in collaborative research to develop and implement this technology which will be valuable in evaluation and review of vaccines and therapeutics. Initial studies will address identifying epitopes from influenza that are presented by different HLA alleles in infected lung cells.
Influenza virus infection affects a significant proportion of the population and is associated with serious morbidity and mortality. Although many epitopes can be predicted by computer programs and by screening peripheral blood cells with panels of viral peptides from influenza, the peptides that are presented on the infected target cells in the tissues and the infiltrating T cells that recognize the HLA-peptide complexes are the critical elements to control and recover from infection. The technology of directly identifying viral epitopes in HLA can elucidate viral targets for T cells and provide the foundation for new approaches for rapid development of effective vaccines. More effective vaccines to prevent and control influenza infections will have broad public health benefits by reducing morbidity and mortality of this infectious disease.
For this purpose, a direct epitope elution approach is needed to allow milligram quantities of HLA-peptide complexes to be purified from influenza infected lung cells lines that express soluble HLA. Human lung cell lines engineered to secrete soluble HLA from three supertypes (A*01, A*03, and B*27) should be infected with at least two current influenza strains and HLA collected during infection. HLA will be purified and bound peptides eluted. Influenza peptides should be systematically identified by mass spectrometry analysis and sequencing. Synthetic viral peptides can then be tested for binding to recombinant HLA to verify binding specificity and affinity. Influenza epitopes identified in this initial phase of the project can be evaluated for immunogenicity and antigenicity in follow up studies.
This project will provide the regulatory science to facilitate development and evaluation of direct discovery of HLA presented epitopes. The direct epitope methodology will be applied to current influenza strains initially, but has the flexibility to address novel pandemic strains and other pathological agents.
The technology requires extensive infrastructure for growing cells, purifying HLA from culture supernatants, and for mass spectrometry analysis. Staff at the University of Oklahoma Health Sciences Center are leaders in this technology and have published the first reports on applying this method to influenza. Support of this project will allow the extension of the methodology to examine other HLA types. FDA believes this is a novel and valuable methodology that should be implemented at FDA. Funding this collaborative initiative will allow FDA to acquire the proteomic expertise, training, and tissue culture support to establish a laboratory in the field of immunoproteomics. The direct
Only one grant award will be made in fiscal year (FY) 2012. The application budget is not limited, but it needs to reflect the actual needs of the proposed project. However, presently for FY 2012, the funds are available in the amount of $400,000 (total cost), and are subject to change based on the availability of funds.
The maximum period is 1 year with the option of 4 more years of budget support depending on the availability of funds.
To submit a paper application in response to this FOA, applicants should first review the full announcement located at
• Step 1: Obtain a Dun and Bradstreet (DUNS) Number.
• Step 2: Register With Central Contractor Registration.
• Step 3: Register With Electronic Research Administration (eRA) Commons.
Steps 1 and 2, in detail, can be found at
Food and Drug Administration, HHS.
Notice of meeting.
The Food and Drug Administration (FDA) is announcing the following Office of Women's Health and Society for Women's Health Research jointly sponsored meeting: Dialogues in Diversifying Clinical Trials: Successful Strategies for Engaging Women and Minorities in Clinical Trials. The purpose of this symposium is to facilitate the broader discussion and dissemination of innovative strategies for increasing the recruitment and retention of women and minority subpopulations into clinical trials. The overarching goal of this symposium is to use a best practices learning exchange to share information and encourage successful methods and/or model implementation within a broad research community—industry, academia, and government.
If you need special accommodations due to a disability, please contact Rachel Griffith at least 7 days in advance.
In accordance with section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463, codified at 5 U.S.C. App. 2), notice is hereby given of the following meeting:
National Institutes of Health, Public Health Service, HHS.
Notice.
The inventions listed below are owned by an agency of the U.S. Government and are available for licensing in the U.S. in accordance with 35 U.S.C. 207 to achieve expeditious commercialization of results of federally-funded research and development. Foreign patent applications are filed on selected inventions to extend market coverage for companies and may also be available for licensing.
Licensing information and copies of the U.S. patent applications listed below may be obtained by writing to the indicated licensing contact at the Office of Technology Transfer, National Institutes of Health, 6011 Executive Boulevard, Suite 325, Rockville, Maryland 20852-3804;
Description of Technology: Syndesmophyte (abnormal bone) growth in the spine is a hallmark of Ankylosing Spondylitis, a type of inflammatory arthritis. Syndesmophyte growth is currently monitored using semi-quantitative scoring of radiographs, but radiographs consider only a small part of the vertebra, and the method is subject to reader error. Because syndesmophytes grow slowly, radiographs also lack sensitivity. The invention provides a method to measure syndesmophytes using data from computed tomography scans of the lumbar spine. It provides computer algorithm that fully quantitates syndesmophyte volumes in three-dimension space. This method allows precise and accurate measurement of the presence and rate of growth of syndesmophytes over time, which for the first time will permit testing of whether any treatments can slow the progression of this type of spinal arthritis.
Potential Commercial Applications:
• The method would be useful for clinical trials of drugs against Syndesmophyte growth.
• Because of the improved precision, achieving statistical significance in assessing the efficacy of a drug would require smaller samples.
Competitive Advantages:
• The present method is more automated than existing methods.
• The method is more precise and sensitive than existing methods, thus providing more reliable statistical analysis and improved planning in treatment regimen.
Development Stage: In vivo data available (human).
Inventors: Sovira Tan (NIAMS),
Publication: Tan S, Yao J, Ward MM, Yao L, Summers RM. Computer aided evaluation of ankylosing spondylitis using high-resolution CT. IEEE Trans Med Imaging 2008 Sep;27(9):1252-1267. [PMID 18779065].
Intellectual Property: HHS Reference No. E-167-2011/0—Software. Patent protection is not being pursued for this technology.
Licensing Contact: Michael Shmilovich,
Collaborative Research Opportunity: The National Institute of Arthritis and Musculoskeletal and Skin Diseases is seeking statements of capability or interest from parties interested in collaborative research to further develop, evaluate or commercialize this technology. For collaboration opportunities, please contact Brian W. Bailey, Ph.D. at
Description of Technology: Vertebral fractures due to osteoporosis result in loss of vertebral height. Degenerative disk disease in the spine results in loss of disk height. Currently, radiography and magnetic resonance imaging are used to assess vertebral and disk height, and measurements are done manually. The present invention offers improved method to measure vertebral and disk heights. The invention provides computer algorithm that substantially automates the task, and uses computed tomography. The advantage of computed tomography over radiography is that of 3D imaging over 2D imaging. Computed tomography's advantage over MRI is better image resolution. The combination of automation and superior imaging capability makes the method substantially more precise than previous ones. This allows better detection of changes in vertebral height and disk height over time, and thus aids in the planning of appropriate medical treatment in cases associated with the loss of vertebral or disk heights, such as in osteoporosis for example.
Potential Commercial Applications:
• The method would be useful for clinical trials of drugs for osteoporosis.
• Because of the improved precision, achieving statistical significance in assessing the efficacy of a drug would require smaller samples.
Competitive Advantages:
• The present method is semi-automated.
• The method is more precise and sensitive than existing methods, thus providing more reliable statistical analysis and improved planning in treatment regimen.
Development Stage: In vivo data available (human).
Inventors: Sovira Tan (NIAMS),
Intellectual Property: HHS Reference No. E-166-2011/0—Software. Patent protection is not being pursued for this technology.
Licensing Contact: Michael Shmilovich,
Collaborative Research Opportunity: The National Institute of Arthritis and Musculoskeletal and Skin Diseases is seeking statements of capability or interest from parties interested in collaborative research to further develop, evaluate or commercialize this technology. For collaboration opportunities, please contact Brian W. Bailey, Ph.D. at
Description of Technology: Early work by Hammond et al. showed gamma globulin to be effective for the prevention of poliomyelitis. Therefore, passive immunotherapy could be another way to treat chronic excretors. Even though prior attempts to use intravenous immunoglobulin (IVIG) and breast milk were unsuccessful, there is reason to think that higher doses of antipoliovirus antibodies could result in complete clearance of poliovirus from chronically infected individuals. Six poliovirus-neutralizing MAbs were recovered from a combinatorial Fab phage display library constructed from bone marrow-derived lymphocytes of immunized chimpanzees. The six MAbs neutralized vaccine strains and virulent strains of poliovirus. Five MAbs were serotype specific, while one MAb cross-neutralized serotypes 1 and 2. Both serotype 2-specific antibodies recognized antigenic site 1. No escape mutants to serotype 3-specific MAbs could be generated. The administration of a serotype 1-specific MAb to transgenic mice susceptible to poliovirus at a dose of 5 μg/mouse completely protected them from paralysis after challenge with a lethal dose of wild-type poliovirus. Moreover, MAb injection 6 or 12 h after virus infection provided significant protection. This application claims the antibodies described above and methods for their use.
Potential Commercial Applications:
• Prophylaxis/therapeutic for poliovirus.
• Post-exposure emergency prophylaxis of poliovirus.
Competitive Advantages:
• No humanization required.
• Highly potent neutralizing antibodies.
• Biological materials available.
Development Stage:
• Pre-clinical.
• In vitro data available.
• In vivo data available (animal).
Inventors: Zhaochun Chen, Robert H. Purcell, Konstantin Chumakov (NIAID).
Publication: Chen Z,
Intellectual Property: HHS Reference No. E-076-2011/0—U.S. Provisional Application No. 61/443,915 filed 17 Feb 2011.
Licensing Contact: Peter Soukas, J.D.; 301-435-4646;
Description of Technology: This technology includes a group of at least twenty-nine, diverse, commercially available compounds that are newly identified for activity against
Potential Commercial Applications:
• Treatment of Giardia in humans.
• Treatment of Giardia in animals—dogs and cats.
Competitive Advantages: These compounds have currently been approved for human and veterinary uses of other indications which provides an opportunity to greatly reduce risk and pre-market investments both in terms of time and costs associated with development and regulatory approval for new Giardia applications including the drug resistant Giardiasis.
Development Stage:
• Early-stage.
• Pre-clinical.
• In vitro data available.
Inventors:
• Wei Zheng, Catherine Chen, Juan J. Marugan, Noel T. Southall, Christopher P. Austin (NHGRI).
• Osnat Hertzberg, Luidmila Kulakova, Andrey Galkin (Institute for Bioscience & Biotechnology Research, University of Maryland).
Publication: Chen CZ, et al. High-throughput Giardia lamblia viability assay using bioluminescent ATP content measurements. Antimicrob Agents Chemother. 2011 Feb;55(2):667-675. [PMID 21078930].
Intellectual Property: HHS Reference No. E-211-2010/1—U.S. Provisional Application No. 61/411,509 filed 09 Nov 2010.
Licensing Contact: Tedd Fenn; 301-435-5031;
Collaborative Research Opportunity: The NHGRI is seeking statements of capability or interest from parties interested in collaborative research to further develop, evaluate, or commercialize Novel Compounds for Treatment of Giardiasis. For collaboration opportunities, please contact Claire Driscoll, NHGRI, at
Notice is hereby given of a meeting of the National Advisory Council on Alcohol Abuse and Alcoholism, September 12, 2011, 3:30 p.m. to 5:30 p.m., September 13, 2011, 9 a.m. to 1 p.m., National Institutes of Health, Building 1, 1 Center Drive, Wilson Hall, Bethesda, MD 20892 which was published in the
The meeting time has changed on September 12, 2011 from 2:45 p.m. to 5:30 p.m. The location of the meeting will remain the same.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(a) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of a meeting of the National Cancer Institute Board of Scientific Advisors.
The meeting will be open to the public, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
This notice is being published less than 15 days prior to the meeting due to scheduling conflicts.
Any interested person may file written comments with the committee by forwarding the statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.
Information is also available on the Institute's/Center's home page:
Notice is hereby given of a change in the meeting of the National Cancer Advisory Board, September 13, 2011, 9 a.m. to September 13, 2011, 5 p.m., National Institutes of Health National Institutes of Health, Building 31, 31 Center Drive, Conference Room 10, Bethesda, MD 20892 which was published in the
This notice is amended to add the National Cancer Advisory Board Ad hoc Subcommittee on Global Cancer Research meeting. The meeting will convene on September 12, 2011 from 6:30 to 8:30 p.m. in the Diplomat/Ambassador room at the Bethesda Regency Hyatt, One Metro Center, Bethesda, MD 20814.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of a meeting of the National Advisory Mental Health Council.
The meeting will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Any member of the public interested in presenting oral comments to the committee may notify the Contact Person listed on this notice at least 10 days in advance of the meeting. Interested individuals and representatives of organizations may submit a letter of intent, a brief description of the organization represented, and a short description of the oral presentation. Only one representative of an organization may be allowed to present oral comments and if accepted by the committee, presentations may be limited to five minutes. Both printed
In the interest of security, visitors will be asked to show one form of identification (for example, a government-issued photo ID, driver's license, or passport) and to state the purpose of their visit.
Information is also available on the Institute's/Center's home page:
Pursuant to section 10(a) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of a conference call of the Interagency Autism Coordinating Committee (IACC).
The IACC Full Committee will be having a conference call on Wednesday, September 7, 2011. The committee plans to discuss a draft letter to the Secretary of Health and Human Services on issues related to seclusion and restraint. This conference call will be accessible to the public through a call-in number and access code.
The conference call will be accessible to the public through a call-in number and access code. Members of the public who participate using the conference call phone number will be able to listen to the meeting but will not be heard. If you experience any technical problems with the conference call, please e-mail
Individuals who participate by using this electronic service and who need special assistance, such as captioning of the conference call or other reasonable accommodations, should submit a request to the Contact Person listed on this notice at least 7 days prior to the meeting.
Schedule subject to change.
Information about the IACC and a registration link for this meeting are available on the Web site:
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of a meeting of the National Advisory Council on Drug Abuse.
The meeting will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Any member of the public interested in presenting oral comments to the committee may notify the Contact Person listed on this notice at least 10 days in advance of the meeting. Interested individuals and representatives of organizations may submit a letter of intent, a brief description of the organization represented, and a short description of the oral presentation. Only one representative of an organization may be allowed to present oral comments and if accepted by the committee, presentations may be limited to five minutes. Both printed and electronic copies are requested for the record. In addition, any interested person may file written comments with the committee by forwarding their statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.
Information is also available on the Institute's/Center's home page:
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable materials, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Office of Refugee Resettlement, ACF, HHS.
The Office of Refugee Resettlement announces the award of single-source expansion supplement grants to seven Unaccompanied Alien Shelter Care Providers.
Awards announced in this notice are authorized by Section 462 of the Homeland Security Act, Public Law 6 U.S.C. 279(b)(A)-(J) and Section 235(a)(5)(C); 235(d); of the Trafficking Victims Protection Reauthorization Act of 2008, (8 U.S.C. 1232).
These grants will support the expansion of bed capacity to meet the number of unaccompanied alien children referrals from the Department of Homeland Security (DHS). The funding program is mandated by Section 462 of the Homeland Security Act to ensure appropriate placement of all referrals from the DHS. ORR's ability to meet this mandate is often a challenge since the program is completely tied to DHS apprehension strategies and the sporadic number of border crossers.
The program has specific requirements for the provision of services. Existing grantees are the only entities with the infrastructure, licensing, experience and appropriate level of trained staff to meet the service requirements and the urgent need for expansion. The program's ability to avoid a backlog of children waiting in border patrol stations for placement can only be accommodated through the expansion of existing programs through this supplemental award process.
The single-source expansion supplement recipients are:
Kenneth Tota, Deputy Director, Office of Refugee Resettlement, Administration for Children and Families, 370 L'Enfant Promenade, SW., Washington, DC 20447, Telephone (202) 401-4858.
60-Day Notice of Information Collection Under Review: Form I-566, Interagency Record of Request, A, G, or NATO Dependent Employment Authorization or Change/Adjustment of Status To/From A, G, or NATO Status.
The Department of Homeland Security, U.S. Citizenship and Immigration Services (USCIS) will be submitting the following information collection request for review and clearance in accordance with the Paperwork Reduction Act of 1995. The information collection is published to obtain comments from the public and affected agencies. Comments are encouraged and will be accepted for 60 days until October 17, 2011.
Written comments and suggestions regarding items contained in this notice, and especially with regard to the estimated public burden and associated response time should be directed to the Department of Homeland Security (DHS), USCIS, Chief, Regulatory Products Division, Office of the Executive Secretariat, 20 Massachusetts Avenue, NW., Washington, DC 20529-2020. Comments may also be submitted to DHS via facsimile to 202-272-0997 or via e-mail at
The address listed in this notice should only be used to submit comments concerning this information collection. Please do not submit requests for individual case status inquiries to this address. If you are seeking information about the status of your individual case, please check “My Case Status” online at:
Written comments and suggestions from the public and affected agencies concerning the collection of information should address one or more of the following four points:
(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 agencies 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,
(1)
(2)
(3)
(4)
(5)
(6)
If you need a copy of the information collection instrument, please visit the Web site at:
We may also be contacted at: USCIS, Regulatory Products Division, Office of the Executive Secretariat, 20 Massachusetts Avenue, NW., Room 5012, Washington, DC 20529-2020, Telephone number 202-272-8377.
Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), Interior.
Call for Information and Nominations for Commercial Leasing for Wind Power on the OCS Offshore Rhode Island and Massachusetts.
BOEMRE invites the submission of nominations for one or more commercial leases that would allow a lessee to propose the construction of a wind energy project(s) on the OCS offshore Rhode Island and Massachusetts and to develop a project if further environmental review is successful. Although this announcement is not itself a leasing announcement, the area described herein may be subject to future leasing, and BOEMRE will use the responses to this Call for Information and Nominations (Call) to gauge specific interest in acquiring commercial wind leases in some or all of the area described, and to determine whether competitive interest exists in any particular area, as required by 43 U.S.C. 1337(p)(3). Parties wishing to submit a nomination in response to this Call should submit detailed and specific information in response to the requirements described in the section entitled, “Required Nomination Information.”
This announcement also requests that interested and affected parties comment and provide information about site conditions, resources and multiple uses within the area identified in this notice that would be relevant to BOEMRE's review of the nominations submitted and any subsequent decision to offer all or part of the area for commercial wind leasing. The information that BOEMRE is requesting is described below in the section entitled, “Requested Information from Interested or Affected Parties.”
This notice is published pursuant to subsection 8(p)(3) of the OCS Lands Act, 43 U.S.C. 1337(p)(3), as well as the implementing regulations at 30 CFR Part 285.
The area under consideration for this Call (Call Area) is located on the OCS off the coast of Rhode Island and Massachusetts within the Area of Mutual Interest (AMI), as described by a Memorandum of Understanding (MOU) between the Governors of Rhode Island and Massachusetts.
The Call Area is divided into two areas which are separated by an existing Traffic Separation Scheme (TSS). The first section of the Call Area is northwest of the TSS beginning approximately 9 nautical miles (nmi) southeast of Point Judith, Rhode Island, and extending approximately 2 nmi seaward (Northwest section). This section of the Call Area is approximately 1.25 square nmi and contains 1 partial OCS lease block. The second section of the Call Area is southeast of the TSS beginning approximately 10 nmi south of the Newport, Rhode Island coast, and extending approximately 20 nmi seaward (Southeast section). This section of the Call Area is approximately 246 square nmi and contains 31 whole OCS lease blocks as well as 10 partial OCS lease blocks.
The Call Area was identified by BOEMRE in consultation with the State of Rhode Island and the Commonwealth of Massachusetts, and further delineated in consultation with the BOEMRE/Rhode Island and BOEMRE/Massachusetts Renewable Energy Task Forces. A detailed description of the area and how it was identified is found later in this notice.
BOEMRE must receive your nomination describing your interest in this potential commercial leasing area postmarked by October 3, 2011 for your nomination to be considered. BOEMRE requests comments or other submissions of information by this same date. BOEMRE will consider only the nominations we receive by that time.
Comments and other submissions of information may be submitted by either of the following two methods:
1. Federal eRulemaking Portal:
2. By U.S. Postal Service or other delivery service, sending your comments and information to the following address: Bureau of Ocean Energy Management, Regulation and Enforcement, Office of Offshore Alternative Energy Programs, 381 Elden Street, Mail Stop 4090, Herndon, Virginia 20170. All responses will be reported on
If you wish to protect the confidentiality of your nomination or comments, clearly mark the relevant sections and request that BOEMRE treat them as confidential. Please label privileged or confidential information with “Contains Confidential Information,” and consider submitting such information as a separate attachment. Treatment of confidential information is addressed in the section of this Call entitled, “Privileged or Confidential Information.” Information that is not labeled as privileged or confidential will be regarded by BOEMRE as suitable for public release.
Jessica Bradley, Project Coordinator, BOEMRE, Office of Offshore Alternative Energy Programs, 381 Elden Street, Mail Stop 4090, Herndon, Virginia 20170, (703) 787-1320.
The OCS Lands Act requires BOEMRE to award leases competitively, unless BOEMRE makes a determination that there is no competitive interest (43 U.S.C. 1337(p)(3)). The issuance of this notice is not intended to indicate that BOEMRE has determined that competitive interest exists in the area identified. Rather, this notice is the first step in the renewable energy planning and leasing process in the AMI offshore Rhode Island and Massachusetts. The responses to this notice will assist BOEMRE in determining if there is any competitive interest in the area identified. This notice also requests information from interested and affected parties on issues relevant to BOEMRE's review of nominations for potential leasing in the area identified.
BOEMRE is issuing a Call instead of an Request for Interest (RFI) to facilitate and expedite the leasing process in keeping with the goals and objectives of the Secretary of the Interior's “Smart from the Start” initiative. If an RFI were issued and the responses to it indicated competitive interest, the applicable regulations would require BOEMRE to issue a Call, which BOEMRE believes would be duplicative of the RFI process and, therefore, unnecessary and inefficient. Issuance of this Call, without a RFI, is designed to enable BOEMRE to analyze information needed to support appropriate commercial leasing, while ensuring ample opportunity for input from interested and affected parties.
The responses to this Call could lead to the initiation of a competitive leasing process in some areas of the AMI (i.e., where competition exists for certain tracts), and a noncompetitive process in other areas of the AMI (i.e., where no competitive interest exists in certain tracts). The leasing process is described more completely under the “Determination of Competitive Interest” and “Noncompetitive Leasing Process,” sections of this notice. If BOEMRE determines that there is no competitive interest in some or all of this area offshore Rhode Island and Massachusetts, BOEMRE may proceed with the noncompetitive lease process pursuant to 30 CFR 285.232 for any area(s) where no competitive interest exists. If BOEMRE determines that there is competitive interest in some or all of this area offshore Rhode Island and Massachusetts, BOEMRE may proceed with Area Identification, as set forth in 30 CFR 285.211(b), and the competitive leasing process set forth under 30 CFR 285.211 through 285.225. Whether the leasing process would be competitive or noncompetitive, it would (1) include additional opportunities for the public to provide input; (2) be reviewed thoroughly for potential environmental and multiple use impacts; and (3) be conducted in conformance with all applicable laws and regulations. The area that may be offered for lease, if any, has not yet been determined, and may be reduced in size from the area identified in this Call.
The EPAct amended the OCS Lands Act by adding subsection 8(p)(1)(C), which authorizes the Secretary of the Interior to grant leases, easements, or rights-of-way (ROWs) on the OCS for activities that are not otherwise authorized by law and that produce or support production, transportation, or transmission of energy from sources other than oil or gas. The EPAct also required the issuance of regulations to carry out the new authority pertaining to renewable energy on the OCS. The Secretary delegated this authority to issue leases, easements, and ROWs, and to promulgate regulations, to the Director of BOEMRE. On April 29, 2009, BOEMRE published the Renewable Energy and Alternate Uses (REAU) rule, at 30 CFR Part 285, which can be found at:
On July 19, 2010, the President signed Executive Order 13547 establishing a national ocean policy and the National Ocean Council (75 FR 43023).
The Order establishes a comprehensive, integrated national policy for the stewardship of the ocean, our coasts, and the Great Lakes. Where BOEMRE actions affect the ocean, the Order requires BOEMRE to take such action as necessary to implement this policy, the stewardship principles, and national priority objectives adopted by the Order, and guidance from the National Ocean Council.
BOEMRE appreciates the importance of coordinating its planning endeavors with other OCS users and regulators and intends to follow principles of coastal and marine spatial planning, and coordinate with the regional planning bodies as established by the National Ocean Council to inform its leasing processes. BOEMRE anticipates that continued coordination with the state Renewable Energy Task Forces will help inform comprehensive coastal and marine spatial planning efforts.
Secretary Ken Salazar announced the “Smart from the Start” OCS renewable energy initiative on November 23, 2010. This initiative includes three key elements: (1) Streamlined processes for commercial wind lease issuance; (2) the identification of Wind Energy Areas (WEA) followed by concrete information gathering; and (3) processing OCS energy transmission line proposals on a parallel but separate track from generation projects.
A WEA is an OCS area identified as having high wind resource potential along with relatively low potential use conflict, making it suitable for the consideration of wind energy leasing. Some of the area delineated for this Call may be identified as a WEA during the Area Identification stage of the leasing and planning process.
BOEMRE established the Rhode Island Task Force in November 2009, at the request of Governor Donald Carcieri, to facilitate coordination among affected Federal agencies and state, local, and tribal governments throughout the entire leasing process. The first meeting was held on November 17, 2009, to introduce the intergovernmental members, discuss the purpose of the task force, explain the BOEMRE renewable energy leasing and environmental review process, and discuss a draft charter. BOEMRE began working on a RFI with the BOEMRE/Rhode Island Renewable Energy Task Force, and originally intended to issue a RFI for an area offshore Rhode Island. Rhode Island and Massachusetts then developed a partnership that resulted in an MOU signed by the Governors of both States in July of 2010. This MOU created the AMI and set a framework for the two states to collaborate on issues concerning offshore wind development on the OCS. In October and November of 2010, two developers submitted separate unsolicited requests pursuant to 30 CFR 285.230 for commercial leases within the AMI that partially overlap geographically. BOEMRE convened joint meetings of the BOEMRE/Rhode Island and BOEMRE/Massachusetts Renewable Energy Task Forces to coordinate on offshore renewable energy leasing within this area. The BOEMRE/Rhode Island Renewable Energy Task Force meeting materials and information related to the joint Task Force efforts are
In light of these partially overlapping unsolicited requests, as well as the high level of interest that has been expressed for potential commercial wind leasing in other areas of the OCS (e.g. Maryland and New Jersey), we anticipate that there will be competitive interest within the Call Area. Issuance of this Call is designed to enable BOEMRE to proceed with the competitive process in an efficient manner while ensuring ample opportunity for input from interested and affected parties.
BOEMRE intends to prepare an environmental assessment (EA), which will consider the environmental consequences associated with issuing commercial wind leases and approving site assessment activities on those leases within all or some of this Call area. BOEMRE is seeking public input in identifying the environmental issues and alternatives to be considered through the publication of a Notice of Intent (NOI) to prepare an EA, concurrently with this Call.
The EA will consider the environmental consequences associated with reasonably foreseeable leasing and site characterization scenarios within the Call Area (including geophysical, geotechnical, archaeological, and biological surveys), and reasonably foreseeable site assessment scenarios (including the installation and operation of meteorological towers and buoys) on the potential leaseholds. At a minimum, the alternatives that will be considered are: no action, (i.e. no issuance of leases or approval of site assessment activities); and the issuance of leases and approval of site assessment activities within the areas described in this Call. The NOI solicits input on the environmental effects associated with the activities described above. The EA will not, however, be used to support any future decision regarding the approval of the construction or operation of any wind energy facility on leases that may be issued within this Call Area. Instead, any proposed project will go through a thorough environmental review process at a future date.
Several consultations will be conducted concurrently with and integrated into the National Environmental Policy Act (NEPA) process. These consultations include, but are not limited to, those required by the Coastal Zone Management Act (CZMA), the Endangered Species Act (ESA), the Magnuson-Stevens Fishery Conservation and Management Act, the National Historic Preservation Act (NHPA), and Executive Order 13175—“Consultation and Coordination With Tribal Governments.” The results of these consultations will assist BOEMRE in deciding whether and where leases may be issued. These consultations would take place prior to the issuance of any leases. BOEMRE has initiated government-to-government tribal consultation pursuant to Executive Order 13175 with three federally recognized tribes that have expressed interest in wind energy development in the New England area. After evaluating the responses to the Call, but before publishing the Proposed Sale Notice (PSN) for a competitive lease sale or issuing a lease noncompetitively, BOEMRE will conduct consultations pursuant to Section 106 of the NHPA. When possible, BOEMRE will conduct consultations concurrently with the NEPA process (30 CFR 800.8(3)(c)).
BOEMRE recognizes the importance of the steps that the State of Rhode Island and the Commonwealth of Massachusetts have taken to encourage environmentally sound offshore wind energy development. While a state may promote such development through initiatives such as the creation of screening tools that inform the BOEMRE planning process, BOEMRE retains the exclusive authority to issue leases, easements, and rights-of-way on the OCS for renewable energy purposes. Below is a summary of the initiatives and actions undertaken by the State of Rhode Island and the Commonwealth of Massachusetts that promote the development of wind energy on the OCS.
The State of Rhode Island has devised a process for identifying areas it believes are suitable for renewable energy development, by considering wind development's compatibility with existing uses and the character of the natural resources in those areas. This effort tiered off two previous initiatives: (1) The Rhode Island Winds Report of 2005, which made a preliminary assessment of the feasibility of wind energy projects offshore Rhode Island; and (2) the Baird's Sea Grant Science Symposium, Sound Connections: The Science of Rhode Island and Block Island Sounds, October 2008; findings of which can be found at
The State of Rhode Island has completed and adopted a Marine Spatial Planning Plan called the Ocean Special Area Management Plan (SAMP) for the areas offshore Rhode Island that support siting activities for offshore renewable energy and reflects extensive stakeholder input. This document, adopted by the National Oceanic and Atmospheric Administration (NOAA) on July 22, 2011, will become the basis for the State of Rhode Island's Federal consistency process for the AMI and is recognized in the July 2010 MOU between Rhode Island and Massachusetts as the guiding document for the AMI area.
The State of Rhode Island continues to gather data for a number of areas on the OCS, including data on avian species, fish habitat, marine mammals, physical oceanographic measurements, acoustics, geophysical and other data. BOEMRE appreciates the importance of this information and will use the data and information gathered by the state in its evaluation of potential lease issuance in the AMI.
The July 2010 MOU between Rhode Island and Massachusetts recognizes the benefits of collaborating in the evaluation and potential development of the AMI. Rhode Island and Massachusetts officials held a series of public meetings in Massachusetts to discuss SAMP data and the process involved. Rhode Island and Massachusetts officials expect that similar stakeholder discussions will continue, such as through the convening of a Fisheries Advisory Board consisting of fishing representatives from both States. In the development of the Call Area, input from both the BOEMRE/Rhode Island and BOEMRE/Massachusetts Task Forces has provided a regional perspective on the physical, biological, and socioeconomic resources of the AMI.
BOEMRE has been involved in a planning process for the AMI area since the establishment of the BOEMRE/Rhode Island Renewable Energy Task Force in 2009. The planning process has involved coordination with the joint BOEMRE/Rhode Island and BOEMRE/Massachusetts Renewable Energy Task Forces on the development of this Call. In addition, at the request of the State of Rhode Island and the Commonwealth
The first step in the leasing process is to determine whether or not there is interest in acquiring a lease and whether there is competitive interest in acquiring a lease in any particular area. At the conclusion of the comment period for this Call, BOEMRE will review the nominations received, undertake a completeness review and qualifications review, and make a determination as to whether competitive interest exists in any specific location within the Call Area.
If two areas of interest fully or partially overlap, BOEMRE may proceed with the competitive leasing process as described below. For areas where BOEMRE determines that there is no competitive interest, BOEMRE may proceed with the noncompetitive leasing process also described below. While BOEMRE anticipates that this Call will result in multiple nominations for the area that indicate competitive interest exists, it is nonetheless possible that the responses to the Call could lead to following a competitive process, noncompetitive process, or both. BOEMRE may consult with the BOEMRE/Rhode Island and BOEMRE/Massachusetts Task Forces throughout these processes.
Situations may arise in which several parties nominate project areas that do not overlap. Under these circumstances, BOEMRE could choose to employ an allocation system of leases that involves the creation of competition across tracts. This system is referred to as intertract competition and would also be implemented under the competitive process outlined in the regulations. BOEMRE may consult with the BOEMRE/Rhode Island and BOEMRE/Massachusetts Task Forces in determining intertract competition.
Respondents to this Call and members of the public should be aware that no lease will be issued, either competitively or noncompetitively, until the necessary consultations and environmental analysis have been completed and the public has been given ample opportunity to comment. As a result, it is possible that certain areas nominated may not be leased, or that the areas nominated may be modified from their original, proposed form before being offered for lease.
If, after receiving responses to this Call, BOEMRE proceeds with the competitive leasing process for certain areas, it would follow the steps required by 30 CFR 285.211 through 285.225:
(1)
(2)
(3)
(4)
As stated above, BOEMRE may consider using the multiple-factor auction format in addition to the three other auction formats described at 30 CFR 285.220. If BOEMRE were to use a multiple-factor auction format, the evaluation of bids would be made by a panel composed of members selected by BOEMRE, and factors that BOEMRE may choose to include in the auction could be selected from a wide array of options. Factors that BOEMRE may consider for inclusion in this auction process are: Compatibility with existing state and local needs; or public benefits. These factors would be identified in the FSN.
If BOEMRE were to use a multiple-factor auction format, it is possible that a negotiation stage may be included in the bid assessment criteria, to be used if it becomes necessary to modify a proposed lease prior to acceptance. BOEMRE would coordinate with the state and other stakeholders, as appropriate, to establish procedures designed to assure the selection of the most worthy proposal that would provide a fair return to the United States pursuant to subsection 8(p)(2)(A) of the OCS Lands Act (43 U.S.C. 1337(p)(2)(A)).
(5)
If, after evaluating the responses to this notice, BOEMRE determines that there is no competitive interest in a proposed lease area, it may proceed with the noncompetitive lease issuance process pursuant to 30 CFR 285.232, as amended by a rulemaking, which took effect on June 15, 2011 (76 FR 28178).
BOEMRE will comply with the requirements of NEPA, CZMA, ESA, NHPA, and other applicable Federal statutes before issuing a lease noncompetitively. BOEMRE would coordinate and consult, as appropriate, with relevant Federal agencies, affected tribes, affected state and local governments, and provide opportunity for public comment prior to issuing a noncompetitive lease and in formulating lease terms, conditions, and stipulations.
It is possible that responses to this notice may result in a determination that there is competitive interest in acquiring leases in some areas but not in others. BOEMRE will announce publicly its determinations before proceeding with any leasing process.
The Call Area is located on the OCS off the coast of Rhode Island and Massachusetts. The Call Area is divided into two areas separated by an existing TSS. The first section of the Call Area is northwest of the TSS beginning approximately 9 nmi southeast of Point Judith, Rhode Island and extending approximately 2 nmi seaward (Northwest section). This section of the Call Area is approximately 1.25 square nmi and contains 1 partial OCS lease block. The second section of the Call Area is southeast of the TSS beginning approximately 10 nmi south of the Newport, Rhode Island coast and extending approximately 20 nmi seaward (Southeast section). This section of the Call area is approximately 246 square nmi and contains 31 whole OCS lease blocks as well as 10 partial OCS lease blocks.
The following partial OCS lease block is included within the Northwest section of the Call Area, in Providence NK19-07:
The following whole OCS lease blocks, are included within the Southeast section of the Call Area in Providence NK19-07: 6817, 6866, 6915, 6916, 6919, 6965, 6966, 6967, 6968, 6969, 6970, 6971, 7015, 7016, 7017, 7018, 7019, 7020, 7021, 7064, 7065, 7066, 7067, 7068, 7069, 7070, 7071, 7114, 7115, 7116, and 7117. The following partial OCS lease blocks, are included within the Southeast section of the Call Area in Providence NK19-07:
The boundary of the Call Area follows the points listed in the tables below for both the Northwest and Southeast sections of the Call Area in clockwise order. Point numbers 1 and 7 are the same in table 1 (Northwest section boundary) and point numbers 1 and 39 are the same in table 2 (Southeast section boundary). Coordinates are provided in X, Y (eastings, northings) UTM Zone 19N, NAD 83 and geographic (longitude, latitude), NAD83.
A map of the area can be found at the following URL:
A large-scale map of the Call Area showing boundaries of the area with numbered blocks is available from BOEMRE at the following address: Bureau of Ocean Energy Management, Regulation and Enforcement, Office of Offshore Alternative Energy Programs, 381 Elden Street, Mail Stop 4090, Herndon, Virginia 20170,
The Call Area was identified by BOEMRE in consultation with the State of Rhode Island and the Commonwealth of Massachusetts, and further delineated through consultation with the BOEMRE/Rhode Island Renewable Energy Task Force and the BOEMRE/Massachusetts Renewable Energy Task Force. Specific mitigation, stipulations, or exclusion areas may be developed as a result of comments and information received in response to this Call, continued coordination with the BOEMRE/Rhode Island Renewable Energy Task Force and the BOEMRE/Massachusetts Renewable Energy Task Force, and the EA for which BOEMRE is concurrently issuing a NOI in the
In October and November 2010, BOEMRE received two separate unsolicited requests, pursuant to 30 CFR 285.230, for commercial leases for areas within the AMI that partially overlap geographically. Because the unsolicited lease requests identified areas within the AMI, BOEMRE organized a joint meeting with both the BOEMRE/Rhode Island and BOEMRE/Massachusetts Renewable Energy Task Forces to discuss the proposals on December 10, 2010.
The following whole OCS lease blocks were requested in an unsolicited commercial lease request by Deepwater Wind New England, LLC: In Providence NK19-07, blocks, 6815, 6816, 6817, 6864, 6865, 6866, 6867, 6914, 6915, 6970, 6971, 7014, 7015, 7016, 7017, 7019, 7020, 7021, 7064, 7065, 7066, 7067, 7068, 7069, 7070, 7071, 7114, 7115, 7116, and 7117.
The following whole OCS lease blocks were requested in an unsolicited commercial lease request by Neptune Wind, LLC: In Providence NK19-07, blocks, 6970, 6971, 7018, 7019, 7020, and 7021.
Portions of the following OCS blocks submitted in Deepwater Wind New England, LLC's unsolicited request have not been included within the Call Area: In Providence NK19-07:
Should Deepwater Wind New England, LLC wish to modify its proposal, it may do so pursuant to the section of this Call entitled “Required Nomination Information.”
BOEMRE is aware of unexploded ordnance, as indicated on the NOAA nautical chart, and has excluded the following OCS lease blocks that overlap:
In Providence NK19-07:
The SAMP has identified portions of the Call Area as important for commercial and recreational fishing activities, as well as important marine fish habitat. Specifically, the area in the vicinity of Cox Ledge is identified in the SAMP as important for a range of commercial fishing activities, including scallop dredging, gillnetting, lobster trapping, bottom trawling and recreational activities. The area also contains complex marine habitats. Specific information on fishery resources, fishing activities and important marine habitats can be found in the Ocean SAMP Fisheries Chapter at:
Data suggest that future development in and around Cox Ledge would potentially conflict with fishing activities and marine habitats. The National Marine Fisheries Service (NMFS) has expressed concern regarding impacts to these fishery resources that may result from potential future development. BOEMRE may exclude additional areas from further consideration for potential commercial wind energy leasing based on the information acquired in response to this Call and the results of the environmental review process conducted pursuant to NEPA, as described earlier in this notice.
BOEMRE received several comments, in consultation with the joint BOEMRE Rhode Island and Massachusetts Renewable Energy Task Forces, on the development of this Call on commercial and recreational fishing activities and fish habitat within the Call Area. BOEMRE has included a summary of these comments for consideration by respondents preparing to submit an expression of interest in response to this Call. The following associations forwarded comments for consideration through consultation with the joint Rhode Island and Massachusetts Renewable Energy Task Forces: Atlantic Offshore Lobstermen's Association, Eastern New England Scallop Association, Martha's Vineyard/Dukes County Fishermen's Association, Rhode Island Lobsterman's Association, Rhode Island Party and Charter Boat Association, and Sakonnet Point Fishermen's Association. BOEMRE has aggregated these comments and provided the following summary:
The entire area included in this Call was identified as being important for commercial and recreational fishing and marine habitat for several species, including Atlantic blue fin tuna, black sea bass, cod, dogfish, groundfish species, lobster, monkfish, scup, sea scallops, large pelagic sharks, winter flounder, and yellowtail flounder. The following OCS blocks were requested to be removed from further consideration from the Call area, in Providence NK19-07: 6764, 6815, 6816, 6865, 6866, 6914, 6915, 6916, 6964, 6966, 6967, 6968, 6969, 6970, 6971, 7014, 7015, 7016, 7017, 7018, 7019, 7020, 7021, 7064, 7065, 7066, 7067, 7068, 7069, 7070, and 7071. BOEMRE has identified these areas for consideration by respondents preparing to submit an expression of interest in response to this Call.
The U.S. Coast Guard (USCG) has provided the following information for consideration by respondents and other interested parties to this Call. The USCG has a responsibility to ensure the safety of navigation under the Ports and Waterways Safety Act (PWSA). The PWSA requires the USCG to provide safe access routes for the movement of vessel traffic proceeding to or from ports or places subject to the jurisdiction of the United States. This is accomplished through designation of necessary fairways and TSS for vessels operating in the territorial sea of the United States and in high sea approaches, outside the territorial sea. The USCG may also determine that establishment of other ships' routing measures would enhance navigational safety, and it works with its Federal interagency and International Maritime Organization partners to establish these voluntary measures as necessary.
The potential for navigational safety risk posed by building structures in the proximity of shipping is affected by numerous factors, including but not limited to: vessel size, vessel type, density of traffic, prevailing conditions, cumulative impacts of multiple obstructions (for example, wind assessment or development facilities), existence of multiple shipping routes (for example, crossing or meeting situations), radar/automatic radar plotting aid (ARPA) interference, and existence of mitigating factors such as navigational aids, vessel traffic services, or pilotage.
Currently, there is no standard recommended separation distance between offshore renewable energy facilities and shipping routes. The USCG has reviewed guidance published by other countries such as the United Kingdom's Maritime Guidance Note MGN-371 and consulted with its own waterways subject matter experts. Currently, the USCG considers that the placement of offshore wind assessment and generation facilities in any areas less than 1 nmi from traditional shipping routes poses a high risk to navigational safety and therefore does not recommend placement of offshore renewable energy facilities in such areas. The USCG considers placement of such wind facilities in areas greater than 5 nmi from existing shipping routes to pose minimal risk to navigational safety. Areas considered for placement of wind facilities between 1 nmi and 5 nmi would require additional USCG analysis to determine if mitigation factors could be applied to bring navigational safety risk to within acceptable levels. Respondents to this Call should note that impacts to radar and ARPA still occur outside of 1 nmi and will have to be evaluated along with other potential impacts. The above are only planning guidelines and may be changed based on the completion of the Atlantic Coast Port Access Route Study (ACPARS) which is described below. In addition, these guidelines maybe further modified upon completion of a Navigational Safety Risk Assessment (NSRA) that may be required before BOEMRE approves construction of any offshore renewable energy facilities.
The USCG is conducting an ACPARS to determine how best to route traffic on the Atlantic coast. (See
As a member of the BOEMRE Rhode Island and Massachusetts Renewable Energy Task Forces, the USCG conducted an evaluation, using the best available information, of the Rhode Island and Massachusetts Call Area. The USCG recommended OCS blocks (including sub-blocks) that, if developed, may have an unacceptable effect on navigational safety, and other OCS blocks (including sub-blocks) that would require further study to determine the potential effect that the installation of wind facilities in these blocks would have on navigation safety. In evaluating the practical effect of the OCS blocks that are the subject of this Call Area, the USCG applied the criteria described above and also conducted a review of other available information including: existing AIS data and user input; existing traffic patterns; and a literature review of material relevant to historical and current coastwise and international uses in the Call Area. In addition, the USCG considered the opinions and advice of USCG Subject Matter Experts (SMEs) and the ACPARS workgroup concerning waterways management, and the potential for modifications to existing routing measures and the creation of new routing measures in the area.
The USCG has advised BOEMRE that, at this time, all blocks included in the Call may be considered for possible leasing and potential development. However, the USCG advises that all blocks included in the Call require further study and analysis related to existing traffic usage and patterns, as well as projected future traffic increases based on the development of adjacent and adjoining blocks, which will be accomplished during the development
The DOD conducts offshore testing, training, and operations on the OCS. BOEMRE will consult with the DOD on all areas nominated for leasing to ensure that any future development can be compatible with defense activities on the OCS.
BOEMRE received a request from Verizon to eliminate OCS blocks 7014, 7064, 7065, 7115, and 6017 from consideration for potential future leasing due to the presence of the CB-1 (formerly Gemini) underwater telecommunications cable. BOEMRE has included this information for consideration by potential respondents to this Call.
Several task force reviewers of the Rhode Island/Massachusetts Call have recommended areas to be excluded from consideration of potential leasing. As explained in the section of the Call entitled, “Purpose of the Call for Information and Nominations,” the inclusion of an area in the Call is not a decision to lease that area. It is a decision to solicit information from all interested and affected parties that BOEMRE can use in arriving at an ultimate decision on whether to offer the area for lease. The information the Call seeks relates to both renewable energy development interest and to other resources and uses. After considering the information it receives in response to the Call, BOEMRE may decide to exclude certain areas at the next step in the planning process—the Area Identification—or to include those areas for further consideration and analysis in the NEPA review. Please refer to the NOI that is concurrently published with this notice. Generally, BOEMRE's approach is to analyze areas thoroughly with the goal of eliminating or reducing to an acceptable level any potential resource and use conflicts. However, if BOEMRE concludes that such conflicts cannot be properly mitigated, exclusions may be necessary. BOEMRE intends to make fully informed decisions on exclusions at the appropriate time in the lease planning process.
The Rhode Island/Massachusetts Call includes areas in which competing uses have been identified by task force members. BOEMRE has highlighted in the Call two such uses: (1) Vessel traffic and (2) commercial fishing, for which we are requesting specific data and information to inform subsequent decisions. We will consider the information we receive from interested developers, maritime interests, commercial fishers, and others concerning these areas and uses in reaching an Area Identification and in planning the ensuing NEPA analysis. It is possible that certain geographic areas and associated mitigation measures could be framed as alternatives in the NEPA analysis to enable thorough and conclusive consideration by BOEMRE in its decisionmaking.
If you intend to submit a nomination for a commercial wind energy lease within the Call Area to BOEMRE, you must provide the following:
(1) The BOEMRE Protraction name, number, and specific whole or partial OCS blocks or sub-blocks within the Call Area that are of interest for commercial wind leasing, including any required buffer area. This information should be submitted as a spatial file compatible with ArcGIS 9.3 in a geographic coordinate system (NAD 83) in addition to your hard copy submittal. If your proposed lease area includes one or more partial blocks please describe those partial blocks in terms of a sixteenth (
(2) A description of your objectives and the facilities that you would use to achieve those objectives including: A general description of devices and infrastructure you intend to use; anticipated power production and likely purchasers; a statement that the proposed activity conforms with state and local energy planning requirements, initiatives or guidance, as appropriate;
(3) A preliminary schedule of proposed activities, including those leading to commercial operations;
(4) Available and pertinent data and information concerning renewable energy resources and environmental conditions in the area you wish to lease, including energy and resource data and information used to evaluate the Call Area. Where applicable, spatial information should be submitted in a format compatible with ArcGIS 9.3 in a geographic coordinate system (NAD 83);
(5) If available, identification of potential cable landfall sites, staging areas and any other support sites that may be necessary for your project;
(6) If available, information regarding proposed land-side and near-shore project elements and their potential effects on historic and cultural resources;
(7) Description of the compatibility of your project with commercial fishing activity (
(8) Documentation demonstrating that you are legally qualified to hold a lease as set forth in 30 CFR 285.106 and 107. Examples of documentation appropriate for demonstrating your legal qualifications can be found in Chapter 2 and Appendix B of the BOMRE Renewable Energy Framework Guide Book available at
(9) You must also include documentation demonstrating that you are technically and financially capable of constructing, operating, maintaining and decommissioning the facilities described in (2) above. Guidance regarding documentation appropriate for demonstrating your technical and financial qualifications can be found at:
(10) Information submitted previously in an unsolicited request need not be re-submitted in response to this Call unless
It is critical that you submit a complete nomination so that BOEMRE may evaluate your submission in a timely manner. If BOEMRE reviews your nomination and determines that it is incomplete, BOEMRE will inform you of this determination in writing. This letter will describe the information that BOEMRE determined to be missing from your nomination, and indicate the information that you must submit in order for BOEMRE to deem your submission complete. You will be given 15 business days from the date of the letter to submit the information that BOEMRE found to be missing from your original submission. If you do not meet this deadline, or if BOEMRE determines this second submission to be insufficient, then BOEMRE may deem your nomination invalid. In such a case, BOEMRE would not move forward with your nomination submitted in response to this Call.
BOEMRE is requesting from the public and other interested or affected parties specific and detailed comments regarding the following conditions in the area identified:
(1) Geological and geophysical conditions (including bottom and shallow hazards);
(2) Known archaeological and/or cultural resource sites on the seabed or nearshore and methodologies used to acquire that data;
(3) Historic properties potentially affected by the construction of meteorological towers, the installation of meteorological buoys, or commercial wind development in the area identified in this Call;
(4) Multiple uses of the area, including navigation (in particular, commercial and recreational vessel use), recreation, and fisheries (commercial and recreational); and
(5) Other relevant socioeconomic, biological, and environmental information.
BOEMRE will protect privileged or confidential information that you submit as required by the Freedom of Information Act (FOIA). Exemption 4 of FOIA applies to trade secrets and commercial or financial information that you submit that is privileged or confidential. If you wish to protect the confidentiality of such information, clearly mark it and request that BOEMRE treat it as confidential. BOEMRE will not disclose such information, subject to the requirements of FOIA. Please label privileged or confidential information “Contains Confidential Information” and consider submitting such information as a separate attachment.
However, BOEMRE will not treat as confidential any aggregate summaries of such information or comments not containing such information. Additionally, BOEMRE will not treat as confidential (1) the legal title of the nominating entity (for example, the name of your company), or (2) the list of whole or partial blocks that you are nominating. Information that is not labeled as privileged or confidential will be regarded by BOEMRE as suitable for public release.
BOEMRE is required, after consultation with the Secretary, to withhold the location, character, or ownership of historic resources if it determines that disclosure may, among other things, risk harm to the historic resources or impede the use of a traditional religious site by practitioners. Tribal entities should designate information that falls under Section 304 of NHPA as “Confidential”.
Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), Interior.
Notice of Intent to Prepare an Environmental Assessment.
This notice is being published as an initial step for the purpose of involving Federal agencies, states, tribes, local government, offshore wind energy developers, and the public in the Department of the Interior's (DOI) “Smart from the Start” wind energy initiative. The purpose of the “Smart from the Start” wind energy initiative is to identify areas that may be most suitable for wind energy leasing on the OCS, and to obtain public and expert input that will inform the Department's decisionmaking with regard to issuing leases and approving site assessment activities in these areas, in accordance with the DOI and the Council on Environmental Quality (CEQ) regulations implementing the provisions of the National Environmental Policy Act (NEPA) of 1969 as amended (42 U.S.C. 4321
In consultation with other Federal agencies and the Rhode Island and Massachusetts Renewable Energy Task Forces, BOEMRE has identified an area for consideration for potential future wind energy leasing. This area, offshore Rhode Island and Massachusetts, is identified in the
More information on the task forces and the “Smart from the Start” initiative can be found at:
BOEMRE intends to prepare an environmental assessment (EA), which will consider the environmental consequences associated with issuing commercial wind leases and approving site assessment activities on those leases (within all or some of this Call Area). The EA will not analyze or support
This Notice of Intent (NOI) to prepare an environmental assessment is published pursuant to 43 CFR 46.305.
Michelle Morin, BOEMRE Office of Offshore Alternative Energy Programs, 381 Elden Street, MS 4090, Herndon, Virginia 20170-4817, (703) 787-1340 or
There are three key phases of the wind energy leasing and development process on the OCS: (1) Lease issuance; (2) approval of a site assessment plan (SAP); and (3) approval of a construction and operation plan (COP). The first phase, issuance of a commercial renewable energy lease, gives the lessee an exclusive right to apply for approval of subsequent plans, the approval of which is necessary for a lessee to advance to the next stage of the renewable energy development process. The second phase is the applicant's submission, and BOEMRE's subsequent review and approval of a SAP. Approval of a SAP would allow the lessee to construct and install a meteorological tower and/or buoys on the leasehold.
The proposed action that will be the subject of the EA is the issuance of renewable energy leases within all or some of the Call Area described in this Notice, and the approval of site assessment activities on those leases (
The EA will not, however, be used to support any future decision regarding the approval of the construction or operation of any wind energy facility on leases that may be issued within all or some of this Call Area. BOEMRE is not currently considering any such plan, nor has any plan been submitted. If and when a lessee is ready to begin this third phase of renewable energy development, it will submit a COP. If a COP is submitted for a particular project on a lease, a separate site- and project-specific NEPA analysis would be prepared. This would take the form of an Environmental Impact Statement (EIS) and would provide additional opportunities for public involvement pursuant to NEPA and the CEQ regulations at 40 CFR parts 1500-1508. Such an EIS process would provide the public and Federal officials with comprehensive site- and project-specific information, and the EIS would consider the reasonably foreseeable environmental impacts of the specific project that the lessee is proposing. These potential impacts will be taken into account when deciding whether to approve, approve with modification, or deny the COP pursuant to 30 CFR 285.628.
The EA, which is the subject of this notice, will consider the environmental consequences associated with reasonably foreseeable leasing scenarios (not development itself), reasonably foreseeable site characterization scenarios within these lease areas (including geophysical, geotechnical, archeological, and biological surveys), and reasonably foreseeable site assessment scenarios (including the installation and operation of meteorological towers and buoys) on the leases that may be issued within all or some of the Call Area. At a minimum, the alternatives that will be considered are: no action (
Federal, state, and local government agencies, tribal governments, and other interested parties may assist BOEMRE in determining the issues and any additional alternatives to be analyzed in the EA. Input is also requested on measures (
If BOEMRE determines during the EA process that issuing leases and conducting site characterization and assessment activities offshore within the Call Area would result in significant environmental impacts, then BOEMRE would publish a NOI to prepare an EIS for the issuance of renewable energy leases and approval of site assessment activities within all or some of this Call Area. If BOEMRE determines during the EA process that issuing leases and conducting site characterization and assessment activities within all or some of this Call Area would not result in significant environmental impacts, then BOEMRE would issue a Finding of No Significant Impact (FONSI). After either a FONSI is issued or the EIS process is completed, BOEMRE may issue one or more renewable energy leases within all or some of this Call Area. In the event that a particular lease is issued, and the lessee submits a SAP, BOEMRE will determine whether the EA adequately considers the environmental consequences of the activities proposed in the lessee's SAP. If the analysis in the EA adequately addresses these consequences, then no further NEPA analysis would be required before the SAP is approved. If that analysis is inadequate, additional NEPA analysis would be conducted before the SAP could be approved.
On November 6, 2007, BOEMRE published a Notice of Availability in the
BOEMRE will incorporate the environmental and socioeconomic analyses of site characterization and assessment activities from the Programmatic EIS, Interim Policy EA, and other public information to inform its analysis in the EA. The EA will be developed using many of the principles of coastal and marine spatial planning, such as comprehensive interagency coordination, to identify information needs for COP submittals necessary for future decisionmaking regarding wind energy development.
BOEMRE has identified an area for consideration for potential future wind energy leasing in consultation with other Federal agencies and the Rhode Island and Massachusetts Renewable Energy Task Forces. The area identified in the Call and this notice is located within the AMI, as described by a MOU between the Governors of Rhode Island and Massachusetts. The Call Area is divided into two areas separated by an existing traffic separation scheme. A detailed description of the area can be found in the Call that is published concurrently with this notice.
A map of the area can be found at the following URL:
A large-scale map of the Call Area showing boundaries of the area with numbered blocks is available from BOEMRE at the following address: Bureau of Ocean Energy Management, Regulation and Enforcement, Office of Offshore Alternative Energy Programs, 381 Elden Street, Mail Stop 4090, Herndon, Virginia 20170,
Based on the information submitted in response to this notice and the aforementioned Call, BOEMRE would identify an area in which interest exists, and which will be subject to environmental analysis, in consultation with appropriate Federal agencies, states, local governments, tribes and other interested parties. The area identified will constitute a WEA under the “Smart from the Start” initiative, which will be the area analyzed in the EA.
BOEMRE invites other Federal agencies and state, tribal, and local governments to consider becoming cooperating agencies in the preparation of this EA. CEQ regulations implementing the procedural provisions of NEPA define cooperating agencies as those with “jurisdiction by law or special expertise” (40 CFR 1508.5). Potential cooperating agencies should consider their authority and capacity to assume the responsibilities of a cooperating agency and to remember that an agency's role in the environmental analysis neither enlarges nor diminishes the final decisionmaking authority of any other agency involved in the NEPA process.
Upon request, BOEMRE will provide potential cooperating agencies with a draft Memorandum of Agreement that includes a schedule with critical action dates and milestones, mutual responsibilities, designated points of contact, and expectations for handling predecisional information. Agencies should also consider the “Factors for Determining Cooperating Agency Status” in Attachment 1 to CEQ's January 30, 2002, Memorandum for the Heads of Federal Agencies: Cooperating Agencies in Implementing the Procedural Requirements of the NEPA. A copy of this document is available at:
BOEMRE, as the lead agency, will not provide financial assistance to cooperating agencies. Even if an organization is not a cooperating agency, opportunities will exist to provide information and comments to BOEMRE during the normal public input phases of the NEPA/EA process.
Federal, state, local government agencies, tribal governments, and other interested parties are requested to send their written comments regarding environmental issues and the identification of reasonable alternatives related to the proposed actions described in this notice in one of the following ways:
1.
2. In written form, delivered by hand or by mail, enclosed in an envelope labeled “Comments on Rhode Island and Massachusetts EA” to Program Manager, Office of Offshore Alternative Energy Programs (MS 4090), Bureau of Ocean Energy Management, Regulation and Enforcement, 381 Elden Street, Herndon, Virginia 20170. Comments should be submitted no later than October 3, 2011.
Bureau of Land Management, Interior.
Notice of availability.
In accordance with the National Environmental Policy Act of 1969, as amended, the Bureau of Land Management (BLM) announces the availability of the Record of Decision (ROD) for the South Porcupine Coal Lease-by-Application (LBA) included in the Wright Area Coal Lease Applications Environmental Impact Statement (EIS).
The document is available electronically on the following Web site:
• Bureau of Land Management, Wyoming State Office, 5353 Yellowstone Road, Cheyenne, Wyoming 82009; and
• Bureau of Land Management, Wyoming High Plains District Office, 2987 Prospector Drive, Casper, Wyoming 82604.
Mr. Tyson Sackett, Acting Wyoming Coal Coordinator, at (307) 775-6487, or Ms. Sarah Bucklin, EIS Project Manager, at (307) 261-7541. Mr. Sackett's office is located at the BLM Wyoming State Office, 5353 Yellowstone Road, Cheyenne, Wyoming 82009. Ms. Bucklin's office is located at the BLM High Plains District Office, 2987 Prospector Drive, Casper, Wyoming 82604. Persons who use a telecommunications device for the deaf
The ROD covered by this Notice of Availability is for the South Porcupine Coal Tract and addresses leasing Federal coal in Campbell County, Wyoming, administered by the BLM Wyoming High Plains District Office. The BLM approves Alternative 2, which is the preferred alternative for this LBA in the Wright Area Coal Final EIS. Under Alternative 2, the South Porcupine Coal LBA area, as modified by the BLM, includes approximately 3,243 acres. The BLM estimates that it contains approximately 401,830,508 tons of mineable Federal coal reserves under the selected configuration.
The BLM will announce a competitive coal lease sale in the
This decision is subject to appeal to the Interior Board of Land Appeals (IBLA), as provided in 43 CFR part 4, within thirty (30) days from the date of publication of this Notice of Availability in the
National Park Service, Interior.
Notice of Availability of the Draft General Management Plan and Environmental Impact Statement.
Pursuant to the National Environmental Policy Act of 1969, 42 U.S.C. 4332(2)(C), the National Park Service (NPS) announces the availability of a Draft Environmental Impact Statement (EIS) for the General Management Plan (GMP) for Biscayne National Park (Park), Florida.
Consistent with NPS laws, regulations, and policies and the purpose of the Park, the Draft EIS/GMP describes the NPS preferred alternative—Alternative 4—to guide the management of the Park over the next 20 to 30 years. The preferred alternative incorporates various management prescriptions to ensure protection, access and enjoyment of the park's resources.
An up-to-date GMP is needed to address how visitors access and use the park and the facilities needed to support those uses, how resources are managed, and how the NPS manages its operations. Recent studies have enhanced the NPS's understanding of resources, resource threats, and visitor use in the park.
The NPS will accept comments from the public on the Draft EIS/GMP for at least 60 days, starting from the date the Environmental Protection Agency publishes this Notice of Availability. The date, time, and location of the public meetings on the Draft EIS/GMP will be announced through the NPS Planning, Environment, and Public Comment (PEPC)
Electronic copies of the Draft EIS/GMP will be available online at
Comments may be submitted by several methods. The preferred method is commenting via the internet on the PEPC Web site above. An electronic public comment form is provided on this Web site. You may also mail comments to Superintendent, Biscayne National Park, 9700 SW 328 Street, Homestead, FL 33033-5634. Finally, you may hand-deliver comments to the park. Before including your address, phone number, e-mail address, or other personal identifying information in your comment, please be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so. We will always make submissions from organizations or businesses, and from individuals identifying themselves as representatives of or officials of organizations or businesses, available for public inspection in their entirety. A limited number of compact disks and printed copies of the Draft GMP/EIS will be made available at Biscayne National Park headquarters, 9700 SW 328 Street, Homestead, FL.
Public meetings, newsletters, and internet updates have kept the public informed and involved throughout the planning process. The draft GMP provides a framework for management, use, and development of the national park for the next 20 or more years. It presents and analyzes five alternatives: Alternative 1 (no action) provides a baseline for evaluating changes and impacts of the four action alternatives. Alternative 2 provides the highest level of visitor services in the form of increased facilities and access to areas of the park. Alternative 3 adds a visitor permit system and marine reserve zone. Alternative 4 is the NPS Preferred Alternative. It was crafted to emphasize strong natural and cultural resource protection while providing a diversity of visitor experiences. Visitor opportunities in this alternative would range from the challenges of exploring the natural environment alone to the conveniences of built surroundings. A limited amount of moderate resource impacts would be tolerated in high-use areas of the park. While the majority of the park would be open for public enjoyment and appreciation, some areas would be closed to visitors to protect sensitive resources and allow wildlife a respite from people. Alternative 5 provides the highest protection of natural and cultural resources on the park, including a larger marine reserve zone.
The five alternatives are described in detail in chapter 2 of the draft plan. The key impacts of implementing the five alternatives are detailed in chapter 4 and summarized in chapter 2.
Biscayne National Park Superintendent Mark Lewis, 9700 SW 328 Street, Homestead, FL 33033-5634 or telephone at (305) 230-1144. The authority for publishing this notice is contained in 40 CFR 1506.6
The responsible official for this Draft EIS is the Regional Director, NPS Southeast Region, 100 Alabama Street SW., 1924 Building, Atlanta, Georgia 30303.
National Park Service, Interior.
Notice of availability of a Draft Environmental Impact Statement for the General Management Plan (DEIS/GMP), Canaveral National Seashore (Seashore).
Pursuant to 42 U.S.C. 4332(2)(C) of the National Environmental Policy Act of 1969 the NPS announces the availability of a DEIS/GMP for Canaveral National Seashore, Florida.
The document provides a framework for management, use, and development options for the Seashore by the NPS for the next 15 to 20 years. It describes four management alternatives for consideration, including a No-Action Alternative that continues current management policies and the NPS's preferred alternative. The document analyzes the environmental impacts of the alternatives.
There will be a 60-day comment period beginning with the Environmental Protection Agency's publication of this notice of availability in the
Copies of the DEIS/GMP are available by contacting the Park Superintendent at Canaveral National Seashore, 212 S. Washington Avenue, Titusville, Florida 32796-3553; telephone: 321-267-1110. An electronic copy of the DEIS/GMP is available on the Internet at
There will be a 60-day comment period beginning with the Environmental Protection Agency's publication of this notice of availability in the
Before including your address, phone number, e-mail address, or other personal identifying information in your comment, please be advised that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold from public review your personal identifying information, we cannot guarantee that we will be able to do so.
The DEIS/GMP presents three management alternatives for the Seashore in addition to the no-action alternative. The four alternatives are as follows:
Alternative A (No-action Alternative): The continuation of current management practices and trends, as set forth general in the 1982 GMP and 1998 GMP amendment.
Alternative B (The NPS Preferred Alternative): Would provide the highest protection of natural and cultural resources associated with the Seashores barrier island system.
Alternative C: Would provide the highest level of visitor services in the form of increased facilities and access to areas of the park.
Alternative D: Would provide a limited level of facility development and would enhance visitor and educational opportunities through partnerships.
The Superintendent, Canaveral National Seashore, at the address and telephone number shown above. An electronic copy of the DEIS/GMP is available on the Internet at
The responsible official for this DEIS/GMP is the Regional Director, Southeast Region, NPS, 100 Alabama Street SW., 1924 Building, Atlanta, Georgia 30303.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has received a complaint entitled
James R. Holbein, Secretary to the Commission, U.S. International Trade Commission, 500 E Street, SW., Washington, DC 20436, telephone (202) 205-2000. The public version of the complaint can be accessed on the Commission's electronic docket (EDIS) at
General information concerning the Commission may also be obtained by accessing its Internet server (
The Commission has received a complaint filed on behalf of Renesas Electronics Corporation and 511 Technologies, Inc. on August 12, 2011. The complaint alleges violations of section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) in the importation into the United States, the sale for importation, and the sale within the United States after importation of certain digital televisions containing integrated circuit devices and components thereof. The complaint names as respondent Vizio, Inc. of CA.
The complainant, proposed respondents, other interested parties, and members of the public are invited to file comments, not to exceed five pages in length, on any public interest issues raised by the complaint. Comments should address whether issuance of an exclusion order and/or a cease and desist order in this investigation would negatively affect the public health and welfare in the United States, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, or United States consumers.
In particular, the Commission is interested in comments that:
(i) Explain how the articles potentially subject to the orders are used in the United States;
(ii) identify any public health, safety, or welfare concerns in the United States relating to the potential orders;
(iii) indicate the extent to which like or directly competitive articles are
(iv) indicate whether Complainant, Complainant's licensees, and/or third party suppliers have the capacity to replace the volume of articles potentially subject to an exclusion order and a cease and desist order within a commercially reasonable time.
Written submissions must be filed no later than by close of business, five business days after the date of publication of this notice in the
Persons filing written submissions must file the original document and 12 true copies thereof on or before the deadlines stated above with the Office of the Secretary. Submissions should refer to the docket number (“Docket No. 2840”) in a prominent place on the cover page and/or the first page. The Commission's rules authorize filing submissions with the Secretary by facsimile or electronic means only to the extent permitted by section 201.8 of the rules (see Handbook for Electronic Filing Procedures,
Any person desiring to submit a document to the Commission in confidence must request confidential treatment. All such requests should be directed to the Secretary to the Commission and must include a full statement of the reasons why the Commission should grant such treatment.
This action is taken under the authority of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and of sections 201.10 and 210.50(a)(4) of the Commission's Rules of Practice and Procedure (19 CFR 201.10, 210.50(a)(4)).
By order of the Commission.
U.S. International Trade Commission.
Notice.
Notice is hereby given that a complaint was filed with the U.S. International Trade Commission on July 15, 2011, under section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337, on behalf of Samsung LED Co., Ltd. of Korea and Samsung LED America, Inc. of Atlanta, Georgia. The complaint alleges violations of section 337 based upon the importation into the United States, the sale for importation, and the sale within the United States after importation of certain light-emitting diodes and products containing same by reason of infringement of certain claims of U.S. Patent No. 6,551,848 (“the '848 patent”); U.S. Patent No. 7,268,372 (“the '372 patent”); U.S. Patent No. 7,282,741 (“the '741 patent”); U.S. Patent No. 7,771,081 (“the '081 patent”); U.S. Patent No. 7,893,443 (“the '443 patent”); U.S. Patent No. 7,838,315 (“the '315 patent”); U.S. Patent No. 7,959,312 (“the '312 patent”); and U.S. Patent No. 7,964,881 (“the '881 patent”). The complaint further alleges that an industry in the United States exists as required by subsection (a)(2) of section 337.
The complainants request that the Commission institute an investigation and, after the investigation, issue an exclusion order and a cease and desist order.
The complaint, except for any confidential information contained therein, is available for inspection during official business hours (8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. International Trade Commission, 500 E Street, SW., Room 112, Washington, DC 20436, telephone (202) 205-2000. Hearing impaired individuals are advised that information on this matter can be obtained by contacting the Commission's TDD terminal on (202) 205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at (202) 205-2000. General information concerning the Commission may also be obtained by accessing its Internet server at
The Office of Unfair Import Investigations, U.S. International Trade Commission, telephone (202) 205-2560.
The authority for institution of this investigation is contained in section 337 of the Tariff Act of 1930, as amended, and in section 210.10 of the Commission's Rules of Practice and Procedure, 19 CFR 210.10 (2011).
(1) Pursuant to subsection (b) of section 337 of the Tariff Act of 1930, as amended, an investigation be instituted to determine whether there is a violation of subsection (a)(1)(B) of section 337 in the importation into the United States, the sale for importation, or the sale within the United States after importation of certain light-emitting diodes and products containing same that infringe one or more of claims 1, 3, 5-10, and 13-16 of the '848 patent; claims 1-9 of the '372 patent; claims 1 and 5-9 of the '741 patent; claims 1, 2, 4, 6-8, 10, and 11 of the '081 patent; claims 1, 4, 5, and 7-14 of the '443 patent; claims 1-4, 6, and 9-13 of the '312 patent; claims 1-5 of the '315 patent; and claims 1-12 of the '881 patent, and whether an industry in the United States exists as required by subsection (a)(2) of section 337;
(2) For the purpose of the investigation so instituted, the following are hereby named as parties upon which this notice of investigation shall be served:
(a) The complainants are:
(b) The respondents are the following entities alleged to be in violation of section 337, and are the parties upon which the complaint is to be served:
(c) The Office of Unfair Import Investigations, U.S. International Trade
(3) For the investigation so instituted, the Chief Administrative Law Judge, U.S. International Trade Commission, shall designate the presiding Administrative Law Judge.
The Office of Unfair Import Investigations will not participate as a party in this investigation.
Responses to the complaint and the notice of investigation must be submitted by the named respondents in accordance with section 210.13 of the Commission's Rules of Practice and Procedure, 19 CFR 210.13. Pursuant to 19 CFR 201.16(d)-(e) and 210.13(a), such responses will be considered by the Commission if received not later than 20 days after the date of service by the Commission of the complaint and the notice of investigation. Extensions of time for submitting responses to the complaint and the notice of investigation will not be granted unless good cause therefor is shown.
Failure of a respondent to file a timely response to each allegation in the complaint and in this notice may be deemed to constitute a waiver of the right to appear and contest the allegations of the complaint and this notice, and to authorize the administrative law judge and the Commission, without further notice to the respondent, to find the facts to be as alleged in the complaint and this notice and to enter an initial determination and a final determination containing such findings, and may result in the issuance of an exclusion order or a cease and desist order or both directed against the respondent.
By order of the Commission.
United States International Trade Commission.
August 26, 2011 at 11 a.m.
Room 101, 500 E Street, SW., Washington, DC 20436. Telephone: (202) 205-2000.
Open to the public.
1. Agendas for future meetings: none.
2. Minutes.
3. Ratification List.
4. Vote in Inv. No. 731-TA-1189 (Preliminary) (Large Power Transformers from Korea). The Commission is currently scheduled to transmit its determination to the Secretary of Commerce on or before August 29, 2011; Commissioners' opinions are currently scheduled to be transmitted to the Secretary of Commerce on or before September 6, 2011.
5. Outstanding action jackets: none.
In accordance with Commission policy, subject matter listed above, not disposed of at the scheduled meeting, may be carried over to the agenda of the following meeting.
By order of the Commission.
Notice is hereby given that on August 12, 2011, a proposed Consent Decree in
Under the Consent Decree, Clean Harbors has agreed to certain injunctive relief, to pay a penalty in the amount of $650,000, and to implement a Supplemental Environmental Project, at a cost of at least $1,062,500, involving the planting of approximately 1,400 trees in low-income or minority areas located in the City of Boston. The Consent Decree resolves the civil claims of the United States for the violations alleged in the Complaint through the date of lodging of the Consent Decree.
For a period of thirty days from the date of this publication, the Department of Justice will receive and consider comments relating to the Consent Decree. All comments must be received by the Department of Justice within this thirty-day period. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and either e-mailed to
The Agreement may be examined at the Office of the United States Attorney, District of Massachusetts, United States Federal Courthouse, 1 Courthouse Way, Boston, MA 02210 (contact George B. Henderson, II at 617-748-3100). During the public comment period, the Agreement may also be examined on the following Department of Justice Web site,
Notice is hereby given that on August 11, 2011, a proposed Consent Decree in
In this action, the United States and the other plaintiffs sought penalties and injunctive relief for the Defendant's violations of the Clean Water Act, 33 U.S.C. 1251
The Department of Justice will receive for a period of thirty (30) days from the date of this publication comments relating to the Consent Decree. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and either e-mailed to
Notice is hereby given that on August 12, 2011, a proposed Partial Consent Decree in
The proposed Partial Consent Decree will settle the United States' claims on behalf of the U.S. Environmental Protection Agency (“EPA”) against Defendants C.A.I., Inc. (“CAI”), Sartorelli Realty, LLC (“SRLLC”), and Roy A. Nelson as Trustee of Nelson Danvers Realty Trust (“NDRT”), pursuant to Section 107 of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. 9607, and Sections 112(r) and 114(a) of the Clean Air Act (“CAA”), 42 U.S.C. 7412(r), 7414(a), with respect to the Danversport Superfund Site, a former inks and paint products manufacturing facility, in Danvers, Massachusetts (“Site”). Pursuant to the Partial Consent Decree, based on demonstrations of limited financial resources: CAI will pay $400,000, including $300,000 in response costs under CERCLA and $100,000 as a civil penalty under the CAA; SRLLC will pay $150,000 in response costs; NDRT will pay $140,000 in response costs; and the settling defendants will transfer to the United States funds from an escrow account totaling approximately $27,000 as of March 2011. In addition, SRLLC and NDRT will make best efforts to sell the Site property and will transfer all net sales proceeds to the United States. Finally, the settling defendants will pay the United States 90% of any net proceeds from the resolution of other Site-related proceedings, up to the total amount of the United States' unreimbursed response costs. The proposed Partial Consent Decree, together with a Partial Consent Decree between the United States and Defendant Arnel Company, Inc. entered on July 1, 2011, will resolve this action in its entirety.
The Department of Justice will receive comments relating to the proposed Partial Consent Decree for a period of 30 days from the date of this publication. Comments on the Partial Consent Decree should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and either e-mailed to
During the public comment period, the proposed Partial Consent Decree may be examined at the following Department of Justice Web site:
Pursuant to Title 21 Code of Federal Regulations 1301.34(a), this is notice that on May 4, 2011, Cambrex Charles City, Inc., 1205 11th Street, Charles City, Iowa 50616-3466, made application by renewal to the Drug Enforcement Administration (DEA) for registration as an importer of the following basic classes of controlled substances:
The company plans to import the listed controlled substances to manufacture a bulk intermediate for sale to its customers. With regards to the phenylacetone, the company plans to use it as a base material in the bulk manufacture of another controlled substance.
No comments, objections, or requests for any hearings will be accepted on any application for registration or re-registration to import crude opium, poppy straw, concentrate of poppy straw, and coca leaves. As explained in the Correction to Notice of Application pertaining to Rhodes Technologies, 72 FR 3417 (2007), comments and requests for hearings on applications to import narcotic raw material are not appropriate.
Any bulk manufacturer who is presently, or is applying to be, registered with DEA to manufacture such basic classes of controlled substances listed in schedule I or II, which fall under the authority of section 1002(a)(2)(B) of the Act 21 U.S.C. 952(a)(2)(B) may, in the circumstances set forth in 21 U.S.C. 958(i), file comments or objections to the issuance of the proposed registration and may, at the same time, file a written request for a hearing on such application pursuant to 21 CFR 1301.43 and in such form as prescribed by 21 CFR 1316.47.
Any such written comments or objections should be addressed, in quintuplicate, to the Drug Enforcement Administration, Office of Diversion Control, Federal Register Representative (ODL), 8701 Morrissette Drive, Springfield, Virginia 22152; and must be filed no later than September 19, 2011.
This procedure is to be conducted simultaneously with, and independent of, the procedures described in 21 CFR 1301.34(b), (c), (d), (e), and (f). As noted in a previous notice published in the
Pursuant to 21 U.S.C. 958(i), the Attorney General shall, prior to issuing a registration under this Section to a bulk manufacturer of a controlled substance in schedule I or II, and prior to issuing a regulation under 21 U.S.C. 952(a)(2) authorizing the importation of such a substance, provide manufacturers holding registrations for the bulk manufacture of the substance an opportunity for a hearing.
Therefore, in accordance with 21 CFR 1301.34(a), this is notice that on May 4, 2011, Cambrex Charles City, 1205 11th Street, Charles City, Iowa 50616-3466, made application by renewal to the Drug Enforcement Administration (DEA) to be registered as an importer of Noroxymorphone (9668), a basic class of controlled substance listed in schedule II.
The company plans to import the basic class of controlled substance in bulk for sale to its customers.
Any bulk manufacturers who are presently, or are applying to be, registered with DEA to manufacture such basic class of controlled substance may file comments or objections to the issuance of the proposed registration and may, at the same time, file a written request for a hearing on such application pursuant to 21 CFR 1301.43 and in such form as prescribed by 21 CFR 1316.47.
Any such written comments or objections should be addressed, in quintuplicate, to the Drug Enforcement Administration, Office of Diversion Control, Federal Register Representative (ODL), 8701 Morrissette Drive, Springfield, Virginia 22152; and must be filed no later than September 19, 2011.
This procedure is to be conducted simultaneously with, and independent of, the procedures described in 21 CFR 1301.34(b), (c), (d), (e), and (f). As noted in a previous notice published in the
Pursuant to Title 21, of the CFR 1301.34(a), this is notice that on June 8, 2011, Aptuit, 10245 Hickman Mills Drive, Kansas City, Missouri 64137, made application by renewal to the Drug Enforcement Administration (DEA) for registration as an importer of the following basic classes of controlled substances:
The company plans to import a finished pharmaceutical product containing cannabis extracts in dosage form for packaging for a clinical trial study. In addition, the company also plans to import an ointment for the treatment of wounds which contain trace amounts of the controlled substances normally found in poppy straw concentrate for packaging and labeling for clinical trials.
No comments, objections, or requests for any hearings will be accepted on any application for registration or re-registration to import crude opium, poppy straw, concentrate of poppy straw or coca leaves. As explained in the Correction to Notice of Application pertaining to Rhodes Technologies, 72 FR 3417(2007), comments and requests for hearings on applications to import narcotic raw material are not appropriate.
Any bulk manufacturer who is presently, or is applying to be, registered with DEA to manufacture such basic classes of controlled substances listed in schedule I or II, which fall under the authority of section 1002(a)(2)(B) of the Act (21 U.S.C. 952(a)(2)(B)) may, in the circumstances set forth in 21 U.S.C. 958(i), file comments or objections to the issuance of the proposed registration, and may, at the same time, file a written request for a hearing on such application pursuant to 21 CFR 1301.43 and in such form as prescribed by 21 CFR 1316.47.
Any such comments or objections should be addressed, in quintuplicate, to the Drug Enforcement Administration, Office of Diversion Control, Federal Register Representative (ODL), 8701 Morrissette Drive, Springfield, Virginia 22152; and must be filed no later than September 19, 2011.
This procedure is to be conducted simultaneously with, and independent of, the procedures described in 21 CFR 1301.34(b), (c), (d), (e), and (f). As noted in a previous notice published in the
By Notice dated May 13, 2011, and published in the
The company plans to import small quantities of the listed controlled substances in dosage form to conduct clinical trials.
No comments or objections have been received. DEA has considered the factors in 21 U.S.C. 823(a) and 952(a), and determined that the registration of Almac Clinical Services Inc. (ACSI) to import the basic classes of controlled substances is consistent with the public interest, and with United States obligations under international treaties, conventions, or protocols in effect on May 1, 1971. DEA has investigated Almac Clinical Services Inc. (ACSI) to ensure that the company's registration is consistent with the public interest. The investigation has included inspection and testing of the company's physical security systems, verification of the company's compliance with state and local laws, and a review of the company's background and history. Therefore, pursuant to 21 U.S.C. 952(a) and 958(a), and in accordance with 21 CFR 1301.34, the above named company is granted registration as an importer of the basic classes of controlled substances listed.
By a Notice dated April 28, 2011, and published in the
The company plans to import the listed controlled substances in order to bulk manufacture controlled substances in Active Pharmaceutical Ingredient (API) form. The company distributes the manufactured API's in bulk form only to its customers.
As explained in the Correction to Notice of Application pertaining to Rhodes Technologies, 72 FR 3417 (2007), comments and requests for hearings on applications to import narcotic raw material are not appropriate.
DEA has considered the factors in 21 U.S.C. 823(a) and 952(a), and determined that the registration of Rhodes Technologies to import the basic classes of controlled substances is consistent with the public interest, and with United States obligations under international treaties, conventions, or protocols in effect on May 1, 1971. DEA has investigated Rhodes Technologies to ensure that the company's registration is consistent with the public interest. The investigation has included inspection and testing of the company's physical security systems, verification of the company's compliance with state and local laws, and a review of the company's background and history. Therefore, pursuant to 21 U.S.C. 952(a) and 958(a), and in accordance with 21 CFR 1301.34, the above named company is granted registration as an importer of the basic classes of controlled substances listed.
Pursuant to § 1301.33(a), Title 21 of the Code of Federal Regulations (CFR), this is notice that on June 17, 2011, Cambridge Isotope Lab, 50 Frontage Road, Andover, Massachusetts 01810, made application by renewal to the
The company plans to utilize small quantities of the listed controlled substance in the preparation of analytical standards.
Any other such applicant, and any person who is presently registered with DEA to manufacture such a substance, may file comments or objections to the issuance of the proposed registration pursuant to 21 CFR 1301.33(a).
Any such written comments or objections should be addressed, in quintuplicate, to the Drug Enforcement Administration, Office of Diversion Control, Federal Register Representative (ODL), 8701 Morrissette Drive, Springfield, Virginia 22152; and must be filed no later than October 17, 2011.
Pursuant to § 1301.33(a), Title 21 of the Code of Federal Regulations (CFR), this is notice that on June 13, 2011, AMRI Rensselaer, Inc., 33 Riverside Avenue, Rensselaer, New York 12144, made application by renewal to the Drug Enforcement Administration (DEA) to be registered as a bulk manufacturer of the following basic classes of controlled substances:
The company plans to manufacture bulk controlled substances for use in product development and for distribution to its customers.
In reference to drug code 7360 (Marihuana), the company plans to bulk manufacture cannabidiol as a synthetic intermediate. This controlled substance will be further synthesized to bulk manufacture a synthetic THC (7370). No other activity for this drug code is authorized for this registration.
Any other such applicant, and any person who is presently registered with DEA to manufacture such substance, may file comments or objections to the issuance of the proposed registration pursuant to 21 CFR 1301.33(a).
Any such written comments or objections should be addressed, in quintuplicate, to the Drug Enforcement Administration, Office of Diversion Control, Federal Register Representative (ODL), 8701 Morrissette Drive, Springfield, Virginia 22152; and must be filed no later than October 17, 2011.
Pursuant to § 1301.33(a), Title 21 of the Code of Federal Regulations (CFR), this is notice that on July 7, 2011, Chemica, 316 West 130th Street, Los Angeles, California 90061, made application by renewal to the Drug Enforcement Administration (DEA) as a bulk manufacturer of Methamphetamine (1105), a basic class of controlled substance listed in schedule II.
The above listed controlled substance is an intermediate in the manufacture of Benzphetamine, a schedule III non-narcotic controlled substance. The methamphetamine will not be sold as a commercial product. The company plans to utilize a bulk active pharmaceutical ingredient (API), as an intermediate for the development of another controlled substance, and further distribution to its customers. The methamphetamine will not be sold.
Any other such applicant, and any person who is presently registered with DEA to manufacture such substance, may file comments or objections to the issuance of the proposed registration pursuant to 21 CFR 1301.33(a).
Any such written comments or objections should be addressed, in quintuplicate, to the Drug Enforcement Administration, Office of Diversion Control, Federal Register Representative (ODL), 8701 Morrissette Drive, Springfield, Virginia 22152; and must be filed no later than October 17, 2011.
Pursuant to § 1301.33(a), Title 21 of the Code of Federal Regulations (CFR), this is notice that on May 27, 2011, Austin Pharma LLC., 811 Paloma Drive, Suite C, Round Rock, Texas 78665-2402, made application by renewal to the Drug Enforcement Administration (DEA) to be registered as a bulk manufacturer of the following basic classes of controlled substances:
The company plans to manufacture bulk active pharmaceutical ingredients (APIs) for distribution to its customers.
In reference to drug code 7360 (Marihuana), the company plans to bulk manufacture cannabidiol as a synthetic intermediate. This controlled substance will be further synthesized to bulk manufacture a synthetic THC (7370). No other activity for this drug code is authorized for this registration.
Any other such applicant, and any person who is presently registered with DEA to manufacture such substance, may file comments or objections to the issuance of the proposed registration pursuant to 21 CFR 1301.33(a).
Any such written comments or objections should be addressed, in quintuplicate, to the Drug Enforcement Administration, Office of Diversion Control, Federal Register Representative (ODL), 8701 Morrissette Drive, Springfield, Virginia 22152; and must be filed no later than October 17, 2011.
Pursuant to § 1301.33(a), Title 21 of the Code of Federal Regulations (CFR), this is notice that on May 16, 2011, Lin Zhi International Inc., 670 Almanor Avenue, Sunnyvale, California 94085, made application by renewal to the Drug Enforcement Administration (DEA) to be registered as a bulk manufacturer of the following basic classes of controlled substances:
The company plans to manufacture the listed controlled substances as bulk reagents for use in drug abuse testing.
Any other such applicant, and any person who is presently registered with DEA to manufacture such substances, may file comments or objections to the issuance of the proposed registration pursuant to 21 CFR 1301.33(a).
Any such written comments or objections should be addressed, in quintuplicate, to the Drug Enforcement Administration, Office of Diversion Control, Federal Register Representative (ODL), 8701 Morrissette Drive, Springfield, Virginia 22152; and must be filed no later than October 17, 2011.
By Notice dated April 25, 2011, and published in the
The company plans to produce the listed controlled substances in bulk to be used in the manufacture of reagents and drug calibrator/controls which are DEA exempt products.
No comments or objections have been received. DEA has considered the factors in 21 U.S.C. 823(a) and determined that the registration of Siemens Healthcare Diagnostics Inc., to manufacture the listed basic classes of controlled substances is consistent with the public interest at this time. DEA has investigated Siemens Healthcare Diagnostics Inc., to ensure that the company's registration is consistent with the public interest. The investigation has included inspection and testing of the company's physical security systems, verification of the company's compliance with state and local laws, and a review of the company's background and history. Therefore, pursuant to 21 U.S.C. 823(a), and in accordance with 21 CFR 1301.33, the above named company is granted registration as a bulk manufacturer of the basic classes of controlled substances listed.
By Notice dated April 28, 2011, and published in the
The company plans to utilize this facility to manufacture small quantities of the listed controlled substances in bulk and to conduct analytical testing in support of the company's primary manufacturing facility in West Deptford, New Jersey. The controlled substances manufactured in bulk at this facility will be distributed to the company's customers.
No comments or objections have been received. DEA has considered the factors in 21 U.S.C. 823(a) and determined that the registration of Johnson Matthey Pharma Services to manufacture the listed basic classes of controlled substances is consistent with the public interest at this time. DEA has investigated Johnson Matthey Pharma Services to ensure that the company's registration is consistent with the public interest. The investigation has included inspection and testing of the company's physical security systems, verification of the company's compliance with state and local laws, and a review of the company's background and history. Therefore, pursuant to 21 U.S.C. 823(a), and in accordance with 21 CFR 1301.33, the above named company is granted registration as a bulk manufacturer of the basic classes of controlled substances listed.
By Notice dated April 11, 2011, and published in the
With regard to Gamma Hydroxybutyric Acid (2010), Tetrahydrocannabinols (7370), and Methamphetamine (1105) only, the company manufactures these controlled substances in bulk solely for domestic distribution within the United States to customers engaged in dosage-form manufacturing.
With regard to Nabilone (7379) only, the company presently manufactures a small amount of this controlled substance in bulk solely to conduct manufacturing process development within the company. It is the company's intention that, when the manufacturing process is refined to the point that its Nabilone bulk product is available for commercial use, the company will export the controlled substance in bulk solely to customers engaged in dosage-form manufacturing outside the United States. The company is aware of the requirement to obtain a DEA registration as an exporter to conduct this activity.
No comments or objections have been received. DEA has considered the factors in 21 U.S.C. 823(a) and determined that the registration of Norac, Inc. to manufacture the listed basic classes of controlled substances is consistent with the public interest at this time. DEA has investigated Norac, Inc. to ensure that the company's registration is consistent with the public interest. The investigation has included inspection and testing of the company's physical security systems, verification of the company's compliance with state and local laws, and a review of the company's background and history. Therefore, pursuant to 21 U.S.C. 823(a), and in accordance with 21 CFR 1301.33, the above named company is granted registration as a bulk manufacturer of the basic classes of controlled substances listed.
By Notice dated April 13, 2011, and published in the
The company plans to manufacture the listed controlled substances in bulk for distribution to its customers.
No comments or objections have been received. DEA has considered the factors in 21 U.S.C. 823(a), and determined that the registration of Stepan Company to manufacture the listed basic classes of controlled substances is consistent with the public interest at this time. DEA has investigated Stepan Company to ensure that the company's registration is consistent with the public interest. The investigation has included inspection and testing of the company's physical security systems, verification of the company's compliance with state and local laws, and a review of the company's background and history. Therefore, pursuant to 21 U.S.C. 823(a), and in accordance with 21 CFR 1301.33, the above named company is granted registration as a bulk manufacturer of the basic classes of controlled substances listed.
By Notice dated April 25, 2011, and published in the
The company plans to manufacture the listed controlled substances in bulk for conversion and sale to dosage form manufacturers.
No comments or objections have been received. DEA has considered the factors in 21 U.S.C. 823(a) and determined that the registration of Rhodes Technologies to manufacture the listed basic classes of controlled substances is consistent with the public interest at this time. DEA has investigated Rhodes Technologies to ensure that the company's registration is consistent with the public interest. The investigation has included inspection and testing of the company's physical security systems, verification of the company's compliance with state and local laws, and a review of the company's background and history. Therefore, pursuant to 21 U.S.C. 823(a), and in accordance with 21 CFR 1301.33, the above named company is granted registration as a bulk manufacturer of the basic classes of controlled substances listed.
Lyle E. Craker, PhD (Respondent) has requested that I reconsider the Final Order I issued on January 7, 2009 (74 FR 2101), which denied his application to
Following the issuance of the January 7, 2009, Final Order, Respondent submitted a letter to me dated January 21, 2009, noting that, in several places in the Final Order, I indicated I was taking official notice of certain documents that were not submitted during the administrative hearing. With respect to such documents, the Final Order states: “To allow Respondent the opportunity to refute the facts of which I take official notice, Respondent may file a motion for reconsideration within fifteen days of service of this order which shall commence with the mailing of the order.” Thus, Respondent had until January 23, 2009, to file a motion for reconsideration of the facts of which I took official notice. In his January 21, 2009, letter, Respondent requested an extension of this filing deadline until January 30, 2009. I granted this request for an extension by letter dated January 22, 2009.
On January 30, 2009, Respondent submitted to me a document entitled “Request for Opportunity Under 5 U.S.C. 556(e) To Respond to New Officially Noticed Evidence and Motion for Reconsideration.” In this document, Respondent provided a preliminary response to those documents of which I took official notice. However, Respondent asked for additional time to supplement his preliminary response, given the length of the Final Order as well as that of the documents of which I took official notice. I granted this request, allowing Respondent until March 11, 2009, to supplement his response and motion. I further instructed that counsel for the Government would have to submit its response no later than 15 days after being served with Respondent's submission.
On March 11, 2009, Respondent submitted “Respondent's Supplemental Brief in Support of Request Under 5 U.S.C. 556(e) To Respond to New Officially Noticed Evidence and Motion for Reconsideration.” In this document, Respondent provided the legal and factual bases for his motion for reconsideration of the Final Order. Also in the document, Respondent requested that the administrative hearing be reopened so that he may call additional witnesses in view of certain documents of which I took official notice in the final order. The Government submitted its response on April 13, 2009. In view of these submissions, and to clarify Respondent's request, I issued an interim order on May 18, 2009, directing Respondent to submit a list of all witnesses he would call if his request to reopen the administrative hearing were granted and to provide a summary of the proposed testimony for each witness. This interim order further instructed Respondent to indicate precisely which documents he sought to introduce for purposes of his motion for reconsideration and, for each document, whether he wanted me to take official notice of it, or whether he wished to introduce it through witnesses if his request to reopen the hearing were granted.
On June 5, 2009, Respondent submitted his “Witness List and Document List in Support of Motion for Reconsideration.” On December 2, 2010, I issued an order granting in part, and denying in part, Respondent's request that I take official notice of certain documents. The order denied Respondent's request that I reopen the hearing to allow him to call additional witnesses. Having ruled on which new documents would be considered part of the record (through my taking official notice thereof), the order then gave Respondent an additional opportunity to file a final brief in support his motion for reconsideration. The order stated that Respondent was required to submit such brief on or before March 7, 2011, and that the Government's responsive brief was due no later than 30 days after receipt of Respondent's brief. Respondent submitted his brief on March 7, 2011 (hereafter, “Respondent's latest submission”), and the Government submitted its responsive brief on April 1, 2011.
Respondent's request to introduce additional documents for purposes of his motion for reconsideration was addressed at length in my December 2, 2010, Order. For each such document Respondent sought to introduce, the December 2, 2010, Order stated (pages 23-27) whether I would take official notice of the document, and the reasons therefor. Only
If Respondent submits all of the correspondence between Chemic and HHS (or any of its components) relating to this application [Chemic's application to HHS to receive marijuana for research] that he has in his possession or can reasonably access (including, but not limited to, any such correspondence on the MAPS website, such as the January 23, 2009, letter from HHS to Chemic), I will take official notice of all such correspondence.
Accordingly, I rule as follows with respect to these latest proposed exhibits:
(1) I will take official notice of Exhibits C, I, J, and K; and
(2) As Exhibits A, B, D, E, F, G, and H do not comport with the instructions contained in the December 2, 2010, Order, I will not take official notice of these documents, and they will not be considered part of the administrative record considered by the agency in this adjudication.
Given the number of written submissions made by Respondent following the issuance of the January 7, 2009, Final Order, along with the Government's responses thereto and the interim orders I issued regarding these submissions, it is important to reiterate here the purpose for which Respondent was given an opportunity to file a motion for reconsideration. That purpose was stated in the January 7, 2009, Final Order: “To allow Respondent the opportunity to refute the facts of which I take official notice, Respondent may file a motion for reconsideration within fifteen days of service of this order which shall
Respondent's post-Final-Order submissions have, in many respects, gone beyond seeking reconsideration of facts of which I took official notice. Respondent has essentially sought broad reconsideration of the factual and legal bases for the Final Order—generally without predicating such arguments on the taking of official notice of any fact. Neither the Controlled Substances Act (CSA) nor the DEA regulations provide for such a broad-based motion for reconsideration of a Final Order.
The arguments contained in Respondent's post-Final-Order submissions are, for the most part, reiterations of the same arguments that were addressed at length and rejected in the Final Order. In a few instances, as noted below, Respondent does present some slightly different assertions than he previously offered. However, even in these instances, Respondent's core contentions remain those that I previously rejected. Furthermore, Respondent fails in these latest submissions to rebut the fundamental reasons that were provided in the Final Order for denying his application.
In his post-Final-Order submissions, Respondent continues to focus on what was his primary theme throughout the adjudication proceedings leading up to the Final Order: his desire to have the Public Health Service and the National Institute on Drug Abuse (NIDA) removed from the process by which the Department of Health and Human Services (HHS) carries out its statutory duty to review proposed research involving marijuana. For purposes of context, it is repeated here, as explained in the Final Order, that under the CSA (21 U.S.C. 823(f)), the Secretary of HHS is responsible for reviewing all proposed research involving schedule I controlled substances. Specifically, section 823(f) provides that, with respect to applications for registration by practitioners wishing to conduct research with schedule I controlled substances, “the Secretary * * * shall determine the qualifications and competency of each practitioner requesting registration,
Respondent does not dispute that the statute assigns the foregoing functions to the Secretary of HHS. However, Respondent objects to the manner in which these functions are carried out within HHS. In particular, Respondent seeks to have the Public Health Service and NIDA stripped of any role in this process.
For purposes of addressing this issue, it is useful to repeat the following parts of the Final Order, which discussed the scientific review process that has been utilized by HHS since 1999 to evaluate marijuana research proposals:
[I]n 1999, due in part to an increased interest in marijuana research and taking into account the IOM report, HHS decided to change the procedures by which it would supply marijuana to researchers. The new procedures were announced in a document released by NIH on May 21, 1999. In the announcement, “HHS recognize[d] the need for objective evaluations of the potential merits of cannabinoids for medical uses[,]” and that “[i]f a positive benefit is found, * * * the need to stimulate development of alternative, safer dosage forms.” Toward this end, NIH explained that the new procedures were designed to increase the availability of marijuana for research purposes by, among other things, making such marijuana “available on a cost-reimbursable basis.” This new procedure allowed researchers who were privately funded to obtain marijuana from HHS by reimbursing the NIDA contractor for the cost of the marijuana. This was a departure from the prior practice (pre-1999), whereby HHS only made marijuana available to persons who received NIH funding. The new procedures implemented by HHS in 1999 remain in effect today.
At the administrative hearing in this case, Steven Gust, PhD, Special Assistant to the Director of NIDA, explained that, in addition to seeking to facilitate research into the possible medical utility of marijuana, the new procedures implemented by HHS in 1999 were intended “to make the process more standardized, and to * * * provide some expertise that did not really exist at NIDA in terms of reviewing applications that involved * * * the use of marijuana * * * for treatment of diseases.” Accordingly, HHS “established a separate peer review process that * * * moved the review into the Public Health Service [a component of HHS] * * * where additional expertise from other NIH Institutes and other Federal agencies” could be utilized in reviewing the scientific merit of the applications. Dr. Gust further explained that the members of the review committee are drawn from the various specialty institutes of NIH, and the Substance Abuse and Mental Health Services Administration (SAMHSA). Dr. Gust also testified that the “scientific bar has been set very low, [so] that any project that has scientific merit is approved,” and that “anything that gets approved gets NIDA marijuana.” As of April 2004, HHS had approved at least seventeen pre-clinical or clinical studies of marijuana, which were sponsored by the California Center for Medical Cannabis Research (CMCR). According to one witness who testified on behalf of Respondent, all of the CMCR-sponsored researchers who applied to NIDA for marijuana did in fact receive marijuana from NIDA.
In his testimony, Dr. Gust explained the term “peer review” as follows: “Peer review is a process that has been used, certainly by NIH, and I think in other agencies in the Department of Health and Human Services, and probably the Federal Government, where outside expertise is acquired and outside opinions on the scientific merit of specific research proposals.” Dr. Gust added that the NIH peer review committees “review
Again, it is Respondent's contention that the involvement of the Public Health Service and NIDA in reviewing proposed marijuana research protocols has the effect of blocking legitimate research into marijuana. Indeed, the primary argument Respondent puts forth in support of his proposed registration is that the current system by which the United States Government makes marijuana available to researchers fails to provide an adequate supply of marijuana within the meaning of 21 U.S.C. 823(a)(1)—precisely because, in Respondent's opinion, the Public Health Service and NIDA have “institutional biases” against certain types of marijuana research.
This argument was carefully examined in the Final Order.
As to this issue, the Final Order stated, among other things:
Respondent also introduced into evidence a letter from the President of Chemic to HHS responding to several points raised by the PHS Committee in denying Chemic's application. Respondent's letter does not, however, establish that HHS impermissibly denied Chemic's application for marijuana. To the contrary,
It is difficult to understand why Respondent would seek to introduce at this juncture six letters between Chemic and HHS that reaffirm what was found in the Final Order—and how Respondent construes these letters as “rebuttal” evidence. The statements by HHS in these letters are, without question, focused entirely on the scientific inadequacies of various iterations of Chemic's research proposal. The letters demonstrate that the HHS scientists have actively engaged in a dialogue with Chemic for many years, and have gone to great lengths to explain to Chemic each of the areas in which Chemic needs to revise its protocol so that it can be deemed scientifically meritorious. The letters thereby reaffirm that HHS (including, but not limited to, the Public Health Service and NIDA) has never indicated any opposition (political, philosophical, or otherwise) to any
Moreover, Respondent's “institutional bias” theory is belied by the following crucial fact. As stated in the Final Order: “The record reflects that since HHS changed its policies in 1999 to make marijuana more readily available to researchers (by, among other things, allowing privately funded researchers to obtain marijuana), every one of the 17 CMCR [California Center for Medical Cannabis Research]-sponsored pre-clinical or clinical studies that requested marijuana from NIDA was provided with marijuana.” 74 FR at 2119. Despite the enormity of this fact in relation to Respondent's “institutional bias” claim, Respondent makes only the following vague reference to it in his latest submission (page 9): “Though the DEA points to other marijuana research that NIDA has allowed, none of these studies aimed to develop marijuana into a legal prescription medicine.” What Respondent downplays as “other marijuana research that NIDA has allowed” is, in fact,
Any suggestion that the HHS scientific review process is unduly rigorous is belied by the testimony of Dr. Gust that the “scientific bar has been set very low, [so] that any project that has scientific merit is approved,” and that “anything that gets approved gets NIDA marijuana” (Tr. at 1700-01) as well as the uncontroverted evidence that every one of the 17 CMCR-sponsored research protocols submitted to HHS was deemed scientifically meritorious by HHS and was supplied with marijuana (GX 31, at 3; Tr. 694-95).
As for Respondent's contention that “none of these studies aimed to develop marijuana into a legal prescription medicine,” this too is contradicted by the record. As stated in the Final Order:
The California research studies were conducted pursuant to a law enacted by California in 1999 known as the Marijuana Research Act of 1999. Cal. Health & Safety Code § 11362.9. This state law established the “California Marijuana Research Program” to develop and conduct studies on the potential medical utility of marijuana.
For the same reasons, the record contradicts Respondent's related claim that the involvement of the Public Health Service and NIDA in determining the scientific merit of proposed marijuana research “renders the supply [of marijuana] inadequate because entire categories of legitimate medical research are effectively foreclosed.” Respondent fails to explain what “categories of legitimate medical research” are supposedly being foreclosed. Again, it seems (but is unclear) that Respondent is suggesting that the Chemic research proposal, and/or Dr. Russo's proposal (see below), were more geared toward “develop[ing] marijuana into a legal prescription medicine” than were the 17 CMCR studies. In other words, Respondent appears to be suggesting that the Public Health Service and NIDA went into their alleged “institutional bias” mode when reviewing the Chemic and Russo proposals, but turned off that mode when reviewing the 17 CMCR proposals because the latter were less geared toward developing marijuana into an FDA-approved medicine. If this is what Respondent is suggesting, there is no evidentiary foundation for such a claim as neither Chemic's proposal nor Dr. Russo's could be characterized as closer than the CMCR studies to the goal of obtaining FDA approval of marijuana as a drug.
To address further the portion of Respondent's latest submission pertaining to Dr. Russo, the following part of the Final Order is recited:
[Dr. Ethan Russo] sought funding from NIDA to study the use of marijuana to treat migraine headaches beginning around 1996. The precise dates of the events related to Dr. Russo are somewhat unclear as Respondent presented these events through the testimony of Mr. Doblin. (Dr. Russo did not testify.) Based on Mr. Doblin's testimony, it appears that during 1996-97, NIDA twice rejected Dr. Russo's protocol for reasons which are not clearly established by the record. However, according to Mr. Doblin, Dr. Russo conceded that, on both of these two occasions when NIDA rejected his protocol, NIDA's bases for doing so did include “some valid critiques.” Mr. Doblin testified that Dr. Russo subsequently attempted for a third time to obtain marijuana from NIDA, but on this third occasion he decided not to seek government funding but to seek private funding to purchase the marijuana from NIDA. According to Mr. Doblin, this third protocol submitted by Dr. Russo was approved by both the FDA and Dr. Russo's institutional review board, but NIDA again refused to supply marijuana. When asked when this last denial by NIDA occurred, Mr. Doblin testified: “I think it was 1999.”
As noted above, NIH announced on May 21, 1999, HHS's new procedures for making marijuana available to researchers. Bearing in mind that Respondent had the burden of proving any proposition of fact that he asserted in the hearing, 21 CFR 1301.44(a), nothing in Mr. Doblin's testimony, or any other evidence presented by Respondent, established that HHS denied Dr. Russo's request for marijuana under the new procedures implemented by the agency in 1999. Indeed, Respondent produced no evidence showing that HHS has denied marijuana to any clinical researcher with an FDA-approved protocol subsequent to the adoption of the 1999 guidelines.
In his post-Final-Order submissions, Respondent submitted a letter dated February 1, 2000, from the Public Health Service and NIDA to Dr. Russo (Exhibit C to Respondent's March 11, 2009, Supplemental Brief). In the December 2, 2010, Order, I granted Respondent's request to take official notice of this document. As Respondent indicates, this letter was issued after HHS announced in 1999 its new procedures for providing marijuana to researchers. Even assuming, arguendo, that this letter demonstrates that the third protocol submitted by Dr. Russo was evaluated by HHS under the new procedures established in 1999,
The most recent document submitted by Respondent regarding Dr. Russo (the February 1, 2000, letter from Public Health Service to Dr. Russo) confirms yet again that the Public Health Service and NIDA focus on
Thus, even when viewing Respondent's newly submitted evidence regarding Dr. Russo as an example of a denial by HHS of marijuana under the post-1999 HHS procedures, it is in the same category as the Chemic protocols: A denial based on scientific merit under the post-1999 procedures. This would bring the total figures under the post-1999 procedures to the following: 17 studies approved and supplied with marijuana; two studies denied until the researcher makes certain changes in the protocol to render the proposal scientifically meritorious. Stated alternatively, under the post-1999 procedures, HHS's approval rate for marijuana studies is at least 89.5 percent, with the possibility of that figure rising to 100 percent if two of the researchers were willing to make adjustments to their protocols to make them scientifically meritorious.
Respondent's latest submission also refers to certain documentary and testimonial statements by NIDA officials, which Respondent contends support his claim of “institutional bias.” As these statements were part of the record that the parties addressed in their pre-Final-Order submissions, and since the Final Order already addressed this type of argument by Respondent, it is not necessary to reexamine this issue at length here. Moreover, the
It was about this time [1999] when there was some increased interest in research, in pursuing the medical use of marijuana, and in an effort to make the process more standardized, and to basically provide some expertise that did not really exist at NIDA in terms of reviewing applications that involved primarily the use of marijuana or any other substance for that matter for treatment of diseases, which did not really fall within NIDA's mission, the department [HHS] established a separate peer review process that made the review—that moved the review into the Public Health Service at the time where additional expertise from other NIH Institutes and other Federal agencies could be brought to bear to help—and help provide reviews, appropriate reviews, of the scientific merit of these applications.
Tr. 1632-33. Thus, Respondent's attempt to focus on NIDA's particular mission, without regard to the mission of other components of HHS involved in review of marijuana research proposals, and without regard to the overall aims of the procedures established by HHS in 1999 for providing marijuana to researchers, is misplaced.
Respondent also asserts that two provisions of the Federal Food, Drug, and Cosmetic Act (FDCA) and an FDA regulation mandate that the FDA—and not NIDA—must carry out the Secretary of HHS's responsibility under 21 U.S.C. 823(f) to determine the scientific merit of proposed marijuana research. Specifically, Respondent cites 21 U.S.C. 393(b) (FDA's mission statement), 21 U.S.C. 355 (new drug approval process), and 21 CFR 312.22(a) (general principles of submission of an investigational new drug application (IND)), in support of this assertion.
This assertion is mistaken in a number of respects, including, but not limited to, the following. First, the fact that the FDA's statutory mission statement lists certain functions by no means precludes other agencies within HHS from having overlapping functions.
The foregoing discussion also sheds light on another assertion made by Respondent in his latest submission: That “several research projects have been blocked by NIDA in spite of FDA-approved protocols.”
Thus, it is incorrect for Respondent to state that the FDA “approved” any “protocols” for proposed marijuana research.
As stated in the Final Order, under the procedures implemented by HHS in 1999 for reviewing proposed marijuana research, the review by FDA on an IND is
In sum, Respondent's motion for reconsideration provides no basis for deviating from the conclusions in the Final Order relating to the process by which HHS determines the scientific merit of proposed marijuana research pursuant to 21 U.S.C. 823(f). Congress assigned to the Secretary of HHS responsibility for deciding how to carry out that function within HHS, and the evidence demonstrates that the procedures established by HHS in 1999, including the Public Health Service interdisciplinary review process, properly focus on the scientific merit of research proposals. As the Final Order indicated, that process makes marijuana available to all researchers who meet the criteria of § 823(f), and Respondent's post-Final-Order submissions provide no evidence suggesting otherwise. Respondent's desire to substitute his opinion for that of the Secretary as to what type of scientific review should be carried out under § 823(f), and who within HHS should carry it out, is legally untenable.
Respondent's claim that the supply of marijuana is inadequate is dependent on his supposition that the current HHS process for supplying marijuana to researchers improperly denies marijuana to researchers. That supposition was found in the Final Order to be without merit, and his latest submission warrants no departure from that finding, as explained above. Accordingly, Respondent has provided no basis to change the conclusion in the Final Order that he failed to meet his burden of proving that the supply of marijuana is inadequate within the meaning of 21 U.S.C. 823(a)(1).
Respondent seeks reconsideration of the determinations in the Final Order relating to the Single Convention on Narcotic Drugs, 1961 (Single Convention). Respondent's post-Final-Order arguments relating to the Single Convention are not predicated on the taking of official notice of any fact. Nonetheless, as indicated, I have considered these arguments. Respondent's core contentions regarding the Single Convention were addressed in the Final Order and, therefore, it is unnecessary to repeat all of that discussion here. However, in view of his latest submissions, a few points warrant reiteration and/or clarification.
Under 21 U.S.C. 823(a), DEA must deny an application by a person seeking to become registered as a bulk manufacturer of a schedule I controlled substance if the agency determines that such registration would be inconsistent with United States obligations under applicable international drug control treaties—
Countries * * * which produce * * * cannabis * * *, [i]n so far as they permit private farmers to cultivate the plants * * *, cannot establish with sufficient exactitude the quantities harvested by individual producers. If they allowed the sale of the crops to private traders, they would not be in a position to ascertain with reasonable exactitude the amounts which enter their controlled trade. The effectiveness of their control régime would thus be considerably weakened. In fact, experience has shown that permitting licensed private traders to purchase the crops results in diversion of large quantities of drugs into illicit channels. * * * [T]he acquisition of the crops and the wholesale and international trade in these agricultural products cannot be entrusted to private traders, but must be undertaken by governmental authorities in the producing countries. Article 23 * * * and article 28 * * * therefore require a government monopoly of the wholesale and international trade in the agricultural product in question in the country which authorizes its production.
As indicated in the Final Order, the United States has, since 1968, implemented this aspect of the treaty through the following system carried out within HHS. NIDA enters into a contract with a private grower, with the grower being obligated under the contract to produce the amount and quantity of marijuana specified by NIDA and to produce marijuana cigarettes to supply researchers as directed by NIDA.
It is true, as Respondent points out in his post-Final-Order submissions, that the Single Convention (article 23, paragraph 3) calls upon parties to carry out the functions of article 23 by a single government agency. It is also true, as Respondent indicates, that the United States fails to adhere strictly to this provision of the treaty as both DEA and HHS carry out certain functions set forth in article 23, paragraph 2.
Therefore, for the reasons detailed in the Final Order, Respondent's stated goal of becoming registered for the purpose of ending the Government monopoly on the wholesale distribution of marijuana to researchers is directly at odds with the Single Convention, which independently warrants denial of his application. Respondent seems to continue to either ignore and/or misunderstand this fundamental aspect of the treaty. In his latest submission, Respondent states (pages 20-21): “It is certainly true Dr. Craker seeks to cultivate marijuana outside
Respondent also continues to argue that the marijuana he seeks to grow is “exempt” from the Single Convention requirement of a government monopoly over the wholesale distribution of marijuana. According to Respondent, because he is seeking to supply marijuana to researchers for the purpose of conducting research that he hopes will someday lead to the FDA approval of marijuana as medicine, the marijuana he is seeking to grow should be deemed “medicinal cannabis” within the meaning of the Single Convention and thus the government monopoly set forth in article 23, paragraph 2(e) should be considered inapplicable to his proposed activity. The Government correctly suggests in its responsive brief (pages 8-9) that Respondent's interpretation would vitiate the language of article 23, paragraph 2(e). As I stated in the December 2, 2010, Order, it is theoretically possible that a marijuana-derived drug might be approved by the FDA in the future that would constitute “medicinal cannabis” within the meaning of the Single Convention. However, no drug product derived from marijuana has been approved by the FDA and, therefore, there is currently no such thing as “medicinal cannabis” in the United States. For this reason, the exception in article 23, paragraph 2(e) for “medicinal cannabis” has no bearing on this adjudication.
For purposes of the Single Convention, the marijuana that Respondent seeks to produce is clearly “cannabis” subject to the government monopoly under article 23, paragraph 2(e). As to this point, the Final Order observed:
In its 2005 Annual Report, the [International Narcotics Control Board] reiterated: “Articles 23 and 28 of the [Single] Convention provide for a national cannabis agency to be established in countries where the cannabis plant is cultivated licitly for the production of cannabis, even if the cannabis produced is used for research purposes only.”
Respondent also makes the following statement in his latest submission (pages 15-16): “Additionally, the conduct of the one currently DEA-licensed manufacturer, who has been permitted by DEA to grow large amounts of marijuana
As set forth in the MOA, the purpose of the registration was “to allow the Center to develop a new product formulation for effecting delivery of THC in a pharmaceutically acceptable dosage form suppository * * * and to provide crude THC extract to a DEA-registered manufacturer of THC for further purification.” The MOA further stated that, under the terms thereof, the Center would “manufacture marijuana for the purpose of extracting THC therefrom.” Subsequently, the Center submitted a new application for a registration to bulk manufacture marijuana and THC “to prepare marihuana extract for further purification into bulk active [THC] for use in launching FDA-approved pharmaceutical products.” DEA has not yet issued a final order as to this application. (DEA publishes in the Federal Register all final orders on applications for registration to bulk manufacture schedule I and II controlled substances.)
In 2005, the University of Mississippi applied for a new registration to manufacture marijuana “to prepare marihuana extract for further purification into bulk active [THC] for use in launching FDA-approved pharmaceutical products.” DEA has not yet issued a final order as to this application and the University therefore does not currently have DEA authorization to undertake such activity. As with Respondent's application, DEA may only grant the pending University of Mississippi application if the agency determines that the University has demonstrated that the registration would be consistent with United States treaty obligations and the public interest. In making such determinations, DEA will not simply rely on the prior issuance of registration under the 1999 MOA but will consider the application anew, in view of the current circumstances and consistent with this final order. Among other things that must be considered with respect to the pending University of Mississippi application, I note that the Commentary to the Single Convention states the following with respect to the exemption for “opium preparations” under Article 23, paragraph (e): “Opium-producing countries may thus authorize private manufacture of, and private international and domestic wholesale trade in, medicinal opium and opium preparations.
When viewing the foregoing statements from the Final Order in juxtaposition with Respondent's latest assertions regarding the National Center, two points should be considered. First, the above statements reflect that as part of the 1999 MOA with the National Center, DEA insisted—as it has in Respondent's case—on adherence to the principle under the Single Convention of prohibiting private trading in cannabis. The National Center has never been permitted to distribute marijuana to any persons except upon the specific instructions of NIDA through the system described above. Second, contrary to Respondent's assertion, DEA has never taken the position that “marijuana grown for any purpose other than to supply NIDA-approved research would violate the Convention.” Rather, as just noted, DEA has consistently taken the position that, in accordance with the Single Convention, the Government must maintain a monopoly on the wholesale distribution of cannabis.
One other argument made by Respondent in his latest submission warrants a brief response. Respondent repeatedly makes erroneous assertions about the legal and factual circumstances surrounding his application, then denounces the situation as a “catch-22.” For example, on page 17 of his latest submission, Respondent describes the following as a “catch-22”: “Medical marijuana does not exist, according to DEA, unless it is an FDA-approved medicine, but Dr. Craker's license to supply marijuana for the research necessary to test such a medicine and secure FDA approval cannot be granted because medical marijuana does not exist.” In fact, not only DEA, but also the United States Supreme Court, interpreting the text of the CSA, has stated—
Respondent also seeks reconsideration of my determinations in the Final Order relating the involvement of Rick Doblin in Respondent's application and proposed activities. Again, in the exercise of my discretion, I have considered Respondent's post-hearing submissions as to this issue, even though they do not arise out of the taking of official notice of any fact.
To briefly recap, the Final Order listed the various ways in which Mr. Doblin was involved in Respondent's application process and how Mr. Doblin would have a role in Respondent's activities if the application were granted. 74 FR at 2126. The Final Order then stated:
In short, Mr. Doblin has mapped out and assisted in most acts, if not every act, that Respondent has taken toward applying for a registration to manufacture marijuana and, if the registration were granted, Mr. Doblin would continue to maintain responsibility for managing and monitoring the activities of the registrant. Given this level of involvement by Mr. Doblin—and the passive, if not subservient, nature of Respondent's involvement—it is appropriate under factor six to consider the following conduct by Mr. Doblin relating to controlled substances. First, Mr. Doblin admits that he smokes marijuana for “recreational use” on a weekly basis. Thus, Mr. Doblin violates federal and state laws relating to controlled substances on a weekly basis. This demonstrates that Mr. Doblin has disregard for the controlled substances laws. It is simply inconceivable that DEA would—consistent with its obligations under the CSA—grant a registration to engage in certain activities involving controlled substances where it is clear that a person who will have
In his latest submission, Respondent points out that in the Final Order, under the fifth public interest factor (21 U.S.C. 823(a)(5)), I concluded that if the registration were granted, Respondent would have in the establishment (
It is plain when comparing the text of factor five with that of factor six that a favorable finding with respect to factor five does not preclude an unfavorable finding under factor six. As explained in the Final Order, under public interest factor five, “the existence in the establishment of effective control against diversion” includes, among other considerations, appropriate physical security and employee screening as required by the DEA
Consider, for example, if a person were seeking to become registered as a manufacturer of oxycodone, and the applicant promised to install and maintain in the facility all the physical security measures and employee screening procedures required by the regulations. Assume further that evidence came to light that the main investor in the facility, who planned to make the decisions as to how the facility would distribute oxycodone, admitted that he obtains oxycodone illegally and uses it for “recreational” purposes on a weekly basis. In such circumstances, it would certainly be appropriate for DEA to draw an adverse inference under factor six based on such person's illicit activity involving oxycodone—regardless of whether the applicant made assurances that it would comply with the security regulations. Thus, I cannot adopt Respondent's suggestion that Mr. Doblin's regular marijuana use should be ignored as a factor relevant to his application.
Nonetheless, it bears repeating that the ultimate decision in this matter did not turn on consideration of Mr. Doblin's marijuana activity. As stated in the Final Order, two other independent grounds existed for denying the application and, therefore, the same result would have been reached had I determined that Mr. Doblin's marijuana activity were irrelevant.
To be clear, if I determined that the proposed registration were consistent with United States obligations under the Single Convention and further that the supply of marijuana available to researchers in the United States were inadequate within the meaning of 21 U.S.C. 823(a)(1), it is conceivable that arrangements could have been made to mitigate the concerns regarding Mr. Doblin's marijuana activity. For example, under a conditional grant of registration or memorandum of agreement, sufficient terms perhaps could have been imposed to ensure that Mr. Doblin would not be allowed to have access to the growing facility and would have no role in any decision making relating to management of the facility or the distribution of marijuana. However, consideration of such an approach was not feasible here given the other grounds for denying the application.
For the foregoing reasons, Respondent's motion for reconsideration is hereby denied. The administrative record is modified as indicated herein and in my December 2, 2010, order. The January 14, 2009, Final Order, as supplemented by this order, is effective on September 7, 2011.
On September 30, 2009, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, issued an Order to Show Cause to Joe C. Fermo, M.D. (Registrant), of Tulsa, Oklahoma. The Show Cause Order proposed the revocation of Registrant's DEA Certificate of Registration, BF7430781, as well as the denial of any pending applications to renew or modify his registration, on the ground that his “continued registration would be inconsistent with the public interest.” Show Cause Order at 1 (citing 21 U.S.C. 823(f) and 824(a)(4)).
The Show Cause Order specifically alleged that on February 23, 1990, Registrant was convicted in the District Court for Oklahoma County, State of Oklahoma, of ten counts of submitting false claims to the Oklahoma Department of Human Services in violation of Oklahoma law, and that on June 20, 1990, the United States Department of Health and Human Services excluded him from participating in federal health care programs under 42 U.S.C. 1320a-7(a).
Finally, the Show Cause Order alleged that on August 27, September 24, and September 26, 2007, an undercover officer had obtained prescriptions from Registrant for alprazolam (at all three visits) and propoxyphene (at the first two visits), both of which are schedule IV controlled substances.
On or about October 5, 2009, the Show Cause Order, which also notified Registrant of his right to either request a hearing on the allegations or to submit a written statement in lieu of a hearing, the procedures for doing so, and the consequence if he failed to do so, was served on Registrant by certified mail addressed to him at the address of his registered location.
Registrant is the holder of DEA Certificate of Registration, BF7430781, which authorizes him to dispense controlled substances in schedules II through V as a practitioner at the registered location of 5970 E. 31 St., Suite O, Tulsa, Oklahoma. While his registration was to expire on September 30, 2010, on August 13, 2010, Registrant filed a renewal application. In accordance with the Administrative Procedure Act and DEA regulations, I find that Registrant's registration remains in effect pending the issuance
On August 27, 2007, an Agent with the Oklahoma Bureau of Narcotics went to Registrant's office to perform an undercover visit with Merli Fermo, M.D., Registrant's wife, who was also a DEA registrant.
After the Agent and Registrant discussed the former's having spent some time in Minnesota and why she had returned to Oklahoma, who she lived with, how she was supporting herself, and her address, Registrant asked the Agent: “So what do you want me to put you on?” The Agent replied: “I've been on Xanax. Two milligrams.” Registrant then asked the Agent if she had “been on it for a while?” The Agent replied that she had been, that she had “continued it when” she had gone to Minnesota, and had gotten it “from a doctor up there.”
Registrant then asked: “You're taking Xanax three times a day?”; the Agent replied “four times a day.” Registrant responded: “It says three times a day,” to which the Agent said, “I know but it was increased up there.” Registrant then told the Agent to “take it two times a day. Two milligrams.” The Agent asked: “So I'm only get[ing] it two times a day?” Registrant replied affirmatively and asked, “What else are you taking?” The Agent answered: “I was taking Darvocet too.”
Registrant then asked “are you having some pain?” The Agent replied: “Oh, every once in a while.” Registrant told the Agent to “[t]ake it two times a day and I'll give you a hundred”; the Agent replied: “Okay. I wish you'd give me the four on this Xanax though.” After several comments which were unintelligible, Registrant and the Agent discussed how far the latter had lived from Minneapolis, whether the Agent went there much when she lived in Minnesota, and Registrant's having previously lived in the Minneapolis area. Before the visit ended, Registrant gave the Agent prescriptions for 100 Xanax (alprazolam) 2 mg and 100 Darvocet-N (propoxyphene) 100 mg, both of which are schedule IV controlled substances,
On September 24, 2007, the Agent returned to Registrant's office and paid the receptionist $65. While the Agent was scheduled to see Registrant's wife, when informed that the latter was not available, she agreed to see Registrant, and after a short wait, was taken to his office.
Registrant asked the Agent how she was doing; she replied “great.” Registrant then asked “what's going on with you?” The Agent answered: “Not a thing. I wonder if I could get a hundred and twenty of the Xanax instead of a hundred?” Registrant asked why she wanted one hundred twenty; the Agent answered: “I ran out.”
After telling the Agent that she could take the Xanax “three times a day,” Registrant asked her: “Do you still need the Darvocet?”; the Agent answered: “Yes.” After a conversation about such subjects as how much social security the Agent was getting, what type of work she had previously done, her shopping habits, and whether she had a boyfriend, Registrant told the Agent to take the Celexa because it is an anti-depressant that works with Xanax and would help her to get going in the morning. After still more conversation about the Agent's social life, Registrant gave her new prescriptions for 100 Xanax 2 mg, 100 Darvocet-N 100 mg, and Celexa. Shortly thereafter, the visit ended.
The Government did not, however, submit either the MOA, which Registrant entered into with DEA, or any of the applications which it alleged he had materially falsified. Instead, it submitted the MOA that DEA entered into with his wife and an affidavit of an Agency Investigator stating that he had “received information from” an Investigator in another office that Registrant's MOA “was identical” to his wife's. Affidavit of Diversion Investigator, at 1.
Even accepting this would establish that Registrant settled the Show Cause Proceeding on the same terms as his wife did, his wife's MOA merely stated that an April 21, 2000 Order to Show Cause “further alleged that on August 13, 1991, September 22, 1994, and again on August 28, 1997, the Respondent materially falsified her renewal applications by failing to disclose that the Board placed her medical license on probation in June 1990.” MOA, at 2. Continuing, the MOA states: “The above matters, if proven at an administrative hearing, constitute grounds for revocation of the Respondent's DEA Certificate of Registration, and denial of her pending application for renewal of that registration.”
Section 304(a) of the Controlled Substances Act (CSA) provides that “[a] registration pursuant to section 823 of this title to * * * dispense a controlled substance * * * may be suspended or revoked by the Attorney General upon a finding that the registrant * * * has committed such acts as would render his registration under section 823 of this title inconsistent with the public interest as determined under such section.” 21 U.S.C. 824(a)(4). In making the public interest determination in the case of a practitioner, Congress directed that the following factors be considered:
(1) The recommendation of the appropriate State licensing board or professional disciplinary authority.
(2) The applicant's experience in dispensing * * * controlled substances.
(3) The applicant's conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.
(4) Compliance with applicable State, Federal, or local laws relating to controlled substances.
(5) Such other conduct which may threaten the public health and safety. 21 U.S.C. 823(f).
“[T]hese factors are considered in the disjunctive.”
In this matter, while I have considered all of the factors, I conclude that it is not necessary to make findings with respect to factors one (the recommendation of the state licensing board), three (registrant's conviction record) and five (such other conduct which may threaten public health and safety). I find that the Government's evidence with respect to Registrant's experience in dispensing controlled substances (factor two) and his compliance with applicable Federal and State laws related to the distribution and dispensing of controlled substances (factor four) makes out a
Under a longstanding DEA regulation, a prescription for a controlled substance is not “effective” unless it is “issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.” 21 CFR 1306.04(a). This regulation further provides that “an order purporting to be a prescription issued not in the usual course of professional treatment * * * is not a prescription within the meaning and intent of [21 U.S.C. 829] and * * * the person issuing it, shall be subject to the penalties provided for violations of the provisions of law related to controlled substances.”
As the Supreme Court recently explained, “the [CSA's] prescription requirement * * * ensures patients use controlled substances under the supervision of a doctor so as to prevent addiction and recreational abuse. As a corollary, [it] also bars doctors from peddling to patients who crave the drugs for those prohibited uses.”
Under the CSA, it is fundamental that a practitioner must establish and maintain a bonafide doctor-patient relationship in order to act “in the usual course of * * * professional practice” and to issue a prescription for a “legitimate medical purpose.”
Under the Oklahoma Board of Medical Licensure and Supervision's rule on the “[u]se of controlled substances for the management of chronic pain,” “[a] medical history and physical examination must be obtained, evaluated and documented in the medical record.” Okla. Admin. Code 435:10-7-11(1). Moreover, “[t]he medical record should document the nature and intensity of the pain, current and past treatments for pain, underlying or coexisting diseases or conditions, the effect of the pain on physical and psychological function and history of substance abuse.”
As found above, on two occasions, Registrant prescribed Darvocet-N 100 mg., a drug which includes propoxyphene, a schedule IV narcotic controlled substance, as well as Xanax (alprazolam) to an OBN Agent acting in an undercover capacity. Notably, during the first visit, Registrant did not ask the Agent whether she had any medical complaints. Rather, after engaging in small talk and asking for her address, Registrant asked the Agent: “So what do you want me to put you on?” While the Agent stated Xanax 2 mg, and told her she had been getting it from another doctor, Registrant did not even ask her if she had anxiety.
Moreover, Registrant then asked the Agent: “what else are you taking?” After the Agent replied that she “was taking Darvocet too,” Registrant asked: “I think, are you having some pain?” While the Agent replied: “[e]very once in a while,” Registrant did not ask the Agent any questions regarding “the nature and intensity of the pain,” the “effect of the pain on [the Agent's] physical and psychological function,” whether the Agent had been previously treated for pain, or whether she had a “history of substance abuse” as required under the Oklahoma rule.
The Xanax and Darvocet prescriptions Respondent gave the Agent at her second visit also violated Federal law. While at this visit, Registrant, after being told by the Agent (who was seeking an even larger quantity of the drug and was three weeks early in seeking the refill) that she had run out of Xanax, did discuss with her that she should not take more of the drug than he prescribed and explained that the drug is controlled “because people have a tendency to” take more than is prescribed, once again, he did not determine that the Agent had anxiety or another medical condition that might warrant a prescription for the drug.
Likewise, after telling the Agent to only take the Xanax three times per day, he then asked her if she “still need[ed]
As the forgoing demonstrates, Registrant has committed acts which “render his registration * * * inconsistent with the public interest.” 21 U.S.C. 824(a)(4). I will therefore order that his registration be revoked and that any pending applications be denied.
Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 824(a), as well as by 28 CFR 0.100(b), I hereby order that DEA Certificate of Registration, BF7430781, issued to Joe C. Fermo, M.D., be, and it hereby is, revoked. I further order that any pending application of Joe C. Fermo, M.D., to renew or modify his registration be, and it hereby is, denied. This Order is effective September 19, 2011.
On November 12, 2010, I, the then Deputy Administrator of the Drug Enforcement Administration, issued an Order to Show Cause and Immediate Suspension of Registration to Ideal Pharmacy Care, Inc., d/b/a Esplanade Pharmacy (Registrant), of New Orleans, Louisiana. The Show Cause Order proposed the revocation of Registrant's DEA Certificate of Registration FF1125651, which authorizes it to dispense controlled substances in schedules II through V as a retail pharmacy, on the ground that it has committed acts which render its registration “inconsistent with the public interest.” Show Cause Order at 1 (citing 21 U.S.C. 824(a)(4)). The Show Cause Order also proposed the denial of any pending applications to renew or modify Registrant's registration.
The Show Cause Order specifically alleged that on October 14, 2010, investigators conducted an accountability audit of Registrant and found that it had “significant shortages” of various controlled substances.
Next, the Show Cause Order alleged that various distributors make deliveries of controlled substances to Registrant when it “is closed,” and that the “deliveries are received and signed for by” non-employees who work “at the grocery store in which [it] is located,” and that the deliveries are then “diverted in violation of 21 U.S.C. 843(a)(3).”
The Show Cause Order also alleged that Registrant had violated a Memorandum of Agreement (MOA) it entered into with DEA.
Based on the matters set forth above, I concluded that Registrant's continued registration during the pendency of the proceeding would constitute “an imminent danger to public health and safety.”
On November 17, 2010, the Order to Show Cause and Immediate Suspension of Registration, which also notified Registrant of its right to request a hearing on the allegations or to submit a written statement in lieu of a hearing, the procedures for doing either, and the consequences for failing to do either,
Registrant is the holder of DEA Certificate of Registration FI1125651, which authorizes it to dispense controlled substances in schedules II through V as a retail pharmacy, at the registered address of 1400 Esplanade Ave., New Orleans, Louisiana. Registrant's registration does not expire until November 30, 2011. Registrant is apparently located in a building which also contains a grocery store. Affidavit of DI, at 8 (GX 22).
On October 14, 2010, DEA Investigators conducted an audit of Registrant's handling of controlled substances.
1. A shortage of 3,891 dosage units of hydrocodone/apap 7.5/650 mg, which was 78 percent of the total amount for which it was accountable;
2. A shortage of 27,179 dosage units of hydrocodone/apap 7.5/750 mg, which was 59 percent of the total amount for which it was accountable;
3. A shortage of 5,514 dosage units of hydrocodone/apap 10/500 mg, which was 48 percent of the total amount for which it was accountable;
4. A shortage of 114,826 dosage units of hydrocodone/apap 10/650 mg. which was 96 percent of the total amount for which it was accountable;
5. A shortage of 83,254 dosage units of alprazolam 2 mg., which was also 96 percent of the total amount for which it was accountable; and
6. A shortage of 1,616,420 ml of promethazine with codeine, a shortage of 99 percent of the total amount for which it was accountable.
While pharmacy employees told the DI that they were the only persons who accepted controlled substance deliveries, based on the records obtained from one of Registrant's distributors, the DI determined that many of the shipments had been delivered on Saturdays, a day when the pharmacy was closed, and that a number of the shipments were signed for by non-pharmacy employees who worked in the grocery store.
Section 304(a) of the Controlled Substances Act (CSA) provides that a registration to “dispense a controlled substance * * * may be suspended or revoked by the Attorney General upon a finding that the registrant * * * has committed such acts as would render [its] registration under section 823 of this title inconsistent with the public interest as determined under such section.” 21 U.S.C. 824(a)(4). In making the public interest determination, the CSA requires that the following factors be considered:
(1) The recommendation of the appropriate state licensing board or professional disciplinary authority.
(2) The applicant's experience in dispensing * * * controlled substances.
(3) The applicant's conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.
(4) Compliance with applicable State, Federal, or local laws relating to controlled substances.
(5) Such other conduct which may threaten the public health and safety.
These factors are considered in the disjunctive.
Having considered all of the factors, I conclude that the evidence pertinent to Registrant's compliance with applicable laws related to controlled substances (factor four) is dispositive and supports a finding that it has committed acts which render its registration “inconsistent with the public interest.” 21 U.S.C. 824(a)(4).
As found above, DIs conducted an audit of Registrant's handling of various controlled substances and found that it could not account for extraordinary quantities of four different formulations of hydrocodone, a schedule III controlled substance, and alprazolam 2 mg (generic for Xanax), a schedule IV controlled substance; both of these drugs are highly popular with drug abusers.
Pursuant to DEA regulations, all “registrants shall provide effective controls and procedures to guard against theft and diversion of controlled substances.” 21 CFR 1301.71(a). Among the factors DEA considers in assessing whether a registrant maintains effective controls against theft and diversion, is “[t]he adequacy of the registrant's * * * system for monitoring the receipt * * * distribution, and disposition of controlled substances in its operations.”
Moreover, under Federal law and DEA regulations, “every registrant under this subchapter * * * distributing, or dispensing a controlled substance or substances shall maintain, on a current basis, a complete and accurate record of each such substance * * * received, sold, delivered, or otherwise disposed of by [it].” 21 U.S.C. 827(a)(3).
Whether the shortages are attributable to outright diversion by either pharmacy or store employees, theft, or the failure to maintain accurate records, does not matter. What is clear is that Registrant purchased several hundred thousand dosage units of highly abused controlled substances which cannot be accounted for and that it has committed acts which render its registration “inconsistent with the public interest.” 21 U.S.C. 824(a)(4). Accordingly, I will order that Registrant's registration be revoked and that any pending application be denied.
Registrant's loss of state authority thus provides an additional ground to revoke its registration.
Pursuant to the authority vested in me by 21 U.S.C. 823(f) & 824(a), as well as 28 CFR 0.100(b), I order that DEA Certificate of Registration FI1125651, issued to Ideal Pharmacy Care, Inc., d/b/a/Esplanade Pharmacy, be, and it hereby is, revoked.
I further order that any pending application to renew or modify this registration, be, and it hereby is, denied.
On August 31, 2009, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, issued an Order to Show Cause to Surinder Singh Dang, M.D. (“Respondent”), of Fountain Valley, California. The Order proposed the revocation of Respondent's DEA Certificate of Registration, AD6122143, as a practitioner, as well as the denial of any pending applications to renew or modify his registration “for reason that [Respondent's] continued registration[] would be inconsistent with the public interest, as that term is used in 21 U.S.C. 823(f) and 824(a)(4).” ALJ Ex.1, at 1.
The Order specifically alleged that between January 2004 and July 2007, Respondent and his wife, Dr. Satinder Dang, “who also possesses a DEA registration and shares [Respondent's] registered location,” ordered “more than 5,000,000 dosage units of hydrocodone” and that Respondent “failed to properly account for, secure, and otherwise handle these controlled substances.”
Next, the Order alleged that on March 16, 2006, DEA conducted an accountability audit of Respondent's handling of hydrocodone and that Respondent “could not account for more than 3,500,000 dosage units” that Respondent and his wife “had ordered,” and that Respondent “failed to keep accurate and complete records of each controlled substance received, sold, delivered, or otherwise disposed of as required by 21 U.S.C. 827(c) and 21 CFR 1304.01
By letter of October 2, 2009, Respondent, through his counsel, requested a hearing on the allegations. ALJ Ex. 2. The matter was then assigned to an Administrative Law Judge (ALJ), who conducted a hearing on March 3, 2010, in Santa Ana, California.
At the hearing, the Government called one witness to testify and introduced documentary evidence. Respondent did not call any witnesses and introduced a single exhibit, this being a letter from the counsel for Respondent's employee R.K. stating that she intended to assert her Fifth Amendment privilege if called to testify.
On May 19, 2010, the ALJ issued her Recommended Decision (also ALJ). Therein, the ALJ considered the five public interest factors,
As to the first factor—the recommendation of the appropriate State licensing board or professional disciplinary authority—the ALJ found that the California Medical Board “has not taken any formal action to limit Respondent's right to practice medicine nor has it recommended limiting his ability to prescribe controlled substances.”
The ALJ then considered factors two and four—Respondent's experience in dispensing controlled substances and his compliance with Federal, State, and local laws relating to controlled substances—together.
The ALJ further found that Respondent “prescribed Vicodin,” a schedule III controlled substance, to patient B.R. “on many occasions without a thorough examination.”
Next, the ALJ found that Respondent did not have any inventories for the controlled substances his clinic dispensed, that he “failed to maintain accurate records of the controlled
Turning to factor five—other conduct which may threaten the public health and safety—the ALJ found “it likely that * * * Respondent is engaged in the illegal diversion of hydrocodone.”
The ALJ further explained that “[e]ven if Respondent did not commit the above violations of Federal law and DEA regulations,” she would still find that he had “committed acts which constitute `conduct which may threaten the public health and safety' and which render his registration `inconsistent with the public interest.'”
The ALJ then addressed whether Respondent had rebutted the Government's
Neither party filed exceptions to the ALJ's decision. Thereafter, the record was forwarded to me for Final Agency Action. Having considered the entire record, I adopt the ALJ's findings of fact and conclusions of law except as expressly noted herein. I further adopt the ALJ's ultimate conclusion that Respondent's “continued registration is not in the public interest,”
Respondent is the holder of DEA Certificate of Registration, AD6122143, which authorizes him to dispense controlled substances in schedules II through V, as a practitioner, at the registered location of 17150 Euclid #200, Fountain Valley, California. GX 1. While Respondent's registration was to expire on June 30, 2009,
Respondent currently holds a license to practice medicine in California and the California Medical Board has not taken any formal action to limit his ability to practice medicine or to prescribe controlled substances. ALJ Ex. 3, at 3. Also, Respondent has not been convicted of an offense related to the manufacture, distribution, or dispensing of controlled substances.
Respondent is married to Satinder Dang, M.D.
In November 2005, a Diversion Group Supervisor (GS) in DEA's Riverside Diversion Group reviewed ARCOS
Of particular concern to the GS were Respondent's purchases of hydrocodone, a schedule III controlled substance. Tr. 22; 21 CFR 1308.13(e)(iv). According to ARCOS records, while in 2004, Respondent purchased 190,600 tablets of hydrocodone from all suppliers, in 2005, he purchased 1,353,600 such tablets. Tr. 24; GX 4, at 2-6. ARCOS data further showed that in 2005, Respondent and his wife had ordered a combined total of 3,626,400 tablets of hydrocodone. GX 3, at 13; GX 4, at 6;
Upon reviewing the ARCOS data, the GS contacted several of the firms that were distributing controlled substances to Respondent.
Throughout the investigation, several of the firms also provided the GS with information regarding when various deliveries were to be made to Respondent's clinic. On December 14, 2005, the GS, who had received information from two different distributors (Henderson and Moore Medical) that controlled substances
On January 13, 2006, from “[m]orning till late afternoon,” the GS conducted a second surveillance.
On January 17, 2006, from 9 a.m. to 6 p.m., the GS, who had received notice of a controlled substance delivery from another distributor (ParMed Pharmaceuticals, Inc.), conducted another surveillance.
As he approached R.K., the CHP officer observed “cardboard boxes that were taped shut in the rear cargo area.” GX 10, at 2. The CHP officer advised R.K. of the reason for the stop and requested her license, registration, and insurance.
After the CHP Officer asked R.K. to step out of her car, he asked “why she had cases of Vicodin.”
The CHP Officer then asked how the Vicodin had ended up in her vehicle, R.K. stated that “she [had] carried the boxes to her vehicle around noon time and left them there,” and that she had stayed in her office until about 5 p.m., at which point “she left * * * to get something to eat.”
The CHP Officer then “asked R.K. to open the boxes” to confirm that they contained Vicodin.
The CHP Officer then contacted a DEA Task Force Officer (TFO) and arranged to transfer custody of the drugs to DEA; upon the TFO's arrival at the Officer's location, the TFO took possession of the drugs.
R.K. then drove to her residence in Anaheim Hills; Investigators followed her there in order to question her about the drugs that were found in her vehicle. Tr. 47. R.K. told the Investigators that she had taken the hydrocodone with her for safekeeping because Respondent was out of the office; she also maintained that she intended to return them to the office after she ate.
R.K. stated that there were about five physicians who worked at Respondent's clinic, that they dispensed the pills in 30 and 60-count bottles, and that the clinic had approximately twenty to twenty-five patients per day.
The Investigators then asked R.K. if she would consent to a search of her residence; she agreed.
On cross-examination, the GS acknowledged that the amount of drugs found at R.K.'s residence could indicate she was stealing drugs from Respondent's clinic.
On February 7, 2006, the GS obtained notice of another delivery of controlled substances and conducted another surveillance.
On February 24, 2006, Respondent wrote a letter to CHP requesting the return of the hydrocodone which had been seized during the traffic stop of R.K. Tr. 52-53; GX 12. The letter stated that R.K. was Respondent's “office manager,” and that she had “informed CHP that the property was not hers, and instead belonged to her employer, Complete Medical Care Inc.” GX 12.
On March 16, 2006, DEA executed search warrants at both Respondent's clinic and R.K.'s residence. Tr. 61, 67-68, 70. At the clinic, the Investigators took an inventory of the controlled substances on hand and found 48,000 tablets of hydrocodone, which they seized; the Investigators also seized CMC's controlled substance purchasing records and dispensing log.
The Investigators did, however, interview four of Respondent's employees and a patient who was present. A.N. had been a medical assistant at CMC since 1992; her duties involved taking patients to the examination room.
K.G. had been a medical assistant at CMC for seven months; her duties included taking patients' blood pressure, drawing blood, and performing other tests.
L.Y. had been hired as medical assistant in November 2005; her responsibilities included the scheduling of appointments and flu shots.
S.B. had worked at CMC for three years and did patient billing.
S.B. further stated that CMC had approximately twenty-five patients per day, of which fifteen saw Respondent and ten saw his wife.
As found above, on March 16, 2006, DEA Investigators also executed a search warrant at R.K.'s residence.
In April 2006, the GS interviewed Dr. B., one of the physicians listed as being part of Respondent's clinic.
Dr. B. stated that he rarely prescribed controlled substances to his patients, and that when he did, he did not dispense drugs.
In May 2006, a Diversion Investigator (DI) interviewed one of Respondent's patients, A.A., who said that she saw him for knee pain and “asthmatic issues.” Tr. 81. A.A. had worked for twelve years as a patient care representative in “a couple hospitals”; at one, she was the Quality Care Coordinator with “duties related to medical, financial counseling and medical billing.”
A.A. stated that on several occasions during her visits to Respondent's clinic, she observed R.K. take persons “into a back room” and that “several minutes later,” these persons “would come out with bags in their hands.”
The Government also submitted into evidence a portion of a Report of Investigation relating an interview of another of Respondent's patients, B.R. Tr. 167;
B.R. further said that she was buying bottles of 100 tablets of Vicodin 7.5 mg every two weeks for $20 per bottle and that Respondent had instructed her to take the Vicodin as needed with no further instructions.
However, the report of B.R.'s interview contains no evidence suggesting that she was not a legitimate patient. Moreover, the Government did not introduce B.R.'s patient record into evidence and offered no evidence (beyond the conclusory assertion that his exam was not thorough) regarding the scope of the physical examination Respondent performed on her. Nor did it offer any evidence from an Expert (whether through testimony or a report) establishing that Respondent failed to perform a medically appropriate prior examination and lacked a medical indication when he prescribed Vicodin to B.R.
Using the records seized during the search of Respondent's clinic and its patient files (which were subsequently obtained with Respondent's consent), ARCOS data, and information provided by several of the distributors,
Using both the ARCOS data and distributor invoices, the GS determined that 4,037,900 tablets of hydrocodone had been ordered during the audit period.
Among the documents the Government entered into evidence is a November 7, 2005 letter from Respondent to J.N., a compliance coordinator at Henry Schein. GX 6, at 20. Therein, Respondent wrote that he was the Medical Director of “a multiple specialty medical group,” comprised of five physicians including himself, his wife, the aforementioned Dr. B., as well as Drs. H.L. and D.S.
The Government also entered into evidence a credit application submitted on behalf of CMC to ParMed. GX 9, at 4. The application, which is dated November 21, 2005, lists Respondent as the person making the application; his name is printed in the signature block (which is signed), and the application also contains the name of a ParMed Sales Representative.
The Government further entered into evidence reports prepared by ParMed on January 5, 2006, which list ParMed's controlled substance distributions to Respondent and his wife.
Respondent did not testify in the proceeding and offered only one exhibit, a letter from R.K.'s attorney stating that she would invoke her Fifth Amendment privilege if called to testify. RX1.
Section 304(a) of the Controlled Substances Act (CSA) provides that “[a] registration pursuant to section 823 of this title to * * * dispense a controlled substance * * * may be suspended or revoked by the Attorney General upon a finding that the registrant * * * has committed such acts as would render his registration under section 823 of this title inconsistent with the public interest as determined under such section.” 21 U.S.C. 824(a)(4). In making the public interest determination in the case of a practitioner, Congress directed that the following factors be considered:
(1) The recommendation of the appropriate State licensing board or professional disciplinary authority.
(2) The applicant's experience in dispensing * * * controlled substances.
(3) The applicant's conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.
(4) Compliance with applicable State, Federal, or local laws relating to controlled substances.
(5) Such other conduct which may threaten the public health and safety.
“[T]hese factors are considered in the disjunctive.”
With respect to a practitioner's registration, the Government bears the burden of proving by a preponderance of the evidence that the continuation of a registration would be inconsistent with the public interest. 21 CFR 1301.44(d). However, where the Government satisfies its
In this matter, having considered the entire record and all of the statutory factors, I reject the ALJ's finding that Respondent violated Federal and State law when he prescribed Vicodin to B.R. However, I agree with the ALJ's conclusions that the Government's evidence under factors two, four, and five makes out a
Be that as it may, in enacting the CSA, Congress vested this Agency with “a separate oversight responsibility [apart from that which exists in state
There is also no evidence that Respondent has been convicted of an offense related to the manufacture, distribution, or dispensing of controlled substances under either Federal or state law (factor three). ALJ Ex. 3. However, while a history of criminal convictions for offenses involving the distribution or dispensing of controlled substances is a highly relevant consideration, there are any number of reasons why a registrant may not have been convicted of (or even prosecuted for) such an offense, and thus, the absence of such a conviction is of considerably less consequence in the public interest inquiry.
The Government's case implicates each of these factors. As found above, during an approximately fifteen month period, more than four million tablets of highly abused combination drugs containing hydrocodone, a schedule III controlled substance, were purchased by R.K., Respondent's office manager, using his and his wife's DEA registrations. When DEA Investigators audited Respondent's handling of hydrocodone, they could account for only 167,000 tablets, leaving nearly 3.9 million tablets unaccounted for.
At a minimum, the evidence clearly shows that Respondent violated the CSA's various recordkeeping provisions. Under Federal law, as soon as Respondent “first engage[d] in the * * * distribution or dispensing of controlled substances, and every second year thereafter,” he was required “
Under Federal law, Respondent was also required to “maintain, on a current basis,
Recordkeeping is one of the central features of the CSA's closed system of distribution.
While in his brief, Respondent, who did not testify, acknowledges that “he failed * * * to maintain complete records reflecting his dispensing of controlled substances,” Resp. Br. at 6, he argues that R.K. “ordered, received and paid for” the drugs, and that she “distributed or sold the drugs outside [of] the CMC practice.”
DEA has long held that a registrant is strictly liable for the misuse of his registration by a person to whom he entrusts his registration.
Moreover, several documents in evidence support the conclusion that Respondent was clearly aware that controlled substances were being ordered under his registration. These include Respondent's November 2005 letter to Schein declaring that he had “decided to order medications through your company,” GX 7, and the credit application he submitted to ParMed. GX 9, at 4.
The evidence also supports the inference that Respondent authorized R.K. to use his registration to order controlled substances. Several clinic employees told Investigators that R.K. would order the drugs.
Thus, it is clear that Respondent authorized R.K. to order controlled substances using his registration. And even if it were the case that Respondent was unaware of R.K.'s illegal activities (although it is not), he is still strictly liable for her misuse of his registration and his failure to properly monitor how
As for Respondent's implicit suggestion that he lacked knowledge of R.K.'s activities, the evidence is to the contrary.
It is well established that the Agency may draw an adverse inference from a respondent's failure “to testify in response to probative evidence offered against” him.
I thus conclude that Respondent knew that R.K. was engaging in illegal activity and did nothing to prevent it. Respondent's misconduct clearly threatened public health and safety, 21 U.S.C. 823(f)(5), and is especially egregious given that nearly four million dosage units of hydrocodone cannot be accounted for and were likely diverted.
The evidence suggests, however, that B.R. had a legitimate medical complaint, and there is absolutely no evidence (such as B.R.'s medical record) other than the conclusory assertion set forth above as to the scope of the examination Respondent performed. Finally, there is no evidence as to the scope of the medical examination necessary to properly diagnose and treat B.R.'s condition. I therefore conclude that the ALJ's finding is not supported by substantial evidence.
Under Agency precedent, where the Government has made out a
As noted above, Respondent failed to testify in this proceeding. While in his brief, he now acknowledges that he violated Federal law and DEA regulations by failing to maintain proper records, notably, he does not acknowledge his misconduct in failing to properly monitor how R.K. was using his registration.
Given the grievous nature of Respondent's misconduct and his failure to accept responsibility, none of the “favorable facts” cited by the ALJ provide any reason to impose a sanction less than revocation. While the record may contain no other evidence of misconduct on Respondent's part, ALJ at 31, as I have previously explained, the fact that a practitioner can point to even an extensive body of compliance with the CSA does not negate a
Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 824(a), as well as by 28 CFR 0.100(b), I hereby order that DEA Certificate of Registration, AD6122143, issued to Surinder Singh Dang, M.D., be, and it hereby is, revoked. I further order that any pending application of Surinder Singh
On August 31, 2009, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, issued an Order to Show Cause to Satinder K. Dang, M.D. (Respondent), of Fountain Valley, California. The Order proposed the revocation of Respondent's DEA Certificate of Registration, AD9234446, as a practitioner, as well as the denial of any pending applications to renew or modify her registration, “for reason that [Respondent's] continued registration[] would be inconsistent with the public interest, as that term is used in 21 U.S.C. 823(f) and 824(a)(4).” ALJ Ex.1, at 1.
The Order specifically alleged that between January 2004 and July 2007, Respondent and her husband Surinder Dang, “who also possesses a DEA registration and shares [Respondent's] registered location,” ordered “more than 5,000,000 dosage units of hydrocodone” and that Respondent “failed to properly account for, secure, and otherwise handle these controlled substances.”
Next, the Order alleged that on March 16, 2006, DEA conducted an accountability audit of Respondent's handling of hydrocodone and that Respondent “could not account for more than 3,500,000 dosage units” that Respondent and her husband “had ordered”; the Order thus also alleged that Respondent “failed to keep accurate and complete records of each controlled substance received, sold, delivered, or otherwise disposed of as required by 21 U.S.C. 827(c) and 21 CFR 1304.01
By letter of October 2, 2009, Respondent, through her counsel, requested a hearing on the allegations. ALJ Ex. 2. The matter was then assigned to an Administrative Law Judge (ALJ), who conducted a hearing on March 2-3, 2010, in Santa Ana, California.
At the hearing, the Government called two witnesses to testify and introduced documentary evidence. Respondent testified on her own behalf. Following the hearing, both parties submitted briefs containing their proposed findings of fact, conclusions of law and argument.
On June 18, 2010, the ALJ issued her Recommended Decision (also ALJ). Therein, the ALJ considered the five public interest factors,
As to the first factor—the recommendation of the appropriate State licensing board or professional disciplinary authority—the ALJ found “no evidence that the Medical Board of California has taken any action against the Respondent.”
The ALJ then considered factors two and four—Respondent's experience in dispensing controlled substances and her compliance with Federal, State, and local laws relating to controlled substances—together.
The ALJ rejected Respondent's argument that “the DEA's findings did not distinguish between the controlled substances prescribed or dispensed to Respondent's patients versus the patients of” her husband.
Turning to factor five—such other conduct as may threaten the public health and safety—the ALJ explained that “[e]ven if Respondent was not directly involved in the illegal diversion of controlled substances * * * she committed acts which constitute ‘conduct which may threaten the public health and safety’ and which render her registration ‘inconsistent with the public interest.’ ”
The ALJ further found incredible Respondent's testimony that “she was unaware of [R.K's] actions.”
Noting that Respondent blamed her husband and R.K. for her misconduct, the ALJ further found that “Respondent's acceptance of responsibility has been minimal” and “weighs heavily against her continuing registration.”
The ALJ also found that “the fact that [Respondent] still works alongside [R.K.] is an aggravating factor.”
On August 9, 2010, Respondent filed Exceptions to the ALJ's Decision, and on August 18, the ALJ forwarded the record to me for Final Agency Action. On September 10, 2010, the Government filed a motion with my Office to accept its response to Respondent's Exceptions. In its motion, the Government stated that Respondent's counsel had consented to its filing. Accordingly, by this Order I grant the Government's motion.
Having considered the entire record, I adopt the ALJ findings of fact and conclusions of law except as expressly noted herein. I further adopt the ALJ's ultimate conclusion that Respondent's “continued registration is not in the public interest,” ALJ at 38, and her recommendation that her registration be revoked. As ultimate factfinder, I make the following findings:
Respondent is the holder of DEA Certificate of Registration, AD9234446, which authorizes her to dispense controlled substances in schedules II through V, as a practitioner, at the registered location of 17150 Euclid #200, Fountain Valley, California. GX 1. While Respondent's registration was to expire on June 30, 2007,
Respondent currently holds a medical license issued by the Medical Board of California. Moreover, the Board has not taken any formal action to limit her ability to practice medicine or to prescribe controlled substances. ALJ Ex. 3, at 3. Also, Respondent has not been convicted of an offense related to the manufacture, distribution, or dispensing of controlled substances.
Respondent is married to Surinder Dang, M.D.
In November 2005, a Diversion Group Supervisor (GS) in DEA's Riverside Diversion Group reviewed ARCOS
The majority of the controlled substances ordered under Respondent's DEA registration were obtained from Anda Pharmaceuticals. GX 3; Tr. 130, 139. The GS obtained purchase records from Anda showing hydrocodone and other controlled substances purchases by both Respondent and her husband between 2000 and 2005. GX 8; Tr. 47-49. However, there is no evidence that Respondent ever personally ordered these controlled substances. Tr. 140.
CMC also ordered controlled substances, primarily hydrocodone, from another drug distributor, Henry Schein, Inc. GX 6; Tr. 44. The Schein records show that the orders were placed under Respondent's husband's name, but a number of the invoices note Respondent's name as well as her husband's. GX 6, at 8-9, 11, 14-15, 17-18, 29. R.K.'s name was also listed as
In a letter dated November 7, 2005, Respondent's husband explained to Henry Schein that CMC would begin ordering controlled substances so that CMC's physicians could dispense medications directly to CMC's patients. GX 7; Tr. 46. This letter listed the CMC physicians as Surinder Dang, M.D.; Satinder Dang, M.D.; Robert Belanger, D.O.; Huey Lin, M.D.; and Davinder Singh, M.D. GX 7. The letter also stated: “We dispense medications to our patients only. Our practice has been growing.”
The DEA registration numbers of both Respondent and her husband were used to order controlled substances from Darby Medical Supply and ParMed Pharmaceuticals. GX 16; GX 9, 11; Tr. 51, 61-62. The Darby records show that Respondent ordered hydrocodone fourteen times. GX 16, at 1, 5, 7, 11. The ParMed records show that between December 29, 2005 and January 4, 2006, 88,800 dosage units of hydrocodone were ordered under Respondent's registration. GX 9, at 2. At one point, D.L., ParMed's Regulatory Affairs officer, reported to the GS that CMC's orders were “excessive and suspicious”; D.L. also identified R.K. as the point of contact for the clinic and that R.K. had opened the CMC accounts. Tr. 51-53.
According to ARCOS records, while in 2004, Respondent purchased 157,100 dosage units of hydrocodone, in 2005, she purchased 2,272,800 dosage units. GX 3, at 2-13. ARCOS data further showed that in 2005, Respondent and her husband had ordered a combined total of 3,626,400 tablets of hydrocodone. GX 3 at 13; GX 4, at 6;
Throughout the investigations, several of the firms also provided the GS with information regarding when various deliveries were to be made to Respondent's clinic. On December 14, 2005, the GS, who had received information from two different distributors (Henry Schein and Moore Medical) that controlled substances deliveries were to be made that day, conducted surveillance at the [Dangs'] clinic from approximately 9:00 a.m. until 6:00 p.m. Tr. 43, 67-68, 75. During the surveillance, the GS observed both deliveries and noted that “approximately no more than a dozen” people entered the clinic that day.
On January 13, 2006, the GS conducted a second surveillance from approximately 9:00 a.m. until 3 p.m.
On January 17, 2006, the GS, who had received notice of a controlled substance delivery from another distributor (ParMed Pharmaceuticals, Inc.), conducted another full-day surveillance.
As he approached R.K., the CHP officer observed “cardboard boxes that were taped shut in the rear cargo area.” GX 10, at 2. The CHP officer advised R.K. of the reason for the stop and requested her license, registration, and insurance.
After the CHP Officer asked R.K. to step out of her car, he asked “why she had cases of Vicodin.”
The CHP Officer then asked how the Vicodin had ended up in her vehicle; R.K. stated that “she [had] carried the boxes to her vehicle around noon time and left them there,” and that she had stayed in her office until about 5 p.m., at which point “she left * * * to get something to eat.”
The CHP Officer then “asked R.K. to open the boxes” to confirm that they contained Vicodin.
The CHP Officer then contacted a DEA Task Force Officer (TFO) and arranged to transfer custody of the drugs to DEA; upon the TFO's arrival at the Officer's location, the drugs were transferred to the TFO.
R.K. then drove to her residence in Anaheim Hills; Investigators followed her there in order to question her about the drugs that were found in her vehicle. Tr. 82. R.K. told the Investigators that she had taken the hydrocodone with her for safekeeping because Respondent was out of the office; she also maintained that she intended to return them to the office after she ate.
R.K. stated that there were about five physicians who worked at Respondent's clinic, that they dispensed the pills in 30- and 60-count bottles, and that the clinic had approximately twenty to twenty-five patients per day.
The Investigators then asked R.K. if she would consent to a search of her residence; she agreed.
On February 24, 2006, Respondent's husband wrote a letter to CHP requesting the return of the hydrocodone which had been seized during the traffic stop of R.K. Tr. 88-89; GX 12. The letter asserted that R.K. was the clinic's “office manager,” and had “informed CHP that the property was not hers, and instead belonged to her employer, Complete Medical Care Inc.” GX 12.
On March 16, 2006, DEA executed search warrants at both Respondent's clinic and R.K.'s residence. Tr. 90, 104. At the clinic, the Investigators took an inventory of the controlled substances on hand and found 48,000 tablets of hydrocodone, which they seized; the Investigators also seized CMC's controlled substance purchasing records and dispensing log. Tr. at 90, 95.
R.K. was present during the search of her residence and was interviewed.
On March 16, 2006, the Diversion Investigator (DI) interviewed several CMC employees, including A.N.,
Using the records seized during the search of Respondent's clinic and its patient files, ARCOS data, and information provided by several of the distributors,
Using both the ARCOS data and distributor invoices, the GS determined that 4,037,900 tablets of hydrocodone had been ordered during the audit period. Tr. 94; GX 15. The clinic's dispensing logs, which did not identify which doctor had authorized the various dispensings,
Respondent testified that she had no knowledge that her “DEA registration
Respondent testified that while during this time period, she was aware that her husband was ordering drugs for his pain management practice, she did not know how much he was ordering.
Respondent further testified that she was unaware that R.K. had taken drugs from CMC to her residence until learning of it through these proceedings; she also stated that she was not sure if her husband had instructed R.K. regarding taking drugs to her residence.
Regarding the controlled substance drug storage area, Respondent stated that she had “no idea” how the drugs were organized. Tr. 198-99. Respondent testified that she did not pay attention to what was in that storage area, but then stated there was a basic cabinet that was locked at night and that she did not have a key.
While Respondent testified on direct examination that she had not dispensed drugs at CMC, on cross-examination, she stated “I don't recall. I might have dispensed but I dispensed rarely.”
Section 304(a) of the Controlled Substances Act (CSA) provides that “[a] registration pursuant to section 823 of this title to * * * dispense a controlled substance * * * may be suspended or revoked by the Attorney General upon a finding that the registrant * * * has committed such acts as would render [her] registration under section 823 of this title inconsistent with the public interest as determined under such section.” 21 U.S.C. 824(a)(4). In making the public interest determination in the case of a practitioner, Congress directed that the following factors be considered:
(1) The recommendation of the appropriate State licensing board or professional disciplinary authority.
(2) The applicant's experience in dispensing * * * controlled substances.
(3) The applicant's conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.
(4) Compliance with applicable State, Federal, or local laws relating to controlled substances.
(5) Such other conduct which may threaten the public health and safety.
“[T]hese factors are considered in the disjunctive.”
With respect to a practitioner's registration, the Government bears the burden of proving by a preponderance of the evidence that the continuation of a registration would be inconsistent with the public interest. 21 CFR 1301.44(d). However, where the Government satisfies its
In this matter, having considered the entire record and all of the factors, I agree with the ALJ's conclusions that the Government's evidence under factors two, four, and five makes out a
Be that as it may, in enacting the CSA, Congress vested this Agency with “a separate oversight responsibility [apart from that which exists in state authorities] with respect to the handling of controlled substances.”
There is also no evidence that Respondent has been convicted of an offense related to the manufacture, distribution, or dispensing of controlled substances under either Federal or state law (factor three). ALJ at 27-28. However, while a history of criminal convictions for offenses involving the distribution or dispensing of controlled substances is a highly relevant consideration, there are any number of reasons why a registrant may not have been convicted of (or even prosecuted for) such an offense, and thus, the absence of such a conviction is of considerably less consequence in the public interest inquiry.
The Government's case implicates each of these factors. As found above, during an approximately fifteen-month period, more than four million tablets of highly abused combination drugs containing hydrocodone, a schedule III controlled substance, were purchased by R.K., Respondent's office manager, using her and her husband's DEA registrations, approximately 2.3 million of which were ordered under her registration during 2005 alone. When DEA Investigators audited Respondent's and her husband's handling of the hydrocodone, they could account for only 167,000 tablets, leaving Respondent with over two million
At a minimum, the evidence clearly shows that Respondent violated the CSA's various recordkeeping provisions. Under Federal law, as soon as Respondent “first engage[d] in the * * * distribution[] or dispensing of controlled substances, and every second year thereafter,” she was required “
Under Federal law, Respondent was also required to “maintain, on a current basis,
Recordkeeping is one of the central features of the CSA's closed system of distribution.
In her Exceptions to the ALJ's decision, Respondent argues that “she had no knowledge that her DEA Registration was being used by her husband or [R.K.] to order controlled substances” until DEA executed the search warrant on March 16, 2006. However, DEA has long held that a registrant is strictly liable for the misuse of her registration by a person to whom she entrusts her registration.
Contrary to Respondent's understanding, the purpose of this proceeding is to protect the public interest, and in determining whether a registrant has committed acts which render her registration “inconsistent with the public interest,” 21 U.S.C. 824(a)(4), the standards of
In any event, the ALJ did not find credible Respondent's testimony that she was unaware of R.K.'s activities. ALJ at 30. I agree. Given the duration and scope of R.K.'s activities, Respondent's denial of knowledge is implausible.
In her Exceptions, Respondent also argues that the ALJ's decision “fails to distinguish between the drugs ordered under Respondent's DEA Registration and the drugs ordered under her husband's.” Res. Exc. at 22. This is true. However, as ultimate factfinder, I have reviewed the evidence and found that the ARCOS data shows that in 2005 alone, more than 2.27 million dosage units of hydrocodone were ordered under Respondent's registration, and that at most, 167,000 dosage units can be accounted for. Thus, Respondent is responsible for more than two million dosage units that cannot be accounted for and were likely diverted.
Respondent's misconduct thus clearly threatened public health and safety.
Under Agency precedent, where the Government has made out a
During her testimony, Respondent continued to deny that she was responsible for the unaccounted-for hydrocodone and blamed her husband and R.K. Furthermore, the ALJ found incredible Respondent's denial that she had knowledge of R.K.'s illegal activities. DEA has repeatedly held that a registrant's lack of candor is a highly relevant consideration in determining the appropriate sanction.
Given the scope of the diversion which likely occurred here and what the ALJ characterized as Respondent's minimal acceptance of responsibility
I therefore conclude that it would be inconsistent with the public interest to grant her even a restricted registration. Accordingly, I will order that Respondent's registration be revoked and that any pending application be denied.
Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 824(a), as well as by 28 CFR 0.100(b), I hereby order that DEA Certificate of Registration, AD9234446, issued to Satinder K. Dang, M.D., be, and it hereby is, revoked. I further order that any pending application of Satinder K. Dang, M.D., to renew or modify her registration be, and it hereby is, denied. This Order is effective September 22, 2011.
On September 9, 2010, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, issued an Order to Show Cause to Roots Pharmaceuticals, Inc. (Registrant), of American Fork, Utah. The Show Cause Order proposed the revocation of Registrant's DEA Certificate of Registration BR9610571, which authorizes it to dispense controlled substances as a retail pharmacy, on the ground that Registrant's state pharmacy and controlled substance licenses had expired on September 30, 2009, and that it therefore lacks authority under the laws of the State in which it is registered with DEA to dispense controlled substances. Show Cause Order at 1 (citing 21 U.S.C. 823(f) and 824(a)(3)). The Show Cause Order also notified Registrant of its right to request a hearing on the allegations or to submit a written statement in lieu of a hearing, the procedures for doing either, and the consequence for failing to do either.
The Government's initial attempt to serve Registrant by certified mail was unsuccessful. Thereafter, as evidenced by the signed return receipt card, on January 14, 2011, the Government accomplished service by mailing the Show Cause Order to Registrant's Registered Agent. On January 11, 2011, the Government also sent an electronic version of the Show Cause Order to Registrant's Registered Agent at the e-mail address he had previously provided to the Agency. However, since the date of service of the Show Cause Order, no person has requested a hearing, or submitted a written statement in lieu of a hearing, on behalf of Registrant. Because thirty days have now passed since service of the Show Cause Order, I find that Registrant has waived its right to request a hearing or to submit a written statement in lieu of a hearing.
Registrant is the holder of DEA Certificate of Registration BR9610571, which authorizes it to dispense controlled substances in schedules II through V as a retail pharmacy, at the registered location of 12 W 100N, Suite 201B, American Fork, Utah. GX A. Registrant's registration does not expire until April 30, 2012.
According to a Pharmacy Licensing Specialist with the State of Utah, Department of Commerce, Division of Occupational and Professional Licensing, Registrant's Utah Pharmacy License and Utah Controlled Substance Dispensing License expired on September 30, 2009. GX B. Registrant did not renew either license.
Under the Controlled Substances Act (CSA), a practitioner must be currently authorized to handle controlled substances in the “jurisdiction in which [it] practices” in order to maintain a DEA registration.
The CSA further authorizes the Agency to revoke a registration “upon a finding that the registrant * * * has had [its] State license or registration suspended [or] revoked * * * and is no longer authorized by State law to engage in the * * * distribution [or] dispensing of controlled substances.” 21 U.S.C. 824(a)(3). Moreover, because holding state authority is a statutory requirement for registration as a practitioner,
As found above, Registrant allowed its state pharmacy and controlled substance licenses to expire, and thus, it no longer holds authority under Utah law to dispense controlled substances.
Pursuant to the authority vested in me by 21 U.S.C. 824(a)(3), as well as 28 CFR 0.100(b), I order that DEA Certificate of Registration BR9610571, issued to Roots Pharmaceuticals, Inc., be, and it hereby is, revoked. I further order that any pending application of Roots Pharmaceuticals, Inc., to renew or modify its registration, be, and it hereby is, denied. This Order is effective September 19, 2011.
Prohibited Transaction Exemptions and Grant of Individual Exemptions Involving D-11468 and D-11469, The Krispy Kreme Doughnut Corporation Retirement Savings Plan and The Krispy Kreme Profit-Sharing Stock Ownership Plan, 2011-14; D-11634, The United Brotherhood of Carpenters Pension Fund, 2011-15; L-11651 and L-11652, Verizon Communications, Inc. and Cellco Partnership, 2011-16,
In the
1. On page 49788, in the third column, above the heading “Exemption,” for “The Krispy Kreme Doughnut Corporation Retirement and Savings Plan (the Savings Plan) and the Krispy Kreme Profit-Sharing Stock Ownership Plan the KSOP; together, the Plans)” replace the bracketed text “[Prohibited Transaction Exemption 2011-10;]” with “[Prohibited Transaction Exemption 2011-14;].”
2. On page 49790, in the second column, above the heading “Exemption,” for “The United Brotherhood of Carpenters Pension Fund (the Plan),” replace the bracketed text “[Prohibited Transaction Exemption 2011-11;]” with “[Prohibited Transaction Exemption 2011-15;].”
3. On page 49790, in the third column, above the heading “Exemption,” for “Verizon Communications, Inc. (Verizon) and Cellco Partnership, doing business as Verizon Wireless (Verizon Wireless; collectively, the Applicants),” replace the bracketed text “[Prohibited Transaction Exemption 2011-12;]” with “[Prohibited Transaction Exemption 2011-16;].”
In accordance with Section 223 of the Trade Act of 1974, as amended (“Act”), 19 U.S.C. 2273, the Department of Labor issued a Certification of Eligibility to Apply for Worker Adjustment Assistance on February 3, 2011, applicable to workers of Ericsson Services, Inc., currently known as Ericsson, Inc., Service Assurance, Deployment and Integration, and Engineering and IS/IT Division, including on-site leased workers from Brook Consultants Inc., Cortech LLC, Adex Corporation, American Cybersystems Inc., Apeiron Inc., Apex Systems Inc., ARC Partners Inc., Avion Systems Inc., BCI Communications Inc., Brosna Communications, Collaborative LLC, Convergenz LLC, Corestaff Services LP, FMHC Corporation, Fusion Solutions Inc., GCB Services LLC, Global Technology Associates, HCONN Inc., J.M. Neil and Associates Inc., JMA Chartered, Makro Technologies Inc., Multi Services Inc., Multipoint International, Nexius Inc., Technisource Inc., Teksystems Inc., T-Force Inc., Thinktel Inc., United Information Technologies, and Wireless Facilities, Inc., Overland Park, Kansas. The workers provide telecommunications services. The notice was published in the
At the request of a company official, the Department reviewed the certification for workers of the subject firm.
New information provided by the company confirms that workers at the Kansas City, Missouri location of Ericsson Services, Inc., currently known as Ericsson, Inc., Service Assurance, Deployment and Integration, and Engineering and IS/IT Divisions are part of the same worker group as the group certified under TA-W-75,056. Moreover, worker separations at the Kansas City, Missouri facility are attributable to the same shift of services that was the basis for certification TA-W-75,056.
Based on these findings, the Department is amending this certification to include employees of the Kansas City, Missouri location of Ericsson Services, Inc., currently known as Ericsson, Inc., Service Assurance, Deployment and Integration, and Engineering and IS/IT Division, including on-site leased workers from Convergenz, LLC.
The amended notice applicable to TA-W-75,056 is hereby issued as follows:
All workers of Ericsson Services, Inc., currently known as Ericsson, Inc., Service Assurance, Deployment and Integration, and Engineering and IS/IT Divisions including on-site leased workers from Brook Consultants Inc., Cortech LLC, Adex Corporation, American Cybersystems Inc., Apeiron Inc., Apex Systems Inc., ARC Partners Inc., Avion Systems Inc., BCI Communications Inc., Brosna Communications, Collaborative LLC, Convergenz LLC, Corestaff Services LP, FMHC Corporation, Fusion Solutions Inc., GCB Services LLC, Global Technology Associates, HCONN Inc., J.M. Neil and Associates Inc., JMA Chartered, Makro Technologies Inc., Multi Services Inc., Multipoint International, Nexius, Inc., Technisource Inc., Teksystems Inc., T-Force Inc., Thinktel Inc., United Information Technologies, and Wireless Facilities, Inc. Overland Park, Kansas (TA-W-75,056) and Ericsson Services, Inc., currently known as Ericsson, Inc., Service Assurance, Deployment and Integration, and Engineering and IS/IT Divisions, including on-site leased workers from Convergenz, LLC, Kansas City, Missouri (TA-W-75,056A) who became totally or partially separated from employment on or after December 29, 2009, through February 3, 2013, and all workers in the group threatened with total or partial separation from employment on February 3, 2011 through February 3, 2013, are eligible to apply for adjustment assistance under
In The Matter of: TA-W-70,520; The Boeing Company,
Commercial Aircraft Group; Including On-Site Leased Workers From Comforce Corporation, Adecco, Multax, Inconen, CTS, Hi-Tec, Woods, Ciber, Kelly Services, Analysts Internatinal Corp, Comsys, Filter LLC, Excell, Entegee, Chipton-Ross, Ian Martin, Can-Tech, IT Services, IDEX Solutions (NWCAD), Media Logic, HL YOH, Volt, PDS, CDI Corp, Teksystems, Innovative Systems, Inc., Murphy & Associates, Dell, PFI Tech, RMS and PSC Industrial Services, Inc.; Puget Sound, Washington.
In the matter of; TA-W-70,520A; The Boeing Company, Commercial Aircraft Group; Including On-Site Leased Workers From Comforce Corporation, Adecco, Multax, Inconen, CTS, Hi-Tec, Woods, Ciber, Kelly Services, Analysts Internatinal Corp, Comsys, Filter LLC, Excell, Entegee, Chipton-Ross, Ian Martin, Can-Tech, IT Services, IDEX Solutions (NWCAD), Media Logic, HL YOH, Volt, PDS, CDI Corp, Teksystems, Innovative Systems, Inc., Murphy & Associates, Dell, PFI Tech, RMS And PSC Industrial Services, Inc., Portland, Oregon; Amended Certification Regarding Eligibility To Apply For Worker Adjustment Assistance.
In accordance with section 223 of the Trade Act of 1974, as amended (“Act”), 19 U.S.C. 2273, the Department of Labor issued a Certification of Eligibility to apply for Worker Adjustment Assistance on October 19, 2009, applicable to workers of The Boeing Company, Commercial Aircraft Group, Puget Sound, Washington, (TA-W-70,520), and The Boeing Company, Commercial Aircraft Group, Portland, Oregon (TA-W-70,520A). The notice was published in the
The company reports that on-site leased workers from PSC Industrial Services, Inc. were employed on-site at both the Puget Sound, Washington and Portland, Oregon locations of The Boeing Company, Commercial Aircraft Group. The Department has determined that these workers were sufficiently under the control of the subject firm to be considered leased workers.
Based on these findings, the Department is amending the certification to include leased workers from PSC Industrial Services, Inc. working on-site at the Puget Sound, Washington and Portland, Oregon locations of The Boeing Company, Commercial Aircraft Group.
The amended notice applicable to the TA-W-70,520 and TA-W 70,520A are hereby issued as follows:
All workers of The Boeing Company, Commercial Aircraft Group, including on-site leased workers from Comforce Corporation, Adecco, Multax, Inconen, CTS, Hi-Tec, Woods, Ciber, Kelly Services, Analysts International Corp, Comsys, Filter LLC, Excell, Entegee, Chipton-Ross, Ian Martin, Can-Tech, IT Services, IDEX Solutions (NW CAD), Media Logic, HL YOH, Volt, PDS, CDI Corp, Teksystems, Innovative Systems, Inc., Murphy & Associates, Dell, PFI Tech, RMS and PSC Industrial Services, Inc., Puget Sound, Washington (TA-W-70,520), and Portland, Oregon (TA-W-70,520A), who became totally or partially separated from employment on or after May 22, 2008, through October 19, 2011, and all workers in the group threatened with total or partial separation from employment on the date of certification through two years from the date of certification, are eligible to apply for adjustment assistance under Chapter 2 of Title II of the Trade Act of 1974, as amended.
Signed in Washington, DC, this 4th day of August, 2011.
In accordance with Section 223 of the Trade Act of 1974, as amended (19 U.S.C. 2273) the Department of Labor herein presents summaries of determinations regarding eligibility to apply for trade adjustment assistance for workers (TA-W) number and alternative trade adjustment assistance (ATAA) by (TA-W) number issued during the period of July 25, 2011 through July 29, 2011.
In order for an affirmative determination to be made for workers of a primary firm and a certification issued regarding eligibility to apply for worker adjustment assistance, each of the group eligibility requirements of Section 222(a) of the Act must be met.
I. Section (a)(2)(A) all of the following must be satisfied:
A. A significant number or proportion of the workers in such workers' firm, or an appropriate subdivision of the firm, have become totally or partially separated, or are threatened to become totally or partially separated;
B. the sales or production, or both, of such firm or subdivision have decreased absolutely; and
C. increased imports of articles like or directly competitive with articles produced by such firm or subdivision have contributed importantly to such workers' separation or threat of separation and to the decline in sales or production of such firm or subdivision; or
II. Section (a)(2)(B) both of the following must be satisfied:
A. A significant number or proportion of the workers in such workers' firm, or an appropriate subdivision of the firm, have become totally or partially separated, or are threatened to become totally or partially separated;
B. There has been a shift in production by such workers' firm or subdivision to a foreign country of articles like or directly competitive with articles which are produced by such firm or subdivision; and
C. One of the following must be satisfied:
1. The country to which the workers' firm has shifted production of the articles is a party to a free trade agreement with the United States;
2. The country to which the workers' firm has shifted production of the articles to a beneficiary country under the Andean Trade Preference Act, African Growth and Opportunity Act, or the Caribbean Basin Economic Recovery Act; or
3. There has been or is likely to be an increase in imports of articles that are like or directly competitive with articles which are or were produced by such firm or subdivision.
Also, in order for an affirmative determination to be made for secondarily affected workers of a firm and a certification issued regarding
(1) Significant number or proportion of the workers in the workers' firm or an appropriate subdivision of the firm have become totally or partially separated, or are threatened to become totally or partially separated;
(2) The workers' firm (or subdivision) is a supplier or downstream producer to a firm (or subdivision) that employed a group of workers who received a certification of eligibility to apply for trade adjustment assistance benefits and such supply or production is related to the article that was the basis for such certification; and
(3) Either—
(A) The workers' firm is a supplier and the component parts it supplied for the firm (or subdivision) described in paragraph (2) accounted for at least 20 percent of the production or sales of the workers' firm; or
(B) A loss or business by the workers' firm with the firm (or subdivision) described in paragraph (2) contributed importantly to the workers' separation or threat of separation.
In order for the Division of Trade Adjustment Assistance to issue a certification of eligibility to apply for Alternative Trade Adjustment Assistance (ATAA) for older workers, the group eligibility requirements of Section 246(a)(3)(A)(ii) of the Trade Act must be met.
1. Whether a significant number of workers in the workers' firm are 50 years of age or older.
2. Whether the workers in the workers' firm possess skills that are not easily transferable.
3. The competitive conditions within the workers' industry (i.e., conditions within the industry are adverse).
The following certifications have been issued. The date following the company name and location of each determination references the impact date for all workers of such determination.
The following certifications have been issued. The requirements of Section 222(b) (supplier to a firm whose workers are certified eligible to apply for TAA) of the Trade Act have been met.
The following certifications have been issued. The date following the company name and location of each determination references the impact date for all workers of such determination.
The following certifications have been issued. The requirements of Section 222(a)(2)(A) (increased imports) and Section 246(a)(3)(A)(ii) of the Trade Act have been met.
The following certifications have been issued. The requirements of Section 222(a)(2)(B) (shift in production) and Section 246(a)(3)(A)(ii) of the Trade Act have been met.
In the following cases, it has been determined that the requirements of 246(a)(3)(A)(ii) have not been met for the reasons specified.
The Department has determined that criterion (1) of Section 246 has not been met. The firm does not have a significant number of workers 50 years of age or older.
In the following cases, the investigation revealed that the eligibility criteria for worker adjustment assistance have not been met for the reasons specified.
Because the workers of the firm are not eligible to apply for TAA, the workers cannot be certified eligible for ATAA.
The investigation revealed that criteria (a)(2)(A)(I.A.) and (a)(2)(B)(II.A.) (employment decline) have not been met.
The investigation revealed that criteria (a)(2)(A)(I.C.) (increased imports) and (a)(2)(B)(II.B.) (shift in production to a foreign country) have not been met.
The workers' firm does not produce an article as required for certification under Section 222 of the Trade Act of 1974.
After notice of the petitions was published in the
The following determinations terminating investigations were issued because the petitioning groups of workers are covered by active certifications. Consequently, further investigation in these cases would serve no purpose since the petitioning group of workers cannot be covered by more than one certification at a time.
I hereby certify that the aforementioned determinations were issued during the period of
In accordance with Section 223 of the Trade Act of 1974, as amended (19 U.S.C. 2273) the Department of Labor herein presents summaries of determinations regarding eligibility to apply for trade adjustment assistance for workers (TA-W) number and alternative trade adjustment assistance (ATAA) by (TA-W) number issued during the period of
In order for an affirmative determination to be made for workers of a primary firm and a certification issued regarding eligibility to apply for worker adjustment assistance, each of the group eligibility requirements of Section 222(a) of the Act must be met.
I. Section (a)(2)(A) all of the following must be satisfied:
A. A significant number or proportion of the workers in such workers' firm, or an appropriate subdivision of the firm, have become totally or partially separated, or are threatened to become totally or partially separated;
B. The sales or production, or both, of such firm or subdivision have decreased absolutely; and
C. Increased imports of articles like or directly competitive with articles produced by such firm or subdivision have contributed importantly to such workers' separation or threat of separation and to the decline in sales or production of such firm or subdivision; or
II. Section (a)(2)(B) both of the following must be satisfied:
A. A significant number or proportion of the workers in such workers' firm, or an appropriate subdivision of the firm, have become totally or partially separated, or are threatened to become totally or partially separated;
B. There has been a shift in production by such workers' firm or subdivision to a foreign country of articles like or directly competitive with articles which are produced by such firm or subdivision; and
C. One of the following must be satisfied:
1. The country to which the workers' firm has shifted production of the articles is a party to a free trade agreement with the United States;
2. The country to which the workers' firm has shifted production of the articles to a beneficiary country under the Andean Trade Preference Act, African Growth and Opportunity Act, or the Caribbean Basin Economic Recovery Act; or
3. There has been or is likely to be an increase in imports of articles that are like or directly competitive with articles which are or were produced by such firm or subdivision.
Also, in order for an affirmative determination to be made for secondarily affected workers of a firm and a certification issued regarding eligibility to apply for worker adjustment assistance, each of the group eligibility requirements of Section 222(b) of the Act must be met.
(1) Significant number or proportion of the workers in the workers' firm or an appropriate subdivision of the firm have become totally or partially separated, or are threatened to become totally or partially separated;
(2) The workers' firm (or subdivision) is a supplier or downstream producer to a firm (or subdivision) that employed a group of workers who received a certification of eligibility to apply for trade adjustment assistance benefits and such supply or production is related to the article that was the basis for such certification; and
(3) Either—
(A) The workers' firm is a supplier and the component parts it supplied for the firm (or subdivision) described in paragraph (2) accounted for at least 20 percent of the production or sales of the workers' firm; or
(B) A loss of business by the workers' firm with the firm (or subdivision) described in paragraph (2) contributed importantly to the workers' separation or threat of separation.
In order for the Division of Trade Adjustment Assistance to issue a certification of eligibility to apply for Alternative Trade Adjustment Assistance (ATAA) for older workers, the group eligibility requirements of Section 246(a)(3)(A)(ii) of the Trade Act must be met.
1. Whether a significant number of workers in the workers' firm are 50 years of age or older.
2. Whether the workers in the workers' firm possess skills that are not easily transferable.
3. The competitive conditions within the workers' industry (
The following certifications have been issued. The date following the company name and location of each determination references the impact date for all workers of such determination.
The following certifications have been issued. The requirements of Section 222(a)(2)(A) (increased imports) and Section 246(a)(3)(A)(ii) of the Trade Act have been met.
The following certifications have been issued. The requirements of Section 222(a)(2)(B) (shift in production) and Section 246(a)(3)(A)(ii) of the Trade Act have been met.
The following certifications have been issued. The requirements of Section 222(b) (supplier to a firm whose workers are certified eligible to apply for TAA) and Section 246(a)(3)(A)(ii) of the Trade Act have been met.
In the following cases, the investigation revealed that the eligibility criteria for worker adjustment assistance have not been met for the reasons specified.
Because the workers of the firm are not eligible to apply for TAA, the
The investigation revealed that criteria (a)(2)(A)(I.C.) (increased imports) and (a)(2)(B)(II.B.) (shift in production to a foreign country) have not been met.
The workers' firm does not produce an article as required for certification under Section 222 of the Trade Act of 1974.
I hereby certify that the aforementioned determinations were issued during the period of
Employment and Training Administration, Labor.
Notice.
The Employment and Training Administration is issuing this notice to announce the receipt of a “Certification of Non-Relocation and Market and Capacity Information Report” (Form 4279-2) for the following:
Principal Product/Purpose: The loan, guarantee, or grant application is to support the expansion of business to the international market. The project will be located in Cambridge, Maryland. The NAICS industry code for this enterprise is: 332994 (rifles and services).
All interested parties may submit comments in writing no later than September 1, 2011.
Copies of adverse comments received will be forwarded to the applicant noted above.
Address all comments concerning this notice to Anthony D. Dais, U.S. Department of Labor, Employment and Training Administration, 200 Constitution Avenue, NW., Room S-4231, Washington, DC 20210; or e-mail
Anthony D. Dais, at telephone number (202) 693-2784 (this is not a toll-free number).
Section 188 of the Consolidated Farm and Rural Development Act of 1972, as established under 29 CFR part 75, authorizes the United States Department of Agriculture to make or guarantee loans or grants to finance industrial and business activities in rural areas. The Secretary of Labor must review the application for financial assistance for the purpose of certifying to the Secretary of Agriculture that the assistance is not calculated, or likely, to result in: (a) A transfer of any employment or business activity from one area to another by the loan applicant's business operation; or, (b) An increase in the production of goods, materials, services, or facilities in an area where there is not sufficient demand to employ the efficient capacity of existing competitive enterprises unless the financial assistance will not have an adverse impact on existing competitive enterprises in the area. The Employment and Training Administration within the Department of Labor is responsible for the review and certification process. Comments should address the two bases for certification and, if possible, provide data to assist in the analysis of these issues.
Postal Regulatory Commission.
Notice.
This document informs the public that an appeal of the closing of the Grant, Iowa post office has been filed. It identifies preliminary steps and provides a procedural schedule. Publication of this document will allow the Postal Service, petitioners, and others to take appropriate action.
Submit comments electronically by accessing the “Filing Online” link in the banner at the top of the Commission's Web site (
Stephen L. Sharfman, General Counsel, at 202-789-6820 (case-related information) or
Notice is hereby given that, pursuant to 39 U.S.C. 404(d), on August 11, 2011, the Commission received a petition for review of the Postal Service's determination to close the post office in Grant, Iowa. The petition was filed by Laurenda Mifflin (Petitioner) and is postmarked August 5, 2011. The Commission hereby institutes a proceeding under 39 U.S.C. 404(d)(5) and establishes Docket No. A2011-44 to consider Petitioner's appeal. If Petitioner would like to further explain her position with supplemental information or facts, Petitioner may
After the Postal Service files the administrative record and the Commission reviews it, the Commission may find that there are more legal issues than those set forth above, or that the Postal Service's determination disposes of one or more of those issues. The deadline for the Postal Service to file the applicable administrative record with the Commission is August 26, 2011.
The appeal and all related documents are also available for public inspection in the Commission's docket section. Docket section hours are 8 a.m. to 4:30 p.m., eastern time, Monday through Friday, except on Federal government holidays. Docket section personnel may be contacted via electronic mail at
The Commission reserves the right to redact personal information which may infringe on an individual's privacy rights from documents filed in this proceeding.
1. The Postal Service shall file the applicable administrative record regarding this appeal no later than August 26, 2011.
2. Any responsive pleading by the Postal Service to this notice is due no later than August 26, 2011.
3. The procedural schedule listed below is hereby adopted.
4. Pursuant to 39 U.S.C. 505, Emmett Rand Costich is designated officer of the Commission (Public Representative) to represent the interests of the general public.
5. The Secretary shall arrange for publication of this notice and order in the
By the Commission.
Postal Regulatory Commission.
Notice.
This document informs the public that an appeal of the closing of the Sublime, Texas post office has been filed. It identifies preliminary steps and provides a procedural schedule. Publication of this document will allow the Postal Service, petitioners, and others to take appropriate action.
Submit comments electronically by accessing the “Filing Online” link in the banner at the top of the Commission's Web site (
Stephen L. Sharfman, General Counsel, at 202-789-6820 (case-related information) or
Notice is hereby given that, pursuant to 39 U.S.C. 404(d), on August 11, 2011, the Commission received a petition for review of the Postal Service's determination to close the post office in Sublime, Texas. The petition was filed by Betty Bunch on behalf of the Save the Sublime Post Office Committee (Petitioner) and is postmarked August 6, 2011. The Commission hereby institutes a proceeding under 39 U.S.C. 404(d)(5) and establishes Docket No. A2011-45 to consider Petitioner's appeal. If Petitioner would like to further explain her position with supplemental information or facts, Petitioner may either file a Participant Statement on PRC Form 61 or file a brief with the Commission no later than September 15, 2011.
After the Postal Service files the administrative record and the Commission reviews it, the Commission may find that there are more legal issues than the one set forth above, or that the Postal Service's determination disposes of one or more of those issues. The deadline for the Postal Service to file the applicable administrative record with the Commission is August 26, 2011.
The appeal and all related documents are also available for public inspection in the Commission's docket section. Docket section hours are 8 a.m. to 4:30 p.m., eastern time, Monday through Friday, except on Federal government holidays. Docket section personnel may be contacted via electronic mail at
The Commission reserves the right to redact personal information which may infringe on an individual's privacy rights from documents filed in this proceeding.
1. The Postal Service shall file the applicable administrative record regarding this appeal no later than August 26, 2011.
2. Any responsive pleading by the Postal Service to this notice is due no later than August 26, 2011.
3. The procedural schedule listed below is hereby adopted.
4. Pursuant to 39 U.S.C. 505, Cassandra L. Hicks is designated officer of the Commission (Public Representative) to represent the interests of the general public.
5. The Secretary shall arrange for publication of this notice and order in the
By the Commission.
Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Rule 17f-2(e) requires members of national securities exchanges, brokers, dealers, registered transfer agents, and registered clearing agencies claiming exemption from the fingerprinting requirements of Rule 17f-2 to prepare and maintain a statement supporting their claim exemption. There is no filing requirement. Instead, Rule 17f-2(e)(2) requires covered entities to make and keep current a copy of the notice required by Rule 17f-2(e) in an easily accessible place at the organization's principal office and at the office employing the persons for whom exemptions are claimed and shall be made available upon request for inspection by the Commission, appropriate regulatory agency (if not the Commission) or other designated examining authority. Notices prepared pursuant to Rule 17f-2(e) must be maintained for as long as the covered entity claims an exemption from the fingerprinting requirements of Rule 17f-2. The recordkeeping requirement under Rule 17f-2(e) assists the Commission and other regulatory agencies with ensuring compliance with Rule 17f-2. This rule does not involve the collection of confidential information.
We estimate that approximately 75 respondents will incur an average burden of 30 minutes per year to comply with this rule, which represents the time it takes for a staff person at a covered entity to properly document a claimed exemption from the fingerprinting requirements of Rule 17f-2, and properly retain that document according to the entities record retention policies and procedures. The total annual burden for all covered entities is approximately 38 hours (75 entities × .5 hours).
Written comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's estimates of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
The Commission may not conduct or sponsor a collection of information unless it displays a currently valid control number.
Background documentation for this information collection may be viewed at the following link,
Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Paragraph (a)(1) of Rule 17a-10 generally requires broker-dealers that are exempted from the requirement to file monthly and quarterly reports pursuant to paragraph (a) of Exchange Act Rule 17a-5 (17 CFR 240.17a-5) to file with the Commission the Facing Page, a Statement of Income (Loss), and balance sheet from Part IIA of Form X-17A-5
Paragraph (a)(2) of Rule 17a-10 requires a broker-dealer subject to Rule 17a-5(a) to submit Schedule I of Form X-17A-5 with its Form X-17A-5 for the calendar quarter ending December 31 of each year. The burden associated with filing Schedule I of Form X-17A-5 is accounted for in the PRA filing associated with Rule 17a-5.
Paragraph (b) of Rule 17a-10 provides that the provisions of paragraph (a) do not apply to members of national securities exchanges or registered national securities associations that maintain records containing the information required by Form X-17A-5 and which transmit to the Commission copies of the records pursuant to a plan which has been declared effective by the Commission.
The primary purpose of Rule 17a-10 is to obtain the economic and statistical data necessary for an ongoing analysis of the securities industry. As originally adopted in 1968, Rule 17a-10 required brokers and dealers to provide their revenue and expense data on a special form. The Rule was amended in 1977 to eliminate the form. The data previously reported on the form is now reported using Form X-17A-5 and its supplementary schedules.
The Commission estimates that approximately 103 broker-dealers will spend an average of approximately 12 hours per year complying with Rule 17a-10. Thus, the total compliance burden is estimated to be approximately 1,236 burden-hours per year.
The Commission may not conduct or sponsor a collection of information unless it displays a currently valid OMB control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
Background documentation for this information collection may be viewed at the following link,
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”)
National Stock Exchange, Inc. (“NSX®” or “Exchange”) proposes to amend its rules to ensure NSX Rule 11.19(c) will continue to operate in the same way after changes to the single stock trading pauses are effective.
The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The exchanges
As part of the changes to the clearly erroneous process under Rule 11.19, the Exchange replaced existing Rule 11.19(c)(4) with all new text to provide clarity in the clearly erroneous process when a Pause Pilot trading pause is triggered. Pursuant to Rule 11.19(c)(4), Latency Trades will be broken by the Exchange if they exceed the applicable percentage from the Reference Price, as noted in the table found under Rule 11.19(c)(1).
On June 23, 2011, the Commission approved a joint proposal to expand the respective Pause Pilot rules of the Markets to include all remaining NMS stocks (“Phase III Securities”).
The recently-approved changes to the Pause Pilot will have the unintended effect of removing the Phase III Securities from the normal clearly erroneous process and potentially result in unfair outcomes in the face of severe volatility in such securities. Phase III Securities are currently subject to the clearly erroneous process under Rules 11.19(c)(1) to 11.19(c)(3), which apply to all securities except the current Pause Pilot securities subject to a pause. For purposes of transactions in securities not involving Pause Pilot securities, or transactions involving Pause Pilot securities that occur when there is not a pause pursuant to the Pause Pilot, the Reference Price is the consolidated last sale price immediately prior to the execution(s) under review, subject to certain exceptions.
Under the new Pause Pilot rules, a Latency Trade in a Phase III Security occurs only after either a 30 or 50 percent (or greater) move in the transacted price of the security in a five minute period. As a result, a ETP Holder that trades in a Phase III Security that triggers a clearly erroneous threshold of three, five or ten percent from the Reference Price, yet falls below the Pause Pilot trigger of either 30 or 50 percent, would be able to avail themselves of a clearly erroneous review. A similarly situated ETP Holder that transacts in the same security as a Latency Trade at a price equal to or greater than the Phase III Security thresholds, yet less than the clearly erroneous thresholds under Rule 11.19(c)(1), would not be able to avail themselves of the clearly erroneous process. Another ETP Holder that transacts in the same security as a Latency Trade that exceeds three, five or ten percent from the Trading Pause Trigger Price would automatically receive clearly erroneous relief. The Exchange believes that this would be an inequitable result and an arbitrary application of the clearly erroneous process. Specifically, the Exchange believes that, since the 30 and 50 percent triggers of the Pause Pilot are substantially greater than the 10 percent threshold of the original Pause Pilot, the Phase III Securities should remain under the current clearly erroneous process of Rules 11.19(c)(1)-(3).
Applying the clearly erroneous process under Rules 11.19(c)(1)-(3) to the Phase III Securities would allow the Exchange to review all transactions that exceed the normal clearly erroneous thresholds and Reference Price, and, importantly, avoid arbitrary selection of “winners” and “losers” in the face of severe volatile moves in a security of 30 or 50 percent over a five minute period. For example, an ETP Holder that trades in a Phase III Security that triggers a clearly erroneous threshold of three, five or ten percent, yet falls below the Pause Pilot trigger threshold trading at 29 percent from the prior day's closing price, would be potentially entitled to a clearly erroneous break pursuant Rule 11.19(c)(1). Should trading in that same stock trigger a trading pause at a price of 30 or 50 percent greater than the prior day's close, the ETP Holder would not be entitled to a clearly erroneous trade break unless that trade exceeded three, five or ten percent beyond the price that triggered the pause. This scenario causes an inequity among a group of ETP Holders that have transactions in the Phase III Securities falling between the three, five and ten percent thresholds from the Reference Price under the normal Rule 11.19(c)(1) clearly erroneous process and the Pause Pilot clearly erroneous triggers of three, five or ten percent away from the Trading Pause Trigger Price. Such ETP Holders would not be provided relief under the clearly erroneous rules merely due to the imposition of a Pause Pilot halt, notwithstanding that other ETP Holders with transactions that occur at the same rolling five minute percentage difference. The Exchange believes a better outcome is to afford all ETP Holders transacting in Phase III Securities the opportunity of having such trades reviewed.
The expansion of the Pause Pilot to the Phase III Securities will have the unintended consequence of setting the point at which a clearly erroneous transaction occurs once a Pause Pilot pause is initiated far beyond the triggers applied prior to the expansion, which will, in turn, prevent certain market participants from availing themselves of the clearly erroneous rules, notwithstanding that other similarly situated participants are able to do so. The Exchange believes that this would be an arbitrary application of the clearly erroneous process in a manner that is
The statutory basis for the proposed rule change is Section 6(b)(5) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange does not believe that the proposed rule change will impose any inappropriate burden on competition.
The Exchange has neither solicited nor received written comments on the proposed rule change.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to list and trade TrimTabs Float Shrink ETF under NYSE Arca Equities Rule 8.600. The text of the proposed rule change is available at the Exchange, the Commission's Public Reference Room, and
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to list and trade the following Managed Fund Shares
Commentary .06 to Rule 8.600 provides that, if the investment adviser to the Investment Company issuing Managed Fund Shares is affiliated with a broker-dealer, such investment adviser shall erect a “fire wall” between the investment adviser and the broker-dealer with respect to access to information concerning the composition and/or changes to such Investment Company portfolio. In addition, Commentary .06 further requires that personnel who make decisions on the open-end fund's portfolio composition must be subject to procedures designed to prevent the use and dissemination of material nonpublic information regarding the open-end fund's portfolio.
According to the Registration Statement, the Fund is an actively managed exchange-traded fund that seeks to achieve its investment objective primarily by investing in the broad U.S. equity market, as represented by the
Decile Ranking of Russell 3000 Stocks. The Sub-Adviser ranks stocks in the Index based on the following criteria:
I. The decrease in their outstanding shares over approximately the past 120 days (“float shrink”);
II. The increase in free cash flow (the money available to the company that is not used to pay for its daily operations) over approximately the past 120 days; and
III. The decrease in leverage over approximately the past 120 days. Leverage is measured as the ratio of total liabilities to total assets. The Sub-Adviser uses the relative decrease in leverage rather than amount of leverage itself as a criterion because the degree of leverage varies across industries.
The top decile of each respective ranking consists of the stocks of the companies with (I) the strongest reduction in shares outstanding, (II) the strongest growth in free cash flow, and (III) the largest decrease in leverage, respectively.
The Sub-Adviser uses an algorithm to give a relative weight to the three decile rankings, combining them in a single ranking (combined ranking). The algorithm places a higher weight on the float shrink ranking, followed by the free cash flow ranking, followed by the leverage ranking. The Fund under normal circumstances
According to the Registration Statement, the Sub-Adviser's investment process is quantitative. Based on extensive historical research, the Sub-Adviser designed the following stock selection rules, which involve rebalancing, weighting, liquidity, and trading considerations:
Before trading, the Fund will estimate the liquidity impact of its suggested trades. Specifically, the Fund will avoid stocks whose average trading volume over the past 30 days would be less than 50% of the size of the Fund's proposed trades. As a result, the Fund will not invest in stocks that meet its investment criteria in terms of float shrink, free cash flow growth and leverage if their trading volume is below such levels. As a result, the Fund will not invest in stocks that it deems to be illiquid.
Although the Fund initially will invest an equal dollar amount in the stocks that meet its investment criteria, the Fund is not market capitalization weighted. As a result, the Fund will overweight small-cap stocks and mid-cap stocks relative to traditional, market cap weighted indices.
The relative weights of the sectors in the Fund may vary significantly from those of traditional, market cap weighted indices. Stocks with favorable liquidity characteristics may be concentrated in certain sectors. Sector concentration might increase the Fund's volatility over the short term. According to the Registration Statement, the Fund will not correct these sector effects because the Sub-Adviser's research shows that historically they are a source of long-term outperformance.
To respond to adverse market, economic, political or other conditions, the Fund may invest 100% of its total assets, without limitation, in short-term, high-quality debt securities and money market instruments. The Fund may invest in these instruments for extended periods, depending on the Sub-Adviser's assessment of market conditions. These debt securities and money market instruments include shares of other mutual funds, commercial paper, certificates of deposit, bankers' acceptances, U.S. Government securities, including U.S. Treasury zero-coupon bonds, repurchase and reverse repurchase agreements
Diversification. The Fund may not (i) with respect to 75% of its total assets, purchase securities of any issuer (except securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities or shares of investment companies) if, as a result, more than 5% of its total assets would be invested in the securities of such issuer; or (ii) acquire more than 10% of the outstanding voting securities of any one issuer.
Concentration. The Fund may not invest 25% or more of its total assets in the securities of one or more issuers conducting their principal business activities in the same industry or group of industries. This limitation does not apply to investments in securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities, or shares of investment companies. The Fund will not invest 25% or more of its total assets in any investment company that so concentrates.
The Fund will not purchase illiquid securities.
According to the Registration Statement, the Fund will seek to qualify for treatment as a Regulated Investment Company (“RIC”) under Subchapter M of the Internal Revenue Code.
Pursuant to the terms of the Exemptive Order, the Fund will not invest in options contracts, futures contracts or swap agreements. The Fund's investments will be consistent with the Fund's investment objective and will not be used to enhance leverage.
The Shares will conform to the initial and continued listing criteria under NYSE Arca Equities Rule 8.600. The Exchange represents that, for initial and/or continued listing, the Fund will be in compliance with Rule 10A-3
The Fund issues and redeems Shares on a continuous basis at NAV only in a large specified number of Shares called a “Creation Unit.” The Shares of the Fund that trade on the Exchange are “created” at their NAV by Authorized Participants only in block-size Creation Units of at least 25,000 Shares. An Authorized Participant enters into an agreement (“Participant Agreement”) with the Distributor or uses a Depository Trust Company participant who has executed a Participant Agreement, and deposits into the Fund a portfolio of securities closely approximating the holdings of the Fund and a specified amount of cash, together totaling the NAV of the Creation Unit(s), in exchange for 25,000 Shares of the Fund (or multiples thereof). Shares are not redeemable from the Fund except when aggregated in Creation Units. The prices at which creations and redemptions occur are based on the next calculation of NAV after an order is received in a form prescribed in the Participant Agreement.
The Fund's Web site (
On a daily basis, the Adviser will disclose on the Fund's Web site for each portfolio security or other financial instrument of the Fund the following information: ticker symbol (if applicable), name of security or financial instrument, number of shares or dollar value of financial instruments held in the portfolio, and percentage weighting of the security or financial instrument in the portfolio. The Web site information will be publicly available at no charge.
In addition, a basket composition file, which includes the security names and share quantities required to be delivered in exchange for Fund Shares, together with estimates and actual cash components, will be publicly disseminated daily prior to the opening of the New York Stock Exchange (“NYSE”) via the National Securities Clearing Corporation. The basket will represent one Creation Unit of the Fund.
The NAV of the Fund will normally be determined as of the close of the regular trading session on the NYSE (ordinarily 4 p.m. Eastern Time) on each business day.
The Fund will calculate its NAV by: (i) Taking the current market value of its total assets; (ii) subtracting any liabilities; and (iii) dividing that amount by the total number of Shares owned by shareholders. The Fund will calculate NAV once each business day as of the regularly scheduled close of normal trading on the Exchange (normally, 4 p.m., Eastern Time). In calculating NAV, the Fund generally will value its investment portfolio at market price. If market prices are unavailable or the Fund thinks that they are unreliable, or when the value of a security has been materially affected by events occurring after the relevant market closes, the Fund will price those securities at fair value as determined in good faith using methods approved by the Fund's Board of Trustees.
Investors can also obtain the Trust's Statement of Additional Information (“SAI”), the Fund's Shareholder Reports, and its Form N-CSR and Form N-SAR, filed twice a year. The Trust's SAI and Shareholder Reports are available free upon request from the Trust, and those documents and the Form N-CSR and Form N-SAR may be viewed on-screen or downloaded from the Commission's Web site at
Additional information regarding the Trust and the Shares, including investment strategies, risks, creation and redemption procedures, fees, portfolio holdings disclosure policies, distributions and taxes is included in the Registration Statement. All terms relating to the Fund that are referred to, but not defined in, this proposed rule change are defined in the Registration Statement.
With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Shares of the Fund.
The Exchange deems the Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities. Shares will trade on the NYSE Arca Marketplace from 4 a.m. to 8 p.m. Eastern Time in accordance with NYSE Arca Equities Rule 7.34 (Opening, Core, and Late Trading Sessions). The Exchange has appropriate rules to facilitate transactions in the Shares during all trading sessions. As provided in NYSE Arca Equities Rule 7.6, Commentary .03, the minimum price variation (“MPV”) for quoting and entry of orders in equity securities traded on the NYSE Arca Marketplace is $0.01, with the exception of securities that are priced less than $1.00 for which the MPV for order entry is $0.0001.
The Exchange intends to utilize its existing surveillance procedures applicable to derivative products (which include Managed Fund Shares) to monitor trading in the Shares. The Exchange represents that these procedures are adequate to properly monitor Exchange trading of the Shares in all trading sessions and to deter and detect violations of Exchange rules and applicable Federal securities laws.
The Exchange's current trading surveillance focuses on detecting securities trading outside their normal patterns. When such situations are detected, surveillance analysis follows and investigations are opened, where appropriate, to review the behavior of all relevant parties for all relevant trading violations.
The Exchange may obtain information via the Intermarket Surveillance Group (“ISG”) from other exchanges that are members of ISG or with which the Exchange has entered [sic] a comprehensive surveillance sharing agreement.
In addition, the Exchange also has a general policy prohibiting the distribution of material, non-public information by its employees.
Prior to the commencement of trading, the Exchange will inform its Equity Trading Permit (“ETP”) Holders in an Information Bulletin (“Bulletin”) of the special characteristics and risks associated with trading the Shares. Specifically, the Bulletin will discuss the following: (1) The procedures for purchases and redemptions of Shares in Creation Unit aggregations (and that Shares are not individually redeemable); (2) NYSE Arca Equities Rule 9.2(a), which imposes a duty of due diligence on its ETP Holders to learn the essential facts relating to every customer prior to trading the Shares; (3) the risks involved in trading the Shares during the Opening and Late Trading Sessions when an updated Portfolio Indicative Value will not be calculated or publicly disseminated; (4) how information regarding the Portfolio Indicative Value is disseminated; (5) the requirement that ETP Holders deliver a prospectus to investors purchasing newly issued Shares prior to or concurrently with the confirmation of a transaction; and (6) trading information.
In addition, the Bulletin will reference that the Fund is subject to various fees and expenses described in the Registration Statement. The Bulletin will discuss any exemptive, no-action, and interpretive relief granted by the Commission from any rules under the Exchange Act. The Bulletin will also disclose that the NAV for the Shares will be calculated after 4 p.m. Eastern Time each trading day.
The basis under the Exchange Act for this proposed rule change is the requirement under Section 6(b)(5)
The Exchange believes that the proposed rule change is designed to prevent fraudulent and manipulative acts and practices in that the Shares will be listed and traded on the Exchange pursuant to the initial and continued listing criteria in NYSE Arca Equities Rule 8.600. The Exchange has in place surveillance procedures that are adequate to properly monitor trading in the Shares in all trading sessions and to deter and detect violations of Exchange rules and applicable Federal securities laws. The Exchange may obtain information via ISG from other exchanges that are members of ISG or with which the Exchange has entered into a comprehensive surveillance sharing agreement. The Fund will achieve its investment objective primarily by investing in the broad U.S. equity market as represented by the Russell 3000® Index, the components of which are listed and traded on U.S. exchange markets. The Fund will not purchase illiquid securities. In addition, the Fund will not invest in non-U.S.-registered equity securities, loan participation agreements and Rule 144A securities. Further, the Fund will not invest in options, futures or swaps. The Fund's investments will be consistent with the Fund's investment objective
The proposed rule change is designed to promote just and equitable principles of trade and to protect investors and the public interest in that the Exchange will obtain a representation from the issuer of the Shares that the NAV per Share will be calculated daily and that the NAV and the Disclosed Portfolio will be made available to all market participants at the same time. In addition, a large amount of information is publicly available regarding the Fund and the Shares, thereby promoting market transparency. The Fund's portfolio holdings will be disclosed on its Web site daily after the close of trading on the Exchange and prior to the opening of trading on the Exchange the following day. Moreover, the Portfolio Indicative Value will be disseminated by one or more major market data vendors at least every 15 seconds during the Exchange's Core Trading Session. On each business day, before commencement of trading in Shares in the Core Trading Session on the Exchange, the Fund will disclose on its Web site the Disclosed Portfolio that will form the basis for the Fund's calculation of NAV at the end of the business day. Information regarding market price and trading volume of the Shares is and will be continually available on a real-time basis throughout the day on brokers' computer screens and other electronic services, and quotation and last sale information will be available via the CTA high-speed line. The Web site for the Fund will include a form of the prospectus for the Fund and additional data relating to NAV and other applicable quantitative information. Moreover, prior to the commencement of trading, the Exchange will inform its ETP Holders in an Information Bulletin of the special characteristics and risks associated with trading the Shares. Trading in Shares of the Fund will be halted if the circuit breaker parameters in NYSE Arca Equities Rule 7.12 have been reached or because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable, and trading in the Shares will be subject to NYSE Arca Equities Rule 8.600(d)(2)(D), which sets forth circumstances under which Shares of the Fund may be halted. In addition, as noted above, investors will have ready access to information regarding the Fund's holdings, the Portfolio Indicative Value, the Disclosed Portfolio, and quotation and last sale information for the Shares.
The proposed rule change is designed to perfect the mechanism of a free and open market and, in general, to protect investors and the public interest in that it will facilitate the listing and trading of an additional type of actively-managed exchange-traded product that will enhance competition among market participants, to the benefit of investors and the marketplace. As noted above, the Exchange has in place surveillance procedures relating to trading in the Shares and may obtain information via ISG from other exchanges that are members of ISG or with which the Exchange has entered into a comprehensive surveillance sharing agreement. In addition, as noted above, investors will have ready access to information regarding the Fund's holdings, the Portfolio Indicative Value, the Disclosed Portfolio, and quotation and last sale information for the Shares.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
No written comments were solicited or received with respect to the proposed rule change.
Within 45 days of the date of publication of this notice in the
(A) by order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to r
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
CHX proposes to amend Article 20, Rule 10, governing clearly erroneous executions, so that the rule will continue to operate in the same manner after changes to the single stock trading pause process are effective. The text of this proposed rule change is available on the Exchange's Web site at (
In its filing with the Commission, the CHX included statements concerning the purpose of and basis for the proposed rule changes and discussed any comments it received regarding the proposal. The text of these statements may be examined at the places specified in Item IV below. The CHX has prepared summaries, set forth in sections A, B and C below, of the most significant aspects of such statements.
The Exchanges
As part of the changes to the clearly erroneous process under Article 20, Rule 10, CHX replaced existing Rule 10(c)(4) with all new text to provide clarity in the clearly erroneous process when a Pause Pilot trading pause is triggered. Pursuant to Rule 10(c) (4), Latency Trades will be broken by the exchange if they exceed the applicable percentage from the Reference Price, as noted in the table found under Rule 10(c)(1).
On June 23, 2011, the Commission approved a joint proposal to expand the respective Pause Pilot rules of the Exchanges and FINRA to include all remaining NMS stocks (“Phase III Securities”).
The recently-approved changes to the Pause Pilot will have the unintended effect of removing the Phase III Securities from the normal clearly erroneous process and potentially result in unfair outcomes in the face of severe volatility in such securities. Phase III Securities are currently subject to the clearly erroneous process under Rules 10(c)(1)-(3), which apply to all securities except the current Pause Pilot securities subject to a pause. For purposes of transactions in securities not involving Pause Pilot securities, or transactions involving Pause Pilot securities that occur when there is not a pause pursuant to the Pause Pilot, the Reference Price is the consolidated last sale price immediately prior to the execution(s) under review, subject to certain exceptions.
Under the new Pause Pilot rules, a Latency Trade in a Phase III Security occurs only after either a 30 or 50 percent (or greater) move in the transacted price of the security in a five minute period. As a result, a member firm that trades in a Phase III Security that triggers a clearly erroneous threshold of three, five or ten percent from the Reference Price, yet falls below the Pause Pilot trigger of either 30 or 50 percent, would be able to avail themselves of a clearly erroneous review. A similarly situated member firm that transacts in the same security as a Latency Trade at a price equal to or greater than the Phase III Security thresholds, yet less than the clearly erroneous thresholds under Rule 10(c)(1), would not be able to avail themselves of the clearly erroneous process. Another member firm that transacts in the same security as a Latency Trade that exceeds three, five or ten percent from the Trading Pause Trigger Price would automatically receive clearly erroneous relief. CHX believes that this would be an inequitable result and an arbitrary application of the clearly erroneous process. Specifically, CHX believes that, since the 30 and 50 percent triggers of the Pause Pilot are substantially greater than the 10 percent threshold of the original Pause Pilot, the Phase III Securities should remain under the current clearly erroneous process of Rules 10(c)(1)-(3).
Applying the clearly erroneous process under Rules 10(c)(1)-(3) to the Phase III Securities would allow CHX to review all transactions that exceed the normal clearly erroneous thresholds and Reference Price, and, importantly, avoid arbitrary selection of “winners” and “losers” in the face of severe volatile moves in a security of 30 or 50 percent over a five minute period. For example, A member firm that trades in a security subject to Rule 2(e)(ii) or (iii) that triggers a clearly erroneous threshold of three, five or ten percent, yet falls below the Pause Pilot trigger threshold trading at 29 percent from the prior day's closing price, would be potentially entitled to a clearly erroneous break pursuant Rule 10(c)(1). Should trading in that same stock trigger a trading pause at a price of 30 or 50 percent greater than the prior day's close, the member firm would not be entitled to a clearly erroneous trade break unless that trade exceeded three, five or ten percent beyond the price that triggered the pause. This scenario causes an inequity among a group of member firms that have transactions in the Phase III Securities falling between the three, five and ten percent thresholds from the Reference Price under the normal Rule 10(c)(1) clearly erroneous process and the Pause Pilot clearly erroneous triggers of three, five or ten percent away from the Trading Pause Trigger Price. Such member firms would not be provided relief under the clearly erroneous rules merely due to the imposition of a Pause Pilot halt, notwithstanding that other member firms with transactions that occur at the same rolling five minute percentage difference. CHX believes a better outcome is to afford all members transacting in Phase III Securities the opportunity of having such trades reviewed.
Summary
The expansion of the Pause Pilot to the Phase III Securities will have the unintended consequence of setting the point at which a clearly erroneous transaction occurs once a Pause Pilot pause is initiated far beyond the triggers applied prior to the expansion, which will, in turn, prevent certain market participants from availing themselves of the clearly erroneous rules, notwithstanding that other similarly situated participants are able to do so. CHX believes that this would be an arbitrary application of the clearly erroneous process in a manner that is unfair and not consistent with the spirit and purpose of the rule. Accordingly, CHX is proposing to amend Rules 10(c)(1)-(4) to specify that Rule 10(c)(4) applies only to the current securities of Pause Pilot, as found under Rule 2(e)(i).
The statutory basis for the proposed rule change is Section 6(b)(5) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
No written comments were either solicited or received.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
On May 5, 2011, the New York Stock Exchange LLC (“NYSE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
comments.
In its filing, NYSE is proposing to amend the Manual by adding a new Section 907.00 that sets forth a practice of offering certain complimentary products and services to currently and newly listed issuers. NYSE offers the complimentary products and services as described below to respond to competitive pressures in the market for listings to attract new listings and retain existing listings.
NYSE developed a market information analytics platform that is available for free to all NYSE listed issuers, called the NYSE Market Access Center. In the rule filing, NYSE states that the NYSE's Market Access Center was created to “provide issuers with better market insight and information across all exchange and trading venues.”
In addition to the NYSE Market Access Center, NYSE offers products and services to certain currently listed and newly listed issuers on a tiered basis. Currently listed issuers are categorized into two tiers, Tier One and Tier Two. Under NYSE's proposal, Tier One issuers are U.S. issuers that have 270 million or more total shares of common stock issued and outstanding in all share classes, including and in addition to Treasury shares, and Foreign Private Issuers that have 270 million or more in ADRs issued and outstanding, each calculated annually as of December 31 of the preceding year.
Newly listed issuers similarly are categorized into two tiers, Tier A and Tier B.
Fourteen commenters raised objections to the proposal.
Commenters believed that the proposal would require issuers to use the specific vendor offered by NYSE or create the impression that listed companies must use the preferred vendor.
Four commenters suggested that instead of offering complimentary products and services of certain vendors, NYSE should instead offer issuers a subsidy or credit, which would allow them to use any service provider.
Another commenter recommended disapproving the proposed rule change and having the exchanges consider free listings or alternatively, having the Commission require increased disclosure regarding listing benefit packages provided to issuers, which would address transparency concerns.
One commenter noted that the proposal is not clear on the fee arrangements between the Exchange and the product and service vendors and questioned whether issuers pay for services over and above the services provided by NYSE and if the vendors share revenues with the Exchange or if the services are competitively priced.
Lastly, this commenter raised the issue of whether a for-profit exchange should be in the investor relations services business at all.
In the NYSE Response Letter, NYSE responded to the issues raised by the commenters.
Further, the Exchange represented that it provides the third-party products and services to listed companies through non-exclusive arrangements with vendors. Accordingly, the Exchange is willing to consider entering into such arrangements with other third-party vendors that provide “high-quality” products and services. NYSE further stated that it does not endorse, nor require the use of, any particular vendor or any particular products and services.
In response to the NYSE Response Letter, one commenter questioned the Exchange's willingness to enter into arrangements with other third-party vendors, stating that upon performing its own research, the commenter was unable to “find any information provided by NYSE outlining the process that vendors must follow to have their services added or reviewed.”
Finally, in response to the conflict of interest issue that was raised, the Exchange disagreed that there is any conflict of interest with respect to its offerings of products and services because such product and services are offered on a complimentary basis and the arrangements with the vendors are non-exclusive. NYSE also reiterated that issuers are not required to accept or use the products or services to satisfy their obligations under the Exchange's listing standards.
The Commission has carefully reviewed the proposed rule change and finds that it is consistent with the requirements of Section 6 of the Act.
The Commission believes that the proposed rule change, which would permit the NYSE to provide complimentary products and services to all listed companies and additional products and services to certain companies based on (i) total shares or total ADRs issued and outstanding for currently listed issuers or (ii) global market value based on a public offering price for newly listed issuers, is appropriate and consistent with the Act. The Commission also believes that by describing in the Manual the products and services available to issuers and the values of the products and services, the Exchange is adding greater transparency to its rules and the fees applicable to issuers.
The Commission notes that the NYSE has represented that the various tiers are designed so that qualifying issuers with increased trading volumes and market activity have enhanced access to products and services that the listed companies would use in the absence of the complimentary services arrangement. The NYSE has further represented that all issuers receive some level of free services and that the requirements to qualify for a higher level of free services and products are transparent and set forth clearly in the language being adopted in new Section 907.00 of the Manual. This language also includes the commercial value of the free services in each tier. While not all issuers receive the same level of services, NYSE has stated that trading volume and market activity are related to the level of services that the listed companies would use in the absence of the complimentary services arrangements.
The NYSE Response Letter clarified and responded to many of the questions and concerns raised by commenters. Specifically, NYSE represented that issuers are not forced or required to utilize the complimentary products and services as a condition of listing. Furthermore, the third-party products and services are provided through non-exclusive arrangements with vendors and the Exchange does not expressly endorse any particular vendor or any product or services provided by any particular vendor. In fact, one vendor noted that it has replaced the NYSE's complimentary web-hosting vendor with its web system for a number of NYSE listed issuers.
The Commission recognizes, however, that the proposed rule change may affect the purchase decisions of some listed issuers. The effect of offering the services of some vendors on a complimentary basis is to provide issuers with the services of those vendors at a price that is lower in relative terms than what other vendors charge. A reduction in a vendor's relative price will generally cause some issuers to substitute their business toward that vendor. Accordingly, the Commission believes that the NYSE's offering of selected vendors' products and services on a complimentary basis will, by lowering their relative price, likely cause some listed issuers to substitute their business away from other vendors and toward the selected vendors. The Commission believes, however, that the impact of this substitution would be mitigated for the reasons discussed below.
The Commission believes that the NYSE is responding to competitive pressures in the market for listing in making this proposal. Specifically, the NYSE is offering complimentary products and services to attract new listings, retain currently-listed issuers, and respond to competitive pressures.
The Commission also recognizes that to ensure quality to its listed issuers, the NYSE represented that it selects only vendors with the capacity to service all their eligible listed companies without sacrificing quality.
While some commenters have argued that the Commission's approval of the NYSE's proposal will mean the Commission has implicitly approved the particular service providers NYSE currently uses, the Commission disagrees. The Commission, in approving the Exchange's proposal, is not endorsing, specifically or implicitly, any party with which the NYSE has chosen to do business.
The Commission has carefully considered the comment letters. Although some of the alternative proposals by the commenters might also satisfy the standards under Sections 6(b) and 19(b) of the Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
NASDAQ proposes to establish an Acceptable Trade Range for quotes and orders entered on the NASDAQ Options Market (“NOM”). Similar mechanisms are used successfully on other exchanges to protect investors and members by limiting volatility and obvious errors.
The text of the proposed rule change is available at
In its filing with the Commission, NASDAQ included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. NASDAQ has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
Accordingly, NASDAQ is proposing to adopt a mechanism that will prevent the NOM trading system (“System”) from experiencing dramatic price swings. This circumstance can exist if, for example, a market order or aggressively priced limit order is entered that is larger than the total volume of contracts quoted at the top-of-book across all U.S. options exchanges. Currently, without any protections in place, this could result in options executing at prices that have little or no relation to the theoretical price of the option.
For example, in a thinly traded option:
Away Exchange Quotes:
NOM Price Levels:
If NOM receives a routable market order to buy 80 contracts, the System will respond as described below:
After these executions, there are no other known valid away exchange quotes. The NBBO is therefore comprised of the remaining interest on the NOM book, specifically 10 contracts at $1.40 and 10 contracts at $5.00. In the absence of an Acceptable Trade Range mechanism, the order would execute against the remaining interest at $1.40 and $5.00, resulting in potential harm to investors.
To bolster the normal resilience and market behavior that persistently produces robust reference prices, NOM is proposing to create a level of protection that prevents the market from moving beyond set thresholds. The thresholds consist of a reference price plus (minus) set dollar amounts based on the nature of the option and the premium of the option. The exchange is not introducing a new concept. In fact, The NASDAQ Stock Market, NASDAQ OMX PSX, and NASDAQ OMX BX all place a limit on the prices at which market orders will be allowed to execute.
During the brief pause, NOM will display the Acceptable Trade Range Threshold Price on one side of the market and the best available price on the opposite side of the market using a “non-firm” indicator.
NASDAQ believes that disseminating a non-firm quotation message as described above is consistent with its obligations under the SEC Quote Rule.
Importantly, the Acceptable Trade Range is neutral with respect to away markets. The order may route to other destinations to access liquidity priced within the Acceptable Trade Range provided the order is designated as routable. If the order still remains unexecuted, this process will repeat until the order is executed, cancelled, or posted at its limit price. If after an order is routed to the full size of an away exchange and additional size remains available, the remaining contracts will be posted on NOM at a price that
For example, assume that the Acceptable Trade Range is set for $0.05 and the following quotations are posted in all markets:
Away Exchange Quotes:
NOM Price Levels:
NOM receives a routable order to buy 70 contracts at $1.10. The Acceptable Trade Range is $0.05 and the reference price is the National Best Offer—$0.90. The Acceptable Trade Range threshold is then $0.90 + $0.05 = $0.95. The order is allowed to execute up to and including $0.95. The System then pauses for a brief period not to exceed one second to allow the market (including other exchanges) to refresh and to determine whether additional liquidity will become available within the order's posted price. If additional liquidity becomes available on NOM or any away market, that liquidity will be accessed and executed.
• 10 contracts will be executed at $0.90 against NOM
• 10 contracts will be executed at $0.90 against ISE
• 10 contracts will be executed at $0.92 against AMEX
• 10 contracts will be executed at $0.94 against PHLX
• 10 contracts will be executed at $0.95 against NOM
• Then, after executing at multiple price levels, the order is posted at $0.95 for a brief period not to exceed one second to determine whether additional liquidity will become available.
• A new Acceptable Trade Range Threshold Price of $1.00 is determined (new reference price of $0.95 + $0.05 = $1.00)
• If, during the brief pause not to exceed 1 second, no liquidity becomes available within the order's posted price of $0.95, the System will then execute 10 contracts at $0.97, and 10 contracts at $1.00
Similarly, if a new order is received when a previous order has reached the Acceptable Trade Range threshold, the Threshold Price will be used as the reference price for the new Acceptable Trade Range threshold. Both orders would then be allowed to execute up (down) to the new Threshold Price.
For example:
Away Exchange Quotes:
NOM Price Levels:
• NOM receives a routable order to buy 60 contracts at $1.10. The Acceptable Trade Range is $0.05 and the reference price is the National Best Offer—$0.90. The Acceptable Trade Range threshold is then $0.90 + $0.05 = $0.95. The order is allowed to execute up to and including $0.95.
• 10 contracts will be executed at $0.90 against NOM
• 10 contracts will be executed at $0.90 against ISE
• 10 contracts will be executed at $0.92 against AMEX
• 10 contracts will be executed at $0.94 against PHLX
• 10 contracts will be executed at $0.95 against NOM
• Then, after executing at multiple price levels, the order is posted at $0.95 for a brief period not to exceed one second to determine whether additional liquidity will become available.
• A new Acceptable Trade Range Threshold Price of $1.00 is determined (new reference price of $0.95 + $0.05 = $1.00)
• If, during the brief period not to exceed one second, a second order is received to buy 10 contracts at $1.25, the two orders would then post at the new Acceptable Trade Range Threshold price of $1.00 for a brief period not to exceed one second to determine whether additional liquidity will become available.
• A new Acceptable Trade Range threshold of $1.05 will be calculated.
• If no additional liquidity becomes available within the posted price of the orders ($1.00) during the brief period not to exceed one, the orders would execute 10 contracts each against the order on the NOM book at $1.05
For example, looking at some SPY January 2011 Call options on December 27th of 2010:
Bid/Offer of SPY Jan 126 Call (at or near-the-money): $1.78 × $1.79 (several hundred contracts on bid and offer)
Bid/Offer of SPY Jan 80 Call (deep in-the-money): $45.61 × $45.87 (20 contracts on each side)
The deep in-the-money calls (Jan 80 calls) have a wider spread ($45.87-$45.61 = $0.26) compared to a spread of $0.01 for the at-the-money calls (Jan 126 calls). Therefore, it is appropriate to have different thresholds for the two options. For instance, it may make sense to have a $0.05 threshold for the at-the-money strikes (Premium < $2) and a $0.50 threshold for the deep in-the-money strikes (Premium > $10).
To consider another example, the January 2011 CSCO put options on December 27th of 2010:
Bid/Offer of CSCO 20 Jan Put (at or near-the-money): $0.11 × $0.12 (300×550)
Bid/Offer of CSCO 35 Jan Put (deep in-the-money): $14.35 × $15.20 (48×18)
Even though CSCO has a much lower share price than SPY, and is a different type of security (it is a common stock of a technology company whereas SPY is an ETF based on the S&P 500 Index), the pattern is the same. The option with the lower premium has a very narrow spread of $0.01 with significant size displayed whereas the higher premium option has a wide spread ($0.85) and less size displayed.
The Acceptable Trade Range settings will be tied to the option premium. However, other factors will be considered when determining the exact settings. For example, Acceptable Ranges may change if market-wide volatility is as high as it was during the financial crisis in 2008 and 2009, or if overall liquidity is low based on historical trends. These different market conditions may present the need to adjust the threshold amounts from time to time to ensure a well-functioning market. Without adjustments, the market may become too constrained or conversely, prone to wide price swings. As stated above, the Exchange would publish the Acceptable Trade Range table or tables on the NASDAQTrader.com Web site. The Exchange does not foresee updating the table(s) often or intraday. The Exchange will provide sufficient advanced notice of changes to the Acceptable Trade Range table to its membership via Options Trader Alerts.
The Acceptable Trade Range settings would generally be the same across all options traded on NOM, although NASDAQ proposes to maintain flexibility to set them separately based on characteristics of the underlying security. For instance, Google is a stock with a high share price ($602.38 closing price on December 27th). Google options therefore may require special settings due to the risk involved in actively quoting options on such a high-priced stock. Option spreads on Google are wider and the size available at the best bid and offer is smaller. Google could potentially need a wider threshold setting compared to other lower-priced stocks. There are other options that fit into this category (e.g. AAPL) which makes it necessary to have threshold settings that have flexibility based on the underlying security. Additionally, it is generally observed that options subject to the Penny Pilot program quote with tighter spreads than options not subject to the Penny Pilot. Currently, NASDAQ expects to set Acceptable Trade Ranges for three categories of options: Standard Penny Pilot, Special Penny Pilot (IWM, QQQQ, SPY), and Non-Penny Pilot.
NASDAQ believes the proposed rule change is consistent with the provisions of Section 6 of the Act,
NASDAQ does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended.
Written comments were neither solicited nor received.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an e-mail to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Rule 15c3-5(f) under the Securities Exchange Act of 1934 (“Exchange Act”),
On November 3, 2010, the Commission adopted Rule 15c3-5 under the Exchange Act.
The Commission has received a request from NYSE Amex LLC (“NYSE Amex”), NYSE Arca, Inc. (“NYSE Arca”), and New York Stock Exchange LLC (“NYSE”) (collectively, “NYSE Euronext”) to extend the compliance date for the automated controls requirement pursuant to Rules 15c3-5(c)(1)(ii) and (c)(2) for Floor Brokers until November 30, 2011.
The Commission is temporarily exempting Floor Brokers from the automated controls requirement of Rules 15c3-5(c)(1)(ii)
For the foregoing reasons, the Commission finds that granting the foregoing temporary exemption is necessary and appropriate in the public interest, and is consistent with the protection of investors.
By the Commission.
Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
For further information, including a list of the exhibit objects, contact Paul W. Manning, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State (
The following Applications for Certificates of Public Convenience and Necessity and Foreign Air Carrier Permits were filed under subpart B (formerly subpart Q) of the Department of Transportation's Procedural Regulations (See 14 CFR 301.201
Federal Aviation Administration, Department of Transportation.
Notice of Availability of the FONSI.
In accordance with the National Environmental Policy Act (NEPA) of 1969, 42 United States Code 4321-4347 (as amended), Council on Environmental Quality (CEQ) NEPA implementing regulations (40 Code of Federal Regulations [CFR] Parts 1500-1508), and FAA Order 1050.1E, Change 1, the FAA is announcing the availability of a FONSI for the FAA/AST action to issue, renew, or modify Launch Operator Licenses for Atlas V launch operations from SLC-3E at VAFB. The FONSI is based on the analysis and findings of the 2003 United States Air Force (USAF) Final Environmental Assessment for the Atlas V System at SLC-3E (2003 EA).
In 1998, the USAF issued the 1998 Final Environmental Impact Statement for the EELV Program (1998 EIS) to evaluate the potential environmental impacts of the development, deployment, and operation of EELV systems (later known as the Atlas V and Delta IV launch vehicle families). In 2000, the USAF prepared the Supplemental Environmental Impact Statement for the EELV Program (2000 SEIS) to evaluate the potential environmental impacts of adding up to five solid-propellant strap-on rocket motors to the Atlas V launch vehicle and larger solid-propellant strap-on rocket motors on the Delta IV vehicle. The FAA participated as a cooperating agency in preparation of both the 1998 FEIS and 2000 SEIS.
In 2003, changes in USAF programs resulted in a need for SLC-3E at VAFB to be used for Atlas V launches rather than SLC-3W as originally planned, and therefore the USAF prepared the 2003 EA. The EA supplemented and updated the previous NEPA evaluation of implementing the Atlas V program as analyzed in the 1998 FEIS and 2000 SEIS. The 2003 EA analyzed the environmental impacts associated with the proposed action of modifying existing facilities and roadways and launching the Atlas V up to four times annually from SLC-3E at VAFB. The 2003 EA tiered its analyses from the 1998 FEIS and 2000 SEIS, and therefore both documents were incorporated by reference into the 2003 EA. The FAA did not participate as a cooperating agency with the USAF in preparation of the 2003 EA. Under the FAA's Proposed Action as stated in the FONSI, FAA/AST could issue, renew, or modify Launch Operator Licenses for Atlas V launch operations from SLC-3E at VAFB. A Launch Operator License would authorize launches of Atlas V vehicles over the five-year term of the license.
In accordance with the requirements of FAA Order 1050.1E, Change 1, paragraph 410, the FAA has independently evaluated the information contained in the 2003 EA and has verified the continued validity of the analysis contained in the EA. The FAA has determined that the discussion of Atlas V launch operations in the 2003 EA sufficiently addresses the concerns of the FAA and complies with FAA requirements for implementing NEPA as stated in FAA Order 1050.1E, Change 1. The FAA has determined that there is no new information or analysis that would require preparation of a new or supplemental EA or EIS according to the CEQ Regulations (40 CFR 1502.9(c)(1)). Therefore, the FAA issued the FONSI concurring with the analysis of impacts and findings in the 2003 EA and formally adopts the launch operations discussion in the EA in compliance with the requirements of 40 CFR 1506.3 to support the issuance, renewal, or modification of Launch Operator Licenses for Atlas V launch operations from SLC-3E at VAFB. The 2003 EA is incorporated by reference and is summarized as necessary in the FONSI.
The FAA has posted the FONSI on the Internet at
Mr. Daniel A. Czelusniak, Environmental Program Lead, Office of Commercial Space Transportation, Federal Aviation Administration, 800 Independence Ave., SW., Room 325, Washington, DC 20591, telephone (202) 267-5924; E-mail
Federal Aviation Administration, DOT.
Notice of Availability.
In accordance with the National Environmental Policy Act (NEPA) of 1969, 42 United States Code U.S.C. 4321-4347 (as amended), Council on Environmental Quality (CEQ) NEPA implementing regulations (40 Code of Federal Regulations [CFR parts 1500-1508]), and FAA Order 1050.1E, Change 1, the FAA is announcing the availability of its ROD for the FAA/AST to issue, renew, or modify launch operator licenses for launch vehicles covered under the EELV Program from CCAFS and VAFB. The ROD was prepared to document FAA/AST's decision to issue, renew, or modify launch operator licenses for launch vehicles covered under the EELV Program from CCAFS and VAFB.
The FAA participated as a cooperating agency with the U.S. Air Force (USAF) in the preparation of the 1998 Final Environmental Impact Statement for the EELV Program (1998 FEIS) and the 2000 Supplemental Environmental Impact Statement for the EELV Program (2000 SEIS). The 1998 FEIS preferred alternative analyzed a maximum of 30 combined FAA/AST-licensed launches and non-FAA/AST licensed launches of Atlas V and Delta IV in one year from VAFB and CCAFS, combined. The 2000 SEIS analyzed the environmental impacts of up to five solid-propellant strap-on rocket motors (SRMs) on the Atlas V medium lift vehicle and larger SRMs on the Delta IV vehicle. In addition, the 2000 SEIS considered a maximum of 33 combined
In 2003, changes in USAF programs resulted in a need for SLC-3E at VAFB to be used for Atlas V launches rather than SLC-3W as originally planned. In 2003, the USAF prepared a Final Environmental Assessment for the Atlas V System at SLC-3E (2003 EA). The EA supplemented and updated the previous NEPA evaluation of implementing the Atlas V program as analyzed in the 1998 FEIS and 2000 SEIS. The 2003 EA analyzed the environmental impacts associated with the proposed action of modifying existing facilities and roadways and launching the Atlas V up to four times annually from SLC-3E at VAFB. The FAA did not participate as a cooperating agency with the USAF in preparation of the 2003 EA, but has independently evaluated the information contained in the 2003 EA and has verified the continued validity of the analysis contained in the document. The FAA has therefore, adopted the 2003 EA and issued a Finding of No Significant Impact. The analysis from the 2003 EA and the FAA's findings on that analysis are incorporated by reference in the ROD, and therefore references from the 1998 FEIS and 2000 SEIS to SLC-3W at VAFB have been revised to read “SLC-3E” throughout the ROD.
Under the FAA's Proposed Action, FAA/AST could issue, renew, or modify launch operator licenses for Atlas V and Delta IV operations at CCAFS and VAFB. The 1998 FEIS and 2000 SEIS analyzed the full potential scope of the operations that could be covered under a launch operator license for Atlas V and Delta IV at CCAFS and VAFB. The FAA's Proposed Action has been identified as the Preferred Alternative.
Under the No Action Alternative, the FAA would not issue, renew, or modify launch operator licenses for Atlas V or Delta IV expendable launch vehicles at CCAFS and VAFB. Without a license, there could not be any FAA/AST-licensed commercial launches of Atlas V or Delta IV vehicles from CCAFS or VAFB; however, non-FAA/AST licensed or government launches of these vehicles could continue from both locations. The ROD addresses the potential environmental impacts of the FAA's Proposed Action and the FAA's No Action Alternative.
In accordance with the requirements of FAA Order 1050.1E, Change 1, paragraph 515, the FAA has independently evaluated the information contained in the 1998 FEIS and 2000 SEIS and has verified the continued validity of the analysis contained in both documents. Through this re-evaluation, the FAA has determined that the 1998 FEIS and 2000 SEIS sufficiently address the concerns of the FAA and comply with FAA requirements for implementing NEPA as stated in FAA Order 1050.1E, Change 1. The FAA has also determined that there is no new information or analysis that would require preparation of a new or supplemental EIS according to the CEQ Regulations (40 CFR 1502.9(c)(1)). The FAA is therefore adopting the 1998 FEIS and 2000 SEIS, and is using these documents to support its decision as stated in the ROD. The FAA has posted the ROD on the FAA Office of Commercial Space Transportation Web site at
Under the Proposed Action in the 2000 SEIS, up to five solid-propellant strap-on rocket motors (SRMs) would be added to the Atlas V medium lift vehicle and larger SRMs would be used on the Delta IV vehicle. The Atlas V vehicle would launch from SLC-41 at CCAFS and SLC-3E at VAFB, and the Delta IV vehicle would launch from SLC-37 at CCAFS and SLC-6 at VAFB. While use of SRM-assisted vehicles was considered in the 1998 FEIS, the 2000 SEIS considered a higher proportion of vehicles using SRM-assisted vehicles than the 1998 FEIS. Under the Proposed Action in the 2000 SEIS, a maximum of 33 combined FAA/AST-licensed launches and non-FAA/AST licensed launches of Atlas V and Delta IV would occur in one year from VAFB and CCAFS, combined. Under the No Action Alternative, the EELV program would continue, except that SRMs would not be added to the Atlas V launch vehicles and smaller SRMs would be used on Delta IV launch vehicles.
The FAA has determined the analysis of impacts presented in the 1998 FEIS and 2000 SEIS represents the best available information regarding the potential impacts associated with the FAA's regulatory responsibilities described in the ROD. The 1998 FEIS and 2000 SEIS are therefore incorporated by reference and summarized as necessary in the ROD.
Resource areas were considered to provide a context for understanding and assessing the potential environmental effects of the FAA's Proposed Action, with attention focused on key issues. The resource areas considered in the ROD include air quality; biological resources; cultural resources; geology and soils; land use and section 4(f) resources; noise; physical resources (Water Resources [Surface Water, Ground Water, Floodplains], Hazardous Materials, Pollution Prevention, and Solid Waste); and socioeconomics, environmental justice, and children's environmental health and safety. Potential cumulative impacts of the Proposed Action are also addressed in the ROD.
Mr. Daniel A. Czelusniak, Environmental Program Lead, Office of Commercial Space Transportation, Federal Aviation Administration, 800 Independence Ave., SW., Suite 325, Washington, DC 20591, by e-mail at
Federal Aviation Administration (FAA), DOT.
Notice of Commercial Space Transportation Advisory Committee open meeting.
Pursuant to Section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463, 5 U.S.C. App. 2), notice is hereby given of a meeting of the Commercial Space Transportation Advisory Committee (COMSTAC). The meeting will take place on Thursday, October 13, 2011, from 8 a.m. to 5 p.m., and Friday, October 14, 2011, from 8 a.m. to 4:30 p.m., at the National Housing Center, 1201 15th Street NW., Washington, DC, 20005. This will be the 54th meeting of the COMSTAC.
The proposed agenda for October 13 features meetings of the working groups as follows:
The proposed agenda for October 14 features:
Interested members of the public may submit relevant written statements for the COMSTAC members to consider under the advisory process. Statements may concern the issues and agenda items mentioned above and/or additional issues that may be relevant for the U.S. commercial space transportation industry. Interested parties wishing to submit written statements should contact Susan Lender, DFO, (the Contact Person listed below) in writing (mail or e-mail) by October 5, 2011, so that the information can be made available to COMSTAC members for their review and consideration before the October 13 and 14, 2011 meetings. Written statements should be supplied in the following formats: One hard copy with original signature and/or one electronic copy via e-mail.
Subject to approval, a portion of the October 14th meeting will be closed to the public (starting at approximately 3 p.m.).
An agenda will be posted on the FAA Web site at
Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should inform the Contact Person listed below in advance of the meeting.
Susan Lender (AST-5), Office of Commercial Space Transportation (AST), 800 Independence Avenue SW., Room 331, Washington, DC 20591, telephone (202) 267-8029; E-mail
Federal Aviation Administration, DOT.
Notice of Request to Release Airport Land.
The Federal Aviation Administration (FAA) proposes to rule and invites public comment on the application for a release of approximately 1,727 square feet of airport property at Phoenix-Mesa Gateway, Mesa, Arizona, from all conditions contained in the Quitclaim Deed and Grant Assurances since the parcel of land is not needed for airport purposes. The property will be sold for its fair market value and the proceeds deposited in the airport account. The reuse of the land for a roadway improvement project by the State of Arizona represents a compatible land use that will not interfere with the airport or its operation, thereby protecting the interests of civil aviation.
Comments must be received on or before September 19, 2011.
Comments on the request may be mailed or delivered to the FAA at the following address: Tony Garcia, Airports Compliance Program Manager, Federal Aviation Administration, Airports Division,
In accordance with the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR 21), Public Law 10-181 (Apr. 5, 2000; 114 Stat. 61), this notice must be published in the
The following is a brief overview of the request:
Phoenix-Mesa Gateway Authority, Mesa, Arizona requested a release from the conditions contained in the Quitclaim Deed and Grant Assurance obligations for approximately 1,727 square feet of airport land. The property is located on the east side of the airport in the vicinity of Ellsworth Road. The land is presently unused and undeveloped. The land is needed for the construction of State Route 24, Gateway Freeway, which will encroach into airport property. The Phoenix-Mesa Gateway Airport Authority has agreed to the sale of the small parcel to the State of Arizona since the property is not needed for airport purposes. The conveyance will not impede future development of the airport, while SR-24 will improve access to the east side of the airport. The sale price will be based on its appraised market value and the sale proceeds will be deposited in the airport account and used for airport purposes. The use of the property as a public roadway represents a compatible use that will not interfere with airport operations. The airport will be properly compensated, thereby serving the interests of civil aviation.
Federal Aviation Administration, DOT.
Notice of Request to Release Airport Land.
The Federal Aviation Administration (FAA) proposes to rule and invites public comment on the application for a release of a U.S. Air Force easement restriction covering 52.6 acres of property abutting Phoenix-Mesa Gateway, Mesa, Arizona, from all conditions contained in a grant of an easement, since the easement is not needed for civilian airport purposes. In exchange for the easement, the airport will receive 19 acres of land and a new avigation easement. Reuse of the land under the easement will remain compatible and not interfere with the airport or its operation. The interest of civil aviation is properly served by the release.
Comments must be received on or before September 19, 2011.
Comments on the request may be mailed or delivered to the FAA at the following address: Tony Garcia, Airports Compliance Program Manager, Federal Aviation Administration, Airports Division,
In accordance with the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR 21), Public Law 10-181 (Apr. 5, 2000; 114 Stat. 61), this notice must be published in the
The following is a brief overview of the request:
Phoenix-Mesa Gateway Airport Authority, Mesa, Arizona requested a release of an easement that was obtained from the U.S. Air Force via an Assignment of Easement on April 14, 1998. The easement covers approximately 52.6 acres of private property. It extends eastward from the airport boundary and is located east of Ellsworth Road and north of Pecos Road. Use of the private property east of the airport is restricted by the easement. Relinquishment of the easement will not harm the airport because it is being replaced with a standard avigation easement. The new easement will provide the airport with a continued right for aircraft to fly in the airspace above the private property. It will also prevent interference with airport operations and the erection of obstructions that pose a hazard to aircraft. As compensation, the private land owner will convey 17.53 acres of land at no cost to the Airport Authority that will serve an airport purpose. The land will allow the airport to have a complete runway protection zone for runway end 30R on airport property. Presently, a portion of the RPZ extends beyond the airport boundary to the private property located east of Ellsworth Road. The Airport Authority has agreed to the exchange because the restrictive easement is not needed and will be replaced with an avigation easement. The airport will be additionally compensated with a donation of land that has an immediate airport purpose. The use of the property under the new easement will continue to be used compatibly with the airport and not cause interference with airport operations. The exchange is equitable and the donation of land to the airport clearly serves the interests of civil aviation.
Federal Highway Administration (FHWA), USDOT.
Notice of Limitation on Claims for Judicial Review of Actions by FHWA.
This notice announces actions taken by the FHWA that are final within the meaning of 23 U.S.C. 39(l)(1). The actions relate to a proposed highway project, Tooele Midvalley Highway, from I-80 to State Route 36 Tooele County, State of Utah. Those actions grant licenses, permits, and approvals for the project.
By this notice, the FHWA is advising the public of final agency actions subject to 23 U.S.C. 139(l)(1). A claim seeking judicial review of the Federal agency actions that are covered by this notice will be barred unless the claim is filed on or before February 14, 2012. If the Federal law that authorizes judicial review of a claim provides a time period of less than 180 days for filing such claim, then that shorter time period still applies.
On Friday, January 14, 2011, the FHWA published the Notice of Availability in the
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23 U.S.C. 139(l)(1).
In accordance with Part 211 of Title 49 Code of Federal Regulations (CFR), this document provides the public notice that by a document dated June 29, 2011, Penn Valley Railroad LLC has petitioned the Federal Railroad Administration (FRA) for a waiver of compliance from certain provisions of the Federal railroad safety regulations contained at 49 CFR Section 223.15. FRA assigned the petition Docket Number FRA-2011-0067.
Penn Valley Railroad LLC is requesting consideration of a waiver from 49 CFR § 223.15, Safety Glazing Standards, in regard to Coach PRR 1776. The coach is equipped with a type of automotive safety glass and is serviced and maintained by Penn Valley Railroad LLC. There have not been any injuries on this coach due to broken glass. Penn Valley Railroad LLC is requesting the glazing waiver because of the extremely high cost to replace the glazing and the low risk to safety of continuing to operate with the current safety glass.
A copy of the petition, as well as any written communications concerning the petition, is available for review online at
Interested parties are invited to participate in these proceedings by submitting written views, data, or comments. FRA does not anticipate scheduling a public hearing in connection with these proceedings since the facts do not appear to warrant a hearing. If any interested party desires an opportunity for oral comment, they should notify FRA, in writing, before the end of the comment period and specify the basis for their request.
All communications concerning these proceedings should identify the appropriate docket number and may be submitted by any of the following methods:
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Communications received by October 3, 2011 will be considered by FRA before final action is taken. Comments received after that date will be considered as far as practicable.
Anyone is able to search the electronic form of any written communications and comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union,
In accordance with part 211 of Title 49 Code of Federal Regulations (CFR), this document provides the public notice that by a document dated July 15, 2011, Port Authority Trans-Hudson Corporation (PATH) has petitioned the Federal Railroad Administration (FRA) for a waiver of compliance from certain provisions of the Federal railroad safety regulations contained at 49 CFR part 236. FRA has previously assigned all PATH Positive Train Control (PTC)-related documentation Docket Number FRA-2010-0034, and is adding this waiver request to that docket.
PATH seeks a waiver from compliance with PTC system requirements found at 49 CFR Section 236.1006,
It is PATH's intention to retire the existing PA-4 fleet from passenger service, but to retain some of these PA-4 cars to function as MOW work equipment. PATH will modify the interiors of some of these vehicles so that they are configured to transport tools and equipment. The PA-4 work vehicles would retain their trip cock equipment, and as such, the STDS would provide enforced braking for these vehicles at stop (red) signals. Further, since the PA-4 cars reliably shunt track circuits, they will be continuously detected by both the STDS and the CBTC system, thereby preventing train-to-train collisions.
PATH's justification for relief is that the proposed use of non-equipped PA-4 vehicles for MOW work equipment does not introduce any new or different safety hazards to the existing operation, and provides additional safety elements not available for other types of MOW equipment. The installation of the ATC and/or CBTC systems and the STDS by December 31, 2015, in conjunction with well-established operating rules and procedures, will in fact provide enhanced safety for such operations.
A copy of the petition, as well as any written communications concerning the petition, is available for review online at
Interested parties are invited to participate in these proceedings by submitting written views, data, or comments. FRA does not anticipate scheduling a public hearing in connection with these proceedings since the facts do not appear to warrant a hearing. If any interested party desires an opportunity for oral comment, they should notify FRA, in writing, before the end of the comment period and specify the basis for their request.
All communications concerning these proceedings should identify the appropriate docket number and may be submitted by any of the following methods:
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Communications received by October 3, 2011 will be considered by FRA before final action is taken. Comments received after that date will be considered as far as practicable.
Anyone is able to search the electronic form of any written communications and comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union,
Maritime Administration, Department of Transportation.
Invitation for public comments on a requested administrative waiver of the Coastwise Trade Laws for the vessel CATATONIC.
As authorized by 46 U.S.C. 12121, the Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below. The complete application is given in DOT docket MARAD-2011-0104 at
Submit comments on or before September 19, 2011.
Comments should refer to docket number MARAD-2011-0104. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. You may also send comments electronically via the Internet at
Joann Spittle, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue, SE., Room W21-203, Washington, DC 20590. Telephone 202-366-5979, E-mail
As described by the applicant the intended service of the vessel CATATONIC is:
Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union,
By Order of the Maritime Administration.
Maritime Administration, Department of Transportation.
Invitation for public comments on a requested administrative waiver of the Coastwise Trade Laws for the vessel SENSEI.
As authorized by 46 U.S.C. 12121, the Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below. The complete application is given in DOT docket MARAD-2011-0109 at
Submit comments on or before September 19, 2011.
Comments should refer to docket number MARAD-2011-0109. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. You may also send comments electronically via the Internet at
Joann Spittle, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue, SE., Room W21-203, Washington, DC 20590. Telephone 202-366-5979, E-mail
As described by the applicant the intended service of the vessel SENSEI is:
Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union,
By Order of the Maritime Administrator.
Maritime Administration, Department of Transportation.
Invitation for public comments on a requested administrative waiver of the Coastwise Trade Laws for the vessel CORSAIRE.
As authorized by 46 U.S.C. 12121, the Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below. The complete application is given in DOT docket MARAD-2011-0106 at
Submit comments on or before September 19, 2011.
Comments should refer to docket number MARAD-2011 0106. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. You may also send comments electronically via the Internet at
Joann Spittle, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue, SE., Room W21-203, Washington, DC 20590. Telephone 202-366-5979, E-mail
As described by the applicant the intended service of the vessel CORSAIRE is:
Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the
By Order of the Maritime Administrator.
Maritime Administration, Department of Transportation.
Invitation for public comments on a requested administrative waiver of the Coastwise Trade Laws for the vessel TELL TALES.
As authorized by 46 U.S.C. 12121, the Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below. The complete application is given in DOT docket MARAD-2011-0107 at
Submit comments on or before September 19, 2011.
Comments should refer to docket number MARAD-2011 0107. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. You may also send comments electronically via the Internet at
Joann Spittle, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue, SE., Room W21-203, Washington, DC 20590. Telephone 202-366-5979, E-mail
As described by the applicant the intended service of the vessel TELL TALES is:
Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union,
By Order of the Maritime Administration.
Maritime Administration, Department of Transportation.
Invitation for public comments on a requested administrative waiver of the Coastwise Trade Laws for the vessel EUREKA.
As authorized by 46 U.S.C. 12121, the Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below. The complete application is given in DOT docket MARAD-2011 0108 at
Submit comments on or before September 19, 2011.
Comments should refer to docket number MARAD-2011 0108. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. You may also send comments electronically via the Internet at
Joann Spittle, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue, SE., Room W21-203, Washington, DC 20590. Telephone 202-366-5979, E-mail
As described by the applicant the intended service of the vessel EUREKA is:
Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union,
By Order of the Maritime Administration.
Maritime Administration, Department of Transportation.
Invitation for public comments on a requested administrative waiver of the Coastwise Trade Laws for the vessel JOINT VENTURE.
As authorized by 46 U.S.C. 12121, the Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below. The complete application is given in DOT docket MARAD-2011-0105 at
Submit comments on or before September 19, 2011.
Comments should refer to docket number MARAD-2011-0105. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. You may also send comments electronically via the Internet at
Joann Spittle, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue, SE., Room W21-203, Washington, DC 20590. Telephone 202-366-5979, E-mail
As described by the applicant the intended service of the vessel JOINT VENTURE is:
Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union,
By Order of the Maritime Administrator.
Maritime Administration, Department of Transportation.
Invitation for public comments on a requested administrative waiver of the Coastwise Trade Laws for the vessel LEONESSA.
As authorized by 46 U.S.C. 12121, the Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below. The complete application is given in DOT docket MARAD-2011-0103 at
Submit comments on or before September 19, 2011.
Comments should refer to docket number MARAD-2011-0103. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140,
Joann Spittle, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue, SE., Room W21-203, Washington, DC 20590. Telephone 202-366-5979, E-mail
As described by the applicant the intended service of the vessel LEONESSA is:
Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union,
By Order of the Maritime Administrator.
National Highway Traffic Safety Administration, DOT.
Receipt of Petition for Inconsequential Noncompliance.
BMW of North America, LLC,
Pursuant to 49 U.S.C. 30118(d) and 30120(h) (see implementing rule at 49 CFR part 556), BMW has petitioned for an exemption from the notification and remedy requirements of 49 U.S.C. Chapter 301 on the basis that this noncompliance is inconsequential to motor vehicle safety.
This notice of receipt of BMW's petition is published under 49 U.S.C. 30118 and 30120 and does not represent any agency decision or other exercise of judgment concerning the merits of the petition.
Affected are approximately 75 model year 2011 Mini Cooper Clubman and Mini Cooper S Clubman model passenger cars that were manufactured between February 8, 2011 and May 11, 2011.
NHTSA notes that the statutory provisions (49 U.S.C. 30118(d) and 30120(h)) that permit manufacturers to file petitions for a determination of inconsequentiality allow NHTSA to exempt manufacturers only from the duties found in sections 30118 and 30120, respectively, to notify owners, purchasers, and dealers of a defect or noncompliance and to remedy the defect or noncompliance. Therefore, these provisions only apply to the 75
Paragraph S5.2.1 of FMVSS No. 101 requires in pertinent part:
S5.2.1 Except for the Low Tire Pressure Telltale, each control, telltale and indicator that is listed in column 1 of Table 1 or Table 2 must be identified by the symbol specified for it in column 2 or the word or abbreviation specified for it in column 3 of Table 1 or Table 2. If a symbol is used, each symbol provided pursuant to this paragraph must be substantially similar in form to the symbol as it appears in Table 1 or Table 2. If a symbol is used, each symbol provided pursuant to this paragraph must have the proportional dimensional characteristics of the symbol as it appears in Table 1 or Table 2.
Paragraphs S5.5.2 and S5.5.5 of FMVSS No. 135 requires in pertinent part:
S5.5.2. Function check. (a) All indicators shall be activated as a check function by either: (1) Automatic activation when the ignition (start) switch is turned to the “on” (“run”) position when the engine is not running, or when the ignition (“start”) switch is in a position between “on” (“run”) and “start” that is designated by the manufacturer as a check position, or (2) A single manual action by the driver, such as momentary activation of a test button or switch mounted on the instrument panel in front of and in clear view of the driver, or, in the case of an indicator for application of the parking brake, by applying the parking brake when the ignition is in the “on” (“run”) position. (b) In the case of a vehicle that has an interlock device that prevents the engine from being started under one or more conditions, check functions meeting the requirements of S5.5.2(a) need not be operational under any condition in which the engine cannot be started. (c) The manufacturer shall explain the brake check function test procedure in the owner's manual.
S5.5.5. Labeling. (a) Each visual indicator shall display a word or words in accordance with the requirements of Standard No. 101 (49 CFR 571.101) and this section, which shall be legible to the driver under all daytime and nighttime conditions when activated. Unless otherwise specified, the words shall have letters not less than 3.2 mm (1/8 inch) high and the letters and background shall be of contrasting colors, one of which is red. Words or symbols in addition to those required by Standard No. 101 and this section may be provided for purposes of clarity.
(b) Vehicles manufactured with a split service brake system may use a common brake warning indicator to indicate two or more of the functions described in S5.5.1(a) through S5.5.1(g). If a common indicator is used, it shall display the word “Brake.”
BMW explained that the noncompliance is that the telltales used for Brake Warning, Park Brake Warning and Antilock Braking System (ABS) failure warnings are displayed using International Organization for Standardization (ISO) symbols instead
BMW stated its belief that although the instrument cluster telltale symbols are displayed using ISO symbols the noncompliance is inconsequential to motor vehicle safety for the following reasons:
(1) If a problem is encountered in which a brake system warning or malfunction indicator symbol is displayed, it is believed that the driver will be able to understand the warning symbol and take any necessary actions required.
(2) The instrument cluster is mounted behind the steering wheel in direct sight of the driver, making any warning symbol or indicator visible.
(3) There is a “message center” within the tachometer which is also used to inform the driver that a problem exists and can be used to better clarify why the warning symbol is illuminated.
(4) Due to similarities between the symbols required by FMVSS Nos. 101 and 135 and ISO symbols, eventually the driver will come to associate the wheel depiction symbol with the brake system.
(5) In such an event where the driver is unable to identify the warning symbol the driver would be able to consult the owner's manual which depicts as well as explains each of the warning/malfunction indicator symbols.
(6) BMW has received no customer complaints regarding the issue of non compliant telltales.
BMW also explains NHTSA has previously granted similar petitions.
In summation, BMW believes that the described noncompliance of its vehicles is inconsequential to motor vehicle safety, and that its petition, to exempt it from providing recall notification of noncompliance as required by 49 U.S.C. 30118 and remedying the recall noncompliance as required by 49 U.S.C. 30120 should be granted.
a. By mail addressed to: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590.
b. By hand delivery to U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. The Docket Section is open on weekdays from 10 a.m. to 5 p.m. except Federal Holidays.
c. Electronically: by logging onto the Federal Docket Management System (FDMS) Web site at
Comments must be written in the English language, and be no greater than 15 pages in length, although there is no limit to the length of necessary attachments to the comments. If comments are submitted in hard copy form, please ensure that two copies are provided. If you wish to receive confirmation that your comments were received, please enclose a stamped, self-addressed postcard with the comments. Note that all comments received will be posted without change to
Documents submitted to a docket may be viewed by anyone at the address and times given above. The documents may also be viewed on the Internet at
The petition, supporting materials, and all comments received before the close of business on the closing date indicated below will be filed and will be considered. All comments and supporting materials received after the closing date will also be filed and will be considered to the extent possible. When the petition is granted or denied, notice of the decision will be published in the
Comment closing date: September 19, 2011.
(49 U.S.C. 30118, 30120: delegations of authority at CFR 1.50 and 501.8)
CSX Transportation, Inc. (CSXT) has filed a verified notice of exemption under 49 CFR pt. 1152 subpart F—
CSXT has certified that: (1) No local traffic has moved over the line for at least 2 years; (2) no overhead traffic has operated on the line so none needs to be rerouted over other lines; (3) no formal complaint filed by a user of rail service on the line (or by a state or local government entity acting on behalf of such user) regarding cessation of service over the line either is pending with the Surface Transportation Board (Board) or with any U.S. District Court or has been decided in favor of complainant within the 2-year period; and (4) the requirements at 49 CFR 1105.7(c) (environmental report), 49 CFR 1105.11 (transmittal letter), 49 CFR 1105.12 (newspaper publication), and 49 CFR 1152.50(d)(1) (notice to governmental agencies) have been met.
As a condition to this exemption, any employee adversely affected by the abandonment shall be protected under
Provided no formal expression of intent to file an offer of financial assistance (OFA) has been received, this exemption will be effective on September 17, 2011, unless stayed pending reconsideration. Petitions to stay that do not involve environmental issues,
A copy of any petition filed with the Board should be sent to CSXT's representative: Louis E. Gitomer, Law Offices of Louis E. Gitomer, LLC, 600 Baltimore Ave., Suite 301, Towson, MD 21204.
If the verified notice contains false or misleading information, the exemption is void
CSXT has filed environmental and historic reports that address the effects, if any, of the abandonment on the environment and historic resources. OEA will issue an environmental assessment (EA) by August 23, 2011. Interested persons may obtain a copy of the EA by writing to OEA (Room 1100, Surface Transportation Board, Washington, DC 20423-0001) or by calling OEA at (202) 245-0305. Assistance for the hearing impaired is available through the Federal Information Relay Service at 1-800-877-8339. Comments on environmental and historic preservation matters must be filed within 15 days after the EA becomes available to the public.
Environmental, historic preservation, public use, or trail use/rail banking conditions will be imposed, where appropriate, in a subsequent decision.
Pursuant to the provisions of 49 CFR 1152.29(e)(2), CSXT shall file a notice of consummation with the Board to signify that it has exercised the authority granted and fully abandoned the line. If consummation has not been effected by CSXT's filing of a notice of consummation by August 18, 2012, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire.
Board decisions and notices are available on our Web site at
By the Board.
CSX Transportation, Inc. (CSXT) filed a verified notice of exemption under 49 CFR pt. 1152 subpart F-
CSXT has certified that: (1) No local traffic has moved over the line for at least 2 years; (2) there is no overhead traffic on the line to be rerouted; (3) no formal complaint filed by a user of rail service on the line (or by a state or local government entity acting on behalf of such user) regarding cessation of service over the line either is pending with the Surface Transportation Board (Board) or with any U.S. District Court or has been decided in favor of complainant within the 2-year period; and (4) the requirements at 49 CFR 1105.7(c) (environmental report), 49 CFR 1105.11 (transmittal letter), 49 CFR 1105.12 (newspaper publication), and 49 CFR 1152.50(d)(1) (notice to governmental agencies) have been met.
As a condition to this exemption, any employee adversely affected by the abandonment shall be protected under
Provided no formal expression of intent to file an offer of financial assistance (OFA) has been received, this exemption will be effective on September 17, 2011, unless stayed pending reconsideration. Petitions to stay that do not involve environmental issues,
A copy of any petition filed with the Board should be sent to CSXT's representative: Louis E. Gitomer, 600 Baltimore Avenue, Suite 301, Towson, MD 21204.
If the verified notice contains false or misleading information, the exemption is void
CSXT has filed environmental and historic reports, which address the effects, if any, of the abandonment on the environment and historic resources. OEA will issue an environmental assessment (EA) by August 23, 2011. Interested persons may obtain a copy of the EA by writing to OEA (Room 1100, Surface Transportation Board, Washington, DC 20423-0001) or by calling OEA, at (202) 245-0305. Assistance for the hearing impaired is available through the Federal Information Relay Service (FIRS) at 1-800-877-8339. Comments on environmental and historic preservation matters must be filed within 15 days after the EA becomes available to the public.
Environmental, historic preservation, public use, or trail use/rail banking conditions will be imposed, where appropriate, in a subsequent decision.
Pursuant to the provisions of 49 CFR 1152.29(e)(2), CSXT shall file a notice of consummation with the Board to signify that it has exercised the authority granted and fully abandoned the line. If consummation has not been effected by CSXT's filing of a notice of consummation by August 18, 2012, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire.
Board decisions and notices are available on our Web site at “
By the Board, Rachel D. Campbell, Director, Office of Proceedings.
Genesee & Wyoming Inc. (GWI), a noncarrier, has filed a verified notice of exemption to acquire control of Arizona Eastern Railway Company (AZER), a Class III rail carrier. GWI intends to consummate the transaction on September 1, 2011, the effective date of the exemption (30 days after the exemption was filed).
GWI directly or indirectly controls one Class II rail carrier, Buffalo & Pittsburgh Railroad, Inc., and 57 Class III rail carriers operating in 23 states. For a complete list of these Class III carriers, and the states within which they operate, see GWI's notice of exemption filed on August 2, 2011. The notice is available on the Board's Web site at “
AZER currently owns and operates approximately 200 route miles of rail line between Bowie and Miami, Ariz. and between Lordsburg, N.M. and Clifton, Ariz. AZER is a wholly owned subsidiary of Permian Basin Railways, Inc. (Permian Basin), which in turn is a wholly owned subsidiary of Iowa Pacific Holdings, LLC, a noncarrier holding company. As a result of the proposed transaction, GWI will obtain control of AZER through the purchase of all of AZER's stock from Permian Basin.
Applicants represent that: (1) The rail lines to be acquired by GWI do not connect with any other railroad in the corporate family;
Under 49 U.S.C. 10502(g), the Board may not use its exemption authority to relieve a rail carrier of its statutory obligation to protect the interests of its employees. Because the transaction involves the control of at least one Class II and one or more Class III rail carriers, the transaction is subject to the labor protection requirements of 49 U.S.C. 11326(b).
If the verified notice contains false or misleading information, the exemption is void
An original and 10 copies of all pleadings, referring to Docket No. FD 35537, must be filed with the Surface Transportation Board, 395 E Street, SW., Washington, DC 20423-0001. In addition, one copy of each pleading must be served on Thomas J. Litwiler, Fletcher & Sippel LLC, 29 North Wacker Drive, Suite 920, Chicago, IL 60606.
Board decisions and notices are available on our Web site at “
By the Board, Rachel D. Campbell, Director, Office of Proceedings.
The Department of the Treasury will submit the following public information collection requirements to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13 on or after the date of publication of this notice. A copy of the submissions may be obtained by calling the Treasury Bureau Clearance Officer listed. Comments regarding these information collections should be addressed to the OMB reviewer listed and to the Treasury PRA Clearance Officer, Department of the Treasury, 1750 Pennsylvania Avenue, NW., Suite 11010, Washington, DC 20220.
Written comments should be received on or before September 19, 2011 to be assured of consideration.
The Department of the Treasury will submit the following public information collection requirements to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13 on or after the date of publication of this notice. A copy of the submissions may be obtained by calling the Treasury Bureau Clearance Officer listed. Comments regarding these information collections should be addressed to the OMB reviewer listed and to the Treasury PRA Clearance Officer, Department of the Treasury, 1750 Pennsylvania Avenue, NW., Suite 11010, Washington, DC 20220.
Written comments should be received on or before September 19, 2011 to be assured of consideration.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Public Law 104-13(44 U.S.C. 3506(c)(2)(A)). The IRS is soliciting comments concerning information collection requirements related to the obligation of material advisors to prepare and maintain lists with respect to reportable transactions.
Written comments should be received on or before October 17, 2011 to be assured of consideration.
Direct all written comments to Yvette B. Lawrence, Internal Revenue Service, room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224.
Requests for additional information or copies of the regulation should be directed to Joel Goldberger, at (202) 927-9368, or at Internal Revenue Service, room 6129, 1111 Constitution Avenue, NW., Washington, DC 20224, or through the Internet at
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Centers for Medicare and Medicaid Services (CMS), HHS.
Final rules.
We are revising the Medicare hospital inpatient prospective payment systems (IPPS) for operating and capital-related costs of acute care hospitals to implement changes arising from our continuing experience with these systems and to implement certain statutory provisions contained in the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively known as the Affordable Care Act) and other legislation. We also are setting forth the update to the rate-of-increase limits for certain hospitals excluded from the IPPS that are paid on a reasonable cost basis subject to these limits.
We are updating the payment policy and the annual payment rates for the Medicare prospective payment system (PPS) for inpatient hospital services provided by long-term care hospitals (LTCHs) and implementing certain statutory changes made by the Affordable Care Act. In addition, we are finalizing an interim final rule with comment period that implements section 203 of the Medicare and Medicaid Extenders Act of 2010 relating to the treatment of teaching hospitals that are members of the same Medicare graduate medical education affiliated groups for the purpose of determining possible full-time equivalent (FTE) resident cap reductions.
This
In the past, a majority of the tables referred to throughout this preamble and in the Addendum to this final rule were published in the
Readers who experience any problems accessing any of the tables that are posted on the CMS Web sites identified above should contact Nisha Bhat at (410) 786-4487.
Section 1886(d) of the Social Security Act (the Act) sets forth a system of payment for the operating costs of acute care hospital inpatient stays under Medicare Part A (Hospital Insurance) based on prospectively set rates. Section 1886(g) of the Act requires the Secretary to pay for the capital-related costs of hospital inpatient stays under a prospective payment system (PPS). Under these PPSs, Medicare payment for hospital inpatient operating and capital-related costs is made at predetermined, specific rates for each hospital discharge. Discharges are classified according to a list of diagnosis-related groups (DRGs).
The base payment rate is comprised of a standardized amount that is divided
If the hospital treats a high percentage of certain low-income patients, it receives a percentage add-on payment applied to the DRG-adjusted base payment rate. This add-on payment, known as the disproportionate share hospital (DSH) adjustment, provides for a percentage increase in Medicare payments to hospitals that qualify under either of two statutory formulas designed to identify hospitals that serve a disproportionate share of low-income patients. For qualifying hospitals, the amount of this adjustment varies based on the outcome of the statutory calculations.
If the hospital is an approved teaching hospital, it receives a percentage add-on payment for each case paid under the IPPS, known as the indirect medical education (IME) adjustment. This percentage varies, depending on the ratio of residents to beds.
Additional payments may be made for cases that involve new technologies or medical services that have been approved for special add-on payments. To qualify, a new technology or medical service must demonstrate that it is a substantial clinical improvement over technologies or services otherwise available, and that, absent an add-on payment, it would be inadequately paid under the regular DRG payment.
The costs incurred by the hospital for a case are evaluated to determine whether the hospital is eligible for an additional payment as an outlier case. This additional payment is designed to protect the hospital from large financial losses due to unusually expensive cases. Any eligible outlier payment is added to the DRG-adjusted base payment rate, plus any DSH, IME, and new technology or medical service add-on adjustments.
Although payments to most hospitals under the IPPS are made on the basis of the standardized amounts, some categories of hospitals are paid in whole or in part based on their hospital-specific rate, which is determined from their costs in a base year. For example, sole community hospitals (SCHs) receive the higher of a hospital-specific rate based on their costs in a base year (the highest of FY 1982, FY 1987, FY 1996, or FY 2006) or the IPPS Federal rate based on the standardized amount. Through and including FY 2006, a Medicare-dependent, small rural hospital (MDH) received the higher of the Federal rate or the Federal rate plus 50 percent of the amount by which the Federal rate is exceeded by the higher of its FY 1982 or FY 1987 hospital-specific rate. As discussed below, for discharges occurring on or after October 1, 2007, but before October 1, 2012, an MDH will receive the higher of the Federal rate or the Federal rate plus 75 percent of the amount by which the Federal rate is exceeded by the highest of its FY 1982, FY 1987, or FY 2002 hospital-specific rate. SCHs are the sole source of care in their areas, and MDHs are a major source of care for Medicare beneficiaries in their areas. Specifically, section 1886(d)(5)(D)(iii) of the Act defines an SCH as a hospital that is located more than 35 road miles from another hospital or that, by reason of factors such as isolated location, weather conditions, travel conditions, or absence of other like hospitals (as determined by the Secretary), is the sole source of hospital inpatient services reasonably available to Medicare beneficiaries. In addition, certain rural hospitals previously designated by the Secretary as essential access community hospitals are considered SCHs. Section 1886(d)(5)(G)(iv) of the Act defines an MDH as a hospital that is located in a rural area, has not more than 100 beds, is not an SCH, and has a high percentage of Medicare discharges (not less than 60 percent of its inpatient days or discharges in its cost reporting year beginning in FY 1987 or in two of its three most recently settled Medicare cost reporting years). Both of these categories of hospitals are afforded this special payment protection in order to maintain access to services for beneficiaries.
Section 1886(g) of the Act requires the Secretary to pay for the capital-related costs of inpatient hospital services “in accordance with a prospective payment system established by the Secretary.” The basic methodology for determining capital prospective payments is set forth in our regulations at 42 CFR 412.308 and 412.312. Under the capital IPPS, payments are adjusted by the same DRG for the case as they are under the operating IPPS. Capital IPPS payments are also adjusted for IME and DSH, similar to the adjustments made under the operating IPPS. In addition, hospitals may receive outlier payments for those cases that have unusually high costs.
The existing regulations governing payments to hospitals under the IPPS are located in 42 CFR Part 412, Subparts A through M.
Under section 1886(d)(1)(B) of the Act, as amended, certain hospitals and hospital units are excluded from the IPPS. These hospitals and units are: Rehabilitation hospitals and units; long-term care hospitals (LTCHs); psychiatric hospitals and units; children's hospitals; and cancer hospitals. Religious nonmedical health care institutions (RNHCIs) are also excluded from the IPPS. Various sections of the Balanced Budget Act of 1997 (BBA, Public Law 105-33), the Medicare, Medicaid and SCHIP [State Children's Health Insurance Program] Balanced Budget Refinement Act of 1999 (BBRA, Pub. L. 106-113), and the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA, Pub. L. 106-554) provide for the implementation of PPSs for rehabilitation hospitals and units (referred to as inpatient rehabilitation facilities (IRFs)), LTCHs, and psychiatric hospitals and units (referred to as inpatient psychiatric facilities (IPFs)). (We note that the annual updates to the LTCH PPS are now included as part of the IPPS annual update document. Updates to the IRF PPS and IPF PPS are issued as separate documents.) Children's hospitals, cancer hospitals, and RNHCIs continue to be paid solely under a reasonable cost-based system subject to a rate-of-increase ceiling on inpatient operating costs per discharge.
The existing regulations governing payments to excluded hospitals and hospital units are located in 42 CFR Parts 412 and 413.
The Medicare prospective payment system (PPS) for LTCHs applies to hospitals described in section 1886(d)(1)(B)(iv) effective for cost reporting periods beginning on or after October 1, 2002. The LTCH PPS was established under the authority of sections 123(a) and (c) of Public Law 106-113 and section 307(b)(1) of Public Law 106-554 (as codified under section 1886(m)(1) of the Act). During the 5-year (optional) transition period, a LTCH's payment under the PPS was based on an increasing proportion of the LTCH Federal rate with a corresponding decreasing proportion based on reasonable cost principles. Effective for cost reporting periods beginning on or after October 1, 2006, all LTCHs are paid 100 percent of the Federal rate. The existing regulations governing payment under the LTCH PPS are located in 42 CFR Part 412, Subpart O. Beginning
Under sections 1814(l), 1820, and 1834(g) of the Act, payments are made to critical access hospitals (CAHs) (that is, rural hospitals or facilities that meet certain statutory requirements) for inpatient and outpatient services are generally based on 101 percent of reasonable cost. Reasonable cost is determined under the provisions of section 1861(v)(1)(A) of the Act and existing regulations under 42 CFR Parts 413 and 415.
Under section 1886(a)(4) of the Act, costs of approved educational activities are excluded from the operating costs of inpatient hospital services. Hospitals with approved graduate medical education (GME) programs are paid for the direct costs of GME in accordance with section 1886(h) of the Act. The amount of payment for direct GME costs for a cost reporting period is based on the hospital's number of residents in that period and the hospital's costs per resident in a base year. The existing regulations governing payments to the various types of hospitals are located in 42 CFR Part 413.
The Patient Protection and Affordable Care Act (Pub. L. 111-148), enacted on March 23, 2010, and the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152), enacted on March 30, 2010, made a number of changes that affect the IPPS and the LTCH PPS. (Pub. L. 111-148 and Pub. L. 111-152 are collectively referred to as the “Affordable Care Act.”) A number of the provisions of the Affordable Care Act affect the updates to the IPPS and the LTCH PPS and providers and suppliers. The provisions of the Affordable Care Act that were applicable to the IPPS and the LTCH PPS for FYs 2010 and 2011 were implemented in the following documents:
On June 2, 2010, we issued in the
On August 16, 2010, we issued in the
In this final rule, we are implementing the following provisions (or portions of the following provisions) of the Affordable Care Act that are applicable to the IPPS and LTCH PPS for FY 2012:
• Section 3001 of Public Law 111-148, which provides for establishment of a hospital value-based purchasing program and applicable measures for value-based incentive payments with respect to discharges occurring during FY 2013.
• Section 3004 of Public Law 111-148, which provides for the submission of quality data for LTCHs beginning in FY 2013 in order to receive the full annual update to the payment rates beginning with FY 2014 and the establishment of quality data measures by FY 2012 for the FY 2014 payment determination.
• Section 3025 of Public Law 111-148, which provides for a hospital readmissions reduction program and related quality data reporting measures.
• Section 3124 of Public Law 111-148, which provides for extension of the Medicare-dependent, small rural hospital (MDH) program through FY 2012.
• Section 3401 of Public Law 111-148, which provides for the incorporation of productivity improvements into the market basket updates for IPPS hospitals and LTCHs.
In addition, we are continuing in FY 2012 to implement the following provisions, which were initiated in FY 2011:
• Section 10324 of Public Law 111-148, which provided for a wage adjustment for hospitals located in frontier States.
• Sections 3401 and 10319 of Public Law 111-148 and section 1105 of Public Law 111-152, which revise certain market basket update percentages for IPPS and LTCH PPS payment rates for FY 2012.
• Sections 3125 and 10314 of Public Law 111-148, which provide for temporary percentage increases in payment adjustments to low-volume hospitals for discharges occurring in FY 2012.
• Section 1109 of Public Law 111-152, which provides for additional payments in FY 2012 for qualifying hospitals in the lowest quartile of per capita Medicare spending.
• Section 5503 of Public Law 111-148, as amended by Public Law 111-152 and section 203 of Public Law 111-309, which provides for the reduction in FTE resident caps for direct GME under Medicare for certain hospitals, and to authorize the “redistribution” of the estimated number of FTE resident slots to other qualified hospitals. In addition, section 5503 requires the application of these provisions to IME in the same manner as the FTE resident caps for direct GME.
The May 5, 2011
Below is a summary of the major changes that we proposed to make:
In section II. of the preamble of the proposed rule, we included—
• Proposed changes to MS-DRG classifications based on our yearly review.
• Proposed application of the documentation and coding adjustment for FY 2012 resulting from implementation of the MS-DRG system.
• A discussion of the Research Triangle Institute, International (RTI) reports and recommendations relating to charge compression.
• Proposed recalibrations of the MS-DRG relative weights.
• Proposed changes to hospital-acquired conditions (HACs) and a listing and discussion of HACs, including infections, that would be subject to the statutorily required quality adjustment in MS-DRG payments for FY 2012.
We discussed the FY 2012 status of new technologies approved for add-on payments for FY 2011 and presented our evaluation and analysis of the FY 2012 applicants for add-on payments for high-cost new medical services and technologies (including public input, as directed by Public Law 108-173, obtained in a town hall meeting).
In section III. of the preamble to the proposed rule, we proposed revisions to the wage index for acute care hospitals and the annual update of the wage data. Specific issues addressed included the following:
• The proposed FY 2012 wage index update using wage data from cost reporting periods beginning in FY 2008.
• Analysis and implementation of the proposed FY 2012 occupational mix adjustment to the wage index for acute care hospitals, including discussion of the 2010 occupational mix survey.
• A proposal to change the reporting requirements for pension costs for the Medicare wage index.
• Proposed revisions to the wage index for acute care hospitals based on hospital redesignations and reclassifications.
• The proposed adjustment to the wage index for acute care hospitals for FY 2012 based on commuting patterns of hospital employees who reside in a county and work in a different area with a higher wage index.
• The timetable for reviewing and verifying the wage data used to compute the proposed FY 2012 hospital wage index.
• Determination of the labor-related share for the proposed FY 2012 wage index.
In section IV. of the preamble of the proposed rule, we discussed a number of the provisions of the regulations in 42 CFR Parts 412, 413, and 476, including the following:
• The reporting of hospital quality data under the Hospital Inpatient Quality Reporting (IQR) Program as a condition for receiving the full annual payment update increase.
• The proposed implementation of the Hospital Value-Based Purchasing Program measures.
• The proposed establishment of hospital readmission measures for reporting of hospital quality data.
• The proposed updated national and regional case-mix values and discharges for purposes of determining RRC status.
• The statutorily required IME adjustment factor for FY 2012.
• Proposed payment adjustment for low-volume hospitals.
• Proposal for counting hospice days in the formula for determining the payment adjustment for disproportionate share hospitals.
• Proposal for making additional payments for qualifying hospitals with lowest per enrollee Medicare spending for FY 2012.
• Proposal to clarify ESRD add-on payment requirements based on cost report requirements.
• Proposal relating to changes to the reporting requirements for pension costs for Medicare cost-finding purposes.
• Proposal to implement statutory change to the hospital payment update, including incorporation of a productivity adjustment.
• Discussion of the Rural Community Hospital Demonstration Program and a proposal for making a budget neutrality adjustment for the demonstration program.
• Discussion of August 2010 interim final rule with comment period and further proposed changes relating to the 3-day payment window for payments for services provided to outpatients who are later admitted as inpatients.
In section V. of the preamble to the proposed rule, we discussed the proposed payment policy requirements for capital-related costs and capital payments to hospitals for FY 2012 and the proposed MS-DRG documentation and coding adjustment for FY 2012.
In section VI. of the preamble of the proposed rule, we discussed proposed changes to payments to certain excluded hospitals. In addition, we discussed proposed changes relating to payment for TEFRA services furnished under arrangements and payment for ambulance services furnished by CAH-owned and operated entities.
In section VII. of the preamble of the proposed rule, we set forth proposed changes to the payment rates, factors, and other payment rate policies under the LTCH PPS for FY 2012, including the annual update of the MS-LTC-DRG classifications and relative weights for use under the LTCH PPS for FY 2012 and the proposed rebasing and revising of the market basket for LTCHs. In addition, we set forth proposals for implementing the quality data reporting program for LTCHs. We also proposed to clarify two policies regarding the calculation of the average length of stay requirement for LTCHs, and proposed a policy to address a LTCH moratorium issue.
In the Addendum to the proposed rule, we set forth proposed changes to the amounts and factors for determining the proposed FY 2012 prospective payment rates for operating costs and capital-related costs for acute care hospitals. We also proposed to establish the threshold amounts for outlier cases. In addition, we addressed the proposed update factors for determining the rate-of-increase limits for cost reporting periods beginning in FY 2012 for certain hospitals excluded from the IPPS.
In the Addendum to the proposed rule, we set forth proposed changes to the amounts and factors for determining the proposed FY 2012 prospective standard Federal rate. We also proposed to establish the proposed adjustments for wage levels, the labor-related share, the cost-of-living adjustment, and high-cost outliers, including the fixed-loss amount, and the LTCH cost-to-charge ratios (CCRs) under the LTCH PPS.
In Appendix A of the proposed rule, we set forth an analysis of the impact that the proposed changes would have on affected acute care hospitals and LTCHs.
In Appendix B of the proposed rule, as required by sections 1886(e)(4) and (e)(5) of the Act, we provided our recommendations of the appropriate percentage changes for FY 2012 for the following:
• A single average standardized amount for all areas for hospital inpatient services paid under the IPPS for operating costs of acute care hospitals (and hospital-specific rates applicable to SCHs and MDHs).
• Target rate-of-increase limits to the allowable operating costs of hospital inpatient services furnished by certain hospitals excluded from the IPPS.
• The standard Federal rate for hospital inpatient services furnished by LTCHs.
Under section 1805(b) of the Act, MedPAC is required to submit a report to Congress, no later than March 1 of each year, in which MedPAC reviews
We received approximately 385 timely pieces of correspondence containing multiple comments on the FY 2012 IPPS/LTCH PPS proposed rule. We note that some of these public comments were outside of the scope of the proposed rule. These out-of-scope public comments are not addressed with policy responses in this final rule. Summaries of the public comments that are within the scope of the proposed rule and our responses to those comments are set forth in the various sections of this final rule under the appropriate heading.
On March 14, 2011, we issued in the
Section 1886(d) of the Act specifies that the Secretary shall establish a classification system (referred to as DRGs) for inpatient discharges and adjust payments under the IPPS based on appropriate weighting factors assigned to each DRG. Therefore, under the IPPS, Medicare pays for inpatient hospital services on a rate per discharge basis that varies according to the DRG to which a beneficiary's stay is assigned. The formula used to calculate payment for a specific case multiplies an individual hospital's payment rate per case by the weight of the DRG to which the case is assigned. Each DRG weight represents the average resources required to care for cases in that particular DRG, relative to the average resources used to treat cases in all DRGs.
Congress recognized that it would be necessary to recalculate the DRG relative weights periodically to account for changes in resource consumption. Accordingly, section 1886(d)(4)(C) of the Act requires that the Secretary adjust the DRG classifications and relative weights at least annually. These adjustments are made to reflect changes in treatment patterns, technology, and any other factors that may change the relative use of hospital resources.
As discussed in the preamble to the FY 2008 IPPS final rule with comment period (72 FR 47138), we focused our efforts in FY 2008 on making significant reforms to the IPPS consistent with the recommendations made by MedPAC in its “Report to the Congress, Physician-Owned Specialty Hospitals” in March 2005. MedPAC recommended that the Secretary refine the entire DRG system by taking severity of illness into account and applying hospital-specific relative value (HSRV) weights to DRGs.
Currently, cases are classified into MS-DRGs for payment under the IPPS based on the following information reported by the hospital: The principal diagnosis, up to eight additional diagnoses, and up to six procedures performed during the stay. (We refer readers to section II.G.11.c. of this final rule for a discussion of our efforts to increase our internal systems capacity to process diagnosis and procedures on hospital claims to 25 diagnosis codes and 25 procedure codes prior to the use of the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM) for diagnosis coding and the International Classification of Diseases, 10th Revision, Procedure Coding System (ICD-10 PCS) for inpatient hospital procedure coding, effective October 1, 2013.) In a small number of MS-DRGs, classification is also based on the age, sex, and discharge status of the patient. The diagnosis and procedure information is reported by the hospital using codes from the International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM) prior to October 1, 2013. We refer readers to section II.G.11.b. of this final rule for a reference to the replacement of ICD-9-CM, Volumes 1 and 2, including the Official ICD-9-CM Guidelines for Coding and Reporting, Volume 3, with the ICD-10-CM and ICD-10-PCS, including the Official ICD-10-CM and ICD-10-PCS Guidelines for Coding and Reporting, effective October 1, 2013 (FY 2014).
The process of developing the MS-DRGs was begun by dividing all possible principal diagnoses into mutually exclusive principal diagnosis areas, referred to as Major Diagnostic Categories (MDCs). The MDCs were formulated by physician panels to ensure that the DRGs would be clinically coherent. The diagnoses in each MDC correspond to a single organ system or etiology and, in general, are associated with a particular medical specialty. Thus, in order to maintain the requirement of clinical coherence, no final MS-DRG could contain patients in different MDCs. For example, MDC 6 is Diseases and Disorders of the Digestive System. This approach is used because clinical care is generally organized in
In general, cases are assigned to an MDC based on the patient's principal diagnosis before assignment to an MS-DRG. However, under the most recent version of the Medicare GROUPER (Version 28.0), there are 13 MS-DRGs to which cases are directly assigned on the basis of ICD-9-CM procedure codes. These MS-DRGs are for heart transplant or implant of heart assist systems; liver and/or intestinal transplants; bone marrow transplants; lung transplants; simultaneous pancreas/kidney transplants; pancreas transplants; and tracheostomies. Cases are assigned to these MS-DRGs before they are classified to an MDC. The table below lists the 13 current pre-MDCs.
Once the MDCs were defined, each MDC was evaluated to identify those additional patient characteristics that would have a consistent effect on hospital resource consumption. Because the presence of a surgical procedure that required the use of the operating room would have a significant effect on the type of hospital resources used by a patient, most MDCs were initially divided into surgical DRGs and medical DRGs. Surgical DRGs are based on a hierarchy that orders operating room (O.R.) procedures or groups of O.R. procedures by resource intensity. Medical DRGs generally are differentiated on the basis of diagnosis and age (0 to 17 years of age or greater than 17 years of age). Some surgical and medical DRGs are further differentiated based on the presence or absence of a complication or comorbidity (CC) or a major complication or comorbidity (MCC).
Generally, nonsurgical procedures and minor surgical procedures that are not usually performed in an operating room are not treated as O.R. procedures. However, there are a few non-O.R. procedures that do affect MS-DRG
Once the medical and surgical classes for an MDC were formed, each diagnosis class was evaluated to determine if complications or comorbidities would consistently affect hospital resource consumption. Each diagnosis was categorized into one of three severity levels. These three levels include a major complication or comorbidity (MCC), a complication or comorbidity (CC), or a non-CC. Physician panels classified each diagnosis code based on a highly iterative process involving a combination of statistical results from test data as well as clinical judgment. As stated earlier, we refer readers to section II.D. of the FY 2008 IPPS final rule with comment period for a full detailed discussion of how the MS-DRG system was established based on severity levels of illness (72 FR 47141).
A patient's diagnosis, procedure, discharge status, and demographic information is entered into the Medicare claims processing systems and subjected to a series of automated screens called the Medicare Code Editor (MCE). The MCE screens are designed to identify cases that require further review before classification into an MS-DRG.
After patient information is screened through the MCE and further development of the claim is conducted, the cases are classified into the appropriate MS-DRG by the Medicare GROUPER software program. The GROUPER program was developed as a means of classifying each case into an MS-DRG on the basis of the diagnosis and procedure codes and, for a limited number of MS-DRGs, demographic information (that is, sex, age, and discharge status).
After cases are screened through the MCE and assigned to an MS-DRG by the GROUPER, the PRICER software calculates a base MS-DRG payment. The PRICER calculates the payment for each case covered by the IPPS based on the MS-DRG relative weight and additional factors associated with each hospital, such as IME and DSH payment adjustments. These additional factors increase the payment amount to hospitals above the base MS-DRG payment.
The records for all Medicare hospital inpatient discharges are maintained in the Medicare Provider Analysis and Review (MedPAR) file. The data in this file are used to evaluate possible MS-DRG classification changes and to recalibrate the MS-DRG weights. However, in the FY 2000 IPPS final rule (64 FR 41499 and 41500), we discussed a process for considering non-MedPAR data in the recalibration process. We stated that for use of non-MedPAR data to be feasible for purposes of DRG recalibration and reclassification, the data must, among other things: (1) Be independently verified; (2) reflect a complete set of cases (or a representative sample of cases); and (3) enable us to calculate appropriate DRG relative weights and ensure that cases are classified to the “correct” DRG, and to one DRG only, in the recalibration process. Further, in order for us to consider using particular non-MedPAR data, we must have sufficient time to evaluate and test the data. The time necessary to do so depend upon the nature and quality of the non-MedPAR data submitted. Generally, however, a significant sample of the non-MedPAR data should be submitted by mid-October for consideration in conjunction with the next year's proposed rule. This date allows us time to test the data and make a preliminary assessment as to the feasibility of using the data. Subsequently, a complete non-MedPAR database should be submitted by early December for consideration in conjunction with the next year's proposed rule.
As we indicated above, for FY 2008, we made significant improvements in the DRG system to recognize severity of illness and resource usage by adopting MS-DRGs that were reflected in the FY 2008 GROUPER, Version 25.0, and were effective for discharges occurring on or after October 1, 2007. Our MS-DRG analysis for the FY 2012 proposed rule was based on data from the September 2010 update of the FY 2010 MedPAR file, which contained hospital bills received through September 30, 2010, for discharges occurring through September 30, 2010. For this FY 2012 final rule, our MS-DRG analysis is based on data from the March 2011 update of the FY 2010 MedPAR file, which contained hospital bills received through March 31, 2011, for discharges occurring through September 30, 2010.
Many of the changes to the MS-DRG classifications we make annually are the result of specific issues brought to our attention by interested parties. We encourage individuals with comments about MS-DRG classifications to submit these comments no later than early December of each year so they can be carefully considered for possible inclusion in the annual proposed rule and, if included, may be subjected to public review and comment. Therefore, similar to the timetable for interested parties to submit non-MedPAR data for consideration in the MS-DRG recalibration process, comments about MS-DRG classification issues should be submitted no later than early December in order to be considered and possibly included in the next annual proposed rule updating the IPPS.
The actual process of forming the MS-DRGs was, and will likely continue to be, highly iterative, involving a combination of statistical results from test data combined with clinical judgment. In the FY 2008 IPPS final rule (72 FR 47140 through 47189), we described in detail the process we used to develop the MS-DRGs that we adopted for FY 2008. In addition, in deciding whether to make further modification to the MS-DRGs for particular circumstances brought to our attention, we considered whether the resource consumption and clinical characteristics of the patients with a given set of conditions are significantly different than the remaining patients in the MS-DRG. We evaluated patient care costs using average charges and lengths of stay as proxies for costs and relied on the judgment of our medical advisors to decide whether patients are clinically distinct or similar to other patients in the MS-DRG. In evaluating resource costs, we considered both the absolute and percentage differences in average charges between the cases we selected for review and the remainder of cases in the MS-DRG. We also considered variation in charges within these groups; that is, whether observed average differences were consistent across patients or attributable to cases that were extreme in terms of charges or length of stay, or both. Further, we considered the number of patients who will have a given set of characteristics and generally preferred not to create a new MS-DRG unless it would include a substantial number of cases.
In the FY 2006, FY 2007, and FY 2008 IPPS final rules, we discussed a number
For FY 2007, we began this process. In the FY 2007 IPPS proposed rule, we proposed to adopt Consolidated Severity DRGs (CS DRGs) for FY 2008 (if not earlier). Based on public comments received on the FY 2007 IPPS proposed rule, we decided not to adopt the CS DRGs. In the FY 2007 IPPS final rule (71 FR 47906 through 47912), we discussed several concerns raised by public commenters regarding the proposal to adopt CS DRGs. We acknowledged the many public comments suggesting the logic of Medicare's DRG system should continue to remain in the public domain as it has since the inception of the PPS. We also acknowledged concerns about the impact on hospitals and software vendors of moving to a proprietary system. Several commenters suggested that CMS refine the existing DRG classification system to preserve the many policy decisions that were made over the last 20 years and were already incorporated into the DRG system, such as complexity of services and new device technologies. Consistent with the concerns expressed in the public comments, this option had the advantage of using the existing DRGs as a starting point (which was already familiar to the public) and retained the benefit of many DRG decisions that were made in recent years. We stated our belief that the suggested approach of incorporating severity measures into the existing DRG system was a viable option that would be evaluated.
Therefore, we decided to make interim changes to the existing DRGs for FY 2007 by creating 20 new DRGs involving 13 different clinical areas that would significantly improve the CMS DRG system's recognition of severity of illness. We also modified 32 DRGs to better capture differences in severity. The new and revised DRGs were selected from 40 existing CMS DRGs that contained 1,666,476 cases and represented a number of body systems. In creating these 20 new DRGs, we deleted 8 existing DRGs and modified 32 existing DRGs. We indicated that these interim steps for FY 2007 were being taken as a prelude to more comprehensive changes to better account for severity in the DRG system by FY 2008.
In the FY 2007 IPPS final rule (71 FR 47898), we indicated our intent to pursue further DRG reform through two initiatives. First, we announced that we were in the process of engaging a contractor to assist us with evaluating alternative DRG systems that were raised as potential alternatives to the CMS DRGs in the public comments. Second, we indicated our intent to review over 13,000 ICD-9-CM diagnosis codes as part of making further refinements to the current CMS DRGs to better recognize severity of illness based on the work that CMS (then HCFA) did in the mid-1990's in connection with adopting severity DRGs. We describe below the progress we have made on these two initiatives and our actions for FYs 2008, 2009, 2010, and 2011, and our proposed and final actions for FY 2012 based on our continued analysis of reform of the DRG system. We note that the adoption of the MS-DRGs to better recognize severity of illness has implications for the outlier threshold, the application of the postacute care transfer policy, the measurement of real case-mix versus apparent case-mix, and the IME and DSH payment adjustments. We discuss these implications for FY 2012 in other sections of this preamble and in the Addendum to this final rule.
In the FY 2007 IPPS proposed rule, we discussed MedPAC's recommendations to move to a cost-based HSRV weighting methodology using HSRVs beginning with the FY 2007 IPPS proposed rule for determining the DRG relative weights. Although we proposed to adopt the HSRV weighting methodology for FY 2007, we decided not to adopt the proposed methodology in the final rule after considering the public comments we received on the proposal. Instead, in the FY 2007 IPPS final rule, we adopted a cost-based weighting methodology without the HSRV portion of the proposed methodology. The cost-based weights were adopted over a 3-year transition period in
We believe that revisions to the DRG system to better recognize severity of illness and changes to the relative weights based on costs rather than charges are improving the accuracy of the payment rates in the IPPS. We agree with MedPAC that these refinements should be pursued. Although we continue to caution that any prospective payment system based on grouping cases will always present some opportunities for providers to specialize in cases they believe have higher margins, we believe that the changes we have adopted and the continuing reforms we are proposing to make in this proposed rule for FY 2012 will improve payment accuracy and reduce financial incentives to create specialty hospitals.
We refer readers to section II.D. of the FY 2008 IPPS final rule with comment period for a full discussion of how the MS-DRG system was established based
As we discussed earlier in this preamble, we adopted the MS-DRG patient classification system for the IPPS, effective October 1, 2007, to better recognize severity of illness in Medicare payment rates for acute care hospitals. The adoption of the MS-DRG system resulted in the expansion of the number of DRGs from 538 in FY 2007 to 745 in FY 2008. (Currently, there are 751 MS-DRGs, which include 4 additional MS-DRGs that we are adopting for FY 2012.) By increasing the number of MS-DRGs and more fully taking into account patient severity of illness in Medicare payment rates for acute care hospitals, MS-DRGs encourage hospitals to improve their documentation and coding of patient diagnoses.
In the FY 2008 IPPS final rule with comment period (72 FR 47175 through 47186), we indicated that the adoption of the MS-DRGs had the potential to lead to increases in aggregate payments without a corresponding increase in actual patient severity of illness due to the incentives for additional documentation and coding. In that final rule with comment period, we exercised our authority under section 1886(d)(3)(A)(vi) of the Act, which authorizes us to maintain budget neutrality by adjusting the national standardized amount, to eliminate the estimated effect of changes in coding or classification that do not reflect real changes in case-mix. Our actuaries estimated that maintaining budget neutrality required an adjustment of −4.8 percent to the national standardized amount. We provided for phasing in this −4.8 percent adjustment over 3 years. Specifically, we established prospective documentation and coding adjustments of −1.2 percent for FY 2008, −1.8 percent for FY 2009, and −1.8 percent for FY 2010.
On September 29, 2007, Congress enacted the TMA [Transitional Medical Assistance], Abstinence Education, and QI [Qualifying Individuals] Programs Extension Act of 2007, Public Law 110-90. Section 7(a) of Public Law 110-90 reduced the documentation and coding adjustment made as a result of the MS-DRG system that we adopted in the FY 2008 IPPS final rule with comment period to −0.6 percent for FY 2008 and −0.9 percent for FY 2009. Section 7(a) of Public Law 110-90 did not adjust the FY 2010 −1.8 percent documentation and coding adjustment promulgated in the FY 2008 IPPS final rule with comment period. To comply with section 7(a) of Public Law 110-90, we promulgated a final rule on November 27, 2007 (72 FR 66886) that modified the IPPS documentation and coding adjustment for FY 2008 to −0.6 percent, and revised the FY 2008 payment rates, factors, and thresholds accordingly. These revisions were effective on October 1, 2007.
For FY 2009, section 7(a) of Public Law 110-90 required a documentation and coding adjustment of −0.9 percent instead of the −1.8 percent adjustment established in the FY 2008 IPPS final rule with comment period. As discussed in the FY 2009 IPPS final rule (73 FR 48447) and required by statute, we applied a documentation and coding adjustment of −0.9 percent to the FY 2009 IPPS national standardized amount. The documentation and coding adjustments established in the FY 2008 IPPS final rule with comment period, as amended by Public Law 110-90, are cumulative. As a result, the −0.9 percent documentation and coding adjustment for FY 2009 was in addition to the −0.6 percent adjustment for FY 2008, yielding a combined effect of −1.5 percent.
Section 7(b)(1)(A) of Public Law 110-90 requires that, if the Secretary determines that implementation of the MS-DRG system resulted in changes in documentation and coding that did not reflect real changes in case-mix for discharges occurring during FY 2008 or FY 2009 that are different than the prospective documentation and coding adjustments applied under section 7(a) of Public Law 110-90, the Secretary shall make an appropriate adjustment under section 1886(d)(3)(A)(vi) of the Act. Section 1886(d)(3)(A)(vi) of the Act authorizes adjustments to the average standardized amounts for subsequent fiscal years in order to eliminate the effect of such coding or classification changes. These adjustments are intended to ensure that future annual aggregate IPPS payments are the same as the payments that otherwise would have been made had the prospective adjustments for documentation and coding applied in FY 2008 and FY 2009 reflected the change that occurred in those years.
If, based on a retroactive evaluation of claims data, the Secretary determines that implementation of the MS-DRG system resulted in changes in documentation and coding that did not reflect real changes in case-mix for discharges occurring during FY 2008 or FY 2009 that are different from the prospective documentation and coding adjustments applied under section 7(a) of Public Law 110-90, section 7(b)(1)(B) of Public Law 110-90 requires the Secretary to make an additional adjustment to the standardized amounts under section 1886(d) of the Act. This adjustment must offset the estimated increase or decrease in aggregate payments for FYs 2008 and 2009 (including interest) resulting from the difference between the estimated actual documentation and coding effect and the documentation and coding adjustment applied under section 7(a) of Public Law 110-90. This adjustment is in addition to making an appropriate adjustment to the standardized amounts under section 1886(d)(3)(A)(vi) of the Act as required by section 7(b)(1)(A) of Public Law 110-90. That is, these adjustments are intended to recoup (or repay, in the case of underpayments) spending in excess of (or less than) spending that would have occurred had the prospective adjustments for changes in documentation and coding applied in FY 2008 and FY 2009 precisely matched the changes that occurred in those years. Public Law 110-90 requires that the Secretary make these recoupment or repayment adjustments for discharges occurring during FYs 2010, 2011, and 2012.
In order to implement the requirements of section 7 of Public Law 110-90, we indicated in the FY 2009 IPPS final rule (73 FR 48450) that we planned a thorough retrospective evaluation of our claims data. We stated that the results of this evaluation would be used by our actuaries to determine any necessary payment adjustments to the standardized amounts under section 1886(d) of the Act to ensure the budget neutrality of the MS-DRGs implementation for FY 2008 and FY 2009, as required by law. In the FY 2009 IPPS proposed rule (73 FR 23541 through 23542), we described our preliminary plan for a retrospective analysis of inpatient hospital claims
In that proposed rule, we indicated that we intended to measure and corroborate the extent of the overall national average changes in case-mix for FY 2008 and FY 2009. We expected that the two largest parts of this overall national average change would be attributable to underlying changes in actual patient severity of illness and to documentation and coding improvements under the MS-DRG system. In order to separate the two effects, we planned to isolate the effect of shifts in cases
The MS-DRGs divide the base DRGs into three severity levels (with MCC, with CC, and without CC); the previously used CMS DRGs had only two severity levels (with CC and without CC). Under the CMS DRG system, the majority of hospital discharges had a secondary diagnosis which was on the CC list, which led to the higher severity level. The MS-DRGs significantly changed the code lists of what was classified as an MCC or a CC. Many codes that were previously classified as a CC are no longer included on the MS-DRG CC list because the data and clinical review showed these conditions did not lead to a significant increase in resource use. The addition of a new level of high severity conditions, the MCC list, also provided a new incentive to code more precisely in order to increase the severity level. We anticipated that hospitals would examine the MS-DRG MCC and CC code lists and then work with physicians and coders on documentation and coding practices so that coders could appropriately assign codes from the highest possible severity level. We note that there have been numerous seminars and training sessions on this particular coding issue. The topic of improving documentation practices in order to code conditions on the MCC list was also discussed extensively by participants at the March 11-12, 2009 ICD-9-CM Coordination and Maintenance Committee meeting. Participants discussed their hospitals' efforts to encourage physicians to provide more precise documentation so that coders could appropriately assign codes that would lead to a higher severity level. Because we expected most of the documentation and coding changes under the MS-DRG system would occur in the secondary diagnoses, we believed that the shifts among base DRGs were less likely to be the result of the MS-DRG system and the shifts within base DRGs were more likely to be the result of the MS-DRG system. We also anticipated evaluating data to identify the specific MS-DRGs and diagnoses that contributed significantly to the documentation and coding payment effect and to quantify their impact. This step entailed analysis of the secondary diagnoses driving the shifts in severity within specific base DRGs.
In the FY 2009 IPPS proposed rule, we solicited public comments on the analysis plans described above, as well as suggestions on other possible approaches for performing a retrospective analysis to identify the amount of case-mix changes that occurred in FY 2008 and FY 2009 that did not reflect real increases in patient severity of illness.
A few commenters, including MedPAC, expressed support for the analytic approach described in the FY 2009 IPPS proposed rule. A number of other commenters expressed concerns about certain aspects of the approach and/or suggested alternate analyses or study designs. In addition, one commenter recommended that any determination or retrospective evaluation by the actuaries of the impact of the MS-DRGs on case-mix be open to public scrutiny prior to the implementation of the payment adjustments beginning in FY 2010.
We took these comments into consideration as we developed our proposed analysis plan, and in the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule (74 FR 24092 through 24101), we solicited public comment on our methodology and analysis. For the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule, we performed a retrospective evaluation of the FY 2008 data for claims paid through December 2008. Based on this evaluation, our actuaries determined that implementation of the MS-DRG system resulted in a 2.5 percent change due to documentation and coding that did not reflect real changes in case-mix for discharges occurring during FY 2008. In the FY 2010 IPPS/RY 2010 LTCH PPS final rule, we updated this analysis with FY 2008 data for claims paid through March 2009, and we noted that the estimates for all IPPS remained essentially the same to those in the proposed rule (42 FR 43770, 43775). Also, in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43768 through 43772), we responded to comments on our methodology for the retrospective evaluation of FY 2008 claims data. We refer readers to that final rule for a detailed description of our analysis and prior responses to comments.
In the FY 2011 IPPS/LTCH PPS final rule (75 FR 50057 through 50068), we performed the same analysis for FY 2009 claims data using the same methodology as we did for FY 2008 claims. We note that, in the FY 2011 IPPS/LTCH PPS proposed rule, we performed this analysis using FY 2009 claims paid through December 2009. In the FY 2011 IPPS/LTCH PPS final rule, we updated the analysis with FY 2009 claims paid through March 2010, as we discussed in the proposed rule. We note that, for all IPPS hospitals, other than those in Puerto Rico, the estimates were unchanged from those in the proposed rule. We refer readers to the FY 2011 IPPS/LTCH PPS final rule (75 FR 50057 through 50068) for a detailed description of our analysis and prior responses to comments. The results of the analysis for the FY 2011 proposed and final rules provided additional support for our conclusion that the proposed 5.4 percent estimate accurately reflected the FY 2009 increases in documentation and coding under the MS-DRG system.
As in prior years, the FY 2008 and FY 2009 MedPAR files are available to the public to allow independent analysis of the FY 2008 and FY 2009 documentation and coding effect. Interested individuals may still order these files through the Web site at:
Persons placing an order must send the following: A Letter of Request, the LDS Data Use Agreement and Research Protocol (refer to the Web site for further instructions), the LDS Form, and a check for $3,655 to:
Mailing address if using the U.S. Postal Service: Centers for Medicare & Medicaid Services, RDDC Account, Accounting Division, P.O. Box 7520,Baltimore, MD 21207-0520.
Mailing address if using express mail: Centers for Medicare & Medicaid Services, OFM/Division of Accounting—RDDC, 7500 Security Boulevard, C3-07-11, Baltimore, MD 21244-1850.
Based on our evaluation of FY 2008 Medicare claims data that were most current at the time of the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule, the estimated 2.5 percent change in FY 2008 case-mix due to changes in
After analysis of the FY 2009 claims data for the FY 2011 IPPS/LTCH PPS final rule (75 FR 50057 through 50073), we found a total prospective documentation and coding effect of 1.054. After accounting for the −0.6 percent and the −0.9 percent documentation and coding adjustments in FYs 2008 and 2009, we found a remaining documentation and coding effect of 3.9 percent. As we have discussed, an additional cumulative adjustment of −3.9 percent would be necessary to meet the requirements of section 7(b)(1)(A) of Public Law 110-90 to make an adjustment to the average standardized amounts in order to eliminate the full effect of the documentation and coding changes on future payments. Unlike section 7(b)(1)(B) of Public Law 110-90, section 7(b)(1)(A) does not specify when we must apply the prospective adjustment, but merely requires us to make an “appropriate” adjustment. Therefore, as we stated in the FY 2011 IPPS/LTCH PPS final rule (75 FR 50061), we believe we have some discretion as to the manner in which we apply the prospective adjustment of −3.9 percent. We indicated that applying the full prospective adjustment of −3.9 percent for FY 2011, in combination with the proposed recoupment adjustment of −2.9 percent in FY 2011 (discussed below) would require an aggregate adjustment of −6.8 percent. As we discuss elsewhere in this section II.D., and more extensively in the FY 2011 IPPS/LTCH PPS final rule, it has been our practice to moderate payment adjustments when necessary to mitigate the effects of significant downward adjustments on hospitals, to avoid what could be widespread, disruptive effects of such adjustments on hospitals. As we also discuss below in this section II.D., we are required to implement the remaining adjustment in section 7(b)(1)(B) of Public Law 110-90 no later than the FY 2012 rulemaking period, and accordingly, in the FY 2011 IPPS/LTCH PPS proposed rule, we proposed a recoupment adjustment under section 7(b)(1)(B) of −2.9 percent for FY 2011 (75 FR 23870 and 23871). Therefore, we stated that we believed it was appropriate to not implement any or all of the −3.9 percent prospective adjustment in FY 2011. Accordingly, we did not propose a prospective adjustment under section 7(b)(1)(A) of Public Law 110-90 for FY 2011 (75 FR 23868 through 23870) for FY 2011. We note that, as a result, payments in FY 2011 (and in each future year until we implement the requisite adjustment) would be 3.9 percent higher than they would have been if we had implemented an adjustment under section 7(b)(1)(A) of Public Law 110-90. Our actuaries estimate that this 3.9 percentage point increase will result in an aggregate payment of approximately $4 billion. We also noted that payments in FY 2010 were also expected to be 3.9 percent higher than they would have been if we had implemented an adjustment under section 7(b)(1)(A) of Public Law 110-90, which our actuaries estimated increased aggregate payments by approximately $4 billion in FY 2010.
In the FY 2012 IPPS/LTCH PPS proposed rule (76 FR 25803 and 25804), we indicated that because further delay of this prospective adjustment will result in a continued accrual of unrecoverable overpayments, it was imperative that we proposed a prospective adjustment for FY 2012, while recognizing CMS' continued desire to mitigate the effects of any significant downward adjustments to hospitals. Therefore, we proposed a −3.15 percent prospective adjustment to the standardized amount to partially eliminate the full effect of the documentation and coding changes on future payments. Due to the offsetting nature of the remaining recoupment adjustment under section 7(b)(1)(B) of Public Law 110-90 (described below in section II.D.6. of this preamble), and after considering other payment adjustments to FY 2012 rates proposed elsewhere within the proposed rule, we indicated that we believe the proposed −3.15 percent adjustment would allow for a significant reduction in potential unrecoverable overpayments, yet would maintain a comparable adjustment level between FY 2011 and FY 2012, reflecting the applicable percentage increase with a documentation and coding adjustment. We stated that we recognize that an additional adjustment of −0.75 (3.9 minus 3.15) percent would be required in future rule making to complete the necessary −3.9 adjustment to meet CMS' statutory requirement under section 7(b)(1)(A) of Public Law 110-90. In the proposed rule, we indicated that we were not at that time proposing a timeline to implement the remainder of this prospective adjustment.
As discussed in section II.D.1. of this preamble, section 7(b)(1)(B) of Public Law 110-90 requires the Secretary to make an adjustment to the standardized amounts under section 1886(d) of the Act to offset the estimated increase or decrease in aggregate payments for FY 2008 and FY 2009 (including interest) resulting from the difference between the estimated actual documentation and coding effect and the documentation and coding adjustments applied under section 7(a) of Public Law 110-90. This determination must be based on a retrospective evaluation of claims data.
In the FY 2010 IPPS/RY 2010 LTCH PPS final rule with comment period (74 FR 43773), we estimated a 2.5 percent change due to documentation and coding that did not reflect real changes in case-mix for discharges occurring during FY 2008, exceeding the −0.6 percent prospective documentation and coding adjustment applied under section 7(a) of Public Law 110-90 by 1.9 percentage points. We stated that our actuaries had estimated that this 1.9 percentage point increase resulted in an increase in aggregate payments of approximately $2.2 billion in FY 2008. We did not propose to make an adjustment to the FY 2010 average standardized amounts to offset, in whole or in part, the estimated increase in aggregate payments for discharges occurring in FY 2008, but stated in the proposed rule that we intended to address this issue in future rulemaking. In the FY 2010 IPPS/RY 2010 LTCH PPS
As we indicated in the FY 2011 IPPS/LTCH PPS final rule, the change due to documentation and coding that did not reflect real changes in case-mix for discharges occurring during FY 2008 and FY 2009 exceeded the −0.6 and −0.9 percent prospective documentation and coding adjustments applied under section 7(a) of Public Law 110-90 for those 2 years, respectively, by 1.9 percentage points in FY 2008 and 3.9 percentage points in FY 2009. In total, this change exceeded the cumulative prospective adjustments by 5.8 (1.9 plus 3.9) percentage points. Our actuaries estimated that this 5.8 percentage point increase resulted in an increase in aggregate payments of approximately $6.9 billion. In the FY 2011 IPPS/LTCH PPS final rule, we noted that there may be a need to actuarially adjust the recoupment adjustment to accurately reflect accumulated interest. Therefore, we determined that an aggregate adjustment of −5.8 percent in FYs 2011 and 2012, subject to actuarial adjustment to reflect accumulated interest, would be necessary in order to meet the requirements of section 7(b)(1)(B) of Public Law 110-90 to adjust the standardized amounts for discharges occurring in FYs 2010, 2011, and/or 2012 to offset the estimated amount of the increase in aggregate payments (including interest) in FYs 2008 and 2009. In the FY 2011 IPPS/LTCH PPS proposed rule (75 FR 23871), we stated that we intended to take into account the need to reflect accumulated interest in proposing a recoupment adjustment under section 7(b)(1)(B) of Public Law 110-90 for FY 2012.
It is often our practice to phase in rate adjustments over more than one year in order to moderate the effect on rates in any one year. Therefore, consistent with the policies that we have adopted in many similar cases, in the FY 2011 IPPS/LTCH PPS proposed rule, we proposed to make an adjustment to the standardized amount of −2.9 percent, representing approximately half of the aggregate adjustment required under section 7(b)(1)(B) of Public Law 110-90, for FY 2011. An adjustment of this magnitude would allow us to moderate the effects on hospitals in one year while simultaneously making it possible to implement the entire adjustment within the timeframe required under section 7(b)(1)(B) of Public Law 110-90 (that is, no later than FY 2012).
Unlike the permanent prospective adjustment to the standardized amounts under section 7(b)(1)(A) of Public Law 110-90 described earlier, the recoupment adjustment to the standardized amounts under section 7(b)(1)(B) of Public Law 110-90 is not cumulative, and, therefore, would be removed for subsequent fiscal years once we have completely offset the increase in aggregate payments for discharges for FY 2008 and FY 2009 expenditures. In keeping with our practice of moderating payment adjustments when necessary, we stated that we anticipated that the proposal of phasing in the recoupment adjustment will have an additional, and significant, moderating effect on implementing the requirements of section 7(b)(1)(B) of Public Law 110-90 for FY 2012.
In the FY 2011 IPPS/LTCH PPS proposed rule, we sought public comment on our proposal to offset part of the total 5.8 percent increase in aggregate payments (including interest) for discharges occurring in FY 2008 and FY 2009 resulting from the adoption of the MS-DRGs in FY 2011, noting that this proposal would result in a −2.9 percent adjustment to the standardized amount. We received numerous comments on our proposal, especially from national and regional hospital associations, hospital systems, and individual hospitals. MedPAC also commented on our proposal. We refer readers to the FY 2011 IPPS/LTCH PPS final rule with comment period (75 FR 50055 through 50073) for a detailed description of our analysis and prior responses to comments, and finalized policy.
In the FY 2011 IPPS/LTCH PPS final rule (75 FR 50062 through 50068), we finalized the proposed adjustment to the standardized amount of −2.9 percent, which represented approximately half of the aggregate recoupment adjustment required under section 7(b)(1)(B) of Public Law 110-90, for FY 2011. We were persuaded by both the MedPAC's analysis, and our own review of the methodologies recommended by various commenters, that the methodology we employed to determine the required recoupment adjustment was sound. Since the statute required that we implement the entire recoupment adjustment no later than FY 2012, we have sought, as we commonly do, to moderate the potential impact on hospitals by phasing in the required adjustment over more than one year. As we stated in prior rulemaking, a major advantage of making the −2.9 percent adjustment to the standardized amount in FY 2011 was that, because the required recoupment adjustment is not cumulative, we anticipated removing the FY 2011 −2.9 percent adjustment from the rates (in other words, making a positive 2.9 percent adjustment to the rates) in FY 2012, at the same time that the law required us to apply the remaining approximately −2.9 percent adjustment required by section 7(b)(1)(B) of Public Law 110-90. These two steps in FY 2012, restoring the FY 2011 −2.9 percent adjustment and then applying the remaining adjustment of approximately −2.9 percent, would effectively cancel each other out. The result of these two steps would be an aggregate adjustment of approximately 0.0 percent. While we stated in the FY 2011 IPPS/LTCH PPS final rule the need to potentially adjust the remaining −2.9 percent estimate to account for accumulated interest, our actuaries have determined that there has been no significant interest accumulation and that no additional adjustment will be required. Therefore, for FY 2012, pursuant to the timeframes set forth by section 7(b)(1)(B) of Public Law 110-90, and consistent with the discussion in the FY 2011 IPPS/LTCH PPS final rule, we proposed to complete the recoupment adjustment by implementing the remaining −2.9 percent adjustment, in addition to removing the effect of the −2.9 percent adjustment to the standardized amount finalized for FY 2011. Because these adjustments will, in effect, balance out, there will be no year-to-year change in the standardized amount due to this recoupment adjustment. As this
Consistent with its comments in prior years, MedPAC's comment noted that its analysis of Medicare hospital inpatient claims for 2007-2009 yielded similar estimates of the documentation and coding effect. MedPAC concluded that “CMS would need to reduce IPPS payments temporarily by 5.8 percent to recover overpayments that occurred in 2008 and 2009. CMS also expected that overpayments equal to 3.9 percent of annual IPPS payments would continue through 2010, 2011, and future years until CMS makes a prospective offsetting adjustment (−3.9 percent) to the IPPS payments rates.”
MedPAC's comment described potential circumstances in which the methodology used both by our actuaries and MedPAC could overestimate the documentation and coding effect, noting that these possible circumstances “could cause only a small change in the estimated effect of documentation changes.”
MedPAC stated, “In response to the new MS-DRGs, hospitals had an incentive to report diagnoses that count as CCs in the new system. MedPAC's argument is that hospitals may also have stopped reporting diagnoses that counted as CCs in the old system, but do not count in the new one.” In short, MedPAC argued that the disappearance of the general chronic condition codes could have caused the CMIs based on the old FY 2007 GROUPER and weights to be understated in FYs 2008 and 2009. Thus, because CMIs based on the 2007 GROUPER and weights are the denominators of the documentation change estimates, understatement would bias the estimates upward. However, understatement would occur only to the extent that hospitals, when coding: (1) Did not replace such general chronic condition codes with corresponding acute manifestation codes and (2) the patient had no other secondary diagnosis code that qualified as a CC in the old GROUPER and are now CCs or MCCs under the MS-DRGs.
MedPAC's analysis concluded that the maximum possible effect of this potential overestimation is 0.36 percent, and “that total overpayments due to documentation changes in 2008 and 2009 may have ranged from 5.1 to 5.8 percent of IPPS payments ($6.0 to $6.9 billion).”
MedPAC recommended that CMS slow the pace of the payment adjustments so that hospitals would receive a net 1 percent update in FY 2012, as it recommend in its March 2011 Report to Congress. Furthermore, MedPAC stated that legislation should be enacted to require the Secretary of Health and Human Services to adjust payments further to recover all overpayments that have occurred or will occur in FYs 2010, 2011, and 2012 because the prospective adjustment was not completed. MedPAC asserted that:
“To allow payments to increase due to documentation and coding changes would undermine Congressional policy on updates. If Congress wants more money to flow into the hospital sector, a higher update is the appropriate mechanism, not cumulative changes in documentation and coding. Indeed, allowing those changes to increase hospital payments through the back door could eventually discourage needed refinements to the case-mix system in a tight budget era. In other words, if more money inevitably leaks into the system every time case-mix is refined, then there may be pressure to stop refining. That would lead to inequities for both providers and patients.”
With regard to MedPAC's analysis regarding the possible overestimate of the documentation and coding effect, we note that MedPAC characterized the potential effect as “small” and provided no corroborating analysis or specific examples of when this scenario may have occurred. We consulted with our medical coding experts and were unable to identify specific examples to support MedPAC's hypothesis. We note that MedPAC stated in its comment letter that the potential for overestimation exists only to the extent that “hospitals (1) did not replace such general chronic condition codes with corresponding acute manifestation codes and (2) the patient had no other secondary diagnosis code that qualified as a CC in the old grouper.” We reviewed coding changes that occurred during the transition to MS-DRGs and were able to identify codes that would result in a CC prior to MS-DRGs but would not result in a CC in the MS-DRG system. However, we were unable to identify an instance where this would necessarily result in a lower MS-DRG assignment because more specific codes were
We did not receive any other public comments regarding MedPAC's statements that we may have overestimated the effect of the documentation and coding by considering cases grouped under the MS-DRG system as having a higher severity due to being coded without appropriate CCs under the pre-MS-DRG system.
At this time, we believe it would not be appropriate to revise our estimates based solely on MedPAC's analysis without knowing of any specific examples of the scenario described above. Without this information, we cannot determine whether there was a sufficient volume of cases to cause a potential documentation and coding overestimate. However, we welcome specific examples from the public to possibly inform future rulemaking.
We acknowledge MedPAC's recommendation to provide hospitals with a net 1 percent update. As noted above, the comment restates MedPAC's recommendation from its March 2011 Report to Congress. We address this issue below in our response to comments by the provider community that expressed concern regarding the impact of various payment adjustments on hospitals.
We also acknowledge MedPAC's request that additional statutory authority be granted to the Secretary of Health and Human Services to recover overpayments made during subsequent fiscal years.
Lastly, we agree with MedPAC that it is important to continue refining the methodology of how case mix is measured to ensure payment accuracy. We note that in this final rule we discuss potential refinements to the MS-DRG relative weight system, and CMS' active engagement in implementing the ICD-10 system. These discussions illustrate the efforts the agency is undertaking to improve the ability to measure case mix precisely and to pay hospitals for inpatient services more accurately.
We also received Congressional correspondence from numerous members of Congress stating that hospitals had expressed concerns regarding the CMS Actuary's methodology and requesting that CMS ensure that its methodology accurately reflects changes in patient severity prior to finalizing adjustments for documentation and coding in response to hospitals' concerns. Specifically, the correspondence suggested that CMS could consider alternative methodologies for estimating the effect of documentation and coding, including trend-based analysis and chart abstraction.
Several commenters stated that historical case mix trend is inconsistent with our estimate of the effect of the FY 2008 and FY 2009 documentation and coding changes due to the implementation of the MS-DRGs. One commenter stated “Our analysis, which used multiple years of patient claims, clearly shows that a significant portion of the change CMS found is actually the continuation of historical trends, rather than the effect of documentation and coding changes due to implementation of MS-DRGs. This analysis found a cumulative documentation and coding effect of 3.6 percent for FYs 2008 and 2009, as opposed to the 5.4 percent that CMS found.”
Several commenters submitted an historical case-mix trend analysis last year, which showed a documentation and coding effect of 2.3 percent. An analysis submitted by the same commenters this year showed a cumulative documentation and coding increase through FY 2009 of 3.6 percent. The commenters revised their analysis to respond to CMS comments made in last year's rule. Specifically, the national hospital associations stated that, “This year we make several modifications to that trend-based analysis to respond to CMS' critiques as enumerated in the FY 2011 inpatient PPS final rule. Given that we have addressed the agency's concerns, we are hopeful that it will give our methodology fresh consideration.” One hospital association also pointed out that CMS included an assumption regarding real case-mix growth in the adjustment for “changes in case-mix” in the capital update framework at § 412.308(c)(1)(ii) and suggested that the estimate made by our actuaries regarding documentation and coding be reduced by this assumption in order to maintain consistency with the capital update framework.
Commenters also examined the methodology used by our actuaries and MedPAC using index number theory. As stated by these commenters, “the relative case weights in a given grouper are like relative prices in a price index calculation (in fact they are relative prices for the different MS-DRGs) and the quantities of discharges in various MS-DRGs are like the quantities of goods in the price index calculation.” Commenters claimed that, based on index number theory, the methodology employed by MedPAC and our actuaries can only provide upper and lower bounds of the combined effect of documentation and coding and real case-mix change. MedPAC, however, indicated that knowledge of the 2007 MS-DRG GROUPER, the new MS-DRG GROUPER, historical documentation of patients' diagnoses, and the changes CMS made when it created the MS-DRGs can be used to narrow the range of the potential documentation and coding effect as described above, although they noted that these “could cause only a small change in the estimated effect of documentation changes.”
As in past years, several commenters indicated that CMS should use medical records data to distinguish documentation and coding changes from real case-mix changes. MedPAC disagreed with the commenters' rationale that the use of medical records data could determine the effect of both documentation and coding, and stated the following: “Gold-standard coders, however, only see the diagnoses written in the record and therefore are not able to distinguish changes in documentation from real changes in patients' diagnoses. This method of recoding existing documentation only works in situations where hospitals have no incentive to change documentation. That is clearly not the case with the transition to MS-DRGs.”
The national hospital associations' most significant response to our critique of their previous analysis in the FY 2011 IPPS/LTCH PPS final rule was to expand the time period upon which its trend analysis is based to include years where there were sustained negative changes in actual CMI. This raised their estimate of documentation and coding from 2.3 percent to 3.6 percent. We believe that this increase demonstrates the variability in the estimates that can be obtained using trend analyses. We also stated in last year's final rule that “despite our position that our methodology more directly measures the relevant increase, we did examine the alternative approach favored by commenters for calculating the documentation and classification increase. As a general statement, the approach of examining historical trends to estimate what case-mix would have been in the absence of the adoption of the MS-DRGs should not necessarily yield significantly different results from the analysis done by our actuaries and the MedPAC, if an appropriate historical trend can be determined.”
We reiterate our concerns with the use of historical trends to determine documentation and coding this year, and we do not believe that the modifications to the commenters' analysis address all of these concerns. In particular, we agree with MedPAC that “absent changes in documentation and coding and the shift away from inpatient surgeries, real changes in the CMI in 2008 through 2010 would be completely consistent with historical CMI changes since 2001.” In performing its analysis, MedPAC adjusted for changes in the share of cases with surgery, share of cases with CCs, and the estimated effects of changes in documentation and coding. MedPAC summarized the results of its analysis in the following graph.
In summary, with respect to trend analysis, we continue to believe that the determination of an appropriate historical trend is less straightforward than our proposed methodology, which simply removes real case-mix growth from the calculation. In addition, the estimates obtained using our proposed methodology are consistent with the historical case-mix growth, as demonstrated by MedPAC.
We also disagree with commenters who stated that the methodology employed by MedPAC and our actuaries can only provide upper and lower bounds of the combined effect of documentation and coding and real case-mix change and cannot separate documentation and coding effects from real case-mix change. While MedPAC recognized that the potential for a range of estimates may exist, MedPAC disagreed with the conclusion that index number theory, as described above, should be used to determine this range. MedPAC stated that “in this instance at least, the estimated range between the lower and upper bounds based on this approach is so wide that the estimates are useless for policy making.” We agree with MedPAC that the wide range resulting from an index number theory approach renders such an approach useless in this context.
In response to commenters' support for using hospital records to distinguish documentation and coding effect from real case-mix changes, we agree with MedPAC's rationale that such an analysis would fail to capture changes in documentation. MedPAC stated: “In our view, this approach does not work. The reason is that hospitals had an incentive to persuade attending physicians to be more specific in describing patients' acute manifestations of chronic conditions in their medical records. Some hospitals hired documentation specialists with the goal of changing physicians' medical record documentation, not simply to do a better job of coding what they wrote in the record (Hahey 2008). Gold-standard coders, however, only see the diagnoses written in the record and therefore are not able to distinguish changes in documentation from real changes in patients' diagnoses. This method of recoding existing documentation only works in situations where hospitals have no incentive to change documentation. That is clearly not the case with the transition to MS-DRGs. Thus, a very important part of the effect of changes in documentation and coding cannot be detected by the proposed method.”
We also note that as one part of our initial documentation and coding analysis, we attempted to examine coding changes based on hospital chart data from the Medicare Clinical Data Abstraction Center (CDAC). However, as we described in the FY 2010 IPPS/LTCH PPS final rule, it was not possible to perform this analysis due to aberrant CDAC data. We stated, “While we attempted to use the CDAC data to distinguish real increase in case-mix growth from documentation and coding in the overall case-mix number, we found aberrant data and significant variation across the FY 1999-FY 2007 analysis period. It was not possible to distinguish changes in documentation and coding from changes in real case-mix in the CDAC data. Therefore, we concluded that the CDAC data would not support analysis of real case-mix growth that could be used in our retrospective evaluation of the FY 2008 claims data.” (74 FR 43769)
Finally, we disagree with the commenters' suggestion that the assumptions in the capital update framework should be applied in our actuaries' estimate of documentation and coding, because the capital update framework is intended for projection purposes and would be inappropriate to use as a proxy for historical trends.
After careful consideration of all of the public comments we received, including alternatives suggested by commenters, we remain confident in the accuracy of our methodology and its appropriateness in determining the required adjustment amounts.
As noted previously, we also received Congressional correspondence from numerous members of Congress that requested CMS to reconsider what would be an appropriate adjustment to hospital payments and also requested that CMS reexamine its methodology. This correspondence noted that hospitals would experience payment reductions if the proposed rule were finalized without modification and further stated that hospitals needed “adequate Medicare reimbursement to ensure that patients and communities receive the care they need.”
In the proposed rule, we stated it was imperative that CMS make a significant prospective adjustment amount in FY 2012 to prevent the accumulation of unrecoverable overpayments. As stated in previous responses to comments, we remain confident in the accuracy of the overall methodology and its appropriateness in determining the required adjustment amount. However, after consideration of the public comments, and in keeping with our longstanding policy to mitigate, when possible, the effects of significant downward adjustments on hospitals, we are finalizing a prospective adjustment of −2.0 percent, which is a reduction from our proposed adjustment of −3.15 percent. We note that this adjustment will result in a total update of +1.0 percent, in accordance with MedPAC's recommendation in its March 2011 Report to Congress for hospitals that report quality data consistent with the requirements of the Hospital IQR Program. Specifically, as discussed elsewhere in this final rule, the applicable percentage increase for FY 2012 is +1.9 percent (based on a market basket of +3.0 percent, a multifactor productivity adjustment of −1.0 percentage point, and a statutory adjustment of −0.1 percentage point in accordance with section 3401 of the Affordable Care Act). When combined with the +1.1 adjustment in light of
The table below summarizes the adjustments for FY 2012 for documentation and coding for IPPS hospitals.
Under section 1886(d)(5)(D)(i) of the Act, SCHs are paid based on whichever of the following rates yields the greatest aggregate payment: The Federal rate; the updated hospital-specific rate based on FY 1982 costs per discharge; the updated hospital-specific rate based on FY 1987 costs per discharge; the updated hospital-specific rate based on FY 1996 costs per discharge; or the updated hospital-specific rate based on FY 2006 costs per discharge. Under section 1886(d)(5)(G) of the Act, MDHs are paid based on the Federal national rate or, if higher, the Federal national rate plus 75 percent of the difference between the Federal national rate and the updated hospital-specific rate based on the greatest of the FY 1982, FY 1987, or FY 2002 costs per discharge. In the FY 2008 IPPS final rule with comment period (72 FR 47152 through 47188), we established a policy of applying the documentation and coding adjustment to the hospital-specific rates. In that final rule with comment period, we indicated that because SCHs and MDHs use the same DRG system as all other hospitals, we believe they should be equally subject to the budget neutrality adjustment that we are applying for adoption of the MS-DRGs to all other hospitals. In establishing this policy, we relied on section 1886(d)(3)(A)(vi) of the Act, which provides us with the authority to adjust “the standardized amount” to eliminate the effect of changes in coding or classification that do not reflect real change in case-mix.
However, in the final rule that appeared in the
In the FY 2009 IPPS proposed rule (73 FR 23540), we indicated that we continued to have concerns about this issue. Because hospitals paid based on the hospital-specific rate use the same MS-DRG system as other hospitals, we believe they have the potential to realize increased payments from documentation and coding changes that do not reflect real increases in patient severity of illness. In section 1886(d)(3)(A)(vi) of the Act, Congress stipulated that hospitals paid based on the standardized amount should not receive additional payments based on the effect of documentation and coding changes that do not reflect real changes in case-mix. Similarly, we believe that hospitals paid based on the hospital-specific rates should not have the potential to realize increased payments due to documentation and coding changes that do not reflect real increases in patient severity of illness. While we continue to believe that section 1886(d)(3)(A)(vi) of the Act does not provide explicit authority for application of the documentation and coding adjustment to the hospital-specific rates, we believe that we have the authority to apply the documentation and coding adjustment to the hospital-specific rates using our special exceptions and adjustment authority under section 1886(d)(5)(I)(i) of the Act. The special exceptions and adjustment provision authorizes us to provide “for such other exceptions and adjustments to [IPPS] payment amounts * * * as the Secretary deems appropriate.” In the FY 2009 IPPS final rule (73 FR 48448 through 48449), we indicated that, for the FY 2010 rulemaking, we planned to examine our FY 2008 claims data for hospitals paid based on the hospital-specific rate. We further indicated that if we found evidence of significant increases in case-mix for patients treated in these hospitals that do not reflect real changes in case-mix, we would consider proposing application of the documentation and coding adjustments to the FY 2010 hospital-specific rates under our authority in section 1886(d)(5)(I)(i) of the Act.
In response to public comments received on the FY 2009 IPPS proposed rule, we stated in the FY 2009 IPPS final rule that we would consider whether such a proposal was warranted for FY 2010. To gather information to evaluate these considerations, we indicated that we planned to perform analyses on FY 2008 claims data to examine whether there has been a significant increase in case-mix for hospitals paid based on the hospital-specific rate. If we found that application of the documentation and coding adjustment to the hospital-specific rates for FY 2010 was warranted, we indicated that we would propose to make such an adjustment in the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule.
In the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule and final rule (74 FR 24098 through 24100 and 74 FR 43775 through 43776, respectively), we discussed our retrospective evaluation of the FY 2008 claims data for SCHs and MDHs using the same methodology described earlier for other IPPS hospitals. We found that, independently for both SCHs and MDHs, the change due to documentation and coding that did not reflect real changes in case-mix for discharges occurring during FY 2008 slightly exceeded the proposed 2.5 percent result discussed earlier for other IPPS hospitals, but did not significantly differ from that result. We refer readers to those rules for a more complete discussion.
Therefore, consistent with our statements in prior IPPS rules, we proposed to use our authority under section 1886(d)(5)(I)(i) of the Act to prospectively adjust the hospital-specific rates by the proposed −2.5 percent in FY 2010 to account for our estimated documentation and coding effect in FY 2008 that does not reflect real changes in case-mix. We proposed to leave this adjustment in place for subsequent fiscal years in order to ensure that changes in documentation and coding resulting from the adoption of the MS-DRGs do not lead to an increase in aggregate payments for SCHs and MDHs not reflective of an increase in real case-mix. The proposed −2.5 percent adjustment to the hospital-specific rates exceeded the −1.9 percent adjustment to the national standardized amount under section 7(b)(1)(A) of Public Law 110-90 because, unlike the national standardized rates, the FY 2008 hospital-specific rates were not previously reduced in order to account for anticipated changes in documentation and coding that do not reflect real changes in case-mix resulting from the adoption of the MS-DRGs.
In the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule (74 FR 24100), we solicited public comment on this proposal. Consistent with our approach for IPPS hospitals discussed earlier, in the FY 2010 IPPS/RY 2010 LTCH PPS final rule, we also delayed adoption of a documentation and coding adjustment to the hospital-specific rate until FY 2011. We refer readers to the FY 2010 IPPS/RY 2010 LTCH PPS final rule for a more detailed discussion of our proposal, responses to comments, and finalized policy.
As we have noted previously, because SCHs and MDHs use the same MS-DRG system as all other IPPS hospitals, we believe they have the potential to realize increased payments from documentation and coding changes that do not reflect real increases in patient severity of illness. Therefore, we believe they should be equally subject to a prospective budget neutrality adjustment that we are applying for adoption of the MS-DRGs to all other hospitals. We believe the documentation and coding estimates for all subsection (d) hospitals should be the same. While the findings for the documentation and coding effect for all IPPS hospitals are similar to the effect for SCHs and slightly different to the effect for MDHs, we continue to believe that this is the appropriate policy so as to neither advantage or disadvantage different types of providers. As we discuss in section II.D.4. of this preamble, our best estimate, based on the most recently available data, is that a cumulative adjustment of −5.4 percent is required to eliminate the full effect of the documentation and coding changes on future payments to SCHs and MDHs. Unlike the case of standardized amounts paid to IPPS hospitals, prior to FY 2011, we had not made any previous adjustments to the hospital-specific rates paid to SCHs and MDHs to account for documentation and coding changes. Therefore, the entire −5.4 percent recoupment adjustment needed to be made, as opposed to a −3.9 percent remaining adjustment for IPPS hospitals.
In the FY 2011 IPPS/LTCH PPS final rule (75 FR 50068 through 50071), we made an adjustment to the standardized
As discussed earlier in this section II.D., in the FY 2012 IPPS/LTCH PPS proposed rule, we proposed a net −3.15 percent documentation and coding adjustment for IPPS hospitals in FY 2012 (−3.15 percent prospective adjustment plus a −2.9 percent recoupment adjustment in FY 2012, offset by the removal of the −2.9 percent recoupment adjustment for FY 2010). The proposed IPPS adjustment exceeded the remaining −2.5 percent documentation and coding adjustment for hospitals receiving a hospital-specific rate (that is, the entire −5.4 percent adjustment, minus the −2.9 percent adjustment finalized for FY 2011). As we indicated in the FY 2011 IPPS/LTCH PPS proposed rule and final rule, we are continuing, as much as possible, consistent with section 7(b)(1) of Public Law 110-90 and section 1886(d)(5)(I)(i) of the Act, to take such consistency and equity into account in developing future proposals for implementing documentation and coding adjustments. We believe that any adjustment to the hospital-specific rate due to documentation and coding effect should be as similar as possible to adjustments to the IPPS rate. Accordingly, we proposed a −2.5 percent payment adjustment to the hospital-specific rate. We believe that proposing the entire remaining prospective adjustment of −2.5 percent would allow CMS to maintain, to the extent possible, similarity and consistency in payment rates for different IPPS hospitals paid using the MS-DRG. As discussed below, we took a similar approach in finalizing an adjustment to the Puerto-Rico specific rate in FY 2011.
We continue to believe that any adjustment to the hospital-specific rate due to documentation and coding effect should be as similar as possible to adjustments to the standardized amount. Accordingly, because we are finalizing a prospective adjustment to the standardized amount of −2.0 percent for FY 2012, we are also finalizing a prospective adjustment to the hospital-specific rate of −2.0 percent for FY 2012, instead of our proposed adjustment of −2.5 percent. Making this level of adjustment allows CMS to maintain, for FY 2012, consistency in payment rates for different IPPS hospitals paid using the MS-DRG. Because this −2.0 percent adjustment no longer reflects the entire remaining requirement adjustment amount of −2.5 percent, an additional −0.5 percent adjustment to the hospital-specific payment rates will be required in future rulemaking.
Puerto Rico hospitals are paid based on 75 percent of the national standardized amount and 25 percent of the Puerto Rico-specific standardized amount. As noted previously, the documentation and coding adjustment we adopted in the FY 2008 IPPS final rule with comment period relied upon our authority under section 1886(d)(3)(A)(vi) of the Act, which provides the Secretary the authority to
While section 1886(d)(3)(A)(vi) of the Act is not applicable to the Puerto Rico-specific standardized amount, we believe that we have the authority to apply the documentation and coding adjustment to the Puerto Rico-specific standardized amount using our special exceptions and adjustment authority under section 1886(d)(5)(I)(i) of the Act. Similar to SCHs and MDHs that are paid based on the hospital-specific rate, we believe that Puerto Rico hospitals that are paid based on the Puerto Rico-specific standardized amount should not have the potential to realize increased payments due to documentation and coding changes that do not reflect real increases in patient severity of illness. Consistent with the approach described for SCHs and MDHs, in the FY 2009 IPPS final rule (73 FR 48449), we indicated that we planned to examine our FY 2008 claims data for hospitals in Puerto Rico. We indicated in the FY 2009 IPPS proposed rule (73 FR 23541) that if we found evidence of significant increases in case-mix for patients treated in these hospitals, we would consider proposing to apply documentation and coding adjustments to the FY 2010 Puerto Rico-specific standardized amount under our authority in section 1886(d)(5)(I)(i) of the Act.
For the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule, we performed a retrospective evaluation of the FY 2008 claims data for Puerto Rico hospitals using the same methodology described earlier for IPPS hospitals paid under the national standardized amounts under section 1886(d) of the Act. We found that, for Puerto Rico hospitals, the increase in payments for discharges occurring during FY 2008 due to documentation and coding that did not reflect real changes in case-mix for discharges occurring during FY 2008 was approximately 1.1 percent. However, as we noted earlier for IPPS hospitals and hospitals receiving hospital-specific rates, if the estimated documentation and coding effect determined based on a full analysis of FY 2009 claims data was more or less than our then current estimates, it would change, possibly lessen, the anticipated cumulative adjustments that we had estimated we would have to make for the FY 2008 and FY 2009 combined adjustment. Therefore, we believed that it would be more prudent to delay implementation of the documentation and coding adjustment to allow for a more complete analysis of FY 2009 claims data for Puerto Rico hospitals.
In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43777), we indicated that, given these documentation and coding increases, consistent with our statements in prior IPPS rules, we would use our authority under section 1886(d)(5)(I)(i) of the Act to adjust the Puerto Rico-specific rate and solicited public comment on the proposed −1.1 percent prospective adjustment. However, in parallel to our decision to postpone adjustments to the Federal standardized amount, we also indicated that we were adopting a similar policy for the Puerto Rico-specific rate for FY 2010 and would consider the phase-in of this adjustment over an appropriate time period through future rulemaking. We noted that, as with the hospital-specific rates, the Puerto Rico-specific standardized amount had not previously been adjusted based on estimated changes in documentation and coding associated with the adoption of the MS-DRGs.
Consistent with our approach for IPPS hospitals for FY 2010, we indicated that we would address in the FY 2011 rulemaking cycle any change in FY 2009 case-mix due to documentation and coding that did not reflect real changes in case-mix for discharges occurring during FY 2009.
As we have noted above, similar to SCHs and MDHs, hospitals in Puerto Rico use the same MS-DRG system as all other hospitals and we believe they have the potential to realize increased payments from documentation and coding changes that do not reflect real increases in patient severity of illness. Therefore, we believe they should be equally subject to the prospective budget neutrality adjustment that we intend to apply to prospective payment rates for IPPS hospitals, including SCHs and MDHs, in order to eliminate the full effect of the documentation and coding changes associated with implementation of the MS-DRG system.
As discussed in the FY 2011 IPPS/LTCH PPS final rule (75 FR 50071 through 50073), using the same methodology we applied to estimate documentation and coding changes under IPPS for non-Puerto Rico hospitals, our best estimate, based on the then most recently available data (FY 2009 claims paid through March 2010), was that, for documentation and coding that occurred over FY 2008 and FY 2009, a cumulative adjustment of −2.6 percent was required to eliminate the full effect of the documentation and coding changes on future payments from the Puerto Rico-specific rate. As we stated above, we believe it important to maintain both consistency and equity among all hospitals paid on the basis of the same MS-DRG system. At the same time, however, we recognize that the estimated cumulative impact on aggregate payment rates resulting from implementation of the MS-DRG system was smaller for Puerto Rico hospitals as compared to IPPS hospitals and SCHs and MDHs. Therefore, in the FY 2011 IPPS/LTCH PPS proposed rule (75 FR 23876), we proposed an adjustment to eliminate the full effect of the documentation and coding changes on the portion of future payments to Puerto Rico hospitals based on the Puerto Rico-specific rate. We stated that we believed that a full prospective adjustment was the most appropriate means to take into full account the effect of documentation and coding changes on payments, while maintaining equity as much as possible between hospitals paid on the basis of different prospective rates. We noted that our updated data analysis in the FY 2011 IPPS/LTCH PPS final rule (75 FR 50072 through 50073) showed that this adjustment would be −2.6 percent. The previous estimate in the proposed rule was a −2.4 percent adjustment.
One reason we proposed the full prospective adjustment for the Puerto Rico-specific rate in FY 2011 was to
Therefore, because the Puerto Rico-specific rate received a full prospective adjustment of −2.6 percent in FY 2011, we proposed no further adjustment in the proposed rule for FY 2012.
In the FY 2009 IPPS final rule (73 FR 48450), we continued to implement significant revisions to Medicare's inpatient hospital rates by completing our 3-year transition from charge-based relative weights to cost-based relative weights. Beginning in FY 2007, we implemented relative weights based on cost report data instead of based on charge information. We had initially proposed to develop cost-based relative weights using the hospital-specific relative value cost center (HSRVcc) methodology as recommended by MedPAC. However, after considering concerns expressed in the public comments we received on the proposal, we modified MedPAC's methodology to exclude the hospital-specific relative weight feature. Instead, we developed national CCRs based on distinct hospital departments and engaged a contractor to evaluate the HSRVcc methodology for future consideration. To mitigate payment instability due to the adoption of cost-based relative weights, we decided to transition cost-based weights over 3 years by blending them with charge-based weights beginning in FY 2007. (We refer readers to the FY 2007 IPPS final rule for details on the HSRVcc methodology and the 3-year transition blend from charge-based relative weights to cost-based relative weights (71 FR 47882 through 47898).)
In FY 2008, we adopted severity-based MS-DRGs, which increased the number of DRGs from 538 to 745. Many commenters raised concerns as to how the transition from charge-based weights to cost-based weights would continue with the introduction of new MS-DRGs. We decided to implement a 2-year transition for the MS-DRGs to coincide with the remainder of the transition to cost-based relative weights. In FY 2008, 50 percent of the relative weight for each DRG was based on the CMS DRG relative weight and 50 percent was based on the MS-DRG relative weight.
In FY 2009, the third and final year of the transition from charge-based weights to cost-based weights, we calculated the MS-DRG relative weights based on 100 percent of hospital costs. We refer readers to the FY 2007 IPPS final rule (71 FR 47882) for a more detailed discussion of our final policy for calculating the cost-based DRG relative weights and to the FY 2008 IPPS final rule with comment period (72 FR 47199) for information on how we blended relative weights based on the CMS DRGs and MS-DRGs.
As we transitioned to cost-based relative weights, some public commenters raised concerns about potential bias in the weights due to “charge compression,” which is the practice of applying a higher percentage charge markup over costs to lower cost items and services, and a lower percentage charge markup over costs to higher cost items and services. As a result, the cost-based weights would undervalue high-cost items and overvalue low-cost items if a single CCR is applied to items of widely varying costs in the same cost center. To address this concern, in August 2006, we awarded a contract to RTI to study the effects of charge compression in calculating the relative weights and to consider methods to reduce the variation in the CCRs across services within cost centers. RTI issued an interim draft report in January 2007 with its findings on charge compression (which was posted on the CMS Web site at:
In its interim draft report, RTI offered a number of recommendations to mitigate the effects of charge compression, including estimating regression-based CCRs to disaggregate the Medical Supplies Charged to Patients, Drugs Charged to Patients, and Radiology cost centers, and adding new cost centers to the Medicare cost report, such as adding a “Devices, Implants and Prosthetics” line under “Medical Supplies Charged to Patients” and a “CT Scanning and MRI” subscripted line under “Radiology-Diagnostics”. Despite receiving public comments in support of the regression-based CCRs as a means to immediately resolve the problem of charge compression, particularly within the Medical Supplies and Equipment CCR, we did not adopt RTI's recommendation to create additional regression-based CCRs. (For more details on RTI's findings and recommendations, we refer readers to the FY 2009 IPPS final rule (73 FR 48452).) RTI subsequently expanded its analysis of charge compression beyond inpatient services to include a reassessment of the regression-based CCR models using both outpatient and inpatient charge data. This interim report was made available in April 2008 during the public comment period on the FY 2009 IPPS proposed rule and can be found on RTI's Web site at:
RTI's final report found that, under the IPPS and the OPPS, accounting improvements to the cost reporting data reduce some of the sources of aggregation bias without having to use regression-based adjustments. In general, with respect to the regression-based adjustments, RTI confirmed the findings of its March 2007 report that regression models are a valid approach for diagnosing potential aggregation bias within selected services for the IPPS and found that regression models are equally valid for setting payments under the OPPS.
RTI also noted that cost-based weights are only one component of a final prospective payment rate. There are other rate adjustments (wage index, IME, and DSH) to payments derived from the revised cost-based weights, and the cumulative effect of these components may not improve the ability of final payment to reflect resource cost. RTI endorsed short-term regression-based adjustments, but also concluded that more refined and accurate accounting data are the preferred long-term solution to mitigate charge compression and related bias in hospital cost-based weights. For a more detailed
In the FY 2009 IPPS/LTCH PPS final rule (73 FR 48458 through 48467), in response to the RTI's recommendations concerning cost report refinements, and because of RAND's finding that regression-based adjustments to the CCRs do not significantly improve payment accuracy, we discussed our decision to pursue changes to the cost report to split the cost center for Medical Supplies Charged to Patients into one line for “Medical Supplies Charged to Patients” and another line for “Implantable Devices Charged to Patients.” (We refer readers to the Web site:
In the FY 2011 IPPS/LTCH PPS final rule (75 FR 50075 through 50080), we finalized our proposal to create standard cost centers for CT scans, MRI, and cardiac catheterization, and to require that hospitals report the costs and charges for these services under new cost centers on the revised Medicare cost report Form CMS 2552-10. As we discussed in the FY 2009 IPPS/LTCH PPS and CY 2009 OPPS/ASC proposed and final rules, RTI found that the costs and charges of CT scans, MRI, and cardiac catheterization differ significantly from the costs and charges of other services included in the standard associated cost center. RTI also concluded that both the IPPS and OPPS relative weights would better estimate the costs of those services if CMS were to add standard costs centers for CT scans, MRI, and cardiac catheterization in order for hospitals to report separately the costs and charges for those services and in order for CMS to calculate unique CCRs to estimate the cost from charges on claims data. (We refer readers to the FY 2011 IPPS/LTCH PPS final rule (75 FR 50075 through 50080) for a more detailed discussion on the reasons for the creation of standard cost centers for CT scans, MRI, and cardiac catheterization.) The new standard cost centers for MRI, CT scans, and cardiac catheterization are effective for cost report periods beginning on or after May 1, 2010, on the revised cost report Form CMS-2552-10. CMS issued the new hospital cost report Form CMS-2552-10 on December 30, 2010. The new cost report form can be accessed at the CMS Web site at:
In the FY 2009 IPPS/LTCH PPS final rule (73 FR 48468), we stated that, due to what is typically a 3-year lag between the reporting of cost report data and the availability for use in ratesetting, we anticipated that we might be able to use data from the new “Implantable Devices Charged to Patients” cost center to develop a CCR for Implantable Devices Charged to Patients in the FY 2012 or FY 2013 IPPS rulemaking cycle. Specifically, we stated, “Because there is approximately a 3-year lag between the availability of cost report data for IPPS and OPPS rate-setting purposes in a given fiscal year, we may be able to derive two distinct CCRs, one for medical supplies and one for devices, for use in calculating the FY 2012 or FY 2013 IPPS relative weights and the CY 2012 or CY 2013 OPPS relative weights” (73 FR 48468). However, as noted in the FY 2010 IPPS/LTCH PPS final rule (74 FR 43782), due to delays in the issuance of the revised cost report CMS 2552-10, a new CCR for Implantable Devices Charged to Patients may not be available until FY 2013. Similarly, when we finalized the decision in the FY 2011 IPPS/LTCH PPS final rule to add new cost centers for MRI, CT scans, and cardiac catheterization, we explained that data from any new cost centers that may be created will not be available until at least 3 years after they are first used (75 FR 50077). That is, in the FY 2011 IPPS/LTCH PPS final rule (75 FR 50077), we stated that the data from the standard cost centers for MRI, CT scans, and cardiac catheterization respectively, would not even be available for possible use in calculating the relative weights earlier than 3 years after Form CMS-2552-10 becomes available. We further stated that, at that time, we would analyze the data and determine if it is appropriate to use those data to create distinct CCRs from these cost centers for use in the relative weights for the respective payment systems. We also reassured public commenters that there was no need for immediate concern regarding possible negative payment impacts on MRI and CT scans under the IPPS and the OPPS because the cost report data that would be used for the calculation of the relative weights were at least 3 years from being available. We stated that we will first thoroughly analyze and run impacts on the data and provide the public with the opportunity to comment before distinct CCRs for MRI and CT scans would be finalized for use in the calculation of the relative weights. We also urged all hospitals to properly report their costs and charges for MRI, CT scans, and all other services so that, in several years' time, we will have reliable data from all hospitals on which to base a decision as to whether to incorporate additional CCRs into the relative weight calculation (75 FR 50077).
Accordingly, in preparation for the FY 2012 IPPS/LTCH PPS proposed rule, we assessed the availability of data in the “Implantable Devices Charged to Patients” cost center. In order to develop a robust analysis regarding the use of cost data from the “Implantable Devices Charged to Patients” cost center, it was necessary to have a critical mass of cost reports filed with data in this cost center. The cost center for “Implantable Devices Charged to Patients” is effective for cost reporting periods beginning on or after May 1, 2009. While developing the FY 2012 IPPS/LTCH PPS proposed rule, we checked the availability of FY 2009 cost reports in the December 31, 2010 quarter ending update of HCRIS, which was the latest upload of FY 2009 cost report data that we could use for the proposed rule. We determined that there were only 437 hospitals (out of approximately 3,500 IPPS hospitals)
Another commenter stated that, based on the December 2010 update of FY 2009 HCRIS, 804 hospitals reported data on either line 55 (Medical Supplies Charged to Patients) or line 55.30 (Implantable Devices Charged to Patients), and in the March 2011 update of FY 2009 HCRIS, approximately 1,600 hospitals were reporting data on either of those lines. As such, the commenters believed there is now a sufficient amount of data to use the implantable device CCR to calculate the relative weights and improve accuracy of the payment rates. Commenters also noted that if we do not use the implantable device cost center to calculate the FY 2012 relative weights, there will be enough data to develop an implantable device CCR for FY 2013.
One commenter suggested that CMS adopt regression-based CCRs to calculate the FY 2012 MS-DRG relative weights because CMS does not yet have sufficient cost report data to develop the implantable device CCR. This would allow CMS to address charge compression immediately and improve payment accuracy for medical devices and implantables.